175 
level of consideration given the factor of 
prior success in achieving high quality serv-
ice delivery shall not vary from the level of 
consideration given such factor during fiscal 
years 1994 through 1997, except that grants 
made under section 402H shall not be given 
such consideration. 
‘‘(ii) The Secretary shall not give 
points for prior success in achieving high 
quality service delivery to any current 
grantee that, during the then most recent 
period for which funds were provided, did 
not meet or exceed two or more objectives es-
tablished in the eligible entity’s application 
based on the performance measures de-
scribed in subsection (f). 
‘‘(iii) From the amounts awarded 
under subsection (g) for a program under 
this chapter (other than a program under 
sections 402G and 402H) for any fiscal 
year in which the Secretary conducts a 
competition for the award of grants or con-
tracts under such programs, the Secretary 
shall reserve not less than 10 percent of such 
available amount to award grants or con-
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tracts to applicants who have not previously 
received a grant or contract under this 
chapter. If the Secretary determines that 
there are an insufficient number of quali-
fied applicants to use the full amount re-
served under the preceding sentence, the 
Secretary shall use the remainder of such 
amount to award grants or contracts to ap-
plicants who have previously received a 
grant or contract under this chapter.’’; 
(B) in paragraph (3)— 
(i) in subparagraph (A)— 
(I) by striking ‘‘as provided in 
subparagraph (B)’’ and inserting ‘‘as 
provided in subparagraph (C)’’; 
(II) by striking ‘‘experience’’ and 
inserting ‘‘success in achieving high 
quality service delivery’’; 
(ii) by redesignating subparagraph (B) 
as subparagraph (C); and 
(iii) by inserting after subparagraph 
(A) the following new subparagraph: 
‘‘(B) To ensure that congressional priorities in 
conducting competitions for grants and contracts 
under this chapter are implemented, the Secretary 
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shall 
not 
impose 
additional 
criteria 
for 
the 
prioritization of applications for such grants or con-
tracts (including additional competitive, absolute, or 
other criteria) beyond the criteria described in this 
chapter.’’; 
(C) in paragraph (6)— 
(i) by striking the period at the end of 
the second sentence and inserting ‘‘, as long 
as the program is serving a different popu-
lation or a different campus.’’; 
(ii) by striking ‘‘the programs author-
ized by’’ and inserting ‘‘sections 402B, 
402C, 402D, and 402F of’’; 
(iii) by striking ‘‘The Secretary shall 
encourage’’ and inserting the following: 
‘‘(A) The Secretary shall encourage’’; 
(iv) by striking ‘‘The Secretary shall 
permit’’ and inserting the following: 
‘‘(B) The Secretary shall permit’’; 
(D) in paragraph (7), by striking ‘‘8 
months’’ each place it appears and inserting ‘‘90 
days’’; 
(E) in paragraph (8)— 
(i) in subparagraph (A)— 
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178 
(I) in the matter preceding clause 
(i), by striking ‘‘Not later than 180 
days after the date of enactment of the 
Higher Education Opportunity Act,’’ 
and inserting ‘‘Not later than 90 days 
before the commencement of each com-
petition for a grant under this chap-
ter,’’; 
(II) in clause (iii), by striking 
‘‘prior experience points for high qual-
ity service delivery are awarded’’ and 
inserting ‘‘application scores are ad-
justed for prior success in achieving 
high quality service delivery’’; and 
(III) in clause (v), by striking 
‘‘prior experience points for’’ and in-
serting ‘‘the adjustment in scores for 
prior success in achieving’’; 
(ii) by striking subparagraph (B) and 
redesignating subparagraph (C) as subpara-
graph (B); and 
(iii) in subparagraph (B), as so redes-
ignated— 
(I) in clause (iii)— 
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179 
(aa) in the matter preceding 
subclause (I), by striking ‘‘prior 
experience points for’’ and insert-
ing ‘‘points for prior success in 
achieving’’; and 
(bb) in subclause (II), by 
striking ‘‘prior experience points’’ 
and inserting ‘‘points for prior 
success in achieving high quality 
service delivery’’; and 
(II) in clause (vi), by inserting 
before the period at the end the fol-
lowing: ‘‘from funds reserved under 
subsection (g)’’; and 
(F) by adding at the end the following: 
‘‘(9) MATCHING REQUIREMENT.— 
‘‘(A) IN GENERAL.—The Secretary shall not 
approve an application submitted under section 
402B, 402C, 402D, 402E, or 402F unless such 
application— 
‘‘(i) provides that the eligible entity 
will provide, from State, local, institutional, 
or private funds, not less than 20 percent of 
the cost of the program, which matching 
funds may be provided in cash or in kind 
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180 
and may be accrued over the full duration 
of the grant award period, except that the 
eligible 
entity 
shall 
make 
substantial 
progress towards meeting the matching re-
quirement in each year of the grant award 
period; 
‘‘(ii) specifies the methods by which 
matching funds will be paid; and 
‘‘(iii) includes provisions designed to 
ensure that funds provided under this chap-
ter shall supplement and not supplant 
funds expended for existing programs. 
‘‘(B) SPECIAL RULE.—Notwithstanding the 
matching requirement described in subparagraph 
(A), the Secretary may by regulation modify the 
percentage requirement described in subpara-
graph (A). The Secretary may approve an eligi-
ble entity’s request for a reduced match percent-
age— 
‘‘(i) at the time of application if the el-
igible entity demonstrates significant eco-
nomic hardship that precludes the eligible 
entity from meeting the matching require-
ment; or 
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181 
‘‘(ii) in response to a petition by an el-
igible entity subsequent to a grant award 
under section 402B, 402C, 402D, 402E, or 
402F if the eligible entity demonstrates that 
the matching funds described in its applica-
tion are no longer available and the eligible 
entity has exhausted all revenues for replac-
ing such matching funds.’’. 
(2) in subsection (d)(3), by adding at the end the 
following new sentence: ‘‘In addition, the Secretary 
shall host at least one virtual, interactive education 
session using telecommunications technology to ensure 
that any interested applicants have access to technical 
assistance.’’; 
(3) in subsection (e)— 
(A) in paragraph (1)— 
(i) in subparagraph (C), by striking 
‘‘or’’ at the end; 
(ii) in subparagraph (D), by striking 
the period at the end and inserting ‘‘; or’’; 
and 
(iii) by adding at the end the following 
new subparagraph: 
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182 
‘‘(E) documentation that the student has been de-
termined to be eligible for a Federal Pell Grant under 
section 401.’’; and 
(B) in paragraph (2)— 
(i) in subparagraph (C), by striking 
‘‘or’’ at the end; 
(ii) in subparagraph (D), by striking 
the period at the end and inserting ‘‘; or’’; 
and 
(iii) by adding at the end the following 
new subparagraph: 
‘‘(E) documentation that the student has been de-
termined to be eligible for a Federal Pell Grant under 
section 401.’’; 
(4) in subsection (f)— 
(A) in the heading of paragraph (1), by 
striking ‘‘PRIOR
EXPERIENCE’’ and inserting 
‘‘ACCOUNTABILITY FOR OUTCOMES’’; 
(B) in paragraph (1) by striking ‘‘experi-
ence of’’ and inserting ‘‘success in achieving’’; 
(C) in paragraph (3)— 
(i) in subparagraph (A)— 
(I) in clause (iv) by striking ‘‘rig-
orous secondary school program of 
study that will make such students eli-
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183 
gible for programs such as the Aca-
demic Competitiveness Grants Pro-
gram’’ and inserting ‘‘secondary school 
program of study that will prepare 
such students to enter postsecondary 
education without the need for reme-
dial education’’; 
(II) by redesignating clauses (v) 
and (vi) as clauses (vi) and (vii), re-
spectively; and 
(III) by inserting after clause (iv) 
the following new clause: 
‘‘(v) the completion of financial aid 
applications, including the Free Applica-
tion for Federal Student Aid described in 
section 483(a) and college admission appli-
cations;’’; 
(ii) in subparagraph (B)— 
(I) by redesignating clauses (i), 
(ii), (iii), (iv), (v), (vi), and (vii) as 
subclauses (I), (II), (III), (IV), (VI), 
(VIII), and (IX), respectively; 
(II) by inserting after subclause 
(IV), as so redesignated, the following: 
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184 
‘‘(V) the enrollment of such stu-
dents into a general educational devel-
opment (commonly known as a ‘GED’) 
program;’’. 
(III) in subclause (VI), as so re-
designated, by striking ‘‘rigorous sec-
ondary school program of study that 
will make such students eligible for 
programs such as the Academic Com-
petitiveness Grants Program’’ and in-
serting ‘‘secondary school program of 
study that will prepare such students 
to enter postsecondary education with-
out the need for remedial education’’; 
(IV) by inserting after subclause 
(VI), as so redesignated, the following 
new subclause: 
‘‘(VII) the completion of financial aid 
applications, including the Free Applica-
tion for Federal Student Aid described in 
section 483(a) and college admission appli-
cations;’’; 
(V) by striking ‘‘(B) For pro-
grams authorized under section 402C,’’ 
and inserting ‘‘(B)(i) For programs 
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185 
authorized under section 402C, except 
in the case of projects that specifically 
target veterans,’’; and 
(VI) by adding at the end the fol-
lowing new clause: 
‘‘(ii) For programs authorized under section 
402C that specifically target veterans, the extent 
to which the eligible entity met or exceeded the 
entity’s objectives for such program with respect 
to— 
‘‘(I) the delivery of service to a total 
number of students served by the program, 
as agreed upon by the entity and the Sec-
retary for the period; 
‘‘(II) such students’ academic perform-
ance, as measured by standardized tests; 
‘‘(III) the retention and completion of 
participants in the project; 
‘‘(IV) the provision of assistance to stu-
dents served by the program in completing 
financial aid applications, including the 
Free Application for Federal Student Aid 
described in section 483(a) and college ad-
mission applications; 
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186 
‘‘(V) the enrollment of such students in 
an institution of higher education; and 
‘‘(VI) to the extent practicable, the 
postsecondary education completion rate of 
such students.’’; 
(iii) in subparagraph (C)(ii)— 
(I) in subclause (I), by striking 
‘‘in which such students were enrolled’’ 
and inserting ‘‘within six years of the 
initial enrollment of such students in 
the program’’; 
(II) in subclause (II); 
(aa) in the matter preceding 
item (aa), by striking ‘‘offer a 
baccalaureate degree’’ and insert-
ing ‘‘primarily offer baccalaureate 
degrees’’; and 
(bb) in item (aa), by striking 
‘‘students; and’’ and inserting 
‘‘students within 4 years of the 
initial enrollment of such students 
in the program; or’’; 
(iv) in subparagraph (D)— 
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(I) in clause (iii), by striking ‘‘; 
and’’ and inserting ‘‘within two years 
of receiving a baccalaureate degree;’’; 
(II) in clause (iv), by striking 
‘‘study and’’ and all that follows 
through the period and inserting 
‘‘study; and’’; and 
(III) by adding at the end the fol-
lowing new clause: 
‘‘(v) the attainment of doctoral degrees 
by former program participants within 10 
years of receiving a baccalaureate degree.’’; 
and 
(v) in subparagraph (E)(ii), by insert-
ing ‘‘, or re-enrollment,’’ after ‘‘enrollment’’; 
(5) in subsection (g)— 
(A) in the first sentence, by striking 
‘‘$900,000,000 for fiscal year 2009 and such 
sums as may be necessary for’’ and inserting 
‘‘$900,000,000 for fiscal year 2019 and’’; 
(B) in the second sentence— 
(i) by striking ‘‘no more than 1⁄2 of 1’’ 
and inserting ‘‘not more than 1’’; 
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189 
(C) by inserting after paragraph (2) the fol-
lowing new paragraph: 
‘‘(3) to advise such youths on the postsecondary 
institution selection process, including consideration 
of the financial aid awards offered and the potential 
loan burden required; and’’; 
(2) in subsection (b)— 
(A) in paragraph (1), by inserting ‘‘and, 
where necessary, remedial education services’’ 
after ‘‘academic tutoring services’’; and 
(B) by striking paragraph (6) and inserting 
the following: 
‘‘(6) connections to education or counseling serv-
ices designed to— 
‘‘(A) improve the financial literacy and eco-
nomic literacy of students or the students’ par-
ents in order to aid them in making informed 
decisions about how to best finance their postsec-
ondary education; and 
‘‘(B) assist students and families regarding 
career choice.’’; 
(3) in subsection (c)(2), by striking ‘‘career’’ and 
inserting ‘‘academic’’; and 
(4) in subsection (d)— 
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190 
(A) by redesignating paragraphs (2), (3), 
and (4) as paragraphs (3), (4), and (5), respec-
tively; 
(B) by inserting after paragraph (1) the fol-
lowing new paragraph: 
‘‘(2) require an assurance that the remaining 
youths participating in the project proposed to be car-
ried out in any application be low-income individ-
uals, first generation college students, or students who 
have a high risk for academic failure;’’; 
(C) in paragraph (4), as so redesignated— 
(i) by inserting ‘‘, section 402C,’’ after 
‘‘under this section’’; and 
(ii) by striking ‘‘and’’ at the end; 
(D) in paragraph (5), as so redesignated, by 
striking the period at the end and inserting ‘‘; 
and’’; and 
(E) by adding at the end the following: 
‘‘(6) require the grantee to maintain, to the ex-
tent practicable, a record of any services participants 
receive during the project year from another program 
under this chapter or other federally funded programs 
serving similar populations to minimize the duplica-
tion of services.’’. 
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191 
(c) UPWARD
BOUND.—Section 402C (20 U.S.C. 
1070a–13) is amended— 
(1) in subsection (b)— 
(A) by striking paragraph (1) and insert-
ing: 
‘‘(1) academic tutoring, which may include in-
struction in reading, writing, study skills, mathe-
matics, science, and other subjects and, where nec-
essary, remedial education services, to enable students 
to complete secondary or postsecondary courses;’’. 
(B) in paragraph (4), by adding ‘‘and’’ at 
the end; and 
(C) by striking paragraphs (5) and (6) and 
inserting the following: 
‘‘(5) education or counseling services designed 
to— 
‘‘(A) improve the financial literacy and eco-
nomic literacy of students or the students’ par-
ents in order to aid them in making informed 
decisions about how to best finance their postsec-
ondary education; and 
‘‘(B) assist students and their families re-
garding career choice.’’; 
(2) in subsection (d)— 
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(A) in paragraph (1), by striking ‘‘youth’’ 
and inserting ‘‘participants’’; 
(B) in paragraph (2), by striking ‘‘youth 
participating in the project’’ and inserting 
‘‘project participants’’; and 
(C) in paragraph (5), by striking ‘‘youth 
participating in the project’’ and inserting 
‘‘project participants’’; 
(3) in subsection (e)— 
(A) in paragraph (4), by striking ‘‘and’’ at 
the end; 
(B) by redesignating paragraph (5) as 
paragraph (6); and 
(C) by inserting after paragraph (4) the fol-
lowing: 
‘‘(5) require an assurance that individuals par-
ticipating in the project proposed in any application 
do not have access to services from another project 
funded under this section, section 402B, or section 
402F;’’; 
(D) in paragraph (6), as so redesignated, by 
striking the period at the end and inserting ‘‘; 
and’’; and 
(E) by adding at the end the following: 
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193 
‘‘(7) for purposes of minimizing the duplication 
of services, require that the grantee maintain, to the 
extent practicable, a record of any services received by 
participants during the program year from another 
program funded under this chapter, or any other Fed-
erally funded program that serves populations similar 
to the populations served by programs under this 
chapter.’’. 
(4) by striking subsection (g) and redesignating 
subsection (h) as subsection (g). 
(d) STUDENT SUPPORT SERVICES.—Section 402D (20 
U.S.C. 1070a–14) is amended— 
(1) in subsection (a)(3), by inserting ‘‘low-in-
come and first generation college students, including’’ 
after ‘‘success of’’; 
(2) in subsection (b)(4)— 
(A) by striking ‘‘, including financial’’ and 
inserting ‘‘, including— 
‘‘(A) financial’’; and 
(B) by adding at the end the following: 
‘‘(B) basic personal income, household 
money management, and financial planning 
skills; and 
‘‘(C) basic economic decisionmaking skills;’’; 
and 
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194 
(3) in subsection (e)— 
(A) in paragraph (5), by striking ‘‘and’’ at 
the end; 
(B) by redesignating paragraph (6) as 
paragraph (7); 
(C) by inserting after paragraph (5) the fol-
lowing: 
‘‘(6) require the grantee to maintain, to the ex-
tent practicable, a record of any services participants 
receive during the project year from another program 
under this chapter or other federally funded programs 
serving similar populations to minimize the duplica-
tion of services; and’’. 
(e) POSTBACCALAUREATE ACHIEVEMENT PROGRAM 
AUTHORITY.—Section 402E (20 U.S.C. 1070a–15) is 
amended— 
(1) in subsection (b)(2), by striking ‘‘summer in-
ternships’’ and inserting ‘‘internships and faculty-led 
research experiences’’; and 
(2) in subsection (d)— 
(A) in paragraph (3), by striking ‘‘and’’ at 
the end; 
(B) in paragraph (4)— 
(i) by striking ‘‘summer’’; 
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195 
(ii) by striking the period at the end 
and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(5) the grantee to maintain, to the extent prac-
ticable, a record of any services participants receive 
during the project year from another program under 
this chapter or other federally funded program serving 
similar populations to minimize the duplication of 
services.’’; and 
(3) in subsection (g), by striking ‘‘2009 through 
2014’’ and inserting ‘‘2019 through 2024’’. 
(f) EDUCATIONAL OPPORTUNITY CENTERS.—Section 
402F (20 U.S.C. 1070a–16) is amended— 
(1) in subsection (a)— 
(A) in paragraph (1), by inserting ‘‘or re- 
enter’’ after ‘‘pursue’’; and 
(B) in paragraph (3), by striking ‘‘of stu-
dents’’ and inserting ‘‘of such persons’’; 
(2) in subsection (b)(5), by striking ‘‘students;’’ 
and inserting the following: ‘‘students, including— 
‘‘(A) financial planning for postsecondary 
education; 
‘‘(B) basic personal income, household 
money management, and financial planning 
skills; and 
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196 
‘‘(C) basic economic decisionmaking skills;’’; 
and 
(3) in subsection (c)— 
(A) by redesignating paragraphs (2) and 
(3) as paragraphs (3) and (4), respectively; and 
(B) by inserting after paragraph (1) the fol-
lowing new paragraph: 
‘‘(2) require an assurance that the remaining 
persons participating in the project proposed to be 
carried out under any application be low-income in-
dividuals or first generation college students;’’; 
(C) in paragraph (3), as so redesignated, by 
striking ‘‘and’’ at the end; 
(D) in paragraph (4), as so redesignated, by 
striking the period at the end and inserting ‘‘; 
and’’; and 
(E) by adding at the end the following: 
‘‘(5) require the grantee to maintain, to the ex-
tent practicable, a record of any services participants 
receive during the project year from another program 
under this chapter or other federally funded program 
serving similar populations to minimize the duplica-
tion of services.’’. 
(g) 
STAFF
DEVELOPMENT
ACTIVITIES.—Section 
402G(b) (20 U.S.C. 1070a–17(b)) is amended— 
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(1) in the matter preceding paragraph (1)— 
(A) by inserting ‘‘webinars and online 
classes,’’ after ‘‘seminars, workshops,’’; and 
(B) by striking ‘‘directors’’ and inserting 
‘‘staff’’; and 
(2) in paragraph (3), by inserting ‘‘and innova-
tive’’ after ‘‘model’’. 
(h) REPORTS, EVALUATIONS, 
AND
GRANTS
FOR 
PROJECT IMPROVEMENT AND DISSEMINATION.—Subsection 
(b) of section 402H (20 U.S.C. 1070a–18) is amended to 
read as follows: 
‘‘(b) EVALUATIONS.— 
‘‘(1) IN GENERAL.—For the purpose of improv-
ing the effectiveness of the programs assisted under 
this chapter, the Secretary shall make grants to or 
enter into contracts with one or more organizations 
to— 
‘‘(A) evaluate the effectiveness of the pro-
grams assisted under this chapter; and 
‘‘(B) disseminate information on the impact 
of the programs in increasing the education level 
of participants, as well as other appropriate 
measures. 
‘‘(2) ISSUES TO BE EVALUATED.—The evalua-
tions described in paragraph (1) shall measure the ef-
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198 
fectiveness of programs funded under this chapter 
in— 
‘‘(A) meeting or exceeding the stated objec-
tives regarding the outcome criteria under sub-
section (f) of section 402A; 
‘‘(B) enhancing the access of low-income in-
dividuals and first-generation college students to 
postsecondary education; 
‘‘(C) preparing individuals for postsec-
ondary education; 
‘‘(D) comparing the level of education com-
pleted by students who participate in the pro-
grams funded under this chapter with the level 
of education completed by students of similar 
backgrounds who do not participate in such pro-
grams; 
‘‘(E) comparing the retention rates, dropout 
rates, graduation rates, and college admission 
and completion rates of students who participate 
in the programs funded under this chapter with 
the rates of students of similar backgrounds who 
do not participate in such programs; and 
‘‘(F) such other issues as the Secretary con-
siders appropriate for inclusion in the evalua-
tion. 
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‘‘(3) PROGRAM
METHODS.—Such evaluations 
shall also investigate the effectiveness of alternative 
and innovative methods within programs funded 
under this chapter of increasing access to, and reten-
tion of, students in postsecondary education. 
‘‘(4) RESULTS.—The Secretary shall submit to 
the authorizing committees— 
‘‘(A) an interim report on the progress and 
preliminary results of the evaluation of each pro-
gram funded under this chapter not later than 2 
years following the date of enactment of the 
PROSPER Act; and 
‘‘(B) a final report not later than 3 years 
following the date of enactment of such Act. 
‘‘(5) PUBLIC AVAILABILITY.—All reports and un-
derlying data gathered pursuant to this subsection 
shall be made available to the public upon request, in 
a timely manner following submission of the applica-
ble reports under this subsection, except that any per-
sonally identifiable information with respect to a stu-
dent participating in a program or project assisted 
under this chapter shall not be disclosed or made 
available to the public.’’. 
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(i) IMPACT GRANTS.—Part A of title IV (20 U.S.C. 
1070 et seq.) is amended by inserting after section 402H 
(20 U.S.C. 1070a–28) the following: 
‘‘SEC. 402I. IMPACT GRANTS. 
‘‘(a) IN GENERAL.—From funds reserved under sub-
section (e), the Secretary shall make grants to improve post-
secondary access and completion rates for qualified individ-
uals from disadvantaged backgrounds. These grants shall be 
known as innovative measures promoting postsecondary ac-
cess and completion grants or ‘IMPACT Grants’ and allow 
eligible entities to— 
‘‘(1) create, develop, implement, replicate, or take 
to scale evidence-based, field-initiated innovations, in-
cluding through pay-for-success initiatives, to serve 
qualified individuals from disadvantaged backgrounds 
and improve student outcomes; and 
‘‘(2) rigorously evaluate such innovations, in ac-
cordance with subsection (d). 
‘‘(b) DESCRIPTION OF GRANTS.—The grants described 
in subsection (a) shall include— 
‘‘(1) early-phase grants to fund the development, 
implementation, and feasibility testing of a program, 
which prior research suggests has a promise, for the 
purpose of determining whether the program can suc-
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cessfully improve postsecondary access and completion 
rates; 
‘‘(2) mid-phase grants to fund implementation 
and a rigorous evaluation of a program that has been 
successfully implemented under an early-phase grant 
described in paragraph (1); and 
‘‘(3) expansion grants to fund implementation 
and a rigorous replication evaluation of a program 
that has been found to produce sizable, important im-
pacts under a mid-phase grant described in para-
graph (2) for the purposes of— 
‘‘(A) determining whether such outcomes 
can be successfully reproduced and sustained 
over time; and 
‘‘(B) identifying the conditions in which the 
project is most effective. 
‘‘(c) REQUIREMENTS
FOR APPROVAL
OF APPLICA-
TIONS.—To receive a grant under this section, an eligible 
entity shall submit an application to the Secretary at such 
time, and in such manner as the Secretary may require, 
which shall include— 
‘‘(1) an assurance that not less than two-thirds 
of the individuals who will participate in the pro-
gram proposed to be carried out with the grant will 
be— 
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‘‘(A) low-income individuals who are first 
generation college students; or 
‘‘(B) individuals with disabilities; 
‘‘(2) an assurance that any other individuals 
(not described in paragraph (1)) who will participate 
in such proposed program will be— 
‘‘(A) low-income individuals; 
‘‘(B) first generation college students; or 
‘‘(C) individuals with disabilities; 
‘‘(3) a detailed description of the proposed pro-
gram, including how such program will directly ben-
efit students; 
‘‘(4) the number of projected students to be served 
by the program; 
‘‘(5) how the program will be evaluated; and 
‘‘(6) an assurance that the individuals partici-
pating in the project proposed are individuals who do 
not have access to services from another programs 
funded under this section. 
‘‘(d) EVALUATION.—Each eligible entity receiving a 
grant under this section shall conduct an independent eval-
uation of the effectiveness of the program carried out with 
such grant and shall submit to the Secretary, on an annual 
basis, a report that includes— 
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‘‘(1) a description of how funds received under 
this section were used; 
‘‘(2) the number of students served by the project 
carried out under this section; and 
‘‘(3) a quantitative analysis of the effectiveness of 
the project. 
‘‘(e) FUNDING.—From amounts appropriated under 
section 402A(g), the Secretary shall reserve not less than 
10 percent of such funds to carry out this section.’’. 
SEC. 403. GAINING EARLY AWARENESS AND READINESS 
FOR UNDERGRADUATE PROGRAMS. 
(a) EARLY INTERVENTION AND COLLEGE AWARENESS 
PROGRAM.—Section 404A (20 U.S.C. 1070a–21) is amend-
ed— 
(1) in subsection (a)(1), by striking ‘‘academic 
support’’ and inserting ‘‘academic support for college 
readiness’’; 
(2) in subsection (b)— 
(A) in paragraph (1), by inserting ‘‘new’’ 
before ‘‘awards’’; and 
(B) in paragraph (3)— 
(i) by amending subparagraph (A) to 
read as follows: 
‘‘(A) give priority to eligible entities that 
have a prior, demonstrated commitment to early 
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intervention leading to college access and readi-
ness through collaboration and replication of 
successful strategies; and’’; and 
(ii) in subparagraph (B), by striking 
‘‘the Higher Education Opportunity Act’’ 
and inserting ‘‘the PROSPER Act’’; and 
(C) by adding at the end the following: 
‘‘(4) MULTIPLE AWARD PROHIBITION.—Eligible 
entities described in subsection (c)(1) that receive a 
grant under this chapter shall not be eligible to re-
ceive an additional grant under this chapter until 
after the date on which the initial grant period ex-
pires.’’. 
(3) in subsection (c)(2)(B), by striking ‘‘institu-
tions or agencies sponsoring programs authorized 
under subpart 4,’’. 
(b) APPLICATIONS.—Section 404C (20 U.S.C. 1070a– 
23) is amended— 
(1) in subsection (a)— 
(A) in paragraph (2)— 
(i) in the matter preceding subpara-
graph (A)— 
(I) by striking ‘‘, contain or be 
accompanied by such information or 
assurances,’’; and 
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(II) by striking ‘‘, at a min-
imum’’; 
(ii) by amending subparagraph (B) to 
read as follows: 
‘‘(B) describe, in the case of an eligible enti-
ty described in section 404A(c)(2) that chooses to 
provide scholarships, or an eligible entity de-
scribed in section 404A(c)(1)— 
‘‘(i) the eligible entity’s plan to estab-
lish or maintain a financial assistance pro-
gram in accordance with the requirements 
of section 404E, including any eligibility 
criteria other than the criteria described in 
section 404E(g), such as— 
‘‘(I) demonstrating financial need; 
‘‘(II) meeting and maintaining 
satisfactory academic progress; and 
‘‘(III) other criteria aligned with 
State and local goals to increase post-
secondary readiness, access, and com-
pletion; and 
‘‘(ii) how the eligible entity will meet 
the other requirements of section 404E;’’; 
(iii) by striking subparagraph (H); 
and 
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(iv) by redesignating subparagraphs 
(I) and (J) as subparagraphs (H) and (I), 
respectively; and 
(2) in subsection (b), by striking paragraph (2) 
and inserting the following: 
‘‘(2) 
SPECIAL
RULE.—Notwithstanding 
the 
matching requirement described in paragraph (1)(A), 
the Secretary may— 
‘‘(A) at the time of application— 
‘‘(i) approve a Partnership applicant’s 
request for a waiver of up to 75 percent of 
the matching requirement for up to two 
years if the applicant demonstrates in its 
application a significant economic hardship 
that stems from a specific, exceptional, or 
uncontrollable event, such as a natural dis-
aster, that has a devastating effect on the 
members of the Partnership and the commu-
nity in which the project would operate; 
‘‘(ii)(I) approve a Partnership appli-
cant’s request to waive up to 50 percent of 
the matching requirement for up to two 
years if the applicant demonstrates in its 
application a pre-existing and an on-going 
significant economic hardship that pre-
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cludes the applicant from meeting its 
matching requirement; and 
‘‘(II) provide tentative approval of an 
applicant’s request for a waiver under sub-
clause (I) for all remaining years of the 
project period; 
‘‘(iii) approve a Partnership appli-
cant’s request in its application to match 
its contributions to its scholarship fund, es-
tablished under section 404E, on the basis 
of two non-Federal dollars for every one dol-
lar of Federal funds provided under this 
chapter; or 
‘‘(iv) approve a request by a Partner-
ship applicant that has three or fewer insti-
tutions of higher education as members to 
waive up to 70 percent of the matching re-
quirement if the Partnership applicant in-
cludes— 
‘‘(I) a fiscal agent that is eligible 
to receive funds under title V, or part 
B of title III, or section 316 or 317, or 
a local educational agency; 
‘‘(II) only participating schools 
with a 7th grade cohort in which at 
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least 75 percent of the students are eli-
gible for free or reduced-price lunch 
under the Richard B. Russell National 
School Lunch Act; and 
‘‘(III) 
only 
local 
educational 
agencies in which at least 50 percent of 
the students enrolled are eligible for 
free or reduced-price lunch under the 
Richard B. Russell National School 
Lunch Act; and 
‘‘(B) after a grant is awarded, approve a 
Partnership grantee’s written request for a waiv-
er of up to— 
‘‘(i) 50 percent of the matching re-
quirement for up to two years if the grantee 
demonstrates that— 
‘‘(I) the matching contributions 
described for those two years in the 
grantee’s approved application are no 
longer available; and 
‘‘(II) the grantee has exhausted all 
funds and sources of potential con-
tributions for replacing the matching 
funds; or 
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‘‘(ii) 75 percent of the matching re-
quirement for up to two years if the grantee 
demonstrates that matching contributions 
from the original application are no longer 
available due to an uncontrollable event, 
such as a natural disaster, that has a dev-
astating economic effect on members of the 
Partnership and the community in which 
the project would operate. 
‘‘(3) ADDITIONAL TERMS.— 
‘‘(A) ON-GOING ECONOMIC HARDSHIP.—In 
determining whether a Partnership applicant is 
experiencing an on-going economic hardship that 
is significant enough to justify a waiver under 
subparagraphs (A)(i) and (A)(ii)(I) of para-
graph (2), the Secretary may consider docu-
mentation of the following: 
‘‘(i) Severe distress in the local econ-
omy of the community to be served by the 
grant (e.g., there are few employers in the 
local area, large employers have left the 
local area, or significant reductions in em-
ployment in the local area). 
‘‘(ii) Local unemployment rates that 
are higher than the national average. 
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‘‘(iii) Low or decreasing revenues for 
State and County governments in the area 
to be served by the grant. 
‘‘(iv) Significant reductions in the 
budgets of institutions of higher education 
that are participating in the grant. 
‘‘(v) Other data that reflect a signifi-
cant economic hardship for the geographical 
area served by the applicant. 
‘‘(B) EXHAUSTION
OF
FUNDS.—In deter-
mining whether a Partnership grantee has ex-
hausted all funds and sources of potential con-
tributions for replacing matching funds under 
paragraph (2)(B), the secretary may consider the 
grantee’s documentation of key factors that have 
had a direct impact on the grantee such as the 
following: 
‘‘(i) A reduction of revenues from State 
government, County government, or the 
local educational agency. 
‘‘(ii) An increase in local unemploy-
ment rates. 
‘‘(iii) Significant reductions in the op-
erating budgets of institutions of higher 
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education that are participating in the 
grant. 
‘‘(iv) A reduction of business activity 
in the local area (e.g., large employers have 
left the local area). 
‘‘(v) Other data that reflect a signifi-
cant decrease in resources available to the 
grantee in the local geographical area served 
by the grantee. 
‘‘(C) RENEWAL OF WAIVER.—A Partnership 
applicant that receives a tentative approval of a 
waiver under subparagraph (A)(ii)(II) of para-
graph (2) for more than two years under this 
paragraph must submit to the Secretary every 
two years by such time as the Secretary may di-
rect documentation that demonstrates that— 
‘‘(i) the significant economic hardship 
upon which the waiver was granted still ex-
ists; and 
‘‘(ii) the grantee tried diligently, but 
unsuccessfully, to obtain contributions need-
ed to meet the matching requirement. 
‘‘(D) MULTIPLE WAIVERS.—If a grantee has 
received one or more waivers under paragraph 
(2), the grantee may request an additional waiv-
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er of the matching requirement under this sub-
section not earlier than 60 days before the expi-
ration of the grantee’s existing waiver.’’. 
(c) ACTIVITIES.—Section 404D (20 U.S.C. 1070a–24) 
is amended— 
(1) in subsection (a)— 
(A) in paragraph (1), by striking ‘‘finan-
cial aid for’’ and inserting ‘‘financial aid, in-
cluding loans, grants, scholarships, and institu-
tional aid for’’; 
(B) in paragraph (2) by striking ‘‘rigorous 
and challenging curricula and coursework, in 
order 
to’’ 
and 
inserting 
‘‘curricula 
and 
coursework designed to’’; 
(C) by redesignating paragraphs (3) and 
(4) as paragraphs (5) and (6), respectively; 
(D) by inserting after paragraph (2) the fol-
lowing: 
‘‘(3) Providing information to students and fam-
ilies about the advantages of obtaining a postsec-
ondary education. 
‘‘(4) Providing tutors and mentors, who may in-
clude adults or former participants of a program 
under this chapter, for use by eligible students in 
need.’’; 
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(E) in paragraph (5), as so redesignated, by 
striking ‘‘Improving’’ and inserting ‘‘Providing 
supportive services to improve’’; and 
(2) in subsection (b)— 
(A) by striking paragraph (1); and 
(B) 
by 
redesignating 
paragraphs 
(2) 
through (15) as paragraphs (1) through (14), re-
spectively; 
(C) in paragraph (3), as so redesignated, by 
striking ‘‘rigorous’’ each place it appears; 
(D) in paragraph (9), as so redesignated— 
(i) by redesignating subparagraphs (E) 
through (K) as subparagraphs (F) through 
(L), respectively; 
(ii) by inserting after subparagraph 
(D) the following: 
‘‘(E) providing counseling or referral serv-
ices to address the behavioral, social-emotional, 
and mental health needs of at-risk students;’’; 
(iii) in subparagraph (I), as so redes-
ignated, by striking ‘‘skills assessments’’ 
and inserting ‘‘skills, cognitive, non-cog-
nitive, and credit-by-examination assess-
ments’’; 
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(iv) in subparagraph (K), as so redes-
ignated, by striking ‘‘and’’ at the end; 
(v) in subparagraph (L), as so redesig-
nated, by striking the period at the end and 
inserting ‘‘; and’’; and 
(vi) by adding at the end the following: 
‘‘(M) capacity building activities that create 
college-going cultures in participating schools 
and local education agencies.’’; and 
(E) by adding at the end the following: 
‘‘(15) Creating or expanding drop-out recovery 
programs that allow individuals who drop out of 
school to complete a regular secondary school diploma 
and begin college-level work.’’; 
(3) in subsection (c)— 
(A) in paragraph (3), by inserting ‘‘and 
technical assistance’’ after ‘‘administrative sup-
port’’; and 
(B) by striking paragraph (9); and 
(4) in subsection (e), by striking ‘‘institutions 
and agencies sponsoring programs authorized under 
subpart 4,’’. 
(d) SCHOLARSHIP REQUIREMENTS.—Section 404E 
(20 U.S.C. 1070a–25) is amended— 
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(1) in subsection (a)(1), by inserting ‘‘described 
in section 404C(a)(2)(B)(i)’’ after ‘‘financial assist-
ance program’’; and 
(2) in subsection (e)(1), by striking ‘‘an amount’’ 
and all that follows through the period at the end and 
inserting the following: ‘‘an estimated amount that is 
based on the requirements of the financial assistance 
program of the eligible entity described in section 
404C(a)(2)(B)(i).’’ 
(e) EVALUATION AND REPORT.—Section 404G(b) (20 
U.S.C. 1070a–27(b)) is amended— 
(1) in paragraph (1), by striking ‘‘and’’ at the 
end; 
(2) in paragraph (2), by striking the period at 
the end and inserting ‘‘; and’’ 
(3) by adding after paragraph (2) the following: 
‘‘(3) include the following metrics: 
‘‘(A) the number of students completing the 
Free Application for Federal Student Aid; 
‘‘(B) the enrollment of participating stu-
dents in curricula and coursework designed to 
reduce the need for remedial coursework at the 
postsecondary level; 
‘‘(C) if applicable, the number of students 
receiving a scholarship; 
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‘‘(D) the graduation rate of participating 
students from high school; 
‘‘(E) the enrollment of participating stu-
dents into postsecondary education; and 
‘‘(F) such other information as the Sec-
retary may require.’’. 
(f) AUTHORIZATION
OF APPROPRIATIONS.—Section 
404H (20 U.S.C. 1070a–28) is amended by striking 
‘‘$400,000,000 for fiscal year 2009 and such sums as may 
be necessary for each of the five succeeding fiscal years’’ and 
inserting ‘‘$339,754,000 for fiscal year 2019 and each of 
the five succeeding fiscal years’’. 
SEC. 404. SPECIAL PROGRAMS FOR STUDENTS WHOSE FAMI-
LIES ARE ENGAGED IN MIGRANT AND SEA-
SONAL FARMWORK. 
Section 418A(i) (20 U.S.C. 1070d—2(i)) is amended 
by striking ‘‘$75,000,000’’ and all that follows through the 
period at the end and inserting ‘‘$44,623,000 for each of 
fiscal years 2019 through 2024.’’. 
SEC. 405. CHILD CARE ACCESS MEANS PARENTS IN 
SCHOOL. 
Section 419N (20 U.S.C. 1070e) is amended— 
(1) in the heading of paragraph (6) of subsection 
(b), by striking ‘‘CONSTRUCTION’’ and inserting 
‘‘RULE OF CONSTRUCTION’’; and 
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(2) in subsection (c)— 
(A) in paragraph (4), by striking ‘‘assisted’’ 
and inserting ‘‘funded’’; 
(B) in paragraph (5)— 
(i) by striking ‘‘resources, including 
technical expertise’’ and inserting ‘‘re-
sources, including non-Federal resources, 
technical expertise,’’; 
(ii) by striking ‘‘the use of the’’ and in-
serting ‘‘these’’; and 
(C) in paragraph (9)— 
(i) by inserting ‘‘provisional status,’’ 
after ‘‘approval,’’; and 
(ii) by striking ‘‘; and’’ and inserting 
‘‘prior to serving children and families; 
and’’; 
(3) in subsection (d)— 
(A) in paragraph (1)— 
(i) by striking ‘‘local’’ and inserting 
‘‘non-Federal, local,’’; and 
(ii) by striking ‘‘and’’ at the end; 
(B) in paragraph (2), by striking the period 
at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
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‘‘(3) coordinate with other community programs 
where appropriate to improve the quality and limit 
cost of the campus-based program.’’; 
(4) by amending subsection (e) to read as fol-
lows: 
‘‘(e) REPORTING REQUIREMENTS; CONTINUING ELIGI-
BILITY.— 
‘‘(1) REPORTING REQUIREMENTS.— 
‘‘(A) REPORTS.—Each institution of higher 
education receiving a grant under this section 
shall report to the Secretary annually. The Sec-
retary shall annually publish such reports on a 
publicly accessible website of the Department of 
Education. 
‘‘(B) CONTENTS.—Each report shall in-
clude— 
‘‘(i) data on the population served 
under this section, including the total num-
ber of children and families served; 
‘‘(ii) information on sources of campus 
and community resources and the amount 
of non-Federal funding used to help low-in-
come students access child care services on 
campus; 
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‘‘(iii) documentation that the program 
meets applicable licensing, certification, ap-
proval, or registration requirements; and 
‘‘(iv) a description of how funding was 
used to pursue the goals of this section de-
termined by the institution under subsection 
(c). 
‘‘(2) CONTINUING
ELIGIBILITY.—The Secretary 
shall make continuation awards under this section to 
an institution of higher education only if the Sec-
retary determines, on the basis of the reports sub-
mitted under paragraph (1) and the application from 
the institution, that the institution is— 
‘‘(A) using funds only for authorized pur-
poses; 
‘‘(B) providing low-income students at the 
institution with priority access to affordable, 
quality child care services as provided under this 
section; and 
‘‘(C) documenting a continued need for Fed-
eral funding under this section, while dem-
onstrating how non-federal sources will be lever-
aged to support a continuation award.’’; and 
(5) in subsection (g), by striking ‘‘such sums as 
may be necessary for fiscal year 2009 and each of the 
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five 
succeeding 
fiscal 
years’’ 
and 
inserting 
‘‘$15,134,000 for each of fiscal years 2019 through 
2024’’. 
SEC. 406. REPEALS. 
(a) ACADEMIC COMPETITIVENESS GRANTS.—Section 
401A (20 U.S.C. 1070a–1) is repealed. 
(b) FEDERAL SUPPLEMENTAL EDUCATIONAL OPPOR-
TUNITY GRANTS.— 
(1) REPEAL.—Subpart 3 of part A of title IV 
(20 U.S.C. 1070b et seq.) is repealed. 
(2) EFFECTIVE
DATE.—The repeal made by 
paragraph (1) shall take effect on June 30, 2018. 
(3) APPROPRIATIONS.—Notwithstanding para-
graphs (1) and (2), sums appropriated under section 
413A for fiscal year 2018 shall be available for pay-
ments to institutions of higher education under such 
section (as in effect on June 29, 2018) until the end 
of fiscal year 2019. 
(c) LEVERAGING EDUCATIONAL ASSISTANCE PART-
NERSHIP PROGRAM.—Subpart 4 of part A of title IV (20 
U.S.C. 1070c et seq.) is repealed. 
(d) ROBERT C. BYRD HONORS SCHOLARSHIP PRO-
GRAM.—Subpart 6 of part A of title IV (20 U.S.C. 1070d– 
31 et seq.) is repealed. 
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SEC. 407. SUNSET OF TEACH GRANTS. 
Subpart 9 of part A of title IV (20 U.S.C. 1070g) is 
amended— 
(1) in section 420L(1) (20 U.S.C. 1070g(1), by 
striking ‘‘section 102’’ and inserting ‘‘section 102 (as 
in effect on the day before the date of enactment of 
the PROSPER Act)’’; 
(2) in section 420N (20 U.S.C. 1070g–2)— 
(A) by amending subparagraph (B) of sub-
section (b)(1) to read as follows: 
‘‘(B) teach— 
‘‘(i) in a public or other nonprofit pri-
vate elementary school or secondary school, 
which, for the purpose of this paragraph 
and for that year— 
‘‘(I) has been determined by the 
Secretary (pursuant to regulations of 
the Secretary and after consultation 
with the State educational agency of 
the State in which the school is lo-
cated) to be a school in which the num-
ber of children meeting a measure of 
poverty under section 1113(a)(5) of the 
Elementary and Secondary Education 
Act of 1965 (20 U.S.C. 6313(a)(5)), ex-
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ceeds 30 percent of the total number of 
children enrolled in such school; and 
‘‘(II) is in the school district of a 
local educational agency which is eligi-
ble in such year for assistance pursu-
ant to part A of title I of the Elemen-
tary and Secondary Education Act of 
1965 (20 U.S.C. 6311 et seq.); or 
‘‘(ii) in one or more public, or non-
profit private, elementary schools or sec-
ondary schools or locations operated by an 
educational service agency that have been 
determined by the Secretary (pursuant to 
regulations of the Secretary and after con-
sultation with the State educational agency 
of the State in which the educational service 
agency operates) to be a school or location 
at which the number of children taught who 
meet a measure of poverty under section 
1113(a)(5) of the Elementary and Sec-
ondary Education Act of 1965 (20 U.S.C. 
6313(a)(5)), exceeds 30 percent of the total 
number of children taught at such school or 
location;’’; and 
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223 
(B) in subsection (c), by inserting ‘‘(as in 
effect on the day before the date of the enactment 
of the PROSPER Act)’’ after ‘‘part D of title 
IV’’; 
(3) in section 420M(a) (20 U.S.C. 1070g–1), by 
adding at the end the following: 
‘‘(3) TERMINATION.— 
‘‘(A) TERMINATION OF PROGRAM AUTHOR-
ITY.—Except as provided in paragraph (4), no 
new grants may be made under this subpart 
after June 30, 2018. 
‘‘(B) LIMITATION ON FUNDS.— 
‘‘(i) IN GENERAL.—No funds are au-
thorized to be appropriated, and no funds 
may be obligated or expended under this 
Act or any other Act, to make a grant to a 
new recipient under this subpart. 
‘‘(ii) NEW RECIPIENT DEFINED.—For 
purposes of this subparagraph, the term 
‘new recipient’ means a teacher candidate 
who has not received a grant under this 
subpart for which the first disbursement 
was on or before June 30, 2018. 
‘‘(4) STUDENT
ELIGIBILITY
BEGINNING
WITH 
AWARD YEAR 2018.—With respect to a recipient of a 
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224 
grant under this subpart for which the first disburse-
ment was made on or before June 30, 2018, such re-
cipient may receive additional grants under this sub-
part until the earlier of— 
‘‘(A) the date on which the recipient com-
pletes the course of study for which the recipient 
received the grant for which the first disburse-
ment was made on or before June 30, 2018; or 
‘‘(B) the date on which the recipient receives 
the total amount that the recipient may receive 
under this subpart in accordance with subsection 
(d).’’; and 
(4) in section 420O (20 U.S.C. 1070g–3)— 
(A) by striking ‘‘2008’’ and inserting 
‘‘2008, and ending on June 30, 2018’’; and 
(B) by adding at the end the following: 
‘‘Except as provided in section 420M(a)(4), no 
funds shall be available to the Secretary to carry 
out this subpart after June 30, 2018.’’. 
PART B—FEDERAL FAMILY EDUCATION LOAN 
PROGRAM 
SEC. 421. FEDERAL DIRECT CONSOLIDATION LOANS. 
Section 428C (20 U.S.C. 1078–3) is amended— 
(1) in subsection (a)(4)(B), by inserting before 
the semicolon at the end ‘‘, as in effect on the day be-
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225 
fore the date of enactment of the PROSPER Act and 
pursuant to section 461(a) of such Act’’; and 
(2) in subsection (b)(1)(F)(ii)— 
(A) in the matter preceding subclause (I), 
by inserting ‘‘, as in effect on the day before the 
date of enactment of the PROSPER Act and 
pursuant to section 461(a) of such Act’’ after 
‘‘part E’’; 
(B) in subclause (I), in the matter pre-
ceding item (aa), by inserting ‘‘, as so in effect,’’ 
after ‘‘part E’’; 
(C) in subclause (I)(bb), by inserting ‘‘, as 
so in effect’’ after ‘‘section 464(c)(1)(A)’’; 
(D) in subclause (II), by inserting ‘‘, as so 
in effect’’ after ‘‘section 465(a)’’; and 
(E) in subclause (III)— 
(i) by inserting ‘‘, as so in effect’’ after 
‘‘section 465’’; and 
(ii) by inserting ‘‘, as so in effect’’ 
after ‘‘465(a)’’. 
SEC. 422. LOAN REHABILITATION. 
Section 428F(a)(5) (20 U.S.C. 1078–6) is amended by 
striking ‘‘one time’’ and inserting ‘‘two times’’. 
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226 
SEC. 423. LOAN FORGIVENESS FOR TEACHERS. 
Section 428J(b)(1)(A) (20 U.S.C. 1078–10(b)(1)(A)) is 
amended by striking ‘‘that qualifies under section 
465(a)(2)(A) for loan cancellation for Perkins loan recipi-
ents who teach in such schools or locations’’ and inserting 
‘‘described in section 420N(b)(1)(B)’’. 
SEC. 424. LOAN FORGIVENESS FOR SERVICE IN AREAS OF 
NATIONAL NEED. 
Section 428K (20 U.S.C. 1078–11) is amended— 
(1) in subsection (b)— 
(A) in paragraph (4)(B), by striking ‘‘that 
qualifies under section 465(a)(2)(A) for loan 
cancellation for Perkins loan recipients who 
teach in such a school’’ and inserting ‘‘described 
in section 420N(b)(1)(B)’’; 
(B) in paragraph (5)(B)(ii), by striking 
‘‘that qualifies under section 465(a)(2)(A) for 
loan cancellation for Perkins loan recipients who 
teach in such a school’’ and inserting ‘‘described 
in section 420N(b)(1)(B)’’; 
(C) in paragraph (7)(A), by striking ‘‘that 
qualifies under section 465(a)(2)(A) for loan 
cancellation for Perkins loan recipients who 
teach in such a school’’ and inserting ‘‘described 
in section 420N(b)(1)(B)’’; 
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227 
(D) in paragraph (8)(B), by striking ‘‘that 
qualifies under section 465(a)(2)(A) for loan 
cancellation for Perkins loan recipients who 
teach in such a school’’ and inserting ‘‘described 
in section 420N(b)(1)(B)’’ ; and 
(E) in paragraph (16), by striking ‘‘that 
qualify under section 465(a)(2)(A) for loan can-
cellation for Perkins loan recipients who teach in 
such a school’’ and inserting ‘‘described in sec-
tion 420N(b)(1)(B)’’; and 
(2) in subsection (g)(6)(B), by striking ‘‘that 
qualifies under section 465(a)(2)(A) for loan cancella-
tion for Perkins loan recipients who teach in such a 
school’’ 
and 
inserting 
‘‘described 
in 
section 
420N(b)(1)(B)’’. 
SEC. 425. LOAN REPAYMENT FOR CIVIL LEGAL ASSISTANCE 
ATTORNEYS. 
Section 428L(b)(2)(A) (20 U.S.C. 1078–12(b)(2)(A)) is 
amended— 
(1) in clause (i), by inserting before the semi-
colon at the end ‘‘, as in effect on the day before the 
date of enactment of the PROSPER Act and pursu-
ant to section 461(a) of such Act’’; and 
(2) in clause (ii)(III), by inserting ‘‘, as in effect 
on the day before the date of enactment of the PROS-
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228 
PER Act and pursuant to section 461(a) of such Act’’ 
after ‘‘part E’’; 
SEC. 426. SUNSET OF COHORT DEFAULT RATE AND OTHER 
CONFORMING CHANGES. 
(a) REQUIREMENTS FOR THE SECRETARY.—Section 
430(e) (20 U.S.C. 1080(e)) is amended by adding at the 
end the following: 
‘‘(4) SUNSET.—The Secretary shall not be subject 
to the requirements of this subsection after the transi-
tion period described in section 481B(e)(3).’’. 
(b) ELIGIBLE INSTITUTION DEFINED.—Section 435 
(20 U.S.C. 1085) is amended— 
(1) in subsection (a)— 
(A) in paragraph (1), by striking ‘‘section 
102’’ and inserting ‘‘sections 101 and 102’’; and 
(B) by adding at the end the following: 
‘‘(9) SUNSET.—No institution shall be subject to 
paragraph (2) after the transition period described in 
section 481B(e)(3).’’; 
(2) in subsection (m), by adding at the end the 
following: 
‘‘(5) TRANSITION PERIOD; SUNSET.— 
‘‘(A) TRANSITION
PERIOD.—During the 
transition period, the cohort default rate for an 
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229 
institution shall be calculated in the manner de-
scribed in section 481B(e)(1). 
‘‘(B) SUNSET.—The Secretary shall not be 
subject, and no institution shall be subject, to the 
requirements of this subsection after the transi-
tion period. 
‘‘(C) DEFINITION.—In this paragraph, the 
term ‘transition period’ has the meaning given 
the term in section 481B(e)(3).’’; and 
(3) in subsection (o)(1), by inserting ‘‘, as in ef-
fect on the day before the date of enactment of the 
PROSPER Act and pursuant to section 461(a) of 
such Act’’ after ‘‘part E’’. 
SEC. 427. ADDITIONAL DISCLOSURES. 
Section 433(a) (20 U.S.C. 1083(a)) is amended— 
(1) in the matter preceding paragraph (1), by 
striking the second sentence and inserting ‘‘Any dis-
closure required by this subsection shall be made on 
the Plain Language Disclosure Form developed by the 
Secretary under section 455(p).’’; 
(2) in paragraph (4), by striking ‘‘the origina-
tion fee and’’ and inserting ‘‘finance charges, the 
origination fee, and’’; 
(3) by redesignating paragraphs (6) through (19) 
as paragraphs (7) through (20), respectively; and 
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230 
(4) by inserting after paragraph (5), the fol-
lowing: 
‘‘(6) the annual percentage rate of the loan, as 
calculated using the standard 10-year repayment 
term, and how interest accrues and is capitalized 
during periods when the interest is not paid by the 
borrower;’’. 
SEC. 428. CLOSED SCHOOL AND OTHER DISCHARGES. 
Section 437(c) (20 U.S.C. 1087) is amended— 
(1) in paragraph (1), by inserting ‘‘and the bor-
rower meets the applicable requirements of para-
graphs (6) through (8),’’ after ‘‘such student’s lend-
er,’’; 
(2) in paragraph (4), by inserting before the pe-
riod at the end ‘‘, as in effect on the day before the 
date of enactment of the PROSPER Act and pursu-
ant to section 461(a) of such Act’’; and 
(3) by adding at the end the following: 
‘‘(6) BORROWER QUALIFICATIONS FOR A CLOSED 
SCHOOL DISCHARGE.— 
‘‘(A) IN GENERAL.—In order to qualify for 
the discharge of a loan under this subsection due 
to the closure of the institution in which the bor-
rower was enrolled, a borrower shall submit to 
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the Secretary a written request and sworn state-
ment— 
‘‘(i) that contains true factual asser-
tions; 
‘‘(ii) that is made by the borrower 
under penalty of perjury, and that may or 
may not be notarized; 
‘‘(iii) under which the borrower (or the 
student on whose behalf a parent borrowed) 
states— 
‘‘(I) that the borrower or the stu-
dent— 
‘‘(aa) received, on or after 
January 1, 1986, the proceeds of 
a loan made, insured, or guaran-
teed under this title to attend a 
program of study at an institu-
tion of higher education; 
‘‘(bb)(AA) did not complete 
the program of study because the 
institution closed while the stu-
dent was enrolled; or 
‘‘(BB) the student withdrew 
from the institution not more 
than 120 days before the institu-
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232 
tion closed, or in the case of excep-
tional circumstances described in 
subparagraph (B), not more than 
the period by which such 120-day 
period is extended under such sub-
paragraph; and 
‘‘(cc) attempted but was un-
able to complete the program of 
study through a teach-out at an-
other institution or by transfer-
ring academic credits or hours 
earned at the closed institution to 
another institution; 
‘‘(II) whether the borrower (or the 
student) has made a claim with respect 
to the institutions’s closing with any 
third party, such as the holder of a 
performance bond or a tuition recovery 
program, and, if so, the amount of any 
payment received by the borrower (or 
the student) or credited to the bor-
rower’s loan obligation; and 
‘‘(III) that the borrower (or the 
student)— 
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233 
‘‘(aa) agrees to provide to the 
Secretary or the holder of the loan 
upon request other documentation 
reasonably available to the bor-
rower that demonstrates that the 
borrower meets the qualifications 
for discharge under this sub-
section; and 
‘‘(bb) agrees to cooperate 
with the Secretary in enforcement 
actions in accordance with sub-
paragraph (C) and to transfer 
any right to recovery against a 
third party to the Secretary in 
accordance 
with 
subparagraph 
(D). 
‘‘(B) EXCEPTIONAL CIRCUMSTANCES.— 
‘‘(i) IN GENERAL.—The Secretary may 
extend the 120-day period described in sub-
paragraph (A)(iii)(I)(bb)(BB) if the Sec-
retary determines that exceptional cir-
cumstances related to an institution’s clos-
ing justify an extension. 
‘‘(ii) DEFINITION.—For purposes of 
this subsection, the term ‘exceptional cir-
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234 
cumstances’, when used with respect to an 
institution that closed, includes the loss of 
accreditation 
of 
institution, 
the 
institutions’s discontinuation of the major-
ity of its academic programs, action by the 
State to revoke the institution’s license to 
operate or award academic credentials in 
the State, or a finding by a State or Fed-
eral Government agency that the institution 
violated State or Federal law. 
‘‘(C) COOPERATION BY BORROWER IN EN-
FORCEMENT ACTIONS.— 
‘‘(i) IN GENERAL.—In order to obtain 
a discharge described in subparagraph (A), 
a borrower shall cooperate with the Sec-
retary in any judicial or administrative 
proceeding brought by the Secretary to re-
cover amounts discharged or to take other 
enforcement action with respect to the con-
duct on which the discharge was based. At 
the request of the Secretary and upon the 
Secretary’s tendering to the borrower the 
fees and costs that are customarily provided 
in litigation to reimburse witnesses, the bor-
rower shall— 
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‘‘(I) provide testimony regarding 
any representation made by the bor-
rower to support a request for dis-
charge; 
‘‘(II) produce any documents rea-
sonably available to the borrower with 
respect to those representations; and 
‘‘(III) if required by the Sec-
retary, provide a sworn statement re-
garding those documents and represen-
tations. 
‘‘(ii) DENIAL OF REQUEST FOR DIS-
CHARGE.—The Secretary shall deny the re-
quest for such a discharge or revoke the dis-
charge of a borrower who— 
‘‘(I) fails to provide the testimony, 
documents, or a sworn statement re-
quired under clause (i); or 
‘‘(II) provides testimony, docu-
ments, or a sworn statement that does 
not support the material representa-
tions made by the borrower to obtain 
the discharge. 
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236 
‘‘(D) TRANSFER
TO
THE
SECRETARY
OF 
BORROWER’S
RIGHT
OF
RECOVERY
AGAINST 
THIRD PARTIES.— 
‘‘(i) IN GENERAL.—Upon receiving a 
discharge described in subparagraph (A) of 
a loan, the borrower shall be deemed to have 
assigned to and relinquished in favor of the 
Secretary any right to a loan refund for 
such loan (up to the amount discharged) 
that the borrower (or student) may have by 
contract or applicable law with respect to 
the loan or the enrollment agreement for the 
program for which the loan was received, 
against the institution, its principals, its 
affiliates and their successors, its sureties, 
and any private fund, including the portion 
of a public fund that represents funds re-
ceived from a private party. 
‘‘(ii) APPLICATION.—The provisions of 
this subsection apply notwithstanding any 
provision of State law that would otherwise 
restrict transfer of such rights by the bor-
rower (or student), limit, or prevent a 
transferee from exercising such rights, or es-
tablish procedures or a scheme of distribu-
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237 
tion that would prejudice the Secretary’s 
ability to recover on such rights. 
‘‘(iii) RULE OF CONSTRUCTION.—Noth-
ing in this subsection shall limit or foreclose 
the borrower’s (or student’s) right to pursue 
legal and equitable relief regarding disputes 
arising from matters unrelated to the dis-
charged loan. 
‘‘(E) DISCHARGE PROCEDURES.— 
‘‘(i) IN
GENERAL.—After confirming 
the date of an institution’s closure, the Sec-
retary shall identify any borrower (or stu-
dent on whose behalf a parent borrowed) 
who appears to have been enrolled at the in-
stitution on the closure date of the institu-
tion or to have withdrawn not more than 
120 days prior to the closure date (or in the 
case of exceptional circumstances described 
in subparagraph (B), not more than the pe-
riod by which such 120-day period is ex-
tended under such subparagraph. In the 
case of a loan made, insured, or guaranteed 
under this part, a guaranty agency shall 
notify the Secretary immediately whenever 
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238 
it becomes aware of reliable information in-
dicating an institution may have closed. 
‘‘(ii) BORROWER ADDRESS.— 
‘‘(I) KNOWN.—If the borrower’s 
current address is known, the Sec-
retary shall mail the borrower a dis-
charge application and an explanation 
of the qualifications and procedures for 
obtaining a discharge. The Secretary 
or the guaranty agency shall promptly 
suspend any efforts to collect from the 
borrower on any affected loan. The 
Secretary may continue to receive bor-
rower payments of the loan for which 
the discharge application has been 
filed. 
‘‘(II) 
UNKNOWN.—If 
the 
bor-
rower’s current address is unknown, 
the Secretary shall attempt to locate 
the borrower and determine the bor-
rower’s potential eligibility for a dis-
charge described in subparagraph (A) 
by consulting with representatives of 
the closed institution, the institution’s 
licensing agency, the institution’s ac-
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239 
crediting agency, and other appro-
priate parties. If the Secretary learns 
the new address of a borrower, the Sec-
retary shall mail to the borrower a dis-
charge application and explanation, 
and shall suspend collection on the 
loan, as described in subclause (I). 
‘‘(iii) SWORN STATEMENT.—If a bor-
rower fails to submit the written request 
and sworn statement described subpara-
graph (A) not later than 60 days after date 
on which the Secretary mails the discharge 
application under clause (ii), the Sec-
retary— 
‘‘(I) shall resume collection on the 
loan and grant forbearance of prin-
cipal and interest for the period in 
which collection activity was sus-
pended; and 
‘‘(II) may capitalize any interest 
accrued and not paid during such pe-
riod. 
‘‘(iv) NOTIFICATION.— 
‘‘(I) 
QUALIFICATIONS
MET.—If 
the Secretary determines that a bor-
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240 
rower who requests a discharge de-
scribed in subparagraph (A) meets the 
qualifications for such a discharge, the 
Secretary shall— 
‘‘(aa) notify the borrower in 
writing of that determination; 
and 
‘‘(bb) not regard a borrower 
who has defaulted on a loan that 
has been so discharged as in de-
fault on the loan after such dis-
charge, and such a borrower shall 
be eligible to receive assistance 
under this title. 
‘‘(II) 
QUALIFICATIONS
NOT 
MET.—If the Secretary determines that 
a borrower who requests a discharge 
described in subparagraph (A) does not 
meet the qualifications for such a dis-
charge, the Secretary or guaranty 
agency shall resume collection on the 
loan and notify the borrower in writ-
ing of that determination and the rea-
sons for the determination. 
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241 
‘‘(7) BORROWER QUALIFICATIONS FOR A FALSE 
CERTIFICATION DISCHARGE.— 
‘‘(A) APPLICATION.— 
‘‘(i) IN GENERAL.—In order to qualify 
for false certification discharge under this 
subsection, the borrower shall submit to the 
Secretary, on a form approved by the Sec-
retary, an application for discharge that— 
‘‘(I) does not need not be nota-
rized, but shall be made by the bor-
rower under penalty of perjury; and 
‘‘(II) demonstrates to the satisfac-
tion of the Secretary that the require-
ments in subparagraphs (B) through 
(G) have been met. 
‘‘(ii) NOTIFICATION.—If the Secretary 
determines the application does not meet the 
requirements of clause (i), the Secretary 
shall notify the applicant and explain why 
the application does not meet the require-
ments. 
‘‘(B) HIGH SCHOOL DIPLOMA OR EQUIVA-
LENT.—In the case of a borrower requesting a 
false certification discharge based on not having 
had a high school diploma and not having met 
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the alternative to graduation from high school 
eligibility requirements under section 484(d) ap-
plicable at the time the loan was originated, and 
the institution or a third party to which the in-
stitution referred the borrower falsified the stu-
dent’s high school diploma, the borrower shall 
state in the application that the borrower (or the 
student on whose behalf a parent borrowed)— 
‘‘(i) reported not having a valid high 
school diploma or its equivalent at the time 
the loan was certified; and 
‘‘(ii) did not satisfy the alternative to 
graduation from high school statutory or 
regulatory eligibility requirements identi-
fied on the application form and applicable 
at the time the institution certified the loan. 
‘‘(C) DISQUALIFYING
CONDITION.—In the 
case of a borrower requesting a false certification 
discharge based on a condition that would dis-
qualify the borrower from employment in the oc-
cupation that the program for which the bor-
rower received the loan was intended, the bor-
rower shall state in the application that the bor-
rower (or student on whose behalf the parent bor-
rowed) did not meet State requirements for em-
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ployment (in the student’s State of residence) in 
the occupation that the program for which the 
borrower received the loan was intended because 
of a physical or mental condition, age, criminal 
record, or other reason accepted by the Secretary. 
‘‘(D) UNAUTHORIZED LOAN.—In the case of 
a borrower requesting a discharge under this 
subsection because the institution signed the bor-
rower’s name on the loan application or promis-
sory note without the borrower’s authorization, 
the borrower shall— 
‘‘(i) state that the borrower did not 
sign the document in question or authorize 
the institution to do so; and 
‘‘(ii) provide 5 different specimens of 
the borrower’s signature, 2 of which must be 
within one year before or after the date of 
the contested signature. 
‘‘(E) UNAUTHORIZED
PAYMENT.—In the 
case of a borrower requesting a false certification 
discharge because the institution, without the 
borrower’s authorization, endorsed the borrower’s 
loan check or signed the borrower’s authorization 
for electronic funds transfer, the borrower shall— 
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‘‘(i) state that the borrower did not en-
dorse the loan check or sign the authoriza-
tion for electronic funds transfer or author-
ize the institution to do so; 
‘‘(ii) provide 5 different specimens of 
the borrower’s signature, 2 of which must be 
within one year before or after the date of 
the contested signature; and 
‘‘(iii) state that the proceeds of the con-
tested disbursement were not delivered to the 
borrower or applied to charges owed by the 
borrower to the institution. 
‘‘(F) IDENTITY THEFT.— 
‘‘(i) IN GENERAL.—In the case of an 
individual whose eligibility to borrow was 
falsely certified because the individual was 
a victim of the crime of identity theft and 
is requesting a discharge, the individual 
shall— 
‘‘(I) certify that the individual 
did not sign the promissory note, or 
that any other means of identification 
used to obtain the loan was used with-
out the authorization of the individual 
claiming relief; 
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‘‘(II) certify that the individual 
did not receive or benefit from the pro-
ceeds of the loan with knowledge that 
the loan had been made without the 
authorization of the individual; 
‘‘(III) provide a copy of a local, 
State, or Federal court verdict or judg-
ment that conclusively determines that 
the individual who is named as the 
borrower of the loan was the victim of 
a crime of identity theft; and 
‘‘(IV) if the judicial determination 
of the crime does not expressly state 
that the loan was obtained as a result 
of the crime of identity theft, provide— 
‘‘(aa) authentic specimens of 
the signature of the individual, as 
described 
in 
subparagraph 
(D)(ii), or of other means of iden-
tification of the individual, as ap-
plicable, 
corresponding 
to 
the 
means of identification falsely 
used to obtain the loan; and 
‘‘(bb) statement of facts that 
demonstrate, to the satisfaction of 
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246 
the Secretary, that eligibility for 
the loan in question was falsely 
certified as a result of the crime of 
identity theft committed against 
that individual. 
‘‘(ii) DEFINITIONS.—For purposes of 
this subparagraph: 
‘‘(I) IDENTITY THEFT.—The term 
‘identity theft’ means the unauthorized 
use of the identifying information of 
another individual that is punishable 
under section 1028, 1028A, 1029, or 
1030 of title 18, United States Code, or 
substantially comparable State or local 
law. 
‘‘(II) 
IDENTIFYING
INFORMA-
TION.—The term ‘identifying informa-
tion’ includes— 
‘‘(aa) name, Social Security 
number, date of birth, official 
State or government issued driv-
er’s license or identification num-
ber, alien registration number, 
government passport number, and 
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employer or taxpayer identifica-
tion number; 
‘‘(bb) unique biometric data, 
such as fingerprints, voiceprint, 
retina or iris image, or unique 
physical representation; 
‘‘(cc) unique electronic iden-
tification number, address, or 
routing code; or 
‘‘(dd) 
telecommunication 
identifying information or access 
device (as defined in 18 U.S.C. 
1029(e)) borrower qualifications 
for a false certification discharge 
‘‘(G) CLAIM
TO
THIRD
PARTY.—The bor-
rower shall state whether the borrower has made 
a claim with respect to the institutions’s false 
certification or unauthorized payment with any 
third party, such as the holder of a performance 
bond or a tuition recovery program, and, if so, 
the amount of any payment received by the bor-
rower or credited to the borrower’s loan obliga-
tion. 
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248 
‘‘(H) 
COOPERATION
WITH
THE
SEC-
RETARY.—The borrower shall state that the bor-
rower— 
‘‘(i) agrees to provide to the Secretary 
upon request other documentation reason-
ably available to the borrower that dem-
onstrates that the borrower meets the quali-
fications for discharge under this subsection; 
and 
‘‘(ii) agrees to cooperate with the Sec-
retary in enforcement actions and to trans-
fer any right to recovery against a third 
party to the Secretary. 
‘‘(8) BORROWER QUALIFICATIONS FOR AN UN-
PAID REFUND DISCHARGE.—To receive an unpaid re-
fund discharge of a portion of a loan under this sub-
section, a borrower shall submit to the holder or guar-
anty agency a written application— 
‘‘(A) that requests the information required 
to calculate the amount of the discharge; 
‘‘(B) that the borrower signs for the purpose 
of swearing to the accuracy of the information; 
‘‘(C) that is made by the borrower under 
penalty of perjury, and that may or may not be 
notarized; 
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‘‘(D) under which the borrower states— 
‘‘(i) that the borrower— 
‘‘(I) received, on or after January 
1, 1986, the proceeds of a loan, in 
whole or in part, made, insured, or 
guaranteed under this title to attend 
an institution of higher education; 
‘‘(II) did not attend, withdrew, or 
was terminated from the institution 
within a timeframe that entitled the 
borrower to a refund; and 
‘‘(III) did not receive the benefit 
of a refund to which the borrower was 
entitled either from the institution or 
from a third party, such as the holder 
of a performance bond or a tuition re-
covery program; 
‘‘(ii) whether the borrower has any 
other application for discharge pending for 
this loan; and 
‘‘(iii) that the borrower— 
‘‘(I) agrees to provide to the Sec-
retary upon request other documenta-
tion reasonably available to the bor-
rower that demonstrates that the bor-
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rower meets the qualifications for dis-
charge under this subsection; and 
‘‘(II) agrees to cooperate with the 
Secretary in enforcement actions and 
to transfer any right to recovery 
against a third party to the Sec-
retary.’’. 
PART C—FEDERAL WORK-STUDY PROGRAMS 
SECTION 441. PURPOSE; AUTHORIZATION OF APPROPRIA-
TIONS. 
Section 441 (20 U.S.C. 1087–51) is amended— 
(1) in subsection (a)— 
(A) by striking ‘‘part-time’’ and inserting 
‘‘paid’’; 
(B) by striking ‘‘, graduate, or profes-
sional’’; and 
(C) by striking ‘‘community service’’ and 
inserting ‘‘work-based learning’’; 
(2) in subsection (b), by striking ‘‘part, such 
sums as may be necessary for fiscal year 2009 and 
each of the five succeeding fiscal years.’’ and inserting 
‘‘part, $1,722,858,000 for fiscal year 2019 and each 
of the 5 succeeding fiscal years.’’; and 
(3) by amending subsection (c) to read as fol-
lows: 
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251 
‘‘(c) WORK-BASED LEARNING.—For purposes of this 
part, the term ‘work-based learning’ means paid inter-
actions with industry or community professionals in real 
workplace settings that foster in-depth, first-hand engage-
ment with the tasks required of a given career field, that 
are aligned to a student’s field of study.’’. 
SEC. 442. ALLOCATION FORMULA. 
Section 442 (20 U.S.C. 1087–52) is amended to read 
as follows: 
‘‘SEC. 442. ALLOCATION OF FUNDS. 
‘‘(a) RESERVATIONS.— 
‘‘(1) RESERVATION
FOR
IMPROVED
INSTITU-
TIONS.— 
‘‘(A) AMOUNT
OF
RESERVATION
FOR
IM-
PROVED
INSTITUTIONS.—For a fiscal year in 
which the amount appropriated under section 
441(b) exceeds $700,000,000, the Secretary 
shall— 
‘‘(i) reserve the lesser of— 
‘‘(I) an amount equal to 20 per-
cent of the amount by which the 
amount appropriated under section 
441(b) exceeds $700,000,000; or 
‘‘(II) $150,000,000; and 
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‘‘(ii) allocate the amount reserved 
under clause (i) to each improved institu-
tion in an amount— 
‘‘(I) that bears the same propor-
tion to the amount reserved under 
clause (i) as the total amount of all 
Federal Pell Grant funds awarded at 
the improved institution for the second 
preceding fiscal year bears to the total 
amount of Federal Pell Grant funds 
awarded at improved institutions par-
ticipating under this part for the sec-
ond preceding fiscal year; and 
‘‘(II) is not— 
‘‘(aa) less than $10,000; or 
‘‘(bb) 
greater 
than 
$1,500,000. 
‘‘(B) IMPROVED INSTITUTION DESCRIBED.— 
For purposes of this paragraph, an improved in-
stitution is an institution that, on the date the 
Secretary makes an allocation under subpara-
graph (A)(ii) is, with respect to— 
‘‘(i) the completion rate or graduation 
rate of Federal Pell Grant recipients at the 
institution, in the top 10 percent of— 
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‘‘(I) if the institution is an insti-
tution described in any of clauses (iv) 
through (ix) of section 132(d)(1)(B), 
all 
such 
institutions 
participating 
under this part for the preceding fiscal 
year; or 
‘‘(II) if the institution is an insti-
tution described in any of clauses (i) 
through (iii) of section 132(d)(1)(B), 
all 
such 
institutions 
participating 
under this part for the preceding fiscal 
year; or 
‘‘(ii) the improvement of the comple-
tion rate or graduation rate between the 
preceding fiscal year and such date, in the 
top 10 percent of the institutions described 
in clause (i). 
‘‘(C) COMPLETION
RATE
OR
GRADUATION 
RATE.—For purposes of determining the comple-
tion rate or graduation rate under this section, 
a Federal Pell Grant recipient shall be counted 
as a completor or graduate if, within the normal 
time for completion of or graduation from the 
program, the student has completed or graduated 
from the program, or enrolled in any program of 
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254 
an institution participating in any program 
under this title for which the prior program pro-
vides substantial preparation. 
‘‘(D) 
REALLOCATION
OF
RETURNED 
AMOUNT.—If an institution returns to the Sec-
retary any portion of the sums allocated to such 
institution under this paragraph for any fiscal 
year, the Secretary shall reallot such excess to 
improved institutions on the same basis as under 
subparagraph (A)(ii)(I). 
‘‘(2) RESERVATION
FOR
WORK
COLLEGES.— 
From the amounts appropriated under section 441(b), 
the Secretary shall reserve to carry out section 448 
such amounts as may be necessary for fiscal year 
2019 and each of the 5 succeeding fiscal years. 
‘‘(b) ALLOCATION FORMULA FOR FISCAL YEARS 2019 
THROUGH 2023.— 
‘‘(1) IN
GENERAL.—From the amount appro-
priated under section 441(b) for a fiscal year and re-
maining after the Secretary reserves funds under sub-
section (a), the Secretary shall allocate to each insti-
tution— 
‘‘(A) for fiscal year 2019, an amount equal 
to the greater of— 
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‘‘(i) 90 percent of the amount the insti-
tution received under this subsection and 
subsection (a) for fiscal year 2018, as such 
subsections were in effect with respect to 
such fiscal year (in this subparagraph re-
ferred to as the ‘2018 amount for the insti-
tution’); or 
‘‘(ii) the fair share amount for the in-
stitution determined under subsection (d); 
‘‘(B) for fiscal year 2020, an amount equal 
to the greater of— 
‘‘(i) 80 percent of the 2018 amount for 
the institution; or 
‘‘(ii) the fair share amount for the in-
stitution determined under subsection (d); 
‘‘(C) for fiscal year 2021, an amount equal 
to the greater of— 
‘‘(i) 60 percent of the 2018 amount for 
the institution; or 
‘‘(ii) the fair share amount for the in-
stitution determined under subsection (d); 
‘‘(D) for fiscal year 2022, an amount equal 
to the greater of— 
‘‘(i) 40 percent of the 2018 amount for 
the institution; or 
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‘‘(ii) the fair share amount for the in-
stitution determined under subsection (d); 
and 
‘‘(E) for fiscal year 2023, an amount equal 
to the greater of— 
‘‘(i) 20 percent of the 2018 amount for 
the institution; or 
‘‘(ii) the fair share amount for the in-
stitution determined under subsection (d). 
‘‘(2) RATABLE REDUCTION.— 
‘‘(A) IN GENERAL.—If the amount appro-
priated under section 441(b) for a fiscal year 
and remaining after the Secretary reserves funds 
under subsection (a) is less than the amount re-
quired to be allocated to the institutions under 
this subsection, then the amount of the allocation 
to each institution shall be ratably reduced. 
‘‘(B) ADDITIONAL APPROPRIATIONS.—If the 
amounts allocated to each institution are ratably 
reduced under subparagraph (A) for a fiscal year 
and additional amounts are appropriated for 
such fiscal year, the amount allocated to each in-
stitution from the additional amounts shall be 
increased on the same basis as the amounts 
under subparagraph (A) were reduced (until 
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257 
each institution receives the amount required to 
be allocated under this subsection). 
‘‘(c) ALLOCATION FORMULA FOR FISCAL YEAR 2024 
AND EACH SUCCEEDING FISCAL YEAR.—From the amount 
appropriated under section 441(b) for fiscal year 2024 and 
each succeeding fiscal year and remaining after the Sec-
retary reserves funds under subsection (a), the Secretary 
shall allocate to each institution the fair share amount for 
the institution determined under subsection (d). 
‘‘(d) DETERMINATION OF FAIR SHARE AMOUNT.— 
‘‘(1) IN GENERAL.—The fair share amount for 
an institution for a fiscal year shall be equal to the 
sum of the following: 
‘‘(A) An amount equal to 50 percent of the 
amount that bears the same proportion to the 
available appropriated amount for such fiscal 
year as the total amount of Federal Pell Grant 
funds disbursed at the institution for the pre-
ceding fiscal year bears to the total amount of 
Federal Pell Grant funds awarded at all institu-
tions participating under this part for the pre-
ceding fiscal year. 
‘‘(B) An amount equal to 50 percent of the 
amount that bears the same proportion to the 
available appropriated amount for such fiscal 
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258 
year as the total amount of the undergraduate 
student need at the institution for the preceding 
fiscal year bears to the total amount of under-
graduate student need at all institutions partici-
pating under this part for the preceding fiscal 
year. 
‘‘(2) DEFINITIONS.—In this subsection: 
‘‘(A) AVAILABLE APPROPRIATED AMOUNT.— 
The 
term 
‘available 
appropriated 
amount’ 
means— 
‘‘(i) the amount appropriated under 
section 441(b) for a fiscal year, minus 
‘‘(ii) the amounts reserved under sub-
section (a) for such fiscal year. 
‘‘(B) AVERAGE COST OF ATTENDANCE.—The 
term ‘average cost of attendance’ means, with re-
spect to an institution, the average of the attend-
ance costs for a fiscal year for students which 
shall include— 
‘‘(i) tuition and fees, computed on the 
basis of information reported by the institu-
tion to the Secretary, which shall include— 
‘‘(I) total revenue received by the 
institution from undergraduate tuition 
and fees for the second year preceding 
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259 
the year for which it is applying for 
an allocation; and 
‘‘(II) the institution’s enrollment 
for such second preceding year; 
‘‘(ii) standard living expenses equal to 
150 percent of the difference between the in-
come protection allowance for a family of 5 
with 1 in college and the income protection 
allowance for a family of 6 with 1 in college 
for a single independent student; and 
‘‘(iii) books and supplies, in an 
amount not exceeding $800. 
‘‘(C) UNDERGRADUATE
STUDENT
NEED.— 
The term ‘undergraduate student need’ means, 
with respect to an undergraduate student for a 
fiscal year, the lesser of the following: 
‘‘(i) The total of the amount equal to 
(except the amount computed by this clause 
shall not be less than zero)— 
‘‘(I) the average cost of attendance 
for the fiscal year, minus 
‘‘(II) the total amount of each 
such undergraduate student’s expected 
family contribution (computed in ac-
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260 
cordance with part F of this title) for 
the preceding fiscal year. 
‘‘(ii) $12,500. 
‘‘(e) RETURN OF SURPLUS ALLOCATED FUNDS.— 
‘‘(1) AMOUNT RETURNED.—If an institution re-
turns more than 10 percent of its allocation under 
subsection (d), the institution’s allocation for the next 
fiscal year shall be reduced by the amount returned. 
‘‘(2) WAIVER.—The Secretary may waive this 
paragraph for a specific institution if the Secretary 
finds that enforcing this paragraph would be contrary 
to the interest of the program. 
‘‘(f) FILING DEADLINES.—The Secretary shall, from 
time to time, set dates before which institutions must file 
applications for allocations under this part.’’. 
SEC. 443. GRANTS FOR FEDERAL WORK-STUDY PROGRAMS. 
Section 443 (20 U.S.C. 1087–53) is amended— 
(1) in subsection (b)— 
(A) in paragraph (1), in the matter pre-
ceding subparagraph (A), by striking ‘‘part- 
time’’; 
(B) in paragraph (2), by striking ‘‘except 
that—’’ and all that follows through ‘‘an institu-
tion may use a portion’’ and inserting ‘‘except 
that an institution may use a portion’’; 
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(C) in paragraph (3), by inserting ‘‘under-
graduate’’ after ‘‘only’’; 
(D) in paragraph (4), by striking ‘‘300’’ 
and inserting ‘‘500’’; 
(E) in paragraph (5)— 
(i) by striking ‘‘shall not exceed 75 
percent’’ and inserting ‘‘shall not exceed 75 
percent in the first year after the date of the 
enactment of PROSPER Act, 65 percent in 
the first succeeding fiscal year, 60 percent 
in the second succeeding fiscal year, 55 per-
cent in the third succeeding fiscal year, and 
50 percent each succeeding fiscal year’’; 
(ii) by striking subparagraph (A); 
(iii) in subparagraph (B)— 
(I) by striking ‘‘75’’ and inserting 
‘‘50’’; and 
(II) by striking the semicolon and 
inserting ‘‘; and’’; 
(iv) by redesignating subparagraph 
(B) as subparagraph (A); and 
(v) by adding at the end the following: 
‘‘(B) the Federal share may equal 100 per-
cent with respect to funds received under section 
442(a)(1)(A);’’; 
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(F) in paragraph (8)— 
(i) in subparagraph (A)(i), by striking 
‘‘vocational’’ and inserting ‘‘career’’; and 
(ii) in subparagraph (B), by striking 
‘‘community service’’ and inserting ‘‘work- 
based learning’’; 
(G) in paragraph (10), by striking ‘‘; and’’ 
and inserting a semicolon; 
(H) in paragraph (11), by striking the pe-
riod at the end and inserting a semicolon; and 
(I) by adding at the end the following: 
‘‘(12) provide assurances that the institution will 
collect data from students and employers such that the 
employment made available from funds under this 
part will, to the maximum extent practicable, com-
plement and reinforce the educational goals or career 
goals of each student receiving assistance under this 
part; and 
‘‘(13) provide assurances that if the institution 
receives funds under section 442(a)(1)(A), such insti-
tution shall— 
‘‘(A) use such funds to compensate students 
participating in the work-study program; and 
‘‘(B) prioritize the awarding of such funds 
to students— 
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‘‘(i) who demonstrate exceptional need; 
or 
‘‘(ii) who are employed in work-based 
learning opportunities through the work- 
study program.’’; 
(2) in subsection (c)— 
(A) in paragraph (1)— 
(i) by striking ‘‘program of part-time 
employment’’ and inserting the following: 
‘‘program— 
‘‘(A) of employment’’; and 
(ii) by inserting ‘‘or’’ after ‘‘subsection 
(b)(3);’’; and 
(iii) by adding at the end the fol-
lowing: 
‘‘(B) of full-time employment of its coopera-
tive education students in work for a private for- 
profit organization under an arrangement be-
tween the institution and such organization that 
complies with the requirements of subparagraphs 
(A) through (D) of subsection (b)(1) of this sec-
tion and subsection (b)(4) of this section;’’; 
(B) by striking paragraph (2); 
(C) in paragraph (4), by inserting ‘‘and 
complement and reinforce the educational goals 
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or career goals of each student receiving assist-
ance under this part’’ after ‘‘relevant’’; and 
(D) by redesignating paragraphs (3), (4), 
and (5) as paragraphs (2), (3), and (4), respec-
tively; and 
(3) in subsection (d)— 
(A) in paragraph (1)— 
(i) by striking ‘‘In any academic year 
to which subsection (b)(2)(A) applies, an 
institution shall ensure that’’ and inserting 
‘‘An institution may use the’’ ; and 
(ii) by striking ‘‘are used’’; and 
(B) in paragraph (3), by striking ‘‘may ex-
ceed 75 percent’’ and inserting ‘‘shall not exceed 
50 percent’’. 
SEC. 444. FLEXIBLE USE OF FUNDS. 
Section 445(a) (20 U.S.C. 1087–55(a)) is amended— 
(1) in paragraph (2), by striking ‘‘in the same 
State’’ and inserting ‘‘described under section 
442(a)(1)(B)’’; and 
(2) by adding at the end the following new para-
graph: 
‘‘(3) In addition to the carry-over sums authorized 
under paragraph (1) of this section, an institution may 
permit a student who completed the previous award period 
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to continue to earn unearned portions of the student’s work- 
study award from that previous year if— 
‘‘(A) any reduction in the student’s need upon 
which the award was based is accounted for in the re-
maining portion; and 
‘‘(B) the student is currently employed in a 
work-based learning position.’’. 
SEC. 445. JOB LOCATION AND DEVELOPMENT PROGRAMS. 
Section 446 (20 U.S.C. 1087–56) is amended— 
(1) in subsection (a)— 
(A) in paragraph (1)— 
(i) by striking ‘‘10 percent or $75,000’’ 
and inserting ‘‘20 percent or $150,000’’; 
and 
(ii) by striking ‘‘, including commu-
nity service jobs,’’; 
(B) in paragraph (2), by striking ‘‘voca-
tional’’ and inserting ‘‘career’’; and 
(C) by adding at the end the following: 
‘‘(3) An institution may use a portion of the funds 
expended under this section to identify and expand oppor-
tunities for apprenticeships for students and to assist em-
ployers in developing jobs that are part of apprenticeship 
programs.’’; and 
(2) in subsection (b)— 
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(A) by striking paragraph (2); 
(B) 
by 
redesignating 
paragraphs 
(3) 
through (6) as paragraphs (4) through (7), re-
spectively; and 
(C) by inserting before paragraph (4), as so 
redesignated, the following: 
‘‘(2) provide satisfactory assurance that the in-
stitution will prioritize placing students with the low-
est expected family contribution and Federal work- 
study recipients in jobs located and developed under 
this section; 
‘‘(3) provide a satisfactory assurance that the in-
stitution will locate and develop work-based learning 
opportunities through the job location development 
programs;’’; and 
(D) in paragraph (7), as so redesignated, by 
striking the period and inserting ‘‘, including— 
‘‘(A) the number of students employed in 
work-based learning opportunities through such 
program; 
‘‘(B) the number of students demonstrating 
exceptional need and employed in a work-study 
program through such program; and 
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‘‘(C) the number of students demonstrating 
exceptional need and employed in work-based 
learning opportunities through such program.’’. 
SEC. 446. COMMUNITY SERVICE. 
Section 447 (20 U.S.C. 1087–57) is repealed. 
SEC. 447. WORK COLLEGES. 
Section 448 (20 U.S.C. 1087–58) is amended— 
(1) in subsection (b)— 
(A) in paragraph (1)— 
(i) by striking ‘‘and part E’’; and 
(ii) by striking ‘‘appropriated’’ and 
inserting ‘‘allocated’’; 
(B) in paragraph (2), by striking ‘‘appro-
priated pursuant to’’ and inserting ‘‘allocated 
under’’; and 
(2) in subsection (c), by striking ‘‘authorized by’’ 
and inserting ‘‘allocated under’’; 
(3) in subsection (e)(1)— 
(A) in subparagraph (C), by striking ‘‘; 
and’’ and inserting a semicolon; and 
(B) by adding at the end the following: 
‘‘(E) has administered Federal work-study 
for at least 2 years; and’’; and 
(4) by amending subsection (f) to read as follows: 
‘‘(f) ALLOCATION OF RESERVED FUNDS.— 
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‘‘(1) IN
GENERAL.—Subject to paragraph (2), 
from the amount reserved under section 442(a)(2) for 
a fiscal year to carry out this section, the Secretary 
shall allocate to each work college that submits an ap-
plication under subsection (c) an amount equal to the 
amount that bears the same proportion to the amount 
appropriated for such fiscal year as the number of 
students eligible for employment under a work-study 
program under this part who are enrolled at the work 
college bears to the total number of students eligible 
for employment under a work-study program under 
this part who are enrolled at all work colleges. 
‘‘(2) REALLOTMENT OF UNMATCHED FUNDS.—If 
a work college is unable to match funds received 
under paragraph (1) in accordance with subsection 
(d), any unmatched funds shall be returned to the 
Secretary and the Secretary shall reallot such funds 
on the same basis as funds are allocated under para-
graph (1).’’. 
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PART D—FEDERAL DIRECT STUDENT LOAN 
PROGRAM 
SEC. 451. TERMINATION OF FEDERAL DIRECT LOAN PRO-
GRAM UNDER PART D AND OTHER CON-
FORMING AMENDMENTS. 
(a) APPROPRIATIONS.—Section 451 (20 U.S.C. 1087a) 
is amended— 
(1) in subsection (a), by adding at the end the 
following: ‘‘No sums may be expended after September 
30, 2024, with respect to loans under this part for 
which the first disbursement is after such date.’’; and 
(2) by adding at the end, the following: 
‘‘(c) TERMINATION
OF AUTHORITY
TO MAKE NEW 
LOANS.—Notwithstanding subsection (a) or any other pro-
vision of law— 
‘‘(1) no new loans may be made under this part 
after September 30, 2024; and 
‘‘(2) no funds are authorized to be appropriated, 
or may be expended, under this Act, or any other Act 
to make loans under this part for which the first dis-
bursement is after September 30, 2024, 
except as expressly authorized by an Act of Congress enacted 
after the date of enactment of the PROSPER Act. 
‘‘(d) STUDENT ELIGIBILITY BEGINNING WITH AWARD 
YEAR 2019.— 
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‘‘(1) NEW BORROWERS.—No loan may be made 
under this part to a new borrower for which the first 
disbursement is after June 30, 2019. 
‘‘(2) BORROWERS
WITH
OUTSTANDING
BAL-
ANCES.—Subject to paragraph (3), with respect to a 
borrower who, as of July 1, 2019, has an outstanding 
balance of principal or interest owing on a loan made 
under this part, such borrower may— 
‘‘(A) in the case of such a loan made to the 
borrower for enrollment in a program of under-
graduate education, borrow loans made under 
this part for any program of undergraduate edu-
cation through the close of September 30, 2024; 
‘‘(B) in the case of such a loan made to the 
borrower for enrollment in a program of grad-
uate or professional education, borrow loans 
made under this part for any program of grad-
uate or professional education through the close 
of September 30, 2024; and 
‘‘(C) in the case of such a loan made to the 
borrower on behalf of a dependent student for the 
student’s enrollment in a program of under-
graduate education, borrow loans made under 
this part on behalf of such student through the 
close of September 30, 2024. 
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‘‘(3) LOSS
OF
ELIGIBILITY.—A borrower de-
scribed in paragraph (2) who borrows a loan made 
under part E for which the first disbursement is 
made on or after July 1, 2019, shall lose the bor-
rower’s eligibility to borrow loans made under this 
part in accordance with paragraph (2).’’. 
(b) PERKINS LOAN CONFORMING AMENDMENT.—Sec-
tion 453(c)(2)(A) (20 U.S.C. 1087c(c)(2)(A)) is amended by 
inserting ‘‘, as in effect on the day before the date of enact-
ment of the PROSPER Act and pursuant to section 
461(a),’’ after ‘‘part E’’; 
(c) APPLICABLE INTEREST RATES AND OTHER TERMS 
AND CONDITIONS.—Section 455 (20 U.S.C. 1087e) is 
amended— 
(1) in subsection (a)— 
(A) in paragraph (1), by inserting ‘‘, and 
first disbursed before October 1, 2024,’’ after 
‘‘under this part’’; 
(B) in paragraph (2), by inserting ‘‘, and 
first disbursed before October 1, 2024,’’ after 
‘‘under this part’’; 
(2) in subsection (b)(8)— 
(A) in the paragraph heading, by inserting 
‘‘AND BEFORE OCTOBER 1, 2024’’ after ‘‘2013’’; 
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(B) in subparagraph (A), by inserting ‘‘and 
before October 1, 2024,’’ after ‘‘July 1, 2013,’’; 
(C) in subparagraph (B), by inserting ‘‘and 
before October 1, 2024,’’ after ‘‘July 1, 2013,’’; 
(D) in subparagraph (C), by inserting ‘‘and 
before October 1, 2024,’’ after ‘‘July 1, 2013,’’; 
and 
(E) in subparagraph (D), by inserting ‘‘and 
before October 1, 2024,’’ after ‘‘July 1, 2013,’’; 
(3) in subsection (c)(2)(E), by inserting ‘‘, and 
before October 1, 2024’’ after ‘‘July 1, 2010’’; 
(4) in subsection (e)(7), in the matter preceding 
subparagraph (A), by inserting ‘‘, as in effect on the 
day before the date of enactment of the PROSPER 
Act and pursuant to section 461(a)’’ after ‘‘part E’’; 
and 
(5) in subsection (g)— 
(A) by inserting ‘‘, and first disbursed be-
fore October 1, 2024,’’ after ‘‘under this part’’ the 
first place it appears; and 
(B) by adding at the end the following: 
‘‘The authority to make consolidation loans 
under this subsection expires at the close of Sep-
tember 30, 2024. No loan may be made under 
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this subsection for which the disbursement is on 
or after October 1, 2024.’’; and 
(6) in subsection (o)— 
(A) in paragraph (1), by inserting ‘‘, and 
before October 1, 2024’’ after ‘‘October 1, 2008’’; 
and 
(B) in paragraph (2)— 
(i) by inserting ‘‘and before October 1, 
2024,’’ after ‘‘October 1, 2008,’’; and 
(ii) by inserting ‘‘, and before October 
1, 2024’’ before the period at the end. 
SEC. 452. BORROWER DEFENSES. 
Section 455(h) (20 U.S.C. 1087e(h)) is amended to 
read as follows: 
‘‘(h) BORROWER DEFENSES.— 
‘‘(1) IN GENERAL.—In any proceeding to collect 
on a loan made under this part on or after July 1, 
2018 to a borrower, the Secretary shall abide by the 
following: 
‘‘(A) In no event may the borrower recover 
any amount previously collected or be freed of 
amounts owed to the Secretary without submit-
ting an individually-filed application for ap-
proval. 
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‘‘(B) In no event may the borrower recover 
amounts previously collected by the Secretary, in 
any action arising from or relating to a loan 
made under this part, in an amount in excess of 
the amount that has been paid by the borrower 
on such loan. 
‘‘(C) In no event may the borrower submit 
an application to recover amounts previously 
collected by the Secretary later than 3 years after 
the misconduct or breach of contract on behalf of 
the institution takes place that gives rise to the 
borrower to assert a defense to repayment of the 
loan. 
‘‘(D) In no event may anyone other than an 
administrative law judge or its equivalent pre-
side over hearings of any kind related to appli-
cations submitted under this subsection. 
‘‘(E) In no event may the Secretary ap-
prove or disapprove the borrower’s application 
under this subsection without allowing for the 
equal consideration of evidence and arguments 
presented by a representative on behalf of the 
student or students and a representative on be-
half of the institution, if either such party makes 
a request. 
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‘‘(F) In no event may the Secretary with-
hold from an institution any materials, facts, or 
evidence used when processing an application 
submitted by the borrower. 
‘‘(G) In no event may the borrower of a 
loan made, insured or guaranteed under this 
title (other than a loan made under this part or 
a Federal ONE Loan) submit an application 
under this subsection without consolidating the 
loans of the borrower into a Federal ONE Con-
solidation Loan. 
‘‘(2) BORROWER APPLICATION REQUIREMENTS.— 
‘‘(A) IN
GENERAL.—An application sub-
mitted by a borrower under this subsection to the 
Secretary shall— 
‘‘(i) certify the borrower’s receipt of 
loan proceeds, in whole or in part, to attend 
the named institution of higher education; 
‘‘(ii) provide evidence described in sub-
paragraph (B) that supports a borrower de-
fense to repayment of the loan; and 
‘‘(iii) indicate whether the borrower 
has made a claim with respect to the infor-
mation underlying the borrower defense 
with any third party and, if so, the amount 
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of any payment received by the borrower or 
credited to the borrower’s loan obligation. 
‘‘(B) EVIDENCE.—The borrower has a bor-
rower defense if— 
‘‘(i) the borrower, whether as an indi-
vidual or as a member of a class, or a gov-
ernmental agency, has obtained against the 
institution of higher education a nondefault, 
favorable contested judgment based on State 
or Federal law in a court or administrative 
tribunal of competent jurisdiction; 
‘‘(ii) the institution of higher education 
for which the borrower received the loan 
made under this part failed to perform its 
obligations under the terms of a contract 
with the student; or 
‘‘(iii) the institution of higher edu-
cation described in clause (ii) or any of its 
representatives engaged directly in mar-
keting, recruitment or admissions activities, 
or any other institution of higher education, 
organization, or person with whom such in-
stitution has an agreement to provide edu-
cational programs, or to provide marketing, 
advertising, recruiting, or admissions serv-
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ices, made a substantial misrepresentation 
within 
the 
meaning 
of 
section 
487(c)(3)(B)(i)(II) that the borrower rea-
sonably relied on when the borrower decided 
to attend, or to continue attending, such in-
stitution. 
‘‘(3) 
SECRETARIAL
NOTIFICATION
REQUIRE-
MENTS.— 
‘‘(A) RECEIPT OF APPLICATION.—Upon re-
ceipt of a borrower’s application, the Sec-
retary— 
‘‘(i) if the borrower is not in default on 
the loan for which a borrower defense has 
been asserted, shall grant a forbearance and 
notify the borrower of the option to decline 
the forbearance and to continue making 
payments on the loan; 
‘‘(ii) if the borrower is in default on 
the loan for which a borrower defense has 
been asserted— 
‘‘(I) shall suspend collection activ-
ity on the loan until the Secretary 
issues a decision on the borrower’s 
claim; 
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‘‘(II) shall notify the borrower of 
the suspension of collection activity 
and explain that collection activity 
will resume if the Secretary determines 
that the borrower does not qualify for 
a full discharge; and 
‘‘(III) shall notify the borrower of 
the option to continue making pay-
ments under a rehabilitation agree-
ment or other repayment agreement on 
the defaulted loan; and 
‘‘(iii) shall to the extent possible, notify 
the institutions against which the applica-
tion is filed, which notification shall in-
clude— 
‘‘(I) the reasons that the applica-
tion has been filed; and 
‘‘(II) the amount of relief re-
quested. 
‘‘(B) APPROVED
APPLICATION.—If a bor-
rower’s application is approved in full or in 
part, the Secretary shall— 
‘‘(i) notify the borrower and the insti-
tution in writing of that determination and 
of the relief provided; and 
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‘‘(ii) inform the institution of the op-
portunity to request a one-time reconsider-
ation of the claim in the application if new 
evidence that was not previously provided 
can be identified. 
‘‘(C) APPLICATION
NOT
APPROVED.—If a 
borrower’s application is not approved in full or 
in part, the Secretary— 
‘‘(i) shall notify the borrower and the 
institution of the reasons for the denial, the 
evidence that was relied upon, any portion 
of the loan that is due and payable to the 
Secretary, whether the Secretary will reim-
burse any amounts previously collected, and 
inform the borrower that the loan will re-
turn to its status prior to the borrower’s 
submission of the application; and 
‘‘(ii) shall inform the borrower of the 
opportunity to request a one-time reconsid-
eration of the claim in the application if 
new evidence that was not previously pro-
vided can be identified. 
‘‘(D) 
CONSOLIDATION.—During 
a 
pro-
ceeding for an individual borrower, the Secretary 
may consolidate individually-filed applications 
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280 
that have common facts and claims and resolve 
the borrowers’ borrower defense claims for faster 
processing. 
‘‘(E) NEW EVIDENCE DEFINED.—For pur-
poses of this paragraph, the term ‘new evidence’ 
means relevant evidence that the borrower or the 
institution did not previously provide and that 
was not identified in the final decision as evi-
dence that was relied upon for the final decision. 
If accepted for reconsideration by the Secretary, 
the Secretary shall follow the procedure under 
this paragraph. 
‘‘(F) NOTIFICATION.—After a borrower sub-
mits an application, the Secretary shall include 
in the notification to the borrower— 
‘‘(i) the actions, including deadlines 
and document requests, that will be taken 
by the Secretary when processing an appli-
cation by the borrower; and 
‘‘(ii) that the final action by the Sec-
retary shall be available for review under 
subchapter II of chapter 5, and chapter 7, 
of title 5, United States Code (commonly 
known as the ‘Administrative Procedure 
Act’). 
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‘‘(G) TIMELY APPROVAL PROCESS.—During 
a proceeding for an individual borrower, the Sec-
retary shall process a submitted application and 
notify the borrower of the final determination in 
a manner that is timely and efficient. 
‘‘(H) REPORT.—Not later than two years 
after the date of enactment of the PROSPER 
Act, the Secretary shall submit to the author-
izing committees a report that includes— 
‘‘(i) the established policies and proce-
dures for processing applications; 
‘‘(ii) the established policies and proce-
dures for approving an application; 
‘‘(iii) the established policies and pro-
cedures for denying an application; 
‘‘(iv) the method used to calculate the 
amount and type of relief to be awarded to 
borrowers who submit an application; and 
‘‘(v) the established timeframes for the 
policies and procedures identified in clauses 
(i) through (iii). 
‘‘(4) CALCULATION OF RELIEF.—The Secretary 
shall determine the appropriate method for calcu-
lating the amount of relief to be awarded to a bor-
rower as a result of a proceeding described in this 
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subsection based on the materials, facts, and evidence 
presented during the proceeding. 
‘‘(5) FURTHER RELIEF.—The Secretary may af-
ford the borrower such further relief as the Secretary 
determines is appropriate under the circumstances, 
but which shall not exceed the following: 
‘‘(A) Reimbursing the borrower for amounts 
paid toward the loan voluntarily or through en-
forced collection. 
‘‘(B) Restoring eligibility for assistance 
under this title after determining that the bor-
rower is not in default on the loan. 
‘‘(C) Updating reports to consumer report-
ing agencies to which the Secretary previously 
made adverse credit reports with regard to a 
loan made under this part after July 1, 2018. 
‘‘(6) RECOVERY.— 
‘‘(A) IN GENERAL.—The Secretary may ini-
tiate an appropriate proceeding to require the 
institution of higher education whose act or 
omission resulted in the borrower’s successful de-
fense against repayment of a loan made under 
this part to pay to the Secretary the amount of 
the loan to which the defense applies not later 
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283 
than 3 years from the end of the last award year 
in which the student attended the institution. 
‘‘(B) NOTICE.—The Secretary may initiate 
a proceeding to collect at any time if the institu-
tion received notice of the claim before the end of 
the later of the periods described in subpara-
graph (A). For purposes of this subparagraph, 
notice includes receipt of— 
‘‘(i) actual notice from the borrower, 
from a representative of the borrower, or 
from the Department; 
‘‘(ii) a class action complaint asserting 
relief for a class that may include the bor-
rower; or 
‘‘(iii) written notice, including a civil 
investigative demand or other written de-
mand for information, from a Federal or 
State agency that has power to initiate an 
investigation into conduct of the institution 
of higher education relating to specific pro-
grams, periods, or practices that may have 
affected the borrower.’’. 
SEC. 453. PLAIN LANGUAGE DISCLOSURE FORM. 
(a) PLAIN LANGUAGE DISCLOSURE FORM.—Section 
455(p) (20 U.S.C. 1087e(p)) is amended to read as follows: 
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‘‘(p) DISCLOSURES.— 
‘‘(1) IN GENERAL.—The Secretary shall, with re-
spect to loans under this part and in accordance with 
such regulations as the Secretary shall prescribe, com-
ply with each of the requirements under section 433 
that apply to a lender with respect to a loan under 
part B. 
‘‘(2) PLAIN LANGUAGE DISCLOSURE FORM.— 
‘‘(A) DEVELOPMENT
AND
ISSUANCE
OF 
FORM.—Not later than 24 months after the date 
of the enactment of this paragraph, the Secretary 
shall, based on consumer testing, develop and 
issue a model form to be known as the ‘Plain 
Language Disclosure Form’ that shall be used by 
the Secretary to comply with paragraph (1). 
‘‘(B) FORMAT.—The Secretary shall ensure 
that the Plain Language Disclosure Form— 
‘‘(i) enables borrowers to easily iden-
tify the information required to be disclosed 
under section 433(a) with respect to a loan, 
with emphasis on the loan terms determined 
by the Secretary, based on consumer testing, 
to be critical to understanding the total 
costs of the loan and the estimated monthly 
repayment; 
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‘‘(ii) has a clear format and design, in-
cluding easily readable font; and 
‘‘(iii) is as succinct as practicable. 
‘‘(C) CONSULTATION.—In developing Plain 
Language Disclosure Form, the Secretary shall, 
as appropriate, consult with— 
‘‘(i) the Federal Reserve Board; 
‘‘(ii) borrowers of loans under this 
part; and 
‘‘(iii) other organizations involved in 
the provision of financial assistance to stu-
dents, as identified by the Secretary. 
‘‘(3) ELECTRONIC SYSTEM FOR COMPLIANCE.—In 
carrying out paragraph (2), Secretary shall develop 
and implement an electronic system to generate a 
Plain Language Disclosure Form for each borrower 
that includes personalized information about the bor-
rower and the borrower’s loans. 
‘‘(4) LIMIT ON LIABILITY.—Nothing in this sub-
section shall be construed to create a private right of 
action against the Secretary with respect to the form 
or electronic system developed under this paragraph. 
‘‘(5) BORROWER SIGNATURE REQUIRED.—Begin-
ning after the issuance of the Plain Language Disclo-
sure Form by the Secretary under paragraph (2), a 
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loan may not be issued to a borrower under this part 
unless the borrower acknowledges to the Secretary, in 
writing (which may include an electronic signature), 
that the borrower has read the Plain Language Dis-
closure Form for the loan concerned. 
‘‘(6) CONSUMER TESTING DEFINED.—In this sub-
section, the term ‘consumer testing’ means the solici-
tation of feedback from individuals, including bor-
rowers and prospective borrowers of loans under this 
part (as determined by the Secretary), about the use-
fulness of different methods of disclosing material 
terms of loans on the Plain Language Disclosure 
Form to maximize borrowers’ understanding of the 
terms and conditions of such loans.’’. 
(b) REPORT TO CONGRESS.—Not later than 3 years 
after the date of the enactment of this Act, the Secretary 
of Education shall submit to Congress a report that includes 
a description of the methods and procedures used to develop 
the Plain Language Disclosure Form required under section 
455(p)(2) of the Higher Education Act of 1965 (as added 
by subsection (a) of this section). 
SEC. 454. ADMINISTRATIVE EXPENSES. 
Section 458(a) (20 U.S.C. 1087h)— 
(1) in paragraph (3)— 
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(A) by striking ‘‘2007’’ each place it ap-
pears, including in any headings, and inserting 
‘‘2019’’; 
(B) by striking ‘‘2014’’ each place it ap-
pears, including in any headings, and inserting 
‘‘2024’’; and 
(C) by striking ‘‘part and part B, including 
the costs of the direct student loan programs 
under this part’’ and inserting ‘‘title’’; 
(2) in paragraph (4), by striking ‘‘2017’’ and in-
serting ‘‘2024’’; 
(3) in paragraph (6)— 
(A) in subparagraph (B), by striking 
‘‘2010’’ and inserting ‘‘2019’’; and 
(B) in subparagraph (C), by striking 
‘‘training’’ and inserting ‘‘education’’; 
(4) by striking paragraph (7); and 
(5) by redesignating paragraph (8) as para-
graph (7). 
SEC. 455. LOAN CANCELLATION FOR TEACHERS. 
Section 460(b)(1)(A) (20 U.S.C. 1087j(b)(1)(A)) is 
amended by striking ‘‘that qualifies under section 
465(a)(2)(A) for loan cancellation for Perkins loan recipi-
ents who teach in such schools or locations’’ and inserting 
‘‘described in section 420N(b)(1)(B)’’. 
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PART E—FEDERAL ONE LOANS 
SEC. 461. WIND-DOWN OF FEDERAL PERKINS LOAN PRO-
GRAM. 
(a) IN GENERAL.—Except as otherwise provided in 
this section and notwithstanding section 462, the provisions 
of part E of title IV of the Higher Education Act of 1965 
(20 U.S.C. 1087aa et seq.), as in effect on the day before 
the date of enactment of this Act, are deemed to be incor-
porated in this subsection as though set forth fully in this 
subsection, and shall have the same force and effect as on 
such day. 
(b) CLOSE-OUT AUDITS.— 
(1) IN GENERAL.—In the case of an institution 
of higher education that desires to have a final audit 
of its participation under the program under part E 
of title IV of the Higher Education Act of 1965 (20 
U.S.C. 1087aa et seq.), as in effect pursuant to sub-
section (a), at the same time as its annual financial 
and compliance audit under section 487(c) of such 
Act (20 U.S.C. 1094(c)), such institution shall submit 
to the Secretary a request, in writing, for such an ar-
rangement not later than 60 days after the institution 
terminates its participation under such program. 
(2) TERMINATION OF PARTICIPATION.—For pur-
poses of this subsection, an institution shall be consid-
ered to have terminated its participation under the 
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program described in paragraph (1), if the institu-
tion— 
(A)(i) has made a determination not to 
service and collect student loans made available 
from funds under part E of title IV of the High-
er Education Act of 1965 (20 U.S.C. 1087aa et 
seq.), as in effect pursuant to subsection (a); or 
(ii) has completed the servicing and collec-
tion of such student loans; and 
(B) has completed the asset distribution re-
quired under section 466(b) of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1087ff(b)), as in 
effect pursuant to subsection (a). 
(c) COLLECTION OF INTEREST ON CERTAIN STUDENT 
LOANS.—In the case of an institution of higher education 
that, on or after October 1, 2006, loaned an amount to its 
student loan fund established under part E of title IV of 
the Higher Education Act of 1965 (20 U.S.C. 1087aa et 
seq.), as in effect pursuant to subsection (a), for the purpose 
of making student loans from such fund, and that, before 
the date of enactment of this Act, has repaid to itself the 
amount loaned to such student loan fund, the institution 
shall collect any interest earned on such student loans. 
(d) ASSIGNMENT OF LOANS TO SECRETARY.—Notwith-
standing the requirements of section 463(a)(5) of the Higher 
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Education Act of 1965 (20 U.S.C. 1087cc(a)(5)), as in effect 
pursuant to subsection (a), if an institution of higher edu-
cation determines not to service and collect student loans 
made available from funds under part E of such Act (20 
U.S.C. 1087aa et seq.), as so in effect— 
(1) the institution shall assign, during the re-
payment period, any notes or evidence of obligations 
of student loans made from such funds to the Sec-
retary; and 
(2) the Secretary shall deposit any sums collected 
on such notes or obligations (less an amount not to 
exceed 30 percent of any such sums collected to cover 
that Secretary’s collection costs) into the Treasury of 
the United States. 
(e) CLOSED SCHOOL DISCHARGE.—The amendments 
made by section 428 to section 437(c) of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1087), relating to closed 
school discharge, shall apply with respect to any loans dis-
charged on or after the date of enactment of this Act under 
section 464(g) of such Act (20 U.S.C. 10877dd(g)), as in 
effect pursuant to subsection (a)). 
SEC. 462. FEDERAL ONE LOAN PROGRAM. 
Part E of title IV (20 U.S.C. 1087aa et seq.) is amend-
ed to read as follows: 
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291 
‘‘PART E—FEDERAL ONE LOAN PROGRAM 
‘‘SEC. 461. PROGRAM AUTHORITY. 
‘‘(a) IN GENERAL.—There are hereby made available, 
in accordance with the provisions of this part, such sums 
as may be necessary to make loans to all eligible students 
(and the eligible parents of such students) in attendance 
at participating institutions of higher education selected by 
the Secretary to enable such students to pursue their courses 
of study at such institutions during the period beginning 
July 1, 2019. Loans made under this part shall be made 
by participating institutions that have agreements with the 
Secretary to originate loans. 
‘‘(b) DESIGNATION.—The program established under 
this part shall be referred to as the ‘Federal ONE Loan Pro-
gram’. 
‘‘(c) ONE LOANS.—Except as otherwise specified in 
this part, loans made to borrowers under this part shall 
be known as ‘Federal ONE Loans’. 
‘‘SEC. 462. FUNDS FOR THE ORIGINATION OF ONE LOANS. 
‘‘(a) IN GENERAL.—The Secretary shall provide, on 
the basis of eligibility of students at each participating in-
stitution, and parents of such students, for such loans, funds 
for student and Parent Loans under this part directly to 
an institution of higher education that has an agreement 
with the Secretary under section 464(a) to participate in 
the Federal ONE Loan Program under this part and that 
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also has an agreement with the Secretary under section 
464(b) to originate loans under this part. 
‘‘(b) PARALLEL TERMS.—Subsections (b), (c), and (d) 
of section 452 shall apply to the loan program under this 
part in the same manner that such subsections apply to 
the loan program under part D. 
‘‘SEC. 463. SELECTION OF INSTITUTIONS FOR PARTICIPA-
TION AND ORIGINATION. 
‘‘(a) GENERAL AUTHORITY.—The Secretary shall enter 
into agreements pursuant to section 464(a) with institu-
tions of higher education to participate in the Federal ONE 
Loan Program under this part, and agreements pursuant 
to section 464(b) with institutions of higher education, to 
originate loans in such program, for academic years begin-
ning on or after July 1, 2019. Such agreements for the aca-
demic year 2019–2020 shall, to the extent feasible, be en-
tered into not later than January 1, 2019. 
‘‘(b) SELECTION CRITERIA
AND PROCEDURE.—The 
application and selection procedure for an institution of 
higher education desiring to participate in the loan pro-
gram under this part shall be the application and selection 
procedure described in section 453(b) for an institution of 
higher education desiring to participate in the loan pro-
gram under part D. 
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293 
‘‘(c) ELIGIBLE INSTITUTIONS.—The Secretary may 
not select an institution of higher education for participa-
tion under this part unless such institution is an eligible 
institution under section 487(a). 
‘‘SEC. 464. AGREEMENTS WITH INSTITUTIONS. 
‘‘(a) PARTICIPATION AGREEMENTS.—An agreement 
with any institution of higher education for participation 
in the Federal ONE Loan Program under this part shall— 
‘‘(1) provide for the establishment and mainte-
nance of a direct student loan program at the institu-
tion under which the institution will— 
‘‘(A) identify eligible students who seek stu-
dent financial assistance at such institution in 
accordance with section 484; 
‘‘(B) provide a statement that certifies the 
eligibility of any student to receive a loan under 
this part that is not in excess of the annual or 
aggregate limit applicable to such loan, except 
that the institution may, in exceptional cir-
cumstances identified by the Secretary pursuant 
to section 454(a)(1)(C), refuse to certify a state-
ment that permits a student to receive a loan 
under this part, if the reason for such action is 
documented and provided in written form to 
such student; 
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‘‘(C) set forth a schedule for disbursement of 
the proceeds of the loan in installments, con-
sistent with the requirements of section 465(a); 
and 
‘‘(D) provide timely and accurate informa-
tion, concerning the status of student borrowers 
(and students on whose behalf parents borrow 
under this part) while such students are in at-
tendance at the institution and concerning any 
new information of which the institution becomes 
aware for such students (or their parents) after 
such borrowers leave the institution, to the Sec-
retary for the servicing and collecting of loans 
made under this part; 
‘‘(2) provide assurances that the institution will 
comply with requirements established by the Secretary 
relating to student loan information with respect to 
loans made under this part; 
‘‘(3) provide that the institution accepts respon-
sibility and financial liability stemming from its fail-
ure to perform its functions pursuant to the agree-
ment; 
‘‘(4) provide for the implementation of a quality 
assurance system, as established by the Secretary and 
developed in consultation with institutions of higher 
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295 
education, to ensure that the institution is complying 
with program requirements and meeting program ob-
jectives; and 
‘‘(5) provide that the institution will not charge 
any fees of any kind, however described, to student or 
parent borrowers for origination activities or the pro-
vision of any information necessary for a student or 
parent to receive a loan under this part, or any bene-
fits associated with such loan. 
‘‘(b) ORIGINATION.—An agreement with any institu-
tion of higher education for the origination of loans under 
this part shall— 
‘‘(1) supplement the agreement entered into in 
accordance with subsection (a); 
‘‘(2) include provisions established by the Sec-
retary that are similar to the participation agreement 
provisions described in paragraphs (2), (3), (4), and 
(5) of subsection (a), as modified to relate to the 
origination of loans by the institution; 
‘‘(3) provide that the institution will originate 
loans to eligible students and parents in accordance 
with this part; and 
‘‘(4) provide that the note or evidence of obliga-
tion on the loan shall be the property of the Secretary. 
‘‘(c) WITHDRAWAL PROCEDURES.— 
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‘‘(1) IN GENERAL.—An institution of higher edu-
cation participating in the Federal ONE Loan Pro-
gram under this part may withdraw from the pro-
gram by providing written notice to the Secretary of 
the intent to withdraw not less than 60 days before 
the intended date of withdrawal. 
‘‘(2) DATE OF WITHDRAWAL.—Except in cases in 
which the Secretary and an institution of higher edu-
cation agree to an earlier date, the date of withdrawal 
from the Federal ONE Loan Program under this part 
of an institution of higher education shall be the later 
of— 
‘‘(A) 60 days after the institution submits 
the notice required under paragraph (1); or 
‘‘(B) a date designated by the institution. 
‘‘SEC. 465. DISBURSEMENT OF STUDENT LOANS, LOAN LIM-
ITS, INTEREST RATES, AND LOAN FEES. 
‘‘(a) REQUIREMENTS FOR DISBURSEMENT OF STU-
DENT LOANS.— 
‘‘(1) MULTIPLE DISBURSEMENT REQUIRED.— 
‘‘(A) 
REQUIRED
DISBURSEMENTS.—The 
proceeds of any loan made under this part that 
is made for any period of enrollment shall be 
disbursed as follows: 
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‘‘(i) The disbursement of the first in-
stallment of proceeds shall, with respect to 
any student other than a student described 
in subparagraph (B)(i), be made not more 
than 30 days prior to the beginning of the 
period of enrollment, and not later than 30 
days after the beginning of such period of 
enrollment. 
‘‘(ii) The disbursement of an install-
ment of proceeds shall be made in substan-
tially equal monthly or weekly installments 
over the period of enrollment for which the 
loan was made, except that installments 
may be unequal as necessary to permit the 
institution to adjust for unequal costs 
(which may include upfront costs such as 
tuition and fees) incurred or estimated fi-
nancial assistance received by the student, 
or based on the academic progress of the 
student. 
‘‘(B) DISBURSEMENT
OF
CREDIT
BAL-
ANCES.— 
‘‘(i) TYPE
OF
DISBURSEMENT.—The 
credit balances of any loan made under this 
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298 
part that is made for any period of enroll-
ment shall be disbursed by— 
‘‘(I) an electronic transfer of 
funds to the borrower’s financial ac-
count; 
‘‘(II) a check for the amount pay-
able to, and requiring the endorsement 
of, the borrower; 
‘‘(III) an access device in accord-
ance with clause (ii); or 
‘‘(IV) a cash payment for which 
the institution obtains a receipt signed 
by the borrower. 
‘‘(ii) USAGE OF ACCESS DEVICE.—An 
institution may enter into an agreement 
with a third-party servicer for the delivery 
of funds awarded under this part in which 
the third-party servicer provides the bor-
rower with an unvalidated access device for 
accessing credit balances of any loan if— 
‘‘(I) the agreement provides that 
the access device must bear a promi-
nent disclosure informing the borrower 
that the borrower is not required to use 
such access device and open such an 
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account in order to access the student’s 
funds under this part; 
‘‘(II) the agreement provides that 
the consent of the borrower is obtained 
before the access device is validated to 
enable the student to access the ac-
count; 
‘‘(III) the agreement provides for 
the protection of the borrower against 
fraud; and 
‘‘(IV) the institution documents 
that it has conducted a reasonable due 
diligence review before entering into 
the agreement, and will conduct such a 
review at least every two years to en-
sure that— 
‘‘(aa) the fees applicable to 
such account are, considered as a 
whole, below prevailing market 
rates; and 
‘‘(bb) the terms and condi-
tions of such account are other-
wise consistent with prevailing 
market terms and conditions. 
‘‘(C) FIRST YEAR STUDENTS.— 
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‘‘(i) IN
GENERAL.—The first install-
ment of the proceeds of any loan made 
under this part that is made to a student 
borrower who is entering the first year of a 
program of undergraduate education, and 
who has not previously obtained a loan 
under this part, shall not (regardless of the 
amount of such loan or the duration of the 
period of enrollment) be presented by the in-
stitution of higher education to the student 
for endorsement until 30 days after the bor-
rower begins a course of study, but may be 
delivered to the eligible institution prior to 
the end of that 30-day period. 
‘‘(ii) EXEMPTION.—An institution of 
higher education in which each educational 
program has a loan repayment rate (as de-
termined under section 481B(c)) for the 
most recent fiscal year for which data are 
available that is greater than 60 percent 
shall be exempt from the requirements of 
clause (i). 
‘‘(2) WITHDRAWING OF SUCCEEDING DISBURSE-
MENTS.— 
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‘‘(A) WITHDRAWING
STUDENTS.—In the 
case in which the Secretary is informed by the 
borrower or the institution that the borrower has 
ceased to be enrolled before the disbursement of 
the second or any succeeding installment, the 
Secretary shall withhold such disbursement. Any 
disbursement which is so withheld shall be cred-
ited to the borrower’s loan and treated as a pre-
payment on the principal of the loan. 
‘‘(B) 
STUDENTS
RECEIVING
OVER- 
AWARDS.—If the sum of a disbursement for any 
borrower and the other financial aid obtained by 
borrower exceeds the amount of assistance for 
which the borrower is eligible under this title, the 
institution the borrower, or dependent student, 
in the case of a parent borrower, is attending 
shall withhold and return to the Secretary the 
portion (or all) of such installment that exceeds 
such eligible amount, except that overawards per-
mitted pursuant to section 443(b)(4) shall not be 
construed to be overawards for purposes of this 
subparagraph. Any portion (or all) of a dis-
bursement installment which is so returned shall 
be credited to the borrower’s loan and treated as 
a prepayment on the principal of the loan. 
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‘‘(3) EXCLUSION OF CONSOLIDATION AND FOR-
EIGN
STUDY
LOANS.—The provisions of this sub-
section shall not apply in the case of a Federal ONE 
Consolidation Loan, or a loan made to a student to 
cover the cost of attendance in a program of study 
abroad approved by the home eligible institution if 
each of the educational programs of such home eligible 
institution has a loan repayment rate (as calculated 
under section 481B(c)) for the most recent fiscal year 
for which data are available of greater than 70 per-
cent. 
‘‘(4) BEGINNING OF PERIOD OF ENROLLMENT.— 
For purposes of this subsection, a period of enrollment 
begins on the first day that classes begin for the ap-
plicable period of enrollment. 
‘‘(b) AMOUNT OF LOAN.— 
‘‘(1) IN
GENERAL.—The determination of the 
amount of a loan disbursed by an eligible institution 
under this section shall be the lesser of— 
‘‘(A) an amount that is equal to the esti-
mated loan amount, as determined by the insti-
tution by calculating— 
‘‘(i) the estimated cost of attendance at 
the institution; minus 
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‘‘(ii)(I) any estimated financial assist-
ance reasonably available to such student, 
including assistance that the student will 
receive from a Federal grant, including a 
Federal Pell Grant, a State grant, an insti-
tutional grant, or a scholarship or grant 
from another source, that is known to the 
institution at the time the student’s deter-
mination of need is made; and 
‘‘(II) in the case of a loan to a parent, 
the amount of a loan awarded under this 
part to the parent’s child; or 
‘‘(B) the maximum Federal loan amount for 
which such borrower is eligible in accordance 
with paragraph (2). 
‘‘(2) LOAN LIMITS.— 
‘‘(A) ANNUAL LIMITS.—Except as provided 
under subparagraph (B), (C), or (D), the 
amount of loans made under this part that an 
eligible student or parent borrower may borrow 
for an academic year shall be as follows: 
‘‘(i) UNDERGRADUATE
STUDENTS.— 
With respect to enrollment in a program of 
undergraduate education at an eligible in-
stitution— 
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‘‘(I) in the case of a dependent 
student— 
‘‘(aa) who has not success-
fully completed the first year of a 
program of undergraduate edu-
cation, $7,500; 
‘‘(bb) who has successfully 
completed such first year but has 
not successfully completed the re-
mainder of a program of under-
graduate education, $8,500; and 
‘‘(cc) who has successfully 
completed the first and second 
years of a program of under-
graduate education but has not 
successfully completed the remain-
der of such program, $9,500; 
‘‘(II) in the case of an inde-
pendent student, or a dependent stu-
dent whose parents are unable to bor-
row a loan under this part on behalf of 
such student— 
‘‘(aa) who has not success-
fully completed the first year of a 
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program of undergraduate edu-
cation, $11,500; 
‘‘(bb) who has successfully 
completed such first year but has 
not successfully completed the re-
mainder of a program of under-
graduate education, $12,500; and 
‘‘(cc) who has successfully 
completed the first and second 
years of a program of under-
graduate education but has not 
successfully completed the remain-
der of such program, $14,500; and 
‘‘(III) in the case of a student who 
is enrolled in a program of under-
graduate education that is less than 
one academic year, the maximum an-
nual loan amount that such student 
may receive may not exceed the 
amount that bears the same ratio to 
the amount specified in subclause (I) 
or (II), as applicable, as the length of 
such program measured in semester, 
trimester, quarter, or clock hours bears 
to one academic year. 
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‘‘(ii) GRADUATE
OR
PROFESSIONAL 
STUDENTS.—In the case of a graduate or 
professional student for enrollment in a pro-
gram of graduate or professional education 
at an eligible institution, $28,500. 
‘‘(iii) PARENT
BORROWERS.—In the 
case of a parent borrowing a loan under 
this part on behalf of a dependent student 
for the student’s enrollment in a program of 
undergraduate education at an eligible in-
stitution, $12,500 per each such student. 
‘‘(iv) 
COURSEWORK
FOR
UNDER-
GRADUATE ENROLLMENT.—With respect to 
enrollment in coursework specified in sec-
tion 484(b)(3)(B) necessary for enrollment 
in an undergraduate degree or certificate 
program— 
‘‘(I) in the case of a dependent 
student, $2,625; 
‘‘(II) in the case of a parent bor-
rowing a loan under this part on be-
half of a dependent student for the stu-
dent’s enrollment in such coursework, 
$6,000; and 
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‘‘(III) in the case an independent 
student, or a dependent student whose 
parents are unable to borrow a loan 
under this part on behalf of such stu-
dent, $8,625. 
‘‘(v) COURSEWORK FOR GRADUATE OR 
PROFESSIONAL ENROLLMENT OR TEACHER 
EMPLOYMENT.—With respect to the enroll-
ment of a student who has obtained a bac-
calaureate degree in coursework specified in 
section 484(b)(3)(B) necessary for enroll-
ment in a graduate or professional degree 
or certificate program, or coursework speci-
fied in section 484(b)(4)(B) necessary for a 
professional credential or certification from 
a State required for employment as a teach-
er in an elementary or secondary school, in 
the case of a student (without regard to 
whether the student is a dependent student 
or dependent student), $12,500. 
‘‘(B) AGGREGATE LIMITS.—Except as pro-
vided under subparagraph (C), (D), or (E), the 
maximum aggregate amount of loans under this 
part and parts B and D that an eligible student 
or parent borrower may borrow shall be— 
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‘‘(i) for enrollment in a program of 
undergraduate education at an eligible in-
stitution, 
including 
for 
enrollment 
in 
coursework described in clause (iv) or (v) of 
subparagraph (A)— 
‘‘(I) in the case of a dependent 
student, $39,000; 
‘‘(II) in the case of an inde-
pendent student, or an dependent stu-
dent whose parents are unable to re-
ceive a loan under this part on behalf 
of such student, $60,250; and 
‘‘(III) in the case of a parent bor-
rowing a loan under this part on be-
half of a dependent student for the stu-
dent’s enrollment in such a program, 
$56,250 per each such student. 
‘‘(ii) in the case of a graduate or pro-
fessional student for enrollment in a pro-
gram of graduate or professional education 
at an eligible institution, $150,000. 
‘‘(C) APPLICATION
OF
LIMITS
TO
BOR-
ROWERS WITH PART B OR D LOANS.— 
‘‘(i) GRADUATE
OR
PROFESSIONAL 
STUDENTS.—In the case of a graduate or 
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309 
professional student who is not described in 
subparagraph (E) and who has received 
loans made under part B or D for enroll-
ment in a graduate or professional program 
at an eligible institution, the total amount 
of which equal or exceed $28,500 as of the 
time of disbursement, the student may con-
tinue to borrow the amount of loans under 
this part necessary to complete such pro-
gram without regard to the aggregate limit 
under subparagraph (B)(ii), except that 
the— 
‘‘(I) amount of such loans shall 
not exceed the annual limits under 
subparagraph (A)(ii) for any academic 
year beginning after June 30, 2019; 
and 
‘‘(II) authority to borrow loans in 
accordance with this subclause shall 
terminate at the end of the academic 
year ending before September 30, 2024. 
‘‘(ii) PARENT
BORROWERS.—In the 
case of a parent borrower who has received 
loans made under part B or D on behalf of 
a dependent student for the student’s enroll-
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310 
ment in a program of undergraduate edu-
cation at an eligible institution, the total 
amount of which equal or exceed $12,500 for 
such student as of the time of disbursement, 
the parent borrower may continue to borrow 
the amount of loans under this part nec-
essary for such student to complete such 
program without regard to the aggregate 
limit under subparagraph (B)(i)(III), ex-
cept that the— 
‘‘(I) amount of such loans shall 
not exceed the annual limits under 
subparagraph (A)(iii) for any aca-
demic year beginning after June 30, 
2019; and 
‘‘(II) the authority to borrow 
loans in accordance with this subclause 
shall terminate at the end of the aca-
demic year ending before September 
30, 2024. 
‘‘(D) INSTITUTIONAL
DETERMINED
LIM-
ITS.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
any other provision of this subsection, an el-
igible institution (at the discretion of a fi-
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311 
nancial aid administrator at the institu-
tion) may prorate or limit the amount of a 
loan any student enrolled in a program of 
study at that institution may borrow under 
this part for an academic year— 
‘‘(I) if the institution, using the 
most recently available data from the 
Bureau of Labor Statistics for the av-
erage starting salary in the region in 
which the institution is located for typ-
ical occupations pursued by graduates 
of such program, can reasonably dem-
onstrate that student debt levels are or 
would be excessive for such program; 
‘‘(II) in a case in which the stu-
dent is enrolled on a less than full-time 
basis or the student is enrolled for less 
than the period of enrollment to which 
the annual loan limit applies under 
this subsection, based on the student’s 
enrollment status; 
‘‘(III) based on the credential level 
(such as a degree, certificate, or other 
recognized educational credential) that 
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312 
the student would attain upon comple-
tion of such program; or 
‘‘(IV) based on the year of the 
program for which the student is seek-
ing such loan. 
‘‘(ii) 
APPLICATION
TO
ALL
STU-
DENTS.—Any proration or limiting of loan 
amounts under clause (i) shall be applied in 
the same manner to all students enrolled in 
the institution or program of study. 
‘‘(iii) INCREASES
FOR
INDIVIDUAL 
STUDENTS.—Upon the request of a student 
whose loan amount for an academic year 
has been prorated or limited under clause 
(i), an eligible institution (at the discretion 
of the financial aid administrator at the in-
stitution) may increase such loan amount 
to an amount not exceeding the annual loan 
amount applicable to such student under 
this subparagraph for such academic year if 
such student demonstrates special cir-
cumstances or exceptional need. 
‘‘(E) INCREASES FOR CERTAIN GRADUATE 
OR PROFESSIONAL STUDENTS.— 
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313 
‘‘(i) ADDITIONAL ANNUAL AMOUNTS.— 
Subject to clause (iii) of this subparagraph, 
in addition to the loan amount for an aca-
demic year described in subparagraph 
(A)(ii)— 
‘‘(I) a graduate or professional 
student who is enrolled in a program 
of study to become a doctor of 
allopathic medicine, doctor of osteo-
pathic medicine, doctor of dentistry, 
doctor of veterinary medicine, doctor of 
optometry, doctor of podiatric medi-
cine, doctor of naturopathic medicine, 
or doctor of naturopathy may borrow 
an additional— 
‘‘(aa) in the case of a pro-
gram with a 9-month academic 
year, $20,000 for an academic 
year; or 
‘‘(bb) in the case of a pro-
gram with a 12-month academic 
year, $26,667 for an academic 
year; and 
‘‘(II) a graduate or professional 
student who is enrolled in a program 
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314 
of study to become a doctor of phar-
macy, doctor of chiropractic medicine, 
or a physician’s assistant, or receive a 
graduate degree in public health, doc-
toral degree in clinical psychology, or 
a masters or doctoral degree in health 
administration may borrow an addi-
tional— 
‘‘(aa) in the case of a pro-
gram with a 9-month academic 
year, $12,500 for an academic 
year; or 
‘‘(bb) in the case of a pro-
gram with a 12-month academic 
year, $16,667 for an academic 
year. 
‘‘(ii) AGGREGATE
LIMIT.—Subject to 
clause (iii) of this subparagraph, the max-
imum aggregate amount of loans under this 
part and parts B and D that a student de-
scribed in clause (i) may borrow shall be 
$235,500. 
‘‘(iii) LIMITATION.—In the case of a 
graduate or professional student described 
in clause (i) of this subparagraph who has 
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315 
received loans made under part B or D for 
enrollment in a graduate or professional 
program at an eligible institution, the total 
amount of which equal or exceed $28,500 as 
of the time of disbursement, the student may 
continue to borrow the amount of loans 
under this part necessary to complete such 
program without regard to the aggregate 
limit under clause (ii) of this subpara-
graph, except that the— 
‘‘(I) amount of such loans shall 
not exceed the annual limits under 
clause (i) of this subparagraph for any 
academic year beginning after June 
30, 2019; and 
‘‘(II) authority to borrow loans in 
accordance with this subclause shall 
terminate at the end of the academic 
year ending before September 30, 2024. 
‘‘(c) INTEREST RATE PROVISIONS FOR FEDERAL ONE 
LOANS.— 
‘‘(1) UNDERGRADUATE
ONE
LOANS.—For Fed-
eral ONE Loans issued to undergraduate students, the 
applicable rate of interest shall, for loans disbursed 
during any 12-month period beginning on July 1 and 
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316 
ending on June 30, be determined on the preceding 
June 1 and be equal to the lesser of— 
‘‘(A) a rate equal to the high yield of the 
10-year Treasury note auctioned at the final 
auction held prior to such June 1 plus 2.05 per-
cent; or 
‘‘(B) 8.25 percent. 
‘‘(2) 
GRADUATE
AND
PROFESSIONAL
ONE 
LOANS.—For Federal ONE Loans issued to graduate 
or professional students, the applicable rate of interest 
shall, for loans disbursed during any 12-month period 
beginning on July 1 and ending on June 30, be deter-
mined on the preceding June 1 and be equal to the 
lesser of— 
‘‘(A) a rate equal to the high yield of the 
10-year Treasury note auctioned at the final 
auction held prior to such June 1 plus 3.6 per-
cent; or 
‘‘(B) 9.5 percent. 
‘‘(3) PARENT
ONE
LOANS.—For Federal ONE 
Parent Loans, the applicable rate of interest shall, for 
loans disbursed during any 12-month period begin-
ning on July 1 and ending on June 30, be determined 
on the preceding June 1 and be equal to the lesser 
of— 
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317 
‘‘(A) a rate equal to the high yield of the 
10-year Treasury note auctioned at the final 
auction held prior to such June 1 plus 4.6 per-
cent; or 
‘‘(B) 10.5 percent. 
‘‘(4) CONSOLIDATION LOANS.—Any Federal ONE 
Consolidation Loan for which the application is re-
ceived on or after July 1, 2019, shall bear interest at 
an annual rate on the unpaid principal balance of 
the loan that is equal to the weighted average of the 
interest rates on the loans consolidated, rounded to 
the nearest higher one-eighth of one percent. 
‘‘(5) PUBLICATION.—The Secretary shall deter-
mine the applicable rates of interest under this sub-
section after consultation with the Secretary of the 
Treasury and shall publish such rate in the Federal 
Register as soon as practicable after the date of deter-
mination. 
‘‘(6) RATE.—The applicable rate of interest de-
termined under this subsection for a loan under this 
part shall be fixed for the period of the loan. 
‘‘(d) PROHIBITION ON CERTAIN REPAYMENT INCEN-
TIVES.—Notwithstanding any other provision of this part, 
the Secretary is prohibited from authorizing or providing 
any repayment incentive or subsidy not otherwise author-
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318 
ized under this part to encourage on-time repayment of a 
loan under this part, including any reduction in the inter-
est paid by a borrower of such a loan, except that the Sec-
retary may provide for an interest rate reduction of not 
more than 0.25 percentage points for a borrower who agrees 
to have payments on such a loan automatically debited 
from a bank account. 
‘‘(e) LOAN FEE.—The Secretary shall not charge the 
borrower of a loan made under this part an origination 
fee. 
‘‘(f) ARMED FORCES STUDENT LOAN INTEREST PAY-
MENT PROGRAM.— 
‘‘(1) AUTHORITY.—Using funds received by 
transfer to the Secretary under section 2174 of title 
10, United States Code, for the payment of interest on 
a loan made under this part to a member of the 
Armed Forces, the Secretary shall pay the interest on 
the loan as due for a period not in excess of 36 con-
secutive months. The Secretary may not pay interest 
on such a loan out of any funds other than funds that 
have been so transferred. 
‘‘(2) DEFERMENT.—During the period in which 
the Secretary is making payments on a loan under 
paragraph (1), the Secretary shall grant the borrower 
administrative deferment, in the form of a temporary 
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319 
cessation of all payments on the loan other than the 
payments of interest on the loan that are made under 
that paragraph. 
‘‘(g) NO ACCRUAL OF INTEREST FOR ACTIVE DUTY 
SERVICE MEMBERS.— 
‘‘(1) IN GENERAL .—Notwithstanding any other 
provision of this part and in accordance with para-
graphs (2) and (4), interest shall not accrue for an 
eligible military borrower on a loan made under this 
part. 
‘‘(2) CONSOLIDATION LOANS.—In the case of any 
consolidation loan made under this part, interest 
shall not accrue pursuant to this subsection only on 
such portion of such loan as was used to repay a loan 
made under this part or a loan made under part D 
for which the first disbursement was made on or after 
October 1, 2008, and before July 1, 2019. 
‘‘(3) ELIGIBLE
MILITARY
BORROWER.—In this 
subsection, the term ‘eligible military borrower’ means 
an individual who— 
‘‘(A)(i) is serving on active duty during a 
war or other military operation or national 
emergency; or 
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320 
‘‘(ii) is performing qualifying National 
Guard duty during a war or other military op-
eration or national emergency; and 
‘‘(B) is serving in an area of hostilities in 
which service qualifies for special pay under sec-
tion 310 of title 37, United States Code. 
‘‘(4) LIMITATION.—An individual who qualifies 
as an eligible military borrower under this subsection 
may receive the benefit of this subsection for not more 
than 60 months. 
‘‘SEC. 466. REPAYMENT. 
‘‘(a) REPAYMENT PERIOD; COMMENCEMENT OF RE-
PAYMENT.— 
‘‘(1) REPAYMENT PERIOD.— 
‘‘(A) IN GENERAL.—In the case of a Federal 
ONE Loan (other than a Federal ONE Consoli-
dation Loan or a Federal ONE Parent Loan)— 
‘‘(i) subject to clause (ii), the repay-
ment period shall— 
‘‘(I) exclude any period of author-
ized deferment under section 469A; and 
‘‘(II) begin the day after 6 months 
after the date the student ceases to 
carry at least one-half the normal full- 
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321 
time academic workload (as deter-
mined by the institution); and 
‘‘(ii) interest shall begin to accrue or 
be paid by the borrower on the day the loan 
is disbursed. 
‘‘(B) 
CONSOLIDATION
AND
PARENT 
LOANS.—In the case of a Federal ONE Consoli-
dation Loan or a Federal ONE Parent Loan, the 
repayment period shall— 
‘‘(i) exclude any period of authorized 
deferment; and 
‘‘(ii) begin— 
‘‘(I) on the day the loan is dis-
bursed; or 
‘‘(II) if the loan is disbursed in 
multiple installments, on the day of the 
last such disbursement. 
‘‘(C) ACTIVE DUTY EXCLUSION.—There shall 
be excluded from the 6-month period that begins 
on the date on which a student ceases to carry 
at least one-half the normal full-time academic 
workload as described in subparagraph (A) any 
period not to exceed 3 years during which a bor-
rower who is a member of a reserve component 
of the Armed Forces named in section 10101 of 
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322 
title 10, United States Code, is called or ordered 
to active duty for a period of more than 30 days 
(as defined in section 101(d)(2) of such title). 
Such period of exclusion shall include the period 
necessary to resume enrollment at the borrower’s 
next available regular enrollment period. 
‘‘(2) PAYMENT OF PRINCIPAL AND INTEREST.— 
‘‘(A) COMMENCEMENT OF REPAYMENT.—Re-
payment of principal on loans made under this 
part shall begin at the beginning of the repay-
ment period described in paragraph (1). 
‘‘(B) CAPITALIZATION OF INTEREST.— 
‘‘(i) IN
GENERAL.—Interest on loans 
made under this part for which payments of 
principal are not required during the 6- 
month 
period 
described 
in 
paragraph 
(1)(A)(i)(II) or for which payments are de-
ferred under section 469A shall— 
‘‘(I) be paid monthly or quarterly; 
or 
‘‘(II) be added to the principal 
amount of the loan only— 
‘‘(aa) when the loan enters 
repayment; 
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323 
‘‘(bb) at the expiration of a 
the 6-month period described in 
paragraph (1)(A)(i)(II); 
‘‘(cc) at the expiration of a 
period of deferment, unless other-
wise exempted; or 
‘‘(dd) when the borrower de-
faults. 
‘‘(ii) MAXIMUM
AGGREGATE
LIMIT.— 
Interest capitalized shall not be deemed to 
exceed the amount equal to the maximum 
aggregate limit of the loan under section 
465(b). 
‘‘(C) NOTICE.—Not less than 60 days, and 
again not less than 30 days, prior to the antici-
pated commencement of the repayment period for 
a Federal ONE Loan, the Secretary shall provide 
notice to the borrower— 
‘‘(i) that interest will accrue before re-
payment begins; 
‘‘(ii) that interest will be added to the 
principal amount of the loan in the cases 
described in subparagraph (B)(i)(II); and 
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324 
‘‘(iii) of the borrower’s option to begin 
loan repayment prior to such repayment 
period. 
‘‘(b) REPAYMENT AMOUNT.— 
‘‘(1) IN GENERAL.—The total of the payments by 
a borrower, except as otherwise provided by an in-
come-based repayment plan under subsection (d), dur-
ing any year of any repayment period with respect 
to the aggregate amount of all loans made under this 
part to the borrower shall not (unless the borrower 
and the Secretary otherwise agree), be less than $600 
or the balance of all such loans (together with interest 
thereon), whichever amount is less (but in no instance 
less than the amount of interest due and payable, not-
withstanding any repayment plan described in sub-
section (c)). 
‘‘(2) AMORTIZATION.— 
‘‘(A) INTEREST RATE.—The amount of the 
periodic payment and the repayment schedule 
for a loan made under this part shall be estab-
lished by assuming an interest rate equal to the 
applicable rate of interest at the time of the first 
disbursement of the loan. 
‘‘(B) 
ADJUSTMENT
TO
REPAYMENT 
AMOUNT.—The note or other written evidence of 
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325 
a loan under this part shall require that the 
amount of the periodic payment will be adjusted 
annually in order to reflect adjustments in— 
‘‘(i) interest rates occurring as a con-
sequence of variable rate loans under parts 
B or D paid in conjunction with Federal 
ONE Loans under subsection (d)(1)(B)(i); 
or 
‘‘(ii) principal occurring as a con-
sequence of interest capitalization under 
subsection (a)(2)(B). 
‘‘(c) REPAYMENT PLANS.— 
‘‘(1) DESIGN AND SELECTION.—Not more than 6 
months prior to the date on which a borrower’s first 
payment on a loan made under this part is due, the 
Secretary shall offer the borrower two plans for re-
payment of such loan, including principal and inter-
est on the loan. The borrower shall be entitled to ac-
celerate, without penalty, repayment on the bor-
rower’s loans under this part. The borrower may 
choose— 
‘‘(A) a standard repayment plan with a 
fixed monthly repayment amount paid over a 
fixed period of time, not to exceed 10 years; or 
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326 
‘‘(B) an income-based repayment plan 
under subsection (d). 
‘‘(2) SELECTION BY SECRETARY.—If a borrower 
of a loan made under this part does not select a re-
payment plan described in paragraph (1), the Sec-
retary shall provide the borrower with the repayment 
plan described in paragraph (1)(A). 
‘‘(3) CHANGES IN SELECTIONS.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the borrower of a loan made under 
this part may change the borrower’s selection of 
a repayment plan under paragraph (1), or the 
Secretary’s selection of a plan for the borrower 
under paragraph (2), as the case may be, under 
such terms and conditions as may be established 
by the Secretary, except that the Secretary may 
not establish any terms or conditions with re-
spect to whether a borrower may change the bor-
rower’s repayment plan. Nothing in this sub-
section shall prohibit the Secretary from encour-
aging struggling borrowers from enrolling in the 
income-driven repayment plan described in sec-
tion 466(d). 
‘‘(B) SAME REPAYMENT PLAN REQUIRED.— 
All loans made under this part to a borrower 
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shall be repaid under the same repayment plan 
under paragraph (1), except that the borrower 
may repay a Federal ONE Parent Loan or an 
Excepted Federal ONE Consolidation Loan (as 
defined in subsection (d)(5)) separately from 
other loans made under this part to the bor-
rower. 
‘‘(4) REPAYMENT
AFTER
DEFAULT.—The Sec-
retary may require any borrower who has defaulted 
on a loan made under this part to— 
‘‘(A) pay all reasonable collection costs asso-
ciated with such loan; and 
‘‘(B) repay the loan pursuant to the in-
come-based repayment plan under subsection (d). 
‘‘(5) REPAYMENT PERIOD.—For purposes of cal-
culating the repayment period under this subsection, 
such period shall commence at the time the first pay-
ment of principal is due from the borrower. 
‘‘(6) INSTALLMENTS.— Repayment of loans 
under this part shall be in installments in accordance 
with the repayment plan selected under paragraph 
(1) and commencing at the beginning of the repay-
ment period determined under paragraph (5). 
‘‘(d) INCOME-BASED REPAYMENT PROGRAM.— 
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‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of this Act, the Secretary shall carry out a 
program under which— 
‘‘(A) a borrower of any loan made under 
this part (other than a Federal ONE Parent 
Loan or an Excepted Federal ONE Consolida-
tion Loan) may elect to have the borrower’s ag-
gregate monthly payment for all such loans— 
‘‘(i) not to exceed the result obtained 
by dividing by 12, 15 percent of the result 
obtained by calculating, on at least an an-
nual basis, the amount by which— 
‘‘(I) the adjusted gross income of 
the borrower or, if the borrower is mar-
ried and files a Federal income tax re-
turn jointly with or separately from 
the borrower’s spouse, the adjusted 
gross income of the borrower and the 
borrower’s spouse; exceeds 
‘‘(II) 150 percent of the poverty 
line applicable to the borrower’s family 
size as determined under section 673(2) 
of the Community Services Block 
Grant Act (42 U.S.C. 9902(2)); and 
‘‘(ii) not to be less than $25; 
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‘‘(B) the Secretary adjusts the calculated 
monthly payment under subparagraph (A), if— 
‘‘(i) in addition to the loans described 
in subparagraph (A), the borrower has an 
outstanding loan made under part B or D 
(other than an excepted parent loan or an 
excepted consolidation loan, as such terms 
are defined in section 493C(a)), by deter-
mining the borrower’s adjusted monthly 
payment by multiplying— 
‘‘(I) the calculated monthly pay-
ment, by 
‘‘(II) the percentage of the total 
outstanding principal amount of the 
borrower’s loans described in the mat-
ter preceding subclause (I), which are 
described in subparagraph (A); 
‘‘(ii) the borrower and borrower’s 
spouse have loans described in subpara-
graph (A) and outstanding loans under 
part B or D (other than an excepted parent 
loan or an excepted consolidation loan, as 
such terms are defined in section 493C(a)) 
and have filed a joint or separate Federal 
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income tax return, in which case the Sec-
retary determines— 
‘‘(I) each borrower’s percentage of 
the couple’s total outstanding amount 
of principal on such loans; 
‘‘(II) the adjusted monthly pay-
ment for each borrower by multiplying 
the borrower’s calculated monthly pay-
ment by the percentage determined 
under subclause (I) applicable to the 
borrower; and 
‘‘(III) if the borrower’s loans are 
held by multiple holders, the borrower’s 
adjusted monthly payment for loans 
described in subparagraph (A) by mul-
tiplying the adjusted monthly payment 
determined under subclause (II) by the 
percentage of the total outstanding 
principal amount of the borrower’s 
loans described in the matter preceding 
subclause (I), which are described in 
subparagraph (A); 
‘‘(C) the holder of such a loan shall apply 
the borrower’s monthly payment under this sub-
section first toward interest due on the loan, next 
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toward any fees due on the loan, and then to-
ward the principal of the loan; 
‘‘(D) any principal due and not paid under 
subparagraph (C) shall be deferred; 
‘‘(E) any interest due and not paid under 
subparagraph (C) shall be capitalized, at the 
time the borrower— 
‘‘(i) ends the election to make income- 
based repayment under this subsection; or 
‘‘(ii) begins making payments of not 
less than the amount specified in subpara-
graph (G)(i); 
‘‘(F) the amount of time the borrower makes 
monthly payments under subparagraph (A) may 
exceed 10 years; 
‘‘(G) if the borrower no longer wishes to 
continue the election under this subsection, 
then— 
‘‘(i) the maximum monthly payment 
required to be paid for all loans made to the 
borrower under this part (other than a Fed-
eral ONE Parent Loan or an Excepted Fed-
eral ONE Consolidation Loan) shall not ex-
ceed the monthly amount calculated under 
subsection (c)(1)(A), based on a 10-year re-
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payment period, when the borrower first 
made the election described in this sub-
section; and 
‘‘(ii) the amount of time the borrower 
is permitted to repay such loans may exceed 
10 years; 
‘‘(H) the Secretary shall cancel any out-
standing balance (other than an amount equal to 
the interest accrued during any period of in- 
school deferment under subparagraph (A), (B), 
or (F) of section 469A(b)(1)) due on all loans 
made under this part (other than a Federal ONE 
Parent Loan or an Excepted Federal ONE Con-
solidation Loan) to a borrower— 
‘‘(i) who, at any time, elected to par-
ticipate in income-based repayment under 
subparagraph (A); 
‘‘(ii) whose final monthly payment for 
such loans prior to the loan cancellation 
under this subparagraph was made under 
such income-based repayment; and 
‘‘(iii) who has repaid, pursuant to in-
come-based repayment under subparagraph 
(A), a standard repayment plan under sub-
section (c)(1)(A), or a combination— 
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‘‘(I) an amount on such loans 
that is equal to the total amount of 
principal and interest that the bor-
rower would have repaid under a 
standard repayment plan under sub-
section (c)(1)(A), based on a 10-year 
repayment period, when the borrower 
entered repayment on such loans; and 
‘‘(II) the amount of interest that 
accrues during a period of deferment 
described in section 469A prior to the 
completion of the repayment period de-
scribed in subclause (I) on the portion 
of such loans remaining to be repaid 
in accordance with such subclause; and 
‘‘(I) a borrower who is repaying a loan 
made under this part pursuant to income-based 
repayment under subparagraph (A) may elect, at 
any time during the 10-year period beginning on 
the date the borrower entered repayment on the 
loan, to terminate repayment pursuant to such 
income-based repayment and repay such loan 
under the standard repayment plan. 
‘‘(2) ELIGIBILITY DETERMINATIONS.— 
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‘‘(A) IN GENERAL.—The Secretary shall es-
tablish procedures for annual verification of a 
borrower’s annual income and the annual 
amount due on the total amount of loans made 
under this part (other than a Federal ONE Par-
ent Loan or an Excepted Federal ONE Consoli-
dation Loan), and such other procedures as are 
necessary to implement effectively income-based 
repayment under this subsection, including the 
procedures established with respect to section 
493C. 
‘‘(B) INCOME INFORMATION.—The Secretary 
may obtain such information as is reasonably 
necessary regarding the income of a borrower 
(and the borrower’s spouse, if applicable) of a 
loan made under this part that is, or may be, re-
paid pursuant to income-based repayment under 
this subsection, for the purpose of determining 
the annual repayment obligation of the borrower. 
The Secretary shall establish procedures for de-
termining the borrower’s repayment obligation 
on that loan for such year, and such other proce-
dures as are necessary to implement effectively 
the income-based repayment under this sub-
section. 
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‘‘(C) BORROWER
REQUIREMENTS.—A bor-
rower who chooses to repay a loan made under 
this part pursuant to income-based repayment 
under this subsection, and— 
‘‘(i) for whom adjusted gross income is 
available and reasonably reflects the bor-
rower’s current income, shall, to the max-
imum extent practicable, provide to the Sec-
retary the Federal tax information of the 
borrower; and 
‘‘(ii) for whom adjusted gross income is 
unavailable or does not reasonably reflect 
the borrower’s current income, shall provide 
to the Secretary other documentation of in-
come satisfactory to the Secretary, which 
documentation the Secretary may use to de-
termine an appropriate repayment schedule. 
‘‘(3) NOTIFICATION TO BORROWERS.—The Sec-
retary shall establish procedures under which a bor-
rower of a loan made under this part who chooses to 
repay such loan pursuant to income-based repayment 
under this subsection is notified of the terms and con-
ditions of such plan, including notification that if a 
borrower considers that special circumstances, such as 
a loss of employment by the borrower or the bor-
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336 
rower’s spouse, warrant an adjustment in the bor-
rower’s loan repayment as determined using the bor-
rower’s Federal tax return information, or the alter-
native documentation described in paragraph (2)(C), 
the borrower may contact the Secretary, who shall de-
termine whether such adjustment is appropriate, in 
accordance with criteria established by the Secretary. 
‘‘(4) REDUCED PAYMENT PERIODS.— 
‘‘(A) IN GENERAL.—The Secretary shall au-
thorize borrowers meeting the criteria under sub-
paragraph (B) to make monthly payments of $5 
for a period not in excess of 3 years, except 
that— 
‘‘(i) for purposes of subparagraph 
(B)(i), the Secretary may authorize reduced 
payments in 6-month increments, beginning 
on the date the borrower provides to the 
Secretary the evidence described in sub-
clause (I) or (II) of subparagraph (B)(i); 
and 
‘‘(ii) for purposes of subparagraph 
(B)(ii), the Secretary may authorize re-
duced payments in 3-month increments, be-
ginning on the date the borrower provides to 
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the Secretary the evidence described in sub-
paragraph (B)(ii)(I). 
‘‘(B) ELIGIBILITY
DETERMINATIONS.—The 
Secretary shall authorize borrowers to make re-
duced payments under this paragraph in the fol-
lowing circumstances: 
‘‘(i) In a case of borrower who is seek-
ing and unable to find full-time employ-
ment, as demonstrated by providing to the 
Secretary— 
‘‘(I) evidence of the borrower’s eli-
gibility for unemployment benefits to 
the Secretary; or 
‘‘(II) a written certification or an 
equivalent that— 
‘‘(aa) the borrower has reg-
istered with a public or private 
employment agency that is avail-
able to the borrower within a 50- 
mile radius of the borrower’s home 
address; and 
‘‘(bb) in the case of a bor-
rower that has been granted a re-
quest under this subparagraph, 
the borrower has made at least six 
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diligent attempts during the pre-
ceding six-month period to secure 
full-time employment. 
‘‘(ii) The Secretary determines that, 
due to high medical expenses, the $25 
monthly payment the borrower would other-
wise make would be an extreme economic 
hardship to the borrower, if— 
‘‘(I) the borrower documents the 
reason why the $25 minimum pay-
ment is an extreme economic hardship; 
and 
‘‘(II) the borrower recertifies the 
reason for the $5 minimum payment 
on a three-month basis. 
‘‘(C) DEFINITION.—For purpose of this sec-
tion, the term ‘full-time employment’ means em-
ployment that will provide not less than 30 
hours of work a week and is expected to continue 
for a period of not less than 3 months. 
‘‘(5) DEFINITIONS.—In this subsection: 
‘‘(A) ADJUSTED GROSS INCOME.—The term 
‘adjusted gross income’ has the meaning given 
the term in section 62 of the Internal Revenue 
Code of 1986. 
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339 
‘‘(B) EXCEPTED FEDERAL ONE CONSOLIDA-
TION LOAN.—The term ‘Excepted Federal ONE 
Consolidation Loan’ means a Federal ONE Con-
solidation Loan if the proceeds of such loan were 
used to discharge the liability on— 
‘‘(i) a Federal ONE Parent Loan; 
‘‘(ii) a Federal Direct PLUS Loan, or 
a loan under section 428B, that is made, 
insured, or guaranteed on behalf of a de-
pendent student; 
‘‘(iii) an excepted consolidation loan 
(defined in section 493C); or 
‘‘(iv) a Federal ONE Consolidation 
loan that was used to discharge the liability 
on a loan described in clause (i), (ii), or 
(iii). 
‘‘(e) RULES OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to authorize, with respect to loans 
made under this part— 
‘‘(1) eligibility for a repayment plan that is not 
described in subsection (c)(1) or section 468(c); or 
‘‘(2) the Secretary to— 
‘‘(A) carry out a repayment plan, which is 
not described in subsection (c)(1) or section 
468(c); or 
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‘‘(B) modify a repayment plan that is de-
scribed in subsection (c)(1) or section 468(c). 
‘‘SEC. 467. FEDERAL ONE PARENT LOANS. 
‘‘(a) AUTHORITY TO BORROW.— 
‘‘(1) AUTHORITY AND ELIGIBILITY.—The parent 
of a dependent student shall be eligible to borrow 
funds under this section in amounts specified in sub-
section (b), if— 
‘‘(A) the parent is borrowing to pay for the 
educational costs of a dependent student who 
meets the requirements for an eligible student 
under section 484(a); 
‘‘(B) the parent meets the applicable re-
quirements concerning defaults and overpay-
ments that apply to a student borrower; 
‘‘(C) the parent complies with the require-
ments for submission of a statement of edu-
cational purpose that apply to a student bor-
rower under section 484(a)(4)(A) (other than the 
completion of a statement of selective service reg-
istration status); 
‘‘(D) the parent meets the requirements that 
apply to a student under section 437(a); 
‘‘(E) the parent— 
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341 
‘‘(i) does not have an adverse credit 
history; or 
‘‘(ii) has an adverse credit history, but 
has— 
‘‘(I) obtained an endorser who 
does not have an adverse credit history 
or documented to the satisfaction of the 
Secretary 
that 
extenuating 
cir-
cumstances exist in accordance with 
paragraph (4)(D); and 
‘‘(II) completed Federal ONE 
Parent Loan counseling offered by the 
Secretary; and 
‘‘(F) in the case of a parent who has been 
convicted of, or has pled nolo contendere or 
guilty to, a crime involving fraud in obtaining 
funds under this title, such parent has completed 
the repayment of such funds to the Secretary, or 
to the holder in the case of a loan under this title 
obtained by fraud. 
‘‘(2) TERMS, CONDITIONS, AND BENEFITS.—Ex-
cept as provided in subsections (c), (d), and (e), loans 
made under this section shall have the same terms, 
conditions, and benefits as all other loans made under 
this part. 
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‘‘(3) PARENT BORROWERS.— 
‘‘(A) DEFINITION.—For purposes of this sec-
tion, the term ‘parent’ includes a student’s bio-
logical or adoptive mother or father or the stu-
dent’s stepparent, if the biological parent or 
adoptive mother or father has remarried at the 
time of filing the common financial reporting 
form under section 483(a), and that spouse’s in-
come and assets would have been taken into ac-
count when calculating the student’s expected 
family contribution. 
‘‘(B) CLARIFICATION.—Whenever necessary 
to carry out the provisions of this section, the 
terms ‘student’ and ‘borrower’ as used in this 
part shall include a parent borrower under this 
section. 
‘‘(4) ADVERSE
CREDIT
HISTORY
DEFINITIONS 
AND ADJUSTMENTS.— 
‘‘(A) DEFINITIONS.—For purposes of this 
section: 
‘‘(i) IN GENERAL.—The term ‘adverse 
credit history’, when used with respect to a 
borrower, means that the borrower— 
‘‘(I) has one or more debts with a 
total combined outstanding balance 
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equal to or greater than $2,085, as 
may be adjusted by the Secretary in 
accordance with subparagraph (B), 
that— 
‘‘(aa) are 90 or more days 
delinquent as of the date of the 
credit report; or 
‘‘(bb) have been placed in col-
lection or charged off during the 
two years preceding the date of 
the credit report; or 
‘‘(II) has been the subject of a de-
fault determination, bankruptcy dis-
charge, foreclosure, repossession, tax 
lien, wage garnishment, or write-off of 
a debt under this title during the 5 
years preceding the date of the credit 
report. 
‘‘(ii) 
CHARGED
OFF.—The 
term 
‘charged off’ means a debt that a creditor 
has written off as a loss, but that is still 
subject to collection action. 
‘‘(iii) IN COLLECTION.— The term ‘in 
collection’ means a debt that has been 
placed with a collection agency by a cred-
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344 
itor or that is subject to more intensive ef-
forts by a creditor to recover amounts owed 
from a borrower who has not responded sat-
isfactorily to the demands routinely made 
as part of the creditor’s billing procedures. 
‘‘(B) ADJUSTMENTS.— 
‘‘(i) IN GENERAL.—In a case of a bor-
rower with a debt amount described in sub-
paragraph (A)(i), the Secretary shall in-
crease such debt amount, or its inflation-ad-
justed equivalent, if the Secretary deter-
mines that an inflation adjustment to such 
debt amount would result in an increase of 
$100 or more to such debt amount. 
‘‘(ii) 
INFLATION
ADJUSTMENT.—In 
making the inflation adjustment under 
clause (i), the Secretary shall— 
‘‘(I) use the annual average per-
cent change of the All Items Consumer 
Price Index for All Urban Consumers, 
before seasonal adjustment, as the 
measurement of inflation; and 
‘‘(II) if the adjustment calculated 
under subclause (I) is equal to or 
greater than $100— 
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345 
‘‘(aa) add the adjustment to 
the debt amount, or its inflation- 
adjusted equivalent; and 
‘‘(bb) round up to the nearest 
$5. 
‘‘(iii) PUBLICATION.—The Secretary 
shall publish a notice in the Federal Reg-
ister announcing any increase to the thresh-
old amount specified in subparagraph 
(A)(i)(I). 
‘‘(C) TREATMENT OF ABSENCE OF CREDIT 
HISTORY.—For purposes of this section, the Sec-
retary shall not consider the absence of a credit 
history as an adverse credit history and shall not 
deny a Federal ONE Parent loan on that basis. 
‘‘(D) EXTENUATING CIRCUMSTANCES.—For 
purposes of this section, the Secretary may deter-
mine that extenuating circumstances exist based 
on documentation that may include— 
‘‘(i) an updated credit report for the 
parent; or 
‘‘(ii) a statement from the creditor that 
the parent has repaid or made satisfactory 
arrangements to repay a debt that was con-
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346 
sidered in determining that the parent has 
an adverse credit history 
‘‘(b) LIMITATION BASED ON NEED.—Any loan under 
this section may be counted as part of the expected family 
contribution in the determination of need under this title, 
but no loan may be made to any parent under this section 
for any academic year in excess of the lesser of— 
‘‘(1) the student’s estimated cost of attendance 
minus the student’s estimated financial assistance (as 
calculated under section 465(b)(1)(A)); or 
‘‘(2) the established annual loan limits for such 
loan under section 465(b). 
‘‘(c) PARENT LOAN DISBURSEMENT.—All loans made 
under this section shall be disbursed in accordance with the 
requirements of section 465(a) and shall be disbursed by— 
‘‘(1) an electronic transfer of funds from the 
lender to the eligible institution; or 
‘‘(2) a check copayable to the eligible institution 
and the parent borrower. 
‘‘(d) PAYMENT OF PRINCIPAL AND INTEREST.— 
‘‘(1) COMMENCEMENT OF REPAYMENT.—Repay-
ment of principal on loans made under this section 
shall commence not later than 60 days after the date 
such loan is disbursed by the Secretary, subject to de-
ferral— 
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347 
‘‘(A) during any period during which the 
parent borrower meets the conditions required 
for a deferral under section 469A; and 
‘‘(B) upon the request of the parent bor-
rower, during the 6-month period beginning, if 
the parent borrower is also a student, the day 
after the date such parent borrower ceases to 
carry at least one-half such a workload. 
‘‘(2) MAXIMUM REPAYMENT PERIOD.—The max-
imum repayment period for a loan made under this 
section shall be a 10-year period beginning on the 
commencement of such period described in paragraph 
(1). 
‘‘(3) CAPITALIZATION OF INTEREST.—Interest on 
loans made under this section for which payments of 
principal are deferred pursuant to paragraph (1) 
shall, if agreed upon by the borrower and the Sec-
retary— 
‘‘(A) be paid monthly or quarterly; or 
‘‘(B) be added to the principal amount of 
the loan not more frequently than quarterly by 
the Secretary. 
‘‘(4) APPLICABLE RATES OF INTEREST.—Interest 
on loans made pursuant to this section shall be at the 
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348 
applicable rate of interest provided in section 
465(c)(3) for loans made under this section. 
‘‘(5) AMORTIZATION.—Section 466(b)(2) shall 
apply to each loan made under this section. 
‘‘(e) VERIFICATION OF IMMIGRATION STATUS AND SO-
CIAL SECURITY NUMBER.—A parent who wishes to borrow 
funds under this section shall be subject to verification of 
the parent’s— 
‘‘(1) immigration status in the same manner as 
immigration status is verified for students under sec-
tion 484(g); and 
‘‘(2) social security number in the same manner 
as social security numbers are verified for students 
under section 484(p). 
‘‘(f) DESIGNATION.—For purposes of this Act, the Fed-
eral ONE Loans described in this section shall be known 
as ‘Federal ONE Parent Loans’. 
‘‘SEC. 468. FEDERAL ONE CONSOLIDATION LOANS. 
‘‘(a) TERMS AND CONDITIONS.—In making consolida-
tion loans under this section, the Secretary shall— 
‘‘(1) not make such a loan to an eligible bor-
rower, unless the Secretary has determined, in accord-
ance with reasonable and prudent business practices, 
for each loan being consolidated, that the loan— 
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‘‘(A) is a legal, valid, and binding obliga-
tion of the borrower; and 
‘‘(B) was made and serviced in compliance 
with applicable laws and regulations; 
‘‘(2) ensure that each consolidation loan made 
under this section will bear interest, and be subject to 
repayment, in accordance with subsection (c), except 
as otherwise provided under subsections (f) and (g) of 
section 465; 
‘‘(3) ensure that each consolidation loan will be 
made, notwithstanding any other provision of this 
part limiting the annual or aggregate principal 
amount for all loans made to a borrower, in an 
amount which is equal to the sum of the unpaid prin-
cipal and accrued unpaid interest and late charges of 
all eligible student loans received by the eligible bor-
rower which are selected by the borrower for consoli-
dation; 
‘‘(4) ensure that the proceeds of each consolida-
tion loan will be paid by the Secretary to the holder 
or holders of the loans so selected to discharge the li-
ability on such loans; 
‘‘(5) disclose to a prospective borrower, in simple 
and understandable terms, at the time the Secretary 
provides an application for a consolidation loan— 
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‘‘(A) with respect to a loan made, insured, 
or guaranteed under this part, part B, or part 
D, that if a borrower includes such a loan in the 
consolidation loan— 
‘‘(i) that the consolidation would result 
in a loss of loan benefits; and 
‘‘(ii) which specific loan benefits the 
borrower would lose, including the loss of 
eligibility for loan forgiveness (including 
loss of eligibility for interest rate forgive-
ness), cancellation, deferment, forbearance, 
interest-free periods, or loan repayment pro-
grams that would have been available for 
such a loan; and 
‘‘(B) with respect to Federal Perkins Loans 
under this part (as this part was in effect on the 
day before the date of enactment of the PROS-
PER Act)— 
‘‘(i) that if a borrower includes such a 
Federal Perkins Loan in the consolidation 
loan, the borrower will lose all interest-free 
periods that would have been available for 
the Federal Perkins Loan, such as— 
‘‘(I) the periods during which no 
interest accrues on such loan while the 
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borrower is enrolled in an institution 
of higher education at least half-time; 
‘‘(II) the grace period under sec-
tion 464(c)(1)(A) (as such section was 
in effect on the day before the date of 
enactment of the PROSPER Act); and 
‘‘(III) the periods during which 
the borrower’s student loan repayments 
are deferred under section 464(c)(2) (as 
such section was in effect on the day 
before the date of enactment of the 
PROSPER Act); and 
‘‘(ii) that if a borrower includes such a 
Federal Perkins Loan in the consolidation 
loan, the borrower will no longer be eligible 
for cancellation of part or all of the Federal 
Perkins Loan under section 465(a) (as such 
section was in effect on the day before the 
date of enactment of the PROSPER Act); 
and 
‘‘(iii) the occupations listed in section 
465 that qualify for Federal Perkins Loan 
cancellation under section 465(a) (as such 
section was in effect on the day before the 
date of enactment of the PROSPER Act); 
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