(1) in subsection (a)— 
(A) by amending paragraph (3)(B)(i)(V) to 
read as follows: 
‘‘(V) an individual who has a consoli-
dation loan under this section and does not 
have a consolidation loan under section 
455(g) may obtain a subsequent consolida-
tion loan under section 455(g).’’; and 
(B) in paragraph (4)(A), by inserting ‘‘, 
and first disbursed before July 1, 2010’’ after 
‘‘under this part’’; 
(2) in subsection (b)— 
(A) in paragraph (1)(E), by inserting be-
fore the semicolon ‘‘, and before July 1, 2010’’ 
and 
(B) in paragraph (5), by striking ‘‘In the 
event that’’ and inserting ‘‘If, before July 1, 
2010,’’; 
(3) in subsection (c)(1)— 
(A) in subparagraph (A)(ii), by inserting 
‘‘and that is disbursed before July 1, 2010,’’ 
after ‘‘2006,’’; and 
(B) in subparagraph (C), by inserting 
‘‘and first disbursed before July 1, 2010,’’ after 
‘‘1994,’’; and 
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(4) in subsection (e), by striking ‘‘September 
30, 2014.’’ and inserting ‘‘June 30, 2010. No loan 
may be made under this section for which the first 
disbursement would be on or after July 1, 2010.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a)(1)(A) shall be effective at the close of June 
30, 2010. 
SEC. 207. UNSUBSIDIZED STAFFORD LOANS FOR MIDDLE- 
INCOME BORROWERS. 
Section 428H (20 U.S.C. 1078–8) is amended— 
(1) in subsection (a), by inserting ‘‘that are 
first disbursed before July 1, 2010,’’ after ‘‘under 
this part’’; 
(2) in subsection (b)— 
(A) by striking ‘‘Any student’’ and insert-
ing ‘‘Prior to July 1, 2010, any student’’; and 
(B) by inserting ‘‘for which the first dis-
bursement is made before such date’’ after ‘‘un-
subsidized Federal Stafford Loan’’; and 
(3) in subsection (h), by inserting ‘‘and that are 
first disbursed before July 1, 2010,’’ after ‘‘July 1, 
2006,’’. 
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SEC. 208. LOAN REPAYMENT FOR CIVIL LEGAL ASSISTANCE 
ATTORNEYS. 
Section 
428L(b)(2)(A) 
(20 
U.S.C. 
1078– 
12(b)(2)(A)) is amended— 
(1) by amending clause (i) to read as follows: 
‘‘(i) subject to clause (ii)— 
‘‘(I) a loan made, insured, or 
guaranteed under this part, and that 
is first disbursed before July 1, 2010; 
or 
‘‘(II) a loan made under part D 
or part E; and’’; and 
(2) in clause (ii)— 
(A) by striking ‘‘428C or 455(g)’’ and in-
serting ‘‘428C, that is disbursed before July 1, 
2010, or section 455(g)’’; and 
(B) in subclause (II), by inserting ‘‘for 
which the first disbursement is made before 
July 1, 2010,’’ after ‘‘or 428H’’. 
SEC. 209. SPECIAL ALLOWANCES. 
Section 438 (20 U.S.C. 1087–1) is amended— 
(1) in subsection (b)(2)(I)— 
(A) in the header, by inserting ‘‘, AND BE-
FORE JULY 1, 2010’’ after ‘‘2000’’; 
(B) in clause (i), by inserting ‘‘and before 
July 1, 2010,’’ after ‘‘2000,’’; 
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(C) in clause (ii)(II), by inserting ‘‘and be-
fore July 1, 2010,’’ after ‘‘2006,’’; 
(D) in clause (iii), by inserting ‘‘and before 
July 1, 2010,’’ after ‘‘2000,’’; 
(E) in clause (iv), by inserting ‘‘and that 
is disbursed before July 1, 2010,’’ after 
‘‘2000,’’; 
(F) in clause (v)(I), by inserting ‘‘and be-
fore July 1, 2010,’’ after ‘‘2006,’’; and 
(G) in clause (vi)— 
(i) in the header, by inserting ‘‘, AND 
BEFORE JULY 1, 2010’’ after ‘‘2007’’; and 
(ii) in the matter preceding subclause 
(I), by inserting ‘‘and before July 1, 
2010,’’ after ‘‘2007,’’; 
(2) in subsection (c)— 
(A) in paragraph (2)(B)— 
(i) in clause (iii), by inserting ‘‘and’’ 
after the semicolon; 
(ii) in clause (iv), by striking ‘‘; and’’ 
and inserting a period; and 
(iii) by striking clause (v); and 
(B) in paragraph (6), by inserting ‘‘and 
first disbursed before July 1, 2010,’’ after 
‘‘1992,’’; and 
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(3) in subsection (d)(2)(B), by inserting ‘‘, and 
before July 1, 2010’’ after ‘‘2007’’. 
SEC. 210. REVISED SPECIAL ALLOWANCE CALCULATION. 
(a) 
REVISED
CALCULATION
RULE.—Section 
438(b)(2)(I) of the Higher Education Act of 1965 (20 
U.S.C. 1087–1(b)(2)(I)) is amended by adding at the end 
the following new clause: 
‘‘(vii) REVISED
CALCULATION
RULE 
TO REFLECT FINANCIAL MARKET CONDI-
TIONS.— 
‘‘(I) CALCULATION
BASED
ON 
LIBOR.—For the calendar quarter be-
ginning on January 1, 2010, and each 
subsequent calendar quarter, in com-
puting the special allowance paid pur-
suant to this subsection with respect 
to loans described in subclause (II), 
clause (i)(I) of this subparagraph 
shall be applied by substituting ‘of the 
1-month London Inter Bank Offered 
Rate (LIBOR) for United States dol-
lars in effect for each of the days in 
such quarter as compiled and released 
by the British Bankers Association’ 
for ‘of the quotes of the 3-month com-
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day of the second full fiscal quar-
ter after the date of enactment of 
such Act, the holder of the loan 
affirmatively 
and 
permanently 
waives all contractual, statutory 
or other legal rights to a special 
allowance paid pursuant to this 
subsection 
that 
is 
calculated 
using the formula in effect at the 
time the loans were first dis-
bursed. 
‘‘(III) TERMS
OF
WAIVER.—A 
waiver pursuant to subclause (II)(bb) 
shall— 
‘‘(aa) be applicable to all 
loans described in such subclause 
that are held, under any lender 
identification number associated 
with the holder (pursuant to sec-
tion 487B), directly or as an eli-
gible lender trustee on behalf of 
another party; and 
‘‘(bb) apply with respect to 
all future calculations of the spe-
cial allowance on loans described 
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in such subclause that are held 
on the date of such waiver or 
that are acquired by the holder 
after such date. 
‘‘(IV) PARTICIPANT’S
YIELD.— 
For the calendar quarter beginning on 
January 1, 2010, and each subse-
quent calendar quarter, the Sec-
retary’s participant yield in any loan 
for which the first disbursement is 
made on or after January 1, 2000, 
and before January 1, 2010, and that 
is held by a lender that has sold any 
participation interest in such loan to 
the Secretary shall be determined by 
using the LIBOR-based rate described 
in subclause (I) as the substitute rate 
(for the commercial paper rate) re-
ferred to in the participation agree-
ment between the Secretary and such 
lender.’’; 
(b) 
CONFORMING
AMENDMENT.—Section 
438(b)(2)(I) of such Act (20 U.S.C. 1087–1(b)(2)(I)) is 
further amended in clause (v)(III) by striking ‘‘(iv), and 
(vi)’’ and inserting ‘‘(iv), (vi), and (vii)’’. 
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SEC. 211. ORIGINATION OF DIRECT LOANS AT INSTITU-
TIONS 
LOCATED 
OUTSIDE 
THE 
UNITED 
STATES. 
(a) LOANS
FOR STUDENTS ATTENDING INSTITU-
TIONS LOCATED OUTSIDE THE UNITED STATES.—Sec-
tion 452 (20 U.S.C. 1087b) is amended by adding at the 
end the following: 
‘‘(d) INSTITUTIONS LOCATED OUTSIDE THE UNITED 
STATES.—Loan funds for students (and parents of stu-
dents) attending institutions located outside the United 
States shall be disbursed through a financial institution 
located in the United States and designated by the Sec-
retary to serve as the agent of such institutions with re-
spect to the receipt of the disbursements of such loan 
funds and the transfer of such funds to such institutions. 
To be eligible to receive funds under this part, an other-
wise eligible institution located outside the United States 
shall make arrangements, subject to regulations by the 
Secretary, with the agent designated by the Secretary 
under this subsection to receive funds under this part.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) AMENDMENTS.—Section 102 (20 U.S.C. 
1002), as amended by section 102 of the Higher 
Education Opportunity Act (Public Law 110–315) 
and section 101 of Public Law 111–39, is amend-
ed— 
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(A) by striking ‘‘part B’’ each place it ap-
pears and inserting ‘‘part D’’; 
(B) in subsection (a)(1)(C), by inserting ‘‘, 
consistent with the requirements of section 
452(d)’’ before the period at the end; and 
(C) in subsection (a)(2)(A)— 
(i) in the matter preceding clause (i), 
by striking ‘‘made, insured, or guaranteed’’ 
and inserting ‘‘made’’; and 
(ii) in clause (iii)— 
(I) in subclause (III), by striking 
‘‘only Federal Stafford’’ and all that 
follows through ‘‘section 428B’’ and 
inserting ‘‘only Federal Direct Staf-
ford 
Loans 
under 
section 
455(a)(2)(A), Federal Direct Unsub-
sidized Stafford Loans under section 
455(a)(2)(D), 
or 
Federal 
Direct 
PLUS 
Loans 
under 
section 
455(a)(2)(B)’’; and 
(II) in subclause (V), by striking 
‘‘a Federal Stafford’’ and all that fol-
lows through ‘‘section 428B’’ and in-
serting ‘‘a Federal Direct Stafford 
Loan under section 455(a)(2)(A), a 
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Federal Direct Unsubsidized Stafford 
Loan under section 455(a)(2)(D), or a 
Federal Direct PLUS Loan under 
section 455(a)(2)(B)’’. 
(2) EFFECTIVE DATE.—The amendments made 
by subparagraph (C) of paragraph (1) shall be effec-
tive on July 1, 2010, as if enacted as part of section 
102(a)(1) of the Higher Education Opportunity Act 
(Public Law 110–315). 
SEC. 212. AGREEMENTS WITH INSTITUTIONS. 
Section 454 (20 U.S.C. 1087d) is amended— 
(1) in subsection (a), by striking paragraph (4) 
and redesignating the succeeding paragraphs accord-
ingly; and 
(2) in subsection (b)(2), by striking ‘‘(5), (6), 
and (7)’’ and inserting ‘‘(5), and (6)’’. 
SEC. 213. TERMS AND CONDITIONS OF LOANS. 
(a) AMENDMENTS.—Section 455 (20 U.S.C. 1087e) 
is amended— 
(1) in subsection (a)(1), by inserting ‘‘, and 
first disbursed on June 30, 2010,’’ before ‘‘under 
sections 428’’; and 
(2) in subsection (g)— 
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(A) by inserting ‘‘, including any loan 
made under part B and first disbursed before 
July 1, 2010’’ after ‘‘section 428C(a)(4)’’; and 
(B) by striking the third sentence. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a)(1) shall apply with respect to loans first dis-
bursed under part D of title IV of the Higher Education 
Act of 1965 (20 U.S.C. 1087a et seq.) on or after July 
1, 2010. 
SEC. 214. CONTRACTS. 
Section 456 (20 U.S.C. 1087f) is amended— 
(1) in subsection (a)— 
(A) in paragraph (1)— 
(i) in the header, by striking ‘‘IN 
GENERAL’’ and inserting ‘‘AWARDING OF 
CONTRACTS’’; 
(ii) by striking ‘‘The Secretary’’ and 
inserting the following: 
‘‘(A) IN GENERAL.—The Secretary’’; and 
(iii) by adding at the end the fol-
lowing: 
‘‘(B) AWARDING
CONTRACTS
FOR
SERV-
ICING
LOANS.—The Secretary shall, if prac-
ticable, award multiple contracts, through a 
competitive bidding process, to entities, includ-
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ing eligible not-for-profit servicers, to service 
loans originated under this part. The competi-
tive bidding process shall take into account 
price, servicing capacity, and capability, and 
may take into account the capacity and capa-
bility to provide default aversion activities and 
outreach services.’’; 
(B) in paragraph (2)— 
(i) in the first sentence, by inserting 
‘‘, 
including 
eligible 
not-for-profit 
servicers,’’ after ‘‘The entities’’; 
(ii) by amending the third sentence to 
read as follows: ‘‘The entities with which 
the Secretary may enter into such con-
tracts shall include, where practicable, 
agencies with agreements with the Sec-
retary under sections 428(b) and (c) on 
the date of the enactment of the Student 
Aid and Fiscal Responsibility Act of 2009, 
and eligible not-for-profit servicers, if such 
agencies or servicers meet the qualifica-
tions as determined by the Secretary under 
this subsection and if those agencies or 
servicers have such experience and dem-
onstrated effectiveness.’’; and 
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(iii) by striking the last sentence and 
inserting the following: ‘‘In awarding con-
tracts to such State agencies, and such eli-
gible not-for-profit servicers, the Secretary 
shall, to the extent practicable and con-
sistent with the purposes of this part, give 
special consideration to State agencies and 
such servicers with a history of high qual-
ity performance and demonstrated integ-
rity in conducting operations with institu-
tions of higher education and the Sec-
retary.’’; 
(C) by redesignating paragraph (3) as 
paragraph (4), and by inserting in such para-
graph ‘‘, or of any eligible not-for-profit servicer 
to enter into an agreement for the purposes of 
this section as a member of a consortium of 
such entities’’ before the period at the end; and 
(D) by inserting after paragraph (2) the 
following new paragraph: 
‘‘(3) SERVICING BY ELIGIBLE NOT-FOR-PROFIT 
SERVICERS.— 
‘‘(A) IN GENERAL.—Notwithstanding any 
other provision of this section, in each State 
where one or more eligible not-for-profit 
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servicer has its principal place of business, the 
Secretary shall contract with each such servicer 
to service loans originated under this part on 
behalf of borrowers attending institutions lo-
cated within such State, provided that the 
servicer demonstrates that it meets the stand-
ards for servicing Federal assets and agrees to 
service the loans at a competitive market rate, 
as determined by the Secretary. In determining 
such a competitive market rate, the Secretary 
may take into account the volume of loans serv-
iced by the servicer. Contracts awarded under 
this paragraph shall be subject to the same re-
quirements for quality, performance, and ac-
countability as contracts awarded under para-
graph (2) for similar activities. 
‘‘(B) 
ALLOCATIONS.—(i) 
ONE 
SERVICER.—In the case of a State with only 
one eligible not-for-profit servicer with a con-
tract described in subparagraph (A), the Sec-
retary shall, at a minimum, allocate to such 
servicer, on an annual basis, the servicing 
rights for the lesser of— 
‘‘(I) the loans of 100,000 borrowers 
(including borrowers who borrowed loans 
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in a prior year that were serviced by the 
servicer) attending institutions located 
within the State; or 
‘‘(II) the loans of all the borrowers at-
tending institutions located within the 
State. 
‘‘(ii) MULTIPLE SERVICERS.—In the case 
of a State with more than one eligible not-for- 
profit servicer with a contract described in sub-
paragraph (A), the Secretary shall, at a min-
imum, allocate to each such servicer the serv-
icing rights for the lesser of— 
‘‘(I) the loans of 100,000 borrowers 
(including borrowers who borrowed loans 
in a prior year that were serviced by the 
servicer) attending institutions located 
within the State; or 
‘‘(II) an equal share of the loans of all 
borrowers attending institutions located 
within the State, except the Secretary shall 
adjust such shares as necessary to ensure 
that the loans of any single borrower re-
main with a single servicer. 
‘‘(iii) ADDITIONAL ALLOCATION.—The Sec-
retary may allocate additional servicing rights 
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to an eligible not-for-profit servicer based on 
the performance of such servicer, as determined 
by the Secretary, including performance in the 
areas of customer service and default aversion. 
‘‘(C) MULTIPLE LOANS.—Notwithstanding 
the allocations required by subparagraph (B), 
the Secretary may transfer loans among 
servicers who are awarded contracts to service 
loans pursuant to this section to ensure that 
the loans of any single borrower remain with a 
single servicer.’’; and 
(2) by adding at the end the following: 
‘‘(c) REPORT TO CONGRESS.—Not later than 3 years 
after the date of the enactment of the Student Aid and 
Fiscal Responsibility Act of 2009, the Secretary shall pre-
pare and submit to the authorizing committees, a report 
evaluating the performance of all eligible not-for-profit 
servicers awarded a contract under this section to service 
loans originated under this part. Such report shall give 
consideration to— 
‘‘(1) customer satisfaction of borrowers and in-
stitutions with respect to the loan servicing provided 
by the servicers; 
‘‘(2) compliance with applicable regulations by 
the servicers; and 
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‘‘(3) the effectiveness of default aversion activi-
ties, and outreach services (if any), provided by the 
servicers. 
‘‘(d) DEFINITIONS.—In this section: 
‘‘(1) DEFAULT
AVERSION
ACTIVITIES.—The 
term ‘default aversion activities’ means activities 
that are directly related to providing collection as-
sistance to the Secretary on a delinquent loan, prior 
to the loan being legally in a default status, includ-
ing due diligence activities required pursuant to reg-
ulations. 
‘‘(2) ELIGIBLE NOT-FOR-PROFIT SERVICER.— 
‘‘(A) IN GENERAL.—The term ‘eligible not- 
for-profit servicer’ means an entity that, on the 
date of enactment of the Student Aid and Fis-
cal Responsibility Act of 2009— 
‘‘(i) meets the definition of an eligible 
not-for-profit holder under section 435(p), 
except that such term does not include eli-
gible 
lenders 
described 
in 
paragraph 
(1)(D) of such section; 
‘‘(ii) notwithstanding clause (i), is the 
sole beneficial owner of a loan for which 
the special allowance rate is calculated 
under section 438(b)(2)(I)(vi)(II) because 
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the loan is held by an eligible lender trust-
ee that is an eligible not-for-profit holder 
as defined under section 435(p)(1)(D); or 
‘‘(iii) is an affiliated entity of an eligi-
ble not-for-profit servicer described in 
clause (i) or (ii) that— 
‘‘(I) directly employs, or will di-
rectly employ (on or before the date 
the entity begins servicing loans under 
a contract awarded by the Secretary 
pursuant to subsection (a)(3)(A)), the 
majority of individuals who perform 
student loan servicing functions; and 
‘‘(II) on such date of enactment, 
was performing, or had entered into a 
contract with a third party servicer 
(as such term is defined in section 
481(c)) who was performing, student 
loan servicing functions for loans 
made under part B of this title. 
‘‘(B) AFFILIATED ENTITY.—For the pur-
poses of subparagraph (A), the term ‘affiliated 
entity’ means an entity contracted to perform 
services for an eligible not-for-profit servicer 
that— 
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‘‘(i) is a nonprofit entity; and 
‘‘(ii) is not owned or controlled, in 
whole or in part, by— 
‘‘(I) a for-profit entity; or 
‘‘(II) an entity having its prin-
cipal place of business in another 
State. 
‘‘(3) OUTREACH
SERVICES.—The term ‘out-
reach services’ means programs offered to students 
and families, including programs delivered in coordi-
nation with institutions of higher education that— 
‘‘(A) encourage— 
‘‘(i) students to attend and complete a 
degree or certification program at an insti-
tution of higher education; and 
‘‘(ii) students and families to obtain 
financial aid, but minimize the borrowing 
of education loans; and 
‘‘(B) deliver financial literacy and coun-
seling tools.’’. 
SEC. 215. SUBSIDIZED LOAN LIMITATION. 
Section 455(a) (20 U.S.C. 1087e(a)) is amended by 
adding at the end the following new paragraph: 
‘‘(3) TERMINATION
OF
AUTHORITY
TO
MAKE 
INTEREST SUBSIDIZED LOANS TO GRADUATE AND 
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PROFESSIONAL
STUDENTS.—Notwithstanding any 
provision of this part or part B, a graduate or pro-
fessional student shall not be eligible to receive a 
subsidized Federal Direct Stafford loan under this 
part for any period of instruction beginning on or 
after July 1, 2015.’’. 
SEC. 216. INTEREST RATES. 
Section 455(b)(7) (20 U.S.C. 1087e(b)(7)) is amend-
ed by adding at the end the following new subparagraph: 
‘‘(E) 
REDUCED
RATES
FOR
UNDER-
GRADUATE
FDSL
ON
AND
AFTER
JULY
1, 
2012.—Notwithstanding the preceding para-
graphs of this subsection and subparagraph (A) 
of this paragraph, for Federal Direct Stafford 
Loans made to undergraduate students for 
which the first disbursement is made on or 
after July 1, 2012, the applicable rate of inter-
est shall, during any 12-month period beginning 
on July 1 and ending on June 30, be deter-
mined 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, 
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except that such rate shall not exceed 6.8 per-
cent.’’. 
Subtitle B—Perkins Loan Reform 
SEC. 221. FEDERAL DIRECT PERKINS LOANS TERMS AND 
CONDITIONS. 
Part D of title IV (20 U.S.C. 1087a et seq.) is 
amended by inserting after section 455 the following new 
section: 
‘‘SEC. 455A. FEDERAL DIRECT PERKINS LOANS. 
‘‘(a) DESIGNATION OF LOANS.—Loans made to bor-
rowers under this section shall be known as ‘Federal Di-
rect Perkins Loans’. 
‘‘(b) IN GENERAL.—It is the purpose of this section 
to authorize loans to be awarded by institutions of higher 
education through agreements established under section 
463(f). Unless otherwise specified in this section, all terms 
and conditions and other requirements applicable to Fed-
eral Direct Unsubsidized Stafford loans established under 
section 455(a)(2)(D) shall apply to loans made pursuant 
to this section. 
‘‘(c) ELIGIBLE BORROWERS.—Any student meeting 
the requirements for student eligibility under section 
464(b) (including graduate and professional students as 
defined in regulations promulgated by the Secretary) shall 
be eligible to borrow a Federal Direct Perkins Loan, pro-
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vided the student attends an eligible institution with an 
agreement with the Secretary under section 463(f), and 
the institution uses its authority under that agreement to 
award the student a loan. 
‘‘(d) LOAN LIMITS.—The annual and aggregate lim-
its for loans under this section shall be the same as those 
established under section 464, and aggregate limits shall 
include loans made by institutions under agreements 
under section 463(a). 
‘‘(e) APPLICABLE
RATES
OF
INTEREST.—Loans 
made pursuant to this section shall bear interest, on the 
unpaid balance of the loan, at the rate of 5 percent per 
year.’’. 
SEC. 222. AUTHORIZATION OF APPROPRIATIONS. 
Section 461 (20 U.S.C. 1087aa) is amended— 
(1) in subsection (a), by inserting ‘‘, before July 
1, 2010,’’ after ‘‘The Secretary shall’’; 
(2) in subsection (b)— 
(A) in paragraph (1)— 
(i) by striking ‘‘(1) For the purpose’’ 
and inserting ‘‘For the purpose’’; and 
(ii) by striking ‘‘and for each of the 
five succeeding fiscal years’’; and 
(B) by striking paragraph (2); and 
(3) by striking subsection (c). 
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SEC. 223. ALLOCATION OF FUNDS. 
Section 462 (20 U.S.C. 1087bb) is amended— 
(1) in subsection (a)(1), by striking ‘‘From’’ 
and inserting ‘‘For any fiscal year before fiscal year 
2010, from’’; and 
(2) in subsection (i)(1), by striking ‘‘for any fis-
cal year,’’ and inserting ‘‘for any fiscal year before 
fiscal year 2010,’’. 
SEC. 224. FEDERAL DIRECT PERKINS LOAN ALLOCATION. 
Part E of title IV is further amended by inserting 
after section 462 (20 U.S.C. 1087bb) the following: 
‘‘SEC. 462A. FEDERAL DIRECT PERKINS LOAN ALLOCATION. 
‘‘(a) PURPOSES.—The purposes of this section are— 
‘‘(1) to allocate, among eligible and partici-
pating institutions (as such terms are defined in this 
section), the authority to make Federal Direct Per-
kins Loans under section 455A with a portion of the 
annual loan authority described in subsection (b); 
and 
‘‘(2) to make funds available, in accordance 
with section 452, to each participating institution 
from a portion of the annual loan authority de-
scribed in subsection (b), in an amount not to exceed 
the sum of an institution’s allocation of funds under 
subparagraphs (A), (B), and (C) of subsection (b)(1) 
to enable each such institution to make Federal Di-
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rect Perkins Loans to eligible students at the insti-
tution. 
‘‘(b) AVAILABLE DIRECT PERKINS ANNUAL LOAN 
AUTHORITY.— 
‘‘(1) AVAILABILITY AND ALLOCATIONS.—There 
are hereby made available, from funds made avail-
able for loans made under part D, not to exceed 
$6,000,000,000 of annual loan authority for award 
year 2010–2011 and each succeeding award year, to 
be allocated as follows: 
‘‘(A) The Secretary shall allocate not more 
than 1⁄2 of such funds for each award year by 
allocating to each participating institution an 
amount equal to the adjusted self-help need 
amount of the institution, as determined in ac-
cordance with subsection (c) for such award 
year. 
‘‘(B) The Secretary shall allocate not more 
than 1⁄4 of such funds for each award year by 
allocating to each participating institution an 
amount equal to the low tuition incentive 
amount of the institution, as determined in ac-
cordance with subsection (d). 
‘‘(C) The Secretary shall allocate not more 
than 1⁄4 of such funds for each award year by 
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allocating to each participating institution an 
amount which bears the same ratio to the funds 
allocated under this subparagraph as the ratio 
determined in accordance with subsection (e) 
for the calculation of the Federal Pell Grant 
and degree recipient amount of the institution. 
‘‘(2) NO FUNDS TO NON-PARTICIPATING INSTI-
TUTIONS.—The Secretary shall not make funds 
available under this subsection to any eligible insti-
tution that is not a participating institution. The ad-
justed self-help need amount (determined in accord-
ance with subsection (c)) of an eligible institution 
that is not a participating institution shall not be 
made available to any other institution. 
‘‘(c) ADJUSTED SELF-HELP NEED AMOUNT.—For 
the purposes of subsection (b)(1)(A), the Secretary shall 
calculate the adjusted self-help need amount of each eligi-
ble institution for an award year as follows: 
‘‘(1) 
USE
OF
BASE
SELF-HELP
NEED 
AMOUNTS.— 
‘‘(A) IN GENERAL.—Except as provided in 
paragraphs (2), (3), and (4), the adjusted self- 
help need amount of each eligible institution 
shall be the institution’s base self-help need 
amount, which is the sum of— 
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self-help need of an institution’s eligible grad-
uate and professional students, the Secretary 
shall determine the sum of each eligible grad-
uate and professional student’s average cost of 
attendance for the second preceding award year 
less each such student’s expected family con-
tribution (computed in accordance with part F) 
for such second preceding award year, except 
that, for each such eligible graduate and profes-
sional student, the amount computed by such 
subtraction shall not be less than zero or more 
than $8,000. 
‘‘(2) RATABLE REDUCTION ADJUSTMENTS.—If 
the sum of the base self-help need amounts of all eli-
gible institutions for an award year as determined 
under paragraph (1) exceeds 1⁄2 of the annual loan 
authority under subsection (b) for such award year, 
the Secretary shall ratably reduce the base self-help 
need amounts of all eligible institutions until the 
sum of such amounts is equal to the amount that is 
1⁄2 of the annual loan authority under subsection 
(b). 
‘‘(3) REQUIRED MINIMUM AMOUNT.—Notwith-
standing paragraph (2), the adjusted self-help need 
amount of each eligible institution shall not be less 
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than the average of the institution’s total principal 
amount of loans made under this part for each of 
the 5 most recent award years. 
‘‘(4) ADDITIONAL ADJUSTMENTS.—If the Sec-
retary determines that a ratable reduction under 
paragraph (2) results in the adjusted self-help need 
amount of any eligible institution being reduced 
below the minimum amount required under para-
graph (3), the Secretary shall— 
‘‘(A) for each institution for which the 
minimum amount under paragraph (3) is not 
satisfied, increase the adjusted self-help need 
amount to the amount of the required minimum 
under such subparagraph; and 
‘‘(B) ratably reduce the adjusted self-help 
need amounts of all eligible institutions not de-
scribed in subparagraph (A) until the sum of 
the adjusted self-help need amounts of all eligi-
ble institutions is equal to the amount that is 
1⁄2 of the annual loan authority under sub-
section (b). 
‘‘(d) LOW TUITION INCENTIVE AMOUNT.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(b)(1)(B), the Secretary shall determine the low tui-
tion incentive amount for each participating institu-
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tion for each award year, by calculating for each 
such institution the sum of— 
‘‘(A) the total amount, if any (but not less 
than zero), by which— 
‘‘(i) the average tuition and required 
fees for the institution’s sector for the sec-
ond preceding award year; exceeds 
‘‘(ii) the tuition and required fees for 
the second preceding award year for each 
undergraduate and graduate student at-
tending the institution who had financial 
need (as determined under part F); plus 
‘‘(B) the total amount, if any (but not less 
than zero), by which— 
‘‘(i) the total amount for the second 
preceding award year of non-Federal grant 
aid provided to meet the financial need of 
all undergraduate students attending the 
institution (as determined without regard 
to financial aid not received under this 
title); exceeds 
‘‘(ii) the total amount for the second 
preceding award year, if any, by which— 
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‘‘(I) the tuition and required fees 
of each such student with such finan-
cial need; exceeds 
‘‘(II) the average tuition and re-
quired fees for the institution’s sector. 
‘‘(2) RATABLE REDUCTION.—If the sum of the 
low tuition incentive amounts of all participating in-
stitutions for an award year as determined under 
paragraph (1) exceeds 1⁄4 of the annual loan author-
ity under subsection (b) for such award year, the 
Secretary shall ratably reduce the low tuition incen-
tive amounts of all participating institutions until 
the sum of such amounts is equal to the amount 
that is 1⁄4 of the annual loan authority under sub-
section (b). 
‘‘(e) FEDERAL PELL GRANT AND DEGREE RECIPI-
ENT AMOUNT.—For purposes of subsection (b)(1)(C), the 
Secretary shall determine the Federal Pell Grant and de-
gree recipient amount for each participating institution for 
each award year, by calculating for each such institution 
the ratio of— 
‘‘(1) the number of students who, during the 
most recent year for which data are available, ob-
tained an associate’s degree or other postsecondary 
degree from such participating institution and, prior 
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to obtaining such degree, received a Federal Pell 
Grant for attendance at any institution of higher 
education; to 
‘‘(2) the sum of the number of students who, 
during the most recent year for which data are 
available, obtained an associate’s degree or other 
postsecondary degree from each participating insti-
tution and, prior to obtaining such degree, received 
a Federal Pell Grant for attendance at any institu-
tion of higher education. 
‘‘(f) DEFINITIONS.—As used in this section: 
‘‘(1) ANNUAL
LOAN
AUTHORITY.—The term 
‘annual loan authority’ means the total original prin-
cipal amount of loans that may be allocated and 
made available for an award year to make Federal 
Direct Perkins Loans under section 455A. 
‘‘(2) AVERAGE COST OF ATTENDANCE.— 
‘‘(A) IN
GENERAL.—The term ‘average 
cost of attendance’ means the average of the at-
tendance costs for undergraduate students and 
for graduate and professional students, respec-
tively, for the second preceding award year 
which shall include— 
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‘‘(i) tuition and required fees deter-
mined in accordance with subparagraph 
(B); 
‘‘(ii) standard living expenses deter-
mined in accordance with subparagraph 
(C); and 
‘‘(iii) books and supplies determined 
in accordance with subparagraph (D). 
‘‘(B) TUITION AND REQUIRED FEES.—The 
average undergraduate and graduate and pro-
fessional tuition and required fees described in 
subparagraph (A)(i) shall be computed on the 
basis of information reported by the institution 
to the Secretary, which shall include— 
‘‘(i) total revenue received by the in-
stitution from undergraduate and graduate 
and professional students, respectively, for 
tuition and required fees for the second 
preceding award year; and 
‘‘(ii) the institution’s full-time equiva-
lent enrollment of undergraduate and 
graduate and professional students, respec-
tively, for such second preceding award 
year. 
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‘‘(C) STANDARD LIVING EXPENSES.—The 
standard living expense described in subpara-
graph (A)(ii) is equal to the allowance, deter-
mined by an institution, for room and board 
costs incurred by a student, as computed in ac-
cordance with part F for the second preceding 
award year. 
‘‘(D) BOOKS AND SUPPLIES.—The allow-
ance for books and supplies described in sub-
paragraph (A)(iii) is equal to the allowance, de-
termined by an institution, for books, supplies, 
transportation, and miscellaneous personal ex-
penses, including a reasonable allowance for the 
documented rental or purchase of a personal 
computer, as computed in accordance with part 
F for the second preceding award year. 
‘‘(3) AVERAGE TUITION AND REQUIRED FEES 
FOR THE INSTITUTION’S SECTOR.—The term ‘aver-
age tuition and required fees for the institution’s 
sector’ shall be determined by the Secretary for each 
of the categories described in section 132(d). 
‘‘(4) ELIGIBLE INSTITUTION.—The term ‘eligi-
ble institution’ means an institution of higher edu-
cation that participates in the Federal Direct Staf-
ford Loan Program. 
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‘‘(5) PARTICIPATING INSTITUTION.—The term 
‘participating institution’ means an institution of 
higher education that has an agreement under sec-
tion 463(f). 
‘‘(6) SECTOR.—The term ‘sector’ means each of 
the categories described in section 132(d).’’. 
SEC. 225. AGREEMENTS WITH INSTITUTIONS OF HIGHER 
EDUCATION. 
(a) AMENDMENTS.—Section 463 (20 U.S.C. 1087cc) 
is amended— 
(1) in subsection (a)— 
(A) in the heading, by inserting ‘‘FOR 
LOANS MADE BEFORE JULY 1, 2010’’ after 
‘‘AGREEMENTS’’; 
(B) in paragraph (3)(A), by inserting ‘‘be-
fore July 1, 2010’’ after ‘‘students’’; 
(C) in paragraph (4), by striking ‘‘there-
on—’’ and all that follows and inserting ‘‘there-
on, if the institution has failed to maintain an 
acceptable collection record with respect to such 
loan, as determined by the Secretary in accord-
ance with criteria established by regulation, the 
Secretary may require the institution to assign 
such note or agreement to the Secretary, with-
out recompense;’’; and 
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(D) in paragraph (5), by striking ‘‘and the 
Secretary shall apportion’’ and all that follows 
through ‘‘in accordance with section 462’’ and 
inserting ‘‘and the Secretary shall return a por-
tion of funds from loan repayments to the insti-
tution as specified in section 466(b)’’; 
(2) by amending subsection (b) to read as fol-
lows: 
‘‘(b) ADMINISTRATIVE EXPENSES.—An institution 
that has entered into an agreement under subsection (a) 
shall be entitled, for each fiscal year during which it serv-
ices student loans from a student loan fund established 
under such agreement, to a payment in lieu of reimburse-
ment for its expenses in servicing student loans made be-
fore July 1, 2010. Such payment shall be equal to 0.50 
percent of the outstanding principal and interest balance 
of such loans being serviced by the institution as of Sep-
tember 30 of each fiscal year.’’; and 
(3) by adding at the end the following: 
‘‘(f) CONTENTS OF AGREEMENTS FOR LOANS MADE 
ON OR AFTER JULY 1, 2010.—An agreement with any 
institution of higher education that elects to participate 
in the Federal Direct Perkins Loan program under section 
455A shall provide— 
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‘‘(1) for the establishment and maintenance of 
a Direct Perkins Loan program at the institution 
under which the institution shall use loan authority 
allocated under section 462A to make loans to eligi-
ble students attending the institution; 
‘‘(2) that the institution, unless otherwise speci-
fied in this subsection, shall operate the program 
consistent with the requirements of agreements es-
tablished under section 454; 
‘‘(3) that the institution will pay matching 
funds, quarterly, in an amount agreed to by the in-
stitution and the Secretary, to an escrow account 
approved by the Secretary, for the purpose of pro-
viding loan benefits to borrowers; 
‘‘(4) that if the institution fails to meet the re-
quirements of paragraph (3), the Secretary shall 
suspend or terminate the institution’s eligibility to 
make Federal Direct Perkins Loans under section 
455A until such time as the Secretary determines, 
in accordance with section 498, that the institution 
has met the requirements of such paragraph; and 
‘‘(5) that if the institution ceases to be an eligi-
ble institution within the meaning of section 435(a) 
by reason of having a cohort default rate that ex-
ceeds the threshold percentage specified paragraph 
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(2) of such section, the Secretary shall suspend or 
terminate the institution’s eligibility to make Fed-
eral Direct Perkins Loans under section 455A un-
less and until the institution would qualify for a re-
sumption of eligible institution status under such 
section.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
paragraph (2) of subsection (a) shall take effect on Octo-
ber 1, 2010. 
SEC. 226. STUDENT LOAN INFORMATION BY ELIGIBLE IN-
STITUTIONS. 
Section 463A (20 U.S.C. 1087cc–1) is amended— 
(1) in subsection (a), by striking ‘‘Each institu-
tion’’ and inserting ‘‘For loans made before July 1, 
2010, each institution’’; and 
(2) in subsection (b), by striking ‘‘Each institu-
tion’’ and inserting ‘‘For loans made before July 1, 
2010, each institution’’. 
SEC. 227. TERMS OF LOANS. 
(a) Section 464 (20 U.S.C. 1087dd) is amended— 
(1) in subsection (a)(1), by striking ‘‘section 
463’’ and inserting ‘‘section 463(a)’’; 
(2) in subsection (b)(1), by inserting ‘‘made be-
fore July 1, 2010,’’ after ‘‘A loan’’; 
(3) in subsection (c)— 
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(A) in paragraph (1), by inserting ‘‘made 
before July 1, 2010,’’ after ‘‘a loan’’; 
(B) in paragraph (2)— 
(i) in subparagraph (A), by inserting 
‘‘made before July 1, 2010,’’ after ‘‘any 
loan’’; and 
(ii) in subparagraph (B), by inserting 
‘‘made before July 1, 2010,’’ after ‘‘any 
loan’’; 
(C) in paragraph (3)(B), by inserting ‘‘for 
a loan made before July 1, 2010,’’ after ‘‘dur-
ing the repayment period’’; 
(D) in paragraph (4), by inserting ‘‘before 
July 1, 2010,’’ after ‘‘for a loan made’’; 
(E) in paragraph (5), by striking ‘‘The in-
stitution’’ and inserting ‘‘For loans made before 
July 1, 2010, the institution’’; and 
(F) in paragraph (6), by inserting ‘‘made 
before July 1, 2010,’’ after ‘‘of loans’’; 
(4) in subsection (d), by inserting ‘‘made before 
July 1, 2010,’’ before ‘‘from the student loan fund’’; 
(5) in subsection (e), by inserting ‘‘with respect 
to loans made before July 1, 2010, and’’ before ‘‘as 
documented in accordance with paragraph (2),’’; 
(6) by repealing subsection (f); 
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(7) in subsection (g)(1), by inserting ‘‘and be-
fore July 1, 2010,’’ after ‘‘January 1, 1986,’’; 
(8) in subsection (h)— 
(A) in paragraph (1)(A) by inserting ‘‘be-
fore July 1, 2010,’’ after ‘‘made under this 
part’’; and 
(B) in paragraph (2), by inserting ‘‘before 
July 1, 2010,’’ after ‘‘under this part’’; and 
(9) in subsection (j)(1), by inserting ‘‘before 
July 1, 2010,’’ after ‘‘under this part’’. 
SEC. 228. DISTRIBUTION OF ASSETS FROM STUDENT LOAN 
FUNDS. 
(a) Section 465 (20 U.S.C. 1087ee) is amended— 
(1) in subsection (a), by inserting ‘‘and before 
July 1, 2010,’’ after ‘‘June 30, 1972,’’; and 
(2) by amending subsection (b) to read as fol-
lows: 
‘‘(b) REIMBURSEMENT FOR CANCELLATIONS.— 
‘‘(1) ASSIGNED LOANS.—In the case of loans 
made under this part before July 1, 2010, and that 
are assigned to the Secretary, the Secretary shall, 
from amounts repaid each quarter on assigned Per-
kins Loans made before July 1, 2010, pay to each 
institution for each quarter an amount equal to— 
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‘‘(A) the aggregate of the amounts of loans 
from its student loan fund that are canceled 
pursuant to this section for such quarter, minus 
‘‘(B) an amount equal to the aggregate of 
the amounts of any such loans so canceled that 
were made from Federal capital contributions 
to its student loan fund. 
‘‘(2) RETAINED LOANS.—In the case of loans 
made under this part before July 1, 2010, and that 
are retained by the institution for servicing, the in-
stitution shall deduct from loan repayments owed to 
the Secretary under section 466, an amount equal 
to— 
‘‘(A) the aggregate of the amounts of loans 
from its student loan fund that are canceled 
pursuant to this section for such quarter, minus 
‘‘(B) an amount equal to the aggregate of 
the amounts of any such loans so canceled that 
were made from Federal capital contributions 
to its student loan fund.’’. 
(b) Section 466 (20 U.S.C. 1087ff) is amended to 
read as follows: 
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‘‘SEC. 466. DISTRIBUTION OF ASSETS FROM STUDENT LOAN 
FUNDS. 
‘‘(a) CAPITAL DISTRIBUTION.—Beginning July 1, 
2010, there shall be a capital distribution of the balance 
of the student loan fund established under this part by 
each institution of higher education as follows: 
‘‘(1) For the quarter beginning July 1, 2010, 
the Secretary shall first be paid, no later than Sep-
tember 30, 2010, an amount that bears the same 
ratio to the cash balance in such fund at the close 
of June 30, 2010, as the total amount of the Fed-
eral capital contributions to such fund by the Sec-
retary under this part bears to— 
‘‘(A) the sum of such Federal contribu-
tions and the institution’s capital contributions 
to such fund, less 
‘‘(B) an amount equal to— 
‘‘(i) the institution’s outstanding ad-
ministrative costs as calculated under sec-
tion 463(b), 
‘‘(ii) outstanding charges assessed 
under section 464(c)(1)(H), and 
‘‘(iii) outstanding loan cancellation 
costs incurred under section 465. 
‘‘(2) At the end of each quarter subsequent to 
the quarter ending September 30, 2010, the Sec-
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retary shall first be paid an amount that bears the 
same ratio to the cash balance in such fund at the 
close of the preceding quarter, as the total amount 
of the Federal capital contributions to such fund by 
the Secretary under this part bears to— 
‘‘(A) the sum of such Federal contribu-
tions and the institution’s capital contributions 
to such fund, less 
‘‘(B) an amount equal to— 
‘‘(i) the institution’s administrative 
costs incurred for that quarter as cal-
culated under section 463(b), 
‘‘(ii) charges assessed for that quarter 
under section 464(c)(1)(H), and 
‘‘(iii) loan cancellation costs incurred 
for that quarter under section 465. 
‘‘(3)(A) The Secretary shall calculate the 
amounts due to the Secretary under paragraph (1) 
(adjusted in accordance with subparagraph (B), as 
appropriate) and paragraph (2) and shall promptly 
inform the institution of such calculated amounts. 
‘‘(B) In the event that, prior to the date of en-
actment of the Student Aid and Fiscal Responsi-
bility Act of 2009, an institution made a short-term, 
interest-free loan to the institution’s student loan 
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fund established under this part in anticipation of 
collections or receipt of Federal capital contribu-
tions, and the institution demonstrates to the Sec-
retary, on or before June 30, 2010, that such loan 
will still be outstanding after June 30, 2010, the 
Secretary shall subtract the amount of such out-
standing loan from the cash balance of the institu-
tion’s student loan fund that is used to calculate the 
amount due to the Secretary under paragraph (1). 
An adjustment of an amount due to the Secretary 
under this subparagraph shall be made by the Sec-
retary on a case-by-case basis. 
‘‘(4) Any remaining balance at the end of a 
quarter after a payment under paragraph (1) or (2) 
shall be retained by the institution for use at its dis-
cretion. Any balance so retained shall be withdrawn 
from the student loan fund and shall not be counted 
in calculating amounts owed to the Secretary for 
subsequent quarters. 
‘‘(5) Each institution shall make the quarterly 
payments to the Secretary described in paragraph 
(2) until all outstanding Federal Perkins Loans at 
that institution have been assigned to the Secretary 
and there are no funds remaining in the institution’s 
student loan fund. 
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‘‘(6) In the event that the institution’s adminis-
trative costs, charges, and cancellation costs de-
scribed in paragraph (2) for a quarter exceed the 
amount owed to the Secretary under paragraphs (1) 
and (2) for that quarter, no payment shall be due 
to the Secretary from the institution for that quarter 
and the Secretary shall pay the institution, from 
funds realized from the collection of assigned Fed-
eral Perkins Loans made before July 1, 2010, an 
amount that, when combined with the amount re-
tained by the institution under paragraphs (1) and 
(2), equals the full amount of such administrative 
costs, charges, and cancellation costs. 
‘‘(b) ASSIGNMENT OF OUTSTANDING LOANS.—Be-
ginning July 1, 2010, an institution of higher education 
may assign all outstanding loans made under this part be-
fore July 1, 2010, to the Secretary, consistent with the 
requirements of section 463(a)(5). In collecting loans so 
assigned, the Secretary shall pay an institution an amount 
that constitutes the same fraction of such collections as 
the fraction of the cash balance that the institution retains 
under subsection (a)(2), but determining such fraction 
without regard to subparagraph (B)(i) of such sub-
section.’’. 
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SEC. 229. ADMINISTRATIVE EXPENSES. 
Section 489(a) (20 U.S.C. 1096(a)) is amended— 
(1) in the second sentence, by striking ‘‘or 
under part E of this title’’; and 
(2) in the third sentence— 
(A) by inserting ‘‘and’’ after ‘‘subpart 3 of 
part A,’’; and 
(B) by striking ‘‘compensation of stu-
dents,’’ and all that follows through the period 
and inserting ‘‘compensation of students.’’. 
TITLE III—MODERNIZATION, 
RENOVATION, AND REPAIR 
Subtitle A—Elementary and 
Secondary Education 
SEC. 301. DEFINITIONS. 
In this subtitle: 
(1) The term ‘‘Bureau-funded school’’ has the 
meaning given such term in section 1141 of the 
Education Amendments of 1978 (25 U.S.C. 2021). 
(2) The term ‘‘charter school’’ has the meaning 
given such term in section 5210 of the Elementary 
and Secondary Education Act of 1965 (20 U.S.C. 
7221i). 
(3) The term ‘‘CHPS Criteria’’ means the 
green building rating program developed by the Col-
laborative for High Performance Schools. 
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(4) The term ‘‘Energy Star’’ means the Energy 
Star program of the United States Department of 
Energy and the United States Environmental Pro-
tection Agency. 
(5) The term ‘‘Green Globes’’ means the Green 
Building Initiative environmental design and rating 
system referred to as Green Globes. 
(6) The term ‘‘LEED Green Building Rating 
System’’ means the United States Green Building 
Council Leadership in Energy and Environmental 
Design green building rating standard referred to as 
LEED Green Building Rating System. 
(7) The term ‘‘local educational agency’’— 
(A) has the meaning given such term in 
section 9101 of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 7801); 
(B) includes any public charter school that 
constitutes a local educational agency under 
State law; and 
(C) includes the Recovery School District 
of Louisiana. 
(8) The term ‘‘outlying area’’— 
(A) means the United States Virgin Is-
lands, Guam, American Samoa, and the Com-
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monwealth of the Northern Mariana Islands; 
and 
(B) includes the Republic of Palau. 
(9) The term ‘‘public school facilities’’ means 
existing public elementary or secondary school facili-
ties, including public charter school facilities and 
other existing facilities planned for adaptive reuse as 
public charter school facilities. 
(10) The term ‘‘Secretary’’ means the Secretary 
of Education. 
(11) The term ‘‘State’’ means each of the 50 
States, the District of Columbia, and the Common-
wealth of Puerto Rico. 
CHAPTER 1—GRANTS FOR MODERNIZA-
TION, RENOVATION, OR REPAIR OF 
PUBLIC SCHOOL FACILITIES 
SEC. 311. PURPOSE. 
Grants under this chapter shall be for the purpose 
of modernizing, renovating, or repairing public school fa-
cilities (including early learning facilities, as appropriate), 
based on the need of the facilities for such improvements, 
to ensure safe, healthy, high-performing, and techno-
logically up-to-date public school facilities. 
SEC. 312. ALLOCATION OF FUNDS. 
(a) RESERVATION.— 
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(1) IN
GENERAL.—From the amount appro-
priated to carry out this chapter for each fiscal year 
pursuant to section 345(a), the Secretary shall re-
serve 2 percent of such amount, consistent with the 
purpose described in section 311— 
(A) to provide assistance to the outlying 
areas; and 
(B) for payments to the Secretary of the 
Interior to provide assistance to Bureau-funded 
schools. 
(2) USE OF RESERVED FUNDS.—In each fiscal 
year, the amount reserved under paragraph (1) shall 
be divided between the uses described in subpara-
graphs (A) and (B) of such paragraph in the same 
proportion as the amount reserved under section 
1121(a) of the Elementary and Secondary Edu-
cation Act of 1965 (20 U.S.C. 6331(a)) is divided 
between the uses described in paragraphs (1) and 
(2) of such section 1121(a) in such fiscal year. 
(3) DISTRESSED AREAS AND NATURAL DISAS-
TERS.—From the amount appropriated to carry out 
this chapter for each fiscal year pursuant to section 
345(a), the Secretary shall reserve 5 percent of such 
amount for grants to— 
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(A) local educational agencies serving geo-
graphic areas with significant economic distress, 
to be used consistent with the purpose de-
scribed in section 311 and the allowable uses of 
funds described in section 313; and 
(B) local educational agencies serving geo-
graphic areas recovering from a natural dis-
aster, to be used consistent with the purpose 
described in section 321 and the allowable uses 
of funds described in section 323. 
(b) ALLOCATION TO STATES.— 
(1) STATE-BY-STATE
ALLOCATION.—Of the 
amount appropriated to carry out this chapter for 
each fiscal year pursuant to section 345(a), and not 
reserved under subsection (a), each State shall be al-
located an amount in proportion to the amount re-
ceived by all local educational agencies in the State 
under part A of title I of the Elementary and Sec-
ondary Education Act of 1965 (20 U.S.C. 6311 et 
seq.) for the previous fiscal year relative to the total 
amount received by all local educational agencies in 
every State under such part for such fiscal year. 
(2) STATE ADMINISTRATION.—A State may re-
serve up to 1 percent of its allocation under para-
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graph (1) to carry out its responsibilities under this 
chapter, which include— 
(A) providing technical assistance to local 
educational agencies; 
(B) developing an online, publicly search-
able database that includes an inventory of pub-
lic school facilities in the State, including for 
each such facility, its design, condition, mod-
ernization, renovation and repair needs, utiliza-
tion, energy use, and carbon footprint; and 
(C) creating voluntary guidelines for high- 
performing school buildings, including guide-
lines concerning the following: 
(i) Site location, storm water manage-
ment, outdoor surfaces, outdoor lighting, 
and transportation, including public transit 
and pedestrian and bicycle accessability. 
(ii) Outdoor water systems, land-
scaping to minimize water use, including 
elimination of irrigation systems for land-
scaping, and indoor water use reduction. 
(iii) Energy efficiency (including min-
imum and superior standards, such as for 
heating, ventilation, and air conditioning 
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systems), use of alternative energy sources, 
commissioning, and training. 
(iv) Use of durable, sustainable mate-
rials and waste reduction. 
(v) Indoor environmental quality, such 
as day lighting in classrooms, lighting 
quality, indoor air quality (including with 
reference to reducing the incidence and ef-
fects of asthma and other respiratory ill-
nesses), acoustics, and thermal comfort. 
(vi) Operations and management, 
such as use of energy-efficient equipment, 
indoor environmental management plan, 
maintenance plan, and pest management. 
(3) GRANTS
TO
LOCAL
EDUCATIONAL
AGEN-
CIES.—From the amount allocated to a State under 
paragraph (1), each eligible local educational agency 
in the State shall receive an amount in proportion 
to the amount received by such local educational 
agency under part A of title I of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 6311 
et seq.) for the previous fiscal year relative to the 
total amount received by all local educational agen-
cies in the State under such part for such fiscal 
year, except that no local educational agency that re-
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