have greater choices among institutions of higher edu-
cation. 
SEC. 3. COLLEGE ACCESS GRANTS. 
(a) GRANTS.— 
(1) IN GENERAL.— 
(A) ALLOCATION TO OUTLYING AREAS.— 
From the total amount appropriated under sub-
section (n) for a fiscal year, the Secretary shall 
allocate 25 percent to each outlying area to 
make grants to eligible institutions in accord-
ance with subparagraph (B). 
(B) 
GRANTS
TO
ELIGIBLE
INSTITU-
TIONS.—From the amount allocated to an out-
lying area under subparagraph (A) for a fiscal 
year, the Governor of the outlying area shall 
carry out a program under which the Governor 
awards grants to eligible institutions, on behalf 
of each eligible student from the outlying area 
who is enrolled in such institution, to pay the 
difference between— 
(i) the base amount of tuition and 
fees charged to the eligible student; and 
(ii) the base amount of tuition and 
fees charged to a student of the institution 
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who is a resident of the State in which the 
institution is located. 
(2) 
MAXIMUM
STUDENT
AMOUNTS.—The 
amount paid on behalf of an eligible student under 
this section shall be— 
(A) not more than $15,000 for any one 
award year (as defined in section 481 of the 
Higher Education Act of 1965 (20 U.S.C. 
1088)); and 
(B) not more than $45,000 in the aggre-
gate. 
(3) PRORATION.—In the case of a grant made 
under this section on behalf of an eligible student 
who is attending an eligible institution on a less 
than full-time basis, the amount of the grant shall 
be reduced in proportion to the degree to which that 
student is not so attending on a full-time basis. 
(b) REDUCTION
FOR
INSUFFICIENT
APPROPRIA-
TIONS.— 
(1) IN
GENERAL.—If the funds appropriated 
pursuant to subsection (n) for any fiscal year are in-
sufficient to enable the Governor of an outlying area 
to award a grant in the amount determined under 
subsection (a) on behalf of each eligible student from 
the outlying area enrolled in an eligible institution, 
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then the Governor, in consultation with the Sec-
retary, shall— 
(A) first, ratably reduce the amount of the 
tuition and fee payment made on behalf of each 
eligible student from the outlying area who has 
not received funds under this section for a pre-
ceding year; and 
(B) after making reductions under sub-
paragraph (A), ratably reduce the amount of 
the tuition and fee payments made on behalf of 
all other eligible students from the outlying 
area. 
(2) ADJUSTMENTS.—The Governor of an out-
lying area, in consultation with the Secretary, may 
adjust the amount of tuition and fee payments made 
under paragraph (1) based on— 
(A) the financial need of the eligible stu-
dents to avoid undue hardship to the eligible 
students; or 
(B) undue administrative burdens on the 
Governor. 
(3) 
FURTHER
ADJUSTMENTS.—Notwith-
standing paragraphs (1) and (2), the Governor of an 
outlying area may prioritize the making or amount 
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of tuition and fee payments under this subsection 
based on the income and need of eligible students. 
(c) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to require an institution of higher 
education to alter the institution’s admissions policies or 
standards in any manner to enable an eligible student to 
enroll in the institution. 
(d) APPLICATIONS.—Each student desiring that a 
Governor award a grant under this section to an eligible 
institution on behalf of the student shall submit an appli-
cation to the eligible institution at such time, in such man-
ner, and accompanied by such information as the eligible 
institution may require. 
(e) EMPLOYMENT AGREEMENT.— 
(1) IN GENERAL.—Except as provided in sub-
section (g), each application submitted under sub-
section (d) shall contain or be accompanied by an 
agreement by the applicant that the applicant will— 
(A) maintain full-time employment within 
the outlying area where the applicant was domi-
ciled, as described in subsection (l)(3)(A), for a 
period of not less than 2 years within the 4- 
year period after the date the applicant com-
pletes the course of study for which the appli-
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cant received grant assistance under this sec-
tion; and 
(B) submit evidence of such employment in 
the form of a certification by the employer upon 
completion of each year of such employment. 
(2) FAILURE OR REFUSAL TO CARRY OUT EM-
PLOYMENT OBLIGATION.—In the event that an ap-
plicant is determined to have failed or refused to 
carry out the employment obligation described in 
paragraph (1), the sum of the grant assistance 
under this section received by such applicant shall be 
treated as a loan and collected from the applicant in 
accordance with subsection (f) and the policies and 
procedures under subsection (h)(2). 
(f) REPAYMENT FOR FAILURE TO COMPLETE EM-
PLOYMENT.—In the event that a student on whose behalf 
a grant is made under this section fails or refuses to com-
ply with the employment obligation in the agreement 
under subsection (e), the sum of the amounts of any such 
grant received by such student shall, upon a determination 
of such a failure or refusal in such employment obligation, 
be treated as a loan, and shall be subject to repayment, 
together with interest thereon accruing from the date of 
the grant award, in accordance with terms and conditions 
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specified by the Governor through policies and procedures 
under subsection (h)(2). 
(g) EXTENUATING CIRCUMSTANCES.— 
(1) IN GENERAL.—Each Governor shall identify 
extenuating circumstances under which a student on 
whose behalf a grant is made under this section who 
is unable to fulfill all or part of the student’s em-
ployment obligation under subsection (e) may be ex-
cused from fulfilling that portion of the employment 
obligation. 
(2) CONTINUOUS ENROLLMENT.—If a student 
on whose behalf a grant is made under this section 
is continuously enrolled at an institution of higher 
education in one or more postbaccalaureate pro-
grams and is maintaining satisfactory progress in 
the course of study the student is pursuing in ac-
cordance with section 484(c) of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1091(c)), the employ-
ment obligation in the agreement under subsection 
(e) shall begin once such recipient is no longer con-
tinuously enrolled. 
(h) ADMINISTRATION OF PROGRAM.— 
(1) IN GENERAL.—Each Governor shall carry 
out the program authorized under this section in 
consultation with the Secretary. Each Governor may 
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enter into a grant, contract, or cooperative agree-
ment with another public or private entity to admin-
ister the program under this section if the Governor 
determines that doing so is a more efficient way of 
carrying out the program. 
(2) POLICIES AND PROCEDURES.—Each Gov-
ernor, in consultation with institutions of higher 
education eligible for participation in the program 
authorized under this section, shall develop policies 
and procedures for the administration of the pro-
gram. 
(3) MEMORANDUM
OF
AGREEMENT.—Each 
Governor and the Secretary shall enter into a memo-
randum of agreement that describes— 
(A) the manner in which the Governor 
shall consult with the Secretary with respect to 
administering the program authorized under 
this section; and 
(B) any technical or other assistance to be 
provided to the Governor by the Secretary for 
purposes of administering the program (which 
may include access to the information in the 
common financial reporting form developed 
under section 483 of the Higher Education Act 
of 1965 (20 U.S.C. 1090)). 
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(i) GOVERNOR’S REPORT.—Each Governor shall re-
port to the authorizing committees annually regarding— 
(1) the number of eligible students from the 
outlying area attending each eligible institution and 
the amount of the grant assistance paid to such in-
stitutions on behalf of the eligible students; 
(2) the extent, if any, to which a ratable reduc-
tion was made in the amount of tuition and fee pay-
ments made on behalf of eligible students from the 
outlying area; 
(3) the progress in obtaining recognized aca-
demic credentials of the cohort of eligible students 
from the outlying area for each year; and 
(4) the number of eligible students whose grant 
assistance under this section has been converted to 
a loan, and the repayment of such loans. 
(j) GAO REPORT.—Beginning on the date of enact-
ment of this section, the Comptroller General of the 
United States shall monitor the effect of the program au-
thorized under this section on educational opportunities 
for eligible students. The Comptroller General shall ana-
lyze whether eligible students had difficulty gaining admis-
sion to eligible institutions because of any preference af-
forded in-State residents by eligible institutions, and shall 
expeditiously report any findings regarding such difficulty 
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to the authorizing committees. In addition, the Comp-
troller General shall— 
(1) analyze the extent to which there are an in-
sufficient number of eligible institutions to which 
students from outlying areas can gain admission, in-
cluding admission aided by assistance provided 
under this section, due to— 
(A) caps on the number of out-of-State 
students the institution will enroll; 
(B) significant barriers imposed by aca-
demic entrance requirements (such as grade 
point average and standardized scholastic ad-
missions tests); and 
(C) absence of admission programs benefit-
ting minority students; and 
(2) report the findings of the analysis described 
in paragraph (1) to the authorizing committees. 
(k) GENERAL REQUIREMENTS.— 
(1) PERSONNEL.—The Secretary shall arrange 
for the assignment of an individual, pursuant to sub-
chapter VI of chapter 33 of title 5, United States 
Code, to serve as an adviser to each Governor with 
respect to the program authorized under this sec-
tion. 
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(2) ADMINISTRATIVE
EXPENSES.—Each Gov-
ernor may use not more than 5 percent of the funds 
made available for the program authorized under 
this section for a fiscal year to pay the administra-
tive expenses of the program for the fiscal year. 
(3) INSPECTOR
GENERAL
REVIEW.—The pro-
gram authorized under this section shall be subject 
to audit and other review by the Inspector General 
of the Department of Education in the same manner 
as programs are audited and reviewed under the In-
spector General Act of 1978 (5 U.S.C. App.). 
(4) GIFTS.—Each Governor may accept, use, 
and dispose of donations of services or property for 
purposes of carrying out this section. 
(5) MAXIMUM
STUDENT
AMOUNT
ADJUST-
MENTS.—Each Governor shall establish rules to ad-
just the maximum student amounts described in 
subsection (a)(2)(B) for eligible students who trans-
fer between the eligible institutions. 
(l) DEFINITIONS.—In this section: 
(1) AUTHORIZING
COMMITTEES.—The term 
‘‘authorizing committees’’ has the meaning given the 
term in section 103 of the Higher Education Act of 
1965 (20 U.S.C. 1003). 
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(2) ELIGIBLE INSTITUTION.—The term ‘‘eligi-
ble institution’’ means an institution that— 
(A) is a public 4-year institution of higher 
education located in one of the several States of 
the United States, the District of Columbia, or 
the Commonwealth of Puerto Rico; 
(B) is eligible to participate in the student 
financial assistance programs under title IV of 
the Higher Education Act of 1965 (20 U.S.C. 
1070 et seq.); and 
(C) enters into an agreement with a Gov-
ernor containing such terms and conditions as 
the Governor and institution may jointly speci-
fy, including a requirement that the institution 
use the funds made available under this section 
to supplement and not supplant assistance that 
otherwise would be provided to eligible students. 
(3) ELIGIBLE
STUDENT.—The term ‘‘eligible 
student’’ means an individual who— 
(A) was domiciled in the outlying area 
from which a grant is sought under this section 
for not less than the 12 consecutive months 
preceding the commencement of the freshman 
year of the individual at an institution of higher 
education; 
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