I 
111TH CONGRESS 
1ST SESSION H. R. 3221 
To amend the Higher Education Act of 1965, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 15, 2009 
Mr. GEORGE MILLER of California (for himself, Mr. HINOJOSA, Mr. BISHOP 
of New York, Mr. PAYNE, Mr. HOLT, Mr. COURTNEY, Ms. HIRONO, Mr. 
ANDREWS, Mr. KILDEE, Ms. SHEA-PORTER, Mr. GRIJALVA, Mr. 
LOEBSACK, Ms. FUDGE, Mr. SCOTT of Virginia, Ms. ESHOO, Mr. 
TIERNEY, Mr. SABLAN, Mr. WU, Mr. KUCINICH, Mr. HARE, Mr. SESTAK, 
Ms. WOOLSEY, and Mrs. DAVIS of California) introduced the following 
bill; which was referred to the Committee on Education and Labor 
A BILL 
To amend the Higher Education Act of 1965, and for other 
purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Student Aid and Fiscal 
Responsibility Act of 2009’’. 
SEC. 2. TABLE OF CONTENTS. 
The table of contents is as follows: 
Sec. 1. Short title. 
Sec. 2. Table of contents. 
Sec. 3. References. 
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TITLE I—INVESTING IN STUDENTS AND FAMILIES 
Subtitle A—Increasing College Access and Completion 
Sec. 101. Federal Pell Grants. 
Sec. 102. College Access and Completion Innovation Fund. 
Sec. 103. Investment in historically Black colleges and universities and other 
minority-serving institutions. 
Sec. 104. Investment in cooperative education. 
Subtitle B—Student Financial Aid Form Simplification 
Sec. 121. General effective date. 
Sec. 122. Treatment of assets in need analysis. 
Sec. 123. Social Security allowances. 
Sec. 124. Changes to total income; aid eligibility. 
TITLE II—STUDENT LOAN REFORM 
Subtitle A—Stafford Loan Reform 
Sec. 201. Federal Family Education Loan appropriations. 
Sec. 202. Scope and duration of Federal loan insurance program. 
Sec. 203. Applicable interest rates. 
Sec. 204. Federal payments to reduce student interest costs. 
Sec. 205. Federal PLUS Loans. 
Sec. 206. Federal Consolidation Loan. 
Sec. 207. Unsubsidized Stafford loans for middle-income borrowers. 
Sec. 208. Loan repayment for civil legal assistance attorneys. 
Sec. 209. Special allowances. 
Sec. 210. Revised special allowance calculation. 
Sec. 211. Origination of Direct Loans at institutions located outside the United 
States. 
Sec. 212. Agreements with institutions. 
Sec. 213. Terms and conditions of loans. 
Sec. 214. Contracts. 
Sec. 215. Subsidized loan limitation. 
Sec. 216. Interest rates. 
Subtitle B—Perkins Loan Reform 
Sec. 221. Federal Direct Perkins Loans terms and conditions. 
Sec. 222. Authorization of appropriations. 
Sec. 223. Allocation of funds. 
Sec. 224. Federal Direct Perkins Loan allocation. 
Sec. 225. Agreements with institutions of higher education. 
Sec. 226. Student loan information by eligible institutions. 
Sec. 227. Terms of loans. 
Sec. 228. Distribution of assets from student loan funds. 
Sec. 229. Administrative expenses. 
TITLE III—MODERNIZATION, RENOVATION, AND REPAIR 
Subtitle A—Elementary and Secondary Education 
Sec. 301. Definitions. 
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CHAPTER 1—GRANTS FOR MODERNIZATION, RENOVATION, OR REPAIR OF 
PUBLIC SCHOOL FACILITIES 
Sec. 311. Purpose. 
Sec. 312. Allocation of funds. 
Sec. 313. Allowable uses of funds. 
Sec. 314. Priority projects. 
CHAPTER 2—SUPPLEMENTAL GRANTS FOR LOUISIANA, MISSISSIPPI, AND 
ALABAMA 
Sec. 321. Purpose. 
Sec. 322. Allocation to local educational agencies. 
Sec. 323. Allowable uses of funds. 
CHAPTER 3—GENERAL PROVISIONS 
Sec. 331. Impermissible uses of funds. 
Sec. 332. Supplement, not supplant. 
Sec. 333. Prohibition regarding State aid. 
Sec. 334. Maintenance of effort. 
Sec. 335. Special rule on contracting. 
Sec. 336. Use of American iron, steel, and manufactured goods. 
Sec. 337. Labor standards. 
Sec. 338. Charter schools. 
Sec. 339. Green schools. 
Sec. 340. Reporting. 
Sec. 341. Special rules. 
Sec. 342. Promotion of employment experiences. 
Sec. 343. Advisory Council on Green, High-Performing Schools. 
Sec. 344. Education regarding projects. 
Sec. 345. Availability of funds. 
Subtitle B—Higher Education 
Sec. 351. Federal assistance for community college modernization and construc-
tion. 
TITLE IV—EARLY LEARNING CHALLENGE FUND 
Sec. 401. Purpose. 
Sec. 402. Programs authorized. 
Sec. 403. Quality pathways grants. 
Sec. 404. Development grants. 
Sec. 405. Research and evaluation. 
Sec. 406. Reporting requirements. 
Sec. 407. Construction. 
Sec. 408. Definitions. 
Sec. 409. Availability of funds. 
TITLE V—COMMUNITY COLLEGE INITIATIVE 
Sec. 501. Authorization and appropriation. 
Sec. 502. Definitions. 
Sec. 503. Grants to eligible entities for community college reform. 
Sec. 504. Grants to eligible States for community college programs. 
Sec. 505. National activities. 
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SEC. 3. REFERENCES. 
Except as otherwise expressly provided, whenever in 
this Act an amendment or repeal is expressed in terms 
of an amendment to, or repeal of, a section or other provi-
sion, the reference shall be considered to be made to a 
section or other provision of the Higher Education Act of 
1965 (20 U.S.C. 1001 et seq.). 
TITLE I—INVESTING IN 
STUDENTS AND FAMILIES 
Subtitle A—Increasing College 
Access and Completion 
SEC. 101. FEDERAL PELL GRANTS. 
Section 401(b) (20 U.S.C. 1070a(b)) is amended— 
(1) by amending paragraph (2)(A) to read as 
follows: 
‘‘(A) The amount of the Federal Pell 
Grant for a student eligible under this part 
shall be— 
‘‘(i) the maximum Federal Pell Grant, 
as specified in the last enacted appropria-
tion Act applicable to that award year, 
plus 
‘‘(ii) the amount of the increase cal-
culated under paragraph (8)(B) for that 
year, less 
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‘‘(iii) an amount equal to the amount 
determined to be the expected family con-
tribution with respect to that student for 
that year.’’; and 
(2) by amending paragraph (8), as amended by 
the Higher Education Opportunity Act (Public Law 
110–315), to read as follows: 
‘‘(8) ADDITIONAL FUNDS.— 
‘‘(A) IN GENERAL.—There are authorized 
to be appropriated, and there are appropriated, 
to carry out subparagraph (B) of this para-
graph (in addition to any other amounts appro-
priated to carry out this section and out of any 
money in the Treasury not otherwise appro-
priated) the following amounts— 
‘‘(i) $2,030,000,000 for fiscal year 
2008; 
‘‘(ii) $2,733,000,000 for fiscal year 
2009; and 
‘‘(iii) such sums as may be necessary 
for fiscal year 2010 and each subsequent 
fiscal year to provide the amount of in-
crease of the maximum Federal Pell Grant 
required by clauses (ii) and (iii) of sub-
paragraph (B). 
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‘‘(B) 
INCREASE
IN
FEDERAL
PELL 
GRANTS.—The amounts made available pursu-
ant to subparagraph (A) shall be used to in-
crease the amount of the maximum Federal 
Pell Grant for which a student shall be eligible 
during an award year, as specified in the last 
enacted appropriation Act applicable to that 
award year, by— 
‘‘(i) $490 for each of the award years 
2008–2009 and 2009–2010; 
‘‘(ii) $690 for the award year 2010– 
2011; and 
‘‘(iii) the amount determined under 
subparagraph (C) for each succeeding 
award year. 
‘‘(C) INFLATION-ADJUSTED AMOUNTS.— 
‘‘(i) AWARD
YEAR
2011–2012.—For 
award year 2011–2012, the amount deter-
mined under this subparagraph for pur-
poses of subparagraph (B)(iii) shall be 
equal to— 
‘‘(I) $5,550 or the total max-
imum Federal Pell Grant for the pre-
ceding award year (as determined 
under clause (iv)(II)), whichever is 
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‘‘(II) $4,860 or the maximum 
Federal Pell Grant for which a stu-
dent was eligible for the preceding 
award year, as specified in the last en-
acted appropriation Act applicable to 
that year, whichever is greater; and 
‘‘(III) rounded to the nearest $5. 
‘‘(iii) LIMITATION ON DECREASES.— 
Notwithstanding clauses (i) and (ii), if the 
amount determined under clause (i) or (ii) 
for an award year is less than the amount 
determined under this paragraph for the 
preceding award year, the amount deter-
mined under such clause for such award 
year shall be the amount determined under 
this paragraph for the preceding award 
year. 
‘‘(iv) DEFINITIONS.—For purposes of 
this subparagraph— 
‘‘(I) the term ‘annual adjustment 
percentage’ as it applies to an award 
year is equal to the sum of— 
‘‘(aa) the estimated percent-
age change in the Consumer 
Price Index (as determined by 
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the Secretary, using the defini-
tion in section 478(f)) for the 
most recent calendar year ending 
prior to the beginning of that 
award year; and 
‘‘(bb) one percentage point; 
and 
‘‘(II) the term ‘total maximum 
Federal Pell Grant’ as it applies to a 
preceding award year is equal to the 
sum of— 
‘‘(aa) the maximum Federal 
Pell Grant for which a student is 
eligible during an award year, as 
specified in the last enacted ap-
propriation Act applicable to that 
preceding award year; and 
‘‘(bb) the amount of the in-
crease in the maximum Federal 
Pell Grant required by this para-
graph for that preceding award 
year. 
‘‘(D) PROGRAM REQUIREMENTS AND OP-
ERATIONS
OTHERWISE
UNAFFECTED.—Except 
as provided in subparagraphs (B) and (C), 
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nothing in this paragraph shall be construed to 
alter the requirements and operations of the 
Federal Pell Grant Program as authorized 
under this section, or to authorize the imposi-
tion of additional requirements or operations 
for the determination and allocation of Federal 
Pell Grants under this section. 
‘‘(E) 
AVAILABILITY
OF
FUNDS.—The 
amounts made available by subparagraph (A) 
for any fiscal year shall be available beginning 
on October 1 of that fiscal year, and shall re-
main available through September 30 of the 
succeeding fiscal year.’’. 
SEC. 102. COLLEGE ACCESS AND COMPLETION INNOVA-
TION FUND. 
(a) HEADER.—Part E of title VII (20 U.S.C. 1141 
et seq.) is amended by striking the header of such part 
and inserting the following: 
‘‘PART E—COLLEGE ACCESS AND COMPLETION 
INNOVATION FUND’’. 
(b) PURPOSE.—Part E of title VII (20 U.S.C. 1141 
et seq.) is further amended by inserting before section 781 
the following: 
‘‘SEC. 780. PURPOSES. 
‘‘The purposes of this part are— 
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‘‘(1) to promote innovation in postsecondary 
education practices and policies by institutions of 
higher education, States, and nonprofit organiza-
tions to improve student success, completion, and 
post-completion employment, particularly for stu-
dents from groups that are underrepresented in 
postsecondary education; and 
‘‘(2) to assist States in developing longitudinal 
data systems, common metrics, and reporting sys-
tems to enhance the quality and availability of infor-
mation about student success, completion, and post- 
completion employment.’’. 
(c) AUTHORIZATION AND APPROPRIATION.—Section 
781(a) (20 U.S.C. 1141(a)) is amended to read as follows: 
‘‘(a) AUTHORIZATION AND APPROPRIATION.— 
‘‘(1) IN GENERAL.—There are authorized to be 
appropriated, and there are appropriated, to carry 
out this part (in addition to any other amounts ap-
propriated to carry out this part and out of any 
money in the Treasury not otherwise appropriated), 
$600,000,000 for each of the fiscal years 2010 
through 2014. 
‘‘(2) ALLOCATIONS.—Of the amount appro-
priated for any fiscal year under paragraph (1)— 
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‘‘(A) 25 percent shall be made available to 
carry out section 781; 
‘‘(B) 50 percent shall be made available to 
carry out section 782; 
‘‘(C) 24 percent shall be made available to 
carry out section 783; and 
‘‘(D) 1 percent shall be made available to 
carry out section 784.’’. 
(d) STATE GRANTS AND GRANTS TO ELIGIBLE ENTI-
TIES.—Part E of title VII (20 U.S.C. 1141 et seq.) is 
further amended by adding at the end the following: 
‘‘SEC. 782. STATE INNOVATION COMPLETION GRANTS. 
‘‘(a) PROGRAM AUTHORIZATION.—From the amount 
appropriated under section 781(a)(2)(B) to carry out this 
section, the Secretary shall award grants to States on a 
competitive basis to promote student persistence in, and 
completion of, postsecondary education. 
‘‘(b) FEDERAL SHARE; NON-FEDERAL SHARE.— 
‘‘(1) FEDERAL
SHARE.—The amount of the 
Federal share under this section for a fiscal year 
shall be equal to 2⁄3 of the costs of the activities and 
services described in subsection (d)(1) that are car-
ried out under the grant. 
‘‘(2) NON-FEDERAL
SHARE.—The amount of 
the non-Federal share under this section shall be 
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equal to 1⁄3 of the costs of the activities and services 
described in subsection (d)(1). The non-Federal 
share may be in cash or in kind, and may be pro-
vided from State resources, contributions from pri-
vate organizations, or both. 
‘‘(3) SUPPLEMENT, NOT SUPPLANT.—The Fed-
eral and non-Federal shares required by this para-
graph shall be used to supplement, and not sup-
plant, State and private resources that would other-
wise be expended to carry out activities and services 
to promote student persistence in and completion of 
postsecondary education. 
‘‘(c) APPLICATION AND SELECTION.— 
‘‘(1) APPLICATION REQUIREMENTS.—For each 
fiscal year for which a State desires to receive a 
grant under this section, the State agency with ju-
risdiction over higher education, or another agency 
designated by the Governor or chief executive of the 
State to administer the grant program under this 
section, shall submit an application to the Secretary 
at such time, in such manner, and containing such 
information as the Secretary may require. Such ap-
plication shall include— 
‘‘(A) a description of the State’s capacity 
to administer the grant under this section; 
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‘‘(B) a description of the State’s plans for 
using the grant funds for activities described in 
subsection (d)(1), including plans for how the 
State will make special efforts to provide bene-
fits to students in the State who are from 
groups that are underrepresented in postsec-
ondary education; 
‘‘(C) a description of how the State will 
provide for the non-Federal share from State 
resources, private contributions, or both; 
‘‘(D) a description of— 
‘‘(i) the administrative system that 
the State has in place to administer the ac-
tivities and services described in subsection 
(d)(1); or 
‘‘(ii) the plan to develop such adminis-
trative system; 
‘‘(E) a description of the data system the 
State has or will have in place to measure the 
performance and progress toward the State’s 
goals included in the Access and Completion 
Plan submitted, or that will be submitted, 
under paragraph (2)(A); and 
‘‘(F) the assurances under paragraph (2). 
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‘‘(2) STATE ASSURANCES.—The assurances re-
quired in paragraph (1)(F) shall include an assur-
ance of each of the following: 
‘‘(A) That the State will submit, not later 
than July 1, 2011, an Access and Completion 
Plan to increase the State’s rate of persistence 
in and completion of postsecondary education. 
Such plan shall include— 
‘‘(i) the State’s annual and long-term 
quantifiable goals with respect to— 
‘‘(I) the rates of postsecondary 
enrollment, persistence, and comple-
tion, disaggregated by income, race, 
ethnicity, gender, disability, and age 
of students; 
‘‘(II) closing gaps in enrollment, 
persistence, and completion rates for 
students from groups that are under-
represented in postsecondary edu-
cation; 
‘‘(III) targeting education and 
training programs to address labor 
market needs in the State, as such 
needs are determined by the State; 
and 
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‘‘(IV) improving coordination be-
tween two-year and four-year institu-
tions of higher education in the State, 
including supporting comprehensive 
articulation agreements between such 
institutions; and 
‘‘(ii) the State’s plan to develop a 
statewide longitudinal data system that 
will— 
‘‘(I) 
collect, 
maintain, 
disaggregate (by income, race, eth-
nicity, gender, disability, and age of 
students), and analyze postsecondary 
education and workforce information, 
including— 
‘‘(aa) 
postsecondary 
edu-
cation 
enrollment, 
persistence, 
and completion information; 
‘‘(bb) post-completion em-
ployment outcomes of students 
who enrolled in postsecondary 
programs and training programs 
offered by eligible training pro-
viders under the Workforce In-
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vestment Act of 1998 (29 U.S.C. 
2801 et seq.); and 
‘‘(cc) 
postsecondary 
edu-
cation and employment outcomes 
of students who move out of the 
State; and 
‘‘(II) make the information de-
scribed in subclause (I) available to 
the general public in a manner that is 
transparent and user-friendly. 
‘‘(B) That the State has a comprehensive 
planning or policy formulation process with re-
spect to increasing postsecondary enrollment, 
persistence, and completion that— 
‘‘(i) encourages coordination between 
the State administration of grants under 
this section and similar State programs; 
‘‘(ii) encourages State policies that 
are designed to improve rates of enroll-
ment and persistence in, and completion 
of, postsecondary education for all cat-
egories of institutions of higher education 
described in section 132(d) in the State; 
‘‘(iii) considers the postsecondary edu-
cation needs of students from groups that 
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are underrepresented in postsecondary 
education; 
‘‘(iv) considers the resources of public 
and private institutions of higher edu-
cation, organizations, and agencies within 
the State that are capable of providing ac-
cess to postsecondary education opportuni-
ties within the State; and 
‘‘(v) provides for direct, equitable, and 
active participation in the comprehensive 
planning or policy formulation process or 
processes, through membership on State 
planning 
commissions, 
State 
advisory 
councils, or other State entities established 
by the State and consistent with State law, 
by representatives of— 
‘‘(I) institutions of higher edu-
cation, including at least one member 
from a junior or community college 
(as defined in section 312(f)); 
‘‘(II) students; 
‘‘(III) other providers of postsec-
ondary education services (including 
organizations providing access to such 
services); and 
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‘‘(IV) the general public in the 
State. 
‘‘(C) That the State will incorporate poli-
cies and practices that, through the activities 
funded under this section, are determined to be 
effective in improving rates of postsecondary 
education enrollment, persistence, and comple-
tion into the future postsecondary education 
policies and practices of the State to ensure 
that the benefits achieved through the activities 
funded under this section continue beyond the 
period of the grant. 
‘‘(3) SUBGRANTS
TO
NONPROFIT
ORGANIZA-
TIONS.—A State receiving a payment under this sec-
tion may elect to make a subgrant to one or more 
nonprofit organizations in the State, including agen-
cies with agreements with the Secretary under sub-
sections (b) and (c) of section 428 on the date of the 
enactment of the Student Aid and Fiscal Responsi-
bility Act of 2009, or a partnership of such organi-
zations, to carry out activities and services described 
in subsection (d)(1), if the nonprofit organization or 
partnership— 
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