349 
the requirements of subsections (b) and (c) 
of section 479. 
‘‘(ii) 
REDUCED
DATA
REQUIRE-
MENTS.—The EZ FAFSA shall permit an 
applicant to submit for financial assistance 
purposes, only the data elements required 
to make a determination of whether the 
applicant meets the requirements under 
subsections (b) and (c) of section 479. 
‘‘(iii) STATE
DATA.—The Secretary 
shall include on the EZ FAFSA such data 
items as may be necessary 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 to use 
the EZ FAFSA for State assistance. 
‘‘(iv) FREE AVAILABILITY AND PROC-
ESSING.—The provisions of paragraph (7) 
shall apply to the EZ FAFSA, and the 
data collected by means of the EZ FAFSA 
shall be available to institutions of higher 
education, guaranty agencies, and States 
in accordance with paragraph (9). 
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350 
‘‘(v) TESTING.—The Secretary shall 
conduct appropriate field testing on the 
EZ FAFSA. 
‘‘(C) PROMOTING
THE
USE
OF
ELEC-
TRONIC FAFSA.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall make all efforts to encourage all ap-
plicants to utilize the electronic forms de-
scribed in paragraph (4). 
‘‘(ii) MAINTENANCE OF THE FAFSA IN 
A
PRINTABLE
ELECTRONIC
FILE.—The 
Secretary shall maintain a version of the 
paper forms described in subparagraphs 
(A) and (B) in a printable electronic file 
that is easily portable. The printable elec-
tronic 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 
may be downloaded and printed from an 
electronic file format in order to meet the 
filing requirements of this section and in 
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351 
order to receive aid from programs under 
this title. 
‘‘(iii) REPORTING
REQUIREMENT.— 
The Secretary shall report annually to 
Congress on the impact of the digital di-
vide on students completing applications 
for title IV aid described under this para-
graph and paragraph (4). The Secretary 
will also report on the steps taken to elimi-
nate the digital divide and reduce produc-
tion of the paper form described in sub-
paragraph (A) of this paragraph. The Sec-
retary’s report will specifically address the 
impact of the digital divide on the fol-
lowing student populations: independent 
students, 
traditionally 
underrepresented 
students, and dependent students. 
‘‘(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 
common electronic forms for applicants who do 
not meet the requirements of subparagraph (C) 
of this paragraph. 
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352 
‘‘(B) STATE
DATA.—The Secretary shall 
include on the common electronic forms space 
for information that needs to be entered for the 
applicant to be eligible for State financial as-
sistance, as provided under paragraph (6), ex-
cept the Secretary shall not require applicants 
to enter 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 elec-
tronic application form to be used by appli-
cants meeting the requirements under sub-
sections (b) and (c) of section 479. 
‘‘(ii) 
REDUCED
DATA
REQUIRE-
MENTS.—The simplified electronic applica-
tion forms shall permit an applicant to 
submit for financial assistance purposes, 
only the data elements required to make a 
determination of whether the applicant 
meets the requirements under subsection 
(b) or (c) of section 479. 
‘‘(iii) STATE
DATA.—The Secretary 
shall include on the simplified electronic 
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353 
application forms such data items as may 
be necessary to award state financial as-
sistance, as provided under paragraph (6), 
except that the Secretary shall not require 
applicants to enter 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 
education, guaranty agencies, and States 
in accordance 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 
subsection shall be construed to prohibit the use 
of the forms developed by the Secretary pursu-
ant to this paragraph by an eligible institution, 
eligible lender, guaranty agency, State grant 
agency, private computer software provider, a 
consortium thereof, or such other entities as the 
Secretary may designate. 
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354 
‘‘(E) PRIVACY.—The Secretary shall en-
sure that data collection under this paragraph 
complies with section 552a of title 5, United 
States Code, and that any entity using the elec-
tronic version of the forms developed by the 
Secretary pursuant to this paragraph shall 
maintain reasonable and appropriate adminis-
trative, technical, and physical safeguards to 
ensure the integrity and confidentiality of the 
information, and to protect against security 
threats, or unauthorized 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 administra-
tion of aid awarded under this title, State aid 
awarded under section 415C, or aid awarded by 
eligible 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 
or a contractor or designee of the Secretary, ex-
cept as may be permitted under this title. 
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355 
‘‘(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 
or if the applicant uses a personal identification 
number provided by the Secretary under sub-
paragraph (G) of this paragraph. 
‘‘(G) PERSONAL
IDENTIFICATION
NUM-
BERS AUTHORIZED.—The Secretary may assign 
to applicants personal identification numbers— 
‘‘(i) to enable the applicants to use 
such numbers in lieu of a signature for 
purposes of completing a form under this 
paragraph; 
‘‘(ii) to enable the applicants to use 
such numbers in lieu of a signature for 
purposes of completing forms required by 
States under section 415C; and 
‘‘(iii) for any purpose determined by 
the Secretary to enable the Secretary to 
carry out this title. 
‘‘(H) PERSONAL IDENTIFICATION NUMBER 
IMPROVEMENT.—Not later than 180 days after 
the date of enactment of the College Oppor-
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356 
tunity and Affordability Act of 2007, the Sec-
retary shall implement a real-time data match 
between the Social Security Administration and 
the Department to minimize the time required 
for an applicant to obtain a personal identifica-
tion number when applying for aid under this 
title through an electronic version of a form de-
veloped under this paragraph. 
‘‘(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, con-
sistent with the requirements of this sub-
section, for an applicant who applies for fi-
nancial assistance under this title in the 
next succeeding academic year subsequent 
to the year in which such applicant first 
applied for financial assistance under this 
title. 
‘‘(ii) MECHANISMS
FOR
REAPPLICA-
TION.—The Secretary shall develop appro-
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357 
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 up-
dated from the previous academic year’s 
application. 
‘‘(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 re-
quired of reapplicants. 
‘‘(v) ZERO FAMILY CONTRIBUTION.— 
Applicants determined to have a zero fam-
ily 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 
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358 
FAFSA on the date of enactment of the 
College Opportunity and Affordability Act 
of 2007 (including questions on the 
FAFSA for the purposes described in 
paragraph (6)), the Secretary, in coopera-
tion with representatives of agencies and 
organizations involved in student financial 
assistance, shall continue to reduce the 
number of such data elements required to 
be entered by all applicants, with the goal 
of reducing such number by 50 percent. 
Reductions of data elements under para-
graph (3)(B), (4)(C), or (5)(A)(iv) shall 
not be counted towards such reduction un-
less those data elements are reduced for all 
applicants. 
‘‘(ii) REPORT.—The Secretary shall 
submit a report on the process of this re-
duction to each the authorizing committees 
within 2 years after such date of enact-
ment. 
‘‘(6) STATE REQUIREMENTS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
include on the forms developed under this sub-
section, such State-specific nonfinancial data 
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359 
items as the Secretary determines are necessary 
to meet State requirements for need-based 
State aid under section 415C, except as pro-
vided in paragraphs (3)(B)(iii) and (4)(C)(iii) 
of this subsection. Such items shall be selected 
in consultation with State agencies that submit 
applications under section 415C in order to as-
sist in the awarding of State financial assist-
ance in accordance with the terms of this sub-
section, 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 included on the form for the 
2008–2009 academic year, unless a State noti-
fies the Secretary that the State no longer re-
quires those data items for the distribution of 
State need-based aid. 
‘‘(B) ANNUAL
REVIEW.—The Secretary 
shall conduct an annual review process to deter-
mine which forms and nonfinancial data items 
the States require to award need-based State 
aid and other application requirements that the 
States may impose. 
‘‘(C) STATE USE OF SIMPLIFIED FORMS.— 
The Secretary shall encourage States to take 
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360 
such steps as necessary to encourage the use of 
simplified 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. 
‘‘(D) FEDERAL
REGISTER
NOTICE.—The 
Secretary shall publish on an annual basis a no-
tice in the Federal Register requiring State 
agencies 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 nonfinancial 
data that the State agency requires for de-
livery of State need-based financial aid. 
‘‘(E) STATE NOTIFICATION TO THE SEC-
RETARY.— 
‘‘(i) IN GENERAL.—Each State agency 
that submits an application under section 
415C shall notify the Secretary— 
‘‘(I) whether the State permits 
an applicant to file a form described 
in paragraph (3)(B) or (4)(A) of this 
subsection for purposes of deter-
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361 
mining eligibility for State need-based 
grant aid; and 
‘‘(II) 
the 
State-specific 
non-
financial data that the State agency 
requires for delivery of State need- 
based financial aid. 
‘‘(ii) ACCEPTANCE OF FORMS.—In the 
event that a State does not permit an ap-
plicant to file a form described in para-
graph (3)(B) or (4)(A) of this subsection 
for purposes of determining eligibility for 
State need-based grant aid— 
‘‘(I) the State shall notify the 
Secretary if the State is not permitted 
to do so because of either State law or 
because 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 
(4)(A) of this subsection. 
‘‘(iii) LACK OF NOTIFICATION BY THE 
STATE.—If a State does not notify the 
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362 
Secretary pursuant to clause (i), the Sec-
retary shall— 
‘‘(I) permit residents of that 
State to complete simplified applica-
tion forms under paragraphs (3)(B) 
and (4)(A) of this subsection; and 
‘‘(II) not require any resident of 
that State to complete any non-
financial data previously 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 
delivery 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 developed by the Secretary pursuant to 
this subsection. No student may receive assist-
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363 
ance 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 Sec-
retary pursuant to this subsection. No data col-
lected on a form for which a fee is charged shall 
be used to complete the FAFSA. 
‘‘(B) NOTICE.—Any entity that provides to 
students and parents, or charges students or 
parents for, any value-added services with re-
spect to or in connection with the FAFSA, such 
as completion of the FAFSA, submission of the 
FAFSA, or tracking of the FAFSA for a stu-
dent, shall provide to students and parents 
clear and conspicuous 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 
created under this subsection in order to meet the 
filing requirements of this section and in order to re-
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364 
ceive aid from programs under this title and shall 
initiate the processing of applications under this 
subsection as early as practicable prior to October 
15 of the year prior to the student’s planned year 
of enrollment.’’; 
(2) by adding at the end of subsection (a) the 
following paragraph: 
‘‘(13) EARLY APPLICATION AND AWARD DEM-
ONSTRATION PROGRAM.— 
‘‘(A) PROGRAM REQUIRED.—The Secretary 
shall, no later than two years after the date of 
the enactment of the College Opportunity and 
Affordability Act of 2007, implement an early 
application demonstration program enabling de-
pendent students to— 
‘‘(i) complete applications under this 
subsection in such students’ junior year of 
secondary school, or in the academic year 
that is 2 years prior to such students’ in-
tended year of enrollment at an institution 
of higher education; 
‘‘(ii) receive an estimate of such stu-
dents’ financial aid awards; 
‘‘(iii) update, in the year prior to such 
students’ planned year of enrollment, the 
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365 
information contained in an application 
submitted under clause (i), using the proc-
ess described in paragraph (5) to deter-
mine such students’ final financial aid 
awards; and 
‘‘(iv) receive final financial aid awards 
based on updated information described in 
clause (iii). 
‘‘(B) PURPOSE
AND
OBJECTIVES.—The 
purpose of the demonstration program under 
this paragraph shall be to measure the benefits, 
in terms of student aspirations and plans to at-
tend college, and the adverse effects, in terms 
of program costs, integrity, distribution, and 
delivery of aid under this title, of implementing 
an early application system for all dependent 
students that allows dependent students to 
apply for financial aid using information from 
the year prior to the year prior to enrollment. 
Additional objectives associated with implemen-
tation of the demonstration program are the 
following: 
‘‘(i) Measure the feasibility of ena-
bling dependent students to apply for Fed-
eral, State, and institutional financial aid 
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366 
in their junior year of high school, using 
information from the year prior to the year 
prior to enrollment, by completing any of 
the application forms under this sub-
section. 
‘‘(ii) Identify whether receiving final 
financial aid awards no later than the fall 
of the senior year provides students with 
additional time to compete for the limited 
resources available for State and institu-
tional financial aid and positively impacts 
the college aspirations and plans of these 
students. 
‘‘(iii) Measure the impact of using in-
come information from the years prior to 
enrollment on— 
‘‘(I) eligibility for financial aid 
under this title and for other State 
and institutional aid; and 
‘‘(II) the cost of financial aid 
programs under this title. 
‘‘(iv) Effectively evaluate the benefits 
and adverse effects of the demonstration 
program on program costs, integrity, dis-
tribution, and delivery of aid. 
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367 
‘‘(C) PARTICIPANTS.—The Secretary shall 
select States and institutions within those 
States to participate in the demonstration pro-
gram under this paragraph that are partici-
pating in the programs under this title and that 
are willing to make final financial aid awards to 
students based on their application information 
from the year prior to the year prior to enroll-
ment. The Secretary shall also select as partici-
pants in the demonstration program secondary 
schools and dependent students that are located 
in the participating States. 
‘‘(D) APPLICATION
PROCESS.—The Sec-
retary shall insure that the following provisions 
are included in the demonstration program: 
‘‘(i) Participating States and institu-
tions shall— 
‘‘(I) encourage participating stu-
dents to apply for estimates of finan-
cial aid awards as provided under this 
title in such students’ junior year of 
secondary school, or in the academic 
year that is 2 years prior to such stu-
dents’ intended year of enrollment at 
an institution of higher education, 
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368 
using the most recent information 
available; and 
‘‘(II) make final financial aid 
awards 
to 
participating 
students 
based on the updated information con-
tained on a form submitted using the 
process described in paragraph (5). 
‘‘(ii) Financial aid administrators at 
participating institutions shall be allowed 
to use their discretion in awarding finan-
cial aid to participating students, as out-
lined under section 479A and section 
480(d)(7). 
‘‘(E) EVALUATION.—The Secretary shall 
conduct a rigorous evaluation of this dem-
onstration program in order to measure its ben-
efits and adverse effects as indicated under sub-
paragraph (A). 
‘‘(F) OUTREACH.—The Secretary shall 
make appropriate efforts in order to notify 
States of the demonstration program under this 
paragraph. Upon determination of participating 
States, the Secretary shall continue to make ef-
forts to notify institutions and dependent stu-
dents within participating States of the oppor-
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369 
tunity to participate in the demonstration pro-
gram and of the participation requirements. 
‘‘(G) CONSULTATION.—The Secretary shall 
consult with the Advisory Committee on Stu-
dent Financial Assistance, established under 
section 491, on the design and implementation 
of the demonstration program and on the eval-
uation described in subparagraph (E).’’; 
(3) by striking subsection (b); and 
(4) by redesignating subsections (c), (d), and 
(e) as subsections (b), (c), and (d), respectively. 
(b) MASTER CALENDAR.—Section 482(a)(1) (20 
U.S.C. 1089(a)(1)) is amended by striking subparagraphs 
(B) and (C) and inserting the following: 
‘‘(B) by March 1: proposed modifications, 
updates, and notices pursuant to sections 478 
and 483(a)(6) published in the Federal Reg-
ister; 
‘‘(C) by June 1: final modifications, up-
dates, and notices pursuant to sections 478 and 
483(a)(6) published in the Federal Register;’’. 
(c) MODEL INSTITUTION FINANCIAL AID OFFER 
FORM.— 
(1) REPORT AND MODEL FORMAT.—Not later 
than 1 year after the date of enactment of the Col-
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370 
lege Opportunity and Affordability Act of 2007, the 
Secretary shall— 
(A) prepare a report on the adequacy of 
the financial aid offer forms provided by insti-
tutions of higher education to students and the 
parents of such students, after consulting 
with— 
(i) students; 
(ii) parents of students; 
(iii) representatives of institutions of 
higher education (including financial aid 
administrators, registrars, and business of-
ficers); and 
(iv) consumer groups that receive no 
commercial or institution of higher edu-
cation support; 
(B) include in the report a model format 
for financial aid offer forms that— 
(i) is based on the report’s findings; 
and 
(ii) includes the information described 
in paragraph (2); and 
(C)(i) submit the report and model format 
to the authorizing committees (as defined in 
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371 
section 103 of the Higher Education Act of 
1965 (20 U.S.C. 1003); and 
(ii) make the report and model format 
available to institutions of higher education, 
lenders, and the public. 
(2) MODEL FORMAT CONTENTS.—The model fi-
nancial aid offer format developed under paragraph 
(1) shall present, in a consumer-friendly manner, the 
following information: 
(A) The student’s cost of attendance for 
the year for which the institution of higher edu-
cation is issuing the financial aid offer form, in-
cluding the actual or estimated costs included 
in the cost of attendance for such year for each 
of the following: 
(i) Tuition and fees. 
(ii) Room and board costs. 
(iii) Books and supplies. 
(iv) Transportation. 
(B) The amount of financial aid that the 
student does not have to repay, such as scholar-
ships and grants, offered to the student for 
such year. 
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372 
(C) The conditions under which the finan-
cial aid described in subparagraph (B) is renew-
able each year. 
(D) The amount of work-study assistance 
offered to the student for such year, and the 
conditions under which the student has to fulfill 
the work-study assistance. 
(E) The types and amounts of loans under 
part B, D, or E of title IV for which the stu-
dent is eligible for such year, and the interest 
rate, loan term, monthly repayment amount, 
and total repayment amount of each such loan. 
(F) The types and amounts of loans under 
428B or Federal Direct PLUS loans under sec-
tion 455 for which a parent of the student is 
eligible for such year, and the interest rate, 
loan term, monthly repayment amount, and 
total repayment amount of each such loan. 
(G) The net amount that the student or 
the student’s parent will have to pay to attend 
the institution for such year, which amount 
shall be the difference between— 
(i) the cost of attendance for the stu-
dent for such year; less 
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373 
(ii) the amount of financial aid offered 
by the covered institution in the financial 
aid offer form. 
(H) Where a student or the student’s par-
ent can seek additional information regarding 
the financial aid offered. 
(I) Any other information the Secretary 
determines necessary so that students and par-
ents can make informed student loan borrowing 
decisions. 
SEC. 483. INCREASING ACCESS TO TECHNOLOGY. 
Section 483 (20 U.S.C. 1087ss) is further amended 
by adding at the end the following: 
‘‘(e) 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(b) or (c).’’. 
SEC. 484. SENSE OF THE CONGRESS; REPORT. 
(a) SENSE OF CONGRESS.—It is the sense of the Con-
gress that— 
(1) in order to simplify the Free Application for 
Federal Student Aid (FAFSA), which serves as an 
entry point for the scholarships, grants, loans, and 
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374 
work-study assistance that make it possible for mil-
lions of students to attend college, the Secretary of 
Education and the Secretary of the Treasury should 
work together to develop a process by which the De-
partment of Education will, with the aid applicant’s 
permission, draw income information directly from 
the Internal Revenue Service for the purpose of com-
pleting the EZ FAFSA, the FAFSA, and FAFSA 
renewal applications and providing early estimates of 
aid eligibility; and 
(2) this process would— 
(A) ease the burden of reporting income- 
related information for applicants; 
(B) increase the efficiency, accuracy, and 
security of the FAFSA filing process; 
(C) significantly reduce the need for fur-
ther verification by the Department of Edu-
cation, institutions, and applicants; and 
(D) protect the security, privacy, and safe-
ty of all data used in the FAFSA filing process. 
(b) REPORT.—The Secretary of Education shall, 
within one year after the date of enactment of this Act— 
(1) provide the Congress with information on 
the progress in devising the simplified process de-
scribed in subsection (a); and 
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375 
(2) inform the Congress of any necessary statu-
tory changes for the purpose of increasing the effi-
ciency and effectiveness of the FAFSA application 
process. 
SEC. 485. STUDENT ELIGIBILITY. 
(a) AMENDMENTS.—Section 484 (20 U.S.C. 1091) is 
amended— 
(1) in subsection (a)— 
(A) in paragraph (4), by striking ‘‘the Re-
public of the Marshall Islands, the Federated 
States of Micronesia, or’’; and 
(B) in paragraph (5), by striking ‘‘a cit-
izen of any one of the Freely Associated 
States’’ and inserting ‘‘or, to the extent de-
scribed in subsection (j), a citizen of the Repub-
lic of Palau’’; 
(2) by amending subsection (j) to read as fol-
lows: 
‘‘(j) ASSISTANCE UNDER SUBPART 1 OF PART A FOR 
STUDENTS FROM PALAU.—Notwithstanding any other 
provision of law, a student shall be eligible until Sep-
tember 30, 2009, for assistance under subpart 1 of part 
A if the student is otherwise qualified and— 
‘‘(1) is a citizen of the Republic of Palau and 
attends an institution of higher education in a State 
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376 
or a public or nonprofit private institution of higher 
education in the Freely Associated States; or 
‘‘(2) meets the requirements of subsection 
(a)(5) and attends a public or nonprofit private in-
stitution of higher education in any one of the Free-
ly Associated States.’’; 
(3) by striking subsection (l) and inserting the 
following: 
‘‘(l) COURSES OFFERED THROUGH DISTANCE EDU-
CATION.— 
‘‘(1) 
RELATION
TO
CORRESPONDENCE 
COURSES.— 
‘‘(A) IN GENERAL.—A student enrolled in 
a course of instruction at an institution of high-
er education that is offered principally through 
distance education and leads to a recognized 
certificate, or associate, baccalaureate, or grad-
uate degree, conferred by such institution, shall 
not be considered to be enrolled in correspond-
ence courses. 
‘‘(B) EXCEPTION.—An institution of high-
er education referred to in subparagraph (A) 
shall not include an institution or school de-
scribed in section 3(3)(C) of the Carl D. Per-
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377 
kins Career and Technical Education Act of 
2006. 
‘‘(2) RESTRICTION OR REDUCTIONS OF FINAN-
CIAL AID.—A student’s eligibility to receive grants, 
loans, or work assistance under this title shall be re-
duced if a financial aid officer determines under the 
discretionary authority provided in section 479A 
that distance education results in a substantially re-
duced cost of attendance to such student. 
‘‘(3) SPECIAL RULE.—For award years prior to 
July 1, 2008, the Secretary shall not take any com-
pliance, disallowance, penalty, or other action 
against a student or an eligible institution when 
such action arises out of such institution’s prior 
award of student assistance under this title if the in-
stitution demonstrates to the satisfaction of the Sec-
retary that its course of instruction would have been 
in conformance with the requirements of this sub-
section.’’; and 
(4) by adding at the end the following: 
‘‘(s) STUDENTS
WITH
INTELLECTUAL
DISABIL-
ITIES.—Notwithstanding subsection (a), in order to re-
ceive any grant or work assistance under subparts 1 and 
3 of part A and part C of this title, a student with an 
intellectual disability shall— 
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378 
‘‘(1) be an individual with an intellectual dis-
ability whose mental retardation or other significant 
cognitive impairment substantially impacts the indi-
vidual’s intellectual and cognitive functioning; 
‘‘(2)(A) be a student eligible for assistance 
under the Individuals with Disabilities Education 
Act who has completed secondary school; or 
‘‘(B) be an individual who is no longer eligible 
for assistance under the Individuals with Disabilities 
Education Act because the individual has exceeded 
the maximum age for which the State provides a 
free appropriate public education; 
‘‘(3) be enrolled or accepted for enrollment in 
a comprehensive transition and postsecondary edu-
cation program that— 
‘‘(A) is designed for students with an intel-
lectual disability who are seeking to continue 
academic, vocational, and independent living in-
struction at the institution in order to prepare 
for gainful employment and independent living; 
‘‘(B) includes an advising and curriculum 
structure; and 
‘‘(C) requires students to participate on at 
least a half-time basis, as determined by the in-
stitution, including— 
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