962 
tion, the average unmet need of eligible 
students in all States for the most re-
cent year for which data are available; 
and 
‘‘(II) for each subsequent award 
year, the amount determined under 
this subparagraph for the preceding 
award year, increased by the lesser 
of— 
‘‘(aa) a percentage equal to 
the estimated percentage increase 
in the Consumer Price Index (as 
determined by the Secretary) since 
the date of such determination; or 
‘‘(bb) 3 percent. 
‘‘(B) EXCEPTION
FOR
CERTAIN
INDIAN 
TRIBES.—In any case in which not less than 75 
percent of the students at the institutions of 
higher education operated or controlled by an In-
dian tribe are low-income students, the amount 
of the Federal share for such Indian tribe shall 
be not less than 95 percent of the total amount 
needed to waive tuition and fees for all eligible 
students enrolled in such institutions of higher 
education. 
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963 
‘‘(2) STATE OR TRIBAL SHARE.— 
‘‘(A) FORMULA.— 
‘‘(i) IN GENERAL.—The State or tribal 
share of a grant under this section for each 
fiscal year shall be the amount needed to 
pay 25 percent of the average unmet need of 
eligible students in all States in the first 
award year for which grants are made 
under this section for all eligible students in 
the State or Indian tribe, respectively, for 
such fiscal year, except as provided in 
clause (ii). 
‘‘(ii) EXCEPTION FOR CERTAIN INDIAN 
TRIBES.—In the case of an Indian tribe de-
scribed in paragraph (1)(B), the amount of 
such Indian tribe’s tribal share shall not ex-
ceed 5 percent of the total amount needed to 
pay the average unmet need for all eligible 
students enrolled in the institutions of high-
er education described in such subpara-
graph. 
‘‘(B) NEED-BASED AID.—A State or Indian 
tribe may include, as part of the State or tribal 
share, any need-based financial aid that— 
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964 
‘‘(i) is provided from State or tribal 
funds to an eligible student; and 
‘‘(ii) may be used by such student to 
pay costs of attendance other than tuition 
and fees. 
‘‘(3) DETERMINING NUMBER OF ELIGIBLE STU-
DENTS.— 
‘‘(A) IN GENERAL.—The Secretary shall de-
velop and implement a process for accurately es-
timating the number of eligible students in a 
State or Indian tribe for purposes of paragraphs 
(1) and (2). 
‘‘(B) INITIAL
DETERMINATION.—For the 
first year for which grants are awarded under 
this section, the number of eligible students in a 
State or Indian tribe shall be considered to be 
equal to the number of eligible students that were 
in the State or tribe for the preceding school 
year. 
‘‘(4) ADJUSTMENT
OF
GRANT
AMOUNT.—Not 
later than 180 days after the date on which a State 
or Indian tribe receives a grant under this section, 
the Secretary shall— 
‘‘(A) in consultation with the State or tribe 
concerned, determine whether the actual number 
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965 
of eligible students in the State or Tribe for the 
year covered by the grant is greater than the es-
timated number of such students that was used 
to determine the amount of the grant; and 
‘‘(B) if it is determined under paragraph 
(1) that the actual number of eligible students in 
the State or Tribe is higher than such estimate, 
issue a supplementary grant payment to the 
State or tribe in an amount that ensures that the 
total amount of the grant funds received by the 
State or tribe under this section for the year cov-
ered by the grant accurately reflects the higher 
number of eligible students. 
‘‘(c) APPLICATIONS.—In order to receive a grant under 
this section, a State or tribe shall submit an application 
to the Secretary at such time, in such manner, and con-
taining such information as the Secretary may require. 
‘‘(d) ALLOWABLE USES OF FUNDS.— 
‘‘(1) IN GENERAL.—A State or Indian tribe shall 
use a grant under this section only to provide to each 
eligible student a grant that equals the unmet need of 
such recipient. 
‘‘(2) ANNUAL REPORT.—A State or Indian tribe 
receiving a grant under this section shall submit an 
annual report to the Secretary describing the uses of 
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grant funds under this section, the progress made in 
fulfilling the requirements of the grant, and rates of 
transfer, graduation, and attainment of recognized 
postsecondary credentials at institutions of higher 
education in the State or Indian tribe, including such 
rates disaggregated by race, income, and age, and in-
cluding any other information as the Secretary may 
require. 
‘‘(3) REPORTING BY THE SECRETARY.—The Sec-
retary annually shall— 
‘‘(A) compile and analyze the information 
described in paragraph (2); and 
‘‘(B) prepare and submit a report to the 
Committee on Health, Education, Labor, and 
Pensions of the Senate and the Committee on 
Education and Labor of the House of Represent-
atives containing the analysis described in sub-
paragraph (A) and an identification of State 
and Indian tribe best practices for achieving the 
purpose of this section. 
‘‘(4) TECHNICAL
ASSISTANCE.—The Secretary 
shall provide technical assistance to eligible States 
and Indian tribes concerning best practices regarding 
the promising and evidence-based institutional re-
forms and innovative practices to improve student 
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967 
outcomes and shall disseminate such best practices 
among the States and Indian tribes. 
‘‘(5) CONTINUATION OF FUNDING.— 
‘‘(A) IN GENERAL.—A State or Indian tribe 
receiving a grant under this section for a fiscal 
year may continue to receive funding under this 
section for future fiscal years conditioned on the 
availability of budget authority and on meeting 
the requirements of the grant, as determined by 
the Secretary. 
‘‘(B) 
DISCONTINUATION.—The 
Secretary 
may discontinue funding of the Federal share of 
a grant under this section if the State or Indian 
tribe has violated the terms of the grant. 
‘‘(6) 
SUPPLEMENT, 
NOT
SUPPLANT.—Funds 
made available under this section shall be used to 
supplement, and not supplant, other Federal, State, 
and local funds that would otherwise be expended to 
carry out activities under this section. 
‘‘(e) DEFINITIONS.—In this section: 
‘‘(1) ELIGIBLE STUDENT.— 
‘‘(A) DEFINITION.—The term ‘eligible stu-
dent’ means a student who— 
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