I 
109TH CONGRESS 
1ST SESSION H. R. 1293
To amend the Higher Education Act of 1965 to provide access and equity 
in higher education, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 15, 2005
Mr. ANDREWS (for himself, Mrs. MCCARTHY, Mr. HOLT, Mr. OWENS, Ms. 
HOOLEY, Mr. FATTAH, Mr. HINOJOSA, Mr. DAVIS of Tennessee, Mr. 
KANJORSKI, Mr. ROSS, Mr. MCDERMOTT, Mr. CASE, Mr. RUSH, Mr. 
GORDON, Mr. BERMAN, Mr. MEEKS of New York, Mr. NEAL of Massa-
chusetts, Ms. MCCOLLUM of Minnesota, Mr. MICHAUD, Mr. WEXLER, 
Mr. CONYERS, Mr. ALLEN, Mr. POMEROY, and Mr. CARDIN) introduced 
the following bill; which was referred to the Committee on Education and 
the Workforce 
A BILL 
To amend the Higher Education Act of 1965 to provide 
access and equity in higher education, and for other 
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; REFERENCES; EFFECTIVE DATE. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Access and Equity in Higher Education Act’’. 
(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.). 
(c) EFFECTIVE DATE.—Except as otherwise provided 
in this Act, the amendments made by this Act shall apply 
with respect to any loan for which the first disbursement 
of principal is made on or after the date of enactment of 
this Act. 
TITLE I—STUDENT ASSISTANCE 
SEC. 101. LOAN LIMITS. 
(a) FFEL LOANS.—
(1) INCREASES IN SUBSIDIZED LOAN LIMITS.—
Section 428(b)(1) (20 U.S.C. 1078(b)(1)) is amend-
ed—
(A) in subparagraph (A)(i), by striking 
‘‘$2,625’’ in subclause (I) and inserting 
‘‘$4,000’’; 
(B) in subparagraph (A)(ii), by striking 
‘‘$3,500’’ in subclause (I) and inserting 
‘‘$6,000’’; 
(C) in subparagraph (A)(iii), by striking 
subclause (I) and inserting the following: 
‘‘(I) $20,000 minus any amount 
previously borrowed during any pre-
ceding academic year in such remain-
der of such program (but excluding 
amounts borrowed under clause (i) or 
(ii) for such first and second year); 
or’’; 
(D) in subparagraph (A)(v), by striking 
‘‘$8,500’’ and inserting ‘‘$10,000’’; 
(E) in subparagraph (B)(i), by striking 
‘‘$23,000’’ and inserting ‘‘$30,000’’; and 
(F) in subparagraph (B)(ii)—
(i) by striking ‘‘$65,500’’ and insert-
ing ‘‘$60,000’’; 
(ii) by striking ‘‘and (I) including’’ 
and inserting ‘‘but (I) excluding’’; and 
(iii) by striking ‘‘but (II)’’ and insert-
ing ‘‘and (II)’’. 
(2) INCREASES IN UNSUBSIDIZED LOAN LIM-
ITS.—Section 428H(d)(1) (20 U.S.C. 1078–8(d)(1)) 
is amended—
(A) in subparagraph (A)(i), by striking 
‘‘$4,000’’ and inserting ‘‘$5,500’’; 
(B) in subparagraph (B)(i), by striking 
‘‘$5,000’’ and inserting ‘‘$20,000 minus any 
amount previously borrowed during any pre-
ceding academic year in such remainder of such
program (but excluding amounts borrowed 
under subparagraph (A) for such first and sec-
ond year)’’; and 
(C) in subparagraph (C), by striking 
‘‘$10,000’’ and inserting ‘‘$25,000 minus the 
amount borrowed for the same academic year in 
a subsidized loan under section 428 or part D’’. 
(3) AUTHORITY
TO
REDUCE
LOAN
LIMITS.—
Section 428(a)(2)(D) (20 U.S.C. 1078(a)(2)(D)) is 
amended by adding at the end the following new 
sentence: ‘‘An eligible institution may, in carrying 
out such subparagraphs, provide a statement which 
certifies the eligibility of a student for a loan 
amount that is less than such maximum amount, 
and that is less than the amount for which the stu-
dent shows financial need, if the institution has es-
tablished a lesser amount than such maximum 
amount as the loan limit applicable to the students 
attending such institution.’’. 
(4) CONFORMING AMENDMENTS TO FISL.—
(A) 
ANNUAL
LIMITS.—Section 
425(a)(1)(A) (20 U.S.C. 1075(a)(1)(A)) is 
amended—
(i) in clause (i)(I), by striking 
‘‘$2,625’’ in subclause (I) and inserting 
‘‘$4,000’’; 
(ii) in clause (ii)(I), by striking 
‘‘$3,500’’ in subclause (I) and inserting 
‘‘$6,000’’; 
(iii) in clause (iii), by striking sub-
clause (I) and inserting the following: 
‘‘(I) $20,000 minus the amount 
previously borrowed during any pre-
ceding academic year in such remain-
der of such program (and excluding 
amounts borrowed under clause (i) or 
(ii) for such first and second year); 
or’’; and 
(iv) 
in 
clause 
(iv), 
by 
striking 
‘‘$8,500’’ and inserting ‘‘$10,000’’. 
(B) 
AGGREGATE
LIMITS.—Section 
425(a)(2)(A) is amended—
(i) in clause (i), by striking ‘‘$23,000’’ 
and inserting ‘‘$30,000’’; and 
(ii) in clause (ii)—
(I) by striking ‘‘$65,500’’ and in-
serting ‘‘$60,000’’;
(II) by striking ‘‘and (I) includ-
ing’’ and inserting ‘‘but (I) exclud-
ing’’; and 
(III) by striking ‘‘but (II)’’ and 
inserting ‘‘and (II)’’. 
SEC. 102. ORIGINATION FEES. 
(a) FEDERAL
FAMILY
EDUCATION
LOAN
PRO-
GRAM.—Section 438(c) of the Higher Education Act of 
1965 (20 U.S.C. 1087–1(c)) is amended by adding at the 
end the following new paragraph: 
‘‘(9) ORIGINATION FEES TERMINATED.—
‘‘(A) IN GENERAL.—Notwithstanding any 
other provision of this subsection except for 
subparagraph (B) of this paragraph, with re-
spect to any loan made, insured, or guaranteed 
under this part on or after July 1, 2005, other 
than a loan made under section 428B or 
428H—
‘‘(i) no eligible lender may collect di-
rectly or indirectly from any borrower any 
origination fee with respect to such loan; 
and 
‘‘(ii) the Secretary shall not collect 
such origination fee from the lender under 
this subsection.
‘‘(B) 
UNSUBSIDIZED
LOANS.—Notwith-
standing subparagraph (A), with respect to any 
loan made under section 428H on or after July 
1, 2005—
‘‘(i) an eligible lender may collect an 
origination fee with respect to such loan 
under paragraph (2), except that such 
paragraph shall be applied by substituting 
‘1.5 percent’ for ‘3.0 percent’; and 
‘‘(ii) the Secretary shall collect any 
such origination fee from the lender under 
paragraph (1) of this subsection.’’. 
(b) FEDERAL DIRECT LOAN PROGRAM.—
(1) AMENDMENT.—Section 455(c) (20 U.S.C. 
1087e(c)) is amended to read as follows: 
‘‘(c) LOAN FEE.—The Secretary shall charge—
‘‘(1) the borrower of a Federal Direct Stafford 
Loan an origination fee of 1.0 percent of the prin-
cipal amount of the loan; 
‘‘(2) the borrower of a Federal Direct Stafford 
Unsubsidized Stafford Loan an origination fee of 2.5 
percent of the principal amount of the loan; and 
‘‘(3) the borrower of a Federal Direct PLUS 
loan an origination fee of 4.0 percent of the prin-
cipal amount of the loan.’’.
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply with respect to any 
loan made under part D of title IV on an after July 
1, 2005. 
SEC. 103. LOAN FLEX. 
(a) AMENDMENT.—Section 428(b)(9)(A) (20 U.S.C. 
1078(b)(9)(A)) is amended by striking clauses (iii) and 
(iv) and inserting the following: 
‘‘(iii) an income-sensitive repayment 
plan, 
with 
income-sensitive 
repayment 
amounts paid over an extended period of 
time prescribed by the Secretary, not to 
exceed 25 years, except that—
‘‘(I) after 10 years, if the indi-
vidual 
has 
not 
made 
adequate 
progress in repaying the principal of 
the loan (defined by the Secretary as 
percentage of principal) the lender 
may use an alternative formula, to be 
determined by the Secretary, by which 
the loan could be expected to be re-
paid in full within the remaining 15 
years; 
‘‘(II) after 25 years, if the loan is 
not repaid, the Secretary shall acquire
the loan from the lender and admin-
ister the loan under part D of this 
title; and 
‘‘(III) the other terms and condi-
tions of which shall be comparable to 
the terms and conditions applicable to 
income contingent repayment under 
section 455(d)(1)(D) and 455(e); and 
‘‘(iv) an extended repayment plan, 
with a fixed annual or graduated repay-
ment amount paid over an extended period 
of time, not to exceed 25 years, except that 
in the first 2 years of repayment, the bor-
rower shall have the option of paying the 
interest as it accrues or having such inter-
est be added to principal for repayment 
during the remainder of the repayment pe-
riod.’’. 
(b) CONFORMING AMENDMENT.—Clause (i) of sec-
tion 428(b)(1)(L) (20 U.S.C. 1078(b)(1)(L)) is amended 
to read as follows: 
‘‘(i) except as otherwise provided by a 
repayment plan selected by the borrower 
under clause (ii), (iii), or (iv) of paragraph 
(9)(A), during any year of any repayment
period with respect to the aggregate 
amount of all loans to that borrower which 
are insured under this part shall not, un-
less the borrower and the lender otherwise 
agree, be less than $600 or the balance of 
all such loans (together with interest there-
on), whichever amount is less; and’’. 
SEC. 104. CONSOLIDATION LOAN INTEREST RATES. 
(a) INTEREST RATE TIED TO INCOME.—Paragraph 
(3) of section 427A(l) (20 U.S.C. 1077a(n)) is amended 
to read as follows: 
‘‘(3) CONSOLIDATION LOANS.—
‘‘(A) IN GENERAL.—With respect to any 
consolidation loan under section 428C for which 
the application is received by an eligible lender 
on or after the date of enactment of the Access 
and Equity in Higher Education Act, the appli-
cable rate of interest shall, during any 12-
month period beginning on July 1 and ending 
on June 30, be determined on the preceding 
June 1 and be equal to—
‘‘(i) the bond equivalent rate of 91-
day Treasury bills auctioned at the final 
auction held prior to such June 1; plus 
‘‘(ii) 2.3 percent,
except that such rate shall not exceed 8.25 per-
cent, and except that for any loan under section 
428C that is used exclusively to consolidate 
loans made under section 428B, clause (ii) shall 
be applied by substituting ‘3.1 percent’ for ‘2.3 
percent’. 
‘‘(B) VARIATION
OF
INTEREST
RATE 
BASED ON INCOME.—In the case of—
‘‘(i) a borrower who demonstrates to 
the lender, in accordance with regulations 
prescribed by the Secretary, that during 
such 12-month period, the sum of the bor-
rower’s monthly payments during a year 
will exceed—
‘‘(I) 8 percent of the borrower 
total income, subparagraph (A)(ii) 
shall be applied by substituting ‘1.0 
percent’ for ‘2.3 percent’; or 
‘‘(II) 9 percent of the borrower’s 
total income, subparagraph (A)(ii) 
shall be applied by substituting ‘0.0 
percent’ for ‘2.3 percent’; and 
‘‘(ii) a borrower who so demonstrates 
that the sum of the borrower’s monthly 
payments during a year will exceed—