I
104TH CONGRESS
1ST SESSION
H. R. 1720
To amend the Higher Education Act of 1965 to provide for the cessation
of Federal sponsorship of two Government sponsored enterprises, and
for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 25, 1995
Mr. MCKEON introduced the following bill; which was referred to the
Committee on Economic and Educational Opportunities
A BILL
To amend the Higher Education Act of 1965 to provide
for the cessation of Federal sponsorship of two Govern-
ment sponsored enterprises, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCES.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Privatization Act of 1995’’.
(b) REFERENCES.—References in this Act to ‘‘the
Act’’ are references to the Higher Education Act of 1965.
SEC. 2. PURPOSE.
The purpose of this Act is to provide for the cessation
of Federal sponsorship of two Government sponsored en-
terprises, the Student Loan Marketing Association and
the College Construction Loan Insurance Association now
that both corporations are economically viable and have
successfully fulfilled the purposes for which they were cre-
ated.
TITLE I—STUDENT LOAN
MARKETING ASSOCIATION
SEC. 101. REORGANIZATION OF THE STUDENT LOAN MAR-
KETING ASSOCIATION THROUGH THE FOR-
MATION OF A HOLDING COMPANY.
(a) AMENDMENT.—Part B of title IV of the Higher
Education Act of 1965 (20 U.S.C. 1071 et seq. (1988))
is amended by inserting after section 439 (20 U.S.C.
1087–2) the following new section:
‘‘SEC. 440. REORGANIZATION OF THE STUDENT LOAN MAR-
KETING ASSOCIATION THROUGH THE FOR-
MATION OF A HOLDING COMPANY.
‘‘(a) ACTIONS BY THE ASSOCIATION’S BOARD OF DI-
RECTORS.—The Board of Directors of the Association
shall take or cause to be taken all such action as it deems
necessary or appropriate to effect, upon the shareholder
approval described in subsection (b), a restructuring of the
common stock ownership of the Association, as set forth
in a plan of reorganization adopted by the Board of Direc-
tors (the terms of which shall be consistent with this Act)
so that all of the outstanding common shares shall be di-
rectly owned by an ordinary business corporation char-
tered under State or District of Columbia law (the ‘Hold-
ing Company’), as the Board of Directors may determine.
Such actions may include, in the Board’s discretion, a
merger of a wholly owned subsidiary of the Holding Com-
pany with and into the Association, which would have the
effect provided in the plan of reorganization and the law
of the jurisdiction in which such subsidiary is incor-
porated. As part of the restructuring, the Board of Direc-
tors may cause (1) the common shares of the Association
to be converted, at the reorganization effective date, to
common shares of the Holding Company on a one for one
basis, consistent with applicable State or District of Co-
lumbia law, and (2) Holding Company common shares to
be registered with the Securities and Exchange Commis-
sion.
‘‘(b) SHAREHOLDER APPROVAL.—The plan of reor-
ganization adopted by the Board of Directors pursuant to
subsection (a) shall be submitted to common stockholders
of the Association for their approval. The reorganization
shall occur at the reorganization effective date, provided
that the plan of reorganization has been approved by the
affirmative votes, cast in person or by proxy, of the holders
of a majority of the issued and outstanding shares of the
Association common stock.
‘‘(c) TRANSITION.—
‘‘(1) IN GENERAL.—Except as specifically pro-
vided in this section, until the dissolution date the
Association shall continue to have all of the rights,
privileges and obligations set forth in, and shall be
subject to all of the limitations and restrictions of,
section 439 of this Act as in effect on the effective
date of this section. The Holding Company and its
affiliates other than the Association shall not be en-
titled to any of the rights, privileges and obligations,
and shall not be subject to the limitations and re-
strictions, applicable to the Association under section
439 of this Act as in effect on the effective date of
this section, except as specifically provided in this
section. The Holding Company and its subsidiaries
(other than the Association) shall not purchase loans
insured under this Act until such time as the Asso-
ciation ceases acquiring such loans, except that the
Association may continue to acquire loans as a lend-
er of last resort pursuant to section 439(q) of this
Act or under an agreement with the Secretary de-
scribed in section 440(c)(6).
‘‘(2) TRANSFER OF CERTAIN PROPERTY.—Ex-
cept as specifically provided in this section, at the
reorganization effective date or as soon as prac-
ticable thereafter, the Association shall use its best
efforts to transfer to the Holding Company or its
subsidiaries (or both), in each case, as directed by
the Holding Company, all real and personal property
of the Association (both tangible and intangible)
other than the remaining property. Without limiting
the preceding sentence, such transferred property
shall include all right, title and interest in (A) direct
or indirect subsidiaries of the Association (excluding
any interest in any government sponsored enter-
prise), (B) contracts, leases, and other agreements,
(C) licenses and other intellectual property, and (D)
any other property of the Association. Notwithstand-
ing the preceding provisions of this paragraph, noth-
ing in this paragraph shall be construed to prohibit
the Association from transferring remaining prop-
erty from time to time to the Holding Company or
its subsidiaries, subject to the provisions of para-
graph (4).
‘‘(3) TRANSFER OF PERSONNEL.—At the reor-
ganization effective date, employees of the Associa-
tion shall become employees of the Holding Com-
pany (or of the subsidiaries), and the Holding Com-
pany (or the subsidiaries or both) shall provide all
necessary and appropriate management and oper-
ational support (including loan servicing) to the As-
sociation, as requested by the Association. The Asso-
ciation may, however, obtain such management and
operational support from other persons or entities.
‘‘(4) DIVIDENDS.—The Association may pay
dividends in the form of cash or noncash distribu-
tions so long as at the time of the declaration of
such dividends, after giving effect to the payment of
such dividends as of the date of such declaration by
the Board of Directors of the Association, the Asso-
ciation’s capital would be in compliance with the
capital standards set forth in section 439(r) of this
Act. If, at any time after the reorganization effective
date, the Association fails to comply with such cap-
ital standards, the Holding Company shall be obli-
gated to transfer to the Association additional cap-
ital in such amounts as are necessary to ensure that
the Association again complies with the capital
standards, but not to exceed that amount received
by the Holding Company as dividends during the 6-
month period immediately preceding such failure.
‘‘(5) VALUATION
OF
NONCASH
DISTRIBU-
TIONS.—After the reorganization effective date, any
distribution of noncash assets by the Association to
the Holding Company shall be valued at book value
on the date the Association’s Board of Directors ap-
proved such distribution for purposes of calculating
compliance with section 439(r) of this Act.
‘‘(6) RESTRICTIONS ON NEW BUSINESS ACTIV-
ITY OR ACQUISITION OF ASSETS BY ASSOCIATION.—
After the reorganization effective date, the Associa-
tion shall not engage in any new business activities
or acquire any additional assets other than—
‘‘(A) in connection with (i) student loan
purchases through September 30, 2003, and (ii)
contractual 
commitments 
for 
future
warehousing advances or pursuant to letters of
credit or standby bond purchase agreements
which are outstanding as of the reorganization
effective date;
‘‘(B) in connection with its serving as a
lender-of-last-resort pursuant to section 439 of
this Act; and
‘‘(C) in connection with its purchase of
loans insured under this part, if the Secretary,
with the approval of the Secretary of the Treas-
ury, requests the Association to continue or re-
sume its secondary market purchase program
because the Secretary determines there is inad-
equate liquidity for loans made under this part,
the Secretary is authorized to enter into agree-
ments with the Association covering these addi-
tional secondary market activities.
Any agreement entered into under subparagraph (C)
shall cover a period of 12 months, but may be re-
newed if the Secretary determines that liquidity re-
mains inadequate. The fee provided under section
439(h)(7) shall not apply to loans acquired under
any such agreement with the Secretary.
‘‘(7) ISSUANCE OF DEBT OBLIGATIONS DURING
THE TRANSITION PERIOD; ATTRIBUTES OF DEBT OB-
LIGATIONS.—After the reorganization effective date,
the Association shall not issue debt obligations which
mature later than September 30, 2007, except in
connection with serving as a lender-of-last-resort
pursuant to section 439 of this Act or with purchas-
ing loans under an agreement with the Secretary as
described in paragraph (6) of this subsection. Noth-
ing in this subsection shall modify the attributes ac-
corded the debt obligations of the Association by sec-
tion 439, regardless of whether such debt obligations
are incurred prior to, or at any time following, the
reorganization effective date or are transferred to a
trust in accordance with subsection (d).
‘‘(8) MONITORING
OF
SAFETY
AND
SOUND-
NESS.—
‘‘(A) OBLIGATION TO OBTAIN, MAINTAIN,
AND REPORT INFORMATION.—The Association
shall obtain such information and make and
keep such records as the Secretary of the
Treasury may from time to time prescribe con-
cerning the Association’s policies, procedures,
or systems for monitoring and controlling finan-
cial risk to it resulting from the activities of
any of its associated persons, to the extent such
activities are reasonably likely to have a mate-
rial impact on the financial condition of the As-
sociation, including its capital ratio, its liquid-
ity, or its ability to conduct and finance its op-
erations, except that the Association’s obliga-
tions under this subsection with respect to any
associated person which is a third party servicer
(as defined in 34 C.F.R. 682.200(b)) shall be
limited to providing to the Secretary of the
Treasury copies of any reports or other infor-
mation provided to the Secretary of Education
from any office of the Holding Company or
any of its subsidiaries.
‘‘(iv) No director of the Association
that is appointed by the President pursu-
ant to section 439(c)(1)(A) may serve as a
director of the Holding Company.
‘‘(v) At least one officer of the Asso-
ciation shall remain an officer solely of the
Association.
‘‘(vi) Transactions between the Asso-
ciation and the Holding Company or its
other subsidiaries, including any loan serv-
icing arrangements, shall be on terms no
less favorable to the Association than the
Association could obtain from an unrelated
third party.
‘‘(vii) The Association shall not extend
credit to the Holding Company or any of
its affiliates, nor guarantee or provide any
credit enhancement to any debt obligations
of the Holding Company or any of its af-
filiates.
‘‘(C) ENCUMBRANCE
OF
ASSETS.—Not-
withstanding any otherwise applicable Federal
or State law, rule, or regulation, or legal or eq-
uitable principle, doctrine, or theory to the con-
trary, under no circumstances shall the assets
of—
‘‘(i) the Association be available or
used to pay claims or debts of or incurred
by the Holding Company; or
‘‘(ii) the Holding Company be avail-
able or used to pay claims or debts of or
incurred by the Association.
Nothing in this subparagraph shall limit the
right of the Association to pay dividends not
otherwise prohibited hereunder or limit any li-
ability of the Holding Company explicitly pro-
vided for in this part.
‘‘(D) HOLDING
COMPANY
ACTIVITIES.—
After the reorganization effective date and prior
to the dissolution of the Association in accord-
ance with section 440(d), Holding Company ac-
tivities shall be limited to ownership of the As-
sociation and any other subsidiaries. All busi-
ness activities shall be conducted through sub-
sidiaries.
‘‘(9) ASSOCIATION
BOARD
OF
DIRECTORS.—
Notwithstanding any other provision of part B of
this title, after the reorganization effective date, the
14 directors of the Association elected by the Asso-
ciation’s stockholders (which immediately after the
reorganization effective date shall be the Holding
Company) shall no longer be required to meet the
eligibility requirements set forth in section 439(c).
‘‘(10) ISSUANCE OF STOCK WARRANTS.—At the
reorganization effective date, the Holding Company
shall issue to the Secretary of the Treasury 100,000
stock warrants, each entitling the holder of the stock
warrant to purchase from the Holding Company one
share of the registered common stock of the Holding
Company at any time on or before September 30,
2007. The exercise price for such warrants shall be
an amount equal to (A) the average closing price of
the common stock of the Association for the 20 busi-
ness days prior to and including the date of enact-
ment of this section on the exchange or market
which is then the primary exchange or market for
the common stock of the Association, plus (B) 10
percent of the average price described in clause (A)
subject to any adjustments necessary to reflect the
conversion of Association common stock into Hold-
ing Company common stock as part of the plan of
reorganization approved by the Association’s share-
holders.
‘‘(11) RESTRICTIONS ON TRANSFER OF ASSO-
CIATION
SHARES
AND
BANKRUPTCY
OF
ASSOCIA-
TION.—After the reorganization effective date, the
Holding Company shall not sell, pledge, or otherwise
transfer the outstanding shares of the Association,
or agree to or cause the liquidation of the Associa-
tion to file a petition of bankruptcy under title 11,
United States Code, without prior approval of the
Secretary of the Treasury.
‘‘(d) TERMINATION OF THE ASSOCIATION.—The As-
sociation shall dissolve, and its separate existence shall
terminate on September 30, 2007, after discharge of all
outstanding debt obligations and liquidation pursuant to
this subsection. The Association may dissolve pursuant to
this subsection prior to such date by notifying the Sec-
retary of Education and the Secretary of the Treasury of
its intention to dissolve, unless within 60 days of receipt
of such notice the Secretary of Education notifies the As-
sociation that it continues to be needed to serve as a lend-
er of last resort pursuant to section 439(q) of this Act
or continues to be needed to purchase loans under an
agreement with the Secretary described in subsection
(c)(6) of this section. On the dissolution date, the Associa-
tion shall take the following actions:
‘‘(1) ESTABLISHMENT OF A TRUST.—The Asso-
ciation shall, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the
Secretary of the Treasury, the Association and the
appointed trustee, irrevocably transfer all remaining
obligations of the Association to the trust and irrev-
ocably deposit or cause to be deposited into such
trust, to be held as trust funds solely for the benefit
of holders of the remaining obligations, money or di-
rect noncallable obligations of the United States of
America or any agency thereof for which payment
the full faith and credit of the United States is
pledged, maturing as to principal and interest in
such amounts and at such times as are determined
by the Secretary of the Treasury to be sufficient,
without consideration of any significant reinvestment
of such interest, to pay the principal of, and interest
on, the remaining obligations in accordance with
their terms. To the extent the Association cannot
provide money or qualifying obligations in the
amount required, the Holding Company shall be re-
quired to transfer money or qualifying obligations to
the trust in the amount necessary to prevent any de-
ficiency.
‘‘(2) USE OF TRUST ASSETS.—All money, obli-
gations, or financial assets deposited into the trust
pursuant to this subsection shall be applied by the
trustee to the payment of the remaining obligations
assumed by the trust. Upon the fulfillment of the
trustee’s duties under the trust, any remaining as-
sets of the trust shall be transferred to the Holding
Company or its subsidiaries, or both, as directed by
the Holding Company.
‘‘(3) OBLIGATIONS NOT TRANSFERRED TO THE
TRUST.—The Association shall make proper provi-
sion for all other obligations of the Association, in-
cluding the repurchase or redemption, or the making
of proper provision for the repurchase or redemp-
tion, of any preferred stock of the Association then
outstanding. Any obligations of the Association
which cannot be fully satisfied shall become liabil-
ities of the Holding Company as of the date of dis-
solution.
‘‘(4) TRANSFER OF REMAINING ASSETS.—After
compliance with paragraphs (1), (2), and (3), the
Association shall transfer to the Holding Company
any remaining assets of the Association.
‘‘(e) OPERATION OF THE HOLDING COMPANY.—
‘‘(1) HOLDING
COMPANY
BOARD
OF
DIREC-
TORS.—The number and composition of the Board
of Directors of the Holding Company shall be deter-
mined as set forth in the Holding Company’s charter
or like instrument (as amended from time to time)
or bylaws (as amended from time to time) and as
permissible under the laws of the jurisdiction of its
incorporation.
‘‘(2) HOLDING COMPANY NAME.—The names of
the Holding Company and any direct or indirect
subsidiary of the Holding Company other than the
Association (A) may not contain the name ‘Student
Loan Marketing Association’, and (B) may contain
(to the extent permitted by the applicable State or
District of Columbia law), ‘Sallie Mae’, or variations
thereof or such other name as the Board of Direc-
tors of the Association or the Holding Company
shall deem appropriate.
‘‘(f) STRICT CONSTRUCTION.—Except as specifically
set forth in this section, nothing contained in this section
shall be construed to limit the authority of the Association
as a federally chartered corporation, or of the Holding
Company as a State or District of Columbia chartered cor-
poration.
‘‘(g) DEADLINE FOR REORGANIZATION EFFECTIVE
DATE.—This section shall be of no further force and effect
in the event that the reorganization effective date does not
occur on or before 18 months after the date of enactment
of this section.
‘‘(h) DEFINITIONS.—For purposes of this section—
‘‘(1) The term ‘Association’ means the Student
Loan Marketing Association.
‘‘(2) The term ‘dissolution date’ shall mean
September 30, 2007, or such earlier date as the Sec-
retary of Education permits the transfer of remain-
ing obligations in accordance with subsection (d) of
this section.
‘‘(3) The term ‘reorganization effective date’
means the effective date of the reorganization as de-
termined by the Board of Directors of the Associa-
tion, which shall not be earlier than the date that
stockholder approval is obtained pursuant to sub-
section (b) of this section and shall not be later than
the date that is 18 months after the date of enact-
ment of this section.
‘‘(4) The term ‘Holding Company’ means the
new business corporation formed pursuant to this
section by the Association under the laws of any
State of the United States or the District of Colum-
bia.
‘‘(5) The term ‘remaining obligations’ shall
mean the debt obligations of the Association out-
standing as of the dissolution date.
‘‘(6) The term ‘remaining property’ shall mean
the following assets and liabilities of the Association
which are outstanding as of the reorganization effec-
tive date: (A) debt obligations issued by the Associa-
tion, (B) contracts relating to interest rate, cur-
rency, or commodity positions or protections, (C) in-
vestment securities owned by the Association, (D)
any instruments, assets, or agreements described in
section 439(d) of this Act (including without limita-
tion all student loans, forward purchase and lending
commitments, warehousing advances, academic fa-
cilities obligations, letters of credit, standby bond
purchase agreements, liquidity agreements, and stu-
dent loan revenue bonds or other loans), and (E) ex-
cept as specifically prohibited by this Act, any other
nonmaterial assets or liabilities of the Association
which the Association’s Board of Directors deter-
mines to be necessary or appropriate to its oper-
ations.
‘‘(7) The term ‘reorganization’ means the re-
structuring event or events (including any merger
event) giving effect to the holding company structure
described in subsection (a) of this section.
‘‘(8) The term ‘subsidiaries’ shall mean one or
more direct or indirect subsidiaries of the Holding
Company.’’.
(b) TECHNICAL AMENDMENTS.—
(1) AMENDMENTS TO THE HIGHER EDUCATION
ACT.—Effective on the reorganization effective date
(as defined in section 440(h)(3) of the Higher Edu-
cation Act of 1965, as added by subsection (a)), sec-
tions 435(d)(1) (F) and (G) and 428C(a)(1)(A) of
such Act (20 U.S.C. 1085(d)(1)(F), (G); 1078–
3(a)(1)(A)) are each amended by inserting after
‘‘Student Loan Marketing Association’’ the follow-
ing: ‘‘or the Holding Company of the Student Loan
Marketing Association, including all subsidiaries of
such Holding Company, created pursuant to section
440 of this Act,’’.
(2) REPEAL
OF
THE
ASSOCIATION’S
CHAR-
TER.—Effective on the dissolution date (as defined
in section 440(h)(2) of the Higher Education Act of
1965, as added by subsection (a)), section 439 of
the Higher Education Act of 1965 (20 U.S.C. 1087–
2) is repealed.
TITLE II—COLLEGE CONSTRUC-
TION LOAN INSURANCE ASSO-
CIATION
SEC. 201. PRIVATIZATION OF COLLEGE CONSTRUCTION
LOAN INSURANCE ASSOCIATION.
(a) REPEAL OF STATUTORY RESTRICTIONS.—Part D
of title VII of the Higher Education Act of 1965 (20
U.S.C. 1132f et seq.) is repealed.
(b) STATUS OF THE CORPORATION.—
(1) STATUS OF THE CORPORATION.—The Cor-
poration shall not be an agency, instrumentality, or
establishment of the United States Government and
shall not be a ‘‘Government corporation’’ nor a
‘‘Government controlled corporation’’ as defined in
section 103 of title 5, United States Code. No action
under section 1491 of title 28, United States Code
(commonly known as the Tucker Act) shall be allow-
able against the United States based on the actions
of the Corporation.
(2) CORPORATE
POWERS.—The Corporation
shall have the power to engage in any business or
other activities for which corporations may be orga-
nized under the laws of any State of the United
States or the District of Columbia. The Corporation
shall have the power to enter into contracts, to exe-
cute instruments, to incur liabilities, to provide prod-
ucts and services, and to do all things as are nec-
essary or incidental to the proper management of its
affairs and the efficient operation of a private, for-
profit business.
(c) RELATED PRIVATIZATION REQUIREMENTS.—
(1) NOTICE
REQUIREMENTS.—During the 5-
year period following the date of the enactment of
this Act, the Corporation shall include in any docu-
ment offering the Corporation’s securities a state-
ment that—
(A) the Corporation is not a Government-
sponsored enterprise or instrumentality of the
United States; and
(B) the Corporation’s obligations are not
guaranteed by the full faith and credit of the
United States.
(2) CORPORATE CHARTER.—The Corporation’s
charter shall be amended as necessary and without
delay to conform the requirements of this Act.
(3) CORPORATE NAME.—The name of the Cor-
poration, or of any direct or indirect subsidiary
thereof, may not contain the term ‘‘College Con-
struction Loan Insurance Association’’.
(4) ARTICLES OF INCORPORATION.—The Cor-
poration shall amend its articles of incorporation
without delay to reflect that one of the purposes of
the Corporation shall be to guarantee, insure and re-
insure bonds, leases, and other evidences of debt of
educational institutions, including Historically Black
Colleges and Universities and other academic insti-
tutions which are ranked in the lower investment
grade category using a nationally recognized credit
rating system.
(5) TRANSITION REQUIREMENTS.—
(A) REQUIREMENTS UNTIL STOCK SALE.—
Notwithstanding subsection (a), the require-
ments of section 754 of the Higher Education
Act of 1965 (20 U.S.C. 1132f–3), as in exist-
ence as of the day before enactment of this Act,
shall continue to be effective until the day im-
mediately following the date of closing of the
purchase of the Secretary’s stock (or the date
of closing of the final purchase, in the case of
multiple transactions) pursuant to subsection
(d) of this section.
(B) REPORTS AFTER STOCK SALE.—The
Corporation shall, not later than March 30 of
the first full calendar year immediately follow-
ing the sale pursuant to subsection (d), and
each of the 2 succeeding years, submit to the
Secretary of Education a report describing the
Corporation’s efforts to assist in the financing
of 
education 
facilities 
projects, 
including
projects for elementary, secondary, and post-
secondary educational institution infrastructure,
and detailing, on a project-by-project basis, the
Corporation’s business dealings with edu-
cational institutions that are rated by a nation-
ally recognized statistical rating organization at
or below the organization’s third highest rat-
ings.
(d) SALE OF FEDERALLY OWNED STOCK.—
(1) SALE OF STOCK REQUIRED.—The Secretary
of the Treasury shall, upon the request of the Sec-
retary of Education sell, pursuant to section 324 of
title 31, United States Code, the voting common
stock of the Corporation owned by the Secretary of
Education not later than one year after the date of
the enactment of this Act.
(2) PURCHASE BY THE CORPORATION.—In the
event that the Secretary of the Treasury is unable
to sell the voting common stock, or any portion
thereof, at a price acceptable to the Secretary of
Education and the Secretary of the Treasury within
the period specified in paragraph (1), the Corpora-
tion shall purchase such stock at a price determined
by the Secretary of the Treasury and acceptable to
the Corporation based on independent appraisal by
one or more nationally recognized financial advisory
firms. Such firms shall be selected by the Secretary
of the Treasury in consultation with the Secretary of
Education and the Corporation.
(e) ASSISTANCE BY THE CORPORATION.—The Cor-
poration shall provide such assistance as the Secretary of
the Treasury and the Secretary of Education may require
to facilitate the sale of the stock under this section.
(f) DEFINITION.—As used in this section, the term
‘‘Corporation’’ means the Corporation established pursu-
ant to the provision of law repealed by subsection (a).
TITLE 
III—GENERAL 
PROVI-
SIONS 
RELATING 
TO 
STU-
DENT 
ASSISTANCE 
PRO-
GRAMS
SEC. 301. AMENDMENT TO HIGHER EDUCATION ACT.
Section 481(b)(6) of the Higher Education Act of
1965 (20 U.S.C. 1088(b)(6)) is amended by striking ‘‘(6)
which has’’ and all that follows through the period and
insert the following: ‘‘which has at least 15 percent of total
institutional revenues from all sources, including all con-
tract training and education revenue, that are not derived
from funds under this title, as certified by the institution’s
independent auditor using generally accepted accounting
practices. For the purposes of determining an institution’s
eligibility under this subsection, the Secretary shall not
retroactively review any institution’s fiscal year which
began prior to April 30, 1994.’’.
TITLE IV—REPEALERS AND
OTHER AMENDMENTS
SEC. 401. HIGHER EDUCATION PROVISIONS.
(a) HIGHER EDUCATION ACT
OF 1965 PROVI-
SIONS.—The following provisions of the Higher Education
Act of 1965 are repealed:
(1) Part B of title I (20 U.S.C. 1011 et seq.),
relating to articulation agreements.
(2) Part C of title I (20 U.S.C. 1015 et seq.),
relating to access and equity to education for all
Americans through telecommunications.
(3) Title II (20 U.S.C. 1021 et seq.), relating
to academic libraries and information services.
(4) Chapter 2 of subpart 2 of part A of title IV
(20 U.S.C. 1070a–21 et seq.), relating to national
early intervention scholarships.
(5) Chapter 3 of subpart 2 of part A of title IV
(20 U.S.C. 1070a–31 et seq.), relating to presi-
dential access scholarships.
(6) Chapter 4 of subpart 2 of part A of title IV
(20 U.S.C. 1070a–41 et seq.), relating to model pro-
gram 
community 
partnerships 
and 
counseling
grants.
(7) Chapter 5 of subpart 2 of part A of title IV
(20 U.S.C. 1070a–52 et seq.), relating to a database
and information line concerning student financial as-
sistance.
(8) Chapter 8 of subpart 2 of part A of title IV
(20 U.S.C. 1070a–81), relating to technical assist-
ance for teachers and counselors.
(9) Subpart 4 of part A of title IV (20 U.S.C.
1070c et seq.), relating to State student incentive
grants.
(10) Subpart 5 of part A of title IV of the
Higher Education Act of 1965 (20 U.S.C. 1070d–
2).
(11) Subpart 8 of part A of title IV (20 U.S.C.
1070f), relating to special child care services for dis-
advantaged college students.
(12) Section 428J (20 U.S.C. 1078–10), relat-
ing to loan forgiveness for teachers, individuals per-
forming national community service and nurses.
(13) Section 486 (20 U.S.C. 1093), relating to
training in financial aid services.
(14) Subpart 1 of part H of title IV (20 U.S.C.
1099a et seq.) relating to State postsecondary re-
view entity programs.
(15) Part A of title V (20 U.S.C. 1102 et seq.),
relating to State and local programs for teacher ex-
cellence.
(16) Part B of title V (20 U.S.C. 1103 et seq.),
relating to national teacher academies.
(17) Subpart 1 of part C of title V (20 U.S.C.
1104 et seq.), relating to Douglas teacher scholar-
ships.
(18) Subpart 3 of part C of title V (20 U.S.C.
1106 et seq.), relating to the teacher corps.
(19) Subpart 3 of part D of title V (20 U.S.C.
1109 et seq.), relating to class size demonstration
grants.
(20) Subpart 4 of part D of title V (20 U.S.C.
1110 et seq.), relating to middle school teaching
demonstration programs.
(21) Subpart 1 of part E of title V (20 U.S.C.
1111 et seq.), relating to new teaching careers.
(22) Subpart 1 of part F of title V (20 U.S.C.
1113 et seq.), relating to the national mini corps
programs.
(23) Section 586 (20 U.S.C. 1114), relating to
demonstration grants for critical language and area
studies.
(24) Section 587 (20 U.S.C. 1114a), relating to
development of foreign languages and cultures in-
structional materials.
(25) Subpart 3 of part F of title V (20 U.S.C.
1115), relating to small State teaching initiatives.
(26) Subpart 4 of part F of title V (20 U.S.C.
1116), relating to faculty development grants.
(27) Subpart 5 of part F of title V (20 U.S.C.
1117), relating to early childhood staff training and
professional enhancement.
(A) by striking subparagraph (E); and
(B) by redesignating subparagraphs (F)
through (H) as subparagraphs (E) through (G),
respective;
(2) in section 487(a)(3), by striking subpara-
graph (B) and redesignating subparagraphs (C) and
(D) as subparagraphs (B) and (C), respectively;
(3) in section 487(a)(15), by striking ‘‘the Sec-
retary of Veterans Affairs, and State review entities
under subpart 1 of part H’’ and inserting ‘‘and the
Secretary of Veterans Affairs’’;
(4) in section 487(a)(21), by striking ‘‘, State
postsecondary review entities,’’;
(5) in section 487(c)(1)(A)(i), by striking
‘‘State agencies, and the State review entities re-
ferred to in subpart 1 of part H’’ and inserting ‘‘and
State agencies’’;
(6) in section 487(c)(4), by striking ‘‘, after
consultation with each State review entity designated
under subpart 1 of part H,’’;
(7) in section 487(c)(5), by striking ‘‘State re-
view entities designated under subpart 1 of part
H,’’;
(8) in section 496(a)(7), by striking ‘‘and the
appropriate State postsecondary review entity’’;
(9) in section 496(a)(8), by striking ‘‘and the
State postsecondary review entity of the State in
which the institution of higher education is located’’;
(10) in section 498(g)(2), by striking everything
after the first sentence;
(11) in section 498A(a)(2)(D), by striking ‘‘by
the appropriate State postsecondary review entity
designated under subpart 1 of this part or’’;
(12) in section 498A(a)(2)—
(A) by inserting ‘‘and’’ after the semicolon
at the end of subparagraph (E);
(B) by striking subparagraph (F); and
(C) by redesignating subparagraph (G) as
subparagraph (F); and
(13) in section 498A(a)(3)—
(A) by inserting ‘‘and’’ after the semicolon
at the end of subparagraph (C);
(B) by striking ‘‘; and’’ at the end of sub-
paragraph (D) and inserting a period; and
(C) by striking subparagraph (E).
SEC. 402. EFFECTIVE DATE.
The repeals and amendments made by this title shall
take effect on October 1, 1996.
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