H. R. 2669—21 
shall develop the revised table of income protection 
allowances by increasing each of the dollar amounts 
contained in the table of income protection allowances 
under section 477(b)(4)(D) by a percentage equal to 
the estimated percentage increase in the Consumer 
Price Index (as determined by the Secretary) between 
December 2011 and the December next preceding the 
beginning of such academic year, and rounding the 
result to the nearest $10. 
‘‘(C) TABLE
FOR
PARENTS.—For each academic year 
after academic year 2008–2009, the Secretary shall develop 
the revised table of income protection allowances under 
section 475(c)(4) by increasing each of the dollar amounts 
contained in the table by a percentage equal to the esti-
mated percentage increase in the Consumer Price Index 
(as determined by the Secretary) between December 1992 
and the December next preceding the beginning of such 
academic year, and rounding the result to the nearest 
$10.’’; and 
(2) in paragraph (2), by striking ‘‘shall be developed’’ and 
all that follows through the period at the end and inserting 
‘‘shall be developed for each academic year after academic year 
2012–2013, by increasing each of the dollar amounts contained 
in such section for academic year 2012–2013 by a percentage 
equal to the estimated percentage increase in the Consumer 
Price Index (as determined by the Secretary) between December 
2011 and the December next preceding the beginning of such 
academic year, and rounding the result to the nearest $10.’’. 
(e) EFFECTIVE DATE.—The amendments made by this section 
shall be effective on July 1, 2009. 
SEC. 602. SIMPLIFIED NEEDS TEST AND AUTOMATIC ZERO IMPROVE-
MENTS. 
(a) SIMPLIFIED NEEDS TEST.—Section 479 (20 U.S.C. 1087ss) 
is amended— 
(1) in subsection (b)— 
(A) in paragraph (1)(A)(i)— 
(i) in subclause (II), by striking ‘‘or’’ after the semi-
colon; 
(ii) by redesignating subclause (III) as subclause 
(IV); 
(iii) by inserting after subclause (II) the following: 
‘‘(III) 1 of whom is a dislocated worker; or’’; 
and 
(iv) in subclause (IV) (as redesignated by clause 
(ii)), by striking ‘‘12-month’’ and inserting ‘‘24-month’’; 
and 
(B) in paragraph (1)(B)(i)— 
(i) in subclause (II), by striking ‘‘or’’ after the semi-
colon; 
(ii) by redesignating subclause (III) as subclause 
(IV); 
(iii) by inserting after subclause (II) the following: 
‘‘(III) 1 of whom is a dislocated worker; or’’; 
and 
(iv) in subclause (IV) (as redesignated by clause 
(ii)), by striking ‘‘12-month’’ and inserting ‘‘24-month’’;
H. R. 2669—22 
(2) in subsection (c)— 
(A) in paragraph (1)— 
(i) in subparagraph (A)— 
(I) in clause (ii), by striking ‘‘or’’ after the 
semicolon; 
(II) by redesignating clause (iii) as clause (iv); 
(III) by inserting after clause (ii) the following: 
‘‘(iii) 1 of whom is a dislocated worker; or’’; and 
(IV) in clause (iv) (as redesignated by sub-
clause (II)), by striking ‘‘12-month’’ and inserting 
‘‘24-month’’; and 
(ii) in subparagraph (B), by striking ‘‘$20,000’’ and 
inserting ‘‘$30,000’’; and 
(B) in paragraph (2)— 
(i) in subparagraph (A)— 
(I) in clause (ii), by striking ‘‘or’’ after the 
semicolon; 
(II) by redesignating clause (iii) as clause (iv); 
(III) by inserting after clause (ii) the following: 
‘‘(iii) 1 of whom is a dislocated worker; or’’; and 
(IV) in clause (iv) (as redesignated by sub-
clause (II)), by striking ‘‘12-month’’ and inserting 
‘‘24-month’’; and 
(ii) in subparagraph (B), by striking ‘‘$20,000’’ and 
inserting ‘‘$30,000’’; and 
(C) in the flush matter following paragraph (2)(B), 
by adding at the end the following: ‘‘The Secretary shall 
annually adjust the income level necessary to qualify an 
applicant for the zero expected family contribution. The 
income level shall be adjusted according to increases in 
the Consumer Price Index, as defined in section 478(f).’’; 
and 
(3) in subsection (d)— 
(A) by redesignating paragraphs (1) through (6) as 
subparagraphs (A) through (F), respectively and moving 
the margins of such subparagraphs 2 ems to the right; 
and 
(B) by striking ‘‘(d) DEFINITION’’ and all that follows 
through ‘‘the term’’ and inserting the following: 
‘‘(d) DEFINITIONS.—In this section: 
‘‘(1) DISLOCATED
WORKER.—The term ‘dislocated worker’ 
has the meaning given the term in section 101 of the Workforce 
Investment Act of 1998 (29 U.S.C. 2801). 
‘‘(2) MEANS-TESTED
FEDERAL
BENEFIT
PROGRAM.—The 
term’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall be effective on July 1, 2009. 
SEC. 603. DISCRETION OF STUDENT FINANCIAL AID ADMINISTRATORS. 
(a) AMENDMENTS.—The third sentence of section 479A(a) (20 
U.S.C. 1087tt(a)) is amended— 
(1) by inserting ‘‘or an independent student’’ after ‘‘family 
member’’; 
(2) by inserting ‘‘a family member who is a dislocated 
worker (as defined in section 101 of the Workforce Investment 
Act of 1998),’’ before ‘‘the number of parents’’; and
H. R. 2669—23 
(3) by inserting ‘‘a change in housing status that results 
in an individual being homeless (as defined in section 103 
of the McKinney-Vento Homeless Assistance Act),’’ after ‘‘under 
section 487,’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall take effect on July 1, 2009. 
SEC. 604. DEFINITIONS. 
(a) IN GENERAL.—Section 480 (20 U.S.C. 1087vv) is amended— 
(1) in subsection (a)(2)— 
(A) by striking ‘‘and no portion’’ and inserting ‘‘no 
portion’’; and 
(B) by inserting ‘‘and no distribution from any qualified 
education benefit described in subsection (f)(3) that is not 
subject to Federal income tax,’’ after ‘‘1986,’’; 
(2) by striking subsection (b) and inserting the following: 
‘‘(b) UNTAXED INCOME AND BENEFITS.— 
‘‘(1) The term ‘untaxed income and benefits’ means— 
‘‘(A) child support received; 
‘‘(B) workman’s compensation; 
‘‘(C) veteran’s benefits such as death pension, depend-
ency, and indemnity compensation, but excluding veterans’ 
education benefits as defined in subsection (c); 
‘‘(D) interest on tax-free bonds; 
‘‘(E) housing, food, and other allowances (excluding 
rent subsidies for low-income housing) for military, clergy, 
and others (including cash payments and cash value of 
benefits); 
‘‘(F) cash support or any money paid on the student‘s 
behalf, except, for dependent students, funds provided by 
the student’s parents; 
‘‘(G) untaxed portion of pensions; 
‘‘(H) payments to individual retirement accounts and 
Keogh accounts excluded from income for Federal income 
tax purposes; and 
‘‘(I) any other untaxed income and benefits, such as 
Black Lung Benefits, Refugee Assistance, or railroad retire-
ment benefits, or benefits received through participation 
in employment and training activities under title I of the 
Workforce Investment Act of 1998 (29 U.S.C. 2801 et seq.). 
‘‘(2) The term ‘untaxed income and benefits’ shall not 
include the amount of additional child tax credit claimed for 
Federal income tax purposes.’’; 
(3) in subsection (d)— 
(A) by redesignating paragraphs (1), (2), (3) through 
(6), and (7) as subparagraphs (A), (B), (D) through (G), 
and (I), respectively, and indenting appropriately; 
(B) by striking ‘‘The term’’ and inserting the following: 
‘‘(1) DEFINITION.—The term’’; 
(C) by striking subparagraph (B) (as redesignated by 
subparagraph (A)) and inserting the following: 
‘‘(B) is an orphan, in foster care, or a ward of the 
court, at any time when the individual is 13 years of 
age or older; 
‘‘(C) is an emancipated minor or is in legal guardian-
ship as determined by a court of competent jurisdiction 
in the individual’s State of legal residence;’’;
H. R. 2669—24 
(D) in subparagraph (G) (as redesignated by subpara-
graph (A)), by striking ‘‘or’’ after the semicolon; 
(E) by inserting after subparagraph (G) (as redesig-
nated by subparagraph (A)) the following: 
‘‘(H) has been verified during the school year in which 
the application is submitted as either an unaccompanied 
youth who is a homeless child or youth (as such terms 
are defined in section 725 of the McKinney-Vento Homeless 
Assistance Act), or as unaccompanied, at risk of homeless-
ness, and self-supporting, by— 
‘‘(i) a local educational agency homeless liaison, 
designated pursuant to section 722(g)(1)(J)(ii) of the 
McKinney-Vento Homeless Assistance Act; 
‘‘(ii) the director of a program funded under the 
Runaway and Homeless Youth Act or a designee of 
the director; 
‘‘(iii) the director of a program funded under sub-
title B of title IV of the McKinney-Vento Homeless 
Assistance Act (relating to emergency shelter grants) 
or a designee of the director; or 
‘‘(iv) a financial aid administrator; or’’; and 
(F) by adding at the end the following: 
‘‘(2) SIMPLIFYING THE DEPENDENCY OVERRIDE PROCESS.— 
A financial aid administrator may make a determination of 
independence under paragraph (1)(I) based upon a documented 
determination of independence that was previously made by 
another financial aid administrator under such paragraph in 
the same award year.’’; 
(4) in subsection (e)— 
(A) in paragraph (3), by striking ‘‘and’’ after the semi-
colon; 
(B) in paragraph (4), by striking the period at the 
end and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(5) special combat pay.’’; 
(5) in subsection (f), by striking paragraph (3) and inserting 
the following: 
‘‘(3) A qualified education benefit shall be considered an 
asset of— 
‘‘(A) the student if the student is an independent stu-
dent; or 
‘‘(B) the parent if the student is a dependent student, 
regardless of whether the owner of the account is the 
student or the parent.’’; 
(6) in subsection (j)— 
(A) in paragraph (2), by inserting ‘‘, or a distribution 
that is not includable in gross income under section 529 
of such Code, under another prepaid tuition plan offered 
by a State, or under a Coverdell education savings account 
under section 530 of such Code,’’ after ‘‘1986’’; and 
(B) by adding at the end the following: 
‘‘(4) Notwithstanding paragraph (1), special combat pay 
shall not be treated as estimated financial assistance for pur-
poses of section 471(3).’’; and 
(7) by adding at the end the following:
H. R. 2669—25 
‘‘(n) SPECIAL COMBAT PAY.—The term ‘special combat pay’ 
means pay received by a member of the Armed Forces because 
of exposure to a hazardous situation.’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall be effective on July 1, 2009. 
TITLE VII—COMPETITIVE LOAN 
AUCTION PILOT PROGRAM 
SEC. 701. COMPETITIVE LOAN AUCTION PILOT PROGRAM. 
Title IV (20 U.S.C. 1070 et seq.) is further amended by adding 
at the end the following: 
‘‘PART I—COMPETITIVE LOAN AUCTION PILOT 
PROGRAM 
‘‘SEC. 499. COMPETITIVE LOAN AUCTION PILOT PROGRAM. 
‘‘(a) DEFINITIONS.—In this section: 
‘‘(1) ELIGIBLE FEDERAL PLUS LOAN.—The term ‘eligible Fed-
eral PLUS Loan’ means a loan described in section 428B made 
to a parent of a dependent student who is a new borrower 
on or after July 1, 2009. 
‘‘(2) ELIGIBLE LENDER.—The term ‘eligible lender’ has the 
meaning given the term in section 435. 
‘‘(b) PILOT PROGRAM.—The Secretary shall carry out a pilot 
program under which the Secretary establishes a mechanism for 
an auction of eligible Federal PLUS Loans in accordance with 
this subsection. The pilot program shall meet the following require-
ments: 
‘‘(1) PLANNING AND IMPLEMENTATION.—During the period 
beginning on the date of enactment of this section and ending 
on June 30, 2009, the Secretary shall plan and implement 
the pilot program under this subsection. During the planning 
and implementation, the Secretary shall consult with other 
Federal agencies with knowledge of, and experience with, auc-
tion programs, including the Federal Communication Commis-
sion and the Department of the Treasury. 
‘‘(2) ORIGINATION
AND
DISBURSEMENT; APPLICABILITY
OF 
SECTION 428B.—Beginning on July 1, 2009, the Secretary shall 
arrange for the origination and disbursement of all eligible 
Federal PLUS Loans in accordance with the provisions of this 
subsection and the provisions of section 428B that are not 
inconsistent with this subsection. 
‘‘(3) LOAN ORIGINATION MECHANISM.—The Secretary shall 
establish a loan origination auction mechanism that meets 
the following requirements: 
‘‘(A) AUCTION FOR EACH STATE.—The Secretary admin-
isters an auction under this paragraph for each State, 
under which eligible lenders compete to originate eligible 
Federal PLUS Loans under this paragraph at all institu-
tions of higher education within such State. 
‘‘(B) PREQUALIFICATION PROCESS.—The Secretary estab-
lishes a prequalification process for eligible lenders desiring 
to participate in an auction under this paragraph that 
contains, at a minimum—
H. R. 2669—26 
‘‘(i) a set of borrower benefits and servicing require-
ments each eligible lender shall meet in order to 
participate in such an auction; and 
‘‘(ii) an assessment of each such eligible lender’s 
capacity, including capital capacity, to participate effec-
tively. 
‘‘(C) TIMING
AND
ORIGINATION.—Each State auction 
takes place every 2 years, and the eligible lenders with 
the winning bids for the State are the only eligible lenders 
permitted to originate eligible Federal PLUS Loans made 
under this paragraph for the cohort of students at the 
institutions of higher education within the State until the 
students graduate from or leave the institutions of higher 
education. 
‘‘(D) BIDS.—Each eligible lender’s bid consists of the 
amount of the special allowance payment (after the applica-
tion of section 438(b)(2)(I)(v)) the eligible lender proposes 
to accept from the Secretary with respect to the eligible 
Federal PLUS Loans made under this paragraph in lieu 
of the amount determined under section 438(b)(2)(I). 
‘‘(E) MAXIMUM
BID.—The maximum bid allowable 
under this paragraph shall not exceed the amount of the 
special allowance payable on eligible Federal PLUS Loans 
made under this paragraph computed under section 
438(b)(2)(I) (other than clauses (ii), (iii), (iv), and (vi) of 
such section), except that for purposes of the computation 
under this subparagraph, section 438(b)(2)(I)(i)(III) shall 
be applied by substituting ‘1.79 percent’ for ‘2.34 percent’. 
‘‘(F) WINNING BIDS.—The winning bids for each State 
auction shall be the 2 bids containing the lowest and the 
second lowest proposed special allowance payments, subject 
to subparagraph (E). 
‘‘(G) AGREEMENT
WITH
SECRETARY.—Each eligible 
lender having a winning bid under subparagraph (F) enters 
into an agreement with the Secretary under which the 
eligible lender— 
‘‘(i) agrees to originate eligible Federal PLUS 
Loans under this paragraph to each borrower who— 
‘‘(I) seeks an eligible Federal PLUS Loan 
under this paragraph to enable a dependent stu-
dent to attend an institution of higher education 
within the State; 
‘‘(II) is eligible for an eligible Federal PLUS 
Loan; and 
‘‘(III) elects to borrow from the eligible lender; 
and 
‘‘(ii) agrees to accept a special allowance payment 
(after the application of section 438(b)(2)(I)(v)) from 
the Secretary with respect to the eligible Federal PLUS 
Loans originated under clause (i) in the amount pro-
posed in the second lowest winning bid described in 
subparagraph (F) for the applicable State auction. 
‘‘(H) SEALED
BIDS; CONFIDENTIALITY.—All bids are 
sealed and the Secretary keeps the bids confidential, 
including following the announcement of the winning bids. 
‘‘(I) ELIGIBLE LENDER OF LAST RESORT.—
H. R. 2669—27 
‘‘(i) IN GENERAL.—In the event that there is no 
winning bid under subparagraph (F), the students at 
the institutions of higher education within the State 
that was the subject of the auction shall be served 
by an eligible lender of last resort, as determined by 
the Secretary. 
‘‘(ii) DETERMINATION OF ELIGIBLE LENDER OF LAST 
RESORT.—Prior to the start of any auction under this 
paragraph, eligible lenders that desire to serve as an 
eligible lender of last resort shall submit an application 
to the Secretary at such time and in such manner 
as the Secretary may determine. Such application shall 
include an assurance that the eligible lender will meet 
the 
prequalification 
requirements 
described 
in 
subparagraph (B). 
‘‘(iii) GEOGRAPHIC LOCATION.—The Secretary shall 
identify an eligible lender of last resort for each State. 
‘‘(iv) NOTIFICATION TIMING.—The Secretary shall 
not identify any eligible lender of last resort until 
after the announcement of all the winning bids for 
a State auction for any year. 
‘‘(v) MAXIMUM
SPECIAL
ALLOWANCE.—The Sec-
retary is authorized to set a special allowance payment 
that shall be payable to a lender of last resort for 
a State under this subparagraph, which special allow-
ance payment shall be kept confidential, including fol-
lowing the announcement of winning bids. The Sec-
retary shall set such special allowance payment so 
that it incurs the lowest possible cost to the Federal 
Government, taking into consideration the lowest bid 
that was submitted in an auction for such State and 
the lowest bid submitted in a similar State, as deter-
mined by the Secretary. 
‘‘(J) GUARANTEE
AGAINST
LOSSES.—The Secretary 
guarantees the eligible Federal PLUS Loans made under 
this paragraph against losses resulting from the default 
of a parent borrower in an amount equal to 99 percent 
of the unpaid principal and interest due on the loan. 
‘‘(K) LOAN
FEES.—The Secretary shall not collect a 
loan fee under section 438(d) with respect to an eligible 
Federal Plus Loan originated under this paragraph. 
‘‘(L) CONSOLIDATION.— 
‘‘(i) IN GENERAL.—An eligible lender who is per-
mitted to originate eligible Federal PLUS Loans for 
a borrower under this paragraph shall have the option 
to consolidate such loans into 1 loan. 
‘‘(ii) NOTIFICATION.—In the event a borrower with 
eligible Federal PLUS Loans made under this para-
graph wishes to consolidate the loans, the borrower 
shall notify the eligible lender who originated the loans 
under this paragraph. 
‘‘(iii) LIMITATION ON ELIGIBLE LENDER OPTION TO 
CONSOLIDATE.—The option described in clause (i) shall 
not apply if— 
‘‘(I) the borrower includes in the notification 
in clause (ii) verification of consolidation terms 
and conditions offered by an eligible lender other
H. R. 2669—28 
than the eligible lender described in clause (i); 
and 
‘‘(II) not later than 10 days after receiving 
such notification from the borrower, the eligible 
lender described in clause (i) does not agree to 
match such terms and conditions, or provide more 
favorable terms and conditions to such borrower 
than the offered terms and conditions described 
in subclause (I). 
‘‘(iv) CONSOLIDATION OF ADDITIONAL LOANS.—If a 
borrower has a Federal Direct PLUS Loan or a loan 
made on behalf of a dependent student under section 
428B and seeks to consolidate such loan with an 
eligible Federal PLUS Loan made under this para-
graph, then the eligible lender that originated the bor-
rower’s loan under this paragraph may include in the 
consolidation under this subparagraph a Federal Direct 
PLUS Loan or a loan made on behalf of a dependent 
student under section 428B, but only if— 
‘‘(I) in the case of a Federal Direct PLUS Loan, 
the eligible lender agrees, not later than 10 days 
after the borrower requests such consolidation 
from the lender, to match the consolidation terms 
and conditions that would otherwise be available 
to the borrower if the borrower consolidated such 
loans in the loan program under part D; or 
‘‘(II) in the case of a loan made on behalf 
of a dependent student under section 428B, the 
eligible lender agrees, not later than 10 days after 
the borrower requests such consolidation from the 
lender, to match the consolidation terms and condi-
tions offered by an eligible lender other than the 
eligible lender that originated the borrower’s loans 
under this paragraph. 
‘‘(v) SPECIAL ALLOWANCE ON CONSOLIDATION LOANS 
THAT INCLUDE LOANS MADE UNDER THIS PARAGRAPH.— 
The applicable special allowance payment for loans 
consolidated under this paragraph shall be equal to 
the lesser of— 
‘‘(I) the weighted average of the special allow-
ance payment on such loans, except that in calcu-
lating such weighted average the Secretary shall 
exclude any Federal Direct PLUS Loan included 
in the consolidation; or 
‘‘(II) the result of— 
‘‘(aa) the average of the bond equivalent 
rates of the quotes of the 3-month commercial 
paper (financial) rates in effect for each of 
the days in such quarter as reported by the 
Federal Reserve in Publication H–15 (or its 
successor) for such 3-month period; plus 
‘‘(bb) 1.59 percent. 
‘‘(vi) INTEREST PAYMENT REBATE FEE.—Any loan 
under section 428C consolidated under this paragraph 
shall not be subject to the interest payment rebate 
fee under section 428C(f).’’.
H. R. 2669—29 
TITLE VIII—PARTNERSHIP GRANTS 
SEC. 801. COLLEGE ACCESS CHALLENGE GRANT PROGRAM. 
Title VII (20 U.S.C. 1133 et seq.) is amended by adding at 
the end the following new part: 
‘‘PART E—COLLEGE ACCESS CHALLENGE 
GRANT PROGRAM 
‘‘SEC. 771. COLLEGE ACCESS CHALLENGE GRANT PROGRAM. 
‘‘(a) AUTHORIZATION AND APPROPRIATION.—There are authorized 
to be appropriated, and there are appropriated, to carry out this 
section $66,000,000 for each of the fiscal years 2008 and 2009. 
The authority to award grants under this section shall expire at 
the end of fiscal year 2009. 
‘‘(b) PROGRAM AUTHORIZED.— 
‘‘(1) GRANTS
AUTHORIZED.—From amounts appropriated 
under subsection (a), the Secretary shall award grants, from 
allotments under subsection (c), to States (and to philanthropic 
organization, as appropriate under paragraph (3)) having 
applications approved under subsection (d), to enable the State 
(or philanthropic organization) to pay the Federal share of 
the costs of carrying out the activities and services described 
in subsection (f). 
‘‘(2) FEDERAL SHARE; NON-FEDERAL SHARE.— 
‘‘(A) FEDERAL
SHARE.—The amount of the Federal 
share under this section for a fiscal year shall be equal 
to 2⁄3 of the costs of the activities and services described 
in subsection (f) that are carried out under the grant. 
‘‘(B) NON-FEDERAL SHARE.—The amount of the non- 
Federal share under this section shall be equal to 1⁄3 of 
the costs of the activities and services described in sub-
section (f). The non-Federal share may be in cash or in- 
kind, and may be provided from State resources, contribu-
tions from private organizations, or both. 
‘‘(3) REDUCTION FOR FAILURE TO PAY NON-FEDERAL SHARE.— 
If a State fails to provide the full non-Federal share required 
under this subsection, the Secretary shall reduce the amount 
of the grant payment under this section proportionately, and 
may award the proportionate reduction amount of the grant 
directly to a philanthropic organization, as defined in subsection 
(i), to carry out this section. 
‘‘(4) TEMPORARY
INELIGIBILITY
FOR
SUBSEQUENT
PAY-
MENTS.— 
‘‘(A) IN
GENERAL.—The Secretary shall determine a 
grantee to be temporarily ineligible to receive a grant pay-
ment under this section for a fiscal year if— 
‘‘(i) the grantee fails to submit an annual report 
pursuant to subsection (h) for the preceding fiscal year; 
or 
‘‘(ii) the Secretary determines, based on informa-
tion in such annual report, that the grantee is not 
effectively meeting the conditions described under sub-
section (g) and the goals of the application under sub-
section (d).
H. R. 2669—30 
‘‘(B) REINSTATEMENT.—If the Secretary determines that 
a grantee is ineligible under subparagraph (A), the Sec-
retary may enter into an agreement with the grantee set-
ting forth the terms and conditions under which the grantee 
may regain eligibility to receive payments under this sec-
tion. 
‘‘(c) DETERMINATION OF ALLOTMENT.— 
‘‘(1) AMOUNT
OF
ALLOTMENT.—Subject to paragraph (2), 
in making grant payments to grantees under this section, the 
allotment to each grantee for a fiscal year shall be equal to 
the sum of— 
‘‘(A) the amount that bears the same relation to 50 
percent of the amount appropriated under subsection (a) 
for such fiscal year as the number of residents in the 
State aged 5 through 17 who are living below the poverty 
line applicable to the resident’s family size (as determined 
under section 673(2) of the Community Service Block Grant 
Act) bears to the total number of such residents in all 
States; and 
‘‘(B) the amount that bears the same relation to 50 
percent of the amount appropriated under subsection (a) 
for such fiscal year as the number of residents in the 
State aged 15 through 44 who are living below the poverty 
line applicable to the individual’s family size (as determined 
under section 673(2) of the Community Service Block Grant 
Act) bears to the total number of such residents in all 
States. 
‘‘(2) MINIMUM
AMOUNT.—The allotment for each State 
under this section for a fiscal year shall not be an amount 
that is less than 0.5 percent of the total amount appropriated 
under subsection (a) for such fiscal year. 
‘‘(d) SUBMISSION AND CONTENTS OF APPLICATION.— 
‘‘(1) IN GENERAL.—For each fiscal year for which a grantee 
desires a grant payment under subsection (b), the State agency 
with jurisdiction over higher education, or another agency des-
ignated by the Governor or chief executive of the State to 
administer the program under this section, or a philanthropic 
organization, in accordance with subsection (b)(3), shall submit 
an application to the Secretary at such time, in such manner, 
and containing the information described in paragraph (2). 
‘‘(2) APPLICATION.—An application submitted under para-
graph (1) shall include the following: 
‘‘(A) A description of the grantee’s capacity to admin-
ister the grant under this section and report annually 
to the Secretary on the activities and services described 
in subsection (f). 
‘‘(B) A description of the grantee’s plan for using the 
grant funds to meet the requirements of subsections (f) 
and (g), including plans for how the grantee will make 
special efforts to— 
‘‘(i) provide such benefits to students in the State 
that are underrepresented in postsecondary education; 
or 
‘‘(ii) in the case of a philanthropic organization 
that operates in more than one State, provide benefits 
to such students in each such State for which the
H. R. 2669—31 
philanthropic organization is receiving grant funds 
under this section. 
‘‘(C) A description of how the grantee will provide 
or coordinate the provision of the non-Federal share from 
State resources or private contributions. 
‘‘(D) A description of— 
‘‘(i) the structure that the grantee has in place 
to administer the activities and services described in 
subsection (f); or 
‘‘(ii) the plan to develop such administrative 
capacity. 
‘‘(e) SUBGRANTS
TO
NONPROFIT
ORGANIZATIONS.—A State 
receiving a payment under this section may elect to make a 
subgrant to one or more nonprofit organizations in the State, 
including an eligible not-for-profit holder (as defined in section 
435(p) of the Higher Education Act of 1965, as amended by section 
303 of this Act), or a partnership of such organizations, to carry 
out activities or services described in subsection (f), if the nonprofit 
organization or partnership— 
‘‘(1) was in existence on the day before the date of the 
enactment of this Act; and 
‘‘(2) as of such day, was participating in activities and 
services related to increasing access to higher education, such 
as those activities and services described in subsection (f). 
‘‘(f) ALLOWABLE USES.— 
‘‘(1) IN GENERAL.—Subject to paragraph (3), a grantee may 
use a grant payment under this section only for the following 
activities and services, pursuant to the conditions under sub-
section (g): 
‘‘(A) Information for students and families regarding— 
‘‘(i) the benefits of a postsecondary education; 
‘‘(ii) postsecondary education opportunities; 
‘‘(iii) planning for postsecondary education; and 
‘‘(iv) career preparation. 
‘‘(B) Information on financing options for postsecondary 
education and activities that promote financial literacy and 
debt management among students and families. 
‘‘(C) Outreach activities for students who may be at 
risk of not enrolling in or completing postsecondary edu-
cation. 
‘‘(D) Assistance in completion of the Free Application 
for Federal Student Aid or other common financial 
reporting form under section 483(a) of the Higher Edu-
cation Act of 1965. 
‘‘(E) Need-based grant aid for students. 
‘‘(F) Professional development for guidance counselors 
at middle schools and secondary schools, and financial aid 
administrators and college admissions counselors at institu-
tions of higher education, to improve such individuals’ 
capacity to assist students and parents with— 
‘‘(i) understanding— 
‘‘(I) entrance requirements for admission to 
institutions of higher education; and 
‘‘(II) State eligibility requirements for Aca-
demic Competitiveness Grants or National SMART 
Grants under section 401A, and other financial
H. R. 2669—32 
assistance that is dependent upon a student’s 
coursework; 
‘‘(ii) applying to institutions of higher education; 
‘‘(iii) applying for Federal student financial assist-
ance and other State, local, and private student finan-
cial assistance and scholarships; 
‘‘(iv) activities that increase students’ ability to 
successfully complete the coursework required for a 
postsecondary degree, including activities such as 
tutoring or mentoring; and 
‘‘(v) activities to improve secondary school students’ 
preparedness for postsecondary entrance examinations. 
‘‘(G) Student loan cancellation or repayment (as 
applicable), or interest rate reductions, for borrowers who 
are employed in a high-need geographical area or a high- 
need profession in the State, as determined by the State. 
‘‘(2) PROHIBITED USES.—Funds made available under this 
section shall not be used to promote any lender’s loans. 
‘‘(3) USE
OF
FUNDS
FOR
ADMINISTRATIVE
PURPOSES.—A 
grantee may use not more than 6 percent of the total amount 
of the sum of the Federal share provided under this section 
and the non-Federal share required under this section for 
administrative purposes relating to the grant under this section. 
‘‘(g) SPECIAL CONDITIONS.— 
‘‘(1) AVAILABILITY TO STUDENTS AND FAMILIES.—A grantee 
receiving a grant payment under this section shall— 
‘‘(A) make the activities and services described in sub-
paragraphs (A) through (F) of subsection (f)(1) that are 
funded under the payment available to all qualifying stu-
dents and families in the State; 
‘‘(B) allow students and families to participate in the 
activities and services without regard to— 
‘‘(i) the postsecondary institution in which the stu-
dent enrolls; 
‘‘(ii) the type of student loan the student receives; 
‘‘(iii) the servicer of such loan; or 
‘‘(iv) the student’s academic performance; 
‘‘(C) not charge any student or parent a fee or addi-
tional charge to participate in the activities or services; 
and 
‘‘(D) in the case of an activity providing grant aid, 
not require a student to meet any condition other than 
eligibility for Federal financial assistance under title IV 
of the Higher Education Act of 1965, except as provided 
for in the loan cancellation or repayment or interest rate 
reductions described in subsection (f)(1)(G). 
‘‘(2) PRIORITY.—A grantee receiving a grant payment under 
this section shall, in carrying out any activity or service 
described in subsection (f)(1) with the grant funds, prioritize 
students and families who are living below the poverty line 
applicable to the individual’s family size (as determined under 
section 673(2) of the Community Service Block Grant Act). 
‘‘(3) DISCLOSURES.— 
‘‘(A) ORGANIZATIONAL DISCLOSURES.—In the case of a 
State that has chosen to make a payment to an eligible 
not-for-profit holder in the State in accordance with sub-
section (e), the holder shall clearly and prominently indicate
H. R. 2669—33 
the name of the holder and the nature of the holder’s 
work in connection with any of the activities carried out, 
or any information or services provided, with such funds. 
‘‘(B) INFORMATIONAL
DISCLOSURES.—Any information 
about financing options for higher education provided 
through an activity or service funded under this section 
shall— 
‘‘(i) include information to students and the stu-
dents’ parents of the availability of Federal, State, 
local, institutional, and other grants and loans for post-
secondary education; and 
‘‘(ii) present information on financial assistance 
for postsecondary education that is not provided under 
title IV of the Higher Education Act of 1965 in a 
manner that is clearly distinct from information on 
student financial assistance under such title. 
‘‘(4) COORDINATION.—A grantee receiving a grant payment 
under this section shall attempt to coordinate the activities 
carried out with the grant payment with any existing activities 
that are similar to such activities, and with any other entities 
that support the existing activities in the State. 
‘‘(h) REPORT.—A grantee receiving a payment under this section 
shall prepare and submit an annual report to the Secretary on 
the activities and services carried out under this section, and on 
the implementation of such activities and services. The report shall 
include— 
‘‘(1) each activity or service that was provided to students 
and families over the course of the year; 
‘‘(2) the cost of providing each activity or service; 
‘‘(3) the number, and percentage, if feasible and applicable, 
of students who received each activity or service; and 
‘‘(4) the total contributions from private organizations 
included in the grantee’s non-Federal share for the fiscal year. 
‘‘(i) DEFINITIONS.—In this section: 
‘‘(1) PHILANTHROPIC
ORGANIZATION.—The term ‘philan-
thropic organization’ means a non-profit organization— 
‘‘(A) that does not receive funds under title IV of the 
Higher Education Act of 1965 or under the Elementary 
and Secondary Education Act of 1965; 
‘‘(B) that is not a local educational agency or an institu-
tion of higher education; 
‘‘(C) that has a demonstrated record of dispersing grant 
aid to underserved populations to ensure access to, and 
participation in, higher education; 
‘‘(D) that is affiliated with an eligible consortia (as 
defined in paragraph (2)) to carry out this section; and 
‘‘(E) the primary purpose of which is to provide finan-
cial aid and support services to students from underrep-
resented populations to increase the number of such stu-
dents who enter and remain in college. 
‘‘(2) ELIGIBLE
CONSORTIA.—The term ‘eligible consortia’ 
means a partnership of 2 or more entities that have agreed 
to work together to carry out this section that— 
‘‘(A) includes— 
‘‘(i) a philanthropic organization, which serves as 
the manager of the consortia;
H. R. 2669—34 
‘‘(ii) a State that demonstrates a commitment to 
ensuring the creation of a Statewide system to address 
the issues of early intervention and financial support 
for eligible students to enter and remain in college; 
and 
‘‘(iii) at the discretion of the philanthropic 
organization described in clause (i), additional part-
ners, including other non-profit organizations, govern-
ment entities (including local municipalities, school dis-
tricts, cities, and counties), institutions of higher edu-
cation, and other public or private programs that pro-
vide mentoring or outreach programs; and 
‘‘(B) conducts activities to assist students with entering 
and remaining in college, which may include— 
‘‘(i) providing need-based grants to students; 
‘‘(ii) providing early notification to low-income stu-
dents of their potential eligibility for Federal financial 
aid (which may include assisting students and families 
with filling out FAFSA forms), as well as other finan-
cial aid and other support available from the eligible 
consortia; 
‘‘(iii) encouraging increased student participation 
in higher education through mentoring or outreach 
programs; and 
‘‘(iv) conducting marketing and outreach efforts 
that are designed to— 
‘‘(I) encourage full participation of students 
in the activities of the consortia that carry out 
this section; and 
‘‘(II) provide the communities impacted by the 
activities of the consortia with a general knowledge 
about the efforts of the consortia. 
‘‘(3) GRANTEE.—The term ‘grantee’ means— 
‘‘(A) a State awarded a grant under this section; or 
‘‘(B) with respect to such a State that has failed to 
meet the non-Federal share requirement of subsection (b), 
a philanthropic organization awarded the proportionate 
reduction amount of such a grant under subsection (b)(3).’’. 
SEC. 802. INVESTMENT IN HISTORICALLY BLACK COLLEGES AND 
UNIVERSITIES AND MINORITY-SERVING INSTITUTIONS. 
Title IV (20 U.S.C. 1070 et seq.) is further amended by adding 
after part I (as added by section 701 of this Act) the following 
new part: 
‘‘PART 
J—STRENGTHENING 
HISTORICALLY 
BLACK COLLEGES AND UNIVERSITIES AND 
OTHER MINORITY-SERVING INSTITUTIONS 
‘‘SEC. 499A. INVESTMENT IN HISTORICALLY BLACK COLLEGES AND 
UNIVERSITIES AND OTHER MINORITY-SERVING INSTITU-
TIONS. 
‘‘(a) ELIGIBLE INSTITUTION.—An institution of higher education 
is eligible to receive funds from the amounts made available under 
this section if such institution is—
H. R. 2669—35 
‘‘(1) a part B institution (as defined in section 322 (20 
U.S.C. 1061)); 
‘‘(2) a Hispanic-serving institution (as defined in section 
502 (20 U.S.C. 1101a)); 
‘‘(3) a Tribal College or University (as defined in section 
316 (20 U.S.C. 1059c)); 
‘‘(4) an Alaska Native-serving institution or a Native 
Hawaiian-serving institution (as defined in section 317(b) (20 
U.S.C. 1059d(b))); 
‘‘(5) a Predominantly Black Institution (as defined in sub-
section (c)); 
‘‘(6) an Asian American and Native American Pacific 
Islander-serving institution (as defined in subsection (c)); or 
‘‘(7) a Native American-serving nontribal institution (as 
defined in subsection (c)). 
‘‘(b) NEW INVESTMENT OF FUNDS.— 
‘‘(1) IN GENERAL.—There shall be available to the Secretary 
to carry out this section, from funds not otherwise appropriated, 
$255,000,000 for each of the fiscal years 2008 and 2009. The 
authority to award grants under this section shall expire at 
the end of fiscal year 2009. 
‘‘(2) ALLOCATION AND ALLOTMENT.— 
‘‘(A) IN
GENERAL.—Of the amounts made available 
under paragraph (1) for each fiscal year— 
‘‘(i) $100,000,000 shall be available for allocation 
under subparagraph (B); 
‘‘(ii) $100,000,000 shall be available for allocation 
under subparagraph (C); and 
‘‘(iii) $55,000,000 shall be available for allocation 
under subparagraph (D). 
‘‘(B) HSI STEM
AND
ARTICULATION
PROGRAMS.—The 
amount made available for allocation under this subpara-
graph by subparagraph (A)(i) for any fiscal year shall be 
available for Hispanic-serving Institutions for activities 
described in section 503, with a priority given to applica-
tions that propose— 
‘‘(i) to increase the number of Hispanic and other 
low income students attaining degrees in the fields 
of science, technology, engineering, or mathematics; 
and 
‘‘(ii) to develop model transfer and articulation 
agreements between 2-year Hispanic-serving institu-
tions and 4-year institutions in such fields. 
‘‘(C) ALLOCATION AND ALLOTMENT HBCUS AND PBIS.— 
From the amount made available for allocation under this 
subparagraph by subparagraph (A)(ii) for any fiscal year— 
‘‘(i) 85 percent shall be available to eligible institu-
tions described in subsection (a)(1) and shall be made 
available as grants under section 323 and allotted 
among such institutions under section 324, treating 
such amount, plus the amount appropriated for such 
fiscal year in a regular or supplemental appropriation 
Act to carry out part B of title III, as the amount 
appropriated to carry out part B of title III for purposes 
of allotments under section 324, for use by such institu-
tions with a priority for—
H. R. 2669—36 
‘‘(I) activities described in paragraphs (1), (2), 
(4), (5), and (10) of section 323(a); and 
‘‘(II) other activities, consistent with the 
institution’s comprehensive plan and designed to 
increase the institution’s capacity to prepare stu-
dents for careers in the physical or natural 
sciences, 
mathematics, 
computer 
science 
or 
information technology or sciences, engineering, 
language instruction in the less-commonly taught 
languages or international affairs, or nursing or 
allied health professions; and 
‘‘(ii) 15 percent shall be available to eligible institu-
tions described in subsection (a)(5) and shall be avail-
able for a competitive grant program to award 25 
grants of $600,000 annually for programs in any of 
the following areas: 
‘‘(I) science, technology, engineering, or mathe-
matics (STEM); 
‘‘(II) health education; 
‘‘(III) internationalization or globalization; 
‘‘(IV) teacher preparation; or 
‘‘(V) improving educational outcomes of Afri-
can American males. 
‘‘(D) ALLOCATION AND ALLOTMENT TO OTHER MINORITY- 
SERVING INSTITUTIONS.—From the amount made available 
for allocation under this subparagraph by subparagraph 
(A)(iii) for any fiscal year— 
‘‘(i) $30,000,000 for such fiscal year shall be avail-
able to eligible institutions described in subsection 
(a)(3) and shall be made available as grants under 
section 316, treating such $30,000,000 as part of the 
amount appropriated for such fiscal year in a regular 
or supplemental appropriation Act to carry out such 
section, and using such $30,000,000 for purposes 
described in subsection (c) of such section; 
‘‘(ii) $15,000,000 for such fiscal year shall be avail-
able to eligible institutions described in subsection 
(a)(4) and shall be made available as grants under 
section 317, treating such $15,000,000 as part of the 
amount appropriated for such fiscal year in a regular 
or supplemental appropriation Act to carry out such 
section and using such $15,000,000 for purposes 
described in subsection (c) of such section; 
‘‘(iii) $5,000,000 for such fiscal year shall be avail-
able to eligible institutions described in subsection 
(a)(6) for activities described in section 311(c); and 
‘‘(iv) $5,000,000 for such fiscal year shall be avail-
able to eligible institutions described in subsection 
(a)(7)— 
‘‘(I) to plan, develop, undertake, and carry out 
activities to improve and expand such institutions’ 
capacity to serve Native Americans, which may 
include— 
‘‘(aa) the purchase, rental, or lease of sci-
entific or laboratory equipment for educational 
purposes, including instructional and research 
purposes;
H. R. 2669—37 
‘‘(bb) renovation and improvement in 
classroom, library, laboratory, and other 
instructional facilities; 
‘‘(cc) support of faculty exchanges, faculty 
development, and faculty fellowships to assist 
faculty in attaining advanced degrees in the 
faculty’s field of instruction; 
‘‘(dd) curriculum development and aca-
demic instruction; 
‘‘(ee) the purchase of library books, 
periodicals, microfilm, and other educational 
materials; 
‘‘(ff) funds and administrative manage-
ment, and acquisition of equipment for use 
in strengthening funds management; 
‘‘(gg) the joint use of facilities such as 
laboratories and libraries; and 
‘‘(hh) academic tutoring and counseling 
programs and student support services; and 
‘‘(II) to which the Secretary, to the extent pos-
sible and consistent with a competitive process 
under which such grants are awarded, allocates 
funds under this clause to ensure maximum and 
equitable distribution among all such eligible 
institutions. 
‘‘(c) DEFINITIONS.— 
‘‘(1) ASIAN AMERICAN.—The term ‘Asian American’ has the 
meaning given the term ‘Asian’ in the Office of Management 
and Budget’s Standards for Maintaining, Collecting, and Pre-
senting Federal Data on Race and Ethnicity as published on 
October 30, 1997 (62 Fed. Reg. 58789). 
‘‘(2) ASIAN
AMERICAN
AND
NATIVE
AMERICAN
PACIFIC 
ISLANDER-SERVING
INSTITUTION.—The term ‘Asian American 
and Native American Pacific Islander-serving institution’ means 
an institution of higher education that— 
‘‘(A) is an eligible institution under section 312(b); and 
‘‘(B) at the time of application, has an enrollment of 
undergraduate students that is at least 10 percent Asian 
American and Native American Pacific Islander students. 
‘‘(3) ENROLLMENT OF NEEDY STUDENTS.—The term ‘enroll-
ment of needy students’ means the enrollment at an institution 
of higher education with respect to which not less than 50 
percent of the undergraduate students enrolled in an academic 
program leading to a degree— 
‘‘(A) in the second fiscal year preceding the fiscal year 
for which the determination is made, were Federal Pell 
Grant recipients for such year; 
‘‘(B) come from families that receive benefits under 
a means-tested Federal benefit program (as defined in para-
graph (5)); 
‘‘(C) attended a public or nonprofit private secondary 
school— 
‘‘(i) that is in the school district of a local edu-
cational agency that was eligible for assistance under 
part A of title I of the Elementary and Secondary 
Education Act of 1965 for any year during which the 
student attended such secondary school; and
H. R. 2669—38 
‘‘(ii) which for the purpose of this paragraph and 
for that year was determined by the Secretary (pursu-
ant to regulations and after consultation with the State 
educational agency of the State in which the school 
is located) to be a school in which the enrollment 
of children counted under a measure of poverty 
described in section 1113(a)(5) of such Act exceeds 
30 percent of the total enrollment of such school; or 
‘‘(D) are first-generation college students (as that term 
is defined in section 402A(g)), and a majority of such first- 
generation college students are low-income individuals. 
‘‘(4) LOW-INCOME INDIVIDUAL.—The term ‘low-income indi-
vidual’ has the meaning given such term in section 402A(g). 
‘‘(5) MEANS-TESTED FEDERAL BENEFIT PROGRAM.—The term 
‘means-tested Federal benefit program’ means a program of 
the Federal Government, other than a program under title 
IV, in which eligibility for the programs’ benefits or the amount 
of such benefits are determined on the basis of income or 
resources of the individual or family seeking the benefit. 
‘‘(6) NATIVE AMERICAN.—The term ‘Native American’ means 
an individual who is of a tribe, people, or culture that is 
indigenous to the United States. 
‘‘(7) NATIVE AMERICAN PACIFIC ISLANDER.—The term ‘Native 
American Pacific Islander’ means any descendant of the 
aboriginal people of any island in the Pacific Ocean that is 
a territory or possession of the United States. 
‘‘(8) NATIVE AMERICAN-SERVING NONTRIBAL INSTITUTION.— 
The term ‘Native American-serving nontribal institution’ means 
an institution of higher education that— 
‘‘(A) at the time of application— 
‘‘(i) has an enrollment of undergraduate students 
that is not less than 10 percent Native American stu-
dents; and 
‘‘(ii) is not a Tribal College or University (as 
defined in section 316); and 
‘‘(B) submits to the Secretary such enrollment data 
as may be necessary to demonstrate that the institution 
is described in subparagraph (A), along with such other 
information and data as the Secretary may by regulation 
require. 
‘‘(9) 
PREDOMINANTLY
BLACK
INSTITUTION.—The 
term 
‘Predominantly Black institution’ means an institution of higher 
education that— 
‘‘(A) has an enrollment of needy students as defined 
by paragraph (3); 
‘‘(B) has an average educational and general expendi-
ture which is low, per full-time equivalent undergraduate 
student in comparison with the average educational and 
general expenditure per full-time equivalent undergraduate 
student of institutions of higher education that offer similar 
instruction, except that the Secretary may apply the waiver 
requirements described in section 392(b) to this subpara-
graph in the same manner as the Secretary applies the 
waiver requirements to section 312(b)(1)(B); 
‘‘(C) has an enrollment of undergraduate students— 
‘‘(i) that is at least 40 percent Black American 
students;
H. R. 2669—39 
‘‘(ii) that is at least 1,000 undergraduate students; 
‘‘(iii) of which not less than 50 percent of the 
undergraduate students enrolled at the institution are 
low-income individuals or first-generation college stu-
dents (as that term is defined in section 402A(g)); 
and 
‘‘(iv) of which not less than 50 percent of the under-
graduate students are enrolled in an educational pro-
gram leading to a bachelor’s or associate’s degree that 
the institution is licensed to award by the State in 
which the institution is located; 
‘‘(D) is legally authorized to provide, and provides 
within the State, an educational program for which the 
institution of higher education awards a bachelor’s degree, 
or in the case of a junior or community college, an associ-
ate’s degree; 
‘‘(E) is accredited by a nationally recognized accrediting 
agency or association determined by the Secretary to be 
a reliable authority as to the quality of training offered, 
or is, according to such an agency or association, making 
reasonable progress toward accreditation; and 
‘‘(F) is not receiving assistance under part B of title 
III.’’. 
Speaker of the House of Representatives. 
Vice President of the United States and
President of the Senate.