113
this chapter, has distinct needs for specialized 
services.’’. 
(h) EDUCATION
AND
COUNSELING
SERVICES.—
Chapter 1 of subpart 2 of part A of title IV is further 
amended—
(1) in section 402B(b) (20 U.S.C. 1070a–
12(b))—
(A) 
by 
redesignating 
paragraphs 
(3) 
through (10) as paragraphs (4) through (11), 
respectively; 
(B) by inserting after paragraph (2) the 
following: 
‘‘(3) education or counseling services designed 
to improve the financial literacy and economic lit-
eracy of students and, as appropriate, their par-
ents;’’; and 
(C) in paragraph (11), as redesignated by 
subparagraph (A), by striking ‘‘paragraphs (1) 
through (9)’’ and inserting ‘‘paragraphs (1) 
through (10)’’. 
(2) in section 402C (20 U.S.C. 1070a–13)—
(A) in subsection (b)—
(i) by redesignating paragraphs (2) 
through (12) as paragraphs (3) through 
(13), respectively;
114
(ii) by inserting after paragraph (1) 
the following: 
‘‘(2) education or counseling services designed 
to improve the financial literacy and economic lit-
eracy of students and, as appropriate, their par-
ents;’’; and 
(iii) in paragraph (13), as redesig-
nated by clause (i), by striking ‘‘para-
graphs (1) through (11)’’ and inserting 
‘‘paragraphs (1) through (12)’’; and 
(B) in subsection (e), by striking ‘‘sub-
section (b)(10)’’ and inserting ‘‘subsection 
(b)(11)’’; 
(3) in section 402D(b) (20 U.S.C. 1070a–
14(b))—
(A) 
by 
redesignating 
paragraphs 
(2) 
through (10) as paragraphs (3) through (11), 
respectively; 
(B) by inserting after paragraph (1) the 
following: 
‘‘(2) education or counseling services designed 
to improve the financial literacy and economic lit-
eracy of students and, as appropriate, their par-
ents;’’; and
115
(C) in paragraph (11), as redesignated by 
subparagraph (A), by striking ‘‘paragraphs (1) 
through (9)’’ and inserting ‘‘paragraphs (1) 
through (10)’’; 
(4) in section 402E(b) (20 U.S.C. 1070a–
15(b))—
(A) by redesignating paragraphs (7) and 
(8) as paragraphs (8) and (9), respectively; and 
(B) by inserting after paragraph (6) the 
following: 
‘‘(7) education or counseling services designed 
to improve the financial literacy and economic lit-
eracy of students and, as appropriate, their par-
ents;’’; 
(5) in section 402F(b) (20 U.S.C. 1070a–
16(b))—
(A) 
by 
redesignating 
paragraphs 
(4) 
through (10) as paragraphs (5) through (11), 
respectively; 
(B) by inserting after paragraph (3) the 
following: 
‘‘(4) education or counseling services designed 
to improve the financial literacy and economic lit-
eracy of students and, as appropriate, their par-
ents;’’; and
116
(C) in paragraph (11), as redesignated by 
subparagraph (A), by striking ‘‘paragraphs (1) 
through (9)’’ and inserting ‘‘paragraphs (1) 
through (10)’’. 
(i) MAXIMUM
STIPENDS.—Section 402C(e) (20 
U.S.C. 1070a–13(e)) is amended—
(1) by striking ‘‘$60’’ and inserting ‘‘$100’’; 
and 
(2) by striking ‘‘$40’’ and inserting ‘‘$60’’. 
(j) 
STUDENT
SUPPORT
SERVICES.—Section 
402D(d)(6) (20 U.S.C. 1070a–14(d)(6)) is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (A); 
(2) by striking the period at the end of sub-
paragraph (B) and inserting ‘‘; and’’; and 
(3) by inserting after subparagraph (B) the fol-
lowing new subparagraph: 
‘‘(C) working with other entities that serve 
low-income working adults to increase access to 
and successful progress in postsecondary edu-
cation by low-income working adults seeking 
their first postsecondary degree or certificate.’’. 
(k) POSTBACCALAUREATE ACHIEVEMENT MAXIMUM 
STIPENDS.—Section 402E(e)(1) (20 U.S.C. 1070a–
117
15(e)(1)) is amended by striking ‘‘$2,800’’ and inserting 
‘‘$5,000’’. 
(l) EDUCATIONAL OPPORTUNITY CENTERS: APPLICA-
TION APPROVAL.—Section 402F(c) (20 U.S.C. 1070a–
16(c)) is amended—
(1) by striking ‘‘and’’ at the end of paragraph 
(2); 
(2) by striking the period at the end of para-
graph (3) and inserting ‘‘; and’’; and 
(3) by inserting after paragraph (3) the fol-
lowing new paragraph: 
‘‘(4) consider the extent to which the proposed 
project would provide services to low-income working 
adults in the region to be served, in order to in-
crease access to postsecondary education by low-in-
come working adults.’’. 
SEC. 403. GEARUP. 
(a) DURATION OF AWARDS.—Section 404A(b) (20 
U.S.C. 1070a–21(b)) is amended—
(1) in paragraph (2)(B), by striking ‘‘Higher 
Education Amendments of 1998’’ and inserting 
‘‘College Access and Opportunity Act of 2005’’; and 
(2) by adding at the end thereof the following 
new paragraph:
118
‘‘(3) DURATION.—An award made by the Sec-
retary under this chapter to an eligible entity de-
scribed in paragraph (1) or (2) of subsection (c) 
shall be for the period of 6 years.’’. 
(b) CONTINUING ELIGIBILITY.—Section 404A (20 
U.S.C. 1070a–21) is amended by adding at the end the 
following new subsection: 
‘‘(d) CONTINUING ELIGIBILITY.—An eligible entity 
shall not cease to be an eligible entity upon the expiration 
of any grant under this chapter (including a continuation 
award).’’. 
(c) CONTINUITY OF SERVICE.—
(1) 
COHORT
APPROACH.—Section 
404B(g)(1)(B) (20 U.S.C. 1070a–22(g)(1)(B)) is 
amended by inserting ‘‘and provide the option of 
continued services through the student’s first year of 
attendance at an eligible institution of higher edu-
cation’’ after ‘‘grade level’’. 
(2) EARLY INTERVENTION.—Section 404D (20 
U.S.C. 1070a–24) is amended—
(A) in subsection (b)(2)(A), by inserting 
‘‘and students in the first year of attendance at 
an eligible institution of higher education’’ after 
‘‘grade 12’’; and
119
(B) in subsection (c), by inserting ‘‘and 
may consider students in their first year of at-
tendance at an eligible institution who is eligi-
ble’’ after ‘‘grade 12’’. 
(d) COORDINATION.—Section 404C(a)(2) (20 U.S.C. 
1070a–23(a)(2)) is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (A); 
(2) by redesignating subparagraph (B) as sub-
paragraph (C); and 
(3) by inserting after subparagraph (A) the fol-
lowing new subparagraph: 
‘‘(B) describe activities for coordinating, 
complementing, and enhancing services under 
this chapter provided by other eligible entities 
in the State; and’’. 
(e) EDUCATION AND COUNSELING SERVICES.—Sec-
tion 404D(b)(2)(A)(ii) (20 U.S.C. 1070a–24(b)(2)(A)(ii)) 
is amended by striking ‘‘and academic counseling’’ and in-
serting ‘‘academic counseling, and financial literacy and 
economic literacy education or counseling’’. 
(f) REAUTHORIZATION.—Section 404H (20 U.S.C. 
1070a–28) is amended by striking ‘‘$200,000,000 for fis-
cal year 1999 and such sums as may be necessary for each 
of the 4 succeeding fiscal years’’ and inserting
120
‘‘$306,500,000 for fiscal year 2006 and such sums as may 
be necessary for each of the 5 succeeding fiscal years’’. 
SEC. 404. FEDERAL SUPPLEMENTAL EDUCATIONAL OPPOR-
TUNITY GRANTS. 
(a) AUTHORIZATION OF APPROPRIATIONS.—Section 
413A(b)(1) (20 U.S.C. 1070b(b)(1)) is amended by strik-
ing ‘‘$675,000,000 for fiscal year 1999 and such sums 
as may be necessary for the 4 succeeding fiscal years’’ and 
inserting ‘‘$779,000,000 for fiscal year 2006 and such 
sums as may be necessary for the 5 succeeding fiscal 
years’’. 
(b) PHASEOUT OF ALLOCATION BASED ON PREVIOUS 
ALLOCATIONS.—
(1) AMENDMENT.—Subsection (a) of section 
413D (20 U.S.C. 1070b–3(a)) is amended to read as 
follows: 
‘‘(a) ALLOCATION BASED
ON PREVIOUS ALLOCA-
TION.—
‘‘(1) BASE GUARANTEE.—From the amount ap-
propriated pursuant to section 413A(b) for each fis-
cal year after fiscal year 2007, the Secretary shall, 
subject to paragraph (2), first allocate to each eligi-
ble institution an amount equal to the following per-
centage of the amount such institution received 
under subsection (a) of this section for fiscal year
121
2007 (as such subsection was in effect with respect 
to allocations for such fiscal year): 
‘‘(A) 80 percent for fiscal years 2008 and 
2009; 
‘‘(B) 60 percent for fiscal years 2010 and 
2011; 
‘‘(C) 40 percent for fiscal years 2012 and 
2013; 
‘‘(D) 20 percent for fiscal years 2014 and 
2015; and 
‘‘(E) 0 percent for fiscal year 2016 and 
any succeeding fiscal year. 
‘‘(2) RATABLE REDUCTIONS FOR INSUFFICIENT 
APPROPRIATIONS.—
‘‘(A) REDUCTION OF BASE GUARANTEE.—
If the amount appropriated for any fiscal year 
is less than the amount required to be allocated 
to all institutions under this subsection, then 
the amount of the allocation to each such insti-
tution shall be ratably reduced. 
‘‘(B) ADDITIONAL APPROPRIATIONS ALLO-
CATION.—If additional amounts are appro-
priated for any such fiscal year, such reduced 
amounts shall be increased on the same basis as 
they were reduced (until the amount allocated
122
equals the amount required to be allocated 
under this subsection). 
‘‘(3) ADDITIONAL ALLOCATIONS FOR CERTAIN 
INSTITUTIONS.——
‘‘(A) ALLOCATIONS PERMITTED.—Notwith-
standing any other provision of this section, the 
Secretary may allocate an amount equal to not 
more than 10 percent of the amount by which 
the amount appropriated in any fiscal year to 
carry out this subpart exceeds $700,000,000 
among eligible institutions described in sub-
paragraph (B). 
‘‘(B) ELIGIBLE INSTITUTIONS.—For pur-
poses of subparagraph (A)—
‘‘(i) an eligible institution that is a 4-
year institution may receive an allocation 
under subparagraph (A) if more than 50 
percent of the students who are degree-
seeking Pell Grant recipients attending 
such institution graduate within 4 calendar 
years of the first day of enrollment; and 
‘‘(ii) an eligible institution that is a 2-
year institution may receive an allocation 
under subparagraph (A) if more than 50 
percent of the students who are degree-
123
seeking Pell Grant recipients attending 
such institution graduate within 2 calendar 
years of the first day of enrollment.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply with respect to any 
amounts appropriated under section 413A(b) of the 
Higher Education Act of 1965 (20 U.S.C. 1070b(b)) 
for fiscal year 2008 or any succeeding fiscal year. 
(c) BOOKS AND SUPPLIES.—Section 413D(c)(3)(D) 
(20 U.S.C. 1070–3(c)(3)(D)) is amended by striking 
‘‘$450’’ and inserting ‘‘$600’’. 
SEC. 405. LEAP. 
Section 415A(b)(1) (20 U.S.C. 1070c(b)(1)) is 
amended—
(1) by striking ‘‘1999’’ and inserting ‘‘2006’’; 
and 
(2) by striking ‘‘4 succeeding’’ and inserting ‘‘5 
succeeding’’. 
SEC. 406. HEP/CAMP PROGRAM. 
Section 418A (20 U.S.C. 1070d–2) is amended—
(1) in subsection (b)(1)(B)(i), by inserting ‘‘, or 
whose spouse’’ after ‘‘themselves’’; 
(2) in subsection (b)(3)(B), by inserting ‘‘, in-
cluding preparation for college entrance exams,’’ 
after ‘‘program’’;
124
(3) in subsection (b)(8), by inserting ‘‘, includ-
ing child care and transportation’’ after ‘‘supportive 
services’’; 
(4) by striking ‘‘and’’ at the end of subsection 
(b)(7), by striking the period at the end of sub-
section (b)(8) and inserting ‘‘; and’’, and by adding 
at the end of subsection (b) the following new para-
graph: 
‘‘(9) follow-up activity and reporting require-
ments, except that not more than 2 percent of the 
funds provided under this section may be used for 
such purposes.’’; 
(5) in subsection (c)(1)(A), by inserting ‘‘, or 
whose spouse’’ after ‘‘themselves’’; 
(6) in subsection (c)(1)(B), by striking clause 
(i) and inserting the following: 
‘‘(i) personal, academic, career, and eco-
nomic education or personal finance counseling 
as an ongoing part of the program;’’; 
(7) in subsection (c)(2)(B), by inserting ‘‘(in-
cluding mentoring and guidance of such students)’’ 
after ‘‘services’’; 
(8) in subsection (c)(2), by striking ‘‘and’’ at 
the end of subparagraph (A), by striking the period 
at the end of subparagraph (B) and inserting ‘‘;
125
and’’, and by adding at the end of subsection (c)(2) 
the following new subparagraph: 
‘‘(C) for students in any program that 
does not award a bachelor’s degree, encour-
aging the transfer to, and persistence in, such 
a program, and monitoring the rate of such 
transfer, persistence, and completion.’’; 
(9) in subsection (e), by striking ‘‘section 
402A(c)(1)’’ and inserting ‘‘section 402A(c)(2)’’; 
and 
(10) in subsection (h)—
(A) 
in 
paragraph 
(1), 
by 
striking 
‘‘$15,000,000 for fiscal year 1999 and such 
sums as may be necessary for each of the 4 
succeeding 
fiscal 
years’’ 
and 
inserting 
‘‘$24,000,000 for fiscal year 2006 and such 
sums as may be necessary for each of the 5 
succeeding fiscal years’’; and 
(B) 
in 
paragraph 
(2), 
by 
striking 
‘‘$5,000,000 for fiscal year 1999 and such 
sums as may be necessary for each of the 4 
succeeding 
fiscal 
years’’ 
and 
inserting 
‘‘$16,000,000 for fiscal year 2006 and such 
sums as may be necessary for each of the 5 
succeeding fiscal years’’.
126
SEC. 407. BYRD SCHOLARSHIP. 
Section 419K (20 U.S.C. 1070d–41) is amended—
(1) by striking ‘‘1999’’ and inserting ‘‘2006’’; 
and 
(2) by striking ‘‘4 succeeding’’ and inserting ‘‘5 
succeeding’’. 
SEC. 408. CHILD CARE ACCESS. 
Section 419N(g) (20 U.S.C. 1070e(g)) is amended—
(1) by striking ‘‘1999’’ and inserting ‘‘2006’’; 
and 
(2) by striking ‘‘4 succeeding’’ and inserting ‘‘5 
succeeding’’. 
SEC. 409. LEARNING ANYTIME ANYWHERE PARTNERSHIPS. 
(a) REPEAL.—Subpart 8 of part A of title IV (20 
U.S.C. 1070f—1070f–6) is repealed. 
(b) CONFORMING AMENDMENT.—Section 400(b) (20 
U.S.C. 1070(b)) is amended by striking ‘‘through 8’’ and 
inserting ‘‘through 7’’. 
SEC. 410. TECHNICAL AMENDMENTS. 
Part A of title IV is further amended as follows: 
(1) Section 419C(b)(1) (20 U.S.C. 1070d–
33(b)(1)) is amended by inserting ‘‘and’’ after the 
semicolon at the end thereof. 
(2) Section 419D(d) (20 U.S.C. 1070d–34(d)) 
is amended by striking ‘‘Public Law 95–1134’’ and 
inserting ‘‘Public Law 95–134’’.
127
PART B—FEDERAL FAMILY EDUCATION LOAN 
PROGRAM 
SEC. 421. REAUTHORIZATION OF FEDERAL FAMILY EDU-
CATION LOAN PROGRAM. 
(a) AUTHORIZATION OF APPROPRIATIONS.—Section 
421(b)(5) (20 U.S.C. 1071(b)(5)) is amended by striking 
‘‘administrative cost allowance’’ and inserting ‘‘loan proc-
essing and issuance fee’’. 
(b) EXTENSION OF AUTHORITY.—
(1) FEDERAL INSURANCE LIMITATIONS.—Sec-
tion 424(a) (20 U.S.C. 1074(a)) is amended—
(A) by striking ‘‘2004’’ and inserting 
‘‘2012’’; and 
(B) by striking ‘‘2008’’ and inserting 
‘‘2016’’. 
(2) GUARANTEED
LOANS.—Section 428(a)(5) 
(20 U.S.C. 1078(a)(5)) is amended—
(A) by striking ‘‘2004’’ and inserting 
‘‘2012’’; and 
(B) by striking ‘‘2008’’ and inserting 
‘‘2016’’. 
(3) CONSOLIDATION LOANS.—Section 428C(e) 
(20 U.S.C. 1078–3(e)) is amended by striking 
‘‘2004’’ and inserting ‘‘2012’’.
128
SEC. 422. LOAN LIMITS. 
(a) 
FEDERAL
INSURANCE
LIMITS.—Section 
425(a)(1)(A) (20 U.S.C. 1075(a)(1)(A)) is amended—
(1) in clause (i)(I), by striking ‘‘$2,625’’ and 
inserting ‘‘$3,500’’; and 
(2) in clause (ii)(I), by striking ‘‘$3,500’’ and 
inserting ‘‘$4,500’’. 
(b) GUARANTEE LIMITS.—Section 428(b)(1)(A) (20 
U.S.C. 1078(b)(1)(A)) is amended—
(1) in clause (i)(I), by striking ‘‘$2,625’’ and 
inserting ‘‘$3,500’’; and 
(2) in clause (ii)(I), by striking ‘‘$3,500’’ and 
inserting ‘‘$4,500’’. 
(c) COUNTING OF CONSOLIDATION LOANS AGAINST 
LIMITS.—Section 428C(a)(3)(B) (20 U.S.C. 1078–
3(a)(3)(B)) is amended by adding at the end the following 
new clause: 
‘‘(ii) Loans made under this section shall, to 
the extent used to discharge loans made under this 
title, be counted against the applicable limitations on 
aggregate 
indebtedness 
contained 
in 
sections 
425(a)(2), 
428(b)(1)(B), 
428H(d), 
455, 
and 
464(a)(2)(B).’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to any loan made, in-
sured, or guaranteed under part B or part D of title IV
129
of the Higher Education Act of 1965 for which the first 
disbursement of principal is made on or after July 1, 
2007. 
SEC. 423. INTEREST RATES AND SPECIAL ALLOWANCES. 
(a) FFEL INTEREST RATE.—Section 427A (20 
U.S.C. 1077a(k)) is amended—
(1) in subsection (k)—
(A) by striking ‘‘, AND BEFORE JULY 1, 
2006’’ in the heading of such subsection; and 
(B) by striking ‘‘, and before July 1, 
2006,’’ each place it appears other than para-
graph (4); 
(2) by striking subsection (l); and 
(3) by redesignating subsections (m) and (n) as 
subsections (l) and (m), respectively. 
(b) DIRECT
LOAN
INTEREST
RATES.—Section 
455(b) (20 U.S.C. 1087e(b)) is amended—
(1) in paragraph (6)—
(A) by striking ‘‘, AND BEFORE JULY 1, 
2006’’ in the heading of such paragraph; and 
(B) by striking ‘‘, and before July 1, 
2006,’’ each place it appears other than sub-
paragraph (D); 
(2) by striking paragraph (7); and
130
(3) by redesignating paragraphs (8) and (9) as 
paragraphs (7) and (8), respectively. 
(c) CONSOLIDATION LOANS.—
(1) FFEL CONSOLIDATION
LOANS.—Section 
427A(k) (20 U.S.C. 1077a(k)) is further amended—
(A) by redesignating paragraph (5) as 
paragraph (6); and 
(B) by inserting after paragraph (4) the 
following new paragraph: 
‘‘(5) VARIABLE
RATE
FOR
CONSOLIDATION 
LOANS.—With respect to any consolidation loan 
under section 428C for which the application is re-
ceived by an eligible lender on or after July 1, 2006, 
the applicable 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—
‘‘(A) the bond equivalent rate of 91-day 
Treasury bills auctioned at the final auction 
held prior to such June 1; plus 
‘‘(B) 2.3 percent, 
except that such rate shall not exceed 8.25 percent, 
and the rate determined under paragraph (3) shall 
apply in lieu of the rate determined under this para-
graph in the case of any such consolidation loan that
131
is used to repay loans each of which was made under 
section 428B or was a Federal Direct PLUS Loan 
(or both).’’. 
(2) DIRECT
CONSOLIDATION
LOANS.—Section 
455(b)(6) (20 U.S.C. 1087e(b)(6)) is further 
amended—
(A) by redesignating subparagraph (E) as 
subparagraph (F); and 
(B) by inserting after subparagraph (D) 
the following new subparagraph: 
‘‘(E) VARIABLE RATE FOR CONSOLIDATION 
LOANS.—With respect to any Federal Direct 
Consolidation loan for which the application is 
received on or after July 1, 2006, the applicable 
rate of interest shall, during any 12-month pe-
riod 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 the rate determined under subpara-
graph (C) shall apply in lieu of the rate deter-
132
mined under this subparagraph in the case of 
any such consolidation loan that is used to 
repay loans each of which was made under sec-
tion 428B or was a Federal Direct PLUS Loan 
(or both).’’. 
(d) CONSOLIDATION LOAN CONFORMING AMEND-
MENT.—Section 428C(c)(1)(A)(ii) (20 U.S.C. 1078–
3(c)(1)(A)(ii)) 
is 
amended 
by 
striking 
‘‘section 
427A(l)(3)’’ and inserting ‘‘section 427A(k)(5)’’. 
(e) CONFORMING AMENDMENTS FOR SPECIAL AL-
LOWANCES.—
(1) AMENDMENT.—Subparagraph (I) of section 
438(b)(2) (20 U.S.C. 1087–1(b)(2)) is amended—
(A) by striking clause (ii) and inserting the 
following: 
‘‘(ii) IN
SCHOOL
AND
GRACE
PE-
RIOD.—In the case of any loan for which 
the first disbursement is made on or after 
January 1, 2000, and for which the appli-
cable interest rate is described in section 
427A(k)(2), clause (i)(III) of this subpara-
graph shall be applied by substituting 
‘1.74 percent’ for ‘2.34 percent’.’’; 
(B) in clause (iii)—
(i) by striking ‘‘or (l)(2)’’; and