266 
‘‘(ii) 
REDUCED
DATA
REQUIRE-
MENTS.—The form under this subparagraph 
shall permit an applicant to submit, for fi-
nancial assistance purposes, only the data 
elements required to make a determination 
of whether the applicant meets the require-
ments under section 479(c). 
‘‘(iii) STATE
DATA.—The Secretary 
shall include on the form under this sub-
paragraph such data items as may be nec-
essary to award State financial assistance, 
as provided under paragraph (6), except 
that the Secretary shall not include a 
State’s data if that State does not permit 
its applicants for State assistance to use the 
form under this subparagraph. 
‘‘(iv) FREE AVAILABILITY AND PROC-
ESSING.—The provisions of paragraph (7) 
shall apply to the form under this subpara-
graph, and the data collected by means of 
the form under this subparagraph shall be 
available to institutions of higher education, 
guaranty agencies, and States in accord-
ance with paragraph (9).
267 
‘‘(v) TESTING.—The Secretary shall 
conduct appropriate field testing on the 
form under this subparagraph. 
‘‘(C) PROMOTING THE USE OF ELECTRONIC 
FAFSA.— 
‘‘(i) IN GENERAL.—The Secretary shall 
make an effort to encourage applicants to 
utilize the electronic forms described in 
paragraph (4). 
‘‘(ii) MAINTENANCE OF THE FAFSA IN 
A PRINTABLE ELECTRONIC FILE.—The Sec-
retary shall maintain a version of the paper 
forms described in subparagraphs (A) and 
(B) in a printable electronic file that is eas-
ily portable. The printable electronic file 
will 
be 
made 
easily 
accessible 
and 
downloadable to students on the same 
website used to provide students with the 
electronic application forms described in 
paragraph (4) of this subsection. The Sec-
retary shall enable students to submit a 
form created under this subparagraph that 
is downloaded and printed from an elec-
tronic file format in order to meet the filing
268 
requirements of this section and in order to 
receive aid from programs under this title. 
‘‘(iii) 
REPORTING
REQUIREMENT.— 
The Secretary shall report annually to Con-
gress on the impact of the digital divide on 
students completing applications for title IV 
aid described under this paragraph and 
paragraph (4). The Secretary will also re-
port on the steps taken to eliminate the dig-
ital divide and phase out the paper form 
described in subparagraph (A) of this para-
graph. The Secretary’s report will specifi-
cally address the impact of the digital di-
vide on the following student populations: 
dependent students, independent students 
without dependents, and independent stu-
dents with dependents other than a spouse. 
‘‘(4) ELECTRONIC FORMAT.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
produce, distribute, and process common forms 
in electronic format to meet the requirements of 
paragraph (1). The Secretary shall develop com-
mon electronic forms for applicants who do not 
meet the requirements of subparagraph (C) of 
this paragraph.
269 
‘‘(B) STATE DATA.—The Secretary shall in-
clude on the common electronic forms space for 
information that needs to be submitted from the 
applicant to be eligible for State financial assist-
ance, as provided under paragraph (6), except 
the Secretary shall not require applicants to 
complete data required by any State other than 
the applicant’s State of residence. 
‘‘(C) SIMPLIFIED APPLICATIONS: FAFSA ON 
THE WEB.— 
‘‘(i) IN GENERAL.—The Secretary shall 
develop and use a simplified electronic ap-
plication form to be used by applicants 
meeting the requirements under subsection 
(c) of section 479 and an additional, sepa-
rate simplified electronic application form 
to be used by applicants meeting the re-
quirements under subsection (b) of section 
479. 
‘‘(ii) 
REDUCED
DATA
REQUIRE-
MENTS.—The simplified electronic applica-
tion forms shall permit an applicant to sub-
mit for financial assistance purposes, only 
the data elements required to make a deter-
mination of whether the applicant meets the
270 
requirements under subsection (b) or (c) of 
section 479. 
‘‘(iii) STATE
DATA.—The Secretary 
shall include on the simplified electronic 
application forms such data items as may 
be necessary to award state financial assist-
ance, as provided under paragraph (6), ex-
cept that the Secretary shall not require ap-
plicants to complete data required by any 
State other than the applicant’s State of 
residence. 
‘‘(iv) 
AVAILABILITY
AND
PROC-
ESSING.—The data collected by means of the 
simplified electronic application forms shall 
be available to institutions of higher edu-
cation, guaranty agencies, and States in ac-
cordance with paragraph (9). 
‘‘(v) TESTING.—The Secretary shall 
conduct appropriate field testing on the 
forms developed under this subparagraph. 
‘‘(D) USE OF FORMS.—Nothing in this sub-
section shall be construed to prohibit the use of 
the forms developed by the Secretary pursuant to 
this paragraph by an eligible institution, eligible 
lender, guaranty agency, State grant agency,
271 
private computer software provider, a consor-
tium thereof, or such other entities as the Sec-
retary may designate. 
‘‘(E) PRIVACY.—The Secretary shall ensure 
that data collection under this paragraph com-
plies with section 552a of title 5, United States 
Code, and that any entity using the electronic 
version of the forms developed by the Secretary 
pursuant to this paragraph shall maintain rea-
sonable and appropriate administrative, tech-
nical, and physical safeguards to ensure the in-
tegrity and confidentiality of the information, 
and to protect against security threats, or unau-
thorized uses or disclosures of the information 
provided on the electronic version of the forms. 
Data collected by such electronic version of the 
forms shall be used only for the application, 
award, and administration of aid awarded 
under this title, State aid, or aid awarded by el-
igible institutions or such entities as the Sec-
retary may designate. No data collected by such 
electronic version of the forms shall be used for 
making final aid awards under this title until 
such data have been processed by the Secretary
272 
or a contractor or designee of the Secretary, ex-
cept as may be permitted under this title. 
‘‘(F) 
SIGNATURE.—Notwithstanding 
any 
other provision of this Act, the Secretary may 
permit an electronic form under this paragraph 
to be submitted without a signature, if a signa-
ture is subsequently submitted by the applicant. 
‘‘(5) STREAMLINING.— 
‘‘(A) STREAMLINED REAPPLICATION PROC-
ESS.— 
‘‘(i) IN GENERAL.—The Secretary shall 
develop streamlined reapplication forms 
and processes, including both paper and 
electronic reapplication processes, consistent 
with the requirements of this subsection, for 
an applicant who applies for financial as-
sistance under this title— 
‘‘(I) in the academic year suc-
ceeding the year in which such appli-
cant first applied for financial assist-
ance under this title; or 
‘‘(II) in any succeeding academic 
years. 
‘‘(ii) MECHANISMS
FOR
REAPPLICA-
TION.—The Secretary shall develop appro-
273 
priate mechanisms to support reapplica-
tion. 
‘‘(iii) IDENTIFICATION
OF
UPDATED 
DATA.—The Secretary shall determine, in 
cooperation with States, institutions of 
higher education, agencies, and organiza-
tions involved in student financial assist-
ance, the data elements that can be updated 
from the previous academic year’s applica-
tion. 
‘‘(iv) REDUCED DATA AUTHORIZED.— 
Nothing in this title shall be construed as 
limiting the authority of the Secretary to 
reduce the number of data elements required 
of reapplicants. 
‘‘(v) ZERO
FAMILY
CONTRIBUTION.— 
Applicants determined to have a zero family 
contribution pursuant to section 479(c) 
shall not be required to provide any finan-
cial data in a reapplication form, except 
that which is necessary to determine eligi-
bility under such section. 
‘‘(B) REDUCTION OF DATA ELEMENTS.— 
‘‘(i) REDUCTION ENCOURAGED.—Of the 
number of data elements on the FAFSA on
274 
the date of enactment of the College Access 
and Opportunity Act of 2005 (including 
questions on the FAFSA for the purposes 
described in paragraph (6)), the Secretary, 
in cooperation with representatives of agen-
cies and organizations involved in student 
financial assistance, shall continue to re-
duce the number of such data elements fol-
lowing the date of enactment. Reductions of 
data elements under paragraph (3)(B), 
(4)(C), or (5)(A)(iv) shall not be counted to-
wards the reduction referred to in this 
paragraph unless those data elements are 
reduced for all applicants. 
‘‘(ii) REPORT.—The Secretary shall 
annually report to the House of Representa-
tives and the Senate on the progress made 
of reducing data elements. 
‘‘(6) STATE REQUIREMENTS.— 
‘‘(A) IN GENERAL.—The Secretary shall in-
clude on the forms developed under this sub-
section, such State-specific data items as the Sec-
retary determines are necessary to meet State re-
quirements for State need-based financial aid 
under section 415C, except as provided in para-
275 
graphs (3)(B)(iii) and (4)(C)(iii) of this sub-
section. Such items shall be selected in consulta-
tion with State agencies in order to assist in the 
awarding of State financial assistance in accord-
ance with the terms of this subsection, except as 
provided 
in 
paragraphs 
(3)(B)(iii) 
and 
(4)(C)(iii) of this subsection. The number of such 
data items shall not be less than the number in-
cluded on the form on October 7, 1998, unless a 
State notifies the Secretary that the State no 
longer requires those data items for the distribu-
tion of State need-based financial aid. 
‘‘(B) ANNUAL REVIEW.—The Secretary shall 
conduct an annual review process to determine 
which forms and data items the States require to 
award State need-based financial aid and other 
application requirements that the States may 
impose. 
‘‘(C) STATE USE OF SIMPLIFIED FORMS.— 
The Secretary shall encourage States to take such 
steps as necessary to encourage the use of sim-
plified application forms, including those de-
scribed in paragraphs (3)(B) and (4)(C), to meet 
the requirements under subsection (b) or (c) of 
section 479.
276 
‘‘(D) FEDERAL
REGISTER
NOTICE.—The 
Secretary shall publish on an annual basis a no-
tice in the Federal Register requiring State agen-
cies to inform the Secretary— 
‘‘(i) if the State agency is unable to 
permit applicants to utilize the simplified 
application forms described in paragraphs 
(3)(B) and (4)(C); and 
‘‘(ii) of the State-specific data that the 
State agency requires for delivery of State 
need-based financial aid. 
‘‘(E) STATE
NOTIFICATION
TO
THE
SEC-
RETARY.— 
‘‘(i) IN GENERAL.—Each State agency 
shall notify the Secretary— 
‘‘(I) whether the State permits an 
applicant to file a form described in 
paragraph (3)(B) or paragraph (4)(C) 
of this subsection for purposes of deter-
mining eligibility for State need-based 
financial aid; and 
‘‘(II) the State-specific data that 
the State agency requires for delivery 
of State need-based financial aid.
277 
‘‘(ii) ACCEPTANCE OF FORMS.—In the 
event that a State does not permit an appli-
cant to file a form described in paragraph 
(3)(B) or paragraph (4)(C) of this sub-
section for purposes of determining eligi-
bility for State need-based financial aid— 
‘‘(I) the State shall notify the Sec-
retary if the State is not permitted to 
do so because of either State law or be-
cause of agency policy; and 
‘‘(II) the notification under sub-
clause (I) shall include an estimate of 
the program cost to permit applicants 
to 
complete 
simplified 
application 
forms under paragraphs (3)(B) and 
paragraph (4)(C) of this subsection. 
‘‘(iii) LACK OF NOTIFICATION BY THE 
STATE.—If a State does not notify the Sec-
retary pursuant to clause (i), the Secretary 
shall— 
‘‘(I) permit residents of that State 
to 
complete 
simplified 
application 
forms under paragraphs (3)(B) and 
paragraph (4)(C) of this subsection; 
and
278 
‘‘(II) not require any resident of 
that State to complete any data pre-
viously required by that State under 
this section. 
‘‘(7) CHARGES TO STUDENTS AND PARENTS FOR 
USE OF FORMS PROHIBITED.— 
‘‘(A) FEES PROHIBITED.—The FAFSA, in 
whatever form (including the EZ–FAFSA, 
paper, electronic, simplified, or reapplication), 
shall be produced, distributed, and processed by 
the Secretary and no parent or student shall be 
charged a fee for the collection, processing, or de-
livery of financial aid through the use of the 
FAFSA. The need and eligibility of a student for 
financial assistance under parts A through E of 
this title (other than under subpart 4 of part A) 
may only be determined by using the FAFSA de-
veloped by the Secretary pursuant to this sub-
section. No student may receive assistance under 
parts A through E of this title (other than under 
subpart 4 of part A), except by use of the 
FAFSA developed by the Secretary pursuant to 
this subsection. No data collected on a form for 
which a fee is charged shall be used to complete 
the FAFSA.
279 
‘‘(B) NOTICE.—Any entity that provides to 
students or parents, or charges students or par-
ents for, any value-added services with respect to 
or in connection with the FAFSA, such as com-
pletion of the FAFSA, submission of the FAFSA, 
or tracking of the FAFSA for a student, shall 
provide to students and parents clear and con-
spicuous notice that— 
‘‘(i) the FAFSA is a free Federal stu-
dent aid application; 
‘‘(ii) the FAFSA can be completed 
without professional assistance; and 
‘‘(iii) includes the current Internet ad-
dress for the FAFSA on the Department’s 
web site. 
‘‘(8) APPLICATION
PROCESSING
CYCLE.—The 
Secretary shall enable students to submit a form cre-
ated under this subsection in order to meet the filing 
requirements of this section and in order to receive 
aid from programs under this title and shall initiate 
the processing of applications under this subsection as 
early as practicable prior to January 1 of the stu-
dent’s planned year of enrollment.’’. 
(2) MASTER
CALENDAR.—Section 482(a)(1)(B) 
(20 U.S.C. 1089) is amended to read as follows:
280 
‘‘(B) by March 1: proposed modifications, 
updates, and notices pursuant to sections 478, 
479(c)(2)(C), and 483(a)(6) published in the 
Federal Register;’’. 
(c) INCREASING ACCESS TO TECHNOLOGY.—Section 
483 (20 U.S.C. 1090) is further amended by adding at the 
end the following: 
‘‘(f) ADDRESSING THE DIGITAL DIVIDE.—The Sec-
retary shall utilize savings accrued by moving more appli-
cants to the electronic forms described in subsection (a)(4) 
to improve access to the electronic forms described in sub-
section (a)(4) for applicants meeting the requirements of 
section 479(c).’’. 
(d) EXPANDING THE DEFINITION OF AN INDEPENDENT 
STUDENT.—Section 480(d) (20 U.S.C.1087vv(d)) is amend-
ed by striking paragraph (2) and inserting the following: 
‘‘(2) is an orphan, in foster care, or a ward of 
the court, or was in foster care or a ward of the court 
until the individual reached the age of 18;’’. 
SEC. 472. ADDITIONAL NEED ANALYSIS AMENDMENTS. 
(a) INCOME PROTECTION ALLOWANCE FOR DEPEND-
ENT STUDENTS.—— 
(1) AMENDMENT.—Section 475(g)(2)(D) (20 
U.S.C. 1087oo(g)(2)(D)) is amended by striking 
‘‘$2,200’’ and inserting ‘‘$3,000’’.
281 
(2) EFFECTIVE DATE.—The amendment made by 
paragraph (1) shall apply with respect to determina-
tions of need for periods of enrollment beginning on 
or after July 1, 2006. 
(b) EMPLOYMENT
EXPENSE
ALLOWANCE.—Section 
478(h) (20 U.S.C. 1087rr(h)) is amended— 
(1) by striking ‘‘476(b)(4)(B),’’; and 
(2) by striking ‘‘meals away from home, apparel 
and upkeep, transportation, and housekeeping serv-
ices’’ and inserting ‘‘food away from home, apparel, 
transportation, and household furnishings and oper-
ations’’. 
(c) DISCRETION OF STUDENT FINANCIAL AID ADMIN-
ISTRATORS.—Section 479A(a) (20 U.S.C. 1087tt(a)) is 
amended— 
(1) by striking ‘‘(a) IN GENERAL.—’’ and insert-
ing the following: 
‘‘(a) AUTHORITY TO MAKE ADJUSTMENTS.— 
‘‘(1) 
ADJUSTMENTS
FOR
SPECIAL
CIR-
CUMSTANCES.—’’; 
(2) by inserting before ‘‘Special circumstances 
may’’ the following: 
‘‘(2) SPECIAL CIRCUMSTANCES DEFINED.—’’; 
(3) by inserting ‘‘a student’s status as a ward of 
the court at any time prior to attaining 18 years of
282 
age, a student’s status as an individual who was 
adopted at or after age 13, a student’s status as a 
homeless or unaccompanied youth (as defined in sec-
tion 725 of the McKinney-Vento Homeless Assistance 
Act),’’ after ‘‘487,’’; 
(4) by inserting before ‘‘Adequate documenta-
tion’’ the following: 
‘‘(3) DOCUMENTATION
AND
USE
OF
SUPPLE-
MENTARY INFORMATION.—’’; and 
(5) by inserting before ‘‘No student’’ the fol-
lowing: 
‘‘(4) FEES FOR SUPPLEMENTARY INFORMATION 
PROHIBITED.—’’. 
(d) TREATING ACTIVE DUTY MEMBERS
OF
THE 
ARMED FORCES
AS INDEPENDENT STUDENTS.—Section 
480(d)(3) (20 U.S.C. 1087vv(d)(3)) is amended by inserting 
before the semicolon at the end the following: ‘‘or is cur-
rently serving on active duty in the Armed Forces for other 
than training purposes’’. 
(e) EXCLUDABLE INCOME.—Section 480(e) (20 U.S.C. 
1087vv(e)) is amended— 
(1) by striking ‘‘and’’ at the end of paragraph 
(3); 
(2) by striking the period at the end of para-
graph (4) and inserting ‘‘; and’’; and
283 
(3) by adding at the end the following new para-
graph: 
‘‘(5) any part of any distribution from a quali-
fied tuition program established under section 529 of 
the Internal Revenue Code of 1986 that is not includ-
able in gross income under such section 529.’’. 
(f) TREATMENT OF SAVINGS PLANS.— 
(1) AMENDMENT.—Section 480(f) (20 U.S.C. 
1087vv(f)) is amended— 
(A) in paragraph (1), by inserting ‘‘quali-
fied tuition programs established under section 
529 of the Internal Revenue Code of 1986 (26 
U.S.C. 529), except as provided in paragraph 
(2),’’ after ‘‘tax shelters,’’; 
(B) by redesignating paragraph (2) as 
paragraph (3); and 
(C) by inserting after paragraph (1) the fol-
lowing new paragraph: 
‘‘(2) A qualified tuition program shall not be consid-
ered an asset of a dependent student under section 475 of 
this part. The value of a qualified tuition program for pur-
poses of determining the assets of parents or independent 
students shall be— 
‘‘(A) the refund value of any tuition credits or 
certificates purchased under section 529 of the Inter-
284 
nal Revenue Code of 1986 (26 U.S.C. 529) on behalf 
of a beneficiary; or 
‘‘(B) the current balance of any account which 
is established under such section for the purpose of 
meeting the qualified higher education expenses of the 
designated beneficiary of the account.’’. 
(2) CONFORMING
AMENDMENT.—Section 480(j) 
(20 U.S.C. 1087vv(j)) is amended— 
(A) by striking ‘‘; TUITION PREPAYMENT 
PLANS’’ in the heading of such subsection; 
(B) by striking paragraph (2); 
(C) in paragraph (3), by inserting ‘‘, or a 
distribution that is not includable in gross in-
come under section 529 of such Code,’’ after 
‘‘1986’’; and 
(D) by redesignating paragraph (3) as 
paragraph (2). 
(g) TREATMENT OF FAMILY OWNERSHIP OF SMALL 
BUSINESSES.—Section 480(f)(3) of the Higher Education 
Act of 1965 (20 U.S.C. 1087vv(f)(3)), as redesignated by 
subsection (f) of this section, is amended— 
(1) in subparagraph (A), by striking ‘‘or’’; 
(2) in subparagraph (B), by striking the period 
at the end and inserting ‘‘; or’’; and
285 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(C) a small business with not more than 100 
full-time or full-time equivalent employees (or any 
part of such a small business) that is owned and con-
trolled by the family.’’. 
(h) DESIGNATED ASSISTANCE.—Section 480(j) (20 
U.S.C. 1087vv(j)) is amended by adding after paragraph 
(2) (as redesignated by subsection (f)(2)(D) of this section) 
the following new paragraph: 
‘‘(3) Notwithstanding paragraph (1) and section 472, 
assistance not received under this title may be excluded 
from both estimated financial assistance and cost of attend-
ance, if that assistance is designated by the State providing 
that assistance to offset a specific component of the cost of 
attendance. If that assistance is excluded from either esti-
mated financial assistance or cost of attendance, it shall 
be excluded from both.’’. 
PART G—GENERAL PROVISIONS RELATING TO 
STUDENT FINANCIAL ASSISTANCE 
SEC. 481. DEFINITIONS OF ACADEMIC YEAR AND ELIGIBLE 
PROGRAM. 
(a) ACADEMIC YEAR.—Paragraph (2) of section 481(a) 
(20 U.S.C. 1088(a)) is amended to read as follows:
286 
‘‘(2)(A) For the purpose of any program under this 
title, the term ‘academic year’ shall— 
‘‘(i) require a minimum of 30 weeks of instruc-
tional time for a course of study that measures its 
program length in credit hours; or 
‘‘(ii) require a minimum of 26 weeks of instruc-
tional time for a course of study that measures its 
program length in clock hours; and 
‘‘(iii) require an undergraduate course of study 
to contain an amount of instructional time whereby 
a full-time student is expected to complete at least— 
‘‘(I) 24 semester or trimester hours or 36 
quarter credit hours in a course of study that 
measures its program length in credit hours; or 
‘‘(II) 900 clock hours in a course of study 
that measures its program length in clock hours. 
‘‘(B) The Secretary may reduce such minimum of 30 
weeks to not less than 26 weeks for good cause, as deter-
mined by the Secretary on a case-by-case basis, in the case 
of an institution of higher education that provides a 2-year 
or 4-year program of instruction for which the institution 
awards an associate or baccalaureate degree.’’. 
(b) ELIGIBLE PROGRAM.—Section 481(b) (20 U.S.C. 
1088(b)) is amended by adding at the end the following new 
paragraph:
287 
‘‘(3) For purposes of this title, an eligible program in-
cludes an instructional program that utilizes direct assess-
ment of student learning, or recognizes the direct assessment 
of student learning, in lieu of credit hours or clock hours 
as the measure of student learning. In the case of a program 
being determined eligible for the first time under this para-
graph, such determination shall be made by the Secretary 
before such program is considered to be eligible. The Sec-
retary shall provide an annual report to Congress identi-
fying the programs made eligible under this paragraph.’’. 
SEC. 482. DISTANCE EDUCATION. 
(a) DISTANCE EDUCATION: ELIGIBLE PROGRAM.— 
Section 481(b) (20 U.S.C. 1088(b)) is amended by adding 
after paragraph (3) (as added by section 481(b) of this Act) 
the following new paragraph: 
‘‘(4) An otherwise eligible program that is offered in 
whole or in part through telecommunications is eligible for 
the purposes of this title if the program is offered by an 
institution, other than a foreign institution, that has been 
evaluated and determined (before or after the date of enact-
ment of this paragraph) to have the capability to effectively 
deliver distance education programs by an accrediting 
agency or association that— 
‘‘(A) is recognized by the Secretary under sub-
part 2 of Part H; and
288 
‘‘(B) has evaluation of distance education pro-
grams within the scope of its recognition, as described 
in section 496(n)(3).’’. 
(b) CORRESPONDENCE COURSES.—Section 484(l)(1) 
(20 U.S.C. 1091(l)(1)) is amended— 
(1) in subparagraph (A)— 
(A) by striking ‘‘for a program of study of 
1 year or longer’’; and 
(B) by striking ‘‘unless the total’’ and all 
that follows through ‘‘courses at the institution’’; 
and 
(2) by amending subparagraph (B) to read as 
follows: 
‘‘(B) EXCEPTION.—Subparagraph (A) does 
not apply to an institution or school described in 
section 3(3)(C) of the Carl D. Perkins Vocational 
and Technical Education Act of 1998.’’. 
SEC. 483. EXPANDING INFORMATION DISSEMINATION RE-
GARDING ELIGIBILITY FOR PELL GRANTS. 
Section 483(a) (20 U.S.C. 1090(a)) (as amended by 
section 471(b)) is further amended by adding at the end 
the following new paragraph: 
‘‘(13) EXPANDING INFORMATION DISSEMINATION 
REGARDING
ELIGIBILITY
FOR
PELL
GRANTS.—The 
Secretary shall make special efforts, in conjunction
289 
with State efforts, to notify students and their parents 
who qualify for a free lunch under the Richard B. 
Russell National School Lunch Act (42 U.S.C. 1751 
et seq.), the Food Stamps program, or such other pro-
grams as the Secretary shall determine, of their po-
tential eligibility for a maximum Pell Grant, and 
shall disseminate such informational materials as the 
Secretary deems appropriate.’’. 
SEC. 484. STUDENT ELIGIBILITY. 
(a) FRAUD: REPAYMENT REQUIRED.—Section 484(a) 
(20 U.S.C. 1091(a)) is amended— 
(1) by striking the period at the end of para-
graph (5) and inserting ‘‘; and’’; and 
(2) by adding at the end the following new para-
graph: 
‘‘(6) if the student has been convicted of, or has 
pled nolo contendere or guilty to, a crime involving 
fraud in obtaining funds under this title, have com-
pleted the repayment of such funds to the Secretary, 
or to the holder in the case of a loan under this title 
obtained by fraud.’’. 
(b) TECHNICAL AMENDMENT.—Section 484(b)(5) (20 
U.S.C. 1091(b)(5)) is amended by inserting ‘‘or parent (on 
behalf of a student)’’ after ‘‘student’’.
290 
(c) LOAN INELIGIBILITY BASED
ON INVOLUNTARY 
CIVIL COMMITMENT
FOR SEXUAL OFFENSES.—Section 
484(b)(5) (20 U.S.C. 1091(b)(5)) is further amended by in-
serting before the period the following: ‘‘, and no student 
who is subject to an involuntary civil commitment upon 
completion of a period of incarceration for a sexual offense 
(as determined under regulations of the Secretary) is eligi-
ble to receive a loan under this title’’. 
(d) FREELY ASSOCIATED STATES.—Section 484(j) (20 
U.S.C. 1091(j)) is amended by inserting ‘‘and shall be eligi-
ble only for assistance under subpart 1 of part A there-
after,’’ after ‘‘part C,’’. 
(e) VERIFICATION OF INCOME DATE.—Paragraph (1) 
of section 484(q) (20 U.S.C. 1091(q)) is amended to read 
as follows: 
‘‘(1) CONFIRMATION WITH IRS.—The Secretary 
of Education, in cooperation with the Secretary of the 
Treasury, is authorized to confirm with the Internal 
Revenue Service the information specified in section 
6103(l)(13) of the Internal Revenue Code of 1986 re-
ported by applicants (including parents) under this 
title on their Federal income tax returns for the pur-
pose of verifying the information reported by appli-
cants on student financial aid applications.’’.
291 
(f) SUSPENSION
OF ELIGIBILITY
FOR DRUG OF-
FENSES.—Section 484(r)(1) (20 U.S.C. 1091(r)(1)) is 
amended by striking everything preceding the table and in-
serting the following: 
‘‘(1) IN GENERAL.—A student who is convicted 
of any offense under any Federal or State law involv-
ing the possession or sale of a controlled substance for 
conduct that occurred during a period of enrollment 
for which the student was receiving any grant, loan, 
or work assistance under this title shall not be eligible 
to receive any grant, loan, or work assistance under 
this title from the date of that conviction for the pe-
riod of time specified in the following table:’’. 
SEC. 485. INSTITUTIONAL REFUNDS. 
Section 484B (20 U.S.C. 1091b) is amended— 
(1) in subsection (a)(1), by inserting ‘‘subpart 4 
of part A or’’ after ‘‘received under’’; 
(2) in subsection (a)(2), by striking ‘‘takes a 
leave’’ and by inserting ‘‘takes one or more leaves’’; 
(3) in subsection (a)(3)(B)(ii), by inserting ‘‘(as 
determined in accordance with subsection (d))’’ after 
‘‘student has completed’’; 
(4) in subsection (a)(4), by amending subpara-
graph (A) to read as follows:
292 
‘‘(A) IN GENERAL.—After determining the 
eligibility of the student for a late disbursement 
or post-withdrawal disbursement (as required in 
regulations prescribed by the Secretary), the in-
stitution of higher education shall contact the 
borrower and obtain confirmation that the loan 
funds are still required by the borrower. In mak-
ing such contact, the institution shall explain to 
the borrower the borrower’s obligation to repay 
the funds following any such disbursement. The 
institution shall document in the borrower’s file 
the result of such contact and the final deter-
mination made concerning such disbursement.’’; 
(5) in subsection (b)(1), by inserting ‘‘no later 
than 45 days from the determination of withdrawal’’ 
after ‘‘return’’; 
(6) in subsection (b)(2), by amending subpara-
graph (C) to read as follows: 
‘‘(C) 
GRANT
OVERPAYMENT
REQUIRE-
MENTS.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
subparagraphs (A) and (B), a student shall 
only be required to return grant assistance 
in the amount (if any) by which—
293 
‘‘(I) the amount to be returned by 
the student (as determined under sub-
paragraphs (A) and (B)), exceeds 
‘‘(II) 50 percent of the total grant 
assistance received by the student 
under this title for the payment period 
or period of enrollment. 
‘‘(ii) MINIMUM.—A student shall not 
be required to return amounts of $50 or 
less.’’; 
(7) in subsection (b)(2), by adding at the end the 
following new subparagraph: 
‘‘(D) WAIVERS OF PELL GRANT REPAYMENT 
BY
STUDENTS
AFFECTED
BY
DISASTERS.—The 
Secretary may waive the amounts that students 
are required to return under this section with re-
spect to Pell grants if the withdrawals on which 
the returns are based are withdrawals by stu-
dents— 
‘‘(i) who were residing in, employed 
in, or attending an institution of higher 
education that is located in an area in 
which the President has declared that a 
major disaster exists, in accordance with 
section 401 of the Robert T. Stafford Dis-
294 
aster Relief and Emergency Assistance Act 
(42 U.S.C. 5170); 
‘‘(ii) whose attendance was interrupted 
because of the impact of the disaster on the 
student or the institution; and 
‘‘(iii) whose withdrawal ended within 
the academic year during which the des-
ignation occurred or during the next suc-
ceeding academic year.’’; and 
(8) in subsection (d), by striking ‘‘(a)(3)(B)(i)’’ 
and inserting ‘‘(a)(3)(B)’’. 
SEC. 486. INSTITUTIONAL AND FINANCIAL ASSISTANCE IN-
FORMATION FOR STUDENTS. 
(a) INFORMATION DISSEMINATION ACTIVITIES.—Sec-
tion 485(a)(1) (20 U.S.C. 1092(a)(1)) is amended— 
(1) by amending the second sentence to read as 
follows: ‘‘The information required by this section 
shall be produced and be made publicly available to 
an enrolled student and to any prospective student, 
through appropriate publications, mailings, electronic 
media, and the reports required by the institution’s 
accrediting agency under section 496(c)(9).’’; 
(2) by amending subparagraph (G) to read as 
follows: