Union Calendar No. 186
105TH CONGRESS
1ST SESSION
H. R. 2535
[Report No. 105–322]
A BILL
To amend the Higher Education Act of 1965 to
allow the consolidation of student loans under
the Federal Family Loan Program and the Di-
rect Loan Program.
OCTOBER 21, 1997
Reported with an amendment, committed to the Commit-
tee of the Whole House on the State of the Union, and
ordered to be printed
IB
Union Calendar No. 186
105TH CONGRESS
1ST SESSION
H. R. 2535
[Report No. 105–322]
To amend the Higher Education Act of 1965 to allow the consolidation
of student loans under the Federal Family Loan Program and the
Direct Loan Program.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 24, 1997
Mr. MCKEON (for himself, Mr. GOODLING, Mr. BOEHNER, Mrs. ROUKEMA,
Mr. BARRETT of Nebraska, Mr. RIGGS, Mr. GRAHAM, Mr. MCINTOSH,
Mr. NORWOOD, Mr. HOEKSTRA, Mr. SAM JOHNSON of Texas, Mr.
GREENWOOD, Mr. PETERSON of Pennsylvania, and Mr. UPTON) intro-
duced the following bill; which was referred to the Committee on Edu-
cation and the Workforce
OCTOBER 21, 1997
Additional sponsors: Mr. BALLENGER, Mr. CASTLE, Mr. WATTS of Oklahoma,
Mr. FAWELL, Mr. SOUDER, Mr. DEAL of Georgia, Mr. GOODLATTE, Mr.
THUNE, Mr. WELLER, Mr. SPENCE, and Mr. BASS
OCTOBER 21, 1997
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in italic]
[For text of introduced bill, see copy of bill as introduced on September 24, 1997]
A BILL
To amend the Higher Education Act of 1965 to allow the
consolidation of student loans under the Federal Family
Loan Program and the Direct Loan Program.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
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 pro-
vided, whenever in this Act an amendment or repeal is ex-
pressed in terms of an amendment to, or repeal of, a section
or other provision, the reference shall be considered to be
made to a section or other provision of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1001 et seq.).
SEC. 2. LOAN CONSOLIDATION PROVISIONS.
(a) DEFINITION OF LOANS ELIGIBLE FOR CONSOLIDA-
TION.—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, except
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 Student Loan
Consolidation Act of 1997 and ending 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 application
is received by an eligible lender before the date of en-
actment of the Emergency Student Loan Consolida-
tion 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 following
new subclause:
‘‘(II) by the Secretary, in the case of a
consolidation loan for which the application
is received by an eligible lender on or after
the date of enactment of the Emergency Stu-
dent Loan Consolidation Act of 1997 and
before October 1, 1998, except that the Sec-
retary shall pay such interest only on that
portion of the loan that repays Federal
Stafford Loans for which the student bor-
rower received an interest subsidy under
section 428 or Federal Direct Stafford
Loans for which the borrower received an
interest subsidy under section 455; or’’.
(c) 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).’’.
(d) AMENDMENTS EFFECTIVE FOR PENDING APPLI-
CANTS.—The consolidation loans authorized by the amend-
ments made by this section shall be available notwithstand-
ing any pending application by a student for a consolida-
tion loan under part D of title IV of the Higher Education
Act of 1965, upon withdrawal of such application 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 amended
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 sub-
paragraph (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 Internal
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 sub-
paragraph (D) and inserting ‘‘; and’’; and