(b) 
CONFORMING
ICR 
AMENDMENT.—Section 
455(d)(1)(D) (20 U.S.C. 1087e(d)(1)(D)) is amended by 
inserting ‘‘made on behalf of a dependent student’’ after 
‘‘PLUS loan’’. 
SEC. 144. DEFINITION OF ECONOMIC HARDSHIP. 
Section 435(o) (20 U.S.C. 1085(o)) is amended— 
(1) in paragraph (1)— 
(A) in subparagraph (A)(ii), by striking 
‘‘100 percent of the poverty line for a family of 
2’’ and inserting ‘‘150 percent of the poverty 
line applicable to the borrower’s family size’’; 
(B) by striking subparagraph (B); and 
(C) by redesignating subparagraph (C) as 
subparagraph (B); and 
(2) in paragraph (2), by striking ‘‘(1)(C)’’ and 
inserting ‘‘(1)(B)’’. 
SEC. 145. DEFERRALS. 
(a) FISL.—Section 427(a)(2)(C)(iii) (20 U.S.C. 
1077(a)(2)(C)(iii)) is amended by striking ‘‘not in excess 
of 3 years’’. 
(b) INTEREST SUBSIDIES.—Section 428(b)(1)(M)(iv) 
(20 U.S.C. 1078(b)(1)(M)(iv)) is amended by striking 
‘‘not in excess of 3 years’’.
(c) DIRECT
LOANS.—Section 455(f)(2)(D) (20 
U.S.C. 1087e(f)(2)(D)) is amended by striking ‘‘not in ex-
cess of 3 years’’. 
(d) PERKINS.—Section 464(c)(2)(A)(iv) (20 U.S.C. 
1087dd(c)(2)(A)(iv)) is amended by striking ‘‘not in ex-
cess of 3 years’’. 
SEC. 146. MAXIMUM REPAYMENT PERIOD. 
(a) IN
GENERAL.—Section 455(e) (20 U.S.C. 
1087e(e)) is amended by adding at the end the following: 
‘‘(9) MAXIMUM REPAYMENT PERIOD.—In calcu-
lating the extended period of time for which an in-
come contingent repayment plan under this sub-
section may be in effect for a borrower, the Sec-
retary shall include all time periods during which a 
borrower of loans under part B, part D, or part E— 
‘‘(A) is not in default on any loan that is 
included in the income contingent repayment 
plan; and 
‘‘(B)(i) is in deferment due to an economic 
hardship described in section 435(o); 
‘‘(ii) makes monthly payments under para-
graph (1) or (6) of section 493C(b); or 
‘‘(iii) makes payments under a standard 
repayment 
plan 
described 
in 
section 
428(b)(9)(A)(i) or subsection (d)(1)(A).’’.
(b) TECHNICAL CORRECTION.—Section 455(d)(1)(C) 
(20 U.S.C. 1087e(d)(1)(C)) is amended by striking 
‘‘428(b)(9)(A)(v)’’ and inserting ‘‘428(b)(9)(A)(iv)’’. 
TITLE II—REDUCING THE COST 
OF COLLEGE 
SEC. 201. STATE COMMITMENT TO AFFORDABLE COLLEGE 
EDUCATION. 
Title I is amended by inserting after section 131 (20 
U.S.C. 1015) the following new section: 
‘‘SEC. 132. STATE COMMITMENT TO AFFORDABLE COLLEGE 
EDUCATION. 
‘‘(a) MAINTENANCE
OF EFFORT REQUIRED.—No 
State shall reduce the total amount provided by the State 
for public institutions of higher education in such State 
for any academic year beginning on or after July 1, 2008, 
to an amount which is less than the average amount pro-
vided by such State to such institutions of higher edu-
cation during the 5 most recent preceeding academic years 
for which satisfactory data is available. 
‘‘(b) WITHHOLDING OF ALL LEAP FUNDS FOR VIO-
LATIONS.—Notwithstanding any other provision of law, 
the Secretary of Education shall withhold from any State 
that violates subsection (a) any amount that would other-
wise be available to the State under the Leveraging Edu-
cational Assistance Partnership Program under subpart 4
of part A of title IV until such State has corrected such 
violation.’’. 
SEC. 202. CONSUMER INFORMATION AND PUBLIC AC-
COUNTABILITY IN HIGHER EDUCATION. 
Section 131 of the Higher Education Act of 1965 (20 
U.S.C. 1015) is amended to read as follows: 
‘‘SEC. 131. CONSUMER INFORMATION AND PUBLIC AC-
COUNTABILITY IN HIGHER EDUCATION. 
‘‘(a) COLLEGE
OPPORTUNITY
ON-LINE
(COOL) 
WEBSITE RE-DESIGN PROCESS.—In carrying out this 
section, the Commissioner of Education Statistics— 
‘‘(1) shall identify the data elements that are of 
greatest importance to prospective students, enrolled 
students, and their families, paying particular atten-
tion to low-income, non-traditional student popu-
lations, and first-generation college students; 
‘‘(2) shall convene a group of individuals with 
expertise in the collection and reporting of data re-
lated to institutions of higher education, the use of 
consumer data, and consumer marketing in general 
to— 
‘‘(A) determine the relevance of particular 
data elements to prospective students, enrolled 
students, and families;
‘‘(B) assess the cost-effectiveness of var-
ious ways in which institutions of higher edu-
cation might produce relevant data; 
‘‘(C) determine the general comparability 
of the data across institutions of higher edu-
cation; 
‘‘(D) make recommendations regarding the 
inclusion of specific data items and the most ef-
fective and least burdensome methods of col-
lecting and reporting useful data from institu-
tions of higher education; and 
‘‘(3) shall ensure that the redesigned COOL 
website— 
‘‘(A) uses, to the extent practicable, data 
elements currently provided by institutions of 
higher education to the Secretary; 
‘‘(B) includes clear and uniform informa-
tion determined to be relevant to prospective 
students, enrolled students, and families; 
‘‘(C) provides comparable information, by 
ensuring that data are based on accepted cri-
teria and common definitions; 
‘‘(D) includes a sorting function that per-
mits users to customize their search for and 
comparison of institutions of higher education
based on the information identified through the 
process as prescribed in paragraph (1) as being 
of greatest relevance to choosing an institution 
of higher education. 
‘‘(b) DATA COLLECTION.— 
‘‘(1) DATA
SYSTEM.—The Commissioner of 
Education Statistics shall continue to redesign the 
relevant parts of the Integrated Postsecondary Edu-
cation Data System to include additional data as re-
quired by this section and to continue to improve the 
usefulness and timeliness of data collected by such 
systems in order to inform consumers about institu-
tions of higher education. 
‘‘(2) COLLEGE CONSUMER PROFILE.—The Sec-
retary shall continue to publish on the COOL 
website, for each academic year and in accordance 
with standard definitions developed by the Commis-
sioner of Education Statistics (including definitions 
developed under section 131(a)(3)(A) as in effect on 
the day before the date of enactment of the College 
Cost Reduction Act of 2007), from at least all insti-
tutions of higher education participating in pro-
grams under title IV the following information:
‘‘(A) The tuition and fees charged for a 
first-time, full-time, full-year undergraduate 
student. 
‘‘(B) The room and board charges for a 
first-time, full-time, full-year undergraduate 
student. 
‘‘(C) The price of attendance for a first- 
time, full-time, full-year undergraduate student, 
consistent with the provisions of section 472. 
‘‘(D) The average amount of financial as-
sistance received by a first-year, full-time, full- 
year undergraduate student, including— 
‘‘(i) each type of assistance or benefits 
described in 428(a)(2)(C)(ii); 
‘‘(ii) institutional and other assist-
ance; and 
‘‘(iii) Federal loans under parts B, D, 
and E of title IV. 
‘‘(E) The number of first-time, full-time, 
full-year undergraduate students receiving fi-
nancial assistance described in each clause of 
subparagraph (D). 
‘‘(F) The institutional instructional ex-
penditure per full-time equivalent student.
‘‘(G) Student enrollment information, in-
cluding information on the number and percent-
age of full-time and part-time students, the 
number and percentage of resident and non- 
resident students. 
‘‘(H) Faculty-to-student ratios. 
‘‘(I) Faculty information, including the 
total number of faculty and the percentage of 
faculty who are full-time employees of the insti-
tution and the percentage who are part-time. 
‘‘(J) Completion and graduation rates of 
undergraduate students, identifying whether the 
completion or graduation rates are from a 2- 
year or 4-year program of instruction and, in 
the case of a 2-year program of instruction, the 
percentage of students who transfer to 4-year 
institutions prior or subsequent to completion 
or graduation. 
‘‘(K) A link to the institution of higher 
education with information of interest to stu-
dents including mission, accreditation, student 
services (including services for students with 
disabilities), transfer of credit policies, any ar-
ticulation agreements entered into by the insti-
tution, and, if appropriate, placement rates and
other measures of success in preparing students 
for entry into or advancement in the workforce. 
‘‘(L) The college affordability information 
elements specified in subsection (c). 
‘‘(M) Any additional information that the 
Secretary may require. 
‘‘(c) COLLEGE AFFORDABILITY INFORMATION ELE-
MENTS.—The college affordability information elements 
required by subsection (b)(2)(L) shall include, for each in-
stitution submitting data— 
‘‘(1) the sticker price of the institution for the 
3 most recent academic years; 
‘‘(2) the net tuition price of the institution for 
the 3 most recent academic years; 
‘‘(3) the percentage change in both the sticker 
price and the net tuition price over the 3-year time 
period that is being reported; 
‘‘(4) the percentage change in the CPI over the 
same 3-year time period; and 
‘‘(5) whether the institution has been placed on 
affordability alert status as required by subsection 
(d)(3). 
‘‘(d) OUTCOMES AND ACTIONS.— 
‘‘(1) RESPONSE FROM INSTITUTION.—Effective 
on June 30, 2008, an institution that increases its
sticker price at a percentage rate for any 3-year in-
terval ending on or after that date that exceeds two 
times the rate of change in the CPI over the same 
time period shall provide a report to the Secretary, 
in such a form, at such time, and containing such 
information as the Secretary may require. Such re-
port shall be published by the Secretary on the 
COOL website, and shall include— 
‘‘(A) a description of the factors contrib-
uting to the increase in the institution’s costs 
and in the tuition and fees charged to students; 
and 
‘‘(B) 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) QUALITY-EFFICIENCY TASK FORCES.— 
‘‘(A) REQUIRED.—Each institution subject 
to paragraph (1) that has a percentage change 
in its sticker price that is in the highest 5 per-
cent of all institutions subject to paragraph (1)
shall establish a quality-efficiency task force to 
review the operations of such institution. 
‘‘(B) MEMBERSHIP.—Such task force shall 
include administrators, business and civic lead-
ers, and faculty, and may include students, 
trustees, parents of students, and alumni of 
such institution. 
‘‘(C) FUNCTIONS.—Such task force shall 
analyze institutional operating costs in compari-
son with such costs at other institutions within 
the class of institutions. Such analysis should 
identify areas where, in comparison with other 
institutions in such class, the institution oper-
ates more expensively to produce a similar re-
sult. Any identified areas should then be tar-
geted for in-depth analysis for cost reduction 
opportunities. 
‘‘(D) REPORT.—Not later than one year 
after a quality-efficiency task force is estab-
lished pursuant to subparagraph (A), the re-
sults of the analysis by a such task force shall 
be submitted to the Secretary and shall be 
made available to the public on the COOL 
website.
‘‘(3) CONSEQUENCES
FOR
2-YEAR
CONTINU-
ATION
OF
FAILURE.—If the Secretary determines 
that an institution that is subject to paragraph (1)) 
has failed to reduce the subsequent increase in stick-
er price to equal to or below two times the rate of 
change in the CPI for 2 consecutive academic years 
subsequent to the 3-year interval used under para-
graph (1), the Secretary shall place the institution 
on affordability alert status. 
‘‘(4) 
EXEMPTIONS.—Notwithstanding 
para-
graph (3), an institution shall not be placed on af-
fordability alert status if, for any 3-year interval for 
which sticker prices are computed under paragraph 
(1)— 
‘‘(A) with respect to the class of institu-
tions described in paragraph (6) to which the 
institution belongs, the sticker price of the in-
stitution is in the lowest quartile of institutions 
within such class, as determined by the Sec-
retary, during the last year of such 3-year in-
terval; or 
‘‘(B) the institution has a percentage 
change in its sticker price computed under 
paragraph (1) that exceeds two times the rate 
of change in the CPI over the same time period,
but the dollar amount of the sticker price in-
crease is less than $500. 
‘‘(5) INFORMATION TO STATE AGENCIES.—Any 
institution that reports under paragraph (1)(B) 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. 
‘‘(6) CLASSES OF INSTITUTIONS.—For purposes 
of this subsection, the classes of institutions shall be 
those sectors used by the Integrated Postsecondary 
Education Data System, based on whether the insti-
tution is public, nonprofit private, or for-profit pri-
vate, and whether the institution has a 4-year, 2- 
year, or less than 2-year program of instruction. 
‘‘(7) DATA REJECTION.—Nothing in this sub-
section shall be construed as allowing the Secretary 
to reject the data submitted by an individual institu-
tion of higher education.
‘‘(e) INFORMATION TO THE PUBLIC.—The Secretary 
shall work with public and private entities to promote 
broad public awareness, particularly among middle and 
high school students and their families, of the information 
made available under this section, including by distribu-
tion to students who participate in or receive benefits from 
means-tested federally funded education programs and 
other Federal programs determined by the Secretary. 
‘‘(f) FINES.—In addition to actions authorized in sec-
tion 487(c), the Secretary may impose a fine in an amount 
not to exceed $25,000 on an institution of higher edu-
cation for failing to provide the information required by 
this section in a timely and accurate manner, or for failing 
to otherwise cooperate with the National Center for Edu-
cation Statistics regarding efforts to obtain data under 
subsections (c) and (i) and pursuant to the program par-
ticipation agreement entered into under section 487. 
‘‘(g) REGULATIONS.—The Secretary is authorized to 
issue such regulations as may be necessary to carry out 
the provisions of this section. 
‘‘(h) DEFINITIONS.—For the purposes of this section: 
‘‘(1) NET TUITION PRICE.—The term ‘net tui-
tion price’ means the average tuition and fees 
charged to a first-time, full-time, full-year under-
graduate student, minus the average grants provided 
to such students, for any academic year. 
‘‘(2) STICKER PRICE.—The term ‘sticker price’ 
means the average tuition and fees charged to a 
first-time, full-time, full-year undergraduate student 
by an institution of higher education for any aca-
demic year. 
‘‘(3) CPI.—The term ‘CPI’ means the Con-
sumer Price Index-All Urban Consumers (Current 
Series).’’. 
SEC. 203. INCENTIVES AND REWARDS FOR LOW TUITION. 
Subpart 1 of part A of title IV is amended by insert-
ing after section 401A (20 U.S.C. 1070a–1) the following 
new section: 
‘‘SEC. 401B. INCENTIVES AND REWARDS FOR LOW TUITION. 
‘‘(a) REWARDS FOR LOW TUITION.—For any institu-
tion of higher education that, for academic year 2008– 
2009 or any succeeding academic year, such institution’s 
annual net tuition price increase (expressed as a percent-
age) for the most recent academic year for which satisfac-
tory data is available is equal to or less than the percent-
age change in the higher education price index for such 
academic year, the Secretary shall, notwithstanding any 
other provision of the law, provide such institution an 
amount sufficient to provide a 25 percent increase under
subpart 1 of part A of title IV to each Pell Grant recipient 
attending such institution for the next award year begin-
ning after the date of such determination. Each such insti-
tution shall distribute any amounts received under this 
subsection among such Pell Grant recipients by increasing 
the amount of their Pell Grant awards by 25 percent. 
‘‘(b) REWARDS FOR GUARANTEED TUITION.— 
‘‘(1) BONUS.—For each institution of higher 
education that the Secretary of Education deter-
mines complies with the requirements of paragraph 
(2) or paragraph (3) of this subsection, the Sec-
retary shall, notwithstanding any other provision of 
the law, provide such institution an amount suffi-
cient to provide a 10 percent increase under subpart 
1 of part A of title IV to each Pell Grant recipient 
attending such institution for the next award year 
beginning after the date of such determination. Each 
such institution shall distribute any amounts re-
ceived under this subsection among such Pell Grant 
recipients by increasing the amount of their Pell 
Grant awards by 10 percent. 
‘‘(2) 4-YEAR INSTITUTIONS.—An institution of 
higher education that provides a program of instruc-
tion for which it awards a bachelor’s degree complies 
with the requirements of this paragraph if such in-
stitution guarantees that for any academic year be-
ginning on or after July 1, 2008, and for each of the 
4 succeeding continuous academic years, the net tui-
tion price charged to an undergraduate student will 
not exceed— 
‘‘(A) the amount that the student was 
charged for an academic year at the time he or 
she first enrolled in the institution of higher 
education, plus 
‘‘(B) the product of the percentage in-
crease in the higher education price index for 
the prior academic year, or the most recent 
prior academic year for which data is available, 
multiplied by the amount determined under 
subparagraph (A). 
‘‘(3) LESS-THAN
4-YEAR
INSTITUTIONS.—An 
institution of higher education that does not provide 
a program of instruction for which it awards a bach-
elor’s degree complies with the requirements of this 
paragraph if such institution guarantees that for 
any academic year (or the equivalent) beginning on 
or after July 1, 2008, and for each of the 1.5 suc-
ceeding continuous academic years, the net tuition 
price charged to an undergraduate student will not 
exceed—
‘‘(A) the amount that the student was 
charged for an academic year at the time he or 
she first enrolled in the institution of higher 
education, plus 
‘‘(B) the product of the percentage in-
crease in the higher education price index for 
the prior academic year, or the most recent 
prior academic year for which data is available, 
multiplied by the amount determined under 
subparagraph (A). 
‘‘(c) MAINTAINING AFFORDABLE TUITION.—For any 
institution of higher education whose increase in the an-
nual net tuition price (expressed as a percentage), for the 
most recent academic year for which satisfactory data is 
available, is greater than the percentage increase in the 
higher education price index for such academic year, the 
Secretary shall require such institution to submit to the 
Secretary the following information, within 6 months of 
such determination: 
‘‘(1) a detailed report on the exact causes for 
the net tuition price increase that outlines revenues 
and expenditures; and 
‘‘(2) cost containment strategies to lower net 
tuition prices. 
‘‘(d) DEFINITIONS.—
‘‘(1) NET TUITION PRICE.—The term ‘net tui-
tion price’ has the same meaning as provided in sec-
tion 131(k). 
‘‘(2) HIGHER EDUCATION PRICE INDEX.—The 
term ‘higher education price index’ means a statis-
tical measure of change over time in the prices of a 
fixed market basket of goods and services purchased 
by colleges and universities through current fund 
educational and general expenditures (excluding ex-
penditures for research), as developed by the Bureau 
of Labor Statistics. 
‘‘(e) FUNDING.—There shall be available to the Sec-
retary to carry out this section, from funds not otherwise 
appropriated, $15,000,000 for each of the fiscal years 
2008 through 2012. 
‘‘(f) SUNSET.—The authority to carry out this sec-
tion shall expire at the end of fiscal year 2012.’’. 
SEC. 204. COOPERATIVE EDUCATION REWARDS FOR INSTI-
TUTIONS 
THAT 
RESTRAIN 
TUITION 
IN-
CREASES. 
The Higher Education Act of 1965 (20 U.S.C. 1101 
et seq.) is amended by adding at the end the following 
title:
‘‘TITLE VIII—COOPERATIVE EDU-
CATION REWARDS FOR INSTI-
TUTIONS 
THAT 
RESTRAIN 
TUITION INCREASES 
‘‘SEC. 801. ELIGIBLE INSTITUTIONS. 
‘‘(a) ELIGIBLE INSTITUTIONS.—An institution of 
higher education shall be eligible to apply for a grant 
under this title if such institution, and a combination of 
such institutions shall be eligible to apply for such a grant 
if each institution in such combination— 
‘‘(1) for the academic year for which the insti-
tution is applying, keeps such institution’s annual 
net tuition price increase (expressed as a percent-
age) for the most recent academic year for which 
satisfactory data is available equal to or less than 
the percentage change in the higher education price 
index for such year; and 
‘‘(2) for such academic year, provides the guar-
antee required by paragraph (2) or (3) of section 
401A(b). 
‘‘(b) DEFINITIONS.— 
‘‘(1) COOPERATIVE EDUCATION.—For the pur-
pose of this title the term ‘cooperative education’ 
means the provision of alternating or parallel periods 
of academic study and public or private employment
in order to give students work experiences related to 
their academic or occupational objectives and an op-
portunity to earn the funds necessary for continuing 
and completing their education. 
‘‘(2) CALCULATION OF INDEX.—The net tuition 
price index shall be equal to the percentage increase 
in the net tuition price charged for a first-time, full- 
time, full-year undergraduate student between a pre-
ceding academic year and the most recent academic 
year for which satisfactory data are available. 
‘‘(3) NET TUITION PRICE.—The term ‘net tui-
tion price’ means the average tuition and fees 
charged to first-time, full-year, full-time under-
graduate students, minus the average grants pro-
vided to such students, for any academic year. 
‘‘(4) TUITION.—The term ‘tuition’ means the 
average price of or payment for actual instruction of 
first-time, full-year, full-time undergraduate stu-
dents at an institution of higher education, for any 
academic year. 
‘‘SEC. 802. AUTHORIZATION OF APPROPRIATIONS; RES-
ERVATIONS. 
‘‘(a) APPROPRIATIONS.—There shall be available to 
the Secretary to carry out this title from funds not other-
wise appropriated $15,000,000 for each of the fiscal years 
2008 through 2012. 
‘‘(b) RESERVATIONS.—Of the amount appropriated 
for each such fiscal year— 
‘‘(1) not less than 50 percent shall be available 
for carrying out grants to institutions of higher edu-
cation and combinations of such institutions de-
scribed in section 803(a)(1)(A) for cooperative edu-
cation under section 803; 
‘‘(2) not less than 25 percent shall be available 
for carrying out grants to institutions of higher edu-
cation described in section 803(a)(1)(B) for coopera-
tive education under section 803; 
‘‘(3) not to exceed 11 percent shall be available 
for demonstration projects under paragraph (1) of 
section 804(a); 
‘‘(4) not to exceed 11 percent shall be available 
for training and resource centers under paragraph 
(2) of section 804(a); and 
‘‘(5) not to exceed 3 percent shall be available 
for research under paragraph (3) of section 804(a). 
‘‘(c) AVAILABILITY
OF APPROPRIATIONS.—Appro-
priations under this title shall not be available for the pay-
ment of compensation of students for employment by em-
ployers under arrangements pursuant to this title.
‘‘(d) SUNSET.—The authority to carry out this title 
shall expire at the end of fiscal year 2012. 
‘‘SEC. 803. GRANTS FOR COOPERATIVE EDUCATION. 
‘‘(a) GRANTS AUTHORIZED.— 
‘‘(1) IN GENERAL.—The Secretary is author-
ized— 
‘‘(A) from the amount available under sec-
tion 802(b)(1) in each fiscal year and in accord-
ance with the provisions of this title, to make 
grants to institutions of higher education or 
combinations of such institutions that have not 
received a grant under this paragraph in the 
10-year period preceding the date for which a 
grant under this section is requested to pay the 
Federal share of the cost of planning, estab-
lishing, expanding, or carrying out programs of 
cooperative education by such institutions or 
combinations of institutions; and 
‘‘(B) from the amount available under sec-
tion 802(b)(2) in each fiscal year and in accord-
ance with the provisions of this title, to make 
grants to institutions of higher education that 
are operating an existing cooperative education 
program as determined by the Secretary to pay 
the cost of planning, establishing, expanding, or
carrying out programs of cooperative education 
by such institutions. 
‘‘(2) PROGRAM
REQUIREMENT.—Cooperative 
education programs assisted under this section shall 
provide alternating or parallel periods of academic 
study and of public or private employment, giving 
students work experience related to their academic 
or occupational objectives and the opportunity to 
earn the funds necessary for continuing and com-
pleting their education. 
‘‘(3) AMOUNT OF GRANTS.— 
‘‘(A) The amount of each grant awarded 
pursuant to paragraph (1)(A) to any institution 
of higher education or combination of such in-
stitutions in any fiscal year shall not exceed 
$500,000. 
‘‘(B)(i) Except as provided in clauses (ii) 
and (iii), the Secretary shall award grants in 
each fiscal year to each institution of higher 
education described in paragraph (1)(B) that 
has an application approved under subsection 
(b) in an amount which bears the same ratio to 
the amount reserved pursuant to section 
802(b)(2) for such fiscal year as the number of 
unduplicated students placed in cooperative
education jobs during the preceding fiscal year 
(other than cooperative education jobs under 
section 804 and as determined by the Sec-
retary) by such institution of higher education 
bears to the total number of all such students 
placed in such jobs during the preceding fiscal 
year by all such institutions. 
‘‘(ii) No institution of higher education 
shall receive a grant pursuant to paragraph 
(1)(B) in any fiscal year in an amount which 
exceeds 25 percent of such institution’s cooper-
ative education program’s personnel and oper-
ating budget for the preceding fiscal year. 
‘‘(iii) The minimum annual grant amount 
which an institution of higher education is eligi-
ble to receive under paragraph (1)(B) is $1,000 
and the maximum annual grant amount is 
$75,000. 
‘‘(4) LIMITATION.—The Secretary shall not 
award grants pursuant to paragraphs (1)(A) and 
(1)(B) to the same institution of higher education or 
combination of such institution in any one fiscal 
year. 
‘‘(5) USES.—Grants under paragraph (1)(B) 
shall be used exclusively—
‘‘(A) to expand the quality and participa-
tion of a cooperative education program; 
‘‘(B) for outreach in new curricular areas; 
and 
‘‘(C) for outreach to potential participants 
including underrepresented and nontraditional 
populations. 
‘‘(b) APPLICATIONS.—Each institution of higher edu-
cation or combination of such institutions desiring to re-
ceive a grant under this section shall submit an application 
to the Secretary at such time and in such manner as the 
Secretary shall prescribe. Each such application shall— 
‘‘(1) set forth the program or activities for 
which a grant is authorized under this section; 
‘‘(2) specify each portion of such program or 
activities which will be performed by a nonprofit or-
ganization or institution other than the applicant 
and the compensation to be paid for such perform-
ance; 
‘‘(3) provide that the applicant will expend dur-
ing such fiscal year for the purpose of such program 
or activities not less than the amount expended for 
such purpose during the previous fiscal year; 
‘‘(4) describe the plans which the applicant will 
carry out to assure, and contain a formal statement
of the institution’s commitment which assures, that 
the applicant will continue the cooperative education 
program beyond the 5-year period of Federal assist-
ance described in subsection (c)(1) at a level which 
is not less than the total amount expended for such 
program during the first year such program was as-
sisted under this section; 
‘‘(5) provide that, in the case of an institution 
of higher education that provides a 2-year program 
which is acceptable for full credit toward a bach-
elor’s degree, the cooperative education program will 
be available to students who are certificate or asso-
ciate degree candidates and who carry at least one- 
half the normal full-time academic workload; 
‘‘(6) provide that the applicant will— 
‘‘(A) for each fiscal year for which the ap-
plicant receives a grant, make such reports with 
respect to the impact of the cooperative edu-
cation program in the previous fiscal year as 
may be essential to ensure that the applicant is 
complying with the provisions of this section, 
including— 
‘‘(i) the number of unduplicated stu-
dent applicants in the cooperative edu-
cation program;
‘‘(ii) the number of unduplicated stu-
dents placed in cooperative education jobs; 
‘‘(iii) the number of employers who 
have hired cooperative education students; 
‘‘(iv) the average income for students 
derived from working in cooperative edu-
cation jobs; and 
‘‘(v) the increase or decrease in the 
number of unduplicated students placed in 
cooperative education jobs in each fiscal 
year compared to the previous fiscal year; 
and 
‘‘(B) keep such records as are essential to 
ensure that the applicant is complying with the 
provisions of this title, including the notation of 
cooperative education employment on the stu-
dent’s transcript; 
‘‘(7) describe the extent to which programs in 
the academic discipline for which the application is 
made have had a favorable reception by public and 
private sector employers; 
‘‘(8) describe the extent to which the institution 
is committed to extending cooperative education on 
an institution-wide basis for all students who can 
benefit;
‘‘(9) describe the plans that the applicant will 
carry out to evaluate the applicant’s cooperative edu-
cation program at the end of the grant period; 
‘‘(10) provide for such fiscal control and fund 
accounting procedures as may be necessary to assure 
proper disbursement of, and accounting for, Federal 
funds paid to the applicant under this title; 
‘‘(11) demonstrate a commitment to serving all 
underserved populations; and 
‘‘(12) include such other information as is es-
sential to carry out the provisions of this title. 
‘‘(c) DURATION OF GRANTS; FEDERAL SHARE.— 
‘‘(1) DURATION OF GRANTS.—No individual in-
stitution of higher education may receive, individ-
ually or as a participant in a combination of such in-
stitutions— 
‘‘(A) a grant pursuant to subsection 
(a)(1)(A) for more than 5 fiscal years; or 
‘‘(B) a grant pursuant to subsection 
(a)(1)(B) for more than 5 fiscal years. 
‘‘(2) FEDERAL SHARE.—The Federal share of a 
grant under section 803(a)(1)(A) may not exceed— 
‘‘(A) 85 percent of the cost of carrying out 
the program or activities described in the appli-
cation in the first year the applicant receives a 
grant under this section; 
‘‘(B) 70 percent of such cost in the second 
such year; 
‘‘(C) 55 percent of such cost in the third 
such year; 
‘‘(D) 40 percent of such cost in the fourth 
such year; and 
‘‘(E) 25 percent of such cost in the fifth 
such year. 
‘‘(3) SPECIAL RULE.—Any provision of law to 
the contrary notwithstanding, the Secretary shall not 
waive the provisions of this subsection. 
‘‘(d) MAINTENANCE OF EFFORT.—If the Secretary 
determines that a recipient of funds under this section has 
failed to maintain the fiscal effort described in subsection 
(b)(3), then the Secretary may elect not to make grant 
payments under this section to such recipient. 
‘‘SEC. 804. DEMONSTRATION AND INNOVATION PROJECTS; 
TRAINING AND RESOURCE CENTERS; AND RE-
SEARCH. 
‘‘(a) AUTHORIZATION.—The Secretary is authorized, 
in accordance with the provisions of this section, to make 
grants and enter into contracts for—
‘‘(1) the conduct of demonstration projects de-
signed to demonstrate or determine the feasibility or 
value of innovative methods of cooperative education 
from the amounts available in each fiscal year under 
section 802(b)(3); 
‘‘(2) the conduct of training and resource cen-
ters designed to— 
‘‘(A) train personnel in the field of cooper-
ative education; 
‘‘(B) improve materials used in cooperative 
education programs if such improvement is con-
ducted in conjunction with other activities de-
scribed in this paragraph; 
‘‘(C) furnish technical assistance to institu-
tions of higher education to increase the poten-
tial of the institution to continue to conduct a 
cooperative education program without Federal 
assistance; 
‘‘(D) encourage model cooperative edu-
cation programs which furnish education and 
training in occupations in which there is a na-
tional need; 
‘‘(E) support partnerships under which an 
institution carrying out a comprehensive cooper-
ative education program joins with one or more
institutions of higher education in order to (i) 
assist the institutions other than the com-
prehensive cooperative education institution to 
develop and expand an existing program of co-
operative education, or (ii) establish and im-
prove or expand comprehensive cooperative edu-
cation programs; and 
‘‘(F) encourage model cooperative edu-
cation programs in the fields of science and 
mathematics for women and minorities who are 
underrepresented in such fields 
from the amounts available in each fiscal year under 
section 802(b)(4); and 
‘‘(3) the conduct of research relating to cooper-
ative education, from the amounts available in each 
fiscal year under section 802(b)(5). 
‘‘(b) ADMINISTRATIVE PROVISION.— 
‘‘(1) IN GENERAL.—To carry out this section, 
the Secretary may— 
‘‘(A) make grants to or contracts with in-
stitutions of higher education, or combinations 
of such institutions; and 
‘‘(B) make grants to or contracts with 
other public or private nonprofit agencies or or-
ganizations, whenever such grants or contracts
will make an especially significant contribution 
to attaining the objectives of this section. 
‘‘(2) LIMITATION.— 
‘‘(A) The Secretary may not use more than 
3 percent of the amount appropriated to carry 
out this section in each fiscal year to enter into 
contracts described in paragraph (1)(A). 
‘‘(B) The Secretary may use not more 
than 3 percent of the amount appropriated to 
carry out this section in each fiscal year to 
enter into contracts described in paragraph 
(1)(B). 
‘‘(c) SUPPLEMENT NOT SUPPLANT.—A recipient of 
a grant or contract under this section may use the funds 
provided only so as to supplement and, to the extent pos-
sible, increase the level of funds that would, in the absence 
of such funds, be made available from non-Federal sources 
to carry out the activities supported by such grant or con-
tract, and in no case to supplant such funds from non- 
Federal sources.’’.
TITLE III—ENSURING A HIGHLY 
QUALIFIED 
TEACHER 
IN 
EVERY CLASSROOM 
PART A—TEACH GRANTS 
SEC. 301. TEACH GRANTS. 
Part A of title IV (20 U.S.C. 1070a et seq.) is 
amended by adding at the end the following new subpart: 
‘‘Subpart 9—TEACH Grants 
‘‘SEC. 420L. PROGRAM ESTABLISHED. 
‘‘(a) PROGRAM AUTHORITY.— 
‘‘(1) PAYMENTS
REQUIRED.—The Secretary 
shall pay to each eligible institution such sums as 
may be necessary to pay to each eligible student (de-
fined in accordance with section 484) who files an 
application and agreement in accordance with sec-
tion 420M, and who qualifies— 
‘‘(A) under paragraph (2) of section 
420M(a), a TEACH Grant in the amount of 
$4,000 for each academic year during which 
that student is in attendance at the institution; 
and 
‘‘(B) under paragraphs (2) and (3) of sec-
tion 420M(a), a Bonus TEACH Grant in the 
amount of $500 (in addition to the amount of 
the TEACH Grant under subparagraph (A))
for each academic year during which that stu-
dent so qualifies. 
‘‘(2) REFERENCE.—Grants made under— 
‘‘(A) paragraph (1)(A) shall be known as 
‘Teacher Education Assistance for College and 
Higher Education Grants’ or ‘TEACH Grants’; 
and 
‘‘(B) paragraph (1)(B) shall be known as 
Bonus TEACH Grants. 
‘‘(b) PAYMENT METHODOLOGY.— 
‘‘(1) PREPAYMENT.—Not less than 85 percent 
of any funds provided to an institution under sub-
section (a) shall be advanced to eligible institutions 
prior to the start of each payment period and shall 
be based upon an amount requested by the institu-
tion as needed to pay eligible students until such 
time as the Secretary determines and publishes in 
the Federal Register with an opportunity for com-
ment, an alternative payment system that provides 
payments to institutions in an accurate and timely 
manner, except that this sentence shall not be con-
strued to limit the authority of the Secretary to 
place an institution on a reimbursement system of 
payment.
‘‘(2) DIRECT PAYMENT.—Nothing in this sec-
tion shall be interpreted to prohibit the Secretary 
from paying directly to students, in advance of the 
beginning of the academic term, an amount for 
which they are eligible, in cases where the eligible in-
stitution elects not to participate in the disburse-
ment system required by paragraph (1). 
‘‘(3) DISTRIBUTION
OF
GRANTS
TO
STU-
DENTS.—Payments under this subpart shall be 
made, in accordance with regulations promulgated 
by the Secretary for such purpose, in such manner 
as will best accomplish the purposes of this subpart. 
Any disbursement allowed to be made by crediting 
the student’s account shall be limited to tuition and 
fees and, in the case of institutionally-owned hous-
ing, room and board. The student may elect to have 
the institution provide other such goods and services 
by crediting the student’s account. 
‘‘(c) REDUCTIONS IN AMOUNT.— 
‘‘(1) PART-TIME
STUDENTS.—In any case 
where a student attends an institution of higher edu-
cation on less than a full-time basis (including a stu-
dent who attends an institution of higher education 
on less than a half-time basis) during any academic 
year, the amount of a grant under this subpart for
which that student is eligible shall be reduced in 
proportion to the degree to which that student is not 
attending on a full-time basis, in accordance with a 
schedule of reductions established by the Secretary 
for the purposes of this subpart, computed in ac-
cordance with this subpart. Such schedule of reduc-
tions shall be established by regulation and pub-
lished in the Federal Register in accordance with 
section 482 of this Act. 
‘‘(2) NO EXCEEDING COST.—The amount of a 
grant awarded under this subpart, in combination 
with Federal assistance and other student assist-
ance, shall not exceed the cost of attendance (as de-
fined in section 472) at the institution at which that 
student is in attendance. If, with respect to any stu-
dent, it is determined that the amount of a TEACH 
Grant or a Bonus TEACH Grant exceeds the cost 
of attendance for that year, the amount of the 
TEACH Grant or Bonus TEACH Grant, respec-
tively, shall be reduced until such grant does not ex-
ceed the cost of attendance at such institution. 
‘‘(d) PERIOD OF ELIGIBILITY FOR GRANTS.— 
‘‘(1) UNDERGRADUATE STUDENTS.—The period 
during which an undergraduate student may receive 
grants under this subpart shall be the period re-