H. R. 4137—144 
a grant for access and persistence and other stu-
dent aid programs; 
‘‘(IV) a nonbinding estimate of the total 
amount of financial aid that a low-income student 
with a similar income level may expect to receive, 
including an estimate of the amount of a grant 
for access and persistence and an estimate of the 
amount of grants, loans, and all other available 
types of aid from the major Federal and State 
financial aid programs; 
‘‘(V) an explanation that in order to be eligible 
for a grant for access and persistence, at a min-
imum, a student shall— 
‘‘(aa) meet the requirement under para-
graph (3); 
‘‘(bb) graduate from secondary school; and 
‘‘(cc) enroll at an institution of higher edu-
cation— 
‘‘(AA) that is a partner in the partner-
ship; or 
‘‘(BB) with respect to which attend-
ance 
is 
permitted 
under 
subsection 
(d)(1)(C)(ii); 
‘‘(VI) information on any additional require-
ments (such as a student pledge detailing student 
responsibilities) that the State may impose for 
receipt of a grant for access and persistence under 
this section; and 
‘‘(VII) instructions on how to apply for a grant 
for access and persistence and an explanation that 
a student is required to file a Free Application 
for Federal Student Aid authorized under section 
483(a) to be eligible for such grant and assistance 
from other Federal and State financial aid pro-
grams; and 
‘‘(ii) may include a disclaimer that grant awards 
for access and persistence are contingent on— 
‘‘(I) a determination of the student’s financial 
eligibility at the time of the student’s enrollment 
at an institution of higher education that is a 
partner in the partnership or qualifies under sub-
section (d)(1)(C)(ii); 
‘‘(II) annual Federal and State spending for 
higher education; and 
‘‘(III) other aid received by the student at the 
time of the student’s enrollment at such institution 
of higher education. 
‘‘(3) ELIGIBILITY.—In determining which students are 
eligible to receive grants for access and persistence, the State 
shall ensure that each such student complies with the following 
subparagraph (A) or (B): 
‘‘(A) Meets not less than two of the following criteria, 
with priority given to students meeting all of the following 
criteria: 
‘‘(i) Has an expected family contribution equal to 
zero, as determined under part F, or a comparable
H. R. 4137—145 
alternative based upon the State’s approved criteria 
in section 415C(b)(4). 
‘‘(ii) Qualifies for the State’s maximum under-
graduate award, as authorized under section 415C(b). 
‘‘(iii) Is participating in, or has participated in, 
a Federal, State, institutional, or community early 
information and intervention, mentoring, or outreach 
program, as recognized by the State agency admin-
istering activities under this section. 
‘‘(B) Is receiving, or has received, a grant for access 
and persistence under this section, in accordance with para-
graph (5). 
‘‘(4) GRANT AWARD.—Once a student, including those stu-
dents who have received early notification under paragraph 
(2) from the State, applies for admission to an institution that 
is a partner in the partnership, files a Free Application for 
Federal Student Aid and any related State form, and is deter-
mined eligible by the State under paragraph (3), the State 
shall— 
‘‘(A) issue the student a preliminary award certificate 
for a grant for access and persistence with estimated award 
amounts; and 
‘‘(B) inform the student that payment of the grant 
for access and persistence award amounts is subject to 
certification of enrollment and award eligibility by the 
institution of higher education. 
‘‘(5) DURATION OF AWARD.—An eligible student who receives 
a grant for access and persistence under this section shall 
receive such grant award for each year of such student’s under-
graduate education in which the student remains eligible for 
assistance under this title, including pursuant to section 484(c), 
and remains financially eligible as determined by the State, 
except that the State may impose reasonable time limits to 
degree completion. 
‘‘(e) ADMINISTRATIVE COST ALLOWANCE.—A State that receives 
an allotment under this section may reserve not more than two 
percent of the funds made available annually through the allotment 
for State administrative functions required to carry out this section. 
‘‘(f) STATUTORY AND REGULATORY RELIEF FOR INSTITUTIONS OF 
HIGHER EDUCATION.—The Secretary may grant, upon the request 
of an institution of higher education that is in a partnership 
described in subsection (b)(2)(B)(ii) and that receives an allotment 
under this section, a waiver for such institution from statutory 
or regulatory requirements that inhibit the ability of the institution 
to successfully and efficiently participate in the activities of the 
partnership. 
‘‘(g) APPLICABILITY RULE.—The provisions of this subpart that 
are not inconsistent with this section shall apply to the program 
authorized by this section. 
‘‘(h) MAINTENANCE
OF
EFFORT
REQUIREMENT.—Each State 
receiving an allotment under this section for a fiscal year shall 
provide the Secretary with an assurance that the aggregate amount 
expended per student or the aggregate expenditures by the State, 
from funds derived from non-Federal sources, for the authorized 
activities described in subsection (d) for the preceding fiscal year
H. R. 4137—146 
were not less than the amount expended per student or the aggre-
gate expenditure by the State for the activities for the second 
preceding fiscal year. 
‘‘(i) SPECIAL RULE.—Notwithstanding subsection (h), for pur-
poses of determining a State’s share of the cost of the authorized 
activities described in subsection (d), the State shall consider only 
those expenditures from non-Federal sources that exceed the State’s 
total expenditures for need-based grants, scholarships, and work- 
study assistance for fiscal year 1999 (including any such assistance 
provided under this subpart). 
‘‘(j) CONTINUATION AND TRANSITION.—For the two-year period 
that begins on the date of enactment of the Higher Education 
Opportunity Act, the Secretary shall continue to award grants 
under section 415E of the Higher Education Act of 1965 as such 
section existed on the day before the date of enactment of the 
Higher Education Opportunity Act to States that choose to apply 
for grants under such predecessor section. 
‘‘(k) REPORTS.—Not later than three years after the date of 
enactment of the Higher Education Opportunity Act and annually 
thereafter, the Secretary shall submit a report describing the activi-
ties and the impact of the partnerships under this section to the 
authorizing committees.’’. 
SEC. 408. SPECIAL PROGRAMS FOR STUDENTS WHOSE FAMILIES ARE 
ENGAGED IN MIGRANT AND SEASONAL FARMWORK. 
Section 418A (20 U.S.C. 1070d–2) is amended— 
(1) in subsection (b)— 
(A) in paragraph (1)(B)(i), by striking ‘‘parents’’ and 
inserting ‘‘immediate family’’; 
(B) in paragraph (3)(B), by inserting ‘‘(including 
preparation for college entrance examinations)’’ after ‘‘col-
lege program’’; 
(C) in paragraph (5), by striking ‘‘weekly’’; 
(D) in paragraph (7), by striking ‘‘and’’ after the semi-
colon; 
(E) in paragraph (8)— 
(i) by inserting ‘‘(such as transportation and child 
care)’’ after ‘‘services’’; and 
(ii) by striking the period at the end and inserting 
‘‘; and’’; and 
(F) by adding at the end the following: 
‘‘(9) other activities to improve persistence and retention 
in postsecondary education.’’; 
(2) in subsection (c)— 
(A) in paragraph (1)— 
(i) in subparagraph (A)— 
(I) by striking ‘‘parents’’ and inserting ‘‘imme-
diate family’’; and 
(II) by striking ‘‘(or such part’s predecessor 
authority)’’; 
(ii) in subparagraph (B)— 
(I) in the matter preceding clause (i), by 
inserting ‘‘to improve placement, persistence, and 
retention in postsecondary education,’’ after ‘‘serv-
ices’’; and
H. R. 4137—147 
(II) in clause (i), by striking ‘‘and career’’ and 
inserting ‘‘career, and economic education or per-
sonal finance’’; 
(iii) in subparagraph (E), by striking ‘‘and’’ after 
the semicolon; 
(iv) by redesignating subparagraph (F) as subpara-
graph (G); 
(v) by inserting after subparagraph (E) the fol-
lowing: 
‘‘(F) internships; and’’; and 
(vi) in subparagraph (G) (as redesignated by clause 
(iv)), by striking ‘‘support services’’ and inserting 
‘‘essential supportive services (such as transportation 
and child care)’’ ; and 
(B) in paragraph (2)— 
(i) in subparagraph (A), by striking ‘‘and’’ after 
the semicolon; 
(ii) in subparagraph (B), by striking the period 
at the end and inserting ‘‘, and coordinating such serv-
ices, assistance, and aid with other non-program serv-
ices, assistance, and aid, including services, assistance, 
and aid provided by community-based organizations, 
which may include mentoring and guidance; and’’; and 
(iii) by adding at the end the following: 
‘‘(C) for students attending two-year institutions of higher 
education, encouraging the students to transfer to four-year 
institutions of higher education, where appropriate, and moni-
toring the rate of transfer of such students.’’; 
(3) in subsection (e), by striking ‘‘section 402A(c)(1)’’ and 
inserting ‘‘section 402A(c)(2)’’; 
(4) in subsection (f)— 
(A) in paragraph (1), by striking ‘‘$150,000’’ and 
inserting ‘‘$180,000’’; and 
(B) in paragraph (2), by striking ‘‘$150,000’’ and 
inserting ‘‘$180,000’’; 
(5) by redesignating subsections (g) and (h) as subsections 
(h) and (i), respectively; 
(6) by inserting after subsection (f) the following: 
‘‘(g) RESERVATION
AND
ALLOCATION
OF
FUNDS.—From the 
amounts made available under subsection (i), the Secretary— 
‘‘(1) may reserve not more than a total of 1⁄2 of one percent 
for outreach activities, technical assistance, and professional 
development programs relating to the programs under sub-
section (a); 
‘‘(2) for any fiscal year for which the amount appropriated 
to carry out this section is equal to or greater than $40,000,000, 
shall, in awarding grants from the remainder of such amounts— 
‘‘(A) make available not less than 45 percent of such 
remainder for the high school equivalency programs and 
not less than 45 percent of such remainder for the college 
assistance migrant programs; 
‘‘(B) award the rest of such remainder for high school 
equivalency programs or college assistance migrant pro-
grams based on the number, quality, and promise of the 
applications; and 
‘‘(C) consider the need to provide an equitable 
geographic distribution of such grants; and
H. R. 4137—148 
‘‘(3) for any fiscal year for which the amount appropriated 
to carry out this section is less than $40,000,000, shall, in 
awarding grants from the remainder of such amounts make 
available the same percentage of funds to the high school 
equivalency program and to the college assistance migrant pro-
gram as was made available for each such program for the 
fiscal year preceding the fiscal year for which the grant was 
made.’’; 
(7) by striking subsection (h) (as redesignated by paragraph 
(5)) and inserting the following: 
‘‘(h) DATA COLLECTION.—The Secretary shall— 
‘‘(1) annually collect data on persons receiving services 
authorized under this subpart regarding such persons’ rates 
of secondary school graduation, entrance into postsecondary 
education, and completion of postsecondary education, as 
applicable; 
‘‘(2) not less often than once every two years, prepare 
and submit to the authorizing committees a report based on 
the most recently available data under paragraph (1); and 
‘‘(3) make such report available to the public.’’; and 
(8) by striking subsection (i) (as redesignated by paragraph 
(5)) and inserting the following: 
‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—For the purpose of 
making grants and contracts under this section, there are author-
ized to be appropriated $75,000,000 for fiscal year 2009 and such 
sums as may be necessary for the each of the five succeeding 
fiscal years.’’. 
SEC. 409. ROBERT C. BYRD HONORS SCHOLARSHIP PROGRAM. 
(a) ELIGIBILITY
OF SCHOLARS.—Section 419F(a) (20 U.S.C. 
1070d–36(a)) is amended by inserting ‘‘(or a home school, whether 
treated as a home school or a private school under State law)’’ 
after ‘‘public or private secondary school’’. 
(b) AUTHORIZATION
OF APPROPRIATIONS.—Section 419K (20 
U.S.C. 1070d–41) is amended by striking ‘‘$45,000,000 for fiscal 
year 1999’’ and all that follows through the period and inserting 
‘‘such sums as may be necessary for fiscal year 2009 and each 
of the five succeeding fiscal years.’’. 
SEC. 410. CHILD CARE ACCESS MEANS PARENTS IN SCHOOL. 
(a) 
MINIMUM
GRANT.—Section 
419N(b)(2)(B) 
(20 
U.S.C. 
1070e(b)(2)(B)) is amended— 
(1) by striking ‘‘A grant’’ and inserting the following: 
‘‘(i) IN
GENERAL.—Except as provided in clause 
(ii), a grant’’; and 
(2) by adding at the end the following: 
‘‘(ii) INCREASE TRIGGER.—For any fiscal year for 
which the amount appropriated under the authority 
of subsection (g) is equal to or greater than 
$20,000,000, a grant under this section shall be 
awarded in an amount that is not less than $30,000.’’. 
(b) ELIGIBLE
INSTITUTIONS.—Section 419N(b)(4) (20 U.S.C. 
1070e(b)(4)) is amended by inserting ‘‘, except that for any fiscal 
year for which the amount appropriated to carry out this section 
is equal to or greater than $20,000,000, this sentence shall be 
applied by substituting ‘$250,000’ for ‘$350,000’ ’’ before the period. 
(c) DEFINITION OF LOW-INCOME STUDENT.—Paragraph (7) of 
section 419N(b) (20 U.S.C. 1070e(b)) is amended to read as follows:
H. R. 4137—149 
‘‘(7) DEFINITION OF LOW-INCOME STUDENT.—For the purpose 
of this section, the term ‘low-income student’ means a student— 
‘‘(A) who is eligible to receive a Federal Pell Grant 
for the award year for which the determination is made; 
or 
‘‘(B) who would otherwise be eligible to receive a Fed-
eral Pell Grant for the award year for which the determina-
tion is made, except that the student fails to meet the 
requirements of— 
‘‘(i) section 401(c)(1) because the student is enrolled 
in a graduate or first professional course of study; 
or 
‘‘(ii) section 484(a)(5) because the student is in 
the United States for a temporary purpose.’’. 
(d) PUBLICITY.—Section 419N(b) (20 U.S.C. 1070e(b)) is further 
amended by adding at the end the following new paragraph: 
‘‘(8) PUBLICITY.—The Secretary shall publicize the avail-
ability of grants under this section in appropriate periodicals, 
in addition to publication in the Federal Register, and shall 
inform appropriate educational organizations of such avail-
ability.’’. 
(e) REPORTING REQUIREMENTS.—Section 419N(e) (20 U.S.C. 
1070e(e)) is amended— 
(1) in paragraph (1)(A), by striking ‘‘18 months,’’ and all 
that follows through the end and inserting ‘‘annually.’’; and 
(2) in paragraph (2)— 
(A) by striking ‘‘the third annual grant payment’’ and 
inserting ‘‘continuation awards’’; and 
(B) by striking ‘‘the 18-month report’’ and inserting 
‘‘the reports’’. 
(f) AUTHORIZATION OF APPROPRIATIONS.—Section 419N(g) (20 
U.S.C. 1070e(g)) is amended by striking ‘‘$45,000,000 for fiscal 
year 1999’’ and all that follows through the period and inserting 
‘‘such sums as may be necessary for fiscal year 2009 and each 
of the five succeeding fiscal years.’’. 
SEC. 411. LEARNING ANYTIME ANYWHERE PARTNERSHIPS. 
Subpart 8 of part A of title IV (20 U.S.C. 1070f et seq.) is 
repealed. 
SEC. 412. TEACH GRANTS. 
(a) AMENDMENTS.—Subpart 9 of part A of title IV (20 U.S.C. 
1070g et seq.) is amended— 
(1) in section 420N (20 U.S.C. 1070g–2)— 
(A) in subsection (b)— 
(i) in paragraph (1)(E), by striking ‘‘and’’ after 
the semicolon; 
(ii) in paragraph (2), by striking the period at 
the end and inserting ‘‘; and’’; and 
(iii) by adding at the end the following new para-
graph: 
‘‘(3) contains, or is accompanied by, a plain-language disclo-
sure form developed by the Secretary that clearly describes 
the nature of the TEACH Grant award, the service obligation, 
and the loan repayment requirements that are the consequence 
of the failure to complete the service obligation.’’; and 
(B) by adding at the end the following new subsection: 
‘‘(d) ADDITIONAL ADMINISTRATIVE PROVISIONS.—
H. R. 4137—150 
‘‘(1) CHANGE OF HIGH-NEED DESIGNATION.—If a recipient 
of an initial grant under this subpart has acquired an academic 
degree, or expertise, in a field that was, at the time of the 
recipient’s application for that grant, designated as high need 
in accordance with subsection (b)(1)(C)(vii), but is no longer 
so designated, the grant recipient may fulfill the service obliga-
tion described in subsection (b)(1) by teaching in that field. 
‘‘(2) EXTENUATING
CIRCUMSTANCES.—The Secretary shall 
establish, 
by 
regulation, 
categories 
of 
extenuating 
cir-
cumstances under which a recipient of a grant under this 
subpart who is unable to fulfill all or part of the recipient’s 
service obligation may be excused from fulfilling that portion 
of the service obligation.’’; and 
(2) by adding at the end the following new section: 
‘‘SEC. 420P. PROGRAM REPORT. 
‘‘Not later than two years after the date of enactment of the 
Higher Education Opportunity Act and every two years thereafter, 
the Secretary shall prepare and submit to the authorizing commit-
tees a report on TEACH grants with respect to the schools and 
students served by recipients of such grants. Such report shall 
take into consideration information related to— 
‘‘(1) the number of TEACH grant recipients; 
‘‘(2) the degrees obtained by such recipients; 
‘‘(3) the location, including the school, local educational 
agency, and State, where the recipients completed the service 
agreed to under section 420N(b) and the subject taught; 
‘‘(4) the duration of such service; and 
‘‘(5) any other data necessary to conduct such evaluation.’’. 
(b) EFFECTIVE DATE.—The amendments made by subsection 
(a)(1) shall take effect on July 1, 2010. 
PART B—FEDERAL FAMILY EDUCATION LOAN 
PROGRAM 
SEC. 421. LIMITATIONS ON AMOUNTS OF LOANS COVERED BY FEDERAL 
INSURANCE. 
Section 424(a) (20 U.S.C. 1074(a)) is amended— 
(1) by striking ‘‘2012’’ and inserting ‘‘2014’’; and 
(2) by striking ‘‘2016’’ and inserting ‘‘2018’’. 
SEC. 422. FEDERAL PAYMENTS TO REDUCE STUDENT INTEREST COSTS. 
(a) DEFINITIONS.— 
(1) AMENDMENTS.—Subparagraph (C) of section 428(a)(2) 
(20 U.S.C. 1078(a)(2)) is amended to read as follows: 
‘‘(C) For the purpose of this paragraph— 
‘‘(i) a student’s cost of attendance shall be determined 
under section 472; 
‘‘(ii) a student’s estimated financial assistance means, 
for the period for which the loan is sought— 
‘‘(I) the amount of assistance such student will 
receive under subpart 1 of part A (as determined in 
accordance with section 484(b)), subpart 3 of part A, 
and parts C and E; plus 
‘‘(II) other scholarship, grant, or loan assistance, 
but excluding—
H. R. 4137—151 
‘‘(aa) any national service education award or 
post-service benefit under title I of the National 
and Community Service Act of 1990; and 
‘‘(bb) any veterans’ education benefits as 
defined in section 480(c); and 
‘‘(iii) the determination of need and of the amount 
of a loan by an eligible institution under subparagraph 
(B) with respect to a student shall be calculated in accord-
ance with part F.’’. 
(2) EFFECTIVE DATE.—The amendments made by paragraph 
(1) shall take effect on July 1, 2010. 
(b) DURATION OF AUTHORITY TO MAKE INTEREST SUBSIDIZED 
LOANS.—Section 428(a)(5) (20 U.S.C. 1078(a)(5)) is amended— 
(1) by striking ‘‘2012’’ and inserting ‘‘2014’’; and 
(2) by striking ‘‘2016’’ and inserting ‘‘2018’’. 
(c) INSURANCE PROGRAM AGREEMENTS.— 
(1) 
DEFERMENT
INFORMATION
REQUIREMENTS.—Section 
428(b)(1)(Y) (20 U.S.C. 1078(b)(1)(Y)) is amended— 
(A) by striking clause (i) and inserting the following: 
‘‘(i) the lender shall determine the eligibility of 
a borrower for a deferment described in subparagraph 
(M)(i) based on— 
‘‘(I) receipt of a request for deferment from 
the borrower and documentation of the borrower’s 
eligibility for the deferment; 
‘‘(II) receipt of a newly completed loan applica-
tion that documents the borrower’s eligibility for 
a deferment; 
‘‘(III) receipt of student status information 
documenting that the borrower is enrolled on at 
least a half-time basis; or 
‘‘(IV) the lender’s confirmation of the bor-
rower’s half-time enrollment status through use 
of the National Student Loan Data System, if the 
confirmation is requested by the institution of 
higher education;’’; 
(B) in clause (ii), by striking the period at the end 
and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(iii) the lender shall, at the time the lender grants 
a deferment to a borrower who received a loan under 
section 428H and is eligible for a deferment under 
subparagraph (M) of this paragraph, provide informa-
tion to the borrower to assist the borrower in under-
standing the impact of the capitalization of interest 
on the borrower’s loan principal and on the total 
amount of interest to be paid during the life of the 
loan.’’. 
(2) 
TRANSFER
INFORMATION
REQUIREMENTS.—Section 
428(b)(2)(F)(i) (20 U.S.C. 1078(b)(2)(F)(i)) is amended— 
(A) in subclause (III), by striking ‘‘and’’ after the semi-
colon; 
(B) in subclause (IV), by striking ‘‘and’’ after the semi-
colon; and 
(C) by adding at the end the following: 
‘‘(V) the effective date of the transfer;
H. R. 4137—152 
‘‘(VI) the date on which the current servicer 
(as of the date of the notice) will stop accepting 
payments; and 
‘‘(VII) the date on which the new servicer will 
begin accepting payments; and’’. 
(d) RESTRICTIONS ON INDUCEMENTS, PAYMENTS, MAILINGS, AND 
ADVERTISING.—Paragraph (3) of section 428(b) (20 U.S.C. 1078(b)(3)) 
is amended to read as follows: 
‘‘(3) RESTRICTIONS ON INDUCEMENTS, PAYMENTS, MAILINGS, 
AND ADVERTISING.—A guaranty agency shall not— 
‘‘(A) offer, directly or indirectly, premiums, payments, 
stock or other securities, prizes, travel, entertainment 
expenses, tuition payment or reimbursement, or other 
inducements to— 
‘‘(i) any institution of higher education or the 
employees of an institution of higher education in order 
to secure applicants for loans made under this part; 
or 
‘‘(ii) any lender, or any agent, employee, or inde-
pendent contractor of any lender or guaranty agency, 
in order to administer or market loans made under 
this part (other than a loan made as part of the guar-
anty agency’s lender-of-last-resort program pursuant 
to section 428(j)), for the purpose of securing the des-
ignation of the guaranty agency as the insurer of such 
loans; 
‘‘(B) conduct unsolicited mailings, by postal or elec-
tronic means, of student loan application forms to students 
enrolled in secondary schools or postsecondary educational 
institutions, or to the families of such students, except 
that applications may be mailed, by postal or electronic 
means, to students or borrowers who have previously 
received loans guaranteed under this part by the guaranty 
agency; 
‘‘(C) perform, for an institution of higher education 
participating in a program under this title, any function 
that such institution is required to perform under this 
title, except that the guaranty agency may perform func-
tions on behalf of such institution in accordance with sec-
tion 485(b); 
‘‘(D) pay, on behalf of an institution of higher education, 
another person to perform any function that such institu-
tion is required to perform under this title, except that 
the guaranty agency may perform functions on behalf of 
such institution in accordance with section 485(b); or 
‘‘(E) conduct fraudulent or misleading advertising con-
cerning loan availability, terms, or conditions. 
It shall not be a violation of this paragraph for a guaranty 
agency to provide technical assistance to institutions of higher 
education comparable to the technical assistance provided to 
institutions of higher education by the Department.’’. 
(e) 
INFORMATION
REGARDING
INCOME-BASED
REPAYMENT 
PLANS.— 
(1) 
IN
GENERAL.—Section 
428(b)(9)(A) 
(20 
U.S.C. 
1078(b)(9)(A)) is amended— 
(A) in clause (iii), by striking ‘‘and’’ after the semicolon;
H. R. 4137—153 
(B) in clause (iv), by striking the period at the end 
and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(v) beginning July 1, 2009, an income-based 
repayment plan that enables a borrower who has a 
partial financial hardship to make a lower monthly 
payment in accordance with section 493C, except that 
the plan described in this clause shall not be available 
to a borrower for a loan under section 428B made 
on behalf of a dependent student or for a consolidation 
loan under section 428C, if the proceeds of such loan 
were used to discharge the liability of a loan under 
section 428B made on behalf of a dependent student.’’. 
(2) CONFORMING AMENDMENT.—Section 428(b)(1)(L)(i) (20 
U.S.C. 1078(b)(1)(L)(i)) is amended by striking ‘‘clause (ii) or 
(iii)’’ and inserting ‘‘clause (ii), (iii), or (v)’’. 
(f) FORBEARANCE INFORMATION REQUIREMENTS IN GUARANTY 
AGREEMENTS.—Section 428(c) (20 U.S.C. 1078(c)) is amended— 
(1) in paragraph (2)(H)(i), by striking ‘‘preclaims’’ and 
inserting ‘‘default aversion’’; and 
(2) in paragraph (3)(C)— 
(A) in clause (i), by striking ‘‘and’’ after the semicolon; 
(B) in clause (ii), by striking ‘‘and’’ after the semicolon; 
and 
(C) by inserting after clause (ii) the following: 
‘‘(iii) the lender shall, at the time of granting a 
borrower forbearance, provide information to the bor-
rower to assist the borrower in understanding the 
impact of capitalization of interest on the borrower’s 
loan principal and total amount of interest to be paid 
during the life of the loan; and 
‘‘(iv) the lender shall contact the borrower not less 
often than once every 180 days during the period of 
forbearance to inform the borrower of— 
‘‘(I) the amount of unpaid principal and the 
amount of interest that has accrued since the last 
statement of such amounts provided to the bor-
rower by the lender; 
‘‘(II) the fact that interest will accrue on the 
loan for the period of forbearance; 
‘‘(III) the amount of interest that will be 
capitalized, and the date on which capitalization 
will occur; 
‘‘(IV) the option of the borrower to pay the 
interest that has accrued before the interest is 
capitalized; and 
‘‘(V) the borrower’s option to discontinue the 
forbearance at any time; and’’. 
(g) APPLICABILITY OF USURY LAWS.— 
(1) AMENDMENT.—Section 428(d) (20 U.S.C. 1078(d)) is 
amended by inserting ‘‘and section 207 of the Servicemembers 
Civil Relief Act (50 U.S.C. App. 527)’’ after ‘‘this Act’’. 
(2) CONFORMING
AMENDMENT.—Section 438 (20 U.S.C. 
1087–1) is amended by adding at the end the following new 
subsection: 
‘‘(g) SPECIAL RULE.—With respect to any loan made under 
this part for which the interest rate is determined under the
H. R. 4137—154 
Servicemembers Civil Relief Act (50 U.S.C. App. 527), the applicable 
interest rate to be subtracted in calculating the special allowance 
for such loan under this section shall be the interest rate determined 
under that Act for such loan.’’. 
(3) EFFECTIVE DATES.—The amendment made by paragraph 
(1) shall take effect on the date of enactment of this Act, 
and the amendment made by paragraph (2) shall take effect 
for loans for which the first disbursement is made on or after 
July 1, 2008. 
(h) REPEAL OF DUPLICATIVE NOTICE REQUIREMENT.—Subsection 
(e) of section 428 (20 U.S.C. 1078(e)) is repealed. 
(i) INFORMATION
ON DEFAULTS.—Section 428(k) (20 U.S.C. 
1078(k)) is amended by adding at the end the following: 
‘‘(4) PROVISION
OF
INFORMATION
TO
BORROWERS
IN 
DEFAULT.—Each guaranty agency that has received a default 
claim from a lender regarding a borrower, shall provide the 
borrower in default, on not less than two separate occasions, 
with a notice, in simple and understandable terms, of not 
less than the following information: 
‘‘(A) The options available to the borrower to remove 
the borrower’s loan from default. 
‘‘(B) The relevant fees and conditions associated with 
each option.’’. 
(j) AUTHORITY TO REQUIRE INCOME-BASED REPAYMENT.—Sec-
tion 428(m) (20 U.S.C. 1078(m)) is amended— 
(1) in the subsection heading, by inserting ‘‘AND INCOME- 
BASED’’ after ‘‘INCOME CONTINGENT’’; 
(2) in paragraph (1)— 
(A) by inserting ‘‘or income-based repayment plan’’ 
before ‘‘, the terms and conditions’’; and 
(B) by inserting ‘‘or an income-based repayment plan 
under section 493C, as the case may be’’ before the period 
at the end; and 
(3) in the paragraph heading of paragraph (2), by inserting 
‘‘OR INCOME-BASED’’ after ‘‘INCOME CONTINGENT’’. 
SEC. 423. VOLUNTARY FLEXIBLE AGREEMENTS. 
Section 428A(a) (20 U.S.C. 1078–1(a)) is amended by adding 
at the end the following: 
‘‘(3) REPORT REQUIRED.— 
‘‘(A) IN GENERAL.—The Secretary, in consultation with 
the guaranty agencies operating under voluntary flexible 
agreements, shall report on an annual basis to the author-
izing committees regarding the program outcomes that the 
voluntary flexible agreements have had with respect to— 
‘‘(i) program integrity and program and cost effi-
ciencies, delinquency prevention, and default aversion, 
including a comparison of such outcomes to such out-
comes for each guaranty agency operating under an 
agreement under subsection (b) or (c) of section 428; 
‘‘(ii) consumer education programs described in sec-
tion 433A; and 
‘‘(iii) the availability and delivery of student finan-
cial aid. 
‘‘(B) CONTENTS.—Each report described in subpara-
graph (A) shall include—
H. R. 4137—155 
‘‘(i) a description of each voluntary flexible agree-
ment and the performance goals established by the 
Secretary for each agreement; 
‘‘(ii) a list of— 
‘‘(I) guaranty agencies operating under vol-
untary flexible agreements; 
‘‘(II) the specific statutory or regulatory 
waivers provided to each such guaranty agency; 
and 
‘‘(III) any other waivers provided to other guar-
anty agencies under paragraph (1); 
‘‘(iii) a description of the standards by which each 
guaranty agency’s performance under the guaranty 
agency’s voluntary flexible agreement was assessed 
and the degree to which each guaranty agency achieved 
the performance standards; 
‘‘(iv) an analysis of the fees paid by the Secretary, 
and the costs and efficiencies achieved under each 
voluntary flexible agreement; and 
‘‘(v) an identification of promising practices for pro-
gram improvement that could be replicated by other 
guaranty agencies.’’. 
SEC. 424. FEDERAL PLUS LOANS. 
(a) AMENDMENTS.—Section 428B (20 U.S.C. 1078–2) is 
amended— 
(1) in subsection (a)(3)(B)(i), by striking subclause (II) and 
inserting the following: 
‘‘(II) does not otherwise have an adverse credit 
history, as determined by the lender in accordance 
with the regulations promulgated pursuant to para-
graph (1)(A), as such regulations were in effect on 
the day before the date of enactment of the Ensuring 
Continued Access to Student Loans Act of 2008.’’; and 
(2) in subsection (d), by striking paragraphs (1) and (2) 
and inserting the following: 
‘‘(1) COMMENCEMENT OF REPAYMENT.—Repayment of prin-
cipal on loans made under this section shall commence not 
later than 60 days after the date such loan is disbursed by 
the lender, subject to deferral— 
‘‘(A)(i) during any period during which the parent bor-
rower or the graduate or professional student borrower 
meets the conditions required for a deferral under section 
427(a)(2)(C) or 428(b)(1)(M); and 
‘‘(ii) upon the request of the parent borrower, during 
any period during which the student on whose behalf the 
loan was borrowed by the parent borrower meets the condi-
tions required for a deferral under section 427(a)(2)(C)(i)(I) 
or 428(b)(1)(M)(i)(I); and 
‘‘(B)(i) in the case of a parent borrower, upon the 
request of the parent borrower, during the 6-month period 
beginning on the later of— 
‘‘(I) the day after the date the student on whose 
behalf the loan was borrowed ceases to carry at least 
one-half the normal full-time academic workload (as 
determined by the institution); or
H. R. 4137—156 
‘‘(II) 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; and 
‘‘(ii) in the case of a graduate or professional student 
borrower, during the 6-month period beginning on the day 
after the date such student ceases to carry at least one- 
half the normal full-time academic workload (as determined 
by the institution). 
‘‘(2) CAPITALIZATION OF INTEREST.— 
‘‘(A) IN GENERAL.—Interest on loans made under this 
section for which payments of principal are deferred pursu-
ant to paragraph (1) shall, if agreed upon by the borrower 
and the lender— 
‘‘(i) be paid monthly or quarterly; or 
‘‘(ii) be added to the principal amount of the loan 
not more frequently than quarterly by the lender. 
‘‘(B) INSURABLE
LIMITS.—Capitalization of interest 
under this paragraph shall not be deemed to exceed the 
annual insurable limit on account of the borrower.’’. 
(b) CONFORMING AMENDMENT.—Section 428(b)(7)(C) (20 U.S.C. 
1078(b)(7)(C)) is amended by striking ‘‘section’’ and all that follows 
through ‘‘428C’’ and inserting ‘‘section 428B or 428C’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall take effect for loans for which the first disbursement is made 
on or after July 1, 2008. 
SEC. 425. FEDERAL CONSOLIDATION LOANS. 
(a) ELIGIBLE BORROWER.—Section 428C(a)(3)(B)(i)(V) (20 U.S.C. 
1078–3(a)(3)(B)(i)(V)) is amended— 
(1) in item (aa), by striking ‘‘or’’ after the semicolon; 
(2) in item (bb), by striking the period and inserting ‘‘; 
or’’; and 
(3) by adding at the end the following: 
‘‘(cc) for the purpose of using the no accrual of 
interest for active duty service members benefit offered 
under section 455(o).’’. 
(b) CONSOLIDATION LOAN LENDER AGREEMENTS.— 
(1) IN
GENERAL.—Section 428C(b)(1) (20 U.S.C. 1078– 
3(b)(1)) is amended— 
(A) in subparagraph (E), by striking ‘‘and’’ after the 
semicolon; 
(B) by redesignating subparagraph (F) as subparagraph 
(G); and 
(C) by inserting after subparagraph (E) the following: 
‘‘(F) that the lender shall disclose to a prospective 
borrower, in simple and understandable terms, at the time 
the lender provides an application for a consolidation loan— 
‘‘(i) whether consolidation would result in a loss 
of loan benefits under this part or part D, including 
loan forgiveness, cancellation, and deferment; 
‘‘(ii) with respect to Federal Perkins Loans under 
part E— 
‘‘(I) that if a borrower includes a Federal Per-
kins Loan under part E in the consolidation loan, 
the borrower will lose all interest-free periods that 
would have been available for the Federal Perkins 
Loan, such as—
H. R. 4137—157 
‘‘(aa) the periods during which no interest 
accrues on such loan while the borrower is 
enrolled in school at least half-time; 
‘‘(bb) the grace period under section 
464(c)(1)(A); and 
‘‘(cc) the periods during which the bor-
rower’s student loan repayments are deferred 
under section 464(c)(2); 
‘‘(II) that if a borrower includes a Federal Per-
kins 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); and 
‘‘(III) the occupations listed in section 465 that 
qualify for Federal Perkins Loan cancellation 
under section 465(a); 
‘‘(iii) the repayment plans that are available to 
the borrower; 
‘‘(iv) the options of the borrower to prepay the 
consolidation loan, to pay such loan on a shorter 
schedule, and to change repayment plans; 
‘‘(v) that borrower benefit programs for a consolida-
tion loan may vary among different lenders; 
‘‘(vi) the consequences of default on the consolida-
tion loan; and 
‘‘(vii) that by applying for a consolidation loan, 
the borrower is not obligated to agree to take the 
consolidation loan; and’’. 
(2) CONSOLIDATION LOANS.—Section 428C(b)(5) (20 U.S.C. 
1078–3(b)(5)) is amended— 
(A) by inserting after the first sentence the following: 
‘‘In addition, in the event that a borrower chooses to obtain 
a consolidation loan for the purposes of using the no accrual 
of interest for active duty service members program offered 
under section 455(o), the Secretary shall offer a Federal 
Direct Consolidation loan to any such borrower who applies 
for participation in such program.’’; and 
(B) by striking ‘‘Such direct consolidation loan’’ and 
inserting ‘‘A direct consolidation loan offered under this 
paragraph’’. 
(3) CONFORMING AMENDMENT.—Section 455(g) (20 U.S.C. 
1087e(g)) is amended by striking ‘‘section 428C(b)(1)(F)’’ and 
inserting ‘‘section 428C(b)(1)(G)’’. 
(c) TECHNICAL AMENDMENT.—Section 203(b)(2)(C) of the College 
Cost Reduction and Access Act (121 Stat. 794) is amended by 
striking ‘‘the second sentence’’ and inserting ‘‘the third sentence’’. 
(d) INCOME-BASED REPAYMENT.— 
(1) AMENDMENTS.—Section 428C(c) (20 U.S.C. 1078–3(c)) 
is amended— 
(A) in the matter preceding clause (i) of paragraph 
(2)(A)— 
(i) by striking ‘‘or income-sensitive’’ and inserting 
‘‘income-sensitive, or income-based’’; and 
(ii) by inserting ‘‘or income-based’’ after ‘‘such 
income-sensitive’’; and 
(B) in paragraph (3)— 
(i) in subparagraph (A)—
H. R. 4137—158 
(I) by inserting ‘‘except in the case of an 
income-based repayment schedule under section 
493C’’, before ‘‘a repayment’’; and 
(II) by striking ‘‘and’’ after the semicolon; 
(ii) in subparagraph (B), by striking the period 
at the end and inserting ‘‘; and’’; and 
(iii) by adding at the end the following: 
‘‘(C) an income-based repayment schedule under sec-
tion 493C shall not be available to a consolidation loan 
borrower who used the proceeds of the loan to discharge 
the liability on a loan under section 428B, or a Federal 
Direct PLUS loan, made on behalf of a dependent student.’’. 
(2) EFFECTIVE DATE.—The amendments made by this sub-
section shall take effect on July 1, 2009. 
(e) EXTENSION OF CONSOLIDATION LOAN AUTHORITY.—Section 
428C(e) (20 U.S.C. 1078–3(e)) is amended by striking ‘‘2012’’ and 
inserting ‘‘2014’’. 
SEC. 426. DEFAULT REDUCTION PROGRAM. 
Section 428F (20 U.S.C. 1078–6) is amended— 
(1) in subsection (a)— 
(A) in paragraph (1)(A), by adding at the end the 
following: ‘‘Upon the sale of the loan to an eligible lender, 
the guaranty agency or other holder of the loan shall 
request any consumer reporting agency to which the guar-
anty agency or holder, as applicable, reported the default 
of the loan, to remove the record of default from the bor-
rower’s credit history.’’; and 
(B) by adding at the end the following: 
‘‘(5) LIMITATION.—A borrower may obtain the benefits avail-
able under this subsection with respect to rehabilitating a 
loan only one time per loan.’’; and 
(2) by adding at the end the following: 
‘‘(c) FINANCIAL
AND
ECONOMIC
LITERACY.—Each program 
described in subsection (b) shall include making available financial 
and economic education materials for a borrower who has rehabili-
tated a loan.’’. 
SEC. 427. REQUIREMENTS FOR DISBURSEMENT OF STUDENT LOANS. 
(a) SPECIAL RULE.—Section 428G(a) (20 U.S.C. 1078–7(a)) is 
amended by adding at the end the following: 
‘‘(4) AMENDMENT TO SPECIAL RULE.—Beginning on October 
1, 2011, the special rule under paragraph (3) shall be applied 
by substituting ‘15 percent’ for ‘10 percent’.’’. 
(b) REQUIREMENTS FOR DISBURSEMENTS TO FIRST YEAR STU-
DENTS.—Section 428G(b) (20 U.S.C. 1078–7(b)) is amended by 
adding at the end the following: 
‘‘(3) AMENDMENT TO COHORT DEFAULT RATE EXEMPTION.— 
Beginning on October 1, 2011, the exemption to the require-
ments of paragraph (1) in the second sentence of such para-
graph shall be applied by substituting ‘15 percent’ for ‘10 per-
cent’.’’. 
SEC. 428. UNSUBSIDIZED STAFFORD LOAN LIMITS. 
(a) AMENDMENTS.—Section 428H(d) (20 U.S.C. 1078–8(d)) is 
amended— 
(1) in paragraph (2)—
H. R. 4137—159 
(A) in the paragraph heading, by striking ‘‘GRADUATE 
AND PROFESSIONAL STUDENTS’’ and inserting ‘‘GRADUATE, 
PROFESSIONAL, 
AND
INDEPENDENT
POSTBACCALAUREATE 
STUDENTS’’; and 
(B) in subparagraph (A)— 
(i) in the matter preceding clause (i), by inserting 
‘‘, or a student described in clause (ii),’’ after ‘‘graduate 
or professional student’’; and 
(ii) by striking clause (ii) and inserting the fol-
lowing: 
‘‘(ii) notwithstanding paragraph (4), in the case 
of an independent student, or a dependent student 
whose parents are unable to borrow under section 428B 
or the Federal Direct PLUS Loan Program, who has 
obtained a baccalaureate degree and who is enrolled 
in coursework specified in paragraph (3)(B) or (4)(B) 
of section 484(b)— 
‘‘(I) $7,000 for coursework necessary for enroll-
ment in a graduate or professional program; and 
‘‘(II) $7,000 for coursework necessary for a 
professional credential or certification from a State 
required for employment as a teacher in an 
elementary or secondary school,’’; and 
(2) in paragraph (4)(A), by striking clause (iii) and inserting 
the following: 
‘‘(iii) in the case of such a student enrolled in 
coursework specified in— 
‘‘(I) section 484(b)(3)(B), $6,000; or 
‘‘(II) section 484(b)(4)(B), $7,000.’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall take effect for loans for which the first disbursement is made 
on or after July 1, 2008. 
SEC. 429. LOAN FORGIVENESS FOR TEACHERS EMPLOYED BY EDU-
CATIONAL SERVICE AGENCIES. 
Section 428J (20 U.S.C. 1078–10) is amended— 
(1) in subsection (b)(1)(A)— 
(A) by inserting ‘‘or location’’ after ‘‘a school’’; and 
(B) by inserting ‘‘or locations’’ after ‘‘schools’’; 
(2) in subsection (c)(1), by striking the second sentence; 
(3) in subsection (c)(3)(B)(iii), by inserting ‘‘or, in the case 
of a teacher who is employed by an educational service agency, 
as certified by the chief administrative officer of such agency,’’ 
after ‘‘borrower is employed,’’; and 
(4) in subsection (g), by striking paragraph (2) and inserting 
the following: 
‘‘(2) PREVENTION OF DOUBLE BENEFITS.—No borrower may, 
for the same service, receive a benefit under both this section 
and— 
‘‘(A) section 428K; 
‘‘(B) section 455(m); 
‘‘(C) section 460; or 
‘‘(D) subtitle D of title I of the National and Community 
Service Act of 1990 (42 U.S.C. 12571 et seq.).’’. 
SEC. 430. LOAN FORGIVENESS FOR SERVICE IN AREAS OF NATIONAL 
NEED. 
Section 428K (20 U.S.C. 1078–11) is amended to read as follows:
H. R. 4137—160 
‘‘SEC. 428K. LOAN FORGIVENESS FOR SERVICE IN AREAS OF NATIONAL 
NEED. 
‘‘(a) PROGRAM AUTHORIZED.— 
‘‘(1) LOAN FORGIVENESS AUTHORIZED.—The Secretary shall 
forgive, in accordance with this section, the qualified loan 
amount described in subsection (c) of the student loan obligation 
of a borrower who— 
‘‘(A) is employed full-time in an area of national need, 
as described in subsection (b); and 
‘‘(B) is not in default on a loan for which the borrower 
seeks forgiveness. 
‘‘(2) METHOD
OF
LOAN
FORGIVENESS.—To provide loan 
forgiveness under paragraph (1), the Secretary is authorized 
to carry out a program— 
‘‘(A) through the holder of the loan, to assume the 
obligation to repay a qualified loan amount for a loan 
made, insured, or guaranteed under this part (other than 
an excepted PLUS loan or an excepted consolidation loan 
(as such terms are defined in section 493C(a))); and 
‘‘(B) to cancel a qualified loan amount for a loan made 
under part D of this title (other than an excepted PLUS 
loan or an excepted consolidation loan). 
‘‘(3) REGULATIONS.—The Secretary is authorized to issue 
such regulations as may be necessary to carry out this section. 
‘‘(b) AREAS OF NATIONAL NEED.—For purposes of this section, 
an individual is employed in an area of national need if the indi-
vidual meets the requirements of one of the following: 
‘‘(1) EARLY
CHILDHOOD
EDUCATORS.—The individual is 
employed full-time as an early childhood educator. 
‘‘(2) NURSES.—The individual is employed full-time— 
‘‘(A) as a nurse in a clinical setting; or 
‘‘(B) as a member of the nursing faculty at an accred-
ited school of nursing (as those terms are defined in section 
801 of the Public Health Service Act (42 U.S.C. 296)). 
‘‘(3) FOREIGN LANGUAGE SPECIALISTS.—The individual— 
‘‘(A) has obtained a baccalaureate or advanced degree 
in a critical foreign language; and 
‘‘(B) is employed full-time— 
‘‘(i) in an elementary school or secondary school 
as a teacher of a critical foreign language; 
‘‘(ii) in an agency of the United States Government 
in a position that regularly requires the use of such 
critical foreign language; or 
‘‘(iii) in an institution of higher education as a 
faculty member or instructor teaching a critical foreign 
language. 
‘‘(4) LIBRARIANS.—The individual is employed full-time as 
a librarian in— 
‘‘(A) a public library that serves a geographic area 
within which the public schools have a combined average 
of 30 percent or more of the schools’ total student enroll-
ments composed of children meeting a measure of poverty 
under section 1113(a)(5) of the Elementary and Secondary 
Education Act of 1965; or 
‘‘(B) a school that qualifies under section 465(a)(2)(A) 
for loan cancellation for Perkins loan recipients who teach 
in such a school.
H. R. 4137—161 
‘‘(5) HIGHLY QUALIFIED TEACHERS SERVING STUDENTS WHO 
ARE LIMITED ENGLISH PROFICIENT, LOW-INCOME COMMUNITIES, 
AND UNDERREPRESENTED POPULATIONS.—The individual— 
‘‘(A) is highly qualified, as such term is defined in 
section 9101 of the Elementary and Secondary Education 
Act of 1965; and 
‘‘(B) is employed full-time— 
‘‘(i) as a teacher educating students who are lim-
ited English proficient; 
‘‘(ii) as a teacher in a school that qualifies under 
section 465(a)(2)(A) for loan cancellation for Perkins 
loan recipients who teach in such a school; 
‘‘(iii) as a teacher and is an individual from an 
underrepresented population in the teaching profes-
sion, as determined by the Secretary; or 
‘‘(iv) as a teacher in an educational service agency, 
as such term is defined in section 9101 of the 
Elementary and Secondary Education Act of 1965. 
‘‘(6) CHILD WELFARE WORKERS.—The individual— 
‘‘(A) has obtained a degree in social work or a related 
field with a focus on serving children and families; and 
‘‘(B) is employed full-time in public or private child 
welfare services. 
‘‘(7) SPEECH-LANGUAGE PATHOLOGISTS AND AUDIOLOGISTS.— 
The individual— 
‘‘(A) is employed full-time as a speech-language 
pathologist or audiologist in an eligible preschool program 
or a school that qualifies under section 465(a)(2)(A) for 
loan cancellation for Perkins loan recipients who teach 
in such a school; and 
‘‘(B) has, at a minimum, a graduate degree in speech- 
language pathology, audiology, or communication sciences 
and disorders. 
‘‘(8) SCHOOL COUNSELORS.—The individual is employed full- 
time as a school counselor (as such term is defined in section 
5421(e) of the Elementary and Secondary Education Act of 
1965), in a school that qualifies under section 465(a)(2)(A) for 
loan cancellation for Perkins loan recipients who teach in such 
a school. 
‘‘(9) 
PUBLIC
SECTOR
EMPLOYEES.—The 
individual 
is 
employed full-time in— 
‘‘(A) public safety (including as a first responder, fire-
fighter, police officer, or other law enforcement or public 
safety officer); 
‘‘(B) emergency management (including as an emer-
gency medical technician); 
‘‘(C) public health (including full-time professionals 
engaged in health care practitioner occupations and health 
care support occupations, as such terms are defined by 
the Bureau of Labor Statistics); or 
‘‘(D) public interest legal services (including prosecu-
tion, public defense, or legal advocacy in low-income 
communities at a nonprofit organization). 
‘‘(10) NUTRITION PROFESSIONALS.—The individual— 
‘‘(A) is a licensed, certified, or registered dietician who 
has completed a degree in a relevant field; and
H. R. 4137—162 
‘‘(B) is employed full-time as a dietician with an agency 
of the special supplemental nutrition program for women, 
infants, and children under section 17 of the Child Nutri-
tion Act of 1966 (42 U.S.C. 1786). 
‘‘(11) MEDICAL SPECIALISTS.—The individual— 
‘‘(A) has received a degree from a medical school at 
an institution of higher education; and 
‘‘(B) has been accepted to, or currently participates 
in, a full-time graduate medical education training program 
or fellowship (or both) to provide health care services (as 
recognized by the Accreditation Council for Graduate Med-
ical Education) that— 
‘‘(i) requires more than five years of total graduate 
medical training; and 
‘‘(ii) has fewer United States medical school grad-
uate applicants than the total number of positions 
available in such program or fellowship. 
‘‘(12) MENTAL HEALTH PROFESSIONALS.—The individual— 
‘‘(A) has not less than a master’s degree in social 
work, psychology, or psychiatry; and 
‘‘(B) is employed full-time providing mental health 
services to children, adolescents, or veterans. 
‘‘(13) DENTISTS.—The individual— 
‘‘(A)(i) has received a degree from an accredited dental 
school (as accredited by the Commission on Dental Accredi-
tation); 
‘‘(ii) has completed residency training in pediatric den-
tistry, general dentistry, or dental public health; and 
‘‘(iii) is employed full-time as a dentist; or 
‘‘(B) is employed full-time as a member of the faculty 
at a program or school accredited by the Commission on 
Dental Accreditation. 
‘‘(14) STEM EMPLOYEES.—The individual is employed full- 
time in applied sciences, technology, engineering, or mathe-
matics. 
‘‘(15) PHYSICAL THERAPISTS.—The individual— 
‘‘(A) is a physical therapist; and 
‘‘(B) is employed full-time providing physical therapy 
services to children, adolescents, or veterans. 
‘‘(16) SUPERINTENDENTS, PRINCIPALS, AND OTHER ADMINIS-
TRATORS.—The individual is employed full-time as a school 
superintendent, principal, or other administrator in a local 
educational agency, including in an educational service agency, 
in which 30 percent or more of the schools are schools that 
qualify under section 465(a)(2)(A) for loan cancellation for Per-
kins loan recipients who teach in such a school. 
‘‘(17) OCCUPATIONAL
THERAPISTS.—The individual is an 
occupational therapist and is employed full-time providing 
occupational therapy services to children, adolescents, or vet-
erans. 
‘‘(c) QUALIFIED LOAN AMOUNT.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), for each school, 
academic, or calendar year of full-time employment in an area 
of national need described in subsection (b) that a borrower 
completes on or after the date of enactment of the Higher 
Education Opportunity Act, the Secretary shall forgive not more 
than $2,000 of the student loan obligation of the borrower
H. R. 4137—163 
that is outstanding after the completion of each such school, 
academic, or calendar year of employment, respectively. 
‘‘(2) MAXIMUM AMOUNT.—The Secretary shall not forgive 
more than $10,000 in the aggregate for any borrower under 
this section, and no borrower shall receive loan forgiveness 
under this section for more than five years of service. 
‘‘(d) PRIORITY.—The Secretary shall grant loan forgiveness 
under this section on a first-come, first-served basis, and subject 
to the availability of appropriations. 
‘‘(e) RULE OF CONSTRUCTION.—Nothing in this section shall 
be construed to authorize the refunding of any repayment of a 
loan. 
‘‘(f) INELIGIBILITY FOR DOUBLE BENEFITS.—No borrower may, 
for the same service, receive a reduction of loan obligations under 
both this section and section 428J, 428L, 455(m), or 460. 
‘‘(g) DEFINITIONS.—In this section: 
‘‘(1) AUDIOLOGIST.—The term ‘audiologist’ means an indi-
vidual who— 
‘‘(A) has received, at a minimum, a graduate degree 
in audiology from an institution of higher education accred-
ited by an agency or association recognized by the Secretary 
pursuant to section 496(a); and 
‘‘(B)(i) provides audiology services under subsection 
(ll)(2) of section 1861 of the Social Security Act (42 U.S.C. 
1395x(ll)(2)); or 
‘‘(ii) meets or exceeds the qualifications for a qualified 
audiologist under subsection (ll)(4) of such section (42 
U.S.C. 1395x(ll)(4)). 
‘‘(2) EARLY CHILDHOOD EDUCATOR.—The term ‘early child-
hood educator’ means an individual who— 
‘‘(A) works directly with children in an eligible pre-
school program or eligible early childhood education pro-
gram in a low-income community; 
‘‘(B) is involved directly in the care, development, and 
education of infants, toddlers, or young children age five 
and under; and 
‘‘(C) has completed a baccalaureate or advanced degree 
in early childhood development or early childhood edu-
cation, or in a field related to early childhood education. 
‘‘(3) ELIGIBLE PRESCHOOL PROGRAM.—The term ‘eligible pre-
school program’ means a program that— 
‘‘(A) provides for the care, development, and education 
of infants, toddlers, or young children age five and under; 
‘‘(B) meets any applicable State or local government 
licensing, certification, approval, and registration require-
ments, and 
‘‘(C) is operated by— 
‘‘(i) a public or private school that is supported, 
sponsored, supervised, or administered by a local edu-
cational agency; 
‘‘(ii) a Head Start agency serving as a grantee 
designated under the Head Start Act (42 U.S.C. 9831 
et seq.); 
‘‘(iii) a nonprofit or community based organization; 
or 
‘‘(iv) a child care program, including a home.
H. R. 4137—164 
‘‘(4) ELIGIBLE
EARLY
CHILDHOOD
EDUCATION
PROGRAM.— 
The term ‘eligible early childhood education program’ means— 
‘‘(A) a family child care program, center-based child 
care program, State prekindergarten program, school pro-
gram, or other out-of-home early childhood development 
care program, that— 
‘‘(i) is licensed or regulated by the State; and 
‘‘(ii) serves two or more unrelated children who 
are not old enough to attend kindergarten; 
‘‘(B) a Head Start Program carried out under the Head 
Start Act (42 U.S.C. 9831 et seq.); or 
‘‘(C) an Early Head Start Program carried out under 
section 645A of the Head Start Act (42 U.S.C. 9840a). 
‘‘(5) LOW-INCOME
COMMUNITY.—The term ‘low-income 
community’ means a school attendance area (as defined in 
section 1113(a)(2)(A) of the Elementary and Secondary Edu-
cation Act of 1965)— 
‘‘(A) in which 70 percent of households earn less than 
85 percent of the State median household income; or 
‘‘(B) that includes a school that qualifies under section 
465(a)(2)(A) for loan cancellation for Perkins loan recipients 
who teach in such a school. 
‘‘(6) NURSE.—The term ‘nurse’ means a nurse who meets 
all of the following: 
‘‘(A) The nurse graduated from— 
‘‘(i) an accredited school of nursing (as those terms 
are defined in section 801 of the Public Health Service 
Act (42 U.S.C. 296)); 
‘‘(ii) a nursing center; or 
‘‘(iii) an academic health center that provides nurse 
training. 
‘‘(B) The nurse holds a valid and unrestricted license 
to practice nursing in the State in which the nurse practices 
in a clinical setting. 
‘‘(C) The nurse holds one or more of the following: 
‘‘(i) A graduate degree in nursing, or an equivalent 
degree. 
‘‘(ii) A nursing degree from a collegiate school of 
nursing (as defined in section 801 of the Public Health 
Service Act (42 U.S.C. 296)). 
‘‘(iii) A nursing degree from an associate degree 
school of nursing (as defined in such section). 
‘‘(iv) A nursing degree from a diploma school of 
nursing (as defined in such section). 
‘‘(7) OCCUPATIONAL
THERAPIST.—The term ‘occupational 
therapist’ means an individual who— 
‘‘(A) has received, at a minimum, a baccalaureate 
degree in occupational therapy from an institution of higher 
education accredited by an agency or association recognized 
by the Secretary pursuant to section 496(a); and 
‘‘(B)(i) provides occupational therapy services under 
section 1861(g) of the Social Security Act (42 U.S.C. 
1395x(g)); or 
‘‘(ii) meets or exceeds the qualifications for a qualified 
occupational therapist, as determined by State law. 
‘‘(8) PHYSICAL
THERAPIST.—The term ‘physical therapist’ 
means an individual who—
H. R. 4137—165 
‘‘(A) has received, at a minimum, a graduate degree 
in physical therapy from an institution of higher education 
accredited by an agency or association recognized by the 
Secretary pursuant to section 496(a); and 
‘‘(B)(i) provides physical therapy services under section 
1861(p) of the Social Security Act (42 U.S.C. 1395x(p)); 
or 
‘‘(ii) meets or exceeds the qualifications for a qualified 
physical therapist, as determined by State law. 
‘‘(9) SPEECH-LANGUAGE PATHOLOGIST.—The term ‘speech- 
language pathologist’ means a speech-language pathologist 
who— 
‘‘(A) has received, at a minimum, a graduate degree 
in speech-language pathology or communication sciences 
and disorders from an institution of higher education 
accredited by an agency or association recognized by the 
Secretary pursuant to section 496(a); and 
‘‘(B) provides speech-language pathology services under 
section 1861(ll)(1) of the Social Security Act (42 U.S.C. 
1395x(ll)(1)), or meets or exceeds the qualifications for a 
qualified speech-language pathologist under subsection 
(ll)(3) of such section (42 U.S.C. 1395x(ll)(3)). 
‘‘(h) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 
to be appropriated to carry out this section such sums as may 
be necessary for fiscal year 2009 and each of the five succeeding 
fiscal years to provide loan forgiveness in accordance with this 
section.’’. 
SEC. 431. LOAN REPAYMENT FOR CIVIL LEGAL ASSISTANCE ATTOR-
NEYS. 
Part B of title IV (20 U.S.C. 1071 et seq.) is amended by 
inserting after section 428K the following: 
‘‘SEC. 428L. LOAN REPAYMENT FOR CIVIL LEGAL ASSISTANCE ATTOR-
NEYS. 
‘‘(a) PURPOSE.—The purpose of this section is to encourage 
qualified individuals to enter and continue employment as civil 
legal assistance attorneys. 
‘‘(b) DEFINITIONS.—In this section: 
‘‘(1) CIVIL LEGAL ASSISTANCE ATTORNEY.—The term ‘civil 
legal assistance attorney’ means an attorney who— 
‘‘(A) is a full-time employee of— 
‘‘(i) a nonprofit organization that provides legal 
assistance with respect to civil matters to low-income 
individuals without a fee; or 
‘‘(ii) a protection and advocacy system or client 
assistance program that provides legal assistance with 
respect to civil matters and receives funding under— 
‘‘(I) subtitle C of title I of the Developmental 
Disabilities Assistance and Bill of Rights Act of 
2000 (42 U.S.C. 15041 et seq.); 
‘‘(II) section 112 or 509 of the Rehabilitation 
Act of 1973 (29 U.S.C. 732, 794e); 
‘‘(III) part A of title I of the Protection and 
Advocacy for Individuals with Mental Illness Act 
(42 U.S.C. 10801 et seq.); 
‘‘(IV) section 5 of the Assistive Technology Act 
of 1998 (29 U.S.C. 3004);
H. R. 4137—166 
‘‘(V) section 1150 of the Social Security Act 
(42 U.S.C. 1320b–21); 
‘‘(VI) section 1253 of the Public Health Service 
Act (42 U.S.C. 300d–53); or 
‘‘(VII) section 291 of the Help America Vote 
Act of 2002 (42 U.S.C. 15461); 
‘‘(B) as such employee, provides civil legal assistance 
as described in subparagraph (A) on a full-time basis; and 
‘‘(C) is continually licensed to practice law. 
‘‘(2) STUDENT LOAN.— 
‘‘(A) IN GENERAL.—Except as provided in subparagraph 
(B), the term ‘student loan’ means— 
‘‘(i) subject to clause (ii), a loan made, insured, 
or guaranteed under this part, part D, or part E; 
and 
‘‘(ii) a loan made under section 428C or 455(g), 
to the extent that such loan was used to repay— 
‘‘(I) a Federal Direct Stafford Loan, a Federal 
Direct Unsubsidized Stafford Loan, or a Federal 
Direct PLUS Loan; 
‘‘(II) a loan made under section 428, 428B, 
or 428H; or 
‘‘(III) a loan made under part E. 
‘‘(B) EXCLUSION
OF
PARENT
PLUS
LOANS.—The term 
‘student loan’ does not include any of the following loans: 
‘‘(i) A loan made to the parents of a dependent 
student under section 428B. 
‘‘(ii) A Federal Direct PLUS Loan made to the 
parents of a dependent student. 
‘‘(iii) A loan made under section 428C or 455(g), 
to the extent that such loan was used to repay— 
‘‘(I) a loan made to the parents of a dependent 
student under section 428B; or 
‘‘(II) a Federal Direct PLUS Loan made to 
the parents of a dependent student. 
‘‘(c) PROGRAM AUTHORIZED.—From amounts appropriated under 
subsection (i) for a fiscal year, the Secretary shall carry out a 
program of assuming the obligation to repay a student loan, by 
direct payments on behalf of a borrower to the holder of such 
loan, in accordance with subsection (d), for any borrower who— 
‘‘(1) is employed as a civil legal assistance attorney; and 
‘‘(2) is not in default on a loan for which the borrower 
seeks repayment. 
‘‘(d) TERMS OF AGREEMENT.— 
‘‘(1) IN GENERAL.—To be eligible to receive repayment bene-
fits under subsection (c), a borrower shall enter into a written 
agreement with the Secretary that specifies that— 
‘‘(A) the borrower will remain employed as a civil legal 
assistance attorney for a required period of service of not 
less than three years, unless involuntarily separated from 
that employment; 
‘‘(B) if the borrower is involuntarily separated from 
employment on account of misconduct, or voluntarily sepa-
rates from employment, before the end of the period speci-
fied in the agreement, the borrower will repay the Secretary 
the amount of any benefits received by such employee 
under this agreement;
H. R. 4137—167 
‘‘(C) if the borrower is required to repay an amount 
to the Secretary under subparagraph (B) and fails to repay 
such amount, a sum equal to that amount shall be recover-
able by the Federal Government from the employee by 
such methods as are provided by law for the recovery 
of amounts owed to the Federal Government; 
‘‘(D) the Secretary may waive, in whole or in part, 
a right of recovery under this subsection if it is shown 
that recovery would be contrary to the public interest; 
and 
‘‘(E) the Secretary shall make student loan payments 
under this section for the period of the agreement, subject 
to the availability of appropriations. 
‘‘(2) REPAYMENTS.— 
‘‘(A) IN GENERAL.—Any amount repaid by, or recovered 
from, an individual under this subsection shall be credited 
to the appropriation account from which the amount 
involved was originally paid. 
‘‘(B) MERGER.—Any amount credited under subpara-
graph (A) shall be merged with other sums in such account 
and shall be available for the same purposes and period, 
and subject to the same limitations, if any, as the sums 
with which the amount was merged. 
‘‘(3) LIMITATIONS.— 
‘‘(A) STUDENT LOAN PAYMENT AMOUNT.—Student loan 
repayments made by the Secretary under this section shall 
be made subject to such terms, limitations, or conditions 
as may be mutually agreed upon by the borrower and 
the Secretary in an agreement under paragraph (1), except 
that the amount paid by the Secretary under this section 
shall not exceed— 
‘‘(i) $6,000 for any borrower in any calendar year; 
or 
‘‘(ii) an aggregate total of $40,000 in the case of 
any borrower. 
‘‘(B) BEGINNING OF PAYMENTS.—Nothing in this section 
shall authorize the Secretary to pay any amount to 
reimburse a borrower for any repayments made by such 
borrower prior to the date on which the Secretary entered 
into an agreement with the borrower under this subsection. 
‘‘(e) ADDITIONAL AGREEMENTS.— 
‘‘(1) IN GENERAL.—On completion of the required period 
of service under an agreement under subsection (d), the bor-
rower and the Secretary may, subject to paragraph (2), enter 
into an additional agreement in accordance with subsection 
(d). 
‘‘(2) TERM.—An agreement entered into under paragraph 
(1) may require the borrower to remain employed as a civil 
legal assistance attorney for less than three years. 
‘‘(f) AWARD BASIS; PRIORITY.— 
‘‘(1) AWARD BASIS.—Subject to paragraph (2), the Secretary 
shall provide repayment benefits under this section on a first- 
come, first-served basis, and subject to the availability of appro-
priations. 
‘‘(2) PRIORITY.—The Secretary shall give priority in pro-
viding repayment benefits under this section in any fiscal year 
to a borrower who—
H. R. 4137—168 
‘‘(A) has practiced law for five years or less and, for 
not less than 90 percent of the time in such practice, 
has served as a civil legal assistance attorney; 
‘‘(B) received repayment benefits under this section 
during the preceding fiscal year; and 
‘‘(C) has completed less than three years of the first 
required period of service specified for the borrower in 
an agreement entered into under subsection (d). 
‘‘(g) INELIGIBILITY FOR DOUBLE BENEFITS.—No borrower may, 
for the same service, receive a reduction of loan obligations under 
both this section and section 428K or 455(m). 
‘‘(h) REGULATIONS.—The Secretary is authorized to issue such 
regulations as may be necessary to carry out this section. 
‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 
to be appropriated to carry out this section $10,000,000 for fiscal 
year 2009 and such sums as may be necessary for each of the 
five succeeding fiscal years.’’. 
SEC. 432. REPORTS TO CONSUMER REPORTING AGENCIES AND 
INSTITUTIONS OF HIGHER EDUCATION. 
(a) IN GENERAL.—Section 430A (20 U.S.C. 1080a) is amended— 
(1) in the section heading, by striking ‘‘CREDIT BUREAUS’’ 
and inserting ‘‘CONSUMER REPORTING AGENCIES’’; 
(2) in subsection (a)— 
(A) in the matter preceding paragraph (1)— 
(i) in the first sentence— 
(I) by striking ‘‘the Secretary,’’ and inserting 
‘‘the Secretary and’’; and 
(II) by striking ‘‘agreements with credit bureau 
organizations’’ and inserting ‘‘an agreement with 
each consumer reporting agency’’; 
(ii) in the second sentence— 
(I) by striking ‘‘such organizations’’ each place 
the term occurs and inserting ‘‘such consumer 
reporting agencies’’; and 
(II) by striking ‘‘insurance), by’’ and inserting 
‘‘insurance) or by’’; and 
(iii) in the third sentence— 
(I) by striking ‘‘Secretary,’’ and inserting ‘‘Sec-
retary or’’; and 
(II) by striking ‘‘organizations’’ and inserting 
‘‘consumer reporting agencies’’; 
(B) by redesignating paragraphs (1), (2), and (3) as 
paragraphs (2), (4), and (5), respectively; 
(C) by inserting before paragraph (2) (as redesignated 
by subparagraph (B)), the following: 
‘‘(1) that the loan is an education loan (as such term is 
defined in section 151);’’; and 
(D) by inserting after paragraph (2) (as redesignated 
by subparagraph (B)) the following: 
‘‘(3) information concerning the repayment status of the 
loan for inclusion in the file of the borrower, except that nothing 
in this subsection shall be construed to affect any otherwise 
applicable provision of the Fair Credit Reporting Act (15 U.S.C. 
1681 et seq.);’’; 
(3) in subsection (b)—
H. R. 4137—169 
(A) by striking ‘‘organizations’’ and inserting ‘‘consumer 
reporting agencies’’; and 
(B) by striking ‘‘subsection (a)(2)’’ and inserting ‘‘sub-
section (a)(4)’’; 
(4) in subsection (c)— 
(A) in paragraph (2), by striking ‘‘organizations’’ and 
inserting ‘‘consumer reporting agencies’’; and 
(B) in paragraph (4)— 
(i) by striking ‘‘subsection (a)(2)’’ and inserting 
‘‘subsection (a)(4)’’; and 
(ii) in subparagraph (A), by striking ‘‘credit bureau 
organizations’’ and inserting ‘‘consumer reporting agen-
cies’’; and 
(5) in subsection (d), by striking ‘‘credit bureau organiza-
tion’’ and inserting ‘‘consumer reporting agency’’. 
(b) CONFORMING AMENDMENTS.—The Act (20 U.S.C. 1001 et 
seq.) is further amended— 
(1) in section 427(a)(2)(G) (20 U.S.C. 1077(a)(2)(G))— 
(A) in clause (i), by striking ‘‘credit bureau organiza-
tions’’ and inserting ‘‘consumer reporting agencies’’; and 
(B) in clause (ii), by striking ‘‘organizations’’ and 
inserting ‘‘consumer reporting agencies’’; 
(2) in section 428(c)(3)(A)(iii) (20 U.S.C. 1078(c)(3)(A)(iii)), 
by striking ‘‘credit bureau organization’’ and inserting ‘‘con-
sumer reporting agency’’; 
(3) in section 428C(b)(4)(E) (20 U.S.C. 1078–3(b)(4)(E))— 
(A) in clause (i), by striking ‘‘credit bureau organiza-
tions’’ and inserting ‘‘consumer reporting agencies’’; and 
(B) in clause (ii), by striking ‘‘organizations’’ and 
inserting ‘‘consumer reporting agencies’’; 
(4) in section 437(c)(5) (20 U.S.C. 1087(c)(5)), by striking 
‘‘credit bureaus’’ and inserting ‘‘consumer reporting agencies’’; 
(5) in section 463(c) (20 U.S.C. 1087cc(c))— 
(A) in the subsection heading, by striking ‘‘CREDIT 
BUREAU
ORGANIZATIONS’’ 
and 
inserting 
‘‘CONSUMER 
REPORTING AGENCIES’’; 
(B) in paragraph (1), by striking ‘‘credit bureau 
organizations’’ and inserting ‘‘consumer reporting agencies’’; 
(C) in paragraph (2), by striking ‘‘organizations’’ and 
inserting ‘‘consumer reporting agencies’’; 
(D) in paragraph (4)(A), by striking ‘‘credit bureau 
organization’’ each place the term occurs and inserting 
‘‘consumer reporting agency’’; and 
(E) in paragraph (5)— 
(i) by striking ‘‘credit bureau organizations’’ and 
inserting ‘‘consumer reporting agencies’’; and 
(ii) by striking ‘‘such organizations’’ and inserting 
‘‘such consumer reporting agencies’’; 
(6) in section 463A(a)(11) (20 U.S.C. 1087cc–1(a)(11)), by 
striking ‘‘credit bureau or credit’’ and inserting ‘‘consumer’’; 
and 
(7) in section 464 (20 U.S.C. 10877dd)— 
(A) in subsection (c)(1)(I), by striking ‘‘credit bureau 
organizations’’ and inserting ‘‘consumer reporting agencies’’; 
and 
(B) in subsection (h)(1)(A), by striking ‘‘credit bureau 
organization or credit’’ and inserting ‘‘consumer’’.
H. R. 4137—170 
SEC. 433. LEGAL POWERS AND RESPONSIBILITIES. 
(a) SETTLEMENT OF CLAIMS.—Section 432(b) (20 U.S.C. 1082(b)) 
is amended by adding at the end the following: ‘‘The Secretary 
may not enter into any settlement of any claim under this title 
that exceeds $1,000,000 unless— 
‘‘(1) the Secretary requests a review of the proposed settle-
ment of such claim by the Attorney General; and 
‘‘(2) the Attorney General responds to such request, which 
may include, at the Attorney General’s discretion, a written 
opinion related to such proposed settlement.’’. 
(b) COMMON FORMS AND FORMATS.—Section 432(m)(1)(D)(i) (20 
U.S.C. 1082(m)(1)(D)(i)) is amended by adding at the end the fol-
lowing: ‘‘Unless otherwise notified by the Secretary, each institution 
of higher education that participates in the program under this 
part or part D may use a master promissory note for loans under 
this part and part D.’’. 
SEC. 434. STUDENT LOAN INFORMATION BY ELIGIBLE LENDERS. 
(a) AMENDMENT.—Section 433 (20 U.S.C. 1083) is amended 
to read as follows: 
‘‘SEC. 433. STUDENT LOAN INFORMATION BY ELIGIBLE LENDERS. 
‘‘(a) REQUIRED
DISCLOSURE
BEFORE
DISBURSEMENT.—Each 
eligible lender, at or prior to the time such lender disburses a 
loan that is insured or guaranteed under this part (other than 
a loan made under section 428C), shall provide thorough and 
accurate loan information on such loan to the borrower in simple 
and understandable terms. Any disclosure required by this sub-
section may be made by an eligible lender by written or electronic 
means, including as part of the application material provided to 
the borrower, as part of the promissory note evidencing the loan, 
or on a separate written form provided to the borrower. Each 
lender shall provide to each borrower a telephone number, and 
may provide an electronic address, through which additional loan 
information can be obtained. The disclosure shall include— 
‘‘(1) a statement prominently and clearly displayed and 
in bold print that the borrower is receiving a loan that must 
be repaid; 
‘‘(2) the name of the eligible lender, and the address to 
which communications and payments should be sent; 
‘‘(3) the principal amount of the loan; 
‘‘(4) the amount of any charges, such as the origination 
fee and Federal default fee, and whether those fees will be— 
‘‘(A) collected by the lender at or prior to the disbursal 
of the loan; 
‘‘(B) deducted from the proceeds of the loan; 
‘‘(C) paid separately by the borrower; or 
‘‘(D) paid by the lender; 
‘‘(5) the stated interest rate on the loan; 
‘‘(6) for loans made under section 428H or to a student 
borrower under section 428B, an explanation— 
‘‘(A) that the borrower has the option to pay the 
interest that accrues on the loan while the borrower is 
a student at an institution of higher education; and 
‘‘(B) if the borrower does not pay such interest while 
attending an institution, when and how often interest on 
the loan will be capitalized;
H. R. 4137—171 
‘‘(7) for loans made to a parent borrower on behalf of 
a student under section 428B, an explanation— 
‘‘(A) that the parent has the option to defer payment 
on the loan while the student is enrolled on at least a 
half-time basis in an institution of higher education; 
‘‘(B) if the parent does not pay the interest on the 
loan while the student is enrolled in an institution, when 
and how often interest on the loan will be capitalized; 
and 
‘‘(C) that the parent may be eligible for a deferment 
on the loan if the parent is enrolled on at least a half- 
time basis in an institution of higher education; 
‘‘(8) the yearly and cumulative maximum amounts that 
may be borrowed; 
‘‘(9) a statement of the total cumulative balance, including 
the loan being disbursed, owed by the borrower to that lender, 
and an estimate of the projected monthly payment, given such 
cumulative balance; 
‘‘(10) an explanation of when repayment of the loan will 
be required and when the borrower will be obligated to pay 
interest that accrues on the loan; 
‘‘(11) a description of the types of repayment plans that 
are available for the loan; 
‘‘(12) a statement as to the minimum and maximum repay-
ment terms which the lender may impose, and the minimum 
annual payment required by law; 
‘‘(13) an explanation of any special options the borrower 
may have for loan consolidation or other refinancing of the 
loan; 
‘‘(14) a statement that the borrower has the right to prepay 
all or part of the loan, at any time, without penalty; 
‘‘(15) a statement summarizing circumstances in which 
repayment of the loan or interest that accrues on the loan 
may be deferred; 
‘‘(16) a statement summarizing the circumstances in which 
a borrower may obtain forbearance on the loan; 
‘‘(17) a description of the options available for forgiveness 
of the loan, and the requirements to obtain loan forgiveness; 
‘‘(18) a definition of default and the consequences to the 
borrower if the borrower defaults, including a statement that 
the default will be reported to a consumer reporting agency; 
and 
‘‘(19) an explanation of any cost the borrower may incur 
during repayment or in the collection of the loan, including 
fees that the borrower may be charged, such as late payment 
fees and collection costs. 
‘‘(b) REQUIRED DISCLOSURE BEFORE REPAYMENT.—Each eligible 
lender shall, at or prior to the start of the repayment period on 
a loan made, insured, or guaranteed under section 428, 428B, 
or 428H, disclose to the borrower by written or electronic means 
the information required under this subsection in simple and under-
standable terms. Each eligible lender shall provide to each borrower 
a telephone number, and may provide an electronic address, through 
which additional loan information can be obtained. The disclosure 
required by this subsection shall be made not less than 30 days 
nor more than 150 days before the first payment on the loan 
is due from the borrower. The disclosure shall include—
H. R. 4137—172 
‘‘(1) the name of the eligible lender or loan servicer, and 
the address to which communications and payments should 
be sent; 
‘‘(2) the scheduled date upon which the repayment period 
is to begin or the deferment period under section 428B(d)(1) 
is to end, as applicable; 
‘‘(3) the estimated balance owed by the borrower on the 
loan or loans covered by the disclosure (including, if applicable, 
the estimated amount of interest to be capitalized) as of the 
scheduled date on which the repayment period is to begin 
or the deferment period under 428B(d)(1) is to end, as 
applicable; 
‘‘(4) the stated interest rate on the loan or loans, or the 
combined interest rate of loans with different stated interest 
rates; 
‘‘(5) information on loan repayment benefits offered for 
the loan or loans, including— 
‘‘(A) whether the lender offers any benefits that are 
contingent on the repayment behavior of the borrower, 
such as— 
‘‘(i) a reduction in interest rate if the borrower 
repays the loan by automatic payroll or checking 
account deduction; 
‘‘(ii) a reduction in interest rate if the borrower 
makes a specified number of on-time payments; and 
‘‘(iii) other loan repayment benefits for which the 
borrower could be eligible that would reduce the 
amount of repayment or the length of the repayment 
period; 
‘‘(B) if the lender provides a loan repayment benefit— 
‘‘(i) any limitations on such benefit; 
‘‘(ii) explicit information on the reasons a borrower 
may lose eligibility for such benefit; 
‘‘(iii) for a loan repayment benefit that reduces 
the borrower’s interest rate— 
‘‘(I) examples of the impact the interest rate 
reduction would have on the length of the bor-
rower’s repayment period and the amount of repay-
ment; and 
‘‘(II) upon the request of the borrower, the 
effect the reduction in interest rate would have 
with respect to the borrower’s payoff amount and 
time for repayment; and 
‘‘(iv) whether and how the borrower can regain 
eligibility for a benefit if a borrower loses a benefit; 
‘‘(6) a description of all the repayment plans that are avail-
able to the borrower and a statement that the borrower may 
change from one plan to another during the period of repay-
ment; 
‘‘(7) the repayment schedule for all loans covered by the 
disclosure, including— 
‘‘(A) the date the first installment is due; and 
‘‘(B) the number, amount, and frequency of required 
payments, which shall be based on a standard repayment 
plan or, in the case of a borrower who has selected another 
repayment plan, on the repayment plan selected by the 
borrower;
H. R. 4137—173 
‘‘(8) an explanation of any special options the borrower 
may have for loan consolidation or other refinancing of the 
loan and of the availability and terms of such other options; 
‘‘(9) except as provided in subsection (d)— 
‘‘(A) the projected total of interest charges which the 
borrower will pay on the loan or loans, assuming that 
the borrower makes payments exactly in accordance with 
the repayment schedule; and 
‘‘(B) if the borrower has already paid interest on the 
loan or loans, the amount of interest paid; 
‘‘(10) the nature of any fees which may accrue or be charged 
to the borrower during the repayment period; 
‘‘(11) a statement that the borrower has the right to prepay 
all or part of the loan or loans covered by the disclosure at 
any time without penalty; 
‘‘(12) a description of the options by which the borrower 
may avoid or be removed from default, including any relevant 
fees associated with such options; and 
‘‘(13) additional resources, including nonprofit organiza-
tions, advocates, and counselors (including the Student Loan 
Ombudsman of the Department) of which the lender is aware, 
where borrowers may receive advice and assistance on loan 
repayment. 
‘‘(c) SEPARATE NOTIFICATION.—Each eligible lender shall, at 
the time such lender notifies a borrower of approval of a loan 
which is insured or guaranteed under this part, provide the bor-
rower with a separate notification which summarizes, in simple 
and understandable terms, the rights and responsibilities of the 
borrower with respect to the loan, including a statement of the 
consequences of defaulting on the loan and a statement that each 
borrower who defaults will be reported to a consumer reporting 
agency. The requirement of this subsection shall be in addition 
to the information required by subsection (a) of this section. 
‘‘(d) SPECIAL DISCLOSURE RULES ON PLUS LOANS, AND UNSUB-
SIDIZED LOANS.—Loans made under sections 428B and 428H shall 
not be subject to the disclosure of projected monthly payment 
amounts required under subsection (b)(7) if the lender, in lieu 
of such disclosure, provides the borrower with sample projections 
of monthly repayment amounts, assuming different levels of bor-
rowing and interest accruals resulting from capitalization of interest 
while the borrower, or the student on whose behalf the loan is 
made, is in school, in simple and understandable terms. Such 
sample projections shall disclose the cost to the borrower of— 
‘‘(1) capitalizing the interest; and 
‘‘(2) paying the interest as the interest accrues. 
‘‘(e) REQUIRED DISCLOSURES DURING REPAYMENT.— 
‘‘(1) PERTINENT INFORMATION ABOUT A LOAN PROVIDED ON 
A PERIODIC BASIS.—Each eligible lender shall provide the bor-
rower of a loan made, insured, or guaranteed under this part 
with a bill or statement (as applicable) that corresponds to 
each payment installment time period in which a payment 
is due and that includes, in simple and understandable terms— 
‘‘(A) the original principal amount of the borrower’s 
loan; 
‘‘(B) the borrower’s current balance, as of the time 
of the bill or statement, as applicable; 
‘‘(C) the interest rate on such loan;
H. R. 4137—174 
‘‘(D) the total amount the borrower has paid in interest 
on the loan; 
‘‘(E) the aggregate amount the borrower has paid for 
the loan, including the amount the borrower has paid in 
interest, the amount the borrower has paid in fees, and 
the amount the borrower has paid against the balance; 
‘‘(F) a description of each fee the borrower has been 
charged for the most recently preceding installment time 
period; 
‘‘(G) the date by which the borrower needs to make 
a payment in order to avoid additional fees and the amount 
of such payment and the amount of such fees; 
‘‘(H) the lender’s or loan servicer’s address and toll- 
free phone number for payment and billing error purposes; 
and 
‘‘(I) a reminder that the borrower has the option to 
change repayment plans, a list of the names of the repay-
ment plans available to the borrower, a link to the appro-
priate page of the Department’s website to obtain a more 
detailed description of the repayment plans, and directions 
for the borrower to request a change in repayment plan. 
‘‘(2) INFORMATION PROVIDED TO A BORROWER HAVING DIF-
FICULTY MAKING PAYMENTS.—Each eligible lender shall provide 
to a borrower who has notified the lender that the borrower 
is having difficulty making payments on a loan made, insured, 
or guaranteed under this part with the following information 
in simple and understandable terms: 
‘‘(A) A description of the repayment plans available 
to the borrower, including how the borrower should request 
a change in repayment plan. 
‘‘(B) A description of the requirements for obtaining 
forbearance on a loan, including expected costs associated 
with forbearance. 
‘‘(C) A description of the options available to the bor-
rower to avoid defaulting on the loan, and any relevant 
fees or costs associated with such options. 
‘‘(3) REQUIRED DISCLOSURES DURING DELINQUENCY.—Each 
eligible lender shall provide to a borrower who is 60 days 
delinquent in making payments on a loan made, insured, or 
guaranteed under this part with a notice, in simple and under-
standable terms, of the following: 
‘‘(A) The date on which the loan will default if no 
payment is made. 
‘‘(B) The minimum payment the borrower must make 
to avoid default. 
‘‘(C) A description of the options available to the bor-
rower to avoid default, and any relevant fees or costs 
associated with such options, including a description of 
deferment and forbearance and the requirements to obtain 
each. 
‘‘(D) Discharge options to which the borrower may be 
entitled. 
‘‘(E) Additional resources, including nonprofit organiza-
tions, advocates, and counselors (including the Student 
Loan Ombudsman of the Department), of which the lender 
is aware, where the borrower can receive advice and assist-
ance on loan repayment.
H. R. 4137—175 
‘‘(f) COST OF DISCLOSURE AND CONSEQUENCES OF NONDISCLO-
SURE.— 
‘‘(1) NO COST TO BORROWERS.—The information required 
under this section shall be available without cost to the bor-
rower. 
‘‘(2) CONSEQUENCES OF NONDISCLOSURE.—The failure of an 
eligible lender to provide information as required by this section 
shall not— 
‘‘(A) relieve a borrower of the obligation to repay a 
loan in accordance with the loan’s terms; or 
‘‘(B) provide a basis for a claim for civil damages. 
‘‘(3) RULE OF CONSTRUCTION.—Nothing in this section shall 
be construed as subjecting the lender to the Truth in Lending 
Act with regard to loans made under this part. 
‘‘(4) ACTIONS BY THE SECRETARY.—The Secretary may limit, 
suspend, or terminate the continued participation of an eligible 
lender in making loans under this part for failure by that 
lender to comply with this section.’’. 
(b) EFFECTIVE DATES.— 
(1) REGULAR DISCLOSURE REQUIREMENTS AND DISCLOSURE 
REQUIREMENTS TO BORROWERS HAVING DIFFICULTY MAKING PAY-
MENTS.—Paragraphs (1) and (2) of section 433(e) of the Higher 
Education Act of 1965, as amended by subsection (a), shall 
apply with respect to loans for which the first payment is 
due on or after July 1, 2009. 
(2) DISCLOSURE
REQUIREMENTS
FOR
BORROWERS
WITH 
DELINQUENT LOANS.—Section 433(e)(3) of the Higher Education 
Act of 1965, as amended by subsection (a), shall apply with 
respect to loans that become delinquent on or after July 1, 
2009. 
SEC. 435. CONSUMER EDUCATION INFORMATION. 
Part B (20 U.S.C. 1071 et seq.) is amended by inserting after 
section 433 (20 U.S.C. 1083) the following: 
‘‘SEC. 433A. CONSUMER EDUCATION INFORMATION. 
‘‘(a) IN GENERAL.—Each guaranty agency participating in a 
program under this part, working with the institutions of higher 
education served by such guaranty agency, shall develop and make 
available high-quality educational programs and materials to pro-
vide training for students and families in budgeting and financial 
management, including debt management and other aspects of 
financial literacy, such as the cost of using high interest loans 
to pay for postsecondary education, particularly as budgeting and 
financial management relates to student loan programs authorized 
by this title. Such programs and materials shall be in formats 
that are simple and understandable to students and families, and 
shall be provided before, during, and after the students’ enrollment 
in an institution of higher education. The activities described in 
this section shall be considered default reduction activities for the 
purposes of section 422. 
‘‘(b) RULE OF CONSTRUCTION.—Nothing in this section shall 
be construed to prohibit— 
‘‘(1) a guaranty agency from using existing activities, pro-
grams, and materials in meeting the requirements of this sec-
tion;
H. R. 4137—176 
‘‘(2) a guaranty agency from providing programs or mate-
rials similar to the programs or materials described in sub-
section (a) to an institution of higher education that provides 
loans exclusively through part D; or 
‘‘(3) a lender or loan servicer from providing outreach or 
financial aid literacy information in accordance with subsection 
(a).’’. 
SEC. 436. DEFINITIONS OF ELIGIBLE INSTITUTION AND ELIGIBLE 
LENDER. 
(a) PARTICIPATION RATE INDEX.— 
(1) AMENDMENTS.—Section 435(a) (20 U.S.C. 1085(a)) is 
amended— 
(A) in paragraph (2)— 
(i) in subparagraph (A)(ii), by striking ‘‘paragraph 
(4)’’ and inserting ‘‘paragraph (5)’’; and 
(ii) in subparagraph (B)— 
(I) by striking ‘‘and’’ at the end of clause (ii); 
and 
(II) by striking clause (iii) and inserting the 
following: 
‘‘(iii) 25 percent for fiscal year 1994 through fiscal 
year 2011; and 
‘‘(iv) 30 percent for fiscal year 2012 and any suc-
ceeding fiscal year.’’; 
(B) by redesignating paragraph (6) as paragraph (8), 
and redesignating paragraphs (3) through (5) as para-
graphs (4) through (6), respectively; 
(C) by inserting after paragraph (2) the following new 
paragraph: 
‘‘(3) APPEALS
FOR
REGULATORY
RELIEF.—An institution 
whose cohort default rate, calculated in accordance with sub-
section (m), is equal to or greater than the threshold percentage 
specified in paragraph (2)(B)(iv) for any two consecutive fiscal 
years may, not later than 30 days after the date the institution 
receives notification from the Secretary, file an appeal dem-
onstrating exceptional mitigating circumstances, as defined in 
paragraph (5). The Secretary shall issue a decision on any 
such appeal not later than 45 days after the date of submission 
of the appeal. If the Secretary determines that the institution 
demonstrates exceptional mitigating circumstances, the Sec-
retary may not subject the institution to provisional certification 
based solely on the institution’s cohort default rate.’’; 
(D) in paragraph (5)(A) (as redesignated by subpara-
graph (B)), by striking ‘‘For purposes of paragraph 
(2)(A)(ii)’’ and all that follows through ‘‘following criteria:’’ 
and inserting ‘‘For purposes of this subsection, an institu-
tion of higher education shall be treated as having excep-
tional mitigating circumstances that make application of 
paragraph (2) inequitable, and that provide for regulatory 
relief under paragraph (3), if such institution, in the opinion 
of an independent auditor, meets the following criteria:’’; 
(E) by inserting after paragraph (6) (as redesignated 
by subparagraph (B)) the following: 
‘‘(7) DEFAULT PREVENTION AND ASSESSMENT OF ELIGIBILITY 
BASED ON HIGH DEFAULT RATES.— 
‘‘(A) FIRST YEAR.—
H. R. 4137—177 
‘‘(i) IN
GENERAL.—An institution whose cohort 
default rate is equal to or greater than the threshold 
percentage specified in paragraph (2)(B)(iv) in any 
fiscal year shall establish a default prevention task 
force to prepare a plan to— 
‘‘(I) identify the factors causing the institu-
tion’s cohort default rate to exceed such threshold; 
‘‘(II) establish measurable objectives and the 
steps to be taken to improve the institution’s cohort 
default rate; and 
‘‘(III) specify actions that the institution can 
take to improve student loan repayment, including 
appropriate counseling regarding loan repayment 
options. 
‘‘(ii) TECHNICAL ASSISTANCE.—Each institution sub-
ject to this subparagraph shall submit the plan under 
clause (i) to the Secretary, who shall review the plan 
and offer technical assistance to the institution to pro-
mote improved student loan repayment. 
‘‘(B) SECOND CONSECUTIVE YEAR.— 
‘‘(i) IN
GENERAL.—An institution whose cohort 
default rate is equal to or greater than the threshold 
percentage specified in paragraph (2)(B)(iv) for two 
consecutive fiscal years, shall require the institution’s 
default prevention task force established under 
subparagraph (A) to review and revise the plan 
required under such subparagraph, and shall submit 
such revised plan to the Secretary. 
‘‘(ii) REVIEW BY THE SECRETARY.—The Secretary 
shall review each revised plan submitted in accordance 
with this subparagraph, and may direct that such plan 
be amended to include actions, with measurable objec-
tives, that the Secretary determines, based on available 
data and analyses of student loan defaults, will pro-
mote student loan repayment.’’; and 
(F) in paragraph (8)(A) (as redesignated by subpara-
graph (B)) by striking ‘‘0.0375’’ and inserting ‘‘0.0625’’. 
(2) EFFECTIVE DATE.—The amendment made by paragraph 
(1)(F) shall take effect for fiscal years beginning on or after 
October 1, 2011. 
(b) TYPES
OF LENDERS.—Section 435(d)(1)(A)(ii) (20 U.S.C. 
1085(d)(1)(A)(ii)) is amended— 
(1) by striking ‘‘part, or (III)’’ and inserting ‘‘part, (III)’’; 
and 
(2) by inserting before the semicolon at the end the fol-
lowing: ‘‘, or (IV) it is a National or State chartered bank, 
or a credit union, with assets of less than $1,000,000,000’’. 
(c) DISQUALIFICATION.—Paragraph (5) of section 435(d) (20 
U.S.C. 1085(d)(5)) is amended to read as follows: 
‘‘(5) DISQUALIFICATION FOR USE OF CERTAIN INCENTIVES.— 
The term ‘eligible lender’ does not include any lender that 
the Secretary determines, after notice and opportunity for a 
hearing, has— 
‘‘(A) offered, directly or indirectly, points, premiums, 
payments (including payments for referrals and for proc-
essing or finder fees), prizes, stock or other securities, 
travel, 
entertainment 
expenses, 
tuition 
payment 
or
H. R. 4137—178 
reimbursement, the provision of information technology 
equipment at below-market value, additional financial aid 
funds, or other inducements, to any institution of higher 
education or any employee of an institution of higher edu-
cation in order to secure applicants for loans under this 
part; 
‘‘(B) conducted unsolicited mailings, by postal or elec-
tronic means, of student loan application forms to students 
enrolled in secondary schools or postsecondary institutions, 
or to family members of such students, except that applica-
tions may be mailed, by postal or electronic means, to 
students or borrowers who have previously received loans 
under this part from such lender; 
‘‘(C) entered into any type of consulting arrangement, 
or other contract to provide services to a lender, with 
an employee who is employed in the financial aid office 
of an institution of higher education, or who otherwise 
has responsibilities with respect to student loans or other 
financial aid of the institution; 
‘‘(D) compensated an employee who is employed in 
the financial aid office of an institution of higher education, 
or who otherwise has responsibilities with respect to stu-
dent loans or other financial aid of the institution, and 
who is serving on an advisory board, commission, or group 
established by a lender or group of lenders for providing 
such service, except that the eligible lender may reimburse 
such employee for reasonable expenses incurred in pro-
viding such service; 
‘‘(E) performed for an institution of higher education 
any function that such institution of higher education is 
required to perform under this title, except that a lender 
shall be permitted to perform functions on behalf of such 
institution in accordance with section 485(b); 
‘‘(F) paid, on behalf of an institution of higher edu-
cation, another person to perform any function that such 
institution of higher education is required to perform under 
this title, except that a lender shall be permitted to perform 
functions on behalf of such institution in accordance with 
section 485(b); 
‘‘(G) provided payments or other benefits to a student 
at an institution of higher education to act as the lender’s 
representative to secure applications under this title from 
individual prospective borrowers, unless such student— 
‘‘(i) is also employed by the lender for other pur-
poses; and 
‘‘(ii) made all appropriate disclosures regarding 
such employment; 
‘‘(H) offered, directly or indirectly, loans under this 
part as an inducement to a prospective borrower to pur-
chase a policy of insurance or other product; or 
‘‘(I) engaged in fraudulent or misleading advertising. 
It shall not be a violation of this paragraph for a lender to 
provide technical assistance to institutions of higher education 
comparable to the kinds of technical assistance provided to 
institutions of higher education by the Department.’’.
H. R. 4137—179 
(d) SCHOOL AS LENDER PROGRAM AUDIT.—Section 435(d) (20 
U.S.C. 1085(d)) is further amended by adding at the end the fol-
lowing: 
‘‘(8) SCHOOL AS LENDER PROGRAM AUDIT.—Each institution 
serving as an eligible lender under paragraph (1)(E), and each 
eligible lender serving as a trustee for an institution of higher 
education or an organization affiliated with an institution of 
higher education, shall annually complete and submit to the 
Secretary a compliance audit to determine whether— 
‘‘(A) the institution or lender is using all proceeds 
from special allowance payments and interest payments 
from borrowers, interest subsidies received from the 
Department, and any proceeds from the sale or other dis-
position of loans, for need-based grant programs, in accord-
ance with paragraph (2)(A)(viii); 
‘‘(B) the institution or lender is using not more than 
a reasonable portion of the proceeds described in paragraph 
(2)(A)(viii) for direct administrative expenses; and 
‘‘(C) the institution or lender is ensuring that the pro-
ceeds described in paragraph (2)(A)(viii) are being used 
to supplement, and not to supplant, Federal and non-Fed-
eral funds that would otherwise be used for need-based 
grant programs.’’. 
(e) COHORT DEFAULT RATES.— 
(1) AMENDMENTS.—Section 435(m) (20 U.S.C. 1085(m)) is 
amended— 
(A) in paragraph (1)— 
(i) in the first sentence of subparagraph (A), by 
striking ‘‘end of the following fiscal year’’ and inserting 
‘‘end of the second fiscal year following the fiscal year 
in which the students entered repayment’’; 
(ii) in subparagraph (B), by striking ‘‘such fiscal 
year’’ and inserting ‘‘such second fiscal year’’; 
(iii) in subparagraph (C), by striking ‘‘end of the 
fiscal year immediately following the year in which 
they entered repayment’’ and inserting ‘‘end of the 
second fiscal year following the year in which they 
entered repayment’’; 
(B) in paragraph (2)(C)— 
(i) by striking ‘‘end of such following fiscal year 
is not considered as in default for the purposes of 
this subsection’’ and inserting ‘‘end of the second fiscal 
year following the year in which the loan entered 
repayment is not considered as in default for purposes 
of this subsection’’; and 
(ii) by striking ‘‘such following fiscal year’’ and 
inserting ‘‘such second fiscal year’’; and 
(C) in paragraph (4)— 
(i) by amending the paragraph heading to read 
as follows: ‘‘COLLECTION AND REPORTING OF COHORT 
DEFAULT RATES AND LIFE OF COHORT DEFAULT RATES.— 
’’; and 
(ii) by amending subparagraph (A) to read as fol-
lows: 
‘‘(A) The Secretary shall publish not less often than once 
every fiscal year a report showing cohort default data and 
life of cohort default rates for each category of institution,
H. R. 4137—180 
including: (i) four-year public institutions; (ii) four-year private 
nonprofit institutions; (iii) two-year public institutions; (iv) two- 
year private nonprofit institutions; (v) four-year proprietary 
institutions; (vi) two-year proprietary institutions; and (vii) less 
than two-year proprietary institutions. For purposes of this 
subparagraph, for any fiscal year in which one or more current 
and former students at an institution enter repayment on loans 
under section 428, 428B, or 428H, received for attendance at 
the institution, the Secretary shall publish the percentage of 
those current and former students who enter repayment on 
such loans (or on the portion of a loan made under section 
428C that is used to repay any such loans) received for attend-
ance at the institution in that fiscal year who default before 
the end of each succeeding fiscal year.’’. 
(2) EFFECTIVE DATE AND TRANSITION.— 
(A) EFFECTIVE DATE.—The amendments made by para-
graph (1) shall take effect for purposes of calculating cohort 
default rates for fiscal year 2009 and succeeding fiscal 
years. 
(B) TRANSITION.—Notwithstanding subparagraph (A), 
the method of calculating cohort default rates under section 
435(m) of the Higher Education Act of 1965 as in effect 
on the day before the date of enactment of this Act shall 
continue in effect, and the rates so calculated shall be 
the basis for any sanctions imposed on institutions of higher 
education because of their cohort default rates, until three 
consecutive years of cohort default rates calculated in 
accordance with the amendments made by paragraph (1) 
are available. 
SEC. 437. DISCHARGE AND CANCELLATION RIGHTS IN CASES OF DIS-
ABILITY. 
(a) FFEL AND DIRECT LOANS.—Section 437(a) (20 U.S.C. 
1087(a)) is amended— 
(1) by striking ‘‘(a) REPAYMENT IN FULL FOR DEATH AND 
DISABILITY.—If a’’ and inserting the following: 
‘‘(a) REPAYMENT IN FULL FOR DEATH AND DISABILITY.— 
‘‘(1) IN GENERAL.—If a’’; 
(2) by inserting ‘‘, or if a student borrower who has received 
such a loan is unable to engage in any substantial gainful 
activity by reason of any medically determinable physical or 
mental impairment that can be expected to result in death, 
has lasted for a continuous period of not less than 60 months, 
or can be expected to last for a continuous period of not less 
than 60 months’’ after ‘‘of the Secretary),’’; and 
(3) by adding at the end the following: ‘‘The Secretary 
may develop such safeguards as the Secretary determines nec-
essary to prevent fraud and abuse in the discharge of liability 
under this subsection. Notwithstanding any other provision 
of this subsection, the Secretary may promulgate regulations 
to reinstate the obligation of, and resume collection on, loans 
discharged under this subsection in any case in which— 
‘‘(A) a borrower received a discharge of liability under 
this subsection and after the discharge the borrower— 
‘‘(i) receives a loan made, insured, or guaranteed 
under this title; or
H. R. 4137—181 
‘‘(ii) has earned income in excess of the poverty 
line; or 
‘‘(B) the Secretary determines necessary.’’. 
(b) DISABILITY DETERMINATIONS.—Section 437(a) (20 U.S.C. 
1087(a)) is further amended by adding at the end the following: 
‘‘(2) DISABILITY
DETERMINATIONS.—A borrower who has 
been determined by the Secretary of Veterans Affairs to be 
unemployable due to a service-connected condition and who 
provides documentation of such determination to the Secretary 
of Education, shall be considered permanently and totally dis-
abled for the purpose of discharging such borrower’s loans 
under this subsection, and such borrower shall not be required 
to present additional documentation for purposes of this sub-
section.’’. 
(c) EFFECTIVE DATE.—The amendments made by subsection 
(a) shall take effect on July 1, 2010. 
SEC. 438. CONFORMING AMENDMENTS FOR REPEAL OF SECTION 439. 
(a) PART B AMENDMENTS.—Part B of title IV (20 U.S.C. 1071 
et seq.) is amended— 
(1) in section 422A(d)(1) (20 U.S.C. 1072a(d)(1)), by striking 
‘‘437, and 439(q)’’ and inserting ‘‘and 437’’; 
(2) in section 428 (20 U.S.C. 1078)— 
(A) in subsection (b)(1)(G)(i), by striking ‘‘or 439(q)’’; 
(B) by striking subsection (h); and 
(C) in subsection (j)(2)— 
(i) by inserting ‘‘and’’ at the end of subparagraph 
(C); 
(ii) by striking ‘‘; and’’ at the end of subparagraph 
(D) and inserting a period; and 
(iii) by striking subparagraph (E); and 
(3) in section 435(d)(1)(G) (20 U.S.C. 1085(d)(1)(G)), by 
striking ‘‘428C, and 439(q),’’ and inserting ‘‘and 428C,’’. 
(b) FEDERAL DEPOSIT INSURANCE ACT.—Section 18(s)(4)(C)(ii)(I) 
of the Federal Deposit Insurance Act (12 U.S.C. 1828(s)(4)(C)(ii)(I)) 
is amended by striking ‘‘as amended’’ and inserting ‘‘as such section 
existed on the day before the date of the repeal of such section’’. 
PART C—FEDERAL WORK-STUDY PROGRAMS 
SEC. 441. AUTHORIZATION OF APPROPRIATIONS. 
Section 441 (42 U.S.C. 2751) is amended— 
(1) in subsection (b), by striking ‘‘$1,000,000,000 for fiscal 
year 1999’’ and all that follows through the period and inserting 
‘‘such sums as may be necessary for fiscal year 2009 and 
each of the five succeeding fiscal years.’’; and 
(2) in subsection (c)(1), by inserting ‘‘emergency prepared-
ness and response,’’ after ‘‘public safety,’’. 
SEC. 442. ALLOWANCE FOR BOOKS AND SUPPLIES. 
Section 442(c)(4)(D) (42 U.S.C. 2752(c)(4)(D)) is amended by 
striking ‘‘$450’’ and inserting ‘‘$600’’. 
SEC. 443. GRANTS FOR FEDERAL WORK-STUDY PROGRAMS. 
Section 443 (42 U.S.C. 2753) is amended— 
(1) in subsection (b)(2)— 
(A) by striking subparagraph (A); and
H. R. 4137—182 
(B) by redesignating subparagraphs (B) and (C) as 
subparagraphs (A) and (B), respectively; and 
(2) by adding at the end the following new subsection: 
‘‘(e) CIVIC EDUCATION AND PARTICIPATION ACTIVITIES.— 
‘‘(1) USE OF FUNDS.—Funds granted to an institution under 
this section may be used in accordance with such subsection 
to compensate (including compensation for time spent in 
training and travel directly related to civic education and 
participation activities) students employed in projects that— 
‘‘(A) teach civics in schools; 
‘‘(B) raise awareness of government functions or 
resources; or 
‘‘(C) increase civic participation. 
‘‘(2) PRIORITY FOR SCHOOLS.—To the extent practicable, an 
institution shall— 
‘‘(A) give priority to the employment of students partici-
pating in projects that educate or train the public about 
evacuation, emergency response, and injury prevention 
strategies relating to natural disasters, acts of terrorism, 
and other emergency situations; and 
‘‘(B) ensure that any student compensated with the 
funds described in paragraph (1) receives appropriate 
training to carry out the educational services required. 
‘‘(3) FEDERAL SHARE.—The Federal share of the compensa-
tion of work-study students compensated under this subsection 
may exceed 75 percent.’’. 
SEC. 444. FLEXIBLE USE OF FUNDS. 
Section 445 (42 U.S.C. 2755) is amended by adding at the 
end the following new subsection: 
‘‘(d) FLEXIBILITY IN THE EVENT OF A MAJOR DISASTER.— 
‘‘(1) IN GENERAL.—In the event of a major disaster, an 
eligible institution located in any area affected by such major 
disaster, as determined by the Secretary, may make payments 
under this part to disaster-affected students, for the period 
of time (not to exceed one academic year) in which the disaster- 
affected students were prevented from fulfilling the students’ 
work-study obligations as described in paragraph (2)(A)(iii), 
as follows: 
‘‘(A) Payments may be made under this part to dis-
aster-affected students in an amount equal to or less than 
the amount of wages such students would have been paid 
under this part had the students been able to complete 
the work obligation necessary to receive work study funds. 
‘‘(B) Payments shall not be made to any student who 
was not eligible for work study or was not completing 
the work obligation necessary to receive work study funds 
under this part prior to the occurrence of the major dis-
aster. 
‘‘(C) Any payments made to disaster-affected students 
under this subsection shall meet the matching require-
ments of section 443, unless such matching requirements 
are waived by the Secretary. 
‘‘(2) DEFINITIONS.—In this subsection: 
‘‘(A) The term ‘disaster-affected student’ means a stu-
dent enrolled at an eligible institution who—
H. R. 4137—183 
‘‘(i) received a work-study award under this section 
for the academic year during which a major disaster 
occurred; 
‘‘(ii) earned Federal work-study wages from such 
eligible institution for such academic year; 
‘‘(iii) was prevented from fulfilling the student’s 
work-study obligation for all or part of such academic 
year due to such major disaster; and 
‘‘(iv) was unable to be reassigned to another work- 
study job. 
‘‘(B) The term ‘major disaster’ has the meaning given 
such term in section 102(2) of the Robert T. Stafford Dis-
aster Relief and Emergency Assistance Act (42 U.S.C. 
5122(2)).’’. 
SEC. 445. JOB LOCATION AND DEVELOPMENT PROGRAMS. 
Section 446(a)(1) (42 U.S.C. 2756(a)(1)) is amended by striking 
‘‘$50,000’’ and inserting ‘‘$75,000’’. 
SEC. 446. ADDITIONAL FUNDS FOR OFF-CAMPUS COMMUNITY SERVICE. 
Section 447 (42 U.S.C. 2756a) is amended— 
(1) by striking ‘‘Each institution participating’’ and 
inserting ‘‘(a) COMMUNITY SERVICE-LEARNING.—Each institu-
tion participating’’; and 
(2) by adding at the end the following new subsection: 
‘‘(b) OFF-CAMPUS COMMUNITY SERVICE.— 
‘‘(1) GRANTS AUTHORIZED.—In addition to funds made avail-
able under section 443(b)(2)(A), the Secretary is authorized 
to award grants to institutions participating under this part 
to supplement off-campus community service employment. 
‘‘(2) USE OF FUNDS.—An institution shall ensure that funds 
granted to such institution under this subsection are used 
in accordance with section 443(b)(2)(A) to recruit and com-
pensate students (including compensation for time spent in 
training and for travel directly related to such community 
service). 
‘‘(3) PRIORITY.—In awarding grants under this subsection, 
the Secretary shall give priority to applications that support 
postsecondary students assisting with early childhood education 
activities and activities in preparation for emergencies and 
natural disasters. 
‘‘(4) 
AUTHORIZATION
OF
APPROPRIATIONS.—There 
are 
authorized to be appropriated to carry out this subsection such 
sums as may be necessary for fiscal year 2009 and each of 
the five succeeding fiscal years.’’. 
SEC. 447. WORK COLLEGES. 
Section 448 (42 U.S.C. 2756b) is amended— 
(1) by striking ‘‘work-learning’’ each place it appears and 
inserting ‘‘work-learning-service’’; 
(2) by striking subsection (e) and inserting the following: 
‘‘(e) DEFINITIONS.—For the purpose of this section— 
‘‘(1) the term ‘work college’ means an eligible institution 
that— 
‘‘(A) has been a public or private nonprofit, four-year, 
degree-granting institution with a commitment to commu-
nity service;
H. R. 4137—184 
‘‘(B) has operated a comprehensive work-learning- 
service program for at least two years; 
‘‘(C) requires students, including at least one-half of 
all students who are enrolled on a full-time basis, to partici-
pate in a comprehensive work-learning-service program for 
at least five hours each week, or at least 80 hours during 
each period of enrollment, except summer school, unless 
the student is engaged in an institutionally organized or 
approved study abroad or externship program; and 
‘‘(D) provides students participating in the comprehen-
sive work-learning-service program with the opportunity 
to contribute to their education and to the welfare of the 
community as a whole; and 
‘‘(2) the term ‘comprehensive student work-learning-service 
program’ means a student work-learning-service program 
that— 
‘‘(A) is an integral and stated part of the institution’s 
educational philosophy and program; 
‘‘(B) requires participation of all resident students for 
enrollment and graduation; 
‘‘(C) includes learning objectives, evaluation, and a 
record of work performance as part of the student’s college 
record; 
‘‘(D) provides programmatic leadership by college per-
sonnel at levels comparable to traditional academic pro-
grams; 
‘‘(E) recognizes the educational role of work-learning- 
service supervisors; and 
‘‘(F) includes consequences for nonperformance or 
failure in the work-learning-service program similar to the 
consequences for failure in the regular academic program.’’; 
and 
(3) in subsection (f), by striking ‘‘$5,000,000’’ and all that 
follows through the period and inserting ‘‘such sums as may 
be necessary for fiscal year 2009 and each of the five succeeding 
fiscal years.’’. 
PART D—FEDERAL DIRECT STUDENT LOAN 
SEC. 451. TERMS AND CONDITIONS OF LOANS. 
(a) INCOME-BASED REPAYMENT.—Section 455(d)(1) (20 U.S.C. 
1087e(d)(1)) is amended— 
(1) in subparagraph (C), by striking ‘‘and’’ after the semi-
colon; 
(2) in subparagraph (D), by striking the period at the 
end and inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(E) beginning on July 1, 2009, an income-based repay-
ment plan that enables borrowers who have a partial finan-
cial hardship to make a lower monthly payment in accord-
ance with section 493C, except that the plan described 
in this subparagraph shall not be available to the borrower 
of a Federal Direct PLUS Loan made on behalf of a 
dependent student or a Federal Direct Consolidation Loan, 
if the proceeds of such loan were used to discharge the 
liability on such Federal Direct PLUS Loan or a loan
H. R. 4137—185 
under section 428B made on behalf of a dependent stu-
dent.’’. 
(b) PUBLIC SERVICE JOB DEFINITION.— 
(1) 
IN
GENERAL.—Section 
455(m)(3)(B) 
(20 
U.S.C. 
1087e(m)(3)(B)) is amended to read as follows: 
‘‘(B) PUBLIC
SERVICE
JOB.—The term ‘public service 
job’ means— 
‘‘(i) a full-time job in emergency management, 
government (excluding time served as a member of 
Congress), military service, public safety, law enforce-
ment, public health (including nurses, nurse practi-
tioners, nurses in a clinical setting, and full-time 
professionals engaged in health care practitioner 
occupations and health care support occupations, as 
such terms are defined by the Bureau of Labor Statis-
tics), public education, social work in a public child 
or family service agency, public interest law services 
(including prosecution or public defense or legal 
advocacy on behalf of low-income communities at a 
nonprofit organization), early childhood education 
(including licensed or regulated childcare, Head Start, 
and State funded prekindergarten), public service for 
individuals with disabilities, public service for the 
elderly, public library sciences, school-based library 
sciences and other school-based services, or at an 
organization that is described in section 501(c)(3) of 
the Internal Revenue Code of 1986 and exempt from 
taxation under section 501(a) of such Code; or 
‘‘(ii) teaching as a full-time faculty member at a 
Tribal College or University as defined in section 316(b) 
and other faculty teaching in high-needs subject areas 
or areas of shortage (including nurse faculty, foreign 
language faculty, and part-time faculty at community 
colleges), as determined by the Secretary.’’. 
(2) INELIGIBILITY FOR DOUBLE BENEFITS.—Section 455(m) 
(20 U.S.C. 1087e(m)) is further amended by adding at the 
end the following: 
‘‘(4) INELIGIBILITY
FOR
DOUBLE
BENEFITS.—No borrower 
may, for the same service, receive a reduction of loan obligations 
under both this subsection and section 428J, 428K, 428L, or 
460.’’. 
(c) IDENTITY FRAUD PROTECTION.—Section 455 (as amended 
by this section) (20 U.S.C. 1087e) is amended by adding at the 
end the following: 
‘‘(n) IDENTITY FRAUD PROTECTION.—The Secretary shall take 
such steps as may be necessary to ensure that monthly Federal 
Direct Loan statements and other publications of the Department 
do not contain more than four digits of the Social Security number 
of any individual.’’. 
(d) NO ACCRUAL OF INTEREST FOR ACTIVE DUTY SERVICE MEM-
BERS.—Section 455 (as amended by this section) (20 U.S.C. 1087e) 
is further amended by adding at the end the following: 
‘‘(o) NO ACCRUAL OF INTEREST FOR ACTIVE DUTY SERVICE MEM-
BERS.— 
‘‘(1) IN GENERAL.—Notwithstanding any other provision of 
this part and in accordance with paragraphs (2) and (4), interest 
shall not accrue for an eligible military borrower on a loan
H. R. 4137—186 
made under this part for which the first disbursement is made 
on or after October 1, 2008. 
‘‘(2) CONSOLIDATION LOANS.—In the case of any consolida-
tion loan made under this part that is disbursed on or after 
October 1, 2008, 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 for which the first 
disbursement is made on or after October 1, 2008. 
‘‘(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 
‘‘(ii) is performing qualifying National Guard duty 
during a war or other military operation or national emer-
gency; and 
‘‘(B) is serving in an area of hostilities in which service 
qualifies for special pay under section 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.’’. 
(e) DISCLOSURES.—Section 455 (as amended by this section) 
(20 U.S.C. 1087e) is further amended by adding at the end the 
following: 
‘‘(p) DISCLOSURES.—Each institution of higher education with 
which the Secretary has an agreement under section 453, and 
each contractor with which the Secretary has a contract under 
section 456, shall, with respect to loans under this part and in 
accordance with such regulations as the Secretary shall prescribe, 
comply with each of the requirements under section 433 that apply 
to a lender with respect to a loan under part B.’’. 
SEC. 452. FUNDS FOR ADMINISTRATIVE EXPENSES. 
Section 458(a) (20 U.S.C. 1087h(a)) is amended— 
(1) in paragraph (2)— 
(A) in the heading of such paragraph, by striking ‘‘2011’’ 
and inserting ‘‘2014’’; and 
(B) by striking ‘‘2011’’ and inserting ‘‘2014’’; and 
(2) in paragraph (3), by striking ‘‘2011’’ and inserting 
‘‘2014’’. 
SEC. 453. GUARANTY AGENCY RESPONSIBILITIES AND PAYMENTS; 
REPORTS AND COST ESTIMATES. 
Section 459A of the Higher Education Act of 1965 (20 U.S.C. 
1087i–1) is amended— 
(1) by redesignating subsection (d) as subsection (f); and 
(2) by inserting after subsection (c) the following: 
‘‘(d) GUARANTY AGENCY RESPONSIBILITIES AND PAYMENTS.—Not-
withstanding any other provision of this Act, beginning on the 
date on which the Secretary purchases a loan under this section— 
‘‘(1) the guaranty agency that insured such loan shall cease 
to have any obligations, responsibilities, or rights (including 
rights to any payment) under this Act for any activity related 
to the administration of such loan that is carried out or required 
to be carried out on or after the date of such purchase; and 
‘‘(2) the insurance issued by such agency pursuant to sec-
tion 428(b) for such loan shall cease to be effective with respect
H. R. 4137—187 
to any default on such loan that occurs on or after the date 
of such purchase. 
‘‘(e) REPORTS AND COST ESTIMATES.—The Secretary shall pre-
pare, transmit to the authorizing committees, and make available 
to the public, the following: 
‘‘(1) QUARTERLY REPORTS.— 
‘‘(A) CONTENTS.—Not later than 60 days after the end 
of each quarter during the period beginning July 1, 2008, 
and ending September 30, 2009, a quarterly report on— 
‘‘(i) the number of loans the Secretary has agreed 
to purchase, or has purchased, using the authority 
provided under this section, and the total amount of 
outstanding principal and accrued interest of such 
loans, during such period; and 
‘‘(ii) the number of loans in which the Secretary 
has purchased a participation interest, and the total 
amount of outstanding principal and accrued interest 
of such loans, during such period. 
‘‘(B) DISAGGREGATED
INFORMATION.—For each quar-
terly report, the information described in clauses (i) and 
(ii) of subparagraph (A) shall be disaggregated by lender 
and, for each lender, by category of institution (using the 
categories described in section 132(d)) and type of loan. 
‘‘(2) ESTIMATES OF PURCHASE PROGRAM COSTS.—Not later 
than February 15, 2010, an estimate of the costs associated 
with the program of purchasing loans described in paragraph 
(1)(A)(i) during the period beginning July 1, 2008, and ending 
September 30, 2009, and an estimate of the costs associated 
with the program of purchasing a participation interest in 
loans described in paragraph (1)(A)(ii) during such period. Each 
such estimate shall— 
‘‘(A) contain the same level of detail, and be reported 
in a similar manner, as the budget estimates provided 
for the loan program under part B and the direct student 
loan program under this part in the President’s annual 
budget submission to Congress, except that current and 
future administrative costs shall also be reported; 
‘‘(B) include an estimate of the gross and net outlays 
that have been, or will be, incurred by the Federal Govern-
ment (including subsidy and administrative costs, and any 
payments made by the Department to lenders, trusts, or 
other entities related to such activities) in purchasing such 
loans or purchasing a participation interest in such loans 
during such period (as applicable); and 
‘‘(C) include a comparison of— 
‘‘(i) the average amount of the gross and net out-
lays (including costs and payments) described in 
subparagraph (B) for each $100 of loans purchased 
or for which a participation interest was purchased 
(as applicable) during such period, disaggregated by 
type of loan; with 
‘‘(ii) the average amount of such gross and net 
outlays (including costs and payments) to the Federal 
Government for each $100 of comparable loans made 
under this part and part B during such period, 
disaggregated by part and by type of loan.
H. R. 4137—188 
‘‘(3) ANNUAL COST ESTIMATES.—Not later than February 
15 of the fiscal year following each of the fiscal years 2008, 
2009, and 2010, an annual estimate of the costs associated 
with the program of purchasing loans described in paragraph 
(1)(A)(i), and an annual estimate of the costs associated with 
the program of purchasing a participation interest in loans 
described in paragraph (1)(A)(ii), that includes the information 
described in paragraph (2) for such fiscal year.’’. 
SEC. 454. LOAN CANCELLATION FOR TEACHERS. 
(a) IN GENERAL.—Section 460 (20 U.S.C. 1087j) is amended— 
(1) in subsection (b)(1)(A)(i)— 
(A) by inserting ‘‘or location’’ after ‘‘a school’’; and 
(B) by inserting ‘‘or locations’’ after ‘‘schools’’; and 
(2) in subsection (c)(3)(B)(iii), by inserting ‘‘or, in the case 
of a teacher who is employed by an educational service agency, 
as certified by the chief administrative officer of such agency,’’ 
after ‘‘borrower is employed,’’. 
(b) PREVENTION OF DOUBLE BENEFITS.—Section 460(g)(2) (20 
U.S.C. 1087j(g)(2)) is amended to read as follows: 
‘‘(2) PREVENTION OF DOUBLE BENEFITS.—No borrower may, 
for the same voluntary service, receive a benefit under both 
this section and— 
‘‘(A) section 428J; 
‘‘(B) section 428K; 
‘‘(C) section 455(m); or 
‘‘(D) subtitle D of title I of the National and Community 
Service Act of 1990 (42 U.S.C. 12571 et seq.).’’. 
(c) TECHNICAL AMENDMENTS.—Section 460(b) (as amended by 
subsection (a)(1)) (20 U.S.C. 1087j(b)) is further amended— 
(1) by striking paragraph (2); 
(2) by striking ‘‘PROGRAM AUTHORIZED.—’’ and all that fol-
lows through ‘‘The Secretary shall’’ and inserting ‘‘PROGRAM 
AUTHORIZED.—The Secretary shall’’; 
(3) by redesignating subparagraph (B) as paragraph (2), 
and adjusting the margin accordingly; and 
(4) by redesignating subparagraph (A) as paragraph (1), 
by redesignating clauses (i) and (ii) of such paragraph (as 
so redesignated) as subparagraphs (A) and (B), respectively, 
and by adjusting the margins accordingly. 
(d) CONFORMING AMENDMENTS.—Section 460 (20 U.S.C. 1087j) 
is further amended— 
(1) in subsection (c)(1), by striking ‘‘(b)(1)(A)’’ and inserting 
‘‘(b)(1)’’; 
(2) in subsection (c)(3)— 
(A) in subparagraph (A)(i), by striking ‘‘(b)(1)’’ and 
inserting ‘‘(b)’’; and 
(B) in subparagraph (B)(i), by striking ‘‘(b)(1)’’ and 
inserting ‘‘(b)’’; and 
(3) in subsection (g)(3), by striking ‘‘(b)(1)(A)(ii)’’ and 
inserting ‘‘(b)(1)(B)’’. 
PART E—FEDERAL PERKINS LOANS 
SEC. 461. EXTENSION OF AUTHORITY. 
Section 461(b) (20 U.S.C. 1087aa(b)) is amended—
H. R. 4137—189 
(1) in paragraph (1), by striking ‘‘$250,000,000 for fiscal 
year 1999’’ and all that follows through the period and inserting 
‘‘$300,000,000 for fiscal year 2009 and for each of the five 
succeeding fiscal years.’’; and 
(2) in paragraph (2), by striking ‘‘2003’’ each place it 
appears and inserting ‘‘2015’’. 
SEC. 462. ALLOWANCE FOR BOOKS AND SUPPLIES. 
Section 462(c)(4)(D) (20 U.S.C. 1087bb(c)(4)(D)) is amended by 
striking ‘‘$450’’ and inserting ‘‘$600’’. 
SEC. 463. AGREEMENTS WITH INSTITUTIONS. 
(a) TRANSFERS
FOR
COLLECTION.—Section 463(a)(4)(B) (20 
U.S.C. 1087cc(a)(4)(B)) is amended to read as follows: 
‘‘(B) if the institution is not one described in subpara-
graph (A), the Secretary may allow such institution to 
refer such note or agreement to the Secretary, without 
recompense, except that, once every six months, any sums 
collected on such a loan (less an amount not to exceed 
30 percent of any such sums collected to cover the Sec-
retary’s collection costs) shall be repaid to such institution 
and treated as an additional capital contribution under 
section 462;’’. 
(b) REVISE AUTHORITY TO PRESCRIBE ADDITIONAL FISCAL CON-
TROLS.—Section 463(a)(9) (20 U.S.C. 1087cc(a)(9)) is amended by 
inserting ‘‘, except that nothing in this paragraph shall be construed 
to permit the Secretary to require the assignment of loans to the 
Secretary other than as is provided for in paragraphs (4) and 
(5)’’ before the period. 
SEC. 464. PERKINS LOAN TERMS AND CONDITIONS. 
(a) LOAN LIMITS.—Section 464(a) (20 U.S.C. 1087dd(a)) is 
amended— 
(1) in paragraph (2)(A)— 
(A) by striking ‘‘$4,000’’ in clause (i) and inserting 
‘‘$5,500’’; and 
(B) by striking ‘‘$6,000’’ in clause (ii) and inserting 
‘‘$8,000’’; and 
(2) in paragraph (2)(B)— 
(A) by striking ‘‘$40,000’’ in clause (i) and inserting 
‘‘$60,000’’; 
(B) by striking ‘‘$20,000’’ in clause (ii) and inserting 
‘‘$27,500’’; and 
(C) by striking ‘‘$8,000’’ in clause (iii) and inserting 
‘‘$11,000’’. 
(b) DISCHARGE AND CANCELLATION RIGHTS IN CASES OF DIS-
ABILITY.— 
(1) AMENDMENT.—Section 464 (20 U.S.C. 1087dd(c)) is fur-
ther amended— 
(A) in subsection (c)(1)(F), by striking ‘‘canceled upon 
the death’’ and all that follows through the semicolon and 
inserting ‘‘cancelled— 
‘‘(i) upon the death of the borrower; 
‘‘(ii) if the borrower becomes permanently and 
totally disabled as determined in accordance with regu-
lations of the Secretary; 
‘‘(iii) if the borrower is unable to engage in any 
substantial gainful activity by reason of any medically
H. R. 4137—190 
determinable physical or mental impairment that can 
be expected to result in death, has lasted for a contin-
uous period of not less than 60 months, or can be 
expected to last for a continuous period of not less 
than 60 months; or 
‘‘(iv) if the borrower is determined by the Secretary 
of Veterans Affairs to be unemployable due to a service- 
connected disability;’’; and 
(B) by adding at the end the following: 
‘‘(k) The Secretary may develop such additional safeguards 
as the Secretary determines necessary to prevent fraud and abuse 
in the cancellation of liability under subsection (c)(1)(F). Notwith-
standing subsection (c)(1)(F), the Secretary may promulgate regula-
tions to resume collection on loans cancelled under subsection 
(c)(1)(F) in any case in which— 
‘‘(1) a borrower received a cancellation of liability under 
subsection (c)(1)(F) and after the cancellation the borrower— 
‘‘(A) receives a loan made, insured, or guaranteed under 
this title; or 
‘‘(B) has earned income in excess of the poverty line; 
or 
‘‘(2) the Secretary determines necessary.’’. 
(2) EFFECTIVE DATE.—The amendments made by paragraph 
(1) shall take effect on July 1, 2008. 
(c) FORBEARANCE.—Section 464 (20 U.S.C. 1087dd) is further 
amended— 
(1) in subsection (e)— 
(A) in the matter preceding paragraph (1), by striking 
‘‘, upon written request,’’ and inserting ‘‘, as documented 
in accordance with paragraph (2),’’; 
(B) by redesignating paragraphs (1) through (3) as 
subparagraphs (A) through (C), respectively; 
(C) by inserting ‘‘(1)’’ after ‘‘FORBEARANCE.—’’; and 
(D) by adding at the end the following: 
‘‘(2) For the purpose of paragraph (1), the terms of forbearance 
agreed to by the parties shall be documented by— 
‘‘(A) confirming the agreement of the borrower by notice 
to the borrower from the institution of higher education; and 
‘‘(B) recording the terms in the borrower’s file.’’; 
(2) in subsection (h)(1)(A), by striking ‘‘12 ontime’’ and 
inserting ‘‘9 on-time’’; and 
(3) in subsection (j)(2), by striking ‘‘(e)(3)’’ and inserting 
‘‘(e)(1)(C)’’. 
SEC. 465. CANCELLATION FOR PUBLIC SERVICE. 
Section 465(a) (20 U.S.C. 1087ee(a)) is amended— 
(1) in paragraph (2)— 
(A) by striking subparagraph (A) and inserting the 
following: 
‘‘(A) as a full-time teacher for service in an academic year 
(including such a teacher employed by an educational service 
agency)— 
‘‘(i) in a public or other nonprofit private elementary 
school or secondary school, which, for the purpose of this 
paragraph and for that year—
H. R. 4137—191 
‘‘(I) has been determined by the Secretary (pursu-
ant to regulations of the Secretary and after consulta-
tion with the State educational agency of the State 
in which the school is located) to be a school in which 
the number of children meeting a measure of poverty 
under section 1113(a)(5) of the Elementary and Sec-
ondary Education Act of 1965, exceeds 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 eligible in such year for assistance 
pursuant to part A of title I of the Elementary and 
Secondary Education Act of 1965; or 
‘‘(ii) in one or more public, or nonprofit private, 
elementary schools or secondary schools or locations oper-
ated by an educational service agency that have been deter-
mined by the Secretary (pursuant to regulations of the 
Secretary and after consultation 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 Secondary Edu-
cation Act of 1965, exceeds 30 percent of the total number 
of children taught at such school or location;’’; 
(B) in subparagraph (B), by striking ‘‘Head Start Act 
which’’ and inserting ‘‘Head Start Act, or in a prekinder-
garten or child care program that is licensed or regulated 
by the State, that’’; 
(C) in subparagraph (C), by inserting ‘‘, including a 
system administered by an educational service agency’’ 
after ‘‘secondary school system’’; 
(D) by striking subparagraph (F) and inserting the 
following: 
‘‘(F) as a full-time law enforcement officer or corrections 
officer for service to local, State, or Federal law enforcement 
or corrections agencies, or as a full-time attorney employed 
in a defender organization established in accordance with sec-
tion 3006A(g)(2) of title 18, United States Code;’’; 
(E) in subparagraph (H), by striking ‘‘or’’ after the 
semicolon; 
(F) in subparagraph (I), by striking the period and 
inserting a semicolon; and 
(G) by inserting before the matter following subpara-
graph (I) the following: 
‘‘(J) as a full-time fire fighter for service to a local, State, 
or Federal fire department or fire district; 
‘‘(K) as a full-time faculty member at a Tribal College 
or University, as that term is defined in section 316; 
‘‘(L) as a librarian, if the librarian has a master’s degree 
in library science and is employed in— 
‘‘(i) an elementary school or secondary school that is 
eligible for assistance under part A of title I of the 
Elementary and Secondary Education Act of 1965; or 
‘‘(ii) a public library that serves a geographic area 
that contains one or more schools eligible for assistance 
under part A of title I of the Elementary and Secondary 
Education Act of 1965; or
H. R. 4137—192 
‘‘(M) as a full-time speech language pathologist, if the 
pathologist has a masters degree and is working exclusively 
with schools that are eligible for assistance under title I of 
the Elementary and Secondary Education Act of 1965.’’; and 
(2) in paragraph (3)(A)— 
(A) in clause (i)— 
(i) by inserting ‘‘(D),’’ after ‘‘(C),’’; and 
(ii) by striking ‘‘or (I)’’ and inserting ‘‘(I), (J), (K), 
(L), or (M)’’; 
(B) in clause (ii), by inserting ‘‘or’’ after the semicolon; 
(C) by striking clause (iii); and 
(D) by redesignating clause (iv) as clause (iii). 
SEC. 466. SENSE OF CONGRESS REGARDING FEDERAL PERKINS LOANS. 
It is the sense of Congress that the Federal Perkins Loan 
Program, which provides low-interest loans to help needy students 
finance the costs of postsecondary education, is an important part 
of Federal student aid, and should remain a campus-based aid 
program at colleges and universities. 
PART F—NEED ANALYSIS 
SEC. 471. COST OF ATTENDANCE. 
(a) AMENDMENTS.—Section 472(3) (20 U.S.C. 1087ll(3)) is 
amended— 
(1) in subparagraph (B), by striking ‘‘and’’ after the semi-
colon; 
(2) by redesignating subparagraph (C) as subparagraph 
(D); and 
(3) by inserting after subparagraph (B), as amended by 
paragraph (1), the following: 
‘‘(C) for students who live in housing located on a 
military base or for which a basic allowance is provided 
under section 403(b) of title 37, United States Code, shall 
be an allowance based on the expenses reasonably incurred 
by such students for board but not for room; and’’. 
(b) EFFECTIVE DATE.—The amendments made by subsection 
(a) shall take effect on July 1, 2010. 
SEC. 472. DISCRETION TO MAKE ADJUSTMENTS. 
(a) AMENDMENTS.—Section 479A(a) (as amended by Public Law 
110–84) (20 U.S.C. 1087tt(a)) is amended— 
(1) by striking ‘‘medical or dental expenses’’ and inserting 
‘‘medical, dental, or nursing home expenses’’; 
(2) by inserting ‘‘or dependent care’’ after ‘‘child care’’; 
(3) by inserting ‘‘student or’’ before ‘‘family member who 
is a dislocated worker’’; and 
(4) by striking the second to last sentence and inserting 
the following: ‘‘In addition, nothing in this title shall be inter-
preted as limiting the authority of the student financial aid 
administrator in such cases (1) to request and use supple-
mentary information about the financial status or personal 
circumstances of eligible applicants in selecting recipients and 
determining the amount of awards under this title, or (2) to 
offer a dependent student financial assistance under section 
428H or a Federal Direct Unsubsidized Stafford Loan without 
requiring the parents of such student to file the financial aid 
form prescribed under section 483 if the student financial aid
H. R. 4137—193 
administrator verifies that the parent or parents of such stu-
dent have ended financial support of such student and refuse 
to file such form.’’. 
(b) EFFECTIVE DATE AMENDMENT TO THE COLLEGE COST REDUC-
TION AND ACCESS ACT.—Section 603(b) of the College Cost Reduction 
and Access Act (Public Law 110–84) is amended by striking ‘‘July 
1, 2009’’ and inserting ‘‘the date of enactment of the Higher Edu-
cation Opportunity Act’’. 
SEC. 473. DEFINITIONS. 
(a) TOTAL INCOME.—Section 480(a) (as amended by Public Law 
110–84) (20 U.S.C. 1087vv(a)) is amended— 
(1) in paragraph (1)— 
(A) by inserting ‘‘(A)’’ after ‘‘(1)’’; 
(B) by inserting ‘‘subparagraph (B) and’’ after ‘‘provided 
in’’; and 
(C) by adding at the end the following new subpara-
graph: 
‘‘(B) Notwithstanding section 478(a), the Secretary may provide 
for the use of data from the second preceding tax year when and 
to the extent necessary to carry out the simplification of applications 
(including simplification for a subset of applications) used for the 
estimation and determination of financial aid eligibility. Such sim-
plification may include the sharing of data between the Internal 
Revenue Service and the Department, pursuant to the consent 
of the taxpayer.’’; and 
(2) in paragraph (2), by inserting ‘‘no portion of veterans’ 
education benefits received by an individual,’’ after ‘‘any pro-
gram by an individual,’’. 
(b) UNTAXED INCOME AND BENEFITS.—Section 480(b)(1)(E) (as 
amended by Public Law 110–84) (20 U.S.C. 1087vv(b)(1)(E)) is 
amended by inserting ‘‘, except that the value of on-base military 
housing or the value of basic allowance for housing determined 
under section 403(b) of title 37, United States Code, received by 
the parents, in the case of a dependent student, or the student 
or student’s spouse, in the case of an independent student, shall 
be excluded’’ before the semicolon. 
(c) INDEPENDENT STUDENT.—Section 480(d)(1) (as amended by 
Public Law 110–84) (20 U.S.C. 1087vv(d)(1)) is amended— 
(1) by striking subparagraph (B) and inserting the fol-
lowing: 
‘‘(B) is an orphan, in foster care, or a ward of the 
court, or was an orphan, in foster care, or a ward of 
the court at any time when the individual was 13 years 
of age or older;’’; and 
(2) by striking subparagraph (C) and inserting the fol-
lowing: 
‘‘(C) is, or was immediately prior to attaining the age 
of majority, an emancipated minor or in legal guardianship 
as determined by a court of competent jurisdiction in the 
individual’s State of legal residence;’’. 
(d) TREATMENT OF COOPERATIVE EDUCATION WORK INCOME.— 
Section 480(e) (as amended by Public Law 110–84) (20 U.S.C. 
1087vv(e)) is amended— 
(1) by redesignating paragraphs (2) through (5) as para-
graphs (3) through (6), respectively; and
H. R. 4137—194 
(2) by inserting after paragraph (1) the following new para-
graph: 
‘‘(2) any income earned from work under a cooperative 
education program offered by an institution of higher edu-
cation;’’. 
(e) OTHER FINANCIAL ASSISTANCE.—Section 480(j)(1) (20 U.S.C. 
1087vv(j)(1)) is amended— 
(1) by striking ‘‘veterans’ education benefits as defined 
in subsection (c), and’’; and 
(2) by inserting before the period at the end the following: 
‘‘, but excluding veterans’ education benefits as defined in sub-
section (c)’’. 
(f) EFFECTIVE DATE.—The amendments made by this section 
shall take effect on July 1, 2010. 
PART G—GENERAL PROVISIONS RELATING TO 
STUDENT ASSISTANCE 
SEC. 481. DEFINITIONS. 
Section 481 (20 U.S.C. 1088) is amended— 
(1) in subsection (a)(2)(B), by inserting ‘‘and that measures 
program length in credit hours or clock hours’’ after ‘‘bacca-
laureate degree’’; and 
(2) by adding at the end the following: 
‘‘(e) CONSUMER REPORTING AGENCY.—For purposes of this title, 
the term ‘consumer reporting agency’ has the meaning given the 
term ‘consumer reporting agency that compiles and maintains files 
on consumers on a nationwide basis’ in Section 603(p) of the Fair 
Credit Reporting Act (15 U.S.C. 1681a(p)). 
‘‘(f) DEFINITION OF EDUCATIONAL SERVICE AGENCY.—For pur-
poses of parts B, D, and E, the term ‘educational service agency’ 
has the meaning given the term in section 9101 of the Elementary 
and Secondary Education Act of 1965.’’. 
SEC. 482. MASTER CALENDAR. 
(a) AMENDMENT.—Section 482 (20 U.S.C. 1089) is amended— 
(1) in subsection (a)(1), by striking subparagraphs (B) and 
(C) and inserting the following: 
‘‘(B) by March 1: proposed modifications, updates, and 
notices pursuant to sections 478 and 483(a)(5) published 
in the Federal Register; 
‘‘(C) by June 1: final modifications, updates, and notices 
pursuant to sections 478 and 483(a)(5) published in the 
Federal Register;’’; and 
(2) by adding at the end the following: 
‘‘(e) COMPLIANCE CALENDAR.—Prior to the beginning of each 
award year, the Secretary shall provide to institutions of higher 
education a list of all the reports and disclosures required under 
this Act. The list shall include— 
‘‘(1) the date each report or disclosure is required to be 
completed and to be submitted, made available, or dissemi-
nated; 
‘‘(2) the required recipients of each report or disclosure; 
‘‘(3) any required method for transmittal or dissemination 
of each report or disclosure; 
‘‘(4) a description of the content of each report or disclosure 
sufficient to allow the institution to identify the appropriate
H. R. 4137—195 
individuals to be assigned the responsibility for such report 
or disclosure; 
‘‘(5) references to the statutory authority, applicable regula-
tions, and current guidance issued by the Secretary regarding 
each report or disclosure; and 
‘‘(6) any other information which is pertinent to the content 
or distribution of the report or disclosure.’’. 
(b) EFFECTIVE DATE.—The amendment made by subsection 
(a)(1) shall take effect on July 1, 2010. 
SEC. 483. IMPROVEMENTS TO PAPER AND ELECTRONIC FORMS AND 
PROCESSES. 
(a) COMMON FINANCIAL AID FORM DEVELOPMENT AND PROC-
ESSING.—Section 483 (20 U.S.C. 1090) is amended— 
(1) in subsection (a), by striking paragraphs (1) through 
(7) and inserting the following: 
‘‘(1) IN GENERAL.—The Secretary, in cooperation with rep-
resentatives of agencies and organizations involved in student 
financial assistance, shall produce, distribute, and process free 
of charge common financial reporting forms as described in 
this subsection to be used for application and reapplication 
to determine the need and eligibility of a student for financial 
assistance under parts A through E (other than subpart 4 
of part A). The forms shall be made available to applicants 
in both paper and electronic formats and shall be referred 
to as the ‘Free Application for Federal Student Aid’ or the 
‘FAFSA’. The Secretary shall work to make the FAFSA con-
sumer-friendly and to make questions on the FAFSA easy for 
students and families to read and understand, and shall ensure 
that the FAFSA is available in formats accessible to individuals 
with disabilities. 
‘‘(2) PAPER FORMAT.— 
‘‘(A) IN GENERAL.—The Secretary shall develop, make 
available, and process— 
‘‘(i) a paper version of EZ FAFSA, as described 
in subparagraph (B); and 
‘‘(ii) a paper version of the other forms described 
in this subsection, in accordance with subparagraph 
(C), for any applicant who does not meet the require-
ments of or does not wish to use the process described 
in subparagraph (B). 
‘‘(B) EZ FAFSA.— 
‘‘(i) IN GENERAL.—The Secretary shall develop and 
use, after appropriate field testing, a simplified paper 
form, to be known as the EZ FAFSA, to be used for 
applicants meeting the requirements of subsection (b) 
or (c) of section 479. 
‘‘(ii) REDUCED
DATA
REQUIREMENTS.—The EZ 
FAFSA shall permit an applicant to submit, for finan-
cial assistance purposes, only the data elements 
required to make a determination of whether the 
applicant meets the requirements under subsection (b) 
or (c) of section 479. 
‘‘(iii) STATE DATA.—The Secretary shall include on 
the EZ FAFSA such data items as may be necessary 
to award State financial assistance, as provided under 
paragraph (5), except that the Secretary shall not
H. R. 4137—196 
include a State’s data if that State does not permit 
the State’s resident applicants to use the EZ FAFSA 
for State assistance. 
‘‘(iv) FREE
AVAILABILITY
AND
PROCESSING.—The 
provisions of paragraph (6) shall apply to the EZ 
FAFSA, and the data collected by means of the EZ 
FAFSA shall be available to institutions of higher edu-
cation, guaranty agencies, and States in accordance 
with paragraph (10). 
‘‘(C) PROMOTING THE USE OF ELECTRONIC FAFSA.— 
‘‘(i) IN GENERAL.—The Secretary shall make all 
efforts to encourage all applicants to utilize the elec-
tronic version of the forms described in paragraph 
(3). 
‘‘(ii) MAINTENANCE OF THE FAFSA IN A PRINTABLE 
ELECTRONIC
FILE.—The Secretary shall maintain a 
version of the paper forms described in subparagraphs 
(A) and (B) in a printable electronic file that is easily 
portable, accessible, and downloadable to students on 
the same website used to provide students with the 
electronic version of the forms described in paragraph 
(3). 
‘‘(iii) REQUESTS FOR PRINTED COPY.—The Secretary 
shall provide a printed copy of the full paper version 
of FAFSA upon request. 
‘‘(iv) REPORTING
REQUIREMENT.—The Secretary 
shall maintain data, and periodically report to Con-
gress, on the impact of the digital divide on students 
completing applications for aid under this title. The 
Secretary shall report on the steps taken to eliminate 
the digital divide and reduce production of the paper 
form described in subparagraph (A). The Secretary’s 
report shall specifically address the impact of the dig-
ital divide on the following student populations: 
‘‘(I) Independent students. 
‘‘(II) Traditionally underrepresented students. 
‘‘(III) Dependent students. 
‘‘(3) ELECTRONIC FORMAT.— 
‘‘(A) IN GENERAL.—The Secretary shall produce, dis-
tribute, and process forms in electronic format to meet 
the requirements of paragraph (1). The Secretary shall 
develop an electronic version of the forms for applicants 
who do not meet the requirements of subsection (b) or 
(c) of section 479. 
‘‘(B) SIMPLIFIED APPLICATIONS: FAFSA ON THE WEB.— 
‘‘(i) IN GENERAL.—The Secretary shall develop and 
use a simplified electronic version of the form to be 
used by applicants meeting the requirements under 
subsection (b) or (c) of section 479. 
‘‘(ii) REDUCED
DATA
REQUIREMENTS.—The sim-
plified electronic version of the forms shall permit an 
applicant to submit, for financial assistance purposes, 
only the data elements required to make a determina-
tion of whether the applicant meets the requirements 
under subsection (b) or (c) of section 479. 
‘‘(iii) USE OF FORMS.—Nothing in this subsection 
shall be construed to prohibit the use of the forms
H. R. 4137—197 
developed by the Secretary pursuant to this paragraph 
by an eligible institution, eligible lender, guaranty 
agency, State grant agency, private computer software 
provider, a consortium thereof, or such other entities 
as the Secretary may designate. 
‘‘(C) STATE DATA.—The Secretary shall include on the 
electronic version of the forms such items as may be nec-
essary to determine eligibility for State financial assistance, 
as provided under paragraph (5), except the Secretary shall 
not require an applicant to enter data pursuant to this 
subparagraph that are required by any State other than 
the applicant’s State of residence. 
‘‘(D) AVAILABILITY
AND
PROCESSING.—The data col-
lected by means of the simplified electronic version of the 
forms shall be available to institutions of higher education, 
guaranty agencies, and States in accordance with para-
graph (10). 
‘‘(E) PRIVACY.—The Secretary shall ensure that data 
collection under this paragraph complies with section 552a 
of title 5, United States Code, and that any entity using 
the electronic version of the forms developed by the Sec-
retary pursuant to this paragraph shall maintain reason-
able and appropriate administrative, technical, and phys-
ical safeguards to ensure the integrity and confidentiality 
of the information, and to protect against security threats, 
or unauthorized uses or disclosures of the information pro-
vided on the electronic version of the forms. Data collected 
by such electronic version of the forms shall be used only 
for the application, award, and administration of aid 
awarded under this title, State aid, or aid awarded by 
eligible institutions or such entities as the Secretary may 
designate. No data collected by such electronic version of 
the forms shall be used for making final aid awards under 
this title until such data have been processed by the Sec-
retary or a contractor or designee of the Secretary, except 
as may be permitted under this title. 
‘‘(F) SIGNATURE.—Notwithstanding any other provision 
of this Act, the Secretary may continue to permit an elec-
tronic version of the form under this paragraph to be 
submitted without a signature, if a signature is subse-
quently submitted by the applicant or if the applicant 
uses a personal identification number provided by the Sec-
retary under subparagraph (G). 
‘‘(G) PERSONAL
IDENTIFICATION
NUMBERS
AUTHOR-
IZED.—The Secretary may continue to assign to an 
applicant a personal identification number— 
‘‘(i) to enable the applicant to use such number 
as a signature for purposes of completing an electronic 
version of a form developed under this paragraph; and 
‘‘(ii) for any purpose determined by the Secretary 
to enable the Secretary to carry out this title. 
‘‘(H) PERSONAL
IDENTIFICATION
NUMBER
IMPROVE-
MENT.—The Secretary shall continue to work with the 
Commissioner of Social Security to minimize the time 
required for an applicant to obtain a personal identification 
number when applying for aid under this title through
H. R. 4137—198 
an electronic version of a form developed under this para-
graph. 
‘‘(4) STREAMLINING.— 
‘‘(A) STREAMLINED REAPPLICATION PROCESS.— 
‘‘(i) IN GENERAL.—The Secretary shall continue to 
streamline reapplication forms and processes for an 
applicant who applies for financial assistance under 
this title in the next succeeding academic year subse-
quent to an academic year for which such applicant 
applied for financial assistance under this title. 
‘‘(ii) UPDATING OF DATA ELEMENTS.—The Secretary 
shall determine, in cooperation with States, institu-
tions of higher education, agencies, and organizations 
involved in student financial assistance, the data ele-
ments that may be transferred from the previous aca-
demic year’s application and those data elements that 
shall be updated. 
‘‘(iii) REDUCED DATA AUTHORIZED.—Nothing in this 
title shall be construed as limiting the authority of 
the Secretary to reduce the number of data elements 
required of reapplicants. 
‘‘(iv) 
ZERO
FAMILY
CONTRIBUTION.—Applicants 
determined to have a zero family contribution pursuant 
to section 479(c) shall not be required to provide any 
financial data in a reapplication form, except data that 
are necessary to determine eligibility under such sec-
tion. 
‘‘(B) REDUCTION OF DATA ELEMENTS.— 
‘‘(i) REDUCTION ENCOURAGED.—Of the number of 
data elements on the FAFSA used for the 2009–2010 
award year, the Secretary, in cooperation with rep-
resentatives of agencies and organizations involved in 
student financial assistance and consistent with efforts 
under subsection (c), shall continue to reduce the 
number of such data elements required to be entered 
by all applicants, with the goal of reducing such 
number by 50 percent. 
‘‘(ii) REPORT.—The Secretary shall submit a report 
on the process of this reduction to each of the author-
izing committees by June 30, 2011. 
‘‘(5) STATE REQUIREMENTS.— 
‘‘(A) IN GENERAL.—Except as provided in paragraphs 
(2)(B)(iii), (3)(B), and (4)(A)(ii), the Secretary shall include 
on the forms developed under this subsection, such State- 
specific data items as the Secretary determines are nec-
essary to meet State requirements for need-based State 
aid. Such items shall be selected in consultation with State 
agencies in order to assist in the awarding of State financial 
assistance in accordance with the terms of this subsection. 
The number of such data items shall not be less than 
the number included on the form for the 2008–2009 award 
year unless a State notifies the Secretary that the State 
no longer requires those data items for the distribution 
of State need-based aid. 
‘‘(B) ANNUAL REVIEW.—The Secretary shall conduct an 
annual review to determine—
H. R. 4137—199 
‘‘(i) which data items each State requires to award 
need-based State aid; and 
‘‘(ii) if the State will permit an applicant to file 
a form described in paragraph (2)(B) or (3)(B). 
‘‘(C) FEDERAL REGISTER NOTICE.—Beginning with the 
forms developed under paragraphs (2)(B) and (3)(B) for 
the award year 2010–2011, the Secretary shall publish 
on an annual basis a notice in the Federal Register 
requiring State agencies to inform the Secretary— 
‘‘(i) if the State agency is unable to permit 
applicants to utilize the simplified forms described in 
paragraphs (2)(B) and (3)(B); and 
‘‘(ii) of the State-specific nonfinancial data that 
the State agency requires for delivery of State need- 
based financial aid. 
‘‘(D) USE OF SIMPLIFIED FORMS ENCOURAGED.—The Sec-
retary shall encourage States to take such steps as are 
necessary to encourage the use of simplified forms under 
this subsection, including those forms described in para-
graphs (2)(B) and (3)(B), for applicants who meet the 
requirements of subsection (b) or (c) of section 479. 
‘‘(E) CONSEQUENCES IF STATE DOES NOT ACCEPT SIM-
PLIFIED FORMS.—If a State does not permit an applicant 
to file a form described in paragraph (2)(B) or (3)(B) for 
purposes of determining eligibility for State need-based 
financial aid, the Secretary may determine that State-spe-
cific questions for such State will not be included on a 
form described in paragraph (2)(B) or (3)(B). If the Sec-
retary makes such determination, the Secretary shall 
advise the State of the Secretary’s determination. 
‘‘(F) LACK
OF
STATE
RESPONSE
TO
REQUEST
FOR 
INFORMATION.—If a State does not respond to the Sec-
retary’s request for information under subparagraph (B), 
the Secretary shall— 
‘‘(i) permit residents of that State to complete sim-
plified forms under paragraphs (2)(B) and (3)(B); and 
‘‘(ii) not require any resident of such State to com-
plete any data items previously required by that State 
under this section. 
‘‘(G) RESTRICTION.—The Secretary shall, to the extent 
practicable, not require applicants to complete any financial 
or nonfinancial data items that are not required— 
‘‘(i) by the applicant’s State; or 
‘‘(ii) by the Secretary. 
‘‘(6) CHARGES TO STUDENTS AND PARENTS FOR USE OF FORMS 
PROHIBITED.—The need and eligibility of a student for financial 
assistance under parts A through E (other than under subpart 
4 of part A) may be determined only by using a form developed 
by the Secretary under this subsection. Such forms shall be 
produced, distributed, and processed by the Secretary, and no 
parent or student shall be charged a fee by the Secretary, 
a contractor, a third-party servicer or private software provider, 
or any other public or private entity for the collection, proc-
essing, or delivery of financial aid through the use of such 
forms. No data collected on a form for which a fee is charged 
shall be used to complete the form prescribed under this section, 
except that a Federal or State income tax form prepared by
H. R. 4137—200 
a paid income tax preparer or preparer service for the primary 
purpose of filing a Federal or State income tax return may 
be used to complete the form prescribed under this section. 
‘‘(7) RESTRICTIONS ON USE OF PIN.—No person, commercial 
entity, or other entity may request, obtain, or utilize an 
applicant’s personal identification number assigned under para-
graph (3)(G) for purposes of submitting a form developed under 
this subsection on an applicant’s behalf. 
‘‘(8) APPLICATION PROCESSING CYCLE.—The Secretary shall 
enable students to submit forms developed under this sub-
section and initiate the processing of such forms under this 
subsection, as early as practicable prior to January 1 of the 
student’s planned year of enrollment. 
‘‘(9) EARLY ESTIMATES.—The Secretary shall continue to— 
‘‘(A) permit applicants to enter data in such forms 
as described in this subsection in the years prior to enroll-
ment in order to obtain a non-binding estimate of the 
applicant’s family contribution (as defined in section 473); 
‘‘(B) permit applicants to update information submitted 
on forms described in this subsection, without needing 
to re-enter previously submitted information; 
‘‘(C) develop a means to inform applicants, in the years 
prior to enrollment, of student aid options for individuals 
in similar financial situations; 
‘‘(D) develop a means to provide a clear and con-
spicuous notice that the applicant’s expected family con-
tribution is subject to change and may not reflect the 
final expected family contribution used to determine Fed-
eral student financial aid award amounts under this title; 
and 
‘‘(E) consult with representatives of States, institutions 
of higher education, and other individuals with experience 
or expertise in student financial assistance application 
processes in making updates to forms used to provide early 
estimates under this paragraph. 
‘‘(10) DISTRIBUTION OF DATA.—Institutions of higher edu-
cation, guaranty agencies, and States shall receive, without 
charge, the data collected by the Secretary using a form devel-
oped under this subsection for the purposes of processing loan 
applications and determining need and eligibility for institu-
tional and State financial aid awards. Entities designated by 
institutions of higher education, guaranty agencies, or States 
to receive such data shall be subject to all the requirements 
of this section, unless such requirements are waived by the 
Secretary. 
‘‘(11) THIRD PARTY SERVICERS AND PRIVATE SOFTWARE PRO-
VIDERS.—To the extent practicable and in a timely manner, 
the Secretary shall provide, to private organizations and con-
sortia that develop software used by institutions of higher 
education for the administration of funds under this title, all 
the necessary specifications that the organizations and con-
sortia must meet for the software the organizations and con-
sortia develop, produce, and distribute (including any diskette, 
modem, or network communications) to be so used. The speci-
fications shall contain record layouts for required data. The 
Secretary shall develop in advance of each processing cycle
H. R. 4137—201 
an annual schedule for providing such specifications. The Sec-
retary, to the extent practicable, shall use multiple means 
of providing such specifications, including conferences and other 
meetings, outreach, and technical support mechanisms (such 
as training and printed reference materials). The Secretary 
shall, from time to time, solicit from such organizations and 
consortia means of improving the support provided by the Sec-
retary. 
‘‘(12) PARENT’S SOCIAL SECURITY NUMBER AND BIRTH DATE.— 
The Secretary is authorized to include space on the forms 
developed under this subsection for the social security number 
and birth date of parents of dependent students seeking finan-
cial assistance under this title.’’; 
(2) by striking subsections (b) and (e); 
(3) by redesignating subsections (c) and (d) (as amended 
by section 103(b)(10)) as subsections (b) and (c), respectively; 
(4) in subsection (c) (as redesignated by paragraph (3)), 
by striking ‘‘that is authorized’’ and all that follows through 
the period at the end and inserting ‘‘or other appropriate pro-
vider of technical assistance and information on postsecondary 
educational services for individuals with disabilities, including 
the National Technical Assistance Center under section 777. 
The Secretary shall continue to implement, to the extent prac-
ticable, a toll-free telephone based system to permit applicants 
who meet the requirements of subsection (b) or (c) of section 
479 to submit an application over such system.’’; and 
(5) by adding at the end the following: 
‘‘(d) ASSISTANCE IN PREPARATION OF FINANCIAL AID APPLICA-
TION.— 
‘‘(1) 
PREPARATION
AUTHORIZED.—Notwithstanding 
any 
provision of this Act, an applicant may use a preparer for 
consultative or preparation services for the completion of a 
form developed under subsection (a) if the preparer satisfies 
the requirements of this subsection. 
‘‘(2) PREPARER IDENTIFICATION REQUIRED.—If an applicant 
uses a preparer for consultative or preparation services for 
the completion of a form developed under subsection (a), and 
for which a fee is charged, the preparer shall— 
‘‘(A) include, at the time the form is submitted to 
the Department, the name, address or employer’s address, 
social security number or employer identification number, 
and organizational affiliation of the preparer on the 
applicant’s form; and 
‘‘(B) be subject to the same penalties as an applicant 
for purposely giving false or misleading information in 
the application. 
‘‘(3) ADDITIONAL REQUIREMENTS.—A preparer that provides 
consultative or preparation services pursuant to this subsection 
shall— 
‘‘(A) clearly inform each individual upon initial contact, 
including contact through the Internet or by telephone, 
that the FAFSA and EZ FAFSA are free forms that may 
be completed without professional assistance via paper or 
electronic version of the forms that are provided by the 
Secretary; 
‘‘(B) include in any advertising clear and conspicuous 
information that the FAFSA and EZ FAFSA are free forms
H. R. 4137—202 
that may be completed without professional assistance via 
paper or electronic version of the forms that are provided 
by the Secretary; 
‘‘(C) if advertising or providing any information on 
a website, or if providing services through a website, 
include on the website a link to the website that provides 
the electronic version of the forms developed under sub-
section (a); and 
‘‘(D) not produce, use, or disseminate any other form 
for the purpose of applying for Federal student financial 
aid other than the form developed by the Secretary under 
subsection (a). 
‘‘(4) SPECIAL RULE.—Nothing in this Act shall be construed 
to limit preparers of the forms required under this title that 
meet the requirements of this subsection from collecting source 
information from a student or parent, including Internal Rev-
enue Service tax forms, in providing consultative and prepara-
tion services in completing the forms. 
‘‘(e) EARLY APPLICATION AND ESTIMATED AWARD DEMONSTRA-
TION PROGRAM.— 
‘‘(1) PURPOSE AND OBJECTIVES.—The purpose of the dem-
onstration program under this subsection is to measure the 
benefits, in terms of student aspirations and plans to attend 
an institution of higher education, and any adverse effects, 
in terms of program costs, integrity, distribution, and delivery 
of aid under this title, of implementing an early application 
system for all dependent students that allows dependent stu-
dents to apply for financial aid using information from two 
years prior to the year of enrollment. Additional objectives 
associated with implementation of the demonstration program 
are the following: 
‘‘(A) To measure the feasibility of enabling dependent 
students to apply for Federal, State, and institutional finan-
cial aid in their junior year of secondary school, using 
information from two years prior to the year of enrollment, 
by completing any of the forms under this subsection. 
‘‘(B) To identify whether receiving final financial aid 
award estimates not later than the fall of the senior year 
of secondary school provides students with additional time 
to compete for the limited resources available for State 
and institutional financial aid and positively impacts the 
college aspirations and plans of these students. 
‘‘(C) To measure the impact of using income informa-
tion from the years prior to enrollment on— 
‘‘(i) eligibility for financial aid under this title and 
for other State and institutional aid; and 
‘‘(ii) the cost of financial aid programs under this 
title. 
‘‘(D) To effectively evaluate the benefits and adverse 
effects of the demonstration program on program costs, 
integrity, distribution, and delivery of financial aid. 
‘‘(2) PROGRAM AUTHORIZED.—Not later than two years after 
the date of enactment of the Higher Education Opportunity 
Act, the Secretary shall implement an early application dem-
onstration program enabling dependent students who wish to 
participate in the program—
H. R. 4137—203 
‘‘(A) to complete an application under this subsection 
during the academic year that is two years prior to the 
year such students plan to enroll in an institution of higher 
education; and 
‘‘(B) based on the application described in subpara-
graph (A), to obtain, not later than one year prior to the 
year of the students’ planned enrollment, information on 
eligibility for Federal Pell Grants, Federal student loans 
under this title, and State and institutional financial aid 
for the student’s first year of enrollment in the institution 
of higher education. 
‘‘(3) EARLY APPLICATION AND ESTIMATED AWARD.—For all 
dependent students selected for participation in the demonstra-
tion program who submit a completed FAFSA, or, as appro-
priate, an EZ FAFSA, two years prior to the year such students 
plan to enroll in an institution of higher education, the Sec-
retary shall, not later than one year prior to the year of such 
planned enrollment— 
‘‘(A) provide each student who completes an early 
application with an estimated determination of such stu-
dent’s— 
‘‘(i) expected family contribution for the first year 
of the student’s enrollment in an institution of higher 
education; and 
‘‘(ii) Federal Pell Grant award for the first such 
year, based on the maximum Federal Pell Grant award 
at the time of application; and 
‘‘(B) remind the students of the need to update the 
students’ information during the calendar year of enroll-
ment using the expedited reapplication process provided 
for in subsection (a)(4)(A). 
‘‘(4) PARTICIPANTS.—The Secretary shall include as partici-
pants in the demonstration program— 
‘‘(A) States selected through the application process 
described in paragraph (5); 
‘‘(B) institutions of higher education within the selected 
States that are interested in participating in the dem-
onstration program, and that can make estimates or 
commitments of institutional student financial aid, as 
appropriate, to students the year before the students’ 
planned enrollment date; and 
‘‘(C) secondary schools within the selected States that 
are interested in participating in the demonstration pro-
gram, and that can commit resources to— 
‘‘(i) advertising the availability of the program; 
‘‘(ii) identifying students who might be interested 
in participating in the program; 
‘‘(iii) encouraging such students to apply; and 
‘‘(iv) participating in the evaluation of the program. 
‘‘(5) APPLICATIONS.—Each State that is interested in partici-
pating in the demonstration program shall submit an applica-
tion to the Secretary at such time, in such form, and containing 
such information as the Secretary shall require. The application 
shall include— 
‘‘(A) information on the amount of the State’s need- 
based student financial assistance available, and the eligi-
bility criteria for receiving such assistance;
H. R. 4137—204 
‘‘(B) a commitment to make, not later than the year 
before the dependent students participating in the dem-
onstration program plan to enroll in an institution of higher 
education, an estimate of the award of State financial 
aid to such dependent students; 
‘‘(C) a plan for recruiting institutions of higher edu-
cation and secondary schools with different demographic 
characteristics to participate in the program; 
‘‘(D) a plan for selecting institutions of higher education 
and secondary schools to participate in the program that— 
‘‘(i) demonstrate a commitment to encouraging stu-
dents to submit a FAFSA, or, as appropriate, an EZ 
FAFSA, two years before the students’ planned date 
of enrollment in an institution of higher education; 
‘‘(ii) serve different populations of students; 
‘‘(iii) in the case of institutions of higher edu-
cation— 
‘‘(I) to the extent possible, are of varying types 
and sectors; and 
‘‘(II) commit to making, not later than the 
year prior to the year that dependent students 
participating in the demonstration program plan 
to enroll in the institution— 
‘‘(aa) estimated institutional awards to 
participating dependent students; and 
‘‘(bb) estimated grants or other financial 
aid available under this title (including supple-
mental grants under subpart 3 of part A), 
for all participating dependent students, along 
with information on State awards, as provided 
to the institution by the State; 
‘‘(E) a commitment to participate in the evaluation 
conducted by the Secretary; and 
‘‘(F) such other information as the Secretary may 
require. 
‘‘(6) SPECIAL PROVISIONS.— 
‘‘(A) DISCRETION OF STUDENT FINANCIAL AID ADMINIS-
TRATORS.—A financial aid administrator at an institution 
of higher education participating in a demonstration pro-
gram under this subsection may use the discretion provided 
under section 479A as necessary for students participating 
in the demonstration program. 
‘‘(B) WAIVERS.—The Secretary is authorized to waive, 
for an institution of higher education participating in the 
demonstration program, any requirements under this title, 
or regulations prescribed under this title, that will make 
the demonstration program unworkable, except that the 
Secretary shall not waive any provisions with respect to 
the maximum award amounts for grants and loans under 
this title. 
‘‘(7) OUTREACH.—The Secretary shall make appropriate 
efforts to notify States of the demonstration program under 
this subsection. Upon determination of participating States, 
the Secretary shall continue to make efforts to notify institu-
tions of higher education and dependent students within partici-
pating States of the opportunity to participate in the demonstra-
tion program and of the participation requirements.
H. R. 4137—205 
‘‘(8) EVALUATION.—The Secretary shall conduct a rigorous 
evaluation of the demonstration program to measure the pro-
gram’s benefits and adverse effects, as the benefits and effects 
relate to the purpose and objectives of the program described 
in paragraph (1). In conducting the evaluation, the Secretary 
shall— 
‘‘(A) identify whether receiving financial aid estimates 
one year prior to the year in which the student plans 
to enroll in an institution of higher education, has a positive 
impact on the higher education aspirations and plans of 
such student; 
‘‘(B) measure the extent to which using a student’s 
income information from the year that is two years prior 
to the student’s planned enrollment date had an impact 
on the ability of States and institutions of higher education 
to make financial aid awards and commitments; 
‘‘(C) determine what operational changes are required 
to implement the program on a larger scale; 
‘‘(D) identify any changes to Federal law that are nec-
essary to implement the program on a permanent basis; 
‘‘(E) identify the benefits and adverse effects of pro-
viding early estimates on program costs, program oper-
ations, program integrity, award amounts, distribution, and 
delivery of aid; and 
‘‘(F) examine the extent to which estimated awards 
differ from actual awards made to students participating 
in the program. 
‘‘(9) CONSULTATION.—The Secretary shall consult, as appro-
priate, with the Advisory Committee on Student Financial 
Assistance established under section 491 on the design, 
implementation, and evaluation of the demonstration program. 
‘‘(f) REDUCTION OF INCOME AND ASSET INFORMATION TO DETER-
MINE ELIGIBILITY FOR STUDENT FINANCIAL AID.— 
‘‘(1) CONTINUATION
OF
CURRENT
FAFSA
SIMPLIFICATION 
EFFORTS.—The Secretary shall continue to examine— 
‘‘(A) how the Internal Revenue Service can provide 
to the Secretary income and other data needed to compute 
an expected family contribution for taxpayers and depend-
ents of taxpayers, and when in the application cycle the 
data can be made available; 
‘‘(B) whether data provided by the Internal Revenue 
Service can be used to— 
‘‘(i) prepopulate the electronic version of the 
FAFSA with student and parent taxpayer data; or 
‘‘(ii) generate an expected family contribution with-
out additional action on the part of the student and 
taxpayer; and 
‘‘(C) whether the data elements collected on the FAFSA 
that are needed to determine eligibility for student aid, 
or to administer the Federal student financial aid programs 
under this title, but are not needed to compute an expected 
family contribution, such as information regarding the stu-
dent’s citizenship or permanent residency status, registra-
tion for selective service, or driver’s license number, can 
be reduced without adverse effects. 
‘‘(2) REPORT ON FAFSA SIMPLIFICATION EFFORTS TO DATE.— 
Not later than 90 days after the date of enactment of the
H. R. 4137—206 
Higher Education Opportunity Act, the Secretary shall provide 
a written report to the authorizing committees on the work 
the Department has done with the Secretary of the Treasury 
regarding— 
‘‘(A) how the expected family contribution of a student 
can be calculated using substantially less income and asset 
information than was used on March 31, 2008; 
‘‘(B) the extent to which the reduced income and asset 
information will result in a redistribution of Federal grants 
and subsidized loans under this title, State aid, or institu-
tional aid, or in a change in the composition of the group 
of recipients of such aid, and the amount of such redistribu-
tion; 
‘‘(C) how the alternative approaches for calculating 
the expected family contribution will— 
‘‘(i) rely mainly, in the case of students and parents 
who file income tax returns, on information available 
on the 1040, 1040EZ, and 1040A; and 
‘‘(ii) include formulas for adjusting income or asset 
information to produce similar results to the existing 
approach with less data; 
‘‘(D) how the Internal Revenue Service can provide 
to the Secretary of Education income and other data needed 
to compute an expected family contribution for taxpayers 
and dependents of taxpayers, and when in the application 
cycle the data can be made available; 
‘‘(E) whether data provided by the Internal Revenue 
Service can be used to— 
‘‘(i) prepopulate the electronic version of the 
FAFSA with student and parent taxpayer data; or 
‘‘(ii) generate an expected family contribution with-
out additional action on the part of the student and 
taxpayer; 
‘‘(F) the extent to which the use of income data from 
two years prior to a student’s planned enrollment date 
will change the expected family contribution computed in 
accordance with part F, and potential adjustments to the 
need analysis formula that will minimize the change; and 
‘‘(G) the extent to which the data elements collected 
on the FAFSA on March 31, 2008, that are needed to 
determine eligibility for student aid or to administer the 
Federal student financial aid programs, but are not needed 
to compute an expected family contribution, such as 
information regarding the student’s citizenship or perma-
nent residency status, registration for selective service, or 
driver’s license number, can be reduced without adverse 
effects. 
‘‘(3) STUDY.— 
‘‘(A) FORMATION OF STUDY GROUP.—Not later than 90 
days after the date of enactment of the Higher Education 
Opportunity Act, the Comptroller General shall convene 
a study group the membership of which shall include the 
Secretary of Education, the Secretary of the Treasury, the 
Director of the Office of Management and Budget, the 
Director of the Congressional Budget Office, representa-
tives of institutions of higher education with expertise in 
Federal and State financial aid assistance, State chief
H. R. 4137—207 
executive officers of higher education with a demonstrated 
commitment to simplifying the FAFSA, and such other 
individuals as the Comptroller General and the Secretary 
of Education may designate. 
‘‘(B) STUDY REQUIRED.—The Comptroller General, in 
consultation with the study group convened under subpara-
graph (A) shall— 
‘‘(i) review and build on the work of the Secretary 
of Education and the Secretary of the Treasury, and 
individuals with expertise in analysis of financial need, 
to assess alternative approaches for calculating the 
expected family contribution under the statutory need 
analysis formula in effect on the day before the date 
of enactment of the Higher Education Opportunity Act 
and under a new calculation that will use substantially 
less income and asset information than was used for 
the 2008–2009 FAFSA; 
‘‘(ii) conduct an additional analysis if necessary; 
and 
‘‘(iii) make recommendations to the authorizing 
committees. 
‘‘(C) OBJECTIVES OF STUDY.—The objectives of the study 
required under subparagraph (B) are— 
‘‘(i) to determine methods to shorten the FAFSA 
and make the FAFSA easier and less time-consuming 
to complete, thereby increasing higher education access 
for low-income students; 
‘‘(ii) to identify changes to the statutory need anal-
ysis formula that will be necessary to reduce the 
amount of financial information students and families 
need to provide to receive a determination of eligibility 
for student financial aid without causing significant 
redistribution of Federal grants and subsidized loans 
under this title; and 
‘‘(iii) to review State and institutional needs and 
uses for data collected on the FAFSA, and to determine 
the best means of addressing such needs in the case 
of modification of the FAFSA as described in clause 
(i), or modification of the need analysis formula as 
described in clause (ii). 
‘‘(D) REQUIRED
SUBJECTS
OF
STUDY.—The study 
required under subparagraph (B) shall examine— 
‘‘(i) with respect to simplification of the financial 
aid application process using the statutory require-
ments for need analysis— 
‘‘(I) additional steps that can be taken to sim-
plify the financial aid application process for stu-
dents who (or, in the case of dependent students, 
whose parents) are not required to file a Federal 
income tax return for the prior taxable year; 
‘‘(II) information on State use of information 
provided on the FAFSA, including— 
‘‘(aa) whether a State uses, as of the time 
of the study, or can use, a student’s expected 
family contribution based on data from two 
years prior to the student’s planned enroll-
ment date;
H. R. 4137—208 
‘‘(bb) the extent to which States and 
institutions will accept the data provided by 
the Internal Revenue Service to prepopulate 
the electronic version of the FAFSA to deter-
mine the distribution of State and institutional 
student financial aid funds; 
‘‘(cc) what data are used by States, as 
of the time of the study, to determine eligi-
bility for State student financial aid, and 
whether the data are used for merit- or need- 
based aid; 
‘‘(dd) whether State data are required by 
State law, State regulations, or policy direc-
tives; and 
‘‘(ee) the extent to which any State-specific 
information requirements can be met by 
completion of a State application linked to the 
electronic version of the FAFSA; and 
‘‘(III) information on institutional needs, 
including the extent to which institutions of higher 
education are already using supplemental forms 
to collect additional data from students and their 
families to determine eligibility for institutional 
funds; and 
‘‘(ii) ways to reduce the amount of financial 
information students and families need to provide to 
receive a determination of eligibility for student finan-
cial aid, taking into account— 
‘‘(I) the amount of redistribution of Federal 
grants and subsidized loans under this title caused 
by such a reduction, and the benefits to be gained 
by having an application process that will be easier 
for students and their families; 
‘‘(II) students and families who do not file 
income tax returns; 
‘‘(III) the extent to which the full array of 
income and asset information collected on the 
FAFSA, as of the time of the study, plays an 
important role in the awarding of need-based State 
financial aid, and whether the State can use an 
expected family contribution generated by the 
FAFSA, instead of income and asset information 
or a calculation with reduced data elements, to 
support determinations of eligibility for such State 
aid programs and, if not, what additional informa-
tion will be needed or what changes to the FAFSA 
will be required; and 
‘‘(IV) 
information 
on 
institutional 
needs, 
including the extent to which institutions of higher 
education are already using supplemental forms 
to collect additional data from students and their 
families to determine eligibility for institutional 
funds; and 
‘‘(V) changes to this Act or other laws that 
will be required to implement a modified need 
analysis system.
H. R. 4137—209 
‘‘(4) CONSULTATION.—The Secretary shall consult with the 
Advisory Committee on Student Financial Assistance estab-
lished under section 491 as appropriate in carrying out this 
subsection. 
‘‘(5) REPORTS.— 
‘‘(A) REPORTS ON STUDY.—The Secretary shall prepare 
and submit to the authorizing committees— 
‘‘(i) not later than one year after the date of enact-
ment of the Higher Education Opportunity Act, an 
interim report on the progress of the study required 
under paragraph (3) that includes any preliminary rec-
ommendations by the study group established under 
such paragraph; and 
‘‘(ii) not later than two years after the date of 
enactment of the Higher Education Opportunity Act, 
a final report on the results of the study required 
under paragraph (3) that includes recommendations 
by the study group established under such paragraph. 
‘‘(B) REPORTS ON FAFSA SIMPLIFICATION EFFORTS.—The 
Secretary shall report to the authorizing committees, from 
time to time, on the progress of the simplification efforts 
under this subsection. 
‘‘(g) ADDRESSING THE DIGITAL DIVIDE.—The Secretary shall uti-
lize savings accrued by moving more applicants to the electronic 
version of the forms described in subsection (a)(3) to improve access 
to the electronic version of the forms described in such subsection 
for applicants meeting the requirements of subsection (b) or (c) 
of section 479. 
‘‘(h) ADJUSTMENTS.—The Secretary shall disclose, on the form 
notifying a student of the student’s expected family contribution, 
that the student may, on a case-by-case basis, qualify for an adjust-
ment under section 479A to the cost of attendance or the values 
of the data items required to calculate the expected contribution 
for the student or parent. Such disclosure shall specify— 
‘‘(1) the special circumstances under which a student or 
family member may qualify for such adjustment; and 
‘‘(2) additional information regarding the steps a student 
or family member may take in order to seek an adjustment 
under section 479A.’’. 
SEC. 484. MODEL INSTITUTION FINANCIAL AID OFFER FORM. 
(a) MODEL FORMAT.—The Secretary of Education shall— 
(1) not later than six months after the date of enactment 
of the Higher Education Opportunity Act, convene a group 
of students, families of students, secondary school guidance 
counselors, representatives of institutions of higher education 
(including financial aid administrators, registrars, and business 
officers), and nonprofit consumer groups for the purpose of 
offering recommendations for improvements that— 
(A) can be made to financial aid offer forms; and 
(B) include the information described in subsection 
(b); 
(2) develop a model format for financial aid offer forms 
based on the recommendations of the group; and 
(3) not later than one year after the date of enactment 
of the Higher Education Opportunity Act—
H. R. 4137—210 
(A) submit recommendations to the authorizing 
committees (as defined in section 103 of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1003); and 
(B) make the recommendations and model format 
widely available. 
(b) CONTENTS.—The recommendations developed under sub-
section (a) for model financial aid offer forms shall include, in 
a consumer-friendly manner that is simple and understandable, 
the following: 
(1) Information on the student’s cost of attendance, 
including the following: 
(A) Tuition and fees. 
(B) Room and board costs. 
(C) Books and supplies. 
(D) Transportation. 
(2) The amount of financial aid that the student does 
not have to repay, such as scholarships, grants, and work- 
study assistance, offered to the student for such year, and 
the conditions of such financial aid. 
(3) The types and amounts of loans under part B, D, 
or E of title IV of the Higher Education Act of 1965 (20 
U.S.C. 1071 et seq., 1087a et seq., 1087aa et seq.) for which 
the student is eligible for such year, and the applicable terms 
and conditions of such loans. 
(4) The net amount that the student, or the student’s 
family on behalf of the student, will have to pay for the student 
to attend the institution for such year, equal to— 
(A) the cost of attendance for the student for such 
year; minus 
(B) the amount of financial aid described in paragraphs 
(2) and (3) that is offered in the financial aid offer form. 
(5) Where a student or the student’s family can seek addi-
tional information regarding the financial aid offered. 
(6) Any other information the Secretary of Education deter-
mines necessary so that students and parents can make 
informed student loan borrowing decisions. 
SEC. 485. STUDENT ELIGIBILITY. 
(a) AMENDMENTS.—Section 484 (20 U.S.C. 1091) is amended— 
(1) in subsection (a)— 
(A) in paragraph (4)(B), by striking ‘‘number,’’ and 
all that follows through the semicolon and inserting 
‘‘number;’’; and 
(B) in paragraph (5)— 
(i) by inserting ‘‘or’’ after ‘‘a permanent resident 
of the United States,’’; and 
(ii) by striking ‘‘citizen or permanent resident’’ and 
all that follows through the semicolon and inserting 
‘‘citizen or permanent resident;’’; 
(2) in subsection (b)(1), by inserting ‘‘, or under section 
428H pursuant to an exercise of discretion under section 479A’’ 
after ‘‘428C’’; 
(3) in subsection (d), by adding at the end the following: 
‘‘(4) The student shall be determined by the institution 
of higher education as having the ability to benefit from the 
education or training offered by the institution of higher edu-
cation upon satisfactory completion of six credit hours or the
H. R. 4137—211 
equivalent coursework that are applicable toward a degree or 
certificate offered by the institution of higher education.’’; 
(4) by striking subsection (j); 
(5) by striking subsection (l) and inserting the following: 
‘‘(l) COURSES OFFERED THROUGH DISTANCE EDUCATION.— 
‘‘(1) RELATION TO CORRESPONDENCE COURSES.— 
‘‘(A) IN GENERAL.—A student enrolled in a course of 
instruction at an institution of higher education that is 
offered principally through distance education and leads 
to a recognized certificate, or recognized associate, recog-
nized baccalaureate, or recognized graduate degree, con-
ferred by such institution, shall not be considered to be 
enrolled in correspondence courses. 
‘‘(B) EXCEPTION.—An institution of higher education 
referred to in subparagraph (A) shall not include an institu-
tion or school described in section 3(3)(C) of the Carl D. 
Perkins Career and Technical Education Act of 2006. 
‘‘(2) REDUCTIONS OF FINANCIAL AID.—A student’s eligibility 
to receive grants, loans, or work assistance under this title 
shall be reduced if a financial aid officer determines under 
the discretionary authority provided in section 479A that dis-
tance education results in a substantially reduced cost of 
attendance to such student. 
‘‘(3) SPECIAL RULE.—For award years beginning prior to 
July 1, 2008, the Secretary shall not take any compliance, 
disallowance, penalty, or other action based on a violation of 
this subsection against a student or an eligible institution when 
such action arises out of such institution’s prior award of stu-
dent assistance under this title if the institution demonstrates 
to the satisfaction of the Secretary that its course of instruction 
would have been in conformance with the requirements of 
this subsection.’’; 
(6) by striking subsection (q) and inserting the following: 
‘‘(q) USE OF INCOME DATA.— 
‘‘(1) MATCHING WITH IRS.—The Secretary, in cooperation 
with the Secretary of the Treasury, is authorized to obtain 
from the Internal Revenue Service such information reported 
on Federal income tax returns by applicants, or by any other 
person whose financial information is required to be provided 
on the Federal student financial aid application, as the Sec-
retary determines is necessary for the purpose of— 
‘‘(A) prepopulating the Federal student financial aid 
application described in section 483; or 
‘‘(B) verifying the information reported on such student 
financial aid applications. 
‘‘(2) CONSENT.—The Secretary may require that applicants 
for financial assistance under this title provide a consent to 
the disclosure of the data described in paragraph (1) as a 
condition of the student receiving assistance under this title. 
The parents of an applicant, in the case of a dependent student, 
or the spouse of an applicant, in the case of an applicant 
who is married but files separately, may also be required to 
provide consent as a condition of the student receiving assist-
ance under this title.’’; 
(7) in subsection (r)(2)— 
(A) in subparagraph (A), by striking ‘‘or’’ at the end 
of clause (ii);
H. R. 4137—212 
(B) by redesignating subparagraph (B) as subpara-
graph (C); and 
(C) by inserting after subparagraph (A) the following 
new subparagraph: 
‘‘(B) the student successfully passes two unannounced 
drug tests conducted by a drug rehabilitation program that 
complies with such criteria as the Secretary shall prescribe 
in regulations for purposes of subparagraph (A)(i); or’’; 
(8) by adding at the end the following: 
‘‘(s) STUDENTS WITH INTELLECTUAL DISABILITIES.— 
‘‘(1) DEFINITIONS.—In this subsection the terms ‘com-
prehensive transition and postsecondary program for students 
with intellectual disabilities’ and ‘student with an intellectual 
disability’ have the meanings given the terms in section 760. 
‘‘(2) REQUIREMENTS.—Notwithstanding subsections (a), (c), 
and (d), in order to receive any grant or work assistance under 
section 401, subpart 3 of part A, or part C, a student with 
an intellectual disability shall— 
‘‘(A) be enrolled or accepted for enrollment in a com-
prehensive transition and postsecondary program for stu-
dents with intellectual disabilities at an institution of 
higher education; 
‘‘(B) be maintaining satisfactory progress in the pro-
gram as determined by the institution, in accordance with 
standards established by the institution; and 
‘‘(C) meet the requirements of paragraphs (3), (4), (5), 
and (6) of subsection (a). 
‘‘(3) AUTHORITY.—Notwithstanding any other provision of 
law unless such provision is enacted with specific reference 
to this section, the Secretary is authorized to waive any statu-
tory provision applicable to the student financial assistance 
programs under section 401, subpart 3 of part A, or part C 
(other than a provision of part F related to such a program), 
or any institutional eligibility provisions of this title, as the 
Secretary determines necessary to ensure that programs 
enrolling students with intellectual disabilities otherwise deter-
mined to be eligible under this subsection may receive such 
financial assistance. 
‘‘(4) 
REGULATIONS.—Notwithstanding 
regulations 
applicable to grant or work assistance awards made under 
section 401, subpart 3 of part A, and part C (other than a 
regulation under part F related to such an award), including 
with respect to eligible programs, instructional time, credit 
status, and enrollment status as described in section 481, the 
Secretary shall promulgate regulations allowing programs 
enrolling students with intellectual disabilities otherwise deter-
mined to be eligible under this subsection to receive such 
awards.’’; and 
(9) by adding after subsection (s) (as added by paragraph 
(7)) the following: 
‘‘(t) DATA ANALYSIS ON ACCESS TO FEDERAL STUDENT AID FOR 
CERTAIN POPULATIONS.— 
‘‘(1) DEVELOPMENT OF THE SYSTEM.—Within one year of 
enactment of the Higher Education Opportunity Act, the Sec-
retary shall analyze data from the FAFSA containing informa-
tion regarding the number, characteristics, and circumstances
H. R. 4137—213 
of students denied Federal student aid based on a drug convic-
tion while receiving Federal aid. 
‘‘(2) RESULTS FROM ANALYSIS.—The results from the anal-
ysis of such information shall be made available on a continuous 
basis via the Department website and the Digest of Education 
Statistics. 
‘‘(3) DATA UPDATING.—The data analyzed under this sub-
section shall be updated at the beginning of each award year 
and at least one additional time during such award year. 
‘‘(4) REPORT TO CONGRESS.—The Secretary shall prepare 
and submit to the authorizing committees, in each fiscal year, 
a report describing the results obtained by the establishment 
and operation of the data system authorized by this sub-
section.’’. 
(b) EFFECTIVE DATE.—The amendments made by subsection 
(a) shall take effect on July 1, 2010, except that the amendments 
made by paragraphs (3), (4), and (8) of such subsection shall take 
effect on the date of enactment of this Act. 
SEC. 486. STATUTE OF LIMITATIONS AND STATE COURT JUDGMENTS. 
Section 484A (20 U.S.C. 1091a) is amended— 
(1) in subsection (b)— 
(A) in paragraph (1), by striking ‘‘and’’ after the semi-
colon; 
(B) in paragraph (2), by striking the period and 
inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(3) in collecting any obligation arising from a loan made 
under part E, an institution of higher education that has an 
agreement with the Secretary pursuant to section 463(a) shall 
not be subject to a defense raised by any borrower based 
on a claim of infancy.’’; and 
(2) by adding at the end the following: 
‘‘(d) SPECIAL RULE.—This section shall not apply in the case 
of a student who is deceased, or to a deceased student’s estate 
or the estate of such student’s family. If a student is deceased, 
then the student’s estate or the estate of the student’s family 
shall not be required to repay any financial assistance under this 
title, including interest paid on the student’s behalf, collection costs, 
or other charges specified in this title.’’. 
SEC. 487. READMISSION REQUIREMENTS FOR SERVICEMEMBERS. 
Part G of title IV (20 U.S.C. 1088 et seq.) is amended by 
inserting after section 484B the following: 
‘‘SEC. 484C. READMISSION REQUIREMENTS FOR SERVICEMEMBERS. 
‘‘(a) DEFINITION OF SERVICE IN THE UNIFORMED SERVICES.— 
In this section, the term ‘service in the uniformed services’ means 
service (whether voluntary or involuntary) on active duty in the 
Armed Forces, including such service by a member of the National 
Guard or Reserve, for a period of more than 30 days under a 
call or order to active duty of more than 30 days. 
‘‘(b) DISCRIMINATION AGAINST STUDENTS WHO SERVE IN THE 
UNIFORMED SERVICES PROHIBITED.—A person who is a member 
of, applies to be a member of, performs, has performed, applies 
to perform, or has an obligation to perform, service in the uniformed 
services shall not be denied readmission to an institution of higher
H. R. 4137—214 
education on the basis of that membership, application for member-
ship, performance of service, application for service, or obligation. 
‘‘(c) READMISSION PROCEDURES.— 
‘‘(1) IN
GENERAL.—Any student whose absence from an 
institution of higher education is necessitated by reason of 
service in the uniformed services shall be entitled to readmis-
sion to the institution of higher education if— 
‘‘(A) the student (or an appropriate officer of the Armed 
Forces or official of the Department of Defense) gives 
advance written or verbal notice of such service to the 
appropriate official at the institution of higher education; 
‘‘(B) the cumulative length of the absence and of all 
previous absences from that institution of higher education 
by reason of service in the uniformed services does not 
exceed five years; and 
‘‘(C) except as otherwise provided in this section, the 
student submits a notification of intent to reenroll in the 
institution of higher education in accordance with the provi-
sions of paragraph (4). 
‘‘(2) EXCEPTIONS.— 
‘‘(A) MILITARY NECESSITY.—No notice is required under 
paragraph (1)(A) if the giving of such notice is precluded 
by military necessity, such as— 
‘‘(i) a mission, operation, exercise, or requirement 
that is classified; or 
‘‘(ii) a pending or ongoing mission, operation, exer-
cise, or requirement that may be compromised or other-
wise adversely affected by public knowledge. 
‘‘(B) FAILURE TO GIVE ADVANCE NOTICE.—Any student 
(or an appropriate officer of the Armed Forces or official 
of the Department of Defense) who did not give advance 
written or verbal notice of service to the appropriate official 
at the institution of higher education in accordance with 
paragraph (1)(A) may meet the notice requirement by 
submitting, at the time the student seeks readmission, 
an attestation to the student’s institution of higher edu-
cation that the student performed service in the uniformed 
services that necessitated the student’s absence from the 
institution of higher education. 
‘‘(3) APPLICABILITY.—This section shall apply to a student 
who is absent from an institution of higher education by reason 
of service in the uniformed services if such student’s cumulative 
period of service in the Armed Forces (including the National 
Guard or Reserve), with respect to the institution of higher 
education for which a student seeks readmission, does not 
exceed five years, except that any such period of service shall 
not include any service— 
‘‘(A) that is required, beyond five years, to complete 
an initial period of obligated service; 
‘‘(B) during which such student was unable to obtain 
orders releasing such student from a period of service in 
the uniformed services before the expiration of such five- 
year period and such inability was through no fault of 
such student; or 
‘‘(C) performed by a member of the Armed Forces 
(including the National Guard and Reserves) who is—