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‘‘(III) elects to borrow from the el-
igible lender; and
‘‘(ii) agrees to accept a special allow-
ance payment (including the recapture of
excess interest) from the Secretary with re-
spect to the eligible Federal PLUS Loans
originated under clause (i) in the amount
proposed in the second lowest winning bid
described in subparagraph (F) for the ap-
plicable State auction.
‘‘(H) SEALED BIDS; CONFIDENTIALITY.—All
bids are sealed and the Secretary keeps the bids
confidential, including following the announce-
ment of the winning bids.
‘‘(I) ELIGIBLE LENDER OF LAST RESORT.—
‘‘(i) IN GENERAL.—In the event that
there is no winning bid under subpara-
graph (F), the students at the institutions of
higher education within the State that was
the subject of the auction shall be served by
an eligible lender of last resort, as deter-
mined by the Secretary.
‘‘(ii) DETERMINATION
OF
ELIGIBLE
LENDER
OF
LAST
RESORT.—Prior to the
start of any auction under this paragraph,
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eligible lenders that desire to serve as an eli-
gible lender of last resort shall submit an
application to the Secretary at such time
and in such manner as the Secretary may
determine. Such application shall include
an assurance that the eligible lender will
meet the prequalification requirements de-
scribed in subparagraph (B).
‘‘(iii) GEOGRAPHIC
LOCATION.—The
Secretary shall identify an eligible lender of
last resort for each State.
‘‘(iv) NOTIFICATION TIMING.—The Sec-
retary shall not identify any eligible lender
of last resort until after the announcement
of all the winning bids for a State auction
for any year.
‘‘(J) GUARANTEE
AGAINST
LOSSES.—The
Secretary guarantees the eligible Federal PLUS
Loans made under this paragraph against losses
resulting from the default of a parent borrower
in an amount equal to 99 percent of the unpaid
principal and interest due on the loan.
‘‘(K) LOAN FEES.—The Secretary shall not
collect a loan fee under section 438(d) with re-
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spect to an eligible Federal Plus Loan originated
under this paragraph.
‘‘(L) CONSOLIDATION.—
‘‘(i) IN GENERAL.—An eligible lender
who is permitted to originate eligible Fed-
eral PLUS Loans for a borrower under this
paragraph shall have the option to consoli-
date such loans into 1 loan.
‘‘(ii) NOTIFICATION.—In the event a
borrower with eligible Federal PLUS Loans
made under this paragraph wishes to con-
solidate the loans, the borrower shall notify
the eligible lender who originated the loans
under this paragraph.
‘‘(iii) LIMITATION ON ELIGIBLE LEND-
ER OPTION TO CONSOLIDATE.—The option
described in clause (i) shall not apply if—
‘‘(I) the borrower includes in the
notification in clause (ii) verification
of consolidation terms and conditions
offered by an eligible lender other than
the eligible lender described in clause
(i); and
‘‘(II) not later than 10 days after
receiving such notification from the
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borrower, the eligible lender described
in clause (i) does not agree to match
such terms and conditions, or provide
more favorable terms and conditions to
such borrower than the offered terms
and conditions described in subclause
(I).
‘‘(iv) CONSOLIDATION OF ADDITIONAL
LOANS.—If a borrower has a Federal Direct
PLUS Loan or a loan made on behalf of a
dependent student under section 428B and
seeks to consolidate such loan with an eligi-
ble Federal PLUS Loan made under this
paragraph, then the eligible lender that
originated the borrower’s loan under this
paragraph may include in the consolidation
under this subparagraph a Federal Direct
PLUS Loan or a loan made on behalf of a
dependent student under section 428B, but
only if—
‘‘(I) in the case of a Federal Di-
rect PLUS Loan, the eligible lender
agrees, not later than 10 days after the
borrower requests such consolidation
from the lender, to match the consoli-
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dation terms and conditions that
would otherwise be available to the bor-
rower if the borrower consolidated such
loans in the loan program under part
D; or
‘‘(II) in the case of a loan made
on behalf of a dependent student under
section 428B, the eligible lender agrees,
not later than 10 days after the bor-
rower requests such consolidation from
the lender, to match the consolidation
terms and conditions offered by an eli-
gible lender other than the eligible
lender that originated the borrower’s
loans under this paragraph.
‘‘(v) SPECIAL ALLOWANCE ON CONSOLI-
DATION LOANS THAT INCLUDE LOANS MADE
UNDER THIS PARAGRAPH.—The applicable
special allowance payment for loans consoli-
dated under this paragraph shall be equal
to the lesser of—
‘‘(I) the weighted average of the
special allowance payment on such
loans, except that such weighted aver-
age shall exclude the special allowance
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payment for any Federal Direct PLUS
Loan included in the consolidation; or
‘‘(II) the result of—
‘‘(aa) the average of the bond
equivalent rates of the quotes of
the 3-month commercial paper (fi-
nancial) rates in effect for each of
the days in such quarter as re-
ported by the Federal Reserve in
Publication H–15 (or its suc-
cessor) for such 3-month period;
plus
‘‘(bb) 1.59 percent.
‘‘(vi) 
INTEREST
PAYMENT
REBATE
FEE.—Any loan under section 428C consoli-
dated under this paragraph shall not be
subject to the interest payment rebate fee
under section 428C(f).
‘‘(c) COLLEGE ACCESS PARTNERSHIP GRANT PRO-
GRAM.—
‘‘(1) PURPOSE.—It is the purpose of this sub-
section to make payments to States to assist the
States in carrying out the activities and services de-
scribed in paragraph (7) in order to increase access
to higher education for students in the State.
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‘‘(2) AUTHORIZATION
AND
APPROPRIATIONS.—
There are authorized to be appropriated, and there
are appropriated, $113,000,000 for each of the fiscal
years 2008 and 2009 to carry out this subsection.
‘‘(3) PROGRAM AUTHORIZED.—
‘‘(A) 
GRANTS
AUTHORIZED.—From
amounts appropriated under paragraph (2), the
Secretary shall award grants, from allotments
under paragraph (4), to States having applica-
tions approved under paragraph (5), to enable
the State to pay the Federal share of the costs of
carrying out the activities and services described
in paragraph (7).
‘‘(B) 
FEDERAL
SHARE; 
NON-FEDERAL
SHARE.—
‘‘(i) FEDERAL SHARE.—The amount of
the Federal share under this subsection for
a fiscal year shall be equal to 2⁄3 of the costs
of the activities and services described in
paragraph (7).
‘‘(ii) 
NON-FEDERAL
SHARE.—The
amount of the non-Federal share under this
subsection shall be equal to 1⁄3 of the costs
of the activities and services described in
paragraph (7). The non-Federal share may
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be in cash or in-kind, and may be provided
from a combination of State resources and
contributions from private organizations in
the State.
‘‘(C) REDUCTION FOR FAILURE TO PAY NON-
FEDERAL SHARE.—If a State fails to provide the
full non-Federal share required under this para-
graph, the Secretary shall reduce the amount of
the grant payment under this subsection propor-
tionately.
‘‘(D) TEMPORARY INELIGIBILITY FOR SUB-
SEQUENT PAYMENTS.—
‘‘(i) IN GENERAL.—The Secretary shall
determine a State to be temporarily ineli-
gible to receive a grant payment under this
subsection for a fiscal year if—
‘‘(I) the State fails to submit an
annual report pursuant to paragraph
(9) for the preceding fiscal year; or
‘‘(II) the Secretary determines,
based on information in such annual
report, that the State is not effectively
meeting the conditions described under
paragraph (8) and the goals of the ap-
plication under paragraph (5).
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‘‘(ii) REINSTATEMENT.—If the Sec-
retary determines a State is ineligible under
clause (i), the Secretary may enter into an
agreement with the State setting forth the
terms and conditions under which the State
may regain eligibility to receive payments
under this subsection.
‘‘(4) DETERMINATION OF ALLOTMENT.—
‘‘(A) AMOUNT OF ALLOTMENT.—Subject to
subparagraph (B), in making grant payments to
States under this subsection, the allotment to
each State for a fiscal year shall be equal to the
sum of—
‘‘(i) the amount that bears the same re-
lation to 50 percent of the amount appro-
priated under paragraph (2) for such fiscal
year as the number of residents in the State
aged 5 through 17 who are living below the
poverty line applicable to the resident’s
family size (as determined under section
673(2) of the Community Service Block
Grant Act) bears to the total number of such
residents in all States; and
‘‘(ii) the amount that bears the same
relation to 50 percent of the amount appro-
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priated under paragraph (2) for such fiscal
year as the number of residents in the State
aged 15 through 44 who are living below the
poverty line applicable to the individual’s
family size (as determined under section
673(2) of the Community Service Block
Grant Act) bears to the total number of such
residents in all States.
‘‘(B) MINIMUM AMOUNT.—No State shall re-
ceive an allotment under this subsection for a fis-
cal year in an amount that is less than 1⁄2 of 1
percent of the total amount appropriated under
paragraph (2) for such fiscal year.
‘‘(5) SUBMISSION AND CONTENTS OF APPLICA-
TION.—
‘‘(A) IN GENERAL.—For each fiscal year for
which a State desires a grant payment under
paragraph (3), the State agency with jurisdic-
tion over higher education, or another agency
designated by the Governor of the State to ad-
minister the program under this subsection, shall
submit an application to the Secretary at such
time, in such manner, and containing the infor-
mation described in subparagraph (B).
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‘‘(B) APPLICATION.—An application sub-
mitted under subparagraph (A) shall include the
following:
‘‘(i) A description of the State’s capac-
ity to administer the grant under this sub-
section and report annually to the Secretary
on the activities and services described in
paragraph (7).
‘‘(ii) A description of the State’s plan
for using the grant funds to meet the re-
quirements of paragraphs (7) and (8), in-
cluding plans for how the State will make
special efforts to provide such benefits to
students in the State that are underrep-
resented in postsecondary education.
‘‘(iii) A description of how the State
will provide or coordinate the non-Federal
share from State and private funds, if ap-
plicable.
‘‘(iv) A description of the existing
structure that the State has in place to ad-
minister the activities and services under
paragraph (7) or the plan to develop such
administrative capacity.
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‘‘(6) PAYMENT TO ELIGIBLE NONPROFIT ORGANI-
ZATIONS.—A State receiving a payment under this
subsection may elect to make a payment to 1 or more
eligible nonprofit organizations, including an eligible
not-for-profit holder (as defined in section 438(p)), or
a partnership of such organizations, in the State in
order to carry out activities or services described in
paragraph (7), if the eligible nonprofit organization
or partnership—
‘‘(A) was in existence on the day before the
date of enactment of the Higher Education Ac-
cess Act of 2007; and
‘‘(B) as of the day of such payment, is par-
ticipating in activities and services related to in-
creasing access to higher education, such as those
activities and services described in paragraph
(7).
‘‘(7) ALLOWABLE USES.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (C), a State may use a grant payment
under this subsection only for the following ac-
tivities and services, pursuant to the conditions
under paragraph (8):
‘‘(i) Information for students and fam-
ilies regarding—
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‘‘(I) the benefits of a postsec-
ondary education;
‘‘(II) postsecondary education op-
portunities;
‘‘(III) planning for postsecondary
education; and
‘‘(IV) career preparation.
‘‘(ii) Information on financing options
for postsecondary education and activities
that promote financial literacy and debt
management among students and families.
‘‘(iii) Outreach activities for students
who may be at risk of not enrolling in or
completing postsecondary education.
‘‘(iv) Assistance in completion of the
Free Application for Federal Student Aid
or other common financial reporting form
under section 483(a).
‘‘(v) Need-based grant aid for students.
‘‘(vi) 
Professional 
development 
for
guidance counselors at middle schools and
secondary schools, and financial aid admin-
istrators and college admissions counselors
at institutions of higher education, to im-
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prove such individuals’ capacity to assist
students and parents with—
‘‘(I) understanding—
‘‘(aa) entrance requirements
for admission to institutions of
higher education; and
‘‘(bb) State eligibility re-
quirements for Academic Competi-
tiveness 
Grants 
or 
National
SMART Grants under section
401A, and other financial assist-
ance that is dependent upon a
student’s coursework;
‘‘(II) applying to institutions of
higher education;
‘‘(III) applying for Federal stu-
dent financial assistance and other
State, local, and private student finan-
cial assistance and scholarships;
‘‘(IV) activities that increase stu-
dents’ ability to successfully complete
the coursework required for a postsec-
ondary degree, including activities
such as tutoring or mentoring; and
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‘‘(V) activities to improve sec-
ondary school students’ preparedness
for postsecondary entrance examina-
tions.
‘‘(vii) Student loan cancellation or re-
payment (as applicable), or interest rate re-
ductions, for borrowers who are employed in
a high-need geographical area or a high-
need profession in the State, as determined
by the State.
‘‘(B) PROHIBITED
USES.—Funds made
available under this subsection shall not be used
to promote any lender’s loans.
‘‘(C) USE OF FUNDS FOR ADMINISTRATIVE
PURPOSES.—A State may use not more than 2
percent of the total amount of the Federal share
and non-Federal share provided under this sub-
section for administrative purposes relating to
the grant under this subsection.
‘‘(8) SPECIAL CONDITIONS.—
‘‘(A) AVAILABILITY TO STUDENTS AND FAM-
ILIES.—A State receiving a grant payment
under this subsection shall—
‘‘(i) make the activities and services
described in clauses (i) through (vi) of para-
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graph (7)(A) that are funded under the
payment available to all qualifying students
and families in the State;
‘‘(ii) allow students and families to
participate in the activities and services
without regard to—
‘‘(I) the postsecondary institution
in which the student enrolls;
‘‘(II) the type of student loan the
student receives;
‘‘(III) the servicer of such loan; or
‘‘(IV) the student’s academic per-
formance;
‘‘(iii) not charge any student or parent
a fee or additional charge to participate in
the activities or services; and
‘‘(iv) in the case of an activity pro-
viding grant aid, not require a student to
meet any condition other than eligibility for
Federal financial assistance under this title,
except as provided for in the loan cancella-
tion or repayment or interest rate reduc-
tions described in paragraph (7)(A)(vii).
‘‘(B) PRIORITY.—A State receiving a grant
payment under this subsection shall, in carrying
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out any activity or service described in para-
graph (7)(A) with the grant funds, prioritize stu-
dents and families who are living below the pov-
erty line applicable to the individual’s family
size (as determined under section 673(2) of the
Community Service Block Grant Act).
‘‘(C) DISCLOSURES.—
‘‘(i) ORGANIZATIONAL DISCLOSURES.—
In the case of a State that has chosen to
make a payment to an eligible not-for-profit
holder in the State in accordance with
paragraph (6), the holder shall clearly and
prominently indicate the name of the holder
and the nature of its work in connection
with any of the activities carried out, or
any information or services provided, with
such funds.
‘‘(ii) INFORMATIONAL DISCLOSURES.—
Any information about financing options
for higher education provided through an
activity or service funded under this sub-
section shall—
‘‘(I) include information to stu-
dents and the students’ parents of the
availability of Federal, State, local, in-