‘‘(4) An undergraduate student who has been award-
ed a scholarship under subsection (a)(1)(A) or a graduate 
student who has been awarded a fellowship under sub-
section (a)(1)(B) may participate in the activities carried 
out under the National Flagship Language Initiative. 
‘‘(5) An institution of higher education that receives 
a grant pursuant to subsection (a)(1)(E) shall give special 
consideration to applicants who are employees of the Fed-
eral Government.’’. 
(3) INAPPLICABILITY OF FUNDING ALLOCATION 
RULES.—(A) The first sentence in the matter fol-
lowing subsection (a)(2) of such section is amended 
by inserting ‘‘or under paragraph (1)(E) for the 
International Flagship Language Initiative described 
in subsection (j)’’ after ‘‘under paragraph (1)(D) for 
the National Flagship Language Initiative described 
in subsection (i)’’. 
(B) The second sentence in such matter is 
amended by inserting ‘‘and the International Flag-
ship Language Initiative’’ after ‘‘the National Flag-
ship Language Initiative’’. 
(4) 
BOARD
REQUIREMENT.—Section 
803(d)(4)(E) of such Act (50 U.S.C. 1903(d)(4)(E)) 
is amended by inserting before the period the fol-
lowing: ‘‘and section 802(a)(1)(E) (relating to
grants for the International Flagship Language Ini-
tiative).’’. 
(b) FUNDING.—Section 811(a) of the David L. Boren 
National Security Education Act of 1991 (50 U.S.C. 
1911(a)) is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(a) IN GEN-
ERAL.—’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(2) In addition to amounts that may be made avail-
able to the Secretary under the Fund for a fiscal year, 
there is authorized to be appropriated to the Secretary for 
each fiscal year, beginning with fiscal year 2004, 
$12,000,000, to carry out the grant program for the Inter-
national Flagship Language Initiative under section 
802(a)(1)(E).’’. 
(c) CONSTRUCTION.—Nothing in this section shall be 
construed as affecting any program or project carried out 
under the David L. Boren National Security Education 
Act of 1991 as in effect on the date that precedes the 
date of the enactment of this Act. 
SEC. 7. FORGIVENESS OF LOANS TO STUDENTS AT INSTITU-
TIONS OF HIGHER EDUCATION. 
(a) GUARANTEED STUDENT LOANS.—Part B of title 
IV of the Higher Education Act of 1965 is amended by
inserting after section 428K (20 U.S.C. 1078–11) the fol-
lowing: 
‘‘SEC. 428L. LOAN FORGIVENESS FOR UNDERGRADUATES IN 
CRITICAL FOREIGN LANGUAGES. 
‘‘(a) ESTABLISHMENT.—The Secretary of Education 
shall establish and implement a program to cancel the ob-
ligation of loan borrowers to pay the principal and interest 
on a loan provided under this part in order to serve as 
an incentive for students to obtain a degree in a critical 
foreign language. 
‘‘(b) PROGRAM AUTHORIZED.—
‘‘(1) IN GENERAL.—The Secretary shall carry 
out a program, through the holder of the loan, of as-
suming the obligation to repay in accordance with 
subsection (c) the principal and interest, not to ex-
ceed a total of $10,000, on a loan made under this 
part for a borrower who—
‘‘(A) has obtained an undergraduate de-
gree in a critical foreign language; 
‘‘(B) is employed in a full-time position—
‘‘(i) in an elementary or secondary 
school as a teacher of a critical foreign lan-
guage; or 
‘‘(ii) in an agency of the United 
States Government in a position that regu-
larly requires the use of such critical for-
eign language; 
‘‘(C) is a United States citizen, United 
States national, permanent legal resident, or 
citizen of the Freely Associated States; and 
‘‘(D) is in repayment status on such loan 
and is not in default on a loan for which the 
borrower seeks forgiveness of principal and in-
terest payments. 
‘‘(2) APPLICATION BY BORROWERS.—The Sec-
retary shall, by regulation, establish procedures by 
which borrowers shall apply for loan repayment 
under this section. 
‘‘(c) TERMS.—
‘‘(1) PROMISE
TO
COMPLETE
SERVICE
RE-
QUIRED FOR PAYMENT.—Any application for pay-
ment under subsection (b) shall contain an agree-
ment by the applicant that the applicant will con-
tinue in a qualifying service described in subsection 
(b)(1)(B) for not less than 5 consecutive complete 
years, or will, upon a failure to complete such 5 
years, repay the United States the amount of the 
principal and interest repaid by the Secretary under 
subsection (b), at a rate and schedule, and in ac-
cordance with regulations, prescribed by the Sec-
retary. Such regulations may provide for waiver by 
the Secretary of such repayment obligations upon
proof of economic hardship as specified in such regu-
lations. 
‘‘(2) PAYMENT
IN
INSTALLMENTS.—After a 
borrower has obtained a bachelor’s degree in a crit-
ical foreign language, the Federal Government shall 
make payments under this section while the bor-
rower is in loan repayment status and continues in 
an employment position described in subsection 
(b)(1)(B). The Secretary shall repay a portion of a 
borrower’s outstanding loan, not to exceed a total of 
$10,000, in the following increments: 
‘‘(A) up to $1,500 or 15 percent of the 
borrower’s outstanding loan balance, which ever 
is less, at the completion of the second year of 
such service; 
‘‘(B) up to $1,500 or 15 percent of the 
borrower’s outstanding loan balance, which ever 
is less, at the completion of the third year of 
such service; 
‘‘(C) up to $2,000 or 20 percent of the 
borrower’s outstanding loan balance, which ever 
is less, at the completion of the fourth year of 
such service; and
‘‘(D) up to $5,000 or 50 percent of the 
borrower’s outstanding loan balance, which ever 
is less, at the completion of the fifth year of 
such service. 
‘‘(d) DEFINITIONS.—In this section: 
‘‘(1) CRITICAL FOREIGN LANGUAGE.—The term 
‘critical foreign language’ includes the languages of 
Arabic, Korean, Japanese, Chinese, Pashto, Persian-
Farsi, Serbian-Croatian, Russian, Portuguese, and 
any other language identified by the Secretary of 
Education, in consultation with the Defense Lan-
guage Institute, the Foreign Service Institute, and 
the National Security Education Program, as a crit-
ical foreign language need. 
‘‘(2) AGENCY.—The term ‘agency of the United 
States Government’ means any agency, office, estab-
lishment, instrumentality, or other entity of the ex-
ecutive, legislative, or judicial branch of the Govern-
ment.’’. 
(b) DIRECT STUDENT LOANS.—Part D of title IV of 
the Higher Education Act of 1965 (20 U.S.C. 1087a et 
seq.) is amended by adding at the end the following:
‘‘SEC. 460A. LOAN FORGIVENESS FOR UNDERGRADUATES 
IN CRITICAL FOREIGN LANGUAGES. 
‘‘(a) ESTABLISHMENT.—The Secretary of Education 
shall establish and implement a program to cancel the ob-
ligation of loan borrowers to pay the principal and interest 
on a loan provided under this part in order to serve as 
an incentive for students to obtain a degree in a critical 
foreign language. 
‘‘(b) PROGRAM AUTHORIZED.—
‘‘(1) IN GENERAL.—The Secretary shall carry 
out a program of assuming the obligation to repay 
in accordance with subsection (c) the principal and 
interest, not to exceed a total of $10,000, on a loan 
made under this part for a borrower who—
‘‘(A) has obtained an undergraduate de-
gree in a critical foreign language; 
‘‘(B) is employed in a full-time position—
‘‘(i) in an elementary or secondary 
school as a teacher of a critical foreign lan-
guage; or 
‘‘(ii) in an agency of the United 
States Government in a position that regu-
larly requires the use of such critical for-
eign language;
‘‘(C) is a United States citizen, United 
States national, permanent legal resident, or 
citizen of the Freely Associated States; and 
‘‘(D) is in repayment status on such loan 
and is not in default on a loan for which the 
borrower seeks forgiveness of principal and in-
terest payments. 
‘‘(2) APPLICATION BY BORROWERS.—The Sec-
retary shall, by regulation, establish procedures by 
which borrowers shall apply for loan repayment 
under this section. 
‘‘(c) TERMS.—
‘‘(1) PROMISE
TO
COMPLETE
SERVICE
RE-
QUIRED FOR PAYMENT.—Any application for pay-
ment under subsection (b) shall contain an agree-
ment by the applicant that the applicant will con-
tinue in a qualifying service described in subsection 
(b)(1)(B) for not less than 5 consecutive complete 
years, or will, upon a failure to complete such 5 
years, repay the United States the amount of the 
principal and interest repaid by the Secretary under 
subsection (b), at a rate and schedule, and in ac-
cordance with regulations, prescribed by the Sec-
retary. Such regulations may provide for waiver by 
the Secretary of such repayment obligations upon
proof of economic hardship as specified in such regu-
lations. 
‘‘(2) PAYMENT
IN
INSTALLMENTS.—After a 
borrower has obtained a bachelor’s degree in a crit-
ical foreign language, the Federal Government shall 
make payments under this section while the bor-
rower is in loan repayment status and continues in 
an employment position described in subsection 
(b)(1)(B). The Secretary shall repay a portion of a 
borrower’s outstanding loan, not to exceed a total of 
$10,000, in the following increments: 
‘‘(A) up to $1,500 or 15 percent of the 
borrower’s outstanding loan balance, which ever 
is less, at the completion of the second year of 
such service; 
‘‘(B) up to $1,500 or 15 percent of the 
borrower’s outstanding loan balance, which ever 
is less, at the completion of the third year of 
such service; 
‘‘(C) up to $2,000 or 20 percent of the 
borrower’s outstanding loan balance, which ever 
is less, at the completion of the fourth year of 
such service; and 
‘‘(D) up to $5,000 or 50 percent of the 
borrower’s outstanding loan balance, which ever
is less, at the completion of the fifth year of 
such service. 
‘‘(d) DEFINITIONS.—In this section: 
‘‘(1) CRITICAL FOREIGN LANGUAGE.—The term 
‘critical foreign language’ includes the languages of 
Arabic, Korean, Japanese, Chinese, Pashto, Persian-
Farsi, Serbian-Croatian, Russian, Portuguese, and 
any other language identified by the Secretary of 
Education, in consultation with the Defense Lan-
guage Institute, the Foreign Service Institute, and 
the National Security Education Program, as a crit-
ical foreign language need. 
‘‘(2) AGENCY.—The term ‘agency of the United 
States Government’ means any agency, office, estab-
lishment, instrumentality, or other entity of the ex-
ecutive, legislative, or judicial branch of the Govern-
ment.’’. 
(c) REPORT
TO
CONGRESS.—Not later than 6 
months after the date of enactment of this Act, the Sec-
retary of Education shall propose regulations to carry out 
this section and submit to the appropriate committees of 
the Congress a report on how the Secretary plans to imple-
ment the programs under amendments made by this sec-
tion and advertise such programs to institutions of higher 
learning and potential applicants. Not later than 6 months
after the date on which the comment period for the regula-
tions proposed under the preceding sentence ends, the Sec-
retary shall promulgate final regulations to carry out this 
section.
Æ