Higher Education Amendments of 1998
PL 105-244 (H.R.6), enacted 10/07/1998

•..'ri'W 
PUBUC LAW 105-244—OCT. 7, 1998 
112 STAT. 1581 
Public Law 105-244 
105th Congress 
An Act 
To extend the authorization of pn^ams under the Hijgher Education Act of 1965, 
Oct. 7,1998 
and for other purposes. 
[H..K 6] 
Be it enacted by the Senate and House of Representatives of 
the United States of 
America in Congress assembled, 
Higher Education 
Amendments of 
SECTION 1. SHORT TITLE; TABLE OF CONTENTIS. 
1998. 
(a) SHORT TITLE.—This Act may be cited as the "Higher ^^^• 
Education Amendments of 1998". 
governmental 
(b) TABLE OF CONTENTS.—^The table of contents is as follows: relations. 
Loans. 
Sec. 1. Short title; table of contents. 
20 USC 1001 
Sec. 2. References. 
note. 
Sec. 3. General effective date. 
TITLE I—GENERAL PROVISIONS 
Sec. 101. Revision of title I. 
Sec. 102. Conforming amendments. 
TITLE II—TEACHER QUALITY 
Sec. 201. Teacher quality enhancement grants. 
TITLE III—INSTITUTIONAL AID 
Sec. 301. Transfers and redesignations. 
Sec. 302. Findings. 
Sec. 303. Strengmening institutions. 
Sec. 304. Strengthening HBCU's. 
Sec. 305. Endowment challenge grants. 
Sec. 306. HBCU capital financing. 
Sec. 307. Minority science and engineering improvement program. 
Sec. 308. General provisions. 
TITLE IV—STUDENT ASSISTiUSfCE 
PART A—GRANTS T
O STUDENTS 
Sec. 401. Federal Pell Grants. 
Sec. 402. Federal TRIO programs. 
Sec. 403. Gear up program. 
Sec. 404. Academic adhievement incentive scholarships. 
Sec. 405. Repeals. 
Sec. 406. Federal supplemental educational opportunity grants. 
Sec. 407. Leveraging educational assistance partnership program. 
Sec. 408. Special programs for students whose families are engaged in migrant and 
seasonal farmwork. 
Sec. 409. Robert C. Byrd Honors Scholarship Program. 
Sec. 410. Child care access means parents in school. 
Sec. 410A. Learning anytime anywhere partnerships. 
PART B—^FEDERAL FAMILY EDUCATION LOAN PROGRAM 
Sec. 411. Limitation repealed. 
Sec. 412. Advances to reserve funds. 
Sec. 413. Guaranty agency reforms. 
Sec. 414. Scope and duration of Federal loan insurance program. 
112 STAT. 1582 
PUBLIC LAW 105-244—OCT. 7, 1998 
Sec. 415. Limitations on individual federally insured loans and Federal loan insur-
ance. 
Sec. 416. Applicable interest rates. 
Sec. 417. Federal payments to reduce student interest costs. 
Sec. 418. Voluntary flexible agreements with guaranty agencies. 
Sec. 419. Federal PLUS loans. 
Sec. 420. Federal consolidation loans. 
Sec. 421. Default reduction program. 
Sec. 422. Requirements for disbursements of student loans. 
Sec. 423. Unsubsidized loans. 
Sec. 424. Loan forgiveness for teachers. 
Sec. 425. Loan forgiveness for child care providers. 
Sec. 426. Notice to Secretary and payment of loss. 
Sec. 427. Legal powers and responsibilities. 
Sec. 428. Student loan information by eligible lenders. 
Sec. 429. Definitions. 
Sec. 430. Delegation of functions. 
Sec. 431. Discharge. 
Sec. 432. Debt management options. 
Sec. 433. Special allowances. 
Sec. 434. Federal family education loan insurance fund. 
PART C—^FEDERAL WORK-STUDY PROGRAMS 
Sec. 441. Authorization of appropriations; community services. 
Sec. 442. Allocation of funds. 
Sec. 443. Grants for Federal work-study programs. 
Sec. 444. Flexible use of funds. 
Sec. 445. Work colleges. 
PART 
D—WILLIAM 
D. 
FORD 
FEDERAL 
DIRECT 
LOAN 
PROGRAM 
Sec. 451. Selection of institutions. 
Sec. 452. Terms and conditions. 
Sec. 453. Contracts. 
Sec. 454. Funds for administrative expenses. 
Sec. 455. Authority to sell loans. 
Sec. 456. Loan cancellation for teachers. 
PART E—FEDERAL PERKINS LOANS 
Sec. 461. Authorization of appropriations. 
Sec. 462. Allocation of funds. 
Sec. 463. Agreements with institutions of higher education. 
Sec. 464. Terms of loans. 
Sec. 465. Cancellation for public service. 
Sec. 466. Distribution of assets from student loan funds. 
Sec. 467. Perkins Loan Revolving Fund. 
PART F—NEED ANALYSIS 
Sec. 471. Cost of attendance. 
Sec. 472. Data elements. 
Sec. 473. Family contribution for dependent students. 
Sec. 474. Family contribution for independent students without dependents other 
than a spouse. 
Sec. 475. Family contribution for independent students with dependents other than 
a spouse. 
Sec. 476. Regulations; updated tables and amounts. 
Sec. 477. Simplified needs test; zero expected family contribution. 
Sec. 478. Discretion of student financial aid administrators. 
Sec. 479. Treatment of other financial assistance. 
Sec. 480. Clerical amendments. 
Sec. 480A. Effective dates. 
PART G—GENERAL PROVISIONS 
Sec. 481. Master calendar. 
Sec. 482. Forms and regulations. 
Sec. 483. Student eligibility. 
Sec. 484. State court judgments. 
Sec. 485. Institutional refiinds. 
Sec. 486. Institutional said financial assistance information for students. 
Sec. 487. National student loan data system. 
Sec. 488. Distance education demonstration programs. 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1583 
Sec. 489. Program participation agreements. 
-
Sec. 490. R^fulatoi^ relief and improvement. 
' ^
-
Sec. 490A. Garnishment requirements. 
Sec. 490B. Administrative subpoena authority. 
Sec. 490C. Advisory Committee on Student Financial Assistance. 
Sec. 490D. Meetings and negotiated rulemaking. 
Sec. 490E. Year 2000 requirements at the Department of Education. 
Sec. 490F. Procedures for cancellations and deferments for eligible disabled veter-
ans. 
PART H—PROGRAM iNTEGRm' 
Sec. 491. State role and responsibilities. 
Sec. 492. Accrediting agency recognition. 
Sec. 493. Eligibility and certification procedures. 
Sec. 494. Pr^ram review and data. 
Sec. 495. Review of regulations. 
TITLE V^-DEVELOPING INSTITUTIONS 
Sec. 501. Establishment of new titie V. 
TITLE VI—INTERNATIONAL EDUCATION PROGRAMS 
Sec. 601. International and foreign language studies. 
Sec. 602. Bvisiness and international education programs. 
Sec. 603. Institute for International Public Policy. 
Sec. 604. General provisions. 
TITLE VII—GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS 
Sec. 701. Revision of titie VII. 
Sec. 702. Repeals. 
TITLE VIII—STUDIES, REPORTS, AND REUiTED PROGRAMS 
PART A—STUDIES 
Sec. 801. Study of market mechanisms in Federal student loan programs. 
Sec. 802. Study of the feasibility of alternative financial instruments for determin-
ing lender yields. 
Sec. 803. Student-related debt study required. 
Sec. 804. Study of transfer of credits. 
Sec. 805. Study of opportunities for participation in athletics programs. 
Sec. 806. Study of the effectiveness of cohort defaiilt rates for institutions with few 
student loan borrowers. 
PART B—ADVANCED PLACEMENT INCENTT*^ PROGRAM 
Sec. 810. Advanced placement incentive program. 
PART C—COMMUNITY SCHOLARSHIP MOBILIZATION 
Sec. 811. Short titie. 
Sec. 812. Finding. 
Sec. 813. Definitions. 
Sec. 814. Purpose; endowment grant authority. 
Sec. 815. Grant agreement and re<}uirements. 
Sec. 816. Authorization of appropriations. 
PART D—GRANTS TO STATES FOR WORKPLACE AND CoMMUNiry TRANSITION 
TRAINING FOR INCARCERATED YOUTH OFFENDERS 
Sec. 821. Grants to States for workplace and community transition training for in-
carcerated youth offenders. 
PART E—GRANTS TO COMBAT VIOLENT CRIMES AGAINOT WOMEN ON CAMPUSES 
Sec. 826. Grants to combat violent crimes against women on campuses. 
Sec. 827. Study of institutional procedures to report sexual assaults. 
PART F—IMPROVING UNITED STATES UNDERSTANDING OF SCIENCE, ENGINEERING, 
AND TECHNOLOGY IN EAST ASIA 
Sec. 831. Improving United States understanding of science, engineering, and tech-
nology in East Asia. 
PART G—OLYMPIC SCHOLARSHIPS 
Sec. 836. Extension of authorization. 
112 STAT. 1584 
PUBLIC LAW 105-244—OCT. 7, 1998 
PARTH—^UNDERGROUND RAILROAD 
Sec. 841. Underground Railroad educational and cultural program. 
PART I—SUMMER TRAVEL AND WORK PROGRAMS 
Sec. 846. Authority to administer summer travel and work programs. 
PART J—WEB-BASED EDUCATION COMMISSION 
Sec. 851. Short title; definitions. 
Sec. 852. Establishment of Web-Based Education Commission. 
Sec. 853. Duties of the Commission. 
Sec. 854. Powers of the Commission. 
Sec. 855. Commission personnel matters. 
Sec. 856. Termination of the Commission. 
Sec. 857. Authorization of appropriations. 
PART K—MISCELLANEOUS 
Sec. 861. Education-welfare study. 
Sec. 862. Release of conditions, covenants, and reversionary interests, Guam Com-
munity College conveyance, Barrigada, Guam. 
Sec. 863. Sense of Congress regarding good character. 
Sec. 864. Educational merchandise licensing codes of conduct. 
TITLE IX—AMENDMENTS TO OTHER LAWS 
PART A—EXTENSION AND REVISION OF INDIAN HIGHER EDUCATION PROGRAMS 
Sec. 901. Tribally controlled colleges and universities. 
Sec. 902. Reauthorization of Navtyo Conmnmity College Act. 
PART B—^EDUCATION OF THE DEAF 
Sec. 911. Short title. 
Sec. 912. Elementary and secondary education programs. 
Sec. 913. Agreement with Gallaudet University. 
Sec. 914. .^reement for the National Technical Institute for the Deaf. 
Sec. 915. Definitions. 
Sec. 916. Gifts. 
Sec. 917. Reports. 
Sec. 918. Monitoring, evaluation, and reporting. 
Sec. 919. Federal endowment programs. 
Sec. 920. Scholarship program. 
Sec. 921. Oversi^t and meet of agreements. 
Sec. 922. International students. 
Sec. 923. Research priorities. 
Sec. 924. National Study on the Education of the Deaf 
Sec. 925. Authorization of appropriations. 
PART C—^UNITED STATES INSTITUTE OF PEACE 
Sec. 931. Authoritiesof the United States Institute of Peace. 
PART D—VOLUNTARY RETIREMENT INCENTIVE PLANS 
Sec. 941. Voluntary retirement incentive plans. 
PART E—GENERAL EDUCATION PROVISIONS ACT AMENDMENT 
Sec. 951. Amendment to Family Educational Rights and Privacy Act of 1974. 
Sec. 952. Alcohol or drug possession disclosiu^. 
PART F—^LIAISON FOR PROPRIETARY INSTITUTIONS OF HIGHER EDUCATION 
Sec. 961. Liaison for proprietary institutions of higher education. 
PART G—^AMENDMENTS TO OTHER STATUTES 
Sec. 971. Nondischareability of certain claims for educational benefits provided to 
obtain higher education. 
Sec. 972. G N M A guarantee fee. 
PART H—REPEALS 
Sec. 981. Repeals. 
Sec. 982. Repeals of previous higher education amendments provisions. 
SEC. 
2
. 
REFERENCES. 
Except as otherwise expressly provided, whenever in this Act 
an amendment or repeal is expressed in terms of an amendment 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1585 
to, or repeal of, a section or other provision, the reference shall 
be considered to be made to a section or other provision of the 
Higher Education Act of 1965 (20 U.S.C. 1001 et seq.). 
SEC. 3. GENERAL EFFECTIVE DATE. 
20 USC 1001 
Except as otherwise provided in this Act or the amendments 
made by this Act, the amendments made by this Act shall take 
effect on October 1,1998. 
TITLE I—GENERAL PROVISIONS 
SEC. 101. REVISION OF TITLE L 
(a) GENERAL PROVISIONS.—Title I (20 U.S.C. 1001 et seq.) is 
amended to read as follows: 
"TITLE I—GENERAL PROVISIONS 
"PART A—DEFINITIONS 
'*SEC. 101. GENERAL DEFINITION OF INSTITUTION OF HIGHER EDU- 
20 USC 1001. 
CATION. 
"(a) INSTITUTION OF HIGHER EDUCATION.—For purposes of this 
Act, other than title IV, the term 'institution of higher education' 
means an educational institution in any State that— 
"(1) admits as regular students only persons having a cer-
tificate of graduation from a school providing secondary edu-
cation, or the recognized equivalent of such a certificate; 
"(2) is legally authorized within such State to provide a 
program of education beyond secondaiy education; 
"(3) provides an educational program for which the institu-
tion awards a bachelor's degree or provides not less than a 
2-year program that is acceptable for full credit toward such 
a degree; 
(4) is a public or other nonprofit institution; and 
"(5) is accredited by a nationally recognized accrediting 
agency or association, or if not so accredited, is an institution 
that has been granted preaccreditation status by such an 
agency or association that has been recognized by the Secretary 
for the granting of preaccreditation status, and the Secretary 
has determined that there is satisfactory assurance that the 
institution will meet the accreditation standards of such an 
agency or association within a reasonable time. 
"(b) ADDITIONAL INSTITUTIONS INCLUDED.—For purposes of this 
Act, other than title IV, the term 'institution of higher education' 
also includes— 
"(1) any school that provides not less than a 1-year program 
of training to prepare students for gainful emplo3naient in a 
recognized occupation and that meets the provision of para-
graphs (1), (2), (4), and (5) of subsection (a); and 
"(2) a public or nonprofit private educational institution 
in any State that, in lieu of the requirement in subsection 
(a)(1), admits as regular students persons who are beyond 
the age of compulsory school attendance in the State in which 
the institution is located. 
**(c) LIST OF ACCREDITING AGENCIES.—For purposes of this sec- Publication. 
tion and section 102, the Secretary shall publish a list of nationally 
112 STAT. 1586 
PUBLIC LAW 105-244—OCT. 7, 1998 
recognized accrediting agencies or associations that the Secretary 
determines, pursuant to subpart 2 of part H of title IV, to be 
reUable authority as to the quality of the education or training 
offered. 
20 use 1002. 
"SEC. 102. DEFINITION OF INSTITUTION OF mGHER EDUCATION FOR 
PURPOSES OF TITLE IV PROGRAMS. 
"(a) DEFINITION OF INSTITUTION OF HIGHER EDUCATION FOR 
PURPOSES OF TITLE IV PROGRAMS.— 
"(1) INCLUSION OF ADDITIONAL INSTITUTIONS.—Subject to 
paragraphs (2) through (4) of this subsection, the term 'institu-
tion of higher education' for purposes of title IV includes, in 
addition to the institutions covered by the definition in section 
101— 
"(A) a proprietary institution of higher education (as 
defined in subsection (b) of this section); 
"(B) a postsecondary vocational institution (as defined 
in subsection (c) of this section); and 
"(C) only for the purposes of part B of title IV, an 
' 
institution outside the United States that is comparable 
to an institution of higher education as defined in section 
101 and that has been approved by the Secretary for the 
purpose of part B of title IV. 
"(2) INSTITUTIONS OUTSIDE THE UNITED STATES.— 
Regulations. 
' 
"(A) IN GENERAL.—For the purpose of qualif3n[ng as 
an institution under paragraph (1)(C), the Secretary shall 
establish criteria by regulation for the approval of institu-
tions outside the United States and for the determination 
that such institutions are comparable to an institution 
of higher education as defined in section 101. In the case 
of a graduate medical or veterinary school outside the 
United States, such criteria shall include a requirement 
that a student attending such school outside the United 
States is ineligible for loans made, insured, or guaranteed 
under part B unless— 
"(iXD at least 60 percent of those enrolled in, and 
at least 60 percent of the graduates of, the graduate 
medical school outside the United States were not per-
sons described in section 484(a)(5) in the year preced-
ing the year for which a student is seeking a loan 
under part B of title IV; and 
"(II) at least 60 percent of the individuals who 
were students or graduates of the graduate medical 
school outside the United States (both nationals of 
the United States and others) taking the examinations 
administered by the Educational Commission for For-
eign Medical Graduates received a passing score in 
the year preceding the year for which a student is 
seeking a loan under part B of title IV; or 
"(ii) the institution has a clinical training program 
that was approved by a State as of January 1, 1992, 
or the institution's students complete their clinical 
training at an approved veterinary school located in 
the United States. 
Establishment. 
"(B) ADVISORY PANEL.— 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1587 
"(i) IN GENERAL.—^For the purpose of qualifying 
as an institution under paragraph (IXC) of this sub-
section, the Secretary shall establish an advisory panel 
of medical experts that shall— 
"(I) evaluate the standards of accreditation 
applied to applicant foreign medical schools; and 
"(II) determine the comparability of those 
standards to standeirds for accreditation applied 
to United States medical schools, 
"(ii) SPECIAL RULE.—If the accreditation standards 
described in clause (i) are determined not to be com-
parable, the foreign medical school shall be required 
to meet the requirements of section 101. 
"(C) FAILURE TO RELEASE INFORNLATION.—^The failure 
of an institution outside the United States to provide, 
release, or authorize release to the Secretary of such 
information as may be required by subparagraph (A) shall 
render such institution ineligible for the purpose of part 
B of title IV. 
"(D) SPECIAL RULE.—If, pursuant to this paragraph, 
an institution loses eligibility to participate in the programs 
under title IV, then a student enrolled at such institution 
may, notwithstanding such loss of eligibility, continue to 
be eligible to receive a loan under part B while attending 
such institution for the academic year succeeding the aca-
demic year in which such loss of eligibility occurred. 
"(3) LIMITATIONS BASED ON COURSE OF STUDY OR ENROLL-
MENT.—An institution shall not be considered to meet the defi-
nition of an institution of higher education in paragraph (1) 
if such institution— 
"(A) offers more than 50 percent of such institution's 
courses by correspondence, unless the institution is an 
institution that meets the definition in section 521(4)(C) 
of the Carl D. Perkins Vocational and Applied Technology 
Education Act; 
"(B) enrolls 50 percent or more of the institution's 
students in correspondence courses, unless the institution 
is an institution that meets the definition in such section, 
except that the Secretary, at the request of such institution, 
may waive the applicability of this subparagraph to such 
institution for good cause, as determined by the Secretary 
in the case of an institution of higher education that pro-
vides a 2- or 4-year program of insti-uction (or both) for 
which the institution awards an associate or baccalaureate 
degree, respectively; 
"(C) has a student enrollment in which more than 
25 percent of the students are incarcerated, except that 
the Secretary may waive the limitation contained in this 
subparagraph for a nonprofit institution that provides a 
2- or 4-year program of instruction (or both) for which 
the institution awards a bachelor's degree, or an associate's 
degree or a postsecondary diploma, respectively; or 
"(D) has a student enrollment in which more than 
50 percent of the students do not have a secondary school 
diploma or its recognized equivalent, and does not provide 
a 2- or 4-year program of instruction (or both) for which 
the institution awards a bachelor's degjee or an associate's 
112 STAT. 1588 
PUBLIC LAW 105-244—OCT. 7, 1998 
degree, respectively, except that the Secretary may waive 
the limitation contained in this subparagraph if a nonprofit 
institution demonstrates to the satisfaction of the Secretary 
that the institution exceeds such limitation because the 
institution serves, through contracts with Federal, State, 
or local government agencies, significant numbers of stu-
dents who do not have a secondary school diploma or 
its recognized equivalent. 
"(4) LIMITATIONS BASED ON MANAGEMENT.—An institution 
shall not be considered to meet the definition of an institution 
of higher education in paragraph (1) if— 
"(A) the institution, or an affiliate of the institution 
that has the power, by contract or ownership interest, 
to direct or cause the direction of the management or 
policies of the institution, has filed for bankruptcy, except 
that this paragraph shall not apply to a nonprofit institu-
tion, the primary function of which is to provide health 
care educational services (or an affiliate of such an institu-
tion that has the power, by contract or ownership interest, 
to direct or cause the direction of the institution's manage-
ment or policies) that files for bankruptcy under chapter 
11 of title 11, United States Code, between July 1, 1998, 
and December 1,1998; or 
"(B) the institution, the institution's owner, or the 
institution's chief executive officer has been convicted of, 
or has pled nolo contendere or guilty to, a crime involving 
the acquisition, use, or expenditure of funds under title 
IV, or has been judicially determined to have committed 
fraud involving funds under title IV. 
"(5) CERTIFICATION.—The Secretary shall certify an institu-
tion's qualification as an institution of higher education in 
accordance with the requirements of subpart 3 of part H of 
title IV. 
"(6) Loss OF ELIGIBILITY.—An institution of higher edu-
cation shall not be considered to meet the definition of an 
institution of higher education in paragraph (1) if such institu-
tion is removed from eligibility for funds under title IV as 
a result of an action pursuant to part H of title IV. 
"(b) PROPRIETARY INSTITUTION OF HIGHER EDUCATION.— 
"(1) PRINCIPAL CRITERIA.—^For the purpose of this section, 
the term 'proprietary institution of higher education' means 
a school that— 
"(A) provides £in eligible program of training to prepare 
students for gainful employment in a recognized occupation; 
"(B) meets the requirements of paragraphs (1) and 
(2) of section 101(a); 
"(C) does not meet the requirement of paragraph (4) 
of section 101(a); 
"(D) is accredited by a nationally recognized accrediting 
agency or association recognized by the Secretary pursuant 
to part H of title IV; 
"(E) has been in existence for at least 2 years; and 
Regulations. 
"(F) has at least 10 percent of the school's revenues 
from sources that are not derived from funds provided 
under title IV, as determined in accordance with regula-
tions prescribed by the Secretary. 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1589 
"(2) ADDITIONAL 
INSTITUTIONS.—^The term 
'proprietary 
institution of higher education' also includes a proprietary edu- 
^ 
cational institution in any State that, in lieu of the requirement 
in paragraph (1) of section 101(a), admits as regular students 
persons who are beyond the age of compulsory school attend-
ance in the State in which the institution is located. 
"(c) POSTSECONDARY VOCATIONAL INSTITUTION.— 
"(1) PRINCIPAL CRITERIA.—^For the purpose of this section, 
the term 'postsecondary vocational institution' means a school 
that— 
"(A) provides an eligible program of training to prepare 
students for gainful emplojnnent in a recognized occupation; 
"(B) meets the requirements of paragraphs (1), (2), 
(4), and (5) of section 101(a); and 
"(C) has been in existence for at least 2 years. 
"(2) ADDITIONAL INSTITUTIONS.—^Thtj term 'postsecondary 
vocational institution' also includes an educational institution 
in any State that, in lieu of the requirement in paragraph 
(1) of section 101(a), admits as regular students persons who 
are beyond the age of compulsory school attendance in the 
State in which the institution is located. 
"SEC. 103. ADDITIONAL DEFINITIONS. 
20 USC 1003. 
"In this Act: 
"(1) 
COMBINATION OF INSTITUTIONS OF HIGHER 
EDU-
CATION.—^The term 'combination of institutions of higher edu-
cation' means a group of institutions of higher education that 
have entered into a cooperative arrangement for the purpose 
of canying out a common objective, or a public or private 
nonprofit agency, organization, or institution designated or cre-
ated by a group of institutions of higher education for the 
purpose of carrying out a common objective on the group's 
behalf. 
"(2) DEPARTMENT.—^The term 'Department' means the 
Department of Education. 
"(3) DISABILITY.—^The term 'disabilitA^ has the same mean-
ing given that term under section 3(2) of the Americans With 
Disabihties Act of 1990. 
"(4) ELEMENTARY SCHOOL.—^The term 'elementary school' 
has the same meaning given that term under section 14101 
of the Elementary and Secondary Education Act of 1965. 
"(5) GIFTED AND TALENTED.—The teriui 'gifted and talented' 
has the same meaning given that term under section 14101 
of the Elementary and Secondary Education Act of 1965. 
"(6) LOCAL EDUCATIONAL AGENCY.—The term 'local edu-
cational agenc/ has the same meaning {pven that term under 
section 14101 of the Elementary and Secondary Education Act 
of 1965. 
"(7) NEW BORROWER.—^The term 'new borrower' when used 
with respect to any date means an individual who on that 
date has no outstanding balance of principal or interest owing 
on any loan made, insured, or guaranteed under title IV. 
"(8) NONPROFIT.—The term 'nonprofit' as applied to a 
school, agency, organization, or institution means a school, 
agency, organization, or institution owned and operated by 
one or more nonprofit corporations or associations, no part 
5»-194 O - 98 - 23: QL 3 Part 2 
112 STAT. 1590 
PUBLIC LAW 105-244—OCT. 7, 1998 
of the net earnings of which inures, or may lawfully inure, 
to the benefit of any private shareholder or individual. 
"(9) SCHOOL OR DEPARTMENT OF DIVINITY.—^The term 'school 
or department of divinity means an institution, or a department 
or a branch of an institution, the program of instruction of 
which is designed for the education of students— 
"(A) to prepare the students to become ministers of 
religion or to enter upon some other religious vocation 
(or to provide continuing tredning for any such vocation); 
or 
"(B) to prepare the students to teach theological sub-
jects. 
"(10) SECONDARY SCHOOL.—The term 'secondary school' has 
the same meaning given that term under section 14101 of 
the Elementary and Secondary Education Act of 1965. 
"(11) SECRETARY.—The term 'Secretary* means the Sec-
retary of Education. 
"(12) SERVICE-LEARNING.—^The term 'service-learning* has 
the same meaning given that term under section 101(23) of 
the National and Community Service Act of 1990. 
"(13) SPECIAL EDUCATION TEACHER.—^The term 'special edu-
cation teacher* mesins teachers who teach children with disabil-
ities as defined in section 602 of the Individuals with Disabil-
ities Education Act. 
"(14) STATE EDUCATIONAL AGENCY.—^The term 'State edu-
cational agency has the same meaning given that term under 
section 14101 of the Elementary and Secondary Education Act 
of 1965. 
"(15) STATE HIGHER EDUCATION AGENCY.—^The term 'State 
higher education agencjr* means the officer or agency primarily 
responsible for the State supervision of higher education. 
"(16) STATE; FREELY ASSOCIATED STATES.— 
"(A) STATE.—^The term 'State' includes, in addition to 
the several States of the United States, the Commonwesdth 
of Puerto Rico, the District of Columbia, Guam, American 
Samoa, the United States Virgin Islands, the Common-
wealth of the Northern Mariana Islands, and the Freely 
Associated States. 
"(B) FREELY ASSOCIATED STATES.—The term 'Freely 
Associated States' means the Republic of the Marshall 
Islands, the Federated States of Micronesia, and the Repub-
lic of Palau. 
**PART B—ADDITIONAL GENERAL PROVISIONS 
20 use 1011. 
"SEC. 111. ANTIDISCRIMINATION. 
"(a) IN GENERAL.—Institutions of higher education receiving 
Federal financial assistance may not use such financial assistance, 
directly or indirectly, to undertake any study or project or fulfill 
the terms of any contract containing an express or implied provision 
that any person or persons of a particular race, religion, sex, or 
national origin be barred from performing such study, project, or 
contract, except that nothing in this subsection shall be construed 
to prohibit an institution from conducting objective studies or 
projects concerning the nature, effects, or prevention of discrimina-
tion, or to have the institution's curriculum restricted on the subject 
of discrimination. 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1591 
"(b) LIMITATIONS ON STATUTORY CONSTRUCTION.—Nothing in 
this Act shall be construed to limit the rights or responsibilities 
of any individual under the Americans With Disabilities Act of 
1990, the Rehabilitation Act of 1973, or any other law. 
"SEC. 112. PROTECTION OF STUDENT SPEECH AND ASSOCIATION 20USC1011a. 
RIGHTS. 
"(a) PROTECTION OF RIGHTS.—It is the sense of Congress that 
no student attending an institution of higher education on a fuU-
or part-time basis should, on the basis of participation in protected 
speech or protected association, be excluded from participation in, 
be denied the benefits of, or be subjected to discrimination or 
official sanction under any education program, activity, or division 
of the institution directly or indirectly receiving financial assistance 
under this Act, whether or not such program, activity, or division 
is sponsored or officially sanctioned by the institution. 
"(b) 
CONSTRUCTION.—-Nothing 
in 
this 
section 
shall 
be 
construed— 
"(1) to discourage the imposition of an official sanction 
on a student that has willfully participated in the disruption 
or attempted disruption of a lecture, class, speech, presentation, 
or performance made or scheduled to be made under the aus-
pices of the institution of higher education; or 
"(2) to prevent an institution of higher education from 
taking appropriate and effective action to prevent violations 
of State liquor laws, to discourage bing[e drinking and other 
alcohol abuse, to protect students from sexual harassment 
including assault and date rape, to prevent hazing, or to regu-
late unsanitary or unsafe conditions in ivay student residence. 
"(c) DEFINITIONS.—^For the purposes of this section: 
"(1) OFFICIAL SANCTION.—^The term 'official sanction'— 
"(A) means expulsion, suspension, probation, censure, 
condemnation, reprimand, or any other disciplinary, coer-
cive, or adverse action taken by ani institution of higher 
education or administrative unit of the institution; and 
"(B) includes an oral or written warning made by an 
official of an institution of higher education acting in the 
official capacity of the official, 
"(2) PROTECTED ASSOCIATION.—The term 'protected associa-
tion' means the joining, assembling, and residing with others 
that is protected under the first and 14th amendments to 
the Constitution, or would be protected if the institution of 
higher education involved were subject to those amendments. 
"(3) PROTECTED SPEECH.—The term 'protected speech' 
means speech that is protected under the first and 14th amend-
ments to the Constitution, or would be protected if the institu-
tion of higher education involved were subject to those amend-
ments. 
"SEC. 113. TREATMENT OF TERRITORIES AND l^RRTTORIAL STUDENT 20 USC 1011b. 
ASSISTANCE. 
"(a) WAIVER AUTHORITY.—^The Secretarj' is required to waive 
the eligibility criteria of any postsecondaiy education program 
administered by the Department where such criteria do not take 
into account the unique circumstances in Guam, the United States 
Virgin Islands, Americam Samoa, the Commonwealth of the North-
em Mariana Islands, and the Freely Associated States. 
112 STAT. 1592 
PUBLIC LAW 105-244—OCT. 7, 1998 
Termination 
date. 
20 use 1011c. 
Federal Register, 
publication. 
Records. 
"(b) ELIGIBILITY.—^Notwithstanding any other provision of law, 
an institution of higher education that is located in any of the 
Freely Associated States, rather than in another State, shall be 
eligible, if otherwise qualified, for assistance under chapter 1 of 
subpart 2 of part A of title IV. This subsection shall cease to 
be effective on September 30, 2004. 
"SEC. 114. NATIONAL ADVISORY COMMITTEE ON mSTTTUTIONAL QUAL-
ITY AND INTEGRITY. 
"(a) ESTABLISHMENT.—^There is established in the Department 
a National Advisory Committee on Institutional Quality and Integ-
rity (heresifter in this section referred to as the 'Committee'), which 
shall be composed of 15 members appointed by the Secretary from 
among individuals who are representatives of, or knowledgeable 
concerning, education and training beyond secondary education, 
including representatives of all sectors and types of institutions 
of higher education (as defined in section 102), to assess the process 
of eligibility and certification of such institutions under title IV 
and the provision of financial aid under title IV. 
"(b) TERMS OF MEMBERS.—^Terms of office of each member 
of the Committee shall be 3 years, except that any member 
appointed to fill a vacancy occurring prior to the expiration of 
the term for which the member's predecessor was appointed shall 
be appointed for the remainder of such term. 
"(c) PUBLIC NOTICE.—The Secretary shall— 
"(1) annually publish in the Federal Register a list contain-
ing the name of each member of the Committee and the date 
of the expiration of the term of office of the member; and 
"(2) publicly solicit nominations for each vacant position 
or expiring term of office on the Committee. 
"(d) FUNCTIONS.—^The Committee shall— 
"(1) advise the Secretary with respect to establishment 
and enforcement of the standards of accrediting agencies or 
associations under subpart 2 of part H of title IV; 
"(2) advise the Secretary with respect to the recognition 
of a specific accrediting agency or association; 
"(3) advise the Secretary with respect to the preparation 
and publication of the list of nationally recognized accrediting 
agencies and associations; 
"(4) develop and recommend to the Secretary standards 
and criteria for specific categories of vocationsd training institu-
tions and institutions of higher education for which there are 
no recognized accrediting agencies, associations, or State agen-
cies, in order to establish the eligibility of such institutions 
on an interim basis for participation in federally funded pro-
grams; 
"(5) advise the Secretary with respect to the eligibility 
and certification process for institutions of higher education 
under title IV, together with recommendations for improve-
ments in such process; 
"(6) advise the Secretary with respect to the relationship 
between— 
"(A) accreditation of institutions of higher education 
and the certification and eligibility of such institutions; 
and 
"(B) State licensing responsibilities with respect to such 
institutions; and 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1593 
"(7) carry out such other advisory functions relating to 
accreditation and institutional eligibility as the Secretary may 
prescribe. 
(e) MEETING PROCEDURES.—^The Committee shall meet not 
less than twice each year at the call of the Chairperson. The 
date of, and agenda for, each meeting of the Committee sheill 
be submitted in advance to the Secretary for approval. A representa-
tive of the Secretary shall be present at all meetings of the Commit-
tee. 
"(f) REPORT.—^Not later than November 30 of each year, the 
Committee shall make an annusd report through the Secretary 
to Congress. The annual report shall contain— 
"(1) a list of the members of the Committee and their 
addresses; 
"(2) a list of the functions of the Committee; 
"(3) a list of dates and places of each meeting during 
the preceding fiscal year; and 
"(4) a summary of the activities, findings and recommenda-
tions made by the Committee during the preceding fiscal year. 
"(g) TERMINATION.—^The Committee shall cease to exist on 
September 30, 2004. 
-SEC. 115. STUDENT REPRESENTATION. 
'The Secretary shall, in appointing individuals to any commis-
sion, committee, board, panel, or other body in connection with 
the administration of this Act, include individuals who are, at 
the time of appointment, attending an institution of higher edu-
cation. 
"SEC. 116. FINANCIAL RESPONSmiLITY OF FORISIGN STUDENTS. 
"Nothing in this Act or any other Federal law shall be construed 
to prohibit any institution of higher education from requiring a 
student who is a foreign national (and not admitted to permanent 
residence in the United States) to guarantee the future payment 
of tuition and fees to such institution by— 
"(1) making advance payment of such tuition and fees; 
"(2) making deposits in an escrow account administered 
by such institution for such pajrments; or 
"(3) obtaining a bond or other insurance that such pay-
ments will be made. 
-SEC. 117. DISCLOSURES OF FOREIGN GIFTS. 
"(a) DISCLOSURE REPORT.—^Whenever any institution is owned 
or controlled by a foreign source or receives a gift from or enters 
into a contract with a foreign source, the value of which is $250,000 
or more, considered alone or in combination with all other gifts 
from or contracts with that foreign source within a calendar year, 
the institution shall file a disclosure report with the Secretary 
on Jginuary 31 or July 31, whichever is sooner. 
"(b) CONTENTS OF REPORT.—Each report to the Secretary 
required by this section shall contain the following: 
"(1) For gifts received from or contracts entered into with 
a foreign source other than a foreign government, the aggregate 
dollar amount of such gifts and contracts attributable to a 
particular country. The country to which a gift is attributable 
is the country of citizenship, or if unknown, the principal resi-
dence for a foreign source who is a natural person, and the 
Deadline. 
Records. 
20 use lOlld. 
20 use lOlle. 
20USei011f. 
Deadline. 
112 STAT. 1594 
PUBLIC LAW 105-244—OCT. 7, 1998 
country of incorporation, or if unknown, the principal place 
of business, for a foreign source which is a legal entity. 
"(2) For gifts received from or contracts entered into with 
a foreign government, the aggregate amount of such gifts and 
contracts received from each foreign government, 
"(3) In the case of an institution which is owned or con-
trolled by a foreign source, the identity of the foreign source, 
the date on which the foreign source assumed ownership or 
control, and any changes in program or structure resulting 
from the change in ownership or control. 
"(c) ADDITIONAL DISCLOSURES FOR RESTRICTED AND CONDI-
TIONAL GIFTS.—^Notwithstanding the provisions of subsection (b), 
whenever any institution receives a restricted or conditional gift 
or contract from a foreign source, the institution shall disclose 
the following: 
"(1) For such gifts received from or contracts entered into 
with a foreign source other than a foreign government, the 
amount, the date, and a description of such conditions or restric-
tions. The report shall also disclose the country of citizenship, 
or if unknown, the principal residence for a foreign source 
which is a natural person, and the country of incorporation, 
or if unknown, the principal place of business for a foreign 
source which is a legal entity. 
"(2) For gifts received from or contracts entered into with 
a foreign government, the amount, the date, a description of 
such conditions or restrictions, and the name of the foreign 
government. 
"(d) RELATION TO OTHER REPORTING REQUIREMENTS.— 
"(1) STATE REQUIREMENTS.—^If an institution described 
under subsection (a) is within a State which has enacted 
requirements for public disclosure of gifts from or contracts 
with a foreign source that are substantially similar to the 
requirements of this section, a copy of the disclosure report 
filed with the State may be filed with the Secretary in lieu 
of a report required under subsection (a). The State in which 
the institution is located shall provide to the Secretary such 
assurances as the Secretary may require to establish that the 
institution has met the requirements for public disclosure under 
State law if the State report is filed. 
"(2) USE OF OTHER FEDERAL REPORTS.—^If an institution 
receives a gift from, or enters into a contract with, a foreign 
source, where any other department, agenqy, or bureau of the 
executive branch requires a report containing requirements 
substantisdly similar to those required under this section, a 
copy of the report may be filed with the Secretary in lieu 
of a report required under subsection (a). 
"(e) PUBLIC INSPECTION.—All disclosure reports required by 
this section shall be public records open to inspection and copying 
during business hours. 
"(f) ENFORCEMENT.— 
"(1) COURT ORDERS.—^Whenever it appears that an institu-
tion has failed to comply with the requirements of this section, 
including any rule or regulation promulgated under this section, 
a civil action may be brought by the Attorney General, at 
the request of the Secretary, in an appropriate district court 
of the United States, or the appropriate United States court 
of any territory or other place subject to the jurisdiction of 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1595 
the United States, to request such court to compel compHance 
with the requirements of this section. 
"(2) COSTS.—^For knowing or willful failure to comply with 
the requirements of this section, including any rule or regula-
tion promulgated thereunder, an institution shall pay to the 
Treasury of the United States the full costs to the United 
States of obtaining compliance, including all associated costs 
of investigation and enforcement. 
"(g) REGULATIONS.—^The Secretary may promulgate regulations 
to carry out this section. 
"(h) DEFII^TIONS.—For the purpose of this section— 
"(1) the term 'contract' means any agreement for the 
acquisition by purchase, lease, or barter of property or services 
by the foreign source, for the direct benefit or use of either 
of the parties; 
"(2) the term 'foreign source' means— 
"(A) a foreign government, including an agency of a 
foreign government; 
"(B) a legal entity, governmental or otherwise, created 
solely under the laws of a foreign state or states; 
"(C) an individual who is not a citizen or a national 
of the United States or a trust temtory or protectorate 
thereof; and 
"(D) an agent, including a subisidiary or affiliate of 
a foreign legal entity, acting on behalf of a foreign source; 
"(3) the term 'gift' means any gift of money or property; 
"(4) the term 'institution' means any institution, public 
or private, or, if a multicampus institution, any single campus 
of such institution, in any State, that— 
"(A) is legally authorized within such State to provide 
a program of education beyond secondary school; 
"(B) provides a program for which the institution 
awards a bachelor's degree (or provides not less than a 
2-year program which is acceptable for full credit toward 
such a degree) or more advanced degiees; and 
"(C) is accredited by a nationally recognized accrediting 
agency or association and to which institution FedersQ 
ftnancial 
assistance is extended (directly or indirectly 
through another entity or person), or which institution 
receives support from the extension of Federal financial 
assistance to any of the institution's subunits; and 
"(5) the term 'restricted or conditioned gift or contract' 
means any endowment, gift, grant, contract, award, present, 
or property of any kind which includes provisions regarding— 
"(A) the employment, assignment, or termination of 
faculty; 
"(B) the 
establishment 
of departments, 
centers, 
research or lecture programs, or new faculty positions; 
"(C) the selection or admission of students; or 
"(D) the award of grants, loans, scholarships, fellow-
ships, or other forms of financial aid restricted to students 
of a specified country, religion, sex, ethnic origin, or politi-
cal opinion. 
"SEC. 118. APPUCATION OF PEER REVIEW PROCESS. 
20 USC lOllg. 
"All applications submitted under the provisions of this Act 
which require peer review shall be read by a panel of readers 
112 STAT. 1596 
PUBLIC LAW 105-244—OCT. 7, 1998 
Collegiate 
Initiative To 
Reduce Binge 
Drinking and 
Illegal Alcohol 
Consumption. 
20 use lOllh. 
20 use lOlli. 
Certification. 
composed of individuals selected by the Secretary, which shall 
include outside readers who are not employees of the Federal 
Grovemment. 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 individusil conducts the review under 
this section. 
"SEC. 119. BINGE DRINKING ON COLLEGE CAMPUSES. 
"(a) SHORT TITLE.—^This section may be cited as the 'Collegiate 
Initiative To Reduce Binge Drinking and Illegal Alcohol Consump-
tion'. 
"(b) SENSE OF CONGRESS.—It is the sense of Congress that, 
in an effort to change the culture of alcohol consumption on college 
campuses, all institutions of higher education should carry out 
the lollowing: 
"(1) The president of the institution should appoint a task 
force consisting of school administrators, faculty, students, 
Greek system representatives, and others to conduct a full 
examination of student and academic life at the institution. 
The task force should make recommendations for a broad range 
of policy and program changes that would serve to reduce 
alcohol and other drug-related problems. The institution should 
provide resources to assist the task force in promoting the 
campus policies and proposed environmental changes that have 
been identified. 
"(2) The institution should provide maximum opportunities 
for students to live in an alcohol-free environment and to engage 
in stimulating, alcohol-free recreational and leisure activities. 
"(3) The institution should enforce a 'zero tolerance' policy 
on the illegal consumption of alcohol by students at the institu-
tion. 
"(4) The institution should vigorously enforce the institu-
tion's code of disciplinary sanctions for those who violate cam-
pus alcohol policies. Students with sdcohol or other drug-related 
problems should be referred for assistance, including on-c£impus 
counseling programs if appropriate. 
"(5) The institution should adopt a policy to discourage 
alcoholic beverage-related sponsorship of on-campus activities. 
It should adopt policies limiting the advertisement and pro-
motion of alcoholic beverages on campus. 
"(6) The institution should work with the local community, 
including local businesses, in a 'Town/Grown' alliance to encour-
age responsible policies toward alcohol consumption and to 
address illegal alcohol use by students. 
"SEC. 
1
2
0
. 
DRUG 
AND 
ALCOHOL 
ABUSE 
PREVENTION. 
"(a) RESTRICTION ON ELIGIBILITY.—Notwithstanding any other 
provision of law, no institution of higher education shall be eligible 
to receive funds or any other form of financial assistance under 
any Federal program, including participation in any federally 
funded or guaranteed student loan program, unless the institution 
certifies to the Secretary that the institution has adopted and 
has implemented a program to prevent the use of illicit drugs 
and the abuse of alcohol by students and employees that, at a 
minimum, includes— 
"(1) the annual distribution to each student and employee 
of— 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1597 
"(A) standards of conduct that clearly prohibit, at a 
minimum, the unlawful possession, use, or distribution of 
illicit drugs and alcohol by students and employees on 
the institution's property or as part of any of the institu-
tion's activities; 
"(B) a description of the applicable legal sanctions 
under locsd. State, or Federal law for the unlawful posses-
sion or distribution of illicit drugs and alcohol; 
"(C) a description of the health-risks associated with 
the use of illicit drugs and the abuse of alcohol; 
"(D) a description of any drug or alcohol counseling, 
treatment, or rehabilitation or re-entry programs that are 
available to employees or students; and 
"(E) a clear statement that the institution will impose 
sanctions on students and employees (consistent with local. 
State, and Federal law), and a description of those sanc-
tions, up to and including expulsion or termination of 
employment and referral for prosecution, for violations of 
the standards of conduct required by subparagraph (A); 
and 
"(2) a biennial review by the institution of the institution's 
program to— 
"(A) determine the program's efl'ectiveness and imple-
ment changes to the program if the changes are needed; 
and 
"(B) ensure that the sanctions required by paragraph 
(1)(E) are consistently enforced. 
"(b) INFORMATION AVAILABILITY.—^Each institution of higher 
education that provides the certification required by subsection 
(a) shall, upon request, make available to the Secretary and to 
the public a copy of each item required by subsection (a)(1) as 
well as the results of the biennial review required by subsection 
(a)(2). 
"(c) REGULATIONS.— 
"(1) IN GENERAL.—^The Secretary shall publish regulations 
to implement and enforce the provisions of this section, includ-
ing regulations that provide for— 
"(A) the periodic review of a I'epresentative sample 
of progrEims required by subsection (a); and 
"(B) a range of responses and sanctions for institutions 
of higher education that fail to implement their programs 
or to consistently enforce their sanctions, 
including 
information and technical assistance, the development of 
a compliance agreement, and the teimination of any form 
of Federal financial assistance. 
"(2) REHABILITATION PROGRAM.—The sanctions required by 
subsection (a)(1)(E) may include the completion of an appro-
priate rehabilitation program. 
"(d) APPEALS.—^Upon determination by the Secretary to termi-
nate financial assistance to any institution of higher education 
under this section, the institution may file an appeal with an 
administrative law judge before the expiration of the 30-day period 
beginning on the date such institution is notified of the decision 
to terminate financial assistance under this section. Such judge 
shall hold a hearing with respect to such termination of assistance 
before the expiration of the 45-day period beginning on the date 
that such appeal is filed. Such judge may extend such 45-day 
112 STAT. 1598 
PUBLIC LAW 105-244—OCT. 7, 1998 
period upon a motion by the institution concerned. The decision 
of the judge with respect to such termination shall be considered 
to be a final agency action. 
"(e) ALCOHOL AND DRUG ABUSE PREVENTION GRANTS.— 
"(1) PROGRAM AUTHORITY.—^The Secretary may make grants 
to institutions of higher education or consortia of such institu-
tions, and enter into contracts with such institutions, consortia, 
and other organizations, to develop, implement, operate, 
improve, and disseminate programs of prevention, and edu-
cation (including treatment-referral) to reduce and eliminate 
the illegal use of drugs and alcohol and the violence associated 
with such use. Such grants or contracts may also be used 
for the support of a higher education center for alcohol and 
drug abuse prevention that will provide training, technical 
assistance, evaluation, dissemination, and associated services 
and assistance to the higher education community as deter-
mined by the Secretary and institutions of higher education. 
"(2) AWARDS.—Grants and contracts shsJl be awarded 
under paragraph (1) on a competitive basis. 
"(3) APPLICATIONS.—An institution of higher education, a 
consortium of such institutions, or another organization that 
desires to receive a grant or contract under paragraph (1) 
shall submit an application to the Secretary at such time, 
in such manner, and containing or accompanied by such 
information as the Secretary may reasonably require by regula-
tion. 
"(4) ADDITIONAL REQUIREMENTS.— 
"(A) PARTICIPATION.—In awarding grants and contracts 
under this subsection the Secretary shall make every effort 
to ensure— 
"(i) the equitable participation of private and public 
institutions of higher education (including community 
and junior colleges); and 
"(ii) the equitable geographic participation of such 
institutions. 
"(B) CONSIDERATION.—In awarding grants and con-
tracts under this subsection the Secretary shall give appro-
priate consideration to institutions of higher education with 
limited enrollment. 
"(5) 
AUTHORIZATION 
OF 
APPROPRIATIONS.—There 
are 
authorized to be appropriated to carry out this subsection 
$5,000,000 for fiscal year 1999 and such sums as may be 
necessary for each of the 4 succeeding fiscal years. 
"(f) NATIONAL RECOGNITION AWARDS.— 
"(1) PURPOSE.—^It is the purpose of this subsection to pro-
vide models of innovative and effective alcohol and drug abuse 
prevention programs in higher education and to focus national 
attention on exemplary alcohol and drug abuse prevention 
efforts. 
"(2) AWARDS.— 
"(A) IN GENERAL.—The Secretary 
shall make 5 
National Recognition Awards for outstanding 
alcohol 
prevention programs and 5 National Recognition Awards 
for outstanding drug abuse prevention programs, on an 
annual basis, to institutions of higher education that— 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1599 
District of 
Columbia. 
Deadline. 
"(i) have developed and implemented innovative 
and effective alcohol prevention programs or drug 
abuse prevention programs; and 
"(ii) with respect to an application for an alcohol 
prevention program award, demonstrate in the applica-
tion submitted under paragraph (3) that the institution 
has undertaken efforts designed to change the culture 
of college drinking consistent with the review criteria 
described in paragraph (3XC)(iii). 
"(B) CEREMONY,—The awards shall be made at a cere-
mony in Washington, D.C. 
"(C) DOCUMENT.—The Secretary shall publish a docu- PubUcation. 
ment describing the alcohol and dinig abuse prevention 
programs of institutions of higher education that receive 
the awards under this subsection and disseminate the docu-
ment nationally to all public and private secondary school 
guidance counselors for use by sec<3ndary school juniors 
and seniors preparing to enter an institution of higher 
education. The document shall be disseminated not later 
than January 1 of each academic year. 
"(D) AMOUNT AND USE.—^Each institution of higher edu-
cation selected to receive an award under this subsection 
shall receive an award in the amount of $50,000. Such 
award shall be used for the maintensince and improvement 
of the institution's outstanding prevention program for the 
academic year following the academic year for which the 
award is made. 
"(3) APPLICATION.— 
"(A) IN GENERAL.—^Each institution of higher education 
desiring an award under this subsection shall submit an 
application to the Secretary at such time, in such manner, 
and accompanied by such information as the Secretary 
may require. Each such application shall contain— 
"(i) a clear description of the goals and objectives 
of the prevention program of the institution; 
"(ii) a description of program activities that focus 
on alcohol or drug policy issues, policy development, 
modification, or refinement, poliicy dissemination and 
implementation, and policy enforcement; 
"(iii) a description of activities that encourage stu-
dent and employee participation and involvement in 
activity development and implementation; 
"(iv) the objective criteria used to determine the 
effectiveness of the methods used in such programs 
and the means used to evaluate and improve the pro-
grams'efforts; 
"(v) a description of specisil initiatives used to 
reduce high-risk behavior or increase low-risk behavior; 
and 
"(vi) a description of coordination and networking 
efforts that exist in the community in which the institu-
tion is located for purposes of such programs. 
"(B) 
APPUCATION 
REVlEW.^The 
Secretary 
shall 
appoint a committee to review applications submitted 
112 STAT. 1600 
PUBLIC LAW 105-244r-OCT. 7, 1998 
under this paragraph. The committee may include rep-
resentatives of Federal departments or agencies the pro-
grams of which include alcohol abuse prevention and edu-
cation efforts and drug abuse prevention and education 
efforts, directors or heads (or their representatives) of 
professional associations that focus on alcohol and drug 
abuse prevention efforts, and non-Federal scientists who 
have backgrounds in social science evaluation and research 
methodology and in education. Decisions of the committee 
shall be made directly to the Secretary without review 
by any other entity in the Department. 
"(C) REVIEW CRITERIA.—^The committee described in 
subparagraph (B) shall develop specific review criteria for 
reviewing and evaluating applications submitted under this 
paragraph. The review criteria shall include— 
"(i) measures of the effectiveness of the program 
of the institution, that includes changes in the campus 
alcohol or other drug environment or the.climate and 
changes in alcohol or other drug use before and after 
the initiation of the program; 
"(ii) measures of program 
institutionalization, 
including— 
"(1) an assessment of needs of the institution; 
"(II) the institution's alcohol and drug policies, 
staff and faculty development activities, drug 
prevention criteria, student, faculty, and campus 
community involvement; and 
"(III) whether the program will be continued 
after the cessation of Federal funding; and 
"(iii) with respect to an application for an alcohol 
prevention program award, criteria for determining 
whether the institution has policies in effect that— 
"(I) prohibit alcoholic beverage sponsorship of 
athletic events, and prohibit alcoholic beverage 
advertising inside athletic facilities; 
"(II) prohibit alcoholic beverage marketing on 
campus, which may include efforts to ban alcohol 
advertising in institutional publications or efforts 
to prohibit alcohol-related advertisements at cam-
pus events; 
"(III) establish or expand upon alcohol-free liv-
ing arrangements for all college students; 
"(IV) establish partnerships with community 
members and organizations to further alcohol 
prevention efforts on campus and the areas 
surrounding campus; and 
"(V) establish innovative communications pro-
grams involving students and faculty in an effort 
to educate students about alcohol-related risks. 
"(4) ELIGIBILITY.—^In order to be eligible to receive a 
National Recognition Award an institution of higher education 
shall— 
"(A) offer an associate or baccalaureate degree; 
"(B) have established an alcohol abuse prevention and 
education program or a drug abuse prevention and edu-
cation program; 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1601 
"(C) nominate itself or be nominated by others, such 
as professional associations or student organizations, to 
receive the award; Eind 
"(D) not have received an award under this subsection 
during the 5 academic years preceding the academic year 
for which the determination is made. 
"(5) AUTHORIZATION OF APPROPRIATIONS.— 
"(A) IN GENERAL.—^There is authorized to be appro-
priated to carry out this subsection $750,000 for fiscal 
year 1999. 
"(B) 
AVAILABILITY.—Funds 
appropriated 
under 
subparagraph (A) shall remain avmlable until expended. 
-SEC. 121. PRIOR RIGHTS AND OBUGATIONS. 
20 USC lOllj. 
"(a) AUTHORIZATION OF APPROPRIATIONS.— 
"(1) PRE-1987 PARTS c AND D OF TITLE VII.—^There are 
authorized to be appropriated such sums as may be necessary 
for fiscal year 1999 and for each of the 4 succeeding fiscal 
years to pay obligations incurred prior to 1987 under parts 
C and D of title VII, as such parts were in effect before the 
effective date of the Higher Eaucation Amendments of 1992. 
"(2) POST-1992 AND PRE-1998 PART C OF TITLE VII.—^There 
are authorized to be appropriated such sums as may be nec-
essary for fiscal year 1999 and for each of the 4 succeeding 
fiscal years to pay obligations incurred prior to the date of 
enactment of the Higher Education Amendments of 1998 under 
part C of title VII, as such part was in effect during the 
period— 
"(A) after the effective date of the Higher Education 
Amendments of 1992; and 
"(B) prior to the date of enactment of the Higher Edu-
cation Amendments of 1998. 
"(b) LEGAL RESPONSIBILITIES.— 
"(1) PRE-1987 TITLE VII.—All entities with continuing obliga-
tions incurred under parts A, B, C, and D of title VII, as 
such parts were in effect before the effective date of the Higher 
Education Amendments of 1992, shall be subject to the require-
ments of such part as in effect before the effective date of 
the Higher Education Amendments of 1992. 
"(2) POST-1992 AND PRE-1998 PART C OF TITLE vii.^All enti-
ties with continuing obligations incurred under part C of title 
VII, as such part was in effect during the period— 
"(A) after the effective date of the Higher Education 
Amendments of 1992; and 
"(B) prior to the date of enactment of the Higher Edu-
cation Amendments of 1998, 
shall be subject to the requirements of such part as such 
part was in effect during such period. 
"SEC. 122. RECOVERY OF PAYMENTS. 
20 USC lOllk. 
"(a) PUBLIC BENEFIT.—Congress declares that, if a facility con-
structed with the aid of a grant under part A of title VII as 
such part A was in effect prior to the date of enactment of the 
Higher Education Amendments of 1998, or part B of such title 
as part B was in effect prior to the date of enactment of the 
Higher Education Amendments of 1992, is used as an academic 
facility for 20 years following completion of such construction, the 
public benefit accruing to the United States will equal in value 
112 STAT. 1602 
PUBLIC LAW 105-244—OCT. 7, 1998 
the amount of the grant. The period of 20 years after completion 
of such construction shall therefore be deemed to be the period 
of Federal interest in such facility for the purposes of such title 
as so in effect. 
"(b) RECOVERY UPON CESSATION OF PUBLIC BENEFIT.—If, within 
20 years after completion of construction of an academic facility 
which has been constructed, in part with a grant under part A 
of title VII as such part A was in effect prior to the date of 
enactment of the Higher Education Amendments of 1998, or part 
B of title VII as such part B was in effect prior to the date 
of enactment of the Higher Education Amendments of 1992— 
"(1) the applicant under such parts as so in effect (or 
the applicant's successor in title or possession) ceases or fails 
to be a public or nonprofit institution; or 
"(2) the facility ceases to be used as an academic facility, 
or the facility is used as a facility excluded from the term 
'academic facility (as such term was defined under title VII, 
as so in effect), unless the Secretary determines that there 
is good cause for releasing the institution from its obligation, 
the United States shall be entitled to recover from such applicant 
(or successor) an amount which bears to the value of the facility 
at that time (or so much thereof as constituted an approved project 
or projects) the same ratio as the amount of Federal grant bore 
to the cost of the facility financed with the aid of such grant. 
The value shall be determined by agreement of the parties or 
by action brought in the United States district court for the district 
in which such facility is situated. 
"(c) PROHIBITION ON USE FOR RELIGION.—Notwithstanding the 
provisions of subsections (a) and (b), no project assisted with funds 
under title VII (as in effect prior to the date of enactment of 
the Higher Education Amendments of 1998) shall ever be used 
for religious worship or a sectarian activity or for a school or 
department of divinity. 
"PART C—COST OF HIGHER EDUCATION 
20 use 1015. 
'^EC. 131. IMPROVEMENTS IN MARKET INFORMATION AND PUBUC 
ACCOUNTABILITY IN mCHER EDUCATION. 
"(a) IMPROVED DATA COLLECTION.— 
"(1) DEVELOPMENT OF UNIFORM METHODOLOGY.—The Sec-
retary shall direct the Commissioner of Education Statistics 
to convene a series of forums to develop nationally consistent 
methodologies for reporting costs incurred by postsecondary 
institutions in providing postsecondary education. 
"(2) REDESIGN OF DATA SYSTEMS.—On the basis of the meth-
odologies developed pursuant to paragraph (1), the Secretary 
shall redesign relevant parts of the postsecondary education 
data systems to improve the usefulness and timeliness of the 
data collected by such systems. 
"(3) INFORMATION TO INSTITUTIONS.—^The Commissioner of 
Education Statistics shall— 
''(A) develop a standard definition for the following 
data elements: 
''(i) tuition and fees for a full-time undergraduate 
student; 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1603 
"(ii) cost of attendance for a fiiU-time undergradu-
ate student, consistent with the provisions of section 
472; 
"(iii) average amount 
of 
financial 
assistance 
received by an undergraduate student who attends 
an institution of higher education, including— 
"(I) each type of assistance or benefit described 
in section 428(a)(2)(C)(i); 
"(II) fellowships; and 
"(III) institutional and other assistance; and 
"(iv) number of students receiving financial assist-
ance described in each of subclauses (I), (II), and (III) 
of clause (iii); 
"(B) not later than 90 days after the date of enactment Deadline, 
of the Higher Education Amendments of 1998, report the Reports, 
definitions to each institution of higher education and 
within a reasonable period of time thereafter inform the 
Committee on Labor and Human Resources of the Senate 
and the Committee on Education and the Workforce of 
the House of Representatives of those definitions; and 
"(C) collect information regEirding the data elements 
described in subparagraph (A) with respect to at least 
all institutions of higher education participating in pro-
grams under title IV, beginning with the information from 
academic year 2000-2001 and annually thereafter. 
"(b) DATA DISSEMINATION.—^The Secretary shall make available 
the data collected pursuant to subsection (a). Such data shall be 
available in a form that permits the review and comparison of 
the data submissions of individual institutions of higher education. 
Such data shall be presented in a form that is easily understandable 
and allows parents and students to make informed decisions based 
on the costs for typical full-time undergraduate students. 
"(c) STUDY.— 
"(1) IN GENERAL.—^The Commissioner of Education Statis-
tics shall conduct a national study of expenditures at institu-
tions of higher education. Such study shall include information 
with respect to— 
"(A) the change in tuition and fees compared with 
the consumer price index and other appropriate measures 
of infiation; 
"(B) faculty salaries and benefits; 
"(C) administrative salaries, benefits and expenses; 
"(D) academic support services; 
"(E) research; 
"(F) operations and maintenance; and 
"(G) institutional expenditures for construction and 
technology and the potential cost of replacing instructional 
buildings and equipment. 
"(2) EVALUATION.—The study shall include an evaluation 
of— 
"(A) changes over time in the expenditures identified 
in paragraph (1); 
"(B) the relationship of the expenditures identified in 
paragraph (1) to college costs; and 
(C) the extent to which increases in institutional 
financial aid £ind tuition discounting practices aftect tuition 
increases, including the demographics of students receiving 
112 STAT. 1604 
PUBLIC LAW 105-244—OCT. 7, 1998 
Deadline. 
Reports. 
Deadline. 
such discounts, the extent to which financial aid is provided 
to students with Hmited need in order to attract a student 
to a particular institution, and the extent to which Federsd 
financial aid, including loan aid, has been used to offset 
the costs of such practices. 
"(3) FINAL REPORT.—^The Commissioner of Education Statis-
tics shsill submit a report regarding the findings of the study 
required by paragraph (1) to the appropriate committees of 
Congress not later than September 30, 2002. 
"(4) HIGHER EDUCATION MARKET BASKET.—^The Bureau of 
Labor Statistics, in consultation with the Commissioner of Edu-
cation Statistics, shall develop a higher education market bas-
ket that identifies the items that comprise the costs of higher 
education. The Bureau of Labor Statistics shall provide a report 
on the market basket to the Committee on Labor and Human 
Resources of the Senate and the Committee on Education and 
the Workforce of the House of Representatives not later than 
September 30, 2002. 
"(5) FINES.—In addition to actions authorized in section 
487(c), the Secretary may impose a fine in an amount not 
to exceed $25,000 on an institution of higher education for 
failing to provide the information described in paragraph (1) 
in a timely and accurate manner, or for failing to otherwise 
cooperate with the National Center for Education Statistics 
regarding efforts to obtain data on the cost of higher education 
under this section and pursuant to the program participation 
agreement entered into under section 487. 
"(d) STUDENT AID RECIPIENT SURVEY.—(1) The Secretary shall 
survey student aid recipients on a regular cycle, but not less than 
once every 3 years— 
"(A) to identify the population of students receiving Federal 
student aid; 
"(B) to determine the income distribution and other socio-
economic characteristics of federally aided students; 
"(C) to describe the combinations of aid from State, Federal, 
and private sources received by students from all income 
groups; 
"(D) to describe the debt burden of loan recipients and 
their capacity to repay their education debts; and 
"(E) to disseminate such information in both published 
and machine readable form. 
"(2) The survey shall be representative of full-time and part-
time, undergraduate, graduate, and professional and current and 
former students in all t5T>es of institutions, and should be designed 
and administered in consultation with the Congress and the post-
secondary education community. 
"PART D—ADMINISTRATIVE PROVISIONS FOR 
DELIVERY OF STUDENT FINANCIAL ASSIST-
ANCE 
20 use 1018. 
••SEC. 141. PERFORMANCE-BASED ORGANIZATION FOR THE DELIVERY 
OF FEDERAL STUDENT FINANCIAL ASSISTANCE. 
"(a) ESTABLISHMENT AND PURPOSE.— 
"(1) ESTABLISHMENT.—^There is established in the Depart-
ment a Performance-Based Organization (hereafter referred to 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1605 
as the TBO') which shall be a discrete management unit 
responsible for managing the operational functions supporting 
the programs authorized under title IV of this Act, as specified 
in subsection (b). 
"(2) PURPOSES.—The purposes of the PBO are— 
"(A) to improve service to students and other partici-
pants in the student financial assistance programs author-
ized under title IV, including making those programs more 
understandable to students and their parents; 
"(B) to reduce the costs of administering those pro-
grams; 
"(C) to increase the accountability of the officials 
responsible for administering the operational aspects of 
these programs; 
"(D) to provide greater flexibility in the management 
of the operational functions of the Federal student financial 
assistance programs; 
"(E) to integrate the information systems supporting 
the Federal student financial assistance programs; 
"(F) to implement an open, common, integrated system 
for the delivery of student financial assistance under title 
IV; and 
"(G) to develop and maintain a student financial assist-
ance system that contains complete, accurate, and timely 
data to ensure program integrity. 
"(b) GENERAL AUTHORITY.— 
"(1) AUTHORITY OF SECRETARY.—^Notwithstanding any other 
provision of this part, the Secretary shall msdntain responsibil-
ity for the development and promulgation of policy and regula-
tions relating to the programs of student financial assistance 
under title IV. In the exercise of its functions, the PBO shall 
be subject to the direction of the Secretary. The Secretary 
shall— 
"(A) request the advice of, and work in cooperation 
with, the Chief Operating Officer in developing regulations, 
policies, administrative guidance, or procedures affecting 
the information systems administered by the PBO, and 
other functions performed by the PBO; 
"(B) request cost estimates from the Chief Operating 
Officer for system changes required by specific policies 
proposed by the Secretary; and 
"(C) assist the Chief Operating Officer in identifying 
goals for the administration and modernization of the deliv-
ery system for student financial assistance under title IV. 
"(2) PBO FUNCTIONS.—Subject to paragraph (1), the PBO 
shall be responsible for administration of the information and 
financial systems that support student financial assistance pro-
grams authorized under this title, excluding the development 
of policy relating to such programs but including the following: 
"(A) The administrative, accounting, and 
financial 
management functions of the delivery system for Federal 
student assistance, including— 
"(i) the collection, processing and transmission of 
applicant data to students, institutions and authorized 
third parties, as provided for in section 483; 
112 STAT. 1606 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(ii) design and technical specifications for software 
development and systems supporting the delivery of 
student financial assistance under title IV; 
"(iii) all software and hardware acquisitions and 
all information technology contracts related to the 
delivery and management of student financial assist-
ance under title IV; 
"(iv) all aspects of contracting for the information 
and financial systems supporting student financial 
assistance programs under this title; and 
"(v) providing all customer service, training, and 
user support related to systems that support those 
programs. 
"(B) Annual development of a budget for the operations 
and services of the PBO, in consultation with the Secretary, 
and for consideration and inclusion in the Department's 
annual budget submission. 
"(3) ADDITIONAL FUNCTIONS.—^The Secretary may allocate 
to the PBO such additional functions as the Secretary and 
the Chief Operating Officer determine are necessary or appro-
priate to achieve the purposes of the PBO. 
"(4) INDEPENDENCE.^-Subject to paragraph (1), in carrying 
out its functions, the PBO shall exercise independent control 
of its budget allocations and expenditures, personnel decisions 
and processes, procurements, and other administrative and 
management functions. 
"(5) AUDITS AND REVIEW.—^The PBO shall be subject to 
the usual and customary Federal audit procedures and to 
review by the Inspector General of the Department. 
"(6) CHANGES.— 
"(A) IN GENERAL.—^The Secretary and the Chief Operat-
ing Officer shall consult concerning the effects of policy, 
market, or other changes on the ability of the PBO to 
achieve the goals and objectives established in the perform-
ance plan described in subsection (c). 
"(B) REVISIONS TO AGREEMENT.—^The Secretary and the 
Chief Operating Officer may revise the annual performance 
agreement described in subsection (d)(4) in light of policy, 
market, or other changes that occur after the Secretary 
and the Chief Operating Officer enter into the agreement. 
"(c) PERFORMANCE PLAN AND REPORT.— 
"(1) PERFORMANCE PLAN.— 
"(A) IN GENERAL.—^Each year, the Secretary and Chief 
Operating Officer shall agree on, and make available to 
the public, a performance plan for the PBO for the succeed-
ing 5 years that establishes measurable goals and objectives 
for the organization. 
"(B) CONSULTATION.—In developing the 5-year perform-
ance plan and any revision to tne plan, the Secretary 
and the Chief Operating Officer shall consult with students, 
institutions of higher education. Congress, lenders, the 
Advisory Committee on Student Financial Assistance, and 
other interested parties not less than 30 days prior to 
the implementation of the performance plan or revision. 
"(C) AREAS.—^The plan shall include a concise state-
ment of the goals for a modernized system for the delivery 
of student financial assistsmce under title IV and identify 
'•9fe-«s*!^-\, 
' 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1607 
action steps necessary to achieve such goals. The plan 
shall address the PBO's responsibilities in the following 
areas: 
"(i) IMPROVING SERVICE.—^Improving service to stu-
dents and other participants in student financial aid 
programs authorized under this title, including making 
those programs more understandable to students and 
their parents. 
"(ii) REDUCING COSTS.—Reducing the costs of 
administering those programs. 
"(iii) IMPROVEMENT AND INTEGRATION OF SUPPORT 
SYSTEMS.—^Improving and integrating the information 
and delivery systems that suppoirt those programs. 
"(iv) 
DELIVERY 
AND 
INI-ORMATION 
SYSTEM.— 
Developing an open, common, and integrated delivery 
and information system for programs authorized under 
this title. 
"(v) OTHER AREAS.—Any other areas identified by 
the Secretary. 
**(2) ANNUAL REPORT.—Each year, the Chief Operating 
Officer shall prepare and submit to Congress, through the 
Secretary, an annual report on the performance of the PBO, 
including an evaluation of the extent to which the PBO met 
the goals and objectives contained in the 5-year performance 
plan described in paragraph (1) for the preceding year. The 
annual report shall include the following: 
"(A) An independent financial audit of the expenditures 
of both the PBO and programs administered by the PBO. 
"(B) 
Financial 
and 
performance 
requirements 
applicable to the PBO under the Chief Financial Officer 
Act of 1990 and the Government Performance and Results 
Act of 1993. 
"(C) The results achieved by the PBO during the year 
relative to the goals established in the organization's 
performance plan. 
"(D) The evaluation rating of the performance of the 
Chief Operating Officer and senior managers under sub-
sections (d)(4) and (eX2), including the amounts of bonus 
compensation awarded to these individuals. 
"(E) Recommendations for legislative and regulatory 
changes to improve service to students and their families, 
and to improve program efficiency and integrity. 
"(F) Other such information as the Director of the 
Office of Management and Budget shall prescribe for 
performance based organizations. 
"(3) 
CONSULTATION 
WITH 
STAKEHOLDERS.—The 
Chief 
Operating Officer, in preparing the report described in para-
graph (2), shall establish appropriate means to consult with 
borrowers, institutions, lenders, guaranty agencies, secondary 
markets, and others involved in the delivery system of student 
aid under this title— 
"(A) regarding the degree of satisfaction with the 
delivery system; and 
"(B) to seek suggestions on means to improve the 
delivery system. 
"(d) CHIEF OPERATING OFFICER.— 
112 STAT. 1608 
PUBLIC LAW 105-244—OCT. 7, 1998 
Deadline. 
Public 
information. 
"(1) APPOINTMENT.—The management of the PBO shall 
be vested in a Chief Operating Officer who shall be appointed 
by the Secretary to a term of not less than 3 and not more 
than 5 years, and compensated without regard to chapters 
33, 51, and 53 of title 5, United States Code. The Secretary 
shall appoint the Chief Operating Officer within 6 months 
after the date of enactment of the Higher Education Amend-
ments of 1998. The appointment shall be made on the basis 
of demonstrated management ability and expertise in informa-
tion technology, including experience with financial systems, 
and without regard to political affiliation or activity. 
"(2) REAPPOINTMENT.—^The Secretary may reappoint the 
Chief Operating Officer to subsequent terms of not less than 
3 and not more than 5 years, so long as the performance 
of the Chief Operating Officer, as set forth in the perform£ince 
agreement described in paragraph (4), is satisfactory. 
"(3) REMOVAL.—The Chief Operating Officer may be 
removed by— 
"(A) the President; or 
"(B) the Secretary, for misconduct or failure to meet 
performance goals set forth in the performance agreement 
in paragraph (4). 
The President or Secretary shall communicate the reasons for 
any such removal to the appropriate committees of Congress. 
"(4) PERFORMANCE AGREEMENT.— 
"(A) IN GENERAL.—^Each year, the Secretary and the 
Chief Operating Officer shall enter into an annual perform-
ance agreement, that shall set forth measurable organiza-
tion and individual goals for the Chief Operating Officer. 
"(B) TRANSMITTAL.—^The final agreement, and any revi-
sion to the final agreement, shall be transmitted to the 
Committee on Education and the Workforce of the House 
of Representatives and the Committee on Labor and 
Human Resources of the Senate, and made publicly avail-
able. 
"(5) COMPENSATION.— 
"(A) IN GENERAL.—The Chief Operating Officer is 
authorized to be paid at an annual rate of basic pay not 
to exceed the maximum rate of basic pay for the Senior 
Executive Service under section 5382 of title 5, United 
States Code, including any applicable locality-based com-
parability payment that may be authorized under section 
5304(hX2XB) of such title. The compensation of the Chief 
Operating Officer shall be considered for purposes of section 
207(c)(2)(A) of title 18, United States Code, to be the 
equivalent of that described under clause (ii) of section 
207(cX2)(A) of such title. 
"(B) BONUS.—In addition, the Chief Operating Officer 
may receive a bonus in an amount that does not exceed 
50 percent of such annual rate of basic pay, based upon 
the Secretary's evaluation of the Chief Operating Officer's 
performance in relation to the goals set forth in the 
performance sigreement described in paragraph (2). 
"(C) PAYMENT.—^Payment of a bonus under 
this 
subparagraph (B) may be made to the Chief Operating 
Officer only to the extent that such payment does not 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1609 
cause the Chief Operating Officer's total aggregate com-
pensation in a calendar year to equal, or exceed the amount 
of the President's salary under section 102 of title 3, United 
States Code. 
"(e) SENIOR MANAGEMENT.— 
"(1) APPOINTMENT.— 
"(A) IN GENERAL.—The Chief Operating Officer may 
appoint such senior managers as that officer determines 
necessary without regard to the provisions of title 5, United 
States Code, governing appointments in the competitive 
service. 
"(B) COMPENSATION.—^The senior managers described 
in subparagraph (A) may be paid without regard to the 
provisions of chapter 51 and subchapter III of chapter 
53 of such title relating to classification £ind General Sched-
ule pay rates. 
"(2) PERFORMANCE AGREEMENT.—^Each year, the Chief 
Operating Officer and each senior manager appointed under 
this subsection shall enter into an annual performance agree-
ment that sets forth measurable organization and individual 
goals. The agreement shall be subject to review and renegoti-
ation at the end of each term. 
"(3) COMPENSATION.— 
"(A) IN GENERAL.—A senior manager appointed under 
this subsection may be paid at an annual rate of basic 
pay of not more than the maximum rate of basic pay 
for the Senior Executive Service under section 5382 of 
title 5, United States Code, including any applicable local-
ity-based comparability payment that may be authorized 
under section 5304(h)(2XC) of such title. The compensation 
of a senior manager shall be considered for purposes of 
section 207(cX2XA) of title 18, United States Code, to be 
the equivalent of that described under clause (ii) of section 
207(cX2)(A) of such title. 
"(B) BONUS.—In addition, a senior manager may 
receive a bonus in an amount such that the manager's 
total annual compensation does not exceed 125 percent 
of the maximum rate of basic pay for the Senior Executive 
Service, including any applicable locality-based comparabil-
ity payment, based upon the Chief Operating Officer's 
evaluation of the manager's performance in relation to 
the goals set forth in the performance agreement described 
in paragraph (2). 
"(4) REMOVAL.—A senior manager shall be removable by 
the Chief Operating Officer, or by the Secretary if the position 
of Chief Operating Officer is vacant. 
"(f) STUDENT LOAN OMBUDSMAN.— 
"(1) APPOINTMENT.—The Chief Operating Officer, in con-
sultation with the Secretary, shall appoint a Student Loan 
Ombudsman to provide timely assistance to borrowers of loans 
made, insured, or guaranteed imder title IV by performing 
the functions described in paragraph (3). 
"(2) PUBLIC INFORMATION.—The Chief Operating Officer 
shall disseminate information about the availability and func-
tions of the Ombudsman to borrowers and potential borrowers, 
as well as institutions of higher education, lenders, guaranty 
112 STAT. 1610 
PUBLIC LAW 105-244—OCT. 7, 1998 
agencies, loan servicers, and other participants in those student 
loan programs. 
Regulations. 
"(3) FUNCTIONS OF OMBUDSMAN.—The Ombudsman shall— 
"(A) in accordance with regulations of the Secretary, 
receive, review, and attempt to resolve informally com-
plaints from borrowers of loans described in paragraph 
(1), including, as appropriate, attempts to resolve such 
complaints within the Department of Education and with 
institutions of higher education, lenders, guaranty agencies, 
loan servicers, and other participants in the loan programs 
described in paragraph (1)(A); and 
Records. 
"(B) compile and analyze data on borrower complaints 
and make appropriate recommendations. 
"(4) REPORT.—Each year, the Ombudsman shall submit 
a report to the Chief Operating Officer, for inclusion in the 
annual report under subsection (c)(2), that describes the activi-
ties, and evaluates the effectiveness of the Ombudsman during 
the preceding year. 
"(g) PERSONNEL FLEXIBILITY.— 
"(1) PERSONNEL CEILINGS.—The PBO shall not be subject 
to any ceiling relating to the number or grade of employees. 
"(2) ADMINISTRATIVE FLEXIBILITY.—^The Chief Operating 
Officer shall work with the Office of Personn,el Management 
to develop and implement personnel flexibilities in staffing, 
classification, and pay that meet the needs of the PBO, subject 
to compliance with title 5, United States Code. 
"(3) EXCEPTED SERVICE.—^The Chief Operating Officer may 
appoint, without regard to the provisions of title 5, United 
States Code, governing appointments in the competitive service, 
not more than 25 technical and professional employees to 
administer the functions of the PBO. These employees may 
be paid without regard to the provisions of chapter 51 and 
subchapter III of chapter 53 of such title relating to classifica-
tion and Greneral Schedule pay rates. 
"(h) ESTABLISHMENT OF A FAIR AND EQUITABLE SYSTEM FOR 
MEASURING STAFF PERFORMANCE.—^The PBO shall establish an 
annual performance management system, subject to compliance 
with title 5, United States Code and consistent with applicable 
provisions of law £md regulations, which strengthens the organiza-
tional effectiveness of the PBO by providing for establishing goals 
or objectives for individual, group, or organizational performance 
(or any combination thereof), consistent with the performance plan 
of the PBO and its performance planning procedures, including 
those established under the Government Performance and Results 
Act of 1993, and communicating such goals or objectives to employ-
ees. 
Deadline. 
"(i) REPORT.—^The Secretary and the Chief Operating Officer, 
not later than 180 days after the date of enactment of the Higher 
Education Amendments of 1998, shall report to Congress on the 
proposed budget and sources of funding for the operation of the 
PBO. 
"(j) AUTHORIZATION OF APPROPRIATIONS.—^The Secretary shall 
allocate from funds made avEiilable under section 458 such funds 
as are appropriate to the functions assumed by the PBO. In addi-
tion, there are authorized to be appropriated such sums as may 
be necessary to carry out the purposes of this part, including transi-
tion costs. 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1611 
<^EC. 142. PROCUREMENT FLEXIBILITY. 
20 use 1018a. 
"(a) PROCUREMENT AUTHORITY.—Subject to the authority of 
the Secretary, the Chief Operating Officer of a PBO may exercise 
the authority of the Secretary to procure property and services 
in the performance of functions managed by the PBO. For the 
purposes of this section, the term 'PBO' includes the Chief Operating 
Officer of the PBO and any employee of the PBO exercising procure-
ment authority under the preceding sentence. 
"(b) IN GENERAL.—^Except as provided in this section, the PBO 
shall abide by all applicable Federal procurement laws and regula-
tions when procuring property and services. The PBO shall— 
"(1) enter into contracts for information systems supporting Contracts, 
the programs authorized under title IV to carry out the func-
tions set forth in section 141(b)(2); and 
"(2) obtain the services of experts and consultants without 
regard to section 3109 of title 5, United States Code and set 
pay in accordance with such section. 
^(c) SERVICE CONTRACTS.— 
"(1) 
PERFORMANCE-BASED 
SERVICING 
CONTRACTS.—The 
Chief Operating Officer shall, to the extent practicable, maxi-
mize the use of performance-based servicing contracts, consist-
ent with guidelines for such contracts published by the Office 
of Federal Procurement Policy, to achieve cost savings and 
improve service. 
"(2) FEE FOR SERVICE ARRANGEMENTS.—The Chief Operat-
ing Officer shall, when appropriate and consistent with the 
purposes of the PBO, acquire services related to the title IV 
delivery system from any entity that has the capability and 
capacity to meet the requirements for the system. The Chief 
Operating Officer is authorized to pay fees that are equivalent 
to those paid by other entities to an organization that provides 
an information system or service that meets the requirements 
of the PBO, as determined by the Chief Operating Officer. 
"(d) TWO-PHASE SOURCE-SELECTION PROCEDURES.— 
"(1) IN GENERAL.—^The PBO may use a two-phase process 
for selecting a source for a procurement of property or services. 
"(2) FIRST PHASE.—The procedures for the first phase of 
the process for a procurement are as follows: 
"(A) PUBLICATION OF NOTiCE.^The contracting officer 
for the procurement shall publish a notice of the procure-
ment in accordance with section 18 of the Office of Federal 
Procurement Policy Act (41 U.S.C. 416) and subsections 
(e), (f), and (g) of section 8 of the Small Business Act 
(15 U.S.C. 637), except that the notice shall include only 
the following: 
"(i) A general description of the scope or purpose 
of the procurement that provides sufficient information 
on the scope or purpose for sources to make informed 
business decisions regarding whether to participate in 
the procurement. 
"(ii) A description of the basis on which potential 
sources are to be selected to submit offers in the second 
phase. 
"(iii) A description of the information that is to 
be required under subparagraph (B). 
"(iv) Any additional information that the contract-
ing officer determines appropriates. 
112 STAT. 1612 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(B) 
INFORMATION 
SUBMITTED BY OFFERORS.—Each 
offeror for the procurement shall submit basic information, 
such as information on the offeror's qualifications, the pro-
posed conceptual approach, costs likely to be associated 
with the proposed conceptual approach, and past perform-
ance of the offeror on Federal Grovemment contracts, 
together with any additional information that is requested 
by the contracting officer. 
"(C) SELECTION FOR SECOND PHASE.—^The contracting 
officer shall select the offerors that are to be eligible to 
participate in the second phase of the process. The contract-
ing officer shall limit the number of the selected offerors 
to the number of sources that the contracting officer deter-
mines is appropriate and in the best interests of the Federal 
Government. 
"(3) SECOND PHASE.— 
"(A) IN GENERAL.—^The contracting officer shall conduct 
the second phase of the source selection process in accord-
since with sections 303A and 303B of the Federal Property 
and Administrative Services Act of 1949 (41 U.S.C. 253a 
and 253b). 
"(B) ELIGIBLE PARTICIPANTS.—Only the sources selected 
in the first phase of the process shall be eligible to partici-
pate in the second phase. 
"(C) SINGLE OR MULTIPLE PROCUREMENTS.—^The second 
phase may include a single procurement or multiple 
procurements within the scope, or for the purpose, 
described in the notice pursuant to paragraph (2)(A). 
"(4) PROCEDURES CONSIDERED COMPETITIVE.—^The proce-
dures used for selecting a source for a procurement under 
this subsection shall be considered competitive procedures for 
all purposes. 
"(e) USE OF SIMPLIFIED PROCEDURES FOR COMMERCIAL ITEMS.— 
Whenever the PBO anticipates that commercial items will be offered 
for a procurement, the PBO may use (consistent with the special 
rules for commercial items) the special simplified procedures for 
the procurement without regard to— 
"(1) any dollar limitation otherwise applicable to the use 
of those procedures; and 
"(2) the expiration of the authority to use special simplified 
procedures under section 4202(e) of the Clinger-Cohen Act of 
1996 (110 Stat. 654; 10 U.S.C. 2304 note). 
"(f) FLEXIBLE WAIT PERIODS AND DEADLINES FOR SUBMISSION 
OF OFFERS OF NONCOMMERCIAL ITEMS.— 
"(1) AUTHORITY.—In carrying out a procurement, the PBO 
may— 
"(A) apply a shorter waiting period for the issuance 
of a solicitation after the publication of a notice under 
section 18 of the Office of Federal Procurement Policy 
Act (41 U.S.C. 416) than is required under subsection 
(a)(3)(A) of such section; and 
"(B) notwithstanding subsection (a)(3) of such section, 
establish any deadline for the submission of bids or propos-
als that affords potential offerors a reasonable opportunity 
to respond to the solicitation. 
"(2) INAPPUCABILITY TO COMMERCIAL ITEMS.—Paragraph 
(1) does not apply to a procurement of a commercial item. 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1613 
"(3) CONSISTENCY WITH APPLICABLE INTERNATIONAL AGREE-
MENTS.—If an international agreement is applicable to the 
procurement, any exercise of authority under paragraph (1) 
shall be consistent with the international agreement. 
"(g) MODULAR CONTRACTING.— 
"(1) IN GENERAL.—^The PBO may satisfy the requirements 
of the PEG for a system incrementally by carrying out succes-
sive procurements of modules of the system. In doing so, the 
PBO may use procedures authorized under this subsection to 
procure any such module after the first module. 
"(2) UTILITY REQUIREMENT.—A module may not be procured 
for a system under this subsection unless the module is useful 
independently of the other modules or useful in combination 
with another module previously procured for the system. 
"(3) CONDITIONS FOR USE OF AUTHORITY.—The PBO may 
use procedures authorized under paragraph (4) for the procure-
ment of an additional module for a system if— 
"(A) competitive procedures were used for awarding 
the contract for the procurement of the first module for 
the system; and 
"(B) the solicitation for the first module included— 
"(i) a general description of the entire system that 
was sufficient to provide potential offerors with reason-
able notice of the general scope of future modules; 
"(ii) other information 
sufficient for potentied 
offerors to make informed business judgments regard-
ing whether to submit offers for the contract for the 
first module; and 
"(iii) a statement that procedures authorized under 
this subsection could be used for awarding subsequent 
contracts for the procurement of additional modules 
for the system. 
"(4) PROCEDURES.—If the procurement of the first module 
for a system meets the requirements set forth in paragraph 
(3), the PBO may award a contract for the procurement of 
an additional module for the system using any of the following 
procedures: 
"(A) SOLE SOURCE.—Award of the contract on a sole-
source basis to a contractor who was awarded a contract 
for a module previously procured for the system under 
competitive procedures or procedures authorized under 
subparagraph (B). 
"(B) ADEQUATE COMPETITION.—Award of the contract 
on the basis of offers made by— 
"(i) a contractor who was awarded a contract for 
a module previously procured for the system after hav-
ing been selected for award of the contract under this 
subparagraph or other competitive procedures; and 
"(ii) at least one other offeror that submitted an 
offer for a module previously procured for the system 
and is expected, on the basis of the offer for the pre-
viously procured module, to submit a competitive offer 
for the additional module. 
"(C) OTHER.—Award of the contract under any other 
procedure authorized by law. 
"(5) NOTICE REQUIREMENT.— 
112 STAT. 1614 
PUBLIC LAW 105-244—OCT. 7, 1998 
Deadline. 
"(A) PUBLICATION.—^Not less than 30 days before issu-
ing a solicitation for offers for a contract for a module 
for a system under procedures authorized under subpara-
graph (A) or (B) of paragraph (4), the PBO shall publish 
in the Commerce Business Daily a notice of the intent 
to use such procedures to enter into the contract. 
"(B) EXCEPTION.—Publication of a notice is not required 
under this paragraph with respect to a use of procedures 
authorized under paragraph (4) if the contractor referred 
to in that subparagraph (who is to be solicited to submit 
an offer) has previously provided a module for the system 
under a contract that contained cost, schedule, and 
performance goals and the contractor met those goals. 
"(C) CONTENT OP NOTICE.—^A notice pubhshed under 
subparagraph (A) with respect to a use of procedures 
described in p£u*agraph (4) shall contain the information 
required under section 18(b) of the Office of Federal 
Procurement Policy Act (41 U.S.C. 416(b)), other than para-
graph (4) of such section, and shall invite the submission 
of any assertion that the use of the procedures for the 
procurement involved is not in the best interest of the 
Federal Government together with information supporting 
the assertion. 
"(6) DOCUMENTATION.—The basis for gui award of a contract 
under this subsection shall be documented. However, a justifica-
tion pursuant to section 303(f) of the Federal Property and 
Administrative Services Act of 1949 (41 U.S.C. 253(f)) or section 
8(h) of the Small Business Act (15 U.S.C. 637(h)) is not 
required. 
"(7) SIMPLIFIED SOURCE-SELECTION PROCEDURES.—The PBO 
may award a contract under any other simplified procedures 
prescribed by the PBO for the selection of sources for the 
procurement of modules for a system, after the first module, 
that are not to be procured under a contract awarded on a 
sole-source basis. 
"(h) USE OF SIMPLIFIED PROCEDURES FOR SMALL BUSINESS SET-
ASIDES FOR SERVICES OTHER THAN COMMERCIAL ITEMS.— 
"(1) AUTHORITY.—^The PBO may use special simplified 
procedures for a procurement of services that are not commer-
cial items if— 
"(A) the procurement is in an amount not greater than 
$1,000,000; 
"(B) the procurement is conducted as a small business 
set-aside pursuant to section 15(a) of the Small Business 
Act (15 U.S.C. 644(a)); and 
"(C) the price charged for supplies associated with 
the services procured are items of supply expected to be 
less than 20 percent of the total contract price. 
"(2) 
INAPPLICABILITY TO CERTAIN PROCUREMENTS.—The 
authority set forth in paragraph (1) may not be used for— 
"(A) an award of a contract on a sole-source basis; 
or 
"(B) a contract for construction. 
"(i) GUIDANCE FOR USE OF AUTHORITY.— 
"(1) ISSUANCE BY PBO.—^The Chief Operating Officer of the 
PBO, 
in consultation with the Administrator for Federal 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1615 
Procurement Policy, shall issue guidance for the use by PBO 
personnel of the authority provided in this section. 
"(2) GUIDANCE FROM OFPP.—AS pstrt of the consultation 
required under paragraph (1), the Administrator for Federal 
Procurement Policy shall provide the PBO with guidance that 
is designed to ensure, to the maximum extent practicable, that 
the authority under this section is exercised by the PBO in 
a manner that is consistent with the exercise of the authority 
by the heads of the other performance-based organizations. 
"(3) COMPLIANCE WITH OFPP GUIDANCE.—^The head of the 
PBO shall ensure that the procurements of the PBO under 
this section are carried out in a manner that is consistent 
with the guidance provided for the PBO under paragraph (2). 
"(j) LIMITATION ON MULTIAGENCY CONTRACTING.—^No depart-
ment or agency of the Federal Government may purchase property 
or services under contracts entered into or administered by a PBO 
under this section unless the purchase is approved in advance 
by the senior procurement official of that department or agency 
who is responsible for purchasing by the department or agency, 
"(k) LAWS NOT AFFECTED.—^Nothing in this section shall be 
construed to waive laws for the enforcement of civil rights or for 
the establishment and enforcement of labor standards that are 
applicable to contracts of the Federal Government. 
"(1) DEFINITIONS.—In this section: 
"(1) COMMERCIAL ITEM.—^The term 'commercial item' has 
the meaning given the term in section 4(12) of the Office 
of Federal Procurement Policy Act (41 U.S.C. 403(12)). 
"(2) COMPETITIVE PROCEDURES.—^The term 'competitive 
procedures' has the meaning given the term in section 309(b) 
of the Federal Property and Administrative Services Act of 
1949 (41 U.S.C. 259(b)). 
"(3) SOLE-SOURCE BASIS.—The term 'sole-source basis', with 
respect to an award of a contract, means that the contract 
is awarded to a source after soliciting an offer or offers from, 
and negotiating with, only that source. 
"(4) SPECIAL RULES FOR COMMERCIAL iTEMS.^The term 
'special rules for commercial items' means the regulations set 
forth in the Federal Acquisition Regulation pursuant to section 
303(gXl) of the Federal Property and Administrative Services 
Act of 1949 (41 U.S.C. 253(gXl)) and section 31 of the Office 
of Federal Procurement Policy Act (41 U.S.C. 427). 
"(5) SPECIAL SIMPLIFIED PROCEDURISS.—^The term 'special 
simplified procedures' means the procedures applicable to pur-
chases of property and services for amounts not greater than 
the simplified acquisition threshold that are set forth in the 
Federal Acquisition Regulation pursuant to section 303(g)(1)(B) 
of the Federal Property and Administrative Services Act of 
1949 (41 U.S.C. 253(gXl)(A)) and section 31(aXl) of the Office 
of Federal Procurement Policy Act (41 U.S.C. 427(aXl)). 
'^EC. 143. ADMINISTRATIVE SIMPLIFICATION OF STUDENT AID DELIV- 20 USC 1018b. 
ERY. 
"(a) IN GENERAL.—In order to improve the efficiency and 
effectiveness of the student aid delivery system, the Secretary and 
the Chief Operating Officer shall encourage and participate in the 
establishment of voluntary consensus standards and requirements 
112 STAT. 1616 
PUBLIC LAW 105-244—OCT. 7, 1998 
for the electronic transmission of information necessary for the 
administration of programs under title IV. 
"(b) PARTICIPATION IN STANDARD SETTING ORGANIZATIONS.— 
"(1) The Chief Operating Officer shall participate in the 
activities of standard setting organizations in carrying out the 
provisions of this section. 
"(2) The Chief Operating Officer shall encourage higher 
education groups seeking to develop common forms, standards, 
and procedures in support of the delivery of Federal student 
financial assistance to conduct these activities within a stand-
ard setting organization. 
"(3) The Chief Operating Officer may pay necessary dues 
and fees associated with participating in standard setting 
org£uiizations pursuEmt to this subsection. 
"(c) ADOPTION OF VOLUNTARY CONSENSUS STANDARDS.—^Except 
with respect to the common financial reporting form under section 
483(a), the Secretary shall consider adopting voluntary consensus 
standards agreed to by the organization described in subsection 
(b) for transactions required under title IV, and common data 
elements for such transactions, to enable information to be 
exchanged electronically between systems administered by the 
Department and among participants in the Federal student aid 
delivery system. 
"(d) USE OF CLEARINGHOUSES.—^Nothing in this section shall 
restrict the ability of participating institutions and lenders from 
using a clearinghouse or servicer to comply with the standards 
for the exchange of information established under this section. 
"(e) DATA SECURITY.—Any entity that maintains or transmits 
information under a transaction covered by this section shall main-
tain reasonable and appropriate administrative, technical, and 
physical safeguards— 
"(1) to ensure the integrity and confidentiality of the 
information; and 
"(2) to protect against any reasonably anticipated security 
threats, or unauthorized uses or disclosures of the information. 
"(f) DEFINITIONS.— 
"(1) CLEARINGHOUSE.—^The term 'clearinghouse' means a 
public or private entity that processes or facilitates the process-
ing of nonstandard data elements into data elements conform-
ing to standards adopted under this section. 
"(2) STANDARD SETTING ORGANIZATION.—The term 'standard 
setting organization' means an organization that— 
"(A) is accredited by the American National Standards 
Institute; 
"(B) develops standards for information transactions, 
data elements, or any other standard that is necessary 
to, or will facilitate, the implementation of this section; 
and 
"(C) is open to the participation of the various entities 
engaged in the delivery of Federal student financial assist-
ance. 
"(3) VOLUNTARY CONSENSUS STANDARD.—^The term 'vol-
untary consensus standard' means a standard developed or 
used by a standard setting organization described in paragraph 
(2).". 
(b) REPEAL OF OLD GENERAL PROVISIONS.—Title XII (20 U.S.C. 
1141 et seq.) is repealed. 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1617 
(c) REPEAL OF TITLE IV DEFINITION.—Section 481 (20 U.S.C. 
1088) is amended— 
(1) by striking subsections (a), (b), and (c); and 
(2) by redesignating subsections (d) through (f) as sub-
sections (a) through (c), respectively. 
SEC. 102. CONFORMING AMENDMENTS. 
(a) CONFORMING AMENDMENTS CORRECTING REFERENCES TO 
SECTION 1201.— 
(1) AGRICULTURE.— 
(A) STUDENT INTERNSHIP PROGRAMS.—Section 922 
of 
the Federal Agriculture Improvement and Reform Act of 
1996 (7 U.S.C. 2279c) is amended— 
(i) in subsection (aXlXB)— 
(I) by striking "1201" and inserting "101"; and 
(II) by striking "(20 U.S.C. 1141)"; and 
(ii) in subsection (b)(1)— 
(I) by striking "1201" and inserting "101"; and 
(II) by striking "(20 U.S.C. 1141)". 
(B) 
AGRICULTURAL 
SCIENCES 
EDUCATION.—Section 
1417(jXl)(A) of the National Agricultural Research, Exten-
sion, and Teaching 
Policy Act of 1977 (7 U.S.C. 
3152(jXl)(A)) is amended— 
(i) by striking "1201(a)" and inserting "101"; and 
(ii) by striking "(20 U.S.C. 1141(a))". 
(2) ARMED FORCES.— 
(A) SCIENCE AND MATHEMATICS EDUCATION IMPROVE-
MENT PROGRAM.—Section 2193(cXl) of title 10, United 
States Code, is amended— 
(i) by striking "1201(a)" and inserting "101"; and 
(ii) by striking "(20 U.S.C. 1141(a))". 
(B) SUPPORT OF SCIENCE, MATHEMATICS, AND ENGINEER-
ING EDUCATION.—Section 2199(2) of title 10, United States 
Code, is amended— 
(i) by striking "1201(a)" and inserting "101"; and 
(ii) by striking "(20 U.S.C. 1141(a))". 
(C) ALLOWABLE COSTS UNDER DEFENSE CONTRACTS.— 
Section 841(cX2) of the National Defense Authorization 
Act for fiscal year 1994 (10 U.S.C. 2324 note) is amended— 
(i) by striking "1201(a)" and inserting "101"; and 
(ii) by striking "(20 U.S.C. 1141(a))". 
(D) 
ENVIRONMENTAL 
RESTOR!VTION 
INSTITUTIONAL 
GRANTS FOR TRAINING DISLOCATED DEFENSE WORKERS AND 
YOUNG ADULTS.—Section 1333(iX3) of the National Defense 
Authorization Act for fiscal year 1994 (10 U.S.C. 2701 
note) is amended— 
(i) by striking "1201(a)" and inserting "101"; and 
(ii) by striking "(20 U.S.C. 1141(a))". 
(E) ENVIRONMENTAL EDUCATION OPPORTUNITIES PRO-
GRAM.—Section 
1334(kX3) 
of the 
National 
Defense 
Authorization Act for fiscal year 1994 (10 U.S.C. 2701 
note) is amended— 
(i) by striking "1201(a)" and inserting "101"; and 
(ii) by striking "(20 U.S.C. 1141(a))". 
(F) 
ENVIRONMENTAL SCHOLARSHIP AND FELLOWSHIP 
PROGRAMS.—Section 4451(bXl) of the National Defense 
112 STAT. 1618 
PUBLIC LAW 105-244—OCT. 7, 1998 
Authorization Act for 1993 (10 U.S.C. 2701 note) is amend-
ed— 
(i) by striking "1201(a)" and inseri:ing "101"; and 
(ii) by striking "(20 U.S.C. 1141(a))". 
(3) APPLICATION OF ANTITRUST LAWS TO AWARD OF NEED-
BASED EDUCATIONAL AID.—Section 568(c)(3) of the Improving 
America's Schools Act of 1994 (15 U.S.C. 1 note) is amended— 
(A) by striking "1201(a)" and inseri:ing "101"; and 
(B) by striking "(20 U.S.C. 1141(a))". 
(4) OMNIBUS PARKS AND PUBLIC LANDS MANAGEMENT ACT 
OF 1996.—Section 1007(c)(5) of the Omnibus Parks and PubUc 
Lands Management Act of 1996 (16 U.S.C. 698u-5) is amended 
by striking "1201(a) of the Higher Education Act of 1965 (20 
U.S.C. 1141(a))" and inserting "101 of the Higher Education 
Act of 1965". 
(5) RESTRICTIONS ON FORMER OFFICERS, EMPLOYEES, AND 
ELECTED 
OFFICIALS OF THE EXECUTIVE AND LEGISLATIVE 
BRANCHES.—Section 207(j)(2)(B) of title 18, United States Code, 
is amended by striking "1201(a)" and inserting "101". 
(6) EDUCATION.— 
(A) HIGHER EDUCATION AMENDMENTS OF 1992.—Section 
1(c) of the Higher Education Amendments of 1992 (20 
U.S.C. 1001 note) is amended by striking "1201" and insert-
ing "101". 
(B) TREATMENT OF BRANCHES.—Section 498(j)(2) of the 
Higher Education Act of 1965 (20 U.S.C. 1099c(j)(2)) is 
amended by striking "1201(a)(2)" and inserting "101(a)(2)". 
(C) 
DISCLOSURE 
REQUIREMENTS.—Section 
429(d)(2)(B)(ii) of the General Education Provisions Act 
(20 U.S.C. 1228c(d)(2)(B)(ii)) is amended by striking 
"1201(a)" and inserting "101". 
(D) HARRY S. TRUMAN SCHOLARSHIPS.—Section 3(4) of 
the Harry S. Truman Memorial Scholarship Act (20 U.S.C. 
2002(4)) is amended by striking "1201(a)" and inserting 
"101". 
(E) TECH-PREP EDUCATION.—Section 347(2)(A) of the 
Carl D. Perkins Vocational and Applied Technology Edu-
cation Act (20 U.S.C. 2394e(2)(A)) is amended by striking 
"1201(a)" and inserting "101". 
(F) EDUCATION FOR ECONOMIC SECURITY.—Section 3(6) 
of the Education for Economic Security Act (20 U.S.C. 
3902(6)) is amended by striking "1201(a)" and inserting 
"101". 
(G) JAMES MADISON MEMORIAL FELLOWSHIPS.—Section 
815 of the James Madison Memorial Fellowship Act (20 
U.S.C. 4514) is amended— 
(i) in paragraph (3), by striking "1201(a)" and 
inserting "101"; and 
(ii) in paragraph (4), by striking "1201(d) of the 
Higher Education Act of 1965" and inserting "14101 
of the Elementary and Secondary Education Act of 
1965". 
(H) BARRY GOLDWATER SCHOLARSHIPS.—Section 1403(4) 
of the Barry Goldwater Scholarship and Excellence in Edu-
cation Act (20 U.S.C. 4702(4)) is amended— 
(i) by striking "1201(a)" and inserting "101"; and 
(ii) by striking "(20 U.S.C. 1141(a))". 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1619 
(I) MORRIS K. UDALL SCHOLARSHIPS.—Section 4(6) of 
the Morris K Udall Scholarship and Excellence in National 
Environmental and Native American Public Policy Act of 
1992 (20 U.S.C. 5602(6)) is amended by striking "1201(a)'' 
and inserting "101". 
(J) BILINGUAL EDUCATION, AND LANGUAGE ENHANCE-
MENT AND ACQUISITION.—Section 7501(4) of the Elementary 
and Secondary Education Act of 1965 (20 U.S.C. 7601(4)) 
is amended by striking "1201(a)" and inserting "101". 
(K) GENERAL DEFINITIONS.—Section 14101(17) of the 
Elementary and Secondary Education Act of 1965 (20 
U.S.C. 8801(17)) is amended by striking "1201(a)" and 
inserting "101". 
(L) NATIONAL EDUCATION STATISTICS.—Section 402(c)(3) 
of the National Education Statistics Act of 1994 (20 U.S.C. 
9001(c)(3)) is amended by striking "1201(a)" and inserting 
"101". 
(7) FOREIGN RELATIONS.— 
(A) 
ENVIRONMENT AND SUSTAINABLE 
DEVELOPMENT 
EXCHANGE PROGRAM.—Section 240(d) of the Foreign Rela-
tions Authorization Act, Fiscal Years 1994 and 1995 (22 
U.S.C. 2452 note) is amended by striking "1201(a)" and 
inserting "101". 
(B) SAMANTHA SMITH MEMORIAL EXCHANGE PROGRAM.— 
Section 112(a)(8) of the Mutual Educational and Cultural 
Exchange Act of 1961 (22 U.S.C. 2460(a)(8)) is amended— 
(i) by striking "1201(a)" and inserting "101"; and 
(ii) by striking "(20 U.S.C. 1141(a))". 
(C) 
SOVIET-EASTERN 
EUROPEAN TRAINING.—Section 
803(1) of the Soviet-Eastern European Research and Train-
ing Act of 1983 (22 U.S.C. 4502(1)) is amended by striking 
"1201(a)" and inserting "101". 
(D) 
DEVELOPING 
COUNTRY 
SCHOLARSHIPS.—Section 
603(d) of the Foreign Relations Authorization Act, Fiscal 
Years 1986 and 1987 (22 U.S.C. 4703(d)) is amended by 
striking "1201(a)" and inserting "101". 
(8) INDIANS.— 
(A) SNYDER ACT.—^The last paragraph of section 410 
of the Act entitled "An Act authorizing appropriations and 
expenditures for the administration of Indian Affairs, and 
for other purposes", approved November 2, 1921 (25 U.S.C. 
13) (commonly known as the Snyder Act) is amended by 
striking "1201" and inserting "101". 
(B) TRIBALLY CONTROLLED COMMUNITY COLLEGE ASSIST-
ANCE.—Section 2(a)(5) of the Tribally Controlled Commu-
nity College Assistance Act (25 U.S.C. 1801(a)(5)) is amend-
ed by striking "1201(a)" and inserting "101". 
(C) 
CONSTRUCTION 
OF 
NEW FACILITIES.—Section 
113(b)(2) of the Tribally Controlled Community College 
Assistance Act (25 U.S.C. 1813(b)(2)) is amended— 
(i) by striking "1201(a)" and inserting "101"; and 
(ii) by striking "(20 U.S.C. 1141(a))". 
(D) 
AMERICAN INDIAN TEACHER TRAINING.—Section 
1371(a)(lXB) of the Higher Education Amendments of 1992 
(25 U.S.C. 3371(a)(1)(B)) is amended by striking "1201(a)" 
and inserting "101". 
(9) LABOR.— 
112 STAT. 1620 
PUBLIC LAW 105-244—OCT. 7, 1998 
(A) REHABILITATION DEFINITIONS.—Section 6(23) of the 
Rehabilitation Act of 1973 (29 U.S.C. 705(23)) is amended— 
(i) by striking "1201(a)" and inserting "101"; and 
(ii) by striking "(20 U.S.C. 1141(a))". 
(B) TECHNOLOGY RELATED ASSISTANCE FOR INDIVIDUALS 
WITH DISABILITIES ACT OF 1988.—Section 3(8) of the Tech-
nology Related Assistance for Individuals with Disabilities 
Act of 1988 (29 U.S.C. 2202(8)) is amended by striking 
"1201(a) of the Higher Education Act of 1965 (20 U.S.C. 
1141(a))" and inserting "101 of the Higher Education Act 
of 1965". 
(10) SURFACE MINING CONTROL.—Section 701(32) of the Sur-
face Mining Control and Reclamation Act of 1977 (30 U.S.C. 
1291(32)) is amended by striking "1201(a)" and inserting "101". 
(11) POLLUTION PREVENTION.—Section 112(a)(1) of the Fed-
eral Water Pollution Control Act (33 U.S.C. 1262(aXl)) is 
amended by striking "1201" and inserting "101". 
(12) POSTAL SERVICE.—Section 3626(b)(3) of title 39, United 
States Code, is amended— 
(A) by striking "1201(a)" and inserting "101"; and 
(B) by striking "(20 U.S.C. 1141(a))". 
(13) PUBLIC HEALTH AND WELFARE.— 
(A) PUBLIC HEALTH SERVICE ACT.—Section 705(a)(2)(C) 
of the Public Health Service Act (42 U.S.C. 292d(a)(2)(C)) 
is amended by striking "section 481(a)" and inserting "sec-
tion 102(a)". 
(B) SCIENTIFIC AND TECHNICAL EDUCATION.—Section 
3(g) of the Scientific and Advanced-Technology Act of 1992 
(42 U.S.C. 1862i(g)) is amended— 
(i) in paragraph (2)— 
(I) by striking "1201(a)" and inserting "101"; 
and 
(II) by striking "(20 U.S.C. 1141(a))"; and 
(ii) in paragraph (3)— 
(I) by striking "1201(a)" and inserting "101"; 
and 
(II) by striking "(20 U.S.C. 1141(a))". 
(C) OLDER AMERICANS.—Section 102(32) of the Older 
Americans Act of 1965 (42 U.S.C. 3002(32)) is amended— 
(i) by striking "1201(a)" and inserting "101"; and 
(ii) by striking "(20 U.S.C. 1141(a))". 
(D) JUSTICE SYSTEM IMPROVEMENT.—Section 901(17) 
of the Omnibus Crime Control and Safe Streets Act of 
1968 (42 U.S.C. 3791(17)) is amended— 
(i) by striking "1201(a)" and inserting "101"; and 
(ii) by striking "(20 U.S.C. 1141(a))". 
(E) ENERGY TECHNOLOGY COMMERCIALIZATION SERVICES 
PROGRAM.—Section 362(f)(5)(A) of the Energy Policy and 
Conservation Act (42 U.S.C. 6322(f)(5)(A)) is amended— 
(i) by striking "1201(a)" and inserting "101"; and 
(ii) by striking "(20 U.S.C. 1141(a))". 
(F) ENVIRONMENTAL RESTORATION AND WASTE MANAGE-
MENT.—Section 
3132(b)(1) 
of 
the 
National 
Defense 
Authorization Act for Fiscal Years 1992 and 1993 (42 U.S.C. 
7274e(bX D) is amended— 
(i) by striking "1201(a)" and inserting "101"; and 
(ii) by striking "(20 U.S.C. 1141(a))". 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1621 
(G) HEAD START.—Section 649(cX3) of the Head Start 
Act (42 U.S.C. 9844(cX3)) is amended— 
(i) by striking "1201(ar and inserting "101"; and 
(ii) by striking "(20 U.S.C. lUKa))". 
(H) STATE DEPENDENT CARE DEVELOPMENT GRANTS.— 
Section 670G(5) of the Child Care and Development Block 
Grant Act of 1990 (42 U.S.C. 9877(5)) is amended by strik-
ing "1201(a)'' and inserting "101". 
(I) 
INSTRUCTIONAL 
ACTIVITIES 
FOR 
LOW-INCOME 
YOUTH.—^The matter preceding subparagraph (A) of section 
682(bXl) of the Community Services Block Grant Act (42 
U.S.C. 9910c(bXl)) is amended by striking "1201(ar and 
inserting "101". 
(J) DRUG ABUSE EDUCATION.—Section 3601(7) of 
the 
Anti-Drug Abuse Act of 1988 (42 U.S.C. 11851(7)) is 
amended— 
(i) by striking "1201(a)" and inserting "101"; and 
(ii) by striking "(20 U.S.C. 1141(a))". 
(K) 
NATIONAL 
AND 
COMMUNITY SERVICE.—Section 
101(13) of the National and Community Service Act of 
1990 (42 U.S.C. 12511(13)) is amended— 
(i) by striking "1201(a)" and inserting "101"; and 
(ii) by striking "(20 U.S.C. 1141(a))". 
(L) CIVILIAN COMMUNITY CORPS.—Section 166(6) of the 
National and Community Service Act of 1990 (42 U.S.C. 
12626(6)) is amended— 
(i) by striking "1201(a)" and inserting "101"; and 
(ii) by striking "(20 U.S.C. 1141(a))". 
(M) CRANSTON-GONZALEZ NATIONAL AFFORDABLE HOUS-
ING ACT.—Section 457(9) of the Cranston-Gonzalez National 
Affordable Housing Act (42 U.S.C. 12899f(9)) is amended 
by striking "1201(a)" and inserting "101". 
(N) COMMUNITY SCHOOLS YOUTH SERVICES AND SUPER-
VISION GRANT PROGRAM.—The definition of public school 
in section 30401(b) of the Community Schools Youth Serv-
ices and Supervision Grant Program Act of 1994 (42 U.S.C. 
13791(b)) is amended— 
(i) by striking "1201" each place the term appears 
and inserting "101"; and 
(ii) by striking "(20 U.S.C. 1141(i))". 
(O) POLICE CORPS.—The definition of institution of 
higher education in section 200103 of the Police Corps 
Act (42 U.S.C. 14092) is amended— 
(i) by striking "1201(a)" and inserting "101"; and 
(ii) by striking "(20 U.S.C. 1141(a))". 
(P) LAW ENFORCEMENT SCHOLARSHIP PROGRAM.—The 
definition of institution of higher education in section 
200202 of the Law Enforcement Scholarship and Recruit-
ment Act (42 U.S.C. 14111) is amended— 
(i) by striking "1201(a)" and inserting "101"; and 
(ii) by striking "(20 U.S.C. 1141(a))". 
(14) TELECOMMUNICATIONS.—Section 223(hX4) of the Tele-
communications Act of 1934 (47 U.S.C. 223(h)(4)) is amended— 
(A) by striking "1201" and inserting "101"; and 
(B) by striking "(20 U.S.C. 1141)". 
5»-194 O - 98 - 24: QL 3 Part 2 
112 STAT. 1622 
PUBLIC LAW 105-244—OCT. 7, 1998 
(15) WAR AND NATIONAL DEFENSE.—Section 808(3) of the 
David L, Boren National Security Education Act of 1991 (50 
U.S.C. 1908(3)) is amended— 
(A) by striking "1201(a)" and inserting "101"; and 
(B) by striking "(20 U.S.C. 1141(a))". 
(b) INTERNAL CROSS REFERENCES.—The Act (20 U.S.C. 1001 
et seq.) is amended— 
(1) in section 402A(c)(2) (20 U.S.C. 1070a-l 1(c)(2)), by 
striking "1210" and inserting "118"; 
(2) in section 435(a) (20 U.S.C. 1085(a)), by striking "section 
481" and inserting "section 102"; 
(3) in section 485(f)(l)(I) (20 U.S.C. 1092(f)(lXI)), by 
striking "1213" and inserting "120"; 
(4) in section 487(d) (20 U.S.C. 1094(d)), by striking "section 
481" and inserting "section 102"; 
(5) in subsections (j) and (k) of section 496 (20 U.S.C. 
1099b), by striking "section 481" each place the term appears 
and inserting "section 102"; 
(6) in section 498(i) (20 U.S.C. 1099c) is amended by 
striking "section 481" and inserting "section 102"; 
(7) in section 498( j) (20 U.S.C. 1099c( j))— 
(A) in paragraph (1), by striking "sections 481(bX5) 
and 481(c)(3)" and inserting "sections 102(b)(1)(E) and 
102(cXl)(C)"; and 
(B) in paragraph (2), by striking "1201(aX2)" and 
inserting "101(aX2)"; and 
(8) in section 631(aX8) (20 U.S.C. 1132(aX8))— 
(A) by striking "section 1201(a)" each place the term 
appears and inserting "section 101"; and 
(B) by striking "of 1201(a)" and inserting "of section 
101". 
(c) 
ADDITIONAL 
CONFORMING 
AMENDMENTS 
CORRECTING 
REFERENCES TO SECTION 481.— 
(1) SCHOOL-TO-WORK OPPORTUNITIES ACT OF 1994.—Section 
4 of the School-to-Work Opportunities Act of 1994 (20 U.S.C. 
6103) is amended— 
(A) in paragraph (llXB)(viii), by striking "section 
481(b)" and inserting "section 102(b)"; and 
(B) in paragraph (12), by striking "section 481" and 
inserting "section 102". 
(2) NATIONAL AND COMMUNITY SERVICE ACT OF I99O.— 
Section 148(g) of the National and Community Service Act 
of 1990 (42 U.S.C. 12604(g)) is amended by striking "section 
481(a) of the Higher Education Act of 1965 (20 U.S.C. 1088(a))" 
and inserting "section 102 of the Higher Education Act of 
1965". 
(d) WORKFORCE INVESTMENT ACT OF 1998.—The Workforce 
Investment Act of 1998 is amended— 
(1) in section 101(35) (29 U.S.C. 2801(35)), by striking 
"section 481 of the Higher Education Act of 1965 (20 U.S.C. 
1088)" and inserting "section 102 of the Higher Education Act 
of 1965"; and 
(2) in section 203(11) (20 U.S.C. 9202(11)), by striking 
"section 1201 of the Higher Education Act of 1965 (20 U.S.C. 
1141)" and inserting "section 101 of the Higher Education Act 
of 1965". 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1623 
TITLE II—TEACHER QUALITY 
SEC. 
201. 
TEACHER 
QUALITY 
ENHANCEMENT 
GRANTS. 
The Act is amended by inserting after title I (20 U.S.C. 1001 
et seq.) the following: 
"TITLE 
II—TEACHER 
QUALITY EN-
HANCEMENT GRANTS FOR STATES 
AND PARTNERSHIPS 
"SBC. 201. PURPOSES; DEFINITIONS. 
20USC1021. 
"(a) PURPOSES.—^The purposes of this title are to— 
"(1) improve student achievement; 
"(2) improve the quaUty of the current and future teaching 
force by improving the preparation of prospective teachers and 
enhancing professional development activities; 
"(3) hold institutions of higher education accountable for 
preparing teachers who have the necessaiy teaching skills and 
are highly competent in the academic content areas in which 
the teachers plan to teach, such as mathematics, science, 
English, foreign languages, history, economics, art, civics. 
Government, and geography, including training in the effective 
uses of technology in the classroom; and 
"(4) recruit highly qualified individuals, including individ-
uals from other occupations, into the teaching force. 
"(b) DEFINITIONS.—^In this title: 
"(1) ARTS AND SCIENCES.—^The term 'arts and sciences' 
means— 
"(A) when referring to an organizational unit of an 
institution of higher education, any academic unit that 
offers 1 or more academic majors in disciplines or content 
areas corresponding to the academic subject matter areas 
in which teachers provide instruction; and 
"(B) when referring to a specific academic subject mat-
ter area, the disciplines or content areas in which academic 
majors are offered by the arts and science organizational 
unit. 
"(2) HIGH NEED LOCAL EDUCATIONAL, AOENCY.^The term 
'high need local educational agency* means a local educational 
agency that serves an elementary school or secondary school 
located in an area in which there is— 
"(A) a high percentage of individuals from families 
with incomes below the poverty line; 
"(B) a high percentage of secondary school teachers 
not teaching in the content area in which the teachers 
were trained to teach; or 
"(C) a high teacher turnover rate, 
"(3) POVERTY LINE.—^The term 'poverty line' means the 
poverty line (as defined by the Office of Management and 
Budget, and revised annually in accordance with section 673(2) 
of the Community Services Block Grant Act (42 U.S.C. 9902(2))) 
applicable to a family of the size involved. 
112 STAT. 1624 
PUBLIC LAW 105-244—OCT. 7, 1998 
20 use 1022. 
'nSEC. 202. STATE GRANTS. 
"(a) IN GENERAL.—^From amounts made available under section 
210(1) for a fiscal year, the Secretary is authorized to award grants 
imder this section, on a competitive basis, to eligible States to 
enable the eligible States to carry out the activities described in 
subsection (d). 
"(b) ELIGIBLE STATE.— 
"(1) DEFINITION.—In this title, the term 'eligible State' 
means— 
"(A) the Governor of a State; or 
"(B) in the case of a State for which the constitution 
or law of such State designates another individual, entity, 
or agency in the State to be responsible for teacher certifi-
cation and preparation activity, such individual, entity, 
or agency. 
"(2) CONSULTATION.—The Governor and the individual, 
entity, or agency designated under paragraph (1) shall consult 
with the Governor, State board of education. State educational 
agency, or State agency for higher education, as appropriate, 
with respect to the activities assisted under this section. 
"(3) CONSTRUCTION.—Nothing in this subsection shall be 
construed to negate or supersede the legal authority under 
State law of any State agency, State entity, or State public 
official over programs that are under the jurisdiction of the 
agency, entity, or official. 
"(c) APPLICATION.—^To be eligible to receive a grant imder this 
section, an eligible State shall, at the time of the initial grant 
application, submit an application to the Secretary that— 
"(1) meets the requirement of this section; 
"(2) includes a description of how the eligible State intends 
to use fUnds provided under this section; and 
"(3) contains such other information and assurances as 
the Secretary may require. 
"(d) USES OF FUNDS.—An eligible State that receives a grant 
under this section shall use the grant funds to reform teacher 
preparation requirements, and to ensure that current and future 
teachers possess the necessary teaching skills and academic content 
knowledge in the subject areas in which the teachers are assigned 
to teach, by carrying out 1 or more of the following activities: 
"(1) REFORMS.—Implementing reforms that hold institu-
tions of higher education with teacher preparation programs 
accountable for preparing teachers who are highly competent 
in the academic content areas in which the teachers pl£in to 
teach, and possess strong teaching skills, which may include 
the use of rigorous subject matter competency tests and the 
requirement that a teacher have an academic major in the 
subject area, or related discipline, in which the teacher plans 
to teach. 
"(2) CERTIFICATION OR LICENSURE REQUIREMENTS.—^Reform-
ing teacher certification or licensure requirements to ensure 
that teachers have the necessary teaching skills and academic 
content knowledge in the subject areas in which teachers are 
assigned to teach. 
"(3) 
ALTERNATIVES 
TO TRADITIONAL 
PREPARATION FOR 
TEACHING.—^Providing prospective teachers with alternatives to 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1625 
traditional preparation for teaching through programs at col-
leges of arts and sciences or at nonprofit educational organiza-
tions. 
"(4) 
ALTERNATIVE 
ROUTES TO STATE CERTIFICATION.— 
Carrying out programs that— 
"(A) include support during the initial 
teaching 
experience; and 
"(B) establish, expand, or improve Edtemative routes 
to State certification of teachers for highly qualified individ-
uals, including mid-career professionals from other occupa-
tions, paraprofessionals, former military personnel and 
recent college graduates with records of academic distinc-
tion. 
"(5) 
RECRUITMENT; 
PAY; REMOVAL.—^Developing 
and 
implementing effective mechanisms to ensure that local edu-
cational agencies and schools are able to effectively recruit 
highly qualified teachers, to financially reward those teachers 
and principals whose students have made significant progress 
toward high academic performEince, such as through perform-
Eince-based compensation systems and access to ongoing profes-
sional development opportunities for teachers and administra-
tors, and to expeditiously remove incompetent or unqualified 
teachers consistent with procedures to ensure due process for 
the teachers. 
"(6) SOCIAL PROMOTION.—^Development and implementation 
of efforts to address the problem of social promotion and to 
prepare teachers to effectively address the issues raised by 
ending the practice of social promotion. 
"(7) RECRUITMENT.—Activities described in section 204(d). 
"SEC. 203. PARTNERSfflP GRANTS. 
20USC1023. 
"(a) GRANTS.—From amounts made available under section 
210(2) for a fiscal year, the Secretary is authorized to award grants 
under this section, on a competitive basis, to eligible partnerships 
to enable the eligible partnerships to carry out the activities 
described in subsections (d) and (e). 
"(b) DEFINITIONS.— 
"(1) 
ELIGIBLE PARTNERSHIPS.—In this title, the term 
'eligible partnerships' means an entity that— 
"(A) shall include— 
"(i) a partner institution; 
"(ii) a school of arts and sciences; and 
"(iii) a high need local educational agency; and 
"(B) may include a Grovemor, State educational agency, 
the State boEird of education, the State agency for higher 
education, an institution of higher education not described 
in subparagraph (A), a public charter school, a public or 
private elementary school or secondary school, a public 
or private nonprofit educational organization, a business, 
a teacher organization, or a prekindergarten program. 
"(2) PARTNER INSTITUTION.—In this section, the term 'part-
ner institution' means a private independent or State-supported 
public institution of higher education, the teacher training pro-
gram of which demonstrates that— 
"(A) graduates from the teacher training program 
exhibit strong performance on State-determined qualifying 
assessments for new teachers through— 
112 STAT. 1626 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(i) demonstrating that 80 percent or more of the 
graduates of the program who intend to enter the 
neld of teaching have passed all of the applicable State 
qualification assessments for new teachers, which shall 
include an assessment of each prospective teacher's 
subject matter knowledge in the content area or areas 
in which the teacher intends to teach; or 
"(ii) being ranked among the highest-performing 
teacher preparation programs in the State as deter-
mined by the State— 
"(I) using criteria consistent with the require-
ments for the State report card under section 
207(b); and 
"(II) using the State report card on teacher 
preparation required under section 207(b), after 
the first publication of such report card and for 
every year thereafter; or 
"(B) the teacher training program requires all the stu-
dents of the program to participate in intensive clinical 
experience, to meet high academic standards, and— 
"(i) in the case of secondary school candidates, 
to successfully complete an academic major in the sub-
ject area in which the candidate intends to teach or 
to demonstrate competence through a high level of 
performance in relevant content areas; and 
"(ii) in the case of elementary school candidates, 
to successfully complete an academic major in the arts 
and sciences or to demonstrate competence through 
a high level of performance in core academic subject 
areas. 
"(c) APPLICATION.—^Each eligible partnership desiring a grant 
under this section shall submit an application to the Secretary 
at such time, in such manner, and accompanied by such information 
as the Secretary may require. Each such application shall— 
"(1) contain a needs assessment of all the partners with 
respect to teaching and learning and a description of how 
the partnership will coordinate with other teacher training 
or professional development programs, and how the activities 
of the partnership will be consistent with State, local, and 
other education reform activities that promote student achieve-
ment; 
"(2) contain a resource assessment that describes the 
resources available to the partnership, the intended use of 
the grant fiinds, including a description of how the grant funds 
will be fairly distributed in accordance with subsection (f), 
and the commitment of the resources of the partnership to 
the activities assisted under this title, including financial sup-
port, faculty participation, time commitments, and continuation 
of the activities when the grant ends; and 
"(3) contain a description of— 
"(A) how the partnership will meet the purposes of 
this title; 
"(B) how the partnership will carry out the activities 
required under subsection (d) and any permissible activities 
under subsection (e); and 
"(C) the partnership's evaluation plan pursuant to sec-
tion 206(b). 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1627 
"(d) REQUIRED USES OF FUNDS.—An eligible partnership that 
receives a grant under this section shall use the grant funds to 
carry out the following activities: 
"(1) REFORMS.—Implementing reforms 
within 
teacher 
preparation programs to hold the programs accountable for 
preparing teachers who are highly competent in the academic 
content areas in which the teachers plan to teach, and for 
promoting strong teaching skills, including working with a 
school of arts and sciences and integrating reliable research-
based teaching methods into the curriculum, which curriculum 
shall include programs designed to successfully integrate tech-
nology into teaching and learning. 
"(2) CLINICAL EXPERIENCE AND INTERACTION.—^Providing 
sustained and high quality preservice clinical experience includ-
ing the mentoring of prospective teachers by veteran teachers, 
and substantially increasing interaction between faculty at 
institutions of higher education and new and experienced teach-
ers, principals, and other administrators at elementary schools 
or secondary schools, and providing support, including prepara-
tion time, for such interaction. 
"(3) PROFESSIONAL DEVELOPMENT.—Creating opportunities 
for enhanced and ongoing professional development 
that 
improves the academic content knowledge of teachers in the 
subject areas in which the teachers are certified to teach or 
in which the teachers are working toward certification to teach, 
and that promotes strong teaching skills. 
"(e) ALLOWABLE USES OF FUNDS.—An eligible partnership that 
receives a grant under this section may use such funds to carry 
out the following activities: 
"(1) TEACHER PREPARATION AND PARENT INVOLVEMENT.— 
Preparing teachers to work with diverse student populations, 
including individuals with disabilities and limited English pro-
ficient individuals, and involving parents in the teacher 
preparation program reform process. 
"(2) DISSEMINATION AND COORDINATION.—Broadly dissemi-
nating information on effective practices used by the partner-
ship, and coordinating with the activities of the Gfovemor, State 
board of education, State higher education agency, and State 
educational agency, as appropriate. 
"(3) MANAGERIAL AND LEADERSHIP SKILLS.—Developing and 
implementing proven mechanisms to provide principals and 
superintendents with effective managerial and leadership skills 
that result in increased student achievement. 
"(4) TEACHER RECRUITMENT.—Activities described in section 
204(d). 
"(f) SPECIAL RULE.—^No individual member of an eligible part-
nership shall retain more than 50 percent of the funds made avail-
able to the partnership under this section. 
"(g) CONSTRUCTION.—^Nothing in this section shall be construed 
to prohibit an eligible partnership from using grant funds to coordi-
nate with the activities of more than one Governor, State board 
of education. State educational agency, local educational agency, 
or State agency for higher education. 
'^EC. 204. TEACHER RECRUITMENT GRANTS. 
20 USC 1024. 
"(a) PROGRAM AUTHORIZED.—^From amounts made available 
under section 210(3) for a fiscal year, the Secretary is authorized 
112 STAT. 1628 
PUBLIC LAW 105-244—OCT. 7, 1998 
to award grants, on a competitive basis, to eligible applicants to 
enable the eligible applicants to carry out activities described in 
subsection (d). 
"(b) ELIGIBLE APPLICANT DEFINED.—^In this title, the term 
'eligible applicant' means— 
"(1) an eligible State described in section 202(b); or 
^ 
"(2) an eligible partnership described in section 203(b). 
"(c) APPLICATION.—Any eligible applicant desiring to receive 
a grant under this section shall submit an application to the Sec-
retary at such time, in such form, and containing such information 
as the Secretary may require, including— 
"(1) a description of the assessment that the eligible 
applicant, and the other entities with whom the eligible 
applicant will carry out the grant activities, have undertaken 
to determine the most criticsd needs of the participating high-
need local educational agencies; 
"(2) a description of the activities the eligible applicant 
will carry out with the grant; and 
"(3) a description of the eligible applicant's plan for continu-
ing the activities carried out with the grant, once Federal 
funding ceases. 
"(d) USES OF FUNDS.—^Each eligible applicant receiving a grant 
under this section shall use the grant funds— 
"(1)(A) to award scholarships to help students pay the 
costs of tuition, room, board, and other expenses of completing 
a teacher preparation program; 
"(B) to provide support services, if needed to enable scholar-
ship recipients to complete postsecondary education programs; 
and 
"(C) for foUowup services provided to former scholarship 
recipients during the recipients first 3 years of teaching; or 
"(2) to develop and implement effective mechanisms to 
ensure that high need local educational agencies and schools 
are able to effectively recruit highly qualified teachers. 
"(e) SERVICE REQUIREMENTS.—The Secretary shall estabhsh 
such requirements as the Secretary finds necessary to ensure that 
recipients of scholarships under this section who complete teacher 
education programs subsequently teach in a high-need local edu-
cational agency, for a period of time equivalent to the period for 
which the recipients receive scholarship assistance, or repay the 
amount of the scholarship. The Secretary shall use any such repay-
ments to carry out additional activities under this section. 
20 use 1025. 
"SEC. 205. ADMINISTRATIVE PROVISIONS. 
"(a) DURATION; ONE-TIME AWARDS; PAYMENTS.— 
"(1) DURATION.— 
"(A) 
ELIGIBLE STATES AND ELIGIBLE APPLICANTS.— 
Grants awarded to eligible States and eligible applicants 
under this title shall be awarded for a period not to exceed 
3 years. 
"(B) 
ELIGIBLE PARTNERSHIPS.—Grants awarded 
to 
eligible partnerships under this title shall be awarded for 
a period of 5 years. 
"(2) ONE-TIME AWARD.^An eligible State and an eligible 
partnership may receive a grant under each of sections 202, 
203, and 204 only once. 
PUBLIC LAW 105-244r-OCT. 7, 1998 
112 STAT. 1629 
"(3) PAYMENTS.^The Secretary shall make annual pay-
ments of grant funds awarded under this part. 
"(b) PEER REVIEW.— 
"(1) PANEL.—^The Secretary shall provide the applications 
submitted under this title to a peer review panel for evaluation. 
With respect to each application, the peer review panel shall 
initisdly recommend the application for funding or for dis-
approval. 
"(2) PRIORITY.—In recommending applications to the 
Secretary for funding under this title, the panel shall— 
"(A) with respect to grants under section 202, give 
priority to eligible States serving States that— 
**(i) have initiatives to refonn State teacher certifi-
cation requirements that are designed to ensure that 
current and future teachers possess the necesseiry 
teaching skills and academic content knowledge in the 
subject areas in which the teachers are certified or 
licensed to teach; 
''(ii) include innovative reforms to hold institutions 
of higher education with teacher preparation programs 
accountable for preparing teachers who are highly com-
petent in the academic content area in which the teach-
ers plan to teach and have strong teaching skills; or 
"(iii) involve the development of innovative efforts 
aimed at reducing the shortage of highly qualified 
teachers in high poverty urban and rural areas; 
"(B) with respect to grants under section 203— 
"(i) give priority to applications from eligible part-
nerships that involve businesses; and 
"(ii) take into consideration— 
"(I) providing an equitable geographic distribu-
tion of the grants throughout the United States; 
and 
"(II) the potential of the proposed activities 
for creating improvement and positive change. 
"(3) SECRETARIAL SELECTION.—The Secretary shall deter-
mine, based on the peer review process, which application shall 
receive fiinding and the amounts of the grants. In determining 
grant amounts, the Secreta^ shall take into account the total 
amount of funds available tor all grants under this title and 
the tjrpes of activities proposed to be carried out. 
"(c) MATCHING REQUIREMENTS.— 
"(1) STATE GRANTS.—^Each eligible State receiving a grant 
under section 202 or 204 shall provide, from non-Federal 
sources, an amount equal to 50 percent of the amount of the 
grant (in cash or in kind) to carry out the activities supported 
by the grant. 
"(2) 
PARTNERSHIP GRANTS.—Each 
eligible 
partnership 
receiving a grant under section 203 or 204 sriEdl provide, from 
non-Federal sources (in cash or in kind), an amount equal 
to 25 percent of the grant for the first year of the grant, 
35 percent of the grant for the second year of the grant, and 
50 percent of the grant for each succeeding year of the grant. 
"(d) LIMITATION ON ADMINISTRATIVE EXPENSES.—An eligible 
State or eligible partnership that receives a grant under this title 
may not use more than 2 percent of the grant funds for purposes 
of administering the grant. 
112 STAT. 1630 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(e) 
TEACHER QUALIFICATIONS PROVIDED TO PARENTS UPON 
REQUEST.—Any local educational agency or school that benefits 
from the activities assisted under this title shall make available, 
upon request and in an understandable and uniform format, to 
any parent of a student attending any school served by the local 
educational agency, information regarding the qualification of the 
student's classroom teacher with regard to the subject matter in 
which the teacher provides instruction. The local educational agency 
shall inform parents that the parents are entitled to receive the 
information upon request. 
20 use 1026. 
"SEC. 206. ACCOUNTABILITY AND EVALUATION. 
"(a) STATE GRANT ACCOUNTABILITY REPORT.—An eligible State 
that receives a grant under section 202 shall submit an annual 
accountability report to the Secretary, the Committee on Labor 
and Human Resources of the Senate, and the Committee on Edu-
cation and the Workforce of the House of Representatives. Such 
report shall include a description of the degree to which the eligible 
State, in using funds provided under such section, has made 
substantial progress in meeting the following goals: 
"(1) STUDENT ACHIEVEMENT.—Increasing student achieve-
ment for all students as defined by the eligible State. 
"(2) RAISING STANDARDS.—Raising the State academic 
standards required to enter the teaching profession, including, 
where appropriate, through the use of incentives to incorporate 
the requirement of an academic major in the subject, or related 
discipline, in which the teacher plans to teach. 
"(3) INITIAL CERTIFICATION OR LICENSURE.—Increasing suc-
cess in the pass rate for initial State teacher certification or 
licensure, or increasing the numbers of highly qualified individ-
uals being certified or licensed as teachers through alternative 
programs. 
"(4) CORE ACADEMIC SUBJECTS.— 
"(A) 
SECONDARY 
SCHOOL 
CLASSES.—Increasing 
the 
percentage of secondary school classes taught in core aca-
demic subject areas by teachers— 
"(i) with academic majors in those areas or in 
a related field; 
"(ii) who can demonstrate a high level of com-
petence through rigorous academic subject area tests; 
or 
"(iii) who can demonstrate competence through a 
high level of performance in relevant content areas. 
"(B) 
ELEMENTARY SCHOOL CLASSES.—Increasing 
the 
percentage of elementary school classes taught by teach-
ers— 
"(i) with academic majors in the arts and sciences; 
or 
"(ii) who can demonstrate competence through a 
high level of performance in core academic subjects. 
"(5) DECREASING TEACHER SHORTAGES.—Decreasing short-
ages of qualified teachers in poor urban and rural areas. 
"(6) INCREASING OPPORTUNITIES FOR PROFESSIONAL DEVEL-
OPMENT.—Increasing opportunities for enhanced and ongoing 
professional development that improves the academic content 
knowledge of teachers in the subject areas in which the teachers 
are certified or licensed to teach or in which the teachers 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1631 
are working toward certification or licensure to teach, and 
that promotes strong teaching skills. 
"(7) TECHNOLOGY INTEGRATION.—Increasing the number of 
teachers prepared to integrate technology in the classroom. 
"(b) ELIGIBLE PARTNERSHIP EVALUATION.—Each ehgible part-
nership receiving a grant under section 203 shall establish and 
include in the application submitted under section 203(c), an evalua-
tion plan that includes strong performance objectives. The plan 
shall include objectives and measures for— 
"(1) increased student achievement for all students as 
measured by the partnership; 
"(2) increased teacher retention in the first 3 years of 
a teacher's career; 
"(3) increased success in the pass rate for initial State 
certification or licensure of teachers; and 
"(4) increased percentage of secondary school classes taught 
in core academic subject areas by teachers— 
"(A) with academic majors in the areas or in a related 
field; and 
^ 
"(B) who can demonstrate a high level of competence 
through rigorous academic subject area tests or who can 
demonstrate competence through a high level of perform-
ance in relevant content areas; 
"(5) increasing the percentage of elementary school classes 
taught by teachers with academic majors in the arts and 
sciences or who demonstrate competence through a high level 
of performance in core academic subject areas; and 
"(6) increasing the number of teachers trained in tech-
nology. 
"(c) REVOCATION OF GRANT.-— 
"(1) REPORT.—Each eligible State or eligible partnership 
receiving a grant under this title shall report annually on 
the progress of the eligible State or eligible partnership toward 
meeting the purposes of this title and the goals, objectives, 
and measures described in subsections (a) and (b). 
"(2) REVOCATION.— 
"(A) 
ELIGIBLE STATES AND ELIGIBLE APPLICANTS.—If 
the Secretary determines that an eligible State or eligible 
applicant is not making substantial progress in meeting 
the purposes, goals, objectives, and measures, as appro-
priate, by the end of the second year of a grant under 
this title, then the grant payment shall not be made for 
the third year of the grant. 
"(B) ELIGIBLE PARTNERSHIPS.—If the Secretary deter-
mines that an eligible partnership is not making substan-
tial progress in meeting the purposes, goals, objectives, 
and measures, as appropriate, by the end of the third 
year of a grant under this title, then the grant payments 
shall not be made for any succeeding year of the grant. 
"(d) EVALUATION AND DISSEMINATION.—The Secretary shall 
evaluate the activities funded under this title and report the Sec-
retary's findings regarding the activities to the Committee on Labor 
and Human Resources of the Senate and the Committee on Edu-
cation and the Workforce of the House of Representatives. The 
Secretary shall broadly disseminate successful practices developed 
by eligible States and eligible partnerships under this title, and 
112 STAT. 1632 
P U B U C LAW 105-244—OCT. 7, 1998 
shall broadly disseminate information r^arding such practices that 
were found to be ineffective. 
20 use 1027. 
"SEC. 207. ACCOUNTABILITY FOR PROGRAMS THAT PREPARE TEACH-
ERS. 
Deadline. 
"(a) DEVELOPMENT OF DEFINITIONS AND REPORTING METHODS.— 
Within 9 months of the date of enactment of the Higher Education 
Amendments of 1998, the Commissioner of the National Center 
for Education Statistics, in consultation with States and institutions 
of higher education, shall develop key definitions for terms^ and 
uniform reporting methods (including the key definitions for the 
consistent reporting of pass rates), related to the performance of 
elementaiy school and secondary school teacher preparation pro-
grams. 
"(b) 
STATE 
REPORT 
CARD ON THE QUAUTY OF TEACHER 
PREPARATION.—^Each State that receives funds under this Act shall 
provide to the Secretary, within 2 years of the date of enactment 
of the Higher Education Amendments of 1998, and annually there-
after, in a uniform and comprehensible manner that conforms with 
the definitions and methods established in subsection (a), a State 
report card on the quality of teacher preparation in the State, 
which shall include at least the following: 
"(1) A description of the teacher certification and licensure 
assessments, and any other certification and licensure require-
ments, used by the State. 
"(2) The standards and criteria that prospective teachers 
must meet in order to attain initial teacher certification or 
licensure and to be certified or licensed to teach particular 
subjects or in particular grades within the State. 
"(3) A description of the extent to which the assessments 
and requirements described in paragraph (1) are aligned with 
the State's standards and assessments for students. 
"(4) The percentage of teaching candidates who passed 
each of the assessments used by the State for teacher certifi-
cation and licensure, and the passing score on each assessment 
that determines whether a candidate has passed that assess-
ment. 
"(5) The percentage of teaching candidates who passed 
each of the assessments used by the State for teacher certifi-
cation and licensure, disaggregated and ranked, by the teacher 
preparation program in that State from which the teacher 
candidate received the candidate's most recent degree, which 
shall be made available widely and publicly. 
"(6) Information on the extent to which teachers in the 
State are given waivers of State certification or licensure 
requirements, including the proportion of such teachers distrib-
uted across high- and low-poverty school districts and across 
subject areas. 
"(7) A description of each State's alternative routes to 
teacher certification, if any, and the percentage of teachers 
certified through alternative certification routes who pass State 
teacher certification or licensure assessments. 
"(8) For each State, a description of proposed criteria for 
assessing the performance of teacher preparation programs 
within institutions of higher education in the State, including 
indicators of teacher can^date knowledge and skills. 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1633 
"(9) Information on the extent to which teachers or prospec-
tive teachers in each State are required to take examinations 
or other assessments of their subject matter knowledge in the 
area or areas in which the teachers provide instruction, the 
standards estabUshed for passing any such assessments, and 
the extent to which teachers or prospective teachers are 
required to receive a passing score on such assessments in 
order to teach in specific subject areas or grade levels. 
"(c) INITIAL REPORT.— 
"(1) IN GENERAL.—^Each State that receives funds under 
this Act, not later than 6 months of the date of enactment 
of the Higher Education Amendments of 1998 and in a uniform 
and comprehensible manner, shall submit to the Secretary the 
information described in paragraphs (1), (5), and (6) of sub-
section (b). Such information shall be compiled by the Secretary 
and submitted to the Committee on Labor and Human 
Resources of the Senate and the Committee on Education and 
the Workforce of the House of Representatives not later than 
9 months after the date of enactment of the Higher Education 
Amendments of 1998. 
"(2) CONSTRUCTION.—^Nothing in this subsection shall be 
construed to require a State to gather information that is 
not in the possession of the State or the teacher preparation 
programs in the State, or readily available to the State or 
teacher preparation programs. 
"(d) REPORT OF THE SECRETARY ON THE QUALITY OF TEACHER 
PREPARATION.— 
"(1) REPORT CARD.—^The Secretary shall provide to Con-
gress, and publish and make widely available, a report card 
on teacher qualifications and preparation in the United States, 
including all the information reported in paragraphs (1) through 
(9) of subsection (b). Such report shall identify States for which 
eligible States £uid eligible partnerships received a grant under 
this title. Such report shall be so provided, published and 
made available not later than 2 years 6 months after the 
date of enactment of the Higher Education Amendments of 
1998 and Einnually thereafter. 
"(2) REPORT TO CONGRESS.—^The Secretary shall report to 
Congress— 
"(A) a comparison of States' efforts to improve teaching 
quality; and 
"(B) regarding the national mean and median scores 
on any standardized test that is used in more than 1 
State for teacher certification or licensure. 
"(3) SPECIAL RULE.—In the case of teacher preparation 
programs with fewer than 10 graduates taking any single initial 
teacher certification or licensure assessment during an aca-
demic year, the Secretary shall collect and publish information 
with respect to an average pass rate on State certification 
or licensure assessments taken over a 3-year period. 
"(e) COORDINATION.—^The Secretary, to the extent practicable, 
shall coordinate the information collected and published under this 
title among States for individuals who took State teacher certifi-
cation or licensure assessments in a State other than the State 
in which the individual received the individual's most recent degree. 
"(f) INSTITUTIONAL REPORT CARDS ON THE QUALITY OF TEACHER 
PREPARATION.— 
i 
Deadline. 
Records. 
Publication. 
Public 
information. 
Records. 
Publication. 
Records. 
Publication. 
112 STAT. 1634 
PUBLIC LAW 105-244—OCT. 7, 1998 
Deadline. 
Reports. 
Public 
information. 
20 use 1028. 
Deadline. 
Procedures. 
Records. 
"(1) REPORT CARD.—Each institution of higher education 
that conducts a teacher preparation program that enrolls stu-
dents receiving Federal assistance under this Act, not later 
than 18 months after the date of enactment of the Higher 
Education Amendments of 1998 and annually thereafter, shall 
report to the State and the general public, in a uniform and 
comprehensible manner that conforms with the definitions and 
methods established 
under subsection (a), the 
following 
information: 
"(A) PASS RATE.—(i) For the most recent year for which 
the information is available, the pass rate of the institu-
tion's graduates on the teacher certification or licensure 
assessments of the State in which the institution is located, 
but only for those students who took those assessments 
within 3 years of completing the program. 
"(ii) A comparison of the program's pass rate with 
the average pass rate for programs in the State. 
"(iii) In the case of teacher preparation programs with 
fewer than 10 graduates taking any single initial teacher 
certification or licensure assessment during an academic 
year, the institution shall collect and publish information 
with respect to an average pass rate on State certification 
or licensure assessments taken over a 3-year period. 
"(B) PROGRAM INFORMATION.—^The number of students 
in the program, the average number of hours of supervised 
practice teaching required for those in the program, and 
the faculty-student ratio in supervised practice teaching. 
"(C) STATEMENT.—In States that approve or accredit 
teacher education programs, a statement of whether the 
institution's program is so approved or accredited. 
"(D) DESIGNATION AS LOW-PERFORMING.—Whether the 
program has been designated as low-performing by the 
State under section 208(a). 
"(2) REQUIREMENT.—^The information described in para-
graph (1) shall be reported through publications such as school 
catalogs and promotional materials sent to potential applicants, 
secondary school guidance counselors, and prospective employ-
ers of the institution's program graduates. 
"(3) FINES.—In addition to the actions authorized in section 
487(c), the Secretary may impose a fine not to exceed $25,000 
on an institution of higher education for failure to provide 
the information described in this subsection in a timely or 
accurate manner. 
"SEC. 208. STATE FUNCTIONS. 
"(a) STATE ASSESSMENT.—^In order to receive funds under this 
Act, a State, not later than 2 years after the date of enactment 
of the Higher Education Amendments of 1998, shall have in place 
a procedure to identify, and assist, through the provision of technicgd 
assistance, low-performing programs of teacher preparation within 
institutions of higher education. Such State shall provide the Sec-
retary an annual list of such low-performing institutions that 
includes an identification of those institutions at-risk of being placed 
on such list. Such levels of performance shall be determined solely 
by the State and may include criteria based upon information 
collected pursuant to this title. Such assessment shall be described 
in the report under section 207(b). 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1635 
"(b) TERMINATION OF ELIGIBILITY.—^Any institution of higher 
education that offers a program of teacher preparation in which 
the State has withdrawn the State's approval or terminated the 
State's financial support due to the low performance of the institu-
tion's teacher preparation program based upon the State assessment 
described in subsection (a)— 
"(1) shall be ineligible for any funding for professional 
development activities awarded by the Department of Edu-
cation; and 
"(2) shall not be permitted to accept or enroll any student 
that receives aid under title IV of this Act in the institution's 
teacher preparation program. 
"(c) NEGOTL\TED RULEMAKING.—If the Secretary develops any 
regulations implementing subsection (b)(2), the Secretary shall sub-
mit such proposed regulations to a negotiated rulemsiking process, 
which shall include representatives of States, institutions of higher 
education, and educational and student organizations. 
-SEC. 209. GENERAL PROVISIONS. 
20 USC 1029. 
"(a) METHODS.—In complying with sections 207 and 208, the 
Secretary shall ensure that States and institutions of higher edu-
cation use fair and equitable methods in reporting and that the 
reporting methods protect the privacy of individuals. 
"(b) SPECIAL RULE.—^For each State in which there are no 
State certification or licensure assessments, or for States that do 
not set minimum performance levels on those assessments— 
"(1) the Secretary shall, to the extent practicable, collect 
data comparable to the data required under this title from 
States, local educational agencies, institutions of higher edu-
cation, or other entities that administer such assessments to 
teachers or prospective teachers; and 
"(2) notwithst£inding any other provision of this title, the 
Secretary shall use such data to carry out requirements of 
this title related to assessments or pass rates. 
"(c) LIMITATIONS.— 
"(1) FEDERAL CONTROL PROHIBITED.—^Nothing in this title 
shall be construed to permit, allow, encourage, or authorize 
any Federal control over any aspect of any private, religious, 
or home school, whether or not a home school is treated as 
a private school or home school under State law. This section 
shall not be construed to prohibit private, religious, or home 
schools from participation in programs or services under this 
title. 
"(2) No CHANGE IN STATE CONTROL ENCOURAGED OR 
REQUIRED.—^Nothing in this title shall be construed to encour-
age or require any change in a State's treatment of any private, 
religious, or home school, whether or not a home school is 
treated as a private school or home school under State law. 
"(3) NATIONAL SYSTEM OF TEACHER CERTIFICATION PROHIB-
ITED.—^Nothing in this title shall be construed to permit, allow, 
encourage, or authorize the Secretary to establish or support 
any national system of teacher certification. 
"SEC. 210. AUTHORIZATION OF APPROPRIATIONS. 
20 USC 1030. 
"There are authorized to be appropriated to carry out this 
title $300,000,000 for fiscal year 1999 and such sums as may 
be necessary for each of the 4 succeeding fiscal years, of which— 
112 STAT. 1636 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(1) 45 percent shall be available for each fiscal year to 
award grants under section 202; 
"(2) 45 percent shall be available for each fiscal year to 
award grants under section 203; and 
"(3) 10 percent shall be available for each fiscal year to 
award grants under section 204.". 
TITLE III—INSTITUTIONAL AID 
SEC. 301. TRANSFERS AND REDESIGNATIONS. 
(a) IN GENERAL.—The Higher Education Act of 1965 is 
amended— 
(1) by redesignating part D of title III (20 U.S.C. 1066 
et seq.) as part F of title III; 
20 use 1066 e
f 
(2) by redesignating sections 351, 352, 353, 354, 356, 357, 
seq., 1068 et seq. 
358, and 360 (20 U.S.C. 1066, 1067, 1068, 1069, 1069b, 1069c, 
1069d, and 1069f) as sections 391, 392, 393, 394, 395, 396, 
397, and 399, respectively; 
20 use 1132 «
f 
(3) by transferring part B of title VII (20 U.S.C. 1132c 
seq., 1066 et seq. 
et seq.) to title III to follow part C o: title III (20 U.S.C. 
1065 et seq.), £uid redesignating such part B as part D; 
20 use 1132 c
f 
(4) by redesignating sections 721 through 728 (20 U.S.C. 
seq., 1066 et seq. 
1132c and 1132c-7) as sections 341 through 348, respectively; 
20 use 1135b et 
(5) by transferring subparts 1 and 3 of part B of title 
seq., I067si et seq. 
X (20 U.S.C. 1135b et seq. and 1135d et seq.) to title III 
to follow part D of title III (as redesignated by paragraph 
(3)), and redesignating such subpart 3 as subpart 2; 
(6) by inserting after part D of title III (as redesignated 
by paragraph (3)) the following: 
"PART E—MINORITY SCIENCE AND 
ENGINEERING IMPROVEMENT PROGRAM"; 
20 use 1135b et 
(7) by redesignating sections 1021 through 1023 (20 U.S.C. 
seq., miaetseq. 
1135b and 1135b-2), and sections 1041, 1042, 1043, 1044, 1046, 
and 1047 (20 U.S.C. 1135d, 1135d-l, 1135d-2, 1135d-3,1135d-
5, and 1135d-6) as sections 351 through 353, and sections 
361, 362, 363, 364, 365, and 366, respectively; and 
20 use 1067/. 
(8) by repealing section 366 (as redesignated by paragraph 
(7))(20U.S.C. 1135d-6). 
20usei067g. 
(b) CONFORMING AMENDMENTS.—Section 361 (as redesignated 
by subsection (aX7)) (20 U.S.C. 1135d) is amended— 
(1) in paragraph (1), by inserting "and" after the semicolon; 
(2) in paragraph (2), by striking "; and" and inserting 
a period; and 
(3) by striking paragraph (3). 
(c) CROSS REFERENCES.—Title III (20 U.S.C. 1051 et seq.) is 
amended— 
(1) in section 311(b) (20 U.S.C. 1057(b)), by striking 
"360(a)(1)" and inserting "399(a)(1)"; 
(2) m section 312 (20 U.S.C. 1058)— 
(A) m subsection (bXl)(B), by striking "352(b)" and 
inserting "392(b)"; and 
(B) in subsection (cX2), by striking "352(a)" and 
inserting "392(a)"; 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1637 
(3) in section 313(b) (20 U.S.C. 1059(b)), by striking 
"354(a)(1)'' and inserting "394(aXl)''; 
(4) in section 342 (as redesignated by subsection (aX4)) 20 USC 1066a. 
(20 U.S.C. 1132C-1)— 
(A) in paragraph (3), by striking "723(b)'' and inserting 
"343(b)''; 
(B) in psiragraph (4), by striking "723" and inserting 
"343"; 
(C) in the matter preceding subparagraph (A) of 
paragraph (5), by striking "724(b) and inserting "344(b)"; 
(D) in paragraph (8), by striking "725(1)" and inserting 
"345(1)"; and 
(E) in paragraph (9), by striking "727" and inserting 
"347"; 
(5) in section 343 (as redesignated by subsection (aX4)) 20 USC 1066b. 
(20 U.S.C. 1132C-2)— 
(A) in subsection (a), by striking "724" and inserting 
"344"; and 
(B) in subsection (b)— 
(i) in the matter preceding paragraph (1), by 
striking "725(1) and 726" and inserting "345(1) and 
346"; 
(ii) in paragraph (10), by striking "724" and insert-
ing "344"; and 
(iii) in subsection (d), by striking "723(cXl)" and 
inserting "343(cXl)"; 
(6) in section 345(2) (as redesignated by subsection (a)(4)) 20 USC I066d. 
(20 U.S.C. 1132c-4(2)), by striking "723" and inserting "343"; 
(7) in section 348 (as redesignated by subsection (a)(4)) 20 USC 1066g. 
(20 U.S.C. 1132C-7), by striking "725(1)" and inserting "345(1)"; 
(8) in section 353(a) (as redesignated by subsection (a)(7)) 20 USC 1067c. 
(20 U.S.C. 1135b-2(a))— 
(A) in paragraph (1), by striking "1046(6)" and 
inserting "365(6)"; 
(B) in paragraph (2), by striking "1046(7)" and 
inserting "365(7)"; 
(C) in paragraph (3), by striking "1046(8)" and 
inserting "365(8)"; and 
(D) in paragraph (4), by striking "1046(9)" and 
inserting "365(9)"; 
(9) in section 361(1) (as redesignated by subsection (a)(7)) 20USC1067g. 
(20 U.S.C. 1135d(l)), by striking "1046(3)" and inserting 
"365(3)"; 
(10) in section 362(a) (as redesignated by subsection (aX7)) 20 USC I067h. 
(20 U.S.C. 1135d-l(a)>-
(A) in the matter preceding paragraph (1), by striking 
"1041" and inserting "361"; and 
(B) in paragraph (1), by striking "1021(b)" and 
inserting "351(b)"; and 
(11) in section 391(b)(6) (as redesignated by subsection 
20 USC 1068. 
(a)(2)), by striking "357" and inserting "396". 
SEC. 302. FINDINGS. 
Section 301(a) (20 U.S.C. 1051(a)) is amended— 
(1) by redesignating paragraphs (3) through (7) as para-
graphs (4) through (8), respectively; and 
(2) by inserting ^fter paragraph (2) the following: 
112 STAT. 1638 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(3) in order to be competitive £ind provide a high-quality 
education for all, institutions of higher education should 
improve their technological capacity and make effective use 
of technology;", 
SEC. 303. STRENGTHENING INSTITUTIONS. 
(a) GRANTS.—Section 311 (20 U.S.C. 1057) is amended by 
adding at the end the following: 
"(c) AUTHORIZED ACTIVITIES.—Grants awarded under this 
section shall be used for 1 or more of the following activities: 
"(1) Purchase, rental, or lease of scientific or laboratory 
equipment for educational purposes, including instructional and 
research purposes. 
"(2) Construction, maintenance, renovation, and improve-
ment in classrooms, libraries, laboratories, and other instruc-
tional facilities, including the integration of computer tech-
nology into institutional facilities to create smart buildings. 
"(3) Support of faculty exchanges, faculty development, and 
faculty fellowships to assist in attaining advanced degrees in 
the field of instruction of the faculty. 
"(4) Development and improvement of academic programs. 
"(5) Purchase of library books, periodicals, and other edu-
cational materials, including telecommunications 
program 
material. 
"(6) Tutoring, counseling, and student service programs 
designed to improve academic success. 
"(7) Funds management, administrative management, and 
acquisition of equipment for use in strengthening 
funds 
management. 
"(8) Joint use of facilities, such as laboratories and libraries. 
"(9) Establishing or improving a development office to 
strengthen or improve contributions from alumni and the pri-
vate sector. 
"(10) Establishing or improving an endowment fund. 
"(11) Creating or improving facilities for Internet or other 
distance learning academic instruction capabilities, including 
purchase or rental of telecommunications technology equipment 
or services. 
"(12) Other activities proposed in the application submitted 
pursuant to subsection (c) that— 
"(A) contribute to carrying out the purposes of the 
program assisted under this part; and 
"(B) are approved by the Secretary as part of the 
review and acceptance of such application. 
"(d) ENDOWMENT FUND.— 
"(1) IN GENERAL.—An eligible institution may use not more 
than 20 percent of the grant funds provided under this part 
to establish or increase an endowment fund at such institution. 
"(2) MATCHING REQUIREMENT.—In order to be eligible to 
use grant funds in accordance with paragraph (1), the eligible 
institution shall provide matching funds from non-Federal 
sources, in an amount equal to or greater than the Federal 
funds used in accordance with paragraph (1), for the establish-
ment or increase of the endowment fund. 
Applicability. 
"(3) COMPARABILITY.—^The provisions of part C, regarding 
the establishment or increase of an endowment fund, that 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1639 
the Secretary determines are not inconsistent with this sub-
section, shall apply to funds used under paragraph (1).". 
(b) ENDOWMENT FUND DEFINITION.—Section 312 (as amended 
by section 301(cX2)) (20 U.S.C. 1058) is amended— 
(1) by redesignating subsections (c) through (f) as sub-
sections (d) throu^ (g), respectively; and 
(2) by inserting after subsection (b) the following: 
"(c) ENDOWMENT FUND.—^For the purpose of this part, the term 
'endowment fund' means a fund that— 
''(I) is established by State law, by an institution of higher 
education, or by a foundation that is exempt from Federal 
income taxation; 
"(2) is maintained for the purpose of generating income 
for the support of the institution; ana 
"(3) does not include real estate.". 
(c) DURATION OF GRANT.—Section 313 (20 U.S.C. 1059) is 
amended— 
(1) in subsection (b), by inserting "subsection (c) and a 
grant undei^ before "section 394(aXl)''; and 
(2) by adding at the end the following: 
"(d) WAIT-OUT-PERIOD.—^Each eligible institution that received 
a grant under this part for a 5-year period shall not be eligible 
to receive an additional grant under tnis part until 2 years after 
the date on which the 5-year grant period terminates.". 
(d) APPLICATIONS.—^Title III is amended by striking section 
314 (20 U.S.C. 1059a) and inserting the foUowmg: 
'«EC.314.APPUCATIONS. 
20 USC 1059a. 
"Each eligible institution desiring to receive assistance under 
this part shall submit an application in accordance with the require-
ments of section 391.". 
(e) AMERICAN INDIAN TRIBALLY CONTROLLED COLLEGES AND 
UNIVERSITIES.—Section 316 (20 U.S.C. 1059c) is amended to read 
as follows: 
<*SEC. 31& AMERICAN INDIAN TRIBALLY CONTROLLED COLLEGES AND 
UNIVERSITIES. 
"(a) PROGRAM AUTHORIZED.—^The Secretary shall provide grants 
and related assistance to Indian Tribal Colleges and Universities 
to enable such institutions to improve and expand their capacity 
to serve Indian students. 
"(b) DEFINITIONS.—In this section: 
"(1) INDIAN.—^The term Indian' has the meaning given 
the term in section 2 of the Tribally Controlled CoUege or 
University Assistance Act of 1978. 
"(2) INDIAN TRIBE.—The term Indian tribe' has the meaning 
given the term in section 2 of the Tribally Controlled College 
or University Assistance Act of 1978. 
"(3) TRIBAL COLLEGE OR UNIVERSITY.—The term Tribal Col-
lege or University* has the meaning give the term tribally 
controlled college or university* in section 2 of the Tribally 
Controlled College or University Assistance Act of 1978, and 
includes an institution listed in the Equity in Educational 
Land Grant Status Act of 1994. 
"(4) INSTITUTION OF HIGHER EDUCATION.—The term 'institu-
tion of higher education' means an institution of higher edu-
cation as defined in section 101(a), except that paragraph (2) 
of such section shall not apply. 
112 STAT. 1640 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(c) AUTHORIZED ACTIVITIES.— 
"(1) IN GENERAL.—Grants awarded under this section shall 
be used by Tribal Colleges or Universities to assist such institu-
tions to plan, develop, undertake, and carry out activities to 
improve and expand such institutions' capacity to serve Indian 
students. 
"(2) EXAMPLES OF AUTHORIZED ACTIVITIES.—The activities 
described in paragraph (1) may include— 
"(A) purchase, rental, or lease of scientific or laboratory 
equipment for educational purposes, including instructional 
and research purposes; 
"(B) 
construction, 
maintenance, 
renovation, 
and 
improvement in classrooms, libraries, laboratories, and 
other instructional facilities, including purchase or rental 
of telecommunications technology equipment or services; 
"(C) support of faculty exchanges, faculty development, 
and faculty fellowships to assist in attaining advanced 
degrees in the faculty's field of instruction; 
"(D) academic instruction in disciplines in which 
Indians are underrepresented; 
"(E) purchase of library books, periodicals, and other 
educational materials, including telecommunications pro-
gram material; 
"(F) tutoring, counseling, and student service programs 
designed to improve academic success; 
"(G) funds management, administrative management, 
and acquisition of equipment for use in strengthening funds 
management; 
"(H) joint use of facilities, such as laboratories and 
libraries; 
"(I) establishing or improving a development office to 
strengthen or improve contributions from alumni and the 
private sector; 
"(J) establishing or enhancing a program of teacher 
education designed to qualify 
students to teach 
in 
elementary schools or secondary schools, with a particular 
emphasis on teaching Indian children and youth, that shall 
include, as part of such program, prepsiration for teacher 
certification; 
"(K) establishing community outreach programs that 
encourage Indian elementary school and secondary school 
students to develop the academic skills and the interest 
to pursue postsecondary education; and 
"(L) other activities proposed in the application submit-
ted pursuant to subsection (d) that— 
"(i) contribute to carrying out the 
activities 
described in subparagraphs (A) through (K); and 
"(ii) are approved by the Secretary as part of the 
review and acceptance of such application. 
"(3) ENDOWMENT FUND.— 
"(A) IN GENERAL.—A Tribal College or University may 
use not more than 20 percent of the grant funds provided 
under this section to establish or increase an endowment 
fund at the institution. 
"(B) MATCHING REQUIREMENT.—In order to be eligible 
to use grant funds in accordance with subparagraph (A), 
the Tribal College or University shall provide matching 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1641 
funds, in an amount equal to the Federal funds used in 
accordance with subparagraph (A), for the estabHshment 
or increase of the endowment fund. 
"(C) COMPARABILITY.—^The provisions of part C regard- Applicability, 
ing the estabUshment or increase of an endowment fund, 
that the Secretary determines are not inconsistent with 
this paragraph, shall apply to funds used under subpara-
graph (A), 
"(d) APPLICATION PROCESS.— 
"(1) INSTITUTIONAL EUGIBILITY.—^To be eligible to receive 
assistance under this section, a Tribal College or University 
' 
shall be an eligible institution under section 312(b). 
**(2) ApPLlCATiON.^Any Tribal College or University desir-
ing to receive assistance under this section shall submit an 
application to the Secretary at such time, and in such manner, 
as the Secretary may by regulation reasonably require. Each 
such application shall include— 
"(A) a 5-year plan for improving the assistance provided 
by the Tribal College or University to Indian students, 
increasing the rates at which Indian secondary school stu-
dents enroll in higher education, and increasing overall 
postsecondary retention rates for Indian students; and 
^ 
''(B) such enrollment data and other information and 
assurances as the Secretary may require to demonstrate 
compliance with paragraph (1). 
"(3) SPECIAL RULE.—^For the purposes of this part, no Tribal 
College or University that is eligible for and receives funds 
under this section may concurrently receive other funds under 
this part or part B.". 
(f) ALASKA NATIVE AND NATIVE HAWAIIAN-SERVING INSTITU-
TIONS.—Part A of title III (20 U.S.C. 1057 et seq.) is amended 
by adding at the end the following: 
'*SEC. 317. ALASKA NATIVE AND NATIVE HAWAIIAN-SERVING INSTITU-
TIONS. 
"(a) PROGRAM AUTHORIZED.—^The Secretary shall provide grants 
and related assistance to Alaska Native-serving institutions and 
Native Hawaiian-serving institutions to enable such institutions 
to improve and expand their capacity to serve Alaska Natives 
and Native Hawaiians. 
"(b) DEFINITIONS.—^For the purpose of this section— 
"(1) the term 'Alaska Native' has the meaning given the 
term in section 9308 of the Elementary and Secondary Edu-
cation Act of 1965; 
"(2) the term 'Alaska Native-serving institution' means an 
institution of higher education that— 
"(A) is an eligible institution under section 312(b); and 
"(B) at the time of application, has an enrollment of 
undergraduate students that is at least 20 percent Alaska 
Native students; 
"(3) the term 'Native Hawaiian' has the meaning given 
the term in section 9212 of the Elementary and Secondary 
Education Act of 1965; and 
"(4) the term 'Native Hawaiian-serving institution' means 
an institution of higher education which— 
"(A) is an eligible institution under section 312(b); and 
20USC1059d. 
112 STAT. 1642 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(B) at the time of application, has an enrollment of 
undergraduate students that is at least 10 percent Native 
Hawaiian students. 
"(c) AUTHORIZED ACTIVITIES.— 
"(1) TYPES OF ACTIVITIES AUTHORIZED.—Grants awarded 
under this section shall be used by Alaska Native-serving 
institutions and Native Hawaiian-serving institutions to assist 
such institutions to plan, develop, undertake, and carry out 
activities to improve and expand such institutions' capacity 
to serve Alaska Natives or Native Hawaiians. 
"(2) EXAMPLES OF AUTHORIZED ACTIVITIES.—Such programs 
may include— 
"(A) purchase, rental, or lease of scientific or laboratory 
equipment for educational purposes, including instructional 
and research purposes; 
"(B) renovation and improvement in classroom, hbrary, 
laboratory, and other instructional facilities; 
"(C) support of faculty exchanges, and faculty develop-
ment and faculty fellowships to assist in attaining advanced 
degrees in the faculty's field of instruction; 
"(D) curriculum development and academic instruction; 
"(E) purchase of library books, periodicals, microfilm, 
and other educational materials; 
"(F) Ainds and administrative 
management, and 
acquisition of equipment for use in strengthening funds 
management; 
"(G) joint use of facilities such as laboratories and 
libraries; and 
"(H) academic tutoring and counseling programs and 
student support services. 
"(d) APPLICATION PROCESS.— 
"(1) INSTITUTIONAL EUGIBIUTY.—^Each Alaska Native-serv-
ing institution and Native Hawaiian-serving institution desiring 
to receive assistance under this section shall submit to the 
Secretary such enrollment data as may be necessary to dem-
onstrate that the institution is an Alaska Native-serving 
institution or a Native HawEiiian-serving institution as defined 
in subsection (b), along with such other information and data 
as the Secretary may by regulation require. 
"(2) APPLICATIONS.—Any institution which is determined 
by the Secretary to be an Alaska Native-serving institution 
or a Native Hawaiian-serving institution may submit an 
application for assistance under this section to the Secretary. 
Such application shall include— 
"(A) a 5-year plan for improving the assistance provided 
by the Alaska Native-serving institution or the Native 
Hawaiian-serving institution to Alaska Native or Native 
Hawaiian students; and 
"(B) such other information and assurance as the Sec-
retary may require. 
"(e) SPECIAL RULE.—^For the purposes of this section, no Alaska 
Native-serving institution or Native Hawaiian-serving institution 
which is eligible for and receives funds under this section may 
concurrently receive other funds under this part or part B.". 
SEC. 304. STRENGTHENING HBCU's. 
(a) GRANTS.—Section 323 (20 U.S.C. 1062) is amended— 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1643 
(1) by redesignating subsection (b) as subsection (c); 
(2) by inserting after subsection (a) the following: 
"(b) ENDOWMENT FUND.— 
"(1) IN GENERAL.—An institution may use not more than 
20 percent of the grant funds provided under this part to 
establish or increase an endowment fund at the institution. 
"(2) MATCHING REQUIREMENT.—In order to be eligible to 
use grant funds in accordance with paragraph (1), the eligible 
institution shall provide matching funds from non-Federal 
sources, in an amount equal to or greater than the Federal 
funds used in accordance with paragraph (1), for the establish-
ment or increase of the endowment fund. 
"(3) COMPARABILITY.—^The provisions of part C regarding Applicability, 
the establishment or increase of an endowment fund, that 
the Secretary determines are not inconsistent with this sub-
section, shall apply to funds used under paragraph (1)."; and 
(3) in subsection (c) (as redesignated by paragraph (1)), 
by striking paragraph (3). 
(b) PROFESSIONAL OR GRADUATE INSTITUTIONS.— 
(1) GENERAL AUTHORIZATION.—Section 326(a) (20 U.S.C. 
1063b(a)) is amended— 
(A) in subsection (a)— 
(i) in paragraph (1), by inserting "in mathematics, 
engineering, or the physical or natural sciences" after 
"graduate education opportunities"; and 
(ii) in paragraph (2>— 
(I) by striking "$500,000" and 
inserting 
"$1,000,000"; and 
(II) by striking "except that" and all that fol-
lows and inserting the following: ", except that 
no institution shall be required to match any por-
tion of the first $1,000,000 of the institution's 
award from the Secretary. After funds are made 
available to each eligible institution under the 
funding rules described in subsection (f), the Sec-
retary shall distribute, on a pro rata basis, any 
amounts which were not so made available (by 
reason of the failure of an institution to comply 
with the matching requirements of this paragraph) 
among the institutions that have complied with 
such matching requirement."; and 
(B) in subsection (d)(2), by striking "$500,000" and 
inserting "$1,000,000". 
(2) USE OF FUNDS.—Section 326(c) (20 U.S.C. 1063b(c)) 
is amended by striking paragraphs (1) through (3) and inserting 
the following: 
"(1) purchase, rental or lease of scientific or laboratory 
equipment for educational purposes, including instructional and 
research purposes; 
"(2) construction, maintenemce, renovation, and improve-
ment in classroom, library, laboratory, and other instructional 
facilities, including purchase or rental of telecommunications 
technology equipment or services; 
"(3) purchase of library books, periodicals, technical and 
other scientific journals, microfilm, microfiche, and other edu-
cational materials, including telecommunications 
program 
materials; 
112 STAT. 1644 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(4) scholarships, fellowships, and other financial assistance 
for needy graduate and professional students to permit the 
enrollment of the students in and completion of the doctoral 
degree in medicine, dentistry, pharmacy, veterinary medicine, 
law, and the doctorate degree in the physical or natural 
sciences, engineering, mathematics, or other scientific dis-
ciplines in which African Americans are imderrepresented; 
"(5) establish or improve a development office to strengthen 
and increase contributions from alumni and the private sector; 
"(6) assist in the establishment or maintenance of an 
institutional endowment to facilitate financial independence 
pursuant to section 331; and 
''(7) funds and administrative management, and the 
acquisition of equipment, including software, for use in 
strengthening funds management and management information 
svstems ". 
(3) ELIGIBILITY.—Section 326(e) (20 U.S.C. 1063b(e)) is 
amended— 
(A) in paragraph (1)— 
(i) by striking "include—** and inserting "are the 
following; 
(ii) by inserting "and other qualified graduate pro-
grams" before the semicolon at the end of subpara-
graphs (E) through (J); 
(iii) by striking "and" at the end of subparagraph 
(O); and 
(iv) in subparagraph (P)— 
(I) by inserting "University" after "State"; and 
(II) by striking the period and inserting a 
semicolon; and 
(III) by adding at the end the following: 
"(Q) Norfolk State University qualified 
graduate 
programs; and 
"(R) Tennessee State University qualified graduate 
programs."; 
(B) by striking paragraphs (2) and (3) and inserting 
the following: 
"(2) QUALIFIED GRADUATE PROGRAM.—(A) For the purposes 
of this section, the term 'qualified graduate program' means 
a graduate or professional program that provides a program 
of instruction in the physical or natural sciences, engineering, 
mathematics, or other scientific discipline in which African 
Americans are underrepresented and has students enrolled in 
such program at the time of application for a grant under 
this section. 
"(B) Notwithstanding the enrollment requirement con-
tained in subparagraph (A), an institution may use an amount 
equal to not more than 1() percent of the institution's grant 
under this section for the development of a new qualified grad-
uate program. 
"(3) SPECIAL RULE.—^Institutions that were awarded grants 
under this section prior to October 1, 1998, shall continue 
to receive such grants, subject to the availability of appropriated 
funds, regardless of the eligibility of the institutions described 
in subparagraphs (Q) and (R) of paragraph (1)."; and 
(C) by adding at the end the following: 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1645 
**(5) INSTITUTIONAL CHOICE.—The president or chancellor 
of the institution may decide which graduate or professional 
school or qualified graduate program will receive funds under 
the grant in any 1 fiscal year, if the allocation of funds among 
the schools or programs is delineated in the application for 
funds submitted to the Secretary under this section.". 
(4) FUNDING RULE.—Section 326(f) (20 U.S.C. 1063b(f)) 
is amended— 
(A) by striking "Of the amount appropriated" and 
inserting "Subject to subsection (g), of the amount appro-
priated"; 
(B) in paragraph (1)— 
(i) 
by 
striking 
"$12,000,000" 
and 
inserting 
"$26,600,000"; and 
(ii) by striking "(A) through (E)" and inserting 
"(A) through (P)"; 
(C) by striking paragraph (2) and inserting the 
following: 
"(2) any amount in excess of $26,600,000, but not in excess 
of $28,600,000, shall be available for the purpose of making 
grants to institutions or programs described in subparagraphs 
(Q) and (R) of subsection (eXl); and 
"(3) any amount in excess of $28,600,000, shall be made 
available to each of the institutions or programs identified 
in subparagraphs (A) through (R) pursuant to a formula devel-
oped by the Secretary that uses the following elements: 
"(A) The ability of the institution to match Federal 
funds with non-Federal funds. 
"(B) The number of students enrolled in the programs 
for which the eligible institution received funding under 
this section in the previous year. 
"(C) The average cost of education per student, for 
all full-time graduate or professional students (or the 
equivalent) enrolled in the eligible professional or graduate 
school, or for doctoral students enrolled in the qualified 
graduate programs. 
"(D) The number of students in the previous year who 
received their first professional or doctoral degree from 
the programs for which the eligible institution received 
funding under this section in the previous year. 
"(E) The contribution, on a percent basis, of the pro-
grams for which the institution is eligible to receive funds 
under this section to the total number of African Americans 
receiving graduate or professional degrees in the profes-
sions or disciplines related to the programs for the previous 
year.". 
(5) HOLD HARMLESS RULE.—Section 326 is further amended 
by adding at the end the following new subsection: 
"(g) HOLD HARMLESS RULE.—Notwithstanding paragraphs (2) 
and (3) of subsection (f), no institution or qualified program identi-
fied in subsection (e)(1) that received a grant for fiscal year 1998 
and that is eligible to receive a grant in a subsequent fiscal year 
shall receive a grant amount in any such subsequent fiscal year 
that is less than the grant amount received for fiscal year 1998, 
unless the amount appropriated is not sufficient to provide such 
112 STAT. 1646 
PUBLIC LAW 105-244—OCT. 7, 1998 
grant amounts to all such institutions and programs, or the institu-
tion cannot provide sufficient matching funds to meet the require-
ments of this section.", 
SEC. 305. ENDOWMENT CHALLENGE GRANTS. 
Section 331(b) (20 U.S.C. 1065(b)) is amended— 
(1) in paragraph (1), by striking "360" and inserting "399"; 
and 
(2) in paragraph (2), by striking subparagraphs (B) and 
(C) and inserting the following: 
"(B) The Secretary may make a grant under this part to an 
eligible institution in any fiscal year if the institution— 
"(i) applies for a grant in an amount not exceeding 
$500,000; and 
"(ii) has deposited in the eligible institution's endowment 
fund established under this section an amount which is equal 
to VQ. of the amount of such grant. 
"(C) An eligible institution of higher education that is awarded 
a grant under subparagraph (B) shall not be eligible to receive 
an additional grant under subparagraph (B) until 10 years after 
the date on which the grant period terminates.". 
SEC. 306. HBCU CAPITAL FINANCING. 
20 use 1066a. 
(a) DEFINITION.—Section 342(5) (as redesignated by section 
301(a)(4)) (20 U.S.C. 1132c-l(5)) is amended— 
(1) by redesignating subparagraphs (B), (C), and (D) as 
subparagraphs (C), (G), and (H), respectively; 
(2) by inserting after subparagraph (A) the following: 
"(B) a facility for the administration of an educational 
program, or a student center or student union, except that 
not more than 5 percent of the loan proceeds provided 
under this part may be used for the facility, center or 
union if the facility, center or union is owned, leased, 
managed, or operated by a private business, that, in return 
for such use, makes a payment to the eligible institution;"; 
(3) in subparagraph (C) (as redesignated by paragraph 
(1)), insert "technology, after "instructional equipment"; 
(4) by inserting after subparagraph (C) (as redesignated 
by paragraph (1)) the following: 
"(D) a maintenance, storage, or utility facility that 
is essential to the operation of a facility, a library, a dor-
mitory, equipment, instrumentation, a fixture, real prop-
erty or an interest therein, described in this paragraph; 
"(E) a facility designed to provide primarily outpatient 
health care for students or faculty; 
"(F) physical infrastructure essential to support the 
projects authorized under this paragraph, including roads, 
sewer and drainage systems, and water, power, lighting, 
telecommunications, and other utilities;"; and 
(5) in subparagraph (H) (as redesignated by paragraph 
(2)), by striking "(C)" and inserting "(G)". 
20 use 1066b. 
(b) RESPONSIBILITIES.—Section 343 (as redesignated by section 
301(aX4)) (20 U.S.C. 1132c-2) is amended— 
(1) in subsection (b)(8) (as redesignated by section 301(a)(4)) 
(20 U.S.C. 1132c-2(b)(8)), by striking "10 percent" each place 
the term appears and inserting "5 percent"; and 
(2) by adding at the end the following: 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1647 
"(e) Notwithstanding any other provision of law, a quaUfied 
bond guaranteed under this part may be sold to any party that 
offers terms that the Secretary determines are in the best interest 
of the eligible institution.". 
(c) TECHNICAL ASSISTANCE.—Section 345 (as redesignated by 20USCi066d. 
section 301(a)(4)) (20 U.S.C. 1132c-4) is amended— 
(1) in paragraph (5), by striking "and" after the semicolon; 
(2) in paragraph (6), by striking the period and inserting 
"; and"; and 
(3) by adding at the end the following: 
"(7) may, directly or by grant or contract, provide technical 
assistance to eligible institutions to prepare the institutions 
to qualify, apply for, and maintain a capital improvement loan, 
including a loan under this part.". 
(d) PROHIBITION.—Section 346 (as redesignated by section 20USCi066e. 
301(aX4)) (20 U.S.C. 1132c-5) is repealed. 
(e) ADVISORY BOARD.—Section 347 (as redesignated by section 20 USC I066f. 
301(aX4)) (20 U.S.C. 1132c-6) is amended— 
(1) in subsection (b)— 
(A) in subparagraph (D), by inserting ", or the presi-
dent's designee." after the period; and 
(B) in subparagraph (E), by inserting ", or the designee 
of the Association" before the period; and 
(2) by striking subsection (c). 
SEC. 307. MmORTTY SCIENCE AND ENGINEERING IMPROVEMENT 
PROGRAM. 
(a) 
MINORITY 
SCIENCE 
AND ENGINB:ERING 
IMPROVEMENT 
PROGRAM FINDINGS.—Subpart 1 of part E of title III (as redesig-
nated by paragraphs (6) and (7) of section 301) (20 U.S.C. 1135b 
et seq.) is amended by inserting after the subpart heading the 
following: 
"SEC 350. FINDINGS. 
20 USC 1067. 
"Congress makes the following findings: 
"(1) It is incumbent on the Federal (jovemment to support 
the technological and economic competitiveness of the United 
States by improving and expanding the scientific and techno-
logical capacity of the Unitea States. More and better prepared 
scientists, engineers, and technical experts are needed to 
improve and expand such capacity. 
"(2) As the Nation's population becomes more diverse, it 
is important that the educational and training needs of all 
Americans are met. Underrepresentation of minorities in 
science and technological fields diminishes our Nation's 
competitiveness by impairing the quantity of well prepared 
scientists, engineers, and teclmical experts in these fields. 
"(3) Despite significant limitations in resources, minority 
institutions provide an important educational opportunity for 
minority students, particularly in science and engineering 
ftelds. Aid to minority institutions is a good way to address 
the underrepresentation of minorities in science smd techno-
logical fields. 
"(4) There is a strong Federal interest in improving science 
and engineering programs at minority institutions as such pro-
grams lag behind in program offerings and in student enroll-
ment compared to such programs at other institutions of higher 
education.". 
112 STAT. 1648 
PUBLIC LAW 105-244—OCT. 7, 1998 
(b) ELIGIBILITY FOR GRANTS.—Section 361 (as redesignated by 
section 301(a)(7)) (20 U.S.C. 1135d) is amended to read as follows: 
20 use 1067g. 
"SEC. 361. ELIGIBILITY FOR GRANTS. 
"Eligibility to receive grants under this part is limited to— 
"(1) public and private nonprofit institutions of higher edu-
cation that— 
"(A) award baccalaureate degrees; and 
"(B) are minority institutions; 
"(2) public or private nonprofit institutions of higher edu-
cation that— 
"(A) award associate degrees; and 
"(B) are minority institutions that— 
"(i) have a curriculum that includes science or 
engineering subjects; and 
"(ii) enter into a partnership with public or private 
nonprofit institutions of higher education that award 
baccalaureate degrees in science and engineering; 
"(3) nonprofit science-oriented organizations, professional 
scientific societies, and institutions of higher education that 
award baccalaureate degrees, that— 
"(A) provide a needed service to a group of minority 
institutions; or 
"(B) provide in-service training for project directors, 
scientists, and engineers from minority institutions; or 
"(4) consortia of organizations, that provide needed services 
to one or more minority institutions, the membership of which 
may include— 
"(A) institutions of higher education which have a 
curriculum in science or engineering; 
"(B) institutions of higher education that have a grad-
uate or professional program in science or engineering; 
"(C) research laboratories of, or under contract with, 
the Department of Energy; 
"(D) private organizations that 
have 
science or 
engineering facilities; or 
"(E) quasi-governmental entities that have a significant 
scientific or engineering mission.". 
20 use 1067k. 
(c) DEFINITIONS.—Section 365(4) (as redesignated by section 
301(a)(7)) (20 U.S.C. 1135d-5(4)) is amended by inserting "behav-
ioral," after "physical,". 
(d) CONFORMING AMENDMENTS.—^The heading for subpart 1 of 
part E of title III (as redesignated by paragraphs (6) and (7) 
of section 301(a)) is amended by inserting "and Engineering" before 
"Improvement Program". 
SEC. 308. GENERAL PROVISIONS. 
(a) APPLICATIONS FOR ASSISTANCE.—Subsection (a) of section 
20 use 1068. 
391(a) (as redesignated by section 301(a)(2)) (20 U.S.C. 1066(a)) 
is amended to read as follows: 
"(a) APPLICATIONS.— 
"(1) APPLICATIONS REQUIRED.—^Any institution which is 
eligible for assistance under this title shall submit to the Sec-
retary an application for assistance at such time, in such form, 
and containing such information, as may be necessary to enable 
the Secretary to evaluate the institution's need for the assist-
ance. Subject to the availability of appropriations to carry out 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1649 
this title, the Secretary may approve an application for assist-
ance under this title only if the Secretary determines that— 
"(A) the application meets the requirements of sub-
section (b); 
"(B) the applicant is eligible for assistance in accord-
ance with the part of this title under which the assistance 
is sought; and 
"(C) the applicant's performance goals are sufficiently 
rigorous as to meet the purposes of this title and the 
performance objectives and indicators for this title estab-
lished by the Secretary pursuant to the Government 
Performance and Results Act of 1993 and the amendments 
made by such Act. 
"(2) PRELIMINARY APPLICATIONS.—In carrying out para-
graph (1), the Secretary may develop a preliminary application 
for use by eligible institutions applying under part A prior 
to the submission of the principal application.". 
(b) APPLICATIONS.—Paragraph (1) of section 391(b) (as redesig- 20USC 1068. 
nated by section 301(aX2)) (20 U.S.C. 1066(b)) is amended by insert-
ing ", D or E" after "part C . 
(c) CONTENTS OF APPUCATIONS.—Section 391(b)(6) (as redesig-
nated by section 301(aX2)) is amended by inserting before the 
semicolon the following: ", except that for purposes of section 316, 
paragraphs (2) and (3) of section 396 shall not apply". 
(d) WAIVERS.—Section 392(a) (as redesignated by section 
20 use 1068a. 
301(aX2)) (20 U.S.C. 1067(a)) is amended— 
(1) by striking "oi^ at the end of paragraph (5); 
(2) by redesignating paragraph (6) as paragraph (7); and 
(3) by inserting after paragraph (5) the following new para-
graph: 
"(6) that is a tribally controlled college or university as 
defined in section 2 of the Tribally Controlled College or Univer-
sity Assistance Act of 1978; or". 
(e) APPLICATION REVIEW PROCESS.—Section 393(a) (as redesig- 
20 use I068b. 
nated by section 301(aX2)) (20 U.S.C. 1068(a)) is amended— 
(1) in paragraph (2), by striking 'TMative American colleges 
and universities" and inserting "Tribal Colleges and Univer-
sities"; and 
(2) by adding at the end the following: 
"(d) EXCLUSION.—^The provisions of this section shall not apply 
to applications submitted under part D.". 
(f) WAIVERS.—^Paragraph (2) of section 395(b) (as redesignated 
20 use I068<i. 
by section 301(aX2)) (20 U.S.C. 1069b(b)) is amended by striking 
"title IV, VII, or VIII" and inserting "part D or title IV". 
(g) CONTINUATION AWARDS.—Part F of title III is amended 
by inserting after section 397 (as redesignated by section 301(a)(2)) 
(20 U.S.C. 1069d) the following: 
"SEC. 398. CONTINUATION AWARDS. 
20 USC 1068g. 
"The Secretary shall make continuation awards under this title 
for the second and succeeding years of a grant only after determin-
ing that the recipient is making satisfactory progress in canying 
out the grant.". 
(h) AUTHORIZATION OF APPROPRIATIONS.—Section 399(a) (as 20usei068h. 
redesignated by section 301(aX2)) (20 U.S.C. 1069f) is amended— 
(1) in paragraph (1)— 
112 STAT. 1650 
PUBLIC LAW 105-244—OCT. 7, 1998 
(A) in subparagraph (A), by striking "1993" and insert-
ing "1999"; 
(B) in subparagraph (B)— 
(i) in clause (i), by striking "$45,000,000 for fiscal 
year 1993" and inserting "$10,000,000 for fiscal year 
1999"; 
(ii) by striking clause (ii); and 
(iii) by striking "(BXi) There" and inserting "(B) 
There"; and 
(C) by adding at the end the following: 
"(C) There are authorized to be appropriated to carry out 
section 317, $5,000,000 for fiscal year 1999 and such sums 
as may be necessary for each of the 4 succeeding fiscal years."; 
(2) in paragraph (2)— 
(A) in subparagraph (A), by striking "1993" and insert-
ing "1999"; and 
(B) in subparagraph (B), by striking "$20,000,000 for 
fiscal year 1993" and inserting "$35,000,000 for fiscal year 
1999"; 
(3) in paragraph (3), by striking "$50,000,000 for fiscal 
year 1993" and inserting "$10,000,000 for fiscal year 1999"; 
(4) by adding at the end the following: 
"(4) PART D.—(A) There are authorized to be appropriated 
to carry out part D (other than section 345(7), but including 
section 347), $110,000 for fiscal year 1999, and such sums 
as may be necessary for each of the 4 succeeding fiscal years. 
"(B) There are authorized to be appropriated to cany out 
section 345(7), such sums as may be necessary for fiscal year 
1999 and each of the 4 succeeding fiscal years. 
"(5) PART E,—^There are authorized to be appropriated to 
carry out part E, $10,000,000 for fiscal year 1999, and such 
sums as may be necessary for each of the 4 succeeding fiscal 
years."; and 
(5) by striking subsections (c), (d), and (e). 
TITLE IV—STUDENT ASSISTANCE 
PART A—GRANTS TO STUDENTS 
SEC. 401. FEDERAL PELL GRANTS. 
(a) EXTENSION OF AUTHORITY.—Section 401(aXl) (20 U.S.C. 
1070a(a)(l)) is amended— 
(1) in the first sentence, by striking "The Secretary shall, 
during the period beginning July 1, 1972, and ending September 
30, 1998," and inserting "For each fiscal year through fiscal 
year 2004, the Secretary shall"; and 
Federal Register, 
(2) in the second sentence, by inserting "until such time 
publication. 
as the Secretary determines and publishes in the Federal Reg-
ister with an opportunity for comment, an alternative payment 
system that provides payments to institutions in an accurate 
and timely manner," after "pay eligible students". 
(b) AMOUNT OF GRANT.—Paragraph (2XA) of section 401(b) 
is amended to read as follows: 
"(2)(A) The amount of the Federal Pell Grant for a student 
eUgible under this part shall be— 
"(i) $4,500 for academic year 1999-2000; 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1651 
"(ii) $4,800 for academic year 2000-2001; 
"(iii) $5,100 for academic year 2001-2002; 
"(iv) $5,400 for academic year 2002-2003; and 
"(v) $5,800 for academic year 2003-2004, 
less an amount equal to the amount determined to be the expected 
family contribution with respect to that student for that year.". 
(c) RELATION OF MAXIMUM GRANT TO TUITION AND EXPENSES.— 
Paragraph (3) of section 401(b) is amended to read as follows: 20 USC 1070a. 
"(3)(A) For any academic year for which an appropriation Act 
provides a maximum basic grant in an amount in excess of $2,700, 
the amount of a student's basic grant shall equal $2,700 plus— 
"(i) one-half of the amount by which such maximum basic 
grant exceeds $2,700; plus 
"(ii) the lesser of— 
"(I) the remaining one-half of such excess; or 
"(II) the sum of the student's tuition and, if the student 
has dependent care expenses (as described in section 
472(8)) or disability-related expenses (as described in sec-
tion 472(9)), an allowance determined by the institution 
for such expenses. 
"(B) An institution that charged only fees in lieu of tuition 
as of October 1, 1998, may include in the institution's determination 
of tuition charged, fees that would normally constitute tuition.". 
(d) REGULATIONS FOR MULTIPLE AWARDS.—Section 401(bX6) 
is amended— 
(1) by redesignating subparagraphs (A) and (B) as clauses 
(i) and (ii), respectively; 
(2) by inserting "(A)" after the paragraph designation; and 
(3) by adding at the end the following: 
"(B) The Secretary shall promulgate regulations implementing Regulations, 
this paragraph.". 
(e) TIME LIMIT TO RECEIVE GRANTS.—Section 401(c) is amended 
by adding at the end the following: 
"(4) Notwithstanding paragraph (1), the Secretary may allow, 
on a case-by-case basis, a student to receive a basic grant if the 
student— 
"(A) is carrying at least one-half the normal full-time work 
load for the course of study the student is pursuing, as deter-
mined by the institution of higher education; and 
"(B) is enrolled 
or accepted 
for enrollment 
in a 
postbaccalaureate program that does not lead to a graduate 
degree, and in courses required by a State in order for the 
student to receive a professional certification or licensing 
credential that is required for employment as a teacher in 
an elementary school or secondary school in that State, 
except that this paragraph shall not apply to a student who is 
enrolled in an institution of higher education that offers a bacca-
laureate degree in education.". 
(f) INSTITUTIONAL INELIGIBIUTY BASED ON DEFAULT RATES.— 
Section 401 is amended by adding at the end the following: 
"(j) INSTITUTIONAL INELIGIBILITY BASED ON DEFAULT RATES.— 
"(1) IN GENERAL.—No institution of higher education shall 
be an eligible institution for purposes of this subpart if such 
institution of higher education is ineligible to participate in 
a loan program under part B or D as a result of a final 
default rate determination made by the Secretary under part 
112 STAT. 1652 
PUBLIC LAW 105-244—OCT. 7, 1998 
B or D after the final publication of cohort default rates for 
fiscal year 1996 or a succeeding fiscal year. 
Regulations. 
"(2) SANCTIONS SUBJECT TO APPEAL OPPORTUNITY.—No 
institution may be subject to the terms of this subsection unless 
the institution has had the opportunity to appeal the institu-
tion's default rate determination under regulations issued by 
the Secretary for the loan progrsun authorized under part B 
or D, as applicable. This subsection shall not apply to an 
institution that was not participating in the loan program 
authorized under part B or D on the date of enactment of 
the Higher Education Amendments of 1998, unless the institu-
tion subsequently participates in the loan programs.", 
(g) CONFORMING AMENDMENTS.— 
(1) Section 400(aXl) (20 U.S.C. 1070(a)(1)) is amended by 
striking "basic educational opportunity grants" and inserting 
"Federal Pell Grants". 
(2) The heading of subpart 1 of part A of title IV (20 
U.S.C. 1070a et seq.) is amended to read as follows: 
"Subpart 1—Federal Pell Grants''. 
20 use 1070a. 
(3) Section 401 is amended— 
(A) in the heading of the section, by striking "BASIC 
EDUCATIONAL OPPORTUNITY" and inserting "FEDERAL. 
PELL"; 
(B) in subsection (a)(3), by striking "Basic grants" and 
inserting "Grants"; 
(C) by striking "basic grant" each place the term 
appears and inserting "Federal Pell Grant"; and 
(D) by striking "basic grants" each place the term 
appears and inserting "Federal Pell Grants". 
(4) Section 401(fX3) is amended by striking "Education 
and Labor" and inserting "Education and the Workforce", 
(5) Section 452(c) (20 U.S.C. 1087b(c)) is amended by strik-
ing 'Tjasic grants" and inserting "Federal Pell Grants". 
(6) Subsections (jX2) and (kX3) of section 455 (20 U.S.C. 
1087e) are each amended by striking "basic grsuits" and insert-
ing "Federal Pell Grants". 
SEC. 402. FEDERAL TRIO PROGRAMS. 
(a) 
PROGRAM 
AUTHORITY; 
AUTHORIZATION 
OF 
APPROPRIA-
TIONS.— 
(1) DURATION OF GRANTS.—Section 402A(bX2) (20 U.S.C. 
1070a-ll(bX2)) is amended— 
(A) by striking "and" at the end of subparagraph (A); 
(B) by striking the period at the end o
f
^ subparagraph 
(B) and inserting "; and"; and 
(C) by inserting after subparagraph (B) the following 
new subparagraph: 
"(C) grants under section 402H shall be awarded for 
a period determined by the Secretary.". 
(2) MINIMUM GRANTS.—Section 402A(bX3) is amended to 
read as follows: 
"(3) MINIMUM GRANTS.—^Unless the institution or agency 
requests a smaller amount, individual grants under this chapter 
shall be no less than— 
"(A) $170,000 for programs authorized by sections 402D 
and 402G; 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1653 
"(B) $180,000 for programs authorized by sections 402B 
and 402F; and 
"(C) $190,000 for programs authorized by sections 402C 
and402E.''. 
(3) PROCEDURES FOR AWARDING GRANTS AND CONTRACTS.— 
Subsection (c) of section 402A is amended to read as follows: 
"(c) PROCEDURES FOR AWARDING GRANTS AND CONTRACTS.— 
"(1) APPLICATION REQUIREMENTS.—^An eligible entity that 
desires to receive a grant or contract under this chapter shall 
submit an application to the Secretary in such manner and 
form, and containing such information and assursmces, as the 
Secretary may reasonably require. 
"(2) PRIOR EXPERIENCE.—^In making grants under this chap-
ter, the Secretary shall consider each applicant's prior experi-
ence of service delivery under the particular program for which 
funds are sought. The level of consideration given the factor 
of prior experience shall not vary from the level of consideration 
given such factor during fiscal years 1994 through 1997, except 
that grants made under section 402H shall not be given prior 
experience consideration. 
"(3) ORDER OF AWARDS; PROGRAM FRAUD.—(A) Except with 
respect to grants made under sections 402G and 402H and 
as provided in subparagraph (B), the Secretary shall award 
grants and contracts under this chapter in the order of the 
scores received by the application for such grant or contract 
in the peer review process required under paragraph (4) and 
adjusted for prior experience in accordance with paragraph 
(2) of this subsection. 
"(B) The Secretary is not required to provide assistance 
to a program otherwise eligible for assistance under this chap-
ter, if the Secretary has determined that such program has 
involved the fraudulent use of funds under this chapter. 
"(4) PEER REVIEW PROCESS.—(A) The Secretary shall ensure 
that, to the extent practicable, members of groups underrep-
resented in higher education, including African Americans, His-
panics. Native Americans, Alaska Natives, Asian Americans, 
and Native American Pacific Islanders (including Native 
Hawaiians), are represented as readers of applications submit-
ted under this chapter. The Secretary shall also ensure that 
persons from urban and rural backgrounds are represented 
as readers. 
"(B) The Secretary shall ensure that each application 
submitted under this chapter is read by at least three readers 
who are not employees of the Federal Government (other than 
as readers of applications). 
"(5) 
NUMBER OF APPLICATIONS FOR GRANTS AND CON-
TRACTS.—^The Secretary shall not limit the number of applica-
tions submitted by sui entity under any program authorized 
under this chapter if the additional applications describe pro-
grams serving different populations or campuses. 
"(6) COORDINATION WITH OTHER PROGRAMS FOR DISADVAN-
TAGED STUDENTS.—^The Secretary shall encourage coordination 
of programs assisted under this chapter with other programs 
for disadvantaged students operated by the sponsoring institu-
tion or agency, regardless of the funding source of such pro-
grams. The Secretary shall not limit an entity's eligibility to 
receive funds under this chapter because such entity sponsors 
20 u s e 1070a-
11. 
Grants. 
Contracts. 
59-194 O - 98 - 25: QL 3 Part 2 
112 STAT. 1654 
PUBLIC LAW 105-244—OCT. 7, 1998 
a program similar to the program to be assisted under this 
chapter, regardless of the funding source of such program. 
The Secretary shall permit the Director of a program receiving 
funds under this chapter to administer one or more additionsd 
programs for disadvantaged students operated by the sponsor-
ing institution or agency, regardless of the funding sources 
of such programs. 
"(7) APPLICATION STATUS.—^The Secretary shall inform each 
entity operating programs under this chapter regarding the 
status of their application for continued funding at least 8 
months prior to the expiration of the grant or contract. The 
Secretary, in the case of an entity that is continuing to operate 
a successful program under this chapter, shall ensure that 
the start-up date for a new grant or contract for such program 
immediately follows the termination of the preceding grant 
or contract so that no interruption of funding occurs for such 
successful reapplicants. The Secretary shall inform each entity 
requesting assistance under this chapter for a new program 
regarding the status of their application at least 8 months 
prior to the proposed startup date of such program.". 
(4) AUTHORIZATION OF APPROPRIATIONS.—Section 402A(f) 
20USCl070a- 
is amended by striking "$650,000,000 for fiscal year 1993" 
11- 
and inserting "$700,000,000 for fiscal year 1999". 
(5) WAIVER.—Section 402A(g) is amended by adding at 
the end the following: 
"(4) WAIVER.—^The Secretary may waive the service require-
ments in subparagraph (A) or (B) of paragraph (3) if the Sec-
retary determines the application of the service requirements 
to a veteran will defeat the purpose of a program under this 
(b) TALENT SEARCH.—Section 402B(b) (20 U.S.C. 1070a-12(b)) 
is amended— 
(1) by striking paragraph (4) and inserting the following: 
"(4) guidance on and assistance in secondary school reentry, 
entry to general educational development (GED) programs, 
other alternative education programs for secondary school drop-
outs, or postsecondary education;"; 
(2) in paragraph (5), by inserting ", or activities designed 
to acquaint individuals from disadvantaged backgrounds with 
careers in which the individuals are particularly underrep-
resented" before the semicolon; 
(3) in paragraph (8), by striking "parents" and inserting 
"families"; and 
(4) in paragraph (9), by inserting "or counselors" after 
(c) UPWARD BOUND.—Section 402C (20 U.S.C. 1070a-13) is 
amended— 
(1) in subsection (b)— 
(A) in paragraph (2), by striking "personal counseling" 
and inserting "counseling and workshops"; 
(B) in paragraph (9)— 
(i) by inserting "or counselors" after "teachers"; 
and 
(ii) by striking "and" after the semicolon; 
(C) by redesignating paragraph (10) as paragraph (12); 
(D) by inserting after paragraph (9) the following: 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1655 
"(10) work-study positions where youth participating in 
the project are exposed to careers requiring a postsecondary 
degree; 
"(11) special services to enable veterans to make the transi-
tion to postsecondary education; and"; and 
(E) in paragraph (12) (as redesignated by subparagraph 
(O), by striking "(9)" and inserting "(11)"; and 
(2) in subsection (e), by striking "and not in excess of 
$40 per month during the remaining period of the year." and 
inserting "except that youth participating in a work-study posi-
tion under subsection (b)(10) may be paid a stipend of $300 
per month during June, July, and August. Youths participating 
in a project proposed to be carried out under any application 
may be paid stipends not in excess of $40 per month during 
the remaining period of the year.". 
(d) STUDENT SUPPORT SERVICES.—^Paragraph (6) of section 
402D(c) (20 U.S.C. 1070a-14(c)(6)) is amended to read as follows: 
"(6) consider, in addition to such other criteria as the 
Secretary may prescribe, the institution's effort, and where 
applicable past history, in— 
"(A) providing sufficient financial assistance to meet 
the full financial need of each student in the project; and 
"(B) maintaining the loan burden of each such student 
at a manageable level.". 
(e) 
POSTBACCALAUREATE 
ACHIEVEMENT 
PRCXJRAM.—Section 
402E(e)(l) (20 U.S.C. 1070a-15(e)(l)) is amended by striking 
"$2,400" and inserting "$2,800". 
(f) STAFF DEVELOPMENT ACTIVITIES.—Section 402G (20 U.S.C. 
1070a-17) is amended— 
(1) in subsection (a), by inserting "participating in," after 
"leadership personnel employed in,"; and 
(2) in subsection (b), by inserting sifter paragraph (3) the 
following new paragraph: 
"(4) The use of appropriate educational technology in the 
operation of projects assisted under this chapter.". 
(g) EVALUATION AND DISSEMINATION.—Section 402H (20 U.S.C. 
1070a-18) is amended to read as follows: 
"SEC. 402H. EVALUATIONS AND GRANTS FOR PROJECT IMPROVEMENT 
AND DISSEMINATION PARTNERSHIP PROJECTS. 
"(a) EVALUATIONS.— 
"(1) IN GENERAL.—For the purpose of improving the 
effectiveness of the programs and projects assisted under this 
chapter, the Secretary may make grants to or enter into con-
tracts with institutions of higher education and other public 
and private institutions and organizations to evaluate the 
effectiveness of the programs and projects assisted under this 
chapter. 
"(2) PRACTICES.—^The evaluations described in paragraph 
(1) shall identify institutional, community, and program or 
project practices that are particularly effective in enhancing 
the access of low-income individuals and first-generation college 
students to postsecondary education, the preparation of the 
individuals and students for postsecondary education, and the 
success of the individuals and students in postsecondary edu-
cation. Such evaluations shall also investigate the effectiveness 
of alternative and innovative methods within Federal TRIO 
112 STAT. 1656 
PUBLIC LAW 105-244—OCT. 7, 1998 
programs of increasing access to, and retention of, students 
in postsecondary education. 
"(b) GRANTS.—^The Secretary may award grants to institutions 
of higher education or other private and public institutions and 
organizations, that are carrying out a program or project assisted 
under this chapter prior to the date of enactment of the Higher 
Education Amendments of 1998, to enable the institutions and 
organizations to expand and leverage the success of such programs 
or projects by working in partnership with other institutions, 
community-based organizations, or combinations of such institutions 
and organizations, that are not receiving assistance under this 
chapter and are serving low-income students and first generation 
college students, in order to— 
"(1) disseminate and replicate best practices of programs 
or projects assisted under this chapter; and 
"(2) provide technical assistance regarding programs and 
projects assisted under this chapter. 
"(c) RESULTS.—^In order to improve overall program or project 
effectiveness, the results of evaluations and grants described in 
this section shall be disseminated by the Secretary to similar pro-
grams or projects assisted under this subpart, as well as other 
individuals concerned with postsecondary access for and retention 
of low-income individuals and first-generation college students.". 
SEC. 403. GEAR UP PROGRAM. 
Chapter 2 of subpart 2 of part A of title IV (20 U.S.C. 1070a-
21 et seq.) is amended to read as follows: 
"CHAPTER 2—GATING EARLY AWARENESS 
AND 
READINESS 
FOR 
UNDERGRADUATE 
PROGRAMS 
20 use 1070a- 
'^EC. 404A. EARLY INTERVENTION AND COLLEGE AWARENESS PRO-
21- 
GRAM AUTHORIZED. 
"(a) PROGRAM AUTHORIZED.—^The Secretary is authorized, in 
accordance with the requirements of this chapter, to establish a 
program that— 
"(1) encourages eligible entities to provide or maintain a 
guarantee to eligible low-income students who obtain a second-
ary school diploma (or its recognized equivalent), of the financial 
assistance necessary to permit the students to attend an institu-
tion of higher education; and 
"(2) supports eligible entities in providing— 
"(A) additional counseling, mentoring, academic sup-
port, outreach, and supportive services to elementary 
school, middle school, and secondary school students who 
are at risk of dropping out of school; and 
"(B) information to students and their parents about 
the advantages of obtaining a postsecondary education and 
the college financing options for the students and their 
parents. 
"(b) AWARDS.— 
"(1) IN GENERAL.—^From fiinds appropriated under section 
404H for each fiscal year, the Secretary shall make awards 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1657 
to eligible entities described in paragraphs (1) and (2) of sub-
section (c) to enable the entities to carry out the program 
authorized under subsection (a). 
"(2) PRIORITY.—In making awards to eligible entities 
described in paragraph (cXl), the Secretary shall— 
"(A) give priority to eligible entities that— 
"(i) on the day before the date of enactment of 
the Higher Education Amendments of 1998, carried 
out successful educational opportunity programs under 
this chapter (as this chapter was in effect on such 
day); and 
"(ii) have a prior, demonstrated commitment to 
early intervention leading to college access through 
collaboration and replication of successful strategies; 
"(B) ensure that students served under this chapter 
on the day before the date of enactment of the Higher 
Education Amendments of 1998 continue to receive assist-
ance through the completion of secondary school. 
"(c) DEFINITION OF ELIGIBLE ENTITY.—For the purposes of this 
chapter, the term 'eligible entity' means— 
"(Da State; or 
"(2) a partnership consisting of— 
"(A) one or more local educational agencies acting on 
behalf of— 
"(i) one or more elementary schools or secondary 
schools; and 
"(ii) the secondary schools that students from the 
schools described in clause (i) would normally attend; 
"(B) one or more degree granting institutions of higher 
education; and 
"(C) at least two community organizations or entities, 
such as businesses, professional associations, community-
based organizations, philanthropic organizations. State 
agencies, institutions or agencies sponsoring programs 
authorized under subpart 4, or other public or private 
agencies or organizations. 
''SEC. 404B. REQUIREMENTS. 
20 USC 1070a-
22 
"(a) FUNDING RULES.— 
"(1) CONTINUATION AWARDS.—From the amount appro-
priated under section 404H for a fiscal year, the Secretary 
shall continue to award grants to States under this chapter 
(as this chapter was in effect on the day before the date of 
enactment of the Higher Education Amendments of 1998) in 
accordance with the terms and conditions of such grants. 
"(2) DISTRIBUTION.—^From the amount appropriated under 
section 404H that remains after making continuation awards 
under paragraph (1) for a fiscal year, the Secretary shall— 
"(A) make available— 
"(i) not less than 33 percent of the amount to 
eligible entities described in section 404A(c)(l); and 
"(ii) not less than 33 percent of the amount to 
eligible entities described in section 404A(c)(2); and 
"(B) award the remainder of the amount to eligible 
entities described in paragraph (1) or (2) of section 404A(c). 
"(3) 
SPECIAL 
RULE.—^Tlie 
Secretary 
shall 
annually 
reevaluate the distribution of funds described in paragraph 
112 STAT. 1658 
PUBLIC LAW 105-244—OCT. 7, 1998 
(2)(B) based on number, quality, and promise of the applications 
and adjust the distribution accordingly.". 
"(b) LIMITATION.—Each eligible entity described in section 
404A(c)(l), and each eligible entity described in section 404A(cX2) 
that conducts a scholarship component under section 404E, shall 
use not less than 25 percent and not more than 50 percent of 
grant funds received under this chapter for the early intervention 
component of an eligible entity's program under this chapter, except 
that the Secretary may waive the 50 percent limitation if the 
eligible entity demonstrates that the eligible entity has another 
means of providing the students with financial assistance that 
is described in the plan submitted under section 404C. 
"(c) COORDINATION.—Each eligible entity shall ensure that the 
activities assisted under this chapter are, to the extent practicable, 
coordinated with, and complement and enhance— 
"(1) services under this chapter provided by other eligible 
entities serving the ssime school district or State; and 
"(2) related services under other Federal or non-Federal 
progrgims. 
"(d) 
DESIGNATION OF FISCAL 
AGENT.—An 
eligible 
entity 
described in section 404A(cX2) shall designate an institution of 
higher education or a local educational agency as the fiscal agent 
for the eligible entity. 
"(e) COORDINATORS.—^An eligible entity described in section 
404A(c)(2) shall have a full-time program coordinator or a part-
time program coordinator, whose primary responsibility is a project 
under section 404C. 
"(f) DISPLACEMENT.—An eligible entity described in 404A(c)(2) 
shall ensure that the activities assisted under this chapter will 
not displace an employee or eliminate a position at a school assisted 
under this chapter, including a partial displacement such as a 
reduction in hours, wages or emplo3rment benefits. 
"(g) COHORT APPROACH.— 
"(1) IN GENERAL.—^The Secretary shall require that eligible 
entities described in section 404A(c)(2)— 
"(A) provide services under this chapter to at least 
one grade level of students, beginning not later than 7th 
grade, in a participating school that has a 7th grade and 
in which at least 50 percent of the students enrolled are 
eligible for free or reduced-price lunch under the National 
School Lunch Act (or, if an eligible entity determines that 
it would promote the effectiveness of a program, an entire 
grade level of students, beginning not later than the 7th 
grade, who reside in public housing as defined in section 
3(b)(1) of the United States Housing Act of 1937); and 
"(B) ensure that the services are provided through 
the 12tli grade to students in the participating grade level. 
"(2) COORDINATION REQUIREMENT.—In order for the Sec-
retary to require the cohort approach described in paragraph 
(1), the Secretary shall, where applicable, ensure that the cohort 
approach is done in coordination and collaboration with existing 
early intervention programs and does not duplicate the services 
already provided to a school or community. 
20 use 1070a- 
"SEC. 404C. EUGIBLE ENTTIY PLANS. 
23 
"(a) PLAN REQUIRED FOR EUGIBIUTY.— 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1659 
"(1) IN GENERAL.—In order for an eligible entity to qualify 
for a grant under this chapter, the eligible entity shall submit 
to the Secretary a plan for canying out the program under 
this chapter. Such plan shall provide for the conduct of a 
scholarship component if required or undertaken pursuant to 
section 404E and an early intervention component required 
pursuant to section 404D. 
"(2) CONTENTS.—^Each plan submitted pursuant to para-
graph (1) shall be in such form, contain or be accompanied 
by such information or assurances, and be submitted at such 
time as the Secretary may require by regulation. Each such 
plan shall— 
"(A) describe the activities for which assistance under 
this chapter is sought; and 
"(B) provide such additional assurances as the Sec-
retary determines necessary to ensure compliance with the 
requirements of this chapter. 
"(b) MATCHING REQUIREMENT.— 
"(1) IN GENERAL.—^The Secretary shall not approve a plan 
submitted under subsection (a) unless such plan— 
"(A) provides that the eligible entity will provide, from 
State, local, institutional, or private funds, not less than 
50 percent of the cost of the program, which matching 
funds may be provided in cash or in kind; 
"(B) specifies the methods by which matching funds 
will be paid; and 
"(C) includes provisions designed to ensure that funds 
provided under this chapter shall supplement and not sup-
plant funds expended for existing programs. 
"(2) SPECIAL RULE.—^Notwithstanding the matching require-
ment described in paragraph (1)(A), the Secretary may by regu-
lation modify the percentage requirement described in para-
graph (1)(A) for eligible entities described in section 404A(c)(2). 
"(c) METHODS FOR COMPLYING WITH 
MATCHING 
REQUIRE-
MENT.—^An eligible entity may count toward the matching require-
ment described in subsection (b)(1)(A)— 
"(1) the amount of the financial assistance paid to students 
from State, local, institutional, or private fiinds under this 
chapter; 
"(2) the amount of tuition, fees, room or board waived 
or reduced for recipients of financial assistance under this 
chapter; and 
"(3) the amount expended on documented, targeted, long-
term mentoring and counseling provided by volunteers or paid 
staff of nonschool organizations, including businesses, religious 
organizations, community groups, postsecondary educational 
institutions, nonprofit and philanthropic organizations, and 
other organizations. 
"(d) PEER REVIEW PANELS.—^The Secretary shall convene peer 
review panels to assist in making determinations regarding the 
awarding of grants under this chapter. 
•^EC. 404D. EARLY INTERVENTION. 
20USC1070a-
"(a) SERVICES.— 
^' 
"(1) IN GENERAL.—In order to receive a grant under this 
chapter, an eligible entity shall demonstrate to the satisfaction 
of the Secretary, in the plan submitted under section 404C, 
112 STAT. 1660 
PUBLIC LAW 105-244—OCT. 7, 1998 
that the eligible entity will provide comprehensive mentoring, 
counseling, outreach, and supportive services to students 
participating in programs under this chapter. Such counseling 
shjdl include— 
"(A) financial aid counseling and information regarding 
the opportunities for financial assistance under this title; 
and 
"(B) activities or information regarding— 
"(i) fostering and improving parent involvement 
in promoting the advantages of a college education, 
academic admission requirements, and the need to take 
college preparation courses; 
(ii) college admissions and achievement tests; and 
"(iii) college application procedures. 
**(2) METHODS.—^The eligible entity shall demonstrate 
in such plan, pursuant to regulations of the Secretary, 
the methods by which the eligible entity will target services 
on priority students 
described in subsection (c), if 
applicable. 
"(b) USES OF FUNDS.— 
Regulations. 
"(1) IN GENERAL.—^The Secretary shall, by regulation, estab-
lish criteria for determining whether, comprenensive mentoring, 
counseling, outreach, and supportive services programs may 
be used to meet the requirements of subsection (a). 
"(2) PERMISSIBLE ACTIVITIES.—^Examples of activities that 
meet the requirements of subsection (a) include the following: 
"(A) Providing eligible students in preschool t h r o u ^ 
grade 12 with a continuing system of mentoring and advis-
ing that— 
"(i) is coordinated with the Federal and State 
community service initiatives; and 
"(ii) may include such support services as after 
school and summer tutoring, assistance in obtaining 
summer jobs, career mentoring, and academic counsel-
ing. 
"(B) Requiring each student to enter into an agreement 
under which the student agrees to achieve certain academic 
milestones, such as completing a prescribed set of courses 
and maintaining satisfactory progress described in section 
484(c), in exchange for receiving tuition assistance for a 
period of time to be established by each eligible entity. 
"(C) Activities designed to ensure secondary school 
completion and college enrollment of at-risk children, such 
as identification of at-risk children, after school and sum-
mer tutoring, assistance in obtaining summer jobs, aca-
demic counseling, volunteer and parent 
involvement, 
providing former or current scholarship recipients as men-
tor or peer counselors, skills assessment, providing access 
to rigorous core courses that reflect challenging academic 
standards, personal counseling, family counseling and home 
visits, staff development, and programs and activities 
described in this subparagraph that are specially designed 
for students of limited English proficiency. 
"(D) Summer programs for individuals who are in their 
sophomore or junior years of secondary school or are plan-
ning to attend an institution of higher education in the 
succeeding academic year that— 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1661 
"(i) are carried out at an institution of higher 
education that has programs of academic year support-
ive services for disadvantaged 
students 
through 
projects authorized under section 402D or through com-
parable projects funded by the State or other sources; 
"(ii) provide for the participation of the individuals 
who are eligible for assistance under section 402D 
or who are eligible for comparable programs funded 
by the State; 
"(iii)(I) provide summer instruction in remedial, 
developmental or supportive courses; 
"(II) provide such summer services as counseling, 
tutoring, or orientation; and 
"(III) provide financial assistance to the individuals 
to cover the individuals' summer costs for books, sup-
plias, living costs, £ind personal expenses; and 
"(iv) provide the individuals with financial assist-
ance during each academic year the individuals are 
enrolled at the participating institution after the sum-
i 
mer program. 
"(E) Requiring eligible students to meet other stand-
ards or requirements as the State determines necessary 
to meet the purposes of this section. 
"(c) PRIORITY STUDENTS.—For eligible entities not using a 
cohort approach, the eligible entity shall treat as priority students 
any student in preschool through grade 12 who is eligible— 
"(1) to be counted under section 1124(c) of the Elementary 
and Secondary Education Act of 1965; 
"(2) for free or reduced price meals under the National 
School Lunch Act; or 
"(3) for assistance pursuant to part A of title IV of the 
Social Security Act. 
"(d) ALLOWABLE PROVIDERS.—In the case of eligible entities 
described in section 404A(c)(l), the activities required by this section 
may be provided by service providers such as community-based 
organizations, schools, institutions of higher education, public and 
private 
agencies, 
nonprofit 
and philanthropic 
organizations, 
businesses, institutions and agencies sponsoring programs author-
ized under subpart 4, and other organizations the State deems 
appropriate. 
"SEC. 404E. SCHOLARSHIP COMPONENT. 
20USC1070a-
"(a) IN GENERAL.— 
^^• 
"(1) STATES.—In order to receive a grant under this chapter, 
an eligible entity described in section 404A(c)(l) shall establish 
or maintain a financial assistance program that awards scholar-
ships to students in accordance with the requirements of this 
section. The Secretary shall encourage the eligible entity to 
ensure that a scholarship provided pursuant to this section 
is available to an eligible student for use at any institution 
of higher education, 
"(2) PARTNERSHIPS.—^An eligible entity described in section 
404A(c)(2) may award scholarships to eligible students in 
accordance with the requirements of this section. 
"(b) GRANT AMOUNTS.—^The maximum amount of a scholarship 
that an eligible student shall be eligible to receive under this 
section shall be established by the eligible entity. The minimum 
112 STAT. 1662 
PUBLIC LAW 105-244—OCT. 7, 1998 
Regulations. 
20 use 1070a-
26. 
20 use 1070a-
27. 
amount of the scholarship for each fiscal year shall not be less 
than the lesser of— 
"(1) 75 percent of the average cost of attendance for an 
in-State student, in a 4-year program of instruction, at public 
institutions of higher education in such State, as determined 
in accordance with regulations prescribed by the Secretary; 
or 
"(2) the maximum Federal Pell Grant funded under section 
" 401 for such fiscEd year. 
"(c) RELATION TO OTHER ASSISTANCE.—Scholarships provided 
under this section shall not be considered for the purpose of award-
ing Federal grant assistance under this title, except that in no 
case shall the total amount of student financial assistance awarded 
to a student under this title exceed such student's total cost of 
attendance. 
"(d) ELIGIBLE STUDENTS.—A student eligible for assistance 
imder this section is a student who— 
"(1) is less than 22 years old at time of first scholarship 
award under this section; 
"(2) receives a secondary school diploma or its recognized 
equivalent on or after January 1, 1993; 
"(3) is enrolled or accepted for enrollment in a program 
of undergraduate instruction at an institution of higher edu-
cation that is located within the State's boundaries, except 
that, at the State's option, an eligible entity may offer scholar-
ship program portability for recipients who attend institutions 
of higher education outside such State; and 
"(4) who participated in the early intervention component 
required under section 404D. 
"(e) PRIORITY.—^The Secretary shall ensure that each eligible 
entity places a priority on awarding scholarships to students who 
will receive a Federal Pell Grant for the academic year for which 
the scholarship is awarded under this section, 
"(f) SPECIAL RULE.—^An eligible entity may consider students 
who have successfully participated in programs funded under chap-
ter 1 to have met the requirements of subsection (d)(4). 
"SEC. 404F. 21ST CENTURY SCHOLAR CERTIFICATES. 
"(a) AUTHORITY.—The Secretary, using funds appropriated 
under section 404H that do not exceed $200,000 for a fiscal year— 
"(1) shall ensure that certificates, to be known as 21st 
Century Scholar Certificates, are provided to all students 
participating in programs under this chapter; and 
"(2) may, as practicable, ensure that such certificates are 
provided to all students in grades 6 through 12 who attend 
schools at which at least 50 percent of the students enrolled 
are eligible for a free or reduced price lunch under the National 
School Lunch Act. 
"(b) INFORMATION REQUIRED.—A 21st Century Scholar Certifi-
cate shall be personalized for each student and indicate the amount 
of Federal financial aid for college which a student may be eligible 
to receive. 
-SEC. 404G. EVALUATION AND REPORT. 
"(a) EVALUATION.—^Each eligible entity receiving a grant under 
this chapter shall biennially evaluate the activities assisted under 
^^^•'^%f%^:.f_;^^'f'^'i'i:fi-^-^i 
*»;»'^i-r) 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1663 
this chapter in accordance with the standards described in sub-
section (b) and shall submit to the Secretary a copy of such evalua-
tion. The evaluation shall permit service providers to track eligible 
student progress during the period such students are participating 
in the activities and shall be consistent with the standards devel-
oped by the Secretary pursuant to subsection (b). 
"(b) EVALUATION STANDARDS.—^The Secretary shall prescribe 
standards for the evaluation described in subsection (a). Such stand-
ards shall— 
"(1) provide for input from eligible entities and service 
providers; and 
"(2) ensure that data protocols and procedures are consist-
ent and uniform. 
"(c) FEDERAL EVALUATION.—In order to evaluate and improve 
the impact of the activities assisted under this chapter, the Sec-
retary shall, from not more than 0.75 percent of the funds appro-
priated under section 404H for a fiscal year, award one or more 
grants, contracts, or cooperative agreements to or with public and 
private institutions and organizations, to enable the institutions 
and organizations to evaluate the effectiveness of the program 
and, as appropriate, disseminate the results of the evaluation, 
"(d) REPORT.—^The Secretary shall biennially report to Congress 
regarding the activities assisted under this chapter and the evalua-
tions conducted pursuant to this section. 
•^EC. 404H. AUTHORIZATION OF APPROPRIATIONS. 
"There are authorized to be appropriated to carry out this 
chapter $200,000,000 for fiscal year 1999 and such sums as may 
be necessary for each of the 4 succeeding fiscal years.". 
SEC. 404. ACADEMIC ACHIEVEMENT INCENTIVE SCHOLARSHIPS. 
Chapter 3 of subpart 2 of part A of title IV (20 U.S.C. 1070a-
31 et seq.) is amended to read as follows: 
"CHAPTER 3—ACADEMIC ACHIEVEMENT INCENTIVE 
SCHOLARSHIPS 
•«EC. 406A. SCHOLARSHIPS AUTHORIZED. 
"The Secretary is authorized to award scholgirships to students 
who graduate from secondary school after May 1, 2000, to enable 
the students to pay the cost of attendance at an institution of 
higher education during the students first 2 academic years of 
undergraduate education, if the students— 
"(1) are eligible to receive Federal Pell Grants for the 
year in which the scholarships are awarded; and 
"(2) demonstrate academic achievement by graduating in 
the top 10 percent of their secondary school graduating class. 
'^EC. 406B. SCHOLARSHIP PROGRAM REQUIREMENTS. 
"(a) AMOUNT OF AWARD.— 
"(1) IN GENERAL.—^Except as provided in paragraph (2), 
the amount of a scholarship awarded under this chapter for 
any academic year shall be equal to 100 percent of the amount 
of the Federal Pell Grant for which the recipient is eligible 
for the academic year. 
"(2) ADJUSTMENT FOR INSUFFICIENT APPROPRIATIONS.—If, 
after the Secretary determines the total number of eligible 
applicants for an academic year in accordance with section 
20 use 1070a-
28. 
20 use 1070a-
31. 
20 use 1070a-
32. 
112 STAT. 1664 
PUBLIC LAW 105-244-OCT. 7, 1998 
20 use 1070a-
33. 
20 use 1070a-
34. 
20 use 1070a-
35. 
20 use 1070a-
41e<seg., 1070a-
51efseg., 1070a-
61,1070a-71, 
1070a-81. 
406C, funds available to carry out this chapter for the academic 
year are insufficient to fully fund all awards under this chapter 
for the academic year, the amount of the scholarship paid 
to each student under this chapter shall be reduced proportion-
ately. 
"(b) ASSISTANCE NOT To EXCEED COST OF ATTENDANCE.^A 
schol£irship awarded under this chapter to any student, in combina-
tion with the Federgd Pell Grant assistance and other student 
financial assistance available to such student, may not exceed the 
student's cost of attendance. 
"SEC. 406C. ELIGIBIUTY OF SCHOLARS. 
"(a) PROCEDURES ESTABLISHED BY REGULATION.—^The Secretary 
shall establish by regulation procedures for the determination of 
eligibility of students for the scholarships awarded under this chap-
ter. Such procedures shall include measures to prevent any second-
Eiry school from certifying more than 10 percent of the school's 
students for eligibility under this section. 
"(b) COORDINATION.—^In prescribing procedures under sub-
section (a), the Secretary shall ensure that the determination of 
eligibility and the amount of the scholarship is determined in a 
timely and accurate manner consistent with the requirements of 
section 482 and the submission of the financial aid form required 
by section 483. For such purposes, the Secretary may provide that, 
for the first academic year of a student's 2 academic years of 
eligibility under this chapter, class rank may be determined prior 
to graduation from secondary school, at such time and in such 
manner as the Secretary may specify in regulations prescribed 
under this chapter. 
"SEC. 406D. STUDENT REQUIREMENTS. 
"(a) IN GENERAL.—^Each eligible student desiring a scholarship 
under this chapter shall submit an application to the Secretary 
at such time, in such manner, and containing such information 
as the Secretary may reasonably require. 
"(b) CONTINUING ELIGIBILITY.—In order for a student to con-
tinue to be eligible to receive a scholarship under this chapter 
for the second year of undergraduate education, the eligible student 
shall maintain eligibility to receive a Federal Pell Grant for that 
year, including fulfilling the requirements for satisfactory progress 
described in section 484(c). 
"SEC. 407E. AUTHORIZATION OF APPROPRIATIONS. 
•"There are authorized to be appropriated to carry out this 
chapter $200,000,000 for fiscal year 1999 and such sums as may 
be necessary for each of the 4 succeeding fiscal years,". 
SEC. 405. REPEALS. 
Chapters 4 through 8 of subpart 2 of part A of title IV (20 
U.S.C. 1070a-41 et seq. and 1070a-81 et seq.) are repealed. 
SEC. 406. FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY 
GRANTS. 
(a) AUTHORIZATION OF APPROPRIATIONS.—Section 413A(b)(l) (20 
U.S.C. 1070b(b)(l)) is amended by striking "1993" and inserting 
"1999". 
,r ., 
^ • .r: . ,•-• 
• ^•*ff-«."^ »
-
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1665 
(b) USE OF FUNDS FOR LESS-THAN-FULL-TIME STUDENTS.—Sub-
section (d) of section 413C (20 U.S.C. 1070b-2) is amended to 
read as follows: 
"(d) USE OF FUNDS FOR LESS-THAN-FULL-TIME STUDENTS.— 
If the institution's allocation under this subpart is directly or 
indirectly based in part on the financial need demonstrated by 
students who are independent students or attending the institution 
on less than a full-time basis, then a reasonable proportion of 
the allocation shall be made available to such students.". 
(c) ALLOCATION OF FUNDS.— 
(1) UPDATING THE BASE PERIOD.—Section 413D(a) (20 
U.S.C. 1070b-3(a)) is amended— 
(A) in paragraph (1), by striking "received and used 
under this part for fiscal year 1985" and inserting "received 
under subsections (a) and (b) of this section for fiscal year 
1999 (as such subsections were in effect with respect to 
allocations for such fiscal year)"; 
(B) in paragraph (2)— 
(i) in subparagraphs (A) and (B), by striking "1985" 
each place the term appears and inserting "1999"; and 
(ii) in subparagraph (C)(i), by striking "1986" and 
inserting "2000". 
(2) ELIMINATION OF PRO RATA SHARE.—Section 413D is 
further amended— 
(A) by striking subsection (b); 
(B) in subsection (c)(1), by striking "three-quarters of 
the remainder" and inserting "the remainder"; 
(C) in subsection (c)(2XA)(i), by striking "subsection 
(d)" and inserting "subsection (c)"; and 
(D) by redesignating subsections (c), (d), (e), and (f) 
as subsections (b), (c), (d), and (e), respectively. 
(3) EFFECTIVE DATE.—^The amendments made by this sub-
section shall apply with respect to allocat ions of amounts appro-
priated pursuant to section 413A(b) of the Higher Education 
Act of 1965 for fiscal year 2000 or any succeeding fiscal year. 
(d) CARRYOVER AND CARRYBACK AUTHORITY.—Subpart 3 of part 
A of title IV (20 U.S.C. 1070b et seq.) is amended by adding 
at the end the following: 
•*SEC. 413E. CARRYOVER AND CARRYBACK AUTHORITY. 
"(a) CARRYOVER AUTHORITY.—Of the sums made available to 
an eligible institution under this subpart for a fiscal year, not 
more than 10 percent may, at the discretion of the institution, 
remain available for expenditure during the succeeding fisc£d year 
to carry out the program under this subpart. 
"(b) CARRYBACK AUTHORITY.— 
"(1) IN GENERAL.—Of the sums made available to an eligible 
institution under this subpart for a fiscal year, not more than 
10 percent may, at the discretion of the institution, be used 
by the institution for expenditure for the fiscal year preceding 
the fiscal year for which the sums were appropriated. 
"(2) USE OF CARRIED-BACK FUNDS.—An eligible institution 
may make grants to students after the end of the academic 
year, but prior to the beginning of the succeeding fiscal year, 
from such succeeding fiscal year's appropriations.". 
Applicability. 
20 use 1070b-3 
note. 
20 use 1070b-4. 
112 STAT. 1666 
PUBLIC LAW 105-244—OCT. 7, 1998 
SEC. 407. LEVERAGING EDUCATIONAL ASSISTANCE 
PARTNERSHIP 
PROGRAM. 
(a) AMENDMENT TO SUBPART HEADING.— 
(1) IN GENERAL.—^The heading for subpart 4 of part A 
of title IV (20 U.S.C. 1070c et seq.) is amended to read as 
follows: 
"SUBPART 4—^LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP 
PROGRAM". 
(2) CONFORMING AMENDMENTS.—Subpart 4 of part A of 
title IV (20 U.S.C. 1070c et seq.) is amended— 
(A) in section 415B(b) (20 U.S.C. 1070c-l(b)), by strik-
ing 
"State 
student 
grant 
incentive" 
and 
inserting 
"leveraging educational assistance partnership"; and 
(B) in the heading for section 415C (20 U.S.C. 1070c-
2), by striking "STATE STUDENT INCENTIVE GRANT" and 
inserting "LEVERAGING EDUCATIONAL ASSISTANCE PART-
NERSHIP". 
(b) AUTHORIZATION OF APPROPRIATIONS.—Section 415A(b) (20 
U.S.C. 1070c(b)) is amended— 
(1) in paragraph (1), by striking "1993" and inserting 
"1999"; 
(2) by redesignating paragraph (2) as paragraph (3); and 
(3) by inserting after paragraph (1) the following: 
"(2) RESERVATION.—^For any fiscal year for which the 
amount appropriated under paragraph (1) exceeds $30,000,000, 
the excess shall be available to carry out section 415E.". 
(c) SPECIAL LEVERAGING EDUCATIONAL ASSISTANCE PARTNER-
SHIP PROGRAM.—Subpart 4 of part A of title IV (20 U.S.C. 1070c 
et seq.) is amended— 
20 use 1070C-4. 
(1) by redesignating section 415E as 415F; and 
(2) by inserting after section 415D the following: 
20 use 1070c- 
"SEC. 415E. SPECIAL LEVERAGING EDUCATIONAL ASSISTANCE PART-
3a. 
NERSmP PROGRAM. 
"(a) IN GENERAL.—^From amounts reserved under section 
415A(b)(2) for each fiscal year, the Secretary shall— 
"(1) make allotments among States in the same manner 
as the Secretary makes allotments among States under section 
415B; and 
"(2) award grants to States, from allotments under para-
graph (1), to enable the States to pay the Federal share of 
the cost of the authorized activities described in subsection 
(c). 
"(b) APPLICABILITY RULE.—^The provisions of this subpart which 
are not inconsistent with this section shall apply to the program 
authorized by this section. 
"(c) AUTHORIZED ACTIVITIES.—Each State receiving a grant 
under this section may use the grant funds for— 
"(1) increasing the dollar amount of grants awarded under 
section 415B to eligible students who demonstrate financial 
need; 
"(2) carrying out transition programs from second£iry school 
to postsecondary education for eligible students who dem-
onstrate financial need; 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1667 
"(3) canying out a financial aid program for eligible stu-
dents who demonstrate financial need £ind wish to enter careers 
in information technology, or other fields of study determined 
by the State to be critical to the State's workforce needs; 
"(4) making funds available for community service work-
study activities for eligible students who demonstrate financial 
need; 
"(5) creating a postsecondary scholarship program for 
eligible students who demonstrate finsincial need and wish 
to enter teaching; 
"(6) creating a scholarship program for eligible students 
who demonstrate financial need and wish to enter a program 
of study leading to a degree in mathematics, computer science, 
or engineering; 
"(7) canying out early intervention programs, mentoring 
programs, and career education programs for eligible students 
who demonstrate financial need; and 
"(8) awarding merit or academic scholarships to eligible 
students who demonstrate financial need. 
"(d) MAINTENANCE OF EFFORT REQUIREMENT.—Each State 
receiving a grant under this section for a fiscal year shall provide 
the Secretary an assurance that the aggregate amount expended 
per student or the aggregate expenditures by the State, from funds 
derived from non-Federal sources, for the authorized activities 
described in subsection (c) for the preceding fiscal year were not 
less than the amount expended per student or the aggregate 
expenditures by the State for the activities for the second preceding 
fiscal year. 
"(e) FEDERAL SHARE.—^The Federal share of the cost of the 
authorized activities described in subsection (c) for any fiscal year 
shall be not more than 33 V
b percent.". 
(c) TECHNICAL AND CONFORMING AMENDMENTS.— 
(1) PURPOSE.—Subsection (a) of section 415A (20 U.S.C. 
1070c(a)) is amended to read as follows: 
"(a) PURPOSE OF SUBPART.—It is the purpose of this subpart 
to make incentive grants available to States to assist States in— 
"(1) providing grants to— 
"(A) eligible students attending institutions of higher 
education or participating in programs of study abroad 
that are approved for credit by institutions of higher edu-
cation at which such students are enrolled; and 
"(B) eligible students for campus-based community 
service work-study; and 
"(2) carrying out the activities described in section 415F.". 
(2) ALLOTMENT.—Section 415B(a)(l) (20 U.S.C. 1070c-
1(a)(1)) is amended by inserting "and not reserved under section 
415A(b)(2r after "415A(b)(l)". 
SEC. 408. SPECIAL PROGRAMS FOR STUDENTS WHOSE FAMILIES ARE 
ENGAGED IN MIGRANT AND SEASONAL FARMWORK. 
(a) COORDINATION.—Section 418A(d) (20 U.S.C. 1070d-2(d)) is 
amended by inserting afl;er "contains assurances" the following: 
"that the grant recipient will coordinate the project, to the extent 
feasible, with other local, State, and Federal programs to maximize 
the resources available for migrant students, and". 
112 STAT. 1668 
PUBLIC LAW 105-244--OCT. 7, 1998 
20 use i070d-2. 
(b) AUTHORIZATION OF APPROPRIATIONS.—Section 418A(g) is 
amended by striking "1993" each place the term appears and insert-
ing "1999". 
(c) DATA COLLECTION.—Section 418A is amended— 
(1) by redesignating subsection (g) (as amended by sub-
section (b)) as subsection (h); and 
(2) by inserting after subsection (f) the following: 
"(g) DATA COLLECTION.—The National Center for Education 
Statistics shall collect postsecondary education data on migrant 
students.". 
(d) TECHNICAL AMENDMENT.—Section 418A(e) is amended by 
striking "authorized by subpart 4 of this part in accordance with 
section 417A(b)(2)" and inserting "in accordance with section 
402A(c)(l)". 
SEC. 409. ROBERT C. BYRD HONORS SCHOLARSHIP PROGRAM. 
(a) FAS ELIGIBILITY.—Section 419D (20 U.S.C. 1070d-34) is 
Eimended by adding at the end thereof the following: 
"(e) FAS ELIGIBILITY.— 
"(1) FISCAL YEARS 2000 THROUGH 2004.—Notwithstanding 
any other provision of this subpart, in the case of students 
from the Freely Associated States who may be selected to 
receive a scholarship under this subpart for the first time 
for any of the fiscal years 2000 through 2004— 
"(A) there shall be 10 scholarships in the aggregate 
awarded to such students for each of the fiscal years 2000 
through 2004; and 
"(B) the Pacific Regional Educational Laboratory shall 
administer the program under this subpart in the case 
of scholarships for students in the Freely Associated States. 
"(2) TERMINATION OF ELIGIBILITY.^A student from the 
Freely Associated States shall not be eligible to receive a schol-
arship under this subpart after September 30,2004.". 
(b) AUTHORIZATION OF APPROPRIATIONS.—Section 419K (20 
U.S.C. 1070d-41) is amended by striking "$10,000,000 for fiscal 
year 1993" and inserting "$45,000,000 for fiscal year 1999". 
SEC. 410. CHHJ) CARE ACCESS MEANS PARENTS IN SCHOOL. 
Part A of title IV (20 U.S.C. 1070 et seq.) is amended by 
inserting after subpart 6 (20 U.S.C. 1070d-31 et seq.) the following: 
^Subpart 7—Child Care Access Means Parents in 
School 
20 use 1070e. 
''SEC. 419N. CHHJ) CARE ACCESS MEANS PARENTS IN SCHOOL. 
"(a) PURPOSE.—^The purpose of this section is to support the 
participation of low-income parents in postsecondary education 
through the provision of campus-based child care services. 
"(b) PROGRAM AUTHORIZED.— 
"(1) AUTHORITY.—^The Secretary may awsird grants to 
institutions of higher education to assist the institutions in 
providing campus-based child care services to low-income stu-
dents. 
"(2) AMOUNT OF GRANTS.— 
"(A) IN GENERAL.—^The amount of a grant awarded 
to an institution of higher education under this section 
for a fiscal year shall not exceed 1 percent of the total 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1669 
amount of all Federal Pell Grant funds awarded to students 
enrolled at the institution of higher education for the 
preceding fiscal year. 
"(B) MINIMUM.—^A grant under this section shall be 
awarded in an amount that is not less than $10,000. 
"(3) DURATION; RENEWAL; AND PAYMENTS.— 
"(A) DURATION.—^The Secretary shall award a grant 
under this section for a period of 4 years. 
"(B) PAYMENTS.—Subject to subsection (e)(2), the Sec-
retary shall make annual grant payments under this sec-
tion. 
"(4) ELIGIBLE INSTITUTIONS.—An institution of higher edu-
cation shall be eligible to receive a grant under this section 
for a fiscal year if the total amount of all Federal Pell Grant 
funds awarded to students enrolled at the institution of higher 
education for the preceding fiscal year equals or exceeds 
$350,000. 
"(5) USE OF FUNDS.—Grant funds under this section shall 
be used by an institution of higher education to support or 
establish a campus-based child care program primarily serving 
the needs of low-income students enrolled at the institution 
of higher education. Grant funds under this section may be 
used to provide before Eind aft^er school services to the extent 
necessary to enable low-income students enrolled at the institu-
tion of higher education to pursue postsecondary education. 
"(6) CONSTRUCTION.—^Nothing in this section shall be con-
strued to prohibit an institution of higher education that 
receives grant funds under this section from serving the child 
care needs of the community served by the institution. 
"(7) DEFINITION OF LOW-INCOME STUDENT.—^For the purpose 
of this section, the term "low-income student" means a student 
who is eligible to receive a Federal Pell Grant for the fiscal 
year for which the determination is made. 
"(c) APPLICATIONS.—An institution of higher education desiring 
a grant under this section shall submit an application to the Sec-
retary at such time, in such manner, and accompsmied by such 
information as the Secretary may require. Each application shall— 
"(1) demonstrate that the institution is an eligible institu-
tion described in subsection (bX4); 
"(2) specify the amount of funds requested; 
"(3) demonstrate the need of low-income students at the 
institution for campus-based child care services by including 
in the application— 
"(A) information regarding student demographics; 
"(B) an assessment of child care capacity on or near 
campus; 
"(C) information regarding the existence of waiting 
lists for existing child care; 
"(D) information regarding additional needs created 
by concentrations of poverty or by geographic isolation; 
and 
"(E) other relevant data; 
"(4) contain a description of the activities to be assisted, 
including whether the grant funds will support an existing 
child care prop'am or a new child care program; 
"(5) identify the resources, including technical expertise 
and financial support, the institution will draw upon to support 
112 STAT. 1670 
PUBLIC LAW 105-244—OCT. 7, 1998 
the child care program and the participation of low-income 
students in the program, such as accessing social services fund-
ing, using student activity fees to help pay the costs of child 
care, using resources obtained by meeting the needs of parents 
who are not low-income students, and accessing foundation, 
corporate or other institutiongd support, and demonstrate that 
the use of the resources will not result in increases in student 
tuition; 
"(6) contain an assurance that the institution will meet 
the child care needs of low-income students through the provi-
sion of services, or through a contract for the provision of 
services; 
"(7) describe the extent to which the child care program 
will coordinate with the institution's early childhood education 
curriculum, to the extent the curriculum is available, to meet 
the needs of the students in the early childhood education 
program at the institution, and the needs of the parents and 
children participating in the child care program assisted under 
this section; 
"(8) in the case of an institution seeking assistance for 
a new child care program— 
"(A) provide a timeline, covering the period from receipt 
of the grant through the provision of the child care services, 
delineating the specific steps the institution will take to 
achieve the goal of providing low-income students with 
child care services; 
"(B) specify any measures the institution will take 
to assist low-income students with child care during the 
period before the institution provides child care services; 
and 
"(C) include a plan for identifying resources needed 
for the child care services, including space in which to 
provide child care services, and technical assistance if nec-
essary; 
"(9) contain an assurance that any child care facility 
assisted under this section will meet the applicable State or 
local government licensing, certification, approved, or registra-
tion requirements; and 
"(10) contain a plan for any child care facility assisted 
under this section to become accredited within 3 years of the 
date the institution first receives assistance under this section. 
"(d) PRIORITY.—^The Secretary shall give priority in awarding 
grants under this section to institutions of higher education that 
submit applications describing programs that— 
"(1) leverage significant local or institutional resources, 
including in-kind contributions, to support the 
activities 
assisted under this section; and 
"(2) utilize a sliding fee scale for child care services provided 
under this section in order to support a high number of low-
income parents pursuing postsecondary education at the 
institution. 
"(e) REPORTING REQUIREMENTS; CONTINUING ELIGIBILITY.— 
"(1) REPORTING REQUIREMENTS.— 
"(A) REPORTS.—Each institution of higher education 
receiving a grant under this section shall report to the 
Secretary 18 months, and 36 months, after receiving the 
first grant payment under this section. 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1671 
"(B) CONTENTS.—The report shall include— 
''(i) data on the population served under this 
section; 
"(ii) information 
on campus and 
community 
resources and funding used to help low-income stu-
dents access child care services; 
"(iii) information on progress made toward accredi-
tation of any child care facility; and 
"(iv) iiiformation on the impact of the grant on 
the quality, availability, and affordability of campus-
based child care services. 
"(2) CONTINUING ELIGIBIUTY.—The Secretary shall make 
the third annual grant payment under this section to an institu-
tion of higher education only if the Secretary determines, on 
the basis of the 18-month report submitted under paragraph 
(1), that the institution is making a good faith effort to ensure 
that low-income students at the institution have access to 
affordable, quality child care services. 
"(f) CONSTRUCTION.—^No funds provided under this section shall 
be used for construction, except for minor renovation or repair 
to meet applicable State or local health or safety requirements. 
"(g) AUTHORIZATION OF APPROPRIATIONS.—^There are authorized 
to be appropriated to carry out this section $45,000,000 for fiscal 
year 1999 and such sums as may be necessary for each of the 
4 succeeding fiscal years.". 
SEC. 411. LEARNING ANYTIME ANYWHERE PARTNERSHIPS. 
Subpart 8 of part A of title IV (20 U.S.C. 1070 et seq.) is 
amended to read as follows: 
^Subpart 8—^Learning Anytime Anywhere 
Partnerships 
'^EC. 420D. FINDINGS. 
20USC1070f. 
"Congress makes the following findings: 
"(1) The nature of postsecondary education delivery is 
changing, and new technology and other related innovations 
can provide promising education opportunities for individuals 
who are currently not being served, particularly for individuals 
without easy access to traditional campus-based postsecondary 
education or for whom traditional courses are a poor match 
with education or training needs. 
"(2) Individuals, including individuals seeking basic or tech-
nical skills or their first postsecondary experience, individuals 
with disabilities, dislocated workers, individuals making the 
transition from welfare-to-work, and individuals who are lim-
ited by time and place constraints can benefit from nontradi-
tional, noncampus-based postsecondary education opportunities 
and appropriate support services. 
"(3) TTbie need for high-quality, nontraditional, technology-
based education opportunities is great, as is the need for skill 
competency credentials and other measures of educational 
progress and attainment that are valid and widely accepted, 
but neither need is likely to be adequately addressed by the 
uncoordinated efforts of agencies and institutions acting 
independently and without assistance. 
112 STAT. 1672 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(4) Partnerships, consisting of institutions of higher edu-
cation, community organizations, or other public or private 
agencies or organizations, can coordinate and combine institu-
tional resources— 
"(A) to provide the needed variety of education options 
to students; and 
"(B) to develop new means of ensuring accountability 
and quality for innovative education methods. 
20 use 1070f-l. 
-SEC. 420E. PURPOSE; PROGRAM AUTHORIZED. 
"(a) PURPOSE.—It is the purpose of this subpart to enhance 
the delivery, quality, and accountability of postsecondary education 
and career-oriented lifelong learning through technology and related 
innovations. 
"(b) PROGRAM AUTHORIZED.— 
"(1) GRANTS.— 
"(A) IN GENERAL.—^The Secretary may, from funds 
appropriated under section 420J make grsmts to, or enter 
into contracts or cooperative agreements with, eligible part-
nerships to carry out the authorized activities described 
in section 420G. 
"(B) DURATION.—Grants under this subpart shall be 
awarded for periods that do not exceed 5 years. 
"(2) DEFINITION OF ELIGIBLE PARTNERSHIP.—For purposes 
of this subpart, the term 'eligible partnership' means a partner-
ship consisting of 2 or more independent agencies, organiza-
tions, or institutions. The agencies, organizations, or institu-
tions may include institutions of higher education, community 
organizations, and other public and private institutions, agen-
cies, and organizations. 
20USC1070f-2. 
-SEC.420F.APPUCATION. 
"(a) REQUIREMENT.—^An eligible partnership desiring to receive 
a grant under this subpart snail submit an application to the 
Secretary, in such form and containing such information, as the 
Secretary may require. 
"(b) CONTENTS.—^Each application shall include— 
"(1) the name of each partner and a description of the 
responsibilities of the partner, including the designation of 
a nonprofit organization as the fiscal agent for the partnership; 
"(2) a description of the need for the project, including 
a description of how the project will build on any existing 
services and activities; 
"(3) a listing of human, financial (other than funds provided 
under this subpart), smd other resources that each member 
of the partnership will contribute to the partnership, and a 
description of the efforts each member of the partnership will 
make in seeking additional resources; and 
"(4) a description of how the project will operate, including 
how funds awarded under this subpart will be used to meet 
the purpose of this subpart. 
20 use 1070f-3. 
"SEC. 420G. AUTHORIZED ACTIYITIES. 
"Funds awarded to an eligible partnership under this subpart 
shall be used to— 
"(1) develop and assess model distance learning programs 
or innovative educational software; 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1673 
"(2) develop methodologies for the identification 
and 
measurement of skill competencies; 
"(3) develop and assess innovative student support services; 
or 
"(4) support other activities that are consistent with the 
purpose of this subpart. 
"SEC. 420H. MATCHING REQUIREMENT. 
"Federgd funds shall provide not more than 50 percent of the 
cost of a project under this subpart. The non-Federal share of 
project costs may be in cash or in kind, fairly evsiluated, including 
services, supplies, or equipment. 
"SEC. 420L PEER REVIEW. 
"The Secretary shall use a peer review process to review 
applications under this subpart and to make recommendations for 
funding under this subpart to the Secretary. 
"SEC. 420J. AUTHORIZATION OF APPROPRIATIONS. 
"There are authorized to be appropriated to carry out this 
subpart $10,000,000 for fiscal year 1999 and such sums as may 
be necessary for each of the 4 succeeding fiscal years.". 
PART 
B—FEDERAL 
FAMILY 
EDUCATION 
LOAN 
PROGRAM 
SEC. 411. LIMITATION REPEALED. 
Section 421 (20 U.S.C. 1071) is amended by striking subsection 
(d). 
SEC. 412. ADVANCES TO RESERVE FUNDS. 
Section 422 (20 U.S.C. 1072) is amended— 
(1) in subsection (a)(2), by striking "428(c)(10)(E)" and 
inserting "428(c)(9)(Er; 
(2) in subsection (c)— 
(A) in paragraph (6)(BXi), by striking "written" and 
inserting "written, electronic,"; 
(B) in paragraph (7)(A), by striking "during the transi-
tion from the Federal Family Education Loan Program 
under this part to the Federal Direct Student Loan Pro-
gram under part D of this title"; and 
(C) in paragraph (7XB), by striking "428(cX10)(FXv)" 
and inserting "428(cX9XFXv)"; 
(3) in the first and second sentences of subsection (g)(1), 
by striking "or the program authorized by part D of this title" 
each place it appears; and 
(4) by adding at the end the following: 
"(i) ADDITIONAL RECALL OF RESERVES.— 
"(1) IN GENERAL.—^Notwithstanding any other provision of 
law and subject to paragraph (4), the Secretary shall recall, 
from reserve funds held in the Federal Student Loan Reserve 
Funds established under section 422A by guaranty agencies— 
"(A) $85,000,000 in fiscal year 2002; 
"(B) $82,500,000 in fiscal year 2006; and 
"(C) $82,500,000 in fiscal year 2007. 
"(2) DEPOSIT.—^Funds recalled by the Secretary under this 
subsection shall be deposited in the Treasury. 
20 use 1070f-4. 
20 use 1070f-5. 
20 use 1070f-6. 
112 STAT. 1674 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(3) REQUIRED SHARE.—The Secretary shall require each 
guaranty agencjr to return reserve funds under paragraph (1) 
on the basis of the agency's required share. For purposes of 
this paragraph, a guaranty agency's required share shall be 
determined as follows: 
"(A) EQUAL PERCE^^^AGE.—^The Secretary shall require 
each guaranty agency to return an amount representing 
an equal percentage reduction in the amount of reserve 
funds held by the agency on September 30, 1996. 
"(B) CALCULATION.—^The equal percentage reduction 
shall be the percentage obtained by dividing— 
"(i) $250,000,000, by 
"(ii) the total amount of all guaranty agencies' 
reserve funds held on September 30, 1996, less any 
amounts subject to recall under subsection (h). 
"(C) SPECIAL RULE.—^Notwithstanding subparagraphs 
(A) and (B), the percentage reduction under subparagraph 
(B) shall not result in the depletion of the reserve funds 
of any agency which charges the 1.0 percent insurance 
premium pursuant to section 428(b)(1)(H) below an amount 
equal to the amount of lender claim payments paid during 
the 90 days prior to the date of the return under this 
subsection. If any additional amount is required to be 
returned after deducting the total of the required shares 
under subparagraph (B) and as a result of the preceding 
sentence, such additional simount shall be obtained by 
imposing on each guaranty agency to which the preceding 
sentence does not apply, an equal percentage reduction 
in the amount of the agency's remaining reserve funds. 
"(4) OFFSET OF REQUIRED SHARES.—If any guaranty agency 
returns to the Secretary any reserve funds in excess of the 
amount required under this subsection or subsection (h), the 
total amount required to be returned under paragraph (1) shall 
be reduced by the amount of such excess reserve funds returned. 
"(5) DEFINITION OF RESERVE FUNDS.—^The term 'reserve 
funds' when used with respect to a guaranty agency— 
"(A) includes any reserve funds in cash or liquid assets 
held by the guaranty agency, or held by, or under the 
control of, any other entity; and 
"(B) does not include buildings, equipment, or other 
nonliquid assets.". 
SEC. 413. GUARANTY AGENCY REFORMS. 
(a) FEDERAL STUDENT LOAN RESERVE FUND.—^Part B of title 
IV is amended by inserting after section 422 (20 U.S.C. 1072) 
the following new section: 
20 use 1072a. 
"SEC. 422A. FEDERAL STUDENT LOAN RESERVE FUND. 
Deadline. 
"(a) ESTABLISHMENT.—Each guaranty agency shall, not later 
than 60 days after the date of enactment of this section, deposit 
all funds, securities, and other liquid assets contained in the reserve 
fund established pursuant to section 422 into a Federal Student 
Loan Reserve Fund (in this section and section 422B referred to 
as the 'Federal Fund'), which shall be an account of a type selected 
by the agency, with the approval of the Secretanr. 
"(b) INVESTMENT OF FUNDS.—^Funds transferred to the Federal 
Fund shall be invested in obligations issued or guaranteed by 
the United States or a State, or in other similarly low-risk securities 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1675 
selected by the gUEu-anty agency, with the approval of the Secretary. 
Earnings from the Federal Fund shall be the sole property of 
the Federal Grovemment. 
"(c) ADDITIONAL DEPOSITS.—After the estabUshment of the Fed-
eral Fund, a guaranty agency shall deposit into the Federal Fund— 
"(1) all amounts received from the Secretary as payment 
of reinsurance on loans pursuant to section 428(c)(1); 
"(2) from amounts collected on behalf of the obligation 
of a defaulted borrower, a percentage amount equal to the 
complement of the reinsurance percentage in effect when pay-
ment under the guaranty agreement was made— 
"(A) with respect to the defaulted loan pursuant to 
sections 428(cX6)(A) and 428F(a)(lXB); and 
"(B) with respect to a loan that the Secretary has 
repaid or discharged under section 437; 
"(3) insurance premiums collected from borrowers pursuant 
to sections 428(b)(1)(H) and 428H(h); 
"(4) all amounts received from the Secretary as pa3rment 
for supplemental preclaims activity performed prior to the date 
of enactment of this section; 
"(5) 70 percent of amounts received after such date of 
enactment from the Secretary as payment for administrative 
cost allowances for loans upon which insurance was issued 
prior to such date of enactment; and 
"(6) other receipts as specified in regulations of the Sec-
retary. 
"(d) USES OF FUNDS.—Subject to subsection (f), the Federal 
Fund may only be used by a guaranty agency— 
"(1) to pay lender claims pursuant to sections 428(bXl)(G), 
428( j), 437, and 439(q); and 
"(2) to pay into the Agency Operating Fund established 
pursuant to section 422B (in this section and section 422B 
referred to as the "Operating Fund") a default aversion fee 
in accordance with section 428(1). 
"(e) OWNERSHIP OF FEDERAL FUND.—The Federal Fund, and 
any nonliquid asset (such as a building or equipment) developed 
or purchased by the guaranty agency in whole or in part with 
Federal reserve funds, regardless of who holds or controls the 
Federal reserve funds or such asset, shall be considered to be 
the property of the United States, prorated based on the percentage 
of such asset developed or purchased with Federal reserve funds, 
which property shall be used in the operation of the program 
authorized by this part, as provided in subsection (d). The Secretary 
may restrict or regulate the use of such asset only to the extent 
necessary to reasonably protect the Secretary's prorated share of 
the value of such asset. The Secretary may direct a guaranty 
agency, or such agency's officers or directors, to cease any activity 
involving expenditures, use, or transfer of the Federal Fund 
administered by the guaranty agency that the Secretary determines 
is a misapplication, misuse, or improper expenditure of the Federal 
Fund or the Secretary's share of such asset. 
"(f) TRANSITION.— 
"(1) IN GENERAL.—^In order to establish the Operating Fund, 
each guaranty agency may transfer not more than 180 days' 
cash expenses for normal operating expenses (not including 
claim payments) as a working capital reserve as defined in 
112 STAT. 1676 
PUBLIC LAW 105-244—OCT. 7, 1998 
Office of Management and Budget Circular A-87 (Cost Account-
ing Standards) from the Federal Fund for deposit into the 
Operating Fund for use in the performance of the guaranty 
agency's duties under this part. Such transfers may occur dur-
ing the first 3 years following the establishment of the Operat-
ing Fund. However, no agency may transfer in excess of 45 
percent of the balance, as of September 30, 1998, of the agency's 
Federal Fund to the agency's Operating Fund during such 
3-year period. In determining the amount that may be trans-
ferred, the agency shall ensure that sufficient funds remain 
in the Federal Fund to pay lender claims within the required 
time periods and to meet the reserve recsJl requirements of 
this section and subsections (h) and (i) of section 422. 
"(2) SPECIAL RULE.—^A limited number of guaranty agencies 
may transfer interest earned on the Federal Fund to the 
Operating Fund during the first 3 years after the date of 
enactment of this section if the guaranty agency demonstrates 
to the Secretary that— 
"(A) the cash flow in the Operating Fund will be nega-
tive without the transfer of such interest; and 
"(B) the transfer of such interest will substantially 
improve the 
financial 
circumstances of the 
guaranty 
agency. 
"(3) REPAYMENT PROVISIONS.—Each guaranty agency shall 
begin repayment of sums transferred pursuant to this sub-
section not later than the start of the fourth year after the 
establishment of the Operating Fund, and shall repay all 
amounts transferred not later than 5 years from the date 
of the establishment of the Operating Fund. With respect to 
amounts transferred from the Federal Fund, the guaranty 
agency shall not be required to repay any interest on the 
funds transferred and subsequently repaid. The guaranty 
agency shall provide to the Secretary a reasonable schedule 
for repayment of the sums transferred and an annual financial 
analysis demonstrating the agency's ability to comply with the 
schedule and repay all outstanding sums transferred. 
"(4) PROHIBITION.—If a guaranty agency transfers funds 
from the Federal Fund in accordance with this section, and 
fails to make scheduled repajonents to the Federal Fund, the 
agency may not receive any other funds under this part until 
the Secretary determines that the agency has made such repay-
ments. The Secretary shall pay to the guaranty agency any 
funds withheld in accordance with this paragraph immediately 
upon making the determination that the guaranty agency has 
made all such repajrments. 
"(5) WAIVER.—The Secretary may— 
"(A) waive the requirements of paragraph (3), but only 
with respect to repayment of interest that was transferred 
in accordance with paragraph (2); and 
"(B) waive paragraph (4); 
for a guaranty agency, if the Secretary determines that there 
are extenuating circumstances (such as State constitutional 
prohibitions) beyond the control of the agency that justify such 
a waiver. 
"(6) 
EXTENSION OF REPAYMENT PERIOD FOR INTEREST.— 
PUBLIC LAW 105-244-~OCT. 7, 1998 
112 STAT. 1677 
"(A) 
EXTENSION 
PERMITTED.—The Secretary 
shall 
extend the period for repayment of interest that was trans-
ferred in accordance with paragraph (2) from 2 years to 
5 years if the Secretary determines that— 
"(i) the cash flow of the Operating Fund will be 
negative as a result of repajrment as required by para-
graph (3); 
"(ii) the repayment of the interest transferred will 
substantially diminish the financial circumstances of 
the guaranty agency; and 
"(iii) the guaranty agency has demonstrated— 
"(I) that the agency is able to repay all trans-
ferred fund* by the end of the 8th year following 
the date of establishment of the Operating Fund; 
and 
"(II) that the agency will be financially sound 
on the completion of repayment. 
"(B) REPAYMENT OF INCOME ON TRANSFERRED FUNDS.— 
All repayments made to the Federal Fund during the 6th, 
7th, and 8th years following the establishment of the 
Operating Fund of interest that was transferred shall 
include the sums transferred plus any income earned from 
the investment of the sums transferred aft;er the 5th year. 
"(7) INVESTMENT OF FEDERAL FUNDS.—^Funds transferred 
from the Federal Fund to the Operating Fund for operating 
expenses shall be invested in obligations issued or guaranteed 
by the United States or a State, or in other similarly low-
risk securities selected by the guaranty agency, with the 
approval of the Secretary. 
"(8) SPECIAL RULE.—^In calculating the minimum reserve 
level required by section 428(c)(9XA), the Secretary shall 
include all amounts owed to the Federal Fund by the guaranty 
agency in the calculation.". 
(b) AGENCY OPERATING FUND ESTABLISHED.—^Part B of title 
IV is further amended by inserting after section 422A (as added 
by subsection (a)) the following new section: 
"SEC. 422B. AGENCY OPERATING FUND. 
20 USC 1072b. 
"(a) ESTABLISHMENT.—Each guaranty agency shall, not later Deadline, 
than 60 days after the date of enactment of this section, establish 
a fiind designated as the Operating Fund. 
"(b) INVESTMENT OF FUNDS.—Funds deposited into the Operat-
ing Fund shall be invested at the discretion of the guaranty agency 
in accordance with prudent investor standards. 
"(c) ADDITIONAL DEPOSITS.—Afl«r the establishment of the 
Operating Fund, the guaranty agency shall deposit into the Operat-
ing Fund— 
"(1) the loan processing and issuance fee paid by the 
Secretary pursuant to section 428(f); 
"(2) 30 percent of amounts received after the date of enact-
ment of this section from the Secretary as payment for adminis-
trative cost allowances for loans upon which insurance was 
issued prior to such date of enactment; 
"(3) the account maintenance fee paid by the Secretary 
in accordance with section 458; 
"(4) the default aversion fee paid in accordance with section 
428(1); 
112 STAT. 1678 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(5) amounts remaining pursuant to section 428(cX6)(B) 
from collection on defaulted loans held by the agency, after 
payment of the Secretary's equitable share, excluding amounts 
deposited in the Federal Fund pursuant to section 422A(c)(2); 
and 
"(6) other receipts as specified in regulations of the 
Secretary. 
"(d) USES OF FUNDS.— 
"(1) IN GENERAL.—Funds in the Operating Fund shall be 
used for application processing, loan disbursement, enrollment 
and repayment status management, default aversion activities 
(including those described in section 422(hX8)), default collec-
tion activities, school and lender training, financial aid aware-
ness and related outreach activities, compliance monitoring, 
and other student financial aid related activities, as selected 
by the guaranty agency. 
"(2) SPECIAL RULE.—The guaranty agency may, in the agen-
cy's discretion, transfer funds from the Operating Fund to 
the Federal Fund for use pursuant to section 422A Such trans-
fer shall be irrevocable, and any funds so transferred shall 
become the sole property of the United States. 
"(3) DEFINITIONS.—^For purposes of this subsection: 
"(A) 
DEFAULT 
COLLECTION 
ACTIVITIES.—The term 
'default collection activities' means activities of a guaranty 
agency that are directly related to the collection of the 
lo£m on which a default claim has been paid to the partici-
pating lender, including the due diligence 
activities 
required pursuant to regulations of the Secretary. 
"(B) DEFAULT AVERSION ACTIVITIES.—^The term 'default 
aversion activities' means activities of a guaranty agency 
that are directly related to providing collection assistance 
to the lender on a delinquent loan, prior to the loan's 
being legally in a default status, including due diligence 
activities required pursuant to regulations of the Secretary. 
"(C) ENROLLMENT AND REPAYMENT STATUS MANAGE-
MENT.—^The term 
'enrollment 
and repa3rment 
status 
management' means activities of a guaranty agency that 
are directly related to ascertaining the student's enrollment 
status, including prompt notification to the lender of such 
status, an audit of the note or written agreement to deter-
mine if the provisions of that note or agreement are consist-
ent with the records of the guaranty agency as to the 
principal amount of the loan guaranteed, and an examina-
tion of the note or agreement to assure that the repayment 
provisions are consistent with the provisions of this part. 
"(e) OWNERSHIP AND REGULATION OF OPERATING FUND.— 
"(1) OWNERSHIP.—^The Operating Fund, with the exception 
of funds transferred from the Federal Fund in accordance with 
section 422A(f), shall be considered to be the property of the 
guaranty agency. 
"(2) REGULATION.—Except as provided in paragraph (3), 
the Secretary may not regulate the uses or expenditure of 
moneys in the Operating Fund, but the Secretary may require 
such necessary reports and audits as provided in section 
428(b)(2). 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1679 
"(3) EXCEPTION.—Notwithstanding paragraphs (1) and (2), 
during any period in which funds are owed to the Federal 
Fund as a result of transfer under section 422A(f)— 
"(A) moneys in the Operating Fund may only be used 
for expenses related to the student loan programs author-
ized under this part; and 
"(B) the Secretary may regulate the uses or expenditure 
of moneys in the Operating Fund.". 
SEC. 414. SCOPE AND DURATION OF FEDERAL LOAN INSURANCE PRO-
GRAM. 
Section 424(a) (20 U.S.C. 1074(a)) is amended— 
(1) by striking "October 1, 2002" and inserting "October 
1, 2004"; and 
(2) by striking "September 30, 2006" and inserting "Septem-
ber 30,2008". 
SEC. 415. LIMITATIONS ON INDIVIDUAL FEDERALLY INSURED LOANS 
AND FEDERAL LOAN INSURANCE. 
Section 425(a)(1)(A) (20 U.S.C. 1075(aXlXA)) is amended— 
(l)in clause (i)— 
(A) by inserting "and" after the semicolon at the end 
of subclause (I); and 
(B) by striking subclauses (II) and (III) and inserting 
the following: 
"(II) if such student is enrolled in a program of 
undergraduate education which is less than one aca-
demic year, the maximum annual loan amount that 
such student may receive may not exceed the amount 
that bears the same ratio to the amount specified 
in subclause (I) as the length of such program meas-
ured in semester, trimester, quarter, or clock hours 
bears to one academic year;"; and 
(2) by inserting "and" after the semicolon at the end of 
clause (iii). 
SEC. 416. APPUCABLE INTEREST RATES. 
(a) APPLICABLE INTEREST RATES.— 
(1) AMENDMENT.—Section 427A (20 U.S.C. 1077a) is 
amended— 
(A) by redesignating subsections (k) and (1) as sub-
sections (1) and (m), respectively; and 
(B) by inserting after subsection (j) the following: 
"(k) INTEREST RATES FOR NEW LOANS ON OR AFTER OCTOBER 
1,1998, AND BEFORE JULY 1,2003.— 
"(1) IN GENERAL.—^Notwithstanding subsection (h) and sub-
ject to paragraph (2) of this subsection, with respect to any 
loan made, insured, or guaranteed under this part (other than 
a loan made pursuant to section 428B or 428C) for which 
the first disbursement is made on or after October 1, 1998, 
and before July 1, 2003, the applicable rate of interest shall, 
during any 12-month period beginning on July 1 and ending 
on June 30, be determined on the preceding June 1 and be 
equal to— 
"(A) the bond equivsdent rate of 91-day Treasury bills 
auctioned at the final auction held prior to such June 
1; plus 
"(B) 2.3 percent, 
112 STAT. 1680 
PUBLIC LAW 105-244—OCT. 7, 1998 
Federal Register, 
publication. 
except that such rate shall not exceed 8.25 percent. 
"(2) IN SCHOOL AND GRACE PERIOD RULES.—Notwithstand-
ing subsection (h), with respect to any loan under this part 
(other than a loan made pursuant to section 428B or 428C) 
for which the first disbursement is made on or after October 
1, 1998, and before July 1, 2003, the applicable rate of interest 
for interest which accrues— 
"(A) prior to the beginning of the repayment period 
of the loan; or 
"(B) during the period in which principal need not 
be paid (whether or not such principal is in fact paid) 
by reason of a provision described in section 427(a)(2)(C) 
or428(b)(l)(M), 
shall be determined under paragraph (1) by substituting *1.7 
percent' for *2.3 percent'. 
"(3) PLUS LOANS.—^Notwithstanding subsection (h), with 
respect to any loan under section 428B for which the first 
disbursement is made on or after October 1, 1998, and before 
July 1, 2003, the applicable rate of interest shall be determined 
under paragraph (1)— 
"(A) by substituting *3.1 percent' for '2.3 percent'; and 
"(B) by substituting '9.0 percent' for '8.25 percent'. 
"(4) CONSOLIDATION LOANS.—^With respect to any consolida-
tion loan under section 428C for which the application is 
received by an eligible lender on or after October 1, 1998, 
and before July 1, 2003, the applicable rate of interest shall 
be at an annual rate on the unpaid principal balance of the 
loan that is equ£il to the lesser of— 
"(A) the weighted average of the interest rates on 
the loans consolidated, rounded to the nearest higher one-
eighth of 1 percent; or 
"(B) 8.25 percent. 
"(5) CONSULTATION.—^The Secretary shall determine the 
applicable rate of interest under this subsection after consulta-
tion with the Secretary of the Treasury and shall publish such 
rate in the Federal Register as soon as practicable after the 
date of determination.". 
(2) 
CONFORMING AMENDMENT.—Section 428B(dX4) (20 
U.S.C. 1078-2(d)(4)) is amended by striking "section 427A(c)'' 
and inserting "section 427A". 
(b) SPECIAL ALLOWANCES.— 
(1) AMENDMENT.—Section 438(b)(2) (20 U.S.C. 1087-l(b)(2)) 
is amended by adding at the end the following: 
"(H) LOANS DISBURSED ON OR AFTER OCTOBER i, i998, 
AND BEFORE JULY 1, 2003.— 
"(i) IN GENERAL.—Subject to paragraph (4) and 
clauses (ii), (iii), and (iv) of this subparagraph, and 
except as provided in subparagraph (B), the special 
allowance paid pursuant to this subsection on loans 
for which the first disbursement is made on or after 
October 1, 1998, and before July 1, 2003, shall be 
computed— 
"(I) by determining the average of the bond 
equivalent rates of 91-day Treasury bills auctioned 
for such 3-month period; 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1681 
"(11) by subtracting the applicable interest 
rates on such loans from such average bond equiva-
lent rate; 
"(III) by adding 2.8 percent to the resultant 
percent; and 
"(IV) by dividing the resultsint percent by 4. 
"(ii) IN SCHOOL AND GRACE PERIOD.—^In the case 
of any loan for which the first disbursement is made 
on or after October 1, 1998, and before July 1, 2003, 
and for which the applicable rate of interest is 
described in section 427A(kX2), clause (i)(III) of this 
subparagraph shall be applied by substituting '2.2 per-
cent' for *2.8 percent'. 
"(iii) PLUS LOANS.—^In the case of any loan for 
which the first disbursement is made on or after Octo-
ber 1, 1998, and before July 1, 2003, and for which 
the applicable rate of interest is described in section 
427A(k)(3), clause (iXIII) of this subparagraph shall 
be applied by substituting *3.1 percent' for *2.8 percent', 
subject to clause (v) of this subparagraph. 
"(iv) CONSOLIDATION LOANS.—^In the case of any 
consolidation loan for which the application is received 
by an eligible lender on or after October 1, 1998, and 
before July 1, 2003, and for which the applicable 
interest rate is determined under section 427A(kX4), 
clause (iXIII) of this subparagraph shall be applied 
by substituting '3.1 percent' for *2.8 percent', subject 
to clause (vi) of this subparagraph. 
"(v) LIMITATION ON SPECIAL ALLOWANCES FOR PLUS 
LOANS.—In the case of PLUS loans made under section 
428B and first disbursed on or after October 1, 1998, 
and before July 1, 2003, for which the interest rate 
is determined under section 427A(kX3), a special allow-
ance shall not be paid for such loan during any 12-
month period beginning on July 1 and ending on June 
30 unless, on the June 1 preceding such July 1— 
"(I) the bond equivalent rate of 91-day Treas-
ury bills auctioned at the final auction held prior 
to such June 1 (as determined by the Secretary 
for purposes of such section); plus 
"(II) 3.1 percent, 
exceeds 9.0 percent. 
"(vi) 
LIMITATION ON SPECIAL ALLOWANCES FOR 
CONSOLIDATION LOANS.—^In the case of consolidation 
loans made under section 428C and for which the 
application is received on or after October 1, 1998, 
and before July 1, 2003, for which the interest rate 
is determined under section 427A(k)(4), a special allow-
ance shall not be paid for such loan during any 3-
month period ending March 31, June 30, September 
30, or December 31 unless— 
"(I) the average of the bond equivsdent rate 
of 91-day Treasury bills auctioned for such 3-
month period; plus 
"(II) 3.1 percent, 
exceeds the rate determined under section 427A(k)(4).''. 
112 STAT. 1682 
PUBLIC LAW 105-244—OCT. 7, 1998 
(2) CONSOLIDATION LOANS.—Section 428C(c)(l) (20 U.S.C. 
1078-3(c)(l)) is amended by striking everything preceding 
subparagraph (B) and inserting the following: 
"(1) INTEREST RATE.—(A) Notwithstanding subparagraphs 
(B) and (C), with respect to any loan made under this section 
for which the application is received by an eligible lender on 
or after October 1, 1998, and before July 1, 2003, the applicable 
interest rate shall be determined under section 427A(k)(4).". 
(3) CONFORMING AMENDMENT.—Section 438(b)(2) (20 U.S.C. 
1087-l(b)(2)(C)(ii)) is amended— 
(A) in subparagraph (A), by striking "(F), and (G)" 
and inserting "(F), (G), and (H)"; 
(B) in subparagraph (B)(iv), by striking "(F), or (G)" 
and inserting "(F), (G), or (H)"; and 
(C) in subparagraph (C)(ii), by striking "subparagraph 
(G)" and inserting "subparagraphs (G) and (H)". 
Applicability. 
(c) EFFECTIVE DATE.—^The amendments made by this section 
20 use 1077a 
shall apply with respect to any loan made, insured, or guaranteed 
"°^- 
under part B of title IV of the Higher Education Act of 1965 
for which the first disbursement is made on or after October 1, 
1998, and before July 1, 2003, except that such amendments shall 
apply with respect to any loan made under section 428C of such 
Act for which the application is received by an eligible lender 
on or after October 1, 1998, and before July 1, 2003. 
SEC. 417. FEDERAL PAYMENTS TO REDUCE STUDENT INTEREST COSTS. 
(a) FEDERAL INTEREST SUBSIDIES.— 
(1) REQUIREMENTS TO RECEIVE SUBSIDY.—Section 428(a)(2) 
(20 U.S.C. 1078(a)(2)) is amended— 
(A) in subparagraph (A)(i), by striking subclauses (I), 
(II), and (III) and inserting the following: 
"(I) sets forth the loan amount for which the stu-
dent shows financial need; and 
"(II) sets forth a schedule for disbursement of the 
proceeds of the loan in installments, consistent with 
the requirements of section 428G; and"; and 
(B) by amending subparagraph (B) to read as follows: 
"(B) For the purpose of clause (ii) of subparagraph (A), 
a student shall qualify for a portion of an interest payment 
under paragraph (1) if the eligible institution has determined 
and documented the student's amount of need for a loan based 
on the student's estimated cost of attendance, estimated finan-
cial assistance, and, for the purpose of an interest payment 
pursuant to this section, expected family contribution (as deter-
mined under part F), subject to the provisions of subparagraph 
(D)."; 
(C) by amending subparagraph (C) to read as follows: 
"(C) For the purpose of subparagraph (B) and this 
paragraph— 
"(i) a student's cost of attendance shall be determined 
under section 472; 
"(ii) a student's estimated financial assistance means, 
for the period for which the loan is sought— 
"(I) the amount of assistance such student will 
receive under subpart 1 of part A (as determined in 
accordance with section 484(b)), subpart 3 of part A, 
and parts C and E; 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1683 
"(11) any veterans' education benefits paid because 
of enrollment in a postsecondary education institution, 
including veterans' education benefits (as defined in 
section 480(c), but excluding benefits described in para-
graph (2)(E) of such section); plus 
"(III) other scholarship, grant, or loan assistance, 
but excluding any national service education award 
or post-service benefit under title I of the National 
and Community Service Act of 1990; and 
"(iii) the determination of need and of the amount 
of a loan by an eligible institution under subparagraph 
(B) with respect to a student shall be calculated in accord-
ance with part F."; and 
(D) by striking subparagraph (F). 
(2) 
DURATION 
OF 
AUTHORITY.—Section 
428(a)(5) 
is 
amended— 
20 USC 1078. 
(A) by striking "September 30, 2002" and inserting 
"September 30, 2004"; and 
(B) by striking "September 30, 2006" and inserting 
"September 30, 2008". 
(b) INSURANCE PROGRAM AGREEMENTS.— 
(1) 
ANNUAL 
LOAN 
LIMITS.—Section 
428(b)(1)(A) 
is 
amended— 
(A) in the matter preceding clause (i), by inserting 
", as defined in section 481(a)(2)," after "academic year"; 
(B) in clause (i)— 
(i) in subclause (I), by striking "length (as deter-
mined under section 481);" and inserting "length; and"; 
and 
(ii) by striking subclauses (II) and (III) and insert-
ing the following: 
"(II) if such student is enrolled in a program 
of undergraduate education which is less than 1 
academic year, the maximum annual loan amount 
that such student may receive may not exceed 
the amount that bears the same ratio to the 
amount specified in subclause (I) as the length 
of such program measured in semester, trimester, 
quarter, or clock hours bears to 1 academic year;"; 
(C) in clause (iv), by striking "and" Eifler the semicolon; 
(D) in clause (v), by inserting "and" after the semicolon; 
and 
(E) by inserting before the matter following clause 
(v) the following: 
"(vi) in the case of a student enrolled in coursework 
specified in sections 484(b)(3)(B) and 484(b)(4)(B)— 
"(I) $2,625 for coursework necessary for enroll-
ment in an undergraduate degree or certificate 
program, and, in the case of a student who has 
obtained 
a baccalaureate 
degree, $5,500 
for 
coursework necessary for enrollment in a graduate 
or professional degree or certification program; and 
"(II) in the case of a student who has obtained 
a baccalaureate degree, $5,500 for coursework nec-
essary for a professional credential or certification 
from a State required for employment as a teacher 
in an elementary school or secondary school;". 
112 STAT. 1684 
PUBLIC LAW 105-244—OCT. 7, 1998 
(2) SELECTION OF REPAYMENT PLANS.—Clause (ii) of section 
20 use 1078. 
428(b)(1)(D) is amended to read as follows: "(ii) the student 
borrower may annually change the selection of a repayment 
plan under this part, and". 
(3) 
REPAYMENT PLANS.—Subparagraph (E) of section 
428(b)(1) is amended to read as follows: 
"(E) subject to subparagraphs (D) £ind (L), and except 
as provided by subparagraph (M), provides that— 
"(i) not more than 6 months prior to the date 
on which the borrower's first pajnnent is due, the 
lender shall offer the borrower of a loan made, insured, 
or guaranteed under this section or section 428H, the 
option of repa3dng the loan in accordance with a stand-
ard, graduated, income-sensitive, or extended repay-
ment schedule (as described in paragraph (9)) estab-
lished by the lender in accordance with regulations 
of the Secretary; and 
"(ii) repayment of loans shall be in installments 
in accordance with the repayment plan selected under 
paragraph (9) and commencing at the beginning of 
the repayment period determined under paragraph 
(7);"; 
(4) COINSURANCE.—Section 428(b)(1)(G) is amended by 
striking "not less than". 
(5) 
PAYMENT 
AMOUNTS.—Section 
428(b)(l)(L)(i) 
is 
amended— 
(A) by inserting "except as otherwise provided by a 
repayment plan selected by the borrower under clause (ii) 
or (iii) of paragraph (9)(A)," before "during any"; and 
(B) by inserting ", notwithstanding any payment plan 
under paragraph (9XA)" after "due and payable". 
(6) DEFERMENTS.—Section 428(b)(l)(M) is amended— 
(A) in clause (i)(I), by inserting before the semicolon 
the following: ", except that no borrower, notwithstanding 
the provisions of the promissory note, shall be required 
to borrow an additional loan under this title in order to 
be eligible to receive a deferment under this clause"; and 
(B) in clause (ii), by inserting before the semicolon 
the following: ", except that no borrower who provides 
evidence of eligibility for unemployment benefits shall be 
required to provide additional paperwork for a deferment 
under this clause". 
(7) LIMITATION, SUSPENSION, AND TERMINATION.—Section 
428(b)(l)(U) is amended— 
(A) by striking "emergency action,," each place the 
term appears and inserting "emergency action,"; and 
(B) in clause (iii)(I), by inserting "that originates or 
holds more than $5,000,000 in loans made under this title 
for any lender fiscal year (except that each lender described 
in section 435(d)(l)(A)(ii)(in) shall annually submit the 
results of an audit required by this clause)," before "at 
least once a year". 
(8) ADDITIONAL 
INSURANCE 
PROGRAM 
REQUIREMENTS.— 
Section 428(b)(1) is further amended— 
(A) by striking "and" at the end of subparagraph (W); 
(B) in subparagraph (X)— 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1685 
(i) by striking "428(c)(10r and inserting "428(c)(9)"; 
and 
(ii) by striking the period at the end and inserting 
"; and"; 
(C) by adding at the end the following new sub-
paragraph: 
"(Y) provides that— 
"(i) the lender shall determine the eligibility of 
a borrower for a deferment described in subparagraph 
(M)(i) based on receipt of— 
"(I) a request for deferment from the borrower 
and documentation of the borrower's eligibility for 
the deferment; 
"(II) a newly completed loan application that 
documents 
the 
borrower's 
eligibility 
for 
a 
deferment; or 
"(III) student status information received by 
the lender that the borrower is enrolled on at 
least a half-time basis; and 
"(ii) the lender will notify the borrower of the 
granting of any deferment under clause (i)(II) or (III) 
of this subparagraph and of the option to continue 
paying on the loan.". 
(9) RESTRICTIONS ON INDUCEMENTS.—Section 428(b)(3) is 
amended— 
20 USC 1078. 
(A) by striking subparagraph (C) and inserting the 
following: 
"(C) conduct unsolicited mailings of student loan 
application forms to students enrolled in secondary school 
or a postsecondary institution, or to psirents of such stu-
dents, except that applications may be mailed to borrowers 
who have previously received loans guaranteed under this 
part by the guarsmty agency; or"; and 
(B) by adding at the end the following new sentence: 
"It shall not be a violation of this paragraph for a guaranty 
agency to provide assistance to institutions of higher education 
comparable to the kinds of assistance provided to institutions 
of higher education by the Department of Education.". 
(10) DELAY IN COMMENCEMENT OF REPAYMENT PERIOD.— 
Section 428(b)(7) is amended by adding at the end the following: 
"(D) There shall be excluded from the 6-month period that 
begins on the date on which a student ceases to carry at 
least one-half the normal full-time academic workload as 
described in subparagraph (AXi) any period not to exceed 3 
years during which a borrower who is a member of a reserve 
component of the Armed Forces named in section 10101 of 
title 10, United States Code, is called or ordered to active 
duty for a period of more than 30 days (as defined in section 
101(d)(2) of such title). Such period of exclusion shedl include 
the period necessary to resume enrollment at the borrower's 
next available regular enrollment period.". 
(11) REPAYMENT PLANS.—Section 428(b) is amended by 
adding at the end the following: 
"(9) REPAYMENT PLANS.— 
"(A) DESIGN AND SELECTION.—In accordance with regu- Regulations, 
lations promulgated by the Secretary, the lender shall offer 
a borrower of a loan made under this part the plans 
59-194 O - 98 - 26: QL 3 Part 2 
112 STAT. 1686 
PUBLIC LAW 105-244—OCT. 7, 1998 
described in this subparagraph for repa3nnent of such loan, 
including principal and interest thereon. No plan may 
require a borrower to repay a loan in less than 5 years 
unless the borrower, during the 6 months immediately 
preceding the start of the repa3rment period, specifically 
requests that repayment be made over of a shorter period. 
The borrower may choose from— 
"(i) a standard repajrment plan, with a fixed 
annual repayment amount paid over a fixed period 
of time, not to exceed 10 years; 
"(ii) a graduated repajrment plan paid over a fixed 
period of time, not to exceed 10 years; 
"(iii) an income-sensitive repayment plan, with 
income-sensitive repa3rment amounts paid over a fixed 
period of time, not to exceed 10 years, except that 
the borrower's scheduled payments shall not be less 
than the amount of interest due; and 
"(iv) for new borrowers on or after the date of 
enactment of the Higher Education Amendments of 
1998 who accumulate (after such date) outstanding 
loans under this part totaling more than $30,000, an 
extended repajonent plan, with a fixed annual or grad-
uated repayment amount paid over an extended period 
of time, not to exceed 25 years, except that the bor-
rower shall repay annually a minimum amount deter-
mined in accordance with paragraph (lXL)(i). 
"(B) LENDER SELECTION OF OPTION IF BORROWER DOES 
NOT SELECT.—If a borrower of a loan made under this 
part does not select a repajmient plan described in subpara-
graph (A), the lender shall provide the borrower with a 
repayment plan described in subparagraph (A)(i).''. 
(c) GUARANTEE AGREEMENTS.— 
(1) REINSURANCE PAYMENTS.— 
(A) 
AMENDMENTS.—Section 
428(c)(1) 
(20 
U.S.C. 
1078(c)(1)) is amended— 
(i) in subparagraph (A), by striking "98 percent" 
and inserting "95 percent"; 
(ii) in subparagraph (B)(i), by striking "88 percent" 
and inserting "85 percent"; 
(iii) in subparagraph (BXii), by striking "78 per-
cent" and inserting "75 percent"; 
(iv) in subparagraph (E)— 
(I) in clause (i), by striking "98 percent" and 
inserting "95 percent"; 
(II) in clause (ii), by striking "88 percent" and 
inserting "85 percent"; and 
(III) in clause (iii), by striking "78 percent" 
and inserting "75 percent"; and 
(v) in subparagraph (F)— 
(I) in clause (i), by striking "98 percent" and 
inserting "95 percent"; 
(II) in clause (ii), by striking "88 percent" and 
inserting "85 percent"; and 
(III) in clause (iii), by striking "78 percent" 
and inserting "75 percent". 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1687 
(B) EFFECTIVE 
DATE.—The amendments made by 
subparagraph (A) of this paragraph apply to loans for which 
the first disbursement is made on or after October 1, 1998. 
(2) 
NOTICE 
TO 
INSTITUTIONS 
OF DEFAULTS.—Section 
428(c)(2) is amended— 
(A) in subparagraph (A), by striking "proof that reason-
able attempts were made" and inserting "proof that the 
institution was contacted and other reasonable attempts 
were made"; and 
(B) in subparagraph (G), by striking "certifies to the 
Secretary that diligent attempts have been made" and 
inserting "certifies to the Secretary that diligent attempts, 
including contact with the institution, have been made". 
(3) GUARANTY AGENCY INFORMATION TO ELIGIBLE INSTITU-
TIONS.—Section 428(c)(2)(H)(ii) is amended to read as follows: 
"(ii) the guaranty agency shall not require the 
payment from the institution of any fee for such 
information; and". 
(4) FORBEARANCE.—Section 428(c)(3) is amended— 
(A) in subparagraph (A)(i), by striking "written"; 
(B) in subparagraph (B), by striking "and" after the 
semicolon; 
(C) in subparagraph (C), by striking the period and 
inserting "; and"; and 
(D) by inserting before the matter following subpara-
graph (C) the following: 
"(D) shall contain provisions that specify that— 
"(i) forbearance for a period not to exceed 60 days 
may be granted if the lender reasonably determines 
that such a suspension of collection activity is war-
ranted following a borrower's request for deferment, 
forbearance, a change in repajnnent plan, or a request 
to consolidate loans, in order to collect or process appro-
priate supporting documentation related to the request, 
and 
"(ii) during such period interest shall accrue but 
not be capitalized.". 
(5) EQUITABLE SHARE.—Paragraph (6) of section 428(c) is 
amended to read as follows: 
"(6) SECRETARY'S EQUITABLE SHARE.—For the purpose of 
paragraph (2)(D), the Secretary's equitable share of pa3rments 
made by the borrower shall be that portion of the payments 
remaining after the guaranty agency with which the Secretary 
has an agreement under this subsection has deducted from 
such payments— 
"(A) a percentage amount equal to the complement 
of the reinsurance percentage in effect when payment under 
the guaranty agreement was made with respect to the 
loan; and 
"(B) an amount equal to 24 percent of such pajnnents 
for use in accordance with section 422B, except that, begin-
ning on October 1, 2003, this subparagraph shall be applied 
by substituting '23 percent' for *24 percent'.". 
(6) ASSIGNMENT.—Section 428(c)(8) is amended— 
(A) by striking "(A) If and inserting "If; and 
(B) by striking subparagraph (B). 
Applicability. 
20 use 1078 
note. 
20 use 1078. 
Effective date. 
Applicability. 
112 STAT. 1688 
PUBLIC LAW 105-244—OCT. 7, 1998 
20 use 1078. 
(7) 
GUARANTY AGENCY RESERVE LEVEL; AGENCY TERMI-
NATION.—Section 428(cX9) is amended— 
(A) in subparagraph (A), by striking "maintain a cur-
rent minimum reserve level of at least .5 percent" and 
inserting "maintain in the agenc^s Federal Student Loan 
Reserve Fund established under section 422A a current 
minimum reserve level of at least 0.25 percent"; 
(B) in subparagraph (C)— 
(i) by striking "80 percent pursuant to section 
428(c)(lXB)(ii)" sind inserting "85 percent pursuant to 
paragraph (l)(B)(i)"; 
(ii) by striking ", as appropriate,"; and 
(iii) by striking "30 working days" and inserting 
"45 working days"; 
(C) in subparagraph (E)— 
(i) by inserting "or" at the end of clause (iv); 
(ii) by striking "; or" at the end of clause (v) and 
inserting a period; and 
(iii) by striking clause (vi); 
(D) in subparagraph (F)(vii), by striking "to avoid 
disruption" and everything that follows and inserting "and 
to avoid disruption of the student loan program."; 
(E) in subparagraph (I), by inserting "that, if com-
menced after September 24, 1998, shall be on the record" 
after "for a hearing"; and 
(F) in subparagraph (K)— 
(i) by striking "and Labor" and inserting "and the 
Workforce"; and 
(ii) by striking everything after "guaranty agency 
system" and inserting a period. 
(d) PAYMENT FOR LENDER REFERRAL SERVICES; INCOME-SEN-
SITIVE REPAYMENT.—Subsection (e) of section 428 is amended to 
read as follows: 
Regulations. 
"(e) NOTICE OF AVAILABILITY OF INCOME-SENSITIVE REPAYMENT 
OPTION.—^At the time of offering a borrower a loan under this 
part, and at the time of offering the borrower the option of repajdng 
a loan in accordance with this section, the lender shall provide 
the borrower with a notice that informs the borrower, in a form 
prescribed by the Secretary by regulation— 
"(1) that all borrowers are eligible for income-sensitive 
repayment, including through loan consolidation under section 
428C; 
"(2) the procedures by which the borrower may elect 
income-sensitive repayment; and 
"(3) where and how the borrower may obtain additional 
information concerning income-sensitive repa3anent.". 
(e) PAYMENT OF CERTAIN COSTS.—Subsection (f) of section 428 
is amended to read as follows: 
"(f) PAYMENTS OF CERTAIN COSTS.— 
"(1) PAYMENT FOR CERTAIN ACTIVITIES.— 
"(A) IN GENERAL.—^The Secretary— 
"(i) for loEins originated during fiscal years begin-
ning on or after October 1, 1998, and before October 
1, 2003, and in accordance with the provisions of this 
pgiragraph, shall, except as provided in subparagraph 
(C), pay to each guaranty agency, a loan processing 
and issuance fee equal to 0.65 percent of the total 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1689 
principal amount of the loans on which insurance was 
issued under this peirt during such fiscal yeeir by such 
agency; and 
"(ii) for loans originated during fiscal years begin-
ning on or after October 1, 2003, and in accordance 
with the provisions of this paragraph, shall, except 
as provided in subparagraph (C), pay to each guaranty 
agency, a loan processing and issuance fee equal to 
0.40 percent of the total principal amount of the loans 
on which insurance was issued under this part during 
such fiscal year by such agency. 
"(B) PAYMENT.—^The payment required by subpara-
graph (A) shall be paid on a quarterly basis. The guaranty 
agency shall be deemed to have a contractual right against 
the United States to receive payments according to the 
provisions of this paragraph. Pa3anents shall be made 
promptly and without administrative delay to any guaranty 
agency submitting an accurate and complete application 
under this subparagraph. 
"(C) REQUIREMENT FOR PAYMENT.—^No payment may 
be made under this paragraph for loans for which the 
disbursement checks have not been cashed or for which 
electronic funds transfers have not been completed.". 
(f) ACTION ON AGREEMENTS.—Section 428(g) is amended by 20USC1078. 
striking "and Labor" and inserting "and the Workforce". 
(g) LENDERS-OF-LAST-RESORT.—Paragraph (3) of section 428(j) 
is amended— 
(1) in the paragraph heading, by striking "DURING TRANSI-
TION TO DIRECT LENDING"; 
(2) in subparagraph (A)— 
(A) by striking "during the transition from the Federsd 
Family Education Loan Program under this part to the 
Federal Direct Student Loan Program under part D of 
this title," and inserting a comma; 
(B) by inserting "designated for a State" after "a 
guaranty agency"; and 
(C) by inserting "subparagraph (C) and" before "section 
422(c)(7),"; and 
(3) by adding at the end thereof the following: 
"(C) The Secretary shall exercise the authority described 
in subparagraph (A) only if the Secretary determines that 
eligible borrowers are seeking and are unable to obtain loans 
under this part, and that the guaranty agency designated for 
that State has the capability to provide lender-of-last-resort 
loans in a timely manner, in accordance with the guaranty 
agencys obligations under paragraph (1), but cannot do so 
without advEinces provided by the Secretary under this para-
graph. If the Secretary makes the determinations described 
in the preceding sentence and determines that it would be 
cost-effective to do so, the Secretary may provide advances 
under this paragraph to such guaranty agency. If the Secretary 
determines that such guaranty agency does not have such 
capability, or will not provide such loans in a timely fashion, 
the Secretary may provide such advances to enable another 
guaranty agency, that the Secretary determines to have such 
capability, to make lender-of-last-resort logins to eligible borrow-
ers in that State who are experiencing loan access problems.". 
112 STAT. 1690 
PUBLIC LAW 105-244—OCT. 7, 1998 
(h) DEFAULT AVERSION ASSISTANCE.—Subsection (1) of section 
20 use 1078. 
428 is amended to read as follows: 
"(1) DEFAULT AVERSION ASSISTANCE.— 
"(1) ASSISTANCE REQUIRED.—^Upon receipt of a complete 
request from a lender received not earlier than the 60th day 
of delinquency, a guaranty agency having an agreement with 
the Secretary under subsection (c) shall engage in default aver-
sion activities designed to prevent the default by a borrower 
on a loan covered by such sigreement. 
"(2) REIMBURSEMENT.— 
"(A) IN GENERAL.—A guaranty agency, in accordance 
with the provisions of this paragraph, may transfer from 
the Federal Student Loan Reserve Fund under section 
422A to the Agency Operating Fund under section 422B 
a default aversion fee. Such fee shall be paid for any 
loan on which a claim for default has not been paid as 
a result of the loan being brought into current repayment 
status by the guaranty agency on or before the 300th 
day after the loan becomes 60 days delinquent. 
"(B) AMOUNT.—^The default aversion fee shall be equal 
to 1 percent of the total unpaid principal and accrued 
interest on the loan at the time the request is submitted 
by the lender. A guaranty agency may transfer such fees 
earned under this subsection not more frequently than 
monthly. Such a fee shall not be paid more than once 
on any loan for which the guareinty agency averts the 
default unless— 
"(i) at least 18 months has elapsed between the 
date the borrower entered current repayment status 
and the date the lender filed a subsequent default 
aversion assistance request; and 
"(ii) during the period between such dates, the 
borrower was not more than 30 days past due on 
any payment of principal and interest on the loan. 
"(C) DEFINITION.—^For the purpose of earning the 
default aversion fee, the term 'current repayment status' 
means that the borrower is not delinquent in the pa3mient 
of any principal or interest on the loan.", 
(i) INCOME CONTINGENT REPAYMENT.—Section 428(m) is amend-
ed by striking "shall require at least 10 percent of the borrowers" 
and inserting "may require borrowers". 
(j) STATE SHARE OF DEFAULT COSTS.—Subsection (n) of section 
428 is repealed. 
(k) 
BLANKET 
CERTIFICATE OF GUARANTY.—Section 428 is 
amended by adding at the end the following: 
"(n) BLANKET CERTIFICATE OF LOAN GUARANTY.— 
"(1) IN GENERAL.—Subject to paragraph (3), any guaranty 
agency that has entered into or enters into any insurance 
program agreement with the Secretary under this part may— 
"(A) offer eligible lenders participating in the agency^s 
gu£u*anty program a blanket certificate of loan guaranty 
that permits the lender to make loans without receiving 
prior approval from the guaranty agency of individual loans 
for eligible borrowers enrolled in eligible progrsims at 
eligible institutions; and 
"(B) provide eligible lenders with the ability to transmit 
electronically data to the agency concerning loans the 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1691 
lender has elected to make under the agency's insurance 
program via standard reporting formats, with such report-
ing to occur at reasonable and standard intervals. 
"(2) LIMITATIONS ON BLANKET CERTIFICATE OF GUARANTY.— 
(A) An eligible lender may not make a loan to a borrower 
under this section after such lender receives a notification 
fi*om the guaranty agency that the borrower is not an eligible 
borrower. 
"(B) A guaranty agency may establish limitations or restric-
tions on the number or volume of loans issued by a lender 
under the blanket certificate of guaranty. 
"(3) PARTICIPATION LEVEL.—During fiscal years 1999 and 
2000, the Secretary may permit, on a pilot basis, a limited 
number of guaranty agencies to offer blanket certificates of 
guaranty under this subsection. Beginning in fiscal year 2001, 
any guaranty agency that has an insurance program agreement 
with the Secretary may offer blanket certificates of guaranty 
under this subsection. 
"(4) REPORT REQUIRED.—The Secretary shall, at the conclu-
sion of the pilot program under paragraph (3), provide a report 
to the Committee on Education £ind the Workforce of the House 
of Representatives and the Committee on Labor and Human 
Resources of the Senate on the impact of the blanket certificates 
of guaranty on program efficiency £ind integrity.". 
SEC. 418. VOLUNTARY FLEXIBLE AGREEMENTS WITH GUARANTY 
AGENCIES. 
Part B of title IV (20 U.S.C. 1071 et seq.) is amended by 
inserting after section 428 (20 U.S.C. 1078) the following: 
"SEC. 428A. VOLUNTARY FLEXIBLE AGREEMENTS WITH GUARANTY 
20 USC 1078-1. 
AGENCIES. 
"(a) VOLUNTARY AGREEMENTS.— 
"(1) AUTHORITY.—Subject to paragraph (2), the Secretary 
may enter into a voluntary, flexible agreement with a guaranty 
agency under this section, in lieu of agreements with a guaranty 
agency under subsections (b) and (c) of section 428. The Sec-
retary may waive or modify any requirement under such sub-
sections, except that the Secretary may not waive— 
"(A) any statutory requirement pertaining to the terms 
and conditions attached to student loans or default claim 
payments made to lenders; or 
"(B) the prohibitions on inducements contained in sec-
tion 428(b)(3) unless the Secretary determines that such 
a waiver is consistent with the purposes of this section 
and is limited to activities of the guaranty agency within 
the State or States for which the guaranty agency serves 
as the designated guarantor. 
"(2) SPECIAL RULE.—If the Secretary grants a waiver pursu-
ant to paragraph (1)(B), any guaranty agency doing business 
within the affected State or States may request, Eind the Sec-
retary shall grant, an identical waiver to such guarsoity agency 
under the same terms and conditions (including service area 
limitations) as govern the original waiver. 
"(3) ELIGIBILITY.—During fiscal years 1999, 2000, and 2001, 
the Secretary may enter into a voluntary, flexible agreement 
with not more than 6 guaranty agencies that had 1 or more 
agreements with the Secretary under subsections (b) and (c) 
112 STAT. 1692 
PUBLIC LAW 105-244-OCT. 7, 1998 
of section 428 as of the day before the date of enactment 
of the Higher Education Amendments of 1998. Beginning in 
fiscal year 2002, any guaranty agency or consortium thereof 
may enter into a voluntary flexible agreement with the Sec-
retary. 
DeadUne. 
"(4) REPORT REQUIRED.—Not later than September 30, 
2001, the Secretary shall report to the Committee on Labor 
and Human Resources of the Senate and the Committee on 
Education and the Workforce of the House of Representatives 
regarding the impact that the voluntary flexible ag-eements 
have had upon program integrity, program and cost efficiencies, 
and the availability and delivery of student financial aid. Such 
report shall include— 
"(A) a description of each voluntary flexible agreement 
and the performance goals established by the Secretary 
for each agreement; 
Records. 
''(B) a list of participating guaranty agencies and the 
specific statutory or regulatory waivers provided to each 
guaranty agency and any waivers provided to other guar-
anty agencies under paragraph (2); 
"(C) a description of tne standards by which each 
agency's performance under the agency's voluntary flexible 
agreement was assessed and the degree to which each 
agency achieved the performance standards; and 
"(D) an analysis of the fees paid by the Secretary, 
and the costs and efficiencies achieved under each vol-
untary agreement. 
"(b) TERMS OF AGREEMENT.—An agreement between the Sec-
retary and a guaranty agency under this section— 
"(1) shall be developed by the Secretary, in consultation 
with the guaranty agency, on a case-by-case basis; 
"(2) may only include provisions— 
"(A) specifying the responsibilities of the guaranty 
agency under the agreement, with respect t o ^ 
"(i) administering the issuance of insurance on 
loans made under this part on behalf of the Secretary; 
"(ii) monitoring insurance commitments made 
under this part; 
"(iii) default aversion activities; 
"(iv) review of default claims made by lenders; 
"(v) payment of default claims; 
"(vi) collection of defaulted loans; 
"(vii) adoption of internal systems of accounting 
and auditing that are acceptable to the Secretary, and 
reporting the result thereof to the Secretary in a timely 
manner, and on an accurate, and auditable basis; 
"(viii) timely and accurate collection and reporting 
of such other data as the Secretary may require to 
carry out the purposes of the programs under this 
title; 
"(ix) monitoring of institutions and lenders partici-
pating in the program under this part; and 
"(x) informational outreach to schools and students 
in support of access to higher education; 
"(B) regarding the fees the Secretary shall pay, in 
lieu of revenues that the guaranty agency may otherwise 
receive under this part, to the guaranty agency under 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1693 
the agreement, and other funds that the guEiranty agency 
may receive or retsiin under the agreement, except that 
in no case may the cost to the Secretary of the agreement, 
as reasonably projected by the Secretary, exceed the cost 
to the Secretary, as similarly projected, in the absence 
of the agreement; 
"(C) regarding the use of net revenues, as described 
in the agreement under this section, for such other activi-
ties in support of postsecondary education as may be agreed 
to by the Secretary and the guaranty agency; 
"(D) regarding the standards by which the guaranty 
agency's performance of the agency's responsibilities under 
the agreement will be assessed, £ind the consequences for 
a guaranty agenc^s failure to achieve a specified level 
of performance on 1 or more performance standards; 
"(E) regarding the circumstances in which a guaranty 
agency's agreement under this section may be ended in 
advance of the agreement's expiration date; 
"(F) regarding such other businesses, previously pur-
chased or developed with reserve funds, that relate to 
the program under this part and in which the Secretary 
permits the guaranty agency to engage; and 
"(G) such other provisions as the Secretary may deter-
mine to be necessary to protect the United States from 
the risk of unreasonable loss and to promote the purposes 
of this part; 
"(3) shall provide for uniform lender participation with 
the guaranty agency under the terms of the agreement; and 
"(4) shall not prohibit or restrict borrowers from selecting 
a lender of the borrower's choosing, subject to the prohibitions 
and restrictions applicable to the selection under this Act. 
"(c) PUBLIC NOTICE.— 
"(1) IN GENERAL.—^The Secretary shall publish in the Federal Register, 
Federal Register a notice to all guaranty agencies that sets publication, 
forth— 
"(A) an invitation for the guaranty agencies to enter 
into agreements under this section; and 
"(B) the criteria that the Secretary will use for selecting 
the guaranty agencies with which the Secretary will enter 
into agreements under this section. 
"(2) AGREEMENT NOTICE.—The Secretary shall notify the 
Chairperson and the Ranking Minority Member of the Commit-
tee on Labor and Human Resources of the Senate and the 
Committee on Education and the Workforce of the House of 
Representatives not later than 30 days prior to concluding 
an agreement under this section. The notice shall contain— 
"(A) a description of the voluntary flexible agreement 
and the performance goals established by the Secretary 
for the agreement; 
"(B) a list of participating guaranty agencies and the Records, 
specific statutory or regulatory waivers provided to each 
guaranty agency; 
"(C) a description of the standards by which each guar-
anty agency's performance under the agreement will be 
assessed; and 
"(D) a description of the fees that will be paid to 
each participating guaranty agency. 
112 STAT. 1694 
PUBLIC LAW 105-244—OCT. 7, 1998 
DeadUne. 
"(3) WAIVER NOTICE.—The Secretary shall notify the Chair-
person and the Ranking Minority Member of the Committee 
on Labor and Human Resources of the Senate and the Commit-
tee on Education and the Workforce of the House of Representa-
tives not later than 30 days prior to the granting of a waiver 
pursuEint to subsection (a)(2) to a guaranty agency that is 
not a party to a voluntary flexible agreement. 
"(4) PUBLIC AVAILABILITY.—The text of any voluntary flexi-
ble agreement, and any subsequent revisions, and any waivers 
related to section 428(bX3) that are not part of such an agree-
ment, shall be readily available to the public. 
"(5) MODIFICATION NOTICE.—The Secretary shall notify the 
Chairperson and the Ranking Minority Members of the 
Committee on Labor and Human Resources of the Senate and 
the Committee on Education and the Workforce of the House 
of Representatives 30 days prior to any modifications to an 
agreement under this section. 
"(d) TERMINATION.—^At the expiration or early termination of 
an agreement under this section, the Secretary shall reinstate the 
guaranty agency's prior agreements under subsections (b) £ind (c) 
of section 428, subject only to such additional requirements as 
the Secretary determines to be necessary in order to ensure the 
efficient transfer of responsibilities between the agreement under 
this section and the agreements under subsections (b) and (c) of 
section 428, and including the guaranty agency's compliance with 
reserve requirements under sections 422 and 428.". 
SEC. 419. FEDERAL PLUS LOANS. 
Section 428B (20 U.S.C. 1078-2) is amended— 
(1) by amending subsection (a) to read as follows: 
"(a) AUTHORITY TO BORROW.— 
"(1) AUTHORITY AND ELIGIBILITY.—^Parents of a dependent 
student shall be eligible to borrow funds under this section 
in amounts specified in subsection (b), if— 
"(A) the parents do not have an adverse credit history 
as determined pursuant to regulations promulgated by the 
Secretary; and 
"(B) the parents meet such other eligibility criteria 
as the Secretary may establish by regulation, after con-
sultation with guaranty agencies, eligible lenders, and 
other organizations involved in student financial assist-
ance. 
"(2) TERMS, CONDITIONS, AND BENEFITS.—^Except as pro-
vided in subsections (c), (d), and (e), loans made under this 
section shall have the same terms, conditions, and benefits 
as all other loans made under this part. 
"(3) SPECIAL RULE.—^Whenever necessary to carry out the 
provisions of this section, the terms 'student' and Tjorrower* 
as used in this part shall include a parent borrower under 
this section."; and 
(2) by adding at the end the following: 
"(f) 
VERIFICATION 
OF 
IMMIGRATION 
STATUS 
AND 
SOCIAL 
SECURITY NUMBER.—^A parent who wishes to borrow funds under 
this section shall be subject to verification of the parent's— 
"(1) immigration status in the same manner as immigration 
status is verified for students under section 484(g); and 
PUBLIC LAW 105-244~OCT. 7, 1998 
112 STAT. 1695 
"(2) social security number in the same manner as social 
security numbers are verified for students under section 
484(p).". 
SEC. 420. FEDERAL CONSOLIDATION LOANS. 
(a) DEFINITION OF ELIGIBLE BORROWER.—Section 428C(aX3) (20 
U.S.C. 1078-3(a)(3)) is amended by striking everything preceding 
subparagraph (C) and inserting the following: 
"(3) 
DEFINITION OF ELIGIBLE BORROWER.—(A) For 
the 
purpose of this section, the term 'eligible borrower' means a 
borrower who— 
"(i) is not subject to a judgment secured through litiga-
tion with respect to a loan under this title or to an order 
for wage garnishment under section 488A; and 
"(ii) at the time of application for a consolidation loan— 
"(I) is in repayment status; 
"(II) is in a grace period preceding repay-
ment; or 
"(III) is a defaulted borrower who has made 
arrangements to repay the obligation on the defaulted 
loans satisfactory to the holders of the defaulted loans. 
"(BXi) An individual's status as an eligible borrower under 
this section terminates upon receipt of a consolidation loan 
under this section, except that— 
"(I) an individual who receives eligible student loans 
after the date of receipt of the consolidation loan may 
receive a subsequent consolidation loan; 
"(II) loans received prior to the date of the consolidation 
loan may be added during the 180-day period following 
the making of the consolidation loan; 
"(III) loans received following the making of the consoli-
dation loan may be added during the 180-day period follow-
ing the making of the consolidation loan; and 
"(IV) loans received prior to the date of the first consoli-
dation loan may be added to a subsequent consolidation 
loan.". 
(b) DEFINITION OF ELIGIBLE STUDENT LOAN.—Section 428C(a)(4) 
is amended by striking subparagraph (C) and inserting the 
following: 
> 
"(C) made under part D of this title;". 
(c) CONTENTS OF AGREEMENTS.—Section 428C(b) is amended— 
(1) in paragraph (l)(A)(i), by inserting "except that this 
clause shall not apply in the case of a borrower with multiple 
holders of loans under this part," after "under this section,"; 
(2) in paragraph (4)(C)(ii)— 
(A) in the matter preceding subclause (I), by inserting 
"during any such period" after "and be paid"; 
(B) in subclause (I), by striking ", or on or after October 
1,1998,"; and 
(C) in subclause (II), by striking "and before October 
1, 1998,"; 
(3) in paragraph (6)(A), by inserting before the semicolon 
at the end the following: ", except that a lender is not required 
to consolidate loans described in subparagraph (D) or (E) of 
subsection (a)(4) or subsection (d)(l)(C)(ii)". 
112 STAT. 1696 
PUBLIC LAW 105-244—OCT. 7, 1998 
20 use 1078-3. 
Termination 
date. 
20 use 1078-7 
note. 
Regulations. 
(d) EXTENSION OF AUTHORITY.—Section 428C(e) is amended 
by striking "September 30, 2002" and inserting "September 30, 
2004". 
(e) SPECIAL RULE.—Section 428C(f) is amended— 
(1) by redesignating peiragraph (2) as paragraph (3); and 
(2) by inserting after paragraph (1) the following: 
"(2) SPECIAL RULE.—^For consolidation loans based on 
applications received during the period from October 1, 1998 
through January 31, 1999, inclusive, the rebate described in 
paragraph (1) shall be equal to 0.62 percent of the principal 
plus accrued unpaid interest on such loan.". 
SEC. 421. DEFAULT REDUCTION PROGRAM. 
The heading for subsection (b) of section 428F (20 U.S.C. 1078-
6) is amended by striking "SPECIAL RULE" and inserting "SATISFAC-
TORY REPAYMENT ARRANGEMENTS TO RENEW ELIGIBILITY". 
SEC. 422. REQUIREMENTS FOR DISBURSEMENTS OF STUDENT LOANS. 
(a) SPECIAL RULE.—Section 428G(a) (20 U.S.C. 1078-7(a)) is 
amended by adding at the end the following: 
"(3) SPECIAL RULE.—An institution whose cohort default 
rate (as determined under section 435(m)) for each of the 3 
most recent fiscal years for which data are available is less 
than 10 percent may disburse any loan made, insured, or 
guaranteed under this part in a single installment for any 
period of enrollment that is not more than 1 semester, 1 tri-
mester, 1 quarter, or 4 months.", 
(b) DISBURSEMENT.—Section 428G(b)(l) is amended by adding 
at the end the following new sentence: "An institution whose cohort 
default rate (as determined under section 435(m)) for each of the 
three most recent fiscal years for which data are available is less 
than 10 percent shall be exempt from the requirements of this 
pEiragraph.". 
(c) EXCLUSIONS.—Section 428G<e) is amended— 
(1) by striking "or made" and inserting ", made"; and 
(2) by inserting ", or made to a student to cover the cost 
of attendance in a program of study abroad approved by the 
home eligible institution if the home eligible institution has 
a cohort default rate (as calculated under section 435(m)) of 
less than 5 percent" before the period. 
(d) EFFECTIVE DATE.—^The amendments made by subsections 
(a) and (b) shall be effective during the period beginning on October 
1, 1998, and ending on September 30, 2002. 
SEC. 423. UNSUBSIDIZED LOANS. 
(a) ELIGIBLE BORROWERS.—Subsection (b) of section 428H (20 
U.S.C. 1078-8(b)) is amended to read as follows: 
"(b) ELIGIBLE BORROWERS.—Any student meeting the require-
ments for student eligibility under section 484 (including graduate 
and professional students as defined in regulations promulgated 
by the Secretary) shall be entitled to borrow an unsubsidized Fed-
eral Stafford Loan if the eligible institution at which the student 
has been accepted for enrollment, or at which the student is in 
attendance, has— 
"(1) determined and documented the student's need for 
the loan based on the student's estimated cost of attendance 
(as determined under section 472) and the student's estimated 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1697 
financial assistance, including a loan which qualifies for interest 
subsidy pajrments under section 428; and 
"(2) provided the lender a statement— 
"(A) certifying the eligibility of the student to receive 
a loan under this section and the amount of the losin 
for which such student is eligible, in accordance with sub-
section (c); and 
"(B) setting forth a schedule for disbursement of the 
proceeds of the loan in installments, consistent with the 
requirements of section 428G.". 
(b) LOAN LIMITS.—Section 428H(d) is amended— 
20 use 1078-8. 
(1) in paragraph (2)— 
(A) in the matter preceding subparagraph (A)— 
(i) by inserting "(as defined in section 481(a)(2))" 
after "academic year"; and 
(ii) by striking "or in any period of 7 consecutive 
months, whichever is longer,"; 
(B) in subparagraph (A)— 
(i) in clause (i), by striking "length (as determined 
under section 481);" and inserting "length; and"; and 
(ii) by striking clauses (ii) Eind (iii) and inserting 
the following: 
"(ii) if such student is enrolled in a program of 
undergraduate education which is less than one aca-
demic year, the maximum annual loan amount that 
such student may receive may not exceed the amount 
that bears the same ratio to the amount specified 
in clause (i) as the length of such program measured 
in semester, trimester, quarter, or clock hours bears 
to one academic year;". 
(C) in subparagraph (C), by inserting "and" after the 
semicolon; and 
(D) by inserting before the matter following subpara-
graph (C) the following: 
"(D) in the case of a student enrolled in coursework 
specified in sections 484(b)(3)(B) and 484(b)(4)(B)— 
"(i) $4,000 for coursework necessary for enrollment 
in an undergraduate degree or certificate program, 
and, in the case of a student who has obtained a 
baccalaureate degree, $5,000 for coursework necessary 
for enrollment in a graduate or professional program; 
and 
"(ii) in the case of a student who has obtained 
a baccalaureate degree, $5,000 for coursework nec-
essary for a professional credential or certification from 
a State required for employment as a teacher in an 
elementary or secondary school;"; and 
(2) in paragraph (3), by adding at the end the following: 
"Interest capitalized shall not be deemed to exceed such maxi-
mum aggregate amount.". 
(c) CAPITALIZATION OF INTEREST.—Paragraph (2) of section 
428H(e) is amended to read as follows: 
"(2) CAPITALIZATION OF INTEREST.—(A) Interest on loans 
made under this section for which pa3mients of principal are 
not required during the in-school and grace periods or for 
which payments are deferred under sections 427(a)(2)(C) and 
112 STAT. 1698 
PUBLIC LAW 105-244—OCT. 7, 1998 
428(b)(lXM) shall, if agreed upon by the borrower and the 
lender— 
"(i) be paid monthly or quarterly; or 
"(ii) be added to the principal amount of the loan 
by the lender only— 
"(I) when the loan enters repayment; 
"(11) at the expiration of a grace period, in the 
case of a loan that qualiHes for a grace period; 
"(III) at the expiration of a period of deferment 
or forbearance; or 
"(IV) when the borrower defaults. 
"(B) The capitalization of interest described in subpara-
graph (A) shall not be deemed to exceed the annual insurable 
limit on account of the student.". 
(d) 
EXTENDED 
REPAYMENT 
PLAN.—Section 
428H(e)(6) 
is 
20 use 1078-8. 
amended by striking "10 year repayment period under section 
428(bXl)(D)'' and inserting "repayment period under 
section 
428(bX9)''. 
(e) QUALIFICATION.—Section 428H(e) is amended by adding at 
the end the following: 
"(7) QUALIFICATION FOR FORBEARANCE.—A lender may 
grant the borrower of a loan under this section a forbearance 
for a period not to exceed 60 days if the lender reasonably 
determines that such a forbearance from collection activity 
is warranted following a borrower's request for forbearance, 
deferment, or a change in repayment plan, or a request to 
consolidate loans in order to collect or process appropriate 
supporting documentation related to the request. During any 
such period, interest on the loan shall accrue but not be capital-
ized. . 
(f) REPEAL.—Subsection (f) of section 428H is repealed. 
SEC. 424. LOAN FORGIVENESS FOR TEACHERS. 
Section 428J (20 U.S.C. 1078-10) is amended to read as follows: 
''SEC 428J. LOAN FORGIVENESS FOR TEACHERS. 
"(a) STATEMENT OF PURPOSE.—^It is the purpose of this section 
to encourage individuals to enter and continue in the teaching 
profession. 
"(b) PROGRAM AUTHORIZED.—The Secretary shall carry out a 
program, through the holder of the loan, of assuming the obligation 
to repay a qusuified loan amount for a loan made under section 
428 or 428H, in accordance with subsection (c), for any new borrower 
on or after October 1, 1998, who— 
"(1) has been employed as a full-time teacher for 5 consecu-
tive complete school years— 
"(A) in a school that qualiHes under section 465(a)(2)(A) 
for loan cancellation for Perkins loan recipients who teach 
in such schools; 
"(B) if employed as a secondary school teacher, is teach-
ing a subject area that is relevant to the borrower's aca-
demic major as certified by the chief administrative officer 
of the public or nonprofit private secondary school in which 
the borrower is employed; and 
"(C) if employed as an element£iry school teacher, has 
demonstrated, as certified by the chief administrative offi-
cer of the public or nonprofit private elementary school 
in which the borrower is employed, knowledge and teaching 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1699 
skills in reading, writing, mathematics, and other areas 
of the elementary school curriculum; and 
"(2) is not in default on a loan for which the borrower 
seeks forgiveness. 
"(c) QUALIFIED LOANS AMOUNT.— 
"(1) IN GENERAL.—^The Secretary shall repay not more than 
$5,000 in the aggregate of the loan obligation on a loan made 
under section 428 or 428H that is outstanding after the comple-
tion of the fifth complete school year of teaching described 
in subsection (b)(1). No borrower may receive a reduction of 
loan obligations under both this section and section 460. 
"(2) TREATMENT OF CONSOLIDATION LOANS.—^A loan amount Regulations. 
for a loan made under section 428C may be a qualified loan 
amount for the purposes of this subsection only to the extent 
that such lo£in amount was used to repay a Federal Direct 
Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, 
or a loan made under section 428 or 428H for a borrower 
who meets the requirements of subsection (b), as determined 
in accordance with regulations prescribed by the Secretary. 
"(d) REGULATIONS.—^The Secretary is authorized to issue such 
regulations as may be necessary to carry out the provisions of 
this section. 
"(e) CONSTRUCTION.—^Nothing in this section shall be construed 
to authorize any refunding of any repajonent of a loan. 
"(f) LIST.—If the list of schools in which a teacher may perform 
service pursuant to subsection (b) is not available before May 1 
of any year, the Secretary may use the list for the year preceding 
the year for which the determination is made to make such service 
determination. 
"(g) ADDITIONAL ELIGIBILITY PROVISIONS.— 
"(1) CONTINUED ELIGIBILITY.—Any teacher who performs 
service in a school that— 
"(A) meets the requirements of subsection (b)(1)(A) in 
any year during such service; and 
"(B) in a subsequent year fails to meet the require-
ments of such subsection, 
may continue to teach in such school and shall be eligible 
for loan forgiveness pursuEint to subsection (b). 
"(2) PREVENTION OF DOUBLE BENEFITS.—No borrower may, 
for the same service, receive a benefit under both this sub-
section and subtitle D of title I of the National and Community 
Service Act of 1990 (42 U.S.C. 12571 et seq.). 
"(h) DEFINITION.—^For purposes of this section, the term 'year** 
where applied to service as a teacher, means an academic year 
as defined by the Secretary.". 
SEC. 425. LOAN FORGIVENESS FOR CHILD CARE PROVIDERS. 
Part B (20 U.S.C. 1071 et seq.) is amended by inserting after 
section 428J (20 U.S.C. 1078-10) the following: 
"SEC. 428K. LOAN FORGIVENESS FOR CHILD CARE PROVIDERS. 
"(a) PURPOSE.—It is the purpose of this section— 
"(1) to bring more highly trained individuals into the early 
child care profession; and 
"(2) to keep more highly trained child care providers in 
the early child care field for longer periods of time. 
"(b) DEFINITIONS.—In this section: 
20 use 1078-11. 
112 STAT. 1700 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(1) CHILD CARE FACILITY.—The term 'child care facility* 
means a facility, including a home, that— 
"(A) provides child care services; and 
"(B) meets applicable State or local government licens-
ing, certification, approval, or registration requirements, 
if any. 
"(2) CHILD CARE SERVICES.—The term 'child care services' 
means activities and services provided for the education and 
care of children from birth through age 5 by an individual 
who has a degree in early childhood education. 
"(3) DEGREE.—^The term 'degree* means an associate's or 
bachelor's degree awarded by an institution of higher education. 
"(4) EARLY CHILDHOOD EDUCATION.—^The term 'early child-
hood education' means education in the areas of early child 
education, child care, or any other educational area related 
to child care that the Secretary determines appropriate. 
"(5) INSTITUTION OF HIGHER EDUCATION.—^Notwithstanding 
section 102, the term 'institution of higher education' has the 
meaning given the term in section 101. 
"(c) DEMONSTRATION PROGRAM.— 
"(1) IN GENERAL.—^The Secretary may carry out a dem-
onstration program of assuming the obligation to repay, pursu-
ant to subsection (d), a loan made, insured, or guaranteed 
under this part or part D (excluding loans made under sections 
428B and 428C or comparable loans made under part D) for 
any new borrower after the date of enactment of the Higher 
Education Amendments of 1998, who— 
"(A) completes a degree in early childhood education; 
"(B) obtains employment in a child care facility; and 
"(C) has worked full time for the 2 consecutive years 
preceding the year for which the determination is made 
as a child care provider in a low-income community. 
"(2) LOW-INCOME COMMUNITY.—^For the purposes of this 
subsection, the term 'low-income community means a commu-
nity in which 70 percent of households within the community 
earn less than 85 percent of the State median household income. 
"(3) AWARD BASIS; PRIORITY.— 
"(A) AWARD BASIS.—Subject to subparagraph (B), loan 
repayment under this section shall be on a first-come, 
first-served basis and subject to the availability of appro-
priations. 
"(B) PRIORITY.—^The Secretary shall give priority in 
providing loan repayment under this section for a fiscal 
year to student borrowers who received loan repayment 
under this section for the preceding fiscal year. 
"(4) REGULATIONS.—^The Secretary is authorized to pre-
scribe such regulations as may be necessary to carry out the 
provisions of this section. 
"(d) LOAN REPAYMENT.— 
"(1) IN GENERAL.—The Secretary shall assume the obliga-
tion to repay— 
"(A) after the second consecutive year of employment 
described in subparagraphs (B) and (C) of subsection (cXD, 
20 percent of the total amoimt of all loans made after 
date of enactment of the Higher Education Amendments 
of 1998, to a student under this part or part D; 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1701 
"(B) after the third consecutive year of such employ-
ment, 20 percent of the total amount of all such loans; 
and 
"(C) after each of the fourth and fifth consecutive years 
of such employment, 30 percent of the total amount of 
all such loans. 
"(2) CONSTRUCTION.—^Nothing in this section shall be con-
strued to authorize the refunding of any repayment of a loan 
made under this part or part D. 
"(3) INTEREST.—If a portion of a loan is repaid by the 
Secretary under this section for any year, the proportionate 
amount of interest on such loan which accrues for such year 
shall be repaid by the Secretary. 
"(4) SPECIAL RULE.—^In the case where a student borrower 
who is not participating in loan repayment pursuant to this 
section returns to an institution of higher education after 
graduation from an institution of higher education for the pur-
pose of obtaining a degree in early childhood education, the 
Secretary is authorized to sissume the obligation to repay the 
total amount of loans made under this part or part D incurred 
for a maximum of two academic years in returning to an 
institution of higher education for the purpose of obtaining 
a degree in early childhood education. Such loans shall only 
be repaid for borrowers who qualify for loan repayment pursu-
ant to the provisions of this section, and shsdl be repaid in 
accordance with the provisions of paragraph (1). 
"(5) INEUGIBILITY OF NATIONAL SERVICE AWARD RECIPI-
ENTS.—^No student borrower may, for the same volunteer serv-
ice, receive a benefit under both this section and subtitle D 
of title I of the National and Community Service Act of 1990 
(42 U.S.C. 12601 et seq.). 
"(e) REPAYMENT TO ELIGIBLE LENDERS.—^The Secretary shall 
pay to each eligible lender or holder for each fiscal year an amount 
equal to the aggregate amount of loans which are subject to repay-
ment pursuant to this section for such year. 
"(f) APPLICATION FOR REPAYMENT.— 
"(1) IN GENERAL.—^Each eligible individual desiring loan 
repayment under this section shsdl submit a complete and 
accurate application to the Secretary at such time, in such 
manner, and containing such information as the Secretary may 
require. 
"(2) CONDITIONS.—An eligible individual may apply for loan 
repayment under this section after completing each year of 
qualif3dng emplo3mtient. The borrower shall receive forbearance 
while engaged in qualifying emplojrment unless the borrower 
is in deferment while so engaged. 
"(g) EVALUATION.— 
"(1) IN GENERAL.—^The Secretary shall conduct, by grant 
or contract, an independent national evaluation of the impact 
of the demonstration program assisted under this section on 
the field of early childhood education. 
"(2) COMPETITIVE BASIS.—The grant or contract described 
in subsection (b) shall be awarded on a competitive basis. 
"(3) CONTENTS.—^The evaluation described in this sub-
section shall— 
112 STAT. 1702 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(A) determine the number of individuals who were 
encouraged by the demonstration program assisted under 
this section to pursue early childhood education; 
"(B) determine the number of individuals who remain 
employed in a child care facility as a result of participation 
in the program; 
"(C) identify the barriers to the effectiveness of the 
program; 
"(D) assess the cost-effectiveness of the program in 
improving the quality of— 
"(i) early childhood education; and 
"(ii) child care services; 
"(E) identify the reasons why participants in the pro-
gram have chosen to take part in the program; 
"(F) identify the number of individuals participating 
in the program who received an associate's degree and 
the number of such individuals who received a bachelor's 
degree; and 
"(G) identify the number of years each individual 
participates in the program. 
Deadline. 
"(4) INTERIM AND FINAL EVALUATION REPORTS.^The Sec-
retary shall prepare and submit to the President and the Con-
gress such interim reports regarding the evaluation described 
in this subsection as the Secretary deems appropriate, and 
shall prepare and so submit a fined report regarding the evalua-
tion by January 1, 2002. 
"(h) AUTHORIZATION OF APPROPRIATIONS.—^There are authorized 
to be appropriated to carry out this section $10,000,000 for fiscal 
year 1999, and such sums as may be necessary for each of the 
4 succeeding fiscal years.". 
SEC. 426. NOTICE TO SECRETARY AND PAYMENT OF LOSS. 
The third sentence of section 430(a) (20 U.S.C. 1080(a)) is 
£imended by inserting "the institution was contacted and other" 
after "submit proof that". 
SEC. 427. LEGAL POWERS AND RESPONSIBILITIES. 
(a) AUDIT OF FINANCIAL TRANSACTIONS.—Section 432(f)(1) is 
20 use 1082. 
amended— 
(1) in subparagraph (B), by striking "section 435(d)(1) (D), 
(F), or (H);" and inserting "section 435(d)(1); and"; 
(2) in subparagraph (C)— 
(A) by striking "and Labor" and inserting "and the 
Workforce"; and 
(B) by striking "; and" inserting a period; and 
(3) by striking subparagraph (D). 
(b) PROGRAM OF ASSISTANCE.—Section 432(k)(3) is amended 
by striking "Within 1 year" and everything that follows through 
"1992, the" and inserting "The". 
(c) 
COMMON 
FORMS 
AND FORMATS.—Section 432(m) is 
amended— 
(1) in paragraph (1)— 
(A) in subparagraph (A), by striking "a common 
application form and promissory note" and inserting "com-
mon application forms and promissory notes, or master 
promissory notes,"; 
(B) in subparagraph (B)— 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1703 
(i) by striking "The form" and inserting "The 
forms"; 
(ii) by striking clause (iii); and 
- (C) by amending subparagraph (C) to read as follows: 
"(C) FREE 
APPLICATION FORM.—For academic year 
1999-2000 and succeeding academic years, the Secretary 
shall prescribe the form developed under section 483 as 
the application form under this part, other than for loans 
under sections 428B and 428C."; 
(D) by amending subparagraph (D) to read as follows: 
"(D) MASTER PROMISSORY NOTE.— 
"(i) IN GENERAL.—^The Secretary shall develop and 
require the use of master promissory note forms for 
loans made under this part and part D. Such forms Deadline, 
shall be available for periods of enrollment beginning 
not later than July 1, 2000. Each form shall allow 
eligible borrowers to receive, in addition to initial loans, 
additional loans for the same or subsequent periods 
of enrollment through a student confirmation process 
approved by the Secretary. Such forms shall be used 
for loans made under this part or part D as directed 
by the Secretary. 
"(ii) CONSULTATION.—In developing the master 
promissory note under this subsection, the Secretary 
shall consult with representatives of guaranty agencies, 
eligible lenders, institutions of higher education, stu-
dents, and organizations involved in student financial 
assistance. 
"(iii) SALE; ASSIGNMENT; ENFORCEABIUTY.—Not-
withstanding any other provision of law, each loan 
made under a master promissory note under this sub-
section may be sold or assigned independently of any 
other loan made under the same promissory note and 
. each such loan shall be separately enforceable in all 
Federal and State courts on the basis of an original 
or copy of the master promissory note in accordance 
" 
with the terms of the master promissory note. 
"(iv) PERFECTION OF SECURITY INTERESTS IN STU-
DENT LOANS.—^Notwithst£inding the provisions of any 
State law to the contrary, including the Uniform 
Commercial Code as in effect in any State, a security 
interest in loans made under this part created on 
behalf of any eligible lender as defined in section 435(d) 
may be perfected either through the taking of posses-
sion of such loans (which can be through tafcng posses-
sion of an original or copy of the master promissory 
note) or by the filing of notice of such security interest 
in such loans in the manner provided by such State 
law for perfection of security interests in accounts."; 
and 
(2) by adding at the end the following: 
"(4) ELECTRONIC FORMS.—^Nothing in this section shall be 
construed to limit the development and use of electronic forms 
and procedures.". 
(d) DEFAULT REDUCTION MANAGEMENT.—Section 432(n) is 
amended— 
20USC1082. 
112 STAT. 1704 
PUBLIC LAW 105-244—OCT. 7, 1998 
(1) in paragraph (1), by striking "1993" and inserting 
"1999"; and 
(2) in paragraph (3), by striking "sind Labor" and inserting 
"and the Workforce". 
20 use 1082. 
(e) REPORTING REQUIREMENT.—Section 432(p) is amended by 
striking "State postsecondary reviewing entities designated under 
subpart 1 of part H,". 
SEC. 428. STUDENT LOAN INFORMATION BY ELIGIBLE LENDERS. 
(a) 
REQUIRED DISCLOSURE BEFORE DISBURSEMENT.—Section 
433(a) (20 U.S.C. 1083(a)) is amended by amending the matter 
preceding paragraph (1) to read as follows: 
"(a) 
REQUIRED 
DISCLOSURE 
BEFORE 
DISBURSEMENT.—Each 
eligible lender, at or prior to the time such lender disburses a 
loan that is insured or guaranteed under this part (other than 
a loan made under section 428C), shall provide thorough Eind 
accurate loan information on such loan to the borrower in simple 
and understandable terms. Any disclosure required by this sub-
section may be made by an eligible lender by written or electronic 
means, including as part of the application material provided to 
the borrower, as part of the promissory note evidencing the loan, 
or on a separate written form provided to the borrower. Each 
lender shall provide to each borrower a telephone number, and 
may provide an electronic address, through which additioned loan 
information can be obtained. The disclosure shall include—". 
(b) REQUIRED DISCLOSURE BEFORE REPAYMENT.—Section 433(b) 
is amended by amending the matter preceding paragraph (1) to 
read as follows: 
"(b) REQUIRED DISCLOSURE BEFORE REPAYMENT.—Each eligible 
lender shall, at or prior to the start of the repayment period of 
the student borrower on loans made, insured, or guaranteed under 
this part, disclose to the borrower by written or electronic means 
the information required under this subsection in simple and under-
standable terms. Each eligible lender shall provide to each borrower 
a telephone number, and may provide an electronic address, through 
which additiongd loan information can be obtained. For any loan 
made, insured, or guaranteed under this part, other than a loan 
made under section 428B or 428C, such disclosure required by 
this subsection shall be made not less than 30 days nor more 
than 240 days before the first pajonent on the loan is due from 
the borrower. The disclosure shall include—". 
SEC. 429. DEFINrnONS. 
(a) COHORT DEFAULT RATE.—Section 435(a) (20 U.S.C. 1085(a)) 
is amended— 
(1) in paragraph (2)— 
(A) in subparagraph (A)— 
(i) by striking "or" at the end of clause (i); 
(ii) by striking clause (ii) and inserting the follow-
ing: 
"(ii) there are exceptional mitigating circumstances 
within the meaning of paragraph (4); or 
"(iii) there are, in the judgment of the Secretary, other 
exceptional mitigating circumstances that would make the 
application of this paragraph inequitable."; and 
(iii) by adding after the matter following clause 
(iii) (as added by clause (ii)) the following: 
PUBLIC LAW 105-244-OCT. 7, 1998 
112 STAT. 1705 
"If an institution continues to participate in a program under 
this part, and the institution's appeal of the loss of eligibility 
is unsuccessful, the institution shall be required to pay to 
the Secretary an amount equal to the amount of interest, 
special allowance, reinsurance, and any related payments made 
by the Secretary (or which the Secretary is obligated to make) 
with respect to loans made under this part to students attend-
ing, or planning to attend, that institution during the pendency 
of such appeal."; and 
(B) in subparagraph (C), by striking "July 1, 1998," 
and inserting "July 1,1999,"; 
(2) in the matter following subparagraph (C) of para-
graph (3)— 
(A) by inserting "for a reasonable period of time, not 
to exceed 30 days," after "access"; and 
(B) by striking "of the affected guaranty agencies and 
loan servicers for a reasonable period of time, not to exceed 
30 days" and inserting "used by a guaranty agency in 
determining whether to pay a claim on a defaulted loan 
or by the Department in determining an institution's 
default rate in the loan program under part D of this 
title"; and 
(3) by adding at the end the following new paragraphs: 
"(4) DEFINITION OF MITIGATING CIRCUMSTANCES.—(A) 
For 
purposes of paragraph (2)(A)(ii), an institution of higher edu-
cation shall be treated as having exceptioned mitigating cir-
cumstances that make application of that paragraph inequitable 
if such institution, in the opinion of an independent auditor, 
meets the following criteria: 
"(i) For a 12-month period that ended during the 6 
months immediately preceding the fiscal year for which 
the cohort of borrowers used to calculate the institution's 
cohort default rate is determined, at least two-thirds of 
the students enrolled on at least a hsilf-time basis at the 
institution— 
"(I) are eligible to receive a Federal Pell Grgmt 
award that is at least equal to one-half the maximum 
Federal Pell Grant award for which a student would 
be eligible based on the student's enrollment status; 
or 
"(II) have an adjusted gross income that when 
added with the adjusted gross income of the student's 
parents (unless the student is an independent student), 
of less than the poverty level, as determined by the 
Depgirtment of Health and Human Services. 
"(ii) In the case of an institution of higher education 
that offers an associate, baccalaureate, graduate or profes-
sional degree, 70 percent or more of the institution's regular 
students who were initially enrolled on a full-time basis 
and were scheduled to complete their programs during 
the same 12-month period described in clause (i)— 
"(I) completed the educational programs in which 
the students were enrolled; 
"(II) transferred from the institution to a higher 
level educational program; 
112 STAT. 1706 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(III) at the end of the 12-month period, remained 
enrolled and making satisfactory progress toward 
completion of the student's educational programs; or 
"(IV) entered active duty in the Armed Forces of 
the United States. 
"(iii)(I) In the case of an institution of higher education 
that does not award a degree described in clause (ii), had 
a placement rate of 44 percent or more with respect to 
the institution's former regular students who— 
"(aa) remained in the program beyond the point 
the students would have received a 100 percent tuition 
refund from the institution; 
"(bb) were initially enrolled on at least a half-
time basis; and 
"(cc) were originally scheduled, at the time of 
enrollment, to complete their educational programs 
during the same 12-month period described in clause 
(i). 
"(II) The placement rate shall not include students 
who are still enrolled and making satisfactory progress 
in the educational programs in which the students were 
originally enrolled on the date following 12 months after 
the date of the student's last date of attendance at the 
institution. 
"(Ill) The placement rate is calculated by determining 
the percentage of all those former regulgir students who— 
"(aa) are employed, in an occupation for which 
the institution provided training, on the date following 
12 months after the date of their last day of attendance 
at the institution; 
"(bb) were employed, in an occupation for which 
the institution provided training, for at least 13 weeks 
before the date following 12 months after the date 
of their last day of attendance at the institution; or 
"(cc) entered active duty in the Armed Forces of 
the United States. 
"(IV) The placement rate shall not include as place-
ments a student or former student for whom the institution 
is the employer. 
"(B) For purposes of determining a rate of completion and 
a placement rate under this paragraph, a student is originally 
scheduled, at the time of enrollment, to complete the edu-
cational program on the date when the student will have been 
enrolled in the program for the amount of time normally 
required to complete the program. The amount of time normally 
required to complete the program for a student who is initially 
enrolled full-time is the period of time specified in the institu-
tion's enrollment contract, catalog, or other materials, for 
completion of the program by a full-time student. For a student 
who is initially enrolled less than full-time, the period is the 
amount of time it would take the student to complete the 
program if the student remained enrolled at that level of enroll-
ment throughout the program. 
"(5) REDUCTION OF DEFAULT RATES AT CERTAIN MINORITY 
INSTITUTIONS.— 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1707 
"(A) BENEFICIARIES OF EXCEPTION REQUIRED TO ESTAB-
USH MANAGEMENT PLAN.^After July 1, 1999, any institu-
tion that has a cohort default rate that equals or exceeds 
25 percent for each of the three most recent fiscal years 
for which data are available and that relies on the exception 
in subparagraph (B) to continue to be an eligible institution 
shall— 
"(i) submit to the Secretary a default management 
plan which the Secretary, in the Secretary's discretion, 
after 
consideration 
of 
the 
institution's 
history, 
resources, dollars in default, and targets for default 
reduction, determines is acceptable and 
provides 
reasonable assurance that the institution will, by July 
1, 2002, have a cohort default rate that is less than 
25 percent; 
"(ii) engage an independent third party (which may 
be paid with funds received under section 317 or part 
B of title III) to provide technical assistance in 
implementing such default msmagement plan; and 
"(iii) provide to the Secretary, on an annual basis 
or at such other intervals as the Secretary may require, 
evidence of cohort default rate improvement and 
successful implementation of such default management 
plan. 
"(B) 
DISCRETIONARY 
ELIGIBILITY 
CONDITIONED 
ON 
IMPROVEMENT.—^Notwithstanding the expiration of the 
exception in paragraph (2XC), the Secretary may, in the 
Secretary's discretion, continue to treat an institution 
described in subparagraph (A) of this paragraph as an 
eligible institution for each of the 1-year periods beginning 
on July 1 of 1999, 2000, and 2001, only if the institution 
submits by the beginning of such period evidence satisfac-
tory to the Secretary that— 
"(i) such institution has complied and is continuing 
to comply with the requirements of subparagraph (A); 
and 
"(ii) 
such 
institution 
has 
made 
substantial 
improvement, during each of the preceding 1-year peri-
ods, in the institution's cohort default rate. 
"(6) PARTICIPATION RATE INDEX.— 
"(A) IN GENERAL.—An institution that demonstrates 
to the Secretary that the institution's participation rate 
index is equal to or less than 0.0375 for any of the 3 
most recent fiscal years for which data is available shall 
not be subject to paragraph (2). The participation rate 
index shall be determined by multiplying the institution's 
cohort default rate for loans under part B or D, or weighted 
average cohort default rate for loans under parts B and 
D, by the percentage of the institution's regular students, 
enrolled on at least a half-time basis, who received a loan 
made under part B or D for a 12-month period ending 
during the 6 months immediately preceding the fiscal year 
for which the cohort of borrowers used to calculate the 
institution's cohort default rate is determined. 
112 STAT. 1708 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(B) DATA.—An institution shall provide the Secretary 
with sufficient data to determine the institution's participa-
tion rate index within 30 days after receiving an initial 
notification of the institution's draft cohort default rate. 
"(C) NOTIFICATION.—Prior to publication of a final 
cohort default rate for an institution that provides the 
data described in subparagraph (B), the Secretary shall 
notify the institution of the institution's compliance or non-
compliance with subparagraph (A).". 
(b) ELIGIBLE LENDER.—Section 435(d) (20 U.S.C. 1085(d)) is 
amended— 
(1) in paragraph (1)— 
(A) in subparagraph (A)(ii)— 
(i) by striking "or" after "1992,"; and 
(ii) by inserting before the semicolon the following: 
", or (III) it is a bank (as defined in section 3(a)(1) 
of the Federal Deposit Insurance Act (12 U.S.C. 
1813(aXl)) that is a wholly owned subsidiary of a non-
profit foundation, the foundation is described in section 
501(c)(3) of the Internal Revenue Code of 1986 and 
exempt from taxation under section 501(1) of such 
Code, £Lnd the bank makes loans under this part only 
to undergraduate students who are age 22 or younger 
and has a portfolio of such loans that is not more 
than $5,000,000"; 
(B) by striking "and" at the end of subparagraph (I); 
(C) by striking the period at the end of subparagraph 
(J) and inserting "; sind"; and 
(D) by adding at the end the following new subpara-
graph: 
"(K) a consumer finance company subsidiary of a 
national bank which, as of the date of enactment of this 
subparagraph, through one or more subsidiaries: (i) acts 
as a small business lending company, as determined under 
regulations of the Small Business Administration under 
section 120.470 of title 13, Code of Federal Regulations 
(as such section is in efiect on the date of enactment 
a 
of this subparagraph); and (ii) participates in the program 
authorized by this part pursuant to subparagraph (C), pro-
vided the national bank and all of the bank's direct and 
indirect subsidiaries taken together as a whole, do not 
have, as their primary consumer credit function, the mak-
ing or holding of loans made to students under this part."; 
and 
(2) in par£igraph (5), by adding at the end the following 
new sentence: 
"It shall not be a violation of this paragraph for a lender 
to provide assistance to institutions of higher education com-
parable to the kinds of assistance provided to institutions of 
higher education by the Department of Education.". 
(c) DEFINITION OF DEFAULT.— 
(1) AMENDMENT.—Section 435(1) is amended— 
(A) by striking "180 days" and inserting "270 days"; 
and 
Applicability. 
(B) by striking "240 days" and inserting "330 days". 
20 use 1085 
(2) EFFECTIVE DATE.—^The amendment made by paragraph 
°°*®* 
(1) shall apply with respect to loans for which the first day 
PUBLIC LAW 105-244-OCT. 7, 1998 
112 STAT. 1709 
of delinquency occurs on or after the date of enactment of 
this Act. 
(d) COHORT DEFAULT RATE.—Section 435(m) is amended— 
20 use 1085. 
(1) in paragraph (IXB), by striking "insurance, and, in 
considering appeals with respect to cohort default rates pursu-
ant to subsection (aX3), exclude" and inserting "insurance. In 
considering appeals with respect to cohort default rates pursu-
ant to subsection (aX3), the Secretary shall exclude, from the 
calculation of the number of students who entered repayment 
and from the calculation of the number of students who 
default,"; and 
(2) in paragraph (2XC), by adding at the end the following: 
"The Secretary may require guaranty agencies to collect data 
with respect to defaulted loans in a manner that will permit 
the identification of any defaulted loan for which (i) the bor-
rower is currently making payments and has made not less 
than 6 consecutive on-time pajonents by the end of such follow-
ing fiscal year, and (ii) a guaranty agency has renewed the 
borrower's title IV eligibility as provided in section 428F(b).''; 
and 
(3) in paragraph (4), by adding at the end the following: 
"(D) The Secretary shall publish the report described in Publication, 
subparagraph (C) by September 30 of each year.". 
Deadline. 
SEC. 430. DELEGATION OF FUNCTIONS. 
Section 436 (20 U.S.C. 1086) is amended to read as follows: 
"SEC. 436. DELEGATION OF FUNCTIONS. 
"(a) IN GENERAL.—An eligible lender or guaranty agency that 
contracts with another entity to perform any of the lender's or 
agency's functions under this title, or otherwise delegates the 
performance of such functions to such other entity— 
"(1) shall not be relieved of the lenders or agency's duty 
to comply with the requirements of this title; and 
"(2) shgdl monitor the activities of such other entity for 
compliance with such requirements. 
"(b) SPECIAL RULE.—^A lender that holds a loan made under 
part B in the lender's capacity as a trustee is responsible for 
compl3dng with all statutory and regulatory requirements imposed 
on any other holder of a loan made under this part.". 
SEC. 43L DISCHARGE. 
Section 437(cXl) (20 U.S.C. 1087(cXl)) is amended— 
(1) by inserting after "falsely certi^ed by the eligible institu-
tion," the following: "or if the institution failed to make a 
refund of loan proceeds which the institution owed to such 
student's lender,"; and 
(2) by adding at the end the following new sentences: 
"In the case of a discharge based upon a failure to refund, 
the amount of the discharge shall not exceed that portion 
of the loan which should have been refunded. The Secretary Reports, 
shall report to the Committee on Education and the Workforce 
of the House of Representatives and the Committee on Labor 
and Human Resources of the Senate annually as to the dollar 
amount of loan discharges attributable to failures to make 
refunds.". 
112 STAT. 1710 
PUBLIC LAW 105-244—OCT. 7, 1998 
SEC. 432. DEBT MANAGEMENT OPTIONS. 
Section 437A (20 U.S.C. 1087-0) is repealed. 
SEC. 433. SPECIAL ALLOWANCES. 
(a) 
DEDUCTION FROM 
INTEREST AND SPECIAL ALLOWANCE 
SUBSIDIES.—Paragraph (1) of section 438(c) (20 U.S.C. 1087-1) is 
amended to read as follows: 
"(1) DEDUCTION FROM INTEREST AND SPECIAL ALLOWANCE 
SUBSIDIES.—(A) Notwithstanding subsection (b), the Secretary 
shall collect the amount the lender is authorized to charge 
as an origination fee in accordance with paragraph (2) of this 
subsection— 
"(i) by reducing the total amount of interest and special 
allow£ince payable under section 428(a)(3)(A) and sub-
section (b) of this section, respectively, to any holder; or 
"(ii) directly from the holder of the loan, if the lender 
fails or is not required to bill the Secretary for interest 
and special allowance or withdraws from the program with 
unpaid loan origination fees. 
"(B) If the Secretary collects the origination fee under this 
subsection through the reduction of interest and special allow-
ance, and the total amount of interest and special allowance 
payable under section 428(a)(3)(A) and subsection (b) of this 
section, respectively, is less than the amount the lender was 
authorized to charge borrowers for origination fees in that 
quarter, the Secretary shall deduct the excess amount from 
the subsequent quarters' pa3anents until the total amount has 
been deducted.". 
(b) ORIGINATION FEES.—Section 438(c) is amended— 
(1) in paragraph (2)— 
(A) by striking "(other than" and inserting "(including 
loans made under section 428H, but excluding"; and 
(B) by adding at the end the following new sentence: 
"Except as provided in paragraph (8), a lender that charges 
an origination fee under this paragraph shall assess the 
same fee to all student borrowers."; and 
(2) by adding at the end the following new paragraph: 
"(8) EXCEPTION.—^Notwithstanding paragraph (2), a lender 
may assess a lesser origination fee for a borrower demonstrating 
greater financial need as determined by such borrower's 
adjusted gross family income.". 
(c) COLLECTION OF FEES.—^Paragraph (1) of section 438(d) is 
amended to read as follows: 
"(1) DEDUCTION FROM INTEREST AND SPECIAL ALLOWANCE 
SUBSIDIES.— 
"(A) IN GENERAL.—^Notwithstanding subsection (b), the 
Secretary shall collect a loan fee in an amount determined 
in accordance with paragraph (2)— 
"(i) by reducing the total amount of interest and 
special allowance payable under section 428(aX3)(A) 
and subsection (b), respectively, to any holder of a 
loan; or 
"(ii) directly from the holder of the loan, if the 
lender— 
"(I) fails or is not required to bill the Secretary 
for interest and special allowance payments; or 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1711 
**(II) withdraws from the program with unpaid 
loan fees. 
"(B) SPECIAL RULE.—If the Secretary collects loan fees 
under this subsection through the reduction of interest 
and special allowance payments, and the total amount 
of interest and special allowance payable under section 
428(aX3XA) and subsection (b), respectively, is less than 
the amount of such loan fees, then the Secretary shall 
deduct the amoimt of the loan fee balance from the amount 
of interest and special allowance pa3rments that would 
otherwise be payable, in subsequent quarterly increments 
until the balance has been deducted.". 
(d) LENDING FROM PROCEEDS OF TAX-EXEMPT OBUGATIONS.— 
(1) AMENDMENT.—Subsection (e) of section 438 is amended 20 use 1087-1. 
to read as follows: 
"(e) NONDISCRIMINATION.—In order for the holders of loans 
which were made or purchased with funds obtained by the holder 
from an Authority issuing obligations, the income from which is 
exempt from taxation under the Internal Revenue Code of 1986, 
to be eligible to receive a special allowance under subsection (bX2) 
on any such loans, the Authority shall not engage in any pattern 
or practice which results in a denial of a borrower's access to 
loans under this part because of the borrower's race, sex, color, 
religion, national origin, age, disability status, income, attendance 
at a particular eligible institution within the area served by the 
Authority, length of the borrower's educational program, or the 
borrowei^s academic year in school.". 
(2) EFFECTIVE DATE.—The amendment made by paragraph 20 use 1087-1 
(1) shall be effective as of the date the plan required by section J^ote. 
438(eXl) (as such section was in effect prior to such amend-
ment) w£is approved by the Secretary or the Governor (which-
ever was the case). No Authority shall have a right or cause 
of action against the Secretary for any amounts paid to or 
offset by the Secretary pursuant to a final settlement agreement 
entered into prior to July 1, 1998, resolving any audit or pro-
gram review findings alleging violations of any provision of 
section 438(e) (as in effect prior to such amendment). 
SEC. 434. FEDERAL FAMILY EDUCATION LOAN INSURANCE FUND. 
20 USC 1081 
Any funds in the insurance fund, as established under section 
431 of the Higher Education Act of 1965 (20 U.S.C. 1081), on 
the date of enactment of this Act shall be transferred to and 
deposited in the Treasury. All funds received by the Secretary 
of Education under subsection (a) of such section after the date 
of enactment of this Act shall be deposited into the fund in accord-
ance with such subsection. 
PART 
C—FEDERAL 
WORK-STUDY 
PROGRAMS 
SEC 
441. AUTHORIZATION 
OF APPROPRIATIONS; COMMUNITY 
SERVICES. 
(a) AUTHORIZATION OF APPROPRIATIONS.—Section 441(b) (42 
U.S.C. 2751(b)) is amended by striking "$800,000,000 for fiscal 
year 1993" and inserting "$1,000,000,000 for fiscal year 1999". 
(b) DEFINITION OF COMMUNITY SERVICES.—Section 441(c) is 
amended— 
112 STAT. 1712 
PUBLIC LAW 105-244—OCT. 7, 1998 
(1) in paragraph (1), by inserting "(including child care 
services provided on campus that are open and accessible to 
the community)" after "child care"; and 
(2) in paragraph (3), by inserting ", including students 
with disabilities wno are enrolled at the institution" before 
the semicolon. 
SEC. 442. ALLOCATION OF FUNDS. 
42 use 2752. 
(a) UPDATING THE BASE PERIOD.—Section 442(a) (20 U.S.C. 
2752(a)) is amended— 
(1) in paragraph (1), by striking "received and used under 
this part for fiscal year 1985" and inserting "received under 
subsections (a) and (b) for fiscal year 1999 (as such subsections 
were in effect with respect to allocations for such fiscEil year)"; 
(2) in paragraph (2)— 
(A) in subparagraphs (A) and (B), by striking "1985" 
each place the term appears and inserting "1999"; and 
(B) in subparagraph (C)(i), by striking "1986" and 
inserting "2000^ 
(b) 
ELIMINATION 
OF PRO RATA 
SHARE.—Section 
442 
is 
amended— 
(1) by striking subsection (b); 
(2) by redesignating subsections (c) through (f) as sub-
sections (b) througn (e), respectively; 
(3) in subsection (b)(1) (as redesignated by paragraph (2)), 
by striking "three-quarters of; 
(4) in subsection (b)(2)(A)(i) (as so redesignated), by striking 
"subsection (d)" and inserting "subsection (c)'; 
(5) in subsection (c)(3) (as so redesignated), by striking 
"the Secretary, for academic year 1988-1989 shall use the 
procedures employed for academic year 1986-1987, and, for 
any subsequent academic years,"; and 
(6) in subsection (d)(1) (as so redesignated)— 
(A) by striking "10 percent" and inserting "5 percent"; 
(B) by striking "in community service" and inserting 
"in tutoring in reading and family literacy activities"; and 
(C) by striking "subsection (c)" and inserting "sub-
section (b)". 
Applicability. 
(c) EFFECTIVE DATE.—^The amendments made by this section 
42 use 2752 
shall apply with respect to sdlocations of amounts appropriated 
°°*®- 
pursuant to section 441(b) for fiscal year 2000 or any succeeding 
fiscal year. 
SEC. 443. GRANTS FOR FEDERAL WORK-STUDY PROGRAMS. 
(a) 
ELIGIBLE 
EMPLOYMENT.—Section 443(b)(1) (42 U.S.C. 
2753(b)(1)) is amended by inserting ", including internships, 
practica, or research assistantships as determined by the Secretary," 
after "part-time emplo3rment". 
(b) COMMUNITY SERVICE.—Section 443(b)(2)(A) is amended— 
(1) by striking "in fiscal year 1994 and succeeding fiscsd 
yeeirs," and inserting "for fiscal year 1999,"; and 
(2) by inserting "(including a reasonable amount of time 
spent in travel or training directly related to such community 
service)" after "community service". 
(c) 
TUTORING AND LITERACY ACTIVITIES.—Section 443 
is 
amended— 
(1) in subsection (b)(2)— 
(A) by striking "and" at the end of subparagraph (A); 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1713 
(B) by redesignating subparagrapk (B) as subpara-
graph (C); and 
(C) by inserting after subparagraph (A) the following: 
"(B) for fiscal year 2000 and succeeding fiscal years, 
an institution shall use at least 7 percent of the total 
amount of funds granted to such institution under this 
section for such fiscal year to compensate 
students 
employed in community service, and shall ensure that not 
less than 1 tutoring or family literacy project (as described 
in subsection (d)) is included in meeting the requirement 
of this subparagraph, except that the Secretary may waive 
this subparagraph if the Secretary determines that enforc-
ing this subparagraph would cause hardship for students 
at the institution; and"; and 
(2) by adding at the end the following new subsection: 
"(d) TUTORING AND LITERACY ACTIVITIES.— 
"(1) USE OF FUNDS.—^In any academic year to which sub-
section (bX2XB) applies, an institution shall ensure that funds 
granted to such institution under this section are used in 
accordance with such subsection to compensate (including com-
pensation for time spent in training and travel directly related 
to tutoring in reading and family literacy activities) students— 
"(A) employed as reading tutors for children who are 
preschool age or are in elementary school; or 
"(B) employed in family literacy projects. 
"(2) PRIORITY FOR SCHOOLS.—To the extent practicable, an 
institution shall— 
"(A) give priority to the employment of students in 
the provision of tutoring in reading in schools that are 
participating in a reading reform project that— 
"(i) is designed to train teachers how to teach 
reading on the basis of scientifically-based research 
on reading; and 
"(ii) is funded under the Elementary and Second-
ary Education Act of 1965; and 
"(B) ensure that any student compensated with the 
funds described in paragraph (1) who is employed in a 
school participating in a reading reform project described 
in subparagraph (A) receives training from the emplojdng 
school in the instructional practices used by the school. 
"(3) FEDERAL SHARE.—The Federal share of the compensa-
tion of work-study students compensated under this subsection 
may exceed 75 percent.". 
(d) USE OF FUNDS FOR INDEPENDENT AND LESS THAN FULL-
TIME STUDENTS.—Paragraph (3) of section 443(b) is amended to 42USC2753. 
read as follows: 
"(3) provide that in the selection of students for emplo3anent 
under such work-study program, only students who dem-
onstrate financial need in accordance with part F and meet 
the requirements of section 484 will be assisted, except that 
if the institution's grant under this part is directly or indirectly 
based in part on the financial need demonstrated by students 
who are (A) attending the institution on less than a full-time 
basis, or (B) independent students, a reasonable portion of 
the grant shall be made available to such students;". 
(e) FEDERAL SHARE.—Paragraph (5) of section 443(b) is 
amended to read as follows: 
112 STAT. 1714 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(5) provide that the Federal share of the compensation 
of students employed in the work-study program in accordance 
with the agreement shall not exceed 75 percent, except that— 
"(A) the Federal share may exceed 75 percent, but 
not exceed 90 percent, if, consistent with regulations of 
the Secretary— 
"(i) the student is employed at a nonprofit private 
organization or a government agency that— 
"(I) is not a part of, and is not owned, operated, 
or controlled by, or under common ownership, oper-
ation, or control with, the institution; 
"(II) is selected by the institution on an 
individual case-by-case basis for such student; and 
"(III) would otherwise be unable to afford the 
costs of such employment; and 
"(ii) not more than 10 percent of the students 
compensated through the institution's grant under this 
part during the academic year are employed in posi-
tions for which the Federal share exceeds 75 percent; 
and 
**(B) the Federal share may exceed 75 percent if the 
Secretary determines, pursuant to regulations promulgated 
by the Secretary establishing objective criteria for such 
determinations, that a Federal share in excess of such 
amounts is required in furtherance of the purpose of this 
part;". 
(f) 
AVAILABILITY 
OF 
EMPLOYMENT.—Section 
443(bX6) 
is 
42 use 2753. 
amended by striking ", and to make" and all that follows through 
"such emplo3anent*'. 
(g) ACADEMIC RELEVANCE.—Section 443(c)(4) is amended by 
inserting before the semicolon at the end the following: ", to the 
maximum extent practicable". 
SEC. 444. FLEXIBLE USE OF FUNDS. 
Section 445 (42 U.S.C. 2755) is amended by adding at the 
end the following: 
"(c) FLEXIBLE USE OF FUNDS.—^An eligible institution may, upon 
the request of a student, make payments to the student under 
this part by crediting the student's account at the institution or 
by making a direct deposit to the student's account at a depository 
institution. An eligible institution may only credit the student's 
account at the institution for (1) tuition and fees, (2) in the case 
of institutionally owned housing, room and board, and (3) other 
institutionally provided goods and services.". 
SEC. 445. WORK COLLEGES. 
Section 448 (42 U.S.C. 2756b) is amended— 
(1) in subsection (bX2)— 
(A) in subparagraph (C), by striking "and" after the 
semicolon; 
(B) in subparagraph (DXii), by striking the period eind 
inserting a semicolon; and 
(C) by adding at the end the following: 
"(E) coordinate and carry out joint projects and activi-
ties to promote work service learning; and 
"(F) carry out a comprehensive, longitudinal study of 
student academic progress and academic and career out-
comes, relative to student self-sufficiency in financing their 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1715 
higher education, repayment of student loans, continued 
community service, kind and quality of service performed, 
and career choice and community service selected after 
graduation."; and 
(2) in subsection (f), by striking "1993" and inserting 
**1999". 
PART D—WILLIAM D. FORD FEDERAL DIRECT 
LOAN PROGRAM 
SEC. 451. SELECTION OF INSTITUTIONS. 
(a) GENERAL AUTHORITY.—Section 453(a) (20 U.S.C. 1087c(a)) 
is amended— 
(1) by striking "PHASE-IN" and everything that follows 
through 
"GENERAL AUTHORITY.—" and inserting 
"GENERAL 
AUTHORITY.—"; and 
(2) by striking paragraphs (2), (3), and (4). 
(b) SELECTION CRITERIA.—Section 453(bX2) is amended by strik-
ing "prescribe," and ever3^hing that follows through the end of 
subparagraph (B) and inserting "prescribe.". 
(c) ORIGINATION.—Section 453(c) is amended— 
(1) in paragraph (2)— 
(A) in the heading, by striking "TRANSITION SELECTION 
CRITERIA" and inserting "SELECTION CRITERIA"; 
(B) by striking "For academic year 1994-1995, the 
Secretary" and inserting "The Secretary"; 
(C) by striking subparagraph (A); 
(D) by striking subparagraph (E); and 
(E) by redesignating subparagraphs (B), (C), (D), (F), 
(G), and (H) as subparagraphs (A) through (F), respectively; 
and 
(2) in paragraph (3)— 
(A) in the paragraph heading, by striking "AFTER 
TRANSITION"; and 
(B) by striking "For academic year 1995-1996 and 
subsequent academic years, the" and inserting "The". 
SEC. 452. TERMS AND CONDITIONS. 
(a) DIRECT LOAN INTEREST RATES.— 
(1) AMENDMENT.—Section 455(b) (20 U.S.C. 1087e(b)) is 
amended by adding at the end the following: 
"(6) INTEREST RATE PROVISION FOR NEW LOANS ON OR AFTER 
OCTOBER 1, 1998, AND BEFORE JULY 1, 2003.— 
"(A) RATES FOR FDSL AND FDUSL.—Notwithstanding the 
preceding paragraphs of this subsection, for Federal Direct 
Stafford Loans and Federal Direct Unsubsidized Stafford 
Loans for which the first disbursement is made on or 
after October 1, 1998, and before July 1, 2003, the 
applicable rate of interest shall, during any 12-month 
period beginning on July 1 £uid ending on June 30, be 
determined on the preceding June 1 and be equal to— 
"(i) the bond equivalent rate of 91-day Treasury 
bills auctioned at the final auction held prior to such 
June 1; plus 
"(ii) 2.3 percent, 
except that such rate shall not exceed 8.25 percent. 
112 STAT. 1716 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(B) IN SCHOOL AND GRACE PERIOD RULES.—Notwith-
standing the preceding paragraphs of this subsection, with 
respect to any Federal Direct Stafford Loan or Federal 
Direct Unsubsidized Stafford Loan for which the first 
disbursement is made on or after October 1, 1998, and 
before July 1, 2003, the applicable rate of interest for 
interest which accrues— 
"(i) prior to the beginning of the repayment period 
of the loan; or 
"(ii) during the period in which principal need 
not be paid (whether or not such principal is in fact 
paid) by reason of a provision described in section 
428(bXl)(M) or 427(aX2XC), 
shall be determined under subparagraph (A) by substitut-
ing '1.7 percent' for '2.3 percent'. 
**(C) PLUS LOANS.—^Notwithstanding the preceding 
paragraphs of this subsection, with respect to Feder^ 
Direct PLUS Loan for which the first disbursement is 
made on or after October 1, 1998, and before July 1, 2003, 
the applicable rate of interest shall be determined under 
subparagraph (A)— 
"(i) by substituting *3.1 percent' for *2.3 percent'; 
and 
**(ii) by substituting *9.0 percent' for *8.25 percent'. 
"(D) 
CONSOLIDATION 
LOANS.—Notwithstanding 
the 
preceding paragraphs of this subsection, any Federal Direct 
Consolidation loan for which the application is received 
on or after February 1, 1999, and before July 1, 2003, 
shall bear interest at an annual rate on the unpaid prin-
cipal balance of the loan that is equal to the lesser of— 
"(i) the weighted average of the interest rates on 
the loans consolidated, rounded to the nearest higher 
one-eighth of one percent; or 
"(ii) 8.25 percent. 
"(E) TEMPORARY RULES FOR CONSOLIDATION LOANS.— 
Notwithstanding the preceding paragraphs of this sub-
section, any Federal Direct Consolidation loan for which 
the application is received on or after October 1, 1998, 
and before February 1, 1999, shall bear interest at an 
annual rate on the unpaid principal balance of the loan 
that is equal to— 
(i) the bond equivalent rate of 91-day Treasury 
bills auctioned at the final auction held prior to sucn 
June 1; plus 
"(ii) 2.3 percent, 
except that such rate shall not exceed 8.25 percent.". 
20USCl087e 
(2) LIMITATION ON CONSOLIDATION LOANS DURING TEM-
note- 
PORARY INTEREST RATE.—^Notwithstanding section 455(g) of the 
Higher Education Act of 1965, a borrower who is enrolled 
or accepted for enrollment in an institution of higher education 
may not consolidate loans under such section during the period 
beginning October 1, 1998, and ending February 1, 1999, unless 
the borrower certifies that the borrower has no outstanding 
loans made, insured, or guaranteed under title IV of such 
Act other than loans made under part D of such title, 
(b) 
REPAYMENT 
INCENTIVES.—Section 
455(b) (20 U.S.C. 
1087e(b)) is further amended by adding at the end the following: 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1717 
Reports. 
Deadline. 
"(7) REPAYMENT INCENTIVES.— 
"(A) IN GENERAL.—^Notwithstanding any other provi- Regulations, 
sion of this part, the Secretary is authorized to prescribe 
by regulation such reductions in the interest rate paid 
by a Dorrower of a loan made under this part as the 
Secretary determines appropriate to encourage on-time 
repayment of the loan. Such reductions may be offered 
only if the Secretary determines the reductions are cost 
neutral and in the oest financial interest of the Federal 
Government. Any increase in subsidy costs resulting from 
such reductions shall be completely offset by corresponding 
savings in funds available for the William D. Ford Federal 
Direct Loan Program in that fiscal year from section 458 
and other administrative accounts. 
"(B) ACCOUNTABILITY.—^Prior to publishing regulations 
proposing repayment incentives, the Secretary shall ensure 
the cost neutrality of such reductions. The Secretary shall 
not prescribe such regulations in final form unless an offi-
cial report from the Director of the Office of Management 
and Budget to the Secretary and a comparable report from 
the Director of the Congressional Budget Office to the 
Congress each certify that any such reductions will be 
completely cost neutral. Such reports shall be transmitted 
to tne Committee on Labor and Human Resources of the 
Senate and the Committee on Education and the Workforce 
of the House of Representatives not less than 60 days 
prior to the publication of regulations proposing such reduc-
tions.". 
(c) CONSOLIDATION LOANS.—The first sentence of section 455(g) 
is amended by striking everjrthing after "section 428C(a)(4)" and 
inserting a period. 
(d) EFFECTIVE DATE.—^The amendments made by subsection 
(a) shall apply with respect to any loan made under part D of 
title IV of tne Higher Education Act of 1965 for which the first 
disbursement is made on or after October 1, 1998, and before 
July 1, 2003, except that such amendments shall apply with respect 
to a Federal Direct Consolidation Loan for which the application 
is received on or after October 1, 1998, and before July 1, 2003. 
SEC. 453. CONTRACTS. 
Section 456(b) (20 U.S.C. 1087f(b)) is amended— 
(1) in paragraph (3), by inserting "and" after the semicolon; 
(2) by striking paragraph (4); and 
(3) by redesignating paragraph (5) as paragraph (4). 
SEC. 454. FUNDS FOR ADMINISTRATIVE EXPENSES. 
Section 458 (20 U.S.C. 1087h) is amended— 
(1) by amending subsection (a) to read as follows: 
"(a) ADMINISTRATIVE EXPENSES.— 
"(1) IN GENERAL.—Each fiscal year there shall be available 
to the Secretary, from funds not otherwise appropriated, funds 
to be obligated for— 
"(A) administrative costs under this part and part B, 
including the costs of the direct student loan programs 
under this part; and 
"(B) account maintenance fees payable to guaranty 
agencies under part B and calculated in accordance with 
subsections (b) and (c), 
20 use 1087e. 
Applicability. 
20 use 1087e 
note. 
5&-194 O - 98 - 27: QL 3 Part 2 
112 STAT. 1718 
PUBLIC LAW 105-244—OCT. 7, 1998 
not to exceed (from such fiinds not otherwise appropriated) 
$617,000,000 in fiscal year 1999, $735,000,000 in fiscal year 
2000, $770,000,000 in fiscal year 2001, $780,000,000 in fiscal 
year 2002, and $795,000,000 in fiscal year 2003. 
"(2) ACCOUNT MAINTENANCE FEES,—Account maintenance 
fees under paragraph (1)(B) shall be paid quarterly and depos-
ited in the Agency Operating Fund established under section 
422B. 
"(3) CARRYOVER.—^The Secretary may carry over funds 
made available under this section to a subsequent fiscal year."; 
(2) by amending subsection (b) to read as follows: 
"(b) CALCULATION BASIS.—Except as provided in subsection (c), 
account maintenance fees payable to guaranty agencies under para-
graph (1)(B) shall be calculated— 
"(1) for fiscal years 1999 and 2000, on the basis of 0.12 
percent of the original principal amount of outstanding loans 
on which insurance was issued under part B; and 
"(2) for fiscal vears 2001, 2002, and 2003, on the basis 
of 0.10 percent of the original principal amount of outstanding 
loans on which insurance was issued under part B."; 
(3) by striking subsection (d); 
(4) by redesignating subsection (c) as subsection (d); and 
(5) by inserting after subsection (b) the following: 
"(c) SPECIAL RULES.— 
"(1) FEE CAP.—^The total amount of account maintenance 
fees payable under this section— 
"(A) for fiscal year 1999, shall not exceed $177,000,000 
"(B) for fiscal year 2000, shall not exceed $180,000,000 
"(C) for fiscal year 2001, shall not exceed $170,000,000 
"(D) for fiscal year 2002, shall not exceed $180,000,000 
and 
"(E) for fiscal year 2003, shall not exceed $195,000,000. 
"(2) INSUFFICIENT FUNDING.— 
"(A) IN GENERAL.—^If the amounts set forth in para-
graph (1) are insufficient to pay the account maintenance 
fees payable to guaranty agencies pursuant to subsection 
(b) for a fiscal year, the Secretary shall pay the insufficiency 
^^ 
by requiring guaranty agencies to transfer funds from the 
Federal Student Loan Reserve Funds under section 422A 
to the Agency Operating Funds under section 422B. 
"(B) ENTITLEMENT.—A guaranty 
agency shall be 
deemed to have a contractual right against the United 
States to receive payments according to the provisions of 
subparagraph (A).". 
SEC. 455. AUTHORITY TO SELL LOANS. 
Part D of title IV (20 U.S.C. 1087a et seq.) is amended by 
adding at the end the following: 
20 use 10871. 
"SEC. 459. AUTHORITY TO SELL LOANS. 
"The Secretary, in consultation with the Secretary of the Treas-
ury, is authorized to sell loans made under this part on such 
terms as the Secretary determines are in the best interest of the 
United States, except that any such sale shall not result in any 
cost to the Federal Government. Notwithstanding any other provi-
sion of law, the proceeds of any such sale may be used by the 
Secretary to offer reductions in the interest rate paid by a borrower 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1719 
of a loan made under this part as the Secretary determines appro-
priate to encourage on-time repayment in accordance with section 
455(b)(7). Such reductions may be offered only if the Secretary 
determines the reductions are in the best financial interests of 
the Federal Grovemment.". 
SEC. 456. LOAN CANCELXATION FOR TEACHERS. 
Part D of title IV (20 U.S.C. 1087a et seq.) is further amended 
by adding after section 459 (as added by section 455) the following: 
"SEC. 460. LOAN CANCELLATION FOR TEACHERS. 
20 USC 1087j. 
"(a) STATEMENT OF PURPOSE,—^It is the purpose of this section 
to encourage individuals to enter and continue in the teaching 
profession. 
"(b) PROGRAM AUTHORIZED.— 
"(1) IN GENERAL.—^The Secretary shall carry out a program 
of canceling the obligation to repay a qualified loan amount 
in accordance with subsection (c) for Federal Direct Stafford 
Loans and Federal Direct Unsubsidized Stafford Loans made 
under this part for any new borrower on or after October 
1, 1998, who— 
"(A) has been employed as a full-time teacher for 5 
consecutive complete school years— 
"(i) in a school that qualifies under section 
465(aX2)(A) for loan cancellation for Perkins loan 
recipients who teach in such schools; 
"(ii) if employed as a secondary school teacher, 
is teaching a subject area that is relevant to the 
borrower's academic major as certified by the chief 
administrative officer of the public or non-profit private 
secondary school in which the borrower is employed; 
and 
"(iii) if employed as an elementary school teacher, 
has demonstrated, as certified by the chief administra-
tive officer of the public or nonprofit private elementary 
school in which the borrower is employed, knowledge 
and teaching skills in reading, writing, mathematics 
and other areas of the elementary school curriculum; 
and 
"(B) is not in default on a loan for which the borrower 
seeks forgiveness. 
"(2) SPECIAL RULE.—No borrower may obtain a reduction 
of loan obligations under both this section and section 428J. 
"(c) QUALIFIED LOAN AMOUNTS.— 
"(1) IN GENERAL.—^The Secretary shall cancel not more 
than $5,000 in the aggregate of the loan obligation on a Federal 
Direct Stafford Loan or a Federsd Direct Unsubsidized Stafford 
Loan that is outstanding after the completion of the fifth com-
plete school year of teaching described in subsection (b)(1)(A). 
"(2) TREATMENT OF CONSOLIDATION LOANS.—A loan amount Regulations, 
for a Federal Direct Consolidation Loan may be a qualified 
loan amount for the purposes of this subsection only to the 
extent that such loan amount was used to repay a Federal 
Direct Stafford Loan, a Federal Direct Unsubsidized Stafford 
Loan, or a loan made under section 428 or 428H, for a borrower 
who meets the requirements of subsection (b), as determined 
in accordance with regulations prescribed by the Secretary. 
112 STAT. 1720 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(d) REGULATIONS.—^The Secretary is authorized to issue such 
regulations as may be necessary to carry out the provisions of 
this section. 
"(e) CONSTRUCTION.—^Nothing in this section shall be construed 
to authorize any refunding of any canceled loan. 
"(f) LIST.—If the list of schools in which a teacher may perform 
service pursuant to subsection (b) is not available before May 1 
of any year, the Secretary may use the list for the year preceding 
the year for which the determination is made to make such service 
determination. 
"(g) ADDITIONAL ELIGIBILITY PROVISIONS.— 
"(1) CONTINUED ELIGIBIUTY.—Any teacher who performs 
service in a school that— 
"(A) meets the requirements of subsection (bXlXA) in 
any year during such service; and 
"(B) in a subsequent year fails to meet the require-
ments of such subsection, may continue to teach in such 
school and shall be eligible for loan cancellation pursuant 
to subsection (b). 
"(2) PREVENTION OF DOUBLE BENEFITS.—NO borrower may, 
for the same volunteer service, receive a benefit under both 
this section and subtitle D of title I of the National and Commu-
nity Service Act of 1990 (42 U.S.C. 12571 et seq.). 
"(h) DEFINITION.—^For the purpose of this section, the term 
'year' where applied to service as a teacher means an academic 
year as defined by the Secretary.". 
PART 
E—FEDERAL 
PERKINS 
LOANS 
SEC. 461. AUTHORIZATION OF APPROPRIATIONS. 
Subsection (b) of section 461 (20 U.S.C. 1087aa) is amended— 
(1) in paragraph (1), by striking "1993" and inserting 
"1999"; and 
(2) in paragraph (2), by striking "1997" each place the 
term appears and inserting "2003". 
SEC. 462. ALLOCATION OF FUNDS. 
(a) CHANGES IN ALLOCATION FORMULA.— 
(1) UPDATING THE BASE PERIOD.—Section 462(a) (20 U.S.C. 
1087bb(a)) is amended— 
(A) in paragraph (1)(A), by striking "the amount of 
the Federal capital contribution allocated to such institu-
tion under this part for fiscal year 1985" and inserting 
"the amount received under subsections (a) and (b) of this 
section for fiscal year 1999 (as such subsections were in 
effect with respect to allocations for such fiscal year)"; 
(B) in paragraph (2)— 
(i) in subparagraphs (A) and (B), by striking "1985" 
each place the term appears and inserting "1999"; and 
(ii) in subparagraph (C)(i), by striking "1986" and 
inserting "2000". 
(2) ELIMINATION OF PRO RATA SHARE.—Section 462 is fur-
ther amended— 
(A) in subsection (a)— 
(i) in paragraph (IXB), by striking "subsection (f)" 
and inserting "subsection (e)"; 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1721 
(ii) in the matter following paragraph (IXB), by 
striking "subsection (g)" and inserting "subsection (f)"; 
(iii) in paragraph (2XD)(ii), by striking "subsection 
(f)" and inserting "subsection (e)"; and 
(iv) in the matter following paragraph (2)(D)(ii), 
by striking "subsection (g)" and inserting "subsection 
(0"; 
(B) by striking subsection (b); 
(C) in subsection (c)(1), by striking "three-quarters of 
the remainder^' and inserting "the remainder"; 
(D) in the matter following subsection (c)(2)(B), by 
striking "subsection (g)" and inserting "subsection (f)"; 
(E) in subsection (c)(3)— 
(i) in subparagraph (A), by striking "subsection 
(d)" and inserting "subsection (c)"; 
(ii) in subparagraph (C), by striking "subsection 
(f)" and inserting "subsection (e)"; and 
(iii) in the matter following subparagraph (C), by 
striking "subsection (g)" and inserting "subsection (f)"; 
(F) in subsection (j)(l)(BXi), by striking "1985" and 
inserting "1999"; 
(G) in subsection (j)(2)— 
(i) in subparagraph (A), by striking "paragraph 
(3) of subsection (c)" and inserting "subsection (bX3)"; 
and 
(ii) in subparagraph (B), by striking "subsection 
(c) of section 462" and inserting "subsection (b)"; and 
(H) by redesignating subsections (c) through (j) as 
subsections (b) through (i), respectively. 
(3) EFFECTIVE DATE.—^The amendments made by this sub-
section shall apply with respect to allocations of amounts appro-
priated pursuant to section 461(b) for fiscal year 2000 or any 
succeeding fiscal year. 
(b) SELF-HELP NEED.—^The matter preceding subparagraph (A) 
of section 462(cX3) (as redesignated oy subsection (a)(2XG)) is 
amended by striking "the Secretary, for" and all that follows through 
20 USC I087bb 
"years,". 
(c) DEFAULT PENALTIES.—Subsections (e) and (f) of section 462 
(as redesignated by subsection (a)(2)(G)) are amended to read as 
follows: 
"(e) DEFAULT PENALTIES.— 
"(1) YEARS PRECEDING FISCAL YEAR 2000.—For any fiscal 
year preceding fiscal year 2000, any institution with a cohort 
default rate that— 
"(A) equals or exceeds 15 percent, shall establish a 
default reduction plan pursuant to regulations prescribed 
by the Secretary, except that such plan shall not be 
required with respect to an institution that has a default 
rate of less than 20 percent and that has less than 100 
students who have loans under this part in such academic 
year; 
"(B) equals or exceeds 20 percent, but is less than 
25 percent, shall have a default penalty of 0.9; 
"(C) equals or exceeds 25 percent, but is less than 
30 percent, shall have a default penalty of 0.7; and 
"(D) equals or exceeds 30 percent shall have a default 
penalty of zero. 
Applicability. 
20 use 1087bb 
note. 
Regulations. 
112 STAT. 1722 
PUBLIC LAW 105-244—OCT. 7, 1998 
Deadlines. 
Deadline. 
"(2) YEARS FOLLOWING FISCAL YEAR 2000.—For fiscal year 
2000 and any succeeding fiscal year, any institution with a 
cohort default rate (as denned under subsection (g)) that equals 
or exceeds 25 percent shall have a default penalty of zero. 
"(3) INEUGIBIUTY.— 
"(A) IN GENERAL.—For fiscal year 2000 and any 
succeeding fiscal year, any institution with a cohort default 
rate (as defined in subsection (g)) that equals or exceeds 
50 percent for each of the 3 most recent years for which 
data are available shall not be eligible to participate in 
a program under this part for the fiscal year for which 
the determination is made and the 2 succeeding fiscal 
years, unless, within 30 days of receiving notification from 
the Secretary of the loss of eligibility under this paragraph, 
the institution appeals the loss of eligibility to the Sec-
retary. The Secretary shall issue a decision on any such 
appeal within 45 days after the submission of the appeal. 
Such decision may permit the institution to continue to 
participate in a program under this part if— 
"(i) the institution demonstrates to the satisfaction 
of the Secretary that the calculation of the institution's 
cohort default rate is not accurate, and that recalcula-
tion would reduce the institution's cohort default rate 
for any of the 3 fiscal years below 50 percent; or 
"(ii) there Eire, in the judgment of the Secretary, 
such a small number of borrowers entering repayment 
that the application of this subparagraph would be 
inequitable. 
"(B) CONTINUED PARTICIPATION.—During an appeal 
under subparagraph (A), the Secretary may permit the 
institution to continue to participate in a program under 
this part. 
(C) RETURN OF FUNDS.—Within 90 days after the date 
of any termination pursuant to subparagraph (A), or the 
conclusion of any appeal pursuant to subparagraph (B), 
whichever is later, the balance of the student loan fund 
established under this part by the institution that is the 
subject of the termination shall be distributed as follows: 
**(i) The Secretary shall first be paid an amount 
which bears the same ratio to such balance (as of 
the date of such distribution) as the total amount of 
Federal capital contributions to such fund by the Sec-
retary under this part bears to the sum of such Federal 
capital contributions and the capital contributions to 
such fund made by the institution. 
"(ii) The remainder of such student loan fund shall 
be paid to the institution. 
"(D) USE OF RETURNED FUNDS.—Any funds returned 
to the Secretary under this paragraph shall be reallocated 
to institutions of higher education pursuant to subsection 
(i). 
**(E) DEFINITION.—^For the purposes of subparagraph 
(A), the term loss of eligibility* shall be defined as the 
mandatory liquidation of an institution's student loan fund, 
and assignment of the institution's outstanding loan port-
folio to the Secretary. 
"(f) APPLICABLE MAXIMUM COHORT DEFAULT RATE.— 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1723 
"(1) AWARD YEARS PRIOR TO 2000.—^For award years prior 
to award year 2000, the applicable maximum cohort default 
rate is 30 percent. 
"(2) AWARD YEAR 2000 AND SUCCEEDING AWARD YEARS.— 
For award year 2000 and subsequent years, the applicable 
maximum cohort default rate is 25 percent.". 
(d) COHORT DEFAULT RATE DEFINITION.—Section 462(g) (as 
redesignated by subsection (a)(2)(G)) is amended— 
20 USC I087bb. 
(1) by striking the subsection heading and paragraphs (1) 
and (2) and inserting the following: 
"(g) DEFINITION OF COHORT DEFAULT RATE.—"; 
(2) by striking "(3XA) For award year 1994 and any 
succeeding award year, the term" and inserting the following: 
"(IXA) The term"; 
(3) in paragraph (1) (as redesignated by paragraph (2))— 
(A) by striking subparagraphs (B) and (E); and 
(B) by redesignating subparagraphs (C), (D), (F), and 
(G) as subparagraphs (B), (C), (D), and (F), respectively; 
(C) by inserting after subparagraph (D) (as redesig-
nated by subparagraph (B)) the following: 
"(E) In determining the number of students who default 
before the end of such award year, the institution, in calculating 
the cohort default rate, shall exclude— 
"(i) any loan on which the borrower has, after the 
time periods specified in paragraph (2)— 
"(I) voluntarily made 6 consecutive payments; 
"(II) voluntarily made all payments currently due; 
"(III) repaid in full the amount due on the 
loan; or 
"(IV) received a deferment or forbearance, based 
on a condition that began prior to such time periods; 
"(ii) any loan which has, after the time periods specified 
in paragraph (2), been rehabilitated or canceled; and 
"(iii) any other loan that the Secretary determines 
should be excluded from such determination."; and 
(4) by striking paragraph (4) and inserting the following: 
"(2) For purposes of calculating the cohort default rate 
under this subsection, a loan shall be considered to be in 
default— 
"(A) 240 days (in the case of a loan repayable monthly), 
or 
"(B) 270 days (in the case of a loan repayable quar-
terly), 
after the borrower fails to make an installment payment when 
due or to comply with other terms of the promissory note.". 
(e) CONFORMING AMENDMENTS.—Section 462 (20 U.S.C. 1087bb) 
is amended— 
(1) in the matter following parsigraphs (IXB) and (2)(DXii) 
of subsection (a), by inserting "cohort" before "default" each 
place the term appears; 
(2) in the matter following paragraphs (2XB) and (3)(C) 
of subsection (b) (as redesignated by subsection (a)(2)(G)), by 
inserting "cohort" before "default" each place the term appears; 
(3) in subsection (dX2) (as redesignated by subsection 
(a)(2XG)), by inserting "cohort" before "default"; and 
(4) in subsection (g)(lXF) (as redesignated by subsections 
(a)(2XG) and (dX3XB)), by inserting "cohort" before "default". 
112 STAT. 1724 
PUBLIC LAW 105-244—OCT. 7, 1998 
SEC. 463. AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION. 
(a) CONTENTS OF AGREEMENTS.—Section 463(a) (20 U.S.C. 
1087cc(a)) is amended— 
(1) by amending subparagraph (B) of paragraph (2) to 
read as follows: 
**(B) a capital contribution by an institution in an 
amount equal to one-third of the Federal capital contribu-
tions described in subparagraph (A);"; 
(2) by striking paragraph (4); and 
(3) by redesignating paragraphs (5) through (10) as para-
graphs (4) through (9); 
(b) AGREEMENTS WITH CREDIT BUREAUS.—Section 463(c) is 
amended— 
(1) in paragraph (1)— 
(A) by striking "the Secretary shall" and inserting "the 
Secretary and each institution of higher education partici-
pating in the program under this part shall"; and 
(B) by inserting "and regarding loans held by the Sec-
retary or an institution" after "section 467"; 
(2) in paragraph (2)— 
(A) in the matter preceding subparagraph (A), by strik-
ing "by the Secretary^ and all that follows through "of— 
" and inserting "by the Secretary or an institution, as 
the case may be, to such organizations, with respect to 
any loan held by the Secretary or the institution, respec-
tively, of—"; 
(B) by amending subparagraph (A) to read as follows: 
"(A) the date of disbursement and the amount of such 
loans made to any borrower under this part at the time 
of disbursement of the loan;"; 
(C) in subparagraph (B)— 
(i) by inserting "the repayment and" after "concern-
ing"; and 
(ii) by striking "any defaulted" and inserting 
"such"; and 
(D) in subparagraph (C), by inserting ", or upon can-
cellation or discharge of the borrower's obligation on the 
loan for any reason" before the period; 
(3) in paragraph (3)— 
(A) in the matter preceding subparagraph (A)— 
(i) by inserting "or an institution" after "from the 
Secretary"; and 
(ii) by striking "until—" and inserting "until the 
loan is paid in full."; and 
(B) by striking subparagraphs (A) and (B); 
(4) by amending paragraph (4) to read as follows: 
"(4)(A) Except as provided in subparagraph (B), an institution 
of higher education, after consultation with the Secretary and 
pursuant to the agreements entered into under paragraph (1), shall 
disclose at least annually to any credit bureau organization with 
which the Secretary has such an agreement the information set 
forth in paragraph (2), and shall disclose promptly to such credit 
bureau organization any changes to the information previously dis-
closed. 
"(B) The Secretary may promulgate regulations establishing 
criteria under which an institution of higher education may cease 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1725 
reporting the information described in paragraph (2) before a loan 
is paid in full,"; and 
(4) by inserting sifter p£iragraph (4) the following: 
"(5) Each institution of higher education shall notify the appro- Notification, 
priate credit bureau organizations whenever a borrower of a loan 
that is made and held by the institution and that is in default 
makes 6 consecutive monthly payments on such loan, for the pur-
pose of encouraging such organizations to update the status of 
information maintained with respect to that borrower.". 
(c) 
CONFORMING 
AMENDMENT.—Section 
463(d) 
is 
amended by striking "subsection (aXlO)" and inserting "subsection 20USCl087cc. 
(aX9)". 
SEC. 464. TERMS OF LOANS. 
(a) TERMS AND CONDITIONS; ANNUAL LIMITS.—^Paragraph (2) 
of section 464(a) (20 U.S.C. 1087dd(a)) is amended to read as 
follows: 
"(2)(A) Except as provided in paragraph (4), the total of loans 
made to a student in any academic year or its equivalent by an 
institution of higher education from a loan fund established pursu-
ant to an agreement under this part shall not exceed— 
"(i) $4,000, in the case of a student who has not successfully 
completed a program of undergraduate education; or 
"(ii) $6,000, in the case of a graduate or professional student Regulations, 
(as defined in regulations issued by the Secretary). 
"(B) Except as provided in paragraph (4), the aggregate unpaid 
principal amount for all loans made to a student by institutions 
of higher education from loan funds established pursuant to agree-
ments under this part may not exceed— 
"(i) $40,000, in the case of any graduate or professional 
student (as defined by regulations issued by the Secretary, 
and including any loans from such funds made to such person 
before such person became a graduate or professional student); 
"(ii) $20,000, in the case of a student who has successfully Regulations, 
completed 2 years of a program of education leading to a 
bachelor's degree but who has not completed the work necessary 
for such a degree (determined under regulations issued by 
the Secretary), and including any loans from such funds made 
to such person before such person became such a student; 
and 
"(iii) $8,000, in the case of any other student.". 
(b) NEED AND ELIGIBILITY.—Section 464(b) is amended— 
(1) in paragraph (1), by adding at the end the following: 
"A student who is in default on a loan under this part shall 
not be eligible for an additional loan under this part unless 
such loan meets one of the conditions for exclusion under section 
462(g)(1)(E)."; and 
(2) by amending paragraph (2) to read as follows: 
"(2) If the institution's capital contribution under section 462 
is directly or indirectly based in part on the financial need dem-
onstrated by students who are (A) attending the institution less 
than full time, or (B) independent students, then a reasonable 
portion of the loans made from the institution's student loan fund 
containing the contribution shall be made available to such stu-
dents.". 
(c) 
CONTENTS 
OF LOAN 
AGREEMENT.—Section 
464(c) is 
amended— 
112 STAT. 1726 
PUBLIC LAW 105-244—OCT. 7, 1998 
(1) in paragraph (IXD)— 
(A) by striking "(i) 3 percent" and all that follows 
through "or (iii)"; and 
(B) by striking "subparagraph (AXi)" and inserting 
"paragraph (2XAXir; 
(2) in the matter following clause (iv) of paragraph (2XA), 
by striking "subparagraph (B)" and inserting "subparagraph 
(A) of paragraph (1)"; 
(3) by adding at the end of paragraph (2) the following: 
"(C) An individual with an outstanding loan balance who meets 
the eligibility criteria for a deferment described in subparagraph 
(A) as in effect on the date of enactment of this subparagraph 
shall be eligible for deferment under this paragraph notwithstand-
ing any contrary provision of the promissory note under which 
the loan or loans were made, and notwithstanding any amendment 
(or effective date provision relating to any amendment) to this 
section made prior to the date of such deferment."; and 
(4) by adding at the end the following: 
"(7) liiere shall be excluded from the 9-month period that 
begins on the date on which a student ceases to carry at least 
one-half the normal full-time academic workload (as described in 
paragraph (1)(A)) any period not to exceed 3 years during which 
a borrower who is a member of a reserve component of the Armed 
Forces named in section 10101 of title 10, United States Code, 
is called or ordered to active duty for a period of more than 30 
days (as defined in section 101(d)(2) of such title). Such period 
of exclusion shall include the period necessary to resume enrollment 
at the borrower's next available regular enrollment period.". 
(d) 
DISCHARGE; 
REHABILITATION; 
INCENTIVE 
REPAYMENT.— 
20 use 1087dd. 
Section 464 is amended by adding at the end the following: 
"(g) DISCHARGE.— 
"(1) IN GENERAL.—^If a student borrower who received a 
loan made under this part on or after January 1, 1986, is 
unable to complete the program in which such student is 
enrolled due to the closure of the institution, then the Secretary 
shall discharge the borrower's liability on the loEin (including 
the interest and collection fees) and shall subsequently pursue 
any claim available to such borrower against the institution 
and the institution's affiliates and principals, or settle the loan 
obligation pursuant to the financial responsibility standards 
described in section 498(c). 
"(2) ASSIGNMENT.—A borrower whose loan has been dis-
charged pursuant to this subsection shall be deemed to have 
assigned to the United States the right to a loan refund in 
an amount that does not exceed the amount discharged against 
the institution and the institution's affiliates and principals. 
"(3) ELIGIBILITY FOR ADDITIONAL ASSISTANCE.—^The period 
during which a student was unable to complete a course of 
study due to the closing of the institution shall not be consid-
ered for purposes of calculating the student's period of eligibility 
for additional assistance under this title. 
"(4) SPECIAL RULE.—A borrower whose loan has been dis-
charged pursuant to this subsection shall not be precluded, 
because of that discharge, from receiving additional grant, loan, 
or work assistance under this title for which the borrower 
-.'Wis^ftr 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1727 
would be otherwise eligible (but for the default on the dis-
charged loan). The amount discharged under this subsection 
shall be treated as an amount canceled under section 465(a). 
"(5) REPORTING.—^The Secretary or institution, as the case 
may be, shall report to credit bureaus with respect to loans 
that have been discharged pursuant to this subsection. 
"(h) REHABILITATION OF LOANS.— 
"(1) REHABILITATION.— 
"(A) IN GENERAL.—If the borrower of a loan made 
under this part who has defaulted on the loan makes 
12 ontime, consecutive, monthly payments of amounts owed 
on the loan, as determined by the institution, or by the 
Secretary in the case of a loan held by the Secretary, 
the loan shall be considered rehabilitated, and the institu-
tion that made that loan (or the Secretary, in the case 
of a loan held by the Secretary) shall request that any 
credit bureau organization or credit reporting agency to 
which the default was reported remove the default from 
the borrower's credit history. 
"(B) COMPARABLE CONDITIONS.—AS long as the bor-
rower continues to make scheduled repa3mients on a loan 
rehabilitated under this paragraph, the rehabilitated loan 
shall be subject to the same terms and conditions, and 
qualify for the same benefits and privileges, as other loans 
made under this part. 
"(C) ADDITIONAL ASSISTANCE.—The borrower of a 
rehabilitated loan shall not be precluded by section 484 
from receiving additional grant, loan, or work assistance 
under this title (for which the borrower is otherwise 
eligible) on the basis of defaulting on the loan prior to 
such rehabilitation. 
"(D) LIMITATIONS.—A borrower only once may obtain 
the benefit of this paragraph with respect to rehabilitating 
a loan under this part. 
"(2) RESTORATION OF ELIGIBILITY.—If the borrower of a 
loan made under this part who has defaulted on that loan 
makes 6 ontime, consecutive, monthly payments of amounts 
owed on such loan, the borrower's eligibility for grant, loan, 
or work assistance under this title shall be restored to the 
extent that the borrower is otherwise eligible. A borrower only 
once may obtain the benefit of this paragraph with respect 
to restored eligibility. 
"(i) INCENTIVE REPAYMENT PROGRAM.— 
"(1) IN GENERAL.—Each institution of higher education may 
establish, with the approval of the Secretary, an incentive 
repayment program designed to reduce default and to replenish 
student loan funds established under this part. Each such 
incentive repayment program may— 
"(A) offer a reduction of the interest rate on a loan 
on which the borrower has made 48 consecutive, monthly 
repayments, but in no event may the rate be reduced 
by more than 1 percent; 
"(B) provide for a discount on the balance owed on 
a loan on which the borrower pays the principal and 
interest in full prior to the end of the applicable repayment 
period, but in no event may the discount exceed 5 percent 
112 STAT. 1728 
PUBLIC LAW 105-244—OCT. 7, 1998 
of the unpaid principal balance due on the loan at the 
time the early repajrment is made; and 
"(C) include such other incentive repayment options 
as the institution determines will carry out the objectives 
of this subsection. 
"(2) LIMITATION.—No incentive repayment option under an 
incentive repa3rment program authorized by this subsection 
may be paid for with Federal funds, including any Federal 
funds from the student loan fund, or with institutional funds 
from the student loan fund.". 
SEC. 465. CANCELLATION FOR PUBLIC SERVICE. 
Section 465 (20 U.S.C. 1087ee) is amended— 
(1) in subsection (a)— 
(A) in paragraph (2XC), by striking "section 676(b)(9r 
and inserting "section 635(aX10r; 
(B) in the last sentence of paragraph (2), by striking 
"section 602(a)(1)'' and inserting "section 602"; and 
(C) by adding at the end the following new paragraph: 
"(7) An individual with an outstanding loan obligation under 
this part who performs service of any type that is described in 
paragraph (2) as in effect on the date of enactment of this paragraph 
shall be eligible for cancellation under this section for such service 
notwithstanding any contrary provision of the promissory note 
under which the loan or loans were made, and notwithstanding 
any amendment (or effective date provision relating to any amend-
ment) to this section made prior to the date of such service."; 
and 
Deadline. 
(2) in subsection (b), by adding at the end the following 
new sentence: "To the extent feasible, the Secretary shall pay 
the amounts for which any institution qualifies under this 
subsection not later than 3 months after the institution files 
an institutional application for campus-based funds.". 
SEC. 466. DISTRIBUTION OF ASSETS FROM STUDENT LOAN FUNDS. 
Section 466 (20 U.S.C. 1087fO is amended— 
(1) in subsection (a)— 
(A) in the matter preceding paragraph (1)— 
(i) by striking "1996" and inserting "2003"; and 
(ii) by striking "1997" and inserting "2004"; and 
(B) in paragraph (1), by striking "1996" and inserting 
"2003"; 
(2) in subsection (b)— 
(A) by striking "2005" and inserting "2012"; and 
(B) by striking "1996" and inserting "2003"; and 
(3) in subsection (c), by striking "1997" and inserting 
"2004". 
SEC. 467. PERKINS LOAN REVOLVING FUND. 
(a) REPEAL.—Subsection (c) of section 467 (20 U.S.C. 1087gg(c)) 
is repealed. 
20USCi087gg 
(b) TRANSFER OF BALANCE.—^Any funds in the Perkins Loan 
note. 
Revolving Fimd on the date of enactment of this Act shall be 
transferred to and deposited in the Treasury. 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1729 
PART F—NEED ANALYSIS 
SEC. 471. COST OF ATTENDANCE. 
Section 472 (20 U.S.C. 108711) is amended— 
(1) in paragraph (2), by inserting after "personal expenses" 
the following: ", including a reasonable allowance for the docu-
mented rental or purchase of a personal computer,"; 
(2) in paragraph (3)— 
(A) in subparagraph (A), by striking "of not less than 
$1,500" and inserting "determined by the institution"; and 
(B) in subparagraph (C), by striking ", except that 
the amount may not be less than $2,500"; 
(3) in paragraph (10), by striking everything after "deter-
mining costs" and inserting a semicolon; and 
(4) in paragraph (11), by striking "placed" and inserting 
"engaged". 
SEC. 472. DATA ELEMENTS. 
Section 474(bX3) (20 U.S.C. 1087nn(b)(3)) is amended by 
inserting ", excluding the student's parents," after "family of the 
student". 
SEC. 473. FAMILY CONTRIBUTION FOR DEPENDENT STUDENTS. 
(a) 
PARENTS' 
CONTRIBUTION 
FROM 
ADJUSTED 
AVAILABLE 
iNCOME.-^Section 475(b)(3) (20 U.S.C. 1087oo(b)(3)) is amended by 
inserting ", excluding the student's parents," after "number of family 
members". 
(b) STUDENT CONTRIBUTION FROM AVAILABLE INCOME.—Section 
475(g) is amended— 
(1) in paragraph (2)— 
(A) in subparagraph (D), by striking "$1,750; and" and 
inserting "$2,200 (or a successor amount prescribed by 
the Secretary under section 478);"; 
(B) by striking the period at the end of subparagraph 
(E) and inserting "; and"; and 
(C) by inserting aftier subparagraph (E) the following 
new subparagraph: 
"(F) an allowance for parents' negative available 
income, determined in accordance with paragraph (6)."; 
and 
(2) by adding at the end the following new paragraph: 
"(6) 
ALLOWANCE 
FOR PARENTS' 
NEGATIVE 
AVAILABLE 
INCOME.—^The allowance for parents' negative available income 
is the amount, if any, by which the sum of the amounts 
deducted under subparagraphs (A) through (F) of subsection 
(c)(1) exceeds the sum of the parents' total income (as defined 
in section 480) and the parents' contribution from assets (as 
determined in accordance with subsection (d)).". 
(c) ADJUSTMENTS TO STUDENT'S CONTRIBUTION FOR ENROLL-
MENT PERIODS OTHER THAN NINE MONTHS.—Section 475 is amend-
ed by adding at the end the following: 
"(j) ADJUSTMENTS TO STUDENT'S CONTRIBUTION FOR ENROLL-
MENT PERIODS OF LESS THAN NINE MONTHS.—For periods of enroll-
ment of less than 9 months, the student's contribution from adjusted 
available income (as determined under subsection (g)) is determined, 
for purposes other than subpart 2 of part A, by dividing the amount 
112 STAT. 1730 
PUBLIC LAW 105-244—OCT. 7, 1998 
determined under such subsection by 9, and multiplying the result 
by the number of months in the perioid of enrollment.". 
SEC. 474. FAMILY CONTRIBUTION FOR INDEPENDENT STUDENTS WITH-
OUT DEPENDENTS OTHER THAN A SPOUSE. 
(a) ADJUSTMENTS FOR ENROLLMENT PERIODS OF LESS THAN 
NINE MONTHS.—Section 476(a) (20 U.S.C. 1087pp(a)) is amended— 
(1) by striking "and" at the end of paragraph (IXB); 
(2) by inserting "and" after the semicolon at the end of 
paragraph (2); and 
(3) by inserting after paragraph (2) the following new para-
graph: 
"(3) for periods of enrollment of less than 9 months, for 
purposes other than subpart 2 of part A— 
"(A) dividing the quotient resulting under paragraph 
(2) by 9; and 
(B) multiplying the result by the number of months 
in the period of enrollment;". 
(b) 
CONTRIBUTION 
FROM 
AVAILABLE 
INCOME.—Section 
476(bXl)(A)(iv) is amended— 
(1) by striking "allowance of—" and inserting "allowance 
of the following amount (or a successor amount prescribed 
by the Secretary under section 478)—"; 
(2) in subclauses (I) and (II), by striking "$3,000" each 
place the term appears and inserting "$5,000"; and 
(3) in subclause (III), by striking "$6,000" and inserting 
"$8,000". 
SEC. 475. FAMILY CONTRIBUTION FOR INDEPENDENT STUDENTS WITH 
DEPENDENTS OTHER THAN A SPOUSE. 
Section 477(a) (20 U.S.C. 1087qq(a)) is amended— 
(1) by striking "and" at the end of paragraph (2); 
(2) by inserting "and" after the semicolon at the end of 
paragrapn (3); and 
(3) by inserting after paragraph (3) the following new para-
graph: 
"(4) for periods of enrollment of less than 9 months, for 
purposes other than subpart 2 of part A— 
"(A) dividing the quotient resulting under paragraph 
(3) by 9; and 
"(B) multiplying the result by the number of months 
in the period of enrollment;". 
SEC. 476. REGULATIONS; UPDATED TABLES AND AMOUNTS. 
Section 478(b) (20 U.S.C. 1087rr(b)) is amended— 
(1) by striking "For each academic year" and inserting 
the following: 
"(1) REVISED TABLES.—For each academic year"; and 
(2) by adding at the end the following new paragraph: 
Federal Register, 
"(2) REVISED AMOUNTS.—^For each academic year after aca-
pubUcation. 
demic year 2000-2001, the Secretary shall publish in the Fed-
eral Register revised income protection allowances for the pur-
pose of sections 475(g)(2)(D) and 476(bXlXA)(iv). Such revised 
allowances shall be developed by increasing each of the dollar 
amounts contained in such section by a percentage equal to 
the estimated percentage increase in the Consumer Price Index 
(as determined by the Secretary) between December 1999 and 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1731 
the December next preceding the beginning of such academic 
year, and rounding the result to the nearest $10.". 
SEC. 477. SIMPLIFIED NEEDS TEST; ZERO EXPECTED FAMILY CON-
TRIBUTION. 
Section 479 (20 U.S.C. 1087ss) is amended— 
(1) in subsection (bX3)— 
(A) in the matter preceding subparagraph (A), by strik-
ing "this paragraph" and inserting this subsection, or sub-
section (c), as the case may be,"; 
(B) in subparagraph (A), by striking "or" at the end 
thereof; 
(C) by redesignating subparagraph (B) as subpara-
graph (C); and 
(D) by inserting after subparagraph (A) the following 
new subparagraph: 
"(B) a form 1040 (including any prepared or electronic 
version of such form) required pursuant to the Internal 
Revenue Code of 1986, except that such form shall be 
considered a qualifjdng form only if the student or family 
files such form in order to take a tax credit under section 
25A of the Internal Revenue Code of 1986, and would 
otherwise be eligible to file a form described in subpara-
graph (A); or"; 
(2) in subsection (c)— 
(A) by amending paragraph (1)(A) to read as follows: 
"(A) the student's parents file, or are eligible to file, 
a form described in subsection (bX3), or certify that the 
parents are not required to file an income tax return and 
the student files, or is eligible to file, such a form, or 
certifies that the student is not required to file an income 
tax return; and"; and 
(B) by amending paragraph (2)(A) to read as follows: 
"(A) the student (and the student's spouse, if any) 
files, or is eligible to file, a form described in subsection 
(bX3), or certifies that the student (and the student's 
spouse, if any) is not required to file an income tax return; 
and". 
SEC. 478. DISCRETION OF STUDENT FINANCIAL AID ADMINISTRATORS. 
Section 479A (20 U.S.C. 1087tt) is amended— 
(1) in subsection (a), by inserting after the second sentence 
the following: "Special circumstances may include tuition 
expenses at an elementary or secondary school, medical or 
dental expenses not covered by insurance, unusually high child 
care costs, recent unemployment of a family member, the num-
ber of parents enrolled at least half-time in a degree, certificate, 
or other program leading to a recognized educational credential 
at an institution with a program participation agreement under 
section 487, or other changes in a family's income, a family's 
assets, or a student's status."; and 
(2) by amending subsection (c) to read as follows: 
"(c) REFUSAL OR ADJUSTMENT OF LOAN CERTIFICATIONS.—On 
a case-by-case basis, an eligible institution may refuse to certify 
a statement that permits a student to receive a loan under part 
B or D, or may certify a loan amount or make a loan that is 
less than the student's determination of need (as determined under 
this part), if the reason for the action is documented and provided 
112 STAT. 1732 
PUBLIC LAW 105-244—OCT. 7, 1998 
20 use 1087kk 
note. 
Applicability. 
Notification. 
in written form to the student. No eligible institution shall discrimi-
nate against any borrower or apphcant in obtaining a loan on 
the basis of race, national origin, religion, sex, marital status, 
age, or disability status.". 
SEC. 479. TREATMENT OF OTHER FINANCIAL ASSISTANCE. 
Section 480( 
j) (20 U.S.C. 1087w( 
j)) is amended— 
(1) in paragraph (1), by inserting before the period at 
the end the following: ", and national service eaucational 
awards or post-service benefits under title I of the National 
and Community Service Act of 1990 (42 U.S.C. 12571 et seq.)"; 
(2) by striking paragraph (3); and 
(3) by redesignating paragraph (4) as paragraph (3). 
SEC. 480. CLERICAL AMENDMENTS. 
(a) AMOUNT OF NEED.—Section 471 (20 U.S.C. 1087kk) is 
amended by striking "or 4" and inserting "or 2". 
(b) FAMILY CONTRIBUTION.—Section 473 (20 U.S.C. 1087mm) 
is amended by striking "subpart 4" and inserting "subpart 2". 
SEC. 480A. EFFECTIVE DATES. 
(a) IN GENERAL.—^Except as provided in subsection (b), the 
amendments made by this part are effective on the date of enact-
ment of this Act. 
(b) PROVISIONS EFFECTIVE FOR ACADEMIC YEAR 2000-2001, AND 
THEREAFTER.—^The amendments made by sections 472, 473, 474, 
and 475 shall apply with respect to determinations of need under 
part F of title IV of the Higher Education Act of 1965 for academic 
years beginning on or after July 1, 2000. 
PART G^-GENERAL PROVISIONS 
SEC. 481. MASTER CALENDAR. 
(a) REQUIRED SCHEDULE.—Section 482(a) (20 U.S.C. 1089(a)) 
is amended by adding at the end the following: 
"(3) The Secretary shall, to the extent practicable, notify 
eligible institutions, guaranty agencies, lenders, interested soft-
ware providers, and, upon request, other interested parties, 
by December 1 prior to the start of an award year of minimal 
hardware and software requirements necessary to administer 
programs under this title. 
"(4) The Secretary shsdl attempt to conduct training activi-
ties for financial aid administrators and others in an expedi-
tious and timely manner prior to the start of an award year 
in order to ensure that all participants are informed of all 
administrative requirements.". 
(b) DELAY OF EFFECTIVE DATE OF LATE PUBLICATIONS.—Sub-
section (c) of section 482 is amended to read as follows: 
"(c) DELAY OF EFFECTIVE DATE OF LATE PUBLICATIONS.—(1) 
Except as provided in paragraph (2), any regulatory changes initi-
ated by the Secretary affecting the programs under this title that 
have not been published in nnal form by November 1 prior to 
the start of the award year shall not become effective until the 
beginning of the second award year after such November 1 date. 
"(2)(A) The Secretary may designate any regulatory provision 
that affects the programs under this title and is published in 
final form after November 1 as one that an entity subject to the 
provision may, in the entity's discretion, choose to implement prior 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1733 
to the effective date described in paragraph (1). The Secretary 
may specify in the designation when, and under what conditions, 
an entity may implement the provision prior to that effective date. 
The Secretary shall publish any designation under this subpara- Federal Register, 
graph in the Federal Register. 
publication. 
"(B) If an entity chooses to implement a regulatory provision 
prior to the effective date described in paragraph (1), as permitted 
by subparagraph (A), the provision shall be effective with respect 
to that entity in accordsince with the terms of the Secretar/s 
designation.". 
SEC. 482. FORMS AND REGULATIONS. 
(a) 
COMMON FINANCIAL AID FORM DEVELOPMENT.—Section 
483(a) (20 U.S.C. 1090(a)) is amended— 
(1) in the subsection heading, by striking "FORM" and 
inserting "FORM DEVELOPMENT"; 
(2) in paragraph (1)— 
(A) by striking "A, C, D, and E" and inserting "A 
through E"; 
(B) by striking "and to determine the need of a student 
for the purpose of part B of this title"; 
(C) by striking the second sentence and inserting the 
following: "The Secretary shall include on the form devel-
oped under this subsection such data items as the Secretary 
determines are appropriate for inclusion. Such items shall 
be selected in consultation with States to assist in the 
awarding of State financial assistance. In no case shall 
the number of such data items be less than the number 
included on the form on the date of enactment of the 
Higher Education Amendments of 1998."; and 
(D) by striking the last sentence; 
(3) in paragraph (2)— 
(A) by striking "A, C, D, and E" each place the term 
appears and inserting "A through E"; 
(B) by striking "and the need of a student for the 
purpose of part B of this title,"; and 
(C) by striking "or have the student's need established 
for the purpose of part B of this title"; 
(4) by amending paragraph (3) to read as follows: 
"(3) DISTRIBUTION OF DATA.—^Institutions of higher edu-
cation, guaranty agencies, and States shall receive, without 
charge, the data collected by the Secretary using the form 
developed pursuant to this section for the purposes of processing 
loan applications and determining need and eligibility for 
institutional and State financial aid awards. Entities designated 
by institutions of higher education, guaranty agencies, or States 
to receive such data shall be subject to all the requirements 
of this section, unless such requirements are waived by the 
Secretary."; 
(5) by adding at the end the following: 
"(5) ELECTRONIC FORMS.—(A) The Secretary, in cooperation 
with representatives of agencies and organizations involved 
in student financial assistance, including private computer soft-
ware providers, shall develop an electronic version of the form 
described in paragraph (1). As permitted by the Secretary, 
such an electronic version shall not require a signature to 
be collected at the time such version is submitted, if a signature 
112 STAT. 1734 
PUBLIC LAW 105-244—OCT. 7, 1998 
Deadline. 
is subsequently submitted by the applicant. The Secretary shall 
prescribe such version not later than 120 days sifter the date 
of enactment of the Higher Education Amendments of 1998. 
"(B) Nothing in this section shall be construed to prohibit 
the use of the form developed by the Secretary pursuant to 
subparagraph (A) by an eligible institution, eligible lender, 
guaranty agency. State grant agency, private computer software 
providers, a consortium thereof, or such other entities as the 
Secretary may designate. 
"(C) No fee shall be charged to students in connection 
with the use of the electronic version of the form, or of any 
other electronic forms used in conjunction with such form in 
appl3dng for Federal or State student financial assistance. 
Privacy. 
"(D) The Secretary shall ensure that data collection com-
plies with section 552a of title 5, United States Code, and 
that any entity using the electronic version of the form devel-
oped by the Secretary pursuant to subparagraph (A) shall main-
tain reasonable and appropriate administrative, technical, and 
physical safeguards to ensure the integrity and confidentiality 
of the information, and to protect against security threats, 
or unauthorized uses or disclosures of the information provided 
on the electronic version of the form. Data collected by such 
version of the form shall be used only for the application, 
award, and administration of aid awarded under this title. 
State aid, or aid awarded by eligible institutions or such entities 
as the Secretary may designate. No data collected by such 
version of the form shall be used for making final aid awards 
under this title until such data have been processed by the 
Secretary or a contractor or designee of the Secretary. 
"(6) THIRD PARTY SERVICERS AND PRIVATE SOFTWARE 
PROVIDERS.—^To the extent practicable and in a timely manner, 
the Secretary shall provide, to private organizations and consor-
tia that develop software used by eligible institutions for the 
administration of funds under this title, all the necessary speci-
fications that the organizations and consortia must meet for 
the software the organizations and consortia develop, produce, 
and distribute (including any diskette, modem, or network 
communications) which are so used. The specifications shall 
contain record layouts for required data. The Secretary shall 
develop in advance of each processing cycle an annual schedule 
for providing such specifications. The Secretary, to the extent 
practicable, shall use means of providing such specifications, 
including conferences and other meetings, outreach, and tech-
nic£il support mechanisms (such as treiining and printed ref-
erence materials). The Secretary shall, from time to time, solicit 
from such organizations and consortia means of improving the 
support provided by the Secretary. 
"(7) PARENT'S SOCIAL SECURITY NUMBER AND BIRTH DATE.— 
The Secretary is authorized to include on the form developed 
under this subsection space for the social security number 
and birth date of parents of dependent students seeking finan-
cial assistance under this title.". 
(b) STREAMLINED REAPPLICATION PROCESS.—Section 483(bXl) 
20USC1090. 
is amended by striking ", within 240 days" and all that follows 
through "of 1992,". 
(c) INFORMATION TO COMMITTEES.—Section 483(c) is amended 
by striking "and Labor" and inserting "and the Workforce". 
PUBLIC LAW 105-244r-OCT. 7, 1998 
112 STAT. 1735 
(d) TOLL-FREE lNFORMATlON.--Section 483(d) is amended by 20USC1090. 
striking "section 633(cr and inserting "section 685(dX2XCr. 
(e) REPEAL.—Subsection (f) of section 483 is repealed. 
SEC. 483. STUDENT EUGIBILITY. 
(a) IN GENERAL.—Section 484(a) (20 U.S.C. 1091(a)) is 
amended— 
(1) in paragraph (4), by striking "the institution" and every-
thing that follows through "lender), a document" and inserting 
^he Secretary, as part of the original financial aid application 
process, a certification,"; and 
(2) in paragraph (5), by striking "or a permanent resident 
of the Trust Territory of the PacSic Islands, Guam, or the 
Northern Mariana Islands" and inserting "a citizen of any 
one of the Freely Associated States". 
(b) HOME-SCHOOLED STUDENTS.—Section 484(d) is amended— 
(1) in the matter preceding paragraph (1), by striking 
"either"; and 
(2) by adding at the end the following: 
"(3) The student has completed a secondary school edu-
cation in a home school setting that is treated as a home 
school or private school imder State law.". 
(c) TERMINATION OF EUGIBILITY.—Section 484(j) is amended 
to read as follows: 
"(j) ASSISTANCE UNDER SUBPARTS 1 AND 3 OF PART A, AND 
PART C.—^Notwithstanding any other provision of law, a student 
shall be eUgible until September 30, 2004, for assistance under 
subparts 1 and 3 of part A, and part C, if the student is otherwise 
qualified and— 
"(1) is a citizen of any one of the Freely Associated States 
and attends an institution of higher education in a State or 
a public or nonprofit private institution of higher education 
in the Freely Associated States; or 
"(2) meets the requirements of subsection (a)(5) and attends 
a public or nonprofit private institution of higher education 
in any one of the Freely Associated States.". 
(d) CORRESPONDENCE COURSES.—Paragraph (1) of section 484(1) 
is amended to read as follows: 
"(1) RELATION TO CORRESPONDENCE COURSES.— 
"(A) IN GENERAL.—^A student enrolled in a course of 
instruction at an institution of higher education that is 
offered in whole or in part through telecommunications 
and leads to a recognized certificate for a program of study 
of 1 year or longer, or a recognized associate, baccalaureate, 
or graduate degree, conferred by such institution, shall 
not be considered to be enrolled in correspondence courses 
unless the total amount of telecommunications and cor-
respondence courses at such institution equeds or exceeds 
50 percent of the total amount of all courses at the institu-
tion. 
"(B) REQUIREMENT.—An institution of higher education 
referred to in subparagraph (A) is an institution of higher 
education— 
"(i) that is not £in institute or school described 
in section 521(4XC) of the Carl D. Perkins Vocational 
and Applied Technology Education Act; and 
112 STAT. 1736 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(ii) for which at least 50 percent of the programs 
of study offered by the institution lead to the award 
of a recognized associate, baccalaureate, or graduate 
degree.". 
20 use 1091. 
(e) VERIFICATION OF INCOME DATA.—Section 484 is amended 
by adding at the end the following: 
"(q) VERIFICATION OF INCOME DATA.— 
"(1) CONFIRMATION WITH IRS.—The Secretary of Education, 
in cooperation with the Secretary of the Treasury, is authorized 
to confirm with the Internal Revenue Service the adjusted 
gross income, Federal income taxes paid, filing status, and 
exemptions reported by applicants (including parents) under 
this title on their Federal income tax returns for the purpose 
of verifying the information reported by applicants on student 
financial aid applications. 
Procedures. 
"(2) NOTIFICATION.—^The Secretary shall establish proce-
dures under which an applicant is notified that the Internal 
Revenue Service will disclose to the Secretary tax return 
information as authorized under section 6103(1)(13) of the 
Internal Revenue Code of 1986.". 
(f) SUSPENSION OF ELIGIBILITY FOR DRUG-RELATED OFFENSES.— 
(1) AMENDMENT.—Section 484 is eimended by adding at 
the end thereof the following: 
"(r) 
SUSPENSION 
OF 
ELIGIBILITY 
FOR 
DRUG-RELATED 
OFFENSES.— 
"(1) IN GENERAL.—^A student who has been convicted of 
any offense under any Federal or State law involving the 
possession or sale of a controlled substance shall not be eligible 
to receive any grant, loan, or work assistance under this title 
during the period beginning on the date of such conviction 
and ending after the interval specified in the following table: 
"If convicted of an offense involving: 
The possession of a con-
troUed substance: 
Ineligibility period is: 
First offense 
1 year 
Second offense 
2 years 
Third offense 
Indefinite. 
The sale of a controlled 
substance: 
Ineligibility period is: 
First offense 
2 years 
Second offense 
Indefinite. 
"(2) REHABILITATION.—A student whose ehgibiUty has been 
suspended under paragraph (1) may resume eligibility before 
the end of the ineligibility period determined under such para-
graph if— 
"(A) the student satisfactorily 
completes a 
drug 
rehabilitation prom*am that— 
"(i) complies with such criteria as the Secretary 
shall prescribe in regulations for purposes of this para-
graph; and 
"(ii) includes two unannounced drug tests; or 
"(B) the conviction is reversed, set aside, or otherwise 
rendered nugatory. 
"(3) DEFINITIONS.—In this subsection, the term 'controlled 
substance' has the meaning given the term in section 102(6) 
of the Controlled Substances Act (21 U.S.C. 802(6)).". 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1737 
note. 
(2) EFFECTIVE DATE.—^The amendment made by paragraph Applicability. 
(1), regarding suspension of eligibility for drug-related offenses, 
20^80 1091 
shall apply with respect to financial assistance to cover the 
costs 01 attendance for periods of enrollment beginning after 
the date of enactment of this Act. 
SEC. 484. STATE COURT JUDGMENTS. 
Section 484A (20 U.S.C. 1091a) is amended— 
(1) in the heading of the section by inserting ", AND STATE 
COURT JUDGMENTS'* after "UMTTATIONS"; and 
(2) by adding at the end the following: 
"(c) STATE COURT JUDGMENTS.—A judgment of a State court 
for the recovery of money provided as grant, loan, or work assistance 
under this title that has been assigned or transferred to the Sec-
retary under this title may be registered in any district court 
of the United States by flung a certified copy of the judgment 
and a copy of the assignment or transfer. A judgment so registered 
shall have the same force and effect, and may be enforced in 
the same manner, as a judgment of the district court of the district 
in which the judgment is registered.", 
SEC. 485. INSTITUTIONAL REFUNDS. 
Section 484B (20 U.S.C. 1091b) is amended to read as follows: 
"SEC. 484B. INSTITUTIONAL REFUNDS. 
"(a) RETURN OF TITLE IV FUNDS.— 
"(1) IN GENERAL.—^If a recipient of assistance under this 
title withdraws from an institution during a payment period 
or period of enrollment in which the recipient began attendance, 
the amount of grant or loan assistance (other than assistance 
received under part C) to be returned to the title IV programs 
is calculated according to paragraph (3) and returned in accord-
ance with subsection (b). 
"(2) LEAVE OF ABSENCE.— 
"(A) LEAVE NOT TREATED AS WITHDRAWAL.—In the case 
of a student who taikes a leave of absence from an institu-
tion for not more than a total of 180 days in any 12-
month period, the institution may consider the student 
as not naving withdrawn from the institution during the 
leave of absence, and not calculate the amount of grant 
and loan assistance provided under this title that is to 
be returned in accordance with this section if— 
"(i) the institution has a formal policy regarding 
leaves of absence; 
"(ii) the student followed the institution's policy 
in requesting a leave of absence; and 
"(iii) the institution approved the student's request 
in accordance with the institution's policy. 
"(B) CONSEQUENCES OF FAILURE TO RETURN.—^If a stu-
dent does not return to the institution at the expiration 
of an approved leave of absence that meets the require-
ments of subparagraph (A), the institution shall calculate 
the amount of grant and loan assistance provided under 
this title that is to be returned in accordance with this 
section based on the day the student withdrew (as deter-
mined under subsection (c)). 
"(3) CALCULATION OF AMOUNT OF TITLE IV ASSISTANCE 
EARNED.— 
112 STAT. 1738 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(A) IN GENERAL.—^The amount of grant or loan assist-
ance under this title that is earned by the recipient for 
purposes of this section is calculated by— 
"(i) determining the percentage of grant and loan 
assistance under this title that has been earned by 
the student, as described in subparagraph (B); and 
"(ii) applying such percentage to the total amount 
of such grant and loan assistance that was disbursed 
(and that could have been disbursed) to the student, 
or on the student's behalf, for the payment period 
or period of enrollment for which the assistance was 
awarded, as of the day the student withdrew. 
"(B) PERCENTAGE EARNED.—^For purposes of subpara-
graph (AXi), the percentage of grant or loan assistance 
under this title that has been earned by the student is— 
"(i) equal to the percentage of the payment period 
or period of enrollment for which assistance was 
awarded that was completed (as determined in accord-
ance with subsection (d)) as of the day the student 
withdrew, provided that such date occurs on or before 
the completion of 60 percent of the payment period 
or period of enrollment; or 
"(ii) 100 percent, if the day the student withdrew 
occurs after the student has completed 60 percent of 
the pa5anent period or period of enrollment. 
"(C) PERCENTAGE AND AMOUNT NOT EARNED.—^For pur-
poses of subsection (b), the amount of grant and loan assist-
ance awarded under this title that has not been earned 
by the student shall be calculated by— 
"(i) determining the complement of the percentage 
of grant or loan assistance under this title that has 
been earned by the student described in subparagraph 
(B);and 
"(ii) appl3dng the percentage determined under 
clause (i) to the total amount of such grant and loan 
assistance that was disbursed (and that could have 
been disbursed) to the student, or on the student's 
behalf, for the payment period or period of enrollment, 
as of the day the student withdrew. 
"(4) 
DIFFERENCES 
BETWEEN 
AMOUNTS 
EARNED AND 
AMOUNTS RECEIVED.— 
Regulations. 
"(A) IN GENERAL.—If the student has received less 
grant or loan assistance than the amount earned as cal-
culated under subparagraph (A) of paragraph (3), the 
institution of higher education shall comply with the proce-
dures for late disbursement specified by the Secretary in 
regulations. 
"(B) RETURN.—If the student has received more grant 
or loan assistance than the amount earned as calculated 
under paragraph (3XA), the unearned funds shall be 
returned by the institution or the student, or both, as 
may be required under paragraphs (1) and (2) of subsection 
(b), to the programs under this title in the order specified 
in subsection (b)(3). 
"(b) RETURN OF TITLE IV PROGRAM FUNDS.— 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1739 
"(1) RESPONSIBILITY OF THE INSTITUTION.—^The institution 
shall return, in the order specified in paragraph (3), the lesser 
of— 
"(A) the amount of grant and loan assistance awarded 
under this title that has not been earned by the student, 
as calculated under subsection (a)(3XC); or 
"(B) an amount equal to— 
"(i) the total institutional charges incurred by the 
student for the payment period or period of enrollment 
for which such assistance was awarded; multiplied by 
"(ii) the percentage of grant and loan assistance 
awarded under this title that has not been earned 
by the student, as described in subsection (aX3)(C)(i). 
"(2) RESPONSIBIUTY OF THE STUDENT.— 
"(A) IN GENERAL.—^The student shall return assistance 
that has not been earned by the student as described 
in subsection (a)(3)(CXii) in the order specified in paragraph 
(3) minus the amount the institution is required to return 
under paragraph (1). 
"(B) SPECIAL RULE.—^The student (or parent in the 
case of funds due to a loan borrowed by a parent under 
part B or D) shall return or repay, as appropriate, the 
amount determined under subparagraph (A) to— 
"(i) a loan program under this title in accordance 
with the terms of the loan; and 
"(ii) a grant program under this title, as an over-
payment of such grant and shall be subject to— 
"(I) repayment arrangements satisfactory to 
the institution; or 
"(II) overpayment collection procedures pre-
scribed by the Secretary. 
"(C) REQUIREMENT.—^Notwithstanding subparagraphs 
(A) and (B), a student shall not be required to return 
50 percent of the grant assistance received by the student 
under this title, for a pa3anent period or period of enroll-
ment, that is the responsibility of the student to repay 
under this section. 
"(3) ORDER OF RETURN OF TITLE IV FUNDS.— 
"(A) IN GENERAL.—^Excess funds returned by the 
institution or the student, as appropriate, in accordance 
with paragraph (1) or (2), respectively, shall be credited 
to outstanding balances on loans made under this title 
to the student or on behalf of the student for the payment 
period or period of enrollment for which a return of funds 
is required. Such excess funds shall be credited in the 
following order: 
"(i) To outstanding balances on loans made under 
section 428H for the pa5anent period or period of enroll-
ment for which a return of funds is required. 
"(ii) To outstanding balances on loans made under 
section 428 for the pa5mient period or period of enroll-
ment for which a return of funds is required. 
"(iii) To outstanding balances on unsubsidized 
loans (other than parent loans) made under part D 
for the pa3anent period or period of enrollment for 
which a return of funds is required. 
112 STAT. 1740 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(iv) To outstanding balances on subsidized loans 
made under part D for the payment period or period 
of enrollment for which a return of funds is required. 
"(v) To outstanding balances on loans made under 
part E for the pa3anent period or period of enrollment 
for which a return of funds is required. 
''(vi) To outstanding balances on loans made under 
section 428B for the payment period or period of enroll-
ment for which a return of funds is required. 
"(vii) To outstanding balances on parent loans 
made under part D for the payment period or period 
of enrollment for which a return of funds is required. 
"(B) REMAINING EXCESSES.—^If excess funds remain 
after repaying all outstanding loan amounts, the remaining 
excess shall be credited in the following order: 
"(i) To awards under subpart 1 of part A for the 
pa3rment period or period of enrollment for which a 
return of ninds is required. 
"(ii) To awards under subpart 3 of part A for 
the pa3rment period or period of enrollment for which 
a return of funds is required. 
"(iii) To other assistance awarded under this title 
for which a return of funds is required. 
**(c) WITHDRAWAL DATE.— 
"(1) IN GENERAL.—In this section, the term 'day the student 
withdrew'— 
"(A) is the date that the institution determines— 
"(i) the student began the withdrawal process pre-
scribed by the institution; 
"(ii) the 
student 
otherwise 
provided 
official 
notification to the institution of the intent to withdraw; 
or 
"(iii) in the case of a student who does not begin 
the withdrawal process or otherwise notify the institu-
tion of the intent to withdraw, the date that is the 
mid-point of the pa3mient period for which assistance 
under this title was disbursed or a later date docu-
mented by the institution; or 
"(B) for institutions required to take attendance, is 
determined by the institution from such attendance records. 
"(2) SPECIAL RULE.—^Notwithstanding paragraph (1), if the 
institution determines that a student did not begin the with-
drawal process, or otherwise notify the institution of the intent 
to withdraw, due to illness, accident, grievous personal loss, 
or other such circumstances beyond the student's control, the 
institution may determine the appropriate withdrawal date. 
"(d) 
PERCENTAGE OF THE PAYMENT PERIOD OR PERIOD OF 
ENROLLMENT COMPLETED.—^For purposes of subsection (a)(3)(B)(i), 
the percentage of the payment period or period of enrollment for 
which assistance was awarded that was completed, is determined— 
"(1) in the case of a program that is measured in credit 
hours, by dividing the total number of calendar days comprising 
the payment period or period of enrollment for which assistance 
is awarded into the number of calendar days completed in 
that period as of the day the student withdrew; and 
"(2) in the case of a program that is measured in clock 
hours, by dividing the total number of clock hours comprising 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1741 
the payment period or period of enrollment for which assistance 
is awarded into the number of clock hours— 
"(A) completed by the student in that period as of 
the day the student withdrew; or 
**(B) scheduled to be completed as of the day the stu- R^ulations. 
dent withdrew, if the clock hours completed in the period 
are not less than a percentage, to be determined by the 
Secretary in regulations, of the hours that were scheduled 
to be completed by the student in the ])eriod. 
"(e) EFFECTIVE DATE.—^The provisions of this section shall take 
effect 2 years after the date of enactment of the Higher Education 
Amendments of 1998. An institution of higher education may choose 
to implement such provisions prior to that date.". 
SEC. 486. INSTITUTIONAL AND FINANCIAL ASSISTANCE INFORMATION 
FOR STUDENTS. 
(a) INFORMATION DISSEMINATION ACTIVITIES.—Section 485(a) 
(20 U.S.C. 1092(a)) is amended— 
(1) in paragraph (1)— 
(A) in the second sentence, by striking ", through appro-
priate publications and mailings, to all current students, 
and to any prospective student upon request" and inserting 
"upon request, through appropriate publications, mailings, 
and electronic media, to an enrolled student and to any 
prospective student"; 
(B) by inserting after the second sentence the following: 
"Each eligible institution shall, on an annual basis, provide 
to all enrolled students a list of the information that is 
required to be provided by institutions to students by this 
section and section 444 of the General Education Provisions 
Act (also referred to as the Family Educational Rights 
and Privacy Act of 1974), together with a statement of 
the procedures required to obtain such information."; 
(C) by amending subparagraph (F) to read as follows: 
"(F) a statement of— 
"(i) the requirements of any refund policy with which 
the institution is required to comply; 
"(ii) the requirements under section 484B for the return 
»
• 
of grsmt or loan assistance provided under this title; and 
"(iii) the requirements for officially withdrawing from 
the institution;"; and 
(D) by striking "and" at the end of subparagraph (M); 
(E) by striking the period at the end of subparagraph 
(N) and inserting "; and"; and 
(F) by adding at the end the following: 
"(O) the campus crime report prepared by the institution 
pursuant to subsection (f), including all required reporting 
categories."; 
(2) in paragraph (3), by amending subparagraph (A) to 
read as follows: 
"(A) shall be made available by July 1 each year to enrolled 
students and prospective students prior to the students enroll-
ing or entering into any financial obligation; and"; and 
(3) by adding at the end the following: 
"(6) Each institution may provide supplemental information 
to enrolled and prospective students showing the completion or 
112 STAT. 1742 
PUBLIC LAW 105-244—OCT. 7, 1998 
graduation rate for students described in paragraph (4) or for stu-
dents transferring into the institution or information showing the 
rate at which students transfer out of the institution.". 
(b) EXIT COUNSELING FOR BORROWERS.—Section 485(b) (20 
U.S.C. 1092(b)) is amended— 
(1) in paragraph (1)(A), by striking "(individually or in 
groups)"; and 
(2) in paragraph (2), by adding at the end the following: 
"(C) Nothing in this subsection shall be construed to prohibit 
an institution of higher education from utilizing electronic means 
to provide personalized exit counseling.". 
(c) DEPARTMENTAL PUBLICATIONS.—Section 485(d) is amended— 
(1) by striking "(1) assist" and inserting "(A) assist"; 
(2) by striking "(2) assist" and inserting "(B) assist"; 
(3) by inserting "(1)" before "The Secretary" the first place 
the term appears; and 
(4) by adding at the end the following: 
Records. 
"(2) The Secretary, to the extent the information is available, 
shsdl compile information describing State and other prepaid tuition 
programs and savings programs and disseminate such information 
to States, eligible institutions, students, and parents in depart-
mental publications. 
Internet. 
"(3) The Secretary, to the extent practicable, shall update the 
Department's Internet site to include direct links to databases 
that contain information on public and private financial assistance 
programs. The Secretary shall only provide direct links to databases 
that can be accessed without charge and shall make reasonable 
efforts to verify that the databases included in a direct link are 
not providing fraudulent information. The Secretary shall promi-
nently display adjacent to any such direct link a disclaimer indicat-
ing that a direct link to a database does not constitute an endorse-
ment or recommendation of the database, the provider of the data-
base, or any services or products of such provider. The Secretary 
shall provide additional direct links to information resources from 
which students may obtain information about fraudulent and decep-
tive practices in the provision of services related to student financial 
aid.". 
(d) DISCLOSURES.—Section 485(e) is amended— 
(1) in paragraph (2)— 
(A) by striking "his parents, his guidance" and insert-
ing "the student's parents, guidance"; and 
(B) by adding at the end the following: "If the institu-
tion is a member of a national collegiate athletic association 
that compiles graduation rate data on behalf of the associa-
tion's member institutions that the Secretary determines 
is substantially comparable to the information described 
in paragraph (1), the distribution of the compilation of 
such data to all secondary schools in the United States 
shall fulfill the responsibility of the institution to provide 
information to a prospective student athlete's guidance 
counselor and coach."; and 
(2) by amending paragraph (9) to read as follows: 
Reports. 
"(9) The reports required by this subsection shall be due each 
Deadline. 
July 1 and shall cover the 1-year period ending August 31 of 
the preceding year.". 
(e) DISCLOSURE OF CAMPUS SECURITY POLICY AND CAMPUS 
CRIME STATISTICS.—Section 485(f) (20 U.S.C. 1092(f)) is amended— 
PUBLIC LAW 105-244-OCT. 7, 1998 
112 STAT. 1743 
(1) in paragraph (1)— 
(A) by amending subparagraph (F) to read as follows: 
"(F) Statistics concerning the occurrence on campus, in 
or on noncampus buildings or property, and on public property 
during the most recent calendar year, and during the 2 preced-
ing calendar years for which data are available— 
"(i) of the following criminal offenses reported to cam-
pus security authorities or local police agencies: 
"(I) murder; 
"(II) sex offenses, forcible or nonforcible; 
"(III) robbery; 
"(IV) aggravated assault; 
"(V) burglary; 
"(VI) motor vehicle theft; 
"(VII) manslaughter; 
"(VIII) arson; and 
"(DC) arrests or persons referred for campus dis-
ciplinary action for liquor law violations, drug-related 
violations, and weapons possession; and 
"(ii) of the crimes described in subclauses (I) through 
(VIII) of clause (i), and other crimes involving bodily injury 
to any person in which the victim is intentionally selected 
because of the actual or perceived race, gender, religion, 
sexual orientation, ethnicity, or disability of the victim 
that are reported to campus security authorities or local 
police agencies, which data shall be collected and reported 
according to category of prejudice."; 
(B) by striking subparagraph (H); and 
(C) by redesignating subparagraph (I) as subparagraph 
(H); 
(2) in paragraph (4)— 
(A) by striking "Upon request of the Secretary, each" 
and inserting "On an annual basis, each"; 
(B) by striking "paragraphs (IXF) and (IXH)" and 
inserting "paragraph (IXF)"; 
(C) by striking "and Labor" and inserting "and the 
Workforce"; 
(D) by striking "1995" and inserting "2000"; 
(E) by striking "and" at the end of subparagraph (A); 
(F) by redesignating subparagraph (B) as subparagraph 
(C); and 
(G) by inserting after subparagraph (A) the following: 
"(B) make copies of the statistics submitted to the Secretary Public 
avEiilable to the public; and"; 
infonnation. 
(3) by amending paragraph (5)(A) to read as follows: 
"(5)(A) In this subsection: 
"(i) The term 'campus' means— 
"(I) any building or property owned or controlled by 
an institution of higher education within the same reason-
ably contiguous geographic area of the institution and used 
by the institution in direct support of, or in a manner 
related to, the institution's educational purposes, including 
residence halls; and 
"(II) property within the same reasonably contiguous 
geographic area of the institution that is owned by the 
institution but controlled by another person, is used by 
112 STAT. 1744 
PUBLIC LAW 105-244—OCT. 7, 1998 
Records. 
Public 
information. 
Deadline. 
students, and supports institutional purposes (such as a 
food or other retail vendor). 
"(ii) The term 'noncampus building or property* means— 
"(I) any building or property owned or controlled by 
a student organization recognized by the institution; and 
"(II) any building or property (other than a branch 
campus) owned or controlled by an institution of higher 
education that is used in direct support of, or in relation 
to, the institution's educational purposes, is used by stu-
dents, and is not within the same reasonably contiguous 
geographic area of the institution. 
"(iii) llie term 'public property* means all public property 
that is within the same reasonably contiguous geographic area 
of the institution, such as a sidewalk, a street, other thorough-
fare, or parking facility, and is adjacent to a facility owned 
or controlled by the institution if the facility is used by the 
institution in direct support of, or in a manner related to 
the institution's educational purposes."; 
(4) in paragraph (6)— 
(A) by striking "paragraphs (IXF) and (1)(H)'' and 
inserting "paragraph (IXF)"; and 
(B) by adding at the end the following: "Such statistics 
shall not identify victims of crimes or persons accused 
of crimes."; 
(5) by redesignating paragraphs (4) through (7) as para-
graphs (5) through (8), respectively; 
(6) by inserting aJFter paragraph (3) the following: 
"(4)(A) Each institution participating in any program under 
this title that maintains a police or security department of any 
kind shall make, keep, and maintain a daily log, written in a 
form that can be easily understood, recording all crimes reported 
to such police or security department, including— 
"(i) the nature, date, time, and general location of each 
crime; and 
"(ii) the disposition of the complaint, if known. 
"(BXi) All entries that are required pursuant to this paragraph 
shall, except where disclosure of such information is prohibited 
by law or such disclosure would jeopardize the confidentiality of 
the victim, be open to public inspection within two business days 
of the initial report being made to the department or a campus 
security authority. 
"(ii) If new information about an entry into a log becomes 
available to a police or security department, then the new informa-
tion ahall be recorded in the log not later than two business days 
after the information becomes available to the police or security 
department. 
"(iii) If there is clear and convincing evidence that the release 
of such information would jeopardize an ongoing criminal investiga-
tion or the safety of an individual, cause a suspect to flee or 
evade detection, or result in the destruction of evidence, such 
information may be withheld until that damage is no longer likely 
to occur from the release of such information."; and 
(7) by adding at the end the following: 
"(9) The Secretary shall provide technical assistance in comply-
ing with the provisions of this section to an institution of higher 
education who requests such assistance. 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1745 
"(10) Nothing in this section shall be construed to require 
the reporting or disclosure of privileged information. 
"(11) The Secretary shall report to the appropriate committees Reports, 
of Congress each institution of higher education that the Secretary 
determines is not in compliance with the reporting requirements 
of this subsection. 
"(12) For purposes of reporting the statistics with respect to 
crimes described in paragraph (1)(F), an institution of higher edu-
cation shall distinguish, by means of separate categories, any crimi-
nal offenses that occur— 
"(A) on campus; 
"(B) in or on a noncampus building or property; 
"(C) on public property; and 
"(D) in dormitories or other residential facilities for stu-
dents on campus. 
"(13) Upon a determination pursuant to section 487(c)(3XB) 
that an institution of higher education has substantially misrepre-
sented the number, location, or nature of the crimes required to 
be reported under this subsection, the Secretsiry shall impose a 
civil penalty upon the institution in the same amount and pursuant 
to the same procedures as a civil penalty is imposed under section 
487(c)(3XB). 
"(14XA) Nothing in this subsection may be construed to— 
"(i) create a cause of action against any institution of 
higher education or any employee of such an institution for 
any civil liability; or 
"(ii) establish any standard of care. 
"(B) Notwithstanding any other provision of law, evidence 
regarding compliance or noncompliance with this subsection shall 
not be admissible as evidence in any proceeding of any court, 
agency, board, or other entity, except with respect to an action 
to enforce this subsection. 
"(15) This subsection may be cited as the 'Jeanne Clery Disclo- Short title, 
sure of Campus Security Policy and Campus Crime Statistics Act'.**. 
(f) DATA REQUIRED.—Section 485(g) is amended— 
20 use 1092. 
(1) in paragraph (1), by adding at the end the following: 
"(IXi) The total revenues, and the revenues from foot-
ball, men's basketball, women's basketball, all other men's 
sports combined and all other women's sports combined, 
derived by the institution from the institution*s intercolle-
giate athletics activities. 
"(ii) For the purpose of clause (i), revenues from inter-
collegiate athletics activities allocable to a sport shall 
include (without limitation) gate receipts, broadcast reve-
nues, appearance guarantees and options, concessions, and 
advertising, but revenues such as student activities fees 
or alumni contributions not so allocable shall be included 
in the calculation of total revenues only. 
"(JXi) The total expenses, and the expenses attrib-
utable to footbsdl, men's basketball, women's basketball, 
all other men's sports combined, and all other women's 
sports combined, made by the institution for the institu-
tion's intercollegiate athletics activities. 
"(ii) For the purpose of clause (i), expenses for inter-
collegiate athletics activities allocable to a sport shall 
include (without limitation) grants-in-aid, salaries, travel, 
equipment, and supplies, but expenses such as general 
112 STAT. 1746 
PUBLIC LAW 105-244—OCT. 7, 1998 
and administrative overhead not so allocable shall be 
included in the calculation of total expenses only."; and 
(2) by striking paragraph (5); 
(3) by redesignating paragraph (4) as paragraph (5); and 
(4) by inserting after paragraph (3) the following: 
Deadlines. 
"(4) SUBMISSION; REPORT; INFORMATION 
AVAILABILITY.—(A) 
On an annual basis, each institution of higher education 
described in paragraph (1) shall provide to the Secretziry, within 
15 days of the date that the institution makes available the 
report under paragraph (1), the information contained in the 
report. 
"(B) The SecretEiry shall prepare a report regarding the 
information received under subparagraph (A) and submit such 
report to the Committee on Education and the Workforce of 
the House of Representatives and the Committee on Labor 
and Human Resources of the Senate by April 1, 2000. The 
report shall— 
"(i) summEu*ize the information and identify trends in 
the information; 
"(ii) aggregate the information by divisions of the 
National Collegiate Athletic Association; and 
"(iii) contain information on each individual institution 
of higher education. 
"(C) The Secretary shall ensure that the reports described 
in subparagraph (A) and the report to Congress described in 
subparagraph (B) are made available to the public within a 
reasonable period of time. 
"(D) Not later than 180 days after the date of enactment 
of the Higher Education Amendments of 1998, the Secretary 
shall notify all secondary schools in all States regarding the 
availability of the information reported under subparagraph 
(B) and the information made available under paragraph (1), 
and how such information may be accessed.". 
SEC. 487. NATIONAL STUDENT LOAN DATA SYSTEM. 
Section 485B(a) (20 U.S.C. 1092b(a)) is amended by inserting 
before the period at the end of the third sentence the following: 
"not later than one year after the date of enactment of the Higher 
Education Amendments of 1998". 
SEC. 488. DISTANCE EDUCATION DEMONSTRATION PROGRAMS. 
20 use 1093. 
Section 486 (20 U.S.C. 1083) is amended to read as follows: 
'nSEC. 486. DISTANCE EDUCATION DEMONSTRATION PROGRAMS. 
"(a) PURPOSE.—It is the purpose of this section— 
"(1) to allow demonstration programs that are strictly mon-
itored by the Department of Education to test the quality 
and viability of expanded distance education programs oir-
rently restricted under this Act; 
"(2) to provide for increased student access to higher edu-
cation through distance education programs; and 
"(3) to help determine— 
"(A) the most effective means of delivering quality edu-
cation via distance education course offerings; 
"(B) the specific statutory and regulatory requirements 
' which should be altered to provide greater access to high 
quality distance education programs; and 
Public 
information. 
Deadline. 
Notification. 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1747 
**(C) the appropriate level of Federal assistance for 
students enrolled in distance education programs. 
"(b) DEMONSTRATION PROGRAMS AUTHORIZED.— 
"(1) IN GENERAL.—In accordance with the provisions of 
subsection (d), the Secretary is authorized to select institutions 
of higher education, systems of such institutions, or consortia 
of such institutions for voluntary participation in a Distance 
Education Demonstration Program that provides participating 
institutions with the ability to offer distance education pro-
grams that do not meet all or a portion of the sections or 
regulations described in paragraph (2). 
"(2) WAIVERS.—^The Secretary is authorized to waive for 
any institution of higher education, system of institutions of 
higher education, or consortium participating in a Distance 
Education Demonstration Program, the requirements of section 
472(5) as the section relates to computer costs, sections 481(a) 
and 481(b) as such sections relate to requirements for a mini-
mum number of weeks of instruction, sections 102(aX3XA), 
102(a)(3XB), and 484(1X1), or one or more of the regulations 
prescribed under this part or part F which inhibit the operation 
of quality distance education programs. 
"(3) ELIGIBLE APPLICANTS.— 
"(A) EUGIBLE INSTITUTIONS.—Except as provided in 
subparagraphs (B), (C), and (D), only an institution of 
higher education that is eligible to participate in programs 
under this title shall be eligible to participate in the dem-
onstration program authorized under this section. 
"(B) PROHIBITION.—An institution of higher education 
described in section 102(a)(lXC) shall not be eligible to 
participate in the demonstration program authorized under 
this section. 
"(C) SPECIAL RULE.—Subject to subparagraph (B), an 
institution of higher education that meets the requii-ements 
of subsection (a) of section 102, other than the requirement 
of paragraph (3XA) or (3)(B) of such subsection, and that 
provides a 2-year or 4-year program of instruction for which 
the institution awards an associate or baccalaureate degree, 
shall be eligible to participate in the demonstration pro-
gram authorized under this section. 
"(D) REQUIREMENT.—^Notwithstanding any other provi-
sion of this paragraph. Western Governors University shall 
be considered eligible to participate in the demonstration 
program authorized under this section. In addition to the 
waivers described in paragraph (2), the Secretary may 
waive the provisions of title I and parts G and H of this 
title for such university that the Secretary determines to 
be appropriate because of the unique characteristics of 
such university. In carrying out the preceding sentence, 
the Secretary shall ensure that adequate program integrity 
and accountability measures apply to such universitj^s 
participation in the demonstration program authorized 
imder this section. 
"(c) APPLICATION.— 
"(1) IN GENERAL.—^Each institution, system, or consortium 
of institutions desiring to participate in a demonstration pro-
gram under this section shall submit an application to the 
112 STAT. 1748 
PUBLIC LAW 105-244—OCT. 7, 1998 
Secretary at such time and in such manner as the Secretary 
may require. 
"(2) CONTENTS.—Each application shall include— 
"(A) a description of the institution, system, or consor-
tium's consultation with a recognized accrediting agency 
or association with respect to quality assurances for the 
distance education programs to be offered; 
"(B) a description of the statutory and regulatory 
requirements described in subsection (b)(2) or, if applicable, 
subsection (b)(3)(D) for which a waiver is sought and the 
reasons for which the waiver is sought; 
"(C) a description of the distance education programs 
to be offered; 
"(D) a description of the students to whom distance 
education programs will be offered; 
"(E) an assurance that the institution, system, or 
consortium will offer full cooperation with the ongoing 
evaluations of the demonstration program provided for in 
this section; and 
"(F) such other information as the Secretary may 
require. 
"(d) SELECTION.— 
"(1) IN GENERAL.—^For the first year of the demonstration 
program authorized under this section, the Secretary is author-
ized to select for participation in the program not more than 
15 institutions, systems of institutions, or consortia of institu-
tions. For the third year of the demonstration program author-
ized under this section, the Secretary may select not more 
than 35 institutions, systems, or consortia, in addition to the 
institutions, systems, or consortia selected pursuant to the 
preceding sentence, to participate in the demonstration program 
if the Secretary determines that such expansion is warranted 
based on the evaluations conducted in accordance with sub-
sections (f) and (g). 
"(2) CONSIDERATIONS.—In selecting institutions to partici-
pate in the demonstration program in the first or succeeding 
years of the program, the Secretary shall take into account— 
"(A) the number and quality of applications received; 
"(B) the Department's capacity to oversee and monitor 
each institution's participation; 
"(C) an institution's— 
"(i) financial responsibility; 
"(ii) administrative capability; and 
"(iii) program or progrsims being offered via dis-
tance education; and 
"(D) ensuring the participation of a diverse group of 
institutions with respect to size, mission, and geographic 
distribution. 
"(e) NOTIFICATION.—^The Secretary shall make available to the 
public and to the Committee on Labor and Human Resources of 
the Senate and the Committee on Education and the Workforce 
of the House of Representatives a list of institutions, systems or 
consortia selected to participate in the demonstration program 
authorized by this section. Such notice shall include a listing of 
the specific statutory and regulatory requirements being waived 
for each institution, system or consortium and a description of 
the distance education courses to be offered. 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1749 
"(f) EVALUATIONS AND REPORTS.— 
"(1) EvALUATlON.^The Secretary shall evaluate the dem-
onstration programs authorized under this section on an annual 
basis. Such evaluations specifically shall review— 
"(A) the extent to which the institution, system or 
consortium has met the goals set forth in its application 
to the Secretary, including the measures of program quality 
assurance; 
"(B) the number and types of students psirticipating 
in the programs offered, including the progress of partici-
pating students toward recognized certificates or degrees 
and the extent to which participation in such programs 
increased; 
"(C) issues related to student financial assistance for 
distance education; 
"(D) effective technologies for delivering distance edu-
cation course offerings; and 
"(E) the extent to which statutory or regulatory 
requirements not waived under the demonstration program 
present difficulties for students or institutions. 
"(2) POLICY ANALYSIS.—^The Secretary shall review current 
policies and identify those policies that present impediments 
to the development and use of distance education and other 
nontraditional methods of expanding access to education. 
"(3) REPORTS.— 
"(A) IN GENERAL.—^Within 18 months of the initiation Deadline, 
of the demonstration program, the Secretary shall report 
to the Committee on Labor and Human Resources of the 
Senate and the Committee on Education and the Workforce 
of the House of Representatives with respect to— 
"(i) the evaluations of the demonstration programs 
authorized under this section; and 
"(ii) any proposed statutory changes designed to 
enhance the use of distance education. 
"(B) ADDITIONAL REPORTS.—The Secretary shall pro-
vide additional reports to the Committee on Labor and 
Human Resources of the Senate and the Committee on 
Education and the Workforce of the House of Representa-
tives on an annual basis regarding— 
"(i) the demonstration programs authorized under 
this section; and 
"(ii) the number and t3rpe8 of students receiving 
Eissistance under this title for instruction leading to 
a recognized certificate, as provided for in section 
484(1)(1), including the progress of such students 
toward recognized certificates and the degree to which 
participation in such programs leading to such certifi-
cates increased. 
"(g) OVERSIGHT.—In conducting the demonstration program 
authorized under this section, the Secretary shall, on a continuing 
basis— 
"(1) assure compliance of institutions, systems or consortia 
with the requirements of this title (other than the sections 
and regulations that are waived under subsections (b)(2) and 
(b)(3XD)); 
"(2) provide technical assistance; 
59-194 O - 98 - 28: QL 3 Part 2 
112 STAT. 1750 
PUBLIC LAW 105-244—OCT. 7, 1998 
**(3) monitor fluctuations in the student population enrolled 
in the participating institutions, systems or consortia; and 
"(4) consult with appropriate accrediting agencies or 
associations and appropriate State regulatory authorities. 
"(h) DEFINITION.—^For the purpose of this section, the term 
'distance education' means an educational process that is character-
ized by the separation, in time or place, between instructor and 
student. Such term may include courses offered principally through 
the use of— 
"(1) television, audio, or computer transmission, such as 
open broadcast, closed circuit, cable, microwave, or satellite 
transmission; 
"(2) audio or computer conferencing; 
"(3) video cassettes or discs; or 
"(4) correspondence.". 
SEC. 489. PROGRAM PARTICIPATION AGREEMENTS. 
(a) REQUIRED CONTENT.—Section 487(a) (20 U.S.C. 1094(a)) 
is amended— 
(1) in paragraph (3)— 
(A) by striking subparagraph (B); and 
(B) by redesignating subparagraphs (C) and (D) as 
subparagraphs (B) and (C), respectively; 
(2) in paragraph (4), by striking "subsection (b)" and 
inserting "subsection (c)"; 
(3) in paragraph (9), by striking "part B" and inserting 
"part B or D"; 
(4) in psuragraph (14)— 
(A) in subparagraph (A), by striking "part B" and 
inserting "part B or D"; and 
(B) in subparagraph (B), by striking "part B" and 
inserting "part B or D"; and 
(C) by adding at the end the following: 
"(C) TTiis paragraph shall not apply in the case of an 
institution in which (i) neither the parent nor the subordinate 
institution has a cohort default rate in excess of 10 percent, 
and (ii) the new owner of such psirent or subordinate institution 
does not, and has not, owned any other institution with a 
cohort default rate in excess of 10 percent."; 
(5) in paragraph (15), by striking "State review entities" 
and inserting "the State agencies"; 
(6) by amending paragraph (18) to read as follows: 
"(18) The institution will meet the requirements established 
pursuant to section 485(g)."; and 
(7) by amending paragraph (21) to read as follows: 
"(21) The institution will meet the requirements established 
by the Secretary and accrediting agencies or associations, and 
will provide evidence to the Secretary that the institution has 
the authority to operate within a State.". 
(b) PROVISION OF VOTER REGISTRATION FORMS.— 
(1) PROGRAM PARTICIPATION REQUIREMENT.—Section 487(a) 
(20 U.S.C. 1094(a)) is amended by adding at the end the 
following: 
"(23)(A) The institution, if located in a State to which 
section 4(b) of the National Voter Registration Act (42 U.S.C. 
1973gg-2(b)) does not apply, will make a good faith effort 
to distribute a mail voter registration form, requested and 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1751 
received from the State, to each student enrolled in a degree 
or certificate program and physically in attendance at the 
institution, and to make such forms widely available to students 
at the institution. 
"(B) The institution shall request the forms from the State 
120 days prior to the deadline for registering to vote within 
the State. If an institution has not received a sufficient quantity 
of forms to fulfill this section from the State within 60 days 
prior to the deadline for registering to vote in the State, the 
institution shall not be held liable for not meeting the require-
ments of this section during that election year. 
"(C) This paragraph shall apply to elections as defined Applicability, 
in section 301(1) of the Federal Election Campaign Act of 
1971 (2 U.S.C. 431(1)), and includes the election for Governor 
or other chief executive within such State).". 
(2) REGULATION PROHIBITED.—^No officer of the executive 
20 use 1094 
branch is authorized to instruct the institution in the manner »
<
>
*
«
. 
in which the amendment made by this subsection is carried 
out. 
(c) 
AUDITS; 
FINANCIAL 
RESPONSIBILITY.—Section 
487(c) 
is 
20USC1094. 
amended— 
(1) in paragraph (IXA)— 
(A) in clause (i)— 
(i) by striking "clause (ii)" and inserting "clauses 
. 
(ii) and (iii)"; 
(ii) by striking "State review entities referred to 
in" and inserting "appropriate State agency notifying 
the Secretary under"; and 
(iii) by striking "or" after the semicolon; 
(B) in clause (ii), by inserting "or" after the semicolon; 
and 
(C) by adding at the end the following: 
"(iii) at the discretion of the Secretary, with regard to 
an eligible institution (other than an eligible institution 
described in section 102(aXlXC)) that has obtained less than 
$200,000 in funds under this title during each of the 2 award 
years that precede the audit period and submits a letter of 
credit payable to the Secretary equal to not less than Vi of 
the annual potential liabilities of such institution as determined 
by the Secretary, deeming an audit conducted every 3 years 
to satisfy the requirements of clause (i), except for the award 
year immediately preceding renewal of the institution's eligi-
bility under section 498(g);"; 
(2) in paragraph (4), by striking ", after consultation with 
each State review entity designated under subpart 1 of part 
H,"; and 
(3) in paragraph (5), by striking "State review entities 
designated" £ind inserting "State agencies notifying the Sec-
retary". 
SEC. 490. REGULATORY RELIEF AND IMPROVEMENT. 
Section 487A (20 U.S.C. 1094a) is amended to read as follows: 
'^EC. 487A. REGULATORY RELIEF AND IMPROVEMENT. 
"(a) QUALITY ASSURANCE PROGRAM.— 
"(1) IN GENERAL.—^The Secretary is authorized to select 
institutions for voluntary participation in a Quality Assurance 
112 STAT. 1752 
PUBLIC LAW 105-244—OCT. 7, 1998 
Termination 
date. 
Deadline. 
Program that provides participating institutions with an alter-
native management approach through which individual schools 
develop and implement their own comprehensive systems, 
related to processing and disbursement of student financial 
aid, verification of student financial aid application data, and 
entrance and exit interviews, thereby enhancing program integ-
rity within the student aid delivery system. 
"(2) CRITERIA AND CONSIDERATION.—The Quality Assurance 
Program authorized by this section shall be based on criteria 
that include demonstrated institutional performance, as deter-
mined by the Secretary, and shall take into consideration cur-
rent quality assurance goals, as determined by the Secretary. 
The selection criteria shall ensure the participation of a diverse 
group of institutions of higher education with respect to size, 
mission, and geographical distribution. 
"(3) WAIVER.—^The Secretary is authorized to waive for 
any institution participating in the Quality Assurance Program 
any reflations dealing with reporting or verification require-
ments m this title that are addressed by the institution's alter-
native management system, and may substitute such quality 
assurance reporting as the Secretary determines necessary to 
ensure accountability and compliance with the purposes of the 
programs under this title. The Secretary shall not modify or 
waive any statutory requirements pursuant to this paragraph. 
"(4) DETERMINATION.—^The Secretary is authorized to 
determine— 
"(A) when an institution that is unable to administer 
the Quality Assurance Program shall be removed from 
such program; and 
''(B) when institutions desiring to cease participation 
in such program will be required to complete the current 
award year under the requirements of the Quality Assur-
ance Program. 
"(5) REVIEW AND EVALUATION.—^The Secretary shall review 
and evaluate the Quality Assurance Program conducted by 
each participating institution and, on the basis of that evalua-
tion, make recommendations regarding amendments to this 
Act that will streamline the administration and enhance the 
integrity of Federal student assistance programs. Such rec-
ommendations shall be submitted to the Committee on Labor 
and Human Resources of the Senate and the Committee on 
Education and the Workforce of the House of Representatives. 
"(b) 
REGULATORY IMPROVEMENT AND STREAMLINING EXPERI-
MENTS.— 
"(1) IN GENERAL.—^The Secretary may continue any experi-
mental sites in existence on the date of enactment of the 
Higher Education Amendments of 1998. Any activities approved 
by the Secretary prior to such date that are inconsistent with 
this section shall be discontinued not later than June 30, 1999. 
"(2) REPORT.—^The Secretary shall review and evaluate the 
experience of institutions participating as experimental sites 
during the period of 1993 through 1998 under this section 
(as such section was in effect on the day before the date 
of enactment of the Higher Education Amendments of 1998), 
and shall submit a report based on this review and evaluation 
to the Committee on Labor and Human Resources of the Senate 
and the Committee on Education and the Workforce of the 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1753 
House of Representatives not later than 6 months after the 
enactment of the Higher Education Amendments of 1998. Such 
report shall include— 
"(A) a list of participating institutions £ind the specific 
statutory or regulatory waivers granted to each institution; 
"(B) the findings and conclusions reached regarding 
each of the experiments conducted; and 
"(C) recommendations for amendments to improve and 
streamline this Act, based on the results of the experiment. 
"(3) SELECTION.— 
"(A) IN GENERAL.—Upon the submission of the report 
required by paragraph (2), the Secretary is authorized to 
select a limited number of additional institutions for vol-
untary participation as experimental sites to provide rec-
ommendations to the Secretary on the impact and effective-
ness of proposed regulations or new management initia-
tives. 
"(B) CONSULTATION.—Prior to approving any additional 
experimental sites, the Secretary shall consult with the 
Committee on Labor and Human Resources of the Senate 
and the Committee on Education and the Workforce of 
the House of Representatives and shall provide to such 
Committees— 
"(i) a list of institutions proposed for participation Records, 
in the experiment and the specific statutory or regu-
latory waivers proposed to be granted to each institu-
tion; 
"(ii) a statement of the objectives to be achieved 
through the experiment; and 
"(iii) an identification of the period of time over 
which the experiment is to be conducted. 
"(C) WAIVERS.—^The Secretary is authorized to waive, 
for any institution participating as an experimental site 
under subparagraph (A), any requirements in this title, 
or regulations prescribed under this title, that will bias 
the results of the experiment, except that the Secretary 
shall not waive any provisions with respect to award rules, 
grant and loan maximum award amounts, and need analy-
sis requirements. 
"(c) DEFINITIONS.—^For purposes of this section, the term 'cur-
rent award year* means the award year during which the participat-
ing institution indicates the institution's intention to cease partici-
pation.". 
SEC. 490A. GARNISHMENT REQUIREMENTS. 
Section 488A (20 U.S.C. 1095a) is amended— 
(1) by redesignating subsection (d) as subsection (e); and 
(2) by inserting after subsection (c) the following: 
"(d) No ATTACHMENT OF STUDENT ASSISTANCE.—Except as 
authorized in this section, notwithstanding any other provision 
of Federal or State law, no grant, loan, or work assistance awarded 
under this title, or property traceable to such assistance, shall 
be subject to garnishment or attachment in order to satisfy any 
debt owed by the student awarded such assistance, other than 
a debt owed to the Secretary and arising under this title.". 
112 STAT. 1754 
PUBLIC LAW 105-244—OCT. 7, 1998 
SEC. 490B. ADMINISTRATIVE SUBPOENA AUTHORITY. 
Part G of title IV is further amended by inserting immediately 
after section 490 (20 U.S.C. 1097) the following: 
20 use 1097a. 
'^EC. 490A. ADMINISTRATIVE SUBPOENAS. 
"(a) AUTHORITY.—^To assist the Secretary in the conduct of 
investigations of possible violations of the provisions of this title, 
the Secretary is authorized to require by subpoena the production 
of information, documents, reports, answers, records, accounts, 
papers, and other documentary evidence pertaining to participation 
in any program under this title. The production of any such records 
may be required from any place in a State. 
"(b) ENFORCEMENT.—^In case of contumacy by, or refusal to 
obey a subpoena issued to, any person, the Secretary may request 
the Attorney General to invoke the aid of any court of the United 
States where such person resides or transacts business for a court 
order for the enforcement of this section.". 
SEC. 490C. ADVISORY COMMITTEE ON STUDENT FINANCIAL ASSIST-
ANCE. 
Section 491 (20 U.S.C. 1098) is amended— 
(1) in subsection (b)— 
(A) in the second sentence, by striking "and expendi-
tures" and inserting ", expenditures and staffing levels"; 
and 
(B) by inserting after the third sentence the following: 
"Reports, publications, and other documents of the Advisory 
Committee, including such reports, publications, and docu-
ments in electronic form, shall not be subject to review 
by the Secretary."; 
(2) in subsection (e)— 
(A) by redesignating paragraphs (3), (4), and (5), as 
paragraphs (4), (5), and (6), respectively; and 
(B) by inserting after paragraph (2) the following: 
"(3) No officers or full-time employees of the Federal Govern-
ment shall serve as members of the Advisory Committee."; 
(3) in subsection (g), by striking "(1) Members" and all 
that follows through "of the United States may each" and 
inserting "Members of the Advisory Committee may each"; 
(4) in subsection (h)(1)— 
(A) by inserting "determined" after "as may be"; and 
(B) by adding at the end the following: "The Advisory 
Committee may appoint not more than 1 full-time equiva-
lent, nonpermanent, consultant without regard to the provi-
sions of title 5, United States Code. The Advisory Commit-
tee shall not be required by the Secretary to reduce person-
nel to meet agency personnel reduction goals."; 
(5) in subsection (i), by striking "$750,000" and inserting 
"$800,000"; 
(6) by amending subsection (j) to read as follows: 
"(j) 
SPECIAL 
ANALYSES 
AND 
ACTIYITIES.—The 
Advisory 
Committee shall— 
Reports. 
"(1) monitor and evaluate the modernization of student 
financial aid systems and delivery processes, including the 
implementation of a performance-based organization within the 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1755 
Dep£irtment, and report to Congress regarding such moderniza-
tion on not less than an annusJ basis, including recommenda-
tions for improvement; 
"(2) assess the adequacy of current methods for disseminat-
ing information about programs under this title and recommend 
improvements, as appropriate, regarding early needs assess-
ment and information for first-year secondary school students; 
"(3) assess and make recommendations concerning the fea-
sibility and degree of use of appropriate technology in the 
application for, and delivery and management of, financial 
assistance under this title, as well as policies that promote 
use of such technology to reduce cost and enhance service 
and program integrity, including electronic application and re-
application, just-in-time delivery of funds, reporting of disburse-
ments and reconciliation; 
"(4) assess the implications of distance education on student 
eligibility and other requirements for financial assistance under 
this title, and make recommendations that will enhance access 
to postsecondary education through distance education while 
maintaining access, through on-campus instruction at eligible 
institutions, and program integrity; and 
"(5) make recommendations to the Secretary regarding 
redundant or outdated provisions of and regulations under 
this Act, consistent with the Secretary's requirements under 
section 4986."; 
(7) in subsection (k), by striking "1998" and inserting 
"2004"; and 
(8) by repealing subsection (1). 
SEC. 490D. MEETINGS AND NEGOTIATED RULEMAKING. 
(a) MEETINGS.—Section 492(a) (20 U.S.C. 1098a) is amended— 
(1) in paragraph (1)— 
(A) by striking "convene regional meetings to"; 
(B) by striking "parts B, G, and H of this title," and 
inserting "this title;"; and 
(C) by striking "Such meetings shall include" and 
inserting "The Secretary shall obtain the advice of and 
recommendations from"; and 
(2) in paragraph (2)— 
(A) by striking "During such meetings the" and insert-
ing "The"; 
(B) by striking "parts B, G, and H" and inserting 
"this title'^ 
(C) by striking "1992" and inserting "1998 through 
such mechanisms as regional meetings and electronic 
exchanges of information"; and 
(D) by striking "at such meetings" and inserting 
"through such mechanisms". 
(b) DRAFT REGULATIONS.—Section 492(b) is amended— 
(1) by striking "After" and inserting the following: 
"(1) I N GENERAL.—After"; 
(2) in paragraph (1) (as redesignated by paragraph (1))— 
(A) by striking "holding regional meetings" and insert-
ing "obtaining the advice and recommendations described 
in subsection (a)(1)"; 
(B) by striking "parts B, G, and H of this title" and 
inserting "this title"; 
112 STAT. 1756 
PUBLIC LAW 105-244—OCT. 7, 1998 
Federal Register, 
publication. 
20 u s e 1098c. 
Reports. 
Deadline. 
(C) by Striking "1992" and inserting "1998"; 
(D) by striking "Tlie Secretary shall follow the guidance 
provided in sections 305.82-4 and 305.85-5 of chapter 1, 
Code of Federal Regulations, and any successor rec-
ommendation, regulation, or law."; 
(E) by stnking "participating in the regional meetings"; 
(F) by striking **240-day" and inserting "360-dav"; and 
(G) by striking "section 431(g)" and inserting section 
437(e)"; and 
(3) by adding at the end the following: 
"(2) EXPANSION OF NEGOTIATED RULEMAKING.—All regula-
tions pertaining to this title that are promulgated after the 
date of enactment of this paragraph shall be subject to a 
negotiated rulemaking (including the selection of the issues 
to be negotiated), unless the Secretary determines that applying 
such a requirement with respect to given regulations is imprac-
ticable, unnecessary, or contrary to the public interest (within 
the meaning of section 553(bX3XB) of title 5, United States 
Code), and publishes the basis for such determination in the 
Federal Register at the same time as the proposed regulations 
in question are first published. All published proposed regula-
tions shall conform to agreements resulting from such nego-
tiated rulemaking unless the Secretary reopens the negotiated 
rulemaking process or provides a written explanation to the 
participants in that process why the Secretary has decided 
to depart from such agreements. Such negotiated rulemaking 
shall be conducted in accordance with the provisions of para-
graph (1), and the Secretary shall ensure that a clear and 
reUable record of agreements reached during the negotiations 
process is maintained.". 
SEC. 490E. YEAR 2000 REQUIREMENTS AT THE DEPARTMENT OF 
EDUCATION. 
Part G of title IV (20 U.S.C. 1088 et seq.) is amended by 
adding at the end the following: 
' ^ E C . 493A. YEAR 2000 REQUIREMENTS AT THE DEPARTMENT. 
"(a) PREPARATIONS FOR YEAR 2000.—In order to ensure that 
the processing, delivery, and administration of grant, loan, and 
work assistance provided under this title is not interrupted due 
to operational problems related to the inability of computer systems 
to indicate accurately dates after December 31, 1999, the Secretary 
of Education shall— 
"(1) take such actions as are necessary to ensure that 
all internal and external systems, hardware, and data exchange 
infrastructure administered by the Department that are nec-
essary for the processing, delivery, and administration of the 
grant, loan, and work assistance are Year 2000 compliant by 
March 31,1999, such that there will be no business interruption 
after December 31,1999; 
"(2) ensure that the Robert T. Stafford Federal Student 
Loan Program and the William D. Ford Federal Direct Loan 
Program are equal in level of priority with respect to address-
ing, and that resources are managed to equally provide for 
successful resolution of, the Year 2000 computer problem in 
both programs by December 31,1999; 
"(3) work with the Department's various data exchange 
partners imder this title to fully test all data exchange routes 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1757 
for Year 2000 compliance via end-to-end testing, and submit 
a report describing the parameters and results of such tests 
to the Comptroller General not later than March 31, 1999; 
"(4) ensure that the Inspector General of the Department 
(or an external, independent entity selected by the Inspector 
General) performs and publishes a risk assessment of the sys-
tems and hardware under the Department's management, that 
has been reviewed by an independent entity, and make such 
assessment publicly available not later than 60 days after the 
date of enactment of the Higher Education Amendments of 
1998; 
"(5) not later than June 30, 1999, ensure that the Inspector 
General (or an external, independent entity selected by the 
Inspector General) conducts a review of the Department's Year 
2000 compliance for the processing, delivery, and administra-
tion of grant, loan, and work assistance, and submits a report 
reflecting the results of that review to the Chairperson of 
the Committee on Labor and Human Resources of the Senate 
and the Chairperson of the Committee on Education and the 
Workforce of the House of Representatives; 
"(6) develop a contingency plan to ensure the programs 
under this title will continue to run uninterrupted in the event 
of widespread disruptions in the flow of accurate computerized 
data, which contingency plan shall include a prioritization of 
mission critical systems and strategies to allow data partners 
to transfer data through alternate means; and 
"(7) alert Congress at the earliest possible time if mission 
critical deadlines will not be met. 
"(b) POSTPONEMENT AUTHORITY FOR THE YEAR 2000.— 
"(1) PURPOSE.—^It is the purpose of this subsection to 
provide the Secretary with the flexibility necessary t o ^ 
"(A) ensure that the resources and capabilities of 
institutions, lenders, and guaranty agencies are not over-
burdened by the combination of student aid processing 
and delivery requirements added or modifled by the amend-
ments made by the Higher Education Amendments of 1998 
and by the changes required to ensure that the systems 
of the institutions, lenders and guaranty agencies are Year 
2000 compliant; and 
"(B) avoid the disruption of grant, loan, or work assist-
ance funds awarded to students because of Year 2000 
compliance problems at a substantial number of institu-
tions, lenders, and guaranty agencies. 
"(2) AUTHORITY TO POSTPONE.—^The Secretary may post-
pone, for a period of time described in paragraph (3), the 
implementation of any requirements under part B, D, E, or 
G that are added or modified by the amendments made by 
the Higher Education Amendments of 1998 related to the 
processing or delivery of grant, loan, and work assistance (which 
shall not include the determination of need for such assistance) 
provided under this title, if the Secretary— 
"(A) determines that— 
"(i) implementation of such requirements would 
require extensive changes to the existing systems of 
institutions, lenders, or guaranty agencies; and 
"(ii) postponement is necessary to avoid jeopardiz-
ing the ability of a substantial number of institutions, 
Publication. 
Public 
information. 
Deadline. 
Deadline. 
Reports. 
112 STAT. 1758 
PUBLIC LAW 105-244—OCT. 7, 1998 
Federal R^[ister, 
publication. 
Records. 
Notification. 
lenders, or guaranty agencies to ensure that all of 
the systems of the institutions, lenders, or guaranty 
agencies related to the processing or delivery of such 
assistance function successfully after December 31, 
1999; and 
"(B) promptly publishes in the Federal Register a list 
of, 
and 
notifies 
Congress 
of, 
any 
provisions, 
the 
implementation of which the Secretary intends to postpone, 
with the reasons for such postponement. 
"(3) EXCEPTIONS TO AUTHORITY.—The Secretary may 
not 
postpone the implementation of one or more provisions 
described in this subsection longer than the earlier of— 
"(A) the period of time that the Secretary determines 
necessary to ensure that the processing and delivery sys-
tems of the institutions, lenders, and guaranty agencies 
referred to in paragraph (lXA)(ii) are capable of functioning 
successfully after December 31,1999; or 
"(B) one award year after the effective date applicable 
to such provision under the Higher Education Amendments 
of 1998.". 
SEC. 490F. PROCEDURES FOR CANCELLATIONS AND DEFERMENTS FOR 
EUGIBLE DISABLED VETERANS. 
Part G of title IV (20 U.S.C. 1088 et seq.) is amended by 
adding after section 493A (as added by section 490E) the following: 
20 use 1098d. 
*^EC. 493B. PROCEDURES FOR CANCELLATIONS AND DEFERMENTS 
FOR ELIGIBLE DISABLED VETERANS. 
"The Secretary, in consultation with the Secretary of Veterans 
Affairs, shall develop and implement a procedure to permit Depart-
ment of Veterans Affairs physicians to provide the certifications 
and affidavits needed to enable disabled veterans enrolled in the 
Department of Veterans Affairs health care system to document 
such veterans' eligibility for deferments or cancellations of student 
Deadline. 
loans made, insured, or guaranteed under this title. Not later 
Reports. 
than 6 months after the date of enactment of the Higher Education 
Amendments of 1998, the Secretary and the Secretary of Veterans 
Affairs jointly shall report to Congress on the progress made in 
developing and implementing the procedure.". 
PART H—PROGRAM INTEGRITY 
SEC. 491. STATE ROLE AND RESPONSmiUTIES. 
Part H of title IV (20 U.S.C. 1099a et seq.) is amended by— 
(1) striking the heading of such part and inserting the 
following: 
"PART H—PROGRAM INTEGRnV; 
and 
(2) by amending subpart 1 (20 U.S.C. 1099a et seq.) to 
read as follows: 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1759 
**Subpart 1—State Role 
' 
"SEC. 495. STATE RESPONSIBILTnES. 
20 USC 1099a. 
"(a) STATE RESPONSIBILITIES.—As part of the integrity program 
Notification, 
authorized by this part, each State, through one State agency 
or several State agencies selected by the State, shall— 
"(1) furnish the Secretary, upon request, information with 
respect to the process for licensing or other authorization for 
institutions of higher education to operate within the State; 
"(2) notify the Secretary promptly whenever the State 
revokes a license or other authority to operate an institution 
of higher education; and 
"(3) notify the Secretary promptly whenever the State has 
credible evidence that an institution of higher education within 
the State— 
''(A) has committed fraud in the administration of the 
student assistance programs authorized by this title; or 
"(B) has substantially violated a provision of this title. 
"(b) INSTITUTIONAL RESPONSIBILITY.—Each institution of higher 
education shall provide evidence to the Secretary that the institu-
tion has authority to operate within a State at the time the institu-
tion is certified under subpart 3.". 
SEC. 492. ACCREDITING AGENCY RECOGNITION. 
(a) RECOGNITION.— 
(1) SUBPART HEADING.—^The heading of subpart 2 of part 
H is amended by striking "Approval" and inserting "Recogni-
tion". 
(2) SECTION 496 HEADING.—The heading of section 496 is 
20 USC I099b. 
amended by striking "APPROVAL" and inserting "RECOGNI-
TION". 
(b) STANDARDS.—Section 496(a) (20 U.S.C. 
1099b(a)) 
is 
amended— 
(1) in the subsection heading, by striking "STANDARDS" 
and inserting "CRITERIA"; 
(2) in the matter preceding paragraph (1), by striking 
"standards" each place the term appears and inserting "cri-
teria"; 
(3) in paragraph (4)— 
(A) by striking "at the institution" and inserting 
"offered by the institution"; and 
(B) by inserting ", including distance education courses 
or programs," after "higher education"; and 
(4) in paragraph (5)— 
(A) by striking "of accreditation" and inserting "for 
accreditation"; 
(B) by striking subparagraphs (H), (I), and (J); 
(C) by redesignating subparagraphs (A) through (G) 
as subparagraphs (B) through (H), respectively; 
(D) by redesignating subparagraphs (K) and (L) as 
subparagraphs (I) and (J), respectively; 
(E) by inserting before subparagraph (B) the following: 
"(A) success with respect to student achievement in 
relation to the institutions mission, including, as appro-
priate, consideration of course completion. State licensing 
examinations, and job placement rates;"; 
112 STAT. 1760 
PUBLIC LAW 105-244—OCT. 7, 1998 
(F) in subparagraph (H) (as redesignated by subpara-
graph (C)), by striking "program length and tuition and 
fees in relation to the subject matters taught" and inserting 
"measures of program length"; 
(G) in subpEiragraph (J) (as redesignated by subpara-
graph (D))— 
(i) by inserting "record of before "compliance"; 
(ii) by striking "Act, including any" and inserting 
"Act based on the most recent student loan default 
rate data provided by the Secretary, the"; and 
(iii) by inserting "any" after "reviews, and"; and 
(H) in the matter following subparagraph (J) (as 
redesignated by subparagraph (D)), by striking "(G), (H), 
(I), (J), and (L)" and inserting "(A), (H), and (J)"; 
(5) in paragraph (7), by striking "State postsecondary 
review entity" and inserting "State licensing or authorizing 
agency"; and 
(6) in paragraph (8), by striking "State postsecondary" and 
everything that follows through "is located" and inserting "State 
licensing or authorizing agency". 
20 use 1099b. 
(c) OPERATING PROCEDURES.—Section 496(c) is amended— 
(1) by striking "approved by the Secretarj^ and inserting 
"recognized by the Secretary"; and 
(2) in paragraph (1), by striking "(at least" and everything 
that follows through "unannounced)," and inserting "(which 
may include unannounced site visits)". 
(d) 
CONFORMING 
AMENDMENTS.—Section 
496 
is 
further 
amended— 
(1) in subsection (d)— 
(A) by striking "APPROVAL" in the heading of such 
subsection and inserting "RECOGNITION"; and 
(B) by striking "approved" and inserting "recognized"; 
(2) in subsection (f), by striking "approved" and inserting 
"recognized"; 
(3) in subsection (g)— 
(A) in the heading of such subsection, by striking 
"STANDARDS" and inserting "CRITERIA"; and 
(B) by striking "standards" the first place such term 
appears and inserting "criteria"; 
(4) in subsection (k)— 
(A) in the matter preceding paragraph (1), by striking 
"section 481" and inserting "section 102"; and 
(B) in paragraph (2), by striking "standards" and 
inserting "criteria"; 
(5) in subsection (1), by striking everything preceding para-
graph (2) and inserting the following: 
"(1) LIMITATION, SUSPENSION, OR TERMINATION OF RECOGNI-
TION.—(1) If the Secretary determines that an accrediting agency 
or association has failed to apply effectively the criteria in this 
section, or is otherwise not in compliance with the requirements 
of this section, the Secretary shall— 
Notice. 
"(A) after notice and opportunity for a hearing, limit, sus-
pend, or terminate the recognition of the agency or association; 
or 
"(B) require the agency or association to take appropriate 
action to bring the agency or association into compliance with 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1761 
such requirements within a timeframe specified by the Sec-
retary, except that— 
"(i) such timeframe shall not exceed 12 months unless 
the Secretary extends such period for good cause; and 
"(ii) if the agency or association fails to bring the Notice 
agency or association into compliance within such time-
frame, the Secretary shall, after notice and opportunity 
for a hearing, limit, suspend, or terminate the recognition 
of the agency or association."; and 
(6) in subsection (n)— 
(A) by striking "standards" each place the term appears 
and inserting "criteria"; 
(B) in paragraph (3)— 
(i) by striking "approval process" and inserting 
"recognition process"; 
(ii) by striking "approval or disapproval" and 
inserting "reco^iition or denial of recognition"; and 
(iii) by adding at the end the following: "When 
the Secretary decides to recognize an accrediting 
agency or association, the Secretary shall determine 
the agency or association's scope of recognition. If the 
agency or association reviews institutions offering dis-
tance education courses or programs and the Secretary 
determines that the agency or association meets the 
requirements of this section, then the agency shall 
be recognized and the scope of recognition shall include 
accreditation of institutions offering distance education 
courses or programs."; and 
(C) by striking paragraph (4) and inserting the 
following: 
"(4) The Secretary shall maintain sufficient documentation to 
support the conclusions reached in the recognition process, and, 
if the Secretary does not recognize any accreditation agency or 
association, shall make publicly available the reason for denying 
recognition, including reference to the specific criteria under this 
section which have not been fulfilled.". 
SEC. 493. EUGmiLITY AND CERTIFICATION PROCEDURES. 
(a) SINGLE APPLICATION FORM.—Section 498(b) (20 U.S.C. 
1099c(b)) is amended— 
(1) in paragraph (1), by striking "and capability" and insert-
ing "financial responsibility, and administrative capability"; 
(2) by amending paragraph (3) to read as follows: 
"(3) requires— 
"(A) a description of the third party servicers of an 
institution of higher education; and 
"(B) the institution to maintain a copy of any contract 
with a financial aid service provider or loan servicer, and 
provide a copy of any such contract to the Secretary upon 
request;"; 
(3) in paragraph (4), by striking the period and inserting 
"; and"; and 
(4) by adding at the end the following: 
"(5) provides, at the option of the institution, for participa-
tion in one or more of the programs under part B or D.". 
(b) FINANCIAL RESPONSIBILITY STANDARDS.—Section 498(c) is 
amended— 
Records. 
Public 
information. 
112 STAT. 1762 
PUBLIC LAW 105-244—OCT. 7, 1998 
(1) in paragraph (2)— 
(A) in the first sentence, by striking 'Vith respect 
to operating losses, net worth, asset to liabilities ratios, 
or operating fund deficits" and inserting "regarding ratios 
that demonstrate financial responsibility,"; and 
(B) in the second sentence, by inserting *
*
, public," 
after "for profit"; 
(2) in paragraph (3XA), by inserting "that the Secretary 
determines are reasonable" after "guarantees"; and 
(3) in paragraph (4)— 
(A) in the matter preceding subparagraph (A), by 
striking "ratio of current assets to current liabilities" and 
inserting "criteria"; and 
(B) in subparagraph (C), by striking "current operating 
ratio requirement" and inserting "criteria". 
(c) FINANCIAL GUARANTEES FROM OWNERS.— 
20 use 1099c. 
(1) AMENDMENT.—Section 498(e) is amended by adding at 
the end the following: 
"(6) Notwithstanding any other provision of law, any individual 
who— 
"(A) the Secretary determines, in accordance with para-
graph (2), exercises substantial control over an institution 
participating in, or seeking to participate in, a program under 
this title; 
"(B) is required to pay, on behalf of a student or borrower, 
a refund of unearned institutional charges to a lender, or to 
the Secretary; and 
"(C) wilmiUy fails to pay such refund or willfully attempts 
in any manner to evade payment of such refund, 
shall, in addition to other penalties provided by law, be liable 
to the Secretary for the amount of the refund not paid, to the 
same extent with respect to such refiind that such an individual 
would be liable as a responsible person for a penalty under section 
6672(a) of Internal Revenue Code of 1986 with respect to the 
nonpayment of taxes.". 
20 use 1099c 
(2) EFFECTIVE DATE.—The amendment made by paragraph 
note- 
(1) shall be effective with respect to any unpaid refunds that 
were first required to be paid to a lender or to the Secretary 
on or after 90 days after the date of enactment of this Act. 
(d) 
APPLICATIONS 
AND SITE 
VISITS.—Section 
498(f) 
is 
amended— 
(1) in the subsection heading, by striking "; SITE VISITS 
AND FEES" and inserting "AND SITE VISITS"; 
(2) in the second sentence, by striking "shall" and inserting 
"may"; 
(3) in the third sentence— 
(A) by striking "may establish" and insert "shall 
establish"; and 
(B) by striking "may coordinate" and inserting "shall, 
to the extent practicable, coordinate"; and 
(4) by striking the fourth sentence. 
(e) TIME LIMITATIONS ON, AND RENEWAL OF, ELIGIBILITY.— 
Subsection (g) of section 498 is amended to read as follows: 
"(g) TIME LIMITATIONS ON, AND RENEWAL OF. ELIGIBILITY.— 
"(1) GENERAL RULE.—After the expiration of the certifi-
cation of any institution under the schedule prescribed under 
this section (as this section was in effect prior to the enactment 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1763 
Regulations. 
is 
20 use 1099c. 
of the Higher Education Act Amendments of 1998), or upon 
request for initial certification from an institution not pre-
viously certified, the Secretary may certify the eligibility for 
the purposes of any program authorized under this title of 
each such institution for a period not to exceed 6 years. 
"(2) NOTIFICATION.—^The Secretary shall notify each institu- Deadline, 
tion of higher education not later than 6 months prior to 
the date of the expiration of the institution's certification. 
"(3) 
INSTITUTIONS 
OUTSIDE THE UNITED 
STATES.—^The 
Secretary shall promulgate regulations regarding the recertifi-
cation requirements applicable to an institution of higher edu-
cation outside of the United States that meets the requirements 
of section 102(a)(1)(C) and received less than $500,000 in funds 
under part B for the most recent year for which data are 
available.". 
(f) 
PROVISIONAL 
CERTIFICATION.—Section 
498(h)(2) 
amended— 
(1) by striking "the approval" and inserting "the recogni-
tion"; and 
(2) by striking "of approval" and inserting "of recognition". 
(g) CHANGE IN OWNERSHIP.—Section 498(i) is amended by 
adding at the end the following: 
"(4)(A) The Secretary may provisionally certify an institution 
seeking approval of a change in ownership based on the preliminary 
review by the Secretary of a materisdly complete application that 
is received by the Secretary within 10 business days of the trans-
action for which the approval is sought. 
"(B) A provisional certification under this paragraph shall 
expire not later than the end of the month following the month 
in which the transaction occurred, except that if the Secretary 
has not issued a decision on the application for the change of 
ownership within that period, the Secretary may continue such 
provisional certification on a month-to-month basis until such deci-
sion has been issued.". 
(h) TREATMENT OF BRANCHES.—^The second sentence of section 
498(j)(l) is amended by inserting "after the branch is certified 
by the Secretary as a branch campus peirticipating in a program 
under this title," after "2 years". 
SEC. 494. PROGRAM REVIEW AND DATA. 
Section 498A (20 U.S.C. 1099c-l) is amended— 
(1) in subsection (a)— 
(A) in paragraph (2)— 
(i) in the matter preceding subparagraph (A), by 
striking "may" and inserting "shall"; 
(ii) by amending subparagraph (C) to read as fol-
^ 
lows: 
"(C) institutions with a significant fluctuation in Fed-
eral Stafford Loan volume. Federal Direct StafTord/Ford 
Loan volume, or Federal Pell Grant award volume, or 
any combination thereof, in the year for which the deter-
mination is made, compared to the year prior to such 
year, that are not accounted for by changes in the Federal 
Stafford Loan program, the Federal Direct Stafford/Ford 
Loan program, or the Pell Grant program, or any combina-
tion thereof;"; 
Termination 
date. 
112 STAT. 1764 
PUBLIC LAW 105-244—OCT. 7, 1998 
(iii) by amending subparagraph (D) to read as 
follows: 
''(D) institutions reported to have deficiencies or finan-
cial aid problems by the State licensing or authorizing 
agency, or by the appropriate accrediting agencr^ or associa-
tion;"; 
(iv) in subparagraph (E), by inserting "and" after 
the semicolon; and 
(v) by striking subparagraphs (F) and (G) and 
inserting the following: 
"(F) such other institutions that the Secretary deter-
mines may pose a significant risk of failure to complv 
with the administrative capability or financial responsibil-
ity provisions of this title; and"; and 
(B) in paragraph (3XA), by inserting "relevant" after 
"all"; and 
(2) by amending subsection (b) to read as follows: 
"(b) SPECIAL ADMINISTRATIVE RULES.—^In carrying out para-
graphs (1) and (2) of subsection (a) and any other relevant provisions 
of this title, the Secretary shall— 
"(1) establish guidelines designed to ensure imiformity of 
practice in the conduct of program reviews of institutions of 
higher education; 
"(2) make available to each institution participating in 
programs authorized under this title complete copies of all 
review guidelines and procedures used in program reviews; 
"(3) permit the institution to correct or cure an administra-
tive, accounting, or recordkeeping error if the error is not 
part of a pattern of error and there is no evidence of fraud 
or misconduct related to the error; 
"(4) base any civil penalty assessed against an institution 
of higher education resulting fi-om a program review or audit 
on the gravity of the violation, failure, or misrepresentation; 
and 
"(5) inform the appropriate State and accrediting agency 
or association whenever the Secretary takes action against 
an institution of higher education under this section, section 
498, or section 432.". 
SEC. 49S. REVIEW OF REGULATIONS. 
Part H of title IV is further amended by adding at the end 
the following: 
20 use 1099C-2. 
'^SEC. 498B. REVIEW OF REGULATIONS. 
"(a) REVIEW REQUIRED.—The Secretary shall review each regu-
lation issued under this title that is in effect at the time of the 
review and applies to the operations or activities of any participant 
in the programs assisted under this title. The review shall include 
a determination of whether the regulation is duplicative, or is 
no longer necessary. The review may involve one or more of the 
following: 
"(1) An assurance of the uniformity of interpretation and 
application of such regulations. 
"(2) The establishment of a process for ensuring that eUgi-
bility and compliance issues, such as institutional audit, pro-
gram review, and recertification, are considered simultaneously. 
"(3) A determination of the extent to which unnecessary 
costs are imposed on institutions of higher education as a 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1765 
consequence of the applicability to the facilities and equipment 
of suoi institutions of regulations prescribed for purposes of 
regulating industrial and commercial enterprises. 
"(b) REGULATORY AND STATUTORY RELIEF FOR SMALL VOLUME 
INSTITUTIONS.—^The Secretary shall review and evaluate ways in 
which regulations under and provisions of this Act affecting institu-
tion of higher education (other than institutions described in section 
102(aXl)(C)), that have received in each of the two most recent 
award years prior to the date of the enactment of the Higher 
Education Amendments of 1998 less than $200,000 in funds through 
this title, may be improved, streamlined, or eliminated. 
"(c) CONSULTATION.—^In carrying out subsections (a) and (b), 
the Secretary shall consult with relevant representatives of institu-
tions participating in the programs authorized by this title. 
"(d) REPORTS TO CONGRESS.— 
Deadlines. 
"(1) IN GENERAL.—The Secretary shall submit, not later 
than 1 year after the date of the enactment of the Higher 
Education Amendments of 1998, a report to the Committee 
on Labor and Human Resources of the Senate and the Commit-
tee on Education and the Workforce of the House of Representa-
tives detailing the Secretary's findings and recommendations 
based on the reviews conducted under subsections (a) and (b), 
including a timetable for implementation of any recommended 
changes in regulations and a description of any recommenda-
tions for legislative changes. 
"(2) ADDITIONAL REPORTS.—Not later than January 1, 2003, 
the Secretary shall submit a report to the Committee on Labor 
and Human Resources of the Senate and the Committee on 
Education and the Workforce of the House of Representatives 
detailing the Secretar^s findings and recommendations based 
on the review conducted under subsection (a), including a time-
table for implementation of any reconmiended changes in regu-
lations and a description of any recommendations for legislative 
changes.". 
TITLE V—DEVELOPING mSTITUnONS 
SEC. 501. ESTABUSHMENT OF NEWTTTLE: V. 
Title V (20 U.S.C. 1101 et seq.) is amended to read as follows: 
"TITLE V—DEVELOPING INSTITUTIONS 
**PART A—fflSPANIC-SERVING INSTITUTIONS 
<^EC. 501. FINDINGS; PURPOSE; AND PROGRAM AUTHORITY. 
20 USC 1101. 
"(a) FINDINGS.—Congress makes the following findings: 
''(I) Hispanic Americans are at high risk of not enrolling 
or graduating from institutions of higher education. 
"(2) Disparities between the enrollment of non-Hispanic 
white students and Hispanic students in postsecondary edu-
cation are increasing. Between 1973 and 1994, enrollment of 
white secondary school graduates in 4-year institutions of 
higher education increased at a rate two times higher than 
that of Hispanic secondary school graduates. 
112 STAT. 1766 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(3) Despite significant limitations in resources, Hispanic-
serving institutions provide a significant proportion of post-
secondary opportunities for HispEinic students. 
"(4) Relative to other institutions of higher education, His-
panic-serving institutions are underfunded. Such institutions 
receive significantly less in State and local funding, per full-
time equivalent student, than other institutions of higher edu-
cation. 
"(5) Hispanic-serving institutions are succeeding in educat-
ing Hispanic students despite significant resource problems 
that— 
"(A) limit the ability of such institutions to expand 
£uid improve the academic programs of such institutions; 
and 
"(B) could imperil the financial and administrative 
stability of such institutions. 
"(6) There is a national interest in remedying the dispari-
ties described in paragraphs (2) and (4) and ensuring that 
Hispanic students have an equal opportunity to pursue post-
secondary opportunities. 
"(b) PURPOSE.—^The purpose of this title is to— 
"(1) expand educational opportunities for, and improve the 
academic attainment of, Hispanic students; and 
"(2) expand and enhsince the academic offerings, program 
quality, and institutional stability of colleges and universities 
that are educating the majority of Hispanic college students 
and helping large numbers of Hispanic students and other 
low-income individuals complete postsecondary degrees. 
"(c) PROGRAM AUTHORITY.—^The Secretary shall provide grants 
and related assistance to Hispanic-serving institutions to enable 
such institutions to improve £ind expand their capacity to serve 
Hispanic students and other low-income individuals. 
20 u s e 1101a. 
•«EC. 502. DEFINITIONS; ELIGIBILITY. 
"(a) DEFINITIONS.—^For the purpose of this title: 
"(1) EDUCATIONAL AND GENERAL EXPENDITURES.—^The term 
'educational and general expenditures' means the total amount 
expended by an institution for instruction, research, public 
service, academic support (including library expenditures), stu-
dent services, institutional support, scholarships and fellow-
ships, operation and maintenance expenditures for the physical 
plant, and any mandatory transfers that the institution is 
required to pay by law. 
"(2) EUGIBLE INSTITUTION.—^The term 'eligible institution' 
means— 
"(A) an institution of higher education— 
"(i) that has an enrollment of needy students £is 
required by subsection (b); 
"(ii) except as provided in section 512(b), the aver-
age educational and general expenditures of which are 
low, per full-time equivalent undergraduate student, 
in comparison with the average educational and gen-
eral expenditures per full-time equivalent undergradu-
ate student of institutions that offer similar instruc-
tion; 
"(iii) that is— 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1767 
"(I) legally authorized to provide, and provides 
within the State, an educational program for which 
the institution awards a bachelors degree; or 
"(II) a junior or community college; 
"(iv) that is accredited by a nationally recognized 
accrediting agency or association determined by the 
Secretary to be reliable authority as to the quality 
of training offered or that is, according to such an 
agency or association, making reasonable progress 
toward accreditation; 
"(v) that meets such other requirements as the 
Secretary may prescribe; and 
"(vi) that is located in a State; and 
"(B) any branch of any institution of higher education 
described under subparagraph (A) that by itself satisHes 
the requirements contained in clauses (i) and (ii) of such 
subparagraph. 
For purposes of the determination of whether an institution 
is an eligible institution under this paragraph, the factor 
described under subparagraph (AXi) shall be given twice the 
weight of the factor described under subparagraph (AXii). 
"(3) ENDOWMENT FUND.—^The term 'endowment fund' 
means a fund that— 
"(A) is established by State law, by a Hispanic-serving 
institution, or by a foimdation that is exempt from Federal 
income taxation; 
"(B) is maintained for the purpose of generating income 
for the support of the institution; and 
"(C) does not include real estate. 
"(4) FULL-TIME EQUIVALENT STUDENTS.—The term 'full-time 
equivalent students' means the sum of the number of students 
enrolled fiill time at an institution, plus the full-time equivalent 
of the number of students enrolled part time (determined on 
the basis of the quotient of the sum of the credit hours of 
all part-time students divided by 12) at such institution. 
"(5) HISPANIC-SERVING INSTITUTION.—The term 'Hispanic-
serving institution' means an institution of higher education 
that— 
"(A) is an eligible institution; 
"(B) at the time of application, has £in enrollment of 
undergraduate full-time equivalent students that is at least 
25 percent Hispanic students; and 
"(C) provides assurances that not less than 50 percent 
of the institution's Hispanic students are low-income 
individuals. 
"(6) JUNIOR OR COMMUNITY COLLEGE.—The term 'junior 
or commimity college' means an institution of higher 
education— 
"(A) that admits as regular students persons who are 
beyond the age of compulsory school attendance in the 
State in which the institution is located and who have 
the ability to benefit from the training offered by the 
institution; 
"(B) that does not provide an educational program 
for which the institution awards a bachelor's degree (or 
an equivalent degree); and 
TOthat— 
112 STAT. 1768 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(i) provides an educational program of not less 
than 2 years in duration that is acceptable for full 
credit toward such a degree; or 
"(ii) offers a 2-year program in engineering, mathe-
matics, or the physical or biological sciences, designed 
to prepare a student to work as a technician or at 
the semiprofessional level in engineering, scientific, or 
other technological fields requiring the understanding 
and application of basic engineering, scientific, or 
mathematical principles of knowledge. 
"(7) 
LOW-INCOME 
INDIVIDUAL.—^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 
criteria of poverty established by the Bureau of the Census. 
"(b) ENROLLMENT OF NEEDY STUDENTS.—^For the purpose of 
this title, the term 'enrollment of needy students' means an enroll-
ment at an institution with respect to which— 
"(1) at least 50 percent of the degree students so enrolled 
are receiving need-based assistance under title IV in the second 
fiscal year preceding the fiscal year for which the determination 
is made (other than loans for which an interest subsidy is 
paid pursuant to section 428); or 
"(2) a substantial percentage of the students so enrolled 
are receiving Federal Pell Grants in the second fiscal year 
preceding the fiscal year for which determination is made, 
compared to the percentage of students receiving Federal Pell 
Grants at all such institutions in the second fisc£d year preced-
ing the fiscal year for which the determination is made, unless 
the requirement of this paragraph is waived under section 
512(a). 
20 use 1101b. 
"SEC. 503. AUTHORIZED ACnvmES. 
"(a) TYPES OF ACTIVITIES AUTHORIZED.—Grants awarded under 
this title shall be used by Hispanic-serving institutions of higher 
education to assist the institutions to plan, develop, undertake, 
and carry out programs to improve and expsind the institutions' 
capacity to serve Hispanic students and other low-income students. 
"(b) AUTHORIZED ACTIVITIES.—Grants awarded under this sec-
tion shall be used for one or more of the following activities: 
"(1) Purchase, rental, or lease of scientific or laboratory 
equipment for educational purposes, including instructional and 
research purposes. 
"(2) Construction, maintenance, renovation, and improve-
ment in classrooms, libraries, laboratories, and other instruc-
tional facilities. 
"(3) Support of faculty exchanges, faculty development, 
curriculum development, academic instruction, and faculty 
fellowships to assist in attaining advanced degrees in the fel-
low's field of instruction. 
"(4) Purchase of library books, periodicals, and other edu-
cational materials, including telecommunications 
program 
material. 
"(5) Tutoring, counseling, and student service programs 
designed to improve academic success. 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1769 
''(6) Funds mamag^ment, administrative management, and 
acquisition of equipment for use in strengthening 
funds 
management. 
"(7) Joint use of facilities, such as laboratories and libraries. 
"(8) Establishing or improving a development ofiRee to 
strengthen or improve contributions from alumni and the pri-
vate sector. 
"(9) Establishing or improving an endowment fund. 
"(10) Creating or iBjproving facilities for Internet or other 
distance learning academic instruction capabilities, including 
purchase or rental of telecommunications technology equipment 
or services. 
"(11) Establishing or enhancing a program of teacher edu-
cation designed to qualify 
students to 
teach in public 
elementary schools and secondary schools. 
"(12) Establishing community outreach programs that will 
encourage elementary school and secondary school students 
to develop the academic skills and the interest to pursue post-
secondary education. 
"(13) Expanding the number of Hispanic and other under-
represented graduate and professional students that can be 
served by the institution by expanding courses and institutional 
resources. 
"(14) Other activities proposed in the application submitted 
pursuant to section 504 that— 
"(A) contribute to carrying out the purposes of this 
title; and 
"(B) are approved by the Secretary as part of the 
review and acceptance of such application. 
"(c) ENDOWMENT FUND LIMITATIONS.— 
"(1) PORTION OF GRANT.—A Hispanic-serving institution 
may not use more than 20 percent of the grant funds provided 
under this title for any fiscal year for establishing or improving 
an endowment fund. 
"(2) MATCHING REQUIRED.—A Hispanic-serving institution 
that uses any portion of the grant funds provided under this 
title for any nscal year for establishing or improving an endow-
ment fund shall provide from non-Federal funds an amount 
equal to or greater than the portion. 
"(3) COMPARABILITY.—The provisions of part C of title III 
regarding the establishment or increase of an endowment fund, 
that the Secretary determines are not inconsistent with this 
subsection, shall apply to funds used under paragraph (1). 
"SEC. 504. DURATION OF GRANT. 
20 USC 1101c. 
"(a) AWARD PERIOD.— 
"(1) IN GENERAL.—^The Secretary may award a grant to 
a Hispanic-serving institution under this title for 5 years. 
"(2) WAITOUT PERIOD.—A Hispanic-serving institution shall 
not be eligible to secure a subsequent 5-year grant award 
under this title until 2 years have elapsed since the expiration 
of the institution's most recent 5-year grant award under this 
title, except that for the purpose of this subsection a grant 
under section 514(a) shall not be considered a grant under 
this title. 
"(b) PLANNING GRANTS.^Notwithstanding subsection (a), the 
Secretary may award a grant to a Hispanic-serving institution 
112 STAT. 1770 
PUBLIC LAW 105-244—OCT. 7, 1998 
under this title for a period of 1 year for the purpose of preparation 
of plans and applications for a grant under this title. 
20 use llOld. 
*^EC. 505. SPECIAL RULE. 
"No Hispanic-serving institution that is eligible for and receives 
funds under this title may receive funds under part A or B of 
title III during the period for which funds under this title are 
awarded. 
"PART B-GENERAL PROVISIONS 
20 use 1103. 
'<SEC. 511. ELIGIBILITY; APPLICATIONS. 
"(a) 
INSTITUTIONAL 
ELIGIBILITY.—Each 
Hispanic-serving 
institution desiring to receive assistance under this title shall sub-
mit to the Secretary such enrollment data as may be necessary 
to demonstrate that the institution is a Hispanic-serving institution 
as defined in section 502, along with such other data and informa-
tion as the Secretary may by regulation require. 
"(b) APPLICATIONS.— 
"(1) APPUCATIONS REQUIRED.—Any institution which is 
eligible for assistance under this title shall submit to the Sec-
retary an application for assistance at such time, in such form, 
and containing such information, as may be necessary to enable 
the Secretary to evaluate the institution's need for assistance. 
Subject to the availability of appropriations to carry out this 
title, the Secretary may approve an application for a grant 
under this title only if the Secretary determines that— 
"(A) the application meets the requirements of sub-
section (b); and 
"(B) the institution is eligible for assistance in accord-
ance with the provisions of this title under which the 
assistance is sought. 
"(2) PRELIMINARY APPLICATIONS.—In carrying out para-
graph (1), the Secretary may develop a preliminary application 
for use by Hispanic-serving institutions applying under this 
title prior to the submission of the principal application. 
"(c) CONTENTS.—^A Hispanic-serving institution, in the institu-
tion's application for a grant, shall— 
(1) set forth, or describe how the institution will develop, 
a comprehensive development plan to strengthen the institu-
tion's academic quality and institutional management, and 
otherwise provide for institutional self-sufficiency and growth 
(including measurable objectives for the institution and the 
Secretary to use in monitoring the eflFectiveness of activities 
under this title); 
"(2) include a 5-year plan for improving the assistance 
provided by the Hispanic-serving institution to Hispanic stu-
dents and other low-income individuals; 
"(3) set forth policies and procedures to ensure that Federal 
funds made available under this title for any fiscal year will 
be used to supplement and, to the extent practical, increase 
the funds that would otherwise be made available for the 
purposes of section 501(b), and in no case supplant those funds; 
"(4) set forth policies and procedures for evaluating the 
eflFectiveness in accomplishing the purpose of the activities for 
which a grant is sought under this title; 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1771 
"(5) provide for such fiscal control and fund accounting 
procedures as may be necessary to ensure proper disbursement 
of and accounting for funds made available to the institution 
under this title; 
"(6) provide that the institution will comply with the limita-
tions set forth in section 516; 
"(7) describe in a comprehensive manner any proposed 
project for which funds are sought under the application and 
include— 
"(A) a description of the various components of the 
proposed project, including the estimated time required 
to complete each such component; 
"(B) in the case of any development project that con-
sists of several components (as described by the institution 
pursuant to subparagraph (A)), a statement identifying 
those components which, if separately funded, would be 
sound investments of FedersJ funds £ind those components 
which would be sound investments of Federal funds only 
if funded under this title in conjunction with other parts 
of the development project (as specified by the institution); 
"(C) an evaluation by the institution of the priority 
given any proposed project for which funds are sought 
in relation to any other projects for which funds are sought 
by the institution under this title, and a similar evaluation 
regarding priorities among the components of any single 
proposed project (as described by the institution pursuant 
to subparagraph (A)); 
"(D) a detailed budget showing the manner in which 
funds for any proposed project would be spent by the 
institution; and 
"(E) a detailed description of any activity which 
involves the expenditure of more than $25,000, as identified 
in the budget referred to in subparagraph (D); 
"(8) provide for making reports, in such form and containing Reports, 
such information, as the Secretary may require to carry out 
the Secretary's functions under this title, including not less 
than one report annually setting forth the institution's progress 
toward aclueving the objectives for which the funds were 
awarded and for keeping such records and affording such access 
to such records, as the Secretary may find necessary to assure 
the correctness and verification of such reports; £uid 
"(9) include such other information as the Secretary may 
prescribe. 
(d) PRIORITY.—^With respect to applications for assistance 
under this section, the Secretary shall give priority to an application 
that contains satisfactory evidence that the Hispanic-serving 
institution has entered into or will enter into a collaborative 
arrangement with at least one local educational agency or commu-
nity-based organization to provide such agency or organization with 
assistance (from funds other than funds provided under this title) 
in reducing dropout rates for Hispanic students, improving rates 
of academic achievement for Hispanic students, and increasing the 
rates at which Hispanic secondary school graduates enroll in higher 
education. 
"(e) ELIGIBILITY DATA.—^The Secretary shall use the most recent 
and relevant data concerning the number and percentage of stu-
dents receiving need-based assistance under title IV in making 
112 STAT. 1772 
PUBLIC LAW 105-244—OCT. 7, 1998 
eligibility determinations and shall advance the base-year for the 
determinations forward following each annual grant cycle. 
20 use 1103a. 
"SEC. 512. WAIVER AUTHORITY AND REPORTING REQUIREMENT. 
"(a) 
WAIVER REQUIREMENTS; NEED-BASED ASSISTANCE STU-
DENTS.—^The Secretary may waive the requirements set forth in 
section 502(a)(2)(A)(i) in the case of an institution— 
"(1) that is extensively subsidized by the State in which 
the institution is located and charges low or no tuition; 
"(2) that serves a substantial number of low-income stu-
dents as a percentage of the institution's total student popu-
lation; 
"(3) that is contributing substantially to increasing higher 
education opportunities for educationally disadvantaged, under-
represented, or minority students, who are low-income individ-
uals; 
"(4) which is substantially increasing higher educational 
opportunities for individuals in rural or other isolated areas 
which are unserved by postsecondary institutions; or 
"(5) wherever located, if the Secretary determines that 
the waiver will substantially 
increase higher 
education 
opportunities appropriate to the needs of Hispanic Americans. 
"(b) WAIVER DETERMINATIONS; EXPENDITURES.— 
"(1) WAIVER DETERMINATIONS.—^The Secretary may waive 
the requirements set forth in section 502(a)(2XA)(ii) if the Sec-
retary determines, based on persuasive evidence submitted by 
the institution, that the institution's failure to meet the require-
ments is due to factors which, when used in the determination 
of compliance with the requirements, distort such determina-
tion, and that the institution's designation as an eligible institu-
tion under part A is otherwise consistent with the purposes 
of this title. 
Reports. 
"(2) EXPENDITURES.—^The Secretary shall submit to Con-
gress every other year a report concerning the institutions 
that, although not satisfying the requirements of section 
502(a)(2XAXii), have been determined to be eligible institutions 
under part A. Such report shall— 
"(A) identify the factors referred to in paragraph (1) 
that were considered by the Secretary as factors that dis-
torted the determination of compliance with clauses (i) 
and (ii) of section 502(aX2XA); and 
Records. 
"(B) contain a list of each institution determined to 
be an eligible institution under part A including a state-
ment of the reasons for each such determination. 
20 use 1103b. 
"SEC. 513. APPUCATION REVIEW PROCESS. 
"(a) REVIEW PANEL.—All applications submitted under this title 
by Hispanic-serving institutions shall be read by a panel of readers 
composed of individuals who are selected by the Secretary and 
who include individuals representing Hispanic-serving institutions. 
The Secretary shall ensure that no individual assigned under this 
section to review any application has any conflict of interest with 
regard to the application that might impair the impartiality with 
which the individual conducts the review under this section. 
"(b) INSTRUCTION.—^All readers selected by the Secretary shall 
receive thorough instruction from the Secretary regarding the 
evaluation process for applications submitted under this title that 
are consistent with the provisions of this title, including— 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1773 
"(1) an enumeration of the factors to be used to determine 
the quality of applications submitted under this title; and 
(2) an enumeration of the factors to be used to determine 
whether a grant should be awarded for a prolect under this 
title, the amount of any such grant, and the duration of any 
such grant. 
"(c) ItecoMMENDATlONS OF PANEL.—^In awarding grants under 
this title, the Secretary shall take into consideration the rec-
ommendations of the panel made imder subsection (a). 
"(d) NOTIFICATION.—Not later than June 30 of each year, the Deadline. 
Secretary shall notify each Hispanic-serving institution making an 
application under this title of— 
"(1) the scores given the institution by the panel pursuant 
to this section; 
"(2) the recommendations of the panel with respect to such 
application; and 
"(3) the reasons for the decision of the Secretary in award-
ing or refusing to award a grant under this title, and any 
modifications, if any, in the recommendations of the panel 
made by the Secretary. 
•^EC. 514. COOPERATIVE ARRANGEMENTS. 
20 U
S
C 1103c. 
"(a) GENERAL AUTHORITY.—^The Secretary may make grants 
to encourage cooperative arrangements with funds available to carry 
out this title, between Hispanic-serving institutions eligible for 
assistance under this title, and between such institutions and 
institutions not receiving assistance under this title, for the activi-
ties described in section 503 so that the resources of the cooperating 
institutions might be combined and shared in order to achieve 
the purposes of this title, to avoid costly duplicative efforts, and 
to enhance the devel^ment of Hispanic-serving institutions. 
"(b) PRIORITY.—^Ime Secretary shall give priority to grants for 
the purposes described under subsection (a) whenever the Secretary 
determines that the cooperative arrangement is geographically and 
economically sound or will benefit the applicant mspanic-serving 
institution. 
"(c) DURATION.—Grants to Hispanic-serving institutions having 
a cooperative arrangement may be made under this section for 
a period determined under section 505. 
'^EC. 515. ASSISTANCE TO INSTITUTIONS UNDER OTHER PROGRAMS. 20 USC 1103d. 
"(a) ASSISTANCE ELIGIBILITY.—^Each Hispanic-serving institu-
tion that the Secretary determines to be an institution eligible 
under this title may be eligible for waivers in accordance with 
subsection (b). 
"(b) WAIVER APPLICABILITY.— 
"(1) IN GENERAL.—Subject to, and in accordance with, regu-
lations promulgated for the purpose of this section, in the 
case of any application by a Hispanic-serving institution 
referred to in suDsection (a) for assistance under any programs 
specified in paragraph (2), the Secretary is authorized, if such 
application is otherwise approvable, to waive any requirement 
for a non-Federal share of the cost of the program or project, 
or, to the extent not inconsistent with other law, to give, or 
require to be given, priority consideration of the apiuication 
in relation to applications from other institutions. 
"(2) PROGRAMS.—^The provisions of this section shall apply 
to any program authorized by title IV or section 604. 
112 STAT. 1774 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(c) LIMITATION.—^The Secretary shall not waive, under sub-
section (b), the non-Federal share requirement for any program 
for applications which, if approved, would require the expenditure 
of more than 10 percent of the appropriations for the program 
for any fiscal year. 
20 use 1103e. 
"SEC. 516. LIMITATIONS. 
*The funds appropriated under section 518 may not be used— 
"(1) for a school or department of divinity or any religious 
worship or sectarian activity; 
"(2) for an activity that is inconsistent with a State plan 
for desegregation of higher education applicable to a Hispanic-
serving institution; 
"(3) for an activity that is inconsistent with a State plan 
of higher education applicable to a Hispanic-serving institution; 
or 
"(4) for purposes other than the purposes set forth in the 
approved application under which the funds were made avail-
able to a Hispanic-serving institution. 
20 use 1103f. 
"SEC. 517. PENALTIES. 
"Whoever, being an officer, director, agent, or employee of, 
or connected in any capacity with, any recipient of Federal financial 
assistance or grant pursuant to this title embezzles, willfully 
misapplies, steals, or obtains by fraud any of the funds that are 
the subject of such grant or assistance, shall be fined not more 
than $10,000 or imprisoned for not more than 2 years, or both. 
20 use 1103g. 
"SEC. 518. AUTHORIZATIONS OF APPROPRIATIONS. 
"(a) AUTHORIZATIONS.—^There are authorized to be appropriated 
to carry out this title $62,500,000 for fiscal year 1999 and such 
sums as may be necessary for each of the 4 succeeding fiscal 
years. 
"(b) USE OF MULTIPLE YEAR AWARDS.—In the event of a mul-
tiple year award to any Hispanic-serving institution under this 
title, the Secretary shall make funds available for such award 
from funds appropriated for this title for the fiscal year in which 
such funds are to be used by the institution.". 
TITLE VI—INTERNATIONAL EDUCATION 
PROGRAMS 
SEC. 601. INTERNATIONAL AND FOREIGN LANGUAGE STUDIES. 
Part A of title VI (20 U.S.C. 1121 et seq.) is amended to 
read as follows: 
**PART A—INTERNATIONAL AND FOREIGN 
LANGUAGE STUDIES 
20 use 1121. 
"SEC. 601. FINDINGS AND PURPOSES. 
"(a) FINDINGS.—Congress finds as follows: 
"(1) The security, stability, and economic vitality of the 
United States in a complex global era depend upon American 
experts in and citizens knowledgeable about world regions, 
foreign languages, and international affairs, as well as upon 
a strong research base in these areas. 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1775 
"(2) Advances in communications technology and the 
growth of regional and globsd problems make knowledge of 
other countries and the ability to communicate in other lan-
guages more essential to the promotion of mutual understand-
ing and cooperation among nations and their peoples. 
"(3) Dramatic post-Cold War changes in the world's geo-
political and economic landscapes are creating needs for Amer-
ican expertise and knowledge about a greater diversity of less 
commonly taught foreign languages and nations of the world. 
"(4) Systematic efforts are necessary to enhance the capac-
ity of institutions of higher education in the United States 
for— 
"(A) producing graduates with international and for-
eign language expertise and knowledge; and 
"(B) research regarding such expertise and knowledge. 
"(5) Cooperative efforts among the Federal Grovemment, 
institutions of higher education, and the private sector are 
necessary to promote the generation and dissemination of 
information about world regions, foreign languages, and inter-
national affairs throughout education, government, business, 
civic, and nonprofit sectors in the United States. 
"(b) PURPOSES.—^The purposes of this part are— 
"(1)(A) to support centers, programs, and fellowships in 
institutions of higher education in the United States for produc-
ing increased numbers of trained personnel and research in 
foreign languages, area studies, and other international studies; 
"(B) to develop a pool of international experts to meet 
national needs; 
"(C) to develop and validate specialized materials and tech-
niques for foreign language acquisition and fluency, emphasiz-
ing (but not limited to) the less commonly taught languages; 
"(D) to promote access to research and training overseas; 
and 
"(E) to advance the internationalization of a variety of 
disciplines throughout undergraduate and graduate education; 
"(2) to support cooperative efforts promoting access to and 
the dissemination of international and foreign language knowl-
edge, teaching materials, and research, throughout education, 
government, business, civic, and nonprofit sectors in the United 
States, through the use of advanced technologies; and 
"(3) to coordinate the programs of the Federal Grovemment 
in the areas of foreign leinguage, area studies, and other inter-
national studies, including professional international affairs 
education and research. 
*
<
S
E
C
. 602. 
GRADUATE AND 
UNDERGRADUATE LANGUAGE AND 
AREA 2
0 
USC 1
1
2
2
. 
CENTERS 
AND 
PROGRAMS. 
"(a) NATIONAL LANGUAGE AND AREA CENTERS AND PROGRAMS 
AUTHORIZED.— 
"(1) CENTERS AND PROGRAMS.— 
"(A) IN GENERAL.—^The Secretary is authorized— 
"(i) to make grants to institutions of higher edu-
cation, or combinations thereof, for the purpose of 
establishing, strengthening, and operating comprehen-
sive foreign language and area or international studies 
centers and programs; and 
112 STAT. 1776 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(ii) to make grants to such institutions or com-
binations for the purpose of establishing, strengthen-
ing, and operating a diverse network of undergraduate 
foreign language and area or international studies cen-
ters and programs. 
"(B) NATIONAL RESOURCES.—^The centers and programs 
referred to in paragraph (1) shall be national resources 
for— 
"(i) teaching of any modem foreign language; 
"(ii) instruction in fields needed to provide full 
understanding of areas, regions, or countries in which 
such language is commonly used; 
"(iii) research and training in international studies, 
and the international and foreign language aspects 
of professional and other fields of study; and 
"(iv) instruction and research on issues in world 
affairs that concern one or more countries. 
"(2) AUTHORIZED ACTIVITIES.—Any such grant may be used 
to pay all or part of the cost of establishing or operating 
a center or program, including the cost of— 
"(A) teaching and research materials; 
"(B) curriculum plemning and development; 
"(C) establishing and maintaining linkages with over-
seas institutions of higher education and other organiza-
tions that may contribute to the teaching and research 
of the center or program; 
"(D) bringing visiting scholars and faculty to the center 
to teach or to conduct research; 
"(E) professional development of the center's faculty 
and staff; 
"(F) projects conducted in cooperation with other cen-
ters addressing themes of world regional, cross-regional, 
international, or global importance; 
"(G) summer institutes in the United States or abroad 
designed to provide language and area training in the 
center's field or topic; and 
"(H) support for faculty, staff, and student travel in 
foreign areas, regions, or countries, and for the development 
and support of educational programs abroad for students. 
"(3) GRANTS TO MAINTAIN LIBRARY COLLECTIONS.—^The Sec-
retary may make grants to centers described in paragraph 
(1) having important library collections, as determined by the 
Secretary, for the maintenance of such collections. 
"(4) 
OUTREACH GRANTS AND SUMMER INSTITUTES.—^The 
Secretary may make additional grants to centers described 
in paragraph (1) for £iny one or more of the following purposes: 
"(A) Programs of linkage or outreach between foreign 
language, area studies, or other international fields, and 
professional schools and colleges. 
"(B) Programs of linkage or outreach with 2- and 4-
year colleges and universities. 
"(C) Programs of linkage or outreach with departments 
or agencies of Federal and State governments. 
"(D) Programs of linkage or outreach with the news 
media, business, professional, or trade associations. 
"(E) Summer institutes in foreign area, foreign lan-
guage, and other international fields designed to carry 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1777 
out the programs of linkage and outreach described in 
subparagraphs (A), (B), (C), and (D). 
"(b) GRADUATE FELLOWSHIPS FOR FOREIGN LANGUAGE AND AREA 
OR INTERNATIONAL STUDIES.— 
"(1) IN GENERAL.—The Secretary is authorized to make 
grants to institutions of higher education or combinations of 
such institutions for the purpose of paying stipends to individ-
uals undergoing advanced training in any center or program 
approved by the Secretary. 
"(2) 
ELIGIBLE 
STUDENTS.—Students receiving 
stipends 
described in paragraph (1) shall be individuals who are engaged 
in an instructional program with stated performance goals for 
functional foreign language use or in a program developing 
such performance goals, in combination with area studies, inter-
national studies, or the international aspects of a professional 
studies 
program, 
including predissertation 
level 
studies, 
preparation for dissertation research, dissertation research 
abroad, and dissertation writing. 
"(c) SPECIAL RULE WITH RESPECT TO TRAVEL.—No funds may 
be expended under this part for undergraduate travel except in 
accordance with rules prescribed by the Secretary setting forth 
policies and procedures to assure that Federal funds made available 
for such travel are expended as part of a formal program of super-
vised study. 
"(d) ALLOWANCES.—Stipends awarded to graduate level recipi-
ents may include allowances for dependents and for travel for 
research and study in the United States and abroad. 
"SEC. 603. LANGUAGE RESOURCE CENTERS. 
"(a) LANGUAGE RESOURCE CENTERS AUTHORIZED.—^The Sec- Contracts, 
retary is authorized to make grants to and enter into contracts 20 USC 1123. 
with institutions of higher education, or combinations of such 
institutions, for the purpose of establishing, strengthening, and 
operating a small number of national Igmguage resource and train-
ing centers, which shall serve as resources to improve the capacity 
to teach and learn foreign languages effectively. 
"(b) AUTHORIZED ACTIVITIES.—The activities carried out by the 
centers described in subsection (a)— 
"(1) shall include effective dissemination efforts, whenever 
appropriate; and 
"(2) may include— 
"(A) the conduct and dissemination of research on new 
and improved teaching methods, including the use of 
advanced educational technology; 
"(B) the development and dissemination of new teach-
ing materials reflecting the use of such research in effective 
teaching strategies; 
"(C) the development, application, and dissemination 
of performance testing appropriate to an educational set-
ting for use as a standard and comparable measurement 
of skill levels in all languages; 
"(D) the training of teachers in the administration 
and interpretation of performance tests, the use of effective 
teaching strategies, and the use of new technologies; 
"(E) a significant focus on the teaching and learning 
needs of the less commonly taught languages, including 
an assessment of the strategic needs of the United States, 
112 STAT. 1778 
PUBLIC LAW 105-244—OCT. 7, 1998 
the determination of ways to meet those needs nationally, 
and the publication and dissemination of instructional 
materials in the less commonly taught languages; 
"(F) the development and dissemination of materials 
designed to serve as a resource for foreign language teach-
ers at the elementary and secondary school levels; and 
"(G) the operation of intensive summer language 
institutes to train advanced foreign language students, to 
provide professional development, and to improve language 
instruction through preservice and inservice language 
training for teachers. 
"(c) CONDITIONS FOR GRANTS.—Grants under this section shall 
be made on such conditions as the Secretary determines to be 
necessary to carry out the provisions of this section. 
20 use 1124. 
'^EC. 604. UNDERGRADUATE INTERNATIONAL STUDIES AND FOREIGN 
LANGUAGE PROGRAMS. 
"(a) INCENTIVES FOR THE CREATION OF NEW PROGRAMS AND 
THE STRENGTHENING OF EXISTING PROGRAMS IN UNDERGRADUATE 
INTERNATIONAL STUDIES AND FOREIGN LANGUAGE PROGRAMS.— 
"(1) AUTHORITY.—^The Secretary is authorized to make 
grants to institutions of higher education, combinations of such 
institutions, or partnerships between nonprofit educational 
organizations and institutions of higher education, to assist 
such institutions, combinations or partnerships in planning, 
developing, and carrying out programs to improve undergradu-
ate instruction in international studies and foreign languages. 
Such grants shall be awarded to institutions, combinations 
or partnerships seeking to create new programs or to strengthen 
existing programs in foreign languages, area studies, and other 
international fields. 
"(2) USE OF FUNDS.—Grants made under this section may 
be used for Federal share of the cost of projects and activities 
which are an integral part of such a program, such as— 
"(A) planning for the development and expansion of 
undergraduate programs in international studies and 
foreign languages; 
"(B) teaching, 
research, 
curriculum 
development, 
faculty training in the United States or abroad, and other 
related activities, including— 
"(i) the 
expansion 
of library 
and 
teaching 
resources; and 
"(ii) preservice and inservice teacher training; 
"(C) expansion of opportunities for learning foreign 
languages, including less commonly taught languages; 
"(D) programs under which foreign teachers and 
scholars may visit institutions as visiting faculty; 
"(E) programs designed to develop or enhance linkages 
between 2- and 4-year institutions of higher education, 
or baccalaureate and post-baccalaureate programs or 
institutions; 
"(F) the development of undergraduate educational 
programs— 
"(i) in locations abroad where such opportunities 
are not otherwise available or that serve students for 
whom such opportunities are not otherwise available; 
and 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1779 
"(ii) that provide courses that are closely related 
to on-campus foreign language and 
international 
curricula; 
"(G) the integration of new and continuing education 
abroad opportunities for undergraduate students into 
curricula of specific degree programs; 
"(H) the development of model programs to enrich or 
enhance the effectiveness of educational programs abroad, 
including predeparture and postretum programs, and the 
integration of educational programs abroad into the 
curriculum of the home institution; 
"(I) the development of programs designed to integrate 
professional and technical education with foreign lan-
guages, area studies, and other international fields; 
"(J) the establishment of linkages overseas with 
institutions of higher education and organizations that 
contribute to the educational programs assisted under this 
subsection; 
"(K) the conduct of summer institutes in foreign area, 
foreign language, and other international fields to provide 
faculty and curriculum development, including the integra-
tion of professional and technical education with foreign 
area and other international studies, and to provide foreign 
area and other international knowledge or skills to govern-
ment personnel or private sector professionals in inter-
national activities; 
"(L) the development of partnerships between— 
"(i) institutions of higher education; and 
"(ii) the private sector, government, or elementary 
and secondeiry education institutions, 
in order to enhance international knowledge and skills; 
and 
"(M) the use of innovative technology to increase access 
to international education programs. 
"(3) NON-FEDERAL SHARE.—The non-Federal share of the 
cost of the programs assisted under this subsection— 
"(A) may be provided in cash from the private sector 
corporations or foundations in an amount equal to one-
third of the total cost of the programs assisted under this 
section; or 
"(B) may be provided as an in-cash or in-kind contribu-
tion from institutional and noninstitutional funds, includ-
ing State and private sector corporation or foundation con-
tributions, equal to one-half of the total cost of the pro-
grams assisted under this section. 
"(4) SPECIAL RULE.—^The Secretary may waive or reduce 
the required non-Federal share for institutions that— 
"(A) are eligible to receive assistance under part A 
or B of title III or under title V; and 
"(B) have submitted a grant application under this 
section. 
"(5) PRIORITY.—^In awarding grants under this section, the 
Secretary shall give priority to applications from institutions 
of higher education, combinations or partnerships that require 
entering students to have successfully completed at least 2 
years of secondary school foreign language instruction or that 
112 STAT. 1780 
PUBLIC LAW 105-244—OCT. 7, 1998 
require each graduating student to earn 2 years of postsecond-
ary credit in a foreign language (or have demonstrated equiva-
lent competence in the foreign language) or, in the case of 
a 2-year degree granting institution, offer 2 years of postsecond-
ary credit in a foreign language. 
"(6) GRANT CONDITIONS.—Grants under this subsection 
shall be made on such conditions as the Secretary determines 
to be necessary to carry out this subsection. 
"(7) APPLICATION.—^Each application for assistance under 
this subsection shall include— 
"(A) evidence that the applicant has conducted exten-
sive planning prior to submitting the application; 
"(B) an assurance that the faculty and administrators 
of all relevant departments and programs served by the 
applicant are involved in ongoing collaboration with regard 
to achieving the stated objectives of the application; 
''(C) an assurance that students at the applicant 
institutions, as appropriate, will have equal access to, and 
derive benefits from, the program assisted under this sub-
section; and 
"(D) an assurance that each institution, combination 
or partnership will use the Federal assistance provided 
under this subsection to supplement and not supplant non-
Federal funds the institution expends for programs to 
improve undergraduate instruction in international studies 
and foreign languages. 
"(8) EVALUATION.—^The Secretary may establish require-
ments for program evaluations and require grant recipients 
to submit annual reports that evaluate the progress and 
performance of students participating in programs assisted 
under this subsection. 
"(b) PROGRAMS OF NATIONAL SIGNIFICANCE.—^The Secretary 
may also award grants to public and private nonprofit agencies 
and organizations, including professional and scholarly associations, 
whenever the Secretary determines such grants will make an espe-
cially significant contribution to improving undergraduate inter-
national studies and foreign language programs. 
"(c) FUNDING SUPPORT.—^The Secretary may use not more than 
10 percent of the total amount appropriated for this part for carry-
ing out the purposes of this section. 
20 use 1125. 
"SEC. 605. RESEARCH; STUDIES; ANNUAL REPORT. 
"(a) AUTHORIZED ACTIVITIES.—^The Secretary may, directly or 
through grants or contracts, conduct research and studies that 
contribute to achieving the purposes of this part. Such research 
and studies may include— 
"(1) studies and surveys to determine needs for increased 
or improved instruction in foreign language, area studies, or 
other international fields, including the demand for foreign 
language, area, and other international specialists in govern-
ment, education, and the private sector; 
"(2) studies and surveys to assess the utilization of grad-
uates of programs supported under this title by governmental, 
educational, and private sector organizations and other studies 
assessing the outcomes and effectiveness of programs so sup-
ported; 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1781 
"(3) evaluation of the extent to which programs assisted 
under this title that address national needs would not otherwise 
be offered; 
"(4) comparative studies of the effectiveness of strategies 
to provide international capabilities at institutions of higher 
education; 
"(5) research on more effective methods of providing 
instruction and achieving competency in foreign languages, area 
studies, or other international fields; 
"(6) the development and publication of specialized mate-
rials for use in foreign language, area studies, and other inter-
national fields, or for training foreign language, area, and other 
international specicdists; 
"(7) studies and surveys of the uses of technology in foreign 
language, area studies, and international studies programs; 
"(8) studies and evaluations of effective practices in the 
dissemination of international information, materials, research, 
teaching strategies, and testing techniques throughout the edu-
cation community, including elementary and secondary schools; 
and 
^(9) the application of performance tests and standards 
across all areas of foreign language instruction and classroom 
use. 
"(b) ANNUAL REPORT.—^The Secretary shall prepare, publish. Publication, 
and announce an annual report listing the books and research 
materials produced with assistance under this section. 
"SEC. 606. TECHNOLOGICAL INNOVATION AND COOPERATION FOR 
20USC1126. 
FOREIGN INFORMATION ACCESS. 
"(a) AUTHORITY.—^The Secretary is authorized to make grants 
to institutions of higher education, public or nonprofit private librar-
ies, or consortia of such institutions or libraries, to develop innova-
tive techniques or programs using new electronic technologies to 
collect, organize, preserve, and widely disseminate information on 
world regions and countries other th8ui the United States that 
address our Nation's teaching and research needs in international 
education and foreign languages. 
"(b) AUTHORIZED ACTIVITIES.—Grants under this section may 
be used— 
"(1) to facilitate access to or preserve foreign information 
resources in print or electronic forms; 
"(2) to develop new means of immediate, full-text document 
delivery for information and scholarship from abroad; 
"(3) to develop new means of shared electronic access to 
international data; 
"(4) to support collaborative projects of indexing, cataloging, 
and other means of bibliographic access for scholars to impor-
tant research materials published or distributed outside the 
United States; 
"(5) to develop methods for the wide dissemination of 
resources written in non-Roman language alphabets; 
"(6) to assist teachers of less commonly taught leinguages 
in acquiring, via electronic and other means, materials suitable 
for classroom use; and 
"(7) to promote collaborative technology based projects in 
foreign languages, area studies, and international studies 
among grant recipients under this title. 
59-194 O - 98 - 29 : QL 3 Part 2 
112 STAT. 1782 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(c) APPLICATION.—^Each institution or consortium desiring a 
grant under this section shall submit an application to the Secretary 
at such time, in such manner, and accompanied by such information 
and assurances as the Secretary may reasonably require. 
"(d) MATCH REQUIRED.—The Federal share of the total cost 
of carrying out a program supported by a grant under this section 
shall not oe more than 66% percent. The non-Federal share of 
such cost mav be provided either in-kind or in cash, and may 
include contributions from private sector corporations or founda-
tions.". 
20 use 1127. 
"SEC. 607. SELECTION OF CERTAIN GRANT RECIPIENTS. 
"(a) COMPETITIVE GRANTS.—The Secretary shall award grants 
under section 602 competitively on the basis of criteria that 
separately, but not less rigorously, evaluates the applications for 
comprehensive and undergraduate language and area centers and 
pro-ams. 
"(b) SELECTION CRITERIA.—The Secretary shall set criteria for 
grants awarded under section 602 by which a determination of 
excellence shall be made to meet the differing objectives of graduate 
and undergraduate institutions. 
"(c) EQUITABLE DISTRIBUTION OF GRANTS.—The Secretary shall, 
to the extent practicable, award grants under this psirt (other than 
section 602) in such manner as to achieve an equitable distribution 
of the grant funds throughout the United States, based on the 
merit of a proposal as determined pursuant to a peer review process 
involving broadly representative professionals. 
20 use 1128. 
"SEC. 608. EQUITABLE DISTRIBUTION OF CERTAIN FUNDS. 
"(a) SELECTION CRITERIA.—^The Secretary shall make excellence 
the criterion for selection of grants awarded under section 602. 
"(b) EQUITABLE DISTRIBUTION.—TO the extent practicable and 
consistent with the criterion of excellence, the Secretary shall award 
grants under this part (other than section 602) in such a manner 
as will achieve an equitable distribution of funds throughout the 
United States. 
"(c) SUPPORT FOR UNDERGRADUATE EDUCATION.—The Secretary 
shall also award grants under this part in such manner as to 
ensure that an appropriate portion of the funds appropriated for 
this part (as determined by the Secretary) are used to support 
undergraduate education. 
20 use 1128a. 
"SEC. 609. AMERICAN OVERSEAS RESEARCH CENTERS. 
Contracts. 
"(a) CENTERS AUTHORIZED.—^The Secretary is authorized to 
make grants to and enter into contracts with any American overseas 
research center that is a consortium of institutions of higher edu-
cation (hereafter in this section referred to as a "center") to enable 
such center to promote postgraduate research, exchanges and area 
studies. 
"(b) USE OF GRANTS.—Grants made and contracts entered into 
pursuant to this section may be used to pay all or a portion 
of the cost of establishing or operating a center or program, 
including— 
"(1) the cost of faculty and staff stipends and salaries; 
"(2) the cost of faculty, staff, and student travel; 
"(3) the cost of the operation and maintenance of overseas 
facilities; 
"(4) the cost of teaching and research materials; 
,<"4v".'*%-
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1783 
"(5) the cost of acquisition, maintenance, and preservation 
of library collections; 
"(6) the cost of bringing visiting scholars and faculty to 
a center to teach or to conduct research; 
"(7) the cost of organizing and managing conferences; and 
"(8) the cost of publication and dissemination of material 
for the scholarly and general public. 
*
*
(
c
) LIMITATION.—The Secretary shall only award grants to 
and enter into contracts with centers under this section that— 
"(1) receive more than 50 percent of their funding from 
public or private United States sources; 
"(2) have a permsinent presence in the country in which 
the center is located; and 
"(3) are organizations described in section 501(c)(3) of the 
Internal Revenue Code of 1986 which are exempt from taxation 
under section 501(a) of such Code. 
"(d) DEVELOPMENT GRANTS.—^The Secretary is authorized to 
make grants for the establishment of new centers. The grants 
may be used to fund activities that, within 1 year, will result 
in the creation of a center described in subsection (c). 
'^EC. 610. AUTHORIZATION OF APPROPRIATIONS. 
20 USC 1128b. 
"There are authorized to be appropriated to carry out this 
part $80,000,000 for fiscal year 1999, and such sums as may be 
necessary for each of the 4 succeeding fiscal years.". 
SEC. 602. BUSINESS AND INTERNATIONAL EDUCATION PROGRAMS. 
(a) AMENDMENT TO HEADING.—The heading for section 611 
(20 U.S.C. 1130) is amended to read as follows: 
'^EC. 611. FINDINGS AND PURPOSES.". 
(b) CENTERS.—Section 612 (20 U.S.C. 1130-1) is amended— 
(1) in subsection (c)— 
(A) in paragraph (1)— 
(i) in subparagraph (B), by striking "advanced"; 
and 
(ii) in subparagraph (C), by striking "evening or 
summer"; and 
(B) in paragraph (2)(C), by inserting "foreign language 
studies," after "area studies,"; and 
(2) in subsection (d)(2XG), by inserting ", such as a rep-
resentative of a community college in the region served by 
the center" before the period. 
(c) AUTHORIZATION OF APPROPRIATIONS.—Section 614 (20 U.S.C. 
1130b) is amended— 
(1) in subsection (a), by striking "1993" and inserting 
"1999"; and 
(2) in subsection (b), by striking "1993" and inserting 
"1999". 
SEC. 603. INSTITUTE FOR INTERNATIONAL PUBUC POUCY. 
(a) MINORITY FOREIGN SERVICE PROFESSIONAL DEVELOPMENT 
PROGRAM.—Section 621(e) (20 U.S.C. 1131(e)) is amended by strik-
ing "one-fourth" and inserting "one-half. 
(b) INSTITUTIONAL DEVELOPMENT.—Part C of title VI (20 U.S.C. 
1131 et seq.) is amended— 
112 STAT. 1784 
PUBLIC LAW 105-244—OCT. 7, 1998 
(1) by redesignating sections 622 through 627 (20 U.S.C. 
1131a through 113 If) as sections 623 through 628, respectively; 
and 
(2) by inserting after section 621 (20 U.S.C. 1131) the 
following: 
Minorities. 
"SEC. 622. INSTITUTIONAL DEVELOPMENT. 
"(a) IN GENERAL.—^The Institute shall award grants, from 
amounts avedlable to the Institute for each fiscal year, to historically 
Black colleges and universities, Hispanic-serving institutions, Trib-
ally Controlled Colleges or Universities, and minority institutions, 
to enable such colleges, universities, and institutions to strengthen 
international affairs programs. 
"(b) APPLICATION.—^No grant may be made by the Institute 
unless an application is made by the college, university, or institu-
tion at such time, in such manner, and accompanied by such 
information as the Institute may require. 
"(c) DEFINITIONS.—In this section— 
"(1) the term 'historically Black college and university* has 
the meaning given the term in section 322; 
"(2) the term 'Hispanic-serving institution' has the meaning 
given the term in section 502; 
"(3) the term 'Tribally Controlled College or University 
has the meaning given the term in section 2 of the Tribally 
Controlled College or University Assistance Act of 1978 (25 
U.S.C. 1801); and 
"(4) the term 'minority institution' has the meaning given 
the term in section 365.". 
(c) STUDY ABROAD PROGRAM.—Section 623 (as redesignated 
by subsection(b)(l)) (20 U.S.C. 1131a)— 
(1) in the section heading, by striking "JUNIOR YEAR" and 
inserting "STUDY"; 
(2) in subsection (bX2)— 
(A) by inserting ", or completing the third year of 
study in the case of a summer abroad program," after 
"stud3r"; and 
(B) by striking "junior year" and inserting "study"; 
£ind 
(3) in subsection (c)— 
(A) in the matter preceding paragraph (1), by striking 
"junior year" and inserting "study'; 
(B) in paragraph (1), by stiiking "junior year" and 
inserting "study"; and 
(C) in paragraph (2)— 
(i) by striking "one-halP and inserting "one-third"; 
i 
and 
(ii) by striking "junior year" and inserting "stud/'. 
20 use 1131c. 
(d) INTERNSHIPS.—Section 625 (as redesignated by subsection 
(bXD) (20 U.S.C. 1132c)— 
(1) by striking "The Institute" and inserting "(a) IN 
GENERAL.—^The Institute"; and 
(2) by adding at the end the following: 
Contracts. 
*(b) POSTBACCALAUREATE INTERNSHIPS.—The Institute shall 
enter into agreements Avith institutions of higher education 
described in the first sentence of subsection (a) to conduct intern-
ships for students who have completed study for a baccalaureate 
.1. 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1785 
degree. The internship program authorized by this subsection 
shall— 
"(1) assist the students to prepare for a master's degree 
program; 
"(2) be carried out with the assistance of the Woodrow 
Wilson International Center for Scholars; 
"(3) contain work experience for the students designed to 
contribute to the students' preparation for a master's degree 
program; and 
"(4) be assisted by the Interagency Committee on Minority 
Careers in International Affairs established under subsection 
(0. 
"(c) INTERAGENCY COMMITTEE ON MINORITY CAREERS IN INTER-
NATIONAL AFFAIRS.— 
"(1) ESTABLISHMENT.—^There is established in the executive 
branch of the Federal Government an Interagency Committee 
on Minority Careers in International Affairs composed of not 
less than 7 members, including— 
"(A) the Under Secretary for Farm and Foreign Agricul-
tural Services of the Depeirtment of Agriculture, or the 
Under Secretarjr's designee; 
"(B) the Assistant Secretary and Director General, of 
the United States and Foreign Commercial Service of the 
Department of Commerce, or the Assistant Secretary and 
Director Greneral's designee; 
"(C) the Under Secretary of Defense for Personnel and 
Readiness of the Department of Defense, or the Under 
Secretary's designee; 
"(D) the Assistant Secretary for Postsecondary Edu-
cation in the Department of Education, or the Assistant 
Secretary's designee; 
"(E) the Director General of the Foreign Service of 
the Department of State, or the Director General's des-
ignee; 
"(F) the General Counsel of the Agency for Inter-
national Development, or the General Counsel's designee; 
and 
"(G) the Associate Director for Educational and Cul-
tural Affairs of the United States Information Agency, or 
the Associate Director's designee. 
"(2) FUNCTIONS.—The Interagency Committee established 
by this section shall— 
"(A) on an annual basis inform the Secretary and the 
Institute regarding ways to advise students participating 
in the internship program assisted under this section with 
respect to goals for careers in international affairs; 
"(B) locate for students potentisd internship opportuni-
ties in the Federal Government related to international 
affairs; and 
"(C) promote policies in each department and agency 
participating in the Committee that are designed to carry 
out the objectives of this part.". 
(f) CONFORMING AMENDMENT.—Section 627 (as redesignated 
by subsection (bXl)) (20 U.S.C. 1131e) is amended by striking 
"625" and inserting "626". 
112 STAT. 1786 
PUBLIC LAW 105-244—OCT. 7, 1998 
(g) 
AUTHORIZATION OF APPROPRIATIONS.—Section 628 
(as 
redesignated by subsection (bXD) (20 U.S.C. 1131f), by striking 
"1993" and inserting "1999". 
SEC. 604. GENERAL PROVISION& 
(a) DEFINITIONS.—Section 631(a) (20 U.S.C. 1132(a)) is 
amended— 
(1) by striking "and" at the end of paragraph (7); 
(2) by striking the period at the end of paragraph (8) 
and inserting "; and"; and 
(3) by inserting after paragraph (8) the following: 
"(9) the term 'educationsd programs abroad' means pro-
grams of study, internships, or service learning outside the 
United States which are part of a foreign language or other 
international curriculum at the undergraduate or graduate edu-
cation levels.". 
(b) REPEAL.—Section 632 (20 U.S.C. 1132-1) is repealed. 
TITLE 
YII—GRADUATE 
AND 
POST-
SECONDARY 
IMPROVEMENT 
PRO-
GRAMS 
SEC. 701. REVISION OF TITLE VIL 
Title VII (20 U.S.C. 1132a et seq.) is amended to read as 
follows: 
"TITLE 
VII—GRADUATE 
AND 
POST-
SECONDARY 
IMPROVEMENT 
PRO-
GRAMS 
20USC1133. 
'<SEC. 700. PURPOSE. 
"It is the purpose of this title— 
"(1) to authorize national graduate fellowship programs— 
"(A) in order to attract students of superior ability 
and achievement, exceptional promise, and demonstrated 
financial need, into high-quality graduate programs and 
provide the students with the financial support necessary 
to complete advanced degrees; and 
"(B) that are designed to— 
"(i) sustein and enhance the capacity for graduate 
education in areas of national need; and 
"(ii) encourage talented students to pursue schol-
arly careers in the humanities, social sciences, and 
the arts; and 
"(2) to promote postsecondary programs. 
"PART A—GRADUATE EDUCATION PROGRAMS 
"Subpart 1—Jacob K. Javits Fellowship Program 
20 use 1134. 
<^EC. 701. A
W
A
R
D OF JACOB K. JAVITS FELLOWSHIPS. 
"(a) AUTHORITY AND TIMING OF AwARDS.^The Secretary is 
authorized to award fellowships in accordance with the provisions 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1787 
of this subpart for graduate study in the arts, humanities, and 
social sciences by students of superior ability selected on the basis 
of demonstrated achievement, financial need, and exceptional prom-
ise. TTie fellowships shall be awarded to students who are eligible 
to receive any grant, loan, or work assistance pursuant to section 
484 and intend to pursue a doctoral degree, except that fellowships 
may be granted to students pursuing a masters degree in those 
fields in which the master's degree is the terminal highest degree 
awsurded in the area of study. All funds appropriated in a fiscal 
year shall be obligated and expended to the students for fellowships 
for use in the academic year beginning after July 1 of the fiscal 
year following the fiscal year for which the fiinds were appropriated. 
The fellowships shall be awarded for only 1 academic year of study 
and shall be renewable for a period not to exceed 4 years of 
study. 
(b) DESIGNATION OF FELLOWS.—Students receiving awards 
under this subpart shall be known as 'Jacob K. Javits Fellows'. 
"(c) INTERRUPTIONS OF STUDY.—The institution of higher edu-
cation may allow a fellowship recipient to interrupt periods of 
study for a period not to exceed 12 months for the purpose of 
work, travel, or independent study away from the campus, if such 
independent study is supportive of the fellowship recipient's aca-
demic program and shall continue payments for those 12-month 
periods during which the student is pursuing travel or independent 
study supportive of the recipient's academic program. 
(d) PROCESS AND TIMING OF CoMPETiTiON.^The Secretary DeadUnes. 
shall make applications for fellowships under this part available 
not later than October 1 of the academic year preceding the aca-
demic year for which fellowships will be awarded, and shall 
announce the recipients of fellowships under this section not later 
than March 1 of the academic year preceding the academic year 
for which the fellowships are awarded. 
"(e) AUTHORITY TO CONTRACT.—The Secretary is authorized 
to enter into a contract with a nongovernmental agency to admin-
ister the program assisted under this part if the Secretary deter-
mines that entering into the contract is an efficient means of 
carrying out the program. 
'nSEC. 702. ALLOCATION OF FELLOWSHIPS. 
"(a) FELLOWSHIP BOARD.— 
"(1) APPOINTMENT.—The Secretary shall appoint a Jacob 
K. Javits Fellows Program Fellowship Board (hereinafter in 
this subpart referred to as the *Board') consisting of 9 individ-
uals representative of both public and private institutions of 
higher education who are especially qualified to serve on the 
Board. In making appointments, the Secretary shall give due 
consideration to tne appointment of individuals who are highly 
respected in the academic community. The Secretary shall 
assure that individuals appointed to the Board are broadly 
representative of a range of disciplines in graduate education 
in arts, humanities, and social sciences. 
"(2) DUTIES.—The Board shall— 
"(A) establish general policies for the program estab-
lished by this subpart and oversee the program's operation; 
"(B) establish general criteria for the award of fellow-
ships in academic fields identified by the Board, or, in 
the event that the Secretary enters into a contract with 
20 use 1134a. 
112 STAT. 1788 
PUBLIC LAW 105-244—OCT. 7, 1998 
a nongovernmental entity to administer the program 
assisted under this subpart, by such nongovernmental 
entity; 
(C) appoint panels of academic scholars with distin-
guished backgrounds in the arts, humanities, and social 
sciences for the purpose of selecting fellows, except that, 
in the event that the Secretary enters into a contract 
with a nongovernmental entity to administer the program, 
such panels may be appointed by such nongovernmental 
entity; and 
Reports. 
(D) prepare and submit to the Congress at least once 
in every 3-year period a report on any modifications in 
the program that the Board determines £
u
*
e appropriate. 
**(3) CONSULTATIONS.—^In carrying out its responsibilities, 
the Board shall consult on a regular basis with representatives 
of the National Science Foundation, the National Endowment 
for the Humanities, the National Endowment for the Arts, 
and representatives of institutions of higher education and 
associations of such institutions, learned societies, and profes-
sional organizations. 
"(4) TERM.—^The term of office of each member of the Board 
shall be 4 years, except that any member appointed to fill 
a vacancy shall serve for the remainder of the term for which 
the predecessor of the member was appointed. No member 
may serve for a period in excess of 6 years. 
**(5) INITIAL MEETING; VACANCY.—The Secretary shall call 
the first meeting of the Board, at which the first order of 
business shall be the election of a Chairperson and a Vice 
Chairperson, who shall serve imtil 1 year after the date of 
the appointment of the Chairperson and Vice Chairperson. 
Thereafter each officer shall be elected for a term of 2 vears. 
In case a vacancy occurs in either office, the Board shall elect 
an individual from among the members of the Board to fill 
such vacancy. 
"(6) QUORUM; ADDITIONAL MEETINGS.—(A) A majority of 
the members of the Board shall constitute a quorum. 
"(B) The Board shall meet at least once a year or more 
frequently, as may be necessary, to carry out the Board's 
responsibilities. 
**(7) COMPENSATION.—^Members of the Board, while serving 
on the business of the Board, shall be entitled to receive com-
pensation at rates fixed by the Secretary, but not exceeding 
the rate of basic pay payable for level IV of the Executive 
Schedule, including travel time, and while so serving away 
from liieir homes or regular places of business, the members 
may be allowed travel expenses, including per diem in lieu 
of subsistence, as authorized by section 5703 of title 5, United 
States Code, for persons in Government service employed inter-
mittently. 
"flj) USE OF SELECTION PANELS.—^The recipiente of fellowships 
shall be selected in each designated field from among all applicante 
nationwide in each field by distinguished panels appointed by the 
Board to make such selections under criteria established by the 
Board, except that, in the event that the Secretary enters into 
a contract with a nongovernmental entity to administer the pro-
gram, such panels may be appointed by such nongovernmental 
entity. The number of recipiente in each field in each year shall 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1789 
not exceed the number of fellows allocated to that field for that 
year by the Board. 
"(c) FELLOWSHIP PORTABIUTY.—^Each recipient shall be entitled 
to use the fellowship in a graduate program at any accredited 
institution of higher education in whicn the recipient may decide 
to enroll. 
'^EC. 703. STIPENDS. 
20 USC 1134b. 
"(a) AWARD BY SECRETARY.—The Secretary shall pay to individ-
uals awarded fellowships under this subpart such stipends as the 
Secretary may establish, reflecting the purpose of this program 
to encourage highly talented students to undertake graduate study 
as described in this subpart. In the case of an individual who 
receives such individual's first stipend under this subpart in aca-
demic year 1999-2000 or any succeeding academic year, such sti-
pend shall be set at a level of support equal to that provided 
by the National Science Foundation graduate fellowships, except 
such amount shall be adjusted as necessary so as not to exceed 
the fellow's demonstrated level of need determined in accordance 
with part F of title IV. 
"(b) INSTITUTIONAL PAYMENTS.— 
"(1) IN GENERAL.—(A) The Secretary shall (in addition to 
stipends paid to individuals under this subpart) pay to the 
institution of higher education, for each individual awarded 
a fellowship under this subpart at such institution, an institu-
tional allowance. Except as provided in subparagraph (B), such 
allowance shall be, for 1999-2000 and succeeding academic 
years, the same amount as the institutional payment made 
for 1998-1999 under section 933(b) (as such section was in 
effect on the day before the date of enactment of the Higher 
Education Amendments of 1998) adjusted for 1999-2000 and 
annually thereafter in accordance with inflation as determined 
by the Department of Labor's Consumer Price Index for the 
previous calendar year. 
"(B) The institutional allowance paid under subparagraph 
(A) shall be reduced by the amount the institution charges 
and collects from a fellowship recipient for tuition and other 
expenses as part of the recipient's instructional program. 
"(2) SPECIAL RULES.—(A) Beginning March 1, 1992, any Effective date, 
applicant for a fellowship under this subpart who has been 
notified in writing by the Secretary that such applicant has 
been selected to receive such a fellowship and is subsequently 
notified that the fellowship award has been withdrawn, shall 
receive such fellowship unless the Secretary subsequently 
makes a determination that such applicant submitted fraudu-
lent information on the application. 
"(B) Subject to the availability of appropriations, amounts 
payable to an institution by the Secretary pursuant to this 
subsection shall not be reduced for any purpose other than 
the purposes specified under paragraph (1). 
"SEC. 704. FELLOWSHIP CONDITIONS. 
"(a) REQUIREMENTS FOR RECEIPT.—An individual awarded a 
fellowship under the provisions of this subpart shall continue to 
receive payments provided in section 703 only during such periods 
as the Secretary finds that such individual is maintaining satisfac-
tory proficiency in, and devoting essentially full time to, study 
or research in the field in which such fellewship was awarded, 
20 use 1134c. 
112 STAT. 1790 
PUBLIC LAW 105-244—OCT. 7, 1998 
in an institution of higher education, and is not engaging in gainful 
emplo3nnent other than part-time employment by such institution 
in teaching, research, or similar activities, approved by the Sec-
retary. 
"(b) REPORTS FROM RECIPIENTS.—The Secretary is authorized 
to require reports containing such information in such form and 
filed at such times as the Secretary determines necessary from 
any person awarded a fellowship under the provisions of this sub-
part. The reports shall be accompanied by a certificate from an 
appropriate official at the institution of higher education, library, 
archive, or other research center approved by the Secretary, stating 
that such individual is making satisfactory progress in, and is 
devoting essentially full time to the program for which the fellow-
ship was awarded. 
20 use 1134d. 
"SEC. 705. AUTHORIZATION OF APPROPRIATIONS. 
"There are authorized to be appropriated $30,000,000 for fiscal 
year 1999 and such sums as may be necessary for each of the 
4 succeeding fiscal years to carry out this subpart. 
^Subpart 2—Graduate Assistance in Areas of 
National Need 
20 use 1135. 
"SEC. 711. GRANTS TO ACADEMIC DEPARTMENTS AND PROGRAMS OF 
INSTITUTIONS. 
"(a) GRANT AUTHORITY.— 
"(1) IN GENERAL.—^The Secretary shall make grants to aca-
demic departments, programs and other academic units of 
institutions of higher education that provide courses of study 
leading to a graduate degree in order to enable such institutions 
to provide assistance to graduate students in accordance with 
this subpart. 
"(2) ADDITIONAL GRANTS.—^The Secretary may also make 
grants to such departments, programs and other academic units 
of institutions of higher education granting graduate degrees 
which submit joint proposals involving nondegree granting 
institutions which have formal arrangements for the support 
of doctoral dissertation research with degree-granting institu-
tions. Nondegree granting institutions eligible for awards as 
part of such joint proposals include any organization which— 
"(A) is described in section 501(c)(3) of the Internal 
Revenue Code of 1986, and is exempt from tax under 
section 501(a) of such Code; 
"(B) is organized and operated substantially to conduct 
scientific and cultural research and graduate training pro-
grams; 
"(C) is not a private foundation; 
"(D) has academic personnel for instruction and coun-
seling who meet the standards of the institution of higher 
education in which the students are enrolled; and 
"(E) has necessary research resources not otherwise 
readily available in such institutions to such students. 
"(b) AWARD AND DURATION OF GRANTS.— 
"(1) AWARDS.—^The principal criterion for the award of 
grants shall be the relative quality of the graduate progreims 
presented in competing applications. Consistent with an alloca-
tion of awards based on quality of competing applications, 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1791 
the Secretary shall, in awarding such grants, promote an equi-
table geographic distribution among eligible public and private 
institutions of higher education. 
"(2)DURATION AND AMOUNT.— 
"(A) DURATION.—^The Secretary shall award a grant 
under this subpart for a period of 3 years. 
"(B) AMOUNT.—^The Secretary shall award a grant to 
an academic department, program or unit of an institution 
of higher education under this subpart for a fiscal year 
in an amount that is not less than $100,000 and not greater 
than $750,000. 
"(3) REALLOTMENT.—Whenever the Secretary determines 
that an academic department, program or unit of an institution 
of higher education is unable to use all of the amounts available 
to the department, program or unit under this subpart, the 
Secretary shall, on such dates during each fiscal year as the 
Secretary may fix, reallot the amounts not needed to academic 
departments, programs and units of institutions which can 
use the grants authorized by this subpart. 
"(c) PREFERENCE TO CONTINUING GRANT RECIPIENTS.— 
"(1) IN GENERAL.—The Secretary shall make new grant 
awards under this subpart only to the extent that each previous 
grant recipient imder this subpart has received continued fund-
ing in accordance with subsection (bX2XA). 
"(2) RATABLE REDUCTION.—TO the extent that appropria-
tions under this subpart are insufidcient to comply with para-
graph (1), available funds shall be distributed by ratably reduc-
ing the amounts required to be awarded under subsection 
(b)(2XA). 
•«EC. 712. INSTITUTIONAL EUGIBILITY. 
"(a) ELIGIBILITY CRITERIA.—Any academic department, program 
or unit of an institution of higher education that ofiTers a program 
of postbaccalaureate study leading to a graduate degree in an 
area of national need (as designated under subsection (b)) may 
apply for a grant under this subpart. No department, program 
or unit shall be eligible for a grant unless the program of 
postbaccalaureate study has been in existence for at least 4 years 
at the time of application for assistance under this subpart. 
"(b) DESIGNATION OF AREAS OF NATIONAL NEED.—After con-
sultation with appropriate Federal and nonprofit agencies and 
organizations, the Secretary shall designate areas of national need. 
In making such designations, the Secretary shall take into account 
the extent to which the interest in the area is compelling, the 
extent to which other Federal programs support postbaccalaureate 
study in the area concerned, and an assessment of how the program 
could achieve the most significant impact with available resources. 
<*SEC. 713. CRITERIA FOR APPUCATIONS. 
"(a) SELECTION OF APPLICATIONS.—The Secretary shall make 
grants to academic departments, programs and units of institutions 
of higher education on the basis of applications submitted in accord-
ance with subsection (b). Applications shall be ranked on program 
quality by review panels of nationally recognized scholars and evalu-
ated on the quality and effectiveness of the academic program 
and the achievement and promise of the students to be served. 
To the extent possible (consistent with other provisions of this 
20 use 1135a. 
20USC1135b. 
112 STAT. 1792 
PUBLIC LAW 105-244—OCT. 7, 1998 
section), the Secretary shall make awards that are consistent with 
recommendations of the review panels. 
"(b) CONTENTS OF APPLICATIONS.—An academic department, 
program or unit of an institution of higher education, in the depart-
ment, program or unit's application for a grant, shall— 
"(1) describe the current academic program of the applicant 
for which the grant is sought; 
"(2) provide assurances that the applicant will provide, 
from other non-Federal sources, for the purposes of the fellow-
ship program under this subpart an amount equal to at least 
25 percent of the amount of the grant received under this 
subpart, which contribution may be in cash or in kind, fairly 
valued; 
"(3) set forth policies and procedures to assure that, in 
making fellowship awards under this subpart, the institution 
will seek talented students from traditionally underrepresented 
backgrounds, as determined by the Secretary; 
"(4) describe the number, types, and amounts of the fellow-
ships that the applicant intends to offer with grant funds 
provided under this part; 
"(5) set forth policies and procedures to assure that, in 
making fellowship awards under this subpart, the institution 
will make awards to individuals who— 
"(A) have financial need, as determined under part 
F of title IV; 
"(B) have excellent academic records in their previous 
programs of study; and 
"(C) plan to pursue the highest possible degree avail-
able in their course of study; 
"(6) set forth policies and procedures to ensure that Federal 
funds made available under this subpart for any fiscal year 
will be used to supplement and, to the extent practical, increase 
the funds that would otherwise be made available for the 
purpose of this subpart and in no case to supplant those funds; 
"(7) provide assurances that, in the event that funds made 
available to the academic department, program or unit under 
this subpart are insufficient to provide the assistance due a 
student under the commitment entered into between the aca-
demic department, program or unit and the student, the aca-
demic department, program or unit will, from any funds avail-
able to the department, program or unit, fulfill the commitment 
to the student; 
"(8) provide that the applicant will comply with the limita-
tions set forth in section 715; 
"(9) provide assurances that the academic department will 
provide at least 1 year of supervised training in instruction 
for students; and 
"(10) include such other information as the Secretsiry may 
prescribe. 
20 use 1135c. 
"SEC. 714. AWARDS TO GRADUATE STUDENTS. 
"(a) COMMITMENTS TO GRADUATE STUDENTS.— 
"(1) IN GENERAL.—^An academic department, program or 
unit of an institution of higher education shall make commit-
ments to graduate students who are eligible students under 
section 484 (including students pursuing a doctoral degree after 
having completed a master's degree program at an institution 
•'tfpi-5*!'%-;- -•-' :s5*;" 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1793 
of higher education) at any point in their graduate study to 
provide stipends for the length of time necessary for a student 
to complete the course of graduate study, but in no case longer 
than 5 years. 
"(2) SPECIAL RULE.—No such commitments shall be made 
to students under this subpart unless the academic department, 
program or unit has determined adequate funds are available 
to nilfill the commitment from funds received or anticipated 
under this subpart, or from institutional funds. 
**(b) AMOUNT OF STIPENDS.—^The Secretary shall make pay-
ments to institutions of higher education for the purpose of paying 
stipends to individuals who are awarded fellowships under this 
subpart. The stipends the Secretary establishes shall reflect the 
purpose of the program under this subpart to encourage highly 
talented students to undertake graduate study as described in 
this subpart. In the case of an individual who receives such individ-
ual's first stipend under this subpart in academic year 1999-2000 
or any succeeding academic year, such stipend shall be set at 
a level of support equal to that provided by the National Science 
Foundation graduate fellowships, except such amount shall be 
adjusted as necessary so as not to exceed the fellow's demonstrated 
level of need as determined under part F of title IV. 
"(c) TREATMENT OF INSTITUTIONAL PAYMENTS.—An institution 
of higher education that makes institutional pajmients for tuition 
and fees on behalf of individuals supported by fellowships under 
this subpart in amounts that exceed the institutional payments 
made by the Secretary pursuant to section 716(a) may count such 
excess toward the amounts the institution is required to provide 
pursuant to section 714(bX2). 
"(d) 
ACADEMIC 
PROGRESS REQUIRED.—Notwithstanding 
the 
provisions of subsection (a), no student shall receive an award— 
"(1) except during periods in which such student is 
maintaining satisfactory progress in, and devoting essentially 
full time to, study or research in the field in which such 
fellowship was awarded; or 
"(2) if the student is engaging in gainful employment other 
than part-time employment involved in teaching, research, or 
similar activities determined by the institution to be in support 
of the student's progress towards a degree. 
'^EC. 715. ADDITIONAL ASSISTANCE FOR COST OF EDUCATION. 
20 USC 1135cL 
"(a) INSTITUTIONAL PAYMENTS.— 
"(1) IN GENERAL.—^The Secretary shall (in addition to sti-
pends paid to individuals under this subpart) pay to the institu-
tion of higher education, for each individual awarded a fellow-
ship under this subpart at such institution, an institutional 
allowance. Except as provided in paragraph (2), such allowance 
shall be, for 1999-2000 and succeeding academic years, the 
same amount as the institutional payment made for 199S-
1999 adjusted annually thereafter in accordance vdth inflation 
as determined by the Department of Labor's Consumer Price 
Index for the previous cedendar year. 
"(2) REDUCTION.—^The institutional allowance paid under 
paragraph (1) shall be reduced by the amount the institution 
charges and collects from a fellowship recipient for tuition 
and other expenses as part of the recipient's instructional pro-
gram. 
112 STAT. 1794 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(b) USE FOR OVERHEAD PROHIBITED.—Funds made available 
pursuant to this subpart may not be used for the general operational 
overhead of 
the academic department or program. 
20 use 1135ee. 
"SEC. 718. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated $35,000,000 for fiscal 
year 1999 and such sums as may be necessary for each of the 
4 succeeding fiscal years to carry out this subpart. 
''Subpart 3—^Thurgood Marshall Legal 
Educational Opportunity Program 
20 use 1136. 
"SEC. 721. LEGAL EDUCATIONAL OPPORTUNITY PROGRAM. 
"(a) PROGRAM AUTHORITY.—^The Secretary shall carry out a 
program to be known as the Thurgood Marshall Legal Educational 
Opportunity Program' designed to provide low-income, minority, 
or disadvantaged college students with the information, preparation, 
and financial assistance to gain access to and complete law school 
study. 
(b) ELIGIBILITY.—A college student is eligible for assistance 
under tiiis section if the student is— 
"(1) from a low-income family; 
"(2) a minority; or 
"(3) from an economically or otherwise disadvantaged back-
ground. 
n[c) CONTRACT OR GRANT AUTHORIZED.—The Secretary is 
authorized to enter into a contract with, or make a grant to, 
the Council on Legal Education Opportunity, for a period of not 
less than 5 years— 
''(1) to identify college students who are from low-income 
families, are minorities, or are from disadvantaged backgrounds 
described in subsection (bX3); 
"(2) to prepare such students for study at accredited law 
schools; 
"(3) to assist such students to select the appropriate law 
school, make application for entry into law school, and receive 
financial assistance for such study; 
"(4) to provide support services to such students who are 
first-year law students to improve retention and success in 
law school studies; and 
"(5) to motivate and prepare such students with respect 
to law school studies and practice in low-income communities. 
**(d) SERVICES PROVIDED.—^In carrying out the purposes 
described in subsection (c), the contract or grant shall provide 
for the delivery of services through prelaw information resource 
centers, summer institutes, midyear seminars, and other edu-
cational activities, conducted under this section. Such services may 
include— 
''(I) information and counseling regarding— 
"(A) accredited law school academic programs, espe-
cially tuition, fees, and admission requirements; 
"(B) course work offered and required for graduation; 
"(C) faculty specialties and areas of legal emphasis; 
and 
"(D) undergraduate preparatory courses and curricu-
lum selection; 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1795 
"(2) tutoring and academic counseling, including assistance 
in preparing for bar examinations; 
"(3) prelaw mentoring programs, involving law school 
faculty, members of State £ind local bar associations, and retired 
and sitting judges, justices, and magistrates; 
"(4) assistance in identifying preparatory courses and 
material for the law school aptitude or admissions tests; 
(5) summer institutes for Thurgood Marshall Fellows that 
expose the Fellows to a rigorous curriculum that emphasizes 
abstract thinking, legal ansdysis, research, writing, and exam-
ination techniques; and 
"(6) midyear seminars and other educational activities that 
are designed to reinforce reading, writing, and studying skills 
of Thurgood Marshall Fellows. 
"(e) DURATION OF THE PROVISION OF SERVICES.—The services 
described in subsection (d) may be provided— 
"(1) prior to the period of law school study; 
**(2) during the period of law school study; and 
"(3) during the period following law school study and prior 
to taking a bar examination. 
"(f) SUBCONTRACTS AND SUBGRANTS.—^For the puiposes of plan-
ning, developing, or delivering one or more of the services described 
in subsection (d), the Council on Legal Education Opportunity shall 
enter into subcontracts with, and make subgrants to, institutions 
of higher education, law schools, public and private agencies and 
organizations, and combinations of such institutions, schools, agen-
cies, and organizations. 
"(g) STIPENDS.—^The Secretary shall annually establish the 
maximum stipend to be paid (including allowances for participant 
travel and for the travel of the dependents of the participant) 
to Thurgood Marshall Fellows for the period of participation in 
summer institutes and midyear seminars. A Fellow may be eUgible 
for such a stipend only if the Thurgood Marshall Fellow maintains 
satisfactory academic progress toward the Juris Doctor or Bachelor 
of Laws degree, as determined by the respective institutions. 
"(h) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 
to be appropriated to carry out this section $5,000,000 for fiscal 
year 1999 and each of the 4 succeeding fiscal years. 
^Subpart 4—General Provisions 
'^EC. 731. ADMINISTRATIVE PROVISIONS FOR SUBPARTS 1, 2, AND 3. 20USC 1137. 
"(a) COORDINATED ADMINISTRATION.—^In carrying out the pur-
pose described in section 700(1), the Secretary shall provide for 
coordinated administration and regulation of graduate programs 
assisted under subpsirts 1, 2, and 3 with other Federal programs 
providing assistance for graduate education in order to minimize 
duplication and improve efficiency to ensure that the programs 
are carried out in a manner most compatible with academic prac-
tices and with the standard timetables for applications for, and 
notifications of acceptance to, graduate programs. 
"(b) HIRING AUTHORITY.—^For purposes of carrying out subparts 
1, 2, and 3, the Secretary shall appoint, without regard to the 
provisions of title 5, United States Code, that govern appointments 
in the competitive service, such administrative and technical 
employees, with the appropriate educational background, as shall 
112 STAT. 1796 
PUBLIC LAW 105-244r-OCT. 7, 1998 
be needed to assist in the administration of such parts. The employ-
ees shall be paid without regard to the provisions of chapter 51 
and subchapter III of chapter 53 of such title relating to classifica-
tion and General Schedule pay rates. 
*
*
(
c
) USE FOR RELIGIOUS PURPOSES PROHIBITED.—NO institu-
tional payment or allowance under section 703(b) or 715(a) shall 
be paid to a school or department of divinity as a result of the 
award of a fellowship under subpart 1 or 2, respectively, to an 
individual who is studying for a religious vocation. 
"(d) EVALUATION.—The Secretary shall evaluate the success 
of assistance provided to individuals under subp£ut 1, 2, or 3 with 
respect to graduating from their degree programs, and placement 
in faculty and professional positions. 
**(e) CONTINUATION AWARDS.—^TTie Secretary, using funds appro-
priated to carry out subparts 1 and 2, and before awarding any 
assistance imder such parts to a recipient that did not receive 
assistance under part C or D of title D
C (as such parts were 
in effect prior to the date of enactment of the Higher Education 
Amendments of 1998) shall continue to provide funding to recipients 
of assistance under such part C or D (as so in effect), as the 
case may be, pursuant to any multiyear award of such assistance. 
**PART B—FUND FOR THE IMPROVEMENT OF 
POSTSECONDARY EDUCATION 
20 use 1138. 
'^EC. 741. FUND FOR THE IMPROVEMENT OF POSTSECONDARY 
EDUCATION. 
"(a) AUTHORITY.—^The Secretary is authorized to make grants 
to, or enter into contracts with, institutions of higher education, 
combinations of such institutions, and other public and private 
nonprofit institutions and agencies, to enable such institutions, 
combinations, and agencies to improve postsecondary education 
opportunities by— 
"(1) encouraging the reform, innovation, and improvement 
of postsecondary education, and providing equal educational 
opportunity for all; 
"(2) the creation of institutions, programs, and joint efforts 
involving paths to career and professional training, and com-
binations of academic and experiential learning; 
"(3) the establishment of institutions and programs based 
on the technology of communications; 
"(4) the carrying out, in postsecondary educational institu-
tions, of changes in internal structure and operations designed 
to clarify institutional priorities and puiposes; 
''(5) the design and introduction of cost-effective methods 
of instruction andoperation; 
"(6) the introduction of institutional reforms designed to 
expand individual opportunities for entering and reentering 
institutions and pursuing programs of study tailored to individ-
ual needs; 
"(7) the introduction of reforms in graduate education, in 
the structure of academic professions, and in the recruitment 
and retention of faculties; and 
"(8) the creation of new institutions and programs for 
examining and awarding credentials to individuals, and the 
introduction of reforms in current institutional practices related 
thereto. 
PUBLIC LAW 105-244—OCT. 7,1998 
112 STAT. 1797 
"(b) PLANNING GRANTS.—The Secretary is authorized to make 
planning grants to institutions of higher education for the develop-
ment and testing of innovative techniques in postsecondary edu-
cation. Such grants shall not exceed $20,000. 
"SEC. 742. BOARD OF THE FUND FOR THE DIPROVEMENT OF POST- 20USC 1138a 
SECONDARY EDUCATION. 
"(a) ESTABLISHMENT.—^There is estabUshed a National Board 
of the Fund for the Improvement of Postsecondary Education (in 
this part referred to as the 'Board'). The Board shall consist of 
15 members appointed by the Secretary for overlapping 3-year 
terms. A majority of the Board shall constitute a quorum. Any 
member of the Board who has served for 6 consecutive years shaU 
thereafter be ineU^ble for appointment to the Board during a 
2-year period followmg the expiration of such sixth year. 
*
*
(
b
) MEMBERSHIP.— 
**(1) IN G
E
N
E
R
A
L
.
—
^
T
h
e Secreta^ shall designate one of 
the members of the Board as Chairperson of the Board. A 
majority of the members of the Board shall be public interest 
representatives, including students, and a minority shall be 
educational representatives. All members selected shall be 
individuals able to contribute an important perspective on prior-
ities for improvement in postsecondary education and strategies 
of educational and institutional change. 
"(2) APPOINTMENT OF DIRECTOR.—The Secretary shall 
appoint the Director of the Fund for the Improvement of Post-
secondaiy Education (hereafter in this part referred to as the 
*Director) 
**(c) DUTIES.—The Board shall— 
**(1) advise the Secretary and the Director on priorities 
for the improvement of postsecondary education and make such 
recommendations as the Board may deem appropriate for the 
improvement of postsecondary education and for the evaluation, 
dissemination, and adaptation of demonstrated improvements 
in i)ostsecondary educational practice; 
"(2) advise the Secretary and the Director on the operation 
of the Fund for the Improvement of Postsecondary Education, 
including advice on planning documents, guidelines, and proce-
dures for grant comp^etitions prepared by the Fund; and 
"(3) meet at the call of the Chairperson, except that the 
Board shall meet whenever one-third or more of the members 
request in writing that a meeting be held. 
"(d) INFORMATION AND ASSISTANCE.—The Director shall make 
available to the Board such information and assistance as may 
be necessary to enable the Board to carry out its functions. 
"SEC. 743. ADMINISTRATIVE PROVISIONS. 
20 USC 1138b. 
"(a) TECHNICAL EMPLOYEES.—The Secretary may appoint, for 
terms not to exceed 3 years, without regard to the provisions 
of title 5, United States Code, governing appointments in the 
competitive service, not more than 7 technical employees to admin-
ister this part who may be paid without regard to the provisions 
of chapter 51 and subchapter III of chapter 53 of such title relating 
to classification and General Schedule pay rates. 
"(b) PROCEDURES.—The Director shall estabUsh procedures for 
reviewing and evaluating grants and contracts made or entered 
into under this part. Procedures for reviewing grant applications 
or contracts for financial assistance imder tms section may not 
112 STAT. 1798 
PUBLIC LAW 105-244—OCT. 7, 1998 
be subject to any review outside of officials responsible for the 
administration of the Fund for the Improvement of Postsecondary 
Education. 
20 use 1138c. 
"SEC. 744. SPECIAL PROJECTS. 
"(a) GRANT AUTHORITY.—^The Director is authorized to make 
grants to institutions of higher education, or consortia thereof, 
and such other public agencies £uid nonprofit organizations as the 
Director deems necessary for innovative projects concerning one 
or more areas of particular national need identified by the Director. 
"(b) APPLICATION.—^No grant shall be made under this part 
unless an application is made at such time, in such manner, and 
contains or is accompanied by such information as the Secretary 
may require. 
"(c) AREAS OF NATIONAL NEED.—Areas of national need shall 
initially include, but shall not be limited to, the following: 
"(1) Institutional restructuring to improve learning and 
promote productivity, efficiency, quality improvement, and cost 
and price control. 
(2) Articulation between 2- and 4-year institutions of 
higher education, including developing innovative methods for 
ensuring the successful transfer of students from 2- to 4-year 
institutions of higher education. 
"(3) Evaluation and dissemination of model programs. 
"(4) International cooperation and student exchange among 
postsecondary educational institutions. 
20 use 1138d. 
"SEC. 746. AUTHORIZATION OF APPROPRIATIONS. 
"There are authorized to be appropriated to carry out this 
part $30,000,000 for fiscal year 1999 and such sums as may be 
necessary for each of the 4 succeeding fiscal years. 
"PART C—URBAN COMMUNITY SERVICE 
20 use 1139. 
"SEC. 751. FINDINGS. 
"The Congress finds that— 
"(1) the Nation's urban centers are facing increasingly 
pressing problems and needs in the areas of economic develop-
ment, community infrastructure and service, social policy, puD-
lic health, housing, crime, education, environmental concerns, 
planning and work force preparation; 
"(2) there are, in the Nation's urban institutions, people 
with underutilized skills, knowledge, and experience who are 
capable of providing a vast range of services toward the 
amelioration of the problems described in paragraph (1); 
"(3) the skills, knowledge and experience in these urbEui 
institutions, if applied in a systematic and sustained manner, 
can make a significant contribution to the solution of such 
problems; and 
"(4) the application of such skills, knowledge and experience 
is hindered by the limited fiinds available to redirect attention 
to solutions to such urban problems. 
20 use 1139a. 
"SEC. 762. PURPOSE; PROGRAM AUTHORIZED. 
"(a) PURPOSE.—^It is the purpose of this part to provide incen-
tives to urban academic institutions to enable sucn institutions 
- . * i ? t 5 R » - < > - . 
^ -
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1799 
to work with private and civic organizations to devise and imple-
ment solutions to pressing and severe problems in their commu-
nities. 
"(b) PROGRAM AUTHORIZED.—The Secretary is authorized to 
carry out a program of providing assistance to eligible institutions 
to enable such institutions to carry out the activities described 
in section 754 in accordance with the provisions of this part. 
"SEC. 753. APPUCAHON FOR URBAN COMMUNITY SERVICE GRANTS. 20 use 1139b. 
"(a) APPUCATION.— 
"(1) IN GENERAL.—An eligible institution seeking assistance 
under this part shall submit to the Secretary an appUcation 
at such time, in such form, and containing or accompanied 
by such information and assurances as the Secretary may 
require by regulation. 
"(2) CONTENTS.—^Each application submitted pursuant to 
paragraph (1) shall— 
"(A) describe the activities and services for which 
assistance is sought; and 
"(B) include a plan that is agreed to by the members 
of a consortium that includes, in addition to the eligible 
institution, one or more of the following entities: 
"(i) A community college, 
"(ii) An urban school system, 
"(iii) A local government, 
"(iv) A business or other employer. 
"(v) A nonprofit institution. 
"(3) WAIVER.—The Secretary may waive the consortium 
requirements described in paragraph (2) for any applicant who 
can demonstrate to the satisfaction of the Secretary that the 
applicant has devised an integrated and coordinated plan which 
meets the purpose of this part. 
"(b) PRIORITY IN SELECTION OF APPUCATIONS.—The Secretary 
shall give priority to applications that propose to conduct joint 
projects supported by other local, State, and Federal programs. 
In addition, the Secretary shall give priority to eligible institutions 
submitting applications that demonstrate the eligible institution's 
commitment to urban community service. 
"(c) SELECTION PROCEDURES.—The Secretary shall, by regula-
tion, develop a formal procedure for the submission of applications 
under this part and shall publish in the Federal Register an 
announcement of that procedure and the availability of funds under 
this part. 
Regulatioas. 
Federal Register, 
publication. 
"SEC. 754. ALLOWABLE ACTIVITIES. 
"Funds made available under this part shall be used to support 
planning, applied research, training, resource exchanges or tech-
nology transfers, the delivery of services, or other activities the 
purpose of which is to design and implement programs to assist 
urban communities to meet and address their pressing and severe 
problems, such as the following: 
"(1) Work force preparation. 
"(2) Urban poverty and the alleviation of such poverty. 
"(3) Health care, including delivery and access. 
"(4) Underperforming school systems and students. 
"(5) Problems faced by the elderly and individuals with 
disabilities in urban settings. 
"(6) Problems faced by families and children. 
20 use 1139c. 
112 STAT. 1800 
PUBLIC LAW 105-244—OCT. 7, 1998 
20 use 1139d. 
20 use 1139e. 
20 use 1139f. 
Publication. 
Records. 
Establishment. 
"(7) Campus and community crime prevention, including 
enhanced security and safety awareness measures as well as 
coordinated programs addressing the root causes of crime. 
"(8) Urban housing. 
"(9) Urban infrastructure. 
"(10) Economic development. 
"(11) Urban environmental concerns. 
"(12) Other problem areas which participants in the consor-
tium described in section 753(aX2XB) concur are of high priority 
in the urban area. 
"(13)(A) Problems faced by individuals with disabilities 
regarding accessibility to institutions of higher education and 
other public and private community facilities. 
"(B) Amelioration of existing attitudinal barriers that pre-
vent full inclusion by individuals with disabilities in their 
community. 
"(14) Improving access to technology in local communities. 
'^EC. 756. PEER REVIEW. 
"The Secretary shall designate a peer review panel to review 
applications submitted under this part and make recommendations 
for funding to the Secretary. In selecting the peer review panel, 
the Secretary may consult with other appropriate Cabinet-level 
officials and with non-Federal organizations, to ensure that the 
panel will be geographically balanced and be composed of represent-
atives from public and private institutions of higher education, 
labor, business, and State and local government, who have expertise 
in urban community service or in education. 
'^EC. 766. DISBURSEMENT OF FUNDS. 
"(a) MULTIYEAR AVAILABILITY.—Subject to the availability of 
appropriations, grants under this part may be made on a multiyear 
basis, except that no institution, individually or as a participant 
in a consortium of such institutions, may receive such a grant 
for more than 5 years. 
"(b) 
EQUITABLE 
GEOGRAPHIC DISTRIBUTION.—The Secretary 
shall award grants under this part in a manner that achieves 
an equitable geographic distribution of such grants. 
"(c) MATCHING REQUIREMENT.—An applicant under this part 
and the local governments associated with the application shall 
4x>ntribute to the conduct of the program supported by the grant 
an amount from non-Federal funds equal to at least one-fourth 
of the amount of the grant, which contribution may be in cash 
or in kind. 
•«EC. 757. DESIGNATION OF URBAN GRANT INSTITUTIONS. 
"The Secretary shall publish a list of eligible institutions under 
this part and shall designate these institutions of higher education 
as TTrban Grant Institutions'. The Secretary shall establish a 
national network of Urban Grant Institutions so that the results 
of individual projects achieved in one metropolitan area can then 
be generalized, disseminated, replicated, and applied throughout 
the Nation. The information developed as a result of this section 
shall be made available to Urban Grant Institutions and to any 
other interested institution of higher education by any appropriate 
means. 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1801 
"SEC. 758. DEFINITIONS. 
20USC1139g. 
"As used in this part: 
"(1) URBAN AREA.—^The term 'urban area' means a metro-
politan statistical area having a population of not less than 
350,000, or two contiguous metropolitan statistical areas having 
a population of not less than 350,000, or, in any State which 
does not have a metropolitan statistical area which has such 
a population, the eligible entity in the State submitting an 
application under sed^ion 753, or, if no such entity submits 
an application, the Secretary, shall designate one urban area 
for the purposes of this part. 
"(2) EuGIBLE INSTITUTION.—^The term 'eligible institution' 
means— 
"(A) a nonprofit municipal university, established by 
the governing body of the city in which it is located, and 
operating as of the date of enactment of the Higher Edu-
cation Amendments of 1992 under that authority; or 
"(B) an institution of higher education, or a consortium 
of such institutions any one of which meets all of the 
requirements of this paragraph, which— 
"(i) is located in an urban area; 
"(ii) draws a substantial portion of its undergradu-
ate students from the urban area in which such institu-
tion is located, or from contiguous areas; 
"(iii) carries out programs to make postsecondary 
educational opportunities more accessible to residents 
of such urban area, or contiguous areas; 
"(iv) has the present capacity to provide resources 
responsive to the needs and priorities of such urban 
area sind contiguous areas; 
"(v) offers a range of professional, technical, or 
graduate programs sufficient to sustain the capacity 
of such institution to provide such resources; and 
"(vi) has demonstrated and sustained a sense of 
responsibility to such urban area and contiguous areas 
and the people of such areas. 
"SEC. 759. AUTHORIZATION OF APPROPRIATIONS. 
20 USC 1139h. 
"There are authorized to be appropriated $20,000,000 for fiscal 
year 1999 and such sums as may be necessary for each of the 
4 succeeding fiscal years to carry out this part. 
"PART D—DEMONSTRATION PROJECTS TO EN-
SURE STUDENTS WITH DISABILITIES RE-
CEIVE A QUALITY HIGHER EDUCATION 
"SEC. 761. PURPOSES. 
20 USC 1140. 
"It is the purpose of this part to support model demonstration 
projects to provide technical assistance or professional development 
for faculty and administrators in institutions of higher education 
in order to provide students with disabilities a quality postsecondary 
education. 
"SEC. 762. GRANTS AUTHORIZED. 
20 USC 1140a. 
"(a) 
COMPETITIVE GRANTS AUTHORIZED.—The Secretary 
may 
award grants, contracts, and cooperative agreements, on a competi-
tive basis, to institutions of higher education, of which at least 
112 STAT. 1802 
PUBLIC LAW 105-244—OCT. 7, 1998 
two such grants shall be awarded to institutions that provide profes-
sional development and technical assistance in order for students 
with learning disabilities to receive a quality postsecondaiy edu-
cation. 
"(b) DURATION; ACTIVITIES.— 
"(1) DURATION.—Grants under this part shall be awarded 
for a period of 3 years. 
"(2) AUTHORIZED ACTIVITIES.—Grants under this part shall 
be used to carry out one or more of the following activities: 
"(A) 
TEACHING 
METHODS 
AND STRATEGIES.—The 
development of innovative, effective, and efficient teaching 
methods and strategies to provide faculty and administra-
tors with the skills and supports necessary to teach stu-
dents with disabilities. Such methods and strategies may 
include inservice training, professional development, cus-
tomized and general technical assistance, workshops, sum-
mer institutes, distance learning, and training in the use 
of assistive and educational technology. 
"(B) SYNTHESIZING 
RESEARCH AND INFORMATION.— 
Synthesizing research and other information related to the 
provision of postsecondaiy educational services to students 
with disabilities. 
"(C) PROFESSIONAL DEVELOPMENT AND TRAINING SES-
SIONS.—Conducting professional development and training 
sessions for faculty and administrators from other institu-
tions of higher education to enable the faculty and adminis-
trators to meet the postsecondaiy educational needs of 
students with disabilities. 
"(3) MANDATORY EVALUATION AND DISSEMINATION.—Grants 
under this part shall be used for evaluation, and dissemination 
to other institutions of higher education, of the information 
obtained through the activities described in subparagraphs (A) 
through (C). 
"(c) CONSIDERATIONS IN MAKING AWARDS.—^In awarding grants, 
contracts, or cooperative agreements under this section, the Sec-
retary shall consider the following: 
"(1) GEOGRAPHIC DISTRIBUTION.—^Providing an equitable 
geographic distribution of such grants. 
"(2) RURAL AND URBAN AREAS.—Distributing such grants 
to urban and rural areas. 
"(3) RANGE AND TYPE OF INSTITUTION.—Ensuring that the 
activities to be assisted are developed for a range of tjrpes 
and sizes of institutions of higher education. 
"(4) PRIOR 
EXPERIENCE OR EXCEPTIONAL 
PROGRAMS.— 
Institutions of higher education with demonstrated prior experi-
ence in, or exceptional programs for, meeting the postsecondaiy 
educational needs of students with disabilities. 
20 use 1140b. 
'«EC.763.APPUCATIONS. 
"Each institution of higher education desiring to receive a grant, 
contract, or cooperative agreement under this part shall submit 
an application to the Secretary at such time, in such manner, 
and accompanied by such information as the Secretary may require. 
Each application shall include— 
"(1) a description of how such institution plans to address 
each of the activities required under this part; 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1803 
"(2) a description of how the institution consulted with 
a broad range of people within the institution to develop activi-
ties for which assistance is sought; and 
"(3) a description of how the institution will coordinate 
and collaborate with the office that provides services to students 
with disabilities within the institution. 
"SEC. 764. RULE OF CONSTRUCTION. 
"Nothing in this part shall be construed to impose any addi-
tional duty, obligation, or responsibility on an institution of higher 
education or on the institution's faculty, administrators, or staff 
than are required by section 504 of the Rehabilitation Act of 1973 
and the Americans with Disabilities Act of 1990. 
"SEC. 765. AUTHORIZATION OF APPROPRIATIONS. 
"There are authorized to be appropriated for this part 
$10,000,000 for fiscal year 1999 and such sums as may be necessary 
for each of the 4 succeeding fiscal years.". 
SEC. 702. REPEALS. 
Except as otherwise provided in section 301(a), titles VIII (20 
U.S.C. 1133 et seq.), IX (20 U.S.C. 1134 et seq.), X (20 U.S.C. 
1135 et seq.), XI (20 U.S.C. 1136), and XII (20 U.S.C. 1141) are 
repealed. 
TITLE VIII—STUDIES, REPORTS, AND 
RELATED PROGRAMS 
20 u s e 1140c. 
20 u s e lUOd. 
PART A—STUDIES 
SEC. 801. STUDY OF MARKET MECHANISMS IN FEDERAL STUDENT 
LOAN PROGRAMS. 
(a) STUDY REQUIRED.—The Comptroller General and the Sec-
retary of Education shall convene a study group including the 
Secretary of the Treasury, the Director of the Office of Management 
and Budget, the Director of the Congressional Budget Office, rep-
resentatives of entities making loans under part B of title IV 
of the Higher Education Act of 1965, representatives of other enti-
ties in the financial services community, representatives of other 
participants in the student loan programs, and such other individ-
uals as the Comptroller General and the Secretary may designate. 
The Comptroller General and Secretary, in consultation with the 
study group, shall design and conduct a study to identify and 
evaluate means of establishing a market mechanism for the delivery 
of loans made pursuant to such title IV. 
(b) DESIGN OF STUDY.—The study required under this section 
shall identify not fewer than 3 different market mechanisms for 
use in determining lender return on student loans while continuing 
to meet the other objectives of the programs under parts B and 
D of such title IV, including the provision of loans to all eligible 
students. Consideration may be given to the use of auctions and 
to the feasibility of incorporating income-contingent repayment 
options into the student loan system and requiring borrowers to 
repay through income tax withholding. 
(c) EVALUATION OF MARKET MECHANISMS.—The mechanisms 
identified under subsection (b) shall be evaluated in terms of the 
following areas: 
20 u s e 1018 
note. 
112 STAT. 1804 
PUBLIC LAW 105-244—OCT. 7, 1998 
Deadlines. 
Public 
infonnation. 
(1) The cost or savings of loans to or for borrowers, includ-
ing parent borrowers. 
(2) The cost or savings of the mechanism to the Federal 
Government. 
(3) The cost, effect, and distribution of Federal subsidies 
to or for participants in the program. 
(4) The abihty of the mechanism to accommodate the poten-
tial distribution of subsidies to students through an income-
contingent repayment option. 
(5) The effect on the simplicity of the program, including 
the effect of the plan on the regulatory burden on students, 
institutions, lenders, and other program participants. 
(6) The effect on investment in human capital and 
resources, loan servicing capability, and the quality of service 
to the borrower. 
(7) The effect on the diversity of lenders, including commu-
nity-based lenders, originating and secondary market lenders. 
(8) The effect on program integrity. 
(9) The degree to which the mechanism will provide market 
incentives to encourage continuous improvement in the delivery 
and servicing of loans. 
(10) The availability of loans to students by region, income 
level, and by categories of institutions. 
(11) The proposed Federal and State role in the operation 
of the mechanism. 
(12) A description of how the mechanism will be adminis-
tered and operated. 
(13) Transition procedures, including the effect on loan 
availability during a transition period. 
(14) Any other areas the study group may include. 
(d) PRELIMINARY FINDINGS AND PUBLICATION OF STUDY.—^Not 
later than November 15, 2000, the study group shall make the 
group's preliminary findings, including any additional or dissenting 
views, available to the public with a 60-day request for public 
comment. The study group shall review these comments and the 
Comptroller Greneral and the Secretary shall transmit a final report, 
including any additional or dissenting views, to the Committee 
on Education and the Workforce of the House of Representatives, 
the Committee on Labor and Human Resources of the Senate, 
and the Committees on the Budget of the House of Representatives 
and the Senate not later than May 15, 2001. 
SEC. 802. STUDY OF THE FEASIBILITY OF ALTERNATIVE FINANCIAL 
INSTRUMENTS FOR DETERMINING LENDER YIELIMS. 
(a) STUDY REQUIRED.—^The Comptroller General and the Sec-
retary of Education shall convene a study group including the 
Secretary of the Treasury, the Director of the Office of Management 
and Budget, the Director of the Congressional Budget Office, rep-
resentatives of entities making loans under part B of title IV 
of the Higher Education Act of 1965, representatives of other enti-
ties in the financial services community, representatives ©
f other 
participants in the student loan programs, and such other individ-
uals as the Comptroller Greneral and the Secretary of Education 
may designate. The Comptroller Greneral and the Secretary of Edu-
cation, in consultation with the study group, shall evaluate the 
91-day IVeasury bill, 30-day and 90-day commercial paper, and 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1805 
the 90-day London Interbank Offered Rate (in this section referred 
to as "LIBOR") in terms of 
the following: 
(1) The historical liquidity of the market for each, and 
a historical comparison of the spread between: (A) the 30-
day and 90-day commercial paper rate, respectively, and the 
91-day Treasury bill rate; and (B) the spread between the 
LIBOR and the 91-day Treasury bill rate. 
(2) The historical volatility of the rates and projections 
of future volatility. 
(3) Recent changes in the liquidity of the market for each 
such instrument in a balanced Federal budget environment 
and a low-interest rate environment, and projections of future 
liquidity assuming the Federal budget remains in balance. 
(4) The cost or savings to lenders with small, medium, 
and large student loan portfolios of basing lender yield on 
either the 30-day or 90-day commercial paper rate or the LIBOR 
while continuing to base the borrower rate on the 91-day Treas-
ury bill, and the effect of such change on the diversity of 
lenders participating in the program. 
(5) The cost or savings to the Federal Government of basing 
lender yield on either the 30-day or 90-day commercial paper 
rate or the LIBOR while continuing to base the borrower rate 
on the 91-day Treasury bill. 
(6) Any possible risks or benefits to the student loan pro-
grams under the Higher Education Act of 1965 and to student 
borrowers. 
(7) Any other areas the Comptroller General and the 
Secretary of Education agree to include. 
(b) REPORT REQUIRED.—^Not later than 6 months after the Deadline, 
date of enactment of this Act, the Comptroller General and the 
Secretary shall submit a final report reg£irding the findings of 
the study group to the Committee on Education and the Workforce 
of the House of Representatives and the Committee on Labor and 
Human Resources of the Senate. 
SEC. 803. STUDENT-RELATED DEBT STUDY REQUIRED. 
20 USC 1015 
(a) IN GENERAL.—^The Secretary of Education shall conduct 
a study that analyzes the distribution and increase in student-
related debt in terms o
f
— 
(1) demographic characteristics, such as race or ethnicity, 
and family income; 
(2) type of institution and whether the institution is a 
public or private institution; 
(3) loan source, such as Federal, State, institutional or 
other, and, if the loan source is Federal, whether the loan 
is or is not subsidized; 
(4) academic field of study; 
(5) parent loans, and whether the parent loans are federally 
guaranteed, private, or property-secured such as home equity 
loans; and 
(6) relation of student debt or anticipated debt to— 
(A) students' decisions about whether and where to 
enroll in college and whether or how much to borrow in 
order to attend college; 
(B) the length of time it takes students to earn bacca-
laureate degrees; 
112 STAT. 1806 
PUBLIC LAW 105-244-OCT. 7, 1998 
20 use 1099b 
note. 
(C) students' decisions about whether and where to 
attend graduate school; 
(D) graduates' employment decisions; 
(E) graduates' burden of repayment as reflected by 
the graduates' ability to save for retirement or invest in 
a home; and 
(F) students' future earnings. 
Deadline. 
(b) REPORT.—^After conclusion of the study required by sub-
section (a), the Secretary of Education shall submit a final report 
regarding the findings of the study to the Committee on Labor 
and Human Resources of the Senate and the Committee on Edu-
cation and the Workforce of the House of Representatives not later 
than 18 months after the date of enactment of the Higher Education 
Amendments of 1998. 
(c) INFORMATION.—After the study and report under this section 
are concluded, the Secretary of Education shall determine which 
information described in subsection (a) would be useful for families 
to know and shall include such information as part of the compara-
tive information provided to families about the costs of higher 
education under the provisions of part C of title I. 
SEC. 804. STUDY OF TRANSFER OF CREDITS. 
(a) STUDY REQUIRED.—The Secretary of Education shall conduct 
a study to evaluate policies or practices instituted by recognized 
accrediting agencies or associations regarding the treatment of the 
transfer of credits from one institution of higher education to 
another, giving particular attention to— 
(1) adopted policies regarding the transfer of credits 
between institutions of higher education which are accredited 
by different agencies or associations and the reasons for such 
policies; 
(2) adopted policies regarding the transfer of credits 
between institutions of higher education which are accredited 
by nationed agencies or associations and institutions of higher 
education which are accredited by regional agencies and 
'' 
associations and the reasons for such policies; 
(3) the effect of the adoption of such policies on students 
transferring between such institutions of higher education, 
including time required to matriculate, increases to the student 
of tuition and fees paid, and increases to the student with 
regard to student loan burden; 
(4) the extent to which Federal financial aid is awarded 
to such students for the duplication of coursework already 
completed at another institution; and 
(5) the aggregate cost to the Federal Government of the 
adoption of such policies. 
Deadline. 
(b) REPORT.—^Not later than one year after the date of enact-
ment of this Act, the Secretary of Education shall submit a report 
to the Chairman and Ranking Minority Member of the Committee 
on Education and the Workforce of the House of Representatives 
and the Committee on Labor and Human Resources of the Senate 
detaiUng the Secretary's findings regarding the study conducted 
under subsection (a). The Secretary's report shall include such 
recommendation with respect to the recognition of accrediting agen-
cies or associations as the Secretary deems advisable. 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1807 
SEC. 805. STUDY OF OPPORTUNITIES FOR PARTICIPATION IN ATHLET- 
20 USC 1001 
ICS PROGRAMS. 
note. 
(a) STUDY.—The Comptroller General shall conduct a study 
of the opportunities for participation in intercollegiate athletics. 
The study shall address issues including— 
(1) the extent to which the number o
f
— 
(A) secondary school athletic teams has increased or 
decreased in the 20 years preceding 1998 (in aggregate 
terms); and 
(B) intercollegiate athletic teams has increased or 
decreased in the 20 years preceding 1998 (in aggregate 
terms) at 2-year and 4-year institutions of higher education; 
(2) the extent to which participation by student-athletes 
in secondary school and intercollegiate athletics has increased 
or decreased in the 20 years preceding 1998 (in aggregate 
terms); 
(3) over the 20-year period preceding 1998, a list of the 
men's and women's secondary school and intercollegiate sports, 
ranked in order of the sports most affected by increases or 
decreases in levels of participation and numbers of teams (in 
the aggregate); 
(4) all factors that have influenced campus officials to add 
or discontinue sports teams at secondary schools and institu-
tions of higher education, including— 
(A) institutional mission and priorities; 
(B) budgetary pressures; 
(C) institutional reforms and restructuring; 
(D) escalating liability insurance premiums; 
(E) changing student and community interest in a 
sport; 
(F) advancement of diversity among students; 
(G) lack of necessary level of competitiveness of the 
sports program; 
(H) club level sport achieving a level of competitiveness 
to make the sport a viable varsity level sport; 
(I) injuries or deaths; and 
(J) conference realignment; 
(5) the actions that institutions of higher education have 
taken when decreasing the level of participation in intercolle-
giate sports, or the number of teams, in terms of providing 
information, 
advice, scholarship maintenance, 
counseling, 
advance warning, and an opportunity for student-athletes to 
be involved in the decisionmaJdng process; 
(6) the administrative processes and procedures used by 
institutions of higher education when determining whether to 
increase or decrease intercollegiate athletic teams or participa-
tion by student-athletes; 
(7) the budgetary or fiscal impact, if any, of a decision 
by an institution of higher education— 
(A) to increase or decrease the number of intercollegiate 
athletic teams or the participation of student-athletes; or 
(B) to be involved in a conference realignment; and 
(8) the alternatives, if any, institutions of higher education 
have pursued in lieu of eliminating, or severely reducing the 
funding for, anintercoUegiate sport, and the success of such 
alternatives. 
112 STAT. 1808 
PUBLIC LAW 105-244—OCT. 7, 1998 
Deadline. 
(b) REPORT.—^The Comptroller GenergJ shall submit a report 
regarding the results of the study to the Committee on Labor 
and Human Resources of the Senate and the Committee on Edu-
cation and the Workforce of the House of Representatives. 
SEC. 806. STUDY OP THE EFFECTIVENESS OF COHORT DEFAULT RATES 
FOR INSTITUTIONS WITH FEW STUDENT LOAN BORROW-
ERS. 
(a) STUDY REQUIRED.—The Secretary of Education shall conduct 
a study of the effectiveness of cohort default rates as an indicator 
of administrative capability and program quality for institutions 
of higher education at which less than 15 percent of students 
eligible to borrow participate in the Federal student loan programs 
under title IV of the Higher Education Act of 1965 and fewer 
than 30 borrowers enter repa3rment in any fiscal year. At a mini-
mum, the study shall include— 
(1) identification of the institutions included in the study 
and of the student populations the institutions serve; 
(2) analysis of cohort default rates as indicators of adminis-
trative shortcomings and program quality at the institutions; 
(3) analysis of the effectiveness of cohort default rates 
as a means to prevent fraud and abuse in the programs assisted 
under such title; 
(4) analysis of the extent to which the institutions with 
high cohort default rates are no longer participants in the 
Federal student loan programs under such title; and 
(5) analysis of the costs incurred by the Department of 
Education for the calculation, publication, correction, and 
appeal of cohort default rates for the institutions in relation 
to any benefits to taxpayers. 
(b) CONSULTATION.—In conducting the study described in sub-
section (a), the Secretary of Education shall consult with institutions 
of higher education. 
(c) REPORT TO CONGRESS.—The Secretary of Education shall 
report to the Committee on Labor and Humsin Resources of the 
Senate and the Committee on Education and the Workforce of 
the House of Representatives not later than September 30, 1999, 
regarding the results of the study described in subsection (a). 
PART 
B—ADVANCED 
PLACEMENT 
INCENTIVE 
PROGRAM 
20 use 1070a-
11 note. 
SEC. 810. ADVANCED PLACEMENT INCENTIVE PROGRAM. 
(a) PROGRAM ESTABLISHED.—The Secretary of Education is 
authorized to make grants to States having applications approved 
imder subsection (c) to enable the States to reimburse low-income 
individuals to cover part or all of the cost of advanced placement 
test fees, if the low-income individuals— 
(1) are enrolled in an advanced placement class; and 
(2) plan to take an advanced placement test. 
(b) 
INFORMATION 
DISSEMINATION.—The 
State 
educational 
agency shall disseminate information regarding the availability of 
test fee pa)anents under this section to eligible individuals through 
secondary school teachers and guidance counselors. 
(c) REQUIREMENTS FOR APPROVAL OF APPLICATIONS.—In approv-
ing applications for grants the Secretary of Education shall— 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1809 
(1) require that each such application contain a description 
of the advanced placement test fees the State will pay on 
behalf of individual students; 
(2) require an assurance that any funds received under 
this section, other than funds used in accordance with sub-
section (d), shall be used only to pay advanced placement test 
fees; 
(3) contain such information as the Secretary may require 
to demonstrate that the State will ensure that a student is 
eligible for payments under this section, including the docu-
mentation required by chapter 1 of subpart 2 of part A of 
title IV of the Higher Education Act of 1965 (20 U.S.C. 1070a-
11 et seq.); and 
(4) consider the number of children eligible to be counted 
under section 1124(c) of the Elementary and Secondary Edu-
cation Act of 1965 in the State in relation to the number 
of such children in all the States in determining grant award 
amounts. 
(d) FxwDiNG RULES.— 
(1) USE OF FUNDS.—A State educational agency in a State 
in which no eligible low-income individual is required to pay 
more than a nominal fee to take advanced placement tests 
in core subjects may use any grant funds provided to that 
State educational agency, that remain after fees have been 
paid on behalf of all eligible low-income individuals, for activi-
ties directly related to increasing— 
(A) the enrollment of low-income individuals 
in 
advanced placement courses; 
(B) the participation of low-income individuals in 
advanced placement tests; and 
(C) the availability of advanced placement courses in 
schools serving high poverty areas. 
(2) SUPPLEMENT, NOT SUPPLANT, RULE.—^Funds provided 
under this section shall supplement and not supplant other 
non-Federal funds that are available to assist low-income 
individuals in pajring advanced placement test fees. 
(e) REGULATIONS.—^The Secretary of Education shall prescribe 
such regulations as are necessary to carry out this section. 
(f) REPORT.—^Each State annually shall report to the Secretary 
of Education regarding— 
(1) the number of low-income individuals in the State who 
receive assistance under this section; and 
(2) the activities described in subsection (dXl), if applicable. 
(g) DEFINITION.—^In this section: 
(1) ADVANCED PLACEMENT TEST.—^The term "advanced 
placement test" includes only an advanced placement test 
approved by the Secretary of Education for the purposes of 
this section. 
(2) 
LOW-INCOME 
INDIVIDUAL.—^The 
term 
"low-income 
individual" has the meaning given the term in section 
402A(gX2) of the Higher Education Act of 1965 (20 U.S.C. 
1070a-ll(g)(2)). 
(h) AUTHORIZATION OF APPROPRIATIONS.—^There are authorized 
to be appropriated $6,800,000 for fiscal year 1999 and such sums 
as may be necessary for each of the 4 succeeding fiscal years 
to carry out this section. 
112 STAT. 1810 
PUBLIC LAW 105-244—OCT. 7, 1998 
Community 
PART C—COMMUNITY SCHOLARSHIP 
Scholarship 
Mobilization Act. 
Scholarship 
MOBILIZATION 
20 use 1070 
SEC. 811. SHORT TITLE. 
XX)t6 
This part may be cited as the "Community Scholarship 
Mobilization Act". 
20 use 1070 
SEC. 812. FINDINGS. 
Congress finds that— 
(1) the local community, when properly organized and chal-
lenged, is one of the best sources of academic support, motiva-
tion toward achievement, and financial resources for aspiring 
postsecondary students; 
(2) local communities, working to complement or augment 
services currently offered by area schools and colleges, can 
raise the educational expectations and increase the rate of 
postsecondary attendance of their youth by forming locally-
based organizations that provide both academic support (includ-
ing guidance, counseling, mentoring, tutoring, encouragement, 
and recognition) and tan^ble, locally raised, effectively tar-
geted, publicly recognized, financial assistance; 
(3) proven methods of stimulating these community efforts 
can be promoted through Federal support for the establishment 
of regional. State, or community program centers to organize 
and challenge community efforts to develop educational incen-
tives and support for local students; and 
(4) using Federal funds to leverage private contributions 
to help students from low-income families attain educational 
and career goals is an efficient and effective investment of 
scarce taxpayer-provided resources. 
20 use 1070 
SEC. 813. DEFINITIONS. 
In this part: 
(1) REGIONAL, STATE, OR COMMUNITY PROGRAM CENTER.— 
The term "regional. State, or community program center" means 
an organization that— 
(A) is a division or member of, responsible 
to, 
and 
overseen by, a national organization; and 
(B) is staffed by professionals trained to create, develop, 
and sustedn local entities in towns, cities, £ind neighbor-
hoods. 
(2) LOCAL ENTITY.—^The term "local entitjr" means an 
organization that— 
(A) is a nonprofit organization that is described in 
section 501(cX3) of the Internal Revenue Code of 1986, 
and exempt from taxation under section 501(a) of such 
Code (or shall meet this criteria through affiliation with 
the national organization); 
(B) is formed for the purpose of providing educational 
scholarships and academic support for residents of the 
local community served by such organization; 
(C) solicits broad-based community support in its aca-
demic support and fund-raising activities; 
(D) is broadly representative of the local community 
in the structures of its volunteer-operated organization and 
has a board of directors that includes leaders from local 
neighborhood organizations and neighborhood residents. 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1811 
such as school or college personnel, parents, students, 
community agency representatives, retirees, and represent-
atives of the business community; 
(E) awards scholarships without regard to age, sex, 
marital status, race, creed, color, religion, national origin, 
or disability; and 
(F) gives priority to awarding scholarships for post-
secondary education to deserving students from low-income 
families in the local community. 
(3) NATIONAL ORGANIZATION.—The term "national organiza-
tion" means an organization that— 
(A) has the capacity to create, develop and sustain 
local entities and affiliated regional, State, or community 
program centers; 
(B) has the capacity to sustain newly created local 
entities in towns, cities, and neighborhoods through 
ongoing training support programs; 
(C) is described in section 501(c)(3) of the Internal 
Revenue Code of 1986, and exempt from taxation under 
section 501(a) of such Code; 
(D) is a publicly supported organization within the 
meaning of section 170(b)( IXA)(iv) of such Code; 
(E) ensures that each of the organization's local entities 
meet the criteria described in subparagraphs (C) and (D); 
and 
(F) has a program for or experience in cooperating 
with secondary and postsecondary institutions in canying 
out the organization's scholarship and academic support 
activities. 
(4) HIGH POVERTY AREA.—The term "high poverty area" 
means a community with a higher percentage of children from 
low-income families than the nationsd average of such percent-
age and a lower percentage of children pursuing postsecondary 
education than the national average of such percentage. 
(5) SECRETARY.—^The term "Secretary" means the Secretary 
of Education. 
(6) STUDENTS FROM LOW-INCOME FAMILIES.—^The term "stu-
dents from low-income families" means students determined, 
pursuant to part F of title IV of the Higher Education Act 
of 1965 (20 U.S.C. 1087kk et seq.), to be eligible for a Federal 
Pell Grant under subpart 1 of part A of title IV of such Act 
(20 U.S.C. 1070a). 
SEC. 814. PURPOSE; ENDOWMENT GRANT AUTHORITY. 
20 USC 1070 
(a) PURPOSE.—It is the purpose of this part to establish and 
support regional. State or community program centers to enable 
such centers to foster the development of local entities in high 
poverty areas that promote higher education goals for students 
from low-income families by— 
(1) providing academic support, including guidance, coun-
seling, mentoring, tutoring, and recognition; and 
(2) providing scholarship assistance for the cost of post-
secondary education. 
(b) ENDOWMENT GRANT AUTHORITY.—From the funds appro-
priated pursuant to the authority of section 816, the Secretary 
shall award an endowment grant, on a competitive basis, to a 
national organization to enable such orgsinization to support the 
112 STAT. 1812 
PUBLIC LAW 105-244—OCT. 7, 1998 
establishment or ongoing work of regional, State or community 
program centers that foster the development of local entities in 
high poverty areas to improve secondary school graduation rates 
and postsecondary attendance through the provision of academic 
support services and scholarship assistance for the cost of post-
secondary education. 
20 use 1070 
SEC. 815. GRANT AGREEMENT AND REQUIREMENTS. 
(a) IN GENERAL.—^The Secretary shall award one or more 
endowment grants described in section 814(b) pursuant to an agree-
ment between the Secretary and a national organization. Such 
agreement shsdl— 
(1) require a national organization to establish an endow-
ment fund in the amount of the grant, the corpus of which 
shall remain intact and the interest income from which shall 
be used to support the activities described in paragraphs (2) 
and (3); 
(2) require a national organization to use 70 percent of 
the interest income from the endowment fund in any fiscal 
year to support the establishment or ongoing work of regional. 
State or community program centers to enable such centers 
to work with local communities to establish local entities in 
high poverty areas and provide ongoing technical assistance, 
training workshops, and other activities to help ensure the 
ongoing success of the local entities; 
(3) require a national organization to use 30 percent of 
the interest income from the endowment fund in any fiscal 
year to provide scholarships for postsecondary education to 
students from low-income families, which scholarships shall 
be matched on a doUar-for-doUar basis from funds raised by 
the local entities; 
(4) require that at least 50 percent of all the interest 
income from the endowment be allocated to establish new local 
entities or support regional. State or community program cen-
ters in high poverty areas; 
(5) require a national organization to submit, for each 
fiscal year in which such organization uses the interest from 
the endowment fund, a report to the Secretary that contains— 
(A) a description of the programs and activities sup-
ported by the interest on the endowment fund; 
(B) the audited financial statement of the national 
organization for the preceding fiscal year; 
(C) a plan for the programs and activities to be sup-
ported by the interest on the endowment fund as the Sec-
retary may require; 
(D) an evaluation of the programs and activities sup-
ported by the interest on the endowment fund as the Sec-
retary may require; and 
(E) data indicating the number of students from low-
income families who receive scholarships from local enti-
ties, and the amounts of such scholarships; 
(6) contain such assurances as the Secretary may require 
with respect to the management and operation of the endow-
ment fund; and 
(7) contain an assurance that if the Secretary determines 
that such organization is not in substantial compliance with 
the provisions of this part, then the national organization shall 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1813 
pay to the Secretary an amount equal to the corpus of the 
endowment fund plus any accrued interest on such fund that 
is available to the national organization on the date of such 
determination. 
(b) RETURNED FUNDS.—All funds returned to the Secretary 
pursuant to subsection (aX7) shall be available to the Secretary 
to carry out any scholarship or grant program assisted under title 
IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.). 
SEC. 816. AUTHORIZATION OF APPROPRIATIONS. 
20 USC 1070 
There are authorized to be appropriated to carry out this part 
$10,000,000 for fiscal year 2000. 
PART D—GRANTS TO STATES FOR WORK-
PLACE 
AND 
COMMUNITY 
TRANSITION 
TRAINING FOR INCARCERATED YOUTH OF-
FENDERS 
SEC. 821. GRANTS TO STATES FOR WORKPLACE AND COMMUNITY 
20 USC 1151. 
TRANSITION 
TRAINING FOR INCARCERATED 
YOUTH 
OFFENDERS. 
(a) FINDINGS.—Congress makes the following findings: 
(1) Over 150,000 youth offenders age 21 and younger are 
incarcerated in the Nation's jails, juvenile facilities, and prisons. 
(2) Most youth offenders who are incarcerated have been 
sentenced as first-time adult felons. 
(3) Approximately 75 percent of youth offenders are high 
school dropouts who lack basic literacy and life skills, have 
little or no job experience, and lack marketable skills. 
(4) The average incarcerated youth has attended school 
only through grade 10. 
(5) Most of these youths can be diverted from a life of 
crime into productive citizenship with available educational, 
vocational, work skills, and related service programs. 
(6) If not involved with educational programs while incar-
cerated, almost all of these youths will return to a life of 
crime upon release. 
(7) The average length of sentence for a youth offender 
is about 3 years. Time spent in prison provides a unique oppor-
tunity for education and training. 
(8) Even with quality education and training provided dur-
ing incarceration, a period of intense supervision, support, and 
counseling is needed upon release to ensure effective reintegra-
tion of youth offenders into society. 
(9) Research consistently shows that the vast majority of 
incarcerated youths will not return to the public schools to 
complete their education. 
(10) There is a need for alternative educational opportuni-
ties during incarceration and after release. 
(b) DEFINITION.—^For purposes of this part, the term "youth 
offender" means a male or female offender under the age of 25, 
who is incarcerated in a State prison, including a prerelease facility. 
(c) GRANT PROGRAM.—^The Secretary of Education (in this sec-
tion referred to as the "Secretarjr") shall establish a program in 
accordance with this section to provide grants to the State correc-
tional education agencies in the States, from allocations for the 
5»-194 O - 98 - 30: QL 3 Part 2 
112 STAT. 1814 
PUBLIC LAW 105-244—OCT. 7, 1998 
States under subsection (i), to assist and encourage incarcerated 
youths to acquire functionsd literacy, life, and job skills, through 
the pursuit of a postsecondary education certificate, or an associate 
of arts or bachelor's degree while in prison, and employment coun-
seling and other related services which start during incarceration 
and continue through prerelease and while on parole. 
(d) APPLICATION.—^To be eligible for a grant under this section, 
a State correctional education agency shall submit to the Secretary 
a proposal for a youth offender program that— 
(1) identifies the scope of the problem, including the num-
ber of incarcerated youths in need of postsecondary education 
and vocational training; 
(2) lists the accredited public or private educational institu-
tion or institutions that will provide postsecondary educational 
services; 
(3) lists the cooperating agencies, public and private, or 
businesses that will provide related services, such as counseling 
in the areas of career development, substance abuse, health, 
and parenting skills; 
(4) describes the evaluation methods and performance 
measures that the State correctional education agency will 
employ, which methods and measures— 
(A) shall be appropriate to meet the goals and objec-
tives of the proposal; and 
(B) shall include measures of— 
(i) program completion; 
(ii) student academic and vocational skill attain-
ment; 
(iii) success in job placement and retention; and 
(iv) recidivism; 
(5) describes how the proposed programs are to be 
integrated with existing State correctional education programs 
(such as adult education, graduate education degree programs, 
and vocational training) and State industry programs; 
(6) addresses the educational needs of youth offenders who 
are in alternative programs (such as boot camps); and 
(7) describes how students will be selected so that only 
youth offenders eligible under subsection (f) will be enrolled 
in postsecondary programs. 
(e) PROGRAM REQUIREMENTS.—Each State correctional edu-
cation agency receiving a grant under this section shall— 
(1) integrate activities carried out under the grant with 
the objectives and activities of the school-to-work programs 
of such State, including— 
(A) work experience or apprenticeship programs; 
(B) transitional worksite job training for vocational 
education students that is related to the occupational goals 
of such students and closely linked to classroom and labora-
tory instruction; 
(C) placement services in occupations that the students 
are preparing to enter; 
(D) emplo3nnent-based learning programs; and 
(E) programs that address State and local labor short-
ages; 
Reports. 
(2) annually report to the Secretary and the Attorney 
General on the results of the evaluations conducted using the 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1815 
methods and performance measures contained in the proposal; 
and 
(3) provide to each State for each student eligible under 
subsection (f) not more than $1,500 annually for tuition, books, 
and essential materials, and not more than $300 annually 
for related services such as career development, substance 
abuse counseling, parenting skills training, and health edu-
cation, for each eligible incarcerated youth. 
(f) STUDENT ELIGIBILITY.—A youth offender shall be eligible 
for participation in a program receiving a grant under this section 
ifthe youth offender— 
(1) is eligible to be released within 5 years (including 
a youth offender who is eligible for parole within such time); 
and 
(2) is 25 years of age or younger. 
(g) LENGTH OF PARTICIPATION.—^A State correctional education 
agency receiving a grant under this section shall provide educational 
and related services to each participating youth offender for a 
period not to exceed 5 years, 1 year of which may be devoted 
to study in a graduate education degree program or to remedial 
education services for students who have obtained a secondary 
school diploma or its recognized equivalent. Educational and related 
services shall start during the period of incarceration in prison 
or prerelease and may continue during the period of parole. 
(h) EDUCATION DELIVERY SYSTEMS.—State correctional edu-
cation agencies and cooperating institutions shall, to the extent 
practicable, use high-tecn applications in developing programs to 
meet the requirements and goals of this section. 
(i) ALLOCATION OF FUNDS.—^From the funds appropriated pursu-
ant to subsection (j) for each fiscal year, the Secretary shall allot 
to each State an amount that bears the same relationship to such 
funds as the total number of students eligible under subsection 
(f) in such State bears to the total number of such students in 
all States. 
(j) AUTHORIZATION OF APPROPRIATIONS.—^There are authorized 
to be appropriated to carry out this section $17,000,000 for fiscal 
year 1999 and such sums as may be necessary for each of the 
4 succeeding fiscal years. 
PART E—GRANTS TO COMBAT VIOLENT 
CRIMES AGAINST WOMEN ON CAMPUSES 
SEC. 826. GRANTS TO COMBAT VIOLENT CRIMES AGAINST WOMEN ON 
20 USC 1152. 
CAMPUSES. 
(a) GRANTS AUTHORIZED.— 
(1) IN GENERAL.—^The Attorney General is authorized to 
make grants to institutions of higher education, for use by 
such institutions or consortia consisting of campus personnel, 
student organizations, campus administrators, security person-
nel, and regional crisis centers affiliated with the institution, 
to develop and strengthen effective security and investigation 
strategies to combat violent crimes against women on campuses, 
and to develop and strengthen victim services in cases involving 
violent crimes against women on campuses, which may include 
partnerships wiui local criminal justice authorities and commu-
nity-based victim services agencies. 
112 STAT. 1816 
PUBLIC LAW 106-244—OCT. 7, 1998 
Contracts. 
(2) AWARD BASIS.—The Attorney General shall award 
grants and contracts under this section on a competitive basis. 
(3) EQUITABLE PARTICIPATION.—The Attorney General shall 
make every effort to ensure— 
(A) the equitable participation of private and public 
institutions of higher education in the activities assisted 
under this section; and 
(B) the equitable geographic distribution of grants 
under this section among the various regions of the United 
States. 
(b) USE OF GRANT FUNDS.—Grant funds awarded under this 
section may be used for the following purposes: 
(1) To provide personnel, training, technical assistance, 
data collection, and other equipment with respect to the 
increased apprehension, investigation, and adjudication of per-
sons committing violent crimes against women on campus. 
(2) To trsdn campus administrators, campus security 
personnel, and personnel serving on campus disciplinary or 
judicial boards to more effectively identify and respond to vio-
lent crimes against women on campus, including the crimes 
of sexual assault, stalking, and domestic violence. 
(3) To implement and operate education programs for the 
prevention of violent crimes against women. 
(4) To develop, enlarge, or strengthen support services pro-
grams, including medical or psychological counseling, for vic-
tims of sexual offense crimes. 
(5) To create, disseminate, or otherwise provide assistance 
and information about victims' options on and off campus to 
bring disciplinary or other legal action. 
(6) To develop and implement more effective campus poli-
cies, protocols, orders, and services specifically devoted to pre-
vent, identify, and respond to violent crimes against women 
on campus, including the crimes of sexual assault, stalking, 
and domestic violence. 
(7) To develop, install, or expand data collection and 
communication systems, including computerized systems, link-
ing campus security to the local law enforcement for the purpose 
of identif3dng and tracking arrests, protection orders, violations 
of protection orders, prosecutions, and convictions with respect 
to violent crimes against women on campus, including the 
crimes of sexual assault, stalking, and domestic violence. 
(8) To develop, enlarge, or strengthen victim services pro-
grams for the campus and to improve delivery of victim services 
on campus. 
(9) To provide capital improvements (including improved 
lighting and communications facilities but not including the 
construction of buildings) on campuses to address violent crimes 
against women on campus, including the crimes of sexual 
assault, stalking, and domestic violence. 
(10) To support improved coordination among campus 
administrators, campus security personnel, and local law 
enforcement to reduce violent crimes against women on campus. 
(c) APPLICATIONS.— 
(1) IN GENERAL.—In order to be eligible to be awarded 
a grant under this section for any fiscal year, an institution 
of higher education shall submit an application to the Attorney 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1817 
General at such time and in such manner as the Attorney 
General shall prescribe. 
(2) CONTENTS.—^Each application submitted under para-
graph (1) shall— 
(A) describe the need for grant funds and the plan 
for implementation for any of the purposes described in 
subsection (b); 
(B) describe how the campus authorities shall consult 
and coordinate with nonprofit and other victim services 
programs, including sexual assault and domestic violence 
victim services programs; 
(C) describe the characteristics of the population being 
served, including type of campus, demographics of the popu-
lation, and number of students; 
(D) provide measurable goals and expected results from 
the use of the grant funds; 
(E) provide assurances that the Federal funds made 
available under this section shall be used to supplement 
and, to the extent practical, increase the level of funds 
that would, in the absence of Federal funds, be made 
available by the institution for the purposes described in 
subsection (b); and 
(F) include such other information and assurances as 
the Attorney General reasonably determines to be nec-
essary. 
(3) 
COMPLIANCE 
WITH 
CAMPUS 
CRIME 
REPORTING 
REQUIRED.—^No institution of higher education shall be eligible 
for a grant under this section unless such institution is in 
compliance with the requirements of section 485(f) of the 
Higher Education Act of 1965. 
(
d
) 
GENERAL 
TERMS 
AND 
CONDITIONS.— 
(1) NONMONETARY ASSISTANCE.—In addition to the assist-
ance provided under this section, the Attorney General may 
request any Federal agency to use the agency's authorities 
and the resources granted to the agency under Federal law 
(including personnel, equipment, supplies, facilities, and mana-
gerial, technical, and advisory services) in support of campus 
security, and investigation and victim service efforts. 
(2) GRANTEE REPORTING.— 
(A) ANNUAL REPORT.—Each institution of higher edu-
cation receiving a grant under this section shsdl submit 
an annual performance report to the Attorney General. 
The Attorney General shall suspend funding under this 
section for an institution of higher education if the institu-
tion fails to submit an annual performance report, 
(B) FINAL REPORT.—^Upon completion of the grant 
period under this section, the institution shall file a 
performance report with the Attorney General and the 
Secretary of Education explaining the activities carried 
out under this section together with an assessment of the 
effectiveness of those activities in achieving the purposes 
described in subsection (b). 
(3) REPORT TO CONGRESS.—Not later than 180 days after Deadline, 
the end of the fiscal year for which grants are awarded under 
this section, the Attorney General shall submit to the commit-
tees of the House of Representatives and the Senate responsible 
112 STAT. 1818 
PUBLIC LAW 105-244—OCT. 7, 1998 
for issues relating to higher education and crime, a report 
that includes— 
(A) the number of grants, and the amount of funds, 
distributed under this section; 
(B) a summary of the purposes for which the grants 
were provided and an evaluation of the progress made 
under the grant; 
(C) a statistical summary of the persons served, detail-
ing the nature of victimization, and providing data on 
age, sex, race, ethnicity, lang^uage, disability, relationship 
to offender, geographic distribution, and type of campus; 
and 
(D) an evaluation of the effectiveness of programs 
funded under this part, including information obtained 
from reports submitted pursuant to section 485(f) of the 
Higher Education Act of 1965. 
Deadlines. 
(4) REGULATIONS O
R GUIDELINES.—Not later than 120 days 
Publications. 
after the date of enactment of this section, the Attorney Gen-
eral, in consultation vnth. the Secretary of Education, shall 
publish proposed regulations or guidelines implementing this 
section. Not later than 180 days after the date of enactment 
of this section, the Attorney General shall publish final regula-
tions or guidelines implementing this section. 
(f) DEFINITIONS.—^In this section— 
(1) the term "domestic violence" includes acts or threats 
of violence, not including acts of self defense, committed by 
a current or former spouse of the victim, by a person with 
whom the victim shares a child in common, by a person who 
is cohabitating with or has cohabitated with the victim, by 
a person similarly situated to a spouse of the victim under 
the domestic or family violence laws of the jurisdiction, or 
by any other person against a victim who is protected from 
that person's acts under the domestic or family violence laws 
of the jurisdiction; 
(2) the term "sexual assault" means any conduct proscribed 
by chapter 109A of title 18, United States Code, whether or 
not the conduct occurs in the special maritime and territorial 
jurisdiction of the United States or in a Federal prison, includ-
ing both assaults committed by offenders who are strangers 
to the victim and assaults committed by offenders who are 
known or related by blood or marriage to the victim; and 
(3) the term "victim services" means a nonprofit, non-
governmental orgEinization that assists domestic violence or 
sexual assault victims, including campus women's centers, rape 
crisis centers, battered women's shelters, and other sexual 
assault or domestic violence programs, including campus coun-
seling support and victim advocate organizations with domestic 
violence, stalking, and sexual assault programs, whether or 
not organized and staffed by students. 
(g) AUTHORIZATION OF APPROPRIATIONS.—^For the purpose of 
canying out this part, there are authorized to be appropriated 
$10,000,000 for fiscal year 1999 and such sums as may be necessary 
for each of the 4 succeeding fiscal years. 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1819 
SEC. 827. STUDY OF INSTITUTIONAL PROCEDURES TO REPORT SEXUAL 20 USC 1152 
ASSAULTS. 
^°^-
(a) IN GENERAL.—The Attorney General, in consultation with 
the Secretary of Education, shall provide for a national study to 
examine procedures undertaken after an institution of higher edu-
cation receives a report of sexual assault. 
(b) REPORT.—The study required by subsection (a) shall include 
an analysis o
f
— 
(1) the existence and publication of the institution of higher 
education's and State's definition of sexual assault; 
(2) the existence and publication of the institution's policy 
for campus sexual assaults; 
(3) the individuals to whom reports of sexual assault are 
given most often and— 
(A) how the individuals are trained to respond to the 
reports; and 
(B) the extent to which the individuals are trained; 
(4) the reporting options that are articulated to the victim 
or victims of the sexual assault regarding— 
(A) on-campus reporting and procedure options; and 
(B) off-campus reporting and procedure options; 
(5) the resources available for victims' safety, support, 
medical health, and confidentiality, including— 
(A) how well the resources are articulated both specifi-
cally to the victim of sexual assault and generally to the 
campus at large; and 
(B) the security of the resources in terms of confiden-
tiality or reputation; 
(6) policies and practices that may prevent or discourage 
the reporting of campus sexual assaults to local crime authori-
ties, or that may otherwise obstruct justice or interfere with 
the prosecution of perpetrators of campus sexual assaults; 
(7) policies and practices found successful in aiding the 
report and any ensuing investigation or prosecution of a campus 
sexual assault; 
(8) the on-campus procedures for investigation and dis-
ciplining the perpetrator of a sexual assault, including— 
(A) the format for collecting evidence; and 
(B) the format of the investigation and disciplinary 
proceeding, including the faculty responsible for running 
the disciplinary procedure and the persons allowed to 
attend the disciplinary procedure; and 
(9) types of punishment for offenders, including— 
(A) whether the case is directed outside the institution 
for further punishment; and 
(B) how the institution punishes perpetrators. 
(c) SUBMISSION OF REPORT.—The report required by subsection 
(b) shall be submitted to Congress not later than September 1, 
2000. 
(d) DEFINITION.—For purposes of this section, the term "campus 
sexual assaults" means sexual assaults occurring at institutions 
of higher education and sexual assaults committed against or by 
students or employees of such institutions. 
(e) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 
to be appropriated to carry out this section $1,000,000 for fiscal 
year 2000. 
112 STAT. 1820 
PUBLIC LAW 105-244—OCT. 7, 1998 
42 use 1862 
note. 
20 use 1070 
note. 
Historic 
preservation. 
20 use 1153. 
PART F—IMPROVING UNITED STATES UNDER-
STANDING OF SCIENCE, ENGINEERING, AND 
TECHNOLOGY IN EAST ASIA 
SEC. 831. IMPROVING UNITED STATES UNDERSTANDING OP SCIENCE, 
ENGINEERING, AND TECHNOLOGY IN EAST ASIA. 
(a) ESTABLISHMENT.—^The Director of the National Science 
Foundation is authorized, beginning in fiscal year 2000, to carry 
out an interdisciplinary program of education and research on East 
Asian science, engineering, and technology. The Director shall carry 
out the interdisciplinary program in consultation with the Secretary 
of Education. 
(b) PURPOSES,—^The purposes of the program established under 
this section shall be to— 
(1) increase understanding of East Asian research, and 
innovation for the creative application of science and technology 
to the problems of society; 
(2) provide scientists, engineers, technology managers, and 
students with training in East Asian languages, and with an 
understanding of research, technology, and management of 
innovation, in East Asian countries; 
(3) provide program participants with opportunities to be 
directly involved in scientific and engineering research, and 
activities related to the management of scientific and techno-
logical innovation, in East Asia; and 
(4) create mechanisms for cooperation and partnerships 
among United States industry, universities, colleges, not-for-
profit institutions. Federal laboratories (within the meaning 
of section 4(6) of the Stevenson-Wydler Technology Innovation 
Act of 1980 (15 U.S.C. 3703(6))), and government, to dissemi-
nate the results of the program assisted under this section 
for the benefit of United States research and innovation. 
(c) PARTICIPATION BY FEDERAL SCIENTISTS, ENGINEERS, AND 
MANAGERS.—Scientists, engineers, and managers of science and 
engineering programs in Federal agencies and the Federal labora-
tories shall be eligible to participate in the program assisted under 
this section on a reimbursable basis. 
(d) REQUIREMENT FOR MERIT REVIEW.—Awards made under 
the program established under this section shall only be made 
using a competitive, merit-based review process. 
(e) AUTHORIZATION OF APPROPRL\TIONS.—^There is authorized 
to be appropriated to carry out this section $10,000,000 for fiscal 
year 2000. 
PART G—OLYMPIC SCHOLARSHIPS 
SEC. 836. EXTENSION OF AUTHORIZATION. 
Section 1543(d) of the Higher Education Amendments of 1992 
is amended by striking "1993" and inserting "1999". 
PART H—UNDERGROUND RAILROAD 
SEC. 841. UNDERGROUND RAILROAD EDUCATIONAL AND CULTURAL 
PROGRAM. 
(a) PROGRAM ESTABLISHED.—^The Secretary of Education, in 
consultation and cooperation with the Secretary of the Interior, 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1821 
is authorized to make grants to 1 or more nonprofit educational 
organizations that are estabUshed to research, display, interpret, 
and collect artifacts relating to the history of the Underground 
Railroad. 
(b) GRANT AGREEMENT.—^Each nonprofit educational organiza-
tion awarded a grant under this section shall enter into an agree-
ment with the Secretary of Education. Each such agreement shall 
require the organization— 
(1) to establish a facility to house, display, and interpret 
the artifacts related to the history of the Underground Railroad, 
and to make the interpretive efforts available to institutions 
of higher education that award a baccalaureate or graduate 
degree; 
(2) to demonstrate substantial private support for the facil-
ity through the implementation of a public-private partnership 
between a State or local public entity and a private entity 
for the support of the facility, which private entity shall provide 
matching funds for the support of the facility in an amount 
equal to 4 times the amount of the contribution of the State 
or local public entity, except that not more than 20 percent 
of the matching funds may be provided by the Federal Govern-
ment; 
(3) to create an endowment to fund any and all shortfalls 
in the costs of the on-going operations of the facility; 
(4) to establish a network of satellite centers throughout 
the United States to help disseminate information regarding 
the Underground Railroad throughout the United States, if 
such satellite centers raise 80 percent of the funds required 
to establish the satellite centers from non-Federal public and 
private sources; 
(5) to establish the capability to electronically link the 
facility with other local and regional facilities that have collec-
tions and programs which interpret the history of the Under-
ground Railroad; and 
(6) to submit, for each fiscal year for which the organization Reports. 
receives funding under this section, a report to the Secretary 
of Education that contains— 
(A) a description of the programs and activities sup-
ported by the funding; 
(B) the audited financial statement of the organization 
for the preceding fiscal year; 
(C) a plan for the programs and activities to be sup-
ported by the funding as the Secretary may require; and 
(D) an evaluation of the programs and activities sup-
ported by the funding as the Secretary may require. 
(c) AUTHORIZATION OF APPROPRIATIONS.—^There are authorized 
to be appropriated to carry out this section $6,000,000 for fiscal 
year 1999, $6,000,000 for fiscal year 2000, $6,000,000 for fiscal 
year 2001, $3,000,000 for fiscal year 2002, and $3,000,000 for fiscal 
year 2003. 
112 STAT. 1822 
PUBLIC LAW 105-244r-OCT. 7, 1998 
PART I—SUMMER TRAVEL AND WORK 
PROGRAMS 
22 use 1474 
SEC. 846. AUTHORITY TO ADMINISTER SUMMER TRAVEL AND WORK 
note. 
PROGRAMS. 
The Director of the United States Information Agency is author-
ized to administer summer travel and work programs without 
regard to preplacement requirements. 
Web-Based 
PART J—WEB-BASED EDUCATION 
SSsLAct. 
COMMISSION 
SEC. 851. SHORT TITLE; DEFINmONS. 
(a) IN GENERAL.—^This part may be cited as the "Web-Based 
Education Commission Act". 
(b) DEFINITIONS.—In this part: 
(1) COMMISSION.—The term "Commission" means the Web-
Based Education Commission established under section 852. 
(2) INFORMATION TECHNOLOGY.—The term "information 
technologjr" has the meaning given that term in section 5002 
of the Information Technology Management Reform Act of 1996 
(110 Stat. 679). 
(3) STATE.—^The term "State" means each of the several 
States of the United States and the District of Columbia. 
SEC. 852. ESTABLISfflklENT OF IKHBR-BASED EDUCATION COMMISSION. 
(a) ESTABLISHMENT.—^There is established a commission to be 
known as the Web-Based Education Commission. 
(b) MEMBERSHIP.— 
(1) COMPOSITION.—^The Commission shall be composed of 
14 members, of which— 
President. 
(A) three members shall be appointed by the President, 
from among individuals representing the Internet tech-
nology industry; 
(B) three members shall be appointed by the Secretary, 
from among individuals with expertise in accreditation, 
establishing statewide curricula, and establishing informa-
tion technology networks pertaining to education curricula; 
(C) two members shall be appointed by the Majority 
Leader of the Senate; 
(D) two members shall be appointed by the Minority 
Leader of the Senate; 
(E) two members shall be appointed by the Speaker 
of the House of Representatives; and 
(F) two members shall be appointed by the Minority 
Leader of the House of Representatives. 
Deadline. 
(2) DATE.—^The appointments of the members of the 
Commission shall be made not later than 45 days after the 
date of enactment of this Act. 
(c) PERIOD OF APPOINTMENT; VACANCIES.—Members shall be 
appointed for the life of the Commission. Any vacancy in the 
Commission shall not afTect its powers, but shall be filled in the 
same manner as the original app)ointment. 
Deadline. 
(d) INITIAL MEETING.—^Not later than 30 days after the date 
on which all members of the Commission have been appointed, 
the Commission shall hold the Commission's first meeting. 
PUBLIC LAW 105-244-OCT. 7, 1998 
112 STAT. 1823 
(e) MEETINGS.—^The Commission shall meet at the call of the 
Chairperson. 
(f) QUORUM,—A majority of the members of the Commission 
shall constitute a quorum, but a lesser number of members may 
hold hearings. 
(g) CHAIRPERSON AND VICE CHAIRPERSON.—The Commission 
shall select a chairperson and vice chairperson from among the 
members of the Commission. 
SEC. 853. DUTIES OF THE COMMISSION. 
(a) STUDY.— 
(1) IN GENERAL.—The Commission shall conduct a thorough 
study to assess the educational software available in retail 
markets for secondary and postsecondary students who choose 
to use such software. 
(2) PUBLIC HEARINGS.—AS part of the study conducted 
under this subsection, the Commission shall hold public hear-
ings in each region of the United States concerning the assess-
ment referred to in paragraph (1). 
(3) EXISTING INFORMATION.—TO the extent practicable, in 
carrying out the study under this subsection, the Commission 
shall identify and use existing information related to the assess-
ment referred to in paragraph (1). 
(b) REPORT.—^Not later than 6 months after the first meeting Deadline, 
of the Commission, the Commission shall submit a report to the 
President and Congress that shall contain a detailed statement 
of the findings and conclusions of the Commission resulting from 
the study, together with the Commission's recommendations— 
(1) for such legislation and administrative actions as the 
Commission considers to be appropriate; and 
(2) regarding the appropriate Federal role in determining 
quality educational software products. 
(c) FACILITATION OF EXCHANGE OF INFORMATION.—In carrying 
out the study under subsection (a), the Commission shall, to the 
extent practicable, facilitate the exchange of information concerning 
the issues that are the subject of the study among— 
(1) officials of the Federal Government, and State govern-
ments and political subdivisions of States; and 
(2) educators from Federal, State, and local institutions 
of higher education and secondary schools. 
SEC. 854. POWERS OF THE COMMISSION. 
(a) HEARINGS.—The Commission may hold such hearings, sit 
and act at such times and places, take such testimony, and receive 
such evidence as the Commission considers advisable to carry out 
the duties of the Commission. 
(b) INFORMATION FROM FEDERAL AGENCIES.—^The Commission 
may request from the head of any Federal agency or instrumentality 
such information as the Commission considers necessary to carry 
out the provisions of this part. Each such agency or instrumentality 
shall, to the extent permitted by law and subject to the exceptions 
set forth in section 552 of title 5, United States Code (commonly 
referred to as the Freedom of Information Act), furnish such 
information to the Commission upon request. 
(c) POSTAL SERVICES.—The Commission may use the United 
States mails in the same manner and under the same conditions 
as other departments and agencies of the Federal Government. 
112 STAT. 1824 
PUBLIC LAW 105-244—OCT. 7, 1998 
(d) GIFTS.—^The Commission may accept, use, and dispose of 
gifts or donations of services or property. 
SEC. 8S5. COMMISSION PERSONNEL MATTERa 
(a) COMPENSATION OF MEMBERS.—Except as provided in sub-
section (b), each member of the Commission who is not an officer 
or employee of the Federal Government shall serve without com-
pensation. All members of the Commission who are officers or 
employees of the United States shall serve without compensation 
in addition to that received for their services as officers or employees 
of the United States. 
(b) TRAVEL EXPENSES.—^The members of the Commission shall 
be allowed travel expenses, including per diem in lieu of subsistence, 
at rates authorized for employees of agencies under subchapter 
I of chapter 57 of title 5, United States Code, while away from 
their homes or regular places of business in the performance of 
services for the Conmiission. 
(c) STAFF.— 
(1) IN GENERAL.—The Chairperson of the Commission may, 
without regard to the civil service laws and regulations, appoint 
^ and terminate an executive director and such other additional 
personnel as may be necessary to enable the Commission to 
perform the Commission's duties. The emplo3rment of an execu-
tive director shall be subject to confirmation by the Commission. 
(2) COMPENSATION.—The Chairperson of the Commission 
may fix the compensation of the executive director and other 
personnel without regard to the provisions of chapter 51 and 
subchapter III of chapter 53 of title 5, United States Code, 
relating to classification of positions and General Schedule pay 
rates, except that the rate of pay for the executive director 
and other personnel may not exceed the rate payable for level 
V of the Executive Schedule under section 5316 of such title. 
(d) DETAIL OF GOVERNMENT EMPLOYEES.—Any Federal Govern-
ment employee may be detailed to the Commission without 
reimbursement, and such detail shall be without interruption or 
loss of civil service status or privilege. 
(e) PROCUREMENT OF TEMPORARY AND INTERMITTENT SERV-
ICES.—The Chairperson of the Commission may procure temporary 
and intermittent services under section 3109(b) of title 5, United 
States Code, at rates for individuals that do not exceed the daily 
equivalent of the annual rate of basic pay prescribed for level 
V of the Executive Schedule imder section 5316 of such title. 
SEC. 856. TERMINATION OF THE COMMISSION. 
The Commission shall terminate on the date that is 90 days 
after the date on which the Commission submits the Commission's 
report under section 853(b). 
SEC. 857. AUTHORIZATION OF APPROPRIATIONa 
(a) IN GENERAL.—^There are authorized to be appropriated 
$450,000 for fiscal year 1999 to the Commission to carry out this 
part. 
(b) AVAILABILITY.—Any sums appropriated under the authoriza-
tion contained in this section shall remain available, without fiscal 
year limitation, until expended. 
PUBUC LAW 105-244r-OCT. 7, 1998 
112 STAT. 1825 
PART K-MISCELLANEOUS 
SEC. 861. EDUCATION-WELFARE STUDY. 
(a) STUDY.—^The Comptroller General of the United States shall 
conduct a study of the efiPectiveness of educational approaches 
(including vocationsJ and post-secondary education approaches) and 
rapid employment approaches to helping welfare recipients and 
omer low-income adults become employed and economically self-
sufficient. Such study shall include— 
(1) a survey of the available scientific evidence and research 
data on the subject, including a comparison of the effects of 
programs emphasizing a vocational or postsecondary edu-
cational approach to programs emphasizing a rapid employment 
approach, along wim research on the impacts of programs 
which emphasize a combination of such approaches; 
(2) an examination of the research regarding the impact 
of postsecondary education on the educational attainment of 
the children of recipients who have completed a postsecondary 
education program; and 
(3) information regarding short and long-term employment, 
wages, duration of employment, poverty rates, sustainable eco-
nomic self-sufficiency, prospects for career advancement or wage 
increases, access to quality child care, placement in employment 
with benefits including health care, life insurance and retire-
ment, and related program outcomes. 
(b) ItePORT.—^Not later than August 1, 1999, the Comptroller Deadline. 
General of the United States shsdl prepare and submit to the 
Committees on Ways and Means and on Education and the 
Workforce of the House of Representatives and the Committees 
on Finance and on Labor and Human Resources of the Senate, 
a report that contains the finding of the study required by sub-
section (a). 
SEC. 862. RELEASE OF CONDITIONS, COVENANTS, AND REVERSIONARY 
INTERESTS, GUAM COMMUNITY COLLEGE CONVEYANCE, 
BARRIGADA, GUAM. 
(a) RELEASE.—The Secretary of Education shall release all 
conditions and covenants that were imposed by the United States, 
and the reversionary interests that were retained by the United 
States, as part of the conveyance of a parcel of Federal surplus 
property located in Barrigada, Guam, consisting of approximately 
314.28 acres and known as Naval Communications ^ e a Master 
Station, WESTPAC, parcel IN, which was conveyed to the Guam 
Community College pursuant to— 
(1) the quitclaim deed dated June 8, 1990, conveying 61.45 
acres, between the Secretary, acting through the Administrator 
for Management Services, and the Guam Community College, 
acting through its Board of Trustees; and 
(2) the quitclaim deed dated June 8,1990, conveying 252.83 
acres, between the Secretary, acting through the Administrator 
for Management Services, and the Guam Community College, 
acting through its Board of Trustees, and the Governor of 
Guam. 
(b) CONSIDERATION.—The Secretary shall execute the release 
of the conditions, covenants, and reversionary interests imder sub-
section (a) without consideration. 
112 STAT. 1826 
PUBLIC LAW 105-244—OCT. 7, 1998 
(c) INSTRUMENT OF RELEASE.—^The Secretary shall execute and 
file in the appropriate office or ofHces a deed of release, amended 
deed, or other appropriate instrument effectuating the release of 
the conditions, covenants, and reversionary interests under sub-
section (a). 
SEC. 863. SENSE OF CONGRESS REGARDING GOOD CHARACTER. 
(a) FINDINGS.—Congress finds that— 
(1) the future of our Nation and world will be determined 
by the young people of today; 
(2) record levels of youth crime, violence, teenage preg-
nancy, and substance abuse indicate a growing moral crisis 
in our society; 
(3) character development is the long-term process of help-
ing young people to know, care about, and act upon such 
basic values as trustworthiness, respect for self and others, 
responsibility, fairness, compassion, and citizenship; 
(4) these values are universal, reaching across cultural 
and religious differences; 
(5) a recent poll found that 90 percent of Americans support 
the teaching of core moral and civic values; 
(6) parents will always be children's primary character 
educators; 
(7) good moral character is developed best in the context 
of the family; 
(8) parents, community leaders, and school officials are 
establishing successful partnerships across the Nation to imple-
ment character education programs; 
(9) character education programs also ask parents, facultv, 
and staff to serve as role models of core values, to provide 
opportunities for young people to apply these values, and to 
establish high academic standards that challenge students to 
set high goals, work to achieve the goals, and persevere in 
spite of dimculty; 
(10) the development of virtue and moral character, those 
habits of mind, heart, and spirit that help young people to 
know, desire, and do what is right, has historically been a 
primary mission of colleges and universities; and 
(11) the Congress encourages parents, faculty, and staff 
across the Nation to emphasize character development in the 
home, in the community, in our schools, and in our colleges 
and universities. 
(b) SENSE OF CONGRESS.—It is the sense of Congress that 
Congress should support and encourage character building initia-
tives in schools across America and urge colleges and universities 
to affirm that the development of character is one of the primary 
goals of higher education. 
SEC. 864. EDUCATIONAL MERCHANDISE UCENSING CODES OF CON-
DUCT. 
It is the sense of Congress that all American colleges and 
universities should adopt rigorous educational merchsuidise licens-
ing codes of conduct to assure that university and college licensed 
merchandise is not made by sweatshop and exploited adult or 
child labor either domestically or abroad, and that such codes 
should include at least the following: 
(1) Public reporting of the code and the companies adhering 
to the code. 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1827 
(2) Independent monitoring of the companies adhering to 
the code by entities not limited to major international account-
ing firms. 
(3) An explicit prohibition on the use of child labor. 
(4) An explicit requirement that companies pay workers 
at least the governing minimum wage and applicable overtime. 
(5) An explicit requirement that companies allow workers 
the right to organize without retribution. 
(6) An explicit requirement that companies maintain a 
safe and healthy workplace. 
TITLE IX—AMENDMENTS TO OTHER 
LAWS 
PART A—EXTENSION AND REVISION OF 
INDIAN HIGHER EDUCATION PROGRAMS 
SEC. 901. TRIBALLY CONTROLLED COLLEGES AND UNIVERSITIES. 
(a) REAUTHORIZATION.— 
(1) AMOUNT OF GRANTS.—Section 108(aX2) of the Tribally 
Controlled Community College Assistance Act of 1978 (25 
U.S.C. 1808(aX2)) is amended by striking "$5,820" and inserting 
"$6,000". 
(2) AUTHORIZATION OF APPROPRIATIONS.— 
(A) TITLE L—Section 110(a) of the Tribally Controlled 
Community College Assistance Act of 1978 (25 U.S.C. 
1810(a)) is amended— 
(i) in paragraph (1), by striking "1993" and 
inserting "1999"; 
(ii) in paragraph (2), by striking "$30,000,000 for 
fiscal year 1993" and inserting "$40,000,000 for fiscal 
year 1999"; 
(iii) in paragraph (3), by striking "1993" and 
inserting "1999"; and 
(iv) in paragraph (4), by striking "1993" and 
inserting "1999". 
(B) TITLE HI.—Section 306(a) of the Tribally Controlled 
Community College Assistance Act of 1978 (25 U.S.C. 
1836(a)) is amended by striking "1993" and inserting 
"1999". 
(C) TITLE rv.—Section 403 of the Tribal Economic 
Development and Technology Related Education Assistance 
Act of 1990 (25 U.S.C. 1852) is amended by striking "1993" 
and inserting "1999". 
(b) EXTENSION TO COLLEGES AND UNIVERSITIES.—The Tribally 
Controlled Community College Assistance Act of 1978 (25 U.S.C. 
1801 et seq.) is £imended— 
(1) in the first section (25 U.S.C. 1801 note), by striking 
"Community College" and inserting "College or University"; 
(2) in the heading for title I (25 U.S.C. 1802 et seq.), 
by striking "COMMUNITY COLLEGES" and inserting "COL-
LEGES OR UNIVERSITIES"; 
(3) in the heading for title III (25 U.S.C. 1831 et seq.), 
by striking "COMMUNITY COLLEGE" and inserting "COL-
LEGE OR UNIVERSITY"; 
112 STAT. 1828 
PUBLIC LAW 105-244—OCT. 7, 1998 
25 use 1801 
note. 
Deadline. 
25 use 1801 
note. 
(4) in the heading for section 107, by striking "COMMUNITY 
COLLEGES" and inserting "COLLEGES OR UNIVERSITIES"; 
(5) in sections 2(a)(4), 2(a)(7), 2(b)(4), 102(b), 103, 105, 
106(b), 
107(a), 
107(b), 
108(a), 
108(bX3)(A), 
108(b)(3)(B), 
108(b)(4), 109(b)(2), 109(b)(3), 109(d), 113(a), 113(b), 113(c)(1), 
t 113(cX2), 302(b), 303, 304, 305(a), and 305(b) (25 U.S.C. 
1801(a)(4), 1801(aX7), 1801(bX4), 1803(b), 1804, 1805, 1806(b), 
1807(a), 
1807(b), 
1808(a), 
1808(bX3)(A), 
1808(bX3XB), 
1808(bX4), 1809(bX2), 1809(bX3), 1809(d), 1813(a), 1813(b), 
1813(cXl), 1813(cX2), 1832(b), 1833, 1834, 1835(a), and 
1835(b)), by striking "community college" each place the term 
appears and inserting "college or university"; 
(6) in sections 101, 102(a), 104(a)(1), 107(a), 108(cX2), 
109(bXl), lll(aX2), 112(a), 112(aX2), 112(cX2XB), 301, 302(a), 
and 402(a) (25 U.S.C. 1802, 1803(a), 1804a(aXl), 1807(a), 
1808(cX2), 
1809(bXl), 
1811(aX2), 
1812(a), 
1812(aX2), 
1812(c)(2XB), 1831, 1832(a), and 1851(a)), by striking "commu-
nity colleges" each place the term appears and inserting "col-
Icfifcs or iiuivsirsitifis 
(7) in sections l68(aXl), 108(a), 113(bX2), 113(c)(2), 302(a), 
302(b), 302(bX2XB), 302(bX4), 303, 304, 305(a), and 305(b) (25 
U.S.C. 1808(aXl), 1808(a), 1813(bX2), 1813(cX2), 1832(a), 
1832(b), 1832(bX2XB), 1832(bX4), 1833, 1834, 1835(a), and 
1835(b)), by striking "such college" each place the term appears 
and inserting "such college or university"; 
(8) in sections 104(aX2), 109(bXl), and lll(aX2) (25 U.S.C. 
1804a(aX2), 1809(bXl), and 1811(aX2)), by striking "such col-
leges" and inserting "such colleges or universities"; 
(9) in section 2(bX5) (25 U.S.C. 1801(bX5)), by striking 
"community college's" and inserting "college or university's"; 
(10) in section 109(a) (25 U.S.C. 1809(a)), by inserting 
"or university" after "tribsdly controlled college"; 
(11) in section 110(aX4) (25 U.S.C. 1810(aX4)), by striking 
"Tribally Controlled Community Colleges" and inserting "trib-
ally controlled colleges or universities"; 
(12) in sections 102(b), 109(d), 113(cX2XE), 302(bX6), and 
.
_ 
305(a) (25 U.S.C. 1803(b), 1809(d), 1813(cX2XE), 1832(bX6), 
and 1835(a)), by striking "the college" and inserting "the college 
or university^; 
(13) in section 112(cXl) (25 U.S.C. 1812(cXl)), by striking 
. 
"colleges" and inserting "colleges or universities"; 
(14) in sections 302(b)(4) and 305(a) (25 U.S.C. 1832(b)(4) 
and 1835(a)), by striking "that college" and inserting "that 
college or university"; and 
(15) in section 302(bX4) (25 U.S.C. 1832(bX4)), by striking 
"other colleges" and inserting "other colleges or universities". 
(c) ADDITIONAL CONFORMING AMENDMENTS.— 
(1) RECOMMENDED LEGISLATION.—^The Secretary of Edu-
cation shall prepare and submit to Congress recommended 
legislation containing technical and conforming amendments 
to reflect the changes made by subsection (b). 
(2) SUBMISSION TO CONGRESS.—^Not later than 6 months 
after the effective date of this title, the Secretary of Education 
shall submit the recommended legislation referred to under 
paragraph (1). 
(d) REFERENCES.—Any reference to a section or other provision 
of the Tribally Controlled Community College Assistance Act of 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1829 
1978 shall be deemed to be a reference to the Tribally Controlled 
College or University Assistance Act of 1978. 
(e) CLERICAL ^ENDMENT.—Section 109 of the Tribally Con-
trolled Colleges or University Act of 1978 (as renamed by subsection 
(b)(1)) (25 U.S.C. 1809) is amended by redesignating subsection 
(d) as subsection (c). 
SEC. 902. REAUTHORIZATION OF NAVAJO COMMUNITY COLLEGE ACT. 
Section 5(a)(1) of the Navajo Community College Act (25 U.S.C. 
640C-1) is amended by striking "1993" and inserting "1999". 
PART B—EDUCATION OF THE DEAF 
Education of the 
Deaf 
SEC. 911. SHORT TITLE. 
Amendments of 
1998 
This part may be cited as the "Education of the Deaf Amend- 20 USC 4301 
ments of 1998". 
note. 
SEC. 912. ELEMENTARY AND SECONDARY EDUCATION PROGRAMS. 
Section 104(b) of the Education of the Deaf Act of 1986 (20 
U.S.C. 4304(b)) is amended— 
(1) in paragraph (1)— 
(A) in subparagraph (A), by inserting "and" after the 
semicolon; 
(B) in subparagraph (B), by striking "; and" and 
inserting a period; and 
(C) by striking subparagraph (C); 
(2) in the matter preceding subparagraph (A) of paragraph 
(2)— 
(A) by striking "paragraph (1)" and inserting "para-
graph (IXB)"; and 
(B) by striking "section 618(b)" and inserting "section 
618(aXlXA)"; 
(3) in paragraph (3), by striking "intermediate educational 
unit" and inserting "educational service agencjr"; 
(4) in paragraph (4)— 
(A) in subparagraph (A), by striking "intermediate edu-
cational unit" and inserting ^Educational service agency"; 
and 
(B) in subparagraph (B), by striking "intermediate edu-
cational units and inserting "educational service agencies"; 
and 
(5) by amending subparagraph (C) to read as follows: 
*(C) provide the child a free appropriate public edu-
cation in accordance with part B of the Individuals with 
Disabilities Education Act and procedural safeguards in 
accordance with the following provisions of section 615 
of such Act: 
"(i) Paragraphs (1), and (3) through (6) of sub-
section (b). 
"(ii) Subsections (c) through (g). 
"(iii) Subsection (h), except for the matter in para-
graph (4) pertaining to transmission of 
findings 
and 
decisions to a State advisory panel. 
"(iv) Paragraphs (1) and (2) of subsection (i). 
"(v) Subsection (j)— 
"(I) except that such subsection shall not be 
applicable to a decision by the University to refuse 
to admit a child; or 
112 STAT. 1830 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(II) to dismiss a child, except that, before 
dismissing any child, the University shall give at 
least 60 days written notice to the child's parents 
and to the local educational agency in wmch the 
child resides, unless the dismissal involves a 
suspension, expulsion, or other change in place-
ment covered under section 615(k). 
"(vi) Subsections (k) through (m).". 
District of 
SEC. 913. AGREEMENT WITH GALLAUDET UNIVERSITY. 
Columbia. 
Section 105(a) of the Education of the Deaf Act of 1986 (20 
U.S.C. 4305(a)) is amended— 
(1) by striking "within 1 year after enactment of the Edu-
cation of the Deaf Act Amendments of 1992, a new" and insert-
ing "and periodically update, an"; and 
(2) by amending the second sentence to read as follows: 
"The Secretary or the University shall determine the necessity 
for the periodic update described in the preceding sentence.". 
SEC. 914. AGREEMENT FOR THE NATIONAL TECHNICAL INSTITUTE 
FOR THE DEAF. 
Paragraph (2) of section 112(a) of the Education of the Deaf 
Act of 1986 (20 U.S.C. 4332(a)) is amended to read as follows: 
"(2) The Secretary and the institution of higher education with 
which the Secretary has an agreement under this section— 
"(A) shall periodically assess the need for modification of 
the agreement; and 
"(B) shall periodically update the agreement as determined 
necessary by the Secretary or the institution.". 
SEC. 915. DEFINITIONS. 
Section 201 of the Education of the Deaf Act of 1986 (20 
U.S.C. 4351) is amended— 
(1) in paragraph (IXC), by striking "Psdau (but only until 
the Compact of Free Association with Palau takes effect),"; 
and 
(2) in paragraph (5)— 
(A) by inserting "and" after "Virgin Islands,"; and 
(B) by striking ", and Palau (but only until the Compact 
of Free Association with Palau takes effect)". 
SEC. 916. GIFTS. 
Subsection (b) of section 203 of the Education of the Deaf 
Act of 1986 (20 U.S.C. 4353) is amended to read as follows: 
"(b) INDEPENDENT FINANCIAL AND COMPLIANCE AUDIT.— 
GaUaudet 
"(1) IN GENERAL.—Gallaudet University shall have an 
University. 
annual independent financial and compliance audit made of 
^^Jl^j^*^ 
the programs and activities of the University, including the 
national mission and school operations of the elementary and 
secondary education programs at Gallaudet. The institution 
of higher education with which the Secretary has an agreement 
under section 112 shall have an annual independent financial 
and compliance audit made of the programs and activities 
of such institution of higher education, including NTID, and 
containing specific schedules and analyses for all NTID funds, 
as determined by the Secretary. 
"(2) COMPLIANCE.—As used in paragraph (1), compliance 
means compliance with sections 102(b), 105(bX4), 112(bX5), 
PUBUC LAW 105-244—OCT. 7,1998 
112 STAT. 1831 
and 203(c), paragraphs (2) and (3) of section 207(b), subsections 
(bX2), 0)X3), and (c) through (f), of section 207, and subsections 
(b) and (c) of section 210. 
i 
**(3) SUBMISSION OF AUDITS.—^A copy of each audit described 
in paragraph (1) shall be provided to the Secretary within 
15 days of acceptance of the audit by the Universi^ or the 
institution authorized to establish and operate the NTID under 
section 112(a), as the case may be, but not later than January 
10 of each year.". 
SEC. 917. REPORTS. 
Section 204(3) of the Education of the Deaf Act of 1986 (20 
U.S.C. 4354(3)) is amended— 
(1) in subparagraph (A), by striking The annual" and 
inserting "A summary of the annual"; and 
(2) in subparagraph (B), by striking "the annual" and 
inserting "a summary of the annual". 
SEC. 918. MONITORING, EVALUATION, AND REPORTING. 
Section 205(c) of the Education of the Deaf Act of 1986 (20 
U.S.C. 4355(c)) is amended by striking "1993, 1994, 1995, 1996, 
and 1997" and inserting "1998 through 2003". 
SEC. 919. FEDERAL ENDOWMENT PROGRAMS. 
Section 207 of the Education of the Deaf Act of 1986 (20 
U.S.C. 4357) is amended— 
(1) in subsection (b)— 
(A) by amending paragraph (2) to read as follows: 
"(2) Subject to the availability of appropriations, the Secretary 
shall make payments to each Federal endowment fund in amounts 
equal to sums contributed to the fund from non-Federal sources 
during the fiscal year in which the appropriations are made avail-
able (excluding transfers from other endowment funds of the institu-
tion involved). ; and 
(B) by striking paragraph (3); 
(2) in subsection (cXl), by inserting "the Federal contribu-
tion of* after "shall invest"; 
(3) in subsection (d)— 
(A) in paragraph (2XC), by striking "Beginning on 
October 1,1992, the* and inserting "The"; and 
(B) in paragraph (3)(A), by striking "prior" and 
inserting "current ; and 
(4) in subsection (h)— 
(A) in paragraph (1), by striking "1993 through 1997" 
and inserting "1998 through 2003"; and 
(B) in paragraph (2), by striking "1993 through 1997" 
and inserting "1998 through 2003". 
SEC. 920. SCHOLARSHIP PROGRAM. 
Section 208 of the Education of the Deaf Act of 1986 (20 
U.S.C. 4358) is repealed. 
SEC. 921. OVERSIGHT AND EFFECT OF AGREEMENTS. 
Section 209 of the Education of the Deaf Act of 1986 (20 
U.S.C. 4359) is amended— 
(1) in subsection (a), by striking "Committee on Education 
and Labor^ and inserting "Committee on Education and the 
Workforce"; and 
112 STAT. 1832 
PUBLIC LAW 105-244—OCT. 7, 1998 
20 use 4359. 
Gallaudet 
University. 
National 
Technical 
Institute for the 
Deaf. 
20 use 4359b. 
Deadhne. 
(2) by redesignating such section as section 208. 
SEC. 922. INTERNATIONAL STUDENTS. 
(a) AMENDMENT.—Section 210 of the Education of the Deaf 
Act of 1986 (20 U.S.C. 4359a) is amended— 
(1) in subsection (a)— 
(A) by striking "10 percent" and inserting "15 percent"; 
and 
(B) by inserting before the period the following: *
*
, 
except that in any school year no United States citizen 
who is qualified to be admitted to the University or NTID 
and applies for admission to the University or NTID shall 
be denied admission because of the admission of an inter-
national student"; and 
(2) in subsection (b), by striking "surcharge of 75 percent 
for the academic year 1993-1994 and 90 percent beginning 
with the academic year 1994-1995" and inserting "surcharge 
of 100 percent for the academic year 1999-2000 and any 
succeeding academic year". 
(b) CONFORMING AMENDMENT.—Section 210 of such Act (20 
U.S.C. 4359a) is amended by redesignating such section as section 
209. 
SEC. 923. RESEARCH PRIORITIES. 
Title II of the Education of the Deaf Act of 1986 is amended 
by striking section 211 (20 U.S.C. 4360) and inserting the following: 
'*SEC. 210. RESEARCH PRIORITIES. 
"(a) RESEARCH PRIORITIES.—Gallaudet University and the 
National Technical Institute for the Deaf shall each establish and 
disseminate priorities for their national mission with respect to 
deafness related research, development, and demonstration activi-
ties, that reflect public input, through a process that includes 
consumers, constituent groups, and the heads of other federally 
funded programs. The priorities for the University shall include 
activities conducted as part of the University's elementary and 
secondary education programs under section 104. 
"(b) RESEARCH REPORTS.—The University and NTID shall each 
prepare and submit an annual research report, to the Secretary, 
the Committee on Education and the Workforce of the House of 
Representatives, and the Committee on Labor and 
Human 
Resources of the Senate, not later than January 10 of each year, 
that shall include— 
"(1) a summary of the public input received as part of 
the establishment and dissemination of priorities required by 
subsection (a), and the University's and NTID's response to 
the input; and 
"(2) a summary description of the research undertaken 
by the University and NTID, the start and projected end dates 
for each research project, the projected cost and source or 
sources of funding for each project, and any products resulting 
from research completed in the prior fiscal year.". 
SEC. 
9
2
4
. 
NATIONAL 
STUDY 
ON 
THE 
EDUCATION 
OF 
THE 
DEAF. 
The Education of the Deaf Act of 1986 (20 U.S.C. 4301 et 
seq.) is amended by adding after section 210 (as inserted by section 
923) the following: 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1833 
*«EC. 211. NATIONAL STUDY ON THE EDUCATION OF THE DEAF. 
20 USC 4360. 
"(a) CONDUCT OF STUDY.— 
"(1) IN GENERAL.—^The Secretary shall conduct a national 
study on the education of the deaf, to identify education-related 
barriers to successful postsecondary education experiences and 
employment for individusJs who are deaf, and those education-
related factors that contribute to successful postsecondary edu-
cation experiences and employment for individuals who are 
deaf. 
"(2) DEFINITION.—^In this section the term 'deaf, when used 
with respect to an individual, means an individual with a 
hearing impairment, including an individual who is hard of 
hearing, an individual deafened later in life, and an individual 
who is profoundly deaf. 
"
^ 
"(b) PUBLIC INPUT AND CONSULTATION.— 
"(1) IN GENERAL.—^In conducting such study, the Secretary 
shall obtain input from the public. To obtain such input, the 
Secretary shall— 
"(A) publish a notice with an opportunity for comment Federal Register, 
in the Federal Register; 
pubUcation. 
"(B) consult with individuals and organizations rep-
resenting a wide range of perspectives on deafness-related 
issues, including organizations representing individuals 
who are deaf, parents of children who are deaf, educators, 
and researchers; and 
"(C) take such other action as the Secretary deems 
appropriate, which may include holding public meetings. 
"(2) STRUCTURED OPPORTUNITIES.—The Secretary shall 
provide structured opportunities to receive and respond to the 
viewpoints of the individuals and organizations described in 
paragraph (IXB). 
(c) REPORT.—^The Secretary shall report to Congress not later Deadline, 
than 18 months after the date of enactment of the Education 
of the Deaf Amendments of 1998 regarding the results of the 
study. The report shall contain— 
"(1) recommendations, including recommendations 
for 
legislation, that the Secretary deems appropriate; and 
"(2) a detailed summary of the input received under sub-
section (b) and the ways in which the report addresses such 
input. 
"(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 
to be appropriated $1,000,000 for each of the fiscal years 1999 
and 2000 to carry out the provisions of this section.". 
SEC. 925. AUTHORIZATION OF APPROPRIATIONS. 
Title II of the Education of the Deaf Act of 1986 (20 U.S.C. 
4351 et seq.) is amended by adding after section 211 (as inserted 
by section 924) the following: 
'^EC. 212. AUTHORIZATION OF APPROPRIATIONS. 
20 USC 4360a. 
"(a) GALLAUDET UNIVERSITY.—There are authorized to be appro-
priated such sums as may be necessary for each of the fiscal 
years 1998 through 2003 to carry out the provisions of title I 
and this title, relating to— 
"(1) Gallaudet University; 
"(2) Kendall Demonstration Elementary School; and 
"(3) the Model Secondary School for the Deaf. 
112 STAT. 1834 
PUBLIC LAW 105-244—OCT. 7, 1998 
"(b) NATIONAL TECHNICAL INSTITUTE FOR THE DEAF.—There 
are authorized to be appropriated such sums as may be necessary 
for each of the fiscal years 1998 through 2003 to carry out the 
provisions of title I and this title relating to the National Technical 
Institute for the Deaf.". 
PART C—UNITED STATES INSTITUTE OF 
PEACE 
SEC. 831. AUTHOIUTIES OF THE UNITED STATES INSTITUTE OF PEACE. 
The United States Institute of Peace Act (22 U.S.C. 4601 et 
seq.) is amended— 
(1) in section 1705 (22 U.S.C. 4604)— 
(A) in subsection (f), by inserting "personal service 
,, and other" after "may enter into"; and 
(B) in subsection (o), by inserting after "Services" the 
following: "and use all sources of supply and services of 
the General Services Administration"; 
(2) in section 1710(a)( 1) (22 U.S.C. 4609(a)( 1))— 
(A) by striking " 1993" and inserting " 1999"; and 
(B) by striking "6" and inserting "4 ; and 
(3) in the second and third sentences of section 1712 (22 
U.S.C. 4611), by striking "shall" each place the term appears 
and inserting "ma}^". 
PART D—VOLUNTARY RETIREMENT 
INCENTIVE PLANS 
SEC. 941, VOLUNTARY RETIREMENT INCENTIVE PLANS. 
(a) IN GENERAL.—Section 4 of the Age Discrimination in 
Employment Act of 1967 (29 U.S.C. 623) is amended by adding 
at the end the following: 
"(m) Notwithstanding subsection (f)(2XB), it shall not be a 
violation of subsection (a), (b), (c), or (e) solely because a plan 
of an institution of higher education (as defined in section 101 
of the Higher Education Act of 1965) offers employees who are 
serving under a contract of unlimited tenure (or similar arrange-
ment providing for unlimited tenure) supplemental benefits upon 
voluntary retirement that are reduced or eliminated on the basis 
of age, if— 
"(1) such institution does not implement with respect to 
such employees any age-based reduction or cessation of benefits 
that are not such supplemental benefits, except as permitted 
by other provisions of this Act; 
"(2) such supplemental benefits are in addition to any 
retirement or severance benefits which have been offered gen-
erally to employees serving under a contract of unlimited tenure 
(or similar arrangement providing for unlimited tenure), 
independent of any early retirement or exit-incentive plan, 
within the preceding 365 days; and 
"(3) any employee who attains the minimum age and satis-
fies all non-age-based conditions for receiving a benefit under 
the plan has an opportunity lasting not less than 180 days 
to elect to retire and to receive the maximum benefit that 
could then be elected by a younger but otherwise similarly 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1835 
situated employee, and the plsm does not require retirement 
to occur sooner than 180 days after such election.". 
(b) PLANS PERMITTED.—Section 4(i)(6) of the Age Discrimination 
in Employment Act of 1967 (29 U.S.C. 623(i)(6)) is amended by 
adding after the word "accruals" the following: "or it is a plan 
permitted by subsection (m)." 
(c) CONSTRUCTION.—^Nothing in the amendment made by sub- 29 use 623 note, 
section (a) shall affect the application of section 4 of the Age 
Discrimination in Employment Act of 1967 (29 U.S.C. 623) with 
respect to— 
(1) any plan described in subsection (m) of section 4 of 
such Act (as added by subsection (a)), for any period prior 
to enactment of such Act; 
(2) any plan not described in subsection (m) of section 
4 of such Act (as added by subsection (a)); or 
(3) any employer other than an institution of higher edu-
cation (as defined in section 101 of the Higher Education Act 
of 1965). 
(d) EFFECTIVE DATE.— 
29 use 623 note. 
(1) IN GENERAL.—^This section shall take effect on the date 
of enactment of this Act. 
(2) EFFECT ON CAUSES OF ACTION EXISTING BEFORE DATE 
OF ENACTMENT.—^The amendment made by subsection (a) shall 
not apply with respect to any cause of action arising under 
the Age Discrimination in Employment Act of 1967 prior to 
the date of enactment of this Act. 
PART E—GENERAL EDUCATION PROVISIONS 
ACT AMENDMENT 
SEC. 951. AMENDMENT TO FAMILY EDUCATIONAL RIGHTS AND PRI-
VACY ACT OF 1974 
Section 444(b) of the General Education Provisions Act (20 
U.S.C. 1232g(b)), also known as the Family Educational Rights 
and Privacy Act of 1974, is amended— 
(1) in paragraph (1), by amending subparagraph (C) to 
read as follows: 
"(CXi) authorized representatives of (I) the Comptroller 
General of the United States, (II) the Secretary, or (III) State 
educational authorities, under the conditions set forth in para-
graph (3), or (ii) authorized representatives of the Attorney 
General for law enforcement purposes under the same condi-
tions as apply to the Secretary under paragraph (3);"; and 
(2) in paragraph (6)— 
(A) by inserting "(A)" after "(6)"; 
(B) in subparagraph (A), as designated by subpara-
graph (A) of this paragraph— 
(i) by striking the results" and inserting "or a 
nonforcible sex offense, the final results"; and 
(ii) by striking "such crime" each place the term 
appears and inserting "such crime or offense"; and 
(C) adding at the end thereof the following: 
"(B) Nothing in this section shall be construed to prohibit 
an institution of postsecondary education from disclosing the final 
results of any disciplinary proceeding conducted by such institution 
against a student who is an alleged perpetrator of any crime of 
violence (as that term is defined in section 16 of title 18, United 
112 STAT. 1836 
PUBLIC LAW 105-244—OCT. 7, 1998 
States Code), or a nonforcible sex offense, if the institution deter-
mines as a result of that disciplinary proceeding that the student 
committed a violation of the institution's rules or policies with 
respect to such crime or offense. 
"(C) For the purpose of this paragraph, the final results of 
any disciplinary proceeding— 
"(i) shall include only the name of the student, the violation 
committed, and any sanction imposed by the institution on 
that student; and 
"(ii) may include the name of any other student, such 
as a victim or witness, only with the written consent of that 
other student.", 
SEC. »52. ALCOHOL OR DRUG POSSESSION DISCLOSURE. 
Section 444 of the General Education Provisions Act (20 U.S.C. 
1232g) is amended by adding at the end the following: 
"(i) DRUG AND ALCOHOL VIOLATION DISCLOSURES.— 
"(1) IN GENERAL.—^Nothing in this Act or the Higher Edu-
cation Act of 1965 shall be construed to prohibit an institution 
of higher education from disclosing, to a parent or legal guard-
ian of a student, information regarding any violation of any 
Federal, State, or local law, or of any rule or policy of the 
institution, governing the use or possession of alcohol or a 
controlled substance, regardless of whether that information 
is contained in the student's education records, if— 
"(A) the student is under the age of 21; and 
"(B) the institution determines that the student has 
committed a disciplinary violation with respect to such 
use or possession. 
"(2) STATE LAW REGARDING DISCLOSURE.—^Nothing in para-
graph (1) shall be construed to supersede any provision of 
State law that prohibits an institution of higher education 
from making the disclosure described in subsection (a).". 
PART F—LIAISON FOR PROPRIETARY 
INSTITUTIONS OF HIGHER EDUCATION 
SEC. 961. LIAISON FOR PROPRIETARY mSTITUTIONS OF HIGHER EDU-
CATION. 
Title II of the Department of Education Organization Act (20 
U.S.C. 3411 et seq.) is amended by adding at the end the following: 
20 use 3426. 
"SEC. 219. LIAISON FOR PROPRIETARY INSTITUTIONS OF HIGHER EDU-
CATION. 
"(a) ESTABLISHMENT.—There shall be in the Department a Liai-
son for Proprietary Institutions of Higher Education, who shall 
be an officer of the Department appointed by the Secretary. 
Deadline. 
"(b) APPOINTMENT.—^The Secretary shall appoint, not later than 
6 months after the date of enactment of the Higher Education 
Amendments of 1998 a Liaison for Proprietary Institutions of 
Higher Education who shall be a person who— 
"(1) has attained a certificate or degree from a proprietary 
institution of higher education; or 
"(2) has been employed in a proprietary institution setting 
for not less than 5 years. 
PUBLIC LAW 105-244—OCT. 7, 1998 
112 STAT. 1837 
"(c) DUTIES.—^The Liaison for Proprietary Institutions of Higher 
Education shall— 
"(1) serve as the principal advisor to the Secretary on 
matters affecting proprietary institutions of higher education; 
"(2) provide guidance to programs within the Department 
that involve functions affecting proprietary institutions of 
higher education; and 
"(3) work with the Federal Interagency Committee on Edu-
cation to improve the coordination of— 
"(A) the outreach programs in the numerous Federal 
departments and agencies that administer education and 
job training programs; 
"(B) cmlaborative business and education partnerships; 
and 
"(C) education programs located in, and involving, rural 
areas.". 
PART G-^AMENDMENTS TO OTHER STATUTES 
SEC. 
971. NONDISCHAREABILITY OF CERTAIN CLAIMS FOR EDU-
CATIONAL BENEFITS PROVIDED TO OBTAIN HIGHER 
EDUCATION. 
(a) AMENDMENT.—Section 523(aX8) of title 11, United States 
Code, is amended by striking "unless—" and all that follows through 
"(B) excepting such debt" and inserting "unless excepting such 
debt". 
(b) EFFECTIVE DATE.—^The amendment made by subsection (a) Applicability, 
shall apply only with respect to cases commenced under title 11, H USC 523 note. 
United States Code, after the date of enactment of this Act. 
SEC. 972. GNMA GUARANTEE FEE. 
(a) IN GENERAL.—Section 306(g)(3)(A) of the National Housing 
Act (12 U.S.C. 1721(g)(3)(A)) is amended by striking "No fee or 
charge" and all that follows through "States)" and inserting "The 
Association shall assess and collect a fee in an amount equal to 
nine basis points". 
(b) EFFECTIVE DATE.—^The amendment made by this section 
12 use I72i 
shall take effect on October 1,2004. 
note. 
PART H—REPEALS 
SEC. 981. REPEALS. 
Section 4122 of the Elementary £ind Secondary Education Act 
of 1965 (20 U.S.C. 7132) is repealed. 
Approved October 7, 1998. 
LEGISLATIVE HISTORY—H.R. 6 (S. 1882): 
HOUSE REPORTS: Nos. 105-481 (Comm. on Education and the Workforce) and 
105-750 (Comm. of Conference). 
SENATE REPORTS: No. 105-181 accompanying S. 1882 (Comm. on Labor and 
Hvrnian Resources). 
CONGRESSIONAL RECORD, Vol. 144 (1998): 
Apr. 29, May 5, 6, considered and passed House. 
July 9, considered and passed Senate, amended, in lieu of S. 1882. 
Sept. 28, House agreed to conference report. 
Sept. 29, Senate agreed to conference report. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 34 (1998): 
Oct. 7, Presidential remarks and statement. 
59-194 O - 98 - 31: QL 3 Part 2