HR 5715 PCS 
obtain loans under this part (other than a consolida-
tion loan under section 428C). 
‘‘(5) STANDARDS
DEVELOPED
BY
THE
SEC-
RETARY.—In developing standards with respect to 
paragraph (4), the Secretary may require— 
‘‘(A) an institution of higher education to 
demonstrate that, despite due diligence on the 
part of the institution, the institution has been 
unable to secure the commitment of lenders 
willing to make loans to a significant number of 
students attending the institution; 
‘‘(B) that, prior to making a request under 
such paragraph for designation for participation 
in the lender-of-last-resort program, an institu-
tion of higher education shall demonstrate that 
the institution has met a minimum threshold, 
as determined by the Secretary, for the number 
or percentage of students at such institution 
who have received rejections from eligible lend-
ers for loans under this part; and 
‘‘(C) any other standards and guidelines 
the Secretary determines to be appropriate.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall take effect on the date of enactment 
of this Act. 
VerDate Aug 31 2005 
03:33 Apr 30, 2008
Jkt 069200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H5715.PCS
H5715
jbell on PROD1PC66 with BILLS
HR 5715 PCS 
(c) REVIEW OF INDUCEMENTS LIMITATIONS.—With-
in 90 days after the date of enactment of this Act, the 
Secretary of Education shall review, and as necessary re-
vise, the Department of Education’s regulations con-
cerning prohibited guaranty agency inducements to eligi-
ble lenders (34 CFR 682.401(e)) to ensure that such 
agency’s do not engage in improper inducements in the 
expansion of operations of the lender-of-last-resort pro-
gram as authorized by the amendments made by this sec-
tion. The Secretary shall submit a report on the review 
and revision required by this subsection to the Committee 
on Education and Labor of the House of Representatives 
and the Committee on Health, Education, Labor, and 
Pensions of the Senate within 180 days after such date 
of enactment. 
SEC. 6. MANDATORY ADVANCES. 
(a) IN GENERAL.—Section 421(b) of the Higher 
Education Act of 1965 (20 U.S.C. 1071(b)) is amended— 
(1) in paragraph (4), by striking ‘‘programs, 
and’’ and inserting ‘‘programs,’’; 
(2) in paragraph (5), by striking ‘‘agencies.’’ 
and inserting ‘‘agencies, and’’; and 
(3) by adding at the end the following: 
‘‘(6) there is authorized to be appropriated, and 
there are appropriated, out of any money in the 
VerDate Aug 31 2005 
03:33 Apr 30, 2008
Jkt 069200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H5715.PCS
H5715
jbell on PROD1PC66 with BILLS
HR 5715 PCS 
Treasury not otherwise appropriated, such sums as 
may be necessary for the purpose of carrying out 
section 422(c)(7).’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall take effect on the date of enactment 
of this Act. 
SEC. 7. TEMPORARY AUTHORITY TO PURCHASE STUDENT 
LOANS. 
(a) SPENDING AUTHORITY.— 
(1) AUTHORITY GRANTED.—The first sentence 
of section 451(a) of the Higher Education Act of 
1965 (20 U.S.C. 1087a(a)) is amended— 
(A) by inserting ‘‘(1)’’ after ‘‘as may be 
necessary’’; and 
(B) by inserting before the period at the 
end of such sentence the following: ‘‘; and (2) 
for purchasing loans under section 459A’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
451(a) of such Act (20 U.S.C. 1087a(a)) is further 
amended by striking ‘‘Such loans shall’’ and insert-
ing ‘‘Loans made under this part shall’’. 
(b) TEMPORARY AUTHORITY.—Part D of title IV of 
the Higher Education Act of 1965 (20 U.S.C. 1087a et 
seq.) is amended by inserting after section 459 the fol-
lowing new section: 
VerDate Aug 31 2005 
03:33 Apr 30, 2008
Jkt 069200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H5715.PCS
H5715
jbell on PROD1PC66 with BILLS
HR 5715 PCS 
‘‘SEC. 459A. TEMPORARY AUTHORITY TO PURCHASE STU-
DENT LOANS. 
‘‘(a) AUTHORITY TO PURCHASE.— 
‘‘(1) 
AUTHORITY; 
DETERMINATION
RE-
QUIRED.—Upon a determination by the Secretary 
that there is an inadequate availability of loan cap-
ital to meet the demand for loans under sections 
428, 428B, or 428H, whether as a result of inad-
equate liquidity for such loans or for other reasons, 
the Secretary, in consultation with the Secretary of 
the Treasury, is authorized to purchase, or enter 
into forward commitments to purchase, from any eli-
gible lender, as defined by section 435(d)(1), loans 
originated under sections 428, 428B, or 428H on or 
after October 1, 2003, on such terms as the Sec-
retary, the Secretary of the Treasury, and the Direc-
tor of the Office of Management and Budget jointly 
determine are in the best interest of the United 
States, except that any purchase under this section 
shall not result in any net cost to the Federal Gov-
ernment, as determined jointly by the Secretary, the 
Secretary of the Treasury, and the Director of the 
Office of Management and Budget. 
‘‘(2) REGULATIONS REQUIRED.—The Secretary, 
the Secretary of the Treasury, and the Director of 
the Office of Management and Budget shall jointly 
VerDate Aug 31 2005 
03:33 Apr 30, 2008
Jkt 069200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H5715.PCS
H5715
jbell on PROD1PC66 with BILLS
HR 5715 PCS 
promulgate emergency regulations and publish such 
emergency regulations promptly in the Federal Reg-
ister concerning the purchases authorized by para-
graph (1). 
‘‘(3) METHODOLOGY AND FACTORS; JUSTIFICA-
TION REQUIRED.—Such regulations shall outline the 
methodology and factors that the Secretary, the Sec-
retary of the Treasury, and the Director of the Of-
fice of Management and Budget shall consider in 
evaluating the price at which to purchase loans 
under sections 428, 428B, or 428H, and shall in-
clude a justification of how the use of such method-
ology and consideration of such factors used to de-
termine purchase price will ensure that loan pur-
chases do not result in any net cost to the Federal 
Government. 
‘‘(b) PROCEEDS.—The Secretary shall require, as a 
condition of any purchase under subsection (a), that the 
funds paid by the Secretary to any eligible lender under 
this section shall be used: (1) to ensure continued partici-
pation of such lender in the Federal student loan pro-
grams authorized under part B of this title; and (2) to 
originate new Federal loans to students, as authorized 
under part B of this title. 
VerDate Aug 31 2005 
03:33 Apr 30, 2008
Jkt 069200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H5715.PCS
H5715
jbell on PROD1PC66 with BILLS