I 
108TH CONGRESS 
2D SESSION 
H. R. 4283
To amend and extend the Higher Education Act of 1965. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 5, 2004
Mr. BOEHNER (for himself and Mr. MCKEON) introduced the following bill; 
which was referred to the Committee on Education and the Workforce 
A BILL 
To amend and extend the Higher Education Act of 1965.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘College Access and Opportunity Act of 2004’’. 
(b) TABLE OF CONTENTS.—
Sec. 1. Short title; table of contents. 
Sec. 2. References; effective date. 
TITLE I—GENERAL PROVISIONS 
Sec. 101. Definition of institution of higher education. 
‘‘Sec. 101. Definition of institution of higher education. 
‘‘Sec. 102. Institutions outside the United States. 
‘‘Sec. 123. Restrictions on funds for for-profit schools. 
Sec. 102. New borrower definition. 
Sec. 103. Student speech and association rights.
Sec. 104. Extension of National Advisory Committee on Institutional Quality 
and Integrity. 
Sec. 105. Alcohol and drug abuse prevention. 
Sec. 106. Prior rights and obligations. 
Sec. 107. Consumer information and public accountability in higher education. 
‘‘Sec. 131. Consumer information and public accountability in higher edu-
cation. 
Sec. 108. Performance-based organization. 
TITLE II—TEACHER PREPARATION 
Sec. 201. Sense of the House of Representatives. 
TITLE III—INSTITUTIONAL AID 
Sec. 301. Title III grants for American Indian Tribally Controlled Colleges and 
Universities. 
Sec. 302. Alaska Native and Native Hawaiian-serving institutions. 
Sec. 303. Grants to part B institutions. 
Sec. 304. Technical amendments. 
Sec. 305. Title III authorizations. 
TITLE IV—STUDENT ASSISTANCE 
PART A—GRANTS TO STUDENTS 
Sec. 401. Pell Grants. 
‘‘Sec. 401A. Pell Grants Plus: achievement grants for State scholars. 
Sec. 402. TRIO programs. 
Sec. 403. GEARUP. 
Sec. 404. Federal Supplemental Educational Opportunity Grants. 
Sec. 405. LEAP. 
Sec. 406. HEP/CAMP program. 
Sec. 407. Byrd Scholarship. 
Sec. 408. Child care access. 
Sec. 409. Learning anytime anywhere partnerships. 
Sec. 410. Technical amendments. 
PART B—FEDERAL FAMILY EDUCATION LOAN PROGRAM 
Sec. 421. Reauthorization of Federal Family Education Loan Program. 
Sec. 422. Loan limits. 
Sec. 423. Interest rates and special allowances. 
Sec. 424. Additional loan terms and conditions. 
Sec. 425. Consolidation loan changes. 
Sec. 426. Unsubsidized Stafford loans. 
Sec. 427. Teacher recruitment and retention. 
Sec. 428. Additional administrative provisions. 
PART C—FEDERAL WORK-STUDY PROGRAMS 
Sec. 441. Authorization of appropriations. 
Sec. 442. Community service. 
Sec. 443. Allocation of funds. 
Sec. 444. Books and supplies. 
Sec. 445. Job location and development. 
Sec. 446. Work colleges.
PART D—FEDERAL DIRECT LOAN PROGRAM 
Sec. 451. Reauthorization of the Direct Loan Program. 
PART E—FEDERAL PERKINS LOAN PROGRAM 
Sec. 461. Reauthorization of program. 
Sec. 462. Loan terms and conditions. 
Sec. 463. Loan cancellation. 
Sec. 464. Technical amendments. 
PART F—NEED ANALYSIS 
Sec. 471. Simplified needs test improvements. 
Sec. 472. Additional need analysis amendments. 
PART G—GENERAL PROVISIONS RELATING TO STUDENT FINANCIAL 
ASSISTANCE 
Sec. 481. Definition of academic year. 
Sec. 482. Distance education. 
Sec. 483. Expanding information dissemination regarding eligibility for Pell 
Grants. 
Sec. 484. Student eligibility. 
Sec. 485. Institutional refunds. 
Sec. 486. Institutional and financial assistance information for students. 
Sec. 487. College access initiative. 
‘‘Sec. 485D. College access initiative. 
Sec. 488. Distance education demonstration program. 
Sec. 489. College affordability demonstration program. 
‘‘Sec. 486A. College affordability demonstration program. 
Sec. 490. Program participation agreements. 
Sec. 491. Additional technical and conforming amendments. 
PART H—PROGRAM INTEGRITY 
Sec. 495. Accreditation. 
TITLE V—DEVELOPING INSTITUTIONS 
Sec. 501. Definitional changes. 
Sec. 502. Assurance of enrollment of needy students. 
Sec. 503. Additional amendments. 
Sec. 504. Title V authorization. 
TITLE VI—TITLE VI AMENDMENTS 
Sec. 601. Sense of the House. 
TITLE VII—TITLE VII AMENDMENTS 
Sec. 701. Sense of the House. 
TITLE VIII—CLERICAL AMENDMENTS 
Sec. 801. Clerical amendments. 
TITLE IX—STUDENT LOAN FORGIVENESS FOR FAMILIES OF 9/11 
VICTIMS
Sec. 901. Cancellation of student loan indebtedness for spouses, surviving joint 
debtors, and parents. 
TITLE X—AMENDMENTS TO OTHER EDUCATION LAWS 
PART A—EDUCATION OF THE DEAF ACT OF 1986
Sec. 1001. Laurent Clerc National Deaf Education Center. 
Sec. 1002. Authority. 
Sec. 1003. Agreement for the National Technical Institute for the Deaf. 
Sec. 1004. Definitions. 
Sec. 1005. Audit. 
Sec. 1006. Reports. 
Sec. 1007. Liaison for educational programs. 
Sec. 1008. Federal endowment programs for Gallaudet University and the Na-
tional Technical Institute for the Deaf. 
Sec. 1009. Oversight and effect of agreements. 
Sec. 1010. Authorization of appropriations. 
PART B—ADDITIONAL EDUCATION LAWS 
Sec. 1021. Amendment to Higher Education Amendments of 1998. 
Sec. 1022. Tribally Controlled College or University Assistance Act of 1978. 
Sec. 1023. Navajo Community College Act. 
Sec. 1024. Education Amendments of 1992. 
Sec. 1025. Study of student learning outcomes and public accountability.
SEC. 2. REFERENCES; EFFECTIVE DATE. 
(a) REFERENCES.—Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal 
is expressed in terms of an amendment to, or repeal of, 
a section or other provision, the reference shall be consid-
ered to be made to a section or other provision of the 
Higher Education Act of 1965 (20 U.S.C. 1001 et seq.). 
(b) EFFECTIVE DATE.—Except as otherwise provided 
in this Act, the amendments made by this Act shall take 
effect on the date of enactment of this Act.
TITLE I—GENERAL PROVISIONS 
SEC. 101. DEFINITION OF INSTITUTION OF HIGHER EDU-
CATION. 
(a) AMENDMENT.—Title I is amended by striking 
sections 101 and 102 (20 U.S.C. 1001, 1002) and insert-
ing the following: 
‘‘SEC. 101. DEFINITION OF INSTITUTION OF HIGHER EDU-
CATION. 
‘‘(a) INSTITUTION
OF HIGHER EDUCATION.—For 
purposes of this Act, the term ‘institution of higher edu-
cation’ means an educational institution in any State 
that—
‘‘(1) admits as regular students only persons 
who—
‘‘(A) meet the requirements of section 
484(d)(3), or have a certificate of graduation 
from a school providing secondary education, or 
the recognized equivalent of such a certificate; 
or 
‘‘(B) are beyond the age of compulsory 
school attendance in the State in which the in-
stitution is located; 
‘‘(2) is legally authorized within such State to 
provide a program of education beyond secondary 
education;
‘‘(3)(A) is accredited by a nationally recognized 
accrediting agency or association; or 
‘‘(B) if not so accredited, is a public or non-
profit 
institution 
that 
has 
been 
granted 
preaccreditation status by such an agency or asso-
ciation that has been recognized by the Secretary for 
the granting of preaccreditation status, and the Sec-
retary has determined that there is satisfactory as-
surance that the institution will meet the accredita-
tion standards of such an agency or association 
within a reasonable time; and 
‘‘(4) meets either of the following criteria: 
‘‘(A) is a nonprofit, for-profit, or public in-
stitution that—
‘‘(i) provides an educational program 
for which the institution awards a bach-
elor’s degree; 
‘‘(ii) provides not less than a 2-year 
educational program which is acceptable 
for full credit towards such a degree; or 
‘‘(iii) provides not less than a 1-year 
program of training that prepares students 
for gainful employment in a recognized oc-
cupation; or
‘‘(B) is a nonprofit, for-profit, or public in-
stitution that provides an eligible program (as 
defined in section 481)—
‘‘(i) for which the institution awards a 
certificate; and 
‘‘(ii) that prepares students for gain-
ful employment in a recognized occupation. 
‘‘(b) ADDITIONAL LIMITATIONS.—
‘‘(1) FOR-PROFIT
POSTSECONDARY
INSTITU-
TIONS.—
‘‘(A) DURATION
OF
ACCREDITATION.—A 
for-profit institution shall not be considered to 
be an institution of higher education unless 
such institution is accredited by a nationally 
recognized accrediting agency or association 
and such institution has been in existence for at 
least 2 years. 
‘‘(B) INSTITUTIONAL
ELIGIBILITY
ONLY 
FOR COMPETITIVE GRANTS.—For the purposes 
of any program providing grants to institutions 
for use by the institution (and not for distribu-
tion among students), a for-profit institution 
shall not be considered to be an institution of 
higher education under this section if such 
grants are awarded on any basis other than
competition on the merits of the grant proposal 
or application. 
‘‘(2) POSTSECONDARY
VOCATIONAL
INSTITU-
TIONS.—A nonprofit or public institution that meets 
the criteria of subsection (a)(4)(B) shall not be con-
sidered to be an institution of higher education un-
less such institution has been in existence for at 
least 2 years. 
‘‘(3) LIMITATIONS BASED ON MANAGEMENT.—
An institution shall not be considered to meet the 
definition of an institution of higher education in 
this section if—
‘‘(A) the institution, or an affiliate of the 
institution that has the power, by contract or 
ownership interest, to direct or cause the direc-
tion of the management or policies of the insti-
tution, has filed for bankruptcy, except that 
this paragraph shall not apply to a nonprofit in-
stitution, the primary function of which is to 
provide health care educational services (or an 
affiliate of such an institution that has the 
power, by contract or ownership interest, to di-
rect or cause the direction of the institution’s 
management or policies) that filed for bank-
ruptcy under chapter 11 of title 11, United
States Code, between July 1, 1998, and Decem-
ber 1, 1998; or 
‘‘(B) the institution, the institution’s 
owner, or the institution’s chief executive officer 
has been convicted of, or has pled nolo 
contendere or guilty to, a crime involving the 
acquisition, use, or expenditure of Federal 
funds, or has been judicially determined to have 
committed a crime involving the acquisition, 
use, or expenditure involving Federal funds. 
‘‘(4) LIMITATION ON COURSE OF STUDY OR EN-
ROLLMENT.—An institution shall not be considered 
to meet the definition of an institution of higher 
education in subsection (a) if such institution—
‘‘(A) offers more than 50 percent of such 
institution’s courses by correspondence (exclud-
ing courses offered by telecommunications as 
defined in 484(l)(4)), unless the institution is 
an institution that meets the definition in sec-
tion 3(3)(C) of the Carl D. Perkins Vocational 
and Technical Education Act of 1998; 
‘‘(B) enrolls 50 percent or more of the in-
stitution’s students in correspondence courses 
(excluding courses offered by telecommuni-
cations as defined in 484(l)(4)), unless the in-
stitution is an institution that meets the defini-
tion in section 3(3)(C) of the Carl D. Perkins 
Vocational and Technical Education Act of 
1998, except that the Secretary, at the request 
of the institution, may waive the applicability of 
this subparagraph to the institution for good 
cause, as determined by the Secretary in the 
case of an institution of higher education that 
provides a 2- or 4-year program of instruction 
(or both) for which the institution awards an 
associate or baccalaureate degree, respectively; 
‘‘(C) has a student enrollment in which 
more than 25 percent of the students are incar-
cerated, except that the Secretary may waive 
the limitation contained in this subparagraph 
for an institution that provides a 2- or 4-year 
program of instruction (or both) for which the 
institution awards a bachelor’s degree, or an as-
sociate’s degree or a postsecondary certificate, 
respectively; or 
‘‘(D) has a student enrollment in which 
more than 50 percent of the students either do 
not meet the requirements of section 484(d)(3) 
or do not have a secondary school diploma or 
its recognized equivalent, and does not provide
a 2- or 4-year program of instruction (or both) 
for which the institution awards an associate’s 
degree or a bachelor’s degree, respectively, ex-
cept that the Secretary may waive the limita-
tion contained in this subparagraph if an insti-
tution demonstrates to the satisfaction of the 
Secretary that the institution exceeds such limi-
tation because the institution serves, through 
contracts with Federal, State, or local govern-
ment agencies, significant numbers of students 
who do not meet the requirements of section 
484(d)(3) or do not have a secondary school di-
ploma or its recognized equivalent. 
‘‘(c) LIST OF ACCREDITING AGENCIES.—For pur-
poses of this section, the Secretary shall publish a list of 
nationally recognized accrediting agencies or associations 
that the Secretary determines, pursuant to subpart 2 of 
part H of title IV, to be reliable authority as to the quality 
of the education or training offered. 
‘‘(d) CERTIFICATION.—The Secretary shall certify, 
for the purposes of participation in title IV, an institu-
tion’s qualification as an institution of higher education 
in accordance with the requirements of subpart 3 of part 
H of title IV.
‘‘(e) LOSS OF ELIGIBILITY.—An institution of higher 
education shall not be considered to meet the definition 
of an institution of higher education in this section for 
the purposes of participation in title IV if such institution 
is removed from eligibility for funds under title IV as a 
result of an action pursuant to part H of title IV. 
‘‘SEC. 102. INSTITUTIONS OUTSIDE THE UNITED STATES. 
‘‘(a) 
INSTITUTIONS
OUTSIDE
THE
UNITED 
STATES.—
‘‘(1) IN GENERAL.—An institution outside the 
United States shall be considered to be an institu-
tion of higher education only for purposes of part B 
of title IV if the institution is comparable to an in-
stitution of higher education, as defined in section 
101, is legally authorized by the education ministry 
(or comparable agency) of the country in which the 
school is located, and has been approved by the Sec-
retary for purposes of that part. The Secretary shall 
establish criteria by regulation for that approval and 
that determination of comparability. An institution 
may not be so approved or determined to be com-
parable unless such institution is a public or non-
profit institution, except that, subject to paragraph 
(2)(B), a graduate medical school or veterinary
school located outside the United States may be a 
for-profit institution. 
‘‘(2) MEDICAL AND VETERINARY SCHOOL CRI-
TERIA.—In the case of a graduate medical or veteri-
nary school outside the United States, such criteria 
shall include a requirement that a student attending 
such school outside the United States is ineligible 
for loans made, insured, or guaranteed under part B 
of title IV unless—
‘‘(A) in the case of a graduate medical 
school located outside the United States—
‘‘(i)(I) at least 60 percent of those en-
rolled in, and at least 60 percent of the 
graduates of, the graduate medical school 
outside the United States were not persons 
described in section 484(a)(5) in the year 
preceding the year for which a student is 
seeking a loan under part B of title IV; 
and 
‘‘(II) at least 60 percent of the indi-
viduals who were students or graduates of 
the graduate medical school outside the 
United States or Canada (both nationals of 
the United States and others) taking the 
examinations administered by the Edu-
cational Commission for Foreign Medical 
Graduates received a passing score in the 
year preceding the year for which a stu-
dent is seeking a loan under part B of title 
IV; or 
‘‘(ii) the institution has a clinical 
training program that was approved by a 
State as of January 1, 1992; or 
‘‘(B) in the case of a veterinary school lo-
cated outside the United States that is not a 
public or nonprofit institution, the institution’s 
students complete their clinical training at an 
approved veterinary school located in the 
United States. 
‘‘(b) ADVISORY PANEL.—
‘‘(1) IN GENERAL.—For the purpose of quali-
fying a foreign medical school as an institution of 
higher education only for purposes of part B of title 
IV, the Secretary shall publish qualifying criteria by 
regulation and establish an advisory panel of medical 
experts that shall—
‘‘(A) evaluate the standards of accredita-
tion applied to applicant foreign medical 
schools; and
‘‘(B) determine the comparability of those 
standards to standards for accreditation applied 
to United States medical schools. 
‘‘(2) FAILURE
TO
RELEASE
INFORMATION.—
The failure of an institution outside the United 
States to provide, release, or authorize release to the 
Secretary of such information as may be required by 
subsection (a)(2) shall render such institution ineli-
gible for the purpose of part B of title IV. 
‘‘(c) SPECIAL RULE.—If, pursuant to this section, an 
institution located outside the United States loses eligi-
bility to participate in the programs under part B of title 
IV, then a student enrolled at such institution may, not-
withstanding such loss of eligibility, continue to be eligible 
to receive a loan under part B of title IV while attending 
such institution for the academic year succeeding the aca-
demic year in which such loss of eligibility occurred.’’. 
(b) RESTRICTIONS
ON FUNDS
FOR FOR-PROFIT 
SCHOOLS.—Part B of title I is amended by inserting after 
section 122 (20 U.S.C. 1011k) the following new section: 
‘‘SEC. 123. RESTRICTIONS ON FUNDS FOR FOR-PROFIT 
SCHOOLS. 
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of this Act authorizing the use of funds by an insti-
tution of higher education that receives funds under this
Act, none of the funds made available under this Act to 
a for-profit institution of higher education may be used 
for—
‘‘(1) construction, maintenance, renovation, re-
pair, or improvement of classrooms, libraries, labora-
tories, or other facilities; 
‘‘(2) establishing, improving, or increasing an 
endowment fund; or 
‘‘(3) establishing or improving an institutional 
development office to strengthen or improve con-
tributions from alumni and the private sector. 
‘‘(b) EXCEPTION.—Subsection (a) shall not apply to 
funds received by the institution from the grant, loan, or 
work assistance that is awarded under title IV to the stu-
dents attending such institution.’’. 
(c) CONFORMING AMENDMENTS.—
(1) Section 114(a) (20 U.S.C. 1011c(a)) is 
amended by striking ‘‘(as defined in section 102)’’. 
(2) Section 428K(b) (20 U.S.C. 1078–11(b)) is 
amended by striking paragraph (5). 
(3) Section 435(a)(1) (20 U.S.C. 1085(a)(1)) is 
amended by striking ‘‘section 102’’ and inserting 
‘‘section 101’’. 
(4) Subsection (d) of section 484 (20 U.S.C. 
1091(d)) is amended by striking the designation and
heading of such subsection and inserting the fol-
lowing: 
‘‘(d) SATISFACTION
OF
SECONDARY
EDUCATION 
STANDARDS.—’’. 
(5) Section 486(b)(2) (20 U.S.C. 1093(b)(2)) is 
amended by striking ‘‘102(a)(3)(A), 102(a)(3)(B)’’ 
and inserting ‘‘101(b)(4)(A), 101(b)(4)(B)’’. 
(6) 
Section 
487(c)(1)(A)(iii) 
(20 
U.S.C. 
1094(c)(1)(A)(iii)) is amended by striking ‘‘section 
102(a)(1)(C)’’ and inserting ‘‘section 102’’. 
(7) Section 487(d) (20 U.S.C. 1094(d)) is 
amended by striking ‘‘section 102’’ and inserting 
‘‘section 101’’. 
(8) Subsections (j) and (k) of section 496 (20 
U.S.C. 1099b(j), (k)) are each amended by striking 
‘‘section 102’’ and inserting ‘‘section 101’’. 
(9) Section 498(g)(3) (20 U.S.C. 1099c(g)(3)) 
is amended by striking ‘‘section 102(a)(1)(C)’’ and 
inserting ‘‘section 102’’. 
(10) Section 498(i) (20 U.S.C. 1099c(i)) is 
amended by striking ‘‘section 102’’ and inserting 
‘‘section 101’’. 
(11) Section 498(j)(1) (20 U.S.C. 1099c) is 
amended by striking ‘‘except that such branch shall 
not be required to meet the requirements of sections
102(b)(1)(E) and 102(c)(1)(C) prior to seeking such 
certification’’ and inserting ‘‘except that such branch 
shall not be required to be in existence for at least 
2 years prior to seeking such certification’’. 
(12) Section 498B(b) (20 U.S.C. 1099c–2(b)) 
is amended by striking ‘‘section 102(a)(1)(C)’’ and 
inserting ‘‘section 102’’. 
SEC. 102. NEW BORROWER DEFINITION. 
Paragraph (7) of section 103 (20 U.S.C. 1003) is 
amended to read as follows: 
‘‘(7) NEW
BORROWER.—The term ‘new bor-
rower’ when used with respect to any date for any 
loan under any provision of—
‘‘(A) part B or part D of title IV means 
an individual who on that date has no out-
standing balance of principal or interest owing 
on any loan made, insured, or guaranteed under 
either of those parts; and 
‘‘(B) part E of title IV means an indi-
vidual who on that date has no outstanding bal-
ance of principal or interest owing on any loan 
made under that part.’’. 
SEC. 103. STUDENT SPEECH AND ASSOCIATION RIGHTS. 
Section 112 (20 U.S.C. 1011a) is amended—
(1) by amending subsection (a) to read as fol-
lows: 
‘‘(a) PROTECTION OF RIGHTS.—It is the sense of 
Congress that—
‘‘(1) no student attending an institution of 
higher education on a full- or part-time basis should, 
on the basis of participation in protected speech or 
protected association, be excluded from participation 
in, be denied the benefits of, or be subjected to dis-
crimination or official sanction under any education 
program, activity, or division of the institution di-
rectly or indirectly receiving financial assistance 
under this Act, whether or not such program, activ-
ity, or division is sponsored or officially sanctioned 
by the institution; and 
‘‘(2) an institution of higher education should 
ensure that a student attending such institution on 
a full- or part-time basis is—
‘‘(A) evaluated solely on the basis of their 
reasoned answers and knowledge of the subjects 
and disciplines they study and without regard 
to their political, ideological, or religious beliefs; 
‘‘(B) assured that the selection of speakers 
and allocation of funds for speakers, programs, 
and other student activities will utilize methods
that promote intellectual pluralism and include 
diverse viewpoints; 
‘‘(C) presented diverse approaches and dis-
senting sources and viewpoints within the in-
structional setting; and 
‘‘(D) not excluded from participation in, 
denied the benefits of, or subjected to discrimi-
nation or official sanction on the basis of their 
political or ideological beliefs under any edu-
cation program, activity, or division of the insti-
tution directly or indirectly receiving financial 
assistance under this Act, whether or not such 
program, activity, or division is sponsored or of-
ficially sanctioned by the institution.’’; and 
(2) in subsection (b)(1), by inserting after 
‘‘higher education’’ the following: ‘‘, provided that 
the imposition of such sanction is done objectively, 
fairly, and without regard to the student’s political, 
ideological, or religious beliefs’’. 
SEC. 104. EXTENSION OF NATIONAL ADVISORY COMMITTEE 
ON INSTITUTIONAL QUALITY AND INTEGRITY. 
Section 114(g) (20 U.S.C. 1011c(g)) is amended by 
striking ‘‘2004’’ and inserting ‘‘2011’’.
SEC. 105. ALCOHOL AND DRUG ABUSE PREVENTION. 
Section 120(e)(5) (20 U.S.C. 1011i(e)(5)) is amend-
ed—
(1) by striking ‘‘1999’’ and inserting ‘‘2005’’; 
and 
(2) by striking ‘‘4 succeeding fiscal years’’ and 
inserting ‘‘5 succeeding fiscal years’’. 
SEC. 106. PRIOR RIGHTS AND OBLIGATIONS. 
Section 121(a) (20 U.S.C. 1011j(a)) is amended by 
striking ‘‘1999 and for each of the 4’’ each place it ap-
pears and inserting ‘‘2005 and for each of the 5’’. 
SEC. 107. CONSUMER INFORMATION AND PUBLIC AC-
COUNTABILITY IN HIGHER EDUCATION. 
Section 131 (20 U.S.C. 1015) is amended to read as 
follows: 
‘‘SEC. 131. CONSUMER INFORMATION AND PUBLIC AC-
COUNTABILITY IN HIGHER EDUCATION. 
‘‘(a) DATA COLLECTION.—
‘‘(1) DATA SYSTEMS.—The Secretary shall con-
tinue to redesign the relevant parts of the postsec-
ondary education data systems to include additional 
data as required by this section and to continue to 
improve the usefulness and timeliness of data col-
lected by such systems. 
‘‘(2) INFORMATION FROM INSTITUTIONS.—The 
Commissioner of Education Statistics shall collect,
for each academic year and in accordance with 
standard definitions developed by the Commissioner 
of Education Statistics (including definitions devel-
oped under section 131(a)(3)(A) as in effect on the 
day before the date of enactment of the College Ac-
cess and Opportunity Act of 2004) from at least all 
institutions of higher education participating in pro-
grams under title IV, and such institutions shall 
provide, the following data: 
‘‘(A) The tuition and fees charged for a 
full-time undergraduate student. 
‘‘(B) The room and board charges for such 
a student. 
‘‘(C) The cost of attendance for a full-time 
undergraduate student, consistent with the pro-
visions of section 472. 
‘‘(D) The average amount of financial as-
sistance received by a full-time undergraduate 
student, including—
‘‘(i) each type of assistance or benefits 
described in 428(a)(2)(C)(ii); 
‘‘(ii) fellowships; 
‘‘(iii) institutional and other assist-
ance; and 
‘‘(iv) loans under parts B and D.
‘‘(E) The number of students receiving fi-
nancial assistance described in each clause of 
subparagraph (D). 
‘‘(F) The average net price for students re-
ceiving Federal, State, or institutional financial 
assistance. 
‘‘(G) The institutional instructional ex-
penditure per full-time equivalent student. 
‘‘(b) DATA DISSEMINATION.—The Secretary shall 
make available the data collected pursuant to this section, 
including an institution’s college affordability index as cal-
culated in accordance with subsection (c). Such data shall 
be made available in a manner that permits the review 
and comparison of data submissions of individual institu-
tions of higher education. Such data shall be presented 
in a form that is easily accessible and understandable and 
allows parents and students to make informed decisions 
based on the prices for typical full-time undergraduate 
students and the institution’s rate of cost increase. 
‘‘(c) COLLEGE AFFORDABILITY INDEX.—
‘‘(1) IN GENERAL.—The Secretary shall, on the 
basis of the data submitted under subsection (a), 
calculate a college affordability index for each insti-
tution of higher education submitting such data and 
shall make the index available in accordance with
subsection (b) as soon as operationally possible on 
the Department’s college opportunity online Web 
site. 
‘‘(2) CALCULATION OF INDEX.—The college af-
fordability index shall be equal to—
‘‘(A) the percentage increase in the tuition 
and fees charged for a first-time, full-time, full-
year undergraduate student between the first of 
the 3 most recent preceding academic years and 
the last of those 3 academic years; divided by 
‘‘(B) the percentage increase in the Con-
sumer Price Index—All Urban Consumers 
(Current Series) from July of the first of those 
3 academic years to July of the last of those 3 
academic years. 
‘‘(d) OUTCOMES AND ACTIONS.—
‘‘(1) RESPONSE FROM INSTITUTION.—Effective 
on June 30, 2008, an institution that has a college 
affordability index that exceeds 2.0 for any 3-year 
interval ending on or after that date shall provide a 
report to the Secretary, in such a form, at such 
time, and containing such information as the Sec-
retary may require. Such report shall include—
‘‘(A) an explanation of the factors contrib-
uting to the increase in the institution’s costs 
and in the tuition and fees charged to students; 
‘‘(B) a management plan stating the spe-
cific steps the institution is and will be taking 
to reduce its college affordability index; 
‘‘(C) an action plan, including a schedule, 
by which the institution will reduce increases in 
or stabilize, such costs and tuition and fees; and 
‘‘(D) if determinations of tuition and fee 
increases are not within the exclusive control of 
the institution, a description of the agency or 
instrumentality of State government or other 
entity that participates in such determinations 
and the authority exercised by such agency, in-
strumentality, or entity. 
‘‘(2) INFORMATION TO THE PUBLIC.—Upon re-
ceipt of the institution’s report and management 
plan under paragraph (1), the Secretary shall make 
the institution’s report required under paragraph (1) 
available to the public in accordance with subsection 
(b). 
‘‘(3) CONSEQUENCES
FOR 2-YEAR
CONTINU-
ATION
OF
FAILURE.—If the Secretary determines 
that the institution has failed to comply with the
management plan and action plan submitted by the 
institution under this subsection following the next 
2 academic years that begin after the submission of 
such plans, and has failed to reduce the college af-
fordability index below 2.0 for such 2 academic 
years, the Secretary—
‘‘(A) shall make available to the public a 
detailed report provided by the institution on all 
costs and expenditures, and on all tuition and 
fees charged to students, for such 2 academic 
years; 
‘‘(B) shall place the institution on an af-
fordability alert status and shall make the in-
formation regarding the institution’s failure 
available in accordance with subsection (b); 
‘‘(C) shall notify the institution’s accred-
iting agency of the institution’s failure; and 
‘‘(D) may require the institution to submit 
to a review and audit by the Inspector General 
of the Department of Education to determine 
the cause of the institution’s failure. 
‘‘(4) INFORMATION TO STATE AGENCIES.—Any 
institution that reports under paragraph (1)(D) that 
an agency or instrumentality of State government or 
other entity participates in the determinations of tui-
tion and fee increases shall, prior to submitting any 
information to the Secretary under this subsection, 
submit such information to, and request the com-
ments and input of, such agency, instrumentality, or 
entity. With respect to any such institution, the Sec-
retary shall provide a copy of any communication by 
the Secretary with that institution to such agency, 
instrumentality, or entity. 
‘‘(5) EXEMPTIONS.—
‘‘(A) RELATIVE PRICE EXEMPTION.—The 
Secretary shall, for any 3-year interval for 
which college affordability indexes are computed 
under paragraph (1), determine and publish the 
dollar amount that, for each class of institution 
described in subparagraph (C) represents the 
maximum tuition and fees charged for a full-
time undergraduate student in the least costly 
quartile of institutions within each such class 
during the last year of such 3-year interval. An 
institution that has a college affordability index 
computed under paragraph (1) that exceeds 2.0 
for any such 3-year interval, but that, on aver-
age during such 3-year interval, charges less 
than such maximum tuition and fees shall not 
be subject to the actions required by subpara-
graph (B) or (C) of paragraph (1), or any ac-
tion under paragraph (3), unless such institu-
tion, for a subsequent 3-year interval, charges 
more than such maximum tuition and fees. 
‘‘(B) DOLLAR INCREASE EXEMPTION.—An 
institution that has a college affordability index 
computed under paragraph (1) that exceeds 2.0 
for any 3-year interval, but that exceeds such 
2.0 by a dollar amount that is less than $500, 
shall not be subject to the actions required by 
subparagraph (B) or (C) of paragraph (1), or 
any action under paragraph (3), unless such in-
stitution has a college affordability index for a 
subsequent 3-year interval that exceeds 2.0 by 
more than such dollar amount. 
‘‘(C) CLASSES
OF
INSTITUTIONS.—For 
purposes of subparagraph (B), the classes of in-
stitutions shall be those sectors used by the In-
tegrated Postsecondary Education Data Sys-
tem, based on whether the institution is public, 
nonprofit private, or for-profit private, and 
whether the institution has a 4-year, 2-year, or 
less than 2-year program of instruction. 
‘‘(e) FINES.—In addition to actions authorized in 
section 487(c), the Secretary may impose a fine in an
amount not to exceed $25,000 on an institution of higher 
education for failing to provide the information described 
in this section in a timely and accurate manner, or for 
failing to otherwise cooperate with the National Center for 
Education Statistics regarding efforts to obtain data on 
the cost and price of higher education under this section 
and pursuant to the program participation agreement en-
tered into under section 487. 
‘‘(f) GAO STUDY AND REPORT.—
‘‘(1) GAO STUDY.—The Comptroller General 
shall conduct a study of the policies and procedures 
implemented by institutions in increasing the afford-
ability of postsecondary education. Such study shall 
include information with respect to—
‘‘(A) a list of those institutions that—
‘‘(i) have reduced their college afford-
ability indexes; or 
‘‘(ii) are, as determined under sub-
section (d)(5)(A), within the least costly 
quartile of institutions within each class 
described in subsection (d)(5)(C); 
‘‘(B) policies implemented to stem the in-
crease in tuition and fees and institutional 
costs;
‘‘(C) the extent to which room and board 
costs and prices changed; 
‘‘(D) the extent to which other services 
were altered to affect tuition and fees; 
‘‘(E) the extent to which the institution’s 
policies affected student body demographics and 
time to completion; 
‘‘(F) what, if any, operational factors 
played a role in reducing tuition and fees; 
‘‘(G) the extent to which academic quality 
was affected, and how; 
‘‘(H) the extent to which policies and prac-
tices reducing costs and prices may be rep-
licated from one institution to another; and 
‘‘(I) other information as necessary to de-
termine best practices in increasing the afford-
ability of postsecondary education. 
‘‘(2) INTERIM
AND
FINAL
REPORTS.—The 
Comptroller General shall submit an interim and a 
final report regarding the findings of the study re-
quired by paragraph (1) to the appropriate author-
izing committees of Congress. The interim report 
shall be submitted not later than July 31, 2010, and 
the final report shall be submitted not later than 
July 31, 2012.
‘‘(g) STUDENT AID RECIPIENT SURVEY.—
‘‘(1) SURVEY REQUIRED.—The Secretary shall 
conduct a survey of student aid recipients under title 
IV on a regular cycle and State-by-State basis, but 
not less than once every 4 years— 
‘‘(A) to identify the population of students 
receiving Federal student aid; 
‘‘(B) to describe the income distribution 
and other socioeconomic characteristics of fed-
erally aided students; 
‘‘(C) to describe the combinations of aid 
from State, Federal, and private sources re-
ceived by students from all income groups; 
‘‘(D) to describe the debt burden of edu-
cational loan recipients and their capacity to 
repay their education debts, and the impact of 
such debt burden on career choices; 
‘‘(E) to describe the role played by the 
price of postsecondary education in the deter-
mination by students of what institution to at-
tend; and 
‘‘(F) to describe how the increased costs of 
textbooks and other instructional materials af-
fects the costs of postsecondary education to 
students.
‘‘(2) SURVEY
DESIGN.—The survey shall be 
representative of full-time and part-time, under-
graduate, graduate, and professional and current 
and former students in all types of institutions, and 
designed and administered in consultation with the 
Congress and the postsecondary education commu-
nity. 
‘‘(3) DISSEMINATION.—The Secretary shall dis-
seminate the information resulting from the survey 
in both printed and electronic form. 
‘‘(h) REGULATIONS.—The Secretary is authorized to 
issue such regulations as may be necessary to carry out 
the provisions of this section.’’. 
SEC. 108. PERFORMANCE-BASED ORGANIZATION. 
Section 141 (20 U.S.C. 1018) is amended—
(1) in subsection (a)(2)(B)—
(A) by inserting ‘‘unit’’ after ‘‘to reduce 
the’’; and 
(B) by inserting ‘‘and, to the extent prac-
ticable, the total costs of administering those 
programs’’ after ‘‘those programs’’; 
(2) in subsection (c)—
(A) in paragraph (1)(A), by striking ‘‘Each 
year’’ and inserting ‘‘Each fiscal year’’;
(B) in paragraph (1)(B), by inserting ‘‘sec-
ondary markets, guaranty agencies,’’ after 
‘‘lenders,’’; and 
(C) in paragraph (2)(B), by striking 
‘‘Chief Financial Officer Act of 1990 and’’ and 
inserting ‘‘Chief Financial Officers Act of 
1990,’’ and by inserting before the period at the 
end the following: ‘‘, and other relevant stat-
utes’’; and 
(3) in subsection (f)(3)(A), by striking ‘‘para-
graph (1)(A)’’ and inserting ‘‘paragraph (1)’’. 
TITLE II—TEACHER 
PREPARATION 
SEC. 201. SENSE OF THE HOUSE OF REPRESENTATIVES. 
It is the sense of the House of Representatives that 
title II of the Higher Education Act of 1965 should be 
amended as provided in H.R. 2211 as passed by the House 
of Representatives on July 9, 2003. 
TITLE III—INSTITUTIONAL AID 
SEC. 301. TITLE III GRANTS FOR AMERICAN INDIAN TRIB-
ALLY CONTROLLED COLLEGES AND UNIVER-
SITIES. 
(a) ELIGIBLE INSTITUTIONS.—Subsection (b) of sec-
tion 316 (20 U.S.C. 1059c(b)) is amended to read as fol-
lows:
‘‘(b) DEFINITIONS.—
‘‘(1) ELIGIBLE
INSTITUTIONS.—For purposes 
of this section, Tribal Colleges and Universities are 
the following: 
‘‘(A) any of the following institutions that 
qualify for funding under the Tribally Con-
trolled College or University Assistance Act of 
1978 or is listed in Equity in Educational Land 
Grant Status Act of 1994 (7 U.S.C. 301 note): 
Bay Mills Community College; Blackfeet Com-
munity College; Cankdeska Cikana Community 
College; Chief Dull Knife College; College of 
Menominee Nation; Crownpoint Institute of 
Technology; Dine´
College; D–Q University; 
Fond du Lac Tribal and Community College; 
Fort Belknap College; Fort Berthold Commu-
nity College; Fort Peck Community College; 
Haskell Indian Nations University; Institute of 
American Indian and Alaska Native Culture 
and Arts Development; Lac Courte Oreilles 
Ojibwa Community College; Leech Lake Tribal 
College; Little Big Horn College; Little Priest 
Tribal College; Nebraska Indian Community 
College; Northwest Indian College; Oglala 
Lakota College; Saginaw Chippewa Tribal Col-
lege; Salish Kootenai College; Si Tanka Univer-
sity—Eagle Butte Campus; Sinte Gleska Uni-
versity; Sisseton Wahpeton Community College; 
Sitting Bull College; Southwestern Indian Poly-
technic Institute; Stone Child College; Tohono 
O’Odham Community College; Turtle Mountain 
Community College; United Tribes Technical 
College; and White Earth Tribal and Commu-
nity College; and 
‘‘(B) any other institution that meets the 
definition of tribally controlled college or uni-
versity in section 2 of the Tribally Controlled 
College or University Assistance Act of 1978, 
and meets all other requirements of this sec-
tion. 
‘‘(2) INDIAN.—The term ‘Indian’ has the mean-
ing given the term in section 2 of the Tribally Con-
trolled College or University Assistance Act of 
1978.’’. 
(b) DISTANCE LEARNING.—Subsection (c)(2) of such 
section is amended—
(1) by amending subparagraph (B) to read as 
follows: 
‘‘(B) construction, maintenance, renova-
tion, and improvement in classrooms, libraries,
laboratories, and other instructional facilities, 
including purchase or rental of telecommuni-
cations technology equipment or services, and 
the acquisition of real property adjacent to the 
campus of the institution on which to construct 
such facilities;’’; 
(2) by striking ‘‘and’’ at the end of subpara-
graph (K); 
(3) by redesignating subparagraph (L) as sub-
paragraph (M); and 
(4) by inserting after subparagraph (K) the fol-
lowing new subparagraph: 
‘‘(L) developing or improving facilities for 
Internet use or other distance learning aca-
demic instruction capabilities; and’’. 
(c) APPLICATION AND ALLOTMENT.—Subsection (d) 
of such section is amended to read as follows: 
‘‘(d) APPLICATION AND ALLOTMENT.—
‘‘(1) INSTITUTIONAL ELIGIBILITY.—To be eligi-
ble to receive assistance under this section, a Tribal 
College or University shall be an eligible institution 
under section 312(b). 
‘‘(2) APPLICATION.—Any Tribal College or Uni-
versity desiring to receive assistance under this sec-
tion shall submit an application to the Secretary at
such time, and in such manner, as the Secretary 
may reasonably require. 
‘‘(3) ALLOTMENTS TO INSTITUTIONS.—
‘‘(A) ALLOTMENT: PELL GRANT BASIS.—
From the amount appropriated to carry out 
this section for any fiscal year, the Secretary 
shall allot to each eligible institution a sum 
which bears the same ratio to one-half that 
amount as the number of Pell Grant recipients 
in attendance at such institution at the end of 
the award year preceding the beginning of that 
fiscal year bears to the total number of Pell 
Grant recipients at all eligible institutions. 
‘‘(B) ALLOTMENT: DEGREE AND CERTIFI-
CATE BASIS.—From the amount appropriated 
to carry out this section for any fiscal year, the 
Secretary shall allot to each eligible institution 
a sum which bears the same ratio to one-half 
that amount as the number of degrees or cer-
tificates awarded by such institution during the 
preceding academic year bears to the total num-
ber of degrees or certificates at all eligible insti-
tutions. 
‘‘(C) MINIMUM
GRANT.—Notwithstanding 
subparagraphs (A) and (B), the amount allot-
ted to each institution under this section shall 
not be less than $400,000. 
‘‘(4) SPECIAL RULES.—
‘‘(A) CONCURRENT
FUNDING.—For the 
purposes of this part, no Tribal College or Uni-
versity that is eligible for and receives funds 
under this section shall concurrently receive 
funds under other provisions of this part or 
part B. 
‘‘(B) EXEMPTION.—Section 313(d) shall 
not apply to institutions that are eligible to re-
ceive funds under this section.’’. 
SEC. 302. ALASKA NATIVE AND NATIVE HAWAIIAN-SERVING 
INSTITUTIONS. 
(a) DISTANCE LEARNING.—Section 317(c)(2) (20 
U.S.C. 1059d(c)(2)) is amended—
(1) by amending subparagraph (B) to read as 
follows: 
‘‘(A) construction, maintenance, renova-
tion, and improvement in classrooms, libraries, 
laboratories, and other instructional facilities, 
including purchase or rental of telecommuni-
cations technology equipment or services, and 
the acquisition of real property adjacent to the
campus of the institution on which to construct 
such facilities;’’; 
(2) by striking ‘‘and’’ at the end of subpara-
graph (G); 
(3) by striking the period at the end of sub-
paragraph (H) and inserting ‘‘; and’’; and 
(4) by inserting after subparagraph (H) the fol-
lowing new subparagraph: 
‘‘(I) development or improvement of facili-
ties for Internet use or other distance learning 
academic instruction capabilities.’’. 
(b) ENDOWMENT FUNDS.—Section 317(c) is further 
amended by adding at the end the following new para-
graph: 
‘‘(3) ENDOWMENT FUNDS.—
‘‘(A) IN GENERAL.—An Alaska Native or 
Native Hawaiian-serving institution may use 
not more than 20 percent of the grant funds 
provided under this section to establish or in-
crease an endowment fund at the institution. 
‘‘(B) MATCHING REQUIREMENT.—In order 
to be eligible to use grant funds in accordance 
with subparagraph (A), the institution shall 
provide to the endowment fund from non-Fed-
eral funds an amount equal to the Federal
funds used in accordance with subparagraph 
(A), for the establishment or increase of the en-
dowment fund. 
‘‘(C) APPLICABILITY
OF
OTHER
PROVI-
SIONS.—The provisions of part C regarding the 
establishment or increase of an endowment 
fund, that the Secretary determines are not in-
consistent with this paragraph, shall apply to 
funds used under subparagraph (A).’’. 
(c) APPLICATION
PROCESS.—Section 317(d) is 
amended—
(1) by adding at the end of paragraph (1) the 
following new sentences: ‘‘Each Alaska Native-serv-
ing institution and Native Hawaiian-serving institu-
tion shall develop a 5-year plan for improving the as-
sistance provided to Alaska Native or Native Hawai-
ian students. Such plan shall not be subject to ap-
proval by the Secretary.’’; and 
(2) in paragraph (2)—
(A) by redesignating subparagraph (B) as 
subparagraph (C); and 
(B) by striking subparagraph (A) and in-
serting the following:
‘‘(A) an assurance that the institution has 
developed a 5-year plan for serving Alaska Na-
tive or Native Hawaiian students; 
‘‘(B) a list of activities and other informa-
tion that are consistent with the institution’s 5-
year plan; and’’. 
SEC. 303. GRANTS TO PART B INSTITUTIONS. 
(a) USE OF FUNDS.—
(1) FACILITIES AND EQUIPMENT.—
(A) UNDERGRADUATE
INSTITUTIONS.—
Paragraph (2) of section 323(a) (20 U.S.C. 
1062(a)) is amended 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) 
GRADUATE
AND
PROFESSIONAL 
SCHOOLS.—Paragraph (2) of section 326(c) is 
amended to read as follows: 
‘‘(2) construction, maintenance, renovation, and 
improvement in classrooms, libraries, laboratories, 
and other instructional facilities, including purchase
or rental of telecommunications technology equip-
ment or services, and the acquisition of real property 
adjacent to the campus of the institution on which 
to construct such facilities;’’. 
(2) OUTREACH
AND
COLLABORATION.—Para-
graph (11) of section 323(a) is amended to read as 
follows: 
‘‘(11) Establishing community outreach pro-
grams and collaborative partnerships between part B 
institutions and local elementary or secondary 
schools. Such partnerships may include mentoring, 
tutoring, or other instructional opportunities that 
will boost student academic achievement and assist 
elementary and secondary school students in devel-
oping the academic skills and the interest to pursue 
postsecondary education.’’. 
(b) TECHNICAL
ASSISTANCE.—Section 323 (20 
U.S.C. 1062) is amended—
(1) by redesignating subsection (c) as sub-
section (d); and 
(2) by inserting after subsection (b) the fol-
lowing new subsection: 
‘‘(c) TECHNICAL ASSISTANCE.—
‘‘(1) IN GENERAL.—An institution may not use 
more than 2 percent of the grant funds provided
under this part to secure technical assistance serv-
ices. 
‘‘(2) 
TECHNICAL
ASSISTANCE
SERVICES.—
Technical assistance services may include assistance 
with enrollment management, financial management, 
and strategic planning. 
‘‘(3) REPORT.—The institution shall report to 
the Secretary on an annual basis, in such form as 
the Secretary requires, on the use of funds under 
this subsection.’’. 
(c) DISTANCE LEARNING.—Section 323(a)(2) (20 
U.S.C. 1062(a)(2)) is amended by inserting ‘‘development 
or improvement of facilities for Internet use or other dis-
tance learning academic instruction capabilities and’’ after 
‘‘including’’. 
(d) MINIMUM
GRANTS.—Section 324(d)(1) (20 
U.S.C. 1063(d)(1)) is amended by inserting before the pe-
riod at the end the following: ‘‘, except that, if the amount 
appropriated to carry out this part for any fiscal year ex-
ceeds the amount required to provide to each institution 
an amount equal to the total amount received by such in-
stitution under subsections (a), (b), and (c) for the pre-
ceding fiscal year, then the amount of such excess appro-
priation shall first be applied to increase the minimum al-
lotment under this subsection to $750,000’’.
(e) 
ELIGIBLE
GRADUATE
OR
PROFESSIONAL 
SCHOOLS.—
(1) GENERAL AUTHORITY.—Section 326(a)(1) 
(20 U.S.C. 1063b(a)(1)) is amended—
(A) by inserting ‘‘(A)’’ after ‘‘subsection 
(e) that’’; 
(B) by inserting before the period at the 
end the following: ‘‘, (B) is accredited by a na-
tionally recognized accrediting agency or asso-
ciation determined by the Secretary to be a reli-
able authority as to the quality of training of-
fered, and (C) according to such an agency or 
association, is in good standing’’. 
(2) 
ELIGIBLE
INSTITUTIONS.—Section 
326(e)(1) (20 U.S.C. 1063b(e)(1)) is amended—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (Q); 
(B) by striking the period at the end of 
subparagraph (R) and inserting a semicolon; 
and 
(C) by adding at the end the following new 
subparagraphs: 
‘‘(S) Alabama State University qualified 
graduate program;
‘‘(T) Prairie View A&M University quali-
fied graduate program; and 
‘‘(U) Coppin State University qualified 
graduate program.’’. 
(3) 
CONFORMING
AMENDMENT.—Section 
326(e)(3) (20 U.S.C. 1063b(e)(3)) is amended—
(A) by striking ‘‘1998’’ and inserting 
‘‘2004’’; and 
(B) by striking ‘‘(Q) and (R)’’ and insert-
ing ‘‘(S), (T), and (U)’’. 
(f) PROFESSIONAL OR GRADUATE INSTITUTIONS.—
Section 326(f) (20 U.S.C. 1063b(f)) is amended—
(1) in paragraph (1)—
(A) by striking ‘‘$26,600,000’’ and insert-
ing ‘‘$55,500,000’’; and 
(B) by striking ‘‘(P)’’ and inserting ‘‘(R)’’; 
(2) in paragraph (2)—
(A) by striking ‘‘$26,600,000 but not in 
excess 
of 
$28,600,000’’ 
and 
inserting 
‘‘$55,500,000, 
but 
not 
in 
excess 
of 
$58,500,000’’; and 
(B) by striking ‘‘subparagraphs (Q) and 
(R)’’ and inserting ‘‘subparagraphs (S), (T), 
and (U)’’; and 
(3) in paragraph (3)—
(A) by striking ‘‘$28,600,000’’ and insert-
ing ‘‘$58,500,000’’; and 
(B) by striking ‘‘(R)’’ and inserting ‘‘(U)’’. 
(g) HOLD HARMLESS.—Section 326(g) (20 U.S.C. 
1063b(g)) is amended by striking ‘‘1998’’ and inserting 
‘‘2004’’. 
SEC. 304. TECHNICAL AMENDMENTS. 
(a) AMENDMENTS.—Title III is further amended—
(1) in section 311(c) (20 U.S.C. 1057(c))—
(A) 
by 
redesignating 
paragraphs 
(7) 
through (12) as paragraphs (8) through (13), 
respectively; and 
(B) by inserting after paragraph (6) the 
following: 
‘‘(7) Education or counseling services designed 
to improve the financial literacy and economic lit-
eracy of students and, as appropriate, their par-
ents.’’; 
(2) 
in 
section 
312(b)(1)(F) 
(20 
U.S.C. 
1058(b)(1)(F)), by inserting ‘‘which is’’ before ‘‘lo-
cated’’; 
(3) 
in 
section 
312(b)(1) 
(20 
U.S.C. 
1058(b)(1)), by redesignating subparagraphs (E) 
and (F) as subparagraphs (F) and (G), respectively,
and by inserting after subparagraph (D) the fol-
lowing new subparagraph: 
‘‘(E) which provides a program that is not 
less than a 2-year educational program that is 
acceptable for full credit toward a bachelor’s de-
gree;’’; 
(4) 
in 
section 
316(b)(3) 
(20 
U.S.C. 
1059c(b)(3)), by striking ‘‘give’’ and inserting 
‘‘given’’; 
(5) 
in 
section 
316(c)(2) 
(20 
U.S.C. 
1059c(c)(2))—
(A) by redesignating subparagraphs (G) 
through (M) (as redesignated by section 
301(b)(2) of this Act) as subparagraphs (H) 
through (N), respectively; 
(B) by inserting after subparagraph (F) 
the following: 
‘‘(G) education or counseling services de-
signed to improve the financial literacy and eco-
nomic literacy of students and, as appropriate, 
their parents;’’; and 
(C) in subparagraph (N), as redesignated 
by subparagraph (A), by striking ‘‘subpara-
graphs (A) through (K)’’ and inserting ‘‘sub-
paragraphs (A) through (M)’’;
(6) 
in 
section 
317(c)(2) 
(20 
U.S.C. 
1059d(c)(2))—
(A) in subparagraph (G), by striking 
‘‘and’’ after the semicolon; 
(B) in subparagraph (H), by striking the 
period at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(I) education or counseling services de-
signed to improve the financial literacy and eco-
nomic literacy of students and, as appropriate, 
their parents.’’; 
(7) in section 323(a) (20 U.S.C. 1062(a))—
(A) by striking ‘‘section 360(a)(2)’’ and in-
serting ‘‘399(a)(2)’’; 
(B) 
by 
redesignating 
paragraphs 
(7) 
through (12) as paragraphs (8) through (13), 
respectively; and 
(C) by inserting after paragraph (6) the 
following: 
‘‘(7) Education or counseling services designed 
to improve the financial literacy and economic lit-
eracy of students and, as appropriate, their par-
ents.’’;
(8) 
in 
section 
324(d)(2) 
(20 
U.S.C. 
1063(d)(2)), by striking ‘‘section 360(a)(2)(A)’’ and 
inserting ‘‘section 399(a)(2)(A)’’; 
(9) 
in 
section 
326(e)(1) 
(20 
U.S.C. 
1063b(e)(1)), in the matter preceding subparagraph 
(A), by inserting a colon after ‘‘the following’’; 
(10) in section 327(b) (20 U.S.C. 1063c(b)), by 
striking ‘‘initial’’; 
(11) 
in 
section 
342(5)(C) 
(20 
U.S.C. 
1066a(5)(C))—
(A) by inserting a comma after ‘‘equip-
ment’’ the first place it appears; and 
(B) by striking ‘‘technology,,’’ and insert-
ing ‘‘technology,’’; 
(12) in section 343(e) (20 U.S.C. 1066b(e)), by 
inserting after the subsection designation the fol-
lowing: ‘‘SALE OF QUALIFIED BONDS.—’’; 
(13) in section 351(a) (20 U.S.C. 1067a(a)), by 
striking ‘‘of 1979’’; and 
(14) in section 396 (20 U.S.C. 1068e), by strik-
ing ‘‘section 360’’ and inserting ‘‘section 399’’. 
(b) REPEAL.—Section 1024 (20 U.S.C. 1135b–3), as 
transferred by section 301(a)(5) of the Higher Education 
Amendments of 1998 (Public Law 105–244; 112 Stat. 
1636), is repealed.
SEC. 305. TITLE III AUTHORIZATIONS. 
Section 399(a) (20 U.S.C. 1068h(a)) is amended—
(1) by striking ‘‘1999’’ each place it appears 
and inserting ‘‘2005’’; 
(2) by striking ‘‘4 succeeding fiscal years’’ each 
place it appears and inserting ‘‘5 succeeding fiscal 
years’’; 
(3) in paragraph (1)—
(A) by striking ‘‘$10,000,000’’ in subpara-
graph (B) and inserting ‘‘$23,800,000’’; and 
(B) by striking ‘‘$5,000,000’’ in subpara-
graph (C) and inserting ‘‘$11,000,000’’; 
(4) in paragraph (2)—
(A) by striking ‘‘$135,000,000’’ in sub-
paragraph (A) and inserting ‘‘$241,000,000’’; 
and 
(B) by striking ‘‘$35,000,000’’ in subpara-
graph (B) and inserting ‘‘$59,000,000’’; and 
(5) in paragraph (4), by striking ‘‘$110,000’’ 
and inserting ‘‘$212,000’’. 
TITLE IV—STUDENT ASSISTANCE 
PART A—GRANTS TO STUDENTS 
SEC. 401. PELL GRANTS. 
(a) EXTENSION OF AUTHORITY.—Section 401(a) (20 
U.S.C. 1070a(a)) is amended by striking ‘‘2004’’ and in-
serting ‘‘2011’’.
laureate degree program of study at an eligible 
institution, award such students two Pell grants 
during a single award year to permit such stu-
dents to accelerate progress toward their degree 
objectives by enrolling in academic programs for 
12 months rather than 9 months. 
‘‘(B) LIMITATION.—The Secretary shall 
limit the awarding of additional Pell grants 
under this paragraph in a single award year to 
students attending baccalaureate degree grant-
ing institutions that have a graduation rate as 
reported by the Integrated Postsecondary Edu-
cation Data System for the 4 preceding aca-
demic years of at least 30 percent. 
‘‘(C) EVALUATION.—The Secretary shall 
conduct an evaluation of the program under 
this paragraph and submit to the Congress an 
evaluation report no later than October 1, 
2010. 
‘‘(D) REGULATIONS REQUIRED.—The Sec-
retary shall promulgate regulations imple-
menting this paragraph.’’. 
(f) ELIGIBILITY PERIOD.—Section 401(c)(2) (20 
U.S.C. 1070a(c)(2)) is amended by inserting ‘‘, for not
more than one academic year,’’ after ‘‘which are deter-
mined by the institution’’ in the first sentence. 
(g) PELL GRANTS PLUS: ACHIEVEMENT GRANTS 
FOR STATE SCHOLARS PROGRAM.—
(1) AMENDMENT.—Subpart 1 of part A of title 
IV is amended by inserting after section 401 (20 
U.S.C. 1070a) the following new section: 
‘‘SEC. 401A. PELL GRANTS PLUS: ACHIEVEMENT GRANTS 
FOR STATE SCHOLARS. 
‘‘(a) GRANTS AUTHORIZED.—From sums appro-
priated to carry out section 401, the Secretary shall estab-
lish a program to award Pell Grants Plus to students 
who—
‘‘(1) have successfully completed a rigorous 
high school program of study established by a State 
or local educational agency in consultation with a 
State coalition assisted by the Center for State 
Scholars; 
‘‘(2) are enrolled full-time in the first academic 
year of undergraduate education, and have not been 
previously enrolled in a program of undergraduate 
education; and 
‘‘(3) are eligible to receive Federal Pell Grants 
for the year in which the grant is awarded. 
‘‘(b) AMOUNT OF GRANTS.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the amount of the grant awarded under 
this section shall be $1,000. 
‘‘(2) ASSISTANCE NOT TO EXCEED COST OF AT-
TENDANCE.—A grant awarded under this section to 
any student, in combination with the Federal Pell 
Grant assistance and other student financial assist-
ance available to such student, may not exceed the 
student’s cost of attendance. 
‘‘(c) SELECTION OF RECIPIENTS.—
‘‘(1) PROCEDURES ESTABLISHED BY REGULA-
TION.—The Secretary shall establish by regulation 
procedures for the determination of eligibility of stu-
dents for the grants awarded under this section. 
Such procedures shall include measures to ensure 
that eligibility is determined in a timely and accu-
rate manner consistent with the requirements of sec-
tion 482 and the submission of the financial aid 
form required by section 483. 
‘‘(2) REQUIRED
INFORMATION.—Each eligible 
student desiring an award under this section shall 
submit at such time and in such manner such infor-
mation as the Secretary may reasonably require. 
‘‘(3) CONTINUATION
OF
GRANT
REQUIRE-
MENTS.—In order for a student to continue to be el-
igible to receive an award under this section for the 
second year of undergraduate education, the eligible 
student must—
‘‘(A) maintain eligibility to receive a Fed-
eral Pell Grant for that year; 
‘‘(B) obtain a grade point average of at 
least 3.0 (or the equivalent as determined under 
regulations prescribed by the Secretary) for the 
first year of undergraduate education; and 
‘‘(C) be enrolled full-time and fulfill the re-
quirements for satisfactory progress described 
in section 484(c). 
‘‘(d) EVALUATION, AND REPORTS.—The Secretary 
shall monitor the progress, retention, and completion rates 
of the students to whom awards are provided under this 
section. In doing so, the Secretary shall evaluate the im-
pact of the Pell Grants Plus Program and report, not less 
than biennially, to the authorizing committees of the 
House of Representatives and the Senate.’’. 
(2) CONFORMING AMENDMENT.—Chapter 3 of 
subpart 2 of part A of title IV (20 U.S.C. 1070a–
31 through 1070a–35) is repealed. 
SEC. 402. TRIO PROGRAMS. 
(a) DURATION OF GRANTS.—
(1) AMENDMENT.—Section 402A(b)(2) (20 
U.S.C. 1070a–11(b)(2)) is amended to read as fol-
lows: 
‘‘(2) DURATION.—Grants or contracts awarded 
under this chapter shall be awarded for a period of 
5 years, except that—
‘‘(A) grants under section 402G shall be 
awarded for a period of 2 years; and 
‘‘(B) grants under section 402H shall be 
awarded for a period determined by the Sec-
retary.’’. 
(2) TRANSITION TO SYNCHRONOUS GRANT PE-
RIODS.—Notwithstanding section 402A(b)(2) of the 
Higher Education Act of 1965 (as in effect both 
prior to and after the amendment made by para-
graph (1) of this subsection), the Secretary of Edu-
cation may continue an award made before the date 
of enactment of this Act under section 402B, 402C, 
402D, 402E, or 402F of such Act as necessary to 
permit all the awards made under such a section to 
expire at the end of the same fiscal year, and there-
after to expire at the end of 5 years as provided in 
the amendment made by paragraph (1) of this sub-
section.
(b) MINIMUM GRANTS.—Section 402A(b)(3) (20 
U.S.C. 1070a–11(b)(3)) is amended to read as follows: 
‘‘(3) MINIMUM GRANTS.—Unless the institution 
or agency requests a smaller amount, individual 
grants for programs authorized under this chapter 
shall be no less than $200,000, except that indi-
vidual grants for programs authorized under section 
402G shall be no less than $170,000.’’. 
(c) PRIOR EXPERIENCE; NOVICE APPLICANTS.—Sec-
tion 402A(c)(2) (20 U.S.C. 1070a–11(c)(2)) is amend-
ed—
(1) by striking ‘‘In making grants’’ and insert-
ing ‘‘(A) Subject to subparagraph (B), in making 
grants’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(B) From the amount available under sub-
section (f) for a program under this chapter (other 
than a program under section 402G or 402H) for 
any fiscal year in which the Secretary conducts a 
competition for the award of grants or contracts 
under such program, the Secretary shall reserve 10 
percent of such available amount for purposes of 
funding applications from novice applicants. If the 
Secretary determines that there are an insufficient
number of qualified novice applicants to utilize the 
amount so reserved, the Secretary shall restore the 
unutilized remainder of the amount reserved for use 
by applicants qualifying under subparagraph (A).’’. 
(d) APPLICATION STATUS.—Section 402A(c) (20 
U.S.C. 1070a–11(c)) is amended by striking paragraph 
(7). 
(e) DOCUMENTATION OF STATUS.—Section 402A(e) 
(20 U.S.C. 1070a–11(e)) is amended by striking ‘‘(g)(2)’’ 
each place it appears in paragraphs (1) and (2) and insert-
ing ‘‘(g)(4)’’. 
(f) AUTHORIZATION OF APPROPRIATIONS.—Section 
402A(f) (20 U.S.C. 1070a–11(f)) is amended by striking 
‘‘$700,000,000 for fiscal year 1999, and such sums as 
may be necessary for each of the 4 succeeding fiscal years’’ 
and inserting ‘‘$835,000,000 for fiscal year 2005 and 
such sums as may be necessary for each of the 5 suc-
ceeding fiscal years’’. 
(g) DEFINITION.—Section 402A(g) (20 U.S.C. 
1070a–11(g)) is amended—
(1) in paragraph (3), by striking ‘‘by reason of 
such individual’s age’’; 
(2) by redesignating paragraphs (1) through 
(4) as paragraphs (3) through (6), respectively; and
(3) by inserting before paragraph (3), as redes-
ignated, the following: 
‘‘(1) DIFFERENT CAMPUS.—The term ‘different 
campus’ means an institutional site that—
‘‘(A) is geographically apart from the main 
campus of the institution; 
‘‘(B) is permanent in nature; and 
‘‘(C) offers courses in educational pro-
grams leading to a degree, certificate, or other 
recognized educational credential. 
‘‘(2) DIFFERENT POPULATION.—The term ‘dif-
ferent population’ means a group of individuals, with 
respect to whom an entity seeks to serve through an 
application for funding under this chapter, that—
‘‘(A) is separate and distinct from any 
other population that the entity seeks to serve 
through an application for funding under this 
chapter; or 
‘‘(B) while sharing some of the same needs 
as another population that the entity seeks to 
serve through an application for funding under 
this chapter, has distinct needs for specialized 
services.’’.
(h) EDUCATION
AND
COUNSELING
SERVICES.—
Chapter 1 of subpart 2 of part A of title IV is further 
amended—
(1) in section 402B(b) (20 U.S.C. 1070a–
12(b))—
(A) 
by 
redesignating 
paragraphs 
(3) 
through (10) as paragraphs (4) through (11), 
respectively; 
(B) by inserting after paragraph (2) the 
following: 
‘‘(3) education or counseling services designed 
to improve the financial literacy and economic lit-
eracy of students and, as appropriate, their par-
ents;’’; and 
(C) in paragraph (11), as redesignated by 
subparagraph (A), by striking ‘‘paragraphs (1) 
through (9)’’ and inserting ‘‘paragraphs (1) 
through (10)’’. 
(2) in section 402C (20 U.S.C. 1070a–13)—
(A) in subsection (b)—
(i) by redesignating paragraphs (2) 
through (12) as paragraphs (3) through 
(13), respectively; 
(ii) by inserting after paragraph (1) 
the following:
‘‘(2) education or counseling services designed 
to improve the financial literacy and economic lit-
eracy of students and, as appropriate, their par-
ents;’’; and 
(iii) in paragraph (13), as redesig-
nated by clause (i), by striking ‘‘para-
graphs (1) through (11)’’ and inserting 
‘‘paragraphs (1) through (12)’’; and 
(B) in subsection (e), by striking ‘‘sub-
section (b)(10)’’ and inserting ‘‘subsection 
(b)(11)’’; 
(3) in section 402D(b) (20 U.S.C. 1070a–
14(b))—
(A) 
by 
redesignating 
paragraphs 
(2) 
through (10) as paragraphs (3) through (11), 
respectively; 
(B) by inserting after paragraph (1) the 
following: 
‘‘(2) education or counseling services designed 
to improve the financial literacy and economic lit-
eracy of students and, as appropriate, their par-
ents;’’; and 
(C) in paragraph (11), as redesignated by 
subparagraph (A), by striking ‘‘paragraphs (1)
through (9)’’ and inserting ‘‘paragraphs (1) 
through (10)’’; 
(4) in section 402E(b) (20 U.S.C. 1070a–
15(b))—
(A) by redesignating paragraphs (7) and 
(8) as paragraphs (8) and (9), respectively; and 
(B) by inserting after paragraph (6) the 
following: 
‘‘(7) education or counseling services designed 
to improve the financial literacy and economic lit-
eracy of students and, as appropriate, their par-
ents;’’; 
(5) in section 402F(b) (20 U.S.C. 1070a–
16(b)) —
(A) 
by 
redesignating 
paragraphs 
(4) 
through (10) as paragraphs (5) through (11), 
respectively; 
(B) by inserting after paragraph (3) the 
following: 
‘‘(4) education or counseling services designed 
to improve the financial literacy and economic lit-
eracy of students and, as appropriate, their par-
ents;’’; and 
(C) in paragraph (11), as redesignated by 
subparagraph (A), by striking ‘‘paragraphs (1)
through (9)’’ and inserting ‘‘paragraphs (1) 
through (10)’’. 
(i) MAXIMUM
STIPENDS.—Section 402C(e) (20 
U.S.C. 1070a–13(e)) is amended—
(1) by striking ‘‘$60’’ and inserting ‘‘$100’’; 
and 
(2) by striking ‘‘$40’’ and inserting ‘‘$60’’. 
(j) 
STUDENT
SUPPORT
SERVICES.—Section 
402D(d)(6) (20 U.S.C. 1070a–14(d)(6)) is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (A); 
(2) by striking the period at the end of sub-
paragraph (B) and inserting ‘‘; and’’; and 
(3) by inserting after subparagraph (B) the fol-
lowing new subparagraph: 
‘‘(C) working with other entities that serve 
low-income working adults to increase access to 
and successful progress in postsecondary edu-
cation by low-income working adults seeking 
their first postsecondary degree or certificate.’’. 
(k) POSTBACCALAUREATE ACHIEVEMENT MAXIMUM 
STIPENDS.—Section 402E(e)(1) (20 U.S.C. 1070a–
15(e)(1)) is amended by striking ‘‘$2,800’’ and inserting 
‘‘$5,000’’.
(l) EDUCATIONAL OPPORTUNITY CENTERS: APPLICA-
TION APPROVAL.—Section 402F(c) (20 U.S.C. 1070a–
16(c)) is amended—
(1) by striking ‘‘and’’ at the end of paragraph 
(2); 
(2) by striking the period at the end of para-
graph (3) and inserting ‘‘; and’’; and 
(3) by inserting after paragraph (3) the fol-
lowing new paragraph: 
‘‘(4) consider the extent to which the proposed 
project would provide services to low-income working 
adults in the region to be served, in order to in-
crease access to postsecondary education by low-in-
come working adults.’’. 
SEC. 403. GEARUP. 
(a) DURATION OF AWARDS.—Section 404A(b) (20 
U.S.C. 1070a–21(b)) is amended—
(1) in paragraph (2)(B), by striking ‘‘Higher 
Education Amendments of 1998’’ and inserting 
‘‘College Access and Opportunity Act of 2004’’; and 
(2) by adding at the end thereof the following 
new paragraph: 
‘‘(3) DURATION.—An award made by the Sec-
retary under this chapter to an eligible entity de-
scribed in paragraph (1) or (2) of subsection (c) 
shall be for the period of 6 years.’’. 
(b) CONTINUING ELIGIBILITY.—Section 404A (20 
U.S.C. 1070a–21) is amended by adding at the end the 
following new subsection: 
‘‘(d) CONTINUING ELIGIBILITY.—An eligible entity 
shall not cease to be an eligible entity upon the expiration 
of any grant under this chapter (including a continuation 
award).’’. 
(c) CONTINUITY OF SERVICE.—
(1) 
COHORT
APPROACH.—Section 
404B(g)(1)(B) (20 U.S.C. 1070a–22(g)(1)(B)) is 
amended by inserting ‘‘and provide the option of 
continued services through the student’s first year of 
attendance at an eligible institution of higher edu-
cation’’ after ‘‘grade level’’. 
(2) EARLY INTERVENTION.—Section 404D (20 
U.S.C. 1070a–24) is amended—
(A) in subsection (b)(2)(A), by inserting 
‘‘and students in the first year of attendance at 
an eligible institution of higher education’’ after 
‘‘grade 12’’; and 
(B) in subsection (c), by inserting ‘‘and 
may consider students in their first year of at-
tendance at an eligible institution who is eligi-
ble’’ after ‘‘grade 12’’. 
(d) COORDINATION.—Section 404C(a)(2) (20 U.S.C. 
1070a–23(a)(2)) is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (A); 
(2) by redesignating subparagraph (B) as sub-
paragraph (C); and 
(3) by inserting after subparagraph (A) the fol-
lowing new subparagraph: 
‘‘(B) describe activities for coordinating, 
complementing, and enhancing services under 
this chapter provided by other eligible entities 
in the State; and’’. 
(e) EDUCATION AND COUNSELING SERVICES.—Sec-
tion 404D(b)(2)(A)(ii) (20 U.S.C. 1070a–24(b)(2)(A)(ii)) 
is amended by striking ‘‘and academic counseling’’ and in-
serting ‘‘academic counseling, and financial literacy and 
economic literacy education or counseling’’. 
(f) REAUTHORIZATION.—Section 404H (20 U.S.C. 
1070a–28) is amended by striking ‘‘$200,000,000 for fis-
cal year 1999 and such sums as may be necessary for each 
of the 4 succeeding fiscal years’’ and inserting 
‘‘$300,000,000 for fiscal year 2005 and such sums as may 
be necessary for each of the 5 succeeding fiscal years’’.
SEC. 404. FEDERAL SUPPLEMENTAL EDUCATIONAL OPPOR-
TUNITY GRANTS. 
(a) AUTHORIZATION OF APPROPRIATIONS.—Section 
413A(b)(1) (20 U.S.C. 1070b(b)(1)) is amended by strik-
ing ‘‘$675,000,000 for fiscal year 1999 and such sums 
as may be necessary for the 4 succeeding fiscal years’’ and 
inserting ‘‘$770,500,000 for fiscal year 2005 and such 
sums as may be necessary for the 5 succeeding fiscal 
years’’. 
(b) PHASEOUT OF ALLOCATION BASED ON PREVIOUS 
ALLOCATIONS.—
(1) AMENDMENT.—Subsection (a) of section 
413D (20 U.S.C. 1070b–3(a)) is amended to read as 
follows: 
‘‘(a) ALLOCATION BASED
ON PREVIOUS ALLOCA-
TION.—
‘‘(1) BASE GUARANTEE.—From the amount ap-
propriated pursuant to section 413A(b) for each fis-
cal year after fiscal year 2006, the Secretary shall, 
subject to paragraph (2), first allocate to each eligi-
ble institution an amount equal to the following per-
centage of the amount such institution received 
under subsection (a) of this section for fiscal year 
2006 (as such subsection was in effect with respect 
to allocations for such fiscal year):
‘‘(A) 80 percent for fiscal years 2007 and 
2008; 
‘‘(B) 60 percent for fiscal years 2009 and 
2010; 
‘‘(C) 40 percent for fiscal years 2011 and 
2012; 
‘‘(D) 20 percent for fiscal years 2013 and 
2014; and 
‘‘(E) 0 percent for fiscal year 2015 and 
any succeeding fiscal year. 
‘‘(2) RATABLE REDUCTIONS FOR INSUFFICIENT 
APPROPRIATIONS.—
‘‘(A) REDUCTION OF BASE GUARANTEE.—
If the amount appropriated for any fiscal year 
is less than the amount required to be allocated 
to all institutions under this subsection, then 
the amount of the allocation to each such insti-
tution shall be ratably reduced. 
‘‘(B) ADDITIONAL APPROPRIATIONS ALLO-
CATION.—If additional amounts are appro-
priated for any such fiscal year, such reduced 
amounts shall be increased on the same basis as 
they were reduced (until the amount allocated 
equals the amount required to be allocated 
under this subsection).
‘‘(3) ADDITIONAL ALLOCATIONS FOR CERTAIN 
INSTITUTIONS.——
‘‘(A) ALLOCATIONS PERMITTED.—Notwith-
standing any other provision of this section, the 
Secretary may allocate an amount equal to not 
more than 10 percent of the amount by which 
the amount appropriated in any fiscal year to 
carry out this subpart exceeds $700,000,000 
among eligible institutions described in sub-
paragraph (B). 
‘‘(B) ELIGIBLE INSTITUTIONS.—For pur-
poses of subparagraph (A)—
‘‘(i) an eligible institution that is a 4-
year institution may receive an allocation 
under subparagraph (A) if more than 50 
percent of the students who are degree-
seeking Pell Grant recipients attending 
such institution graduate within 4 calendar 
years of the first day of enrollment; and 
‘‘(ii) an eligible institution that is a 2-
year institution may receive an allocation 
under subparagraph (A) if more than 50 
percent of the students who are degree-
seeking Pell Grant recipients attending
such institution graduate within 2 calendar 
years of the first day of enrollment.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply with respect to any 
amounts appropriated under section 413A(b) of the 
Higher Education Act of 1965 (20 U.S.C. 1070b(b)) 
for fiscal year 2007 or any succeeding fiscal year. 
(c) BOOKS AND SUPPLIES.—Section 413D(c)(3)(D) 
(20 U.S.C. 1070–3(c)(3)(D)) is amended by striking 
‘‘$450’’ and inserting ‘‘$600’’. 
SEC. 405. LEAP. 
Section 415A(b)(1) (20 U.S.C. 1070c(b)(1)) is 
amended—
(1) by striking ‘‘1999’’ and inserting ‘‘2005’’; 
and 
(2) by striking ‘‘4 succeeding’’ and inserting ‘‘5 
succeeding’’. 
SEC. 406. HEP/CAMP PROGRAM. 
Section 418A (20 U.S.C. 1070d–2) is amended—
(1) in subsection (b)(1)(B)(i), by inserting ‘‘, or 
whose spouse’’ after ‘‘themselves’’; 
(2) in subsection (b)(3)(B), by inserting ‘‘, in-
cluding preparation for college entrance exams,’’ 
after ‘‘program’’;
(3) in subsection (b)(8), by inserting ‘‘, includ-
ing child care and transportation’’ after ‘‘supportive 
services’’; 
(4) by striking ‘‘and’’ at the end of subsection 
(b)(7), by striking the period at the end of sub-
section (b)(8) and inserting ‘‘; and’’, and by adding 
at the end of subsection (b) the following new para-
graph: 
‘‘(9) follow-up activity and reporting require-
ments, except that not more than 2 percent of the 
funds provided under this section may be used for 
such purposes.’’; 
(5) in subsection (c)(1)(A), by inserting ‘‘, or 
whose spouse’’ after ‘‘themselves’’; 
(6) in subsection (c)(1)(B), by striking clause 
(i) and inserting the following: 
‘‘(i) personal, academic, career, and eco-
nomic education or personal finance counseling 
as an ongoing part of the program;’’; 
(7) in subsection (c)(2)(B), by inserting ‘‘(in-
cluding mentoring and guidance of such students)’’ 
after ‘‘services’’; 
(8) in subsection (c)(2), by striking ‘‘and’’ at 
the end of subparagraph (A), by striking the period 
at the end of subparagraph (B) and inserting ‘‘;
and’’, and by adding at the end of subsection (c)(2) 
the following new subparagraph: 
‘‘(C) for students in any program that 
does not award a bachelor’s degree, encour-
aging the transfer to, and persistence in, such 
a program, and monitoring the rate of such 
transfer, persistence, and completion.’’; and 
(9) in subsection (h)—
(A) 
in 
paragraph 
(1), 
by 
striking 
‘‘$15,000,000 for fiscal year 1999 and such 
sums as may be necessary for each of the 4 
succeeding 
fiscal 
years’’ 
and 
inserting 
‘‘$24,000,000 for fiscal year 2005 and such 
sums as may be necessary for each of the 5 
succeeding fiscal years’’; and 
(B) 
in 
paragraph 
(2), 
by 
striking 
‘‘$5,000,000 for fiscal year 1999 and such 
sums as may be necessary for each of the 4 
succeeding 
fiscal 
years’’ 
and 
inserting 
‘‘$16,000,000 for fiscal year 2005 and such 
sums as may be necessary for each of the 5 
succeeding fiscal years’’. 
SEC. 407. BYRD SCHOLARSHIP. 
Section 419K (20 U.S.C. 1070d–41) is amended—
(1) by striking ‘‘1999’’ and inserting ‘‘2005’’; 
and 
(2) by striking ‘‘4 succeeding’’ and inserting ‘‘5 
succeeding’’. 
SEC. 408. CHILD CARE ACCESS. 
Section 419N(g) (20 U.S.C. 1070e(g)) is amended— 
(1) by striking ‘‘1999’’ and inserting ‘‘2005’’; 
and 
(2) by striking ‘‘4 succeeding’’ and inserting ‘‘5 
succeeding’’. 
SEC. 409. LEARNING ANYTIME ANYWHERE PARTNERSHIPS. 
(a) REPEAL.—Subpart 8 of part A of title IV (20 
U.S.C. 1070f—1070f–6) is repealed. 
(b) CONFORMING AMENDMENT.—Section 400(b) (20 
U.S.C. 1070(b)) is amended by striking ‘‘through 8’’ and 
inserting ‘‘through 7’’. 
SEC. 410. TECHNICAL AMENDMENTS. 
Part A of title IV is further amended as follows: 
(1) Section 419C(b)(1) (20 U.S.C. 1070d– 
33(b)(1)) is amended by inserting ‘‘and’’ after the 
semicolon at the end thereof. 
(2) Section 419D(d) (20 U.S.C. 1070d–34(d)) 
is amended by striking ‘‘Public Law 95–1134’’ and 
inserting ‘‘Public Law 95–134’’.
PART B—FEDERAL FAMILY EDUCATION LOAN 
PROGRAM 
SEC. 421. REAUTHORIZATION OF FEDERAL FAMILY EDU-
CATION LOAN PROGRAM. 
(a) AUTHORIZATION OF APPROPRIATIONS.—Section 
421(b)(5) (20 U.S.C. 1071(b)(5)) is amended by striking 
‘‘administrative cost allowance’’ and inserting ‘‘loan proc-
essing and issuance fee’’. 
(b) EXTENSION OF AUTHORITY.—
(1) FEDERAL INSURANCE LIMITATIONS.—Sec-
tion 424(a) (20 U.S.C. 1074(a)) is amended—
(A) by striking ‘‘2004’’ and inserting 
‘‘2011’’; and 
(B) by striking ‘‘2008’’ and inserting 
‘‘2015’’. 
(2) GUARANTEED
LOANS.—Section 428(a)(5) 
(20 U.S.C. 1078(a)(5)) is amended—
(A) by striking ‘‘2004’’ and inserting 
‘‘2011’’; and 
(B) by striking ‘‘2008’’ and inserting 
‘‘2015’’. 
(3) CONSOLIDATION LOANS.—Section 428C(e) 
(20 U.S.C. 1078–3(e)) is amended by striking 
‘‘2004’’ and inserting ‘‘2011’’.
SEC. 422. LOAN LIMITS. 
(a) 
FEDERAL
INSURANCE
LIMITS.—Section 
425(a)(1)(A) (20 U.S.C. 1075(a)(1)(A)) is amended—
(1) in clause (i)(I), by striking ‘‘$2,625’’ and 
inserting ‘‘$3,500’’; and 
(2) in clause (ii)(I), by striking ‘‘$3,500’’ and 
inserting ‘‘$4,500’’. 
(b) GUARANTEE LIMITS.—Section 428(b)(1)(A) (20 
U.S.C. 1078(b)(1)(A)) is amended—
(1) in clause (i)(I), by striking ‘‘$2,625’’ and 
inserting ‘‘$3,500’’; and 
(2) in clause (ii)(I), by striking ‘‘$3,500’’ and 
inserting ‘‘$4,500’’. 
(c) COUNTING OF CONSOLIDATION LOANS AGAINST 
LIMITS.—Section 428C(a)(3)(B) (20 U.S.C. 1078–
3(a)(3)(B)) is amended by adding at the end the following 
new clause: 
‘‘(ii) Loans made under this section shall, to 
the extent used to discharge loans made under this 
title, be counted against the applicable limitations on 
aggregate 
indebtedness 
contained 
in 
sections 
425(a)(2), 
428(b)(1)(B), 
428H(d), 
455, 
and 
464(a)(2)(B).’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to any loan made, in-
sured, or guaranteed under part B or part D of title IV
of the Higher Education Act of 1965 for which the first 
disbursement of principal is made on or after July 1, 
2006. 
SEC. 423. INTEREST RATES AND SPECIAL ALLOWANCES. 
(a) FFEL INTEREST RATE.—Section 427A (20 
U.S.C. 1077a(k)) is amended—
(1) in subsection (k)—
(A) by striking ‘‘, AND BEFORE JULY 1, 
2006’’ in the heading of such subsection; and 
(B) by striking ‘‘, and before July 1, 
2006,’’ each place it appears other than para-
graph (4); 
(2) by striking subsection (l); and 
(3) by redesignating subsections (m) and (n) as 
subsections (l) and (m), respectively. 
(b) DIRECT
LOAN
INTEREST
RATES.—Section 
455(b) (20 U.S.C. 1087e(b)) is amended—
(1) in paragraph (6)—
(A) by striking ‘‘, AND BEFORE JULY 1, 
2006’’ in the heading of such paragraph; and 
(B) by striking ‘‘, and before July 1, 
2006,’’ each place it appears other than sub-
paragraph (D); 
(2) by striking paragraph (7); and
(3) by redesignating paragraphs (8) and (9) as 
paragraphs (7) and (8), respectively. 
(c) CONSOLIDATION LOANS.—
(1) FFEL CONSOLIDATION
LOANS.—Section 
427A(k) (20 U.S.C. 1077a(k)) is further amended—
(A) by redesignating paragraph (5) as 
paragraph (6); and 
(B) by inserting after paragraph (4) the 
following new paragraph: 
‘‘(5) VARIABLE
RATE
FOR
CONSOLIDATION 
LOANS.—With respect to any consolidation loan 
under section 428C for which the application is re-
ceived by an eligible lender on or after July 1, 2006, 
the applicable rate of interest shall, during any 12-
month period beginning on July 1 and ending on 
June 30, be determined on the preceding June 1 
and be equal to—
‘‘(A) the bond equivalent rate of 91-day 
Treasury bills auctioned at the final auction 
held prior to such June 1; plus 
‘‘(B) 2.3 percent, 
except that such rate shall not exceed 8.25 percent, 
and the rate determined under paragraph (3) shall 
apply in lieu of the rate determined under this para-
graph in the case of any such consolidation loan that
is used to repay loans each of which was made under 
section 428B or was a Federal Direct PLUS Loan 
(or both).’’. 
(2) DIRECT
CONSOLIDATION
LOANS.—Section 
455(b)(6) (20 U.S.C. 1087e(b)(6)) is further 
amended—
(A) by redesignating subparagraph (E) as 
subparagraph (F); and 
(B) by inserting after subparagraph (D) 
the following new subparagraph: 
‘‘(E) VARIABLE RATE FOR CONSOLIDATION 
LOANS.—With respect to any Federal Direct 
Consolidation loan for which the application is 
received on or after July 1, 2006, the applicable 
rate of interest shall, during any 12-month pe-
riod beginning on July 1 and ending on June 
30, be determined 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, 
except that such rate shall not exceed 8.25 per-
cent, and the rate determined under subpara-
graph (C) shall apply in lieu of the rate deter-
mined under this subparagraph in the case of 
any such consolidation loan that is used to 
repay loans each of which was made under sec-
tion 428B or was a Federal Direct PLUS Loan 
(or both).’’. 
(d) CONSOLIDATION LOAN CONFORMING AMEND-
MENT.—Section 428C(c)(1)(A)(ii) (20 U.S.C. 1078–
3(c)(1)(A)(ii)) 
is 
amended 
by 
striking 
‘‘section 
427A(l)(3)’’ and inserting ‘‘section 427A(k)(5)’’. 
(e) CONFORMING AMENDMENTS FOR SPECIAL AL-
LOWANCES.—
(1) AMENDMENT.—Subparagraph (I) of section 
438(b)(2) (20 U.S.C. 1087–1(b)(2)) is amended—
(A) by striking clause (ii) and inserting the 
following: 
‘‘(ii) IN
SCHOOL
AND
GRACE
PE-
RIOD.—In the case of any loan for which 
the first disbursement is made on or after 
January 1, 2000, and for which the appli-
cable interest rate is described in section 
427A(k)(2), clause (i)(III) of this subpara-
graph shall be applied by substituting 
‘1.74 percent’ for ‘2.34 percent’.’’; 
(B) in clause (iii)—
(i) by striking ‘‘or (l)(2)’’; and
(ii) by striking ‘‘, subject to clause (v) 
of this subparagraph’’; 
(C) in clause (iv)—
(i) by striking ‘‘or (l)(3)’’ and insert-
ing ‘‘or (k)(5)’’; and 
(ii) by striking ‘‘, subject to clause 
(vi) of this subparagraph’’; and 
(D) by striking clauses (v), (vi), and (vii) 
and inserting the following: 
‘‘(v) RECAPTURE OF EXCESS INTER-
EST.—
‘‘(I) EXCESS
CREDITED.—With 
respect to a loan on which the applica-
ble interest rate is determined under 
section 427A(k) and for which the 
first disbursement of principal is 
made on or after July 1, 2005, if the 
applicable interest rate for any 3-
month period exceeds the special al-
lowance rate applicable to such loan 
under this subparagraph for such pe-
riod, then an adjustment shall be 
made by calculating the excess inter-
est in the amount computed under 
subclause (II) of this clause, and by
crediting the excess interest to the 
Government not less often than annu-
ally. 
‘‘(II) 
CALCULATION
OF
EX-
CESS.—The amount of any adjust-
ment of interest on a loan to be made 
under this subsection for any quarter 
shall be equal to—
‘‘(aa) the applicable interest 
rate minus the special allowance 
rate determined under this sub-
paragraph; multiplied by 
‘‘(bb) the average daily prin-
cipal balance of the loan (not in-
cluding unearned interest added 
to principal) during such cal-
endar quarter; divided by 
‘‘(cc) four.’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall not apply with respect to 
any special allowance payment made under section 
438 of the Higher Education Act of 1965 (20 U.S.C 
1087–1) before July 1, 2005.
(f) SPECIAL ALLOWANCE FOR LOANS FROM THE 
PROCEEDS
OF
TAX
EXEMPT
ISSUES.—Section 
438(b)(2)(B) (20 U.S.C. 1087–1(b)(2)(B)) is amended—
(1) in clause (i), by striking ‘‘this division’’ and 
inserting ‘‘this clause’’; 
(2) in clause (ii), by striking ‘‘division (i) of this 
subparagraph’’ and inserting ‘‘clause (i) of this sub-
paragraph’’; 
(3) in clause (iv), by inserting ‘‘or refunded 
after May 5, 2004,’’ after ‘‘October 1, 1993,’’; and 
(4) by adding at the end the following new 
clause: 
‘‘(v) Notwithstanding clauses (i) and (ii), the 
quarterly rate of the special allowance shall be the 
rate determined under subparagraph (A), (E), (F), 
(G), (H), or (I) of this paragraph, or paragraph (4), 
as the case may be, for a holder of loans that—
‘‘(I) were made or purchased with funds—
‘‘(aa) obtained from the issuance of 
obligations the income from which is ex-
cluded from gross income under the Inter-
nal Revenue Code of 1986 and which obli-
gations were originally issued before Octo-
ber 1, 1993; or
‘‘(bb) obtained from collections or de-
fault reimbursements on, or interests or 
other income pertaining to, eligible loans 
made or purchased with funds described in 
division (aa), or from income on the invest-
ment of such funds; and 
‘‘(II) were—
‘‘(aa) financed by such an obligation 
that has matured, or been retired or 
defeased; 
‘‘(bb) refinanced after May 5, 2004, 
with funds obtained from a source other 
than funds described in subclause (I) of 
this clause; or 
‘‘(cc) sold or transferred to any other 
holder.’’. 
SEC. 424. ADDITIONAL LOAN TERMS AND CONDITIONS. 
(a) DISBURSEMENT.—Section 428(b)(1)(N) (20 
U.S.C. 1078(b)(1)(N)(ii)) is amended—
(1) by striking ‘‘or’’ at the end of clause (i); 
and 
(2) by striking clause (ii) and inserting the fol-
lowing: 
‘‘(ii) in the case of a student who is 
studying outside the United States in a
program of study abroad that is approved 
for credit by the home institution at which 
such student is enrolled, are, at the re-
quest of the student, disbursed directly to 
the student by the means described in 
clause (i), unless such student requests 
that the check be endorsed, or the funds 
transfer authorized, pursuant to an au-
thorized power-of-attorney; or 
‘‘(iii) in the case of a student who is 
studying outside the United States in a 
program of study at an eligible foreign in-
stitution, are, at the request of the foreign 
institution, disbursed directly to the stu-
dent by the means described in clause 
(i).’’. 
(b) REPAYMENT PLANS.—
(1) FFEL LOANS.—Section 428(b)(9)(A) (20 
U.S.C. 1078(b)(9)(A)) is amended—
(A) by inserting before the semicolon at 
the end of clause (ii) the following: ‘‘, and the 
Secretary may not restrict the proportions or 
ratios by which such payments may be grad-
uated with the informed agreement of the bor-
rower’’;
(B) by striking ‘‘and’’ at the end of clause 
(iii); 
(C) by redesignating clause (iv) as clause 
(v); and 
(D) by inserting after clause (iii) the fol-
lowing new clause: 
‘‘(iv) a delayed repayment plan under 
which the borrower makes scheduled pay-
ments for not more than 2 years that are 
annually not less than the amount of inter-
est due or $300, whichever is greater, and 
then makes payments in accordance with 
clause (i), (ii), or (iii); and’’. 
(2) DIRECT
LOANS.—Section 455(d)(1) (20 
U.S.C. 1087e(d)(1)) is amended—
(A) by redesignating subparagraph (D) as 
subparagraph (E); and 
(B) by striking subparagraphs (A), (B), 
and (C) and inserting the following: 
‘‘(A) a standard repayment plan, con-
sistent with subsection (a)(1) of this section 
and with section 428(b)(9)(A)(i); 
‘‘(B) a graduated repayment plan, con-
sistent with section 428(b)(9)(A)(ii);
‘‘(C) an extended repayment plan, con-
sistent with section 428(b)(9)(A)(iv), except 
that the borrower shall annually repay a min-
imum amount determined by the Secretary in 
accordance with section 428(b)(1)(L); 
‘‘(D) a delayed repayment plan under 
which the borrower makes scheduled payments 
for not more than 2 years that are annually not 
less than the amount of interest due or $300, 
whichever is greater, and then makes payments 
in accordance with subparagraph (A), (B), or 
(C); and’’. 
(c) ORIGINATION FEES.—
(1) AMENDMENTS.—Paragraph (2) of section 
438(c) (20 U.S.C. 1087–1(c)) is amended—
(A) by striking the designating and head-
ing of such paragraph and inserting the fol-
lowing: 
‘‘(2) AMOUNT OF ORIGINATION FEES.—
‘‘(A) IN GENERAL.—’’; and 
(B) by adding at the end the following new 
subparagraphs: 
‘‘(B) SUBSEQUENT
REDUCTIONS.—Sub-
paragraph (A) shall be applied to loans made
under this part other than loans made under 
sections 428C and 439(o)—
‘‘(i) by substituting ‘2.0 percent’ for 
‘3.0 percent’ with respect to loans for 
which the first disbursement of principal is 
made on or after July 1, 2006, and before 
July 1, 2008; 
‘‘(ii) by substituting ‘1.5 percent’ for 
‘3.0 percent’ with respect to loans for 
which the first disbursement of principal is 
made on or after July 1, 2008, and before 
July 1, 2010; and 
‘‘(iii) by substituting ‘1.0 percent’ for 
‘3.0 percent’ with respect to loans for 
which the first disbursement of principal is 
made on or after July 1, 2010.’’. 
(2) CONFORMING
AMENDMENT
TO
DIRECT 
LOAN PROGRAM.—Subsection (c) of section 455 (20 
U.S.C. 1087e(c)) is amended to read as follows: 
‘‘(c) LOAN FEE.—
‘‘(1) IN GENERAL.—The Secretary shall charge 
the borrower of a loan made under this part an 
origination fee of 4.0 percent of the principal 
amount of loan.
‘‘(2) SUBSEQUENT
REDUCTIONS.—Paragraph 
(1) shall be applied to loans made under this part 
other than consolidation loans and PLUS loans—
‘‘(A) by substituting ‘2.0 percent’ for ‘4.0 
percent’ with respect to loans for which the first 
disbursement of principal is made on or after 
July 1, 2006, and before July 1, 2008; 
‘‘(B) by substituting ‘1.5 percent’ for ‘4.0 
percent’ with respect to loans for which the first 
disbursement of principal is made on or after 
July 1, 2008, and before July 1, 2010; and 
‘‘(C) by substituting ‘1.0 percent’ for ‘4.0 
percent’ with respect to loans for which the first 
disbursement of principal is made on or after 
July 1, 2010.’’. 
SEC. 425. CONSOLIDATION LOAN CHANGES. 
(a) AMENDMENTS.—Section 428C (20 U.S.C. 1078–
3) is amended—
(1) in subsection (a)(3), by striking subpara-
graph (C); and 
(2) in subsection (b)(1)—
(A) by striking everything after ‘‘under 
this section’’ the first place it appears in sub-
paragraph (A) and inserting the following: ‘‘and 
that, if all the borrower’s loans under this part
are held by a single holder, the borrower has 
notified such holder that the borrower is seek-
ing to obtain a consolidation loan under this 
section;’’; 
(B) by striking ‘‘(i) which’’ and all that 
follows through ‘‘and (ii)’’ in subparagraph (C); 
(C) by striking ‘‘and’’ at the end of sub-
paragraph (E); 
(D) by redesignating subparagraph (F) as 
subparagraph (G); and 
(E) by inserting after subparagraph (E) 
the following new subparagraph: 
‘‘(F) that the lender of the consolidation 
loan shall, upon application for such loan, pro-
vide the borrower with a clear and conspicuous 
notice of at least the following information: 
‘‘(i) the effects of consolidation on 
total interest to be paid, fees to be paid, 
and length of repayment; 
‘‘(ii) the effects of consolidation on a 
borrower’s underlying loan benefits, includ-
ing loan forgiveness, cancellation, and 
deferment; 
‘‘(iii) the ability for the borrower to 
prepay the loan, pay on a shorter schedule,
and to change repayment plans, and that 
borrower benefit programs may vary 
among different loan holders; 
‘‘(iv) the tax benefits for which bor-
rowers may be eligible; 
‘‘(v) the consequences of default; and 
‘‘(vi) that by making the application 
the applicant is not obligated to agree to 
take the consolidation loan; and’’. 
(b) EFFECTIVE DATE FOR SINGLE HOLDER AMEND-
MENT.—The amendment made by subsection (a)(2)(A) 
shall apply with respect to any loan made under section 
428C of the Higher Education Act of 1965 (20 U.S.C. 
1078–3) for which the application is received by an eligible 
lender on or after July 1, 2006. 
(c) CONFORMING AMENDMENTS TO DIRECT LOAN 
PROGRAM.—
(1) PARALLEL TERMS, CONDITIONS, BENEFITS, 
AND
AMOUNTS.—Section 455(a)(1) (20 U.S.C. 
1087e(a)(1)) is amended by inserting ‘‘428C,’’ after 
‘‘428B,’’. 
(2) DISCLOSURE.—Section 455(g) (20 U.S.C. 
1087e(g)) is amended by adding at the end the fol-
lowing new sentences: ‘‘The Secretary, upon applica-
tion for such a loan, shall comply with the require-
ments applicable to a lender under 428C(b)(1)(F).’’
SEC. 426. UNSUBSIDIZED STAFFORD LOANS. 
(a) 
AMENDMENT.—Section 
428H(d)(2)(C) 
(20 
U.S.C. 
1078–8(d)(2)(C)) 
is 
amended 
by 
striking 
‘‘$10,000’’ and inserting ‘‘$12,000’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to loans for which the first dis-
bursement of principal is made on or after July 1, 2006. 
SEC. 427. TEACHER RECRUITMENT AND RETENTION. 
(a) INCREASED QUALIFIED LOAN AMOUNTS.—
(1) FFEL LOANS.—Section 428J(c) (20 U.S.C. 
1078–10(c)) is amended by adding at the end the 
following new paragraph: 
‘‘(3) INCREASED AMOUNTS FOR TEACHERS IN 
MATHEMATICS, SCIENCE, OR
SPECIAL
EDUCATION, 
AND READING SPECIALISTS.—
‘‘(A) 
SERVICE
QUALIFYING
FOR
IN-
CREASED
AMOUNTS.—Notwithstanding 
the 
amount specified in paragraph (1), the aggre-
gate amount that the Secretary shall repay 
under this section shall not be more than 
$17,500 in the case of—
‘‘(i) a secondary school teacher—
‘‘(I) who meets the requirements 
of subsection (b), subject to subpara-
graph (D) of this paragraph; and 
‘‘(II) whose qualifying employ-
ment for purposes of such subsection 
has been teaching mathematics or 
science on a full-time basis; 
‘‘(ii) an elementary or secondary 
school teacher—
‘‘(I) who meets the requirements 
of subsection (b), subject to subpara-
graph (D) of this paragraph; 
‘‘(II) whose qualifying employ-
ment for purposes of such subsection 
has been as a special education teach-
er whose primary responsibility is to 
provide special education to children 
with disabilities (as those terms are 
defined in section 602 of the Individ-
uals with Disabilities Act); and 
‘‘(III) who, as certified by the 
chief administrative officer of the pub-
lic or nonprofit private elementary or 
secondary school in which the bor-
rower is employed, is teaching chil-
dren with disabilities that correspond 
with the borrower’s special education 
training and has demonstrated knowl-
edge and teaching skills in the content 
areas of the elementary or secondary 
school curriculum that the borrower is 
teaching; and 
‘‘(iii) an elementary or secondary 
school teacher who primarily teaches read-
ing and—
‘‘(I) who meets the requirements 
of subsection (b), subject to subpara-
graph (D) of this paragraph; 
‘‘(II) who has obtained a sepa-
rate reading instruction credential 
from the State in which the teacher is 
employed; and 
‘‘(III) who is certified by the 
chief administrative officer of the pub-
lic or nonprofit private elementary or 
secondary school in which the bor-
rower is employed to teach reading—
‘‘(aa) as being proficient in 
teaching the essential compo-
nents of reading instruction as
defined in section 1208 of the El-
ementary and Secondary Edu-
cation Act of 1965; and 
‘‘(bb) as having such creden-
tial. 
‘‘(B) ACCELERATED PAYMENT.—Notwith-
standing the requirements of subsection (b)(1) 
and paragraph (1) of this subsection that 5 
consecutive complete years of service have been 
completed prior to the receipt of loan forgive-
ness, in the case of service described in sub-
paragraph (A) of this paragraph, the Secretary 
shall repay a portion of a borrower’s loan obli-
gation outstanding at the commencement of the 
qualifying service under this subsection, not to 
exceed a total of $17,500, in the following in-
crements: 
‘‘(i) up to $1,750, or 10 percent of 
such outstanding loan obligation, which-
ever is less, at the completion of the second 
year of such service; 
‘‘(ii) up to $2,625, or 15 percent of 
such outstanding loan obligation, which-
ever is less, at the completion of the third 
year of such service;
‘‘(iii) up to $4,375, or 25 percent of 
such outstanding loan obligation, which-
ever is less, at the completion of the fourth 
year of such service; and 
‘‘(iv) up to $8,750, or 50 percent of 
such outstanding loan obligation, which-
ever is less, at the completion of the fifth 
year of such service. 
‘‘(C) PROMISE TO COMPLETE SERVICE RE-
QUIRED
FOR
ACCELERATED
PAYMENT.—Any 
borrower who receives accelerated payment 
under this paragraph shall enter into an agree-
ment to continue in the qualifying service for 
not less than 5 consecutive complete school 
years, or, upon a failure to complete such 5 
years, to repay the United States, in accordance 
with regulations prescribed by the Secretary, 
the amount of the loans repaid by the Secretary 
under this paragraph, together with interest 
thereon and, to the extent required in such reg-
ulations, the reasonable costs of collection. Such 
regulations may provide for waiver by the Sec-
retary of such repayment obligations upon proof 
of economic hardship as specified in such regu-
lations.
‘‘(D) HIGHER POVERTY ENROLLMENT RE-
QUIRED.—In order to qualify for an increased 
repayment amount under this paragraph, sec-
tion 465(a)(2)(A) shall, for purposes of sub-
section (b)(1)(A) of this section, be applied by 
substituting ‘40 percent of the total enrollment’ 
for ‘30 percent of the total enrollment’.’’. 
(2) DIRECT LOANS.—Section 460(c) (20 U.S.C. 
1087j(c)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(3) INCREASED AMOUNTS FOR TEACHERS IN 
MATHEMATICS, SCIENCE, OR
SPECIAL
EDUCATION, 
AND READING SPECIALISTS.—
‘‘(A) 
SERVICE
QUALIFYING
FOR
IN-
CREASED
AMOUNTS.—Notwithstanding 
the 
amount specified in paragraph (1), the aggre-
gate amount that the Secretary shall repay 
under this section shall not be more than 
$17,500 in the case of—
‘‘(i) a secondary school teacher—
‘‘(I) who meets the requirements 
of subsection (b)(1), subject to sub-
paragraph (D) of this paragraph; and 
‘‘(II) whose qualifying employ-
ment for purposes of such subsection
has been teaching mathematics or 
science on a full-time basis; 
‘‘(ii) an elementary or secondary 
school teacher—
‘‘(I) who meets the requirements 
of subsection (b)(1), subject to sub-
paragraph (D) of this paragraph; 
‘‘(II) whose qualifying employ-
ment for purposes of such subsection 
has been as a special education teach-
er whose primary responsibility is to 
provide special education to children 
with disabilities (as those terms are 
defined in section 602 of the Individ-
uals with Disabilities Act); and 
‘‘(III) who, as certified by the 
chief administrative officer of the pub-
lic or nonprofit private elementary or 
secondary school in which the bor-
rower is employed, is teaching chil-
dren with disabilities that correspond 
with the borrower’s special education 
training and has demonstrated knowl-
edge and teaching skills in the content 
areas of the elementary or secondary
school curriculum that the borrower is 
teaching; and 
‘‘(iii) an elementary or secondary 
school teacher who primarily teaches read-
ing and—
‘‘(I) who meets the requirements 
of subsection (b), subject to subpara-
graph (D) of this paragraph; 
‘‘(II) who has obtained a sepa-
rate reading instruction credential 
from the State in which the teacher is 
employed; and 
‘‘(III) who is certified by the 
chief administrative officer of the pub-
lic or nonprofit private elementary or 
secondary school in which the bor-
rower is employed to teach reading—
‘‘(aa) as being proficient in 
teaching the essential compo-
nents of reading instruction as 
defined in section 1208 of the El-
ementary and Secondary Edu-
cation Act of 1965; and 
‘‘(bb) as having such creden-
tial.
‘‘(B) ACCELERATED PAYMENT.—Notwith-
standing 
the 
requirements 
of 
subsection 
(b)(1)(A) and paragraph (1) of this subsection 
that 5 consecutive complete years of service 
have been completed prior to the receipt of loan 
forgiveness, in the case of service described in 
subparagraph (A) of this paragraph, the Sec-
retary shall repay a portion of a borrower’s loan 
obligation outstanding at the commencement of 
the qualifying service under this subsection, not 
to exceed a total of $17,500, in the following in-
crements: 
‘‘(i) up to $1,750, or 10 percent of 
such outstanding loan obligation, which-
ever is less, at the completion of the second 
year of such service; 
‘‘(ii) up to $2,625, or 15 percent of 
such outstanding loan obligation, which-
ever is less, at the completion of the third 
year of such service; 
‘‘(iii) up to $4,375, or 25 percent of 
such outstanding loan obligation, which-
ever is less, at the completion of the fourth 
year of such service; and
100
‘‘(iv) up to $8,750, or 50 percent of 
such outstanding loan obligation, which-
ever is less, at the completion of the fifth 
year of such service. 
‘‘(C) PROMISE TO COMPLETE SERVICE RE-
QUIRED
FOR
ACCELERATED
PAYMENT.—Any 
borrower who receives accelerated payment 
under this paragraph shall enter into an agree-
ment to continue in the qualifying service for 
not less than 5 consecutive complete school 
years, or, upon a failure to complete such 5 
years, to repay the United States, in accordance 
with regulations prescribed by the Secretary, 
the amount of the loans repaid by the Secretary 
under this paragraph, together with interest 
thereon and, to the extent required in such reg-
ulations, the reasonable costs of collection. Such 
regulations may provide for waiver by the Sec-
retary of such repayment obligations upon proof 
of economic hardship as specified in such regu-
lations. 
‘‘(D) HIGHER POVERTY ENROLLMENT RE-
QUIRED.—In order to qualify for an increased 
repayment amount under this paragraph, sec-
tion 465(a)(2)(A) shall, for purposes of sub-
101
section (b)(1)(A)(i) of this section, be applied 
by substituting ‘40 percent of the total enroll-
ment’ for ‘30 percent of the total enrollment’.’’. 
(b) IMPLEMENTING HIGHLY QUALIFIED TEACHER 
REQUIREMENTS.—
(1) AMENDMENTS.—
(A) FFEL LOANS.—Section 428J(b)(1) 
(20 U.S.C. 1078–10(b)(1)) is amended—
(i) by inserting ‘‘and’’ after the semi-
colon at the end of subparagraph (A); and 
(ii) by striking subparagraphs (B) and 
(C) and inserting the following: 
‘‘(B) if employed as an elementary or sec-
ondary school teacher, is highly qualified as de-
fined in section 9101(23) of the Elementary 
Secondary Education Act of 1965; and’’. 
(B) DIRECT LOANS.—Section 460(b)(1)(A) 
(20 U.S.C. 1087j(b)(1)(A)) is amended—
(i) by inserting ‘‘and’’ after the semi-
colon at the end of clause (i); and 
(ii) by striking clauses (ii) and (iii) 
and inserting the following: 
‘‘(ii) if employed as an elementary or 
secondary school teacher, is highly quali-
fied as defined in section 9101(23) of the
102
Elementary Secondary Education Act of 
1965; and’’. 
(2) TRANSITION RULE.—
(A) RULE.—The amendments made by 
paragraph (1) of this subsection to sections 
428J(b)(1) and 460(b)(1)(A) of the Higher 
Education Act of 1965 shall not be applied to 
disqualify any individual who, before the date of 
enactment of this Act, commenced service that 
met and continues to meet the requirements of 
such sections as in effect before such date of 
enactment. 
(B) RULE NOT APPLICABLE TO INCREASED 
QUALIFIED
LOAN
AMOUNTS.—Subparagraph 
(A) of this paragraph shall not apply for pur-
poses of obtaining increased qualified loan 
amounts 
under 
sections 
428J(b)(3) 
and 
460(b)(3) of the Higher Education Act of 1965 
as added by subsection (a) of this section. 
(c) INFORMATION ON BENEFITS TO RURAL SCHOOL 
DISTRICTS.—The Secretary shall—
(1) notify local educational agencies eligible to 
participate in the Small Rural Achievement Program 
authorized under subpart 1 of part B of title VI of 
the Elementary and Secondary Education Act of
103
1965 of the benefits available under the amendments 
made by this section; and 
(2) encourage such agencies to notify their 
teachers of such benefits. 
SEC. 428. ADDITIONAL ADMINISTRATIVE PROVISIONS. 
(a) TREATMENT OF EXEMPT CLAIMS.—
(1) 
INSURANCE
COVERAGE.—Section 
428(b)(1)(G) (20 U.S.C. 1078(b)(1)(G)) is amended 
by inserting before the semicolon at the end the fol-
lowing: ‘‘and 100 percent of the unpaid principal 
amount of exempt claims as defined in subsection 
(c)(1)(G)’’. 
(2) 
TREATMENT.—Section 
428(c)(1) 
(20 
U.S.C. 1078(c)(1)) is amended—
(A) by redesignating subparagraph (G) as 
subparagraph (H), and moving such subpara-
graph 2 em spaces to the left; and 
(B) by inserting after subparagraph (F) 
the following new subparagraph: 
‘‘(G)(i) Notwithstanding any other provisions of 
this section, in the case of exempt claims, the Sec-
retary shall apply the provisions of—
‘‘(I) the fourth sentence of subparagraph 
(A) by substituting ‘100 percent’ for ‘95 per-
cent’;
104
‘‘(II) subparagraph (B)(i) by substituting 
‘100 percent’ for ‘85 percent’; and 
‘‘(III) subparagraph (B)(ii) by substituting 
‘100 percent’ for ‘75 percent’. 
‘‘(ii) For purposes of clause (i) of this subpara-
graph, the term ‘exempt claims’ means claims with 
respect to loans for which it is determined that the 
borrower (or the student on whose behalf a parent 
has borrowed), without the lender’s or the institu-
tion’s knowledge at the time the loan was made, pro-
vided false or erroneous information or took actions 
that caused the borrower or the student to be ineli-
gible for all or a portion of the loan or for interest 
benefits thereon.’’. 
(b) DOCUMENTATION
OF FORBEARANCE AGREE-
MENTS.—Section 428(c) (20 U.S.C. 1078(c)) is further 
amended—
(1) in paragraph (3)(A)(i), by striking ‘‘in writ-
ing’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(10) 
DOCUMENTATION
OF
FORBEARANCE 
AGREEMENTS.—For the purposes of paragraph (3), 
the terms of forbearance agreed to by the parties 
shall be documented by confirming the agreement of
105
the borrower by notice to the borrower from the 
lender, and by recording the terms in the borrower’s 
file.’’. 
(c) VOLUNTARY FLEXIBLE AGREEMENTS.—Section 
428A (20 U.S.C. 1078–1) is amended—
(1) in subsection (a)(1)(B), by striking ‘‘unless 
the Secretary’’ and all that follows through ‘‘des-
ignated guarantor’’; 
(2) by striking paragraph (2) of subsection (a); 
(3) in paragraph (4)(B) of such subsection, by 
striking ‘‘and any waivers provided to other guar-
anty agencies under paragraph (2)’’; 
(4) by redesignating paragraphs (3) and (4) of 
subsection (a) as paragraphs (2) and (3), respec-
tively; and 
(5) by striking paragraph (3) of subsection (c) 
and inserting the following: 
‘‘(3) NOTICE TO INTERESTED PARTIES.—Once 
the Secretary reaches a tentative agreement in prin-
ciple under this section, the Secretary shall publish 
in the Federal Register a notice that invites inter-
ested parties to comment on the proposed agree-
ment. The notice shall state how to obtain a copy of 
the tentative agreement in principle and shall give 
interested parties no less than 30 days to provide
106
comments. The Secretary may consider such com-
ments prior to providing the notices pursuant to 
paragraph (2).’’. 
(d) 
DEFAULT
REDUCTION
PROGRAM.—Section 
428F(a)(1) (20 U.S.C. 1078–6(a)(1)) is amended—
(1) in subparagraph (A), by striking ‘‘consecu-
tive payments for 12 months’’ and inserting ‘‘9 pay-
ments made within 20 days of the due date during 
10 consecutive months’’; and 
(2) by redesignating subparagraph (C) as sub-
paragraph (D); and 
(3) by inserting after subparagraph (B) the fol-
lowing new subparagraph: 
‘‘(C)(i) A guaranty agency may charge and 
retain collection costs in an amount not to ex-
ceed 18.5 percent of the outstanding principal 
and interest at the time of sale of a loan reha-
bilitated under subparagraph (A). 
‘‘(ii) Notwithstanding clause (i), on and 
after July 1, 2006, a guaranty agency that re-
habilitates a defaulted loan by making a con-
solidation loan to a borrower under section 
428C(a)(3)(A)(ii)(III) may not charge and re-
tain collection costs in an amount in excess of
107
10 percent of the outstanding principal and in-
terest of the defaulted loans being consolidated. 
‘‘(iii) For any year beginning on or after 
July 1, 2009, the total principal and interest of 
loans that a guaranty agency rehabilitates by 
making consolidation loans to borrowers under 
such section shall not exceed 45 percent of the 
total loans rehabilitated under subparagraph 
(A).’’. 
(e) FINANCIAL AND ECONOMIC LITERACY.—
(1) DEFAULT REDUCTION PROGRAM.—Section 
428F is further amended by adding at the end the 
following: 
‘‘(c) FINANCIAL AND ECONOMIC LITERACY.—Where 
appropriate, each program described under subsection (b) 
shall include making available financial and economic edu-
cation materials for the borrower.’’. 
(2) PROGRAM ASSISTANCE FOR BORROWERS.—
Section 432(k)(1) (20 U.S.C. 1082(k)(1)) is amend-
ed by striking ‘‘and offering’’ and all that follows 
through the period and inserting ‘‘, offering loan re-
payment matching provisions as part of employee 
benefit packages, and providing employees with fi-
nancial and economic education and counseling.’’.
108
(f) 
CREDIT
BUREAU
ORGANIZATION
AGREE-
MENTS.—Section 430A(a) (20 U.S.C. 1080a(a)) is 
amended by striking ‘‘agreements with credit bureau orga-
nizations’’ and inserting ‘‘an agreement with each national 
credit bureau organization (as described in section 603(p) 
of the Fair Credit Reporting Act)’’. 
(g) UNIFORM ADMINISTRATIVE AND CLAIMS PROCE-
DURE.—Section 432(l)(1)(H) (20 U.S.C. 1082(l)(1)(H)) 
is amended by inserting ‘‘and anticipated graduation 
date’’ after ‘‘status change’’. 
(h) DEFAULT REDUCTION MANAGEMENT.—Section 
432 is further amended—
(1) by striking subsection (n); and 
(2) by redesignating subsections (o) and (p) as 
subsections (n) and (o), respectively. 
(i) SCHOOL
AS LENDER.—Section 435(d)(2) (20 
U.S.C. 1085(d)(2)) is amended by striking subparagraphs 
(C) through (F) and the material following subparagraph 
(F) and inserting the following: 
‘‘(C) shall not make a loan, other than a 
loan made under section 428 or 428H to a 
graduate or professional student, unless the 
borrower has previously received a loan from 
the school, and shall not make a loan to a bor-
rower who is not enrolled at that institution;
109
‘‘(D) shall not have a cohort default rate 
(as defined in section 435(m)) greater than 15 
percent; and 
‘‘(E) shall use the proceeds from special al-
lowance payments and interest payments from 
borrowers, and any proceeds from the sale or 
other disposition of loans, for need-based grant 
programs, except for reasonable reimbursement 
for direct administrative expenses.’’. 
(j) DISABILITY DETERMINATIONS.—Section 437(a) 
(20 U.S.C. 1087(a)) is amended by adding at the end the 
following new sentence: ‘‘In making such determination of 
permanent and total disability, the Secretary shall provide 
that a borrower who has been certified as permanently and 
totally disabled by the Department of Veterans Affairs or 
the Social Security Administration shall not be required 
to present further documentation for purposes of this 
title.’’. 
(k) TREATMENT
OF FALSELY CERTIFIED BOR-
ROWERS.—Section 437(c)(1) (20 U.S.C. 1087(c)(1)) is 
amended by inserting ‘‘or parent’s eligibility’’ after ‘‘such 
student’s eligibility’’. 
(l) PERFECTION OF SECURITY INTERESTS.—Section 
439(d) (20 U.S.C. 1087–2(d)) is amended—
(1) by striking paragraph (3); and
110
(2) by redesignating paragraphs (4) and (5) as 
paragraphs (3) and (4), respectively. 
(m) ADDITIONAL TECHNICAL AMENDMENTS.—
(1) 
Section 
428(a)(2)(A) 
(20 
U.S.C. 
1078(a)(2)(A)) is amended—
(A) by striking ‘‘and’’ at the end of sub-
clause (II) of clause (i); and 
(B) by moving the margin of clause (iii) 
two ems to the left. 
(2) Section 428H(e) (20 U.S.C. 1078–8(e)) is 
amended—
(A) by striking paragraph (6); and 
(B) by redesignating paragraph (7) as 
paragraph (6). 
(3) Section 428I(g) (20 U.S.C. 1078–9(g)) is 
amended by striking ‘‘Code,’’ and inserting ‘‘Code’’. 
(4) 
Section 
432(m)(1)(B) 
(20 
U.S.C. 
1082(m)(1)(B)) is amended—
(A) in clause (i), by inserting ‘‘and’’ after 
the semicolon at the end; and 
(B) in clause (ii), by striking ‘‘; and’’ and 
inserting a period. 
PART C—FEDERAL WORK-STUDY PROGRAMS 
SEC. 441. AUTHORIZATION OF APPROPRIATIONS. 
Section 441(b) (42 U.S.C. 2751(b)) is amended—
111
(1) by striking ‘‘1999’’ and inserting ‘‘2005’’; 
and 
(2) by striking ‘‘4 succeeding’’ and inserting ‘‘5 
succeeding’’. 
SEC. 442. COMMUNITY SERVICE. 
Section 441(c)(1) (42 U.S.C. 2751(c)(1)) is amended 
by striking ‘‘that are open and accessible to the commu-
nity’’. 
SEC. 443. ALLOCATION OF FUNDS. 
(a) PHASEOUT OF ALLOCATION BASED ON PREVIOUS 
ALLOCATIONS.—Subsection (a) of section 442(a) (42 
U.S.C. 2752(a)) is amended to read as follows: 
‘‘(a) ALLOCATION BASED
ON PREVIOUS ALLOCA-
TION.—
‘‘(1) BASE GUARANTEE.—From the amount ap-
propriated pursuant to section 441(b) for each fiscal 
year after fiscal year 2006, the Secretary shall, sub-
ject to paragraph (2), first allocate to each eligible 
institution an amount equal to the following percent-
age of the amount such institution received under 
subsection (a) of this section for fiscal year 2006 (as 
such subsection was in effect with respect to alloca-
tions for such fiscal year): 
‘‘(A) 80 percent for fiscal years 2007 and 
2008;
112
‘‘(B) 60 percent for fiscal years 2009 and 
2010; 
‘‘(C) 40 percent for fiscal years 2011 and 
2012; 
‘‘(D) 20 percent for fiscal years 2013 and 
2014; and 
‘‘(E) 0 percent for fiscal year 2015 and 
any succeeding fiscal year. 
‘‘(2) RATABLE REDUCTIONS FOR INSUFFICIENT 
APPROPRIATIONS.—
‘‘(A) REDUCTION OF BASE GUARANTEE.—
If the amount appropriated for any fiscal year 
is less than the amount required to be allocated 
to all institutions under this subsection, then 
the amount of the allocation to each such insti-
tution shall be ratably reduced. 
‘‘(B) ADDITIONAL APPROPRIATIONS ALLO-
CATION.—If additional amounts are appro-
priated for any such fiscal year, such reduced 
amounts shall be increased on the same basis as 
they were reduced (until the amount allocated 
equals the amount required to be allocated 
under this subsection). 
‘‘(3) ADDITIONAL ALLOCATIONS FOR CERTAIN 
INSTITUTIONS.—
113
‘‘(A) ALLOCATIONS PERMITTED.—Notwith-
standing any other provision of this section, the 
Secretary may allocate an amount equal to not 
more than 10 percent of the amount by which 
the amount appropriated in any fiscal year to 
carry out this part exceeds $700,000,000 
among eligible institutions described in sub-
paragraph (B). 
‘‘(B) ELIGIBLE INSTITUTIONS.—For pur-
poses of subparagraph (A)—
‘‘(i) an eligible institution that is a 4-
year institution may receive an allocation 
under subparagraph (A) if more than 50 
percent of the students who are degree-
seeking Pell Grant recipients attending 
such institution graduate within 4 calendar 
years of the first day of enrollment; and 
‘‘(ii) an eligible institution that is a 2-
year institution may receive an allocation 
under subparagraph (A) if more than 50 
percent of the students who are degree-
seeking Pell Grant recipients attending 
such institution graduate within 2 calendar 
years of the first day of enrollment.’’.
114
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply with respect to any amounts ap-
propriated under section 441(b) of the Higher Education 
Act of 1965 (42 U.S.C. 2751(b)) for fiscal year 2007 or 
any succeeding fiscal year. 
SEC. 444. BOOKS AND SUPPLIES. 
Section 442(c)(4)(D) (42 U.S.C. 2752(c)(4)(D)) is 
amended by striking ‘‘$450’’ and inserting ‘‘$600’’. 
SEC. 445. JOB LOCATION AND DEVELOPMENT. 
Section 446(a)(1) (42 U.S.C. 2756(a)(1)) is amend-
ed—
(1) by striking ‘‘10 percent or $50,000’’ and in-
serting ‘‘15 percent or $75,000’’; and 
(2) by inserting before the period at the end the 
following: ‘‘, except that not less than one-third of 
such amount shall be specifically allocated to locate 
and develop community service jobs’’. 
SEC. 446. WORK COLLEGES. 
Section 448 (42 U.S.C. 2756b) is amended—
(1) by striking ‘‘work-learning’’ each place it 
appears and inserting ‘‘work-learning-service’’; 
(2) by striking ‘‘work-service’’ each place it ap-
pears and inserting ‘‘work-learning-service’’; 
(3) by amending subparagraph (C) of sub-
section (e)(1) to read as follows:
115
‘‘(C) requires all resident students, includ-
ing at least one-half of all students who are en-
rolled on a full-time basis, to participate in a 
comprehensive work-learning-service program 
for at least 5 hours each week, or at least 80 
hours during each period of enrollment, unless 
the student is engaged in an institutionally or-
ganized or approved study abroad or externship 
program; and’’; 
(4) by amending paragraph (2) of subsection 
(e) to read as follows: 
‘‘(2) the term ‘comprehensive student work-
learning-service program’—
‘‘(A) means a student work-learning-serv-
ice program that is an integral and stated part 
of the institution’s educational philosophy and 
program; 
‘‘(B) requires participation of all resident 
students for enrollment and graduation; 
‘‘(C) includes learning objectives, evalua-
tion, and a record of work performance as part 
of the student’s college record; 
‘‘(D) provides programmatic leadership by 
college personnel at levels comparable to tradi-
tional academic programs;
116
‘‘(E) recognizes the educational role of 
work-learning-service supervisors; and 
‘‘(F) 
includes 
consequences 
for 
non-
performance or failure in the work-learning-
service program similar to the consequences for 
failure in the regular academic program.’’; and 
(5) in subsection (f), by striking ‘‘1999 and 
such sums as may be necessary for each of the 4 
succeeding fiscal years’’ and inserting ‘‘2005 and 
such sums as may be necessary for the 5 succeeding 
fiscal years’’. 
PART D—FEDERAL DIRECT LOAN PROGRAM 
SEC. 451. REAUTHORIZATION OF THE DIRECT LOAN PRO-
GRAM. 
(a) ADMINISTRATIVE EXPENSES.—Section 458(a)(1) 
(20 U.S.C. 1087h(a)(1)) is amended by striking 
‘‘$617,000,000’’ and all that follows through ‘‘fiscal year 
2003’’ and inserting ‘‘$807,000,000 in fiscal year 2005, 
$820,000,000 in fiscal year 2006, $833,000,000 in fiscal 
year 
2007, 
$847,000,000 
in 
fiscal 
year 
2008, 
$862,000,000 in fiscal year 2009, and $878,000,000 in 
fiscal year 2010’’. 
(b) CALCULATION BASIS.—Subsection (b) of section 
458 (20 U.S.C. 1087h(b)) is amended by striking ‘‘shall 
be calculated—’’ and all that follows through the end of
117
such subsection and inserting ‘‘shall be calculated on the 
basis of 0.10 percent of the original principal amount of 
outstanding loans on which insurance was issued under 
part B.’’. 
(c) SPECIAL RULES: FEE CAP.—Section 458(c)(1) 
(20 U.S.C. 1087h(c)(1)) is amended by striking subpara-
graphs (A) through (E) and inserting the following: 
‘‘(A) for fiscal year 2005, shall not exceed 
$207,000,000; 
‘‘(B) for fiscal year 2006, shall not exceed 
$220,000,000; 
‘‘(C) for fiscal year 2007, shall not exceed 
$233,000,000; 
‘‘(D) for fiscal year 2008, shall not exceed 
$247,000,000; 
‘‘(E) for fiscal year 2009, shall not exceed 
$262,000,000; and 
‘‘(F) for fiscal year 2010, shall not exceed 
$278,000,000.’’. 
(d) CONSOLIDATION LOAN ELIGIBILITY.—Section 
455(g) (20 U.S.C. 1087e(g)) is amended by adding at the 
end (after the sentence added by section 425(b)(2) of this 
Act) the following new sentence: ‘‘To be eligible for a con-
solidation loan under this part, a borrower must meet all 
the eligibility criteria set forth in section 428C(a)(3).’’.
118
PART E—FEDERAL PERKINS LOAN PROGRAM 
SEC. 461. REAUTHORIZATION OF PROGRAM. 
(a) PROGRAM AUTHORIZATION.—
(1) AUTHORIZATION
OF
APPROPRIATIONS.—
Section 461(b) (20 U.S.C. 1087aa(b)) is amended—
(A) in paragraph (1)—
(i) by striking ‘‘1999’’ and inserting 
‘‘2005’’; and 
(ii) by striking ‘‘4 succeeding’’ and in-
serting ‘‘5 succeeding’’; and 
(B) in paragraph (2), by striking ‘‘2003’’ 
each place it appears and inserting ‘‘2011’’. 
(2) FEDERAL CAPITAL CONTRIBUTION RECOV-
ERY.—Section 466 (20 U.S.C. 1087ff) is amended—
(A) by striking ‘‘2004’’ each place it ap-
pears in subsections (a), (b), and (c) and insert-
ing ‘‘2011’’; 
(B) in subsection (a), by striking ‘‘2003’’ 
each place it appears and inserting ‘‘2010’’; and 
(C) in subsection (b), by striking ‘‘2012’’ 
and inserting ‘‘2019’’. 
(b) PHASEOUT OF ALLOCATION BASED ON PREVIOUS 
ALLOCATIONS.—
(1) AMENDMENT.—Subsection (a) of section 
462 (20 U.S.C. 1087bb(a)) is amended to read as 
follows:
119
‘‘(a) ALLOCATION BASED
ON PREVIOUS ALLOCA-
TION.—
‘‘(1) BASE GUARANTEE.—From the amount ap-
propriated pursuant to section 461(b) for each fiscal 
year after fiscal year 2006, the Secretary shall, sub-
ject to paragraphs (2) and (3), first allocate to each 
eligible institution an amount equal to—
‘‘(A) 100 percent of the amount such insti-
tution received under subsection (a) of this sec-
tion for fiscal year 2006 (as such subsection 
was in effect with respect to allocations for such 
fiscal year), multiplied by 
‘‘(B) the institution’s default penalty, as 
determined under subsection (e), except that if 
the institution has a cohort default rate in ex-
cess of the applicable maximum cohort default 
rate under subsection (f), the institution may 
not receive an allocation under this paragraph. 
‘‘(2) PHASE OUT.—For each of the fiscal years 
after fiscal year 2006, paragraph (1) shall be ap-
plied by substituting for ‘100 percent’: 
‘‘(A) ‘80 percent’ for fiscal years 2007 and 
2008; 
‘‘(B) ‘60 percent’ for fiscal years 2009 and 
2010;
120
‘‘(C) ‘40 percent’ for fiscal years 2011 and 
2012; 
‘‘(D) ‘20 percent’ for fiscal years 2013 and 
2014; and 
‘‘(E) ‘0 percent’ for fiscal year 2015 and 
any succeeding fiscal year. 
‘‘(3) RATABLE REDUCTIONS FOR INSUFFICIENT 
APPROPRIATIONS.—
‘‘(A) REDUCTION OF BASE GUARANTEE.—
If the amount appropriated for any fiscal year 
is less than the amount required to be allocated 
to all institutions under this subsection, then 
the amount of the allocation to each such insti-
tution shall be ratably reduced. 
‘‘(B) ADDITIONAL APPROPRIATIONS ALLO-
CATION.—If additional amounts are appro-
priated for any such fiscal year, such reduced 
amounts shall be increased on the same basis as 
they were reduced (until the amount allocated 
equals the amount required to be allocated 
under this subsection).’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply with respect to any 
amounts appropriated under section 461(b) of the 
Higher 
Education 
Act 
of 
1965 
(20 
U.S.C.
121
1087bb(b)) for fiscal year 2007 or any succeeding 
fiscal year. 
(c) BOOKS
AND SUPPLIES.—Section 462(c)(4)(D) 
(20 U.S.C. 1087bb(c)(4)(D)) is amended by striking 
‘‘$450’’ and inserting ‘‘$600’’. 
SEC. 462. LOAN TERMS AND CONDITIONS. 
(a) LOAN
LIMITS.—Section 464(a) (20 U.S.C. 
1087dd(a))—
(1) in paragraph (2)(A)—
(A) by striking ‘‘$4,000’’ in clause (i) and 
inserting ‘‘$5,500’’; and 
(B) by striking ‘‘$6,000’’ in clause (ii) and 
inserting ‘‘$8,000’’; and 
(2) in paragraph (2)(B)—
(A) by striking ‘‘$40,000’’ in clause (i) and 
inserting ‘‘$60,000’’; 
(B) by striking ‘‘$20,000’’ in clause (ii) 
and inserting ‘‘$27,500’’; and 
(C) by striking ‘‘$8,000’’ in clause (iii) and 
inserting ‘‘$11,000’’. 
(b) FORBEARANCE.—Section 464(e) (20 U.S.C. 
1087dd(e)) is amended by striking ‘‘, upon written re-
quest,’’. 
(c) SPECIAL REPAYMENT RULE.—Paragraph (2) of 
section 464(f) is amended to read as follows:
122
‘‘(2) No compromise repayment of a defaulted loan 
as authorized by paragraph (1) may be made unless 
agreed to by the Secretary.’’. 
(d) REHABILITATION.—Section 464(h)(1)(A) (20 
U.S.C. 1087dd(h)(1)(A)) is amended by striking ‘‘12 
ontime’’ and inserting ‘‘9 on-time’’. 
SEC. 463. LOAN CANCELLATION. 
Section 465(a)(3)(A) (20 U.S.C. 1087ee(a)(3)(A)) is 
amended—
(1) by inserting ‘‘(D),’’ after ‘‘subparagraph 
(A), (C),’’ in clause (i); 
(2) by inserting ‘‘or’’ after the semicolon at the 
end of clause (ii); 
(3) by striking clause (iii); and 
(4) by redesignating clause (iv) as clause (iii). 
SEC. 464. TECHNICAL AMENDMENTS. 
Part E is further amended as follows: 
(1) Section 462(g)(1)(E)(i)(I) (20 U.S.C. 
1087bb(g)(1)(E)(i)(I)) is amended by inserting 
‘‘monthly’’ after ‘‘consecutive’’. 
(2) 
Section 
464(c)(1)(D) 
(20 
U.S.C. 
1087dd(c)(1)(D)) is amended by redesignating sub-
clauses (I) and (II) as clauses (i) and (ii), respec-
tively.
123
(3) Section 465(a)(2) (20 U.S.C. 1087ee(a)(2)) 
is amended—
(A) in subparagraph (A), by striking ‘‘sec-
tion 
111(c)’’ 
and 
inserting 
‘‘section 
1113(a)(5)’’; and 
(B) in subparagraph (C), by striking 
‘‘With Disabilities’’ and inserting ‘‘with Disabil-
ities’’. 
(4) Section 467(b) (20 U.S.C. 1087gg(b)) is 
amended by striking ‘‘(5)(A), (5)(B)(i), or (6)’’ and 
inserting ‘‘(4)(A), (4)(B), or (5)’’. 
(5) Section 469(c) (20 U.S.C. 1087ii(c)) is 
amended—
(A) by striking ‘‘sections 602(a)(1) and 
672(1)’’ and inserting ‘‘sections 602(3) and 
632(5)’’; 
(B) by striking ‘‘qualified professional pro-
vider of early intervention services’’ and insert-
ing ‘‘early intervention services’’; and 
(C) by striking ‘‘section 672(2)’’ and in-
serting ‘‘section 632(4)’’. 
PART F—NEED ANALYSIS 
SEC. 471. SIMPLIFIED NEEDS TEST IMPROVEMENTS. 
Section 479 (20 U.S.C. 1087ss) is amended—
124
(1) by striking clause (i) of subsection (b)(1)(A) 
and inserting the following: 
‘‘(i) the student’s parents file a form 
described in paragraph (3) or certify that 
they are not required to file an income tax 
return, and the student files such a form 
or certifies that the student is not required 
to file an income tax return, or the stu-
dent’s parents receive benefits under a 
means-tested Federal benefit program;’’. 
(2) by striking clause (i) of subsection 
(b)(1)(B) and inserting the following: 
‘‘(i) the student (and the student’s 
spouse, if any) files a form described in 
paragraph (3) or certifies that the student 
(and the student’s spouse, if any) is not re-
quired to file an income tax return, or the 
student (and the student’s spouse, if any) 
receives benefits under a means-tested 
Federal benefit program;’’; 
(3) by striking subparagraph (A) of subsection 
(c)(1) and inserting the following: 
‘‘(A) the student’s parents file a form de-
scribed in subsection (b)(3) or certify that they 
are not required to file an income tax return,
125
and the student files such a form or certifies 
that the student is not required to file an in-
come tax return, or the student’s parents re-
ceive benefits under a means-tested Federal 
benefit program;’’; 
(4) by striking subparagraph (A) of subsection 
(c)(2) and inserting the following: 
‘‘(A) the student (and the student’s 
spouse, if any) files a form described in sub-
section (b)(3) or certifies that the student (and 
the student’s spouse, if any) is not required to 
file an income tax return, or the student (and 
the student’s spouse, if any) receives benefits 
under a means-tested Federal benefit pro-
gram;’’; and 
(5) by adding at the end the following new sub-
section: 
‘‘(d) DEFINITION
OF
MEANS-TESTED
FEDERAL 
BENEFIT PROGRAM.—For purposes of this section, the 
term ‘means-tested Federal benefit program’ means a 
mandatory spending program of the Federal Government, 
other than a program under this title, in which eligibility 
for the programs’ benefits, or the amount of such benefits, 
or both, are determined on the basis of income or re-
sources of the individual or family seeking the benefit, and
126
may include such programs as the supplemental security 
income program under title XVI of the Social Security 
Act, the food stamp program under the Food Stamp Act 
of 1977, and the free and reduced price school lunch pro-
gram under the Richard B. Russell National School Lunch 
Act, and other programs identified by the Secretary.’’. 
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’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply with respect to deter-
minations of need for periods of enrollment begin-
ning on or after July 1, 2005. 
(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’’.
127
(c) DISCRETION OF STUDENT FINANCIAL AID AD-
MINISTRATORS.—Section 479A(a) (20 U.S.C. 1087tt(a)) 
is amended—
(1) by striking ‘‘(a) IN GENERAL.—’’ and in-
serting 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 age,’’ 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 insert-
128
ing before the semicolon at the end the following: ‘‘or is 
currently 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 
(3) by adding at the end the following new 
paragraph: 
‘‘(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 in-
cludable 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 subpara-
graph (2),’’ after ‘‘tax shelters,’’; 
(B) by redesignating paragraph (2) as 
paragraph (3); and
129
(C) by inserting after paragraph (1) the 
following 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 
purposes of determining the assets of parents or inde-
pendent students shall be—
‘‘(A) the refund value of any tuition credits or 
certificates purchased under section 529 of the In-
ternal Revenue Code of 1986 (26 U.S.C. 529) on be-
half 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 includible in gross in-
come under section 529 of such Code,’’ after 
‘‘1986’’; and
130
(D) by redesignating paragraph (3) as 
paragraph (2). 
PART G—GENERAL PROVISIONS RELATING TO 
STUDENT FINANCIAL ASSISTANCE 
SEC. 481. DEFINITION OF ACADEMIC YEAR. 
Paragraph (2) of section 481(a) (20 U.S.C. 1088(a)) 
is amended to read as follows: 
‘‘(2) For the purpose of any program under this title, 
the term ‘academic year’ shall—
‘‘(A) require a minimum of 30 weeks of instruc-
tional time for a course of study that measures its 
program length in credit hours; or 
‘‘(B) require a minimum of 26 weeks of instruc-
tional time for a course of study that measures its 
program length in clock hours; and 
‘‘(C) 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 pro-
gram length in clock hours.’’.
131
SEC. 482. DISTANCE EDUCATION. 
(a) DISTANCE EDUCATION: ELIGIBLE PROGRAM.—
Section 481(b) (20 U.S.C. 1088(b)) is amended by adding 
at the end the following new paragraph: 
‘‘(3) DISTANCE EDUCATION.—An otherwise eli-
gible program that is offered in whole or in part 
through telecommunications is eligible for the pur-
poses of this title if the program is offered by an in-
stitution, other than a foreign institution, that has 
been evaluated and determined (before or after the 
date of enactment of this paragraph) to have the ca-
pability to effectively deliver distance education pro-
grams by an accrediting agency or association 
that—
‘‘(A) is recognized by the Secretary under 
subpart 2 of Part H; and 
‘‘(B) has evaluation of distance education 
programs 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
132
(B) by striking ‘‘unless the total’’ and all 
that follows through ‘‘courses at the institu-
tion’’; and 
(2) by amending subparagraph (B) to read as 
follows: 
‘‘(B) 
EXCEPTION.—Subparagraph 
(A) 
does not apply to an institution or school de-
scribed in section 3(3)(C) of the Carl D. Per-
kins 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)) is amended by 
adding at the end the following new paragraph: 
‘‘(8) EXPANDING INFORMATION DISSEMINATION 
REGARDING ELIGIBILITY FOR PELL GRANTS.—The 
Secretary shall make special efforts, in conjunction 
with State efforts, to notify students and their par-
ents 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 programs as the Secretary shall determine, of 
their potential eligibility for a maximum Pell Grant, 
and shall disseminate such informational materials 
as the Secretary deems appropriate.’’.
133
SEC. 484. STUDENT ELIGIBILITY. 
(a) 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 
inserting the following: 
‘‘(1) IN GENERAL.—A student who is convicted 
of any offense under any Federal or State law in-
volving the possession or sale of a controlled sub-
stance 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 as-
sistance under this title from the date of that convic-
tion for the period of time specified in the following 
table:’’. 
(b) FREELY ASSOCIATED STATES.—Section 484(j) 
(20 U.S.C. 1091(j)) is amended by inserting ‘‘and shall 
be eligible only for assistance under subpart 1 of part A 
thereafter,’’ after ‘‘part C,’’. 
(c) 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 In-
ternal Revenue Service the information specified in
134
section 6103(l)(13) of the Internal Revenue Code of 
1986 reported by applicants (including parents) 
under this title on their Federal income tax returns 
for the purpose of verifying the information reported 
by applicants on student financial aid applications.’’. 
(d) PELL GRANT ELIGIBILITY PROVISION.—Section 
484 is amended by adding at the end the following new 
subsection: 
‘‘(s) PELL GRANT ELIGIBILITY PROVISION.—A stu-
dent who does not have a certificate of graduation from 
a school providing secondary education may be eligible for 
assistance under subpart 1 of Part A of this title for no 
more than two academic years, if such student—
‘‘(1) meets all eligibility requirements for such 
assistance (other than not being enrolled in an ele-
mentary or secondary school) and is an academically 
gifted and talented student, as defined in section 
9101 of the Elementary and Secondary Education 
Act; 
‘‘(2) is in the junior or senior year of secondary 
school, and has not received any assistance under 
this title; 
‘‘(3) is selected for participation and is enrolled 
full-time and resides on campus in a residential col-
135
lege gifted student program for early enrollment, 
leading to fully transferable college academic credit; 
‘‘(4) does not and will not participate in any 
secondary school course work during or after such 
program; and 
‘‘(5) has entered into an agreement that, if the 
student fails to complete the entirety of the aca-
demic program for which assistance under subpart 1 
of Part A of this title was received, or participates 
in secondary school course work after participating 
in such program, the student will repay all funds re-
ceived under such subpart pursuant to this sub-
section to the Federal Government in accordance 
with regulations promulgated by the Secretary.’’. 
(e) TECHNICAL AMENDMENT.—Section 484(b)(5) is 
amended by inserting ‘‘or parent (on behalf of a student)’’ 
after ‘‘student’’. 
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’’;
136
(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: 
‘‘(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 
making such contact, the institution shall ex-
plain to the borrower the borrower’s obligation 
to repay the funds following any such disburse-
ment. The institution shall document in the 
borrower’s file the result of such contact and 
the final determination 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:
137
‘‘(C) GRANT
OVERPAYMENT
REQUIRE-
MENTS.—
‘‘(i) IN
GENERAL.—Notwithstanding 
subparagraphs (A) and (B), a student 
shall only be required to return grant as-
sistance in the amount (if any) by which—
‘‘(I) the amount to be returned 
by the student (as determined under 
subparagraphs (A) and (B)), exceeds 
‘‘(II) 50 percent of the total 
grant assistance received by the stu-
dent 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.’’; and 
(7) 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.—
Section 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
138
an enrolled student and to any prospective student 
in a uniform and comprehensible manner, through 
appropriate publications, mailings, electronic media, 
and the reports required by the institution’s accred-
iting agency under section 496(c)(9).’’; 
(2) by amending subparagraph (G) to read as 
follows: 
‘‘(G) the academic programs of the institution, 
including—
‘‘(i) the current degree programs and other 
educational and training programs; 
‘‘(ii) the institution’s learning objectives 
for those programs; 
‘‘(iii) the instructional, laboratory, and 
other physical plant facilities which relate to the 
academic programs; and 
‘‘(iv) the faculty and other instructional 
personnel;’’; 
(3) by striking subparagraph (L) and inserting 
the following: 
‘‘(L) a summary of student outcomes for full-
time undergraduate students, including—
‘‘(i) the completion or graduation rates of 
certificate- or degree-seeking undergraduate 
students entering such institutions;
139
‘‘(ii) when readily available, information 
showing the number of undergraduate students 
that transfer out of the institution; and 
‘‘(iii) any other student outcome data, 
qualitative or quantitative, including data re-
garding distance education deemed by the insti-
tution to be appropriate to its stated edu-
cational mission and goals, and, when applica-
ble, licensing and placement rates for profes-
sional and vocational programs;’’; 
(4) by inserting before the semicolon at the end 
of subparagraph (J) the following: ‘‘, and the proc-
ess for students to register complaints with the ac-
crediting agencies or associations’’; 
(5) in subparagraph (M), by striking ‘‘guaran-
teed student loans under part B of this title or di-
rect student loans under part E of this title, or 
both,’’ and inserting ‘‘student loans under part B, 
D, or E of this title’’; 
(6) by striking ‘‘and’’ at the end of subpara-
graph (N); 
(7) by striking the period at the end of sub-
paragraph (O) and inserting a semicolon; and 
(8) by adding at the end the following new sub-
paragraphs:
140
‘‘(P) the penalties contained in subsection 
484(r) regarding suspension of eligibility for drug 
related offenses; and 
‘‘(Q) the policies of the institution for accepting 
transfer of credit, explained in a manner that clearly 
states the basis for determining the acceptability and 
applicability of transfer of credits.’’. 
(b) ADDITIONAL AMENDMENTS.—Section 485(a) is 
further amended by striking paragraph (6) and inserting 
the following: 
‘‘(6) Each institution may provide supplemental 
information to enrolled and prospective students 
showing the completion or graduation rate for stu-
dents described in paragraph (4). For the purpose of 
this paragraph, the definitions provided in the Inte-
grated Postsecondary Education Data System shall 
apply. 
‘‘(7) Each eligible institution participating in 
any program under this title may publicly report to 
currently enrolled and prospective students the vol-
untary information collected by the National Survey 
of Student Engagement (NSSE), the Community 
College Survey of Student Engagement (CCSSE), or 
other instruments that provide evidence of student 
participation in educationally purposeful activities.
141
The information shall be produced and made avail-
able in a uniform and comprehensible manner, 
through appropriate publications, mailings, and elec-
tronic media, and may be included in reports re-
quired by the institution’s accrediting agency.’’. 
(c) EXIT COUNSELING.—Section 485(b) (20 U.S.C. 
1092(b)) is amended by adding at the end the following 
new paragraph: 
‘‘(3) Each eligible institution shall, during the exit 
interview required by this subsection, provide to a bor-
rower of a loan made under part B, D, or E a clear and 
conspicuous notice describing the effect of using a consoli-
dation loan to discharge the borrower’s student loans, in-
cluding—
‘‘(A) the effects of consolidation on total inter-
est to be paid, fees to be paid, and length of repay-
ment; 
‘‘(B) the effects of consolidation on a bor-
rower’s underlying loan benefits, including loan for-
giveness, cancellation, and deferment; 
‘‘(C) the ability for the borrower to prepay the 
loan, pay on a shorter schedule, and to change re-
payment plans, and that borrower benefit programs 
may vary among different loan holders;
142
‘‘(D) the tax benefits for which the borrower 
may be eligible; and 
‘‘(E) the consequences of default.’’. 
(d) 
CAMPUS
CRIME
INFORMATION.—Section 
485(f)(1) (20 U.S.C. 1092(f)(1)) is amended by inserting 
‘‘, other than a foreign institution of higher education,’’ 
after ‘‘under this title’’. 
(e) TRANSFER OF CREDIT POLICIES.—Section 485 
is further amended by adding at the end the following new 
subsection: 
‘‘(h) TRANSFER OF CREDIT POLICIES.—
‘‘(1) DISCLOSURE.—Each eligible institution 
participating in any program under this title shall 
publicly disclose in a readable and comprehensible 
manner its transfer of credit policies which shall in-
clude: 
‘‘(A) A statement of the institution’s cur-
rent transfer of credit policies that includes at 
least—
‘‘(i) a statement that transfer of cred-
it shall not be denied solely on the basis of 
the agency or association that accredited 
such other eligible institution, if that agen-
cy or association is recognized by the Sec-
retary pursuant to section 496 to be a reli-
143
able authority as to the quality of the edu-
cation or training offered; and 
‘‘(ii) a statement that transfer of 
credit shall be decided on the basis of 
whether the courses or program are deter-
mined by the institution to be acceptable 
for credit in accordance with objective cri-
teria that the institution publicly discloses 
and the student completed such courses or 
programs at the institution’s required level 
of proficiency. 
‘‘(B) Statistics concerning the annual, as 
well as a 3-year rolling average, rate of the per-
centage of credits accepted in transfer and fully 
counted toward the degree or certificate comple-
tion requirements of undergraduate students. 
Such data shall be disaggregated to report on 
the following categories of institutions from 
which credits were accepted in transfer: 
‘‘(i) nationally accredited; 
‘‘(ii) regionally accredited in the same 
State; 
‘‘(iii) regionally accredited in the same 
region; and
144 
‘‘(iv) regionally accredited in a dif-
ferent region. 
‘‘(2) RULE
OF
CONSTRUCTION.—Nothing in 
this subsection shall be construed to— 
‘‘(A) authorize an officer or employee of 
the Department to exercise any direction, su-
pervision, or control over the curriculum, pro-
gram of instruction, administration, or per-
sonnel of any institution of higher education, or 
over any accrediting agency or association; 
‘‘(B) limit the application of the General 
Education Provisions Act; or 
‘‘(C) create any legally enforceable right.’’. 
SEC. 487. COLLEGE ACCESS INITIATIVE. 
Part G is further amended by inserting after section 
485C (20 U.S.C. 1092c) the following new section: 
‘‘SEC. 485D. COLLEGE ACCESS INITIATIVE. 
‘‘(a) STATE-BY-STATE
INFORMATION.—The Sec-
retary shall direct each guaranty agency with which the 
Secretary has an agreement under section 428(c) to pro-
vide to the Secretary the information necessary for the de-
velopment of web links and access for students and fami-
lies to a comprehensive listing of the postsecondary edu-
cation opportunities programs, publications, Internet Web
145
sites, and other services available in the States for which 
such agency serves as the designated guarantor. 
‘‘(b) GUARANTY AGENCY ACTIVITIES.—
‘‘(1) PLAN
AND
ACTIVITY
REQUIRED.—Each 
guaranty agency with which the Secretary has an 
agreement under section 428(c) shall develop a plan 
and undertake the activity necessary to gather the 
information required under subsection (a) and to 
make such information available to the public and to 
the Secretary in a form and manner as prescribed 
by the Secretary. 
‘‘(2) ACTIVITIES.—Each guaranty agency shall 
undertake such activities as are necessary to pro-
mote access to postsecondary education for students 
through providing information on college planning, 
career preparation, and paying for college. The guar-
anty agency shall publicize such information and co-
ordinate such activities with other entities that ei-
ther provide or distribute such information in the 
States for which such guaranty agency serves as the 
designated guarantor. 
‘‘(3) FUNDING.—The activities required by this 
section may be funded from the guaranty agency’s 
operating account established pursuant to section 
422B and to the extent funds remain, from earnings
146
on the restricted account established pursuant to 
section 422(h)(4). 
‘‘(c) ACCESS TO INFORMATION.—
‘‘(1) SECRETARY’S RESPONSIBILITY.—The Sec-
retary shall ensure the availability of the information 
provided by the guaranty agencies in accordance 
with this section to students, parents and other in-
terested individuals, through web links or other 
methods prescribed by the Secretary. 
‘‘(2) GUARANTY
AGENCY
RESPONSIBILITY.—
The guaranty agencies shall ensure that the infor-
mation required by this section is available without 
charge in printed format for students and parents 
requesting such information. 
‘‘(3) PUBLICITY.—Within 270 days after the 
date of enactment of the College Access and Oppor-
tunity Act of 2004, the Secretary and guaranty 
agencies shall publicize the availability of the infor-
mation required by this section, with special empha-
sis on ensuring that populations that are tradition-
ally underrepresented in postsecondary education are 
made aware of the availability of such information.’’.
147
SEC. 488. DISTANCE EDUCATION DEMONSTRATION PRO-
GRAM. 
(a) ELIGIBLE APPLICANTS.—Section 486(b)(3) (20 
U.S.C. 1093(b)(3)) is amended—
(1) in subparagraph (B), by striking ‘‘section 
102(a)(1)(C)’’ and inserting ‘‘section 102’’; and 
(2) in subparagraph (C), by striking ‘‘sub-
section (a) of section 102, other than the require-
ment of paragraph (3)(A) or (3)(B) of such sub-
section,’’ and inserting ‘‘section 101, other than the 
requirements of subparagraph (A) or (B) of sub-
section (b)(4) of such section’’. 
(b) SELECTION.—Section 486(d)(1) (20 U.S.C. 
1093(d)(1)) is amended—
(1) by striking ‘‘the third year’’ and inserting 
‘‘subsequent years’’; 
(2) by striking ‘‘35 institutions’’ and inserting 
‘‘100 institutions’’; and 
(3) by adding at the end the following new sen-
tence: ‘‘Not more than 5 of such institutions, sys-
tems, or consortia may be accredited, degree-grant-
ing correspondence schools.’’. 
SEC. 489. COLLEGE AFFORDABILITY DEMONSTRATION PRO-
GRAM. 
Part G of title IV is amended by inserting after sec-
tion 486 (20 U.S.C. 1093) the following new section:
148
‘‘SEC. 486A. COLLEGE AFFORDABILITY DEMONSTRATION 
PROGRAM. 
‘‘(a) PURPOSE.—It is the purpose of this section—
‘‘(1) to provide, through a college affordability 
demonstration program, for increased innovation in 
the delivery of higher education and student finan-
cial aid in a manner resulting in reduced costs for 
students as well as the institution by accelerating 
degree or program completion, increasing availability 
of, and access to, distance components of education 
delivery, and other alternative methodologies; and 
‘‘(2) to help determine—
‘‘(A) the most effective means of delivering 
student financial aid as well as quality edu-
cation; 
‘‘(B) the specific statutory and regulatory 
requirements that should be altered to provide 
for more efficient and effective delivery of stu-
dent financial aid, as well as access to high 
quality distance education programs, resulting 
in a student more efficiently completing post-
secondary education; and 
‘‘(C) the most effective methods of obtain-
ing and managing institutional resources. 
‘‘(b) DEMONSTRATION PROGRAM AUTHORIZED.—
149
‘‘(1) IN
GENERAL.—In accordance with the 
purposes described in subsection (a) and the provi-
sions of subsection (d), the Secretary is authorized 
to select not more than 100 institutions of higher 
education or systems of such institutions for vol-
untary participation in the College Affordability 
Demonstration Program in order to enable partici-
pating institutions to carry out such purposes by 
providing programs of postsecondary education, and 
making available student financial assistance under 
this title to students enrolled in those programs, in 
a manner that would not otherwise meet the require-
ments of this title. 
‘‘(2) WAIVERS.—The Secretary is authorized to 
waive for any institutions of higher education, or 
any system or consortia of institutions of higher 
education, selected for participation in the College 
Affordability Demonstration Program, any require-
ments of this Act or the regulations thereunder as 
deemed necessary by the Secretary to meet the pur-
pose described in subsection (a)(1). 
‘‘(3) ELIGIBLE APPLICANTS.—
‘‘(A) ELIGIBLE INSTITUTIONS.—Except as 
provided in subparagraph (B), only an institu-
tion of higher education that is eligible to par-
150
ticipate in programs under this title shall be eli-
gible to participate in the demonstration pro-
gram authorized under this section. 
‘‘(B) PROHIBITION.—An institution of 
higher education described in section 102 shall 
not be eligible to participate in the demonstra-
tion program authorized under this section. 
‘‘(c) APPLICATION.—
‘‘(1) IN GENERAL.—Each institution or system 
of institutions desiring to participate in the dem-
onstration program under this section shall submit 
an application to the Secretary at such time and in 
such manner as the Secretary may require. 
‘‘(2) CONTENTS OF APPLICATIONS.—Each ap-
plication for the college affordability demonstration 
program shall include at least the following: 
‘‘(A) a description of the institution or sys-
tem of institutions and what quality assurance 
mechanisms are in place to insure the integrity 
of the Federal financial aid programs; 
‘‘(B) a description of each regulatory or 
statutory requirement for which waivers are 
sought, with a reason for each waiver; 
‘‘(C) a description of the programs being 
offered and the affected students;
151
‘‘(D) a description of the expected out-
comes of the program changes proposed, includ-
ing the estimated reductions in costs both for 
the institution and for students; 
‘‘(E) a description of any collaborative ar-
rangements with other institutions or organiza-
tions to reduce costs; 
‘‘(F) a description of any expected eco-
nomic impact of participation in the program 
within the community in which the institution is 
located; 
‘‘(G) a description of how the institution 
will reduce the costs of instructional materials, 
including textbooks; 
‘‘(H) an assurance that the participating 
institution or system of institutions will offer 
full cooperation with the ongoing evaluations of 
the demonstration program provided for in this 
section; and 
‘‘(I) any other information or assurances 
the Secretary may require. 
‘‘(d) SELECTION.—In selecting institutions to partici-
pate in the demonstration program under this section, the 
Secretary shall take into account—
152
‘‘(1) the number and quality of applications re-
ceived, determined on the basis of the contents re-
quired by subsection (c)(2); 
‘‘(2) the Department’s capacity to oversee and 
monitor each institution’s participation; 
‘‘(3) an institution’s—
‘‘(A) financial responsibility; 
‘‘(B) administrative capability; 
‘‘(C) program or programs being offered 
via distance education; 
‘‘(D) student completion rates; and 
‘‘(E) student loan default rates; and 
‘‘(4) the participation of a diverse group of in-
stitutions with respect to size, mission, and geo-
graphic distribution. 
‘‘(e) NOTIFICATION.—The Secretary shall make 
available to the public and to the authorizing committees 
a list of institutions and systems of institutions selected 
to participate in the demonstration program authorized by 
this section. Such notice shall include a listing of the spe-
cific statutory and regulatory requirements being waived 
for each institution or system of institutions and a descrip-
tion of the distance education courses to be offered. 
‘‘(f) EVALUATIONS AND REPORTS.—
153
‘‘(1) EVALUATION.—The Secretary shall evalu-
ate the demonstration program authorized under 
this section on a biennial basis. Such evaluations 
specifically shall review—
‘‘(A) the number and types of students 
participating in the programs offered, including 
the progress of participating students toward 
recognized certificates or degrees and the extent 
to which participation in such programs in-
creased; 
‘‘(B) issues related to student financial as-
sistance for distance education; 
‘‘(C) effective technologies and alternative 
methodologies for delivering student financial 
assistance; 
‘‘(D) the extent of the cost savings to the 
institution, the student, and the Federal Gov-
ernment by virtue of the waivers provided, and 
an estimate as to future cost savings should the 
demonstration program continue; 
‘‘(E) the extent to which students saved 
money by virtue of completing their postsec-
ondary education sooner;
154
‘‘(F) the extent to which the institution re-
duced its tuition and fees and its costs by virtue 
of participation in the demonstration program; 
‘‘(G) the extent to which any collaborative 
arrangements with other institutions or organi-
zations have reduced the participating institu-
tion’s costs; and 
‘‘(H) the extent to which statutory or reg-
ulatory requirements not waived under the dem-
onstration program present difficulties for stu-
dents or institutions. 
‘‘(2) POLICY
ANALYSIS.—The Secretary shall 
review current policies and identify those policies 
that present impediments to the development and 
use of distance education and other nontraditional 
methods of expanding access to education. 
‘‘(3) REPORTS.—The Secretary shall provide a 
report to the authorizing committees on a biennial 
basis regarding—
‘‘(A) the demonstration program author-
ized under this section; 
‘‘(B) the results of the evaluations con-
ducted under paragraph (1);
155
‘‘(C) the cost savings to the Federal Gov-
ernment by the demonstration program author-
ized by this section; and 
‘‘(D) recommendations for changes to in-
crease the efficiency and effective delivery of fi-
nancial aid. 
‘‘(g) OVERSIGHT.—In conducting the demonstration 
program authorized under this section, the Secretary 
shall, on a continuing basis—
‘‘(1) ensure compliance of institutions or sys-
tems of institutions with the requirements of this 
title (other than the sections and regulations that 
are waived under subsection (b)(2)); 
‘‘(2) provide technical assistance to institutions 
in their application to and participation in the dem-
onstration program; 
‘‘(3) monitor fluctuations in the student popu-
lation enrolled in the participating institutions or 
systems of institutions; 
‘‘(4) monitor changes in financial assistance 
provided at the institution; and 
‘‘(5) consult with appropriate accrediting agen-
cies or associations and appropriate State regulatory 
authorities.
156
‘‘(h) TERMINATION OF AUTHORITY.—The authority 
of the Secretary under this section shall cease to be effec-
tive on October 1, 2010.’’. 
SEC. 490. PROGRAM PARTICIPATION AGREEMENTS. 
(a) REFUND POLICIES.—Section 487(a) (20 U.S.C. 
1094(a)) is amended—
(1) in paragraph (22), by striking ‘‘refund pol-
icy’’ and inserting ‘‘policy on the return of title IV 
funds’’; and 
(2) in paragraph (23)—
(A) by moving subparagraph (C) 2 em 
spaces to the left; and 
(B) by adding after such subparagraph the 
following new subparagraph: 
‘‘(D) An institution shall be considered in com-
pliance with the requirements of subparagraph (A) 
for any student to whom the institution electroni-
cally transmits a message containing a voter reg-
istration form acceptable for use in the State in 
which the institution is located, or an Internet ad-
dress where such a form can be downloaded, pro-
vided such information is in an electronic message 
devoted to voter registration.’’. 
(b) AUDIT REQUIREMENTS.—Section 487(c)(1)(A)(i) 
(20 U.S.C. 1094(c)(1)(A)(i)) is amended by inserting be-
157
fore the semicolon at the end the following: ‘‘, except that 
the Secretary may modify the requirements of this clause 
with respect to institutions of higher education that are 
foreign institutions, and may waive such requirements 
with respect to a foreign institution whose students receive 
less than $500,000 in loans under this title during the 
award year preceding the audit period;’’. 
(c) REPORTS ON DISCIPLINARY PROCEEDINGS.—
(1) AMENDMENT.—Section 487(a) (20 U.S.C. 
1094(a)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(24) The institution will disclose to the alleged 
victim of any crime of violence (as that term is de-
fined in section 16 of title 18), or a nonforcible sex 
offense, the final results of any disciplinary pro-
ceeding conducted by such institution against a stu-
dent who is the alleged perpetrator of such crime or 
offense with respect to such crime or offense. If the 
alleged victim of such crime or offense is deceased, 
the next of kin of such victim shall be treated as the 
alleged victim for purposes of this paragraph.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply with respect to any dis-
ciplinary proceeding conducted by such institution
158
on or after one year after the date of enactment of 
this Act. 
SEC. 491. ADDITIONAL TECHNICAL AND CONFORMING 
AMENDMENTS. 
Part G is further amended as follows: 
(1) Section 483(d) (20 U.S.C. 1090(d)) is 
amended by striking ‘‘that is authorized under sec-
tion 685(d)(2)(C)’’ and inserting ‘‘, or another ap-
propriate provider of technical assistance and infor-
mation on postsecondary educational services, that is 
supported under section 685’’. 
(2) Section 484 (20 U.S.C. 1091) is amended—
(A) in subsection (a)(4), by striking ‘‘cer-
tification,,’’ and inserting ‘‘certification,’’; 
(B) in subsection (b)(2)—
(i) in the matter preceding subpara-
graph (A), by striking ‘‘section 428A’’ and 
inserting ‘‘section 428H’’; 
(ii) in subparagraph (A), by inserting 
‘‘and’’ after the semicolon at the end 
thereof; 
(iii) in subparagraph (B), by striking 
‘‘; and’’ and inserting a period; and 
(iv) by striking subparagraph (C); and
159
(C) in subsection (l)(1)(B)(i), by striking 
‘‘section 521(4)(C) of the Carl D. Perkins Vo-
cational and Applied Technology Education 
Act’’ and inserting ‘‘section 3(3)(C) of the Carl 
D. Perkins Vocational and Technical Education 
Act of 1998’’. 
(3) Section 485B(a) (20 U.S.C. 1092b(a)) is 
amended—
(A) 
by 
redesignating 
paragraphs 
(6) 
through (10) as paragraphs (7) through (11), 
respectively; 
(B) by redesignating the paragraph (5) (as 
added by section 2008 of Public Law 101–239) 
as paragraph (6); and 
(C) in paragraph (5) (as added by section 
204(3) of the National Community Service Act 
of 1990 (Public Law 101–610))—
(i) by striking ‘‘(22 U.S.C. 2501 et 
seq.)),’’ and inserting ‘‘(22 U.S.C. 2501 et 
seq.),’’; and 
(ii) by striking the period at the end 
thereof and inserting a semicolon. 
(4) Section 491(c) (20 U.S.C. 1098(c)) is 
amended by adding at the end the following new 
paragraph:
160
‘‘(3) The appointment of members under subpara-
graphs (A) and (B) of paragraph (1) shall be effective 
upon publication of the appointment in the Congressional 
Record.’’. 
(5) Section 491(k) (20 U.S.C. 1098(k)) is 
amended by striking ‘‘2004’’ and inserting ‘‘2011’’. 
(6) Section 493A (20 U.S.C. 1098c) is re-
pealed. 
(7) Section 498 (20 U.S.C. 1099c) is amend-
ed—
(A) in subsection (c)(2), by striking ‘‘for 
profit,’’ and inserting ‘‘for-profit,’’; and 
(B) in subsection (d)(1)(B), by inserting 
‘‘and’’ after the semicolon at the end thereof. 
PART H—PROGRAM INTEGRITY 
SEC. 495. ACCREDITATION. 
(a) 
STANDARDS
FOR
ACCREDITATION.—Section 
496(a) (20 U.S.C. 1099b(a)) is amended—
(1) in paragraph (3)—
(A) by inserting ‘‘or’’ after the semicolon 
at the end of subparagraph (A); 
(B) by striking subparagraph (B); and 
(C) by redesignating subparagraph (C) as 
subparagraph (B); 
(2) in paragraph (4)—
161
(A) by inserting ‘‘(A)’’ after ‘‘(4)’’; 
(B) by inserting ‘‘and’’ after the semicolon 
at the end thereof; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(B) if such agency or association already has 
or seeks to include within its scope of recognition 
the evaluation of the quality of institutions or pro-
grams offering distance education, such agency or 
association shall, in addition to meeting the other re-
quirements of this subpart—
‘‘(i) demonstrate to the Secretary that, 
through application of its standards, proce-
dures, and policies, particularly those required 
under paragraph (5) of this subsection, the 
agency or association determines that the qual-
ity of instruction and student support services 
for distance education is comparable to that 
provided by the institution in its classrooms and 
on its campuses (or if distance education is the 
only mode of delivery used by the institution, 
comparable to the quality of instruction and 
student support services provided in campus 
settings); and
162
‘‘(ii) evaluate how an institution offering 
distance education ensures the integrity of stu-
dent participation in its distance education pro-
grams;’’. 
(D) by inserting after ‘‘standards’’ the fol-
lowing: ‘‘(including standards to assess the 
quality of distance education that are com-
parable to the standards used for face-to-face 
classroom instruction)’’; 
(3) in paragraph (5)—
(A) by amending subparagraph (A) to read 
as follows: 
‘‘(A) success with respect to student 
achievement in relation to the institution’s mis-
sion, including, as appropriate, consideration of 
student academic achievement as determined by 
the institution (in accordance with standards of 
the accrediting agency or association) related to 
each institution’s articulation of desired learn-
ing outcomes, retention, course and program 
completion, State licensing examinations, and 
job placement rates; and other student perform-
ance data selected by the institution, particu-
larly data used by the institution to evaluate or 
strengthen its educational programs, and in-
163
cluding thresholds for course completion and 
job placement rates if the institution offers cer-
tificate-granting vocation or technical pro-
grams;’’; 
(B) in subparagraph (E), by striking ‘‘fis-
cal and administrative capacity’’ and inserting 
‘‘fiscal, administrative, and governance capac-
ity’’; and 
(C) by amending subparagraph (I) to read 
as follows: 
‘‘(I) record of student complaints received 
by the agency or association, including those re-
sulting from the process described in section 
485(a)(1)(J); and’’; 
(4) by striking ‘‘and’’ at the end of paragraph 
(7); and 
(5) by striking paragraph (8) and inserting the 
following: 
‘‘(8) such agency or association shall make 
available to the public, and submit to the Secretary, 
for use in consumer information programs, a sum-
mary of agency or association actions, including—
‘‘(A) the award of accreditation or re-
accreditation of an institution and any findings
164
made in connection with the accreditation or re-
accreditation; 
‘‘(B) final denial, withdrawal, suspension, 
or termination of accreditation, or placement on 
probation of an institution; 
‘‘(C) any other adverse action taken with 
respect to an institution; 
‘‘(D) a list of the individuals who comprise 
the inspection and review teams for each agency 
or association, including each individual’s name, 
agency affiliation, and relevant professional ex-
perience; 
‘‘(E) a description of the agency’s or asso-
ciation’s process for selecting, training, and 
evaluating such individuals; and 
‘‘(F) the agency’s or association’s code of 
conduct for its commissioners and such individ-
uals; and 
‘‘(9) such agency or association shall—
‘‘(A) review, during its onsite comprehen-
sive review, the transfer of credit policies of 
programs and institutions under its accredita-
tion; and 
‘‘(B) not adopt or apply standards, poli-
cies, or practices that restrict or deny the trans-
165
fer of credits earned by a student completing 
courses or programs at other eligible institu-
tions of higher education solely on the basis of 
the agency or association that accredited such 
other eligible institution if that agency or asso-
ciation—
‘‘(i) is recognized by the Secretary 
pursuant to this section to be a reliable au-
thority as to the quality of the education 
or training offered; and 
‘‘(ii) is currently listed by the Sec-
retary pursuant to section 101(c).’’. 
(b) OPERATING PROCEDURES.—Section 496(c) (20 
U.S.C. 1099b(c)) is amended—
(1) by inserting ‘‘(including those regarding dis-
tance education), and have several years of related 
experience’’ before the semicolon at the end of para-
graph (1); 
(2) by striking ‘‘and’’ at the end of paragraph 
(5); 
(3) by striking the period at the end of para-
graph (6) and inserting a semicolon; and 
(4) by inserting after paragraph (6) the fol-
lowing new paragraphs:
166
‘‘(7) ensures that its onsite comprehensive re-
views for accreditation or reaccreditation include 
evaluation of the substance of the information re-
quired in subparagraphs (G) and (H) of section 
485(a)(1); 
‘‘(8) confirms as a part of its review for accred-
itation or reaccreditation that the institution has 
transfer policies that are publicly disclosed and con-
sistently applied; 
‘‘(9) develops as required in subsection (a)(8), 
a summary available to the public of the agency’s 
action and the significant findings related to that ac-
tion; 
‘‘(10) includes, in its evaluation for accredita-
tion or reaccreditation, review of the transfer of 
credit policies of the program or institution to assure 
that transfer policies do not deny transfer of credit 
based solely on the accreditation of the sending pro-
gram or institution, except that nothing in this re-
view shall restrict the right of the receiving program 
or institution to determine, on any other basis or on 
a combination of that basis together with other 
bases, the credits the receiving program or institu-
tion will accept for transfer; and
167
‘‘(11) monitors the growth of distance edu-
cation programs, evaluating, as appropriate, the de-
velopment and management of such programs at in-
stitutions that are experiencing significant growth in 
distance education.’’. 
(c) LIMITATION, SUSPENSION, AND TERMINATION OF 
RECOGNITION.—Section 496(l) is amended by adding at 
the end the following new paragraph: 
‘‘(3) The Secretary shall provide an annual report to 
Congress on the status of any agency or association for 
which the Secretary has limited, suspended or terminated 
recognition under this subsection.’’. 
(d) COLLEGE CONSUMER PROFILE.—Section 496 is 
further amended—
(1) by redesignating subsection (o) as sub-
section (p); and 
(2) by inserting after subsection (n): 
‘‘(o) COLLEGE CONSUMER PROFILE.—
‘‘(1) INFORMATION
DISSEMINATION.—No ac-
crediting agency or association shall be recognized 
by the Secretary as a reliable authority as to the 
quality of the education or training offered by an in-
stitution seeking to participate in the programs au-
thorized under this title, unless the agency ensures 
each institution subject to its jurisdiction makes
168
publicly available in a uniform and comprehensible 
manner, a college consumer profile including, at 
minimum, information on the institution’s—
‘‘(A) mission; 
‘‘(B) student demographics; 
‘‘(C) accreditation; 
‘‘(D) faculty/student ratios; 
‘‘(E) faculty qualifications, including the 
number of faculty with terminal degrees; 
‘‘(F) tuition, fees, and other costs of at-
tending the institution; 
‘‘(G) student services, including services 
for students with disabilities; 
‘‘(H) policies and procedures for evaluating 
and accepting credits earned by students trans-
ferring from other institutions and the percent-
age of such credits accepted; 
‘‘(I) completion and graduation rates; and 
‘‘(J) placement rates and other measures 
of success in preparing students for entry into 
or advancement in the workforce. 
‘‘(2) PUBLICATION
OF
COLLEGE
CONSUMER 
PROFILE.—The contents of the college consumer 
profile required by paragraph (1) shall be made pub-
lic through dissemination via the Secretary’s data
169
collection and dissemination system. The informa-
tion required to be disclosed by section 485 may be 
used by the institution to provide (where applicable) 
the contents of the college consumer profile, but 
nothing in this subsection shall be construed to re-
lieve the institution of any information disclosure re-
quirement of such section.’’. 
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) by inserting ‘‘at the end of the award 
year immediately preceding the date of applica-
tion’’ after ‘‘Hispanic students’’ in subpara-
graph (B); 
(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—
170
(1) by redesignating paragraphs (8) and (9) as 
paragraphs (9) and (10), respectively; and 
(2) by inserting after paragraph (7) the fol-
lowing new paragraph: 
‘‘(8) 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: 
‘‘(v) which provides a program of not 
less than 2 years that is acceptable for full 
credit toward a bachelor’s degree; and’’; 
(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
171
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.’’; 
(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.’’; and 
(3) in section 504(a) (20 U.S.C. 1101c(a))—
(A) by striking the following: 
‘‘(a) AWARD PERIOD.—
172
‘‘(1) IN GENERAL.—The Secretary’’ and insert-
ing the following: 
‘‘(a) AWARD PERIOD.—The Secretary’’; and 
(B) by striking paragraph (2). 
SEC. 504. TITLE V AUTHORIZATION. 
Subsection (a) of section 518 of such Act (20 U.S.C. 
1103g(a)) is amended to read as follows: 
‘‘(a) AUTHORIZATIONS OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this title 
$96,000,000 for fiscal year 2005 and such sums as may 
be necessary for each of the 5 succeeding fiscal years.’’. 
TITLE VI—TITLE VI 
AMENDMENTS 
SEC. 601. SENSE OF THE HOUSE. 
It is the sense of the House of Representatives that 
title VI of the Higher Education Act of 1965 should be 
amended as provided in H.R. 3077 as passed by the House 
of Representatives on October 21, 2003. 
TITLE VII—TITLE VII 
AMENDMENTS 
SEC. 701. SENSE OF THE HOUSE. 
It is the sense of the House of Representatives that 
title VII of the Higher Education Act of 1965 should be 
amended as provided in H.R. 3076 as passed by the House 
of Representatives on October 21, 2003.
173
TITLE VIII—CLERICAL 
AMENDMENTS 
SEC. 801. CLERICAL AMENDMENTS. 
(a) DEFINITION.—Section 103 (20 U.S.C. 1003) is 
amended—
(1) by redesignating paragraphs (1) through 
(16) as paragraphs (2) through (17), respectively; 
and 
(2) by inserting before paragraph (2) (as so re-
designated) the following new paragraph: 
‘‘(1) AUTHORIZING
COMMITTEES.—The term 
‘authorizing committees’ means the Committee on 
Health, Education, Labor, and Pensions of the Sen-
ate and the Committee on Education and the Work-
force of the House of Representatives.’’. 
(b) COMMITTEES.—
(1) The following provisions are each amended 
by striking ‘‘Committee on Labor and Human Re-
sources of the Senate and the Committee on Edu-
cation and the Workforce of the House of Rep-
resentatives’’ and inserting ‘‘authorizing commit-
tees’’: 
(A) Section 131(a)(3)(B) (20 U.S.C. 
1015(a)(3)(B)).
174
(B) 
Section 
131(c)(4) 
(20 
U.S.C. 
1015(c)(4)). 
(C) Section 206(d) (20 U.S.C. 1026(d)). 
(D) 
Section 
207(c)(1) 
(20 
U.S.C. 
1027(c)(1)). 
(E) Section 428(g) (20 U.S.C. 1078(g)). 
(F) Section 428A(a)(4) (20 U.S.C. 1078–
1(a)(4)). 
(G) Section 428A(c)(2) (20 U.S.C. 1078–
1(c)(2)). 
(H) Section 428A(c)(3) (20 U.S.C. 1078–
1(c)(3)). 
(I) Section 428A(c)(5) (20 U.S.C. 1078–
1(c)(5)). 
(J) Section 455(b)(8)(B) (20 U.S.C. 
1087e(b)(8)(B)). 
(K) Section 483(c) (20 U.S.C. 1090(c)). 
(L) Section 486(e) (20 U.S.C. 1093(e)). 
(M) Section 486(f)(3)(A) (20 U.S.C. 
1093(f)(3)(A)). 
(N) Section 486(f)(3)(B) (20 U.S.C. 
1093(f)(3)(B)). 
(O) 
Section 
487A(a)(5) 
(20 
U.S.C. 
1094a(a)(5)).
175
(P) 
Section 
487A(b)(2) 
(20 
U.S.C. 
1094a(b)(2)). 
(Q) Section 487A(b)(3)(B) (20 U.S.C. 
1094a(b)(3)(B)). 
(R) Section 498B(d)(1) (20 U.S.C. 1099c–
2(d)(1)). 
(S) Section 498B(d)(2) (20 U.S.C. 1099c–
2(d)(2)). 
(2) The following provisions are each amended 
by striking ‘‘Committee on Education and the Work-
force of the House of Representatives and the Com-
mittee on Labor and Human Resources of the Sen-
ate’’ and inserting ‘‘authorizing committees’’: 
(A) Section 141(d)(4)(B) (20 U.S.C. 
1018(d)(4)(B)). 
(B) 
Section 
428(n)(4) 
(20 
U.S.C. 
1078(n)(4)). 
(C) 
Section 
485(f)(5)(A) 
(20 
U.S.C. 
1092(f)(5)(A)). 
(D) Section 485(g)(4)(B) (20 U.S.C. 
1092(g)(4)(B)). 
(3) Section 206(a) (20 U.S.C. 1026(a)) is 
amended by striking ‘‘, the Committee on Labor and 
Human Resources of the Senate, and the Committee 
on Education and the Workforce of the House of
176
Representatives’’ and inserting ‘‘and the authorizing 
committees’’. 
(4) Section 401(f)(3) (20 U.S.C. 1070a(f)(3)) 
is amended by striking ‘‘Committee on Appropria-
tions and the Committee on Labor and Human Re-
sources of the Senate and the Committee on Appro-
priations and the Committee on Education and the 
Workforce of the House of Representatives’’ and in-
serting ‘‘Committees on Appropriations of the Sen-
ate and House of Representatives and the author-
izing committees’’. 
(5) 
Section 
428(c)(9)(K) 
(20 
U.S.C. 
1078(c)(9)(K)) is amended by striking ‘‘House Com-
mittee on Education and the Workforce and the 
Senate Committee on Labor and Human Resources’’ 
and inserting ‘‘authorizing committees’’. 
(6) Section 428I(h) (20 U.S.C. 1078–9(h)) is 
amended by striking ‘‘Chairman of the Senate Labor 
and Human Resources Committee and the House 
Committee on Education and Labor’’ and inserting 
‘‘chairpersons of the authorizing committees’’. 
(7) 
Section 
432(f)(1)(C) 
(20 
U.S.C. 
1082(f)(1)(C)) is amended by striking ‘‘Committee 
on Education and the Workforce of the House of 
Representatives or the Committee on Labor and
177
Human Resources of the Senate’’ and inserting ‘‘ei-
ther of the authorizing committees’’. 
(8) Section 439(d)(1)(E)(iii) (20 U.S.C. 1087–
2(d)(1)(E)(iii)) is amended by striking ‘‘Chairman 
and the Ranking Member on the Committee on 
Labor and Human Resources of the Senate and the 
Chairman and the Ranking Member of the Com-
mittee on Education and Labor of the House of 
Representatives’’ and inserting ‘‘chairpersons and 
ranking minority members of the authorizing com-
mittees’’. 
(9) Paragraphs (3) and (8)(C) of section 439(r) 
(20 U.S.C. 1087–2(r)) are each amended by striking 
‘‘Chairman and ranking minority member of the 
Committee on Labor and Human Resources of the 
Senate, the Chairman and ranking minority member 
of the Committee on Education and Labor of the 
House of Representatives,’’ and inserting ‘‘chair-
persons and ranking minority members of the au-
thorizing committees’’. 
(10) Paragraphs (5)(B) and (10) of section 
439(r) (20 U.S.C. 1087–2(r)) are each amended by 
striking ‘‘Chairman and ranking minority member of 
the Senate Committee on Labor and Human Re-
sources and to the Chairman and ranking minority
178
member of the House Committee on Education and 
Labor’’ and inserting ‘‘chairpersons and ranking mi-
nority members of the authorizing committees’’. 
(11) Section 439(r)(6)(B) (20 U.S.C. 1087–
2(r)(6)(B)) is amended by striking ‘‘Chairman and 
ranking minority member of the Committee on 
Labor and Human Resources of the Senate and to 
the Chairman and ranking minority member of the 
Committee on Education and Labor of the House of 
Representatives’’ and inserting ‘‘chairpersons and 
ranking minority members of the authorizing com-
mittees’’. 
(12) Section 439(s)(2)(A) (20 U.S.C. 1087–
2(s)(2)(A)) is amended by striking ‘‘Chairman and 
Ranking Member of the Committee on Labor and 
Human Resources of the Senate and the Chairman 
and Ranking Member of the Committee on Eco-
nomic and Educational Opportunities of the House 
of Representatives’’ and inserting ‘‘chairpersons and 
ranking minority members of the authorizing com-
mittees’’. 
(13) Section 439(s)(2)(B) (20 U.S.C. 1087–
2(s)(2)(B)) is amended by striking ‘‘Chairman and 
Ranking Minority Member of the Committee on 
Labor and Human Resources of the Senate and
179
Chairman and Ranking Minority Member of the 
Committee on Economic and Educational Opportu-
nities of the House of Representatives’’ and insert-
ing ‘‘chairpersons and ranking minority members of 
the authorizing committees’’. 
(14) Section 482(d) (20 U.S.C. 1089(d)) is 
amended by striking ‘‘Committee on Labor and 
Human Resources of the Senate and the Committee 
on Education and Labor of the House of Represent-
atives’’ and inserting ‘‘authorizing committees’’. 
(c) ADDITIONAL CLERICAL AMENDMENTS.—
(1) Clauses (i) and (ii) of section 425(a)(2)(A) 
(20 U.S.C. 1075(a)(2)(A)) are each amended by 
striking ‘‘428A or 428B’’ and inserting ‘‘428B or 
428H’’. 
(2) 
Section 
428(a)(2)(E) 
(20 
U.S.C. 
1078(a)(2)(E)) is amended by striking ‘‘428A or’’. 
(3) Clauses (i) and (ii) of section 428(b)(1)(B) 
(20 U.S.C. 1078(b)(1)(B)) are each amended by 
striking ‘‘428A or 428B’’ and inserting ‘‘428B or 
428H’’. 
(4) 
Section 
428(b)(1)(Q) 
(20 
U.S.C. 
1078(b)(1)(Q)) is amended by striking ‘‘sections 
428A and 428B’’ and inserting ‘‘section 428B or 
428H’’.
180
(5) 
Section 
428(b)(7)(C) 
(20 
U.S.C. 
1078(b)(7)(C)) is amended by striking ‘‘428A, 
428B,’’ and inserting ‘‘428B’’. 
(6) Section 428G(c)(2) (20 U.S.C. 1078–
7(c)(2)) is amended by striking ‘‘428A’’ and insert-
ing ‘‘428H’’. 
(7) The heading for section 433(e) (20 U.S.C. 
1083(e)) is amended by striking ‘‘SLS LOANS 
AND’’. 
(8) Section 433(e) (20 U.S.C. 1083(e)) is 
amended by striking ‘‘428A, 428B,’’ and inserting 
‘‘428B’’. 
(9) Section 435(a)(3) (20 U.S.C. 1085(a)(3)) is 
amended—
(A) by inserting ‘‘or’’ at the end of sub-
paragraph (A); 
(B) by striking subparagraph (B); and 
(C) by redesignating subparagraph (C) as 
subparagraph (B). 
(10) 
Section 
435(d)(1)(G) 
(20 
U.S.C. 
1085(d)(1)(G)) is amended by striking ‘‘428A(d), 
428B(d), 428C,’’ and inserting ‘‘428B(d), 428C, 
428H,’’. 
(11) Section 435(m) (20 U.S.C. 1085(m)) is 
amended—
181
(A) in paragraph (1)(A), by striking ‘‘, 
428A,’’; and 
(B) in paragraph (2)(D), by striking 
‘‘428A’’ each place it appears and inserting 
‘‘428H’’. 
(12) Section 438(b)(2)(D) (20 U.S.C. 1087–
1(b)(2)(D)) is amended by striking ‘‘division (i) of 
this subparagraph’’ and inserting ‘‘clause (i) of this 
subparagraph’’. 
(13) Section 438(c)(6) (20 U.S.C. 1087–
1(c)(6)) is amended—
(A) by striking ‘‘SLS AND PLUS’’ in the 
heading and inserting ‘‘PLUS’’; and 
(B) by striking ‘‘428A or’’. 
(14) Section 438(c)(7) (20 U.S.C. 1087–
1(c)(7)) is amended by striking ‘‘428A or’’. 
(15) Nothing in the amendments made by this 
subsection shall be construed to alter the terms, con-
ditions, and benefits applicable to Federal supple-
mental loans for students (‘‘SLS loans’’) under sec-
tion 428A as in effect prior to July 1, 1994 (20 
U.S.C. 1078–1).
182
TITLE IX—STUDENT LOAN FOR-
GIVENESS FOR FAMILIES OF 
9/11 VICTIMS 
SEC. 901. CANCELLATION OF STUDENT LOAN INDEBTED-
NESS FOR SPOUSES, SURVIVING JOINT DEBT-
ORS, AND PARENTS. 
(a) DEFINITIONS.—For purposes of this section: 
(1) ELIGIBLE PUBLIC SERVANT.—The term ‘‘el-
igible public servant’’ means an individual who—
(A) served as a police officer, firefighter, 
other safety or rescue personnel, or as a mem-
ber of the Armed Forces; and 
(B) died (or dies) or became (or becomes) 
permanently and totally disabled due to injuries 
suffered in the terrorist attack on September 
11, 2001; 
as determined in accordance with regulations of the 
Secretary. 
(2) ELIGIBLE VICTIM.—The term ‘‘eligible vic-
tim’’ means an individual who died (or dies) or be-
came (or becomes) permanently and totally disabled 
due to injuries suffered in the terrorist attack on 
September 11, 2001, as determined in accordance 
with regulations of the Secretary.
183
(3) ELIGIBLE
PARENT.—The term ‘‘eligible 
parent’’ means the parent of an eligible victim if—
(A) the parent owes a Federal student loan 
that is a consolidation loan that was used to 
repay a PLUS loan incurred on behalf of such 
eligible victim; or 
(B) the parent owes a Federal student loan 
that is a PLUS loan incurred on behalf of an 
eligible victim who became (or becomes) perma-
nently and totally disabled due to injuries suf-
fered in the terrorist attack on September 11, 
2001. 
(4) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Education. 
(5) FEDERAL
STUDENT
LOAN.—The term 
‘‘Federal student loan’’ means any loan made, in-
sured, or guaranteed under part B, D, or E of title 
IV of the Higher Education Act of 1965. 
(b) RELIEF FROM INDEBTEDNESS.—
(1) IN GENERAL.—The Secretary shall provide 
for the discharge or cancellation of—
(A) the Federal student loan indebtedness 
of the spouse of an eligible public servant, as 
determined in accordance with regulations of 
the Secretary, including any consolidation loan
184
that was used jointly by the eligible public serv-
ant and his or her spouse to repay the Federal 
student loans of the spouse and the eligible 
public servant; 
(B) the portion incurred on behalf of the 
eligible victim (other than an eligible public 
servant), of a Federal student loan that is a 
consolidation loan that was used jointly by the 
eligible victim and his or her spouse, as deter-
mined in accordance with regulations of the 
Secretary, to repay the Federal student loans of 
the eligible victim and his or her spouse; 
(C) the portion of the consolidation loan 
indebtedness of an eligible parent that was in-
curred on behalf of an eligible victim; and 
(D) the PLUS loan indebtedness of an eli-
gible parent that was incurred on behalf of an 
eligible victim. 
(2) METHOD
OF
DISCHARGE
OR
CANCELLA-
TION.—A loan required to be discharged or canceled 
under paragraph (1) shall be discharged or canceled 
by the method used under section 437(a), 455(a)(1), 
or 464(c)(1)(F) of the Higher Education Act of 
1965 
(20 
U.S.C. 
1087(a), 
1087e(a)(1),
185
1087dd(c)(1)(F)), whichever is applicable to such 
loan. 
(c) FACILITATION
OF
CLAIMS.—The Secretary 
shall—
(1) establish procedures for the filing of appli-
cations for discharge or cancellation under this sec-
tion by regulations that shall be prescribed and pub-
lished within 90 days after the date of enactment of 
this Act and without regard to the requirements of 
section 553 of title 5, United States Code; and 
(2) take such actions as may be necessary to 
publicize the availability of discharge or cancellation 
of Federal student loan indebtedness under this sec-
tion. 
(d) AVAILABILITY
OF FUNDS
FOR PAYMENTS.—
Funds available for the purposes of making payments to 
lenders in accordance with section 437(a) for the dis-
charge of indebtedness of deceased or disabled individuals 
shall be available for making payments under section 
437(a) to lenders of loans as required by this section. 
(e) APPLICABLE TO OUTSTANDING DEBT.—The pro-
visions of this section shall be applied to discharge or can-
cel only Federal student loans (including consolidation 
loans) on which amounts were owed on September 11,
186
2001. Nothing in this section shall be construed to author-
ize any refunding of any repayment of a loan. 
TITLE X—AMENDMENTS TO 
OTHER EDUCATION LAWS 
PART A—EDUCATION OF THE DEAF ACT OF 1986
SEC. 1001. LAURENT CLERC NATIONAL DEAF EDUCATION 
CENTER. 
(a) GENERAL AUTHORITY.—Section 104(a)(1)(A) of 
the Education of the Deaf Act of 1986 (20 U.S.C. 
4304(a)(1)(A)) is amended by inserting after ‘‘maintain 
and operate’’ the following: ‘‘, at the Laurent Clerc Na-
tional Deaf Education Center,’’. 
(b) ADMINISTRATIVE REQUIREMENTS.—
(1) IN GENERAL.—Section 104(b) of the Edu-
cation of the Deaf Act of 1986 (20 U.S.C. 4304(b)) 
is amended—
(A) in the matter preceding subparagraph 
(A) of paragraph (1), by striking ‘‘elementary 
and secondary education programs’’ and insert-
ing ‘‘Laurent Clerc National Deaf Education 
Center’’; and 
(B) in paragraph (2), by striking ‘‘elemen-
tary and secondary education programs’’ and 
inserting ‘‘Laurent Clerc National Deaf Edu-
cation Center’’.
187
(2) ACADEMIC CONTENT STANDARDS, ACHIEVE-
MENT
STANDARDS, 
AND
ASSESSMENTS.—Section 
104(b) of the Education of the Deaf Act of 1986 
(20 U.S.C. 4304(b)) is amended by adding at the 
end the following new paragraph: 
‘‘(5) The University, in consultation with the Sec-
retary, shall—
‘‘(A) not later than the beginning of the 2006–
2007 academic year, adopt and implement academic 
content standards, academic achievement standards, 
and academic assessments as described in section 
1111(b) of the Elementary and Secondary Edu-
cation Act of 1965 for the Laurent Clerc National 
Deaf Education Center; 
‘‘(B) develop adequate yearly progress stand-
ards for the Center as described in section 
1111(2)(C) of such Act; and 
‘‘(C) make available to the public the results of 
such assessments, except in such case in which such 
reporting would not yield statistically reliable infor-
mation or would reveal personally identifiable infor-
mation about an individual student.’’. 
SEC. 1002. AUTHORITY. 
Section 111 of the Education of the Deaf Act of 1986 
(20 U.S.C. 4331) is amended by striking ‘‘the institution
188
of higher education with which the Secretary has an agree-
ment under this part’’ and inserting ‘‘the Rochester Insti-
tute of Technology’’. 
SEC. 1003. AGREEMENT FOR THE NATIONAL TECHNICAL IN-
STITUTE FOR THE DEAF. 
(a) GENERAL AUTHORITY.—Section 112(a) of the 
Education of the Deaf Act of 1986 (20 U.S.C. 4332(a)) 
is amended—
(1) in paragraph (1)—
(A) in the first sentence—
(i) by striking ‘‘an institution of high-
er education’’ and inserting ‘‘the Rochester 
Institute of Technology, Rochester, New 
York,’’; and 
(ii) by striking ‘‘of a’’ and inserting 
‘‘of the’’; and 
(B) by striking the second sentence; and 
(2) in paragraph (2)—
(A) in the matter preceding subparagraph 
(A), by striking ‘‘the institution of higher edu-
cation with which the Secretary has an agree-
ment under this section’’ and inserting ‘‘the 
Rochester Institute of Technology’’; and
189
(B) in subparagraph (B), by striking ‘‘the 
institution’’ and inserting ‘‘the Rochester Insti-
tute of Technology’’. 
(b) PROVISIONS OF AGREEMENT.—Section 112(b) of 
the Education of the Deaf Act of 1986 (20 U.S.C. 
4332(b)) is amended—
(1) in paragraph (2), by striking ‘‘or other gov-
erning body of the institution’’ and inserting ‘‘of the 
Rochester Institute of Technology’’; and 
(2) in paragraph (3)—
(A) by striking ‘‘or other governing body of 
the institution’’ and inserting ‘‘of the Rochester 
Institute of Technology’’; 
(B) by striking ‘‘the institution of higher 
education under the agreement with the Sec-
retary’’ and inserting ‘‘the Rochester Institute 
of Technology by the National Technical Insti-
tute for the Deaf’’; and 
(C) by striking ‘‘Committee on Education 
and Labor of the House of Representatives and 
to the Committee on Labor and Human Re-
sources of the Senate’’ and inserting ‘‘Com-
mittee on Education and the Workforce of the 
House of Representatives and to the Committee
190
on Health, Education, Labor, and Pensions of 
the Senate’’. 
(c) LIMITATION.—Section 112(c) of the Education of 
the Deaf Act of 1986 (20 U.S.C. 4332(c)) is amended in 
paragraphs (1) and (2) by striking ‘‘institution’’ each 
place it appears and inserting ‘‘Rochester Institute of 
Technology’’. 
SEC. 1004. DEFINITIONS. 
Section 201 of the Education of the Deaf Act of 1986 
(20 U.S.C. 4351) is amended—
(1) by striking paragraph (3); 
(2) by redesignating paragraphs (4) through 
(7) as paragraphs (3) through (6), respectively; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(7) The term ‘RIT’ means the Rochester Insti-
tute of Technology.’’. 
SEC. 1005. AUDIT. 
(a) INDEPENDENT FINANCIAL
AND COMPLIANCE 
AUDIT.—Section 203(b)(1) of the Education of the Deaf 
Act of 1986 (20 U.S.C. 4353(b)(1)) is amended by strik-
ing the second sentence and inserting the following: 
‘‘NTID shall have an annual independent financial and 
compliance audit made of RIT programs and activities, 
including NTID programs and activities.’’.
191
(b) COMPLIANCE.—Section 203(b)(2) of the Edu-
cation of the Deaf Act of 1986 (20 U.S.C. 4353(b)(2)) 
is amended by striking ‘‘sections’’ and all that follows 
through ‘‘section 207’’ and inserting ‘‘sections 102(b), 
105(b)(4), 112(b)(5), 203(c), 207(b)(2), subsections (c) 
through (f) of section 207’’. 
(c) SUBMISSION OF AUDITS.—Section 203(b)(3) of 
the Education of the Deaf Act of 1986 (20 U.S.C. 
4353(b)(3)) is amended—
(1) by inserting after ‘‘Secretary’’ the following: 
‘‘and the Committee on Education and the Work-
force of the House of Representatives and the Com-
mittee on Health, Education, Labor, and Pensions 
of the Senate’’; and 
(2) by striking ‘‘or the institution authorized to 
establish and operate the NTID under section 
112(a)’’ and inserting ‘‘or RIT’’. 
(d) LIMITATIONS
REGARDING
EXPENDITURE
OF 
FUNDS.—Section 203(c)(2)(A) of the Education of the 
Deaf Act of 1986 (20 U.S.C. 4353(c)(2)(A)) is amended 
in the fifth sentence by striking ‘‘the Committee on Edu-
cation and Labor of the House of Representatives and the 
Committee on Labor and Human Resources of the Sen-
ate’’ and inserting ‘‘the Committee on Education and the 
Workforce of the House of Representatives and the Com-
192
mittee on Health, Education, Labor, and Pensions of the 
Senate’’. 
SEC. 1006. REPORTS. 
(a) TECHNICAL AMENDMENTS.—Section 204 of the 
Education of the Deaf Act of 1986 (20 U.S.C. 4354) is 
amended in the matter preceding paragraph (1)—
(1) by striking ‘‘or other governing body of the 
institution of higher education with which the Sec-
retary has an agreement under section 112’’ and in-
serting ‘‘of RIT’’; and 
(2) by striking ‘‘Committee on Education and 
Labor of the House of Representatives and the Com-
mittee on Labor and Human Resources of the Sen-
ate’’ and inserting ‘‘Committee on Education and 
the Workforce of the House of Representatives and 
the Committee on Health, Education, Labor, and 
Pensions of the Senate’’. 
(b) CONTENTS
OF REPORT.—Section 204 of the 
Education of the Deaf Act of 1986 (20 U.S.C. 4354) is 
amended—
(1) in paragraph (2)(C), by striking ‘‘upon 
graduation/completion’’ and inserting ‘‘within one 
year of graduation/completion’’; and 
(2) in paragraph (3)(B), by striking ‘‘of the in-
stitution of higher education with which the Sec-
193
retary has an agreement under section 112, includ-
ing specific schedules and analyses for all NTID 
funds, as required under section 203’’ and inserting 
‘‘of RIT programs and activities’’. 
SEC. 1007. LIAISON FOR EDUCATIONAL PROGRAMS. 
Section 206(a) of the Education of the Deaf Act of 
1986 (20 U.S.C. 4356(a)) is amended by striking ‘‘Not 
later than 30 days after the date of enactment of this Act, 
the’’ and inserting ‘‘The’’. 
SEC. 1008. FEDERAL ENDOWMENT PROGRAMS FOR GAL-
LAUDET UNIVERSITY AND THE NATIONAL 
TECHNICAL INSTITUTE FOR THE DEAF. 
Section 207(a)(2) of the Education of the Deaf Act 
of 1986 (20 U.S.C. 4357(a)(2)) is amended by striking 
‘‘or other governing body of the institution of higher edu-
cation with which the Secretary has an agreement under 
section 112’’ and inserting ‘‘of RIT’’. 
SEC. 1009. OVERSIGHT AND EFFECT OF AGREEMENTS. 
Section 208(a) of the Education of the Deaf Act of 
1986 (20 U.S.C. 4359(a)) is amended—
(1) by striking ‘‘the institution of higher edu-
cation with which the Secretary has an agreement 
under part B of title I’’ and inserting ‘‘RIT’’; and 
(2) by striking ‘‘Committee on Labor and 
Human Resources of the Senate and the Committee
194
on Education and Labor of the House of Represent-
atives’’ and inserting ‘‘Committee on Education and 
the Workforce of the House of Representatives and 
the Committee on Health, Education, Labor, and 
Pensions of the Senate’’. 
SEC. 1010. AUTHORIZATION OF APPROPRIATIONS. 
(a) MONITORING AND EVALUATION ACTIVITIES.—
Section 205(c) of the Education of the Deaf Act of 1986 
(20 U.S.C. 4355(c)) is amended by striking ‘‘fiscal years 
1998 through 2003’’ and inserting ‘‘fiscal years 2004 
through 2009’’. 
(b) FEDERAL ENDOWMENT PROGRAMS FOR GAL-
LAUDET UNIVERSITY AND THE NATIONAL TECHNICAL IN-
STITUTE FOR THE DEAF.—Section 207(h) of the Edu-
cation of the Deaf Act of 1986 (20 U.S.C. 4357(h)) is 
amended in paragraphs (1) and (2) by striking ‘‘fiscal 
years 1998 through 2003’’ each place it appears and in-
serting ‘‘fiscal years 2004 through 2009’’. 
(c) GENERAL
AUTHORIZATION
OF
APPROPRIA-
TIONS.—Section 212 of the Education of the Deaf Act of 
1986 (20 U.S.C. 4360a) is amended—
(1) in the matter preceding paragraph (1) in 
subsection (a), by striking ‘‘fiscal years 1998 
through 2003’’ and inserting ‘‘fiscal years 2004 
through 2009’’; and