305 
‘‘(3) FUNDING.—The activities required by this 
section may be funded from the guaranty agency’s op-
erating account established pursuant to section 422B 
and, to the extent funds remain, from earnings on the 
restricted account established pursuant to section 
422(h)(4). 
‘‘(c) ACCESS TO INFORMATION.— 
‘‘(1) SECRETARY’S
RESPONSIBILITY.—The Sec-
retary shall ensure the availability of the information 
provided by the guaranty agencies in accordance with 
this section to students, parents, and other interested 
individuals, through web links or other methods pre-
scribed by the Secretary. 
‘‘(2) GUARANTY AGENCY RESPONSIBILITY.—The 
guaranty agencies shall ensure that the information 
required by this section is available without charge in 
printed format for students and parents requesting 
such information. 
‘‘(3) PUBLICITY.—Within 270 days after the date 
of enactment of the College Access and Opportunity 
Act of 2005, the Secretary and guaranty agencies 
shall publicize the availability of the information re-
quired by this section, with special emphasis on en-
suring that populations that are traditionally under-
306 
represented in postsecondary education are made 
aware of the availability of such information.’’. 
SEC. 488. DISTANCE EDUCATION DEMONSTRATION PRO-
GRAM. 
(a) ELIGIBLE APPLICANTS.—Section 486(b)(3) (20 
U.S.C. 1093(b)(3)) is amended— 
(1) in subparagraph (B), by striking ‘‘section 
102(a)(1)(C)’’ and inserting ‘‘section 102’’; and 
(2) in subparagraph (C), by striking ‘‘subsection 
(a) of section 102, other than the requirement of para-
graph (3)(A) or (3)(B) of such subsection,’’ and in-
serting ‘‘section 101, other than the requirements of 
subparagraph (A) or (B) of subsection (b)(4) of such 
section’’. 
(b) 
SELECTION.—Section 
486(d)(1) 
(20 
U.S.C. 
1093(d)(1)) is amended— 
(1) by striking ‘‘the third year’’ and inserting 
‘‘subsequent years’’; 
(2) by striking ‘‘35 institutions’’ and inserting 
‘‘100 institutions’’; and 
(3) by adding at the end the following new sen-
tence: ‘‘Not more than 5 of such institutions, systems, 
or consortia may be accredited, degree-granting cor-
respondence schools.’’.
307 
SEC. 489. COLLEGE AFFORDABILITY DEMONSTRATION PRO-
GRAM. 
Part G of title IV is amended by inserting after section 
486 (20 U.S.C. 1093) the following new section: 
‘‘SEC. 486A. COLLEGE AFFORDABILITY DEMONSTRATION 
PROGRAM. 
‘‘(a) PURPOSE.—It is the purpose of this section— 
‘‘(1) to provide, through a college affordability 
demonstration program, for increased innovation in 
the delivery of higher education and student financial 
aid in a manner resulting in reduced costs for stu-
dents as well as the institution by employing one or 
more strategies including accelerating degree or pro-
gram completion, increasing availability of, and ac-
cess to, distance components of education delivery, en-
gaging in collaborative arrangements with other insti-
tutions and organizations, and other alternative 
methodologies; and 
‘‘(2) to help determine— 
‘‘(A) the most effective means of delivering 
student financial aid as well as quality edu-
cation; 
‘‘(B) the specific statutory and regulatory 
requirements that should be altered to provide for 
more efficient and effective delivery of student fi-
nancial aid, as well as access to high quality dis-
308 
tance education programs, resulting in a student 
more efficiently completing postsecondary edu-
cation; and 
‘‘(C) the most effective methods of obtaining 
and managing institutional resources. 
‘‘(b) DEMONSTRATION PROGRAM AUTHORIZED.— 
‘‘(1) IN GENERAL.—In accordance with the pur-
poses described in subsection (a) and the provisions of 
subsection (d), the Secretary is authorized to select 
not more than 100 institutions of higher education, 
including those applying as part of systems or con-
sortia of such institutions, for voluntary participa-
tion in the College Affordability Demonstration Pro-
gram in order to enable participating institutions to 
carry out such purposes by providing programs of 
postsecondary education, and making available stu-
dent financial assistance under this title to students 
enrolled in those programs, in a manner that would 
not otherwise meet the requirements of this title. 
‘‘(2) WAIVERS.—The Secretary is authorized to 
waive for any institutions of higher education, or any 
system or consortia of institutions of higher edu-
cation, selected for participation in the College Af-
fordability Demonstration Program, any require-
ments of this Act or the regulations thereunder as
309 
deemed necessary by the Secretary to meet the pur-
pose described in subsection (a)(1), and shall make a 
determination that the waiver can reasonably be ex-
pected to result in reduced costs to students or institu-
tions without an increase in Federal program costs. 
The Secretary may not waive under this paragraph 
the maximum award amounts for an academic year 
or loan period. 
‘‘(3) ELIGIBLE APPLICANTS.— 
‘‘(A) ELIGIBLE
INSTITUTIONS.—Except as 
provided in subparagraph (B), only an institu-
tion of higher education that is eligible to par-
ticipate in programs under this title shall be eli-
gible to participate in the demonstration pro-
gram authorized under this section. 
‘‘(B) PROHIBITION.—An institution of high-
er education described in section 102 shall not be 
eligible to participate in the demonstration pro-
gram authorized under this section. 
‘‘(c) APPLICATION.— 
‘‘(1) IN GENERAL.—Each institution or system 
of institutions desiring to participate in the dem-
onstration program under this section shall submit 
an application to the Secretary at such time and in 
such manner as the Secretary may require.
310 
‘‘(2) CONTENTS OF APPLICATIONS.—Each appli-
cation for the college affordability demonstration pro-
gram shall include at least the following: 
‘‘(A) a description of the institution or sys-
tem or consortium of institutions and what qual-
ity assurance mechanisms are in place to insure 
the integrity of the Federal financial aid pro-
grams; 
‘‘(B) a description of the innovation or in-
novations being proposed and the affected pro-
grams and students, including— 
‘‘(i) a description of any collaborative 
arrangements with other institutions or or-
ganizations to reduce costs; 
‘‘(ii) a description of any expected eco-
nomic impact of participation in the pro-
gram within the community in which the 
institution is located; and 
‘‘(iii) a description of any means the 
institution will employ to reduce the costs of 
instructional materials, such as textbooks; 
‘‘(C) a description of each regulatory or 
statutory requirement for which waivers are 
sought, with a reason for each waiver;
311 
‘‘(D) a description of the expected outcomes 
of the program changes proposed, including the 
estimated reductions in costs both for the institu-
tion and for students; 
‘‘(E) a description of the quality assurance 
mechanisms in place to ensure the integrity of 
the Federal financial aid programs; 
‘‘(F) an assurance from each institution in 
a system or consortium of a commitment to ful-
fill its role as described in the application; 
‘‘(G) an assurance that the participating 
institution or system of institutions will offer 
full cooperation with the ongoing evaluations of 
the demonstration program provided for in this 
section; and 
‘‘(H) any other information or assurances 
the Secretary may require. 
‘‘(d) SELECTION.—In selecting institutions to partici-
pate in the demonstration program under this section, the 
Secretary shall take into account— 
‘‘(1) the number and quality of applications re-
ceived, determined on the basis of the contents re-
quired by subsection (c)(2); 
‘‘(2) the Department’s capacity to oversee and 
monitor each institution’s participation;
312 
‘‘(3) an institution’s— 
‘‘(A) financial responsibility; 
‘‘(B) administrative capability; 
‘‘(C) program or programs being offered via 
distance education, if applicable; 
‘‘(D) student completion rates; and 
‘‘(E) student loan default rates; and 
‘‘(4) the participation of a diverse group of insti-
tutions with respect to size, mission, and geographic 
distribution. 
‘‘(e) NOTIFICATION.—The Secretary shall make avail-
able to the public and to the authorizing committees a list 
of institutions selected to participate in the demonstration 
program authorized by this section. Such notice shall in-
clude a listing of the specific statutory and regulatory re-
quirements being waived for each institution and a descrip-
tion of the innovations being demonstrated. 
‘‘(f) EVALUATIONS AND REPORTS.— 
‘‘(1) EVALUATION.—The Secretary shall evaluate 
the demonstration program authorized under this sec-
tion on a biennial basis. Such evaluations specifically 
shall review— 
‘‘(A) the extent to which expected outcomes, 
including the estimated reductions in cost, were 
achieved;
313 
‘‘(B) the number and types of students par-
ticipating in the programs offered, including the 
progress of participating students toward recog-
nized certificates or degrees and the extent to 
which participation in such programs increased; 
‘‘(C) issues related to student financial as-
sistance associated with the innovations under-
taken; 
‘‘(D) effective technologies and alternative 
methodologies for delivering student financial as-
sistance; 
‘‘(E) the extent of the cost savings to the in-
stitution, the student, and the Federal Govern-
ment by virtue of the waivers provided, and an 
estimate as to future cost savings for the dura-
tion of the demonstration program; 
‘‘(F) the extent to which students saved 
money by virtue of completing their postsec-
ondary education sooner; 
‘‘(G) the extent to which the institution re-
duced its tuition and fees and its costs by virtue 
of participation in the demonstration program; 
‘‘(H) the extent to which any collaborative 
arrangements with other institutions or organi-
314 
zations have reduced the participating institu-
tion’s costs; and 
‘‘(I) the extent to which statutory or regu-
latory requirements not waived under the dem-
onstration program present difficulties for stu-
dents or institutions. 
‘‘(2) POLICY ANALYSIS.—The Secretary shall re-
view current policies and identify those policies that 
present impediments to the implementation of inno-
vations that result in cost savings and in expanding 
access to education. 
‘‘(3) REPORTS.—The Secretary shall provide a 
report to the authorizing committees on a biennial 
basis regarding— 
‘‘(A) the demonstration program authorized 
under this section; 
‘‘(B) the results of the evaluations conducted 
under paragraph (1); 
‘‘(C) the cost savings to the Federal Govern-
ment by the demonstration program authorized 
by this section; and 
‘‘(D) recommendations for changes to in-
crease the efficiency and effective delivery of fi-
nancial aid.
315 
‘‘(g) OVERSIGHT.—In conducting the demonstration 
program authorized under this section, the Secretary shall, 
on a continuing basis— 
‘‘(1) ensure compliance of institutions or systems 
of institutions with the requirements of this title 
(other than the sections and regulations that are 
waived under subsection (b)(2)); 
‘‘(2) provide technical assistance to institutions 
in their application to and participation in the dem-
onstration program; 
‘‘(3) monitor fluctuations in the student popu-
lation enrolled in the participating institutions or 
systems of institutions; 
‘‘(4) monitor changes in financial assistance 
provided at the institution; and 
‘‘(5) consult with appropriate accrediting agen-
cies or associations and appropriate State regulatory 
authorities. 
‘‘(h) TERMINATION OF AUTHORITY.—The authority of 
the Secretary under this section shall cease to be effective 
on October 1, 2011.’’. 
SEC. 490. PROGRAM PARTICIPATION AGREEMENTS. 
(a) REFUND POLICIES.—Section 487(a) (20 U.S.C. 
1094(a)) is amended—
316 
(1) in paragraph (16), by inserting ‘‘or other 
Federal, State, or local government funds’’ after 
‘‘funds under this title’’ each place it appears; 
(2) in paragraph (22), by striking ‘‘refund pol-
icy’’ and inserting ‘‘policy on the return of title IV 
funds’’; and 
(3) in paragraph (23)— 
(A) by moving subparagraph (C) 2 em 
spaces to the left; and 
(B) by adding after such subparagraph the 
following new subparagraph: 
‘‘(D) An institution shall be considered in com-
pliance with the requirements of subparagraph (A) 
for any student to whom the institution electronically 
transmits a message containing a voter registration 
form acceptable for use in the State in which the in-
stitution is located, or an Internet address where such 
a form can be downloaded, provided such information 
is in an electronic message devoted to voter registra-
tion.’’. 
(b) ENFORCING THE 90/10 RULE.— 
(1) AMENDMENT.—Section 487(a) (20 U.S.C. 
1094(a)) is further amended by adding at the end the 
following new paragraph:
317 
‘‘(24) The institution will, as calculated in ac-
cordance with subsection (f)(1), have at least 10 per-
cent of its revenues from sources other than funds pro-
vided under this title, or will be subject to the sanc-
tions described in subsection (f)(2).’’. 
(2) IMPLEMENTATION.—Section 487 is further 
amended by adding at the end the following new sub-
section: 
‘‘(f) IMPLEMENTATION OF NON-TITLE IV REVENUE 
REQUIREMENT.— 
‘‘(1) CALCULATION.—In carrying out subsection 
(a)(24), an institution shall use the cash basis of ac-
counting and count the following funds toward the 10 
percent of revenues from sources of funds other than 
funds provided under this title: 
‘‘(A) funds used by students to pay tuition, 
fees, and other institutional charges from sources 
other than funds provided under this title as 
long as the institution can reasonably dem-
onstrate that such funds were used for such pur-
poses; 
‘‘(B) institutional funds used to satisfy 
matching-fund requirements for programs under 
this title;
318 
‘‘(C) funds from savings plans for edu-
cational expenses established pursuant to the In-
ternal Revenue Code of 1986; 
‘‘(D) funds paid by a student, or on behalf 
of a student by a party other than the institu-
tion, for an education or training program that 
is not eligible for funds under this title, so long 
as the program is approved or licensed by the 
appropriate State agency or an accrediting 
agency recognized by the Secretary; and 
‘‘(E) institutional aid, as follows: 
‘‘(i) in the case of institutional loans, 
only the amount of loan repayments re-
ceived during the fiscal year; and 
‘‘(ii) in the case of institutional schol-
arships, only those provided by the institu-
tion in the form of monetary aid or tuition 
discounts based upon the academic achieve-
ments or financial need of students, dis-
bursed during the fiscal year from an estab-
lished restricted account, and only to the ex-
tent that the funds in that account represent 
designated funds from an outside source or 
from income earned on those funds.
319 
‘‘(2) SANCTIONS.—An institution that fails to 
meet the requirements of subsection (a)(24) for 3 con-
secutive years shall become ineligible to participate in 
the programs authorized by this title. In addition to 
such other means of enforcing the requirements of this 
title as may be available to the Secretary, if an insti-
tution fails to meet the requirements of subsection 
(a)(24) in any year, the Secretary may impose one 
or more of the following sanctions on the institution: 
‘‘(A) Place the institution on provisional 
certification in accordance with section 498(h) 
until the institution demonstrates, to the satis-
faction of the Secretary, that it is in compliance 
with subsection (a)(24). 
‘‘(B) Require such other increased moni-
toring and reporting requirements as the Sec-
retary determines necessary until the institution 
demonstrates, to the satisfaction of the Secretary, 
that it is in compliance with subsection (a)(24). 
‘‘(3) PUBLICATION ON COOL WEBSITE.—The Sec-
retary shall identify, on the College Opportunities 
On-Line website under section 131(b), any institution 
that fails to meet the requirements of subsection 
(a)(24) in any year as an institution that is failing
320 
to meet the minimum non-Federal source of revenue 
requirements of that subsection.’’. 
(c) REPORTS ON DISCIPLINARY PROCEEDINGS.— 
(1) AMENDMENT.—Section 487(a) (20 U.S.C. 
1094(a)) is further amended by adding after para-
graph (24), as added by subsection (b) of this section, 
the following new paragraph: 
‘‘(25) The institution will disclose to the alleged 
victim of any crime of violence (as that term is de-
fined in section 16 of title 18), or a nonforcible sex 
offense, the final results of any disciplinary pro-
ceeding conducted by such institution against a stu-
dent who is the alleged perpetrator of such crime or 
offense with respect to such crime or offense. If the al-
leged victim of such crime or offense is deceased, the 
next of kin of such victim shall be treated as the al-
leged victim for purposes of this paragraph.’’. 
(2) EFFECTIVE DATE.—The amendment made by 
paragraph (1) shall apply with respect to any dis-
ciplinary proceeding conducted by such institution on 
or after one year after the date of enactment of this 
Act. 
(d) AUDIT REQUIREMENTS.—Section 487(c)(1)(A)(i) 
(20 U.S.C. 1094(c)(1)(A)(i)) is amended by inserting before 
the semicolon at the end the following: ‘‘, except that the
321 
Secretary may modify the requirements of this clause with 
respect to institutions of higher education that are foreign 
institutions, and may waive such requirements with respect 
to a foreign institution whose students receive less than 
$500,000 in loans under this title during the award year 
preceding the audit period’’. 
SEC. 491. ADDITIONAL TECHNICAL AND CONFORMING 
AMENDMENTS. 
Part G is further amended as follows: 
(1) Section 483(d) (20 U.S.C. 1090(d)) is 
amended by striking ‘‘that is authorized under section 
685(d)(2)(C)’’ and inserting ‘‘, or another appro-
priate provider of technical assistance and informa-
tion on postsecondary educational services, that is 
supported under section 663’’. 
(2) Section 484 (20 U.S.C. 1091) is amended— 
(A) in subsection (a)(4), by striking ‘‘cer-
tification,,’’ and inserting ‘‘certification,’’; and 
(B) in subsection (b)(2)— 
(i) in the matter preceding subpara-
graph (A), by striking ‘‘section 428A’’ and 
inserting ‘‘section 428H’’; 
(ii) in subparagraph (A), by inserting 
‘‘and’’ after the semicolon at the end thereof;
322 
(iii) in subparagraph (B), by striking 
‘‘; and’’ and inserting a period; and 
(iv) by striking subparagraph (C). 
(3) Section 484A(b)(2) (20 U.S.C. 1091a(b)(2)) 
is amended by striking ‘‘part B of this title’’ and in-
serting ‘‘part B, D, or E of this title’’. 
(4) Section 485B(a) (20 U.S.C. 1092b(a)) is 
amended— 
(A) 
by 
redesignating 
paragraphs 
(6) 
through (10) as paragraphs (7) through (11), re-
spectively; 
(B) by redesignating the paragraph (5) (as 
added by section 2008 of Public Law 101–239) 
as paragraph (6); and 
(C) in paragraph (5) (as added by section 
204(3) of the National Community Service Act of 
1990 (Public Law 101–610))— 
(i) by striking ‘‘(22 U.S.C. 2501 et 
seq.)),’’ and inserting ‘‘(22 U.S.C. 2501 et 
seq.),’’; and 
(ii) by striking the period at the end 
thereof and inserting a semicolon. 
(5) Section 487A(b) (20 U.S.C. 1094a(b)) is 
amended— 
(A) in paragraph (1)—
323 
(i) by striking ‘‘Higher Education 
Amendments of 1998’’ and inserting ‘‘Col-
lege Access and Opportunity Act of 2005’’; 
and 
(ii) by striking the second sentence; 
(B) in paragraph (2)— 
(i) by striking ‘‘1993 through 1998’’ 
and inserting ‘‘1998 through 2004’’; 
(ii) by striking ‘‘(as such section’’ and 
all that follows through ‘‘Amendments of 
1998)’’; and 
(iii) by striking ‘‘Higher Education 
Amendments of 1998.’’ and inserting ‘‘Col-
lege Access and Opportunity Act of 2005.’’; 
and 
(C) in paragraph (3)(A)— 
(i) by striking ‘‘Upon the submission’’ 
and all that follows through ‘‘limited num-
ber of additional institutions for voluntary 
participation’’ and inserting ‘‘The Sec-
retary is authorized to continue the vol-
untary participation of institutions partici-
pating as of July 1, 2005,’’; and 
(ii) by inserting before the period at 
the end the following: ‘‘, and shall continue
324 
the participation of any such institution 
unless the Secretary determines that such 
institution’s participation has not been suc-
cessful in carrying out the purposes of this 
section’’. 
(6) Section 491(c) (20 U.S.C. 1098(c)) is amend-
ed by adding at the end the following new paragraph: 
‘‘(3) The appointment of members under subpara-
graphs (A) and (B) of paragraph (1) shall be effective upon 
publication of the appointment in the Congressional 
Record.’’. 
(7) Section 491(h)(1) (20 U.S.C. 1098(h)(1)) is 
amended by striking ‘‘the rate authorized for GS–18 
of the General Schedule’’ and inserting ‘‘the max-
imum rate payable under section 5376 of such title’’. 
(8) Section 491(k) (20 U.S.C. 1098(k)) is 
amended by striking ‘‘2004’’ and inserting ‘‘2011’’. 
(9) Section 493A (20 U.S.C. 1098c) is repealed. 
(10) Section 498 (20 U.S.C. 1099c) is amend-
ed— 
(A) in subsection (c)(2), by striking ‘‘for 
profit,’’ and inserting ‘‘for-profit,’’; and 
(B) in subsection (d)(1)(B), by inserting 
‘‘and’’ after the semicolon at the end thereof.
325 
PART H—PROGRAM INTEGRITY 
SEC. 495. ACCREDITATION. 
(a) STANDARDS FOR ACCREDITATION.—Section 496(a) 
(20 U.S.C. 1099b(a)) is amended— 
(1) in paragraph (3)— 
(A) by inserting ‘‘or’’ after the semicolon at 
the end of subparagraph (A); 
(B) by striking subparagraph (B); and 
(C) by redesignating subparagraph (C) as 
subparagraph (B); 
(2) in paragraph (4)— 
(A) by inserting ‘‘(A)’’ after ‘‘(4)’’; 
(B) by inserting after ‘‘consistently applies 
and enforces standards’’ the following: ‘‘that con-
sider the stated missions of institutions of higher 
education, including such missions as inculca-
tion of religious values, and’’; 
(C) by inserting ‘‘and’’ after the semicolon 
at the end thereof; and 
(D) by adding at the end the following new 
subparagraph: 
‘‘(B) if such agency or association already has or 
seeks to include within its scope of recognition the 
evaluation of the quality of institutions or programs 
offering distance education, such agency or associa-
tion shall, in addition to meeting the other require-
326 
ments of this subpart, demonstrate to the Secretary 
that— 
‘‘(i) the accreditation agency’s or associa-
tion’s standards effectively address the quality of 
an institution’s distance education programs in 
the areas identified in paragraph (5) of this sub-
section, except that the agency or association 
shall not be required to have separate standards, 
procedures, or policies for the evaluation of dis-
tance education institutions or programs in 
order to meet the requirements of this subpara-
graph; and 
‘‘(ii) the agency or association requires that 
an institution that offers distance education pro-
grams to have processes by which it establishes 
that the student who registers in a distance edu-
cation course or program is the same student 
who participates, completes academic work, and 
receives academic credit;’’; 
(3) in paragraph (5)— 
(A) by amending subparagraph (A) to read 
as follows: 
‘‘(A) success with respect to student achieve-
ment in relation to the institution’s mission, in-
cluding, as appropriate, consideration of student
327 
academic achievement as determined by the in-
stitution (in accordance with standards of the 
accrediting agency or association), retention, 
course and program completion, State licensing 
examinations, and job placement rates, and other 
student performance information selected by the 
institution, particularly that information used 
by the institution to evaluate or strengthen its 
programs;’’; and 
(B) by amending subparagraph (E) to read 
as follows: 
‘‘(E) fiscal, administrative capacity, as ap-
propriate to the specified scale of operations, 
and, for an agency or association where its ap-
proval for such institution determines eligibility 
for student assistance under this title, board gov-
ernance, within the context of the institution’s 
mission;’’; 
(4) by striking paragraph (6) and inserting the 
following: 
‘‘(6) such an agency or association shall establish 
and apply review procedures throughout the accred-
iting process, including evaluation and withdrawal 
proceedings that comply with due process that pro-
vides for—
328 
‘‘(A) adequate specification of requirements 
and deficiencies at the institution of higher edu-
cation or program being examined; 
‘‘(B) an opportunity for a written response 
by any such institution to be included in the 
evaluation and withdrawal proceedings; 
‘‘(C) upon the written request of an institu-
tion, an opportunity for the institution to appeal 
any adverse action at a hearing prior to such ac-
tion becoming final before an appeals panel 
that— 
‘‘(i) shall not include current members 
of the agency or association’s underlying de-
cision-making body that made the adverse 
decision; and 
‘‘(ii) is subject to a conflict of interest 
of policy; and 
‘‘(D) the right to representation by counsel 
for an such institution;’’; and 
(5) by striking paragraph (8) and inserting the 
following: 
‘‘(8) such agency or association shall make avail-
able to the public and submit to the Secretary and the 
State licensing or authorizing agency, together with
329 
the comments of the affected institution, a summary 
of agency or association actions, involving— 
‘‘(A) final denial, withdrawal, suspension, 
or termination of accreditation; and 
‘‘(B) any other final adverse action taken 
with respect to an institution.’’. 
(b) OPERATING PROCEDURES.—Section 496(c) (20 
U.S.C. 1099b(c)) is amended— 
(1) by inserting ‘‘(including those regarding dis-
tance education)’’ before the semicolon at the end of 
paragraph (1); 
(2) by striking ‘‘and’’ at the end of paragraph 
(5); 
(3) by striking the period at the end of para-
graph (6) and inserting a semicolon; and 
(4) by inserting after paragraph (6) the fol-
lowing new paragraphs: 
‘‘(7) ensures that its onsite comprehensive re-
views for accreditation or reaccreditation include 
evaluation of the substance of the information re-
quired in subparagraph (H) of section 485(a)(1); 
‘‘(8) confirms as a part of its review for accredi-
tation or reaccreditation that the institution has 
transfer policies— 
‘‘(A) that are publicly disclosed; and
330 
‘‘(B) that do not deny transfer of credit 
based solely on the accreditation of the sending 
institution as long as the association or agency 
is recognized by the Secretary pursuant to sec-
tion 496; 
‘‘(9) develops a brief summary, available to the 
public, of final adverse actions in accordance with the 
requirements of subsection (a)(8); 
‘‘(10) monitors the enrollment growth of distance 
education to ensure that an institution experiencing 
signficant growth has the capacity to serve its stu-
dents effectively; 
‘‘(11) discloses publicly, on the agency’s website 
or through other similar dissemination— 
‘‘(A) a list of the individuals who comprised 
the evaluation teams during the prior calendar 
year for each agency or association and the title 
and institutional affiliation of such individuals, 
although such list shall not be required to iden-
tify those individuals who comprised the evalua-
tion team used for any specific institution; 
‘‘(B) a description of the agency’s or asso-
ciation’s process for selecting, preparing, and 
evaluating such individuals; and
331 
‘‘(C) any statements related to the accredi-
tation responsibilities of such individuals; and 
‘‘(12) reviews the record of student complaints 
resulting from the student information process de-
scribed in section 485(a)(1)(J).’’. 
(c) LIMITATION, SUSPENSION, AND TERMINATION OF 
RECOGNITION.—Section 496(l) is amended by adding at the 
end the following new paragraph: 
‘‘(3) The Secretary shall provide an annual report to 
Congress on the status of any agency or association for 
which the Secretary has limited, suspended or terminated 
recognition under this subsection.’’. 
(d) PROGRAM REVIEW AND DATA.—Section 498A(b) 
(20 U.S.C. 1099c-1(b)) is amended— 
(1) by striking ‘‘and’’ at the end of paragraph 
(4); 
(2) by striking the period at the end of para-
graph (5) and inserting a semicolon; and 
(3) by adding at the end the following new para-
graphs: 
‘‘(6) provide to the institution adequate oppor-
tunity to review and respond to any program review 
report or audit finding and underlying materials re-
lated thereto before any final program review or audit 
determination is reached;
332 
‘‘(7) review and take into consideration the insti-
tution’s response in any final program review or 
audit determination, and include in the final deter-
mination— 
‘‘(A) a written statement addressing the in-
stitution’s response and stating the basis for such 
final determination; and 
‘‘(B) a copy of the institution’s statement in 
response, appropriately redacted to protect con-
fidential information; 
‘‘(8) maintain and preserve at all times the con-
fidentiality of any program review report or audit 
finding until the requirements of paragraphs (6) and 
(7) are met, and until a final program review or 
audit determination has been issued, except to the ex-
tent required to comply with paragraph (5), provided, 
however, that the Secretary shall promptly disclose 
any and all program review reports and audit find-
ings to the institution under review; and 
‘‘(9) require that the authority to approve or 
issue any program review report or audit finding, 
preliminary or otherwise, that contains any finding, 
determination, or proposed assessment that exceeds or 
may exceed $500,000 in liabilities shall not be dele-
333 
gated to any official beyond the Chief Operating Offi-
cer of Federal Student Aid.’’. 
SEC. 496. REPORT TO CONGRESS ON PREVENTION OF 
FRAUD AND ABUSE IN STUDENT FINANCIAL 
AID PROGRAMS. 
Title IV is amended by adding at the end the following 
new section: 
‘‘SEC. 499. REPORT TO CONGRESS ON PREVENTION OF 
FRAUD AND ABUSE IN STUDENT FINANCIAL 
AID PROGRAMS. 
‘‘(a) PURPOSE.—It is the purpose of this section to re-
quire the Secretary to commission a nonpartisan, com-
prehensive study on the prevention of fraud and abuse in 
title IV student financial aid programs, and to report the 
results of such study to Congress. 
‘‘(b) SCOPE OF REPORT.—The study under this section 
shall thoroughly identify and address the following: 
‘‘(1) The impact of fraud and abuse in title IV 
student financial aid programs upon students and 
taxpayers, and the nature of such fraud and abuse. 
‘‘(2) The effectiveness of existing policies and re-
quirements under this Act that were put in place to 
prevent fraud and abuse in title IV student financial 
aid programs, and how such policies and require-
ments should be improved.
334 
‘‘(3) The extent to which existing protections 
against fraud and abuse under this Act are ade-
quately enforced, and how enforcement should be 
strengthened. 
‘‘(4) Areas in which additional information is 
needed to assess the effectiveness of current protections 
and enforcement against fraud and abuse. 
‘‘(5) Existing policies and requirements under 
this Act aimed at fraud and abuse that are ineffec-
tive, hinder innovation, or could be eliminated with-
out reducing effectiveness. 
‘‘(6) New policies and enforcement, particularly 
those suited for the current higher education market-
place, needed to protect against fraud and abuse in 
title IV student financial aid programs. 
‘‘(7) The extent to which States are imple-
menting regulations to protect students from fraud 
and abuse, and whether changes to Federal law will 
preempt such regulations. 
‘‘(c) REPORT.—Not later than December 31, 2007, the 
Secretary, after an opportunity for both the Secretary and 
the Inspector General of the Department of Education to 
review the results of the study, shall transmit to Congress 
a report on the study conducted under this section. Such 
report shall—
335 
‘‘(1) include clear and specific recommendations 
for legislative and regulatory actions that are likely 
to significantly reduce the fraud and abuse in title IV 
student financial aid programs identified under sub-
section (b); and 
‘‘(2) include both the Secretary’s and the Inspec-
tor General’s comments on the report.’’. 
TITLE V—DEVELOPING 
INSTITUTIONS 
SEC. 501. DEFINITIONAL CHANGES. 
Section 502(a) (20 U.S.C. 1101a(a)) is amended— 
(1) in paragraph (5)— 
(A) by inserting ‘‘and’’ after the semicolon 
at the end of subparagraph (A); 
(B) by inserting ‘‘at the end of the award 
year immediately preceding the date of applica-
tion’’ after ‘‘Hispanic students’’ in subparagraph 
(B); 
(C) by striking ‘‘; and’’ at the end of sub-
paragraph (B) and inserting a period; and 
(D) by striking subparagraph (C); and 
(2) by striking paragraph (7). 
SEC. 502. ASSURANCE OF ENROLLMENT OF NEEDY STU-
DENTS. 
Section 511(c) (20 U.S.C. 1103(c)) is amended—
336 
(1) by striking paragraph (2); 
(2) by redesignating paragraphs (3) through (7) 
as paragraphs (2) through (6); and 
(3) by inserting after paragraph (6) as so redes-
ignated the following new paragraph: 
‘‘(7) contain such assurances as the Secretary 
may require that the institution has an enrollment of 
needy students as required by section 502(b);’’. 
SEC. 503. ADDITIONAL AMENDMENTS. 
Title V is further amended— 
(1) 
in 
section 
502(a)(2)(A) 
(20 
U.S.C. 
1101a(a)(2)(A)), by redesignating clauses (v) and (vi) 
as clauses (vi) and (vii), respectively, and inserting 
after clause (iv) the following new clause: 
‘‘(v) which provides a program of not 
less than 2 years that is acceptable for full 
credit toward a bachelor’s degree;’’; 
(2) in section 503(b) (20 U.S.C. 1101b(b))— 
(A) by amending paragraph (2) to read as 
follows: 
‘‘(2) Construction, maintenance, renovation, and 
improvement in classrooms, libraries, laboratories, 
and other instructional facilities, including purchase 
or rental of telecommunications technology equipment 
or services, and the acquisition of real property adja-
337 
cent to the campus of the institution on which to con-
struct such facilities.’’; 
(B) by amending paragraph (12) to read as 
follows: 
‘‘(12) Establishing community outreach pro-
grams and collaborative partnerships between His-
panic-serving institutions and local elementary or 
secondary schools. Such partnerships may include 
mentoring, tutoring, or other instructional opportuni-
ties that will boost student academic achievement and 
assist elementary and secondary school students in de-
veloping the academic skills and the interest to pursue 
postsecondary education.’’; 
(C) 
by 
redesignating 
paragraphs 
(5) 
through (14) as paragraphs (6) through (15), re-
spectively; and 
(D) by inserting after paragraph (4) the fol-
lowing: 
‘‘(5) Education or counseling services designed to 
improve the financial literacy and economic literacy 
of students and, as appropriate, their parents.’’; 
(3) in section 504(a) (20 U.S.C. 1101c(a))— 
(A) by striking the following: 
‘‘(a) AWARD PERIOD.—
338 
‘‘(1) IN GENERAL.—The Secretary’’ and insert-
ing the following: 
‘‘(a) AWARD PERIOD.—The Secretary’’; and 
(B) by striking paragraph (2); and 
(4) in section 514(c) (20 U.S.C. 1103c(c)), by 
striking ‘‘section 505’’ and inserting ‘‘section 504’’. 
SEC. 504. POSTBACCALAUREATE OPPORTUNITIES FOR HIS-
PANIC AMERICANS. 
(a) ESTABLISHMENT OF PROGRAM.—Title V is amend-
ed— 
(1) by redesignating part B as part C; 
(2) by redesignating sections 511 through 518 as 
sections 521 through 528, respectively; and 
(3) by inserting after section 505 (20 U.S.C. 
1101d) the following new part: 
‘‘PART B—PROMOTING POSTBACCALAUREATE 
OPPORTUNITIES FOR HISPANIC AMERICANS 
‘‘SEC. 511. PURPOSES. 
‘‘The purposes of this part are— 
‘‘(1) to expand postbaccalaureate educational op-
portunities for, and improve the academic attainment 
of, Hispanic students; and 
‘‘(2) to expand the postbaccalaureate academic 
offerings and enhance the program quality in the in-
stitutions that are educating the majority of Hispanic
339 
college students and helping large numbers of His-
panic and low-income students complete postsec-
ondary degrees. 
‘‘SEC. 512. PROGRAM AUTHORITY AND ELIGIBILITY. 
‘‘(a) PROGRAM AUTHORIZED.—Subject to the avail-
ability of funds appropriated to carry out this part, the 
Secretary shall award competitive grants to Hispanic-serv-
ing institutions determined by the Secretary to be making 
substantive contributions to graduate educational opportu-
nities for Hispanic students. 
‘‘(b) ELIGIBILITY.—For the purposes of this part, an 
‘eligible institution’ means an institution of higher edu-
cation that— 
‘‘(1) is an eligible institution under section 
502(a)(2); and 
‘‘(2) offers a postbaccalaureate certificate or de-
gree granting program. 
‘‘SEC. 513. AUTHORIZED ACTIVITIES. 
‘‘Grants awarded under this part shall be used for one 
or more of the following activities: 
‘‘(1) Purchase, rental, or lease of scientific or 
laboratory equipment for educational purposes, in-
cluding instructional and research purposes. 
‘‘(2) Construction, maintenance, renovation, and 
improvement of classrooms, libraries, laboratories,
340 
and other instructional facilities, including purchase 
or rental of telecommunications technology equipment 
or services. 
‘‘(3) Purchase of library books, periodicals, tech-
nical and other scientific journals, microfilm, micro-
fiche, and other educational materials, including tele-
communications program materials. 
‘‘(4) Support for needy postbaccalaureate stu-
dents including outreach, academic support services, 
mentoring, scholarships, fellowships, and other finan-
cial assistance to permit the enrollment of such stu-
dents in postbaccalaureate certificate and degree 
granting programs. 
‘‘(5) Support of faculty exchanges, faculty devel-
opment, faculty research, curriculum development, 
and academic instruction. 
‘‘(6) Creating or improving facilities for Internet 
or other distance learning academic instruction capa-
bilities, including purchase or rental of telecommuni-
cations technology equipment or services. 
‘‘(7) Collaboration with other institutions of 
higher education to expand postbaccalaureate certifi-
cate and degree offerings. 
‘‘(8) Other activities proposed in the application 
submitted pursuant to section 514 that—
341 
‘‘(A) contribute to carrying out the purposes 
of this part; and 
‘‘(B) are approved by the Secretary as part 
of the review and acceptance of such application. 
‘‘SEC. 514. APPLICATION AND DURATION. 
‘‘(a) APPLICATION.—Any eligible institution may 
apply for a grant under this part by submitting an appli-
cation to the Secretary at such time and in such manner 
as determined by the Secretary. Such application shall 
demonstrate how the grant funds will be used to improve 
postbaccalaureate education opportunities in programs and 
professions in which Hispanic Americans are underrep-
resented. 
‘‘(b) DURATION.—Grants under this part shall be 
awarded for a period not to exceed 5 years. 
‘‘(c) LIMITATION.—The Secretary shall not award 
more than one grant under this part in any fiscal year 
to any Hispanic-serving institution.’’. 
(b) COOPERATIVE ARRANGEMENTS.—Section 524(a) 
(as redesignated by subsection (a)(2)) (20 U.S.C. 1103c(a)) 
is amended by inserting ‘‘and section 513’’ after ‘‘section 
503’’.
342 
SEC. 505. AUTHORIZATION OF APPROPRIATIONS. 
Subsection (a) of section 528 (as redesignated by sec-
tion 504(a)(2) of this Act) (20 U.S.C. 1103g) is amended 
to read as follows: 
‘‘(a) AUTHORIZATIONS.— 
‘‘(1) PART A.—There are authorized to be appro-
priated to carry out part A and part C of this title 
$96,000,000 for fiscal year 2006 and such sums as 
may be necessary for each of the 5 succeeding fiscal 
years. 
‘‘(2) PART B.—There are authorized to be appro-
priated to carry out part B of this title $59,000,000 
for fiscal year 2006 and such sums as may be nec-
essary for each of the 5 succeeding fiscal years.’’. 
TITLE VI—TITLE VI 
AMENDMENTS 
SEC. 601. INTERNATIONAL AND FOREIGN LANGUAGE STUD-
IES. 
(a) FINDINGS
AND
PURPOSES.—Section 601 (20 
U.S.C. 1121) is amended— 
(1) in subsection (a)— 
(A) by striking ‘‘post-Cold War’’ in para-
graph (3); 
(B) by redesignating paragraphs (4) and 
(5) as paragraphs (5) and (6), respectively; and
343 
(C) by inserting after paragraph (3) the fol-
lowing new paragraph: 
‘‘(4) The events and aftermath of September 11, 
2001, have underscored the need for the Nation to 
strengthen and enhance American knowledge of inter-
national relations, world regions, and foreign lan-
guages. Homeland security and effective United 
States engagement abroad depend upon an increased 
number of Americans who have received such training 
and are willing to serve their Nation.’’; 
(2) in subsection (b)(1)— 
(A) by striking ‘‘; and’’ at the end of sub-
paragraph (D) and inserting ‘‘, including 
through linkages overseas with institutions of 
higher education and relevant organizations that 
contribute to the educational programs assisted 
under this part;’’; 
(B) by inserting ‘‘and’’ after the semicolon 
at the end of subparagraph (E); 
(C) by inserting after such subparagraph 
(E) the following new subparagraph: 
‘‘(F) to assist the national effort to educate and 
train citizens to participate in the efforts of homeland 
security;’’; and 
(3) in subsection (b)(3)—
344 
(A) by inserting ‘‘reinforce and’’ before ‘‘co-
ordinate’’; and 
(B) by inserting ‘‘, and international busi-
ness and trade competitiveness’’ before the pe-
riod. 
(b) GRADUATE AND UNDERGRADUATE LANGUAGE AND 
AREA CENTERS
AND PROGRAMS.—Section 602(a) (20 
U.S.C. 1122(a)) is amended— 
(1) in paragraph (1), by striking subparagraph 
(A) and inserting the following: 
‘‘(A) IN GENERAL.—The Secretary is au-
thorized to make grants to institutions of higher 
education or consortia of such institutions for the 
purpose of establishing, strengthening, and oper-
ating— 
‘‘(i) comprehensive foreign language 
and area or international studies centers 
and programs; and 
‘‘(ii) a diverse network of under-
graduate foreign language and area or 
international studies centers and pro-
grams.’’; 
(2) in paragraph (2)— 
(A) by striking ‘‘and’’ at the end of sub-
paragraph (G);
345 
(B) by striking the period at the end of sub-
paragraph (H) and inserting a semicolon; and 
(C) by inserting after subparagraph (H) the 
following new subparagraphs: 
‘‘(I) supporting instructors of the less com-
monly taught languages; 
‘‘(J) widely disseminating materials devel-
oped by the center or program to local edu-
cational agencies and public and private elemen-
tary and secondary education schools, and insti-
tutions of higher education, presented from di-
verse perspectives and reflective of a wide range 
of views on the subject matter, except that no 
more than 50 percent of funds awarded to an in-
stitution of higher education or consortia of such 
institutions for purposes under this title may be 
associated with the costs of dissemination; and 
‘‘(K) projects that support in students an 
understanding of science and technology in co-
ordination with foreign language proficiency.’’; 
and 
(3) in paragraph (4)— 
(A) by amending subparagraph (B) to read 
as follows:
346 
‘‘(B) Partnerships or programs of linkage 
and outreach with 2-year and 4-year colleges 
and universities, including colleges of education 
and 
teacher 
professional 
development 
pro-
grams.’’; 
(B) in subparagraph (C), by striking ‘‘Pro-
grams of linkage or outreach’’ and inserting 
‘‘Partnerships or programs of linkage and out-
reach’’; 
(C) in subparagraph (E)— 
(i) by striking ‘‘foreign area’’ and in-
serting ‘‘area studies’’; 
(ii) by striking ‘‘of linkage and out-
reach’’; and 
(iii) by striking ‘‘(C), and (D)’’ and 
inserting ‘‘(D), and (E)’’; 
(D) by redesignating subparagraphs (C), 
(D), and (E) as subparagraphs (D), (E), and 
(F), respectively; and 
(E) by inserting after subparagraph (B) the 
following new subparagraph: 
‘‘(C) Partnerships with local educational 
agencies and public and private elementary and 
secondary education schools that are designed to 
increase student academic achievement in foreign
347 
language and knowledge of world regions, and to 
facilitate the wide dissemination of materials re-
lated to area studies, foreign languages, and 
international studies that are reflective of a wide 
range of views on the subject matter.’’. 
(c) LANGUAGE RESOURCE CENTERS.—Section 603(c) 
(20 U.S.C. 1123(c)) is amended by inserting ‘‘reflect the 
purposes of this part and’’ after ‘‘shall’’. 
(d) UNDERGRADUATE INTERNATIONAL STUDIES AND 
FOREIGN LANGUAGE PROGRAMS.—Section 604 (20 U.S.C. 
1124) is amended— 
(1) in subsection (a)(1), by striking ‘‘combina-
tions’’ each place it appears and inserting ‘‘con-
sortia’’; 
(2) in subsection (a)(2)— 
(A) in subparagraph (B)(ii), by striking 
‘‘teacher training’’ and inserting ‘‘teacher profes-
sional development’’; 
(B) by redesignating subparagraphs (I) 
through (M) as subparagraphs (J) through (N), 
respectively; 
(C) by inserting after subparagraph (H) the 
following new subparagraph: 
‘‘(I) the provision of grants for educational 
programs abroad that are closely linked to the
348 
program’s overall goals and have the purpose of 
promoting foreign language fluency and knowl-
edge of world regions, except that not more than 
10 percent of a grant recipient’s funds may be 
used for this purpose;’’; and 
(D) in subparagraph (M)(ii) (as redesig-
nated by subparagraph (B) of this paragraph), 
by striking ‘‘elementary and secondary education 
institutions’’ and inserting ‘‘local educational 
agencies and public and private elementary and 
secondary education schools’’; 
(3) in subsection (a)(4)(B), by inserting ‘‘that 
demonstrates a need for a waiver or reduction’’ before 
the period at the end; 
(4) in subsection (a)(6), by inserting ‘‘reflect the 
purposes of this part and’’ after ‘‘shall’’; 
(5) in subsection (a)(8), by striking ‘‘may’’ and 
inserting ‘‘shall’’; and 
(6) by striking subsection (c). 
(e) RESEARCH; STUDIES; ANNUAL REPORT.—Section 
605(a) (20 U.S.C. 1125(a)) is amended by inserting before 
the period at the end of the first sentence the following: ‘‘, 
including the systematic collection, analysis, and dissemi-
nation of data’’.