A bill to amend title IV of the Higher Education Act of 1965 to provide grants for homeland security scholarships.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Protect America Scholarships Act of 
2003''.

SEC. 2. GRANTS AUTHORIZED.

    Part A of title IV of the Higher Education Act of 1965 (20 U.S.C. 
1070 et seq.) is amended by adding at the end the following:

              ``Subpart 9--Homeland Security Scholarships

``SEC. 420K. PURPOSES.

    ``The purposes of this subpart are--
            ``(1) to recruit talented young people to professions that 
        are needed to ensure the Nation's homeland security; and
            ``(2) to make college education more affordable.

``SEC. 420L. DEFINITIONS.

    ``In this subpart:
            ``(1) Eligible entity.--The term `eligible entity' means a 
        partnership between--
                    ``(A) an institution of higher education (or 
                consortium of such institutions); and
                    ``(B) a qualified employer (or consortium of such 
                employers).
            ``(2) Eligible student.--The term `eligible student' means 
        an individual who--
                    ``(A)(i) is enrolled as a full- or part-time 
                student at an institution of higher education with a 
                qualified academic major or program; or
                    ``(ii) has been accepted for enrollment at an 
                institution of higher education and intends to major in 
                a qualified academic major or program;
                    ``(B) submits an application for a scholarship 
                under this subpart; and
                    ``(C) submits a written contract, prior to 
                receiving assistance, accepting payment of a 
                scholarship in exchange for providing qualified 
                service.
            ``(3) Qualified academic major or program.--
                    ``(A) In general.--The term `qualified academic 
                major or program' means an academic major or program of 
                study designated by the Secretary for each State in an 
                annual notice in the Federal Register that--
                            ``(i) prepares students in such majors or 
                        programs for a career that--
                                    ``(I) is primarily related to 
                                homeland security;
                                    ``(II) requires specialized 
                                expertise; and
                                    ``(III) suffers from a critical 
                                shortage of qualified personnel; and
                            ``(ii) is a--
                                    ``(I) national priority, as 
                                determined by the Secretary in 
                                consultation with the Secretary of 
                                Homeland Security; or
                                    ``(II) State priority, as 
                                determined by the chief executive 
                                officer in the State in which the 
                                student seeking a scholarship under 
                                this subpart--
                                            ``(aa) graduated from 
                                        secondary school; or
                                            ``(bb) is enrolled at an 
                                        institution of higher 
                                        education.
                    ``(B) Continuation of qualification.--An academic 
                major or program of study designated by the Secretary 
                under subparagraph (A) shall continue to be considered 
                a qualified academic major or program for a student if 
                such academic major or program of study was a qualified 
                academic major or program at the time such student 
                commenced study of such major or program of study.
            ``(4) Qualified employer.--The term `qualified employer' 
        means--
                    ``(A) a nonprofit organization; or
                    ``(B) a public agency.
            ``(5) Qualified service.--
                    ``(A) In general.--The term `qualified service' 
                means full-time employment with the qualified employer 
                of the eligible entity that awarded the eligible 
student a scholarship or with another qualified employer (consistent 
with the guidelines issued by the Secretary pursuant to subparagraph 
(B)), for a period of 2 years for the first year of a scholarship award 
and an additional 1 year for each additional year of a scholarship 
award, in a position that--
                            ``(i) is primarily related to homeland 
                        security;
                            ``(ii) requires specialized expertise 
                        related to the qualified academic major or 
                        program of the eligible student; and
                            ``(iii) suffers from a critical lack of 
                        qualified personnel.
                    ``(B) Service with different employer.--The 
                Secretary shall issue guidelines describing when 
                employment may be completed with a qualified employer 
                who is not the qualified employer of the eligible 
                entity that awarded the eligible student a scholarship.

``SEC. 420M. GRANTS TO ELIGIBLE ENTITIES.

    ``(a) In General.--From funds appropriated under section 420O, the 
Secretary shall award grants, on a competitive basis, to eligible 
entities to enable the entities to award scholarships to eligible 
students in exchange for qualified service from such students.
    ``(b) Application.--An eligible entity that desires to receive a 
grant under this subpart shall submit an application to the Secretary 
at such time, in such manner, and containing such information as the 
Secretary may require.
    ``(c) Use of Grant Funds.--
            ``(1) Scholarship awards.--An eligible entity that receives 
        a grant under this subpart shall award scholarships to eligible 
        students in exchange for qualified service from such students.
            ``(2) Application form.--An eligible entity that receives a 
        grant under this subpart shall create an application form for a 
        student desiring to receive a scholarship under this subpart, 
        and include in such form a summary of the rights and 
        liabilities of a student whose application is approved (and 
        whose contract is accepted) by the eligible entity.
            ``(3) Contract.--
                    ``(A) In general.--An eligible entity that receives 
                a grant under this subpart shall prepare a written 
                contract that shall be provided to a student desiring 
                to receive a scholarship under this subpart at the time 
                that an application is provided to such student.
                    ``(B) Content.--The contract described in 
                subparagraph (A) shall be an agreement between the 
                eligible entity and student that states that, subject 
                to subparagraph (C)--
                            ``(i) the eligible entity agrees to provide 
                        the student with a scholarship, that may be 
                        renewed in each year of study at the 
                        institution of higher education for a total of 
                        not more than 4 years; and
                            ``(ii) the student agrees to--
                                    ``(I)(aa) accept provision of such 
                                a scholarship to the student;
                                    ``(bb) maintain enrollment in the 
                                qualified academic major or program 
                                until the student completes the course 
                                of study at the institution of higher 
                                education;
                                    ``(cc) while enrolled in such 
                                qualified academic major or program, 
                                maintain an acceptable level of 
                                academic standing (as determined by the 
                                institution of higher education); and
                                    ``(dd) provide qualified service; 
                                and
                                    ``(II) repay the scholarship under 
                                the terms of this subpart if the 
                                student fails to comply with the 
                                requirements of subclause (I).
                    ``(C) Limitation.--The contract described in 
                subparagraph (A) shall contain a provision that any 
                financial obligation of the United States arising out 
                of a contract entered into under this subpart and any 
                obligation of the student which is conditioned thereon, 
                is contingent upon funds being appropriated for 
                scholarships under this subpart.
            ``(4) Information on scholarship recipients.--An eligible 
        entity that receives a grant under this subpart shall submit a 
        report to the Secretary at the time a scholarship award is 
        provided to an eligible student identifying--
                    ``(A) such student's name, date of birth, and 
                social security number; and
                    ``(B) the amount of such scholarship.
    ``(d) Matching Funds.--An eligible entity receiving Federal 
assistance under this subpart shall contribute non-Federal matching 
funds in an amount equal to 50 percent of the amount of Federal 
assistance.
    ``(e) Duration of Grant.--Grants awarded under this subpart shall 
be for a term of 5 years.

``SEC. 420N. SCHOLARSHIPS.

    ``(a) Submission of Application and Written Contract.--A student 
that desires to receive a scholarship under this subpart shall submit 
an application and written contract to an eligible entity at such time, 
in such manner, and containing such information as the eligible entity 
may require.
    ``(b) Payment.--
            ``(1) In general.--Subject to paragraph (2), a scholarship 
        provided to an eligible student under this subpart for a school 
        year shall consist of payment to, or (in accordance with 
        paragraph (3)) on behalf of, the eligible student of the amount 
        of the tuition and fees, described in section 472(1), of the 
        eligible student in such school year.
            ``(2) Maximum scholarship amount.--A scholarship awarded 
        under this subpart during fiscal year 2004 shall not exceed 
        $10,000. The Secretary shall determine the maximum scholarship 
        amount for each succeeding fiscal year after adjusting for 
        inflation.
            ``(3) Contract.--The Secretary may contract with an 
        institution of higher education, in which an eligible student 
        is enrolled, for the payment to the institution of higher 
        education of the amounts of tuition and fees described in 
        paragraph (1).
    ``(c) Verification of Qualified Service.--
            ``(1) Documentation.----
                    ``(A) From eligible student.--An eligible student 
                that receives a scholarship under this subpart shall 
                submit documentation to the eligible entity that 
                awarded the student the scholarship, under standards 
                and procedures determined by the eligible entity, 
                verifying that the student has completed such student's 
                qualified service.
                    ``(B) From eligible entity.--An eligible entity 
                that receives a grant under this subpart shall submit 
                documentation to the Secretary by a date specified by 
                the Secretary and under standards and procedures 
                determined by the Secretary, verifying that each 
                eligible student awarded a scholarship under this 
                subpart has completed such student's qualified service.
            ``(2) Role of secretary.--If the Secretary does not receive 
        satisfactory documentation under paragraph (1)(B) by the date 
        specified by the Secretary, then the Secretary shall collect 
        the scholarship amount determined under paragraph (3) as a loan 
        under the terms and conditions for repayment of loans under 
        part B (including provisions under such part that provide for 
        loan repayment over time).
            ``(3) Breach of agreement.--Subject to paragraph (4), if an 
        eligible student receives a scholarship under this subpart and 
        agrees to provide qualified service in consideration for 
        receipt of the scholarship, the eligible student is liable to 
        the Federal Government for the amount of such award, for 
        interest on such amount at the rate applicable at the time of 
        noncompliance for Stafford loans under section 427A, and for 
        reasonable collections costs, if the eligible student fails to 
        submit the documentation required under paragraph (1)(A).
            ``(4) Waiver or suspension of liability.--The Secretary 
        shall waive liability under paragraph (3) if--
                    ``(A) the student subsequently demonstrates that 
                such student has provided qualified service;
                    ``(B) the student suffers death or permanent and 
                total disability;
                    ``(C) the student is unable to complete the program 
                in which such student was enrolled due to the closure 
                of the institution of higher education; or
                    ``(D) the Secretary determines that compliance by 
                the student with the agreement involved is impossible 
                or would involve extreme hardship to such student.
            ``(5) Amounts to remain available.--Any amounts collected 
        by the Secretary under this subsection shall remain available 
        for grant awards under this subpart.
    ``(d) Tax-Free.--The amount of any scholarship that is received 
under this subpart shall not, consistent with section 108(f) of the 
Internal Revenue Code of 1986, be treated as gross income for Federal 
income tax purposes.

``SEC. 420O. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this 
subpart--
            ``(1) $50,000,000 for fiscal year 2004;
            ``(2) $100,000,000 for fiscal year 2005;
            ``(3) $150,000,000 for fiscal year 2006; and
            ``(4) such sums as may be necessary for each of fiscal 
        years 2007 and 2008.''.

Summary: Protect America Scholarships Act of 2003 - Amends the Higher Education Act of 1965 to provide grants for homeland security scholarships.Directs the Secretary of Education to award competitive grants to partnerships of institutions of higher education and qualified employers (nonprofit organizations or public agencies) to enable such partnerships to award scholarships to students who are in qualified academic majors or programs relating to homeland security, in exchange for such students' later performing full-time qualified homeland security service with such employers.