formation with respect to loans made 
under this section; 
‘‘(ii) provide that the lender or the in-
stitution (as applicable) accepts responsi-
bility and financial liability stemming from 
its failure to perform its functions pursu-
ant to the agreement; and 
‘‘(iii) include such other provisions as 
the Secretary determines are necessary to 
protect the interests of the United States 
and to promote the purposes of this sec-
tion. 
‘‘(4) WITHDRAWAL AND TERMINATION PROCE-
DURES.—The Secretary shall establish procedures by 
which institutions or lenders may withdraw or be 
terminated from the program under this section. 
‘‘(c) SPECIAL LOAN TERMS AND CONDITIONS.—A 
loan under this section— 
‘‘(1) shall be repaid in accordance with a repay-
ment plan selected by the borrower commencing 6 
months after the date the borrower ceases to be en-
rolled; 
‘‘(2) be subject to deferral of repayment during 
any period of enrollment in which the borrower is 
enrolled as student, even if less-than-half-time; and 
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‘‘(3) during any such deferment— 
‘‘(A) shall not be subject to periodic in-
stallments of principal; and 
‘‘(B) interest— 
‘‘(i) in the case of a loan made by an 
eligible lender, shall be paid by the Sec-
retary; and 
‘‘(ii) in the case of a loan made by the 
Secretary, shall not accrue. 
‘‘(d) WAIVERS.—The Secretary is authorized to 
waive, for any institution of higher education participating 
in the program under this section, the requirements of sec-
tion 472 that relate to limiting the definition of the cost 
of attendance for less-than-half-time students, especially 
paragraphs (2) and (4) of such section, with the goal of 
allowing the institution to use the same definition of the 
cost of attendance for less than half-time students as is 
used for students attending at least half-time. 
‘‘(e) EVALUATIONS AND REPORTS.— 
‘‘(1) EVALUATIONS.—The Secretary shall evalu-
ate the demonstration program authorized under 
this section on an annual basis. Such evaluations 
shall review— 
‘‘(A) the extent to which each institution 
and lender participating in the demonstration 
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program has met the requirements of the par-
ticipation agreement, including program quality 
assurance; 
‘‘(B) the number of students participating 
in the demonstration program, including the 
progress of participating students towards rec-
ognized certificates or degrees and the extent to 
which persistence or completion increased or de-
creased for students in the demonstration pro-
gram; 
‘‘(C) the extent to which persistence or 
completion increased or decreased for students 
in the demonstration program as compared to 
a comparable group of students; 
‘‘(D) the willingness of lenders to partici-
pate and obstacles that discourage participation 
by lenders; and 
‘‘(E) the effect that limitations on the 
number of terms that a less-than-half-time stu-
dent may receive these loans has on their 
course of study. 
‘‘(2) REPORTS.—Not later than 42 months 
after the initiation of the program authorized under 
this section, the Secretary shall report to the Com-
mittee on Health, Education, Labor, and Pensions 
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of the Senate and the Committee on Education and 
Labor of the House of Representatives with respect 
to— 
‘‘(A) the evaluations of the demonstration 
program authorized under this section; and 
‘‘(B) any proposed statutory changes de-
signed to enhance persistence and completion 
for students. 
‘‘(f) OVERSIGHT.—In conducting the demonstration 
program authorized under this section, the Secretary 
shall, on a continuing basis— 
‘‘(1) ensure the compliance of institutions and 
lenders participating in the demonstration program 
with the requirements of this title (other than the 
sections and regulations that are waived under this 
section); and 
‘‘(2) provide technical assistance. 
‘‘(g) APPROPRIATION.—There shall be available to 
the Secretary to carry out this section, from funds not 
otherwise appropriated, such sums as may be necessary 
for fiscal year 2008 and each of the 4 succeeding fiscal 
years.’’. 
Æ 
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