I
103RD CONGRESS
1ST SESSION
H. R. 29
To authorize loans for study at nonprofit institutions of higher education.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 5, 1993
Mr. SMITH of Iowa introduced the following bill; which was referred to the
Committee on Education and Labor
A BILL
To authorize loans for study at nonprofit institutions of
higher education.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
FINDINGS AND DECLARATION OF POLICY
SEC. 2. The Congress hereby finds that the security
and welfare of the United States requires that this and
future generations of American youth be assured ample
opportunity for the fullest development of their intellectual
capacities, and that this opportunity will be jeopardized
unless the financial barrier against youth of college ability
obtaining a higher education can be overcome. It shall be
the policy of the United States that no high school grad-
uate who can secure admission to an institution of higher
education shall be denied an opportunity to attend such
institution as a result of inadequate financial resources
and that it is incumbent upon the Nation to take positive
and immediate action to meet these needs through a pro-
gram providing loans for young people who need financial
assistance for post high school education or training.
TITLE I—LOANS FOR COLLEGE STUDENTS
AGREEMENTS WITH INSTITUTIONS
SEC. 101. (a) The Secretary of Education is author-
ized to enter into an agreement with any institution of
higher education which desires to participate in a program
making financial loans to students. Such payments to in-
stitutions shall be made during the period beginning Octo-
ber 1, 1993, and ending September 30, 1999, but no such
loan shall cover any period after September 30, 2000.
(b) An agreement between the Secretary and an insti-
tution of higher education for making such loans shall—
(1) provide that funds paid to the institution
under this Act will be used solely to make loans to
students in such institution;
(2) provide that (A) no loan made to a recipient
under this Act will cover more than two academic
years, and (B) the amount of each such loan will be
determined in the case of each recipient thereof with
respect to each academic year in which such recipi-
ent receives such a loan, except that no such recipi-
ent shall receive more than $6,000 under the provi-
sions of this Act in any academic year of under-
graduate enrollment; or $8,500 in any academic year
of graduate enrollment;
(3) provide that the average loan per recipient
for undergraduate students shall not exceed $4,500
and for graduate students shall not exceed $6,000
per academic year and shall be reduced proportion-
ately for those students enrolled in such institution
on less than a full-time basis;
(4) provide that payments under such loan will
continue only during such periods as the recipient is
in good standing at the institution;
(5) provide that each recipient of such a loan
for the first and second academic years of under-
graduate study must be selected solely on the basis
of his being (A) capable of doing at least satisfactory
academic work in the course of study which he will
pursue in such institution, (B) in need of the
amount of such loan in order to pursue a course of
study in such institution and without reasonable ex-
pectation of obtaining grant assistance from any
other source sufficient to enable him to undertake
such course of study, and (C) of good character,
with an earnest desire to obtain an education at an
institution of higher education;
(6) provide that at the completion of the second
academic year, if such recipient has maintained good
standing during the first and second academic years
and would be unable to pursue a course of study in
such institution during the third and fourth aca-
demic years without such a loan, the institution in
which such recipient enrolls for the third academic
year is authorized to award an additional loan for
the third and fourth academic years;
(7) include such provisions and be supported by
such assurances as the Secretary may determine to
be necessary to assure that there will be no reduc-
tion of the amount of student financial assistance of-
fered by the institution from its own resources as a
result of participation in the program under this
Act;
(8) include such other provisions as the Sec-
retary may determine to be necessary to protect the
financial interest of the United States and promote
the purposes of this Act and as are agreed to by the
Secretary and the institution;
(9) provide that the institution will secure the
proper execution of such documents by a recipient of
a loan as are necessary to assure repayment of such
loans in accordance with the provisions of section
103 of this Act;
(10) provide that the liability to repay any such
loan shall be cancelled upon the death of the bor-
rower or if he becomes permanently and totally dis-
abled; and
(11) provide that such a loan by an institution
for any year shall be made in such installments as
will reasonably protect against the disbursement of
funds to cover expenses for any period after a recipi-
ent of a loan has failed to maintain a satisfactory
standing at such institution.
PAYMENTS TO INSTITUTIONS
SEC. 102. (a) Sums appropriated under this Act for
any fiscal year shall be available in accordance with agree-
ments between the Secretary and the institution of higher
education for payment of contributions which together
with the repayment of loans to the institutions shall be
used for the establishment and maintenance of a Federal
student loan fund at each institution. The Federal con-
tribution to an institution shall be paid to it from time
to time in such sums as the Secretary shall determine will