I 
110TH CONGRESS 
1ST SESSION 
H. R. 5 
To amend the Higher Education Act of 1965 to reduce interest rates for 
student borrowers. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 12, 2007 
Mr. GEORGE MILLER of California (for himself, Mr. COURTNEY, Mr. KILDEE, 
Mr. PAYNE, Mr. ANDREWS, Mr. SCOTT of Virginia, Ms. WOOLSEY, Mr. 
HINOJOSA, Mrs. MCCARTHY of New York, Mr. TIERNEY, Mr. KUCINICH, 
Mr. WU, Mr. HOLT, Mrs. DAVIS of California, Mr. DAVIS of Illinois, Mr. 
GRIJALVA, Mr. BISHOP of New York, Ms. LINDA T. SA´NCHEZ of Cali-
fornia, Mr. ALTMIRE, Ms. CLARKE, Mr. HARE, Ms. HIRONO, Mr. 
LOEBSACK, Mr. SARBANES, Mr. SESTAK, Ms. SHEA-PORTER, Mr. 
YARMUTH, Mr. ACKERMAN, Mr. ALLEN, Mr. ARCURI, Mr. BACA, Mr. 
BAIRD, Ms. BALDWIN, Ms. BEAN, Mr. BECERRA, Ms. BERKLEY, Mr. 
BERMAN, Mr. BERRY, Mr. BLUMENAUER, Ms. BORDALLO, Mr. BOREN, 
Mr. BOSWELL, Mr. BOUCHER, Mrs. BOYDA of Kansas, Mr. BRADY of 
Pennsylvania, Mr. BRALEY of Iowa, Mr. BUTTERFIELD, Mrs. CAPPS, Mr. 
CAPUANO, Mr. CARDOZA, Mr. CARNAHAN, Mr. CARNEY, Ms. CARSON, 
Ms. CASTOR, Mr. CHANDLER, Mrs. CHRISTENSEN, Mr. CLAY, Mr. CLY-
BURN, Mr. COHEN, Mr. CONYERS, Mr. COOPER, Mr. COSTA, Mr. 
COSTELLO, Mr. CRAMER, Mr. CROWLEY, Mr. CUELLAR, Mr. CUMMINGS, 
Mr. DAVIS of Alabama, Mr. LINCOLN DAVIS of Tennessee, Mr. DEFAZIO, 
Ms. DEGETTE, Mr. DELAHUNT, Ms. DELAURO, Mr. DICKS, Mr. DIN-
GELL, Mr. DOGGETT, Mr. DONNELLY, Mr. DOYLE, Mr. ELLISON, Mr. 
ELLSWORTH, Mr. EMANUEL, Mr. ENGEL, Ms. ESHOO, Mr. ETHERIDGE, 
Mr. FALEOMAVAEGA, Mr. FARR, Mr. FATTAH, Mr. FILNER, Mr. FRANK 
of Massachusetts, Ms. GIFFORDS, Mrs. GILLIBRAND, Mr. GONZALEZ, Mr. 
AL GREEN of Texas, Mr. GENE GREEN of Texas, Mr. HALL of New 
York, Ms. HARMAN, Mr. HASTINGS of Florida, Mr. HIGGINS, Mr. HILL, 
Mr. HINCHEY, Mr. HODES, Mr. HOLDEN, Mr. HONDA, Ms. HOOLEY, Mr. 
HOYER, Mr. INSLEE, Mr. ISRAEL, Mr. JACKSON of Illinois, Ms. JACK-
SON-LEE of Texas, Ms. EDDIE BERNICE JOHNSON of Texas, Mr. JOHN-
SON of Georgia, Mrs. JONES of Ohio, Mr. KAGEN, Ms. KAPTUR, Mr. 
KENNEDY, Ms. KILPATRICK of Michigan, Mr. KIND, Mr. KLEIN of Flor-
ida, Mr. LANGEVIN, Mr. LANTOS, Mr. LAMPSON, Mr. LARSEN of Wash-
ington, Mr. LARSON of Connecticut, Ms. LEE, Mr. LEVIN, Mr. LEWIS of 
Georgia, Mr. LIPINSKI, Ms. ZOE LOFGREN of California, Mrs. LOWEY, 
Mr. LYNCH, Mr. MAHONEY of Florida, Mrs. MALONEY of New York, Mr. 
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MARKEY, Ms. MATSUI, Ms. MCCOLLUM of Minnesota, Mr. MCDERMOTT, 
Mr. MCGOVERN, Mr. MCINTYRE, Mr. MCNERNEY, Mr. MCNULTY, Mr. 
MEEHAN, Mr. MEEK of Florida, Mr. MICHAUD, Ms. MILLENDER- 
MCDONALD, Mr. MITCHELL, Mr. MOORE of Kansas, Mr. MORAN of Vir-
ginia, Mr. MURPHY of Connecticut, Mr. PATRICK MURPHY of Pennsyl-
vania, Mr. NADLER, Mrs. NAPOLITANO, Ms. NORTON, Mr. OBERSTAR, 
Mr. OBEY, Mr. OLVER, Mr. ORTIZ, Mr. PALLONE, Mr. PASCRELL, Mr. 
PASTOR, Mr. PERLMUTTER, Mr. PETERSON of Minnesota, Mr. POMEROY, 
Mr. PRICE of North Carolina, Mr. RAHALL, Mr. RANGEL, Mr. REYES, 
Mr. RODRIGUEZ, Mr. ROSS, Mr. ROTHMAN, Ms. ROYBAL-ALLARD, Mr. 
RUPPERSBERGER, Mr. RUSH, Mr. RYAN of Ohio, Mr. SALAZAR, Ms. 
SCHAKOWSKY, Mr. SCHIFF, Ms. SCHWARTZ, Mr. SCOTT of Georgia, Mr. 
SERRANO, Mr. SHERMAN, Mr. SHULER, Mr. SIRES, Mr. SKELTON, Ms. 
SLAUGHTER, Mr. SMITH of Washington, Mr. SNYDER, Ms. SOLIS, Mr. 
SPACE, Mr. SPRATT, Mr. STARK, Mr. STUPAK, Ms. SUTTON, Mrs. 
TAUSCHER, Mr. THOMPSON of Mississippi, Mr. THOMPSON of California, 
Mr. TOWNS, Mr. UDALL of Colorado, Mr. UDALL of New Mexico, Mr. 
VAN
HOLLEN, Ms. VELA´ZQUEZ, Mr. WALZ
of Minnesota, Ms. 
WASSERMAN SCHULTZ, Ms. WATERS, Ms. WATSON, Mr. WAXMAN, Mr. 
WEINER, Mr. WELCH of Vermont, Mr. WEXLER, Mr. WILSON of Ohio, 
and Mr. WYNN) introduced the following bill; which was referred to the 
Committee on Education and Labor 
A BILL 
To amend the Higher Education Act of 1965 to reduce 
interest rates for student borrowers. 
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 ‘‘College Student Relief 
Act of 2007’’. 
SEC. 2. INTEREST RATE REDUCTIONS. 
(a) FFEL INTEREST RATES.— 
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(1) Section 427A(l) of the Higher Education 
Act of 1965 (20 U.S.C. 1077a(l)) is amended by 
adding at the end the following new paragraph: 
‘‘(4) REDUCED
RATES
FOR
UNDERGRADUATE 
SUBSIDIZED
LOANS.—Notwithstanding subsection 
(h) and paragraph (1) of this subsection, with re-
spect to any loan to an undergraduate student made, 
insured, or guaranteed under this part (other than 
a loan made pursuant to section 428B, 428C, or 
428H) for which the first disbursement is made on 
or after July 1, 2006, and before January 1, 2012, 
the applicable rate of interest shall be as follows: 
‘‘(A) For a loan for which the first dis-
bursement is made on or after July 1, 2006, 
and before July 1, 2007, 6.80 percent on the 
unpaid principal balance of the loan. 
‘‘(B) For a loan for which the first dis-
bursement is made on or after July 1, 2007, 
and before July 1, 2008, 6.12 percent on the 
unpaid principal balance of the loan. 
‘‘(C) For a loan for which the first dis-
bursement is made on or after July 1, 2008, 
and before July 1, 2009, 5.44 percent on the 
unpaid principal balance of the loan. 
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‘‘(D) For a loan for which the first dis-
bursement is made on or after July 1, 2009, 
and before July 1, 2010, 4.76 percent on the 
unpaid principal balance of the loan. 
‘‘(E) For a loan for which the first dis-
bursement is made on or after July 1, 2010, 
and before July 1, 2011, 4.08 percent on the 
unpaid principal balance of the loan. 
‘‘(F) For a loan for which the first dis-
bursement is made on or after July 1, 2011, 
and before January 1, 2012, 3.40 percent on 
the unpaid principal balance of the loan.’’. 
(2) SPECIAL ALLOWANCE CROSS REFERENCE.— 
Section 438(b)(2)(I)(ii)(II) of such Act is amended 
by striking ‘‘section 427A(l)(1)’’ and inserting ‘‘sec-
tion 427A(l)(1) or (l)(4)’’. 
(b) DIRECT
LOAN
INTEREST
RATES.—Section 
455(b)(7) of the Higher Education Act of 1965 (20 
U.S.C. 1087e(b)(7)) is amended by adding at the end the 
following new subparagraph: 
‘‘(D) 
REDUCED
RATES
FOR
UNDER-
GRADUATE
FDSL.—Notwithstanding the pre-
ceding paragraphs of this subsection, for Fed-
eral Direct Stafford Loans made to under-
graduate students for which the first disburse-
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ment is made on or after July 1, 2006, and be-
fore January 1, 2012, the applicable rate of in-
terest shall be as follows: 
‘‘(i) For a loan for which the first dis-
bursement is made on or after July 1, 
2006, and before July 1, 2007, 6.80 per-
cent on the unpaid principal balance of the 
loan. 
‘‘(ii) For a loan for which the first 
disbursement is made on or after July 1, 
2007, and before July 1, 2008, 6.12 per-
cent on the unpaid principal balance of the 
loan. 
‘‘(iii) For a loan for which the first 
disbursement is made on or after July 1, 
2008, and before July 1, 2009, 5.44 per-
cent on the unpaid principal balance of the 
loan. 
‘‘(iv) For a loan for which the first 
disbursement is made on or after July 1, 
2009, and before July 1, 2010, 4.76 per-
cent on the unpaid principal balance of the 
loan. 
‘‘(v) For a loan for which the first 
disbursement is made on or after July 1, 
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2010, and before July 1, 2011, 4.08 per-
cent on the unpaid principal balance of the 
loan. 
‘‘(vi) For a loan for which the first 
disbursement is made on or after July 1, 
2011, and before January 1, 2012, 3.40 
percent on the unpaid principal balance of 
the loan.’’. 
SEC. 3. REDUCTION OF LENDER INSURANCE PERCENTAGE. 
(a) AMENDMENT.—Subparagraph (G) of section 
428(b)(1) of the Higher Education Act of 1965 (20 
U.S.C. 1078(b)(1)(G)) is amended to read as follows: 
‘‘(G) insures 95 percent of the unpaid 
principal of loans insured under the program, 
except that— 
‘‘(i) such program shall insure 100 
percent of the unpaid principal of loans 
made with funds advanced pursuant to sec-
tion 428(j) or 439(q); and 
‘‘(ii) notwithstanding the preceding 
provisions of this subparagraph, such pro-
gram shall insure 100 percent of the un-
paid principal amount of exempt claims as 
defined in subsection (c)(1)(G);’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect with respect to loans made 
on or after July 1, 2007. 
SEC. 4. GUARANTEE AGENCY COLLECTION RETENTION. 
Clause (ii) of section 428(c)(6)(A) of the Higher 
Education Act of 1965 (20 U.S.C. 1078(c)(6)(A)(ii)) is 
amended to read as follows: 
‘‘(ii) an amount equal to 24 percent of 
such payments for use in accordance with 
section 422B, except that— 
‘‘(I) beginning October 1, 2003 
and ending September 30, 2007, this 
subparagraph shall be applied by sub-
stituting ‘23 percent’ for ‘24 percent’; 
‘‘(II) beginning October 1, 2007 
and ending September 30, 2008, this 
subparagraph shall be applied by sub-
stituting ‘20 percent’ for ‘24 percent’; 
‘‘(III) beginning October 1, 2008 
and ending September 30, 2010, this 
subparagraph shall be applied by sub-
stituting ‘18 percent’ for ‘24 percent’; 
and 
‘‘(IV) beginning October 1, 2010, 
this subparagraph shall be applied by 
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substituting for ‘24 percent’ a per-
centage determined in accordance 
with the regulations of the Secretary 
and equal to the average rate paid to 
collection agencies that have contracts 
with the Secretary.’’. 
SEC. 5. ELIMINATION OF EXCEPTIONAL PERFORMER STA-
TUS FOR LENDERS. 
(a) ELIMINATION OF STATUS.—Part B of title IV of 
the Higher Education Act of 1965 (20 U.S.C. 1071 et 
seq.) is amended by striking section 428I (20 U.S.C. 
1078–9). 
(b) CONFORMING AMENDMENTS.—Part B of title IV 
of such Act is further amended— 
(1) 
in 
section 
428(c)(1) 
(20 
U.S.C. 
1078(c)(1))— 
(A) by striking subparagraph (D); and 
(B) by redesignating subparagraphs (E) 
through (H) as subparagraphs (D) through 
(G), respectively; and 
(2) in section 438(b)(5) (20 U.S.C. 1087– 
1(b)(5)), by striking the matter following subpara-
graph (B). 
(c) EFFECTIVE DATE.—The amendments made by 
subsections (a) and (b) shall take effect on July 1, 2007. 
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SEC. 6. REDUCTION OF LENDER SPECIAL ALLOWANCE PAY-
MENTS. 
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 clauses: 
‘‘(vi) REDUCTION
FOR
LOANS
DIS-
BURSED ON OR AFTER JULY 1, 2007.—With 
respect to a loan on which the applicable 
interest rate is determined under section 
427A(l) and for which the first disburse-
ment of principal is made on or after July 
1, 2007, the special allowance payment 
computed pursuant to this subparagraph 
shall be computed— 
‘‘(I) by substituting ‘2.24 per-
cent’ for ‘2.34 percent’ each place it 
appears in this subparagraph; 
‘‘(II) by substituting ‘1.64 per-
cent’ for ‘1.74 percent’ in clause (ii); 
and 
‘‘(III) by substituting ‘2.54 per-
cent’ for ‘2.64 percent’ each place it 
appears in clauses (iii) and (iv). 
‘‘(vii) 
SMALLER
LENDER
EXEMP-
TION.—Clause (vi) shall not apply to the 
calculation of the special allowance pay-
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ment with respect to any 3-month period 
for any holder of eligible loans that, to-
gether with its affiliated holders, is des-
ignated by the Secretary as a small lender. 
‘‘(viii) DESIGNATION OF SMALL LEND-
ERS.—In determining which holders of eli-
gible loans qualify for the exemption pro-
vided under clause (vii), the Secretary 
shall, using the most recently available 
data with respect to the total principal 
amount of eligible loans held by holders— 
‘‘(I) rank all holders of eligible 
loans in descending order by total 
principal amount of eligible loans 
held; 
‘‘(II) calculate the total principal 
amount of eligible loans held by all 
holders; and 
‘‘(III) identify the subset of con-
secutively ranked holders under sub-
clause (I), starting with the lowest 
ranked holder, that together hold a 
total principal amount of such loans 
equal to 10 percent of the total 
amount calculated under subclause 
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(II), but excluding the holder, if any, 
whose holdings when added cause the 
total holdings of the subset to both 
equal and then exceed such 10 per-
cent of such total amount calculated; 
and 
‘‘(IV) designate as small lenders 
any holder identified as a member of 
the subset under subclause (III).’’. 
SEC. 7. INCREASED LOAN FEES FROM LENDERS. 
Paragraph (2) of section 438(d) of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1087–1(d)(2)) is amended 
to read as follows: 
‘‘(2) AMOUNT OF LOAN FEES.—The amount of 
the loan fee which shall be deducted under para-
graph (1), but which may not be collected from the 
borrower, shall be equal to— 
‘‘(A) 0.50 percent of the principal amount 
of the loan with respect to any loan under this 
part for which the first disbursement was made 
on or after October 1, 1993, and before July 1, 
2007; and 
‘‘(B) 1.0 percent of the principal amount 
of the loan with respect to any loan under this 
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part for which the first disbursement was made 
on or after July 1, 2007.’’. 
SEC. 8. INTEREST PAYMENT REBATE FEE. 
Section 428C(f)(2) of the Higher Education Act of 
1965 (20 U.S.C. 1078–2(f)(2)) is amended— 
(1) by striking ‘‘SPECIAL RULE—’’ and insert-
ing ‘‘SPECIAL RULES—(A)’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(B) For consolidation loans based on applica-
tions received on or after July 1, 2007, if 90 percent 
or more of the total principal and accrued unpaid in-
terest outstanding on the loans held, directly or indi-
rectly, by any holder is comprised of principal and 
accrued unpaid interest owed on consolidation loans, 
the rebate described in paragraph (1) for such hold-
er shall be equal to 1.30 percent of the principal 
plus accrued unpaid interest on such loans.’’. 
Æ 
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