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‘‘(A) a written statement addressing the 
institution’s response and stating the basis for 
such final determination; and 
‘‘(B) a copy of the institution’s statement 
in response, appropriately redacted to protect 
confidential information; 
‘‘(8) maintain and preserve at all times the con-
fidentiality of any program review report or audit 
finding until the requirements of paragraphs (6) and 
(7) are met, and until a final program review or 
audit determination has been issued, except to the 
extent required to comply with paragraph (5), pro-
vided, however, that the Secretary shall promptly 
disclose any and all program review reports and 
audit findings to the institution under review; and 
‘‘(9) require that the authority to approve or 
issue any program review report or audit finding, 
preliminary or otherwise, that contains any finding, 
determination, or proposed assessment that exceeds 
or may exceed $500,000 in liabilities shall not be 
delegated to any official beyond the Chief Operating 
Officer of Federal Student Aid.’’. 
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SEC. 496. REPORT TO CONGRESS ON PREVENTION OF 
FRAUD AND ABUSE IN STUDENT FINANCIAL 
AID PROGRAMS. 
Title IV is amended by adding at the end the fol-
lowing new section: 
‘‘SEC. 499. REPORT TO CONGRESS ON PREVENTION OF 
FRAUD AND ABUSE IN STUDENT FINANCIAL 
AID PROGRAMS. 
‘‘(a) PURPOSE.—It is the purpose of this section to 
require the Secretary to commission a nonpartisan, com-
prehensive study on the prevention of fraud and abuse in 
title IV student financial aid programs, and to report the 
results of such study to Congress. 
‘‘(b) SCOPE OF REPORT.—The study under this sec-
tion shall thoroughly identify and address the following: 
‘‘(1) The impact of fraud and abuse in title IV 
student financial aid programs upon students and 
taxpayers, and the nature of such fraud and abuse. 
‘‘(2) The effectiveness of existing policies and 
requirements under this Act that were put in place 
to prevent fraud and abuse in title IV student finan-
cial aid programs, and how such policies and re-
quirements should be improved. 
‘‘(3) The extent to which existing protections 
against fraud and abuse under this Act are ade-
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quately enforced, and how enforcement should be 
strengthened. 
‘‘(4) Areas in which additional information is 
needed to assess the effectiveness of current protec-
tions and enforcement against fraud and abuse. 
‘‘(5) Existing policies and requirements under 
this Act aimed at fraud and abuse that are ineffec-
tive, hinder innovation, or could be eliminated with-
out reducing effectiveness. 
‘‘(6) New policies and enforcement, particularly 
those suited for the current higher education mar-
ketplace, needed to protect against fraud and abuse 
in title IV student financial aid programs. 
‘‘(7) The extent to which States are imple-
menting regulations to protect students from fraud 
and abuse, and whether changes to Federal law will 
preempt such regulations. 
‘‘(c) REPORT.—Not later than December 31, 2007, 
the Secretary, after an opportunity for both the Secretary 
and the Inspector General of the Department of Edu-
cation to review the results of the study, shall transmit 
to Congress a report on the study conducted under this 
section. Such report shall— 
‘‘(1) include clear and specific recommendations 
for legislative and regulatory actions that are likely 
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to significantly reduce the fraud and abuse in title 
IV student financial aid programs that were identi-
fied pursuant to subsection (b); and 
‘‘(2) include both the Secretary’s and the In-
spector General’s comments on the report.’’. 
SEC. 497. REPORT TO CONGRESS ON COMPLIANCE WITH 
THE PAPERWORK REDUCTION ACT OF 1995. 
Title IV is further amended by adding after section 
499, as added by section 496 of this Act, the following 
new section: 
‘‘SEC. 499A. REPORT TO CONGRESS ON THE COMPLIANCE 
OF THE STUDENT AID APPLICATION PROC-
ESS WITH THE REQUIREMENTS OF THE PA-
PERWORK REDUCTION ACT OF 1995. 
‘‘(a) STUDY AND REPORT.—The Secretary shall com-
mission a nonpartisan, comprehensive study on the degree 
to which the student aid application process under title 
IV complies with the requirements of the Paperwork Re-
duction Act of 1995 (44 U.S.C. 101 note). Not later one 
year after the date of the enactment of the College Access 
and Opportunity Act of 2006, the Secretary shall report 
the results of such study to the Congress. 
‘‘(b) SCOPE.—The study and report to the Congress 
under subsection (a) shall thoroughly identify and address 
the following: 
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‘‘(1) The impact of the technical and computer 
literacy of prospective college students on the exist-
ing electronic capabilities offered by the student aid 
application process under title IV, including the Free 
Application 
for 
Federal 
Student 
Aid 
System 
(FAFSA). 
‘‘(2) The effectiveness of the policies and re-
quirements of the FAFSA system that are intended 
to reduce the need for paper and ease the applica-
tion process. 
‘‘(3) Areas in which the electronic system can 
be improved to help facilitate a ‘one-stop shopping’ 
goal for students seeking financial assistance.’’. 
TITLE V—DEVELOPING 
INSTITUTIONS 
SEC. 501. DEFINITIONAL CHANGES. 
Section 502(a) (20 U.S.C. 1101a(a)) is amended— 
(1) in paragraph (5)— 
(A) by inserting ‘‘and’’ after the semicolon 
at the end of subparagraph (A); 
(B) in subparagraph (B)— 
(i) by striking ‘‘at the time of applica-
tion,’’; and 
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(ii) by inserting ‘‘at the end of the 
award year immediately preceding the date 
of application’’ after ‘‘Hispanic students’’; 
(C) by striking ‘‘; and’’ at the end of sub-
paragraph (B) and inserting a period; and 
(D) by striking subparagraph (C); and 
(2) by striking paragraph (7). 
SEC. 502. ASSURANCE OF ENROLLMENT OF NEEDY STU-
DENTS. 
Section 511(c) (20 U.S.C. 1103(c)) is amended— 
(1) by striking paragraph (2); 
(2) by redesignating paragraphs (3) through 
(7) as paragraphs (2) through (6); and 
(3) by inserting after paragraph (6) as so re-
designated the following new paragraph: 
‘‘(7) contain such assurances as the Secretary 
may require that the institution has an enrollment 
of needy students as required by section 502(b);’’. 
SEC. 503. ADDITIONAL AMENDMENTS. 
Title V is further amended— 
(1) 
in 
section 
502(a)(2)(A) 
(20 
U.S.C. 
1101a(a)(2)(A)), by redesignating clauses (v) and 
(vi) as clauses (vi) and (vii), respectively, and insert-
ing after clause (iv) the following new clause: 
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‘‘(v) which provides a program of not 
less than 2 years that is acceptable for full 
credit toward a bachelor’s degree;’’; 
(2) in section 503(b) (20 U.S.C. 1101b(b))— 
(A) by amending paragraph (2) to read as 
follows: 
‘‘(2) Construction, maintenance, renovation, 
and improvement in classrooms, libraries, labora-
tories, and other instructional facilities, including 
purchase or rental of telecommunications technology 
equipment or services, and the acquisition of real 
property adjacent to the campus of the institution 
on which to construct such facilities.’’; 
(B) by amending paragraph (12) to read 
as follows: 
‘‘(12) Establishing community outreach pro-
grams and collaborative partnerships between His-
panic-serving institutions and local elementary or 
secondary schools. Such partnerships may include 
mentoring, tutoring, or other instructional opportu-
nities that will boost student academic achievement 
and assist elementary and secondary school students 
in developing the academic skills and the interest to 
pursue postsecondary education.’’; 
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(C) 
by 
redesignating 
paragraphs 
(5) 
through (14) as paragraphs (6) through (15), 
respectively; and 
(D) by inserting after paragraph (4) the 
following: 
‘‘(5) Education or counseling services designed 
to improve the financial literacy and economic lit-
eracy of students and, as appropriate, their par-
ents.’’; 
(3) in section 504(a) (20 U.S.C. 1101c(a))— 
(A) by striking the following: 
‘‘(a) AWARD PERIOD.— 
‘‘(1) IN GENERAL.—The Secretary’’ and insert-
ing the following: 
‘‘(a) AWARD PERIOD.—The Secretary’’; and 
(B) by striking paragraph (2); and 
(4) in section 514(c) (20 U.S.C. 1103c(c)), by 
striking ‘‘section 505’’ and inserting ‘‘section 504’’. 
SEC. 504. POSTBACCALAUREATE OPPORTUNITIES FOR HIS-
PANIC AMERICANS. 
(a) ESTABLISHMENT
OF
PROGRAM.—Title V is 
amended— 
(1) by redesignating part B as part C; 
(2) by redesignating sections 511 through 518 
as sections 521 through 528, respectively; and 
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(3) by inserting after section 505 (20 U.S.C. 
1101d) the following new part: 
‘‘PART B—PROMOTING POSTBACCALAUREATE 
OPPORTUNITIES FOR HISPANIC AMERICANS 
‘‘SEC. 511. PURPOSES. 
‘‘The purposes of this part are— 
‘‘(1) to expand postbaccalaureate educational 
opportunities for, and improve the academic attain-
ment of, Hispanic students; and 
‘‘(2) to expand the postbaccalaureate academic 
offerings and enhance the program quality in the in-
stitutions that are educating the majority of His-
panic college students and helping large numbers of 
Hispanic and low-income students complete postsec-
ondary degrees. 
‘‘SEC. 512. PROGRAM AUTHORITY AND ELIGIBILITY. 
‘‘(a) PROGRAM AUTHORIZED.—Subject to the avail-
ability of funds appropriated to carry out this part, the 
Secretary shall award competitive grants to Hispanic-serv-
ing institutions determined by the Secretary to be making 
substantive contributions to graduate educational opportu-
nities for Hispanic students. 
‘‘(b) ELIGIBILITY.—For the purposes of this part, an 
‘eligible institution’ means an institution of higher edu-
cation that— 
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‘‘(1) is an eligible institution under section 
502(a)(2); and 
‘‘(2) offers a postbaccalaureate certificate or de-
gree granting program. 
‘‘SEC. 513. AUTHORIZED ACTIVITIES. 
‘‘Grants awarded under this part shall be used for 
one or more of the following activities: 
‘‘(1) Purchase, rental, or lease of scientific or 
laboratory equipment for educational purposes, in-
cluding instructional and research purposes. 
‘‘(2) Construction, maintenance, renovation, 
and improvement of classrooms, libraries, labora-
tories, and other instructional facilities, including 
purchase or rental of telecommunications technology 
equipment or services. 
‘‘(3) Purchase of library books, periodicals, 
technical and other scientific journals, microfilm, 
microfiche, and other educational materials, includ-
ing telecommunications program materials. 
‘‘(4) Support for needy postbaccalaureate stu-
dents including outreach, academic support services, 
mentoring, scholarships, fellowships, and other fi-
nancial assistance to permit the enrollment of such 
students in postbaccalaureate certificate and degree 
granting programs. 
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‘‘(5) Support of faculty exchanges, faculty de-
velopment, faculty research, curriculum development, 
and academic instruction. 
‘‘(6) Creating or improving facilities for Inter-
net or other distance learning academic instruction 
capabilities, including purchase or rental of tele-
communications technology equipment or services. 
‘‘(7) Collaboration with other institutions of 
higher education to expand postbaccalaureate certifi-
cate and degree offerings. 
‘‘(8) Other activities proposed in the application 
submitted pursuant to section 514 that— 
‘‘(A) contribute to carrying out the pur-
poses of this part; and 
‘‘(B) are approved by the Secretary as part 
of the review and acceptance of such applica-
tion. 
‘‘SEC. 514. APPLICATION AND DURATION. 
‘‘(a) APPLICATION.—Any eligible institution may 
apply for a grant under this part by submitting an applica-
tion to the Secretary at such time and in such manner 
as determined by the Secretary. Such application shall 
demonstrate how the grant funds will be used to improve 
postbaccalaureate education opportunities in programs 
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