not result in unnecessary accumulation in the Federal stu-
dent loan fund of such institution established pursuant to
this Act. Payments allotted to such institutions for loans
for graduate students shall not be used to provide loans
for undergraduate students and payments made to provide
loans for undergraduate students shall not be used to pro-
vide loans for graduate students.
(b) If the amount appropriated for any fiscal year
is less than the aggregate of amounts authorized to be
paid under subsection (a) for such year, the amount au-
thorized to be paid under such subsection to each institu-
tion of higher education with which the Secretary has an
agreement under the Act shall be reduced in proportion
to the student enrollments in each institution for such year
so that the aggregate of such amounts does not exceed
the amount appropriated for such year.
REPAYMENTS OF LOANS
SEC. 103. Each year beginning with the second tax-
able year that a scholar who received a loan under this
Act is no longer a bona fide students of an accredited in-
stitution of higher education and working toward a degree,
the recipient shall pay to the Secretary a sum equal to
5 per centum of his personal net taxable income, as de-
fined or determined by section 63 of the 1986 Internal
Revenue Code, as amended, from sources other than pay
for military service. Said sums to be paid each year until
the total of the sums received by the student without inter-
est is repaid. The Secretary shall issue such regulations
as are reasonably necessary to assure receipt of necessary
documents and information to secure such payments and
such required documents and assurances shall be secured
prior to payment of an individual loan.
The recipient shall be given an alternative of repaying
each year 10 per centum of the total of the sums received
by the student and such payments shall begin with the
second calendar year in which the student is no longer
a bona fide student of an accredited institution of higher
education for a period of six or more months and working
toward a degree.
Any sums due and unpaid shall bear interest
compounded annually at the annual rate the Secretary de-
termines to be 2 per centum more than the average inter-
est rate paid on new issues of obligations of the United
States for each calendar year such sums are due and
owing.
APPROPRIATIONS
SEC. 104. In order to carry out the provisions of this
Act, there are hereby authorized to be appropriated such
sums as may be necessary to effectuate the purposes of
this Act for fiscal year 1994 and each fiscal year there-
after through fiscal year 1999. Sums appropriated pursu-
ant to the preceding sentence for fiscal years shall remain
available for the award of financial assistance loans under
this Act until the close of the fiscal year succeeding the
fiscal year for which they were appropriated.
TITLE II—DEFINITIONS AND OTHER
PROVISIONS APPLICABLE TO ENTIRE ACT
DEFINITIONS
SEC. 201. As used in this Act—
(a) The term ‘‘institution of higher education’’ means
a pubic or other nonprofit educational institution in any
State which—
(1) admits as regular students only individuals
having a certificate of graduation from a high
school, or the recognized equivalent of such a certifi-
cate;
(2) is legally authorized within such State to
provide a program of education beyond high school;
(3) provides an educational program for which
it awards a degree, or provides not less than a two-
year program which is acceptable for full credit to-
ward such a degree; and
(4) is accredited by a nationally recognized ac-
crediting agency or association listed by the Sec-
retary pursuant to this paragraph or, if not so ac-
credited, is an institution whose credits are accepted,
on transfer, by not less than three institutions which
are so accredited, for credit on the same basis as if
transferred from an institution so accredited or is an
institution which the Secretary determines provides
an educational program at least equal to the pro-
gram provided by at least three accredited institu-
tions. For the purposes of this paragraph the Sec-
retary shall publish a list of nationally accrediting
agencies or associations which he determines to be
reliable authorities as to the quality of education or
training offered.
(b) The term ‘‘high school’’ does not include any
grade beyond grade 12.
(c) The term ‘‘nonprofit educational institution’’
means an educational institution owned and operated by
one or more corporations or associations no part of the
net earnings of which inures, or may lawfully inure, to
the benefit of any private shareholder or individual.
(d) The term ‘‘public educational institution’’ does
not include a school or institution of any agency of the
United States.
(e) The term ‘‘State’’ includes, in addition to the sev-
eral States, the District of Columbia, the Commonwealth
of Puerto Rico, the Virgin Islands, Guam, and American
Samoa.
(f) the term ‘‘Secretary’’ means the United States
Secretary of Education.
FEDERAL ADMINISTRATION
SEC. 202. (a) The Secretary may delegate any of his
functions under this Act, except the making of regulations,
or determining the accrediting of institutions to any offi-
cer or employee of the Department of Education.
(b) In administering the provisions of this Act for
which he is responsible, the Secretary is authorized to uti-
lize the services and facilities of any agency of the Federal
Government and of any other public or nonprofit agency
or institution in accordance with appropriate agreements,
and to pay for such services either in advance or by way
of reimbursement, as may be agreed upon.
(c) The Secretary, may appoint one or more advisory
committees to advise and consult with the Secretary with
respect to the administration of any of his functions under
this Act. Members of any such committee, while attending
conferences or meetings of the committee, shall be entitled
to receive compensation at a rate to be fixed by the Sec-
retary but not to exceed $150 per diem, and while away
from their homes or regular places of business they may
be allowed travel expenses, including per diem in lieu of
subsistence, as authorized by law (5 U.S.C. 5703) for per-
sons in the Government service employed intermittently.
The provisions of General Education Provisions Act shall
apply to members of such committees.
METHOD OF PAYMENT TO INSTITUTIONS
SEC. 203. Payments under this Act to any individual
or to any State or Federal agency, institution of higher
education, or any other organization, may be made in in-
stallments, and in advance or by way of reimbursement,
and with necessary adjustments on account of overpay-
ments or underpayments.
ADMINISTRATIVE APPROPRIATIONS AUTHORIZED
SEC. 204. There are hereby authorized to be appro-
priated for the fiscal year ending September 30, 1994, and
for each fiscal year thereafter through fiscal year 1999,
such sums as may be necessary for the cost of administer-
ing the provisions of this Act.
SEC. 205. Nothing contained in this Act shall be con-
strued as authorizing a department, agency, officer, or
employee of the United States to exercise any direction,
supervision, or control over, or impose any requirements
or condition with respect to, the personnel, curriculum,
methods of instruction, or administration of any edu-
cational institution.
TITLE III—NATIONAL STUDY
SEC. 301. (a) The Secretary shall undertake a study
to determine the extent to which the provisions of this Act
can reasonably replace various other Federal grants or as-
sistance programs.
(b) The Secretary shall submit a report of his find-
ings made pursuant to the study carried out under this
section, together with such recommendations as he may
deem appropriate, to the President and the Congress with-
in two years after the date of the enactment of this sec-
tion.
SEC. 302. This Act shall be cited as the ‘‘Federal
Student Loan Act’’.
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