IB 
Union Calendar No. 129 
111TH CONGRESS 
1ST SESSION H. R. 3221 
[Report No. 111–232] 
To amend the Higher Education Act of 1965, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 15, 2009 
Mr. GEORGE MILLER of California (for himself, Mr. HINOJOSA, Mr. BISHOP 
of New York, Mr. PAYNE, Mr. HOLT, Mr. COURTNEY, Ms. HIRONO, Mr. 
ANDREWS, Mr. KILDEE, Ms. SHEA-PORTER, Mr. GRIJALVA, Mr. 
LOEBSACK, Ms. FUDGE, Mr. SCOTT of Virginia, Ms. ESHOO, Mr. 
TIERNEY, Mr. SABLAN, Mr. WU, Mr. KUCINICH, Mr. HARE, Mr. SESTAK, 
Ms. WOOLSEY, and Mrs. DAVIS of California) introduced the following 
bill; which was referred to the Committee on Education and Labor 
JULY 27, 2009 
Additional sponsors: Ms. CLARKE, Mr. PIERLUISI, Mr. BERMAN, Mr. 
BLUMENAUER, Ms. BORDALLO, Mr. TONKO, Mrs. MCCARTHY of New 
York, Ms. CASTOR of Florida, Mr. HONDA, Ms. CHU, Mr. HALL of New 
York, Mr. DINGELL, Mr. LEVIN, Mr. PASCRELL, Mr. WEXLER, Mr. 
ABERCROMBIE, Mr. SIRES, Mr. TOWNS, and Mr. SHERMAN 
JULY 27, 2009 
Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed 
[Strike out all after the enacting clause and insert the part printed in italic] 
[For text of introduced bill, see copy of bill as introduced on July 15, 2009] 
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A BILL 
To amend the Higher Education Act of 1965, and for other 
purposes. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Student Aid and Fiscal 
Responsibility Act of 2009’’. 
SEC. 2. TABLE OF CONTENTS. 
The table of contents is as follows: 
Sec. 1. Short title. 
Sec. 2. Table of contents. 
Sec. 3. References. 
TITLE I—INVESTING IN STUDENTS AND FAMILIES 
Subtitle A—Increasing College Access and Completion 
Sec. 101. Federal Pell Grants. 
Sec. 102. College Access and Completion Innovation Fund. 
Sec. 103. Investment in historically Black colleges and universities and other mi-
nority-serving institutions. 
Sec. 104. Investment in cooperative education. 
Sec. 105. Loan forgiveness for servicemembers activated for duty. 
Sec. 106. Veterans Educational Equity Supplemental Grant Program. 
Subtitle B—Student Financial Aid Form Simplification 
Sec. 121. General effective date. 
Sec. 122. Treatment of assets in need analysis. 
Sec. 123. Changes to total income; aid eligibility. 
TITLE II—STUDENT LOAN REFORM 
Subtitle A—Stafford Loan Reform 
Sec. 201. Federal Family Education Loan appropriations. 
Sec. 202. Scope and duration of Federal loan insurance program. 
Sec. 203. Applicable interest rates. 
Sec. 204. Federal payments to reduce student interest costs. 
Sec. 205. Federal PLUS Loans. 
Sec. 206. Federal Consolidation Loan. 
Sec. 207. Unsubsidized Stafford loans for middle-income borrowers. 
Sec. 208. Loan repayment for civil legal assistance attorneys. 
Sec. 209. Special allowances. 
Sec. 210. Revised special allowance calculation. 
Sec. 211. Origination of Direct Loans at institutions located outside the United 
States. 
Sec. 212. Agreements with institutions. 
Sec. 213. Terms and conditions of loans. 
Sec. 214. Contracts. 
Sec. 215. Interest rates. 
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Subtitle B—Perkins Loan Reform 
Sec. 221. Federal Direct Perkins Loans terms and conditions. 
Sec. 222. Authorization of appropriations. 
Sec. 223. Allocation of funds. 
Sec. 224. Federal Direct Perkins Loan allocation. 
Sec. 225. Agreements with institutions of higher education. 
Sec. 226. Student loan information by eligible institutions. 
Sec. 227. Terms of loans. 
Sec. 228. Distribution of assets from student loan funds. 
Sec. 229. Implementation of non-title IV revenue requirement. 
Sec. 230. Administrative expenses. 
TITLE III—MODERNIZATION, RENOVATION, AND REPAIR 
Subtitle A—Elementary and Secondary Education 
Sec. 301. Definitions. 
CHAPTER 1—GRANTS FOR MODERNIZATION, RENOVATION, OR REPAIR OF 
PUBLIC SCHOOL FACILITIES 
Sec. 311. Purpose. 
Sec. 312. Allocation of funds. 
Sec. 313. Allowable uses of funds. 
Sec. 314. Priority projects. 
CHAPTER 2—SUPPLEMENTAL GRANTS FOR LOUISIANA, MISSISSIPPI, AND 
ALABAMA 
Sec. 321. Purpose. 
Sec. 322. Allocation to local educational agencies. 
Sec. 323. Allowable uses of funds. 
CHAPTER 3—GENERAL PROVISIONS 
Sec. 331. Impermissible uses of funds. 
Sec. 332. Supplement, not supplant. 
Sec. 333. Prohibition regarding State aid. 
Sec. 334. Maintenance of effort. 
Sec. 335. Special rule on contracting. 
Sec. 336. Use of American iron, steel, and manufactured goods. 
Sec. 337. Labor standards. 
Sec. 338. Charter schools. 
Sec. 339. Green schools. 
Sec. 340. Reporting. 
Sec. 341. Special rules. 
Sec. 342. Promotion of employment experiences. 
Sec. 343. Advisory Council on Green, High-Performing Public School Facilities. 
Sec. 344. Education regarding projects. 
Sec. 345. Availability of funds. 
Subtitle B—Higher Education 
Sec. 351. Federal assistance for community college modernization and construc-
tion. 
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TITLE IV—EARLY LEARNING CHALLENGE FUND 
Sec. 401. Purpose. 
Sec. 402. Programs authorized. 
Sec. 403. Quality pathways grants. 
Sec. 404. Development grants. 
Sec. 405. Research and evaluation. 
Sec. 406. Reporting requirements. 
Sec. 407. Construction. 
Sec. 408. Definitions. 
Sec. 409. Availability of funds. 
TITLE V—AMERICAN GRADUATION INITIATIVE 
Sec. 501. Authorization and appropriation. 
Sec. 502. Definitions; grant priority. 
Sec. 503. Grants to eligible entities for community college reform. 
Sec. 504. Grants to eligible States for community college programs. 
Sec. 505. National activities. 
SEC. 3. REFERENCES. 
Except as otherwise expressly provided, whenever in 
this Act an amendment or repeal is expressed in terms of 
an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or 
other provision of the Higher Education Act of 1965 (20 
U.S.C. 1001 et seq.). 
TITLE I—INVESTING IN 
STUDENTS AND FAMILIES 
Subtitle A—Increasing College 
Access and Completion 
SEC. 101. FEDERAL PELL GRANTS. 
(a) AMOUNT OF GRANTS.—Section 401(b) (20 U.S.C. 
1070a(b)) is amended— 
(1) by amending paragraph (2)(A) to read as 
follows: 
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‘‘(A) The amount of the Federal Pell Grant 
for a student eligible under this part shall be— 
‘‘(i) the maximum Federal Pell Grant, 
as specified in the last enacted appropria-
tion Act applicable to that award year, plus 
‘‘(ii) the amount of the increase cal-
culated under paragraph (8)(B) for that 
year, less 
‘‘(iii) an amount equal to the amount 
determined to be the expected family con-
tribution with respect to that student for 
that year.’’; and 
(2) by amending paragraph (8), as amended by 
the Higher Education Opportunity Act (Public Law 
110–315), to read as follows: 
‘‘(8) ADDITIONAL FUNDS.— 
‘‘(A) IN GENERAL.—There are authorized to 
be appropriated, and there are appropriated, to 
carry out subparagraph (B) of this paragraph 
(in addition to any other amounts appropriated 
to carry out this section and out of any money 
in the Treasury not otherwise appropriated) the 
following amounts— 
‘‘(i) $2,030,000,000 for fiscal year 
2008; 
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‘‘(ii) $2,733,000,000 for fiscal year 
2009; and 
‘‘(iii) such sums as may be necessary 
for fiscal year 2010 and each subsequent fis-
cal year to provide the amount of increase 
of the maximum Federal Pell Grant re-
quired by clauses (ii) and (iii) of subpara-
graph (B). 
‘‘(B) 
INCREASE
IN
FEDERAL
PELL 
GRANTS.—The amounts made available pursuant 
to subparagraph (A) shall be used to increase the 
amount of the maximum Federal Pell Grant for 
which a student shall be eligible during an 
award year, as specified in the last enacted ap-
propriation Act applicable to that award year, 
by— 
‘‘(i) $490 for each of the award years 
2008–2009 and 2009–2010; 
‘‘(ii) $690 for the award year 2010– 
2011; and 
‘‘(iii) the amount determined under 
subparagraph (C) for each succeeding 
award year. 
‘‘(C) INFLATION-ADJUSTED AMOUNTS.— 
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‘‘(i) 
AWARD
YEAR
2011–2012.—For 
award year 2011–2012, the amount deter-
mined under this subparagraph for pur-
poses of subparagraph (B)(iii) shall be 
equal to— 
‘‘(I) $5,550 or the total maximum 
Federal Pell Grant for the preceding 
award year (as determined under 
clause (iv)(II)), whichever is greater, 
increased by a percentage equal to the 
annual 
adjustment 
percentage 
for 
award year 2011–2012; reduced by 
‘‘(II) $4,860 or the maximum 
Federal Pell Grant for which a student 
was eligible for the preceding award 
year, as specified in the last enacted 
appropriation Act applicable to that 
year, whichever is greater; and 
‘‘(III) rounded to the nearest $5. 
‘‘(ii) SUBSEQUENT
AWARD
YEARS.— 
For award year 2012–2013 and each of the 
subsequent award years, the amount deter-
mined under this subparagraph for pur-
poses of subparagraph (B)(iii) shall be 
equal to— 
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‘‘(iv) DEFINITIONS.—For purposes of 
this subparagraph— 
‘‘(I) the term ‘annual adjustment 
percentage’ as it applies to an award 
year is equal to the sum of— 
‘‘(aa) the estimated percent-
age change in the Consumer Price 
Index (as determined by the Sec-
retary, using the definition in sec-
tion 478(f)) for the most recent 
calendar year ending prior to the 
beginning of that award year; and 
‘‘(bb) one percentage point; 
and 
‘‘(II) the term ‘total maximum 
Federal Pell Grant’ as it applies to a 
preceding award year is equal to the 
sum of— 
‘‘(aa) the maximum Federal 
Pell Grant for which a student is 
eligible during an award year, as 
specified in the last enacted ap-
propriation Act applicable to that 
preceding award year; and 
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‘‘(bb) the amount of the in-
crease in the maximum Federal 
Pell Grant required by this para-
graph for that preceding award 
year. 
‘‘(D) PROGRAM REQUIREMENTS AND OPER-
ATIONS
OTHERWISE
UNAFFECTED.—Except as 
provided in subparagraphs (B) and (C), nothing 
in this paragraph shall be construed to alter the 
requirements and operations of the Federal Pell 
Grant Program as authorized under this section, 
or to authorize the imposition of additional re-
quirements or operations for the determination 
and allocation of Federal Pell Grants under this 
section. 
‘‘(E) 
AVAILABILITY
OF
FUNDS.—The 
amounts made available by subparagraph (A) 
for any fiscal year shall be available beginning 
on October 1 of that fiscal year, and shall re-
main available through September 30 of the suc-
ceeding fiscal year.’’. 
(b) CONFORMING AMENDMENTS.—Title IV (20 U.S.C. 
1070 et seq.) is further amended— 
(1) in section 401(b)(6), as amended by the 
Higher Education Opportunity Act (Public Law 110– 
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315), by striking ‘‘the grant level specified in the ap-
propriate Appropriation Act for this subpart for such 
year’’ and inserting ‘‘the Federal Pell Grant amount, 
determined under paragraph (2)(A), for which a stu-
dent is eligible during such award year’’; 
(2) in section 402D(d)(1), by striking ‘‘exceed the 
maximum appropriated Pell Grant’’ and inserting 
‘‘exceed the Federal Pell Grant amount, determined 
under section 401(b)(2)(A), for which a student is eli-
gible’’; 
(3) in section 435(a)(5)(A)(i)(I), by striking 
‘‘one-half the maximum Federal Pell Grant award for 
which a student would be eligible’’ and inserting 
‘‘one-half the Federal Pell Grant amount, determined 
under section 401(b)(2)(A), for which a student would 
be eligible’’; 
(4) in section 483(e)(3)(ii), by striking ‘‘based on 
the maximum Federal Pell Grant award at the time 
of application’’ and inserting ‘‘based on the Federal 
Pell 
Grant 
amount, 
determined 
under 
section 
401(b)(2)(A), for which a student is eligible at the 
time of application’’; 
(5) in section 485E(b)(1)(A), by striking ‘‘of 
such students’ potential eligibility for a maximum 
Federal Pell Grant under subpart 1 of part A’’ and 
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inserting ‘‘of such students’ potential eligibility for 
the Federal Pell Grant amount, determined under sec-
tion 401(b)(2)(A), for which the student would be eli-
gible’’; and 
(6) in section 894(f)(2)(C)(ii)(I), by striking 
‘‘the maximum Federal Pell Grant for each award 
year’’ and inserting ‘‘the Federal Pell Grant amount, 
determined under section 401(b)(2)(A), for which a 
student may be eligible for each award year’’. 
(c) EFFECTIVE DATE.—The amendments made by sub-
sections (a) and (b) of this section shall take effect on July 
1, 2010. 
SEC. 102. COLLEGE ACCESS AND COMPLETION INNOVATION 
FUND. 
(a) HEADER.—Part E of title VII (20 U.S.C. 1141 et 
seq.) is amended by striking the header of such part and 
inserting the following: 
‘‘PART E—COLLEGE ACCESS AND COMPLETION 
INNOVATION FUND’’. 
(b) PURPOSE.—Part E of title VII (20 U.S.C. 1141 
et seq.) is further amended by inserting before section 781 
the following: 
‘‘SEC. 780. PURPOSES. 
‘‘The purposes of this part are— 
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‘‘(1) to promote innovation in postsecondary 
education practices and policies by institutions of 
higher education, States, and nonprofit organizations 
to improve student success, completion, and post-com-
pletion employment, particularly for students from 
groups that are underrepresented in postsecondary 
education; and 
‘‘(2) to assist States in developing longitudinal 
data systems, common metrics, and reporting systems 
to enhance the quality and availability of informa-
tion about student success, completion, and post-com-
pletion employment.’’. 
(c) AUTHORIZATION
AND APPROPRIATION.—Section 
781(a) (20 U.S.C. 1141(a)) is amended to read as follows: 
‘‘(a) AUTHORIZATION AND APPROPRIATION.— 
‘‘(1) IN GENERAL.—There are authorized to be 
appropriated, and there are appropriated, to carry 
out this part (in addition to any other amounts ap-
propriated to carry out this part and out of any 
money in the Treasury not otherwise appropriated), 
$600,000,000 for each of the fiscal years 2010 through 
2014. 
‘‘(2) ALLOCATIONS.—Of the amount appro-
priated for any fiscal year under paragraph (1)— 
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‘‘(A) 25 percent shall be made available to 
carry out section 781; 
‘‘(B) 50 percent shall be made available to 
carry out section 782; 
‘‘(C) 23 percent shall be made available to 
carry out section 783; and 
‘‘(D) 2 percent shall be made available to 
carry out section 784.’’. 
(d) STATE GRANTS AND GRANTS TO ELIGIBLE ENTI-
TIES.—Part E of title VII (20 U.S.C. 1141 et seq.) is fur-
ther amended by adding at the end the following: 
‘‘SEC. 782. STATE INNOVATION COMPLETION GRANTS. 
‘‘(a) PROGRAM AUTHORIZATION.—From the amount 
appropriated under section 781(a)(2)(B) to carry out this 
section, the Secretary shall award grants to States on a 
competitive basis to promote student persistence in, and 
completion of, postsecondary education. 
‘‘(b) FEDERAL SHARE; NON-FEDERAL SHARE.— 
‘‘(1) FEDERAL SHARE.—The amount of the Fed-
eral share under this section for a fiscal year shall be 
equal to 2⁄3 of the costs of the activities and services 
described in subsection (d)(1) that are carried out 
under the grant. 
‘‘(2) NON-FEDERAL SHARE.—The amount of the 
non-Federal share under this section shall be equal to 
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1⁄3 of the costs of the activities and services described 
in subsection (d)(1). The non-Federal share may be in 
cash or in kind, and may be provided from State re-
sources, contributions from private organizations, or 
both. 
‘‘(3) SUPPLEMENT, NOT SUPPLANT.—The Federal 
and non-Federal shares required by this paragraph 
shall be used to supplement, and not supplant, State 
and private resources that would otherwise be ex-
pended to carry out activities and services to promote 
student persistence in and completion of postsec-
ondary education. 
‘‘(c) APPLICATION AND SELECTION.— 
‘‘(1) APPLICATION
REQUIREMENTS.—For each 
fiscal year for which a State desires to receive a grant 
under this section, the State agency with jurisdiction 
over higher education, or another agency designated 
by the Governor or chief executive of the State to ad-
minister the grant program under this section, shall 
submit an application to the Secretary at such time, 
in such manner, and containing such information as 
the Secretary may require. Such application shall in-
clude— 
‘‘(A) a description of the State’s capacity to 
administer the grant under this section; 
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‘‘(B) a description of the State’s plans for 
using the grant funds for activities described in 
subsection (d)(1), including plans for how the 
State will make special efforts to provide benefits 
to students in the State who are from groups 
that are underrepresented in postsecondary edu-
cation; 
‘‘(C) a description of how the State will 
provide for the non-Federal share from State re-
sources, private contributions, or both; 
‘‘(D) a description of— 
‘‘(i) the administrative system that the 
State has in place to administer the activi-
ties and services described in subsection 
(d)(1); or 
‘‘(ii) the plan to develop such adminis-
trative system; 
‘‘(E) a description of the data system the 
State has or will have in place to measure the 
performance and progress toward the State’s 
goals included in the Access and Completion 
Plan submitted, or that will be submitted, under 
paragraph (2)(A); and 
‘‘(F) the assurances under paragraph (2). 
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‘‘(2) STATE
ASSURANCES.—The assurances re-
quired in paragraph (1)(F) shall include an assur-
ance of each of the following: 
‘‘(A) That the State will submit, not later 
than July 1, 2011, an Access and Completion 
Plan to increase the State’s rate of persistence in 
and completion of postsecondary education. Such 
plan shall include— 
‘‘(i) the State’s annual and long-term 
quantifiable goals with respect to— 
‘‘(I) the rates of postsecondary en-
rollment, persistence, and completion, 
disaggregated by income, race, eth-
nicity, sex, disability, and age of stu-
dents; 
‘‘(II) closing gaps in enrollment, 
persistence, and completion rates for 
students from groups that are under-
represented 
in 
postsecondary 
edu-
cation; 
‘‘(III) targeting education and 
training programs to address labor 
market needs in the State, as such 
needs are determined by the State, or 
the State in coordination with the 
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State public employment service, the 
State workforce investment board, or 
industry or sector partnerships in the 
State; and 
‘‘(IV) improving coordination be-
tween two-year and four-year institu-
tions of higher education in the State, 
including supporting comprehensive 
articulation agreements between such 
institutions; and 
‘‘(ii) the State’s plan to develop an 
interoperable statewide longitudinal data 
system that— 
‘‘(I) can be linked to other data 
systems, as applicable, including ele-
mentary and secondary education and 
workforce data systems; 
‘‘(II) 
will 
collect, 
maintain, 
disaggregate (by institution, income, 
race, ethnicity, sex, disability, and age 
of students), and analyze postsec-
ondary education and workforce infor-
mation, including— 
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‘‘(aa) 
postsecondary 
edu-
cation 
enrollment, 
persistence, 
and completion information; 
‘‘(bb) 
post-completion 
em-
ployment outcomes of students 
who enrolled in postsecondary 
programs and training programs 
offered by eligible training pro-
viders under the Workforce Invest-
ment Act of 1998 (29 U.S.C. 2801 
et seq.); 
‘‘(cc) 
postsecondary 
edu-
cation and employment outcomes 
of students who move out of the 
State; and 
‘‘(dd) postsecondary instruc-
tional workforce information; and 
‘‘(III) makes the information de-
scribed in subclause (I) available to the 
general public in a manner that is 
transparent and user-friendly. 
‘‘(B) That the State has a comprehensive 
planning or policy formulation process with re-
spect to increasing postsecondary enrollment, 
persistence, and completion that— 
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‘‘(i) encourages coordination between 
the State administration of grants under 
this section and similar State programs; 
‘‘(ii) encourages State policies that are 
designed to improve rates of enrollment and 
persistence in, and completion of, postsec-
ondary education for all categories of insti-
tutions of higher education described in sec-
tion 132(d) in the State; 
‘‘(iii) considers the postsecondary edu-
cation needs of students from groups that 
are underrepresented in postsecondary edu-
cation; 
‘‘(iv) considers the resources of public 
and private institutions of higher education, 
organizations, and agencies within the 
State that are capable of providing access to 
postsecondary education opportunities with-
in the State; and 
‘‘(v) provides for direct, equitable, and 
active participation in the comprehensive 
planning or policy formulation process or 
processes, through membership on State 
planning commissions, State advisory coun-
cils, or other State entities established by 
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the State and consistent with State law, by 
representatives of— 
‘‘(I) institutions of higher edu-
cation, including at least one member 
from a junior or community college (as 
defined in section 312(f)); 
‘‘(II) students; 
‘‘(III) other providers of postsec-
ondary education services (including 
organizations providing access to such 
services); 
‘‘(IV) the general public in the 
State; and 
‘‘(V) postsecondary education fac-
ulty members, including at least one 
faculty member whose primary respon-
sibilities are teaching and scholarship. 
‘‘(C) That the State will incorporate poli-
cies and practices that, through the activities 
funded under this section, are determined to be 
effective in improving rates of postsecondary 
education enrollment, persistence, and comple-
tion into the future postsecondary education 
policies and practices of the State to ensure that 
the benefits achieved through the activities fund-
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ed under this section continue beyond the period 
of the grant. 
‘‘(D) That the State will participate in the 
evaluation required under section 784. 
‘‘(3) SUBGRANTS
TO
NONPROFIT
ORGANIZA-
TIONS.—A State receiving a payment under this sec-
tion may elect to make a subgrant to one or more 
nonprofit organizations in the State, including agen-
cies with agreements with the Secretary under sub-
sections (b) and (c) of section 428 on the date of the 
enactment of the Student Aid and Fiscal Responsi-
bility Act of 2009, or a partnership of such organiza-
tions, to carry out activities and services described in 
subsection (d)(1), if the nonprofit organization or 
partnership— 
‘‘(A) was in existence on the day before the 
date of the enactment of the Student Aid and 
Fiscal Responsibility Act of 2009; and 
‘‘(B) as of such day, was participating in 
activities and services related to promoting per-
sistence in, and completion of, postsecondary 
education, such as the activities and services de-
scribed in subsection (d)(1). 
‘‘(4) PRIORITY.—In awarding grants under this 
section, the Secretary shall give priority to States 
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that enter into a partnership with one of the fol-
lowing entities to carry out the activities and services 
described in subsection (d)(1): 
‘‘(A) A philanthropic organization, as such 
term is defined in section 781(i)(1). 
‘‘(B) An agency with an agreement with the 
Secretary under subsections (b) and (c) of section 
428 on the date of the enactment of Student Aid 
and Fiscal Responsibility Act of 2009. 
‘‘(d) USES OF FUNDS.— 
‘‘(1) AUTHORIZED USES.—A State receiving a 
grant under this section shall use the grant funds 
to— 
‘‘(A) provide programs in such State that 
increase persistence in, and completion of, post-
secondary education, which may include— 
‘‘(i) assisting institutions of higher 
education in providing financial literacy, 
education, and counseling to enrolled stu-
dents; 
‘‘(ii) assisting students enrolled in an 
institution of higher education to reduce the 
amount of loan debt incurred by such stu-
dents; 
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‘‘(iii) providing grants to students de-
scribed in section 415A(a)(1), in accordance 
with the terms of that section; and 
‘‘(iv) carrying out the activities de-
scribed in section 415E(a); and 
‘‘(B) support the development and imple-
mentation of a statewide longitudinal data sys-
tem, as described in subsection (c)(2)(A)(ii). 
‘‘(2) PROHIBITED USES.—Funds made available 
under this section shall not be used to promote any 
lender’s loans. 
‘‘(3) RESTRICTIONS
ON
USE
OF
FUNDS.—A 
State— 
‘‘(A) shall use not less than 1⁄3 of the sum 
of the Federal and non-Federal share used for 
paragraph (1)(A) on activities that benefit stu-
dents enrolled in junior or community colleges 
(as defined in section 312(f)), two-year public 
institutions, or two-year programs of instruction 
at four-year public institutions; 
‘‘(B) may use not more than 10 percent of 
the sum of the Federal and non-Federal share 
under this section for activities described in 
paragraph (1)(B); and 
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‘‘(C) may use not more than 6 percent of 
the sum of the Federal and non-Federal share 
under this section for administrative purposes 
relating to the grant under this section. 
‘‘(e) ANNUAL REPORT.—Each State receiving a grant 
under this section shall submit to the Secretary an annual 
report on— 
‘‘(1) the activities and services described in sub-
section (d)(1) that are carried out with such grant; 
‘‘(2) the effectiveness of such activities and serv-
ices in increasing postsecondary persistence and com-
pletion, as determined by measurable progress in 
achieving the State’s goals for persistence and comple-
tion described in the Access and Completion Plan sub-
mitted by the State under subsection (c)(2)(A), if such 
plan has been submitted; and 
‘‘(3) any other information or assessments the 
Secretary may require. 
‘‘(f) DEFINITIONS.—In this section: 
‘‘(1) INDUSTRY OR SECTOR PARTNERSHIP.—The 
term ‘industry or sector partnership’ means a work-
force collaborative that organizes key stakeholders in 
a targeted industry cluster into a working group that 
focuses on the human capital needs of a targeted in-
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dustry cluster and that includes, at the appropriate 
stage of development of the partnership— 
‘‘(A) representatives of multiple firms or 
employers (including workers) in a targeted in-
dustry cluster, including small- and medium- 
sized employers when practicable; 
‘‘(B) 1 or more representatives of State 
labor organizations, central labor coalitions, or 
other labor organizations; 
‘‘(C) 1 or more representatives of local 
workforce investment boards; 
‘‘(D) 1 or more representatives of postsec-
ondary educational institutions or other training 
providers; and 
‘‘(E) 1 or more representatives of State 
workforce agencies or other entities providing 
employment services. 
‘‘(2) STATE PUBLIC EMPLOYMENT SERVICE.—The 
term ‘State public employment service’ has the mean-
ing given such term in section 502(a)(9) of the Stu-
dent Aid and Fiscal Responsibility Act of 2009. 
‘‘(3) STATE
WORKFORCE
INVESTMENT
BOARD; 
LOCAL WORKFORCE INVESTMENT BOARD.—The terms 
‘State workforce investment board’ and ‘local work-
force investment board’ have the meanings given such 
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terms in section 502(a)(10) of the Student Aid and 
Fiscal Responsibility Act of 2009. 
‘‘SEC. 783. INNOVATION IN COLLEGE ACCESS AND COMPLE-
TION NATIONAL ACTIVITIES. 
‘‘(a) PROGRAMS AUTHORIZED.—From the amount ap-
propriated under section 781(a)(2)(C) to carry out this sec-
tion, the Secretary shall award grants, on a competitive 
basis, to eligible entities in accordance with this section to 
conduct innovative programs that advance knowledge 
about, and adoption of, policies and practices that increase 
the number of individuals with postsecondary degrees or 
certificates. 
‘‘(b) ELIGIBLE ENTITIES.—The Secretary is author-
ized to award grants under subsection (a) to— 
‘‘(1) institutions of higher education; 
‘‘(2) States; 
‘‘(3) nonprofit organizations with demonstrated 
experience in the operation of programs to increase 
postsecondary completion; 
‘‘(4) philanthropic organizations (as such term 
is defined in section 781(i)(1)); 
‘‘(5) entities receiving a grant under chapter 1 
of subpart 2 of part A of title IV; and 
‘‘(6) consortia of any of the entities described in 
paragraphs (1) through (5). 
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‘‘(c) INNOVATION GRANTS.— 
‘‘(1) MINIMUM AWARD.—A grant awarded under 
subsection (a) shall be not less than $1,000,000. 
‘‘(2) GRANTS USES.—The Secretary’s authority 
to award grants under subsection (a) includes— 
‘‘(A) the authority to award to an eligible 
entity a grant in an amount equal to all or part 
of the amount of funds received by such entity 
from philanthropic organizations (as such term 
is defined in section 781(i)(1)) to conduct inno-
vative programs that advance knowledge about, 
and adoption of, policies and practices that in-
crease the number of individuals with postsec-
ondary degrees or certificates; and 
‘‘(B) the authority to award an eligible en-
tity a grant to develop 2-year programs that 
provide supplemental grant or loan benefits to 
students that— 
‘‘(i) are designed to improve student 
outcomes, 
including 
degree 
completion, 
graduation without student loan debt, and 
post-completion employment; 
‘‘(ii) are in addition to the student fi-
nancial aid available under title IV of this 
Act; and 
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‘‘(iii) do not result in the reduction of 
the amount of that aid or any other student 
financial aid for which a student is other-
wise eligible under Federal law. 
‘‘(3) APPLICATION.—To be eligible to receive a 
grant under subsection (a), an eligible entity shall 
submit an application at such time, in such manner, 
and containing such information as the Secretary 
shall require. 
‘‘(4) PRIORITIES.—In awarding grants under 
subsection (a), the Secretary shall give priority to ap-
plications that— 
‘‘(A) are from an eligible entity with dem-
onstrated experience in serving students from 
groups that are underrepresented in postsec-
ondary education, including institutions of high-
er education that are eligible for assistance 
under title III or V, or are from a consortium 
that includes an eligible entity with such experi-
ence; 
‘‘(B) are from an eligible entity that is a 
public institution of higher education that does 
not predominantly provide an educational pro-
gram for which it awards a bachelor’s degree (or 
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an equivalent degree), or from a consortium that 
includes at least one such institution; 
‘‘(C) include activities to increase degree or 
certificate completion in the fields of science, 
technology, engineering, and mathematics, in-
cluding 
preparation 
for, 
or 
entry 
into, 
postbaccaluareate study, especially for women 
and other groups of students who are underrep-
resented in such fields; 
‘‘(D) are from an eligible entity that is a 
philanthropic organization with the primary 
purpose of providing scholarships and support 
services to students from groups that are under-
represented in postsecondary education, or are 
from a consortium that includes such an organi-
zation; or 
‘‘(E) are from an eligible entity that en-
courages partnerships between institutions of 
higher education with high degree-completion 
rates and institutions of higher education with 
low degree-completion rates from the same cat-
egory of institutions described in section 132(d) 
to facilitate the sharing of information relating 
to, and the implementation of, best practices for 
increasing postsecondary completion. 
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‘‘(5) TECHNICAL
ASSISTANCE.—The Secretary 
may reserve up to $5,000,000 per year to award 
grants and contracts to provide technical assistance to 
eligible entities receiving a grant under subsection 
(a), including technical assistance on the evaluation 
conducted in accordance with section 784 and estab-
lishing networks of eligible entities receiving grants 
under such subsection. 
‘‘(d) REPORTS.— 
‘‘(1) ANNUAL REPORTS BY ENTITIES.—Each eli-
gible entity receiving a grant under subsection (a) 
shall submit to the Secretary an annual report on— 
‘‘(A) the effectiveness of the program carried 
out with such grant in increasing postsecondary 
completion, 
as 
determined 
by 
measurable 
progress in achieving the goals of the program, 
as described in the application for such grant; 
and 
‘‘(B) any other information or assessments 
the Secretary may require. 
‘‘(2) ANNUAL REPORT TO CONGRESS.—The Sec-
retary shall submit to the authorizing committees an 
annual report on grants awarded under subsection 
(a), including— 
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‘‘(A) the amount awarded to each eligible 
entity receiving a grant under such subsection; 
and 
‘‘(B) a description of the activities con-
ducted by each such eligible entity. 
‘‘SEC. 784. EVALUATION. 
‘‘From the amount appropriated under section 
781(a)(2)(D), the Director of the Institute of Education 
Sciences shall evaluate the programs funded under this 
part. Not later than January 30, 2016, the Director shall 
issue a final report on such evaluation to the authorizing 
committees and the Secretary, and shall make such report 
available to the public. 
‘‘SEC. 785. VETERANS RESOURCE OFFICER GRANTS. 
‘‘(a) PROGRAM AUTHORIZED.—The Secretary shall 
award grants, on a competitive basis, to eligible institutions 
of higher education to hire a Veterans Resource Officer to 
increase the college completion rates for veterans enrolled 
at such institutions. 
‘‘(b) DEFINITIONS.—In this section: 
‘‘(1) ELIGIBLE INSTITUTION OF HIGHER EDU-
CATION.—The term ‘eligible institution of higher edu-
cation’ means an institution of higher education that 
has an enrollment of at least 100 full-time equivalent 
students who are veterans. 
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‘‘(2) FULL-TIME
EQUIVALENT
STUDENTS.—The 
term ‘full-time equivalent students’ has the meaning 
given such term in section 312(e). 
‘‘(3) VETERAN.—The term ‘veteran’ has the 
meaning give such term in section 480(c). 
‘‘(c) APPLICATION.—To be eligible to receive a grant 
under this section, an eligible institution of higher edu-
cation shall submit an application at such time, in such 
manner, and containing such information as the Secretary 
shall require. 
‘‘(d) USES OF FUNDS.— 
‘‘(1) IN
GENERAL.—An eligible institution of 
higher education receiving a grant under this section 
shall use such grant to hire 1 or 2 Veterans Resource 
Officers (in the case of an institution that has an en-
rollment of at least 200 full-time equivalent students 
who are veterans) to serve in the office of campus pro-
grams, or a similar office, at such institution and 
carry out the activities described in paragraph (2). 
‘‘(2) ACTIVITIES.—A Veterans Resource Officer 
shall carry out activities at an eligible institution of 
higher education to help increase the completion rates 
for veterans enrolled at such institution, which shall 
include the following activities: 
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‘‘(A) Serving as a link between student vet-
erans and the staff of the institution. 
‘‘(B) Serving as a link between student vet-
erans and local facilities of the Department of 
Veterans Affairs. 
‘‘(C) Organizing and advising student vet-
erans organization. 
‘‘(D) Organizing veterans oriented group 
functions and events. 
‘‘(E) Maintaining newsletters and listserves 
to distribute news and information to all student 
veterans. 
‘‘(F) Organizing new student veterans cam-
pus orientation. 
‘‘(G) Ensuring that the Department of Vet-
erans Affairs certifying official at such institu-
tion is properly trained. 
‘‘(3) PRIORITY.—To the extent practicable, each 
institution described in paragraph (1) shall give pri-
ority to hiring a veteran to serve as a Veterans Re-
source Officer. 
‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There are 
authorized to be appropriated to carry out this section such 
sums as may be necessary for fiscal year 2010 and each 
succeeding fiscal year.’’. 
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SEC. 103. INVESTMENT IN HISTORICALLY BLACK COLLEGES 
AND UNIVERSITIES AND OTHER MINORITY- 
SERVING INSTITUTIONS. 
Section 371 (20 U.S.C. 1067q) is amended— 
(1) in subsection (a)— 
(A) in paragraph (2), by striking ‘‘section 
502’’ and inserting ‘‘section 502(a)’’; 
(B) in paragraph (3), by striking ‘‘section 
316’’ and inserting ‘‘section 316(b)’’; 
(C) in paragraph (5), by striking ‘‘in sub-
section (c)’’ and inserting ‘‘in section 318(b)’’; 
(D) in paragraph (6), by striking ‘‘in sub-
section (c)’’ and inserting ‘‘in section 320(b)’’; 
and 
(E) in paragraph (7), by striking ‘‘in sub-
section (c)’’ and inserting ‘‘in section 319(b)’’; 
(2) in subsection (b)— 
(A) in paragraph (1)(A), by striking 
‘‘$255,000,000’’ and all that follows and insert-
ing ‘‘$255,000,000 for each of the fiscal years 
2008 through 2019.’’; and 
(B) by amending paragraph (2)(B) to read 
as follows: 
‘‘(B) 
STEM
AND
ARTICULATION
PRO-
GRAMS.—From the amount made available for 
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allocation under this subparagraph by subpara-
graph (A)(i) for any fiscal year— 
‘‘(i) 90 percent shall be available for 
Hispanic-serving institutions for activities 
described in sections 503 and 513, with a 
priority given to applications that pro-
pose— 
‘‘(I) to increase the number of 
Hispanic and other low-income stu-
dents attaining degrees in the fields of 
science, technology, engineering, or 
mathematics; and 
‘‘(II) to develop model transfer 
and articulation agreements between 2- 
year Hispanic-serving institutions and 
4-year institutions in such fields; and 
‘‘(ii) 10 percent shall be available for 
grants under section 355.’’; 
(C) in paragraph (2)(C)(ii), by striking 
‘‘and shall be available for a competitive’’ and 
all that follows and inserting ‘‘and shall be made 
available as grants under section 318 and allot-
ted among such institutions under section 318(e), 
treating such amount, plus the amount appro-
priated for such fiscal year in a regular or sup-
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plemental appropriation Act to carry out section 
318, as the amount appropriated to carry out 
section 318 for purposes of allotments under sec-
tion 318(e)’’; and 
(D) in paragraph (2)(D)— 
(i) in clause (iii), by striking ‘‘for ac-
tivities described in section 311(c)’’ and in-
serting ‘‘and shall be made available as 
grants under section 320, treating such 
$5,000,000 as part of the amount appro-
priated for such fiscal year in a regular or 
supplemental appropriation Act to carry 
out such section and using such $5,000,000 
for purposes described in subsection (c) of 
such section’’; and 
(ii) in clause (iv), by striking ‘‘de-
scribed in subsection (a)(7)—’’ and all that 
follows and inserting ‘‘and shall be made 
available as grants under section 319, treat-
ing such $5,000,000 as part of the amount 
appropriated for such fiscal year in a reg-
ular or supplemental appropriation Act to 
carry out such section and using such 
$5,000,000 for purposes described in sub-
section (c) of such section’’; and 
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(3) by striking subsection (c). 
SEC. 104. INVESTMENT IN COOPERATIVE EDUCATION. 
There are authorized to be appropriated, and there are 
appropriated, to carry out part N of title VIII of the Higher 
Education Act of 1965 (20 U.S.C. 1161n) (in addition to 
any other amounts appropriated to carry out such part and 
out of any money in the Treasury not otherwise appro-
priated), $10,000,000 for fiscal year 2010. 
SEC. 105. LOAN FORGIVENESS FOR SERVICEMEMBERS ACTI-
VATED FOR DUTY. 
(a) IN GENERAL.—Section 484B(b)(2) (20 U.S.C. 
1091b(b)(2)) is amended by adding at the end the following: 
‘‘(F) TUITION
RELIEF
FOR
STUDENTS 
CALLED TO MILITARY SERVICE.— 
‘‘(i) WAIVER OF REPAYMENT BY STU-
DENTS CALLED TO MILITARY SERVICE.—In 
addition to the waivers authorized by sub-
paragraphs (D) and (E), the Secretary shall 
waive the amounts that students are re-
quired to return under this section if the 
withdrawals on which the returns are based 
are withdrawals necessitated by reason of 
service in the uniformed services. 
‘‘(ii) LOAN
FORGIVENESS
AUTHOR-
IZED.—Whenever a student’s withdrawal 
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from an institution of higher education is 
necessitated by reason of service in the uni-
formed services, the Secretary shall, with re-
spect to the payment period or period of en-
rollment for which such student did not re-
ceive academic credit as a result of such 
withdrawal, carry out a program— 
‘‘(I) through the holder of the 
loan, to assume the obligation to 
repay— 
‘‘(aa) the outstanding prin-
cipal and accrued interest on any 
loan assistance awarded to the 
student under part B (including 
to a parent on behalf of the stu-
dent under section 428B) for such 
payment period or period of en-
rollment; minus 
‘‘(bb) any amount of such 
loan assistance returned by the 
institution in accordance with 
paragraph (1) of this subsection 
for such payment period or period 
of enrollment; and 
‘‘(II) to cancel— 
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‘‘(aa) the outstanding prin-
cipal and accrued interest on the 
loan assistance awarded to the 
student under part D or E (in-
cluding a Federal Direct PLUS 
loan awarded to a parent on be-
half of the student) for such pay-
ment period or period of enroll-
ment; minus 
‘‘(bb) any amount of such 
loan assistance returned by the 
institution in accordance with 
paragraph (1) of this subsection 
for such payment period or period 
of enrollment. 
‘‘(iii) 
REIMBURSEMENT
FOR
CAN-
CELLATION OF PERKINS LOANS.—The Sec-
retary shall pay to each institution for each 
fiscal year an amount equal to the aggre-
gate of the amounts of Federal Perkins 
loans in such institutions’s student loan 
fund which are cancelled pursuant to clause 
(iii)(II) for such fiscal year, minus an 
amount equal to the aggregate of the 
amounts of any such loans so canceled 
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which were made from Federal capital con-
tributions to its student loan fund provided 
by the Secretary under section 468. None of 
the funds appropriated pursuant to section 
461(b) shall be available for payments pur-
suant to this paragraph. To the extent fea-
sible, the Secretary shall pay the amounts 
for which any institution qualifies under 
this paragraph not later than 3 months 
after the institution files an institutional 
application for campus-based funds. 
‘‘(iv) LOAN
ELIGIBILITY
AND
LIMITS 
FOR STUDENTS.—Any amounts that are re-
turned by an institution in accordance with 
paragraph (1), or forgiven or waived by the 
Secretary under this subparagraph, with re-
spect to a payment period or period of en-
rollment for which a student did not receive 
academic credit as a result of withdrawal 
necessitated by reason of service in the uni-
formed services, shall not be included in the 
calculation of the student’s annual or aggre-
gate loan limits for assistance under this 
title, or otherwise affect the student’s eligi-
bility for grants or loans under this title. 
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‘‘(v) DEFINITION.—In this subpara-
graph, the term ‘service in the uniformed 
services’ has the meaning given such term 
in section 484C(a).’’. 
(b) EFFECTIVE DATE.— 
(1) IN
GENERAL.—The amendments made by 
this section shall take effect for periods of service in 
the uniformed services beginning after the date of the 
enactment of this Act. 
(2) DEFINITION.—In this paragraph, the term 
‘‘period of service in the uniformed services’’ means 
the period beginning 30 days prior to the date a stu-
dent is required to report to service in the uniformed 
services (as defined in section 484C(a) of the Higher 
Education Act of 1965 (20 U.S.C. 1091c(a)) and end-
ing when such student returns from such service. 
SEC. 
106. 
VETERANS 
EDUCATIONAL 
EQUITY 
SUPPLE-
MENTAL GRANT PROGRAM. 
(a) VETERANS EDUCATIONAL EQUITY SUPPLEMENTAL 
GRANT PROGRAM.—Subpart 1 of part A of title IV (20 
U.S.C. 1070a et seq.) is amended by adding at the end the 
following: 
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‘‘SEC. 401B. VETERANS EDUCATIONAL EQUITY SUPPLE-
MENTAL GRANT PROGRAM. 
‘‘(a) VETERANS
EDUCATIONAL
EQUITY
SUPPLE-
MENTAL
GRANTS
AUTHORIZED.—The Secretary shall 
award a grant to each eligible student, in an amount deter-
mined in accordance with subsection (c), to assist such stu-
dent with paying the cost of tuition incurred by the student 
for a program of education at an institution of higher edu-
cation. 
‘‘(b) DEFINITIONS.—In this section— 
‘‘(1) ELIGIBLE
STUDENT.—The term ‘eligible 
student’ means a student who— 
‘‘(A) is a covered individual, as such term 
is defined in section 3311(b) of title 38, United 
States Code; 
‘‘(B) is enrolled at an institution of higher 
education that— 
‘‘(i) is not a public institution of high-
er education; and 
‘‘(ii) is located in a State with a zero, 
or very low, maximum tuition charge per 
credit hour compared to the maximum tui-
tion charge per credit hour in all other 
States, as determined by the Secretary of 
Veterans Affairs (based on the determina-
tions of maximum tuition charged per cred-
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it hour in each State for the purposes of 
chapter 33 of title 38, United States Code); 
and 
‘‘(C) is eligible for educational assistance 
for an academic year, and will receive an 
amount of such assistance for such year for fees 
charged the individual that is less than the max-
imum amount of such assistance available for 
fees charged for such year in such State. 
‘‘(2) EDUCATIONAL ASSISTANCE.—The term ‘edu-
cational assistance’ means the amount of educational 
assistance from the Secretary of Veterans Affairs an 
eligible student receives or will receive under section 
3313(c)(1)(A) of title 38, United States Code, or a 
similar amount of such assistance under paragraphs 
(2) through (7) of such section 3313(c). 
‘‘(c) GRANT AMOUNT.—A grant to an eligible student 
under this section be equal to an amount that is— 
‘‘(1) the maximum amount of educational assist-
ance for fees charged that the eligible student would 
receive, in accordance with section 3313(c) of title 38, 
United States Code, if such student attended the pub-
lic institution of higher education in the State in 
which the eligible student is enrolled that has the 
highest fees charged to an individual for a year in 
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such State (as determined by the Secretary of Vet-
erans Affairs for the purposes of chapter 33 of such 
title 38), less 
‘‘(2) the educational assistance the eligible stu-
dent will receive, in accordance with such section, for 
fees charged to the student for such year at the insti-
tution of higher education at which the student is en-
rolled. 
‘‘(d) USES OF FUNDS.—An eligible student who re-
ceives a grant under this section shall use such grant to 
pay tuition incurred by the student for a program of edu-
cation at an institution of higher education. 
‘‘(e) NOTIFICATION.—The Secretary, in coordination 
with Secretary of Veterans Affairs, shall establish a system 
of notification to ensure the timely delivery to each eligible 
student of— 
‘‘(1) educational assistance received by the stu-
dent; and 
‘‘(2) grants awarded to the student under this 
section. 
‘‘(f) AUTHORIZATION AND APPROPRIATION.—There are 
authorized to be appropriated, and there are appropriated, 
such sums as may be necessary to carry out this section 
(in addition to any other amounts appropriated to carry 
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out this section and out of any money in the Treasury not 
otherwise appropriated).’’. 
(b) CONFORMING AMENDMENT.—The header for sub-
part 1 of part A of title IV (20 U.S.C. 1070a et seq.) is 
amended by inserting ‘‘; Veterans Educational Eq-
uity Supplemental Grants’’ after ‘‘Pell Grants’’. 
Subtitle B—Student Financial Aid 
Form Simplification 
SEC. 121. GENERAL EFFECTIVE DATE. 
Except as otherwise provided in this subtitle, amend-
ments made by this subtitle shall be effective with respect 
to determinations of need for assistance under title IV of 
the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) 
for award years beginning on or after July 1, 2011. 
SEC. 122. TREATMENT OF ASSETS IN NEED ANALYSIS. 
(a) AMOUNT
OF NEED.—Section 471 (20 U.S.C. 
1087kk) is amended— 
(1) by striking ‘‘Except’’ and inserting the fol-
lowing: 
‘‘(a) IN GENERAL.—Except’’; 
(2) by inserting ‘‘and subject to subsection (b)’’ 
after ‘‘therein’’; and 
(3) by adding at the end the following: 
‘‘(b) ASSET CAP FOR NEED-BASED AID.—Notwith-
standing any other provision of this title, a student shall 
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not be eligible to receive a Federal Pell Grant, a Federal 
Direct Stafford Loan, or work assistance under this title 
if— 
‘‘(1) in the case of a dependent student, the com-
bined net assets of the student and the student’s par-
ents are equal to an amount greater than $150,000 
(or a successor amount prescribed by the Secretary 
under section 478(c)); or 
‘‘(2) in the case of an independent student, the 
net assets of the student (and the student’s spouse, if 
applicable) are equal to an amount greater than 
$150,000 (or a successor amount prescribed by the 
Secretary under section 478(c)).’’. 
(b) DATA ELEMENTS.—Section 474(b) (20 U.S.C. 
1087nn(b)) is amended— 
(1) by striking paragraph (4); and 
(2) by redesignating paragraphs (5), (6), and (7) 
as paragraphs (4), (5), and (6), respectively. 
(c) DEPENDENT STUDENTS.—Section 475 (20 U.S.C. 
1087oo) is amended— 
(1) in subsection (a)— 
(A) in paragraph (1)— 
(i) by striking ‘‘adjusted’’; and 
(ii) by inserting ‘‘and’’ after the semi-
colon; 
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(B) in paragraph (2), by striking ‘‘; and’’ 
and inserting a period; and 
(C) by striking paragraph (3); 
(2) in subsection (b)— 
(A) in the header, by striking ‘‘ADJUSTED’’; 
(B) in the matter preceding paragraph (1), 
by striking ‘‘adjusted’’; 
(C) by striking paragraph (1); 
(D) by redesignating paragraphs (2) and 
(3) as paragraphs (1) and (2), respectively; 
(E) in paragraph (1) (as redesignated by 
subparagraph (D) of this paragraph), by strik-
ing ‘‘adjusted’’; and 
(F) in paragraph (2) (as redesignated by 
subparagraph (D) of this paragraph), by strik-
ing ‘‘paragraph (2)’’ and inserting ‘‘paragraph 
(1)’’; 
(3) by repealing subsection (d); 
(4) in subsection (e)— 
(A) by striking ‘‘The adjusted available’’ 
and inserting ‘‘The available’’; 
(B) by striking ‘‘to as ‘AAI’)’’ and inserting 
‘‘to as ‘AI’)’’; 
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(C) by striking ‘‘From Adjusted Available 
Income (AAI)’’ and inserting ‘‘From Available 
Income (AI)’’; and 
(D) in the table— 
(i) by striking ‘‘If AAI’’ and inserting 
‘‘If AI’’; and 
(ii) by striking ‘‘of AAI’’ each place it 
appears and inserting ‘‘of AI’’; 
(5) in subsection (f)— 
(A) by striking ‘‘and assets’’ each place it 
appears; 
(B) in paragraph (2)(B), by striking ‘‘or 
assets’’; and 
(C) in paragraph (3)— 
(i) by striking ‘‘are taken into’’ and 
inserting ‘‘is taken into’’; and 
(ii) by striking ‘‘adjusted’’; 
(6) in subsection (g)(6), by striking ‘‘exceeds the 
sum of’’ and all that follows and inserting ‘‘exceeds 
the parents’ total income (as defined in section 480)’’; 
(7) by repealing subsection (h); and 
(8) in subsection (i), by striking ‘‘adjusted’’ each 
place it appears. 
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(d) FAMILY CONTRIBUTION FOR INDEPENDENT STU-
DENTS WITHOUT DEPENDENTS OTHER THAN A SPOUSE.— 
Section 476 (20 U.S.C. 1087pp) is amended— 
(1) in subsection (a)— 
(A) by striking paragraph (1); 
(B) by redesignating paragraphs (2) and 
(3) as paragraphs (1) and (2), respectively; 
(C) in paragraph (1) (as redesignated by 
subparagraph (B)), by striking ‘‘the sum result-
ing under paragraph (1)’’ and inserting ‘‘the 
family’s contribution from available income (de-
termined in accordance with subsection (b))’’; 
and 
(D) in paragraph (2)(A) (as redesignated 
by subparagraph (B)), by striking ‘‘paragraph 
(2)’’ and inserting ‘‘paragraph (1)’’; 
(2) by repealing subsection (c); and 
(3) in subsection (d)— 
(A) by striking ‘‘and assets’’; and 
(B) by striking ‘‘or assets’’. 
(e) FAMILY CONTRIBUTION FOR INDEPENDENT STU-
DENTS WITH DEPENDENTS OTHER THAN A SPOUSE.—Sec-
tion 477 (20 U.S.C. 1087qq) is amended— 
(1) in subsection (a)— 
(A) by striking paragraph (1); 
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(B) by redesignating paragraphs (2), (3), 
and (4) as paragraphs (1), (2), and (3), respec-
tively; 
(C) in paragraph (1) (as redesignated by 
subparagraph (B)), by striking ‘‘such adjusted 
available income’’ and inserting ‘‘the family’s 
available income (determined in accordance with 
subsection (b))’’; 
(D) in paragraph (2) (as redesignated by 
subparagraph (B)), by striking ‘‘paragraph (2)’’ 
and inserting ‘‘paragraph (1)’’; and 
(E) in paragraph (3)(A) (as redesignated 
by subparagraph (B)), by striking ‘‘paragraph 
(3)’’ and inserting ‘‘paragraph (2)’’; 
(2) by repealing subsection (c); and 
(3) in subsection (d)— 
(A) by striking ‘‘The adjusted available’’ 
and inserting ‘‘The available’’; 
(B) by striking ‘‘to as ‘AAI’)’’ and inserting 
‘‘to as ‘AI’)’’; 
(C) by striking ‘‘From Adjusted Available 
Income (AAI)’’ and inserting ‘‘From Available 
Income (AI)’’; and 
(D) in the table— 
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(i) by striking ‘‘If AAI’’ and inserting 
‘‘If AI’’; and 
(ii) by striking ‘‘of AAI’’ each place it 
appears and inserting ‘‘of AI’’; and 
(E) in subsection (e)— 
(i) by striking ‘‘and assets’’; and 
(ii) by striking ‘‘or assets’’. 
(f) REGULATIONS; UPDATED TABLES.—Section 478 
(20 U.S.C. 1087rr) is amended— 
(1) in subsection (a), by inserting ‘‘or amounts, 
as the case may be,’’ after ‘‘tables’’ each place the 
term appears; 
(2) by amending subsection (c) to read as fol-
lows: 
‘‘(c) ASSET CAP FOR NEED-BASED AID.—For each 
award year after award year 2011–2012, the Secretary 
shall publish in the Federal Register a revised net asset cap 
for the purposes of section 471(b). Such revised cap shall 
be determined by increasing the dollar amount in such sec-
tion by a percentage equal to the estimated percentage 
change in the Consumer Price Index (as determined by the 
Secretary) between December 2010 and the December pre-
ceding the beginning of such award year, and rounding the 
result to the nearest $5.’’; 
(3) by repealing subsection (d); and 
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(4) in subsection (e), by striking ‘‘adjusted’’ both 
places it appears. 
SEC. 123. CHANGES TO TOTAL INCOME; AID ELIGIBILITY. 
(a) DEFINITION OF UNTAXED INCOME AND BENE-
FITS.—Section 480(b)(1) (20 U.S.C. 1087vv(b)(1)), as 
amended by the Higher Education Opportunity Act (Public 
Law 110–315), is amended— 
(1) by striking subparagraphs (A), (B), (C), (E), 
(F), and (I); 
(2) by redesignating subparagraphs (D), (G), 
and (H) as subparagraphs (A), (B), and (C), respec-
tively; 
(3) in subparagraph (B) (as redesignated by 
paragraph (2)), by inserting ‘‘and’’ after the semi-
colon; and 
(4) in subparagraph (C) (as redesignated by 
paragraph (2)), by striking ‘‘; and’’ and inserting a 
period. 
(b) DEFINITION OF ASSETS.—Section 480(f)(2) (20 
U.S.C. 1087vv(f)(2)) is amended— 
(1) by striking ‘‘or’’ at the end of subparagraph 
(B); 
(2) by striking the period at the end of subpara-
graph (C) and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
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‘‘(D) an employee pension benefit plan (as 
defined in section 3(2) of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 
1002(2))).’’. 
(c) FINANCIAL ADMINISTRATOR DISCRETION.—Section 
479A(b) (20 U.S.C. 1087tt) is amended in the subsection 
heading, by striking ‘‘TO ASSETS’’. 
(d) SUSPENSION OF ELIGIBILITY FOR DRUG-RELATED 
OFFENSES.—Section 484(r)(1) (20 U.S.C. 1091(r)(1)) is 
amended to read as follows: 
‘‘(1) IN GENERAL.—A student who is convicted 
of any offense under any Federal or State law involv-
ing the sale of a controlled substance for conduct that 
occurred during a period of enrollment for which the 
student was receiving any grant, loan, or work assist-
ance under this title shall not be eligible to receive 
any grant, loan, or work assistance under this title 
from the date of that conviction for the period of time 
specified in the following subparagraphs: 
‘‘(A) For a first offense, the period of ineli-
gibility shall be 2 years. 
‘‘(B) For a second offense, the period of in-
eligibility shall be indefinite.’’. 
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TITLE II—STUDENT LOAN 
REFORM 
Subtitle A—Stafford Loan Reform 
SEC. 201. FEDERAL FAMILY EDUCATION LOAN APPROPRIA-
TIONS. 
Section 421 (20 U.S.C. 1071) is amended— 
(1) in subsection (b), in the matter following 
paragraph (6), by inserting ‘‘, except that no sums 
may be expended after June 30, 2010, with respect to 
loans under this part for which the first disbursement 
would be made after such date’’ after ‘‘expended’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(d) TERMINATION OF AUTHORITY TO MAKE OR IN-
SURE
NEW
LOANS.—Notwithstanding paragraphs (1) 
through (6) of subsection (b) or any other provision of 
law— 
‘‘(1) no new loans (including consolidation 
loans) may be made or insured under this part after 
June 30, 2010; and 
‘‘(2) no funds are authorized to be appropriated, 
or may be expended, under this Act or any other Act 
to make or insure loans under this part (including 
consolidation loans) for which the first disbursement 
would be made after June 30, 2010, 
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except as expressly authorized by an Act of Congress enacted 
after the date of enactment of Student Aid and Fiscal Re-
sponsibility Act of 2009.’’. 
SEC. 202. SCOPE AND DURATION OF FEDERAL LOAN INSUR-
ANCE PROGRAM. 
Section 424(a) (20 U.S.C. 1074(a)) is amended by 
striking ‘‘September 30, 1976,’’ and all that follows and in-
serting ‘‘September 30, 1976, for each of the succeeding fis-
cal years ending prior to October 1, 2009, and for the period 
from October 1, 2009, to June 30, 2010, for loans first dis-
bursed on or before June 30, 2010.’’. 
SEC. 203. APPLICABLE INTEREST RATES. 
Section 427A(l) (20 U.S.C. 1077a(l)) is amended— 
(1) in paragraph (1), by inserting ‘‘and before 
July 1, 2010,’’ after ‘‘July 1, 2006,’’; 
(2) in paragraph (2), by inserting ‘‘and before 
July 1, 2010,’’ after ‘‘July 1, 2006,’’; 
(3) in paragraph (3), by inserting ‘‘and that 
was disbursed before July 1, 2010,’’ after ‘‘July 1, 
2006,’’; and 
(4) in paragraph (4)— 
(A) in the matter preceding subparagraph 
(A), by striking ‘‘July 1, 2012’’ and inserting 
‘‘July 1, 2010’’; and 
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(B) by repealing subparagraphs (D) and 
(E). 
SEC. 204. FEDERAL PAYMENTS TO REDUCE STUDENT IN-
TEREST COSTS. 
(a) HIGHER EDUCATION ACT OF 1965.—Section 428 
(20 U.S.C. 1078) is amended— 
(1) in subsection (a)— 
(A) in paragraph (1), in the matter pre-
ceding subparagraph (A), by inserting ‘‘for 
which the first disbursement is made before July 
1, 2010, and’’ after ‘‘eligible institution’’; and 
(B) in paragraph (5), by striking ‘‘Sep-
tember 30, 2014,’’ and all that follows through 
the period and inserting ‘‘June 30, 2010.’’; 
(2) in subsection (b)(1)— 
(A) in subparagraph (G)(ii), by inserting 
‘‘and before July 1, 2010,’’ after ‘‘July 1, 2006,’’; 
and 
(B) in subparagraph (H)(ii), by inserting 
‘‘and that are first disbursed before July 1, 
2010,’’ after ‘‘July 1, 2006,’’; 
(3) in subsection (f)(1)(A)(ii)— 
(A) by striking ‘‘during fiscal years begin-
ning’’; and 
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(B) by inserting ‘‘and first disbursed before 
July 1, 2010,’’ after ‘‘October 1, 2003,’’; and 
(4) in subsection (j)(1), by inserting ‘‘, before 
July 1, 2010,’’ after ‘‘section 435(d)(1)(D) of this Act 
shall’’. 
(b) COLLEGE COST REDUCTION AND ACCESS ACT.— 
Section 303 of the College Cost Reduction and Access Act 
(Public Law 110–84) is repealed. 
SEC. 205. FEDERAL PLUS LOANS. 
Section 428B(a)(1) (20 U.S.C. 1078–2(a)(1)) is 
amended by striking ‘‘A graduate’’ and inserting ‘‘Prior to 
July 1, 2010, a graduate’’. 
SEC. 206. FEDERAL CONSOLIDATION LOAN. 
(a) AMENDMENTS.—Section 428C (20 U.S.C. 1078–3) 
is amended— 
(1) in subsection (a)— 
(A) by amending paragraph (3)(B)(i)(V) to 
read as follows: 
‘‘(V) an individual who has a consoli-
dation loan under this section and does not 
have a consolidation loan under section 
455(g) may obtain a subsequent consolida-
tion loan under section 455(g).’’; and 
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(B) in paragraph (4)(A), by inserting ‘‘, 
and first disbursed before July 1, 2010’’ after 
‘‘under this part’’; 
(2) in subsection (b)— 
(A) in paragraph (1)(E), by inserting be-
fore the semicolon ‘‘, and before July 1, 2010’’; 
and 
(B) in paragraph (5), by striking ‘‘In the 
event that’’ and inserting ‘‘If, before July 1, 
2010,’’; 
(3) in subsection (c)(1)— 
(A) in subparagraph (A)(ii), by inserting 
‘‘and that is disbursed before July 1, 2010,’’ after 
‘‘2006,’’; and 
(B) in subparagraph (C), by inserting ‘‘and 
first disbursed before July 1, 2010,’’ after 
‘‘1994,’’; and 
(4) in subsection (e), by striking ‘‘September 30, 
2014.’’ and inserting ‘‘June 30, 2010. No loan may 
be made under this section for which the first dis-
bursement would be on or after July 1, 2010.’’. 
(b) EFFECTIVE DATE.—The amendments made by sub-
section (a)(1)(A) shall be effective at the close of June 30, 
2010. 
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SEC. 207. UNSUBSIDIZED STAFFORD LOANS FOR MIDDLE- 
INCOME BORROWERS. 
Section 428H (20 U.S.C. 1078–8) is amended— 
(1) in subsection (a), by inserting ‘‘that are first 
disbursed before July 1, 2010,’’ after ‘‘under this 
part’’; 
(2) in subsection (b)— 
(A) by striking ‘‘Any student’’ and insert-
ing ‘‘Prior to July 1, 2010, any student’’; and 
(B) by inserting ‘‘for which the first dis-
bursement is made before such date’’ after ‘‘un-
subsidized Federal Stafford Loan’’; and 
(3) in subsection (h), by inserting ‘‘and that are 
first disbursed before July 1, 2010,’’ after ‘‘July 1, 
2006,’’. 
SEC. 208. LOAN REPAYMENT FOR CIVIL LEGAL ASSISTANCE 
ATTORNEYS. 
Section 428L(b)(2)(A) (20 U.S.C. 1078–12(b)(2)(A)) is 
amended— 
(1) by amending clause (i) to read as follows: 
‘‘(i) subject to clause (ii)— 
‘‘(I) a loan made, insured, or 
guaranteed under this part, and that is 
first disbursed before July 1, 2010; or 
‘‘(II) a loan made under part D 
or part E; and’’; and 
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(2) in clause (ii)— 
(A) by striking ‘‘428C or 455(g)’’ and in-
serting ‘‘428C, that is disbursed before July 1, 
2010, or section 455(g)’’; and 
(B) in subclause (II), by inserting ‘‘for 
which the first disbursement is made before July 
1, 2010,’’ after ‘‘or 428H’’. 
SEC. 209. SPECIAL ALLOWANCES. 
Section 438 (20 U.S.C. 1087–1) is amended— 
(1) in subsection (b)(2)(I)— 
(A) in the header, by inserting ‘‘, AND BE-
FORE JULY 1, 2010’’ after ‘‘2000’’; 
(B) in clause (i), by inserting ‘‘and before 
July 1, 2010,’’ after ‘‘2000,’’; 
(C) in clause (ii)(II), by inserting ‘‘and be-
fore July 1, 2010,’’ after ‘‘2006,’’; 
(D) in clause (iii), by inserting ‘‘and before 
July 1, 2010,’’ after ‘‘2000,’’; 
(E) in clause (iv), by inserting ‘‘and that is 
disbursed before July 1, 2010,’’ after ‘‘2000,’’; 
(F) in clause (v)(I), by inserting ‘‘and be-
fore July 1, 2010,’’ after ‘‘2006,’’; and 
(G) in clause (vi)— 
(i) in the header, by inserting ‘‘, AND 
BEFORE JULY 1, 2010’’ after ‘‘2007’’; and 
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(ii) in the matter preceding subclause 
(I), by inserting ‘‘and before July 1, 2010,’’ 
after ‘‘2007,’’; 
(2) in subsection (c)— 
(A) in paragraph (2)(B)— 
(i) in clause (iii), by inserting ‘‘and’’ 
after the semicolon; 
(ii) in clause (iv), by striking ‘‘; and’’ 
and inserting a period; and 
(iii) by striking clause (v); and 
(B) in paragraph (6), by inserting ‘‘and 
first disbursed before July 1, 2010,’’ after 
‘‘1992,’’; and 
(3) in subsection (d)(2)(B), by inserting ‘‘, and 
before July 1, 2010’’ after ‘‘2007’’. 
SEC. 210. REVISED SPECIAL ALLOWANCE CALCULATION. 
(a) 
REVISED
CALCULATION
RULE.—Section 
438(b)(2)(I) of the Higher Education Act of 1965 (20 
U.S.C. 1087–1(b)(2)(I)) is amended by adding at the end 
the following new clause: 
‘‘(vii) REVISED CALCULATION RULE TO 
REFLECT
FINANCIAL
MARKET
CONDI-
TIONS.— 
‘‘(I) 
CALCULATION
BASED
ON 
LIBOR.—For the calendar quarter be-
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(2) in subsection (b)(2), by striking ‘‘(5), (6), 
and (7)’’ and inserting ‘‘(5), and (6)’’. 
SEC. 213. TERMS AND CONDITIONS OF LOANS. 
(a) AMENDMENTS.—Section 455 (20 U.S.C. 1087e) is 
amended— 
(1) in subsection (a)(1), by inserting ‘‘, and first 
disbursed on June 30, 2010,’’ before ‘‘under sections 
428’’; and 
(2) in subsection (g)— 
(A) by inserting ‘‘, including any loan 
made under part B and first disbursed before 
July 1, 2010’’ after ‘‘section 428C(a)(4)’’; and 
(B) by striking the third sentence. 
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a)(1) shall apply with respect to loans first dis-
bursed under part D of title IV of the Higher Education 
Act of 1965 (20 U.S.C. 1087a et seq.) on or after July 1, 
2010. 
SEC. 214. CONTRACTS. 
Section 456 (20 U.S.C. 1087f) is amended— 
(1) in subsection (a)— 
(A) in paragraph (1)— 
(i) in the header, by striking ‘‘IN GEN-
ERAL’’ and inserting ‘‘AWARDING OF CON-
TRACTS’’; 
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