loan made under part D of title IV on an after July 
1, 2005. 
SEC. 103. LOAN FLEX. 
(a) AMENDMENT.—Section 428(b)(9)(A) (20 U.S.C. 
1078(b)(9)(A)) is amended by striking clauses (iii) and 
(iv) and inserting the following: 
‘‘(iii) an income-sensitive repayment 
plan, 
with 
income-sensitive 
repayment 
amounts paid over an extended period of 
time prescribed by the Secretary, not to 
exceed 25 years, except that— 
‘‘(I) after 10 years, if the indi-
vidual 
has 
not 
made 
adequate 
progress in repaying the principal of 
the loan (defined by the Secretary as 
percentage of principal) the lender 
may use an alternative formula, to be 
determined by the Secretary, by which 
the loan could be expected to be re-
paid in full within the remaining 15 
years; 
‘‘(II) after 25 years, if the loan is 
not repaid, the Secretary shall acquire 
the loan from the lender and admin-
ister the loan under part D of this 
title; and 
‘‘(III) the other terms and condi-
tions of which shall be comparable to 
the terms and conditions applicable to 
income contingent repayment under 
section 455(d)(1)(D) and 455(e); and 
‘‘(iv) an extended repayment plan, 
with a fixed annual or graduated repay-
ment amount paid over an extended period 
of time, not to exceed 25 years, except that 
in the first 2 years of repayment, the bor-
rower shall have the option of paying the 
interest as it accrues or having such inter-
est be added to principal for repayment 
during the remainder of the repayment pe-
riod.’’. 
(b) CONFORMING AMENDMENT.—Clause (i) of sec-
tion 428(b)(1)(L) (20 U.S.C. 1078(b)(1)(L)) is amended 
to read as follows: 
‘‘(i) except as otherwise provided by a 
repayment plan selected by the borrower 
under clause (ii), (iii), or (iv) of paragraph 
(9)(A), during any year of any repayment 
period with respect to the aggregate
amount of all loans to that borrower which 
are insured under this part shall not, un-
less the borrower and the lender otherwise 
agree, be less than $600 or the balance of 
all such loans (together with interest there-
on), whichever amount is less; and’’. 
SEC. 104. CONSOLIDATION LOAN INTEREST RATES. 
(a) INTEREST RATE TIED TO INCOME.—Paragraph 
(3) of section 427A(l) (20 U.S.C. 1077a(n)) is amended 
to read as follows: 
‘‘(3) CONSOLIDATION LOANS.— 
‘‘(A) IN GENERAL.—With respect to any 
consolidation loan under section 428C for which 
the application is received by an eligible lender 
on or after the date of enactment of the Access 
and Equity in Higher Education Act, the appli-
cable rate of interest shall, during any 12- 
month period beginning on July 1 and ending 
on June 30, be determined on the preceding 
June 1 and be equal to— 
‘‘(i) the bond equivalent rate of 91- 
day Treasury bills auctioned at the final 
auction held prior to such June 1; plus 
‘‘(ii) 2.3 percent,
except that such rate shall not exceed 8.25 per-
cent, and except that for any loan under section 
428C that is used exclusively to consolidate 
loans made under section 428B, clause (ii) shall 
be applied by substituting ‘3.1 percent’ for ‘2.3 
percent’. 
‘‘(B) VARIATION
OF
INTEREST
RATE 
BASED ON INCOME.—In the case of— 
‘‘(i) a borrower who demonstrates to 
the lender, in accordance with regulations 
prescribed by the Secretary, that during 
such 12-month period, the sum of the bor-
rower’s monthly payments during a year 
will exceed— 
‘‘(I) 8 percent of the borrower 
total income, subparagraph (A)(ii) 
shall be applied by substituting ‘1.0 
percent’ for ‘2.3 percent’; or 
‘‘(II) 9 percent of the borrower’s 
total income, subparagraph (A)(ii) 
shall be applied by substituting ‘0.0 
percent’ for ‘2.3 percent’; and 
‘‘(ii) a borrower who so demonstrates 
that the sum of the borrower’s monthly 
payments during a year will exceed—
‘‘(I) 10 percent of the borrower’s 
total income, subparagraph (A) shall 
be applied by substituting ‘5 percent’ 
for ‘8.25 percent’; 
‘‘(II) 11 percent of the bor-
rower’s total income, subparagraph 
(A) shall be applied by substituting ‘4 
percent’ for ‘8.25 percent’; or 
‘‘(III) 12 percent of the bor-
rower’s total income, subparagraph 
(A) shall be applied by substituting ‘3 
percent’ for ‘8.25 percent’.’’. 
(b) CONFORMING AMENDMENT.—Section 427A(k)(4) 
is amended by striking ‘‘July 1, 2006,’’ and inserting ‘‘the 
date of enactment of the Access and Equity in Higher 
Education Act’’. 
SEC. 105. LOAN FORGIVENESS FOR PUBLIC SERVICE EM-
PLOYEES. 
Section 428K (20 U.S.C. 1078–11) is amended to 
read as follows: 
‘‘SEC. 428K. LOAN FORGIVENESS FOR PUBLIC SERVICE EM-
PLOYEES. 
‘‘(a) PURPOSES.—The purposes of this section are—
‘‘(1) to reduce the burden of student debt, par-
ticularly for Americans who dedicate their careers to 
meeting certain urgent national needs; and 
‘‘(2) to attract more excellent individuals into 
important public service careers. 
‘‘(b) LOAN FORGIVENESS.— 
‘‘(1) IN GENERAL.—The Secretary shall assume 
the obligation to repay, pursuant to subsection (c), 
a loan made under section 428, 428C, or 428H, a 
Federal Direct Stafford Loan or Federal Direct Un-
subsidized Stafford Loan, a Federal Direct Consoli-
dation Loan, to an individual who— 
‘‘(A) has been employed full time in a 
qualified public service position described in 
paragraph (2) for at least 8 years; 
‘‘(B) has been in an income contingent or 
income sensitive repayment plan for 15 years; 
and 
‘‘(C) is not in default on a loan for which 
the borrower seeks forgiveness. 
‘‘(2) QUALIFIED PUBLIC SERVICE POSITIONS.— 
For purposes of this section, an individual shall be 
treated as employed in a qualified public service po-
sition if the individual is employed in—
‘‘(A) any Federal, State, or local govern-
ment agency; 
‘‘(B) any corporation which is exempt from 
income taxation under section 501(c)(3) of the 
Internal Revenue Code of 1986; or 
‘‘(C) in any profession identified by the 
Secretary of Education, in consultation with the 
Secretary of Homeland Security and the Sec-
retary of Health and Human Services, to be 
providing important public service to the United 
States. 
‘‘(c) LOAN REPAYMENT.— 
‘‘(1) IN GENERAL.—The Secretary shall assume 
the obligation to repay the remainder of a qualifying 
individual’s student obligations. 
‘‘(2) TREATMENT OF CONSOLIDATION LOANS.— 
A loan amount for a loan made under section 428C 
or for a Federal Direct Consolidation Loan may be 
a qualified loan amount for the purposes of this sub-
section only to the extent that such loan amount was 
used to repay a loan described in subsection (b)(1) 
for a borrower who meets the requirements of sub-
section (b), as determined in accordance with regula-
tions prescribed by the Secretary.
‘‘(3) CONSTRUCTION.—Nothing in this section 
shall be construed to authorize the refunding of any 
repayment of a described in subsection (b)(1). 
‘‘(4) INTEREST.—If a portion of a loan is re-
paid by the Secretary under this section for any 
year, the proportionate amount of interest on such 
loan that accrues for such year shall be repaid by 
the Secretary. 
‘‘(5) INELIGIBILITY
OF
NATIONAL
SERVICE 
AWARD RECIPIENTS.—No student borrower may, for 
the same service, receive a benefit under both this 
section and subtitle D of title I of the National and 
Community Service Act of 1990 (42 U.S.C. 12601 
et seq.). 
‘‘(6) INELIGIBILITY FOR DOUBLE BENEFITS.— 
No borrower may receive a reduction of loan obliga-
tions under both this section and section 428J or 
460. 
‘‘(d) REPAYMENT
TO
ELIGIBLE
LENDERS
AND 
HOLDERS.—The Secretary shall pay to each eligible lend-
er or holder for each fiscal year an amount equal to the 
aggregate amount of the lender’s or holder’s loans that 
are subject to repayment pursuant to this section for such 
year. 
‘‘(e) APPLICATION FOR REPAYMENT.—
‘‘(1) IN GENERAL.—Each eligible individual de-
siring loan repayment under this section shall sub-
mit a complete and accurate application to the Sec-
retary at such time, in such manner, and containing 
such information as the Secretary may require. 
‘‘(2) CONDITIONS.—An eligible individual may 
apply for loan repayment under this section after 
completing the years of qualifying service described 
in subsection (c)(2). 
‘‘(f) REGULATIONS.—The Secretary is authorized to 
prescribe such regulations as may be necessary to carry 
out the provisions of this section.’’. 
TITLE II—REAUTHORIZATION OF 
HBCU PROGRAMS 
SEC. 201. REAUTHORIZATION OF PART B OF TITLE III. 
Paragraph (2) of section 399(a) (20 U.S.C. 
1068h(a)) is amended to read as follows: 
‘‘(2) PART B.—There are authorized to be ap-
propriated to carry out part B (other than section 
326), $335,000,000 for fiscal year 2005, and such 
sums as may be necessary for each of the 5 suc-
ceeding fiscal years.’’. 
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