days after the date of enactment of this subsection.
Such regulation shall not be subject to the provisions
of the Master Calendar as specified under section
482 of this title. The provisions of this subsection
shall 
be 
implemented 
notwithstanding 
the
nonpublication of regulations required under this
subsection by the Secretary.’’.
SEC. 202. DIRECT LOAN VOLUME LIMITS.
Section 453(a) of the Act (20 U.S.C. 1087(a)) is
amended by striking paragraphs (2) and (3).
SEC. 203. ADMINISTRATIVE EXPENSES.
Section 458(a) of the Act (20 U.S.C. 1087h(a)) is
amended to read as follows:
‘‘(a) IN GENERAL.—Each fiscal year there shall be
available, from funds not otherwise appropriated, funds to
be obligated for administrative costs under this part, and
for certain expenditures in support of the program author-
ized under part B, not to exceed (from such funds not
otherwise appropriated) $50,000,000 in fiscal year 1996,
$45,000,000 in fiscal year 1997, and no funds available
in fiscal year 1998. The total expenditures by the Sec-
retary (from such funds not otherwise appropriated) shall
not exceed $700,000,000 in fiscal years 1994 through
1998. The Secretary is also authorized to carry over funds
available under this section to a subsequent fiscal year.’’.
SEC. 204. REPEAL.
Part D of title IV of the Higher Education Act, as
amended by this title, is repealed effective October 1,
1997.
TITLE III—IMPROVEMENTS TO
THE FEDERAL FAMILY EDU-
CATION LOAN PROGRAM
SEC. 301. RECOVERY OF GUARANTY AGENCY RESERVES.
The last sentence of section 422(a)(2) of the Act (20
U.S.C. 1072(a)(2)) is amended by striking ‘‘Except as
provided in section 428(c)(10)(E) or (F), such’’ and in-
serting in lieu thereof ‘‘Such’’.
SEC. 302. RESERVE FUNDS.
Section 422(g) of the Act (20 U.S.C. 1072(g)) is
amended to read as follows:
‘‘(g) DISPOSITION OF FUNDS RETURNED OR RECOV-
ERED BY THE SECRETARY.—Any funds that are returned
or otherwise recovered by the Secretary pursuant to this
subsection shall be returned to the United States Treasury
for purposes of reducing the Federal debt.’’.
SEC. 303. TERMINATION OF FDSL CONSOLIDATION LOAN
AUTHORITY.
(a) PART B AUTHORITY.—Section 428C(b) of the
Act (20 U.S.C. 1078–3(b)) is amended by striking para-
graph (5).
(b) PART D AUTHORITY.—Section 455 of the Act is
amended by striking subsection (g).
SEC. 304. CONSOLIDATION UNDER FFELP OF LOANS MADE
PURSUANT TO PART D.
Section 428C(a)(4)(B) of the Act (20 U.S.C. 1087–
3(a)(4)(B)) is amended by inserting ‘‘part D or’’ before
‘‘part E’’.
SEC. 305. ACCOUNTABILITY OF FUNDS FOR DIRECT LOAN
ADMINISTRATIVE EXPENSES.
Section 458 of the Act (20 U.S.C. 1087h) is amended
by redesignating subsection (d) as subsection (e), and by
inserting after subsection (c) thereof the following new
subsection:
‘‘(d) PROHIBITION ON CERTAIN EXPENDITURES.—
Notwithstanding any other provision of law, funds avail-
able under this section shall not be used to support public
relations activities (by Department of Education employ-
ees or pursuant to contracts with the Department) or mar-
keting of institutions to encourage participation in the
program authorized under this part.’’.
SEC. 306. SALE OF FDSL LOAN PORTFOLIOS.
The Act is amended by inserting after section 458
of the Act (20 U.S.C. 1087h) the following new section:
‘‘SEC. 459. SALE OF FEDERAL DIRECT STUDENT LOAN
PORTFOLIOS.
‘‘(a) AUCTION SALES OF LOAN PORTFOLIOS.—The
Secretary shall conduct auctions to sell the outstanding
portfolio of loans made pursuant to this part. Such auc-
tions shall consist of sales of portfolios representative of
the overall characteristics of the direct loans held by the
Secretary. Auctions shall be held for portfolios of not less
than $40,000,000 of loans per sale. The first sale of loans
shall take place not later than 120 days after the date
of enactment of this section, and shall not include Federal
guarantees or reinsurance against the contingency of bor-
rower default, death, or disability.
‘‘(b) LOAN
TERMS
SUBJECT
TO
PROMISSORY
NOTE.—Such loans shall be subject to the terms and con-
ditions as specified in the borrower promissory note, and
shall not be subject to further Federal regulations pursu-
ant to this Act.
‘‘(c) ASSESSMENT OF AUCTION.—The Secretary, fol-
lowing the auctions required pursuant to this section, shall
prepare a report on the results of such auctions. Such re-
port shall include (but not be limited to) the following:
‘‘(1) The Secretary’s opinion as to whether the
results of the auction represent a true reflection of
the Federal subsidy costs associated with federally
supported student loans; and
‘‘(2) an estimate of the reductions in Federal
administrative costs achieved through eliminating fu-
ture Federal oversight and administrative respon-
sibilities of affected loans as a result of sale to the
private sector.
‘‘(d) TRANSMITTAL OF RESULTS TO CONGRESSIONAL
BUDGET OFFICE AND OFFICE OF MANAGEMENT AND
BUDGET.—The Secretary shall provide a copy of all re-
ports and analyses prepared in connection with implemen-
tation of this section to the Director of the Congressional
Budget Office and the Director of the Office of Manage-
ment and Budget.
‘‘(e) DISPOSITION OF PROCEEDS.—All proceeds re-
ceived as a result of the auctions conducted pursuant to
this part shall be returned to the United States Depart-
ment of the Treasury after deduction of expenses incurred
by the Department of Education in connection with the
auctions required pursuant to this section.’’.
SEC. 307. EFFECTIVE DATE.
Except as otherwise specified therein, the amend-
ments made by this title shall be effective 30 days after
the date of the enactment.
Æ