A bill to amend the Higher Education Act of 1965 to prevent abuses in the Supplemental Loans for Students program under part B of title IV of the Higher Education Act of 1965, and for other purposes.
PL 100-369 (H.R.4639), enacted 07/18/1988

PUBLIC LAW 100-369—JULY 18, 1988 
102 STAT. 835 
Public Law 100-369 
100th Congress 
An Act 
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To amend the Higher Education Act of 1965 to prevent abuses in the Supplemental 
j i , g jngg 
Loansfor Students program under part B of title IV of the Higher Education Act of 
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1965, and for other purposes. 
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Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, 
SECTION 1. PELL GRANT APPLICATION REQUIRED FOR GSL AND SLS 
LOANS. 
Section 484(bXl) of the Higher Education Act of 1965 (20 U.S.C. 
1091(bXl)) is amended— 
(1) by striking out "section 428A, 428B, or 428C" and inserting 
"section 428B or 428C"; 
(2) by striking out subparagraph (A) and inserting the 
following: 
"(AXi) have received a determination of eligibility or ineli-
gibility for a Pell Grant under such subpart 1 for such period of 
enrollment; and (ii) if determined to be eligible, have filed an 
application for a Pell Grant for such enrollment period; or". 
SEC. 2. GSL LOAN APPLICATION REQUIRED FOR SLS LOANS. 
Section 4840b) of the Higher Education Act of 1965 is further 
amended— 
(1) by redesignating paragraph (2) as paragraph (3); and 
(2) by inserting after paragraph (1) the following: 
"(2) In order to be eligible to receive any loan under section 428A 
for any period of enrollment, a student shall— 
"(A) have received a determination of need for a loan under 
section 428(aX2XB) of this title; and 
"(B) if determined to have need for a loan under section 428, 
have applied for such a loan.". 
SEC. 3. DETERMINATION OP SLS LOAN AMOUNTS. 
Section 428A(bX3) of the Higher Education Act of 1965 (20 U.S.C. 
1078-l(bX3)) is amended by striking out "minus (B)" and inserting 
"minus (B) the total of (i) any loan for which the student is eligible 
under section 428 and (ii)". 
SEC. 4. RESTRICTIONS ON SLS LOAN ELIGIBILITY. 
Section 428A(a) of the Higher Education Act of 1965 (20 U.S.C. 
1078-l(a)) is amended— 
(1) in the last sentence, by striking "extenuating" and insert-
ing "exceptional"; and 
(2) by adding at the end the following: "If the financial aid 
Records. 
administrator makes such a determination, appropriate docu-
mentation of such determination shall be maintained in the 
institution's records to support such determination.". 
102 STAT. 836 
PUBLIC LAW 100-369—JULY 18, 1988 
SEC. 5. SLS LOAN DISBURSEMENT. 
(a) DISBURSEMENT REQUIREMENTS.—Section 428A(b) of the Higher 
20 use 1078-1. 
Education Act of 1965 is further amended by inserting after para-
graph (3) the following: 
"(4) DISBURSEMENT.—Any loan under this section shall be 
disbursed in the manner required by subparagraphs (N) and (O) 
of section 428(b)(1).". 
(b) (CONFORMING AMENDMENTS.—(1) Section 427(b)(2) of such Act 
(20 U.S.C. 1077(b)(2)) is amended by striking out "section 428A, 428B, 
or 428C" and inserting "section 428B or 428C". 
(2) Section 428(bXl)(0) of such Act (20 U.S.C. 1078(b)(l)(O)) is 
amended by striking out "section 428A, 428B, or 428C" and inserting 
"section 428B or 428C". 
(3) Section 428A(c) of such Act (20 U.S.C. 1078-l(c)) is amended— 
(A) in pargigraph (1), by inserting after "disbursed by the 
lender," the following: "or, if the loan is disbursed in multiple 
installments, not later than 60 days after the disbursement of 
the last such installment,"; 
(B) in paragraph (2), by inserting after "made under this 
section" the following: "which are disbursed in installments 
or,"; and 
(C) in such paragraph (2) by inserting a comma after 
"428(bXlXM)(i)". 
SEC. 6. TECHNICAL AMENDMENT CONCERNING TEACHER TRAINING PRO-
GRAM ELIGIBILITY FOR GSL PROGRAM. 
20 use 1091. 
Section 484 of the Act is further amended— 
(1) in subsection (aXD, by striking out "subsection (bX2)" and 
inserting in lieu thereof "subsections (bX3) and (bX4)"; and 
(2) by adding at the end of subsection (b) the following new 
paragraph: 
"(4) A student who— 
"(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, and 
"(B) is enrolled or accepted for enrollment in a program at an 
eligible institution necessary for a professional credential or 
certification from a State that is required for employment as a 
teacher in an elementary or secondary school in that State, 
shall be, notwithstanding paragraph (1) of subsection (a), eligible to 
apply for loans under part B of this title.". 
SEC. 7. TREATMENT OF TERRITORIAL AND FOREIGN TAX PAYMENTS FOR 
PURPOSES OF NEED ANALYSIS. 
(a) PELL GRANT NEED ANALYSIS.—Section 41 IF of the Higher 
Education Act of 1965 (20 U.S.C. 1070a-6) is amended by adding at 
the end thereof the following: 
"(17XA) The tax on income paid to the Governments of the 
Commonwealth of Puerto Rico, Guam, American Samoa, the 
Virgin Islands, or the Northern Mariana Islands, or the Trust 
Territory of the Pacific Islands under the laws applicable to 
those jurisdictions, or the comparable tax paid to the central 
government of a foreign country, shall be treated as United 
States income taxes. 
"(B) References in this subpart to the Internal Revenue Code 
of 1986, Federal income tax forms, and the Internal Revenue 
Service shall, for purposes of the tax described in subparagraph 
PUBLIC LAW 100-369—JULY 18, 1988 
102 STAT. 837 
(A), be treated as references to the corresponding laws, tax 
forms, and tax collection agencies of those jurisdictions, respec-
tively, subject to such adjustments as the Secretary may 
prescribe by regulation.". 
Qa) GENERAL NEED ANALYSIS PROVISIONS.—Section 480 of 
the 
Higher Education Act of 1965 (20 U.S.C. 1087w) is amended by 
adding at the end thereof the following: 
"(i) TREATMENT OF INCOME TAXES PAID TO OTHER JURISDICTIONS.— 
(1) The tax on income paid to the Grovernments of the Common-
wealth of Puerto Rico, Guam, American Samoa, the Virgin Islands, 
or the Northern Mariana Islands, or the Trust Territory of the 
Pacific Islands under the laws applicable to those jurisdictions, or 
the comparable tax paid to the central government of a foreign 
country, shall be treated as Federal income taxes. 
"(2) References in this part to the Internal Revenue Code of 1986, 
Federal income tax forms, and the Internal Revenue Service shall, 
for purposes of the tax described in paragraph (1), be treated as 
references to the corresponding laws, tax forms, and tax collection 
agencies of those jurisdictions, respectively, subject to such adjust-
ments as the Secretary may prescribe by regulation.". 
(c) TECHNICAL AMENDMENT.—The Higher Education Act of 1965 is 20 use looi et 
amended by striking out "Internal Revenue Code of 1954" each time seq. 
it appears and inserting in lieu thereof "Internal Revenue Code of 
1986'\ 
SEC. 8. ROBERT T. STAFFORD STUDENT LOAN PROGRAM. 
Section 421(c) of the Higher Education Act of 1965 (as amended by 
section 2601 of the Augustus F. Hawkins-Robert T. Stafford Ele-
mentary and Secondary School Improvement Amendments of 1988) 20 USC 1071. 
is amended by striking out "may" and inserting in lieu thereof 
"shall" and by adding at the end thereof the following new sentence: 
"Loans made under this part shall be known as 'Stafford Loans'.". 
SEC. 9. MICRONESIA PROVISION. 
Section 105(h) of the Compact of Free Association Act of 1985 (99 
Stat. 1794) is amended by adding at the end thereof the following 
48 USC 1681 
new paragraph: 
note. 
"(5) FEDERAL EDUCATION GRANTS.—Pursuant to section 224 of Territories, U.S. 
the Compact or section 224 of the Compact with Palau (as 
contained in title II of Public Law 99-658), the Pell Grant 
Program, the Supplemental Educational Opportunity Grant 
Program, and the College Work-Study Program (as authorized 
by title IV of the Higher Education Act of 1965) shall be 
extended to students who are, or will be, citizens of the Fed-
erated States of Micronesia, or the Marshall Islands and who 
attend postsecondary institutions in the United States, its terri-
tories and commonwealths, the Trust Territory of the Pacific 
Islands, the Federated States of Micronesia, or the Marshall 
Islands, except that this paragraph shall not apply to any 
student receiving assistance pursuant to section 223 of the 
Compact or section 223 of the (Jompact with Palau (as contained 
in title II of Public Law 99-658).". 
SEC. 10. AMENDMENTS TO TITLE III. 
(a) HISTORICALLY BLACK COLLEGE ELIGIBILITY FOR PART A FUNDS.— 
Section 312 of the Higher Education Act of 1965 (20 U.S.C. 1058) is 
amended by adding at the end thereof the following new subsection: 
102 STAT. 838 
PUBLIC LAW 100-369—JULY 18, 1988 
"(f) HISTORICALLY BLACK COLLEGE OR UNIVERSITY.—For the pur-
poses of this section, no historically black college or university 
which is eligible for and receives funds under part B of this title is 
eligible for or may receive funds under this part.". 
(b) NEW PART B ACTIVITIES.—Section 323(a) of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1062) is amended— 
(1) by inserting a comma and "and faculty development" after 
"exchanges" in paragraph (3); and 
(2) by inserting after paragraph (6) the following new para-
graphs: 
"(7) Funds and administrative mansigement, and acquisition 
of equipment for use in strengthening funds management. 
"(8) Joint use of facilities, such as laboratories and libraries.". 
20 use 1061. 
(c) TITLE III EUGIBIUTY.—Section 322(2) of the Act is amended— 
(1) by adding a comma after the word "accreditation"; and 
(2) by inserting the following before the period at the end of 
Grants. 
the sentence a comma and the following: "except that any 
branch campus of a southern institution of higher education 
that prior to September 30, 1986, received a grant as an institu-
tion with special needs under section 321 of this title and was 
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formally recognized by the National (llenter for Education 
Statistics as a Historically Black College or University but was 
determined not to be a part B institution on or after October 17, 
1986, shall, from the date of enactment of this exception, be 
considered a part B institution". 
SEC. 11. INTERNSHIP DEFERMENT. 
(a) IN GENERAL.—Sections 427(aX2XC)(vii) and 428(bXlXMXvii) of 
20 use 1077, 
the Act are each amended by inserting "after January 1, 1986," 
lO'^S. 
after "service". 
20 use 1077 
(b) APPLICABILITY.—The amendments made by subsection (a) and 
note. 
section 10(b) of the Higher Education Technical Amendments Act of 
1987 shall apply with respect to loans made, insured or guaranteed 
under part B of the Higher Education Act of 1965, on, before, or 
after the date of enactment of the Higher Education Technical 
Amendments Act of 1987. 
SEC. 12. DELAY OF REGULATORY EFFECTIVE DATE. 
Section 600.3 (c) and (d) of title 34 of the Code of Federal Regula-
tions, relating to new special conditions imposed on an institution's 
authority to measure academic programs in clock or credit hours, 
shall not take effect until July 1,1989. 
20 use 1078-1 
SEC. 13. EFFECTIVE DATE. 
(a) GENERAL RULE.—Except as otherwise provided, the amend-
ments made by this Act to title IV of the Higher Education Act of 
1965 shall be effective for any loan for which the eligibility of the 
PUBLIC LAW 100-369—JULY 18, 1988 
102 STAT. 839 
borrower is certified by the institution 30 days after the date of 
enactment of this Act. 
(b) SPECIAL RULES.—(1) The amendments made by section 5 shall 
be effective with respect to loans made on or after October 1, 1988. 
(2) The amendments made by sections 6, 7, 8, 9,10,11, and 12 shall 
take effect on the date of enactment of this Act. 
Approved July 18,1988. 
LEGISLATIVE HISTORY—H.R. 4639: 
HOUSE REPORTS: No. 100-669 (Ck)mm. on Education and Labor). 
CONGRESSIONAL RECORD, Vol. 134 (1988): 
June 7, 8, considered and passed House. 
June 15, considered and passed Senate, amended. 
June 28, House concurred in Senate amendment.