To provide higher education relief to individuals and institutions affected by Hurricanes Katrina and Rita, and for other purposes.

SECTION 1. REFERENCES.

    References in this Act to ``the Act'' are references to the Higher 
Education Act of 1965 (20 U.S.C. 1001 et seq.).

SEC. 2. WAIVERS AND MODIFICATIONS.

    Notwithstanding any other provision of law, unless enacted with 
specific reference to this section, the Secretary is authorized to 
waive or modify any statutory or regulatory provision applicable to the 
student financial assistance programs under title IV of the Act, or any 
student or institutional eligibility provisions in the Act, as the 
Secretary deems necessary in connection with a Gulf hurricane disaster 
to ensure that--
            (1) the calculation of expected family contribution under 
        section 474 of the Act used in the determination of need for 
        student financial assistance under title IV of the Act for any 
        affected student (and the determination of such need for his or 
        her family, if applicable), is modified to reflect any changes 
        in the financial condition of such affected student and his or 
        her family resulting from a Gulf hurricane disaster; and
            (2) institutions of higher education, systems of 
        institutions, or consortia of institutions that are located in 
        an area affected by a Gulf hurricane disaster, or that are 
        serving affected students, are eligible, notwithstanding 
        section 486(d) of the Act, to apply for participation in the 
        distance education demonstration program under section 486 of 
        the Act, except that the Secretary shall include in reports 
        under section 486(f) of the Act an identification of those 
        institutions, systems, and consortia that were granted 
        participation in the demonstration program due to a Gulf 
        hurricane disaster.

SEC. 3. CANCELLATION OF INSTITUTIONAL REPAYMENT BY COLLEGES AND 
              UNIVERSITIES AFFECTED BY A GULF HURRICANE DISASTER.

    Notwithstanding any provision of title IV of the Act or any 
regulation issued thereunder, the Secretary shall cancel any obligation 
of an affected institution to return or repay any funds the institution 
received before the date of enactment of this Act for, or on behalf of, 
its students under subpart 1 or 3 of part A or parts B, C, D, or E of 
title IV of the Act for any cancelled enrollment period.

SEC. 4. CANCELLATION OF STUDENT LOANS FOR CANCELLED ENROLLMENT PERIODS.

    (a) Loan Forgiveness Authorized.--Notwithstanding any provision of 
title IV of the Act, the Secretary shall discharge all loan amounts 
under parts B and D of title IV of the Act, and cancel any loan made 
under part E of such title, disbursed to, or on behalf of, an affected 
student for a cancelled enrollment period.
    (b) Reimbursement.--The Secretary shall--
            (1) reimburse each affected institution for any amounts 
        discharged under subsection (a) with respect to a loan under 
        part E of title IV of the Act in the same manner as is required 
        by section 465(b) of the Act with respect to a loan cancelled 
        under section 465(a) of the Act; and
            (2) reimburse lenders for the purpose of discharging any 
        loan amounts disbursed to, or on behalf of, an affected student 
        under part B of title IV of the Act for a cancelled enrollment 
        period.
    (c) Limitation on Consolidation Loans.--A loan amount for a loan 
made under section 428C of the Act or a Federal Direct Consolidation 
Loan may be eligible for discharge under this section only to the 
extent that such loan amount was used to repay a loan to an affected 
student for a cancelled enrollment period.
    (d) Construction.--Nothing in this section shall be construed to 
authorize any refunding of any repayment of a loan.

SEC. 5. TEMPORARY DEFERMENT OF STUDENT LOAN REPAYMENT.

    An affected individual who is a borrower of a qualified student 
loan or a qualified parent loan shall be granted a deferment, not in 
excess of 6 months, during which periodic installments of principal 
need not be paid, and interest--
            (1) shall accrue and be paid by the Secretary, in the case 
        of a loan made under section 428, 428B, 428C, or 428H of the 
        Act;
            (2) shall accrue and be paid by the Secretary to the 
        Perkins loan fund held by the institution of higher education 
        that made the loan, in the case of a loan made under part E of 
        title IV of the Act; and
            (3) shall not accrue, in the case of a Federal Direct Loan 
        made under part D of such title.

SEC. 6. NO AFFECT ON GRANT AND LOAN LIMITS.

    Notwithstanding any provision of title IV of the Act or any 
regulation issued thereunder, no grant or loan funds received by an 
affected student under title IV of the Act for a cancelled enrollment 
period shall be counted against such affected student's annual or 
aggregate grant or loan limits for the receipt of grants or loans under 
that title.

SEC. 7. TEACHER LOAN RELIEF.

    The Secretary may waive the requirement of sections 428J(b)(1) and 
460(b)(1)(A) of the Act that the 5 years of qualifying service be 
consecutive academic years for any teacher whose employment was 
interrupted if--
            (1) the teacher was employed in qualifying service, at the 
        time of a Gulf hurricane disaster, in a school located in an 
        area affected by a Gulf hurricane disaster; and
            (2) the teacher resumes qualifying service not later than 
        the beginning of academic year 2006-2007 in that school or any 
        other school in which employment is qualifying service under 
        such section.

SEC. 8. EXPANDING INFORMATION DISSEMINATION REGARDING ELIGIBILITY FOR 
              PELL GRANTS.

    (a) In General.--The Secretary shall make special efforts, in 
conjunction with State efforts, to notify affected students and if 
applicable, their parents, who qualify for means-tested Federal benefit 
programs, of their potential eligibility for a maximum Pell Grant, and 
shall disseminate such informational materials as the Secretary deems 
appropriate.
    (b) Means-Tested Federal Benefit Program.--For the purpose of this 
section, the term ``means-tested Federal benefit program'' means a 
mandatory spending program of the Federal Government, other than a 
program under the Act, in which eligibility for the program's benefits, 
or the amount of such benefits, or both, are determined on the basis of 
income or resources of the individual or family seeking the benefit, 
and may include such programs as the supplemental security income 
program under title XVI of the Social Security Act, the food stamp 
program under the Food Stamp Act of 1977, the free and reduced price 
school lunch program established under the Richard B. Russell National 
School Lunch Act, the temporary assistance to needy families program 
established under part A of title IV of the Social Security Act, and 
the women, infants, and children program established under section 17 
of the Child Nutrition Act of 1966, and other programs identified by 
the Secretary.

SEC. 9. PROCEDURES.

    (a) Deadlines and Procedures.--Sections 482(c) and 492 of the Act 
shall not apply to any waivers, modifications, or actions initiated by 
the Secretary under this Act.
    (b) Case-by-case Basis.--The Secretary is not required to exercise 
any waiver or modification authority under this Act on a case-by-case 
basis.

SEC. 10. TERMINATION OF AUTHORITY.

    The authority of the Secretary to issue waivers or modifications 
under this Act shall expire at the conclusion of the 2005-2006 academic 
year, but the expiration of such authority shall not affect the 
continuing validity of any such waivers or modifications after such 
academic year.

SEC. 11. DEFINITIONS.

    For purposes of this Act, except as otherwise specifically provided 
in this Act, the following terms have the following meanings:
            (1) Affected individual.--The term ``affected individual'' 
        means an individual who has applied for or received student 
        financial assistance under title IV of the Higher Education Act 
        of 1965, and--
                    (A) who is an affected student; or
                    (B) whose primary place of employment or residency 
                was, as of August 29, 2005, in an area affected by a 
                Gulf hurricane disaster.
            (2) Affected institution.--The term ``affected 
        institution'' means an institution of higher education that--
                    (A) is located in an area affected by a Gulf 
                hurricane disaster; and
                    (B) has temporarily ceased operations as a 
                consequence of a Gulf hurricane disaster, as determined 
                by the Secretary.
            (3) Affected state.--The term ``affected State'' means the 
        State of Alabama, Florida, Louisiana, Mississippi, or Texas.
            (4) Affected student.--The term ``affected student'' means 
        an individual who has applied for or received student financial 
        assistance under title IV of the Higher Education Act of 1965, 
        and who--
                    (A) was enrolled or accepted for enrollment, as of 
                August 29, 2005, at an institution of higher education 
                in an area affected by a Gulf hurricane disaster;
                    (B) was a dependent student enrolled or accepted 
                for enrollment at an institution of higher education 
                that is not in an area affected by a Gulf hurricane 
                disaster, but whose parents resided or were employed, 
                as of August 29, 2005, in an area affected by a Gulf 
                hurricane disaster; or
                    (C) was enrolled or accepted for enrollment at an 
                institution of higher education, as of August 29, 2005, 
                and whose attendance was interrupted because of a Gulf 
                hurricane disaster.
            (5) Area affected by a gulf hurricane disaster.--The term 
        ``area affected by a Gulf hurricane disaster'' means a county 
        or parish, in an affected State, that has been designated by 
        the Federal Emergency Management Agency for disaster assistance 
        for individuals and households as a result of Hurricane Katrina 
        or Hurricane Rita.
            (6) Cancelled enrollment period.--The term ``cancelled 
        enrollment period'' means any period of enrollment at an 
        affected institution during the academic year 2005.
            (7) Gulf hurricane disaster.--The term ``Gulf hurricane 
        disaster'' means a major disaster that the President declared 
        to exist, in accordance with section 401 of the Robert T. 
        Stafford Disaster Relief and Emergency Assistance Act, and that 
        was caused by Hurricane Katrina or Hurricane Rita.
            (8) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning given such 
        term in section 102 of the Higher Education Act of 1965, except 
        that the term does not include institutions under subsection 
        (a)(1)(C) of that section.
            (9) Qualified student loan.--The term ``qualified student 
        loan'' means any loan made, insured, or guaranteed under part 
        B, D, or E of title IV of the Higher Education Act of 1965, 
        other than a loan under section 428B of such title or a Federal 
        Direct Plus loan.
            (10) Qualified parent loan.--The term ``qualified parent 
        loan'' means a loan made under section 428B of title IV of the 
        Higher Education Act of 1965 or a Federal Direct Plus loan.
            (11) Secretary.--The term ``Secretary'' means the Secretary 
        of Education.

Summary: Authorizes the Secretary of Education to waive or modify requirements under the Higher Education Act of 1965 for student financial assistance programs, or other student or institutional eligibility provisions, as necessary to reflect changes in the financial condition of affected students and their families resulting from Hurricane Katrina or Hurricane Rita (a Gulf hurricane disaster).

Cancels: (1) certain institutional repayments by institutions of higher education affected by a Gulf hurricane disaster; and (2) student loans for affected students during certain cancelled enrollment periods. Provides for: (1) temporary deferment of student loan repayment by affected individuals; and (2) waiver of consecutive service requirements for affected individuals under a program of student loan forgiveness for school teachers.

Directs the Secretary to make special efforts to notify affected students who qualify for a means-tested federal benefit program of their potential eligibility for a maximum Pell Grant and to disseminate informational materials regarding such eligibility.