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‘‘(2) ELIGIBILITY.—The Secretary may assume 
interest payments under paragraph (1) only for a 
borrower who— 
‘‘(A) has submitted an application in com-
pliance with subsection (d); 
‘‘(B) obtained one or more loans described 
in paragraph (1) as an undergraduate student; 
‘‘(C) is a new borrower (within the mean-
ing of section 103(7) of this Act) on or after 
the date of enactment of the College Oppor-
tunity and Affordability Act of 2008; 
‘‘(D) is a highly qualified teacher (as de-
fined in section 9101 of the Elementary and 
Secondary Education Act of 1965) of science, 
technology, engineering or mathematics at an 
elementary or secondary school in a high need 
local educational agency, or is a mathematics, 
science, or engineering professional; and 
‘‘(E) enters into an agreement with the 
Secretary to complete 5 consecutive years of 
service in a position described in subparagraph 
(D), starting on the date of the agreement. 
‘‘(3) PRIOR INTEREST LIMITATIONS.—The Sec-
retary shall not make any payments for interest 
that— 
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‘‘(A) accrues prior to the beginning of the 
repayment period on a loan in the case of a 
loan made under section 428H or a Federal Di-
rect Unsubsidized Stafford Loan; or 
‘‘(B) has accrued prior to the signing of an 
agreement under paragraph (2)(E). 
‘‘(4) INITIAL SELECTION.—In selecting partici-
pants for the program under this section, the Sec-
retary— 
‘‘(A) shall choose among eligible applicants 
on the basis of— 
‘‘(i) the national security, homeland 
security, and economic security needs of 
the United States, as determined by the 
Secretary, in consultation with other Fed-
eral agencies, including the Departments 
of Labor, Defense, Homeland Security, 
Commerce, and Energy, the Central Intel-
ligence Agency, and the National Science 
Foundation; and 
‘‘(ii) the academic record or job per-
formance of the applicant; and 
‘‘(B) may choose among eligible applicants 
on the basis of— 
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‘‘(i) the likelihood of the applicant to 
complete the 5-year service obligation; 
‘‘(ii) the likelihood of the applicant to 
remain in science, mathematics, or engi-
neering after the completion of the service 
requirement; or 
‘‘(iii) other relevant criteria deter-
mined by the Secretary. 
‘‘(5) AVAILABILITY
SUBJECT
TO
APPROPRIA-
TIONS.—Loan interest payments under this section 
shall be subject to the availability of appropriations. 
If the amount appropriated for any fiscal year is not 
sufficient to provide interest payments on behalf of 
all qualified applicants, the Secretary shall give pri-
ority to those individuals on whose behalf interest 
payments were made during the preceding fiscal 
year. 
‘‘(6) REGULATIONS.—The Secretary is author-
ized to prescribe such regulations as may be nec-
essary to carry out the provisions of this section. 
‘‘(b) DURATION AND AMOUNT OF INTEREST PAY-
MENTS.—The period during which the Secretary shall pay 
interest on behalf of a student borrower who is selected 
under subsection (a) is the period that begins on the effec-
tive date of the agreement under subsection (a)(2)(E), 
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continues after successful completion of the service obliga-
tion, and ends on the earlier of— 
‘‘(1) the completion of the repayment period of 
the loan; 
‘‘(2) payment by the Secretary of a total of 
$5,000 on behalf of the borrower; 
‘‘(3) if the borrower ceases to fulfill the service 
obligation under such agreement prior to the end of 
the 5-year period, as soon as the borrower is deter-
mined to have ceased to fulfill such obligation in ac-
cordance with regulations of the Secretary; or 
‘‘(4) 6 months after the end of any calendar 
year in which the borrower’s gross income equals or 
exceeds 4 times the national per capita disposable 
personal income (current dollars) for such calendar 
year, as determined on the basis of the National In-
come and Product Accounts Tables of the Bureau of 
Economic Analysis of the Department of Commerce, 
as determined in accordance with regulations pre-
scribed by the Secretary. 
‘‘(c) REPAYMENT TO ELIGIBLE LENDERS.—Subject 
to the regulations prescribed by the Secretary by regula-
tion under subsection (a)(6), the Secretary shall pay to 
each eligible lender or holder for each payment period the 
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amount of the interest that accrues on a loan of a student 
borrower who is selected under subsection (a). 
‘‘(d) APPLICATION FOR REPAYMENT.— 
‘‘(1) IN GENERAL.—Each eligible individual de-
siring loan interest payment under this section shall 
submit a complete and accurate application to the 
Secretary at such time, in such manner, and con-
taining such information as the Secretary may re-
quire. 
‘‘(2) FAILURE TO COMPLETE SERVICE AGREE-
MENT.—Such application shall contain an agreement 
by the individual that, if the individual fails to com-
plete the 5 consecutive years of service required by 
subsection (a)(2)(E), the individual agrees to repay 
the Secretary the amount of any interest paid by the 
Secretary on behalf of the individual. 
‘‘(e) TREATMENT
OF CONSOLIDATION LOANS.—A 
consolidation loan made under section 428C of this Act, 
or a Federal Direct Consolidation Loan made under part 
D of title IV of this Act, may be a qualified loan for the 
purpose of this section only to the extent that such loan 
amount was used by a borrower who otherwise meets the 
requirements of this section to repay— 
‘‘(1) a loan made under section 428 or 428H 
of this Act; or 
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‘‘(2) a Federal Direct Stafford Loan, or a Fed-
eral Direct Unsubsidized Stafford Loan, made under 
part D of title IV of this Act. 
‘‘(f) PREVENTION OF DOUBLE BENEFITS.—No bor-
rower may, for the same service, receive a benefit under 
both this section and— 
‘‘(1) any loan forgiveness program under title 
IV of this Act; or 
‘‘(2) subtitle D of title I of the National and 
Community Service Act of 1990 (42 U.S.C. 12601 
et seq.). 
‘‘(g) DEFINITIONS.—As used in this section— 
‘‘(1) the term ‘high need local educational agen-
cy’ has the same meaning given such term in section 
200; and 
‘‘(2) the term ‘mathematics, science, or engi-
neering professional’ means a person who— 
‘‘(A) holds a baccalaureate, masters, or 
doctoral degree (or a combination thereof) in 
science, mathematics, or engineering; and 
‘‘(B) works in a field the Secretary deter-
mines is closely related to that degree, which 
shall include working as a professor at a two- 
or four-year institution of higher education. 
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‘‘SEC. 419C. FOREIGN LANGUAGE PARTNERSHIPS. 
‘‘(a) PURPOSE.—The purpose of this section is to in-
crease the number of highly qualified teachers in, and the 
number of United States’ students who achieve the highest 
level of proficiency in, foreign languages critical to the se-
curity and competitiveness of the Nation. 
‘‘(b) PROGRAM AUTHORIZED.—The Secretary is au-
thorized to award grants to institutions of higher edu-
cation, in partnership with one or more local educational 
agencies, to establish teacher preparation programs in 
critical foreign languages, and activities that will enable 
successful students to advance from elementary school 
through college to achieve proficiency in those languages. 
‘‘(c) APPLICATIONS.— 
‘‘(1) APPLICATION REQUIRED.—Any institution 
of higher education that desires to receive a grant 
under this section shall submit an application to the 
Secretary at such time, in such manner, and con-
taining such information as the Secretary may re-
quire. 
‘‘(2) CONTENTS.—Each Application shall— 
‘‘(A) identify each local educational agency 
partner and describe each such partner’s re-
sponsibilities (including how they will be in-
volved in planning and implementing the pro-
gram, what resources they will provide, and how 
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they will ensure continuity of student progress 
from elementary school to the postsecondary 
level); and 
‘‘(B) describe how the applicant will sup-
port and continue the program after the grant 
has expired, including how it will seek support 
from other sources, such as State and local gov-
ernment, foundations, and the private sector. 
‘‘(d) USES OF FUNDS.—Funds awarded under this 
section shall be used to develop and implement programs 
consistent with the purpose of this section by carrying out 
one or more of the following activities: 
‘‘(1) To recruit highly qualified teachers in crit-
ical foreign languages and professional development 
activities for such teachers at the elementary 
through high school level. 
‘‘(2) To provide innovative opportunities for 
students that will allow for critical language learn-
ing, such as immersion environments, intensive 
study opportunities, internships, and distance learn-
ing. 
‘‘(e) 
MATCHING
REQUIREMENT.—Each 
grantee 
under this section shall provide, from non-Federal sources, 
an amount equal to 100 percent of the amount of the 
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grant (in cash or in kind) to carry out the activities sup-
ported by the grant. 
‘‘(f) EVALUATION.—The Secretary shall evaluate the 
activities funded under this section and report the results 
of the evaluation to the appropriate Committees of Con-
gress. 
‘‘(g) REPORT ON BEST PRACTICES.—Within one year 
after the date of enactment of this section, the Secretary 
shall— 
‘‘(1) conduct a study to identify the best prac-
tices to strengthen the role of institutions that re-
ceive funding under title III or title V in increasing 
America’s critical foreign language education efforts; 
and 
‘‘(2) submit a report on the results of such 
study to the authorizing committees. 
‘‘SEC. 419D. ADJUNCT TEACHER CORPS. 
‘‘(a) PURPOSE.—The purpose of this section is to cre-
ate opportunities for individuals with subject matter ex-
pertise in mathematics, science, and critical foreign lan-
guages to provide such subject matter expertise to sec-
ondary school students on an adjunct basis. 
‘‘(b) PROGRAM AUTHORIZED.—The Secretary is au-
thorized to award grants to eligible entities to identify, re-
cruit, and train individuals with subject matter expertise 
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in mathematics, science, and critical foreign languages to 
serve as adjunct content specialists. 
‘‘(c) DURATION OF GRANTS.—The Secretary may 
award grants under this section for a period of not more 
than 5 years. 
‘‘(d) ELIGIBLE ENTITY.—For the purpose of this sec-
tion, an eligible entity is— 
‘‘(1) a local educational agency; or 
‘‘(2) a partnership consisting of a local edu-
cational agency, serving as a fiscal agent, and a pub-
lic or private educational organization or business. 
‘‘(e) USES OF FUNDS.—An eligible entity that re-
ceives a grant under this section is authorized to use such 
grant to carry out one or both of the following activities: 
‘‘(1) To develop the capacity of the eligible enti-
ty to identify, recruit, and train individuals with 
subject matter expertise in mathematics, science, 
and critical foreign languages who are not employed 
in the elementary and secondary education system 
(including individuals in business and government, 
and individuals who would participate through dis-
tance-learning arrangements) to become adjunct 
content specialists. 
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‘‘(2) To provide pre-service training and on- 
going professional development to adjunct content 
specialists. 
‘‘(f) APPLICATIONS.— 
‘‘(1) APPLICATION REQUIRED.—To be consid-
ered for a grant under this section, an eligible entity 
shall submit an application to the Secretary at such 
time, in such manner, and containing such informa-
tion as the Secretary requires. 
‘‘(2) CONTENTS.—Such application shall in-
clude a description of— 
‘‘(A) the need for, and expected benefits of 
using, adjunct content specialists in the schools 
of the local educational agency, which may in-
clude information on the difficulty the local 
educational agency faces in recruiting qualified 
faculty in mathematics, science, and critical for-
eign language courses; 
‘‘(B) measurable objectives for the activi-
ties supported by the grant, including the num-
ber of adjunct content specialists the eligible 
entity intends to place in schools and class-
rooms, and the gains in academic achievement 
expected as a result of the addition of such spe-
cialists; 
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‘‘(g) PRIORITIES.—In awarding grants under this 
section, the Secretary shall give priority to eligible entities 
that demonstrate in the application for such a grant a plan 
to— 
‘‘(1) serve the schools of the local educational 
agency that have a large number or percentage of 
students performing below grade level in mathe-
matics, science, or critical foreign language courses; 
‘‘(2) serve local educational agencies that have 
a large number or percentage of students from fami-
lies with incomes below the poverty line (as such 
term is defined in section 200); and 
‘‘(3) recruit and train individuals to serve as 
adjunct content specialists in schools that have an 
insufficient number of teachers in mathematics, 
science, or critical foreign languages. 
‘‘(h) MATCHING REQUIREMENT.—Each eligible enti-
ty that receives a grant under this section shall provide, 
from non-Federal sources, an amount equal to 100 percent 
of the amount of such grant (in cash or in kind) to carry 
out the activities supported by such grant. 
‘‘(i) PERFORMANCE REPORT.—Each eligible entity 
receiving a grant under this section shall prepare and sub-
mit to the Secretary a final report on the results of the 
activities supported by such grant, which shall contain 
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such information as the Secretary may require, including 
any improvements in student academic achievement as a 
result of the use of adjunct content specialists. 
‘‘(j) EVALUATION.—The Secretary shall evaluate the 
activities supported by grants under this section, including 
the impact of such activities on student academic achieve-
ment, and shall report the results of such evaluation to 
the authorizing committees. 
‘‘(k) DEFINITION.—In this section the term ‘adjunct 
content specialist’ means an individual who— 
‘‘(1) 
meets 
the 
requirements 
of 
section 
9101(23)(B)(ii) of the Elementary and Secondary 
Education Act of 1965; 
‘‘(2) has demonstrated expertise in mathe-
matics, science, or a critical foreign language, as de-
termined by the local educational agency; and 
‘‘(3) may not be the primary provider of in-
structional services to a student unless the adjunct 
content specialist is under the direct supervision of 
a teacher who meets the requirements of Section 
9101(23) of such Act. 
‘‘SEC. 419E. AUTHORIZATION OF APPROPRIATIONS. 
‘‘There are authorized to be appropriated to carry out 
this subpart $50,000,000 for fiscal year 2009 and such 
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sums as may be necessary for each of the 4 succeeding 
fiscal years.’’. 
SEC. 409. CHILD CARE ACCESS MEANS PARENTS IN 
SCHOOL. 
(a) MINIMUM GRANT.—Section 419N(b)(2)(B) (20 
U.S.C. 1070e(b)(2)(B)) is amended by striking ‘‘$10,000’’ 
and inserting ‘‘$30,000’’. 
(b) ELIGIBLE INSTITUTIONS.—Section 419N(b)(4) is 
amended 
by 
striking 
‘‘$350,000’’ 
and 
inserting 
‘‘$250,000’’. 
(c) INCOME ELIGIBILITY.—Section 419N(b)(7) is 
amended by striking ‘‘who is eligible to receive’’ and in-
serting ‘‘whose income qualifies for eligibility for’’. 
(d) PUBLICITY.—Section 419N(b) is further amend-
ed by adding at the end the following new paragraph: 
‘‘(8) PUBLICITY.—The Secretary shall publicize 
the availability of grants under this section in appro-
priate periodicals in addition to publication in the 
Federal Register, and shall inform appropriate edu-
cational organizations of such availability.’’. 
(e) REPORTING REQUIREMENTS.—Section 419N(e) 
is amended— 
(1) in paragraph (1)(A), by striking ‘‘18 
months,’’ and all that follows through the end there-
of and inserting ‘‘annually.’’; and 
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(2) in paragraph (2)— 
(A) by striking ‘‘the third annual grant 
payment’’ and inserting ‘‘continuation awards’’; 
and 
(B) by striking ‘‘the 18-month report’’ and 
inserting ‘‘the reports’’. 
(f) AUTHORIZATION OF APPROPRIATIONS.—Section 
419N(g) (20 U.S.C. 1070e(g)) is amended by striking 
‘‘$45,000,000 for fiscal year 1999’’ and all that follows 
through the period and inserting ‘‘such sums as may be 
necessary for fiscal year 2009 and each of the 4 suc-
ceeding fiscal years.’’. 
SEC. 410. LEARNING ANYTIME ANYWHERE PARTNERSHIPS. 
Subpart 8 of part A of title IV (20 U.S.C. 1070f et 
seq.) is repealed. 
SEC. 411. TEACH GRANTS. 
Subpart 9 of part A of title IV is amended— 
(1) in section 420L(1)(B), by striking ‘‘sound’’ 
and inserting ‘‘responsible’’; 
(2) in section 420M— 
(A) by striking ‘‘academic year’’ each place 
it appears in subsections (a)(1) and (c)(1) and 
inserting ‘‘year’’; and 
(B) in subsection (c)(2)— 
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(i) by striking ‘‘other student assist-
ance’’ and inserting ‘‘other assistance the 
student may receive’’; and 
(ii) by striking the second sentence; 
(3) in section 420N— 
(A) in subsection (b)— 
(i) in paragraph (1)(E), by striking 
‘‘and’’ after the semicolon; 
(ii) in paragraph (2), by striking the 
period at the end and inserting ‘‘; and’’; 
and 
(iii) by adding at the end the fol-
lowing new paragraph: 
‘‘(3) contains, or is accompanied by, a plain- 
language disclosure form developed by the Secretary 
that clearly describes the nature of the TEACH 
Grant award, the service obligation, and the loan re-
payment requirements that are the consequence of 
the failure to complete the service obligation.’’; and 
(B) by adding a the end the following new 
subsection: 
‘‘(d) ADDITIONAL ADMINISTRATIVE PROVISIONS.— 
‘‘(1) CHANGE OF HIGH-NEED DESIGNATION.— 
In the event that a recipient of an initial grant 
under this subpart has acquired an academic degree, 
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or expertise, in a field that was, at the time of the 
recipient’s application for that grant, designated as 
high-need 
in 
accordance 
with 
subsection 
(b)(1)(C)(vii), but is no longer so designated, the 
grant recipient may fulfill the service obligation de-
scribed in subsection (b)(1) by teaching in that field. 
‘‘(2) 
EXTENUATING
CIRCUMSTANCES.—The 
Secretary shall establish, by regulation, categories of 
extenuating circumstances under which a recipient 
of a grant under this subpart who is unable to fulfill 
all or part of his or her service obligation may be ex-
cused from fulfilling that portion of the service obli-
gation.’’; and 
(4) by adding at the end the following new sec-
tion: 
‘‘SEC. 420P. PROGRAM EVALUATION. 
‘‘The Secretary shall evaluate the effectiveness of 
TEACH grants with respect to the schools and students 
served by recipients of such grants.’’. 
PART B—FEDERAL FAMILY EDUCATION LOANS 
SEC. 421. LIMITATIONS ON AMOUNTS OF LOANS COVERED 
BY FEDERAL INSURANCE. 
Section 424(a) (20 U.S.C. 1074(a)) is amended— 
(1) by striking ‘‘2012’’ and inserting ‘‘2013’’; 
and 
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(2) by striking ‘‘2016’’ and inserting ‘‘2017’’. 
SEC. 422. FEDERAL INTEREST SUBSIDIES. 
Section 428(a)(5) (20 U.S.C. 1078(a)(5)) is amend-
ed— 
(1) by striking ‘‘2012’’ and inserting ‘‘2013’’; 
and 
(2) by striking ‘‘2016’’ and inserting ‘‘2017’’. 
SEC. 423. STUDENT LOAN INFORMATION. 
Section 428(k) (20 U.S.C. 1078(k)) is amended by 
adding at the end the following new paragraph: 
‘‘(4) STUDENT LOAN INFORMATION.— 
‘‘(A) Notwithstanding any other provision 
of law or regulation, if requested by an institu-
tion of higher education or a third party 
servicer (as defined in section 481(c)) working 
on behalf of such institution to prevent student 
loan defaults for borrowers who currently at-
tend or previously attended such institution, a 
lender, secondary market, holder, or guaranty 
agency shall provide, free of charge and in a 
timely and effective manner, any student loan 
information pertaining to loans made under this 
title, as determined by the Secretary, to such 
borrowers maintained by that entity, provided 
that the information requested is for a borrower 
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who currently attends or previously attended 
such institution. 
‘‘(B) An institution and any third party 
servicer obtaining access to information under 
subparagraph (A), including any subcontractor 
obtaining access to information under subpara-
graph (C)(iii), shall safeguard that informa-
tion— 
‘‘(i) as required by any law applicable 
to the institution, third party servicer, or 
subcontractor; and 
‘‘(ii) at least to the same extent that 
the disclosing financial institution is re-
quired to safeguard its customer informa-
tion under sections 501 and 505(b) of the 
Gramm-Leach-Bliley Act (15 U.S.C. 6801, 
6805(b)). 
‘‘(C) Any third party servicer that obtains 
information under this paragraph— 
‘‘(i) shall only use the information in 
a manner directly related to the default 
prevention work the servicer is performing 
on behalf of the institution of higher edu-
cation; 
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‘‘(ii) shall not sell the information to 
other entities; 
‘‘(iii) shall not share the information 
with, or transfer the information to, enti-
ties other than the borrower, a subcon-
tractor of the third party servicer for pur-
poses of skip tracing, or the institution of 
higher education referenced in subpara-
graph (A); and 
‘‘(iv) shall be subject to any regula-
tions established by the Secretary pursuant 
to section 432 concerning the misuse of 
such information, including any penalties 
for such misuse. 
‘‘(D) Any requirement under subparagraph 
(A) to provide student loan information shall be 
considered an applicable legal requirement for 
the purposes of section 502(e)(8) of the 
Gramm-Leach-Bliley 
Act 
(15 
U.S.C. 
6802(e)(8)). 
‘‘(E) Any subcontractor obtaining access to 
information under subparagraph (C)(iii) shall 
meet the same restrictions that apply to third 
party servicers under subparagraph (C).’’. 
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SEC. 424. VOLUNTARY FLEXIBLE AGREEMENTS. 
Section 428A(a) (20 U.S.C. 1078–1(a)) is amended 
by adding at the end the following new paragraph: 
‘‘(3) REPORT
REQUIRED.—The Secretary, in 
consultation with the guaranty agencies partici-
pating under voluntary flexible agreements, shall re-
port on an annual basis to the authorizing commit-
tees regarding the program outcomes that the vol-
untary flexible agreements have had with respect to 
program integrity, program and cost efficiencies, de-
linquency prevention, default aversion, and consumer 
education programs described in section 433A, and 
the availability and delivery of student financial aid. 
Such report shall include— 
‘‘(A) a description of each voluntary flexi-
ble agreement and the performance goals estab-
lished by the Secretary for each agreement; 
‘‘(B) a list of participating guaranty agen-
cies and the specific statutory or regulatory 
waivers provided to each guaranty agency and 
any waivers provided to other guaranty agencies 
under paragraph (2); 
‘‘(C) a description of the standards by 
which each agency’s performance under the 
agency’s voluntary flexible agreement was as-
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sessed and the degree to which each agency 
achieved the performance standards; 
‘‘(D) an analysis of the fees paid by the 
Secretary, and the costs and efficiencies 
achieved under each voluntary flexible agree-
ment; and 
‘‘(E) an identification of promising prac-
tices for program improvement that could be 
replicated by other guaranty agencies.’’. 
SEC. 425. GRACE PERIOD FOR GRADUATE AND PROFES-
SIONAL STUDENT PLUS LOANS. 
(a) AMENDMENT.—Section 428B(d) (20 U.S.C. 
1078–2(d)) is amended by amending paragraphs (1) and 
(2) to read as follows: 
‘‘(1) COMMENCEMENT
OF
REPAYMENT.—Re-
payment of principal on loans made under this sec-
tion shall— 
‘‘(A) commence not later than— 
‘‘(i) in the case of a parent borrower, 
60 days after the date such loan is dis-
bursed by the lender; and 
‘‘(ii) in the case of a graduate or pro-
fessional student borrower, commence at 
the beginning of a repayment period that 
begins the day after 6 months after the 
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date the student ceases to carry at least 
one-half the normal full-time academic 
workload (as determined by the institu-
tion); and 
‘‘(B) be subject to deferral during any pe-
riod during which the graduate or professional 
student or the parent meets the conditions re-
quired for a deferral under section 427(a)(2)(C) 
or 428(b)(1)(M). 
‘‘(2) CAPITALIZATION OF INTEREST.— 
‘‘(A) IN
GENERAL.—Interest on loans 
made under this section— 
‘‘(i) which accrues prior to the begin-
ning 
of 
repayment 
under 
paragraph 
(1)(A)(i), shall be added to the principal 
amount of the loan; and 
‘‘(ii) which accrues during a period in 
which payments of principal are deferred 
pursuant to paragraph (1)(B) shall, if 
agreed upon by the borrower and the lend-
er— 
‘‘(I)(aa) be paid monthly or quar-
terly; or 
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‘‘(bb) be added to the principal 
amount of the loan not more fre-
quently than quarterly by the lender. 
‘‘(B) INSURABLE
LIMITS.—Capitalization 
of interest under this paragraph shall not be 
deemed to exceed the annual insurable limit on 
account of the borrower.’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
428(b)(7)(C) (20 U.S.C. 1078(b)(7)(C)) is amended by 
striking ‘‘, 428B,’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall be effective for loans issued on or after 
July 1, 2008. 
SEC. 426. CONSOLIDATION LOAN DISCLOSURE. 
Section 428C(b)(1) (20 U.S.C. 1078–3(b)(1)) is 
amended— 
(1) by redesignating subparagraphs (E) and 
(F) as subparagraphs (F) and (G), respectively; and 
(2) by inserting after subparagraph (D) the fol-
lowing new subparagraph: 
‘‘(E) that the lender will disclose, in a 
clear and conspicuous manner, to borrowers 
who seek to consolidate loans made under part 
E of this title— 
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‘‘(i) that once the borrower adds a 
Federal Perkins Loan to a Federal Con-
solidation Loan, the borrower will lose all 
interest-free periods that would have been 
available, such as those when no interest 
accrues on the Federal Perkins Loan while 
the borrower is enrolled in school at least 
half-time, during the grace period, and 
during periods when the borrower’s stu-
dent loan repayments are deferred; 
‘‘(ii) that the borrower will no longer 
be eligible for loan cancellation of Federal 
Perkins Loans under any provision of sec-
tion 465; and 
‘‘(iii) in detail the occupations listed 
in section 465 for which the borrower will 
lose eligibility for Federal Perkins Loan 
cancellation;’’. 
SEC. 427. EXTENSION OF CONSOLIDATION LOAN AUTHOR-
ITY. 
Section 428C(e) (20 U.S.C. 1078–3(c)) is amended 
by striking ‘‘2012’’ and inserting ‘‘2013’’. 
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SEC. 428. REQUIREMENTS FOR DISBURSEMENT OF STU-
DENT LOANS. 
(a) SPECIAL RULE.—Section 428G(a) (20 U.S.C. 
1078–7(a)) is amended by adding at the end the following 
new paragraph: 
‘‘(4) AMENDMENT TO SPECIAL RULE.—Begin-
ning on October 1, 2011, the special rule under 
paragraph (3) shall be applied by substituting ‘15 
percent’ for ‘10 percent’.’’. 
(b) REQUIREMENTS FOR DISBURSEMENTS TO FIRST 
YEAR STUDENTS.—Section 428G(b) (20 U.S.C. 1078– 
7(b)) is amended by adding at the end the following new 
paragraph: 
‘‘(3) AMENDMENT TO COHORT DEFAULT RATE 
EXEMPTION.—Beginning on October 1, 2011, the 
exemption to the requirements of paragraph (1) in 
the second sentence of such paragraph shall be ap-
plied by substituting ‘15 percent’ for ‘10 percent’.’’. 
SEC. 429. LOAN FORGIVENESS FOR SERVICE IN AREAS OF 
NATIONAL NEED. 
Section 428K (20 U.S.C. 1078–11) is amended to 
read as follows: 
‘‘SEC. 428K. LOAN FORGIVENESS FOR SERVICE IN AREAS OF 
NATIONAL NEED. 
‘‘(a) PROGRAM AUTHORIZED.— 
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‘‘(1) LOAN
FORGIVENESS
AUTHORIZED.—The 
Secretary shall forgive, in accordance with this sec-
tion, the student loan obligation of a borrower in the 
amount specified in subsection (c) who— 
‘‘(A) is employed full-time in an area of 
national need described in subsection (b); and 
‘‘(B) is not in default on a loan for which 
the borrower seeks forgiveness. 
‘‘(2) METHOD
OF
LOAN
FORGIVENESS.—To 
provide loan forgiveness under paragraph (1), the 
Secretary is authorized to carry out a program— 
‘‘(A) through the holder of the loan, to as-
sume the obligation to repay a qualified loan 
amount for a loan made, insured, or guaranteed 
under this part (other than an excepted PLUS 
loan (as such term is defined in section 
493C(a))); and 
‘‘(B) to cancel a qualified loan amount for 
a loan made under part D of this title (other 
than such an excepted PLUS loan). 
‘‘(3) REGULATIONS.—The Secretary is author-
ized to issue such regulations as may be necessary 
to carry out the provisions of this section. 
‘‘(b) AREAS OF NATIONAL NEED.—For purposes of 
this section, an individual shall be treated as employed in 
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an area of national need if the individual is employed full- 
time as any of the following: 
‘‘(1) EARLY CHILDHOOD EDUCATORS.—An in-
dividual who is employed as an early childhood edu-
cator in an eligible preschool program or eligible 
early childhood education program in a low-income 
community, and who is involved directly in the care, 
development, and education of infants, toddlers, or 
young children age 5 and under. 
‘‘(2) NURSES.—An individual who is em-
ployed— 
‘‘(A) as a nurse in a clinical setting; or 
‘‘(B) as a member of the nursing faculty at 
an accredited school of nursing (as those terms 
are defined in section 801 of the Public Health 
Service Act (42 U.S.C. 296)). 
‘‘(3) FOREIGN
LANGUAGE
SPECIALISTS.—An 
individual who has obtained a baccalaureate or ad-
vanced degree in a critical foreign language and is 
employed— 
‘‘(A) in an elementary or secondary school 
as a teacher of a critical foreign language; 
‘‘(B) in an agency of the United States 
Government in a position that regularly re-
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quires the use of such critical foreign language; 
or 
‘‘(C) in an institution of higher education 
as a faculty member or instructor teaching a 
critical foreign language. 
‘‘(4) LIBRARIANS.—An individual who is em-
ployed as a librarian in— 
‘‘(A) a public library that serves a geo-
graphic area within which the public schools 
have a combined average of 30 percent or more 
of their total student enrollments composed of 
children counted under section 1113(a)(5) of 
the Elementary and Secondary Education Act 
of 1965; or 
‘‘(B) a high-need school. 
‘‘(5) HIGHLY QUALIFIED TEACHERS: SERVING 
STUDENTS WHO ARE LIMITED ENGLISH PROFICIENT, 
LOW-INCOME
COMMUNITIES, 
AND
UNDERREP-
RESENTED POPULATIONS.—An individual who— 
‘‘(A) is highly qualified as such term is de-
fined in section 9101 of the Elementary and 
Secondary Education Act of 1965; and 
‘‘(B)(i) is employed as a teacher educating 
students who are limited English proficient; 
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‘‘(ii) is employed as a teacher in a high- 
need school; or 
‘‘(iii) is an individual from an underrep-
resented population in the teaching profession, 
as determined by the Secretary. 
‘‘(6) CHILD
WELFARE
WORKERS.—An indi-
vidual who— 
‘‘(A) has obtained a degree in social work 
or a related field with a focus on serving chil-
dren and families; and 
‘‘(B) is employed in public or private child 
welfare services. 
‘‘(7) SPEECH-LANGUAGE
PATHOLOGISTS
AND 
AUDIOLOGISTS.—An individual who is a speech-lan-
guage pathologist or audiologist, who is employed in 
an eligible preschool program or an elementary or 
secondary school, and who has, at a minimum, a 
graduate degree in speech-language pathology, audi-
ology, or communication sciences and disorders. 
‘‘(8) NATIONAL SERVICE.—An individual who is 
engaged as a participant in a project under the Na-
tional and Community Service Act of 1990 (as such 
terms are defined in section 101 of such Act (42 
U.S.C. 12511)). 
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‘‘(9) SCHOOL COUNSELORS.—An individual who 
is employed as a school counselor (as such term is 
defined in section 5421(e)(3) of Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 
7245(e)(3))) in a high-need school. 
‘‘(10) PUBLIC SECTOR EMPLOYEES.—An indi-
vidual who is employed in public safety (including as 
a first responder, firefighter, police officer, or other 
law enforcement or public safety officer), emergency 
management (including as an emergency medical 
technician), public health (including full-time profes-
sionals engaged in health care practitioner occupa-
tions and health care support occupations, as such 
terms are defined by the Bureau of Labor Statis-
tics), or public interest legal services (including pros-
ecution or public defense or legal advocacy in low- 
income communities at a nonprofit organization). 
‘‘(11) NUTRITION
PROFESSIONALS.—An indi-
vidual who— 
‘‘(A) is a licensed, certified, or registered 
dietician who has completed a degree in a rel-
evant field; and 
‘‘(B) has obtained employment in an agen-
cy of the special supplemental nutrition pro-
gram for women, infants, and children under 
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section 17 of the Child Nutrition Act of 1966 
(42 U.S.C. 1786). 
‘‘(12) MEDICAL
SPECIALISTS.—An individual 
who— 
‘‘(A) has received his or her degree from 
an accredited medical school (as accredited by 
the Liaison Committee on Medical Education or 
as defined by this title IV); and 
‘‘(B)(i) has been accepted to, or currently 
participates in, a graduate medical education 
training program or fellowship (or both) to pro-
vide health care services (as recognized by the 
Accreditation Council for Graduate Medical 
Education); or 
‘‘(ii) has been accepted to, or currently 
participates in, a graduate medical education 
program or fellowship (or both) to provide 
health care services that— 
‘‘(I) requires more than 5 years of 
total graduate medical training; and 
‘‘(II) has fewer United States medical 
school graduate applicants than the total 
number of training and fellowship positions 
available in the programs specified in sub-
clause (I) of this clause. 
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‘‘(13) MENTAL HEALTH PROFESSIONALS.—In-
dividuals who have at least a master’s degree in so-
cial work, psychology, or psychiatry and who are 
providing mental health services to children, adoles-
cents, or veterans. 
‘‘(14) DENTISTS.—An individual who— 
‘‘(A) has received his or her degree from 
an accredited dental school (as accredited by 
the Commission on Dental Accreditation) and 
has completed residency training in pediatric 
dentistry, general dentistry, or dental public 
health; or 
‘‘(B) is employed as a member of the fac-
ulty at a program or school accredited by the 
Commission on Dental Accreditation. 
‘‘(15) STEM EMPLOYEES.—An individual who 
is employed in engineering, technology, applied 
sciences, or mathematics. 
‘‘(16) PHYSICAL THERAPISTS.—Individuals who 
are physical therapists and who are providing phys-
ical therapy services to children, adolescents, or vet-
erans. 
‘‘(17) SUPERINTENDENTS, PRINCIPALS, AND 
OTHER
ADMINISTRATORS.—Individuals 
who 
are 
school superintendents, principals, or other adminis-
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trators for 5 consecutive complete school years in a 
school district of a local educational agency in which 
30 percent or more of the schools are schools that 
qualify under section 465(a)(2)(A) for loan cancella-
tion for Perkins loan recipients who teach in such a 
school. 
‘‘(c) QUALIFIED LOAN AMOUNT.—At the end of each 
school, academic, or calendar year of full-time employment 
on or after the date of enactment of the College Oppor-
tunity and Affordability Act of 2008 in an area of national 
need described in subsection (b), not to exceed 5 years, 
the Secretary shall forgive not more than $2,000 of the 
student loan obligation of a borrower that is outstanding 
after the completion of each such school, academic, or cal-
endar year of employment, as appropriate, not to exceed 
$10,000 in the aggregate for any borrower. 
‘‘(d) PRIORITY.—The Secretary shall grant loan for-
giveness under this section on a first-come, first-served 
basis, and subject to the availability of appropriations. 
‘‘(e) CONSTRUCTION.—Nothing in this section shall 
be construed to authorize the refunding of any repayment 
of a loan. 
‘‘(f) SEGAL AMERICORPS EDUCATION AWARD AND 
NATIONAL SERVICE AWARD RECIPIENTS.—A student bor-
rower who qualifies for the maximum education award 
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under subtitle D of title I of the National and Community 
Service Act of 1990 (42 U.S.C. 12601 et seq.) shall re-
ceive under this section the amount, if any, by which the 
maximum benefit available under this section exceeds the 
maximum education award available under such subtitle. 
‘‘(g) INELIGIBILITY FOR DOUBLE BENEFITS.—No 
borrower may receive a reduction of loan obligations under 
both this section and section 428J or 460. 
‘‘(h) DEFINITIONS.—In this section: 
‘‘(1) AUDIOLOGIST.—The term ‘audiologist’ 
means an individual who— 
‘‘(A) has received, at a minimum, a grad-
uate degree in audiology from an institution of 
higher education accredited by an agency or as-
sociation recognized by the Secretary pursuant 
to section 496(a) of this Act; and 
‘‘(B) provides audiology services under 
subsection (ll)(2) of section 1861 of the Social 
Security Act (42 U.S.C. 1395x(ll)(2)), or meets 
or exceeds the qualifications for a qualified au-
diologist under subsection (ll)(4) of such section 
(42 U.S.C. 1395x(ll)(4)). 
‘‘(2) 
EARLY
CHILDHOOD
EDUCATOR.—The 
term ‘early childhood educator’ means an early 
childhood educator who works directly with children 
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in an eligible preschool program or eligible early 
childhood education program who has completed a 
baccalaureate or advanced degree in early childhood 
development, early childhood education, or in a field 
related to early childhood education. 
‘‘(3) ELIGIBLE
PRESCHOOL
PROGRAM.—The 
term ‘eligible preschool program’ means a program 
that provides for the care, development, and edu-
cation of infants, toddlers, or young children age 5 
and under, meets any applicable State or local gov-
ernment licensing, certification, approval, and reg-
istration requirements, and is operated by— 
‘‘(A) a public or private school that is sup-
ported, sponsored, supervised, or administered 
by a local educational agency; 
‘‘(B) a Head Start agency serving as a 
grantee designated under the Head Start Act 
(42 U.S.C. 9831 et seq.); 
‘‘(C) a nonprofit or community based orga-
nization; or 
‘‘(D) a child care program, including a 
home. 
‘‘(4) ELIGIBLE EARLY CHILDHOOD EDUCATION 
PROGRAM.—The term ‘eligible early childhood edu-
cation program’ means— 
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‘‘(A) a family child care program, center- 
based child care program, State prekinder-
garten program, school program, or other out- 
of-home early childhood development care pro-
gram, that— 
‘‘(i) is licensed or regulated by the 
State; and 
‘‘(ii) serves 2 or more unrelated chil-
dren who are not old enough to attend kin-
dergarten; 
‘‘(B) a Head Start Program carried out 
under the Head Start Act (42 U.S.C. 9831 et 
seq.); or 
‘‘(C) an Early Head Start Program carried 
out under section 645A of the Head Start Act 
(42 U.S.C. 9840a). 
‘‘(5) LOW-INCOME
COMMUNITY.—The term 
‘low-income community’ means a school attendance 
area (as defined in section 1113(a)(2)(A) of the Ele-
mentary and Secondary Education Act of 1965)— 
‘‘(A) in which 70 percent of households 
earn less than 85 percent of the State median 
household income; or 
‘‘(B) that includes a high-need school. 
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‘‘(6) PHYSICAL THERAPIST.—The term ‘phys-
ical therapist’ means an individual who— 
‘‘(A) has received, at a minimum, a grad-
uate degree in physical therapy from an institu-
tion of higher education accredited by an agen-
cy or association recognized by the Secretary 
pursuant to section 496(a) of this Act; and 
‘‘(B) provides physical therapy services 
under 1861(p) of the Social Security Act (42 
U.S.C. 1395x(p), or meets or exceeds the quali-
fications for a qualified physical therapist as de-
termined by State law. 
‘‘(7) NURSE.—The term ‘nurse’ means a nurse 
who meets all of the following: 
‘‘(A) The nurse graduated from— 
‘‘(i) an accredited school of nursing 
(as those terms are defined in section 801 
of the Public Health Service Act (42 
U.S.C. 296)); 
‘‘(ii) a nursing center; or 
‘‘(iii) an academic health center that 
provides nurse training. 
‘‘(B) The nurse holds a valid and unre-
stricted license to practice nursing in the State 
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in which the nurse practices in a clinical set-
ting. 
‘‘(C) The nurse holds one or more of the 
following: 
‘‘(i) A graduate degree in nursing, or 
an equivalent degree. 
‘‘(ii) A nursing degree from a colle-
giate school of nursing (as defined in sec-
tion 801 of the Public Health Service Act 
(42 U.S.C. 296)). 
‘‘(iii) A nursing degree from an asso-
ciate degree school of nursing (as defined 
in section 801 of the Public Health Service 
Act (42 U.S.C. 296)). 
‘‘(iv) A nursing degree from a diploma 
school of nursing (as defined in section 
801 of the Public Health Service Act (42 
U.S.C. 296)). 
‘‘(8) SPEECH-LANGUAGE
PATHOLOGIST.—The 
term ‘speech-language pathologist’ means a speech- 
language pathologist who— 
‘‘(A) has received, at a minimum, a grad-
uate degree in speech-language pathology or 
communication sciences and disorders from an 
institution of higher education accredited by an 
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agency or association recognized by the Sec-
retary pursuant to section 496(a) of this Act; 
and 
‘‘(B) provides speech-language pathology 
services under section 1861(ll)(1) of the Social 
Security Act (42 U.S.C. 1395x(ll)(1)), or meets 
or exceeds the qualifications for a qualified 
speech-language pathologist under subsection 
(ll)(3) of such section (42 U.S.C. 1395x(ll)(3)). 
‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section 
such sums as may be necessary for fiscal year 2009 and 
each of the 4 succeeding fiscal years to provide loan for-
giveness in accordance with this section.’’. 
SEC. 430. LOAN REPAYMENT FOR CIVIL LEGAL ASSISTANCE 
ATTORNEYS. 
Part B of title IV (20 U.S.C. 1071 et seq.) is amend-
ed by inserting after section 428K the following new sec-
tion: 
‘‘SEC. 428L. LOAN REPAYMENT FOR CIVIL LEGAL ASSIST-
ANCE ATTORNEYS. 
‘‘(a) PURPOSE.—The purpose of this section is to en-
courage qualified individuals to enter and continue em-
ployment as civil legal assistance attorneys. 
‘‘(b) DEFINITIONS.—In this section: 
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‘‘(1) CIVIL
LEGAL
ASSISTANCE
ATTORNEY.— 
The term ‘civil legal assistance attorney’ means an 
attorney who— 
‘‘(A) is a full-time employee of a nonprofit 
organization that provides legal assistance with 
respect to civil matters to low-income individ-
uals without a fee; 
‘‘(B) as such employee, provides civil legal 
assistance as described in subparagraph (A) on 
a full-time basis; and 
‘‘(C) is continually licensed to practice law. 
‘‘(2) STUDENT LOAN.—The term ‘student loan’ 
means— 
‘‘(A) subject to subparagraph (B), a loan 
made, insured, or guaranteed under part B, D, 
or E of this title; and 
‘‘(B) a loan made under section 428C or 
455(g), to the extent that such loan was used 
to repay— 
‘‘(i) a Federal Direct Stafford Loan, a 
Federal 
Direct 
Unsubsidized 
Stafford 
Loan, or a Federal Direct PLUS Loan; 
‘‘(ii) a loan made under section 428, 
428B, or 428H; or 
‘‘(iii) a loan made under part E. 
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‘‘(c) PROGRAM AUTHORIZED.—The Secretary shall 
carry out a program of assuming the obligation to repay 
a student loan, by direct payments on behalf of a borrower 
to the holder or the Secretary in the case of a loan under 
part D or E of such loan, in accordance with subsection 
(d), for any borrower who— 
‘‘(1) is employed as a civil legal assistance at-
torney; and 
‘‘(2) is not in default on a loan for which the 
borrower seeks repayment. 
‘‘(d) TERMS OF AGREEMENT.— 
‘‘(1) IN GENERAL.—To be eligible to receive re-
payment benefits under subsection (c), a borrower 
shall enter into a written agreement with the Sec-
retary that specifies that— 
‘‘(A) the borrower will remain employed as 
a civil legal assistance attorney for a required 
period of service of not less than 3 years, unless 
involuntarily separated from that employment; 
‘‘(B) if the borrower is involuntarily sepa-
rated from employment on account of mis-
conduct, or voluntarily separates from employ-
ment, before the end of the period specified in 
the agreement, the borrower will repay the Sec-
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retary the amount of any benefits received by 
such employee under this agreement; 
‘‘(C) if the borrower is required to repay 
an amount to the Secretary under subpara-
graph (B) and fails to repay such amount, a 
sum equal to that amount shall be recoverable 
by the Federal Government from the employee 
by such methods as are provided by law for the 
recovery of amounts owed to the Federal Gov-
ernment; 
‘‘(D) the Secretary may waive, in whole or 
in part, a right of recovery under this sub-
section if it is shown that recovery would be 
against equity and good conscience or against 
the public interest; and 
‘‘(E) the Secretary shall make student loan 
payments under this section for the period of 
the agreement, subject to the availability of ap-
propriations. 
‘‘(2) REPAYMENTS.— 
‘‘(A) IN
GENERAL.—Any amount repaid 
by, or recovered from, an individual under this 
subsection shall be credited to the appropriation 
account from which the amount involved was 
originally paid. 
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‘‘(B) 
MERGER.—Any 
amount 
credited 
under subparagraph (A) shall be merged with 
other sums in such account and shall be avail-
able for the same purposes and period, and sub-
ject to the same limitations, if any, as the sums 
with which the amount was merged. 
‘‘(3) LIMITATIONS.— 
‘‘(A) 
STUDENT
LOAN
PAYMENT 
AMOUNT.—Student loan repayments made by 
the Secretary under this section shall be made 
subject to such terms, limitations, or conditions 
as may be mutually agreed upon by the bor-
rower and the Secretary in an agreement under 
paragraph (1), except that the amount paid by 
the Secretary under this section shall not ex-
ceed— 
‘‘(i) $6,000 for any borrower in any 
calendar year; or 
‘‘(ii) an aggregate total of $40,000 in 
the case of any borrower. 
‘‘(B) BEGINNING OF PAYMENTS.—Nothing 
in this section shall authorize the Secretary to 
pay any amount to reimburse a borrower for 
any repayments made by such borrower prior to 
the date on which the Secretary entered into an 
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agreement with the borrower under this sub-
section. 
‘‘(e) ADDITIONAL AGREEMENTS.— 
‘‘(1) IN GENERAL.—On completion of the re-
quired period of service under an agreement under 
subsection (d), the borrower and the Secretary may, 
subject to paragraph (2), enter into an additional 
agreement in accordance with subsection (d). 
‘‘(2) TERM.—An agreement entered into under 
paragraph (1) may specify that, notwithstanding 
subsection (d)(1)(A), the required period of service 
during which the borrower will remain employed as 
a civil legal assistance attorney may be less than 3 
years. 
‘‘(f) AWARD BASIS; PRIORITY.— 
‘‘(1) AWARD BASIS.—Subject to paragraph (2), 
the Secretary shall provide repayment benefits under 
this section on a first-come, first-served basis, and 
subject to the availability of appropriations. 
‘‘(2) PRIORITY.—The Secretary shall give pri-
ority in providing repayment benefits under this sec-
tion in any fiscal year to a borrower who— 
‘‘(A) has practiced law for 5 years or less 
and, for at least 90 percent of the time in such 
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practice, has served as a civil legal assistance 
attorney; 
‘‘(B) received repayment benefits under 
this section during the preceding fiscal year; 
and 
‘‘(C) has completed less than 3 years of 
the first required period of service specified for 
the borrower in an agreement entered into 
under subsection (d). 
‘‘(g) REGULATIONS.—The Secretary is authorized to 
issue such regulations as may be necessary to carry out 
the provisions of this section. 
‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section 
$10,000,000 for fiscal year 2009 and such sums as may 
be necessary for each of the 4 succeeding fiscal years.’’. 
SEC. 431. LOAN FORGIVENESS FOR VOLUNTEER MEN-
TORING. 
Part B of title IV is further amended by inserting 
after section 428L (as added by the preceding section) the 
following new section: 
‘‘SEC. 428M. LOAN FORGIVENESS FOR VOLUNTEER MEN-
TORING. 
‘‘(a) PROGRAM AUTHORIZED.— 
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‘‘(1) LOAN
FORGIVENESS
AUTHORIZED.—The 
Secretary shall forgive, in accordance with this sec-
tion, the student loan obligation of a borrower in the 
amount specified in subsection (c) who— 
‘‘(A) commits to volunteering as a mentor 
for a period of at least one school year as de-
scribed in subsection (b); 
‘‘(B) attends a recognized community col-
lege; and 
‘‘(C) is not in default on a loan for which 
the borrower seeks forgiveness. 
‘‘(2) METHOD
OF
LOAN
FORGIVENESS.—To 
provide loan forgiveness under paragraph (1), the 
Secretary is authorized to carry out a program— 
‘‘(A) through the holder of the loan, to as-
sume the obligation to repay a qualified loan 
amount for a loan made, insured, or guaranteed 
under this part (other than an excepted PLUS 
loan (as such term is defined in section 
493C(a))); and 
‘‘(B) to cancel a qualified loan amount for 
a loan made under part D of this title (other 
than such an excepted PLUS loan). 
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‘‘(3) REGULATIONS.—The Secretary is author-
ized to issue such regulations as may be necessary 
to carry out the provisions of this section. 
‘‘(b) VOLUNTEER MENTORING.—For purposes of this 
section, an individual shall be treated as participating in 
a volunteer mentoring program if they commit to men-
toring an at-risk child for a period of not less than one 
school year. 
‘‘(c) QUALIFIED LOAN AMOUNT.—At the end of each 
school, academic, or calendar year of volunteering as a 
mentor on or after the date of enactment of the College 
Opportunity and Affordability Act of 2007 as described 
in subsection (b), not to exceed 5 years, the Secretary shall 
forgive $10 of the student loan obligation of a borrower 
that is outstanding after the completion of each such 
school, academic, or calendar year of employment, for 
every hour of mentoring committed, not to exceed $10,000 
in the aggregate for any borrower. 
‘‘(d) PRIORITY.—The Secretary shall grant loan for-
giveness under this section on a first-come, first-served 
basis, and subject to the availability of appropriations.’’. 
SEC. 432. SETTLEMENT OF CLAIMS. 
Section 432(b) (20 U.S.C. 1082(b)) is amended by 
adding at the end the following: ‘‘The Secretary may not 
enter into any settlement of any claim under this Act that 
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exceeds $1,000,000 unless the Secretary has asked the At-
torney General to review the settlement agreement and 
issue an opinion to the Secretary and the authorizing com-
mittees related to such proposed settlement.’’. 
SEC. 433. DELINQUENCY PREVENTION, DEFAULT AVER-
SION, AND CONSUMER EDUCATION INFORMA-
TION PROGRAMS. 
Part B of title IV is further amended by inserting 
after section 433 (20 U.S.C. 1083) the following new sec-
tion: 
‘‘SEC. 433A. DELINQUENCY PREVENTION, DEFAULT AVER-
SION, AND CONSUMER EDUCATION INFORMA-
TION PROGRAMS. 
‘‘(a) GUARANTY AGENCY DUTY.—Each guaranty 
agency, with respect to loans insured by the agency, shall 
develop specific programs designed to prevent delin-
quencies and avert defaults. 
‘‘(b) TRAINING FOR STUDENTS AND FAMILIES.— 
Each guaranty agency, after consulting with institutions 
of higher education (including institutions of higher edu-
cation participating in the William Ford Direct Loan Pro-
gram), shall develop and make available high quality edu-
cational programs and materials to provide training for 
students and families in budgeting and financial manage-
ment, including debt management and other aspects of fi-
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nancial literacy, such as the cost of using high interest 
loans to pay for postsecondary education. Such programs 
and materials shall address budgeting and financial man-
agement relating to student loans, and shall be made 
available to students and families, in a form and language 
that is understandable, before, during, and after the stu-
dents’ enrollment. 
‘‘(c) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to prohibit— 
‘‘(1) a guaranty agency from using activities, 
programs, and materials existing on the date of en-
actment of this section in meeting the requirements 
of this section; or 
‘‘(2) a lender or loan servicer from providing 
outreach or financial aid literacy information in ac-
cordance with subsection (b).’’. 
SEC. 434. DEFINITION OF ELIGIBLE INSTITUTION: PARTICI-
PATION RATE INDEX. 
(a) AMENDMENTS.—Section 435(a) (20 U.S.C. 
1085(a)) is amended— 
(1) in paragraph (2)— 
(A) in subparagraph (A)(ii), by striking 
‘‘paragraph (4)’’ and inserting ‘‘paragraph 
(5)’’; and 
(B) in subparagraph (B)— 
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current and former students at an institution enter 
repayment on loans under section 428, 428A, or 
428H, received for attendance at the institution, the 
percentage of those current and former students who 
enter repayment on such loans (or on the portion of 
a loan made under section 428C that is used to 
repay any such loans) received for attendance at the 
institution in that fiscal year who default before the 
end of each succeeding fiscal year.’’. 
(b) EFFECTIVE DATE AND TRANSITION.— 
(1) EFFECTIVE DATE.—The amendments made 
by subsection (a) shall be effective for purposes of 
calculating cohort default rates for fiscal year 2008 
and succeeding fiscal years. 
(2) TRANSITION.—Notwithstanding paragraph 
(1), the method of calculating cohort default rates 
under section 435(m) of the Higher Education Act 
of 1965 as in effect on the day before the date of 
enactment of this Act shall continue in effect, and 
the rates so calculated shall be the basis for any 
sanctions imposed on institutions of higher edu-
cation because of their cohort default rates, until 
three consecutive years of cohort default rates cal-
culated in accordance with the amendments made by 
subsection (a) are available. 
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(b) REVISE AUTHORITY TO PRESCRIBE ADDITIONAL 
FISCAL
CONTROLS.—Section 463(a)(9) (20 U.S.C. 
1087cc(a)(9)) is amended by inserting ‘‘, except that noth-
ing in this paragraph shall be construed to permit the Sec-
retary to require the assignment of loans to the Secretary 
other than as is provided for in paragraphs (4) and (5)’’ 
before the period. 
SEC. 464. PERKINS LOAN TERMS AND CONDITIONS. 
(a) LOAN
LIMITS.—Section 464(a) (20 U.S.C. 
1087dd(a)) is amended— 
(1) in paragraph (2)(A)— 
(A) by striking ‘‘$4,000’’ in clause (i) and 
inserting ‘‘$5,500’’; and 
(B) by striking ‘‘$6,000’’ in clause (ii) and 
inserting ‘‘$8,000’’; and 
(2) in paragraph (2)(B)— 
(A) by striking ‘‘$40,000’’ in clause (i) and 
inserting ‘‘$60,000’’; 
(B) by striking ‘‘$20,000’’ in clause (ii) 
and inserting ‘‘$27,500’’; and 
(C) by striking ‘‘$8,000’’ in clause (iii) and 
inserting ‘‘$11,000’’. 
(b) 
FORBEARANCE.—Section 
464 
(20 
U.S.C. 
1087dd) is further amended— 
(1) in subsection (e)— 
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