SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Student Aid and Fiscal 
Responsibility Act of 2009’’. 
SEC. 2. TABLE OF CONTENTS. 
The table of contents is as follows: 
Sec. 1. Short title. 
Sec. 2. Table of contents. 
Sec. 3. References. 
Sec. 4. Prohibition on earmarks. 
Sec. 5. Use of savings for debt reduction. 
TITLE I—INVESTING IN STUDENTS AND FAMILIES 
Subtitle A—Increasing College Access and Completion 
Sec. 101. Federal Pell Grants. 
Sec. 102. College Access and Completion Innovation Fund. 
Sec. 103. Investment in historically Black colleges and universities and other 
minority-serving institutions. 
Sec. 104. Investment in cooperative education. 
Sec. 105. Loan forgiveness for servicemembers activated for duty. 
Sec. 106. Veterans Resource Officer Grants. 
Sec. 107. Officer Daniel Faulkner Children of Fallen Heroes Scholarship. 
Sec. 108. Teacher Excellence. 
Subtitle B—Student Financial Aid Form Simplification 
Sec. 121. General effective date. 
Sec. 122. Treatment of assets in need analysis. 
Sec. 123. Changes to total income; aid eligibility. 
TITLE II—STUDENT LOAN REFORM 
Subtitle A—Stafford Loan Reform 
Sec. 201. Federal Family Education Loan appropriations. 
Sec. 202. Scope and duration of Federal loan insurance program. 
Sec. 203. Applicable interest rates. 
Sec. 204. Federal payments to reduce student interest costs. 
Sec. 205. Federal PLUS Loans. 
Sec. 206. Federal Consolidation Loan. 
Sec. 207. Unsubsidized Stafford loans for middle-income borrowers. 
Sec. 208. Loan repayment for civil legal assistance attorneys. 
Sec. 209. Special allowances. 
Sec. 210. Revised special allowance calculation. 
Sec. 211. Origination of Direct Loans at institutions located outside the United 
States. 
Sec. 212. Agreements with institutions. 
Sec. 213. Terms and conditions of loans. 
Sec. 214. Contracts. 
Sec. 215. Interest rates.
Sec. 216. Technical assistance to institutions of higher education. 
Sec. 217. Outreach Efforts. 
Subtitle B—Perkins Loan Reform 
Sec. 221. Federal Direct Perkins Loans terms and conditions. 
Sec. 222. Authorization of appropriations. 
Sec. 223. Allocation of funds. 
Sec. 224. Federal Direct Perkins Loan allocation. 
Sec. 225. Agreements with institutions of higher education. 
Sec. 226. Student loan information by eligible institutions. 
Sec. 227. Terms of loans. 
Sec. 228. Distribution of assets from student loan funds. 
Sec. 229. Implementation of non-title IV revenue requirement. 
Sec. 230. Administrative expenses. 
TITLE III—MODERNIZATION, RENOVATION, AND REPAIR 
Subtitle A—Elementary and Secondary Education 
Sec. 301. Definitions. 
CHAPTER 1—GRANTS FOR MODERNIZATION, RENOVATION, OR REPAIR OF 
PUBLIC SCHOOL FACILITIES 
Sec. 311. Purpose. 
Sec. 312. Allocation of funds. 
Sec. 313. Allowable uses of funds. 
Sec. 314. Priority projects. 
CHAPTER 2—SUPPLEMENTAL GRANTS FOR LOUISIANA, MISSISSIPPI, AND 
ALABAMA 
Sec. 321. Purpose. 
Sec. 322. Allocation to local educational agencies. 
Sec. 323. Allowable uses of funds. 
CHAPTER 3—GENERAL PROVISIONS 
Sec. 331. Impermissible uses of funds. 
Sec. 332. Supplement, not supplant. 
Sec. 333. Prohibition regarding State aid. 
Sec. 334. Maintenance of effort. 
Sec. 335. Special rule on contracting. 
Sec. 336. Use of American iron, steel, and manufactured goods. 
Sec. 337. Labor standards. 
Sec. 338. Charter schools. 
Sec. 339. Green schools. 
Sec. 340. Reporting. 
Sec. 341. Special rules. 
Sec. 342. Promotion of employment experiences. 
Sec. 343. Advisory Council on Green, High-Performing Public School Facilities. 
Sec. 344. Education regarding projects. 
Sec. 345. Availability of funds. 
Subtitle B—Higher Education
Sec. 351. Federal assistance for community college modernization and construc-
tion. 
TITLE IV—EARLY LEARNING CHALLENGE FUND 
Sec. 401. Purpose. 
Sec. 402. Programs authorized. 
Sec. 403. Quality pathways grants. 
Sec. 404. Development grants. 
Sec. 405. Research and evaluation. 
Sec. 406. Reporting requirements. 
Sec. 407. Construction. 
Sec. 408. Definitions. 
Sec. 409. Availability of funds. 
TITLE V—AMERICAN GRADUATION INITIATIVE 
Sec. 501. Authorization and appropriation. 
Sec. 502. Definitions; grant priority. 
Sec. 503. Grants to eligible entities for community college reform. 
Sec. 504. Grants to eligible States for community college programs. 
Sec. 505. National activities. 
TITLE VI—DEFUND ACORN ACT 
Sec. 601. Short title. 
Sec. 602. Prohibitions on Federal funds and other activities with respect to cer-
tain indicted organizations. 
SEC. 3. REFERENCES. 
Except as otherwise expressly provided, whenever in 
this Act an amendment or repeal is expressed in terms 
of an amendment to, or repeal of, a section or other provi-
sion, the reference shall be considered to be made to a 
section or other provision of the Higher Education Act of 
1965 (20 U.S.C. 1001 et seq.). 
SEC. 4. PROHIBITION ON EARMARKS. 
None of the funds appropriated pursuant to this Act 
may be used for a Congressional earmark as defined in 
clause 9(d) of rule XXI of the Rules of the House of Rep-
resentatives.
SEC. 5. USE OF SAVINGS FOR DEBT REDUCTION. 
All savings in Federal expenditures not otherwise ex-
pended as a result of the enactment of this Act shall be 
made available for the reduction of the Federal deficit. 
TITLE I—INVESTING IN 
STUDENTS AND FAMILIES 
Subtitle A—Increasing College 
Access and Completion 
SEC. 101. FEDERAL PELL GRANTS. 
(a) AMOUNT
OF
GRANTS.—Section 401(b) (20 
U.S.C. 1070a(b)) is amended— 
(1) by amending paragraph (2)(A) to read as 
follows: 
‘‘(A) The amount of the Federal Pell 
Grant for a student eligible under this part 
shall be— 
‘‘(i) the maximum Federal Pell Grant, 
as specified in the last enacted appropria-
tion Act applicable to that award year, 
plus 
‘‘(ii) the amount of the increase cal-
culated under paragraph (8)(B) for that 
year, less 
‘‘(iii) an amount equal to the amount 
determined to be the expected family con-
tribution with respect to that student for 
that year.’’; and 
(2) by amending paragraph (8), as amended by 
the Higher Education Opportunity Act (Public Law 
110–315), to read as follows: 
‘‘(8) ADDITIONAL FUNDS.— 
‘‘(A) IN GENERAL.—There are authorized 
to be appropriated, and there are appropriated, 
to carry out subparagraph (B) of this para-
graph (in addition to any other amounts appro-
priated to carry out this section and out of any 
money in the Treasury not otherwise appro-
priated) the following amounts— 
‘‘(i) $2,030,000,000 for fiscal year 
2008; 
‘‘(ii) $2,733,000,000 for fiscal year 
2009; and 
‘‘(iii) such sums as may be necessary 
for fiscal year 2010 and each subsequent 
fiscal year to provide the amount of in-
crease of the maximum Federal Pell Grant 
required by clauses (ii) and (iii) of sub-
paragraph (B). 
‘‘(B) 
INCREASE
IN
FEDERAL
PELL 
GRANTS.—The amounts made available pursu-
ant to subparagraph (A) shall be used to in-
crease the amount of the maximum Federal 
Pell Grant for which a student shall be eligible 
during an award year, as specified in the last 
enacted appropriation Act applicable to that 
award year, by— 
‘‘(i) $490 for each of the award years 
2008–2009 and 2009–2010; 
‘‘(ii) $690 for the award year 2010– 
2011; and 
‘‘(iii) the amount determined under 
subparagraph (C) for each succeeding 
award year. 
‘‘(C) INFLATION-ADJUSTED AMOUNTS.— 
‘‘(i) AWARD
YEAR
2011–2012.—For 
award year 2011–2012, the amount deter-
mined under this subparagraph for pur-
poses of subparagraph (B)(iii) shall be 
equal to— 
‘‘(I) $5,550 or the total max-
imum Federal Pell Grant for the pre-
ceding award year (as determined 
under clause (iv)(II)), whichever is 
greater, increased by a percentage 
equal to the annual adjustment per-
centage for award year 2011–2012; 
reduced by 
‘‘(II) $4,860 or the maximum 
Federal Pell Grant for which a stu-
dent was eligible for the preceding 
award year, as specified in the last en-
acted appropriation Act applicable to 
that year, whichever is greater; and 
‘‘(III) rounded to the nearest $5. 
‘‘(ii) SUBSEQUENT AWARD YEARS.— 
For award year 2012–2013 and each of 
the subsequent award years, the amount 
determined under this subparagraph for 
purposes of subparagraph (B)(iii) shall be 
equal to— 
‘‘(I) the total maximum Federal 
Pell Grant for the preceding award 
year (as determined under clause 
(iv)(II)), increased by a percentage 
equal to the annual adjustment per-
centage for the award year for which 
the amount under this subparagraph 
is being determined; reduced by 
‘‘(II) $4,860 or the maximum 
Federal Pell Grant for which a stu-
dent was eligible for the preceding 
award year, as specified in the last en-
acted appropriation Act applicable to 
that year, whichever is greater; and 
‘‘(III) rounded to the nearest $5. 
‘‘(iii) LIMITATION ON DECREASES.— 
Notwithstanding clauses (i) and (ii), if the 
amount determined under clause (i) or (ii) 
for an award year is less than the amount 
determined under this paragraph for the 
preceding award year, the amount deter-
mined under such clause for such award 
year shall be the amount determined under 
this paragraph for the preceding award 
year. 
‘‘(iv) DEFINITIONS.—For purposes of 
this subparagraph— 
‘‘(I) the term ‘annual adjustment 
percentage’ as it applies to an award 
year is equal to the sum of— 
‘‘(aa) the estimated percent-
age change in the Consumer 
Price Index (as determined by 
the Secretary, using the defini-
tion in section 478(f)) for the
most recent calendar year ending 
prior to the beginning of that 
award year; and 
‘‘(bb) one percentage point; 
and 
‘‘(II) the term ‘total maximum 
Federal Pell Grant’ as it applies to a 
preceding award year is equal to the 
sum of— 
‘‘(aa) the maximum Federal 
Pell Grant for which a student is 
eligible during an award year, as 
specified in the last enacted ap-
propriation Act applicable to that 
preceding award year; and 
‘‘(bb) the amount of the in-
crease in the maximum Federal 
Pell Grant required by this para-
graph for that preceding award 
year. 
‘‘(D) PROGRAM REQUIREMENTS AND OP-
ERATIONS
OTHERWISE
UNAFFECTED.—Except 
as provided in subparagraphs (B) and (C), 
nothing in this paragraph shall be construed to 
alter the requirements and operations of the
Federal Pell Grant Program as authorized 
under this section, or to authorize the imposi-
tion of additional requirements or operations 
for the determination and allocation of Federal 
Pell Grants under this section. 
‘‘(E) 
AVAILABILITY
OF
FUNDS.—The 
amounts made available by subparagraph (A) 
for any fiscal year shall be available beginning 
on October 1 of that fiscal year, and shall re-
main available through September 30 of the 
succeeding fiscal year.’’. 
(b) MULTIPLE
PELL
GRANT
AWARDS.—Section 
401(b)(5) (20 U.S.C. 1070a(b)(5)) is amended— 
(1) in subparagraph (A)— 
(A) by inserting ‘‘who is making satisfac-
tory academic progress according to the institu-
tion’s standards’’ after ‘‘award a student’’; and 
(B) by striking ‘‘to permit such student to 
accelerate the student’s progress toward a de-
gree or certificate’’ and inserting ‘‘to permit 
such student to accelerate the student’s gradua-
tion date, whether making full- or part-time 
progress toward a degree or certificate,’’; and 
(2) by adding at the end the following new sub-
paragraph:
(C) A student may not receive a combina-
tion of first and second scheduled award funds 
under this paragraph that exceeds the amount 
the student would otherwise be eligible to re-
ceive for the payment period. 
(c) CONFORMING
AMENDMENTS.—Title IV (20 
U.S.C. 1070 et seq.) is further amended— 
(1) in section 401(b)(6), as amended by the 
Higher Education Opportunity Act (Public Law 
110–315), by striking ‘‘the grant level specified in 
the appropriate Appropriation Act for this subpart 
for such year’’ and inserting ‘‘the Federal Pell Grant 
amount, determined under paragraph (2)(A), for 
which a student is eligible during such award year’’; 
(2) in section 402D(d)(1), by striking ‘‘exceed 
the maximum appropriated Pell Grant’’ and insert-
ing ‘‘exceed the Federal Pell Grant amount, deter-
mined under section 401(b)(2)(A), for which a stu-
dent is eligible’’; 
(3) in section 435(a)(5)(A)(i)(I), by striking 
‘‘one-half the maximum Federal Pell Grant award 
for which a student would be eligible’’ and inserting 
‘‘one-half the Federal Pell Grant amount, deter-
mined under section 401(b)(2)(A), for which a stu-
dent would be eligible’’;
(4) in section 483(e)(3)(A)(ii), by striking 
‘‘based on the maximum Federal Pell Grant award 
at the time of application’’ and inserting ‘‘based on 
the Federal Pell Grant amount, determined under 
section 401(b)(2)(A), for which a student is eligible 
at the time of application’’; 
(5) in section 485E(b)(1)(A), by striking ‘‘of 
such students’ potential eligibility for a maximum 
Federal Pell Grant under subpart 1 of part A’’ and 
inserting ‘‘of such students’ potential eligibility for 
the Federal Pell Grant amount, determined under 
section 401(b)(2)(A), for which the student would be 
eligible’’; and 
(6) in section 894(f)(2)(C)(ii)(I), by striking 
‘‘the maximum Federal Pell Grant for each award 
year’’ and inserting ‘‘the Federal Pell Grant 
amount, determined under section 401(b)(2)(A), for 
which a student may be eligible for each award 
year’’. 
(d) EFFECTIVE DATE.—The amendments made by 
subsections (a) and (c) of this section shall take effect on 
July 1, 2010.
SEC. 102. COLLEGE ACCESS AND COMPLETION INNOVA-
TION FUND. 
(a) HEADER.—Part E of title VII (20 U.S.C. 1141 
et seq.) is amended by striking the header of such part 
and inserting the following: 
‘‘PART E—COLLEGE ACCESS AND COMPLETION 
INNOVATION FUND’’. 
(b) PURPOSE.—Part E of title VII (20 U.S.C. 1141 
et seq.) is further amended by inserting before section 781 
the following: 
‘‘SEC. 780. PURPOSES. 
‘‘The purposes of this part are— 
‘‘(1) to promote innovation in postsecondary 
education practices and policies by institutions of 
higher education, States, and nonprofit organiza-
tions to improve student success, completion, and 
post-completion employment, particularly for stu-
dents from groups that are underrepresented in 
postsecondary education; and 
‘‘(2) to assist States in developing longitudinal 
data systems, common metrics, and reporting sys-
tems to enhance the quality and availability of infor-
mation about student success, completion, and post- 
completion employment.’’. 
(c) AUTHORIZATION AND APPROPRIATION.—Section 
781(a) (20 U.S.C. 1141(a)) is amended to read as follows:
‘‘(a) AUTHORIZATION AND APPROPRIATION.— 
‘‘(1) IN GENERAL.—There are authorized to be 
appropriated, and there are appropriated, to carry 
out this part (in addition to any other amounts ap-
propriated to carry out this part and out of any 
money in the Treasury not otherwise appropriated), 
$600,000,000 for each of the fiscal years 2010 
through 2014. 
‘‘(2) ALLOCATIONS.—Of the amount appro-
priated for any fiscal year under paragraph (1)— 
‘‘(A) 25 percent shall be made available to 
carry out section 781; 
‘‘(B) 50 percent shall be made available to 
carry out section 782; 
‘‘(C) 23 percent shall be made available to 
carry out section 783; and 
‘‘(D) 2 percent shall be made available to 
carry out section 784. 
‘‘(3) EXPIRATION OF AUTHORITY.—The author-
ity to award grants under this part shall expire at 
the end of fiscal year 2014.’’. 
(d) STATE GRANTS AND GRANTS TO ELIGIBLE ENTI-
TIES.—Part E of title VII (20 U.S.C. 1141 et seq.) is 
further amended by adding at the end the following:
‘‘SEC. 782. STATE INNOVATION COMPLETION GRANTS. 
‘‘(a) PROGRAM AUTHORIZATION.—From the amount 
appropriated under section 781(a)(2)(B) to carry out this 
section, the Secretary shall award grants to States on a 
competitive basis to promote student persistence in, and 
completion of, postsecondary education. 
‘‘(b) FEDERAL SHARE; NON-FEDERAL SHARE.— 
‘‘(1) FEDERAL
SHARE.—The amount of the 
Federal share under this section for a fiscal year 
shall be equal to 2⁄3 of the costs of the activities and 
services described in subsection (d)(1) that are car-
ried out under the grant. 
‘‘(2) NON-FEDERAL
SHARE.—The amount of 
the non-Federal share under this section shall be 
equal to 1⁄3 of the costs of the activities and services 
described in subsection (d)(1). The non-Federal 
share may be in cash or in kind, and may be pro-
vided from State resources, contributions from pri-
vate organizations, or both. 
‘‘(3) SUPPLEMENT, NOT SUPPLANT.—The Fed-
eral and non-Federal shares required by this para-
graph shall be used to supplement, and not sup-
plant, State and private resources that would other-
wise be expended to carry out activities and services 
to promote student persistence in and completion of 
postsecondary education.
‘‘(c) APPLICATION AND SELECTION.— 
‘‘(1) APPLICATION REQUIREMENTS.—For each 
fiscal year for which a State desires to receive a 
grant under this section, the State agency with ju-
risdiction over higher education, or another agency 
designated by the Governor or chief executive of the 
State to administer the grant program under this 
section, shall submit an application to the Secretary 
at such time, in such manner, and containing such 
information as the Secretary may require. Such ap-
plication shall include— 
‘‘(A) a description of the State’s capacity 
to administer the grant under this section; 
‘‘(B) a description of the State’s plans for 
using the grant funds for activities described in 
subsection (d)(1), including plans for how the 
State will make special efforts to provide bene-
fits to students in the State who are from 
groups that are underrepresented in postsec-
ondary education; 
‘‘(C) a description of how the State will 
provide for the non-Federal share from State 
resources, private contributions, or both; 
‘‘(D) a description of—
‘‘(i) the administrative system that 
the State has in place to administer the ac-
tivities and services described in subsection 
(d)(1); or 
‘‘(ii) the plan to develop such adminis-
trative system; 
‘‘(E) a description of the data system the 
State has or will have in place to measure the 
performance and progress toward the State’s 
goals included in the Access and Completion 
Plan submitted, or that will be submitted, 
under paragraph (2)(A); and 
‘‘(F) the assurances under paragraph (2). 
‘‘(2) STATE ASSURANCES.—The assurances re-
quired in paragraph (1)(F) shall include an assur-
ance of each of the following: 
‘‘(A) That the State will submit, not later 
than July 1, 2011, an Access and Completion 
Plan to increase the State’s rate of persistence 
in and completion of postsecondary education. 
Such plan shall include— 
‘‘(i) the State’s annual and long-term 
quantifiable goals with respect to— 
‘‘(I) the rates of postsecondary 
enrollment, persistence, and comple-
tion, disaggregated by income, race, 
ethnicity, sex, disability, and age of 
students; 
‘‘(II) closing gaps in enrollment, 
persistence, and completion rates for 
students from groups that are under-
represented in postsecondary edu-
cation; 
‘‘(III) targeting education and 
training programs to address labor 
market needs in the State, as such 
needs are determined by the State, or 
the State in coordination with the 
State public employment service, the 
State workforce investment board, or 
industry or sector partnerships in the 
State; and 
‘‘(IV) improving coordination be-
tween public two-year and public four- 
year institutions of higher education 
in the State, including supporting 
comprehensive articulation agreements 
between such institutions in consulta-
tion with faculty from participating 
institutions; and
‘‘(ii) the State’s plan to develop an 
interoperable statewide longitudinal data 
system that— 
‘‘(I) can be linked to other data 
systems, as applicable, including ele-
mentary and secondary education and 
workforce data systems; 
‘‘(II) 
will 
collect, 
maintain, 
disaggregate (by institution, income, 
race, ethnicity, sex, disability, and age 
of students), and analyze postsec-
ondary education and workforce infor-
mation, including— 
‘‘(aa) 
postsecondary 
edu-
cation 
enrollment, 
persistence, 
and completion information; 
‘‘(bb) post-completion em-
ployment outcomes of students 
who enrolled in postsecondary 
programs and training programs 
offered by eligible training pro-
viders under the Workforce In-
vestment Act of 1998 (29 U.S.C. 
2801 et seq.);
‘‘(cc) 
postsecondary 
edu-
cation and employment outcomes 
of students who move out of the 
State; and 
‘‘(dd) postsecondary instruc-
tional workforce information; and 
‘‘(III) makes the information de-
scribed in subclause (I) available to 
the general public in a manner that is 
transparent and user-friendly. 
‘‘(B) That the State has a comprehensive 
planning or policy formulation process with re-
spect to increasing postsecondary enrollment, 
persistence, and completion that— 
‘‘(i) encourages coordination between 
the State administration of grants under 
this section and similar State programs; 
‘‘(ii) encourages State practices that 
are designed to improve rates of enroll-
ment and persistence in, and completion 
of, postsecondary education; 
‘‘(iii) encourages State policies that 
are designed to improve rates of enroll-
ment and re-enrollment of dislocated work-
ers in postsecondary education;
‘‘(iv) encourages the full use of State 
resources in support of financial literacy 
programs; 
‘‘(v) considers the postsecondary edu-
cation needs of students from groups that 
are underrepresented in postsecondary 
education; and 
‘‘(vi) provides for direct, equitable, 
and active participation in the comprehen-
sive planning or policy formulation process 
or processes, through membership on State 
planning 
commissions, 
State 
advisory 
councils, or other State entities established 
by the State and consistent with State law, 
by representatives of— 
‘‘(I) institutions of higher edu-
cation, including at least one member 
from a junior or community college 
(as defined in section 312(f)); 
‘‘(II) students; 
‘‘(III) other providers of postsec-
ondary education services (including 
organizations providing access to such 
services);
‘‘(IV) the general public in the 
State; and 
‘‘(V) 
postsecondary 
education 
faculty members, including at least 
one faculty member whose primary re-
sponsibilities are teaching and schol-
arship. 
‘‘(C) That the State will incorporate poli-
cies and practices that, through the activities 
funded under this section, are determined to be 
effective in improving rates of postsecondary 
education enrollment, persistence, and comple-
tion into the future postsecondary education 
policies and practices of the State to ensure 
that the benefits achieved through the activities 
funded under this section continue beyond the 
period of the grant. 
‘‘(D) That the State will participate in the 
evaluation required under section 784. 
‘‘(3) SUBGRANTS
TO
NONPROFIT
ORGANIZA-
TIONS.— 
‘‘(A) IN GENERAL.—A State receiving a 
payment under this section may elect to make 
a subgrant to one or more nonprofit organiza-
tions in the State, or a partnership of such or-
ganizations, to carry out activities and services 
described in subsection (d)(1), if the nonprofit 
organization or partnership— 
‘‘(i) was in existence on the day before 
the date of the enactment of the Student 
Aid and Fiscal Responsibility Act of 2009; 
and 
‘‘(ii) as of such day, was participating 
in activities and services related to pro-
moting persistence in, and completion of, 
postsecondary education, such as the ac-
tivities and services described in subsection 
(d)(1). 
‘‘(B) NONPROFIT
ORGANIZATIONS.—For 
the purposes of this section, nonprofit organiza-
tions in a State include— 
‘‘(i) agencies with agreements with 
the Secretary under subsections (b) and (c) 
of section 428 on the date of the enact-
ment of the Student Aid and Fiscal Re-
sponsibility Act of 2009; 
‘‘(ii) nonprofit subsidiaries of agencies 
described in clause (i), if such subsidiaries 
were established, pursuant to the law of
such State, on or before January 1, 1998; 
and 
‘‘(iii) eligible not-for-profit servicers, 
as defined in section 456(d), with an 
agreement with the Secretary under sub-
section (a)(3) of section 456, except that 
such a servicer shall only be eligible for a 
subgrant from the State for which the 
servicer is receiving an allocation under 
such agreement. 
‘‘(4) PRIORITY.—In awarding grants under this 
section, the Secretary shall give priority to States 
that enter into a partnership with one of the fol-
lowing entities to carry out the activities and serv-
ices described in subsection (d)(1): 
‘‘(A) A philanthropic organization, as such 
term is defined in section 781(i)(1). 
‘‘(B) An agency with an agreement with 
the Secretary under subsections (b) and (c) of 
section 428 on the date of the enactment of 
Student Aid and Fiscal Responsibility Act of 
2009. 
‘‘(C) A nonprofit subsidiary of agencies de-
scribed in subparagraph (B), if such subsidiary
was established, pursuant to the law of such 
State, on or before January 1, 1998. 
‘‘(d) USES OF FUNDS.— 
‘‘(1) AUTHORIZED USES.—A State receiving a 
grant under this section shall use the grant funds 
to— 
‘‘(A) provide programs in such State that 
increase persistence in, and completion of, post-
secondary education, which may include— 
‘‘(i) assisting institutions of higher 
education in providing financial literacy, 
education, and counseling to enrolled stu-
dents; 
‘‘(ii) assisting students enrolled in an 
institution of higher education to reduce 
the amount of loan debt incurred by such 
students; 
‘‘(iii) providing loan counseling, loan 
delinquency, and default aversion assist-
ance to student loan borrowers and institu-
tions of higher education; 
‘‘(iv) providing grants to students de-
scribed in section 415A(a)(1), in accord-
ance with the terms of that section;
‘‘(v) carrying out the activities de-
scribed in section 415E(a), in accordance 
with such section; 
‘‘(vi) assisting institutions of higher 
education institute programs of persistence 
focused on students at risk of not com-
pleting; and 
‘‘(vii) programs to provide financial 
literacy education and counseling to ele-
mentary, secondary, and postsecondary 
students that include an examination of 
how financial planning may impact a stu-
dent’s ability to pursue postsecondary edu-
cation; and 
‘‘(B) support the development and imple-
mentation of a statewide longitudinal data sys-
tem, as described in subsection (c)(2)(A)(ii). 
‘‘(2) PROHIBITED
USES.—Funds made avail-
able under this section shall not be used to promote 
any lender’s loans. 
‘‘(3) RESTRICTIONS
ON
USE
OF
FUNDS.—A 
State— 
‘‘(A) shall use not less than 1⁄3 of the sum 
of the Federal and non-Federal share used for 
paragraph (1)(A) on activities that benefit stu-
dents enrolled in junior or community colleges 
(as defined in section 312(f)), two-year public 
institutions, or two-year programs of instruc-
tion at four-year public institutions; 
‘‘(B) may use not more than 10 percent of 
the sum of the Federal and non-Federal share 
under this section for activities described in 
paragraph (1)(B); and 
‘‘(C) may use not more than 6 percent of 
the sum of the Federal and non-Federal share 
under this section for administrative purposes 
relating to the grant under this section. 
‘‘(e) ANNUAL REPORT.—Each State receiving a 
grant under this section shall submit to the Secretary an 
annual report on— 
‘‘(1) the activities and services described in sub-
section (d)(1) that are carried out with such grant; 
‘‘(2) the effectiveness of such activities and 
services in increasing postsecondary persistence and 
completion, as determined by measurable progress in 
achieving the State’s goals for persistence and com-
pletion described in the Access and Completion Plan 
submitted by the State under subsection (c)(2)(A), 
if such plan has been submitted; and
‘‘(3) any other information or assessments the 
Secretary may require. 
‘‘(f) DEFINITIONS.—In this section: 
‘‘(1) DISLOCATED
WORKER.—The term ‘dis-
located worker’ has the meaning given such term in 
section 101(9) of the Workforce Investment Act of 
1998 (29 U.S.C. 2801(9)). 
‘‘(2) INDUSTRY
OR
SECTOR
PARTNERSHIP.— 
The term ‘industry or sector partnership’ means a 
workforce collaborative that organizes key stake-
holders in a targeted industry cluster into a working 
group that focuses on the human capital needs of a 
targeted industry cluster and that includes— 
‘‘(A) representatives of multiple firms or 
employers (including workers) in a targeted in-
dustry cluster, including small- and medium- 
sized employers when practicable; 
‘‘(B) 1 or more representatives of State 
labor organizations, trade unions or consortia of 
trade unions, or other labor organizations; 
‘‘(C) 1 or more representatives of local 
workforce investment boards; 
‘‘(D) 1 or more representatives of postsec-
ondary educational institutions or other train-
ing providers; and
‘‘(E) 1 or more representatives of State 
workforce agencies or other entities providing 
employment services. 
‘‘(3) STATE PUBLIC EMPLOYMENT SERVICE.— 
The term ‘State public employment service’ has the 
meaning given such term in section 502(a)(9) of the 
Student Aid and Fiscal Responsibility Act of 2009. 
‘‘(4) STATE WORKFORCE INVESTMENT BOARD; 
LOCAL
WORKFORCE
INVESTMENT
BOARD.—The 
terms ‘State workforce investment board’ and ‘local 
workforce investment board’ have the meanings 
given such terms in section 502(a)(10) of the Stu-
dent Aid and Fiscal Responsibility Act of 2009. 
‘‘SEC. 783. INNOVATION IN COLLEGE ACCESS AND COMPLE-
TION NATIONAL ACTIVITIES. 
‘‘(a) PROGRAMS AUTHORIZED.—From the amount 
appropriated under section 781(a)(2)(C) to carry out this 
section, the Secretary shall award grants, on a competitive 
basis, to eligible entities in accordance with this section 
to conduct innovative programs that advance knowledge 
about, and adoption of, policies and practices that increase 
the number of individuals with postsecondary degrees or 
certificates. 
‘‘(b) ELIGIBLE ENTITIES.—The Secretary is author-
ized to award grants under subsection (a) to—