SECTION 1. SHORT TITLE; REFERENCE.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Emergency Student Loan Consolidation Act of 1997’’.
(b) REFERENCES.—Except as otherwise expressly
provided, whenever in this Act an amendment or repeal
is expressed in terms of an amendment to, or repeal of,
a section or other provision, the reference shall be consid-
ered to be made to a section or other provision of the
Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).
SEC. 2. LOAN CONSOLIDATION PROVISIONS.
(a) DEFINITION OF LOANS ELIGIBLE FOR CONSOLI-
DATION.—Section 428C(a)(4) (20 U.S.C. 1078–3(a)(4))
is amended—
(1) by redesignating subparagraphs (C) and
(D) as subparagraphs (D) and (E), respectively; and
(2) by inserting after subparagraph (B) the fol-
lowing new subparagraph:
‘‘(C) made under part D of this title, ex-
cept that loans made under such part shall be
eligible student loans only for consolidation
loans for which the application is received by an
eligible lender during the period beginning on
the date of enactment of the Emergency Stu-
dent Loan Consolidation Act of 1997 and end-
ing on October 1, 1998;’’.
(b) TERMS
OF CONSOLIDATION LOANS.—Section
428C(b)(4)(C)(ii) is amended—
(1) in subclause (I), by inserting after ‘‘consoli-
dation loan’’ the following: ‘‘for which the applica-
tion is received by an eligible lender before the date
of enactment of the Emergency Student Loan Con-
solidation Act of 1997, or on or after October 1,
1998,’’ ;
(2) by striking ‘‘or’’ at the end of subclause (I);
(3) by inserting ‘‘or (II)’’ before the semicolon
at the end of subclause (II);
(4) by redesignating subclause (II) as subclause
(III); and
(5) by inserting after subclause (I) the follow-
ing new subclause:
‘‘(II) by the Secretary, in the case of
a consolidation loan for which the applica-
tion is received by an eligible lender on or
after the date of enactment of the Emer-
gency Student Loan Consolidation Act of
1997 and before October 1, 1998, except
that the Secretary shall pay such interest
only on that portion of the loan that re-
pays Federal Stafford Loans for which the
student borrower received an interest sub-
sidy under section 428 or Federal Direct
Stafford Loans for which the borrower re-
ceived an interest subsidy under section
455; or’’.
(c) NONDISCRIMINATION
IN
LOAN
CONSOLIDA-
TION.—Section 428C(b) is amended by adding at the end
the following new paragraph:
‘‘(6) NONDISCRIMINATION IN LOAN CONSOLIDA-
TION.—An eligible lender that makes consolidation
loans under this section shall not discriminate
against any borrower seeking such a loan—
‘‘(A) based on the number or type of eligi-
ble student loans the borrower seeks to consoli-
date;
‘‘(B) based on the type or category of in-
stitution of higher education that the borrower
attended;
‘‘(C) based on the interest rate that is au-
thorized to be collected with respect to the con-
solidation loan; or
‘‘(D) with respect to the types of repay-
ment schedules offered to such borrower.’’.
(d) INTEREST RATE.—Section 428C(c)(1) is amend-
ed—
(1) in the first sentence of subparagraph (A),
by striking ‘‘(B) or (C)’’ and inserting ‘‘(B), (C), or
(D)’’; and
(2) by adding at the end the following new sub-
paragraph:
‘‘(D) A consolidation loan for which the applica-
tion is received by an eligible lender on or after the
date of enactment of the Emergency Student Loan
Consolidation Act of 1997 and before October 1,
1998, shall bear interest at an annual rate on the
unpaid principal balance of the loan that is equal to
the rate specified in section 427A(f), except that the
eligible lender may continue to calculate interest on
such a loan at the rate previously in effect and
defer, until not later than April 1, 1998, the recal-
culation of the interest on such a loan at the rate
required by this subparagraph if the recalculation is
applied retroactively to the date on which the loan
is made.’’.
(e) AMENDMENTS EFFECTIVE FOR PENDING APPLI-
CANTS.—The consolidation loans authorized by the
amendments made by this section shall be available not-
withstanding any pending application by a student for a
consolidation loan under part D of title IV of the Higher
Education Act of 1965, upon withdrawal of such applica-
tion by the student at any time prior to receipt of such
a consolidation loan.
SEC. 3. ADMINISTRATIVE EXPENSE REDUCTIONS.
Section 458(a)(1) (20 U.S.C. 1087h(a)(1)) is amend-
ed 
by 
striking 
‘‘$532,000,000’’ 
and 
inserting
‘‘$507,000,000’’.
SEC. 4. TREATMENT OF TAX BENEFITS.
(a) FAMILY CONTRIBUTION FOR DEPENDENT STU-
DENTS.—
(1) PARENTS’ AVAILABLE
INCOME.—Section
475(c)(1) is amended—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (D);
(B) by striking the period at the end of
subparagraph (E) and inserting ‘‘; and’’; and
(C) by adding at the end the following new
subparagraph:
‘‘(F) the amount of any tax credit taken
by the parents under section 25A of the Inter-
nal Revenue Code of 1986.’’.
(2) STUDENT CONTRIBUTION FROM AVAILABLE
INCOME.—Section 475(g)(2) is amended—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (C);
(B) by striking the period at the end of
subparagraph (D) and inserting ‘‘; and’’; and
(C) by inserting after subparagraph (D)
the following new subparagraph:
‘‘(E) the amount of any tax credit taken
by the student under section 25A of the Inter-
nal Revenue Code of 1986.’’.
(b) FAMILY CONTRIBUTION FOR INDEPENDENT STU-
DENTS
WITHOUT
DEPENDENTS
OTHER
THAN
A
SPOUSE.—Section 
476(b)(1)(A) 
(20 
U.S.C.
1087pp(b)(1)(A)) is amended—
(1) by striking ‘‘and’’ at the end of clause (iv);
and
(2) by inserting after clause (v) the following
new clause:
‘‘(vi) the amount of any tax credit
taken under section 25A of the Internal
Revenue Code of 1986; and’’.
(c) FAMILY CONTRIBUTION FOR INDEPENDENT STU-
DENTS WITH DEPENDENTS OTHER THAN A SPOUSE.—
Section 477(b)(1) (20 U.S.C. 1087qq(b)(1)) is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (D);
(2) by striking the period at the end of sub-
paragraph (E) and inserting ‘‘; and’’; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(F) the amount of any tax credit taken
under section 25A of the Internal Revenue
Code of 1986.’’.
(d) TOTAL INCOME.—Section 480(a)(2) (20 U.S.C.
1087vv(a)(2)) is amended—
(1) by striking ‘‘individual, and’’ and inserting
‘‘individual,’’; and
(2) by inserting ‘‘and no portion of any tax
credit taken under section 25A of the Internal Reve-
nue Code of 1986,’’ before ‘‘shall be included’’.
(e) OTHER FINANCIAL ASSISTANCE.—Section 480(j)
is amended by adding at the end the following new para-
graph:
‘‘(4) Notwithstanding paragraph (1), a tax credit
taken under section 25A of the Internal Revenue Code of
1986 shall not be treated as estimated financial assistance
for purposes of section 471(3).’’.
Passed the House of Representatives October 21,
1997.
Attest:
Clerk.