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October 1, 2007, the special allowance pay-
ment computed pursuant to this subpara-
graph shall be computed—
‘‘(I) for loans held by an eligible
lender not described in subclause
(II)—
‘‘(aa) by substituting ‘1.24
percent’ for ‘1.74 percent’ in
clause (ii);
‘‘(bb) by substituting ‘1.84
percent’ for ‘2.34 percent’ each
place the term appears in this
subparagraph;
‘‘(cc) by substituting ‘1.84
percent’ for ‘2.64 percent’ in
clause (iii); and
‘‘(dd) by substituting ‘2.14
percent’ for ‘2.64 percent’ in
clause (iv); and
‘‘(II) for loans held by an eligible
not-for-profit holder—
‘‘(aa) by substituting ‘1.99
percent’ for ‘2.34 percent’ each
place the term appears in this
subparagraph;
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‘‘(bb) by substituting ‘1.39
percent’ for ‘1.74 percent’ in
clause (ii);
‘‘(cc) by substituting ‘1.99
percent’ for ‘2.64 percent’ in
clause (iii); and
‘‘(dd) by substituting ‘2.29
percent’ for ‘2.64 percent’ in
clause (iv).’’.
(b) INCREASED LOAN FEES FROM LENDERS.—Para-
graph (2) of section 438(d) (20 U.S.C. 1087–1(d)(2)) is
amended to read as follows:
‘‘(2) AMOUNT OF LOAN FEES.—The amount of
the loan fee which shall be deducted under paragraph
(1), but which may not be collected from the borrower,
shall be equal to 1.0 percent of the principal amount
of the loan with respect to any loan under this part
for which the first disbursement was made on or after
October 1, 2007.’’.
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TITLE IV—WILLIAM D. FORD FED-
ERAL DIRECT LOAN PROGRAM
SEC. 401. LOAN FORGIVENESS FOR PUBLIC SERVICE EM-
PLOYEES.
Section 455 (as amended by sections 201(c), 202(b),
and 203(c)) (20 U.S.C. 1087e) is further amended by add-
ing at the end the following:
‘‘(m) REPAYMENT PLAN FOR PUBLIC SERVICE EM-
PLOYEES.—
‘‘(1) IN GENERAL.—The Secretary shall cancel
the balance of interest and principal due, in accord-
ance with paragraph (2), on any eligible Federal Di-
rect Loan not in default for an eligible borrower
who—
‘‘(A) has made 120 monthly payments on
the Federal Direct Loan after October 1, 2007,
pursuant to any combination of—
‘‘(i) payments under an income-based
repayment plan under section 455(d)(1)(D);
‘‘(ii) payments under a standard re-
payment plan under section 455(d)(1)(A);
or
‘‘(iii) monthly payments under a re-
payment plan under section 455(d)(1) of
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not less than the monthly amount calculated
under section 455(d)(1)(A); and
‘‘(B)(i) is employed in a public service job
at the time of such forgiveness; and
‘‘(ii) has been employed in a public service
job during the period in which the borrower
makes each of the 120 payments described in
subparagraph (A).
‘‘(2) LOAN
CANCELLATION
AMOUNT.—After the
conclusion of the employment period described in
paragraph (1), the Secretary shall cancel the obliga-
tion to repay, for each year during such period de-
scribed in paragraph (1)(B)(ii) for which the eligible
borrower submits documentation to the Secretary that
the borrower’s annual adjusted gross income or an-
nual earnings were less than or equal to $65,000, 1⁄10
of the amount of the balance of principal and interest
due as of the time of such cancellation, on the eligible
Federal Direct Loans made to the borrower under this
part.
‘‘(3) DEFINITIONS.—In this subsection:
‘‘(A) ELIGIBLE BORROWER.—The term ‘eli-
gible borrower’ means a borrower who submits
documentation to the Secretary that the bor-
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rower’s annual adjusted gross income or annual
earnings is less than or equal to $65,000.
‘‘(B) ELIGIBLE FEDERAL DIRECT LOAN.—
The term ‘eligible Federal Direct Loan’ means a
Federal Direct Stafford Loan, Federal Direct
PLUS Loan, Federal Direct Unsubsidized Loan,
or a Federal Direct Consolidation Loan if such
consolidation loan was obtained by the borrower
under section 428C(b)(5) or in accordance with
section 428C(a)(3)(B)(i)(V).
‘‘(C) PUBLIC SERVICE JOB.—In this para-
graph, the term ‘public service job’ means—
‘‘(i) a full-time job in public emergency
management, government, public safety,
public law enforcement, public health, pub-
lic education, public early childhood edu-
cation, public child care, social work in a
public child or family service agency, public
services for individuals with disabilities,
public services for the elderly, public inter-
est legal services (including prosecution or
public defense), public library sciences, pub-
lic school library sciences, or other public
school-based services; or
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‘‘(ii) teaching as a full-time faculty
member at a Tribal College or University as
defined in section 316(b).’’.
SEC. 402. UNIT COST CALCULATION FOR GUARANTY AGEN-
CY ACCOUNT MAINTENANCE FEES.
Section 458(b) (20 U.S.C. 1087h(b)) is amended—
(1) by striking ‘‘Account’’ and inserting the fol-
lowing:
‘‘(1) FOR
FISCAL
YEARS
2006
AND
2007.—For
each of the fiscal years 2006 and 2007, account’’; and
(2) by adding at the end the following:
‘‘(2) FOR FISCAL YEAR 2008 AND SUCCEEDING
FISCAL YEARS.—
‘‘(A) IN GENERAL.—For fiscal year 2008
and each succeeding fiscal year, the Secretary
shall calculate the account maintenance fees pay-
able to guaranty agencies under subsection
(a)(3), on a per-loan cost basis in accordance
with subparagraph (B).
‘‘(B) AMOUNT DETERMINATION.—To deter-
mine the amount that shall be paid under sub-
section (a)(3) per outstanding loan guaranteed
by a guaranty agency for fiscal year 2008 and
succeeding fiscal years, the Secretary shall—
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‘‘(i) establish the per-loan cost basis
amount by dividing the total amount of ac-
count maintenance fees paid under sub-
section (a)(3) for fiscal year 2006 by the
number of loans under part B that were
outstanding for that fiscal year; and
‘‘(ii) for subsequent fiscal years, adjust
the amount determined under clause (i) as
the Secretary determines necessary to ac-
count for inflation.’’.
TITLE V—FEDERAL PERKINS
LOANS
SEC. 501. DISTRIBUTION OF LATE COLLECTIONS.
Section 466(b) (20 U.S.C. 1087ff(b)) is amended by
striking ‘‘March 31, 2012’’ and inserting ‘‘September 30,
2012’’.
TITLE VI—NEED ANALYSIS
SEC. 601. SUPPORT FOR WORKING STUDENTS.
(a) DEPENDENT STUDENTS.—Subparagraph (D) of
section 475(g)(2) (20 U.S.C. 1087oo(g)(2)(D)) is amended
to read as follows:
‘‘(D) an income protection allowance of the
following amount (or a successor amount pre-
scribed by the Secretary under section 478):
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‘‘(i) for academic year 2009–2010,
$3,750;
‘‘(ii) for academic year 2010–2011,
$4,500;
‘‘(iii) for academic year 2011–2012,
$5,250; and
‘‘(iv) for academic year 2012–2013,
$6,000;’’.
(b) INDEPENDENT STUDENTS WITHOUT DEPENDENTS
OTHER
THAN
A
SPOUSE.—Clause 
(iv) 
of 
section
476(b)(1)(A) (20 U.S.C. 1087pp(b)(1)(A)(iv)) is amended
to read as follows:
‘‘(iv) an income protection allowance
of the following amount (or a successor
amount prescribed by the Secretary under
section 478):
‘‘(I) for single or separated stu-
dents, or married students where both
are enrolled pursuant to subsection
(a)(2)—
‘‘(aa) 
for 
academic 
year
2009–2010, $7,000;
‘‘(bb) 
for 
academic 
year
2010–2011, $7,780;
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‘‘(cc) 
for 
academic 
year
2011–2012, $8,550; and
‘‘(dd) 
for 
academic 
year
2012–2013, $9,330; and
‘‘(II) for married students where 1
is enrolled pursuant to subsection
(a)(2)—
‘‘(aa) 
for 
academic 
year
2009–2010, $11,220;
‘‘(bb) 
for 
academic 
year
2010–2011, $12,460;
‘‘(cc) 
for 
academic 
year
2011–2012, $13,710; and
‘‘(dd) 
for 
academic 
year
2012–2013, $14,960;’’.
(c) INDEPENDENT STUDENTS WITH DEPENDENTS
OTHER THAN A SPOUSE.—Paragraph (4) of section 477(b)
(20 U.S.C. 1087qq(b)(4)) is amended to read as follows:
‘‘(4) INCOME PROTECTION ALLOWANCE.—The in-
come protection allowance is determined by the tables
described in subparagraphs (A) through (D) (or a
successor table prescribed by the Secretary under sec-
tion 478).
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‘‘(A) ACADEMIC YEAR 2009–2010.—For aca-
demic year 2009–2010, the income protection al-
lowance is determined by the following table:
‘‘Income Protection Allowance
Family Size
Number in College
$17,720
$14,690
22,060
19,050
$16,020
27,250
24,220
21,210
$18,170
32,150
29,120
26,100
23,070
$20,060
37,600
34,570
31,570
28,520
25,520
NOTE: For each additional family member, add $4,240.
For each additional college student, subtract $3,020.
‘‘(B) ACADEMIC YEAR 2010–2011.—For aca-
demic year 2010–2011, the income protection al-
lowance is determined by the following table:
‘‘Income Protection Allowance
Family Size
Number in College
$19,690
$16,330
24,510
21,160
$17,800
30,280
26,910
23,560
$20,190
35,730
32,350
29,000
25,640
$22,290
41,780
38,410
35,080
31,690
28,350
NOTE: For each additional family member, add $4,710.
For each additional college student, subtract $3,350.
‘‘(C) ACADEMIC YEAR 2011–2012.—For aca-
demic year 2011–2012, the income protection al-
lowance is determined by the following table:
‘‘Income Protection Allowance
Family Size
Number in College
$21,660
$17,960
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‘‘Income Protection Allowance—Continued
Family Size
Number in College
26,960
23,280
$19,580
33,300
29,600
25,920
$22,210
39,300
35,590
31,900
28,200
$24,520
45,950
42,250
38,580
34,860
31,190
NOTE: For each additional family member, add $5,180.
For each additional college student, subtract $3,690.
‘‘(D) ACADEMIC YEAR 2012–2013.—For aca-
demic year 2012–2013, the income protection al-
lowance is determined by the following table:
‘‘Income Protection Allowance
Family Size
Number in College
$23,630
$19,590
29,420
25,400
$21,360
36,330
32,300
28,280
$24,230
42,870
38,820
34,800
30,770
$26,750
50,130
46,100
42,090
38,030
34,020
NOTE: For each additional family member, add $5,660.
For each additional college student, subtract $4,020.’’.
(d) UPDATED TABLES AND AMOUNTS.—Section 478(b)
(20 U.S.C. 1087rr(b)) is amended—
(1) by striking paragraph (1) and inserting the
following:
‘‘(1) REVISED TABLES.—
‘‘(A) IN GENERAL.—For each academic year
after academic year 2008–2009, the Secretary
shall publish in the Federal Register a revised
table of income protection allowances for the