Higher Education Technical Amendments Act of 1987
PL 100-50 (H.R.1846), enacted 06/03/1987

PUBLIC LAW 100-50—JUNE 3, 1987 
101 STAT. 335 
Public Law 100-50 
' 
•••• -
100th Congress 
An Act 
To make certain technical and conforming amendments in the Higher Education Act 
June 3, 1987 
of 1965, and for other purposes. 
[H.R. 1846] 
Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, 
Higher 
Education 
SECTION 1. SHORT TITLE; REFERENCE. 
Technical 
(a) SHORT TITLE.—This Act may be cited as the "Higher Education 
Act of 1987. 
Technical Amendments Act of 1987". 
20 USC lOOl 
(b) REFERENCE.—References in this Act to "the Act" are references 
note. 
to the Higher Education Act of 1965. 
SEC. 2. INSTITUTIONAL AID. 
(a) TECHNICAL PROVISIONS.—Title III of the Act is amended— 
(1) in section 311(b)(1), by striking out "section 358(a)(1)" and 
20 USC 1057. 
" inserting "section 360(a)(l)^'; 
(2) in section 312(b)(1)— 
20 USC 1058. 
(A) by inserting "which" before "is" each place it appears 
in subparagraphs (C) and (D); 
. • 
- 
K 
(B) by inserting "which" before "has" in subparagraph 
(E); and 
(C) by inserting "which" before "meets" in subparagraph 
(F); 
(3) in section 312(b)(3), by striking out "subparagraphs (A) and 
(B)" and inserting in lieu thereof "subparagraphs (A), (B), (C), 
and (D)"; 
(4) in section 312(b)(5), by striking out "subparagraphs (A) and 
(B)" and inserting in lieu thereof "subparagraphs (A), (B), (C), 
and (D)"; 
(5) in section 312(c)(1), by inserting "in the second fiscal year 
preceding the fiscal year for which the determination is being 
,v made" immediately after "Act"; 
(6) in section 312(c)(2)— 
(A) by striking out "preceding fiscal year," and inserting 
in lieu thereof "fiscal year preceding the fiscal year for 
which determination is being made,"; and 
3 4 
(B) by striking out "such fiscal year" and inserting in lieu 
/jf 
thereof "second preceding fiscal year"; 
'^; 
(7) in section 323(a), by striking out "section 358(aX2)" and 
20 USC 1062. 
j*,j inserting "section 360(a)(2)"; 
(8) in section 325(a)(1), by striking out "section 322" and 20 USC 1063a. 
inserting "section 323"; 
> 
(9) in section 326(a)(2), by inserting before the period at the Schools and 
end thereof the following: except that the Morehouse School of colleges. 
Medicine shall receive at least $3,000,000"; 
„„ , „ „ ,„„„. 
(10) in section 326(c), by striking out "section 333" and insert- ^^ ^^^ ^"*'^''-
ing "section 332"; 
(11) in section 327(a), by striking out "Act" and inserting in 
20 USC I063c. 
-
, ; lieu thereof "part"; 
101 STAT. 336 
PUBLIC LAW 100-50—JUNE 3, 1987 
20 u s e 1065. 
20 u s e 1066. 
20 u s e 1067. 
Indians. 
20 u s e 1058. 
20 u s e 1069a. 
• i y >>' 
(12) in section 332(f)(1), by inserting "(or section 355)" after 
"part A or B"; 
(13) in section 351(bX6), by striking out "section 356" and 
inserting "section 357"; 
(14) in section 352(a)(2), by striking out "low- and middle-
income" and inserting "low-income"; 
(15) in section 352(b), by adding at the end thereof the 
following: 
"(3) The Secretary may waive the requirement set forth in section 
312(bXl)(E) in the case of an institution located on or near an Indian 
reservation or a substantial population of Indians, if the Secretary 
determines that the waiver will substantially increase higher edu-
cation opportunities appropriate to the needs of American Indians."; 
(16) in section 355(a) by inserting "or part B" immediately 
after "part A" each place it appears; and 
(17) in section 355(b), by inserting "part A or" immediately 
before "part B" each place it appears. 
(b) APPLICATION REVIEW PROCESS.—Part A of title III of the Act is 
amended by adding at the end thereof the following new section: 
20 u s e 1059a. 
Minorities. 
Grants. 
20 u s e 1057. 
Grants. 
Grants. 
APPLICATION REVIEW PROCESS 
"SEC. 314. (a) REVIEW PANEL.—(1) All applications submitted 
under part A by institutions of higher education shall be read by a 
panel of readers composed of individuals selected by the Secretary 
which shall include outside readers who are not employees of the 
Federal Government. The Secretary shall ensure that no individual 
assigned under this section to review any application has any 
conflict of interest with regard to that application which might 
impair the impartiality with which that individual conducts the 
review under this section. 
"(2) The Secretary shall take care to include as readers represent-
atives of historically and predominantly Black colleges, Hispanic 
institutions. Native American colleges and universities, and institu-
tions with substantial numbers of students who are Hispanic, Native 
American, Asian American, and Native American Pacific Islander 
(including Native Hawaiians). 
"(3) All readers selected by the Secretary shall receive thorough 
instruction from the Secretary regarding the evaluation process for 
applications submitted under part A, including— 
"(A) explanations and examples of the types of activities 
referred to in section 311(b) that must receive special consider-
>
^ 
ation for grants awarded under part A; 
"(B) an enumeration of the factors to be used to determine the 
li 
quality of applications submitted under part A; and 
"(C) an enumeration of the factors to be used to determine 
whether a grant should be awarded for a project under part A, 
the amount of any such grant, and the duration of any such 
grant. 
"(b) RECOMMENDATIONS OF PANEL.—In awarding grants under 
part A, the Secretary shall take into consideration the recommenda-
tions of the panel established under subsection (a). 
"(c) NOTIFICATION.—Not later than June 30 of each year, the 
Secretary shall notify each institution of higher education making 
an application under part A of— 
"(1) the scores given the applicant by the panel pursuant to 
this section; 
PUBLIC LAW 100-50—JUNE 3, 1987 
1 
.. "(2) the recommendations of the panel with respect to such 
application; and 
"(3) the reasons for the decision of the Secretary in awarding 
or refusing to award a grant under part A and any modifica-
tions, if any, in the recommendations of the panel made by the 
Secretary.". 
SEC. 3. PELL GRANTS. 
(a) CLARIFICATION OF REFERENCE.—Section 411(gX2) of the Act is 
amended by striking out "paragraph (1)" and inserting "paragraph 
(IXB)". 
(b) EXCLUSION OF FORCED SALE PROCEEDS.—(1) Section 411A of the 
Act is amended by adding at the end thereof the following new 
subsection: 
"(b) EXCLUSION OF FORCED SALE PROCEEDS.—In the computation of 
family contributions for the program under this subpart for any 
academic year, there shall be excluded from family income any 
proceeds of a sale of farm or business assets of that family if such 
sale results from a voluntary or involuntary foreclosure, forfeiture, 
or bankruptcy or an involuntary liquidation.". 
(2) Section 411B(g) of the Act is amended— 
(A) by striking out "paragraphs (1) through (7)" in the matter 
preceding paragraph (1) and inserting "paragraphs (1) through 
(6)"; and 
(B) by striking out paragraph (7). 
(3) Section 411C(f) of the Act is amended— 
(A) by striking out "paragraphs (1) through (7)" in the matter 
preceding paragraph (1) and inserting "paragraphs (1) through 
(6)"; and 
(B) by striking out paragraph (7). 
(4) Section 411D(f) of the Act is amended by striking out 
paragraph (5). 
(c) TREATMENT OF EXCLUDABLE INCOME.—(1) Sections 411B(d)(l)(A), 
411C(c)(lXA), and 411D(c)(lXA) are each amended by inserting before 
the semicolon ", less any excludable income (as defined in section 
411F(9))". 
(2) Section 411B(iXlXA) of the Act is amended— 
(A) by striking out "other than amounts earned under part C 
of this title"; and 
(B) by inserting before the semicolon ", less any excludable 
income (as defined in section 411F(9))". 
(d) EFFECTIVE FAMILY INCOME.—Section 411B(dXl) of the Act is 
amended— 
(1) by striking out "and" at the end of subparagraph (A); 
(2) by striking out "minus" at the end of subparagraph (B) 
and inserting "and"; and 
(3) by inserting after such subparagraph the following: 
"(C) one-half of the student's total veterans educational 
benefits, excluding Veterans' Administration contributory 
benefits, expected to be received during the award period, 
minus". 
(e) CONTRIBUTION FROM STUDENT'S AND SPOUSE'S ASSETS.—Section 
411B(1) of the Act is amended by inserting before the period at the 
end thereof the following: ", except that in the case of a student who 
is a dislocated worker (certified in accordance with title III of the 
Job Training Partnership Act) or a displaced homemaker (as defined 
101 STAT. 
'"'*•' '^ 
Grants. 
337 
^>j 0^1 
l U 'K:> 
20 use 1070a. 
20 use 1070a-l. 
• L-'':ui 
')f^'J t 
20 use 1070a-2. 
20 use 1070a-3. 
20 use 1070a-4. 
20 use 1070a-6. 
Veterans. 
29 use 1651. 
101 STAT. 338 
PUBLIC LAW 100-50—JUNE 3, 1987 
20 u s e 1087w. 
20 u s e 1070a-2. 
20 u s e 1070a-3. 
20 u s e 1070a-4. 
.<}-wM-
29 u s e 1651. 
20 u s e 1070a-6. 
in section 480(e) of this Act), the net value of a principal place of 
residence shall be considered to be zero". 
(0 ASSESSMENT OF DISCRETIONARY INCOME.—(1) Section 411B(f)(l) 
of the Act is amended to read as follows: 
"(f) ASSESSMENT OF DISCRETIONARY INCOME.—(1) The discretionary 
income that is assessed under this subsection is equal to (A) the 
effective family income (as determined under subsection (d)), minus 
(B) the total offsets to such income (as determined under subsection 
(e)). If such discretionary income is a negative amount, the contribu-
tion from the parents' income is zero.". 
(2) Section 411C(e)(l) of the Act is amended to read as follows: 
"(e) ASSESSMENT OF DISCRETIONARY INCOME.—(1) The discretionary 
income that is assessed under this subsection is equal to (A) the 
effective family income (as determined under subsection (c)), minus 
(B) the total offsets to such income (as determined under subsection 
(d)). If such discretionary income is a negative amount, the contribu-
tion from the student's (and spouse's) income is zero.". 
(3) Section 411D(e)(l) of the Act is amended to read as follows: 
"(e) ASSESSMENT OF DISCRETIONARY INCOME.—(1) The discretionary 
income that is assessed under this subsection is equal to (A) the 
effective family income (as determined under subsection (c)), minus 
(B) the total offsets to such income (as determined under subsection 
(d)). If such discretionary income is a negative amount, the contribu-
tion from the student's (and spouse's) income is zero.". 
(4) Sections 411B(f)(2), 411B(j)(2), 411C(e)(2), and 411D(e)(2) of the 
Act are each amended by striking out "effective family income" 
each place it appears in the text thereof and inserting "discre-
tionary income". 
(5) The tables in sections 411B(f)(2) and 411C(e)(2) of the Act are 
each amended— 
(A) by striking out "Effective family income" and inserting 
"Discretionary income"; and 
(B) by striking out "effective family income" and inserting 
"discretionary income". 
(g) TREATMENT OF DISLOCATED WORKERS AND DISPLACED HOME-
MAKERS.—Sections 411B(g)(l), 411C(f)(l), and 411D(f)(3) of the Act are 
each amended by inserting before the period at the end of the first 
sentence the following: ", except that in the case of a dislocated 
worker (certified in accordance with title III of the Job Training 
Partnership Act) or a displaced homemaker (as defined in section 
480(e) of this Act), the net value of a principal place of residence 
shall be considered to be zero". 
(h) CORRECTION OF REFERENCES.—(1) Section 411F(1)(B) is amended 
by striking out "paragraph (13)" and inserting "paragraph (15)". 
(2) Section 411C(f)(5)(B) of the Act is amended by striking out "the 
calculation of effective family income required by subsection (c)" 
and inserting in lieu thereof "the assessment of discretionary 
income under subsection (e)". 
(i) TUITION AND FEES.—Section 411F(5)(A) is amended by striking 
out "student's tuition and uniform compulsory fees" and inserting 
"tuition and uniform compulsory fees normally charged a full-time 
student". 
(j) DEPENDENT OF A STUDENT.—Section 411F(6) is amended to read 
as follows: 
"(6) Except as otherwise provided, the term (A) 'dependent of 
the student' means the student's spouse, the student's depend-
ent children, and other persons who live with and receive more 
PUBLIC LAW 100-50—JUNE 3, 1987 
101 STAT. 339 
43 use 1601 
note. 
25 use 1721 
note. 
42 use 2751. 
i
= ' than one-half of their support from the student and will con-
tinue to receive more than half of their support from the 
student during the award year; and (B) the term 'dependent of 
the parent' means the parents of the student, the student, any 
of the student's dependent children, dependent children of the 
student's parents, including those children who are deemed to 
be dependent students when applying for aid under this title, 
and other persons who live with and receive more than one-half 
of their support from the parents and will continue to receive 
more than half of their support from the parents during the 
award year.", 
(k) EXCLUDABLE INCOME.—Section 411F(9) of the Act is amended— 
20 use i070a-6. 
(1) in subparagraph (A), by striking out "(B), (C), and (D)" and 
inserting "(B) through (E)"; 
e
^ ~ 
(2) by striking out subparagraph (B) and inserting in lieu 
thereof the following: 
"(B) For a Native American Student, the annual adjusted 
Indians. 
family income does not include any income and assets of $2,000 
or less per individual payment received by the student (and 
spouse) and student's parents under the Per Capita Act or the 
Distribution of Judgment Funds Act or any income received by 
the student (and spouse) and student's parents under the Alaska 
Native Claims Settlement Act or the Maine Indians Claims 
Settlement Act."; 
(3) in subparagraph (D), by inserting "(including any income 
earned from work under part C of this title)" after "financial 
assistance''; and 
(4) by adding at the end thereof the following new subpara-
graph: 
^ 
"(E) Annual adjusted family income does not include any 
unemployment compensation received by a dislocated worker 
certified in accordance with title III of the Job Training Part-
nership Act.". 
29 use 1651. 
(1) INDEPENDENT.—Section 411F(12) of the Act is amended— 
(1) in subparagraph (B)(iii), by striking out "gradulate" and 
inserting "graduate ; and 
(2) in subparagraph (BXvi), by striking out "an annual total 
income" and by inserting in lieu thereof annual total resources 
(including all sources of resources other than parents)". 
(m) UNTAXED INCOME AND BENEFITS.—Section 411 
F( 15) of the Act 
is amended to read as follows: 
"(15) The term 'untaxed income and benefits' means— 
"(A) child support received; 
"(B) welfare benefits, including aid to families with 
V ^ 
dependent children under a State plan approved under part 
A of title IV of the Social Security Act and aid to dependent 42 use 601. 
children; 
"(C) workman's compensation; 
fc 
"(D) veterans' benefits such as death pension, dependency 
-:. 
and indemnity compensation, but excluding veterans' edu-
cation benefits; 
"(E) interest on tax-free bonds; 
"(F) housing, food, and other allowances (excluding rent 
subsidies for low-income housing) for military, clergy, and 
others (including cash payments and cash value of benefits); 
i 
• 
"(G) cash support or any money paid on the student's 
behalf; 
101 STAT. 340 
PUBLIC LAW 100-50—JUNE 3, 1987 
29 use 1501 
note. 
20 use 1070b-3. 
20 use 1070C-4. 
20 use 
1070d-lb. 
20 use 1070d-2. 
r;' 
"(H) the amount of earned income credit claimed for 
^.'' 
Federal income tax purposes; 
"(I) untaxed portion of pensions; 
i : bjt'-
"(J) credit for Federal tax on special fuels; 
"(K) the amount of foreign income excluded for purposes 
of Federal income taxes; 
"(L) untaxed social security benefits; 
"(M) payments to individual retirement accounts and 
Keogh accounts excluded from income for Federal income 
'' 
^ 
tax purposes; and 
"(N) any other untaxed income and benefits, such as 
Black Lung Benefits, Refugee Assistance, railroad retire-
ment 
benefits, 
or 
Job 
Training 
Partnership 
Act 
noneducational benefits.". 
SEC. 4. SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS. 
(a) FORMULA.—Section 413D(d)(2) of the Act is amended— 
(1) by striking out subparagraph (D) and inserting the 
following: 
"(D) multiply the number of eligible dependent students in 
each income category by 75 percent of the average cost of 
^
^ 
attendance for all undergraduate students determined under 
subparagraph (C), minus the expected family contribution deter-
,, 
mined under subparagraph (B) for that income category, except 
that the amount computed by such subtraction shall not be less 
than zero;"; and 
,jj 
(2) by striking out subparagraph (F) and inserting the 
following: 
"(F) multiply the number of eligible independent students in 
^' 
each income category by 75 percent of the average cost of 
,-s attendance for all undergraduate students determined under 
subparagraph (C), minus the expected family contribution deter-
mined under subparagraph (B) for that income category, except 
[
> 
that the amount computed by such subtraction shall not be less 
than zero;". 
(b) TECHNICAL AMENDMENTS.—(1) Section 413D(d)(3)(A) of the Act 
is amended by striking out "and for graduate and professional 
students". 
(2) Section 413D(d)(3)(B) is amended— 
(A) by striking out "and graduate and professional"; and 
(B) by striking out "and graduate". 
SEC. 5. STATE STUDENT INCENTIVE GRANTS. 
' 
Section 415E(1) of the Act is amended by striking out "literary" 
and inserting "literacy". 
SEC. 
6
. 
STUDENT 
SUPPORT 
SERVICES. 
' 
^i; 
Section 417D(d) of the Higher Education Act of 1965 is amended 
by striking out "Post-Baccalaureate Achievement Program" and 
inserting in lieu thereof "Ronald E. McNair Post-Baccalaureate 
Achievement Program". 
SEC. 7. SEPARATION OF HEP/CAMP AUTHORIZATION. 
' * 
Section 418A(g) of the Act is amended to read as follows: 
"(g) AUTHORIZATION OF APPROPRIATIONS.—(1) There are authorized 
to be appropriated for the high school equivalency program 
PUBLIC LAW 100-50—JUNE 3, 1987 
101 STAT. 341 
$7,000,000 for fiscal year 1987 and such sums as may be necessary 
j, . 
for each of the four succeeding fiscal years. 
' 
"(2) There are authorized to be appropriated for the college assist-
ance migrant program $2,000,000 for fiscal year 1987 and such sums 
as may be necessary for each of the four succeeding fiscal years.". 
SEC. 
8
. 
VETERANS' 
EDUCATION 
OUTREACH. 
Section 420A of the Act is amended— 
20 use I070e-i. 
(1) in subsection (bX2XB), by striking out "subchapter V or 
'* 
VI" and inserting "subchapter V"; 
(2) in subsection Ot>)(5), by striking out "paragraph (3)(A)" and 
inserting "paragraph (4)(A)"; 
^' 
(3) in subsection (c)(2)(A)(i), by striking out "subsection (e)" 
, and inserting "subsection (bX5)"; and 
^' 
(4) in subsection (cX2XCXii)— 
(A) by striking out "(I)"; and 
(B) by striking out "and (II) in the case of any institution 
located near a military installation, under subchapter VI of 
= c
^
; ; v^j >
: 
such chapter 34". 
SEC. 9. SPECIAL CHILD CARE SERVICES. 
Section 420B of the Act is amended— 
20 use I070f. 
(1) in subsection 03X2)— 
(A) by striking out "to pursue a successful program" in 
^, ^ , 
subparagraph (C) and inserting "to pursue successfully a 
program"; 
(B) by striking out subparagraph (B); and 
(C) by redesignating subparagraphs (C) through (F) as 
subparagraphs (B) through (E), respectively; and 
(2) by striking out subsection (d) and inserting the following: 
"(d) DEFINITION.—For purposes of this subpart, the term 'low-
income individual' means an individual from a family whose taxable 
income for the preceding year did not exceed 150 percent of an 
amount equal to the poverty level determined by using the criteria 
of poverty established by the Bureau of the Census.". 
SEC. 10. GUARANTEED STUDENT LOANS. 
' 
(a) INAPPUCABIUTY OF AGGREGATE LOAN LIMITS TO SUPPLEMENTAL 
AND PLUS LOANS.—Sections 425(aX2)(A) and 428(bXlXB) are each 20 use 1075, 
amended— 
1078. 
(1) in clause (i), by inserting ", excluding loans made under 
section 428A or 428B" after "undergraduate education"; and 
(2) in clause (ii) by inserting ", excluding loans made under 
section 428A or 428B" after "graduate or professional student)". 
(b) TEACHER DEFERMENT; INTERNSHIP DEFERMENT.—(1) Sections 
427(aX2XCXvi) and 428(bXlXMXvi) of the Act are each amended by 20 use 1077. 
inserting "nonprofit" before "private". 
(2) Sections 427(aX2XC)(vii) and 428(bXlXMXvii) of the Act are each Health care 
amended by inserting before the semicolon at the end thereof the facilities. 
following: "or serving in an internship or residency program leading 
to a degree or certificate awarded by an institution of higher 
education, a hospital, or a health care facility that offers post-
graduate training". 
(c) MULTIPLE DISBURSEMENT.—Sections 427(aX4) and 428(bXlXO) of 
' "' '
"
^
^ 
the Act are each amended by striking out "more than $1,000" and 
inserting "$1,000 or more". 
101 STAT. 342 
PUBLIC LAW 100-50—JUNE 3, 1987 
(d) VARIABLE INTEREST RATES ON SUPPLEMENTAL AND PLUS 
20 use 1077a. 
LoANS.—(1) Section 427A(c)(4) of the Act is amended— 
(A) in subparagraph (A), by striking out "to cover the cost of 
,
^ 
instruction for any period of enrollment beginning on or after 
July 1, 1987," and inserting "and disbursed on or after July 1, 
1987,"; 
(B) in such subparagraph (A), by striking out "any calendar 
. , 
, .,^ 
year" and inserting "any 12-month period beginning on July 1 
and ending on June 30"; and 
' 
(C) by striking out subparagraph (B) and inserting the 
following: 
5
4 
"(B) For any 12-month period beginning on July 1 and ending 
; , on June 30, the rate determined under this subparagraph is 
* determined on the preceding June 1 and is equal to— 
"(i) the bond equivalent rate of 52-week Treasury bills 
auctioned at the final auction held prior to such June 1; 
plus 
"(ii) 3.25 percent.". 
20 use 1087-1. 
(2) Section 438(bX2)(C) of the Act is amended by striking out "12.5 
percent" and inserting "12 percent". 
(e) COMPLIANCE WITH LOAN LIMITS.—Section 428(a)(2)(D) of the 
20 use 1078. 
Act is amended by striking out "permits the student" and inserting 
"certifies the eligibility of any student". 
(f) INSURANCE PROGRAM AGREEMENTS.—Section 428(b)(1) of the Act 
is amended— 
(1) by striking out "first or" in subparagraph (A)(i) and insert-
ing "first and"; 
(2) by inserting before the semicolon at the end of subpara-
^i graph (N) the following: "and except in the case of attendance at 
an institution outside the United States, the funds shall be 
'4 delivered directly to the student"; 
"
"
^ 
(3) by striking out "being dispensed" in subparagraph (0)(i) 
-' and inserting "being disbursed"; 
'i 
(4) by striking out subparagraph (P) and inserting the 
k: following: 
"(P) requires the borrower to notify the institution 
concerning any change in local address during enrollment 
and requires the borrower and the institution at which the 
borrower is in attendance promptly to notify the holder of 
. V
' ! •• ; 
the loan, directly or through the guaranty agency, concern-
' 
ing (i) any change of permanent address, (ii) when the 
'. ' 
student ceases to be enrolled on at least a half-time basis, 
and (iii) any other change in status, when such change in 
status affects the student's eligibility for the loan;"; and 
(5) by inserting in subparagraph (T) after "eligible institu-
tions" the following: "(other than nonresidential correspond-
N
^ 
J: • ^ 
ence schools)". 
(g) CLARIFICATION OF REFERENCE.—Section 428(b)(5) of the Act is 
. • 
amended by striking out "paragraph (1)(M)" and inserting "para-
. , 
graph (lKM)(i)(III)". 
(h) 
GUARANTY 
AGENCY 
INFORMATION 
TRANSFERS.—Section 
428(b)(6) of the Act is amended— 
(1) in subparagraph (A), by striking out "Prior to the im-
plementation of section 485B" and inserting "Until such time as 
20 use 1092b. 
the Secretary has implemented section 485B and is able to 
provide to guaranty agencies the information required by such 
section"; and 
PUBLIC LAW 100-50—JUNE 3, 1987 
101 STAT. 343 
(2) in subparagraph (B), by striking out clause (ii) and insert-
ing the following: 
"(ii) the amount borrowed and the cumulative amount 
borrowed.". 
(i) SUPPLEMENTAL PRECLAIMS ASSISTANCE.—Section 428(c)(6)(C)(iv) 
of the Act is amended by adding at the end thereof the following: "In 
20 USC 1078. 
the case of accounts brought into repayment status as a result of 
performing supplemental preclaims assistance, the cost of such 
assistance is a permissible charge to the borrower (for the cost of 
collection) for which the borrower shall be liable.". 
(j) 
SECRETARY'S 
EQUITABLE 
SHARE; 
GARNISHMENT.—Section 
428(c)(6)(D) of the Act is amended by inserting "and enforces" after 
"enacts". 
"u -vj =
. 
(k) REINSURANCE FEES.—Section 428(c)(9) of the Act is amended— 
(1) by inserting "covered" before "loans" each place it appears 
in clauses (i) and (ii) of subparagraph (A); and 
(2) by adding at the end thereof the following new subpara-
graph: 
"(D) For purposes of subparagraph (A), the term 'covered 
' ' 
loans' means loans made under this part to which the insurance 
applies, but does not include loans made under section 428A(d), 20 use 1078-1. 
428B(d), or 428C.". 
20 USC 1078-2, 
(1) ESCROW OF DISBURSEMENTS.—(1) The first sentence of section 1078-3. 
428(i)(l) of the Act is amended by striking out "multiple". 
(2) The third sentence of section 428(i)(l) of the Act is amended by 
striking out "45" and inserting in lieu thereof "21". 
(m) LENDERS-OF-LAST-RESORT.—Section 428(j) is amended by 
adding at the end thereof the following new sentence: "The guar-
anty agency shall consider the request of any eligible lender, as 
defined under section 435(d)(1)(A) of this Act, to serve as the lender- 
20 use 1085. 
of-last-resort pursuant to this subsection.". 
(n) USE OF SUPPLEMENTAL LOAN PROGRAM BY UNDERGRADUATES.— 
Section 428A(a) of the Act is amended by adding at the end thereof 
20 use 1078-1. 
the following: "In addition, undergraduate dependent students shall 
be eligible to borrow funds under this section if the financial aid 
administrator determines, after review of the financial information 
submitted by the student and considering the debt burden of the 
student, that extenuating circumstances will likely preclude the 
student's parents from borrowing under section 428B for purposes of 
the expected family contribution and that the student's family is 
otherwise unable to provide such expected family contribution.". 
(o) LOAN DEFERMENTS FOR SUPPLEMENTAL AND PLUS LOANS.—(1) 
Sections 428A(c)(2) and 428B(c)(2) of the Act is amended by striking 
20 use 1078-2. 
out "and interest" after "principal" the first time it appears. 
(2) Section 428B of the Act is amended— 
(A) in subsection (a), by striking out ", but such a parent 
borrower" and all that follows through "clauses (i), (viii), and 
(ix) of such sections"; 
(B) in subsection (c)(1), by striking out "subject to deferral 
pursuant to sections 427(a)(2)(C) (i), (viii), and (ix) and 
20 use 1077. 
428(b)(l)(M) (i), (viii), and (ix)" and inserting in lieu thereof 
"subject to deferral (A) during any period during which the 
parent meets the conditions required for a deferral under clause 
(i), (viii), or (ix) of section 427(a)(2)(C) or 428(b)(l)(M); and (B) 
during any period during which the borrower has a dependent 
student for whom a loan obligation was incurred under this 
101 STAT. 344 
PUBLIC LAW 100-50—JUNE 3, 1987 
20 use 1078-1. 
20 use 1078. 
20 u s e 1078-2. 
20 use 1078-1 
note. 
20 use 1001 
note. 
20 use 1077a. 
section and who meets the conditions required for a deferral 
under clause (i) of either such section"; and 
:
? 
(C) in subsection (c)(2), by striking out "under sections 
427(a)(2)(C)(i) and 428(b)(l)(M)(i)" and inserting "pursuant to 
paragraph (1) of this subsection", 
(p) LIMITATION ON SUPPLEMENTAL AND PLUS LOANS.—(1) Section 
428A(b)(3) of the Act is amended by striking out the first sentence 
and inserting the following: "Any loan under this section may be 
counted as part of the expected family contribution in the deter-
mination of need under this title, but no loan may be made to any 
student under this section for any academic year in excess of (A) the 
student's estimated cost of attendance, minus (B) other financial aid 
as certified by the eligible institution under section 428(a)(2)(A).". 
(2) Section 428B(b)(3) of the Act is amended by striking out the 
first sentence and inserting the following: "Any loan under this 
section may be counted as part of the expected family contribution 
in the determination of need under this title, but no loan may be 
made to any parent under this section for any academic year in 
excess of (A) the student's estimated cost of attendance, minus (B) 
other financial aid as certified by the eligible institution under 
section 428(a)(2)(A).". 
(q) REPAYMENT OF SUPPLEMENTAL AND PLUS LOANS.—Sections 
428A(c)(2)(A) and 428B(c)(2)(A) of the Act are each amended by 
inserting "monthly or" before "quarterly". 
(r) REFINANCING OF SUPPLEMENTAL AND PLUS LOANS.—(1) Sec-
tions 428A(d) and 428B(d) of the Act are each amended— 
(A) in paragraph (1)— 
(i) by inserting "at any time" after "An eligible lender 
may" in the first sentence; 
' ^ 
(ii) by striking out "Unless the borrower complies with 
the requirements of paragraph (2)," in the second sentence 
and inserting "Unless the consolidated loan is obtained by a 
' borrower who is electing to obtain variable interest under 
paragraph (2) or (3),"; and 
(iii) by inserting "(if required by them)" after "shall be 
reported" in the third sentence; 
' 
(B) in paragraph (2)— 
(i) by inserting "under this section before July 1,1987, or" 
before "under section 428B"; 
(ii) by striking out "to reissue a loan" and inserting "to 
reissue a loan or loans"; and 
^ 
(iii) by striking out "reissuing such loan" and inserting 
"reissuing such loan or loans"; and 
(C) in paragraph (5)— 
(i) by striking out "January 1, 1987" and inserting "Octo-
ber 1,1987"; and 
(ii) by inserting before the semicolon at the end of 
•i 
subparagraph (B) the following: "and of the practical con-
sequences of such options in terms of interest rates and 
monthly and total payments for a set of loan examples". 
(2) An eligible lender who has refinanced a loan or loans under 
section 428A(d) or 428B(d) between the date of enactment of the 
Higher Education Amendments of 1986 and July 1,1987, may, at the 
request of a borrower or with the written consent of the borrower, 
amend the note or other written evidence of loan as necessary to 
comply with the requirements of such sections and section 427A(cK4) 
as amended by this Act. Any borrower who is denied such a request 
PUBLIC LAW 100-50—JUNE 3, 1987 
101 STAT. 345 
shall be treated as eligible to obtain a loan from another lender 
under section 428A(d)(3) or 428B(d)(3), as applicable, for the purposes 20 use 1078-1; 
of discharging the loan from the original lender, and a borrower 1078-2. 
exercising this option shall not be subject to an additional insurance 
fee under section 428A(d)(3XC) or 428B(dX3)(C). 
(s) CoNSOUDATiON LoANS.—Section 428C of the Act is amended— 20 use 1078-3. 
(1) in subsection (aXlXC), by striking out "(C) and (E)" and 
inserting in lieu thereof "(C), (E), and (J)"; 
(2) in subsection (a)(3XA)— 
^^^« •''''' " 
(A) in division (i), by adding "and" at the end thereof; 
(B) in division (ii), by striking out the semicolon and 
"and" at the end thereof and inserting in lieu thereof a 
'r' 
period; and 
(C) by striking out division (iii); 
.i*' 
(3) in subsection (a)(3XB)— 
(A) by striking out "loans received under this title" in 
:>• 
the first sentence and inserting "eligible student loans 
^ 
received"; 
(B) by striking out "under this part" and inserting "under 
this title"; 
(C) by striking out "and 428(bXlXB)" in the second sen-
8
1 
tence and inserting ", 428(bXl)(B), 428A(b)(2), and 464(a)(2)"; 
' - '-" • * 
1' 
and 
(D) by adding at the end thereof the following new sen-
tence: "Nothing in this subparagraph shall be interpreted 
' '' 
" 
to authorize the Secretary to require lenders, holders, or 
guarantors of consolidation loans to receive, to maintain, or 
to make reports with respect to pre-existing records relat-
ing to any eligible student loan (as defined under section 
428C(aX4)) discharged by a borrower in receiving a consoli-
dation loan."; 
(4) in subsection (aX4)(A), by inserting before the semicolon at 
the end thereof a comma and the following: "except for loans 
made to parent borrowers under section 428B, including loans 
made to parent borrowers under section 428B as in effect prior 
to the enactment of the Higher Education Amendments of 
1986"; 
20 use 1001 
(5) in subsection (bXlXC)— 
note. 
(A) by striking out "subsection (aX2)" in clause (i) and 
inserting * 
'subsection (aX3)"; and 
(B) by striking out "all loans received by the eligible 
si 
borrower under this title" in clause (ii) and inserting "all 
' '-
eligible student loans received by the eligible borrower"; 
(6) in subsection (cX2XA)(v), by striking out "more" and insert-
ing "equal to or greater"; and 
'" 
(7) in subsection (cX5), by inserting before the period at the 
end thereof the following: ", but a fee may be payable by the 
lender to the guaranty agency to cover the costs of increased or 
extended liability with respect to such loan". 
(t) STATE GARNISHMENT PROGRAM.—Section 428E of the Act is 20 use 1078-5. 
amended— 
(1) in subsection (aXD by inserting before the semicolon a 
comma and the following: except that any State which has a 
garnishment law in effect on the date of the enactment of the 
Higher Education Amendments of 1986 which provides for the 
deduction of an amount not to exceed 15 percent of disposable 
101 STAT. 346 
PUBLIC LAW 100-50—JUNE 3, 1987 
pay, shall be deemed to meet the requirements of this 
% - . 
^ . 
paragraph"; 
(2) in subsection (a)(6), by striking out "proper notice under 
paragraph (2)," and inserting in lieu thereof "notice of the 
withholding order,"; and 
, 4 ; - 
c 
(3) in subsection (c), by striking out "notice given to the 
employer pursuant to subsection (a)(2)" and inserting in lieu 
thereof "notice of the withholding order". 
20 use 1078-6. 
(u) REHABIUTATION PROGRAM.—Section 428F of the Act is 
amended— 
(1) by striking out subsection (b); and 
(2) by redesignating subsection (c) as subsection (b). 
(v) INFORMATION CONCERNING BORROWERS.—Section 430A(e) of the 
20 use 1080a. 
Act is amended by adding at the end thereof the following new 
sentence: "To further the purpose of this section, an eligible institu-
tion may enter into an arrangement with any or all of the holders of 
delinquent loans made to borrowers who attend or previously at-
tended such institution for the purpose of providing current 
information regarding the borrower's location or employment or for 
the purpose of assisting the holder in contacting and influencing 
borrowers to avoid default.". 
20 use 1081. 
(w) CLARIFICATION OF REFERENCE.—Section 431(a) of the Act is 
amended by striking out "section 422(c)(4)(C)" and inserting "section 
422". 
20 use 1082. 
(x) AUDITS OF FINANCIAL TRANSACTIONS.—Section 432(f) of the Act 
is amended by inserting after paragraph (3) the following new 
paragraph: 
"(4) AUDIT PROCEDURES.—In conducting audits pursuant to 
this subsection, the Comptroller General and the Inspector 
General of the Department of Education shall audit the records 
to determine the extent to which they, at a minimum, comply 
with Federal statutes, and rules and regulations prescribed by 
the Secretary, in effect at the time that the record was made, 
and in no case shall the Comptroller General or the Inspector 
General apply subsequently determined standards, proce-
dures, or regulations to the records of such agency, lender, or 
: 
V 
Authority.". 
(y) CIVIL PENALTIES.—Section 432(g)(2) of the Act is amended by 
striking out "representation" each place it appears in sub-
paragraphs (A)(i) and (B) and inserting in lieu thereof "misrepresen-
tation". 
20 use 1083. 
(z) STUDENT LOAN INFORMATION.—Section 433 of the Act is 
amended— 
(1) in the first sentence of subsection (a), by inserting "(other 
20 use 1078-3. 
than a loan made under section 428C)" after "guaranteed under 
this part"; 
(2) in subsection (a), by striking out paragraph (8) and insert-
ing the following: 
"(8) a statement of the total cumulative balance, including the 
J ' 
loan applied for, owed by the student to that lender, and an 
estimate of the projected monthly payment, given such cumu-
lative balance;"; 
(3) in subsection (b)(7), by inserting before the semicolon at the 
end thereof the following: ", except that such explanation is not 
required when the loan being made is a consolidation loan 
under section 428C"; and 
PUBLIC LAW 100-50—JUNE 3, 1987 
101 STAT. 347 
(4) in subsection (d), by striking out "makes the first disburse-
ment of a loan with respect to a borrower" and inserting 
"notifies a borrower of approval of a loan", 
(aa) DEFINITIONS.—Section 435 of the Act is amended— 
20 USC 1085. 
(1) in subsection (b)(3), by inserting before the semicolon the 
following: ", or in the case of a hospital or health care facility, 
which provides training of not less than one year for graduates 
of accredited health professions programs, leading to a degree or 
certificate upon completion of such training"; 
(2) in subsection (d)(1)— 
,1 
(A) by striking out "and" at the end of subparagraph (H); 
(B) by striking out the period at the end of subparagraph 
fca; 
(I) and inserting "; and"; and 
(C) by inserting after such subparagraph the following: 
"(J) for purpose of making loans under section 428C, any 20 USC 1078-3. 
nonprofit private agency functioning in any State as a 
secondary market."; 
(3) in section 435(d)(2)— 
(A) by striking out "and" at the end of subparagraph (A); 
^'•'- 
(B) by striking out the period at the end of subparagraph 
(B) and inserting in lieu thereof a semicolon; and 
-
<
^ 
• -
(C) by inserting after subparagraph (B) the following: 
"(C) shall make loans to not more than 50 percent of the 
undergraduate students at the institutions; and 
"(D) shall not make a loan, other than a loan to a 
graduate or professional student, unless the borrower has 
previously received a loan from the school or has been 
denied a loan by an eligible lender; 
except that the requirements of subparagraphs (C) and (D) shall not 
apply with respect to loans made, and loan commitments made, 
after the date of enactment of the Higher Education Amendments of 
1986 and prior to July 1,1987."; 
20 USC lOOl 
(4) by striking out paragraph (2) of subsection (g) and inserting note. 
the following: 
"(2) DISABLED DEPENDENT OF A BORROWER.—Such term when 
used with respect to a disabled dependent of a borrower means a 
spouse or other dependent who, during a period of injury or 
illness of not less than 3 months, requires continuous nursing or 
similar services."; and 
(5) by striking out "DEFINITION OF" in the heading of subsec-
tion (h). 
(bb) SPECIAL ALLOWANCES.—Section 438(b) of the Act is amended— 20 use 1087-1. 
(1) by striking out "subsection (c)" in paragraph (2)(B)(iii) and 
inserting "subsection (d)"; and 
(2) by inserting after paragraph (6) the following new 
paragraph: 
"(7) USE OF AVERAGE QUARTERLY BALANCE.—The Secretary 
shall permit lenders to calculate interest benefits and special 
allowance through the use of the average quarterly balance 
method until July 1,1988.". 
(cc) REPORT ON SPECIAL ALLOWANCES.—Section 438(d)(4)(C) of the 
Act is amended by striking out ", as evidenced by the information 
submitted under paragraph (2)(G) of this subsection". 
(dd) CORRECTION OF REFERENCE.—Section 439(d)(l)(E)(iii) of the Act 
20 use 1087-2. 
is amended by inserting "Labor and" before "Human Resources". 
101 STAT. 348 
PUBLIC LAW 100-50—JUNE 3, 1987 
SEC. 11. COLLEGE WORK-STUDY. 
42 use 2752. 
(a) REALLOCATION.—Section 442(e)(2) of the Act is amended— ' 
(1) by inserting "not to exceed" immediately before "25 
percent"; 
- 
(2) by striking out "section 448" and inserting in lieu thereof 
"section 447"; and 
(3) by striking out "subsection (c)" and inserting in lieu 
thereof "section 447(c)". 
42 use 2753. 
(b) WORK-STUDY AGREEMENTS.—Section 443(b) of the Act is 
amended— 
(1) in paragraph (2XA), by striking out "clause (6)(B)" and 
inserting "paragraph (5)(B)"; and 
(2) in paragraph (5)(B), by striking out "clause (2)(A)" and 
inserting "paragraph (2)(A)". 
. 
:; • < 
(c) PRIVATE SECTOR AGREEMENT.—(1) Section 443(c) of the Act is 
amended by striking out "In addition to the" and inserting in lieu 
thereof "As part of its agreement". 
(2) Section 443(c)(1) of the Act is amended by inserting "and 
subsection (b)(3)" before the semicolon. 
(d) JOB LOCATION AND DEVELOPMENT AGREEMENTS.—Section 446(b) 
42 use 2756. 
of the Act is amended— 
(1) by striking out paragraph (3); and 
(2) by redesignating paragraphs (4) through (7) as paragraphs 
(3) through (6), respectively. 
SEC. 12. INCOME CONTINGENT LOAN DEMONSTRATION. 
20 use I087d. 
Section 454(a)(4) of the Act is amended to read as follows: 
"(4)(A) The interest rate on loans under this part shall, at the 
discretion of the participating institution, be (i) computed in accord-
ance with subparagraph (B) based on the interest rate computed for 
the calendar year in which the loan was made, and fixed over the 
, j^v., 
life of the loan, or (ii) variable each calendar year based on the 
interest rate computed in accordance with subparagraph (B) for 
such calendar year. 
"(B) The interest rate applicable on such loans in accordance with 
subparagraph (A) shall be obtained by— 
"(i) computing the average of the bond equivalent rates of 91-
day Treasury bills auctioned for the 3-month period ending 
September 30 preceding such year; and 
"(ii) by adding 3 percent to the resulting percent.". 
SEC. 13. DIRECT STUDENT LOANS. 
(a) ALLOCATIONS IN PROPORTION TO FISCAL YEAR 1985 FEDERAL 
20 use I087bb. 
CAPITAL CONTRIBUTION.—Section 462(a)(1) of the Act is amended by 
striking out subparagraph (A) and inserting the following: 
"(A) 100 percent of the amount of Federal capital contribution 
such institution received' under this part for fiscal year 1985, 
multiplied by". 
• (b) CORRECTION OF REFERENCE.—Section 462(d) of the Act is 
amended by redesignating paragraph (3) the second time it appears 
as paragraph (4). 
(c) CORRECTION OF HEADING.—Section 462(e) of the Act is amended 
by striking out "; CASH ON HAND". 
(d) CORRECTION OF REFERENCE.—Section 462(f) of the Act is amend-
' 7s„ 'it 
ed by striking out "under paragraph (2)" and inserting "under 
subsection (g)". 
vfrnKTm ' '^M^ J'.,^--: 
.
= i. -1.?^*.-V.. ,,:...-,,...,.,. ... 
PUBLIC LAW 100-50—JUNE 3, 1987 
101 STAT. 349 
(e) NOTICE OF DEFAULT.—Section 463(a)(4) is amended by striking 
out "given to the Secretary" and everything that follows through 
"semiannually" and inserting "given to the Secretary in an annual 
report describing the total number of loans from such fund which 
are in such default". 
(f) CORRECTION OF REFERENCE.—Section 463(b) of the Act is 
amended by striking out "section 485" and inserting "section 489". 
(g) ESTIMATES OF BALANCES.—Section 463A(a) of the Act is 
amended by striking out pargigraph (8) and inserting the following: 
"(8) a statement of the total cumulative balance, including the 
loan applied for, owed by the student to that lender, and an 
estimate of the projected monthly payment, given such cumu-
lative balance;". 
(h) DEFENSE EDUCATIONAL LOAN REPAYMENT.—Section 463A(a)(10) 
of the Act is amended by striking out "section 902 of the Depart-
ment of Defense Authorization Act, 1981 (10 U.S.C. 2141, note)r and 
inserting "the Department of Defense educational loan repayment 
program (10 U.S.C. 2172);". 
(i) INTERNSHIP DEFERMENT.—Section 464(c)(2)(A)(vi) is amended by 
inserting before the semicolon at the end thereof the following: "or 
serving in an internship or residency program leading to a degree or 
certificate awarded by an institution of higher education, a hospital, 
or a health care facility that offers postgraduate training". 
(j) REFERENCE TO OTHER PROGRAMS.—Section 465(a)(2) of the Act is 
amended— 
(1) in subparagraph (A) by striking out "title I of the Ele-
mentary and Secondary Education Act of 1965" and inserting 
"chapter 1 of the Education Consolidation and Improvement 
: 
Act of 1981"; 
(2) in subparagraph (A), by striking out "such title I" and 
' 
inserting "such chapter 1"; and 
(3) in subparagraph (B), by striking out "section 222(a)(1) of 
'' 
the Economic Opportunity Act of 1964 and inserting "the Head 
Start Act". 
SEC. 14. NEEDS ANALYSIS. 
* Part F of title IV of the Act is amended— 
(1) in sections 475(c)(2), 475(c)(4), 475(d)(2), 476(b)(2), 476(c)(2), 
477(b)(2), 477(c)(2), and 477(d), striking out "section 479" and 
inserting "section 478"; 
(2) in sections 475(c)(7) and 477(b)(7), by striking out "Na-
tional"; 
(3) in sections 475(dX2), 476(c)(2), and 477(c)(2), strike out 
"dislocated homemaker" and insert "displaced homemaker"; 
(4) by striking out the table contained in sections 475(d)(2)(C), 
476(c)(2)(C), and 477(cX2)(C) and inserting the following: 
Reports. 
20 u s e 1087CC. 
20 u s e 1087CC-1. 
20 u s e 1087dd. 
Schools and 
colleges. 
Health care 
facilities. 
20 u s e lOSTee. 
20 u s e 3801 et 
seq. 
42 u s e 9801 
note. 
20 use 
1087oo-1087qq. 
"Adjusted Net Worth of a Business or Farm 
If the net worth of a business or 
farm is— 
Then the adjusted net worth is: 
Less than $1 
$0 
$l-$60,000 
40 percent of NW 
$60,001-$180,000 
$24,000 plus 50 percent of NW over 
$60,000 
101 STAT. 350 
PUBLIC LAW 100-50—JUNE 3, 1987 
"Adjusted Net Worth of a Business or Farm—Continued 
Ifthe net wo^rthof^ business or 
Then the adjusted net worth is: 
$180,001-$300,000 
$84,000 plus 60 percent of NW over 
$180,000 
$300,001 or more 
$156,000 plus 100 percent of NW 
. . s^ 
. 
over $300,000"; 
20USC1087OO, 
(5) in sections 475(d)(4)(B) and 477(c)(4)(B), by striking out 
I087qq. 
"$15,000" and inserting "$15,999"; 
(6) in sections 475(d)(4)(C) and 477(c)(4)(C), by striking out 
"$15,000" each place it appears and inserting "$16,000"; 
(7) in section 475(d)(4)(D), by striking out "equal to or less than 
zero" and inserting "less than zero"; 
(8) in sections 475(e) and 477(d), insert a minus sign before 
• ' 
"$3,409" each time it appears in the chart in each such section; 
(9) in section 475(g)(1)(C), by striking out "paragraph (3)" and 
inserting "paragraph (2)"; 
(10) in section 475(g)(3), by inserting after "following table" 
the following: "(or a successor table prescribed by the Secretary 
20 use I087rr. 
Under section 478)"; 
(11) in section 475, by striking out subsection (h) and inserting 
the following: 
"(h) 
STUDENT (AND SPOUSE) INCOME SUPPLEMENTAL AMOUNT 
. . 
FROM ASSETS.—The student (and spouse) supplemental income from 
assets is determined by calculating the net assets of the student (and 
spouse) and multiplying the amount by 35 percent, except that in 
the case of a student who is a dislocated worker (certified in 
29 use 1651. 
accordance with title III of the Job Training Partnership Act) or a 
20 use I087w. 
displaced homemaker (as defined in section 480(e) of this Act), the 
net value of a principal place of residence shall be considered to be 
zero."; 
(12) in such section, by adding at the end thereof the following 
new subsection: 
"(i) 
ADJUSTMENTS FOR ENROLLMENT PERIODS OTHER THAN 
9 
; 
MONTHS.—For periods of enrollment other than nine months, the 
parents' contribution from adjusted available income is determined 
as follows: 
"(1) For periods of enrollment less than 9 months, the parents' 
contribution from adjusted available income (determined in 
accordance with subsection (b)) is divided by 9 and the result 
multiplied by the number of months enrolled. 
"(2) For periods of enrollment greater than 9 months— 
"(A) the parents' adjusted available income (determined 
in accordance with subsection (b)(1)) is increased by the 
difference between the standard maintenance allowance 
(determined in accordance with subsection (c)(4)) for a 
family of four and a family of five, each with one child in 
college; 
"(B) the resulting revised parents' adjusted available 
income is assessed according to subsection (e) and adjusted 
according to subsection (b)(3) to determine a revised par-
ents' contribution from adjusted available income; 
PUBLIC LAW 100-50—JUNE 3, 1987 
101 STAT. 351 
"(C) the original parents' contribution from adjusted 
available income is subtracted from the revised parents' 
contribution from adjusted available income, and the result 
is divided by 12 to determine the monthly adjustment 
amount; and 
"(D) the original parents' contribution from adjusted 
available income is increased by the product of the monthly 
adjustment amount multiplied by the number of months 
greater than 9 for which the student will be enrolled."; 
(13) in section 476(b)(1)— 
20 USC 1087pp. 
(A) by striking out "subparagraph (B)" in subparagraph 
(C) and inserting "subparagraph (C)"; 
(B) by redesignating subparagraphs (B) and (C) as sub-
paragraphs (C) and (D); and 
(C) by striking out everything preceding clause (i) of 
subparagraph (A) and inserting the following: 
"(A) adding the student's adjusted gross income and any 
income earned from work but not reported on a Federal 
income tax return, and subtracting excludable income (as 
defined in section 480); 
20 USC I087w. 
"(B) computing the student's available taxable income by 
deducting from the amount determined under subpara-
graph (A)-"; 
(14) in section 476(b)(2), by striking out "total taxable income" 
and inserting "total income"; 
(15) in section 476(b)(1)(C), by inserting after "section 480(c))" 
the following: "plus the amount of veterans' benefits paid 
during the award period under chapters 32, 34, and 35 of title 
28, United States Code"; 
(16) in section 476(b)(4)— 
(A) by striking out "$8,900" each place it appears and 
inserting "$8,600"; and 
(B) by striking out "$6,230" and inserting "$6,020"; 
(17) in section 476(c)(1)— 
(A) by striking out the period at the end of subparagraph 
(C) and inserting a semicolon; and 
(B) by inserting at the end thereof (flush with the margin 
of paragraph (1)) the following: 
"except that the student's income supplemental amount from 
-
assets shall not be less than zero."; 
(18) in section 477(a)(1)— 
20 USC 1087qq. 
(A) by striking out "and" at the end of subparagraph (A); 
(B) by inserting "and" after the semicolon at the end of 
subparagraph (B); and 
(C) by inserting after such subparagraph the following: 
"(C) the amount of veterans' benefits to be paid during 
the award period under chapters 32, 34, and 35 of title 38, 
United States Code;"; 
(19) in section 477(b)(5)(A), by striking out "$2,000" and insert-
ing "$2,100"; 
(20) in section 478(d)— 
20 USC I087rr. 
(A) by inserting ", rounded to the nearest $100," after 
"present value cost"; 
(B) by inserting "of 40 and above" after "each age 
cohort"; and 
(C) by inserting after the second sentence the following: 
"For each age cohort below 40, the asset protection allow-
101 STAT. 352 
PUBLIC LAW 100-50—JUNE 3, 1987 
i 3 /ifi; 
ance shall be computed by decreasing the asset protection 
V' 5 >'i[ allowance for age 40, as updated, by one-fifteenth for each 
: 
year of age below age 40 and rounding the result to the 
nearest $100 "• 
20 use I087rr. 
(21) in section 478(cX2), by striking out " '$26,000', '$91,000', 
and 
'$169,000'" and 
inserting 
'^'$24,000', '$84,000', 
and 
'$156,000'"; 
(22) in section 478(f), by striking out "Consumer Price Index 
for Wage Earners and Clerical Workers" and inserting in lieu 
thereof "Consumer Price Index for All Urban Consumers"; 
20 use 1087SS. 
(23) in section 479(a)— 
(A) by striking out "paragraph (2)" and inserting "subsec-
«ifc «c tion(b)"; 
(B) by striking out "families which" and inserting "fami-
u : ? 3
c lies (1) who"; and 
(C) by striking out "and which file a form 1040A pursuant 
to the Internal Revenue Code of 1954" and inserting "and 
(2) who file a form 1040A or 1040EZ pursuant to the In-
26 use 1 et seq. 
ternal Revenue Code of 1986, or are not required to file 
pursuant to such Code"; 
^,^^ 
(24) in section 479(b)— 
"
*
" '• 
(A) by striking out "and State" in paragraph (2); 
• , , , „ , , 
(B) by striking out "and" at the end of paragraph (4); 
' '""' 
(C) by striking out the period at the end of paragraph (5) 
• 
.;^; 
and inserting "; and"; and 
(D) by inserting after paragraph (5) the following new 
paragraph: 
"(6) an allowance (A) for State and other taxes, as defined in 
section 475(c)(2) for dependent students and in section 477(b)(2) 
for independent students with dependents, or (B) for State and 
local income taxes, as defined in section 476(b)(2) for independ-
ent students without dependents."; 
(25) in section 479, by adding at the end thereof the following 
new subsection: 
"(c) SIMPLIFIED APPLICATION FORM,—The Secretary shall develop 
and use a simplified application form for families described in this 
section to qualify for the use of a simplified needs analysis."; 
20 use I087tt. 
(26) by striking out section 479A and inserting in lieu thereof 
the following: 
State and local 
governments. 
20 u s e 1087OO, 
1087qq. 
20 u s e 1087pp. 
,Tg( 
: V 
DISCRETION OF STUDENT FINANCIAL AID ADMINISTRATORS 
"SEC. 479A. (a) IN GENERAL.—Nothing in this title shall be inter-
preted as limiting the authority of the student financial aid adminis-
trator, on the basis of adequate documentation, to make necessary 
adjustments to the cost of attendance and expected student or 
parent contribution (or both) to allow for treatment of individual 
students with special circumstances. In addition, nothing in this 
title shall be interpreted as limiting the authority of the student 
financial aid administrator to use supplementary information about 
the financial status or personal circumstance of eligible applicants 
in selecting recipients and determining the amount of awards under 
subparts 1 and 2 of part A and parts B, C, and E of this title. 
"(b) ADJUSTMENTS TO ASSETS TAKEN INTO ACCOUNT,—A student 
financial aid administrator shall be considered to be making a 
necessary adjustment in accordance with subsection (a) if— 
PUBLIC LAW 100-50—JUNE 3, 1987 
101 STAT. 353 
— 
"(1) the administrator determines, in his or her discretion, 
that the effective family income of the appUcant is small in 
relation to— 
e- A
i V "(A) the net value of the principal place of residence; 
"(B) the net worth of a farm on which the family resides; 
hnr 
or 
"(C) the net worth of a family owned and operated small 
3
£ H 
business; 
"(2) such administrator reduces or eliminates the amount of 
such net value or net worth that is subject to assessment in the 
computation of the expected family contribution of that ap-
plicant; and 
"(8) the administrator reports the amount of such adjust-
ments made with respect to determinations for Pell Grants to 
the contractor or contractors processing applications for such 
grants for the award year. 
"(c) ASSET ADJUSTMENT AS EXAMPLE.—The asset adjustment de-
scribed in subsection (b) is an example of the type of adjustment 
which financial aid administrators are authorized to make by 
subsection (a), and shall not be considered to be the only adjustment 
that is so authorized."; 
(27) by striking section 479B and inserting in lieu thereof the 
following: 
"STUDENT ASSISTANCE AND OTHER FEDERAL PROGRAMS 
"SEC. 479B. (a) ATTENDANCE COSTS NOT TREATED AS INCOME OR 
RESOURCES.—The portion of any student financial assistance re-
ceived under this title, or under Bureau of Indian Affairs student 
assistance programs, that is made available for attendance costs 
described in subsection (b) shall not be considered as income or 
resources in determining eligibility for assistance under any other 
program funded in whole or in part with Federal funds. 
"(b) ATTENDANCE COSTS.—The attendance costs described in this 
subsection are— 
"(1) tuition and fees normally assessed a student carrying the 
same academic workload as determined by the institution, and 
including costs for rental or purchase of any equipment, mate-
rials, or supplies required of all students in the same course of 
study; and 
"(2) an allowance for books, supplies, transportation, and 
miscellaneous personal expenses for a student attending the 
institution on at least a half-time basis, as determined by the 
institution. 
"NATIVE AMERICAN STUDENTS 
"SEC. 479C. In determining family contributions for Native Amer-
ican students, computations performed pursuant to this part shall 
exclude— 
"(1) any income and assets of $2,000 or less per individual 
payment received by the student (and spouse) and student's 
parents under the Per Capita Act or the Distribution of Judg-
ment Funds Act; and 
"(2) any income received by the student (and spouse) and 
student's parents under the Alaskan Native Claims Settlement 
Act or the Maine Indian Claims Settlement Act."; and 
(28) in section 480— 
Grants. 
20 u s e 1087UU. 
20 use 
1087UU-1. 
43 u s e 1601 
note; 25 USe 
1721 note. 
20 u s e 1087w. 
101 STAT. 354 
PUBLIC LAW 100-50—JUNE 3, 1987 
! 
(A) by striking out "paragraphs (2) and (3)" in subsection 
(a)(1) and inserting "paragraphs (2) through (4)"; 
(B) by inserting before the period at the end of such 
subsection the following: "minus excludable income (as de-
fined in subsection (f))"; 
(C) by striking out paragraph (2) of subsection (a) and 
inserting the following: 
"(2) In the computation of family contributions for the programs 
under subpart 2 of part A and parts B, C, and E of this title for any 
academic year, there shall be excluded from family income any 
proceeds of a sale of farm or business assets of that family if such 
sale results from a voluntary or involuntary foreclosure, forfeiture, 
,. y 
or bankruptcy or an involuntary liquidation."; 
(D) by inserting at the end of subsection (a) the following: 
"(4) No portion of any student financial assistance received from 
any program by an individual shall be included as income in the 
computation of expected family contribution for any program 
funded in whole or in part under this Act."; 
(E) by striking out subsections (b) and (c) and inserting 
the following: 
"(b) UNTAXED INCOME AND BENEFITS OF PARENTS AND INDEPEND-
. ,, 
ENT STUDENTS WITH DEPENDENTS.—The term 'untaxed income and 
benefits' when applied to parent contributions or the contributions 
of independent students with dependents (including spouses) 
means— 
"(1) child support received; 
"(2) welfare benefits, including aid to families with dependent 
children under a State plan approved under part A of title IV of 
42 use 601. 
the Social Security Act and aid to dependent children; 
"(3) workman's compensation; 
"(4) veterans' benefits such as death pension, dependency and 
indemnity compensation, but excluding veterans' education 
benefits; 
"(5) interest on tax-free bonds; 
"(6) housing, food, and other allowances (excluding rent sub-
sidies for low-income housing) for military, clergy, and others 
(including cash payments and cash value of benefits); 
"(7) cash support or any money paid on the student's behalf; 
"(8) the amount of earned income credit claimed for Federal 
income tax purposes; 
"(9) untaxed portion of pensions; 
"(10) credit for Federal tax on special fuels; 
* " 
"(11) the amount of foreign income excluded for purposes of 
Federal income taxes; 
"(12) untaxed social security benefits; 
"(13) payments to individual retirement accounts and Keogh 
accounts excluded from income for Federal income tax pur-
"'', 
poses; and 
"(14) any other untaxed income and benefits, such as Black 
Lung Benefits, Refugee Assistance, railroad retirement benefits, 
29 use 1501 
or Job Training Partnership Act noneducational benefits. 
note. 
"(c) UNTAXED INCOME AND BENEFITS OF DEPENDENT STUDENTS OR 
INDEPENDENT STUDENTS WITHOUT DEPENDENTS.—For the purpose of 
this part, the term 'untaxed income and benefits' when applied to 
the contributions of dependent students or independent students 
without dependents means— 
"(1) child support received; 
* '^ "
^
M ' 
- ' 
AJ'V. 
PUBLIC LAW 100-50—JUNE 3, 1987 
101 STAT. 355 
'^' 
"(2) welfare benefits, including aid to families with dependent 
children under a State plan approved under part A of title IV of 
the Social Security Act and aid to dependent children; 
42 USC 601. 
- 
"(3) workman's compensation; 
"(4) veterans' benefits such as death pension, dependency and 
indemnity compensation, but excluding veterans' education 
^ 
benefits; 
"(5) interest on tax-free bonds; 
"(6) housing, food, and other allowances (excluding rent sub-
' 
sidies for low-income housing) for military, clergy, and others 
(including cash payments and cash value of benefits); 
"• 
"(7) cash support or any money paid on the student's behalf; 
"(8) the amount of earned income credit claimed for Federal 
income tax purposes; 
, „,, ^ 
* 
"(9) untaxed portion of pensions; 
^
^ 
f 
"(10) credit for Federal tax on special fuels; 
;
* 
"(11) the amount of foreign income excluded for purposes of 
^ 
Federal income taxes; 
L 
"(12) untaxed social security benefits; 
' 
"(13) payments to individual retirement accounts and Keogh 
^ 
accounts excluded from income for Federal income tax pur-
poses; and 
"(14) any other untaxed income and benefits, such as Black 
Lung Benefits, Refugee Assistance, railroad retirement benefits, 
or Job Training Partnership Act noneducational benefits."; 
29 USC 1501 
(F) in subsection (d)(2)(F), by striking out "an annual total note. 
oo«> 
income" and by inserting in lieu thereof "annual total 
tn Q 
resources (including all sources of resources other than 
i 
parents)"; and 
(G) by inserting after subsection (e) the following new 
'P 
subsections: 
"(f) EXCLUDABLE INCOME.—The term 'excludable income' means— 
"(1) any unemployment compensation received by a dislocated 
r 
worker certified in accordance with title III of the Job Training 
Partnership Act; and 
29 USC 1651. 
"(2) any student financial assistance awarded based on need 
as determined in accordance with the provisions of this part, 
^ 
including any income earned from work under part C of this 
title. 
"(g) ASSETS.—The term 'assets' means cash on hand, including the 
amount in checking and savings accounts, time deposits, money 
market funds, trusts, stocks, bonds, other securities, mutual funds, 
tax shelters, and the net value of real estate, income producing 
property, and business and farm assets. 
"(h) NET ASSETS.—The term 'net assets' means the current market 
value at the time of application of the assets included in the 
definition of 'assets', minus the outstanding liabilities or indebted-
ness against the assets.". 
SEC. 15. GENERAL PROVISIONS. 
Part G of title IV of the Act is amended— 
I 
(1) in section 481(c), by striking out "subsection (d) of this 
20 USC 1088. 
I 
section" and inserting in lieu thereof "section 484(d)"; 
(2) in section 482(b)— 
20 USC 1089. 
1 
(A) by striking out "or 442(e)" and inserting ", 442(e), or 
It 
4620)"; and 
91-194 O - 90 - 13 : QL.3 Part 1 
101 STAT. 356 
PUBLIC LAW 100-50—JUNE 3, 1987 
(B) by striking out "and part C" and inserting ", part C, 
and part E"; 
20 use 1090. 
(3) in the second sentence of section 483(a)(1), by inserting "or 
institutions in which the students are enrolled or accepted for 
enrollment" after "that applicants"; 
(4) in the second sentence of such section 483(a)(1), by insert-
ing before the period at the end thereof the following: "and on 
which the applicant shall clearly indicate a choice of lender"; 
..^^, 
(5) in section 483(a)(2)— 
aT'ni,'; 
(^^ ^y striking out "not less than 3" and inserting "not 
" " ' l e s s than 5"; and 
ilBi' 
^^^ "^y adding at the end thereof the following: "The 
\^.^- 
Secretary shall not select new multiple data entry proc-
essors after the date of enactment of the Higher Education 
20 use 1001 
Amendments Act of 1986, until the Advisory Commission 
note. 
on Student Financial Assistance has examined and made 
% , 
recommendations on the expansion of the number and kind 
' 
of processors and its impact on students, has assessed and 
made recommendations on the relative cost of processing 
applications and development fees, and has examined and 
^*^'^'[ 
made recommendations on the implementation 
of a 
•
"
^
^
^
^
^ 
standardized fee for the reimbursement of all processors by 
the Federal Government."; 
(6) in section 483— 
(A) by redesignating subsections (b) through (e) as subsec-
f'jftj: D80 es ^ 
tions (c) through (f), respectively; and 
" 
' 
(B) by inserting after subsection (a) the following: 
Contracts. 
"(b) CERTIFICATION OF CAPABILITY.—Beginning with the 1988-1989 
State and local 
processing year, the Secretary shall be authorized to enter into 
governments. 
agreements with institutions of higher education. States, or private 
organizations for the purpose of certifying the capability of their 
systems for determining expected family contributions under part F 
of this title."; 
20 use 1091. 
(7) in section 484— 
(A) in subsection (a)(1), by inserting before the semicolon 
.K'4' 08U :
*
S 
a comma and the following: "except as provided in subsec-
tion (b)(2)"; 
(B) in subsection (b), insert "(1)" before "In"; 
f
^ 
' 
(C) in subsection (b), by redesignating paragraphs (1) and 
(2) as subparagraphs (A) and (B), respectively; and 
•9(1 J 
(D) by inserting at the end of subsection (b) the following 
v'9A 
new paragraph: 
"(2) A student who— 
"(A) is carrying at least one-half the normal full-time work 
load for the course of study that the student is pursuing, as 
Ifj' determined by an eligible institution, and 
"(B) is enrolled in a course of study necessary for enrollment 
in a program leading to a degree or certificate, 
shall be, notwithstanding paragraph (1) of subsection (a), eligible to 
apply for loans under part B of this title. The eligibility describe^ in 
this paragraph shall be restricted to one 12-month period."; 
" " 
(8)(A) in section 484(d)— 
8
1
^
0
1 3&U0ii Mfii lo ! (i) by striking out "or" at the end of paragraph (1); and 
(ii) by striking out paragraph (2) and inserting in lieu 
€ 01'38U O
i
; 
thereof the following: 
to ,' 
"(2) be counseled prior to admission and be enrolled in and 
successfully complete the institutionally prescribed program of 
iir,H.:l9 
"I 
U'e-Ok^: 
PUBLIC LAW 100-50—JUNE 3, 1987 
101 STAT. 357 
remedial or developmental education not to exceed one aca-
demic year or its equivalent; or 
"(3XA) be administered a nationally recognized, standardized, 
or industry developed test, subject to criteria developed by the 
appropriate accrediting association, measuring the applicant's 
-J aptitude to complete successfully the program to which the 
"•^ applicant has applied; and 
"(B) with respect to applicants who are unable to satisfy the 
:'^ institutions' admissions testing requirements specified 
in 
'*'^ subparagraph (A), be enrolled in and successfully complete an 
institutionally prescribed program or course of remedial or 
developmental education not to exceed one academic year or its 
equivalent."; 
(B) in section 484(d), by adding at the end thereof the follow-
' ing new sentence: 
"In order to be eligible for assistance a student cannot be enrolled in 
either an elementary or a secondary school."; 
(9) in section 484(f), by adding at the end thereof the following 
new sentence: "In carrying out the provisions of this subsection 
no eligible institution shall be required to verify more than 30 
"^ percent of such applicants in any award year."; 
(10) in section 4850t)), by inserting "(other than loans made 
pursuant to section 428B)" after "part B of this title"; 
(11) in section 485(d), by inserting after the second sentence 
the following: "In addition, such information shall include 
information to enable borrowers to assess the practical con-
sequences of loan consolidation, including differences 
in 
deferment eligibility, interest rates, monthly payments, and 
finance charges, and samples of loan consolidation profiles to 
jj fj illustrate such consequences."; 
(12) in section 485A(a), by striking out "clause (i), (ii), or (iii)" 
and inserting "subparagraph (A), (B), or (C)"; 
(13) in section 485B— 
(A) by striking out "Federal agencies" in subsection (b)(1) 
and inserting "public agencies"; 
(B) by striking out "of a borrower for whom the guaranty 
agency provides insurance" in subsection (b)(2)(D) and 
inserting "of any borrower"; and 
(C) by striking out "Federal agency" in subsection (b)(3) 
and inserting "public agency"; 
(14) in section 488, by striking out "or 446" and inserting "or 
442"; 
(15) in the second sentence of section 489(a), by striking out 
"section 448" and inserting in lieu thereof "section 447";' 
(16) in section 491(b), by adding at the end thereof the follow-
ing new sentence: "The Secretary's authority to terminate ad-
visory committees of the Department pursuant to section 448(b) 
of the General Education Provisions Act ceased to be effective 
on June 23,1983."; 
(17) in section 491(i), by striking out "An amount, not to 
exceed $500,000 in any fiscal year" and inserting in lieu thereof 
"In each fiscal year not less than $500,000"; and 
(18) in section 491, by adding at the end thereof the following 
new subsection: 
(j) SPECIAL INSTITUTIONAL LENDER STUDY.— 
Hi 
Df 
MOi •)«(j(ii; 
20 use 1091. 
20 use 1092. 
Ante, p. 343. 
Loans. 
20 use 1092a. 
20 use 1092b. 
20 use 1095.' O
S 
20 use 1096. 
20 use 1098. 
20 use 1233g. 
101 STAT. 358 
PUBLIC LAW 100-50—JUNE 3, 1987 
20 use 1085. 
ail "
. 
Jew-OBIJ O
S -woffc 
m 
• 
W 
Reports. 
^oiMi 
sum 
iij a 
"(1) The Advisory Committee shall conduct a thorough study 
of institutional lender policy. In carrying out the study, the 
Advisory Committee shall examine, but not be limited to— 
"(A) the relevance and current applicability of the 
institutional lender criteria established in section 435(d); 
"(B) the appropriateness of using default rates for loans 
made under part E or other institutional criteria to deter-
*
: mine institutional participation; 
"(C) whether or not a portion or all of any special allow-
ance or other payments paid to institutional lenders should 
benefit need-based scholarship or grant programs; 
"(D) whether or not institutional lenders should be re-
quired to hold loans made to eligible borrowers through 
graduation or termination of matriculation; 
"(E) examine the extent and degree to which student 
access to loan capital would be adversely affected by the 
restrictions contained in section 435(d)(2); and 
"(F) assess the potential impact on State secondary mar-
kets and lender portfolios if student borrowers at higher 
cost colleges and universities, who come from higher 
'" 
income families, concentrate their lending with a few large 
lenders and secondary markets. 
"(2) The Advisory Committee shall consult with the Commit-
tee on Education and Labor of the House of Representatives and 
the Committee on Labor and Human Resources of the Senate in 
carrying out the study required by this subsection. 
"(3) The Advisory Committee shall, not later than 2 years 
after the date of enactment of the Higher Education Technical 
Amendments Act of 1987, prepare and submit to the Committee 
on Education and Labor of the House of Representatives and 
the Committee on Labor and Human Resources of the Senate a 
report of the study required by this section.". 
SEC. 16. LEADERSHIP 
MENT. 
IN EDUCATIONAL ADMINISTRATION 
DEVELOP-
20 u s e 1109. 
20 u s e 1109a. 
20 u s e 1109b. 
tuo 
.gftOl vBU O
S ••%' 
•JOv 
Subpart 2 of part C of title V of the Act is amended— 
(1) in the matter preceding paragraph (1) of section 541(b), by 
striking out "contractors" and inserting in lieu thereof 
"grantees"; 
(2) in section 542, by striking out "for any fiscal year" and 
inserting "for fiscal year 1987 or any succeeding fiscal year"; 
(3) in section 543— 
(A) in subsection (a)— 
(i) in the subsection heading, by striking out "CON-
TRACTS" and inserting in lieu thereof "GRANTS"; and 
(ii) by striking out "enter into contracts with" and 
inserting in lieu thereof "award grants to"; 
(B) in subsection (b)— 
(i) in the subsection heading, by striking out "CON-
TRACT" and inserting in lieu thereof "GRANT"; 
(ii) in the matter preceding paragraph (1), by striking 
out "contract entered into" and inserting in lieu 
thereof "grant awarded"; and 
(iii) by striking out "contractor" each place it appears 
and inserting in lieu thereof "grantee"; and 
(C) in subsection (c)— .., ,i^^. .«r„.,.. ,^^, ...* ., r,., . .„ ., 
PUBLIC LAW 100-50—JUNE 3, 1987 
101 STAT. 359 
use 1109d. 
•ssri :jau.« 
(i) in the subsection heading, by striking out "CON-
P J. * 
TRACTORS" and inserting in liea thereof "GRANTEES"; 
i;v 
;• i 
*' ^ 
and 
(ii) by striking out "contract" and inserting in lieu 
thereof "grant"; 
(4) in section 544— 
20 use il09c. 
(A) in the section heading, by striking out "CONTRACTS" 
13./ 
and inserting in lieu thereof "GRANTS"; 
-
(B) in subsection (a), by striking out "CONTRACT" and 
mu 
"contract" each place they appear and inserting in lieu 
^ 
thereof "GRANT" and "grant", respectively; and 
^d 
(C) in subsection (b), by striking out "CONTRACT", "con- 
'-• 
tract", and "contractor" each place they appear and insert-
ing in lieu thereof "GRANT", "grant", and "grantee", 
ao 
respectively; and 
(5) in section 545— 
20 
(A) by striking out "and" at the end of paragraph (1); 
(B) by striking out the period at the end of paragraph (2) 
and inserting "; and"; and 
(C) by adding at the end thereof the following: 
"(3) the term 'State' includes, in addition to the several States 
of the Union, the Commonwealth of Puerto Rico, the District of 
Columbia, Guam, American Samoa, the Virgin Islands, the 
Commonwealth of the Northern Mariana Islands, and the Trust 
Territory of the Pacific Islands.". 
SEC. 17. CONGRESSIONAL TEACHER SCHOLARSHIP PROGRAM. 
(a) DESIGNATION OF CONGRESSIONAL TEACHERS' SCHOLARSHIPS.— 
(1) section 551 of the Act is amended by inserting "(a) PUR-
POSE.—" after the section designation; 
(2) by striking out the second sentence of such section; and 
(3) by adding at the end thereof the following new subsection: 
"(b) DESIGNATION.—Scholarships awarded under this subpart 
shall be referred to as the 'Paul Douglas Teacher Scholarships'.". 
(b) APPLICATIONS.—Section 553 of the Act is amended— 
(1) in subsection (a), by striking out "section 546" and insert-
ing "section 551"; 
(2) in subsection (b)(4XA)— 
(A) by striking out "elementary or" and inserting "pre-
school, elementary school, or"; 
(B) by inserting "or private nonprofit" immediately 
iS*.; 
before "education program in any State"; and 
(C)(i) by inserting "or" after "State," the first time it 
appears; and 
(ii) by striking out "or, on a full-time basis handicapped 
children or children with limited English proficiency in a 
private nonprofit school,"; and 
(3) in subsection (b)(4XB), by striking out "section 557" and 
„ ,.», 
inserting "section 556". 
(c) REPAYMENT PROVISION.—Section 557 of the Act is amended by 20 use liiif. 
inserting after "interest" the following: "(but in no event at an 
interest rate higher than the rate applicable to loans in the ap-
plicable period under part B of this title)". 
(d) EXCEPTIONS TO REPAYMENT.—Section 558(a)(6) of the Act is 
20 use liiig. 
amended by inserting before the semicolon the following: "for a 
--^ 
single period not to exceed 27 months". 
02 
20 use iin. 
20 use 11 lib. )s 
D8UCS 
0^ 
101 STAT. 360 
PUBLIC LAW 100-50—JUNE 3, 1987 
20 u s e 1122. 
20 u s e 1132a. 
20 u s e 1132a-l. 
20 u s e 1132d. 
20 u s e 1132d-2. 
20 u s e 1132g-3. 
20 u s e 1132i-l. 
20 u s e 1134h. 
20 u s e 11341. 
20 u s e 1134J. 
20 u s e 1141. 
Ante, p. 356. 
20 u s e 1145e. 
SEC. 
1
8
. 
LANGUAGE 
AND 
AREA 
CENTERS. 
Section 602(bXl)(B) of the Act is amended by striking out "in a 
program of competency-based training," immediately after "in a 
program of competency-based language training,". 
SEC. 19. ACADEMIC FACILITIES. 
M Li 
Title VII of the Act is amended— 
(1) in section 701(b), by inserting "part A or B o f after 
"grants under"; 
(2) in section 702(a), by inserting at the end thereof a comma 
and the following: "or for a preceding fiscal year"; 
(3) in the matter preceding paragraph (1) in section 731(a) by 
striking out "and insure"; 
(4) in section 733— 
(A) in the section heading, by striking out "AND INSUR-
ANCE"; and 
.{{) ; 
(B) in subsection (a) by striking out "and insuring"; 
(5) in section 764(c)(1), by inserting "at least a two-year pro-
gram acceptable for full credit toward" immediately before "a 
baccalaureate degree"; and 
(6) in section 782(1)(B)— 
; 
(A) by striking out "section 724" and inserting "section 
701", and 
4„,„, 
(B) by striking out "section 843" and inserting "section 
SEC. 20. JACOB K. JAVITS FELLOWS PROGRAM. 
, ^ ^
, . ip.. .?n. ;^r.r> ? t nnP. 
Part C of title IX of the Act is amended— 
(1) by striking out the heading of section 931 and inserting the 
following: 
OH. 
AWARD OP JACOB K. JAVITS FELLOWSHIPS 
(2) in section 932(a)(1), by striking out "National Graduate" 
and inserting "Jacob K. Javits"; 
(3) in section 932(a)(2)(C), by striking out "directing" and 
inserting "selecting"; and 
(4) in section 93303)(1), by striking out the period at the end 
thereof and inserting in lieu thereof a comma and "except that 
such amount charged to a fellowship recipient and collected 
from such recipient for tuition and other expenses required by 
the institution as part of the recipient's instructional program 
shall be deducted from the payment to the institution under 
this subsection.". 
islte 
T 
sriitis?./ 
SEC. 21. GENERAL PROVISIONS. 
(a) TECHNICAL AMENDMENT.—Section 1201(a) of the Act is 
amended by striking out "have the ability to benefit from the 
training offered by the institution" and inserting in lieu thereof 
"meet the requirements of section 484(d) of this Act'. 
(b) PEER REVIEW PROCESS.—Title XII of the Act is amended by 
redesignating section 1210 as section 1211, and by adding after 
section 1209 the following new section: 
APPLICATION OF PEER REVIEW PROCESS 
20 use li45d-l. 
"SEC. 1210. All applications submitted under the provisions of this 
Act which require peer review shall be read by a panel of readers 
PUBLIC LAW 100-50—JUNE 3, 1987 
101 STAT. 361 
composed of individuals selected by the Secretary which shall in-
clude outside readers who are not employees of the Federal Govern-
ment. The Secretary shall ensure that no individual assigned under 
this section to review any application has any conflict of interest 
with regard to that application which might impair the impartiality 
with which that individual conducts the review under this section.'. 
SEC. 22. EFFECTIVE DATES OF THE HIGHER EDUCATION AMENDMENTS 
OF 1986. 
(a) SEOG ALLOCATION.—Section 401(b) of the Higher Education 
Amendments of 1986 is amended— 
(1) by redesignating paragraph (6) as paragraph (7); and 
„.,;4 (2) by inserting after paragraph (5) the following new 
paragraph: 
"(6) The changes made in section 413D of the Act shall apply with 
respect to the allocation of funds for the academic year 1988-1989 
and succeeding academic years.". 
(b) GSL AMENDMENTS.—Section 402(b) of such Amendments is 
amended— 
(1) by striking out paragraph (2) and inserting the following: 
"(2) the changes in sections 427(a)(2)(C) and 428(b)(l)(M) of the 
Act (other than clauses (viii), (ix), and (x) of each such section) 
shall apply only to loans to new borrowers that (A) are made to 
cover the cost of instruction for periods of enrollment beginning 
on or after July 1, 1987; or (B) are disbursed on or after July 1, 
1987;"; 
(2) in paragraphs (3) and (4), by inserting "disbursed on or 
after January 1,1987, or" after "only to loans"; and 
(3) in paragraph (7), by inserting "disbursed on or after 30 
days after the date of enactment of this Act or" after "with 
respect to loans". 
(c) CWS AMENDMENTS.—Section 403(b) of such Amendments is 
amended by striking out "(b) EFFECTIVE DATE.—" and inserting in 
lieu thereof the following: 
"(b) EFFECTIVE DATES.—(1) Section 442 of the Act shall apply with 
respect to the allocation of funds for academic year 1988-1989 and 
succeeding academic years. 
"(2)". 
(d) NDSL AMENDMENTS.—Section 4050^) of such Amendments is 
amended— 
(1) by inserting "and section 463A" after "Section 463(a)(9)" in 
paragraph (2); 
(2) by redesignating paragraphs (1), (2), and (3) as paragraphs 
(2), (3), and (4), respectively; and 
(3) by inserting after the subsection heading the following: 
"(1) Section 462 of the Act shall apply with respect to academic 
year 1988-1989 and succeeding academic years.". 
(e) EFFECTIVE DATE OF CERTAIN NEED ANALYSIS PROVISIONS.— 
Section 406(b) of such Amendments is amended— 
(1) by striking out "paragraphs (2) and (3)" in paragraph (1) 
and inserting "paragraphs (2) through (4)"; 
, 
(2) by redesignating paragraph (4) as paragraph (5); and 
(3) by inserting after paragraph (3) the following new 
paragraph: 
"(4) Section 479B of the Act (as so added) shall apply with respect 
to financial assistance provided for any academic year beginning 
after such date of enactment.". 
irfjiii ;:^i;os 
i&}l OfcU O
K 
20 u s e 1070a-l 
note. 
20 u s e 1070d-lb 
note. 
20 u s e 1070b-3 
note. 
20 u s e 1070b-3. 
20 u s e 1071 
note. 
noiJonqoiqqA 
.j"ioi;ifx«horftoe 
I mi 'ym os 
42 u s e 2753 
note. 
42 u s e 2752 
note. 
42 u s e 2753 
note. 
20USei087dd 
note. 
20 u s e 1087bb. 
20 u s e 1087kk 
note. 
20 u s e 1087w 
note. 
Ante, p. 353. 
20 u s e 1087kk 
note. 
101 STAT. 362 
PUBLIC LAW 100-50—JUNE 3, 1987 
20 u s e 1145d 
note. 
20 u s e 1091 
note. 
20 u s e 1121 
note. 
20 u s e 1221e-l 
note. 
IVij. 
•rfoj-; 
Appropriation 
authorization. 
20 u s e 1011 
note. 
3la?i; 
srvV^i^i 
81 8 
"iif 1 
100 Stat. 1583. 
• ~ " - ~ " ' * * -
Loans. 
20 use 1071 
note. 
20 use 1078-3. 
20 use 1221-1 
note. 
eontracts. 
'' 
•fliv-
bm 
"
(
1 
20 u s e 1221e. 
(f) SUNSET FOR DISCLOSURE OF FOREIGN GIFTS.—Section 1206(b) of 
such Amendments is amended by striking out "section 1208" and 
inserting "section 1209". 
SEC. 23. EDUCATION ADMINISTRATION. 
Title XIII of the Higher Education Amendments of 1986 is 
amended— 
(1) in section 1301, by striking out "section 484(d)" and insert-
ing "section 484(c)"; 
(2) in section 1302(b)(1), by striking out "this title" and insert-
ing "title VI of the Act"; 
(3) in section 1303— 
^'^' 
(A) by striking out "shall, through the Office of Education 
Research and Improvement or the Center for Education 
Statistics," in subsection (a) and inserting ", through the 
Office of Educational Research and Improvement,"; 
(B) by striking out "the Department of Education," in 
subsection (b)(3); 
.. :,. 
(C) by striking out "Resources," in such subsection and 
inserting "Resources"; and 
(D) by adding at the end thereof the following: 
"(0 There are authorized to be appropriated $2,700,000 for the 
fiscal year 1987 and for each of the 2 succeeding fiscal years to carry 
out the provisions of this section."; 
(4) in section 1304— 
(A) by striking out "of this title" in subsection (a) and 
inserting "of title I of the Act"; 
(B) by inserting "the provision o f before "an information 
network" in subsection (b)(2); 
(C) by striking out "under this title" in subsection (c) and 
inserting "under this section"; and 
(D) by striking out "purposes of this title" in such subsec-
tion and inserting "purposes of title I of the Act"; 
(5) in section 1307— 
(A) by striking out "$2,700,000" and inserting in lieu 
thereof "$1,000,000"; and 
(B) by striking out "this part" and inserting in lieu 
thereof "sections 1301 and 1302"; 
(6) in section 1314 by adding at the end thereof the following 
new sentence: "Nothing in this section shall be interpreted to 
authorize the Secretary to require lenders, holders, or guaran-
tors to maintain or report records relating to the loans dis-
charged by borrowers in receiving a consolidation loan pursuant 
to section 428C of the Act."; and 
(7) in section 1341, by striking out subsection (b) and inserting 
in lieu thereof the following: 
(b) REPORT REQUIRED.—Not later than one year after the date of 
entering into a contract with the Department of Education for the 
study described in this section, the National Academy of Sciences 
shall prepare and submit to the Congress a report, together with a 
description of programs on the use of volunteers and with such 
recommendations as deemed appropriate.". 
SEC. 24. GENERAL EDUCATION PROVISIONS ACT. 
(a) EDUCATIONAL RESEARCH.—Section 405(g)(1)(C) of the General 
Education Provisions Act is amended to read as follows: 
PUBLIC LAW 100-50—JUNE 3, 1987 
101 STAT. 363 
"(C) not less than $5,700,000 shall be available in each fiscal 
year to assist a separate system of 16 education resources 
information 
clearinghouses 
(including 
direct 
supporting 
dissemination services) pursuant to subsection (d)(3)(A) of this 
section, having the same functions and scope of work as the 
j; 
clearinghouses had on the date of enactment of the Higher 
Education Amendments of 1986;". 
20 USC lOOl 
(b) EDUCATION STATISTICS.—Section 406(e)(1) of the General Edu- note. 
cation Provisions Act is amended by adding at the end thereof the 20 USC I22le-1. 
following new sentence: "All funds received in payment for work or 
services described in this paragraph shall be deposited in a separate 
account which may be used to pay directly the costs of such work or 
services, to repay appropriations which initially bore all or part of 
such costs, or to refund excess sums when necessary.". 
SEC. 25. UNITED STATES INSTITUTE OF PEACE. 
Section 1703 of the United States Institute of Peace Act is 22 use 4604. 
amended by inserting after "(3)" the following: "establish a 
Jeannette Rankin Research Program on Peace to". 
SEC. 26. EXEMPTION FROM CERTAIN PROVISIONS OF LAW. 
The parties to the term loan and security agreement dated 
March 3, 1986, as amended, pursuant to which up to $21,000,000 of 
loans will be made to students and parents of students at a univer-
sity located in California by a branch of a foreign bank located in 
New York shall, with respect to loans made on or before February 
20, 1987, and the transactions relating thereto under such term loan 
and security agreement, be deemed not to be in violation of the 
provisions of sections 435(d)(5)(A) and 490(c) of the Higher Education 
Act of 1965. 
SEC. 27. EFFECTIVE DATE OF TECHNICAL AMENDMENTS. 
The amendments made by this Act shall take effect as if enacted 
as part of the Higher Education Amendments of 1986. 
Approved June 3, 1987. 
Loans. 
Contracts. 
California. 
20 USC 1085, 
1097. 
20 USC 1001 
note. 
LEGISLATIVE HISTORY—H.R. 1846: 
HOUSE REPORTS: No. 100-44 (Comm. on Education and Labor). 
CONGRESSIONAL RECORD, Vol. 133 (1987): 
Apr. 21, considered and passed House. 
May 19, considered and passed Senate, amended. 
May 20, House concurred in Senate amendment.