Education Amendments of 1980
PL 96-374 (H.R.5192), enacted 10/03/1980

PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1367 
Public Law 96-374 
96th Congress 
An Act 
To amend and extend the Higher Education Act of 1965, and for other purposes. —Oct. 3,1980— 
[H.R. 5192] 
Be it enacted by the Senate and House of Representatives of the 
United States of 
America in Congress assembled. That this Act may be E
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sited as the "Education Amendments ofl980". 
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TITLE I-ESTABLISHMENT OF A NEW TITLE I OF THE HIGHER EDUCATION notY^^ ^^^^ 
ACT OF 1965 
Sec. 101. New programs established. 
"TITLE I-CONTINUING POSTSECONDARY EDUCATION PROGRAM AND 
PLANNING 
"PART A—COMMISSION ON NATIONAL DEVELOPMENT IN POSTSECONDARY EDUCATION 
"Sec. 101. Findings. 
"Sec. 102. Establishment of the Commission on National Development in Post-
secondary Education. 
"Sec. 103. Duties of the Commission. 
"Sec. 104. Powers and administrative provisions. 
"Sec. 105. Authorization. 
"PART B—EDUCATION OUTREACH PROGRAMS 
"Sec. 111. Findings. 
"Sec. 112. State allotments. 
"Sec. 113. Comprehensive statewide planning. 
"Sec. 114. Information services. 
"Sec. 115. Continuing education. 
"Sec. 116. Federal discretionaiy grants. 
"Sec. 117. National Advisory Council on Continuing Education. 
"Sec. 118. Definitions. 
"Sec. 119. Appropriations authorized and payments.". 
TITLE n-AMENDMENT AND EXTENSION OF TITLE U OF THE HIGHER 
EDUCATION ACT OF 1965 
Sec. 201. Extension and revision of library programs. 
"TITLE II-COLLEGE AND RESEARCH LIBRARY ASSISTANCE AND LIBRARY 
TRAINING AND RESEARCH 
"Sec. 201. Purpose; authorization. 
"Sec. 202. Notification of State agency. 
"PART A—COLLEGE LIBRARY RESOURCES 
"Sec. 211. Resource development grants. 
"PART B—LIBRARY TRAINING, RESEARCH, AND DEVELOPMENT 
"Sec. 221. Grants authorized. 
"Sec. 222. Library career training. 
"Sec. 223. Research and demonstrations. 
94 STAT. 1368 
PUBLIC LAW 96-374—OCT. 3, 1980 
"Sec. 224. Special purpose grants. 
"PART C—STRENGTHENING RESEARCH LIBRARY RESOURCES 
"Sec. 231. Eligibility for assistance. 
"Sec. 232. Geographical distribution of grants. 
"PART D—NATIONAL PERIODICAL SYSTEM 
"Sec. 241. Purpose. 
"Sec. 242. Establishment. 
"Sec. 243. Functions of the Corporation. 
"Sec. 244. Board of Directors. 
"Sec. 245. Director and staff of Corporation. 
"Sec. 246. Nonprofit nature of Corporation. 
"Sec. 247. Authority of Corporation. 
"Sec. 248. Implementing the design. 
"Sec. 249. Copyright Act. 
"Sec. 250. Definitions. 
"Sec. 251. Authorization of appropriations.". 
TITLE III-ESTABLISHMENT OF A NEW TITLE III OF THE HIGHER 
EDUCATION ACT OF 1965 
Sec. 301. Programs authorized. 
"TITLE III-INSTITUTIONAL AID 
"Sec. 301. Findings and purposes. 
"PART A—STRENGTHENING INSTITUTIONS 
"Sec. 311. Program purpose. 
"Sec. 312. Definitions. 
"Sec. 313. Duration of grant. 
"PART B—AID TO INSTITUTIONS WITH SPECIAL NEEDS 
"Sec. 321. Program purpose. 
"Sec. 322. Definitions. 
"Sec. 323. Duration of grant. 
"Sec. 324. Federal share. 
"PART C—CHALLENGE GRANTS FOR INSTITUTIONS EUGIBLE FOR ASSISTANCE UNDER 
PART A OR PART B 
"Sec. 331. Establishment of challenge grant program, 
"Sec. 332. Applications for challenge grants. 
"PART D—GENERAL PROVISIONS 
"Sec. 341. Applications for assistance. 
"Sec. 342. Waiver authority and reporting requirement. 
"Sec. 343. Application review process. 
"Sec. 344. Cooperative arrangements. 
"Sec. 345. Assistance to institutions under other programs. 
"Sec. 346. Limitations. 
"Sec. 347. Authorizations.". 
TITLE IV-STUDENT ASSISTANCE 
PART A—GRANTS TO STUDENTS IN ATTENDANCE AT INSTITUTIONS OP HIGHER 
EDUCATION 
Sec. 401. Statement of purpose. 
Sec. 402. Pell grants. 
Sec. 403. Supplemental educational opportunity grants. 
Sec. 404. Grants to States for State student incentives. 
Sec. 405. Special programs for students from disadvantaged backgrounds. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1369 
"Subpart 4—Special Programs for Students From Disadvantaged Backgrounds 
"Sec. 417A. Program authority; authorization of appropriations. 
"Sec. 417B. Talent search. 
"Sec. 417C. Upward bound. 
"Sec. 417D. Special services for disadvantaged students. 
"Sec. 417E. Educational opportunity centers. 
"Sec. 417F. Staff development activities.". 
Sec. 406. Special program for migrant and seasonal farmwork students. 
Sec. 407. Veterans' cost-of-instruction payments. 
PART B—GUARANTEED AND INSURED STUDENT LOANS 
Sec. 411. Extension of programs. 
Sec. 412. Loan limitations. 
Sec. 413. Deferral of repayment. 
Sec. 414. State agencies as lenders of last resort. 
Sec. 415. Interest rate and payment. 
Sec. 416. Collection practices. 
Sec. 417. Administrative improvements. 
Sec. 418. Loan information program authorized. 
Sec. 419. Loans to parents. 
Sec. 420. Special allowances. 
Sec. 421. The Student Loan Marketing Association. 
Sec. 422. Prompt due diligence determinations. 
Sec. 423. Miscellaneous amendments. 
PART C—WORK-STUDY PROGRAMS 
Sec. 431. Purpose; appropriations authorized. 
Sec. 432. Allotment to States. 
Sec. 433. Use of certain unused college work-study program funds for the support of 
cooperative education programs. 
Sec. 434. Grants for work-study programs. 
Sec. 435. Distribution of assistance. 
Sec. 436. Job location and development. 
Sec. 437. Work study for community service-learning. 
PART D—NATIONAL DIRECT STUDENT LOANS 
Sec. 441. Extension of program. 
Sec. 442. Alternative funding for direct loans; recapture of current balances. 
Sec. 443. Loan limitations. 
Sec. 444. Deferral of repayment. 
Sec. 445. Collection practices. 
Sec. 446. Interest rates. 
Sec. 447. Student loan information program authorized. 
Sec. 448. Miscellaneous amendments. 
PART E—GENERAL PROVISIONS 
Sec. 451. Student assistance general provisions. 
"PART F—GENERAL PROVISIONS RELATING TO STUDENT ASSISTANCE PROGRAMS 
"Sec. 481. Definitions. 
"Sec. 482. Need analysis. 
"Sec. 483. Forms and. regulations. 
"Sec. 484. Student eligibility. 
"Sec. 485. Institutional and financial assistance information for students. 
"Sec. 486. Training in financial aid and student support services. 
"Sec. 487. Program participation agreements. 
"Sec. 488. Transfer of allotments. 
"Sec. 489. Administrative expenses. 
"Sec. 490. Criminal penalties. 
"Sec. 491. National Commission on Student Financial Assistance.". 
TITLE V—AMENDMENT AND EXTENSION OF TITLE V OF THE HIGHER 
EDUCATION ACT OF 1965 
Sec. 501. Extension of programs. 
94 STAT. 1370 
PUBLIC LAW 96-374—OCT. 3, 1980 
Sec. 502. Teacher Corps amendments. 
Sec. 503. Teacher centers amendments. 
Sec. 504. Teacher training. 
Sec. 505. Training for teachers of handicapped children in areas with a shorta^. 
"PART C—TEIAINING FOR ELEMENTARY AND SECONDARY SCHOOL TEACHERS To TEACH 
HANDICAPPED CHILDREN IN AREAS WITH A SHORTAGE 
"Sec. 541. Grants authorized. 
"Sec. 542. Application. 
"Sec. 543. Stipends and institution of higher education allowances. 
"Sec, 544. Fellowship conditions. 
"Sec. 545. Definition, 
"Sec. 546. Appropriations authorized.". 
Sec. 506. Education professional development. 
"PART D—COORDINATION OP EDUCATION PROFESSIONAL DEVELOPMENT 
"Sec. 551. Findings, 
"Sec. 552, Policy. 
"Sec, 553, Office of Education Professional Development". 
TITLE VI—ESTABUSHMENT OF A NEW TITLE VI OF THE HIGHER 
EDUCATION ACT OF 1965 
Sec. 601. Programs authorized. 
"TITLE VI—INTERNATIONAL EDUCATION PROGRAMS 
"PART A—INTERNATIONAL AND FOREIGN LANGUAGE STUDIES 
"Sec. 601, Findings and purposes. 
"Sec. 602. Graduate and undergraduate language and area centers. 
"Sec. 603. International studies centers. 
"Sec. 604. Undergraduate international studies and foreign language pro-
grams, 
"Sec, 605. Research; studies; annual report. 
"Sec. 606. Equitable distribution of funds, 
"Sec. 607, Authorization of appropriations. 
"PART B—BUSINESS AND INTERNATIONAL EDUCATION PROGRAMS 
"Sec. 611. Findings and puriwses. 
"Sec. 612. Education and training programs. 
"Sec. 613. Authorization of appropriations. 
"PART C—GENERAL PROVISIONS 
"Sec. 621. Advisory board. 
"Sec. 622. Definitions.". 
TITLE Vn-AMENDMENT TO TITLE Vn OF THE HIGHER EDUCATION ACT 
OF 1965 
Sec. 701. Amendment. 
"TITLE Vn-CONSTRUCTION. RECONSTRUCTION, AND RENOVATION OP 
ACADEMIC FACILITIES 
"Sec. 701. General purposes, 
"Sec. 702. Appropriations authorized. 
"PART A—GRANTS FOR THE CONSTRUCTION, RECONSTRUCTION, AND RENOVATION OP 
UNDERGRADUATE ACADEMIC FACILITIES 
"Sec, 711, State plan, 
"Sec, 712. Basic criteria. 
"Sec. 713. Allotment of funds. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1371 
'TABT B—GBANTS FOR CONSTRUCTION, RECONSTRUCTION, AND RENOVATION OF 
GRADUATE ACADEMIC FACILITIES 
"Sec. 721. Grants. 
"PART C—LOANS FOR CONSTRUCTION, RECONSTRUCTION, AND RENOVATION OP 
ACADEMIC FACILITIES 
"Sec. 731. Eligibility conditions, amounts, and terms. 
"Sec. 732. General provisions for loan program. 
"Sec. 733. Revolving loan and insurance fund. 
"Sec. 734. Annual interest grants. 
"Sec. 735. Academic facilities loan insurance. 
"PART D—GENERAL 
"Sec. 741. Recovery of payments. 
"Sec. 742. Definitions.'. 
TITLE Vm-COOPERATIVE EDUCATION 
Sec. 801. Extension of program. 
TITLE K-GRADUATE PROGRAMS 
Sec. 901. Grants to institutions of higher education. 
Sec. 902. Graduate fellowships. 
"PART B—FELLOwsraps FOR GRADUATE AND PROFESSIONAL STUDY 
"Sec. 921. Statement of purpose. 
"Sec. 922. Program authorized. 
"Sec. 923. Award of fellowships. 
"Sec. 924. Authorization of appropriations.". 
Sec. 903. New program authorized. 
"PART C—NATIONAL GRADUATE FELLOWS PROGRAM 
"Sec. 931. Award of national graduate fellowships. 
"Sec. 932. Allocation of fellowships. 
"Sec. 933. Stipends. 
"Sec. 934. Fellowship conditions.". 
Sec. 904. Training and legal assistance profession program authorized. 
"PART D—ASSISTANCE FOR TRAINING IN T
H
E LEGAL PROFESSION 
"Sec. 941. Program authorized. 
"Sec. 942. Authorization of appropriations.". 
Sec. 905. Law school programs included in title IX. 
"PART E—LAW SCHOOL CUNICAL EXPERIENCE PROGRAMS 
"Sec. 951. Program authorization. 
"Sec. 952. Applications. 
"Sec. 953. Authorization of appropriations.". 
TITLE X-ESTABLISHMENT OF A NEW TITLE X OF THE fflGHER 
EDUCATION ACT OF 1965 
Sec. 1001. Fund for the Improvement of Postsecondary Education. 
"TITLE X-FUND FOR THE IMPROVEMENT OF POSTSECONDARY 
EDUCATION 
"PART A—ESTABLISHMENT AND OPERATION OF FUND 
"Sec. 1001. Authorization of program. 
94 STAT. 1372 
PUBLIC LAW 96-374—OCT. 3, 1980 
"Sec. 1002. Consultation. 
"Sec. 1003. National Board of the Fund for the Improvement of Postsecondary 
Education. 
"Sec. 1004. Administrative provisions. 
"Sec. 1005. Authorization of appropriations.". 
TITLE XI—ESTABLISHMENT OF A NEW TITLE XI OF THE HIGHER 
EDUCATION ACT OF 1965 
Sec. 1101. Program authorized. 
"TITLE XI-URBAN GRANT UNIVERSITY PROGRAM 
"Sec. 1101. Findings and purpose. 
"Sec. 1102. Appropriations authorized. 
"Sec. 1103. Project assistance. 
"Sec. 1104. Limitation. 
"Sec. 1105. Definitions.". 
TITLE Xn—GENERAL PROVISIONS 
Sec. 1201. Amendments. 
"Sec. 1203. Federal-State relationships; State agreements. 
"Sec. 1204. Treatment of territories and territorial student assistance. 
"Sec. 1205. National Advisory Committee on Accreditation and Institutional 
Eligibility.". 
TITLE XIII-MISCELLANEOUS PROVISIONS 
PART A—GENERAL EDUCATION PROVISIONS 
Sec. 1301. Contingent extension. 
Sec. 1302. Enforcement of the rules. 
Sec. 1303. Science education programs. 
Sec. 1304. Commission on the Review of the Federal Impact Aid Program. 
Sec. 1305. Evaluation reports. 
Sec. 1306. Education impact statement. 
PART B—NATIONAL INSTITUTE OF EDUCATION 
Sec. 1311. Extension of authority. 
Sec. 1312. Declaration of policy. 
Sec. 1313. Research and development priorities. 
Sec. 1314. Repealer. 
PART C—AMENDMENTS TO THE REHABILITATION ACT OF 1973 
Sec. 1321. Composition of the Architectural and Transportation Barriers Compli-
ance Board and transmission of report. 
Sec. 1322. Information clearinghouse for handicapped individuals. 
PART D—NATIVE HAWAIIAN EDUCATION STUDY 
Sec. 1331. Study authorized. 
PART E—SPECIAL IMPACT AID PROGRAM 
Sec. 1341. Program authorized. 
PART F—THE NAVAJO COMMUNFTY COLLEGE ASSISTANCE PROGRAM 
Sec. 1351. Amendments to the Navajo Community College Act. 
PART G—NEW LAND GRANT COLLEGES 
Sec. 1361. American Samoa and Micronesia land grant colleges. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1373 
PART H—MEMORIALS 
SUBPART i—THE ROBERT A. TAFT INSTITUTE 
Sec. 1371. Short title. 
Sec. 1372. Grants for development. 
Sec. 1373. Authorization of appropriations. 
SUBPART 2—GENERAL DANIEL JAMES MEMORIAL HEALTH EDUCATION CENTER 
Sec. 1376. Financial assistance authorized. 
Sec. 1377. Authorization of appropriations. 
SUBPART 3—THE WILUAM LEVI DAWSON CHAIR OF PUBLIC AFFAIRS 
Sec. 1381. Short title. 
Sec. 1382. Assistance for the establishment of the William Levi Dawson Chair of 
Public Affairs. 
Sec. 1383. Authorization of appropriations. 
PART I—TECHNICAL PROVISIONS 
Sec. 1391. Administrative amendments. 
Sec. 1392. Contract authority. 
Sec. 1393. Effective dates. 
TITLE I—ESTABLISHMENT OF A NEW TITLE I OF THE 
HIGHER EDUCATION ACT OF 1965 
NEW PROGRAMS ESTABUSHED 
SEC. 101. (a) Title I of the Higher Education Act of 1965 (hereafter 
in this Act referred to as the "Act") is amended to read as follows: 
"TITLE I—CONTINUING POSTSECONDARY EDUCATION 
PROGRAM AND PLANNING 
"PART A—COMMISSION ON NATIONAL DEVELOPMENT IN 
POSTSECONDARY EDUCATION 
"FINDINGS 
"SEC. 101. The Congress finds— 
20 use looi. 
"(1) that institutions of higher education in our Nation and 
their human and intellectual resources are critical to the future 
of the American society, and that the Nation's economic poten-
tial, its strength and freedom, and the quality of life for all 
citizens are tied to the quality and extent of higher education 
available; 
"(2) that it is the responsibility of the Federal Government, 
consistent with the rights, duties, and privileges of States and 
institutions of higher education, to promote— 
"(A) equality of access to postsecondary education, without 
regard to age, race, sex, creed, handicap, national origin, 
geographic location, or economic status; 
"(B) freedom of choice to students who wish to participate 
in postsecondary education, to select institutions and pro-
grams which meet their needs and abilities; 
"(C) quality of postsecondary education, including the 
maintenance and extension of academic freedom, responsi-
bility, and educational diversity; 
94 STAT. 1374 
PUBLIC LAW 96-374—OCT. 3, 1980 
"(D) responsiveness of postsecondary education to rapidly 
changing social and economic needs; and 
"(E) the efficient use of resources in postsecondary educa-
tion, and the optimal allocation of human, physical and 
financial resources, through efficient planning and manage-
ment to achieve these goals; and 
"(3) that demographic, economic, and social changes will re-
quire institutions of postsecondary education to adapt to the 
future needs of individuals and of American society. 
"ESTABLISHMENT OP THE COMMISSION ON NATIONAL DEVELOPMENT 
IN POSTSECONDARY EDUCATION 
20 use 1002. 
"SEC. 102. (a) There is established a Commission to be known as the 
Commission on National Development in Postsecondary Education to 
review the effectiveness of policies to promote the Federal responsi-
bilities set forth in clauses (A) through (E) of section 101(2). 
"(b) The Commission shall be composed of twenty-five members as 
follows: 
"(1) Nine members shall be appointed by the President of the 
United States. 
"(2) Eight of the members shall be appointed by the President 
pro tempore of the Senate upon the recommendation of the 
Majority Leader and the Minority Leader. 
"(3) Eight members shall be appointed by the Speaker of the 
House of Representatives. 
"(c)(1) Of each class specified in subsection 0?) not more than four 
members shall be from the same political party, except in the case of 
the members appointed under clause (1), in which case not more than 
five members shall be from the same political party. The members of 
the Commission appointed from private life shall be individuals who 
by reason of experience or training are especially qualified to serve 
on the Commission. 
Appointments. 
* '(2) In making appointments under subsection (b) of this section the 
President, the President pro tempore, and the Speaker of the House 
of Representatives shall give due consideration to the appointment of 
individuals who, collectively, will provide appropriate representation 
of institutions of higher education. State agencies responsible for 
postsecondary education, labor, the business community, and public 
service. 
"(d) Any vacancy in the Commission shall not affect its powers but 
shall be filled in the same manner in which the original appointment 
was made. 
"(e) The Commission shall select a Chairman and a Vice Chairman 
from among its members. 
"(f) Thirteen members of the Commission shall constitute a 
quorum for the transaction of business, but the Commission may 
establish a lesser number as a quorum for the purpose of holding 
hearings, taking testimony, and receiving evidence. 
Compensation. 
"(g)(1) Members of the Commission who are Members of Congress 
or officers or employees of the executive branch of the Government 
shall serve without additional compensation but shall be reimbursed 
for travel, subsistence and other necessary expenses incurred by 
them in carrying out the duties of the Commission. 
"(2) Members of the Commission not otherwise employed by the 
Federal Government shall receive compensation at a rate equal to 
the daily rate prescribed for GS-18 of the General Schedule under 
section 5332 of title 5, United States Code, including traveltime for 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1375 
each day they are engaged in the performance of their duties as 
members of the Commission and shall be entitled to reimbursement 
for travel, subsistence, and other necessary expenses incurred by 
them in carrying out the duties of the Commission. 
"DUTIES OF THE COMMISSION 
"SEC. 103. (a) The Commission shall study and investigate the Study. 
extent to which national policies promote the objectives set forth in ^^ ^^^ ^^^^ 
clauses (A) through (E) of section 101(2). Such study shall include, but 
not be limited to, consideration of— 
"(1) the extent to which postsecondary educational planning by 
States and localities and institutions of higher education is 
designed to identify the future needs of education in American 
society; 
"(2) the effectiveness of Federal financial assistance to stu-
dents and institutions of higher education in promoting national 
development of postsecondary education in the most efficient 
manner; 
"(3) the physical and financial capacity of institutions of higher 
education to carry out their mission, including the conduct of 
basic and applied research in the humanities and scientific and 
technical fields, and the relationship between institutions of 
higher education, public agencies, and the private sector in 
developing the capacity of higher education to promote such 
research; 
"(4) the human and technical resources currently and prospec-
tively available to institutions of higher education to enable 
them to address and respond to national and worldwide social 
and economic forces; 
"(5) the effect of demographic changes on institutions of higher 
education and their constituent disciplines and professions and 
the ability of such institutions to meet national needs; and 
"(6) the extent to which Federal student assistance may be 
used to promote the recruiting of individuals to serve in the 
Armed Forces and to retain members of the Armed Forces. 
"(b)(1) In addition, the Commission shall conduct a study of the 
remaining barriers to adult postsecondary education which analyzes 
the characteristics of current or potential adult postsecondary stu-
dents, the Federal response to the needs of adult postsecondary 
students, and the ability of educational institutions to respond to the 
growing postsecondary student population. For the purpose of the "Adult 
study conducted under this subsection, the term 'adult postsecondary gtudrat"" ^
"
^
^ 
student' means individuals twenty-two years of age or older. 
"(2) In analyzing the characteristics of current or potential adult 
postsecondary students and the Federal response to their needs, the 
Commission shall— 
"(A) review the extent to which such students are motivated by 
employment goals, and whether these students seek further 
education in order to enter the labor force or reenter after an 
extended absence, advance in a current career, or move from one 
career to another; 
"(B) analyze the relationship between different employment 
motivations and sources of financial assistance for education, 
choice of institution or patterns of participation in postsecondary 
education; 
"(C) evaluate the extent to which the unavailability or inacces-
sibility of financial aid sources may prevent educational partici-
79-194 
O—81—pt. 2 
7:QL3 
94 STAT, 1376 
PUBLIC LAW 96-374—OCT. 3, 1980 
Reports to 
President and 
Congress. 
Termination. 
pation by economically or socially disadvantaged adults, or 
otherwise limit their choice of educational focus or intensity of 
study; and 
"(D) evaluate the extent to which age represents a barrier to 
participation in postsecondary education and the potential for 
greater participation in postsecondary education by individuals 
age 60 and older. 
"(3) In analyzing the ability of postsecondary institutions to re-
spond to the potential adult postsecondary student population, the 
Commission shall, at a mimimum— 
"(A) review the availability of outreach, information, counsel-
ing, or supportive service programs, with particular attention to 
programs serving adults such as homemakers or retirees who are 
least likely to have access to normal sources of educational 
information; and 
"(B) review the availability of alternative methods of evaluat-
ing past education credits and experience to promote adult 
participation in postsecondary education, and the availability of 
remedial courses for adult students. 
"(4) The Commission shall coordinate the study conducted under 
this subsection with the research and demonstration priorities of the 
National Institute of Education, and such other studies on student 
financial assistance as are authorized by this Act. 
"(c) The Commission shall submit to the President and to the 
Congress such interim reports as it deems advisable and, not later 
than December 31,1983, a final report of its study and investigation 
together with such recommendations, including recommendations 
for legislation, as the Commission deems advisable. 
"(d) The Commission shall cease to exist 60 days after the submis-
sion of its final report. 
20 u s e 1004. 
5 u s e 101. 
5 u s e 5101 et 
seq. 
5 u s e 5331. 
POWERS AND ADMINISTRATIVE PROVISIONS 
"SEC. 104. (a) The Commission or, on authorization of the Commis-
sion, any subcommittee or member thereof, may, for the purposes of 
carrying out the provisions of this Act, hold such hearings, sit and act 
at such times and places, as the Commission or such subcommittee or 
member may deem advisable. 
"(b) The Commission may acquire directly from the head of any 
department, agency, independent instrumentality, or other authority 
of the executive branch of the Government, available information 
which the Commission considers useful in the discharge of its duties. 
All departments, agencies, and independent instrumentalities, or 
other authorities of the executive branch of the Government, shall 
cooperate with the Commission and furnish all information re-
quested by the Commission to the extent permitted by law. 
"(c) The Commission is authorized to— 
"(1) appoint and fix the compensation of such personnel as may 
be necessary, without regard to the provisions of title 5, United 
States Code, governing appointments in the competitive service, 
and without regard to the provisions of chapter 51 and sub-
chapter III of chapter 53 of such title relating to classification 
and General Schedule pay rates; 
"(2) obtain the services of experts and consultants in accord-
ance with the provisions of section 3109 of title 5, United States 
Code; 
"(3) enter into agreements with the General Services Ad-
ministration for procurement of necessary financial and 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1377 
administrative services, for which payment shall be made by 
reimbursement from funds of the Commission in such amounts 
as may be agreed upon by the Chairman and the Administrator 
of General Services; 
"(4) procure supplies, services, and property, and make con-
tracts, without regard to the laws and procedures applicable to 
Federal agencies; and 
"(5) enter into contracts with Federal or State agencies, private Contract 
firms, institutions, and agencies for the conduct of research or authority. 
surveys, the preparation of reports, and other activities neces-
sary to the discharge of its duties. 
"AUTHORIZATION 
"SEC. 105. There are authorized to be appropriated $3,000,000 to 20 use 1005. 
carry out the provisions of this part for the period beginning 
October 1,1981 through March 1,1984. 
"PART B—EDUCATION OUTREACH PROGRAMS 
"FINDINGS 
"SEC. 111. The Congress finds that— 
20 use ion. 
"(1) the rapid pace of social, economic, and technological 
change has created pressing needs for postsecondary educational 
opportunities for adults in all stages of life; 
"(2) postsecondary educational opportunities in the United 
States are traditionally provided for individuals between the 
ages of eighteen and twenty-two; 
"(3) many adults are barred from advancement or self-suffi-
ciency by lack of access to, and lack of retention in, postsecondary 
educational opportunities appropriate to their needs, or by lack 
of information or support services concerning the availability of 
postsecondary educational opportunities; 
"(4) access to postsecondary educational opportunities is se-
verely limited for adults whose educational needs have been 
inadequately served during youth, or whose age, sex, race, 
handicap, national origin, rural isolation, or economic circum-
stance may be a barrier to such opportunities; 
"(5) with declining population growth rates, the future of 
postsecondary education in the United States is largely depend-
ent upon its ability to respond to the challenges of new student 
populations; 
"(6) service in continuing education will be better achieved 
through increased emphasis on planning and coordination which 
more effectively utilizes existing resources of both public and 
private sectors; and 
"(7) to meet the unique problems and needs of adults who are 
disadvantaged in seeking access to postsecondary educational 
opportunities, resources must be marshalled from a wide range 
of institutions and groups, including community colleges, com-
munity-bEised educational institutions, business, industry, labor, 
and other public and private organizations and institutions. 
"STATE ALLOTMENTS 
"SEC. 112. (a)(1) From 90 per centum of the funds appropriated for 20 use lor 
this part for each fiscal year, the Secretary shall— 
94 STAT. 1378 
PUBLIC LAW 96-374—OCT. 3, 1980 
"(A) allot to each State having an agreement under section 
Post, p. 1493. 
1203 of this Act an amount which bears the same ratio to 60 per 
centum of such amount as the adult population of that State 
bears to the adult population of all States, and 
"(B) allot 40 per centum of such amount to all States having an 
agreement under section 1203 on an equal basis, 
except that no State shall receive less than $187,500 in any such fiscal 
year. If 90 per centum of the sums appropriated for any fiscal year are 
insufficient to pay the allotment specified in clauses (A) and (B) of the 
previous sentence and the exception contained in the previous 
sentence, the amount of each State s allotment under such clauses (A) 
and (B) (but not the amount in the exception) shall be ratably 
reduced. If 90 per centum of the sums appropriated for any fiscal year 
are insufficient after the application of the previous sentence, the 
amount of each State's allotment shall be equal. In case additional 
funds become available in making such payments in any fiscal year 
during which the second and third sentence of this paragraph are 
applicable, such reduced amounts shall be increased on the same 
basis as they were reduced. 
"(2) Ten per centum of the funds appropriated for this part shall be 
available for carrying out section 116. 
"(b) If, in any fiscal year, a State does not wish to conduct 
comprehensive planning pursuant to section 113, the Secretary shall 
allot to such State an amount equal to the amount the State would 
otherwise receive for the conduct of programs of continuing educa-
tion and information services under this part. The Secretary shall 
reallot the funds that would have been used by such State for the 
conduct of statewide planning under section 113 to all other States 
having agreements under section 1203. Such reallotments shall be 
made in proportion to their allotments pursuant to subsection (a). 
20 u s e 1013. 
Programs, 
grants, and 
contracts. State 
report. 
COMPREHENSIVE STATEWIDE PLANNING 
"SEC. 113. (a)(1) Subject to paragraphs (2) and (3), each State with 
an agreement pursuant to section 1203 of this Act shall use at least 15 
per centum but not to exceed 20 per centum of its allotment for the 
purpose of conducting comprehensive statewide planning for 
improving access and retention within the State to postsecondary 
educational programs for traditional and nontraditional learners, 
coordinating educational and occupational information and counsel-
ing services to youth and adults throughout the State, and promoting 
more effective and efficient use of available resources for continuing 
education within the State. 
"(2) In any fiscal year in which appropriations for this part are 
equal to or exceed $18,500,000 but are less than $24,000,000, each 
State with an agreement pursuant to section 1203 of this Act shall use 
at least 10 per centum but not to exceed 15 per centum of its 
allotment for the purpose described in paragraph (1) of this 
subsection. 
"(3) In any fiscal year in which the appropriations for this part are 
equal to or exceed $24,000,000, each State having an agreement 
pursuant to section 1203 of this Act shall use not to exceed 10 per 
centum of its allotment for the purpose described in paragraph (1) of 
this subsection. 
"(b) A State shall submit to the Secretary at the end of each fiscal 
year for which sums have been received a list of programs assisted 
under this part, a brief description of the purposes of the programs, 
and an analysis of the relationship between grants and contracts 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1379 
awarded under this part and comprehensive statewide planning for 
postsecondary education. 
"(c) Of the sums granted to States for comprehensive statewide 
planning, not less than 50 per centum shall be for the purpose of 
canying out a program of statewide planning for continuing educa-
tion in order to improve access for adults within the State to 
postsecondary education programs and to promote more effective and 
efficient use of available resources, including efforts to ensure equal 
treatment of applicants in the evaluation of grant proposals, except 
that the Secretary may, upon application, grant a waiver to a State 
which has demonstrated that the State has adequately provided for 
meeting the needs of adult learners in its statewide planning activi-
ties. Such planning shall give particular consideration to the educa-
tional needs of adults who have been inadequately served by 
programs of postsecondary education. 
"(d) Planning undertaken pursuant to this section shall be coordi-
nated, to the maximum extent feasible, with the planning activities 
under subpart 4 of part A and part B of title IV and section 485 of this 
Act; the Vocational Education Act; the Comprehensive Employment 
and Training Act; the Older Americans Act of 1965; the Rehabilita-
tion Act of 1973; the Career Education Incentive Act; the Adult 
Education Act; the Veterans Readjustment Assistance Act; and other 
Federal, State, and local activities intended to provide outreach, 
guidance, counseling, and educational, student aid, and occupational 
information to persons within the State. 
"(e) Each State may use the funds available for this section to 
conduct studies of student financial assistance needs and resources, 
information coordination, continuing education, and other topics 
consistent with the purposes of subsections (a) and (c) of this section. 
"INFORMATION SERVICES 
"SEC. 114. (a) Each State shall use not less than $50,000 nor more 
than 12 per centum of its allotment, whichever is greater, to conduct 
programs to develop and coordinate new and existing educational 
and occupational information and counseling programs to eliminate 
unnecessary duplication and to provide a more comprehensive deliv-
ery of services to both traditional and nontraditional learners seeking 
educational information and to youth and adults seeking occupa-
tional information. 
"Ot)) Such educational and occupational information and counseling 
programs shall be coordinated to the maximum extent possible with 
those authorized by subpart 4 of part A and part B of title IV and 
section 485 of 
this Act; the Vocational Education Act; the Comprehen-
sive Employment and Training Act; the Older Americans Act of 1965; 
the Rehabilitation Act of 1973; the Career Education Incentive Act; 
the Adult Education Act; the Veterans Readjustment Assistance Act; 
and other Federal, State, and local activities intended to provide 
outreach, guidance, counseling, and educational, student aid, £ind 
occupational information to persons within the State. 
"(c) For the purposes of carrying out this section, each State may 
make grants to, and enter into contracts with, institutions of higher 
education, public and private institutions and organizations, busi-
ness, industry, and labor, or any combination thereof. 
Continuing 
education. 
Post, p. 1407, 
20 u s e 1071, 
post, p. 1449. 
20 u s e 11 note, 
2301 note. 
29 u s e 801 note. 
42 u s e 3001 
note. 
29 u s e 701 note. 
20 u s e 2601 
note. 
20 u s e 1201 
note. 
66 Stat. 663. 
State studies. 
20 u s e 1014. 
Grants and 
contracts. 
94 STAT. 1380 
PUBLIC LAW 96-374—OCT. 3, 1980 
"CONTINUING EDUCATION 
20 use 1015. 
"SEC. 115. (a) Each State shall use such sums as may remain 
available from that State's allotment after reserving the amounts 
required to carry out the provisions of sections 113 and 114 of this 
part for the purpose of— 
"(1) promoting access to and retention in postsecondary educa-
tional programs for adults whose educational needs have been 
inadequately served; 
"(2) expanding and improving postsecondary education pro-
grams which help adults develop their occupational potential 
and prepare for transitions between education and work; 
"(3) eliminating barriers posed by previous education or train-
ing, age, sex, race, handicap, national origin, rural isolation, or 
economic circumstance which may place adults at a disadvan-
tage in seeking postsecondary educational opportunities; 
(4) strengthening statewide and other mechanisms of infor-
mation, counseling, and referral which provide access to postsec-
ondary education and serve the special needs of adults; and 
"(5) developing strategies to promote the financial self-suffi-
ciency of postsecondary education programs initiated pursuant 
to this part. 
Programs, 
"(b) To promote the purposes of subsection (a), each State may 
contracts 
make grants to and enter into contracts with public and private 
institutions and organizations, institutions of higher education, busi-
ness, industry, and labor, or any combination thereof, for programs, 
such as— 
"(1) the creation or expansion of labor education, training and 
technical assistance programs, and the development of coopera-
tive relationships between State and local labor organizations 
and institutions and agencies which provide opportunities for 
continuing education; 
"(2) the removal of barriers to continuing education caused by 
rural isolation or other rural-related factors; 
"(3) legal, vocational, and health educational services and 
information services for older individuals who use preretirement 
education as a means to adjust to retirement; 
"(4) the promotion of resource sharing for innovative uses of 
technology, including telecommunications, either on an inter-
state or intrastate basis, to overcome barriers to postsecondary 
educational opportunities; 
"(5) educational and occupational information and counseling 
services designed to meet the special needs of adult women, 
particularly homemakers, and to assist their entry or reentry 
into postsecondary education and the labor force; 
"(6) the collection and dissemination of information, including 
data banks, on sources of student financial assistance and infor-
mation designed to assist individuals to make choices among 
postsecondary institutions, programs, and other educational 
opportunities; 
(7) community education service activities consistent with the 
purpose of this section for adults in rural areas; 
"(8) postsecondary educational programs suited to individuals 
whose educational needs have been inadequately served, espe-
cially the handicapped, older individuals, migrant and seasonal 
farmworkers, individuals who can participate in programs only 
on a part-time basis, and individuals who otherwise would be 
unlikely to continue their education beyond high school; 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1381 
"(9) child care services to assist individuals desiring to partici-
pate to enter or reenter the field of postsecondary education and 
the labor force; and 
"(10) the promotion or delivery of postsecondary education 
services to women at the place of their employment or in 
conjunction with their employment, 
"(c) No grant or contract may be entered into to carry out the 
activities described in clause (9) of subsection (b) unless the agree-
ment to make the grant or the contract contains provisions designed 
to assure that— 
"(1) the State will provide assurances that the State has 
established a cooperative agreement between the State entity 
responsible for planning under section 113 and the agency 
responsible for coordinating child care services within the State; 
and 
"(2) funds made available pursuant to such grant or contract 
will be used for services furnished only by child care providers 
licensed in the State or child care providers who have applied for 
renewal of such a license and are determined by the State to be 
likely to be approved for renewal. 
"(d) Each State may use an amount which does not exceed 5 per 
centum of sums available for this section or $40,000, whichever is 
greater, for the administration and operation of programs described 
in subsection O
c
>
) of this section. 
Grant and 
contract 
agreement 
provisions. 
Program 
administration 
and operation. 
FEDERAL DISCRETIONARY GRANTS 
"SEC. 116. (a) From 10 per centum of the sums appropriated to carry 
out the provisions of this part, the Secretary is authorized to make 
grants to and enter into contracts with public and private institutions 
and organizations, institutions of higher education, business, indus-
try, labor, and States, or any combination thereof for activities 
which— 
"(1) develop and evaluate innovative delivery systems to in-
crease access to postsecondary education for underserved adults; 
"(2) expand the range of educational and community resources 
used to meet the needs of underserved adults for continuing 
education; 
"(3) promote the development of interstate educational deliv-
ery systems, cooperative and consortial arrangements, and pro-
grams (including telecommunications) which more effectively 
address regional needs for continuing education; 
"(4) stimulate and evaluate creative approaches to the prob-
lems of access for adults inadequately served by existing educa-
tional offerings; 
"(5) develop statewide, regional, or national programs to co-
ordinate educational and occupational information, including 
information on student financial assistance, through creation 
and expansion of data banks for the more effective coordination 
and dissemination of such information; 
"(6) assist States to perform their functions of authorizing 
institutions of higher education effectively; and 
"(7) provide preservice and inservice training to teachers and 
administrative personnel involved in child care programs, in-
cluding the recruitment and training of low-income parents for 
child care positions, and provide specialized training in early 
childhood education, and to provide improved teacher certifica-
tion criteria for child care programs. 
20 u s e 1016. 
94 STAT. 1382 
PUBLIC LAW 96-374—OCT. 3, 1980 
"(b) No grant may be awarded under this section within a State 
unless the Secretary has provided the State entity responsible for 
Post, p. 1493. 
comprehensive planning under section 1203, if applicable, an oppor-
tunity to comment on the relationship of the proposed grant to such 
planning. 
Appointments. 
20 u s e 1017. 
Regulation 
preparation. 
Report to 
President, 
transmittal to 
Congress. 
NATIONAL ADVISORY COUNCIL ON CONTINUING EDUCATION 
"SEC, 117. (a) The President shall appoint a National Advisory 
Council on Continuing Education consisting of eight representatives 
of Federal agencies having postsecondary continuing education and 
training responsibilities, including but not limited to, one representa-
tive each from the Departments of Education, Agriculture, Defense, 
and Labor, and the Veterans' Administration; and twelve members, 
not full-time employees of the Federal Government, who are knowl-
edgeable and experienced in the field of continuing education, includ-
ing State and local government officials, representatives of business, 
labor, and community groups, and adults whose educational needs 
have been inadequately served. The Advisory Council shall meet at 
the call of the chairman but not less than twice a year. 
"0)) The Advisory Council shall advise the Secretary in the prepa-
ration of general regulations and with respect to policies and proce-
dures arising in the administration of this title. 
"(c) The Advisory Council shall examine all federally supported 
continuing education and training programs and make recommenda-
tions with regard to policies to eliminate duplication and to effectuate 
the coordination of programs under this title and other federally 
funded continuing education and training programs and services. 
"(d) The Advisory Council shall make annual reports to the 
President, the Congress, and the Secretary, commencing on Septem-
ber 30, 1981, of its findings and recommendations, including recom-
mendations for changes in the provisions of this title and other 
Federal laws relating to continuing education and training activities. 
The President shall transmit each such report to the Congress with 
his comments and recommendations. The Advisory Council shall 
make such other reports or recommendations to the President, the 
Congress, the Secretary, or the head of any other Federal department 
or agency as may be appropriate. 
"(e) The Advisory Council may utilize the services and facilities of 
any agency of the Federal Government as may be necessary. The 
Advisory Council may accept, employ, and dispose of gifts or bequests 
to carry out its responsibilities under this title. 
DEFINITIONS 
20 use 1018. 
"SEC. 118. For the purposes of this subpart— 
"(1) the term 'Commission' means the Commission on National 
Development in Postsecondary Education established under sec-
tion 102; 
"(2) the term 'Advisory Council' means the National Advisory 
Council on Continuing Education established under section 117; 
"(3) the term 'adults whose educational needs have been 
inadequately served' means individuals eighteen years of age or 
older who, because of circumstances of age, sex, low income, 
handicap, minority status, rural isolation, status of unem-
ployment or underemployment, lack of education, or other sig-
nificant barriers have been discouraged from obtaining equal 
educational opportunities; 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1383 
"(4) the term 'continuing education' means postsecondary 
instruction and support services designed to meet the educa-
tiongd needs of adults, including the expansion of available 
learning opportunities for adults whose educational needs are 
inadequately served by current educational offerings in their 
communities; and 
"(5) the term 'adult population' means the population eighteen 
years old and older of a State and of all the States which shall be 
determined by the Secretary on the basis of the most recent 
satisfactory data available from the Department of Commerce. 
"APPROPRIATIONS AUTHORIZED AND PAYMENTS 
"SEC. 119. (a) There is authorized to be appropriated $20,000,000 for 
fiscal year 1981; $30,000,000 for fiscal year 1982; $40,000,000 for fiscal 
year 1983; $50,000,000 for fiscal year 1984; and $60,000,000 for fiscal 
year 1985 to carry out the provisions of this part. 
"
O
t
>
) Payments under this part shall not exceed two-thirds of the 
cost of activities assisted under this part. The non-Federal share may 
be in C£ish or in kind, but may not include payments received under 
any other Federal program. 
(c) Each State is authorized to use not more than 50 per centum of 
the funds provided under section 113 for the purpose of carrying out 
programs under section 115.". 
Ot)) Subpart 5 of part A of title IV of the Act is repealed. 
TITLE II—AMENDMENT AND EXTENSION OF TITLE II OF 
THE HIGHER EDUCATION ACT OF 1965 
EXTENSION AND REVISION OF UBRARY PROGRAMS 
SEC. 201. Title II of the Act is amended to read as follows: 
"TITLE II—COLLEGE AND RESEARCH LIBRARY ASSISTANCE 
AND LIBRARY TRAINING AND RESEARCH 
20 u s e 1019. 
Repeal. 
20 u s e 1070d-
1070d-3. 
PURPOSE; AUTHORIZATION 
"SEC. 201. (a) The Secretary shall carry out a program to assist— 
"(1) institutions of higher education in the acquisition of 
library resources, including law library resources, and in the 
establishment and maintenance of networks for sharing library 
resources in accordance with part A; 
"(2) in the training of persons in librarianship and to encour-
age research and development relating to the improvement of 
libraries (including the promotion of economical and efficient 
information delivery, cooperative efforts, and developmental 
projects) in accordance with part B; 
"(3) the Nation's major research libraries, in maintaining and 
strengthening their collections, and in making their holdings 
available to other libraries whose users have need for research 
materials, in accordance with part C; and 
"(4) the establishment of a National Periodical System Corpo-
ration, in accordance with part D. 
"(b)(1)(A) There are authorized to be appropriated to carry out part 
A $10,000,000 for the fiscal year 1981, $30,000,000 for the fiscal year 
1982 and for each of the two succeeding fiscal years, and $35,000,000 
for the fiscal year 1985. 
20 u s e 1021. 
Post, p. 1384. 
Post, p. 1385. 
Post, p. 1386. 
Post, p. 1386. 
Appropriation 
authorization. 
94 STAT. 1384 
PUBLIC LAW 96-374—OCT. 3, 1980 
20 u s e 1022. 
Post, p. 1493. 
"(B) There are authorized to be appropriated to carry out part B 
$10,000,000 for the fiscal year 1981, $30,000,000 for the fiscal year 
1982 and for each of the two succeeding fiscal years, and $35,000,000 
for the 
fiscal 
year 1985. 
"(C) There are authorized to be appropriated to carry out part C 
$10,000,000 for the fiscal year 1981, $15,000,000 for the fiscal year 
1982 and each of 
the three succeeding 
fiscal 
years. 
"(2) Notwithstanding paragraph (1), no funds are authorized to be 
appropriated for part D unless the appropriation for each of parts A, 
B, and C equals or exceeds the amount appropriated for each such 
part, respectively, for 
fiscal 
year 1979. 
"(c) No grant may be made under this title for books, periodicals, 
documents, or other related materials to be used for sectarian 
instruction or religious worship, or primarily in connection with any 
part of 
the program of 
a school or department of divinity. 
"NOTIFICATION OF STATE AGENCY 
"SEC. 202. Each institution of higher education which receives a 
grant under this title shall annually inform the State agency desig-
nated pursuant to section 1203 of its activities under this title. 
"PART A—COLLEGE LIBRARY RESOURCES 
20 u s e 1029. 
Limitation. 
Application 
requirements. 
Waiver. 
"Very unusual 
circumstances." 
RESOURCE DEVELOPMENT GRANTS 
"SEC. 211. (a) From the amount appropriated for this part, the 
Secretary shall make grants to institutions of higher education or 
combinations thereof (and to each branch of an institution which is 
located in a community different from that in which its parent 
institution is located), and to other public and private nonprofit 
library institutions whose primary function is to provide library and 
information services to institutions of higher education on a formal, 
cooperative basis. The amount of 
a resource development grant under 
this section shall not exceed $10,000. 
"(b) A grant under this part may be made only if the application 
provides— 
"(1) information about the institution and its library resources 
as prescribed by the Secretary in regulations; 
"(2) satisfactory assurance that the applicant will expend, for 
all library material expenditures (exclusive of construction) 
during the fiscal year for which the grant is sought, from funds 
other than funds received under this part, an amount not less 
than the average annual aggregate amount or the average 
amount per full-time equivalent student it expended for such 
purposes during the two fiscal years preceding the fiscal year for 
which assistance is sought under this part; 
"(3) for such fiscal control and fund accounting procedures as 
are necessary to assure proper disbursement of and accounting 
for Federal funds paid to the applicant under this part; and 
"(4) for making such reports as the Secretary may require and 
for keeping such records and for affording such access thereto as 
the Secretary deems necessary to assure the correctness and 
verification of 
such reports. 
"(c) If the Secretary determines, in accordance with regulations, 
that there are very unusual circumstances which prevent the appli-
cant from making the assurance required by subsection (b)(2), the 
requirement for such assurance may be waived. For purposes of this 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1385 
subsection, the term 'very unusual circumstances' means theft, 
vandalism, fire, flood, earthquake, or other occurrence which may 
temporarily reduce the level of expenditures for library materials 
and total library purposes, or which resulted in unusually high 
expenditures for library materials and total library purposes. 
(d) Grants under this part may be used only for books, periodicals, 
documents, magnetic tapes, phonographic records, audiovisual mate-
rials, and other related library materials (including necessary bind-
ing) and for the establishment and maintenance networks for sharing 
library resources with other institutions of higher education. 
"PART B—LIBRARY TRAINING, RESEARCH, AND DEVELOPMENT 
GRANTS AUTHORIZED 
"SEC. 221. From the amount appropriated for this part, the Secre-
tary shall make grants in accordance with sections 222, 223, and 224. 
Of such amount, one-third shall be available for the purposes of each 
such section. 
"LIBRARY CAREER TRAINING 
"SEC. 222. (a) The Secretary shall make grants to, and contracts 
with, institutions of higher education and library organizations or 
agencies to assist them in training persons in librarianship. Such 
grants or contracts may be used by such institutions, library organi-
zations, or agencies (1) to assist in covering the cost of courses of 
training or study (including short term or regular session institutes), 
(2) to establish and maintain fellowships or traineeships with 
stipends (including allowances for travel, subsistence, and other 
expenses) for fellows and others undergoing training and their 
dependents, not in excess of such maximum amounts as may be 
determined by the Secretary, and (3) to establish, develop, or expand 
programs of library and information science, including new tech-
niques of information transfer and communication technology. 
' (b) Not less than 50 per centum of the grants made under this 
section shall be for the purpose of establishing and maintaining 
fellowships or traineeships under subsection (a)(2). 
20 u s e 1031. 
Grants and 
contracts. 
20 u s e 1032. 
RESEARCH AND DEMONSTRATIONS 
"SEC. 223. The Secretary is authorized to make grants to, and 
contracts with, institutions of higher education and other public or 
private agencies, institutions, and organizations for research and 
demonstration projects related to the improvement of libraries, 
training in librarianship, and information technology, and for the 
dissemination of information derived from such projects. 
Grants and 
contracts. 
20 u s e 1033. 
SPECIAL PURPOSE GRANTS 
"SEC. 224. (a) The Secretary is authorized to make special purpose 20 use 1034. 
grants to (1) institutions of higher education to meet special national 
or regional needs in the library or information sciences, (2) combina-
tions of institutions of higher education which demonstrate a need for 
special assistance in establishing and strengthening joint-use library 
facilities, resources, or equipment, (3) other public and private non-
profit library institutions which provide library and information 
services to institutions of higher education on a formal, cooperative 
basis for the purpose of establishing, developing, or expanding pro-
grams or projects that improve their services, and (4) institutions of 
94 STAT. 1386 
PUBLIC LAW 96-374—OCT. 3, 1980 
Grant 
application 
approval. 
higher education which demonstrate a need for special assistance to 
develop or expand programs or projects that will service the commu-
nities in which the institutions are located. 
"(b) A grant under this section may be made only if the application 
therefor (whether by an individual institution or a combination of 
institutions) is approved by the Secretary on the basis of criteria 
prescribed in regulations and provides satisfactory assurance that (1) 
the applicant will expend during the fiscal year for which the grant is 
sought (from funds other than funds received under this title), for the 
same purpose as such grant, an amount from such other sources 
equal to not less than one-third of such grant, and (2) the applicant 
will expend during such fiscal year from such other sources for all 
library purposes (exclusive of construction) an amount not less than 
the average annual amount it expended for such purposes during the 
two fiscal years preceding the fiscal year for which the grant is sought 
under this section. 
"PART C—STRENGTHENING RESEARCH LIBRARY RESOURCES 
Grants. 
20 u s e 1041. 
"Major research 
library." 
EUGIBIUTY FOR ASSISTANCE 
"SEC. 231. (a)(1) From the amount appropriated for this part, the 
Secretary shall make grants to institutions with major research 
libraries. 
"(2) For the purposes of this part, the term 'major research library' 
means a public or private nonprofit institution (including the library 
resources of an institution of higher education), an independent 
research library, or a State or other public library, having a library 
collection which is available to qualified users and which— 
"(A) makes a significant contribution to higher education and 
research; 
"(B) is broadly based and is recognized as having national or 
international significance for scholarly research; 
"(C) is of a unique nature, and contains material not widely 
available; and 
"(D) is in substantial demand by researchers and scholars not 
connected with that institution. 
"(b) No institution receiving a grant under this part for any fiscal 
year may receive a grant under section 211 or 224 for that year. 
GEOGRAPHICAL DISTRIBUTION OF GRANTS 
20 use 1042. 
"SEC 232. In making grants under this part, the Secretary shall 
endeavor to achieve broad and equitable geographical distribution 
throughout the Nation. 
"PART D—NATIONAL PERIODICAL SYSTEM 
PURPOSE 
20 use 1047. 
"SEC. 241. It is the purpose of this part to assess the feasibility and 
advisability of, and, if feasible and advisable, prepare a design for a 
national periodical system to serve as a national periodical resource 
by contributing to the preservation of periodical materials and by 
providing access to a comprehensive collection of periodical literature 
to public and private libraries throughout the United States. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1387 
ESTABLISHMENT 
"SEC. 242. There is established a nonprofit corporation, to be known 
as the National Periodical System Corporation, which shall not be 
considered an agency or establishment of the United States Govern-
ment. The Corporation shall be subject to the provisions of this part, 
and to the extent consistent with this Act, to the laws of the 
jurisdiction where incorporated. 
National 
Periodical 
System 
Corporation. 
20 u s e 1047a. 
FUNCTIONS OF THE CORPORATION 
"SEC. 243. (a) The Corporation shall assess the feasibility and 20USCi047b. 
advisability of a national system and, if feasible and advisable, design 
such a system to provide reliable and timely document delivery from 
a comprehensive collection of periodical literature. A design may be 
implemented by the Corporation only in accordance with the provi-
sions of section 248. 
"(b) Any design for a national periodical system shall include 
provisions for such system to— 
"(1) acquire current and past issues of periodicals, and to 
preserve and maintain a dedicated collection of such documents; 
"(2) provide information on periodicals to which the system can 
insure access, including those circulated from private sector 
sources, and cooperate in efforts to improve bibliographic and 
physical access to periodicals; 
"(3) make such periodicals available through libraries, by loan, 
photoreproduction or other means; 
"(4) cooperate with and participate in international borrowing 
and lending activities as may be appropriate for such purposes; 
"(5) ensure that copyright owners who do not wish to partici-
pate in such system are not required to participate; 
"(6) ensure that copyright fees are fixed by the copyright 
owners for any reproduction or dissemination of a document 
delivered through the system; 
"(7) complement and not duplicate activities in the private 
sector to provide access to periodical literature; 
"(8) ensure, to the maximum extent feasible, that such system 
not adversely affect the publication and distribution of current 
periodicals, particularly scholarly periodicals of small circula-
tion; and 
"(9) ensure coordination with existing programs to distribute 
periodical literature, including programs of regional libraries 
and programs of interlibrary loan and library networks. 
"(c) Any design shall include provisions for the role, if any, of the 
Corporation in the governance, administration, and operation of the 
system. 
"(d) Any design shall be accompanied by an estimate of the cost for 
each fiscal year of carrying out the system proposed in the design. 
BOARD OF DIRECTORS 
"SEC. 244. (a) The Corporation shall have a Board of Directors, 
consisting of fifteen 
members, including fourteen 
members 
appointed by the President, by and with the advice and consent of the 
Senate, and the Director of the Corporation. 
"(b) The members of the Board appointed by the President shall be 
equitably representative of the needs and interests of the Govern-
ment, academic and research communities, libraries, publishers, the 
Appointments. 
20 u s e 1047c. 
94 STAT. 1388 
PUBLIC LAW 96-374—OCT. 3, 1980 
Term of office. 
Compensation. 
information community, authors, and the public. Except for the 
initial Board of Directors, the members shall be appointed after 
consultation with the Board. 
"(c) The members of the initial Board of Directors shall serve as 
incorporators and shall take whatever actions are necessary to 
establish the Corporation under the laws of the jurisdiction in which 
it is incorporated. 
"(d) The term of office for each member of the Board (other than the 
Director) shall be two years except that any member appointed to fill 
a vacancy occurring prior to the expiration of the term for which his 
predecessor was appointed shall be appointed for the remainder of 
such term. Notwithstanding the preceding provisions of this para-
graph, a member whose term has expired may serve until his 
successor has taken office. 
"(eXD The members of the Board shall not, by reason of member-
ship, be deemed employees of the United States. Except as provided 
in paragraph (2), members shall, while engaged in activities of the 
Board, be entitled to receive compensation at the rate equal to the 
daily rate prescribed for grade GS-18 of the General Schedule under 
section 5332 of title 5, United States Code, for each day and, while 
away from their homes or regular place of business, may be allowed 
travel expenses. 
"(2) Members of the Corporation who are full-time officers and 
employees of the United States shall receive no additional pay, 
allowances, or benefits by reason of their service on the Corporation. 
"(f) Eight members of the Board shall constitute a quorum. 
"(g) The Board shall elect annually one of its members to serve as 
the Chairman. 
"(h) The Board shall meet annually or at the call of the Chairman 
or a majority of its members. 
DIRECTOR AND STAFF OF CORPORATION 
20 use I047d. 
"SEC. 245. (a) The Corporation shall have a Director, and such other 
officers as appointed by the Board for the terms and at rates of 
compensation fixed by the Board. The Director shall manage the 
operations of the Corporation, subject to such rules as may be 
prescribed by the Board. 
"(b) Subject to such rules as may be prescribed by the Board, the 
Director may appoint and fix the pay of personnel and may procure 
temporary and intermittent services. 
20 u s e 1047e. 
Tax exempt 
status. 
NONPROFIT NATURE OF CORPORATION 
"SEC. 246. (a) The Corporation shall have no power to issue any 
shares of stock, or to declare or pay any dividends. 
"(b) No part of the incomes or assets of the Corporation shall inure 
to the benefit of any director, officer, employee, or any other 
individual except as salary or reasonable compensation for services, 
"(c) The National Periodical System Corporation shall be exempt 
from taxation now or hereafter imposed by the United States, or any 
territory or possession thereof, or by any State, county, municipality, 
or local taxing authority. 
20 u s e 1047f. 
AUTHORITY OF CORPORATION 
"SEC. 247. (a) The Corporation is authorized to— 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1389 
"(1) obtain grants from and to make contracts with individuals 
and with private, State, and Federal agencies, organizations, and 
institutions; 
"(2) conduct its business, carry on its operations, and have 
officers and exercise the power granted by this section in any 
State without regard to any qualification or similar statute in 
any State; 
"(3) lease, purchase, or otherwise acquire, own, hold, improve, 
use or otherwise deal in and with any property (real, personal, or 
mixed), or any interest therein, wherever situated; 
"(4) sell, convey, mortgage, pledge, lease, exchange, and other-
wise dispose of its property and assets; and 
"(5) enter into contracts, execute instruments, incur liabilities, 
and do all things as are necessary or incidental to the proper 
management of its affairs and the proper conduct of its business. 
"(b) To carry out its functions and to engage in the activities 
described in subsection (a), the Corporation shall have the usual 
powers conferred upon a nonprofit corporation by the jurisdiction in 
which the Corporation is incorporated. 
"(c) The Corporation may use the United States mails in the same 
manner and under the same conditions as departments and agencies 
of the United States. The Administrator of General Services shall 
provide to the Corporation on a reimbursable basis such administra-
tive support services as the Corporation may request. 
"(d) The Corporation is authorized to accept, hold, administer, and 
use gifts, bequests, and devises of property, both real and personal, for 
the purpose of aiding or facilitating the authority of the Corporation 
pursuant to section 243. For the purpose of Federal income, estate, 
and gift taxes, property accepted by the National Periodical System 
Corporation shall be a gift, bequest, or devise to the United States. 
"(e) The Corporation shall be subject to the provisions of section 
552b of title 5, United States Code. 
Contract 
authority. 
GSA 
administrative 
support services. 
Gifts and 
bequests. 
IMPLEMENTING THE DESIGN 
"SEC. 248. Any design established under this part shall be submit-
ted to the Congress not later than December 31,1981, and may not be 
implemented until the design is approved in whole or in part by 
enactment of a joint resolution of the Congress approving such 
design. 
"COPYRIGHT ACT 
"SEC. 249. Nothing in this part shall be considered to amend, affect, 
or redefine the provisions of title 17, United States Code, relating to 
copyrights. 
"DEFINITIONS 
"SEC. 250. As used in this part— 
"(1) the term 'access' means the ability to identify, locate, and 
obtain a specific item (generally a periodical article), and in-
cludes both bibliographic access (the ability to identify a specific 
item from its description) and physical access to materials (the 
ability to obtain the text of an item in an appropriate form, such 
as visual, audio, or printed formats); 
"(2) the term 'Board' means the Board of Directors of the 
National Periodical System Corporation; 
"(3) the term 'comprehensive collection' means a collection of 
periodical titles which will provide access to approximately 90 
Congressional 
approval. 
20 u s e 1047g. 
20 u s e 1047h. 
17 use 1. 
20 u s e 1047i. 
94 STAT. 1390 
PUBLIC LAW 96-374—OCT. 3, 1980 
per centum of the requests received, except that such titles need 
not all be physically located in the same place; 
"(4) the term 'copyright owner' means the owner of any one of 
the exclusive rights comprised in a copyright; 
"(5) the term 'Corporation' means the National Periodical 
System Corporation established under this part; 
"(6) the term 'dedicated collection' means a collection of 
periodicals maintained for the sole purpose of assuring the 
provision of permanent physical access; 
"(7) the term 'document means any portion or the entire issue 
of a periodical; 
"(8) the term 'periodical' means a publication consisting of 
issues in a continuous series under the same title published at 
regular or irregular intervals, over an indefinite period, indi-
vidual issues in the series being numbered consecutively or each 
issue being dated; and 
"(9) the term 'private sector' means nongovernmental, non-
profit, and for-profit organizations. 
"AUTHORIZATION OF APPROPRIATIONS 
20 use 1047J. 
"SEC. 251. (a) There are authorized to be appropriated, for the 
purpose of carrying out this part, $750,000 for each of fiscal years 
1981 and 1982, and such sums as may be necessary for each of the 
fiscal years 1983,1984, and 1985. 
"G)) In any fiscal year after the joint resolution described in section 
248 is enacted, there are authorized to be appropriated such addi-
tional sums as may be necessary to implement an approved design for 
any such fiscal year ending prior to October 1,1985.'. 
TITLE III—ESTABLISHMENT OF A NEW TITLE III OF THE 
HIGHER EDUCATION ACT OF 1965 
PROGRAMS AUTHORIZED 
SEC. 301. Title III of the Act is amended to read as follows: 
"TITLE III—INSTITUTIONAL AID 
"FINDINGS AND PURPOSES 
20 use 1051. 
"SEC. 301. (a) The Congress finds that— 
"(1) many institutions of higher education in this era of 
declining enrollments and scarce resources face problems which 
threaten their ability to survive; 
"(2) the problems relate to the management and fiscal oper-
ations of certain institutions of higher education, as well as to an 
inability to engage in long-range planning, recruitment activi-
ties, and development activities; 
"(3) the solution of the problems of these institutions would 
enable them to become viable, thriving institutions of higher 
education; and 
"(4) these institutions play an important role in the American 
system of higher education, and there is a strong national 
interest in assisting them in solving their problems and in 
stabilizing their management and fiscal operations. 
"(h) It is the purpose of this title to assist such institutions through 
a program of Federal assistance. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1391 
"PART A—STRENGTHENING INSTITUTIONS 
"PROGRAM PURPOSE 
"SEC. 311. (a) The Secretary shall carry out a pro-am, in accord-
ance with this part, to improve the academic quality, institutional 
management, and fiscal stability of eligible institutions, in order to 
increase their self-sufficiency and strengthen their capacity to make 
a substantial contribution to the higher education resources of the 
Nation. 
"(b) From the sums available for this part under section 347(a)(1), 
the Secretary may award grants to any eligible institution with an 
application approved under section 341 in order to assist such an 
institution to plan, develop, or implement activities that promise to 
strengthen the institution. Special consideration shall be given to 
applications which propose to engage in the following activities 
pursuant to the institution's plan: 
"(1) faculty development; 
"(2) funds and administrative management; 
"(3) development and improvement of academic programs; 
"(4) acquisition of equipment for use in strengthening funds 
management and academic programs; 
"(5) joint use of facilities such as libraries and laboratories; and 
"(6) student services. 
20 use 1057. 
Grants. 
DEFINmONS 
20 use 1058. 
"SEC. 312. For purposes of this part: 
"(1) The term 'educational and general expenditures' means 
the total amount expended by an institution of higher education 
for instruction, research, public service, academic support (in-
cluding librarv expenditures), student services, institutional sup-
port, scholarships and fellowships, operation, and maintenance 
expenditures for physical plant, and any mandatory transfers 
which the institution is required to pay by law. 
"(2) The term 'eligible institution means— 
"(A) an institution of higher education— 
"(i)(I) which, in the case of an institution which 
awards a bachelor's degree, has an enrollment which 
includes a substantial percentage of students receiving 
awards under subpart 1 of part A of title IV, the average 20 use l
O
T
O
a
. 
amount of which is high in comparison with the average 
amount of all grants awarded under such subpart to 
students at such institutions, and (II) which, in the case 
of junior or community colleges, has an enrollment 
which includes a substantial percentage of students 
receiving awards under subpart 1 of title IV, the average 
amount of which is high in comparison with the average 
amount of all grants awarded under such subpart to 
students at such institutions; 
"(ii) except as provided in section 342(a), the average 
educational and general expenditures of which are low, 
per full-time equivalent undergraduate student, in com-
parison with the average educational and general 
expenditures per full-time equivalent undergraduate 
student of institutions that offer similar instruction; 
"(iii)(I) is legally authorized to provide, and provides 
within the State, an educational program for which it 
79-194 
O—81—pt. 2 
8 : QL3 
94 STAT. 1392 
PUBLIC LAW 96-374—OCT. 3, 1980 
awards a bachelor's degree, or (11) is a junior or commu-
nity college; 
"(iv) is accredited by a nationally recognized accredit-
ing agency or association determined by the Secretary to 
be reliable authority as to the quality of training offered 
or is, according to such an agency or association, making 
reasonable progress toward accreditation; 
"(v) except as provided in section 342(b) has, during 
the five academic years preceding the academic year for 
which it seeks assistance under this part— 
"(I) met the requirement of either clause (iii)(I) or 
(iii)(II), or of both such clauses (simultaneously or 
consecutively); and 
"(11) met the requirement of 
clause (iv); and 
"(vi) meets such other requirements as the Secretary 
may prescribe; or 
"(B) any branch of any institution of higher education 
described under subparagraph (A) which by itself satisfies 
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 (A)(i) shall be given twice the weight of the 
factor described under subparagraph (A)(ii). 
"(3) The term 'full-time equivalent students* means the sum of 
the number of students enrolled full 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 twelve) at such 
institution. 
"(4) The term 'junior or community college* means an institu-
tion 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 it awards a bachelor*s degree (or an equivalent 
degree); and 
"(Othat-
"(i) provides an educational program of not less than 
two years that is acceptable for full credit toward such a 
degree, or 
"(ii) offers a two-year program in engineering, math-
ematics, 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 math-
ematical principles of knowledge. 
"DURATION OF GRANT 
20 use 1059. 
"SEC. 313. (a) The Secretary may award a grant to an eligible 
institution under this part for— 
"(1) not to exceed three years, or 
"(2) not less than four nor more than seven years. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1393 
subject for each fiscal year to the availability of appropriations 
therefor. The Secretary shall not accept the application of an eligible 
institution for a grant under both paragraphs (1) and (2) for a fiscal 
year. 
"(b) The Secretary shall not award a grant under this part to an 
eligible institution that has, for any prior fiscal year, received a grant 
under subsection (aX2). 
"(c) Notwithstanding subsection (a), the Secretary may award a 
grant to an eligible institution under this part for a period of 
one year 
for the purpose of assisting such institution in the preparation of 
plans and applications under this part. 
"PART B—AID TO INSTITUTIONS WITH SPECIAL NEEDS 
"PROGRAM PURPOSE 
"SEC. 321. (a) The purpose of this part is to provide for a program of 20 use 1
0
6
O
. 
short-term Federal assistance to strengthen the planning, manage-
ment, and fiscal capabilities of institutions with special needs. 
"(b) From the sums available for this part under section 347(aXl), Grants. 
the Secretary may make grants to any institution with special needs 
with an application approved under section 341 in order to assist such 
an institution to plan, develop, or implement activities consistent 
with the purpose of this part. Such activities shall include— 
"(1) faculty development; 
"(2) funds and administrative management; 
"(3) development and improvement of academic programs; 
"(4) acquisition of equipment for use in strengthening funds 
management and academic programs; 
"(5) joint use of facilities such as libraries and laboratories; and 
"(6) student services. 
"DEFINITIONS 
"SEC. 322. (a) For purposes of this part: 
2
0 use 106I. 
"(1) The term 'educational and general expenditures' means 
the total amount expended by an institution of higher education 
for instruction, research, public service, academic support (in-
cluding library expenditures), student services, institutional sup-
port, scholarships and fellowships, operation, and maintenance 
expenditures of physical plant, and any mandatory transfers 
wnich the institution is required to pay by law. 
"(2) The term 'institution with special needs' means— 
"(A) an institution of higher education— 
"(i)(I) which, in the case of an institution which 
awards a bachelor's degree, has an enrollment which 
includes a substantial percentage of students receiving 
need-based assistance under title IV of this Act, the 2
0 use 1070. 
average amount of which assistance is high in compari-
son with the average amount of all assistance provided 
under such title to students at such institutions, and (II) 
which, in the case of junior or community colleges, has 
an enrollment which includes a substantial percentage 
of students receiving need-based assistance under title 
IV, the average amount of which assistance is high in 
comparison with the average amount of all assistance 
provided under such title to students at such institu-
tions; 
94 STAT. 1394 
PUBLIC LAW 96-374—OCT. 3, 1980 
"(ii) except as provided in section 342(a), the average 
educational and general expenditures of which are low, 
per full-time equivalent undergraduate student, in com-
parison with the average educational and general 
expenditures per full-time equivalent undergraduate 
student of institutions that offer similar instruction; 
*'(iii)(I) is legally authorized to provide, and provides 
within the State, an educational program for which it 
awards a bachelor's degree, or (II) is a junior or commu-
nity college; 
"(iv) is accredited by a nationally recognized accredit-
ing agency or association determined by the Secretary to 
be reliable authority as to the quality of training offered 
or is, according to such an agency or association, making 
reasonable progress toward accreditation; 
"(v) except as provided in section 342(b) has, during 
the five academic years preceding the academic year for 
which it seeks assistance under this part— 
"(I) met the requirement of either clause (iii)(I) or 
(iii)(II), or of both such clauses (simultaneously or 
consecutively); and 
"(II) met the requirement of clause (iv); 
"(vi) has an enrollment of not less than 100 full-time 
equivalent students in the academic year for which the 
determination is made; and 
"(vii) meets such other requirements as the Secretary 
may prescribe; or 
"(B) any branch of any institution of higher education 
described under subparagraph (A) which by itself satisfies 
the requirements contained in clauses (i), (ii), and (vi) of such 
subparagraph and which is located in a community different 
from that in which its parent institution is located. 
For purposes of the determination of whether an institution is an 
eligible institution under this paragraph, the factor described 
under subparagraph (A)(i) shall be given the same weight as the 
factor described under subparagraph (A)(ii), and the Secretary 
may also consider the factors specified under subsection O
t
>
) of 
this section. 
"(3) The term 'full-time equivalent students' means the sum of 
the number of students enrolled full time at an institution, plus 
the full-time equivalent of the number of students enrolled part 
time at such institution (determined on the basis of the quotient 
of the sum of the credit hours of all part-time students divided by 
twelve). 
"(4) The term 'junior or community college' means an institu-
tion 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 it awards a bachelor's degree (or an equivalent 
degree); and 
"(C) that— 
"(i) provides an educational program of not less than 
two years that is acceptable for full credit toward such a 
degree, or 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1395 
"(ii) offers a two-year program in engineering, math-
ematics, 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 math-
ematical principles of knowledge. 
"(b) In determining whether an institution is an institution with 
special needs under subsection (a)(2), the Secretary may also consider 
the following factors: 
"(1) extreme financial limitations requiring low faculty 
salaries, low costs of instruction for students, and low library 
expenditures; 
(2) a little or no endowment, whether or not unrestricted; 
"(3) a high student to faculty ratio; 
"(4) a substantial percentage of students receiving need-based 
Federal student assistance; 
"(5) limited library resources; 
"(6) a low percentage of faculty with doctorate degrees; 
"(7) poor physical facilities and limited resources to maintain 
physical facilities; 
"(8) little or no support from foundations, alumni, or corpora-
tions; 
"(9) limited or no sponsored research or faculty publications; 
"(10) inadequate development offices and a limited capacity for 
long-range planning; and 
"(11) poor or inadequate fiscal management and accounting 
procedures. 
"DURATION OP GRANT 
"SEC. 323, The Secretary may make a grant to any institution with 
special needs under this part for a period of not more than five years. 
A grant to enhance the planning capabilities of an institution shall 
not exceed one year. 
"FEDERAL SHARE 
"SEC. 324. The Federal share of the cost of grants made to 
institutions with special needs under this part shall be 100 per 
centum for the first two years in which an institution receives a 
grant, 90 per centum for the third year an institution receives a 
grant, 80 per centum for the fourth year an institution receives 
a grant, and 70 per centum for the fifth year an institution receives 
a grant, 
"PART C—CHALLENGE GRANTS FOR INSTITUTIONS ELIGIBLE FOR 
ASSISTANCE UNDER PART A OR PART B 
Institutions with 
special needs, 
determination. 
20 u s e 1062. 
Grants. 
20 u s e 1063. 
ESTABLISHMENT OF CHALLENGE GRANT PROGRAM 
"SEC. 331. (a)(1) From the sums available under section 347(a)(2) for 2
0 use 1064. 
each fiscal year, the Secretary may award a ch^lenge grant to each 
institution— 
"(A) which is an eligible institution under part A or would be ^nte, p. 1391. 
considered to be such an institution if section 312(2)(A)(iii) 
referred to a postgraduate degree rather than a bachelor's 
degree; or 
"(B) which is an institution with special needs under part B or ^nte, p. 1393. 
would be considered to be such an institution if section 
94 STAT. 1396 
PUBLIC LAW 96-374—OCT. 3, 1980 
Waiver. 
Ante, pp. 1391, 
1393. 
20 u s e 1065. 
322(a)(2)(A)(iii) referred to a postgraduate degree rather than a 
bachelor's degree. 
"(2) The Secretary may waive the requirements set forth in 
subparagraphs (A) and (B) of paragraph (1) with respect to a postgrad-
uate degree in the case of any institution otherwise eligible under 
such paragraph for a challenge grant upon determining that the 
institution makes a substantial contribution to medical education 
opportunities for minorities and the economically disadvantaged. 
"(b) The Secretary may make a grant under this section for a period 
of not more than 5 years. A grant under this section may be used for 
the programs and activities described in part A or part B, as the case 
may be. 
"APPLICATIONS FOR CHALLENGE GRANTS 
"SEC. 332. (a) Any institution eligible for a challenge grant under 
section 331(a) may apply for such a grant under section 341, except 
that the application for the purpose of this part shall— 
"(1) provide evidence that funds are available to the applicant 
to match funds that the Secretary is requested to make available 
to the institution as a challenge grant; 
"(2) in the case of an application by a public institution, 
contain the recommendations of an appropriate State agency 
responsible for higher education in the State, or provide evidence 
that the institution requested the State agency to comment but 
the State agency failed to comment; and 
"(3) in the case of an application by an institution described 
under section 331(a)(1)(B), demonstrate how challenge grant 
funds will be used to eradicate the conditions enumerated in 
section 322(b) (1) through (11), and lead to greater financial 
independence. 
"(b) Not later than April 1 of the fiscal year preceding the fiscal 
year in which any grant is to be made under this part, the Secretary 
shall determine which institutions will receive challenge grants 
under this part and notify the institutions of the amount of the grant. 
"(c) In approving applications for grants under this part, prefer-
ence shall be given to institutions which are receiving, or have 
received, grants under part A or part B. 
"PART D—GENERAL PROVISIONS 
APPLICATIONS FOR ASSISTANCE 
20 use 1066. 
"SEC. 341. (a) Any institution which is eligible for assistance under 
this title may submit to the Secretary an application for assistance at 
such time, in such form, and containing such information, as may be 
necessary to enable the Secretary to evaluate its 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 if 
the application meets the requirements of subsection (b) and shows 
that the applicant is eligible for assistance in accordance with the 
part of this title under which the assistance is sought. 
Application 
"(b) An institution, in its application for a grant, shall— 
requirements. 
"(1) g^t forth, or describe how it will develop, a comprehensive 
development plan to strengthen the institution's academic qual-
ity and institutional management, and otherwise provide for 
institutional self-sufficiency and growth (including measurable 
objectives for the institution and the Secretary to use in monitor-
ing the effectiveness of activities under this title); 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1397 
Development 
project. 
"(2) 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 311(b) or 321(b), and in no case supplant those funds; 
"(3) set forth policies and procedures for evaluating the effec-
tiveness in accomplishing the purpose of the activities for which 
a grant is sought under this title; 
"(4) provide for such fiscal control and fund accounting proce-
dures as may be necessary to ensure proper disbursement of and 
accounting for funds made available to the applicant under this 
title; 
"(5) provide for making such reports, in such form and contain- Recordkeeping. 
ing such information, as the Secretary may require to carry out 
his functions under this title (including not less than one report 
annually setting forth the institution's progress toward achiev-
ing the objectives for which the funds were awarded), and for 
keeping such records and affording such access thereto, as the 
Secretary may find necessary to assure the correctness and 
verification of such reports; 
"(6) provide that the institution will comply with the limita-
tions set forth in section 346; 
"(7) include such other information as the Secretary may 
prescribe; and 
"(8) describe in a comprehensive manner any development 
project for which funds are sought under the application and 
include— 
"(A) a description of the various components of the devel-
opment project, including the estimated time required to 
complete each such component; 
"(B) in the case of any development project which consists 
of several components (as described by the applicant pursu-
ant to subparagraph (A)), a statement identifying those 
components which, if separately funded, would be sound 
investments of Federal funds and 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 applicant); 
"(C) an evaluation by the applicant of the priority given 
any development project for which funds are sought in 
relation to any other projects for which funds are sought by 
the applicant under this title, and a similar evaluation 
regarding priorities among the components of any single 
development project (as described by the applicant pursuant 
to subparagraph (A)); 
"(D) in the case of a request for an award for a period of 
more than one year, a statement of reasons explaining why 
funds are necessary for each year of such period and why a 
single year award would be inadequate; 
"(E) information explaining the manner in which the 
development project will assist the applicant to prepare for 
the critical financial problems that all institutions of higher 
education will face during the subsequent decade as a result 
of declining enrollment, increased energy costs, and other 
problems; 
"(F) a detailed budget showing the manner in which funds 
for any development project would be spent by the applicant; 
and 
94 STAT. 1398 
PUBLIC LAW 96-374—OCT. 3, 1980 
"(G) a detailed description of any activity which involves 
the expenditure of more than $25,000, as identified in the 
budget referred to in subparagraph (F). 
20 u s e 1067. 
Ante, p. 1391. 
Ante, p. 1393. 
Report to 
Congress. 
Waiver 
qualifications. 
20 u s e 1068. 
Conflict-of-
interest 
safeguard. 
WAIVER AUTHORITY AND REPORTING REQUIREMENT 
"SEC. 342. (a)(1) The Secretary may waive the requirements set 
forth in section 312(2)(A)(ii) or section 322(a)(2)(A)(ii) if the Secretary 
determines, based on persuasive evidence submitted by the institu-
tion, that the institution's failure to meet that criterion is due to 
factors which, when used in the determination of compliance with 
such criterion, distort such determination, and that the institution's 
designation as an eligible institution under part A or as an institution 
with special needs under part B (as the case may be) is otherwise 
consistent with the purposes of such parts. 
"(2) The Secretary shall submit to the Congress each year a report 
concerning the institutions which, although not satisfying the crite-
rion contained in section 312(2)(A)(ii) or section 322(a)(2)(A)(ii), have 
been determined to be eligible institutions under part A or institu-
tions with special needs under part B, as the case may be. Such report 
shall— 
"(A) identify the factors referred to in paragraph (1) which 
were considered by the Secretary as factors that distorted the 
determination of compliance with section 312(2)(A)(ii) or section 
322(a)(2)(A)(ii), as the case may be; and 
"(B) contain a list of each institution determined to be an 
eligible institution under part A or as an institution with special 
needs under part B and include a statement of the reasons for 
each such determination. 
"(b) The Secretary may waive the requirement set forth in sections 
312(2)(v) and 322(a)(2Xv) in the case of an institution— 
"(1) located on or near an Indian reservation or a substantial 
population of Indians, if the Secretary determines that the 
waiver will substantially increase higher education opportuni-
ties appropriate to the needs of American Indians; 
"(2) wherever located, if the Secretary determines that the 
waiver will substantially increase higher education opportuni-
ties appropriate to the needs of Spanish-speaking people; 
"(3) wherever located, if the Secretary determines that the 
waiver will substantially increase higher education opportuni-
ties appropriate to the needs of individuals living in rural areas, 
whose needs are for the most part unserved by other postsecond-
ary education institutions; 
"(4) wherever located, if the Secretary determines that the 
waiver will substantially increase higher education opportuni-
ties appropriate to the needs of low-income individuals; or 
"(5) wherever located, if the Secretary determines that the 
institution has traditionally served substantial numbers of black 
students. 
" A P P L I C A T I O N REVIEW PROCESS 
"SEC. 343. (a)(1) All applications submitted under this title by 
institutions of higher education shall be read by a panel of readers 
composed of individuals selected by the Secretary. The Secretary 
shall ensure that no individual assigned under this section to review 
any application h£is any conflict of interest with regard to the 
application which might impair the impartiality with which the 
individual conducts the review under this section. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1399 
"(2) All readers selected by the Secretary shall receive thorough 
instruction from the Secretary regarding the evaluation process for 
applications submitted under this title and consistent with the 
provisions of this title, including— 
"(A) explanations and examples of the types of activities 
referred to in section 311(b) that should receive special considera-
tion for grants awarded under part A and of the types of 
activities referred to in section 321(b) that should receive special 
consideration for grants awarded under part B; 
"(B) an enumeration of the factors to be used to determine the 
quality of applications submitted under this title; and 
"(C) an enumeration of the factors to be used to determine 
whether a grant should be awarded for a project under this title, 
the amount of any such grant, and the duration of any such 
grant. 
"(b) In awarding grants under this title, the Secretary shall take 
into consideration the recommendations of the panel made under 
subsection (a). 
"(c) Not later than June 30 of each year, the Secretary shall notify 
each institution of higher education making an application under 
this title of— 
"(1) the scores given the applicant 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 awarding or 
refusing to award a grant under this title, and any modifications, 
if any, in the recommendations of the panel made by the 
Secretary. 
"COOPERATIVE ARRANGEMENTS 
"SEC. 344. (a) The Secretary may make grants to encourage cooper-
ative arrangements— 
"(1) with funds available to carry out part A, between institu-
tions eligible for assistance under part A; or 
"(2) with funds available to carry out part B, between institu-
tions eligible for assistance under part B; 
for the activities described in section 311(b) or section 3210b), as the 
case may be, so that the resources of the cooperating institutions 
might be combined and shared to achieve the purposes of such parts 
and avoid costly duplicative efforts. 
"(b) The 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. 
"(c) Grants to institutions having a cooperative arrangement may 
be made under this section for a period as determined under section 
313 or 323, as the case may be. 
Ante, p. 1391. 
Ante, p. 1393. 
Applicant 
notification. 
Grants. 
20 u s e 1069. 
ASSISTANCE TO INSTITUTIONS UNDER OTHER PROGRAMS 
"SEC. 345. (a) Each institution which the Secretary determines to be 20 use I069a. 
an eligible institution under part A or an institution with special 
needs under part B shall be eligible for waivers in accordance with 
subsection (b). 
"03)(1) Subject to, and in accordance with, regulations promulgated Waiver. 
for the purpose of this section, in the case of any application by an 
94 STAT. 1400 
PUBLIC LAW 96-374—OCT. 3, 1980 
Ante, p. 1383, 20 
u s e 1070, ante, 
p. 1472, 20 u s e 
1133. 
institution referred to in subsection (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 application in relation to applications 
from other institutions. 
"(2) The provisions of this section shall apply to any program 
authorized by title II, IV, VII, or VIII of this Act. 
"(c) The Secretary shall not waive, under subsection (b), the non-
Federal share requirement for any program for applications which, if 
approved, would require the expenditure of more than 10 per centum 
of the appropriations for the program for any fiscal year. 
20 u s e 1069b. 
20 u s e 1069c. 
Ante, pp. 1391, 
1393. 
Ante, p. 1395. 
Multiple year 
award. 
Funds, 
allocation. 
LIMITATIONS 
"SEC. 346. The funds appropriated under section 347 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 such institution; 
"(3) for an activity that is inconsistent with a State plan of 
higher education applicable to such institution; or 
"(4) for purposes other than those set forth in the approved 
application under which the funds were made available to the 
institution. 
"AUTHORIZATIONS 
"SEC. 347. (a)(1) There are authorized to be appropriated to carry 
out parts A and B $175,000,000 for the fiscal year 1982, $185,000,000 
for the fiscal year 1983, $200,000,000 for the fiscal year 1984, and 
$220,000,000 for the fiscal year 1985. Of the amounts appropriated 
under this paragraph for each fiscal year, 50 per centum shall be 
made available to carry out part A and 50 per centum shall be made 
available to carry out part B. 
"(2) There are authorized to be appropriated to carry out part C 
$25,000,000 for the fiscal year 1982, $35,000,000 for the fiscal year 
1983, $45,000,000 for the fiscal year 1984, and $50,000,000 for the 
fiscal year 1985. 
"(b) In the event of a multiple year award to any 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 recipient. 
"(c)(1) Of the sums appropriated under subsection (a)(1) for any 
fiscal year for part A, the Secretary shall make available to use for 
the purposes of each such part— 
"(A) not less than 24 per centum to institutions that are junior 
or community colleges, and 
"(B) the remainder to institutions that plan to award a bache-
lor's degree during that year. 
"(2) Of the sums appropriated under subsection (a)(1) for any fiscal 
year for part B, the Secretary shall make available to use for the 
purposes of each such part— 
"(A) not less than 30 per centum to institutions that are junior 
or community colleges, and 
"(B) the remainder to institutions that plan to award a bache-
lor's degree during that year. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1401 
"(d) Of the sums appropriated under subsection (a)(1) for the 
purpose of part A for any fiscal year, the Secretary shall make Ante, p. 1391. 
available not less than 25 per centum for grants under section 
313(a)(2). Any funds made available under this subsection for such 
grants which are not expended during the fiscal year for which such 
funds were appropriated shall remain available for expenditure for 
the purpose of making such grants during subsequent fiscal years. 
"(e) The Secretary shall assure that in each fiscal year the amount 
available under part B for institutions with special needs that Ante, p. 1393. 
historically serve substantial numbers of black students will not be 
less than 50 per centum of the amount received by such institutions 
for fiscal year 1979.". 
TITLE IV—STUDENT ASSISTANCE 
PART A—GRANTS TO STUDENTS IN ATTENDANCE AT INSTITUTIONS OF 
HIGHER EDUCATION 
STATEMENT OF PURPOSE 
SEC. 401. Section 401(a) of the Act is amended— 
(1) by striking out "qualified students" and inserting in lieu 
thereof "eligible students (defined in accordance with section 
484)"; and 
(2) by striking out "of exceptional need who, for lack of such a 
grant, would be unable to obtain the benefits of a postsecondary 
education" in paragraph (2) and inserting in lieu thereof "who 
demonstrate financial need". 
20 u s e 1070. 
PELL GRANTS 
SEC. 402. (a) Section 411(a)(1) of the Act is amended to read as 20 use l
O
T
O
a
. 
follows: 
"SEC. 411. (a)(1)(A) The Secretary shall, during the period beginning 
July 1, 1972, and ending September 30, 1985, pay to each eligible 
student (defined in accordance with section 484) for each academic 
year during which that student is in attendance at an institution of 
higher education, as an undergraduate, a basic grant in the amount 
for which that student is eligible, as determined pursuant to para-
graph (2). 
"(B) The purpose of this subpart is to provide a basic grant that (i) 
as determined under paragraph (2), will meet in academic year 
1985-1986, 70 per centum of a student's cost of attendance not in 
excess of $3,700; and (ii) in combination with reasonable parental or 
independent student contribution and supplemented by the programs 
authorized under subparts 2 and 3 of this part, will meet 75 per 
centum of a student's cost of attendance, unless the institution 
determines that a greater amount of assistance would better serve 
the purposes of section 401. 
"(C) Basic grants made under this subpart shall be known as 'Pell "Pell Grants." 
Grants'.". 
Ot>)(l) Section 411(a)(2)(A)(i) of the Act is amended to read as follows: Basic grants. 
"(2)(A)(i) The amount of the basic grant for a student eligible under 
this part shall be— 
"(I) $1,900 for academic year 1981-1982, 
"(II) $2,100 for academic year 1982-1983, 
"(III) $2,300 for academic year 1983-1984, 
"(IV) $2,500 for academic year 1984-1985, and 
94 STAT. 1402 
PUBLIC LAW 96-374—OCT. 3, 1980 
20 u s e 1070a. 
Limitations. 
"(V) $2,600 for academic year 1985-1986, 
less an amount equal to the amount determined under section 482 to 
be the expected family contribution with respect to that student for 
that year.". 
(2) Section 411(a)(2)(A)(ii) of this Act is amended by striking out 
"February 1 of each year" and inserting in lieu thereof "January 1, 
1981, October 1, 1981, and on October 1 of each succeeding year". 
(c)(1) Section 411(a)(2)(B)(i) of the Act is amended to read as follows: 
"(B)(i) The amount of a basic grant to which a student is entitled 
under this subpart for any academic year shall not exceed— 
"(I) 50 per centum of the cost of attendance (as defined under 
section 482(d)) at the institution at which the student is in 
attendance for that year, when the maximum grant is less than 
or equal to $1,900; 
"(II) 55 per centum of such cost of attendance when the 
maximum basic grant is more than $1,900 but is less than $2,100; 
"(III) 60 per centum of such cost of attendance when the 
m£iximum basic grant is at least $2,100 but is less than $2,300; 
"(IV) 65 per centum of such cost of attendance when the 
maximum basic grant is at least $2,300 but is less than $2,600; 
and 
"(V) 70 per centum of such cost of attendance when the 
maximum basic grant is $2,600.". 
(2) Section 411(a)(2)(B)(ii) of the Act is amended by striking out 
"actual" each time it appears. 
(3) Section 411(a)(2XB)(iv) of the Act is repealed. 
(d)(1) Section 411(a)(3) of the Act is repealed. 
(2) Paragraph (4) of section 411(a) of the Act is redesignated as 
paragraph (3). 
(e) Section 411(a)(3) of the Act (as redesignated by subsection (d)(2)) 
is amended to read as follows: 
"(3) The period during which a student may receive basic grants 
shall be the period required for the completion of the first undergrad-
uate baccalaureate course of study being pursued by that student at 
the institution at which the student is in attendance. Nothing in this 
section shall exclude from eligibility courses of study which are 
noncredit or remedial in nature which are determined by the institu-
tion as necessary to help the student be prepared for the pursuit of a 
first undergraduate baccalaureate degree.". 
(f) Section 41103)(3XBXi) of the Act is amended to read as follows: 
"(B)(i) If, during any period of any fiscal year, the funds available 
for payments under this subpart are insufficient to satisfy fully all 
entitlements, the amount paid with respect to each such entitlement, 
as calculated prior to the cost of attendance limitation provided in 
section 411(aX2XBXi) under this subpart, shall be— 
"(I) the full amount in the case of any student's eligibility 
index which is less than 601; 
"(II) 90 per centum of the amount when the student's eligibility 
index is 601 but less than 801; 
"(III) 80 per centum of the amount when the student's eligibil-
ity index is 801 but less than 1001; 
"(IV) 70 per centum when the student's eligibility index is 1001 
but less than 1201; 
"(V) 60 per centum when the student's eligibility index is 1201 
but less than 1601; and 
"(VI) 50 per centum when the student's eligibility index is 1601 
or greater. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1403 
For the purpose of this division, a 'student's eligibility index' is the 
index of need of a student established by the Secretary in carrying 
out section 482, relating to the family contribution schedule.". 
(g) Section 411(b)(5) of the Act is amended to read as follows: 
(5)iA) For any fiscal year ending prior to October 1, 1985, i
f
— 
"(i) the appropriation for making grants under subpart 2 of 
this part for that fiscal year does not at least equal $370,000,000, 
"(ii) the appropriation for State student incentive grants under 
subpart 3 of this part for that fiscal year does not at least equal 
$76,750,000, 
"(iii) the appropriation for work-study payments under section 
441 of this title for that fiscal year does not at least equal 
$550,000,000, and 
"(iv)(I) the amount available for Federal capital contributions 
to student loan funds for that fiscal year from funds appropriated 
under section 461 does not at least equal $286,000,000, (ID the 
sum of the amounts available under both sections 461 and 468 for 
Federal capital contributions to student loan funds for that fiscal 
year does not at legist equal $286,000,000, or (III) the amount 
available under section 468 is not sufficient to provide Federal 
capital contributions to such funds for that fiscal year in an 
amount which equals or exceeds the total amount which was 
available for student loans during the preceding fiscal year, 
no payment may be made in excess of $1,800 on the basis of 
entitlements established under this subpart in excess of such amount. 
"(B) For any fiscal year ending prior to October 1, 1985, if— 
"(i) the appropriation for making grants under subpart 2 of 
this part for that fiscal year does not at least equal $400,000,000, 
"(ii) the appropriation for State student incentive grants under 
subpart 3 of this part for that fiscal year does not at least equal 
$76,750,000, 
"(iii) the appropriation for work-study payments under section 
441 of this title for that fiscal year does not at least equal 
$550,000,000, and 
"(iv)(I) the amount available for Federal capital contributions 
to student loan funds for that fiscal year from funds appropriated 
under section 461 does not at least equal $286,000,000, (II) the 
sum of the amounts available under both sections 461 and 468 for 
Federal capital contributions to student loan funds for that fiscal 
year does not at least equal $286,000,000, or (III) the amount 
available under section 468 is not sufficient to provide Federal 
capital contributions to such funds for that fiscal year in an 
amount which equals or exceeds the total amount which was 
available for student loans during the preceding fiscal year, 
no payment may be made in excess of $1,899 on the basis of 
entitlements established under this subpart in excess of such amount. 
"(C) For any fiscal year ending prior to October 1, 1985, i
f
— 
"(i) the appropriation for making grants under subpart 2 of 
this part for that fiscal year does not at least equal $440,000,000, 
"(ii) the appropriation for State student incentive grants under 
subpart 3 of this part for that fiscal year does not at least equal 
$76,750,000, 
"(iii) the appropriation for work-study payments under section 
441 of this title for that fiscal year does not at least equal 
$550,000,000, and 
"(iv)(I) the amount available for Federal capital contributions 
to student loan funds for that fiscal year from funds appropriated 
under section 461 does not at least equal $286,000,000, (II) the 
"Student's 
eligibility 
index." 
Post, p. 1445. 
Limitations. 
20 u s e 1070a. 
20 u s e 1070b. 
20 u s e 1070c. 
Post, p. 1433. 
20 u s e 1087aa. 
Post, p. 1437. 
Post, p. 1433. 
94 STAT. 1404 
PUBLIC LAW 96-374—OCT. 3, 1980 
20 use I087aa, 
sum of the amounts available under both sections 461 and 468 for 
post, p. 1437. 
Federal capital contributions to student loan funds for that fiscal 
year does not at least equal $286,000,000, or (III) the amount 
available under section 468 is not sufficient to provide Federal 
capital contributions to such funds for that fiscal year in an 
amount which equals or exceeds the total amount which was 
available for student loans during the preceding fiscal year, 
no pa5mient may be made in excess of $2,099 on the basis of 
entitlements established under this subpart in excess of such amount. 
"(D) For any fiscal year ending prior to October 1, 1985, if— 
"(i) the appropriation for making grants under subpart 2 of 
20 use 1070b. 
this part for that fiscal year does not at least equal $460,000,000, 
"(ii) the appropriation for State student incentive grants under 
20 use 1070c. 
subpart 3 of this part for that fiscal year does not at least equal 
$76,750,000, 
"(iii) the appropriation for work-study pajnnents under section 
Post, p. 1433. 
441 of this title for that fiscal year does not at least equal 
$550,000,000, and 
"(ivXD the amount available for Federal capital contributions 
to student loan funds for that fiscal year from funds appropriated 
under section 461 does not at least equal $286,000,000, (ID the 
sum of the amounts available under both sections 461 and 468 for 
Federal capital contributions to student loan funds for that fiscal 
year does not at least equal $286,000,000, or (III) the amount 
available under section 468 is not sufficient to provide Federal 
capital contributions to such funds for that fiscal year in an 
amount which equals or exceeds the total amount which was 
available for student loans during the preceding fiscal year, 
no payment may be made in excess of $2,299 on the beisis of 
entitlements established under this subpart in excess of such amount. 
"(E) For any fiscal year ending prior to October 1, 1985, if— 
"(i) the appropriation for malang grants under subpart 2 of 
this part for that fiscal year does not at least equal $480,000,000, 
"(ii) the appropriation for State student incentive grants under 
subpart 3 of this part for that fiscal year does not at least equal 
$76,750,000, 
"(iii) the appropriation for work-study pa5nnents under section 
441 of this title for that fiscal year does not equal at least 
$550,000,000, and 
"(ivXD the amount available for Federal capital contributions 
to student loan funds for that fiscal year from funds appropriated 
under section 461 does not at least equal $286,000,000, (ID the 
sum of the amounts available under both sections 461 and 468 for 
Federal capitsd contributions to student loan funds for that fiscal 
year does not at least equal $286,000,000, or (III) the amount 
available under section 468 is not sufficient to provide Federal 
capital contributions to such funds for that fiscal year in an 
amount which equals or exceeds the total amount which was 
available for student loans during the preceding fiscal year, 
no payment may be made equal to or in excess of $2,500 on the basis of 
entitlements established under this subpart which are equal to or in 
excess of such amount.", 
20 use 1070a. 
(h) Subsections (d) and (e) of section 411 of the Act are repealed. 
SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS 
20 use 1070b. 
SEC. 403. (a) Section 413A(a) of the Act is amended by striking out 
"who, for lack of financial means, would be unable to obtain such 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1405 
Post, p. 1445. 
20 u s e 1070b. 
20 u s e 1070b-l. 
benefits without such a grant" and inserting in lieu thereof "who 
demonstrate financial need in accordance with the provisions of 
section 482". 
(b)(1) The first sentence of section 413A(b)(l) of the Act is amended 
by inserting before the period a comma and the following: "and 
$350,000,000 for the fiscal year 1981, and for each of the succeeding 
fiscal years ending prior to October 1,1985". 
(2) Section 413A(b)(3) of the Act is amended by inserting "second" 
before "fiscal year" the second time it appears in such section. 
(cXD Section 413B(aX2XA) of the Act is amended to read as follows: 
"(2XA) The amount of the pa3niient to any student pursuant to 
paragraph (1) shall be equal to the amount determined by the 
institution, in accordance with the provisions of section 482, to be 
needed by that student to enable him to pursue a course of study at 
the institution, except that such amount shall not exceed $2,000.". 
(2) Section 413B(aX2XB) of the Act is amended by adding at the end 
thereof the following new sentence: "For a student enrolled for less 
than a full academic year, the minimum payment required shall be 
reduced proportionately.". 
(3) Section 413B(aX2) of the Act is further amended by striking out 
subparagraph (C). 
(4) Section 413B0t)) of the Act is amended to read as follows: 
"(bXD The period during which a student may receive supplemen-
tal grants shall be the period required for the completion of the first 
undergraduate baccalaureate course of study being pursued by that 
student at the institution at which the student is in attendance. 
"(2) A supplemental grant awarded under this subpart shall entitle 
the student to whom it is awarded to payments pursuant to such 
grant only if the student meets the requirements of section 484, Post, p. 1448. 
except as provided in section 413C(c).". 
(d) Section 413C of the Act is amended to read as follows: 
SELECTION OF RECIPIENTS; AGREEMENTS WITH INSTITUTIONS 
"SEC. 413C. (a) An individual shall be eligible for the award of a 20 use i070b-2. 
supplemental grant under this subpart by an institution of higher 
education which, in accordance with section 487, has an agreement Post, p. 1451. 
with the Secretary applicable to this subpart, if the individual makes 
application at a time and in a manner consistent with the require-
ments of the Secretary and that institution, and meets the require-
ments of section 484. 
"(b) From among individuals who are eligible for supplemental 
grants for each fiscal year, the institution shall, in accordance with 
the agreement under section 487, and within the amount allocated to 
the institution for that purpose for that year under section 413D(b), ^"/^" 
select individuals who are to be awarded such grants and determine, 
in accordance with section 413B, the amounts to be paid to them. 
"(c) An eligible institution may use not more than 10 per centum of 
its allocation for less-than-half-time undergraduate students who are 
determined by the institution to be in need of such grants and who 
meet the requirements of section 484, other than the requirement of 
clause (2) of section 484(a).". 
(eXD Section 413D(aXl) of the Act is amended by striking out 20 use i070b-3. 
"persons" each place it appears and inserting in lieu thereof "under-
graduates". 
(2) Section 413D(aX2) is amended by striking out "section 
431A(bX2)" and inserting in lieu thereof "section 413A(bX2)". 
(3) Section 413D(b)(lXBXii) of the Act is amended to read as follows: 
94 STAT. 1406 
PUBLIC LAW 96-374—OCT. 3, 1980 
Funds, 
allocation 
determination. 
20 u s e 1070a, 
1070c. 
20 u s e 1070b-3. 
"(ii) Allocations under division (i) by the Secretary to such institu-
tions shall be made in accordance with a formula which determines 
institutional need for funds under this subpart by subtracting from 
75 per centum of total student expenses the sum of expected family or 
independent student contributions, awards made under subparts 1 
and 3 of this part, and 25 per centum of grants and awards made by 
the institution from its own resources. In addition, the Secretary, in 
establishing equitable criteria, shall not issue any regulation which 
has the effect of penalizing institutions that under existing State law 
must provide scholarships or grant assistance from their own funds 
and yet are not free under laws in effect on January 1,1979, either to 
select the recipients of such assistance or to adjust the criteria by 
which the recipients are selected. The formula established under this 
division shall not result in any institution receiving an amount less 
than— 
"(I) 100 per centum of the amount such institution received 
and used under this section for fiscal year 1979 in the case of any 
fiscal year for which the appropriation for this part is less than 
$400,000,000; 
"(II) 80 per centum of such amount in the case of any fiscal 
year for which such appropriation is at least $400,000,000 but less 
than $420,000,000; 
"(III) 60 per centum of such amount in the case of any fiscal 
year for which such appropriation is at least $420,000,000 but less 
than $440,000,000; 
"(IV) 40 per centum of such amount in the case of any fiscal 
year for which such appropriation is at least $440,000,000 but less 
than $460,000,000; or 
"(V) 20 per centum of such amount in the case of any fiscal 
year for which such appropriation is at least $460,000,000 but less 
than $480,000,000.". 
(4) Section 413D(b)(2) of the Act is amended by adding at the end 
thereof the following new sentence: "Such allocation shall be made in 
accordance with the formula prescribed by regulation under division 
(ii) of paragraph (1)(B) of this subsection.". 
(f) Section 413D(b) of the Act is amended by redesignating para-
graph (3) as paragraph (4) and by inserting after paragraph (2) the 
following new paragraph: 
"(3) Each institution receiving allocations under this subsection 
from apportionments made to the State under subsection (aXD and 
under subsection (aX2) may use its allocations for initial supplemen-
tal grants and for continuing supplemental grants in such manner as 
the institution determines will best achieve the purposes of this 
subpart.". 
GRANTS TO STATES FOR STATE STUDENT INCENTIVES 
SEC. 404. (a) Section 415A of the Act is amended to read as follows: 
20 u s e 1070c. 
Appropriation 
authorization. 
PURPOSE; APPROPRIATIONS AUTHORIZED 
"SEC. 415A. (a) It is the purpose of this subpart to make incentive 
grants available to the States to assist them in providing grants to 
eligible students attending institutions of higher education. 
"(bXD There are authorized to be appropriated $100,000,000 for 
each of the fiscal years 1981 and 1982, $150,000,000 for fiscal year 
1983, $200,000,000 for fiscal year 1984, and $250,000,000 for fiscal year 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1407 
1985, for payments to the States for grants to eligible students under 
this subpart. 
"(2) Sums appropriated pursuant to paragraph (1) for any fiscal 
year shall remain available for payments to States for the award of 
student grants under this subpart until the end of the fiscal year 
succeeding the fiscal year for which such sums were appropriated.". 
(b) Section 415B(aXl)(A) of the Act is amended by inserting before 
the period a comma and the following: "except that no State shall 
receive less than the State received for fiscal year 1979". 
(c) Section 415C of the Act is amended— 
(1) in subsection (a), by striking out "shall submit" and insert-
ing in lieu thereof "shall have a State agreement pursuant to 
section 1203 and shall submit"; 
(2) in subsection (bXD, by inserting "under section 1203" 
immediately after "agency"; 
(3) in subsection (bX2), by striking out "$1,500" and inserting in 
lieu thereof "$2,000", and by striking out "as an undergraduate"; 
(4) in subsection (bX4), by inserting immediately before the 
semicolon at the end thereof the following: "or in any State in 
which participation of nonprofit institutions of higher education 
is in violation of a statute of the State which was enacted prior to 
October 1,1978"; and 
(5) in subsection 0)), by striking out "and" at the end of clause 
(5), by redesignating clause (6) as clause (8), and by inserting after 
clause (5) the following new clauses: 
"(6) provides that institutions of higher education, with the Grants 
approval of the State agency, may use any proportion of the 
pajmients received in any fiscal year for grants to otherwise 
eligible students who fail to meet the requirement of section 
484(aX2); 
"(7) provides for State expenditures under such program of an 
amount not less than the average annual aggregate expenditures 
for the preceding three fiscal years or the average annual 
expenditure per full-time equivalent student for such years; 
and". 
(d) Section 415E of the Act is repealed. 
20 u s e lOTOc-l. 
20 u s e 1070C-2. 
Post, p. 1493. 
Post, p. 1448. 
Repeal. 
20 u s e 1070c-
SPECIAL PROGRAMS FOR STUDENTS FROM DISADVANTAGED BACKGROUNDS 
SEC. 405. Subpart 4 of part A of title IV of the Act is amended to 
read as follows: 
"SUBPART 4—SPECIAL PROGRAMS FOR STUDENTS FROM 
DISADVANTAGED BACKGROUNDS 
PROGRAM AUTHORITY; AUTHORIZATION OF APPROPRIATIONS 
"SEC. 417A. (a) The Secretary shall, in accordance with the provi-
sions of this subpart, carry out a program of making grants and 
contracts designed to identify qualified individuals from disadvan-
taged backgrounds, to prepare them for a program of postsecondary 
education, to provide special services for such students who are 
pursuing programs of postsecondary education, and to train persons 
serving or preparing for service in programs and projects so designed. 
"ObXD For the purposes described in subsection (a), the Secretary is 
authorized, without regard to section 3709 of the Revised Statutes (41 
U.S.C. 5), to make grants to, and contracts with, institutions of higher 
Grants and 
contracts. 
20 u s e 1070d. 
79-194 
O—81—pt. 2 
9 : QL3 
94 STAT. 1408 
PUBLIC LAW 96-374—OCT. 3, 1980 
Appropriation 
authorization. 
Definitions. 
Veteran 
eligibility. 
20 u s e 1070d-l. 
Tutorial 
services. 
Application 
approval. 
education, public and private agencies and organizations, and, in 
exceptional circumstances, secondary schools for planning, develop-
ing, or carrying out one or more of the services assisted under this 
subpart. 
"(2) In making grants and contracts under this subpart, the 
Secretary shall consider the prior experience of service delivery 
under the particular program for which funds are sought by each 
applicant. 
"(c) For the purpose of making grants and contracts under this 
subpart there are authorized to be appropriated $400,000,000 for 
fiscal year 1982 and such sums as may be necessary for each of the 
succeeding 
fiscal 
years ending prior to October 1,1985. 
"(d) For the purposes of this subpart— 
"(1) the term 'first generation college student' means a person 
neither of whose parents completed a baccalaureate degree; and 
"(2) the term 'low-income individual' means an individual from 
a family whose taxable income for the preceding year did not 
exceed 150 per centum of an amount equal to the poverty level 
determined by using criteria of poverty established by the 
Bureau of the Census. 
"(e) No individual who is an eligible veteran, as that term is defined 
by section 1652(a) of title 38, United States Code, shall be deemed 
ineligible to participate in any program under this subpart by reason 
of 
such individual's age. 
"TALENT SEARCH 
"SEC. 417B. (a) The Secretary shall carry out a program to be 
known as talent search which shall be designed— 
"(1) to identify qualified youths with potential for education at 
the postsecondary level and to encourage such youth to complete 
secondary school and to undertake a program of postsecondary 
education; 
"(2) to publicize the availability of student financial assistance 
available to persons who pursue a program of postsecondary 
education; and 
"(3) to encourage persons who have not completed programs of 
education at the secondary or postsecondary level, but who have 
the ability to complete such programs, to reenter such programs. 
"(b) A talent search project assisted under this subpart may 
include, in addition to the services described in paragraphs (1), (2), 
and (3) of subsection (a), tutorial services for youths being encouraged 
to undertake or reenter programs of postsecondary education if such 
tutorial services are not otherwise available to such youths through a 
project assisted under this subpart. 
"(c) In approving applications for talent search projects under this 
subpart for any 
fiscal 
year the Secretary shall— 
"(1) require an assurance that not less than two-thirds of the 
youths participating in the project proposed to be carried out 
under any application be low-income individuals who are first 
generation college students; 
"(2) require that such participants be persons who either have 
completed six years of elementary education or are at least 
twelve years of age but not more than twenty-seven years of age, 
unless the imposition of any such limitation with respect to any 
person would defeat the purposes of this section or the purposes 
of 
section 417E; and 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1409 
"(3) require an assurance that individuals participating in the 
project proposed in the application do not have access to services 
from another project funded under this section or under section 
417E. 
"(d) In approving applications for talent search projects under this 
subpart for any fiscal year, the Secretary shall require assurances 
that the project will be located in a setting accessible to the persons 
proposed to be served by the project. 
UPWARD BOUND 
20 use 
1070d-la. 
"SEC. 417C. (a) The Secretary shall carry out a program to be 
known as upward bound which shall be designed to generate skills 
and motivation necessary for success in education beyond high 
school. 
"(jo) Any upward bound project assisted under the subpart may Project services. 
provide services such as— 
"(1) instruction in reading, writing, study skills, mathematics, 
and other subjects necessary for success beyond high school; 
"(2) personal counseling; 
"(3) academic advice and assistance in high school course 
selection; 
"(4) tutorial services; 
"(5) exposure to cultural events, academic programs, and other 
activities not usually available to disadvantaged youth; 
"(6) activities designed to acquaint youths participating in the 
project with the range of career options available to them; 
"(7) instruction designed to prepare youths participating in the 
project for careers in which persons from disadvantaged back-
grounds are particularly underrepresented; 
"(8) on-campus residential programs; and 
"(9) programs and activities as described in paragraphs (1) 
through (8) which are specially designed for students of limited 
English proficiency. 
"(c) In approving applications for upward bound projects under this 
subpart for any fiscal year the Secretary shall— 
"(1) require an assurance that not less than two-thirds of the 
youths participating in the project proposed to be carried out 
under any application be low-income individuals who are first 
generation college students; 
"(2) require an assurance that the remaining youths partici-
pating in the project proposed to be carried out under any 
application be either low-income individuals or be first genera-
tion college students; 
"(3) require that there be determination, with respect to each 
participant in such project, that the participant has a need for 
academic support in order to pursue successfully a program of 
education beyond high school; and 
"(4) require that such participants be persons who have com-
pleted eight years of elementary education and are at least 
thirteen years of age but not more than nineteen years of age, 
unless the imposition of any such limitation would defeat the 
purposes of this section. 
"(d) Youths participating in a project proposed to be carried out Stipends. 
under any application may be paid stipends not in excess of $60 per 
month during June, July, and August, and not in excess of $40 per 
month during the remaining period of the year. 
Application 
approval 
requirements. 
94 STAT. 1410 
PUBLIC LAW 96-374—OCT. 3, 1980 
20 use 
1070d-lb. 
Project services. 
Application 
approval 
requirements. 
20 use 
1070d-lc. 
SPECIAL SERVICES FOR DISADVANTAGED STUDENTS 
"SEC. 417D. (a) The Secretary shall carry out a program to be 
known as special services for disadvantaged students (hereinafter 
referred to as 'special services') which shall be designed to provide 
supportive services to persons participating in the projects. 
"(b) A special services project assisted under this subpart may 
provide services such as— 
"(1) instruction in reading, writing, study skills, mathematics, 
and other subjects necessary for success beyond high school; 
"(2) personal counseling; 
"(3) academic advice and assistance in course selection; 
"(4) tutorial services; 
"(5) exposure to cultural events and academic programs not 
usually available to disadvantaged students; 
"(6) activities designed to acquaint students participating in 
the project with the range of career options available to them; 
"(7) activities designed to assist students participating in the 
project in securing admission and financial assistance for enroll-
ment in graduate and professional programs; and 
"(8) programs and activities as described in paragraphs (1) 
through (7) which are specially designed for students of limited 
English proficiency. 
"(c) In approving applications for special services projects under 
this subpart for any fiscal year the Secretary shall— 
"(1) require an assurance that not less than two-thirds of the 
persons participating in the project proposed to be carried out 
under any application— 
"(A) be physically handicapped, or 
"(B) be low-income individuals who are first generation 
college students; 
"(2) require an assurance that the remaining students partici-
pating in the project proposed to be carried out under any 
application either be low-income individuals, first generation 
college students, or physically handicapped; 
"(3) require that there be a determination, with respect to each 
participant in such project, that the participant has a need for 
academic support in order to pursue successfully a program of 
education beyond high school; and 
"(4) require that such participants be enrolled or accepted for 
enrollment at the institution which is the recipient of the grant 
or contract. 
"(d) In approving applications for special services projects under 
this subpart for any fiscal year, the Secretary shall require an 
assurance from the institution which is the recipient of the grant or 
contract that each student enrolled in the project will receive 
sufficient financial assistance to meet that student's full financial 
need. 
"EDUCATIONAL OPPORTUNITY CENTERS 
"SEC. 417E. (a) The Secretary shall carry out a program of paying 
up to 75 per centum of the cost of establishing and operating 
programs to be known as educational opportunity centers which shall 
be designed— 
"(1) to provide information with respect to financial and 
academic assistance available for individuals desiring to pursue 
a program of postsecondary education; and 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1411 
"(2) to provide assistance to such persons in applying for 
admission to institutions at which a program of postsecondary 
education is offered, including preparing necessary applications 
for use by admissions and financial aid officers. 
"(b) An educational opportunity center assisted under this subpart 
may provide, in addition to the services described in clauses (1) and (2) 
of subsection (a), tutorial and counseling services for persons partici-
pating in the project if such tutorial and counseling services are not 
otherwise available through a project assisted under this subpart. 
"(c) In approving applications for educational opportunity centers 
under this subpart for any fiscal year the Secretary shall— 
"(1) require an assurance that not less than two-thirds of the 
persons participating in the project proposed to be carried out 
under any application be low-income individuals who are first 
generation college students; 
"(2) require that such participants be persons who are at least 
nineteen years of age, unless the imposition of such limitation 
with respect to any person would defeat the purposes of this 
section or the purposes of section 417B; and 
"(3) require an assurance that individuals participating in the 
project proposed in the application do not have access to services 
from another project funded under this section or under section 
417B. 
"STAFF DEVELOPMENT ACTIVITIES 
"SEC. 417F. For the purpose of improving the operation of the 
programs and projects authorized by this subpart, the Secretary is 
authorized to make grants to institutions of higher education and 
other public and private nonprofit institutions and organizations to 
provide training for staff and leadership personnel employed in, or 
preparing for employment in, such programs and projects. Such 
training shall include conferences, internships, seminars, and work-
shops designed to improve the operation of such programs and 
projects and shall be carried out in the various regions of the Nation 
in order to ensure that the training opportunities are appropriate to 
meet the needs in the local areas being served by such programs and 
projects. Grants for the purposes of this section shall be made only 
after consultation with regional and State professional associations of 
persons having special knowledge with respect to the needs and 
problems of such programs and projects.". 
Tutorial and 
counseling 
services. 
Application 
approval 
requirements. 
Grants. 
20 use 
1070d-ld. 
SPECIAL PROGRAM FOR MIGRANT AND SEASONAL FARMWORK STUDENTS 
SEC. 406. Subpart 5 of part A of title IV of the Act is amended to 
read as follows: 
"SUBPART 5—SPECIAL PROGRAMS FOR STUDENTS WHOSE FAMILIES 
ARE ENGAGED IN MIGRANT AND SEASONAL FARMWORK 
"SEC. 418A. (a) The Secretary shall maintain and expand existing 20 use l070d-2. 
secondary and postsecondary high school equivalency program and 
college assistance migrant program projects, which shall be designed 
to provide services to students of families who are engaged in migrant 
and seasonal farmwork. The services authorized by this subpart 
include— 
"(1) instruction in reading, writing, study skills, mathematics, 
communication skills, and other subjects necessary for success 
94 STAT. 1412 
PUBLIC LAW 96-374—OCT. 3, 1980 
Appropriation 
authorization. 
beyond high school, and in preparation for the examination for a 
certificate of high school equivalency; 
"(2) personal and academic counseling; 
"(3) outreach and recruitment, special admissions, and finan-
cial assistance; 
"(4) tutorial services; 
"(5) career-oriented work study; 
"(6) housing support and on-campus residential programs; 
"(7) activities designed to acquaint youths participating in the 
project with the range of career options available to them; 
"(8) exposure to cultural events, academic programs and other 
activities not usually available to migrant youth; and 
"(9) other essential supportive services, as needed to ensure the 
success of eligible migrant and seasonal farmwork students at 
the secondary and postsecondary levels. 
"(b) There is authorized to be appropriated $9,600,000 for the fiscal 
year 1981, $12,000,000 for the fiscal year 1982, $14,000,000 for the 
fiscal year 1983, $16,000,000 for the fiscal year 1984, and $18,000,000 
for the fiscal year 1985, to carry out the provisions of this subpart.". 
VETERANS COST-OF-INSTRUCTION PAYMENTS 
SEC. 407. Section 420 of the Act is amended to read as follows: 
Eligible 
institutions. 
20 u s e 1070e-l. 
38 u s e 1501 et 
seq 
38 u s e 1651 et 
seq. 
VETERANS COST-OF-INSTRUCTION PAYMENTS TO INSTITUTIONS OF 
HIGHER EDUCATION 
"SEC. 420. (a)(1) During the period beginning July 1, 1972, and 
ending September 30,1985, each institution of higher education shall 
be entitled to a payment under, and in accordance with, this section 
during any fiscal year i
f
— 
"(A) the number of persons who are veterans receiving voca-
tional rehabilitation under chapter 31 of title 38, United States 
Code, or veterans receiving educational assistance under chapter 
34 of such title, and who are in attendance as undergraduate 
students at such institution during any academic year, equals at 
least— 
"(i) 110 per centum of the number of such recipients who 
were in attendance at such institution during the preceding 
academic year, or 
"(ii) 10 per centum of the total number of undergraduate 
students in attendance at such institution during such 
academic year and if such number does not constitute a per 
centum of such undergraduate students which is less than 
such per centum for the preceding academic year; and 
"(B) the number of such persons is at least 25. 
"(2) With respect to any academic year ending on or before 
September 30,1986, each institution which has qualified for payment 
under this section for the preceding year shall be entitled during such 
academic year, notwithstanding the provisions of paragraph (1)(A), to 
a payment under this section i
f
— 
"(A) the number of persons referred to in paragraph (1) equals 
at least the number which bears the same ratio to the number of 
such recipients who were in attendance at such institution 
during the first academic year in which the institution was 
entitled to payments under this section as the number of such 
recipients in all institutions of higher education during the 
academic year for which the determination is made bears to the 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1413 
number of such recipients in all institutions of higher education 
for the first such academic year; or 
"(B) in the event that subparagraph (A) of this paragraph is not 
satisfied, the Secretary determines, on the basis of evidence 
presented by such institution, that such institution is making 
reasonable efforts, taking into consideration the extent to which 
the number of persons referred to in such paragraph (1) falls 
short of meeting the ratio criterion set forth in such subpara-
graph (A), to continue to recruit, enroll, and provide necessary 
services to veterans. 
"(3) For any fiscal year beginning after September 30, 1980, the 
Secretary may waive the provisions of paragraph (1) of this subsec-
tion for any institution of higher education which has qualified for 
payment under this section for any preceding fiscal year but subse-
quently became ineligible, i
f
— 
"(A) the institution would have been eligible had section 
420(a)(2) been in effect when such institution became ineligible, 
"(B) the institution has had a full-time office of veterans' 
affairs since that institution was so eligible, and 
"(C) the appropriations made available in any such fiscal year 
for this section are in excess of (i) $14,380,000, or (ii) the amount 
requested for carrying out this section in the budget of the 
President submitted under section 201 of the Budget and Ac-
counting Act, 1921, whichever is greater, by an amount sufficient 
to make payments to all institutions meeting the requirements of 
clauses (A) and (B) of this paragraph. 
"(b)(1) The amount of the payment to which any institution shall be 
entitled under this section for any fiscal year shall be— 
"(A) $300 for each person who is a veteran receiving vocational 
rehabilitation under chapter 31 of title 38, United States Code, or 
a veteran receiving educational assistance under chapter 34 of 
such title 38, and who is in attendance at such institution as an 
undergraduate student during such year; and 
"(B) in addition, $150 for each person who is in attendance at 
such institution as an undergraduate student during such year 
and who has been the recipient of educational assistance under 
subchapter V or VI of chapter 34 of such title 38, or who has a 
service-connected disability as defined in section 101(16) of such 
title 38, or who is disabled, as determined in accordance with 
regulations promulgated by the Secretary after consultation 
with the Administrator of Veterans' Affairs. 
"(2) In any case where a person on behalf of whom a payment is 
made under this section attends an institution on less than a full-time 
basis, the amount of the payment on behalf of that person shall be 
reduced in proportion to the degree to which that person is not 
attending on a full-time basis. In no case shall a payment be made on 
behalf of a person who attends an institution on less than a half-time 
basis. 
"(c)(1) An institution of higher education shall be eligible to receive 
the payment to which it is entitled under this section only if it makes 
application therefor to the Secretary. An application under this 
section shall be submitted at such time or times, in such manner, in 
such form and containing such information as the Secretary deter-
mines necessary to carry out the functions of the Secretary under this 
title, and shall— 
"(A) set forth such policies, assurances, and procedures as will 
insure that— 
Waiver. 
31 u s e 11. 
38 u s e 1501 et 
seq. 
38 u s e 1651 et 
seq. 
38 u s e 1690, 
1695. 
Application 
requirements. 
94 STAT. 1414 
PUBLIC LAW 96-374—OCT. 3, 1980 
"(i) the funds received by the institution under this section 
and available to it after the requirements of subsection (e) 
have been met will be used solely to defray instructional 
expenses in academically related programs of the applicant; 
(ii) the funds received by the institution under this 
section will not be used for a school or department of divinity 
or for any religious worship or sectarian activity; 
"(iii) the applicant will expend, during the academic year 
for which a payment is sought, for all academically related 
programs of the institution, an amount equal to at least the 
average amount so expended during the three years preced-
ing the year for which the grant is sought; and 
(iv) the applicant will submit to the Secretary such 
reports as the Secretary may require by regulation; 
"(B) contain such other statement of policies, assurances, and 
procedures as the Secretary may require by regulation in order 
to protect the financial interests of the United States; and 
"(C) set forth such plans, policies, assurances, and procedures 
as will insure that the applicant will make an adequate effort— 
"(i) to maintain a full-time office of veterans' affairs which 
has responsibility for veterans' outreach, recruitment, and 
special education programs, including the provision of edu-
cational, vocational, and personal counseling for veterans, 
"(ii) to carry out programs designed to prepare education-
ally disadvantaged veterans for postsecondary education (I) 
under subchapter V of chapter 34 of title 38, United States 
38 use 1690. 
Code, and (II) in the case of any institution located near a 
military installation, under subchapter VI of such chapter 
38 use 1695. 
34^ 
"(iii) to carry out active outreach (with special emphasis 
on service-connected disabled veterans, other disabled or 
handicapped veterans, incarcerated veterans, and educa-
tionally disadvantaged veterans), recruiting, and counseling 
activities through the use of funds available under federally 
assisted work-study programs (with special emphasis on the 
veteran-student services program under section 1685 of such 
title 38), 
"(iv) to carry out an active tutorial assistance program 
(including dissemination of information regarding such pro-
gram) in order to make maximum use of the benefits 
available under section 1692 of such title 38, and 
"(v) to coordinate activities carried out under this part 
with the readjustment counseling program authorized under 
section 612A of title 38, United States Code, and with the 
veterans employment and training initiatives authorized 
29 use 801 note. 
under the Comprehensive Employment and Training Act 
38 use 2001 et 
and under chapters 41 and 42 of title 38, United States Code, 
seq., 2011 et seq. 
^^ order to assist in serving the readjustment, rehabilitation, 
personal counseling, and employment needs of veterans, 
except that an institution which the Secretary determines, in accord-
ance with regulations jointly prescribed by the Secretary and the 
Administrator of Veterans' Affairs (hereinafter referred to as the 
'Administrator'), cannot fegisibly itself, in terms of the number of 
veterans in attendance there, carry out any or all of the programs set 
forth in subclauses (i) through (v) of clause (C), may carry out such 
program or programs through a consortium agreement with one or 
more other institutions of higher education and shall be required to 
carry out such programs only to the extent that the Secretary 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1415 
determines, in accordance with regulations jointly prescribed by the 
Secretary and the Administrator, is appropriate in terms of the 
number of veterans in attendance at such institution. The adequacy 
of efforts to meet the requirements of clause (C) of this paragraph 
shall be determined by the Secretary, based upon the recommenda-
tions of the Administrator, in accordance with criteria established in 
regulations 
jointly 
prescribed 
by 
the 
Secretary 
and 
the 
Administrator. 
"(2) The Secretary shall not approve an application under this 
subsection unless he determines that the applicant will implement 
the requirements of clause (C) of paragraph (1) within the first 
academic year during which it receives a payment under this section. 
"(d)(1) The Secretary shall pay to each institution of higher educa- Payments, 
tion which has had an application approved under subsection (c) the 
amount to which it is entitled under this section. 
"(2) The maximum amount of payments to any institution of higher 
education, or any branch thereof which is located in a community 
which is different from that in which the parent institution thereof is 
located, in any fiscal year shall be $75,000. In making payments 
under this section for any fiscal year, the Secretary shall apportion 
the appropriation for making such payments, from funds which 
become available as a result of the limitation on payments set forth in 
the preceding sentence, in such a manner as will result in the receipt 
by each institution which is eligible for payment under this section of 
the first $9,000 (or the amount of its entitlement for that fiscal year, 
whichever is the lesser) and then additional amounts up to the 
limitation set forth in the preceding sentence. 
"(e) Not less than 90 per centum of the amounts paid to any Waiver, 
institution under subsection (d) in any fiscal year shall be used to 
implement the requirement of clause (C)(i) of paragraph (1) of 
subsection (c), and to the extent that such funds remain after 
implementing such requirement, funds limited by such 90 per 
centum requirement shall be used for implementing the require-
ments of subclauses (ii) through (v) of clause (C) of such paragraph (1), 
except that the Secretary may, in accordance with criteria estab-
lished in regulations jointly prescribed by the Secretary with the 
Administrator, waive the requirement of this subsection to the extent 
that he finds that such institution is adequately carrying out all such 
requirements without the necessity for such application of such 
amount of the payments received under this subsection. 
"(f) The Secretary, in carrying out the provisions of this section, 
shall seek to assure the coordination of programs assisted under this 
section with programs carried out by the Veterans' Administration 
pursuant to title 38, United States Code, and the Administrator shall 38 USC lOl. 
provide all assistance, technical consultation, and information other-
wise authorized by law as necessary to promote the maximum 
effectiveness of the activities and programs assisted under this 
section. 
"(g) The program provided for in this section shall be administered Administration. 
by an identifiable administrative unit in the Department of 
Education.". 
PART B—GUARANTEED AND INSURED STUDENT LOANS 
EXTENSION OF PROGRAMS 
SEC. 411. (a) Section 424(a) of the Act is amended— 
20 USC 1074. 
94 STAT. 1416 
PUBLIC LAW 96-374—OCT. 3, 1980 
(1) by striking out "1981" and inserting in lieu thereof "1986"; 
and 
(2) by striking out "1985" and inserting in lieu thereof "1990". 
20 use 1078. 
03) Section 428(aX5) of the Act is amended— 
(1) by striking out "1981" and inserting in lieu thereof "1986"; 
and 
(2) by striking out "1985" and inserting in lieu thereof "1990". 
LOAN UMITATIONS 
20 use 1075. 
SEC. 412. (a) Section 425(a)(1) of the Act is amended— 
(1) by redesignating clauses (A), (B), and (C), as clauses (B), (C), 
and (D), respectively; 
(2) by inserting immediately before clause (B) (as so redesig-
nated) the following new clause: 
"(A) that in the C£ise of an independent student (defined in 
Post, p. 1445. 
accordance with section 482(cX2)) who has not successfully com-
pleted a program of undergraduate education, the total of such 
loans may not exceed $3,000,"; and 
(3) by striking out "clause (B)" in the last sentence of such 
section and inserting in lieu thereof "clause (C)". 
0)) Section 425(aX2) of the Act is amended by striking out "$7,500, in 
the case of any student who has not successfully completed a program 
of undergraduate education, and $15,000 in the case of any graduate 
or professional student" and inserting in lieu thereof "$12,500 in the 
case of any student (other than an independent student) who has not 
successfully completed a program of undergraduate education, 
$15,000 in the case of any independent student who has not success-
fully completed a program of undergraduate education, and $25,000 
in the case of any graduate or professional student". 
20 use 1078. 
(c) The matter preceding division (i) of section 428(bXlXA) of the Act 
is amended— 
(1) by inserting after "student" the following: "(other than an 
independent student)"; and 
(2) by inserting after "undergraduate education," the follow-
ing: "or not more than $3,000 in the case of an independent 
student (defined in accordance with section 482(cX2)) who has not 
successfully completed a program of undergraduate education,". 
(d) Section 428(bXlXB) of the Act is amended by striking out 
"$7,500, in the case of any student who has not successfully completed 
a program of undergraduate education, and $15,000 in the case of any 
graduate or professional student" and inserting in lieu thereof 
"$12,500 in the case of any student (other than an independent 
student) who has not successfully completed a program of undergrad-
uate education, $15,000 in the case of any independent student who 
has not successfully completed a program of undergraduate educa-
tion, and $25,000 in the case of any graduate or professional student". 
20 use 1078-1. 
(e) Section 428A of the Act is amended— 
(1) by striking out "$2,500 (in the case of a student who has not 
successfully completed a program of undergraduate education) 
or $5,000 (in the case of a graduate or professional student)" in 
subsection (aXlXA) and in subsection (aX2)(A) and inserting in 
lieu thereof in each such place the following: "$2,500 (in the case 
of a student, other than an independent student, who has not 
successfully completed a program of undergraduate education), 
$3,000 (in the case of an independent student (as defined in 
section 482(cX2)) who h£is not successfully completed a program 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1417 
of undergraduate education), or $5,000 (in the case of a graduate 
or professional student)"; and 
(2) by striking out "$7,500 in the case of any student who has 
not successfully completed a program of undergraduate educa-
tion, and $15,000 in the case of any graduate or professional 
student" in subsection (a)(1)(A) and in subsection (a)(2)(A) and 
inserting in lieu thereof in each such place the following: 
"$12,500 in the case of any student (other than an independent 
student) who has not successfully completed a program of under-
graduate education, $15,000 in the case of any independent 
student who has not successfully completed a program of under-
graduate education, and $25,000 in the case of any graduate or 
professional student". 
(0 Part B of title IV of the Act is further amended by inserting 20 USC 1071. 
immediately before the period at the end of section 425(a)(2) and 20 USC 1075. 
immediately before the semicolon at the end of sections 428(b)(1)(B), 20 USC 1078. 
428A(a)(l)(A), and 428A(a)(2)(A) the following: ", except that the 20 USC 1078-1. 
Secretary may increase the limit applicable to graduate or profes-
sional students who are pursuing programs which the Secretary 
determines are exceptionally expensive". 
DEFERRAL OF REPAYMENT 
SEC. 413. (a) Section 427(a)(2)(C) is amended— 
20 use 1077. 
(1) by inserting "or is an officer in the Commissioned Corps of 
the Public Health Service" immediately after "Armed Forces of 
the United States" in clause (ii); and 
(2) by striking out "or (v)" and inserting in lieu thereof the 
following: "(v) not in excess of three years during which the 
borrower is in service, comparable to the service referred to in 
clauses (iii) and (iv), as a full-time volunteer for an organization 
which is exempt from taxation under section 501(cX3) of the 
Internal Revenue Code of 1954; (vi) not in excess of two years 26 USC 501. 
during which the borrower is serving an internship, the success-
ful completion of which is required in order to receive pro-
fessional recognition required to begin professional practice or 
service; (vii) not in excess of three years during which the 
borrower is temporarily totally disabled, as established by sworn 
affidavit of a qualified physician, or during which the borrower is 
unable to secure employment by reason of the care required by a 
spouse who is so disabled; or (viii)". 
(b) Section 428(b)(l)(M) of the Act is amended— 
20 USC 1078. 
(1) by inserting "or is an officer in the Commissioned Corps of 
the Public Health Service" immediately after "Armed Forces of 
the United States" in clause (ii); and 
(2) by striking out "or (v)" and inserting in lieu thereof the 
following: "(v) not in excess of three years during which the 
borrower is in service, comparable to the service referred to in 
clauses (iii) and (iv), as a full-time volunteer for an organization 
which is exempt from taxation under section 501(c)(3) of the 
Internal Revenue Code of 1954; (vi) not in excess of two years 
during which the borrower is serving an internship, the success-
ful completion of which is required in order to receive pro-
fessional recognition required to begin professional practice or 
service; (vii) not in excess of three years during which the 
borrower is temporarily totally disabled, as established by sworn 
affidavit of a qualified physician, or during which the borrower is 
94 STAT. 1418 
PUBLIC LAW 96-374—OCT. 3, 1980 
unable to secure employment by reason of the care required by a 
spouse who is so disabled, or (viii)". 
Ante, p. 1417. 
(c) Section 427(a)(2)(C) of the Act is amended— 
(1) by striking out "and any such period" and inserting in lieu 
thereof "that any such period", and 
(2) by inserting before the comma at the end thereof a comma 
and the following: "and that no repayment of principal of any 
loan for any period of study, training, service, or unemployment 
described in this clause or any combination thereof shall begin 
until six months after the completion of such period or combina-
tion thereof. 
Ante, p. 1417. 
(d) Section 428(b)(lXM) is amended by inserting before the semi-
colon at the end thereof a comma and the following: "and that no 
repayment of principal of any loan for any period of study, training, 
service, or unemployment described in this clause or any combination 
thereof shall begin until six months after the completion of such 
period or combination thereof. 
20 use 1085. 
(e) Section 435 of the Act is amended by adding at the end thereof 
the following new subsection: 
"Temporarily 
"(j) The term 'temporarily totally disabled' when used with respect 
totally disabled." ^Q g
^ borrower means a borrower who, by reason of injury or illness, 
cannot be expected to be able to attend an eligible institution or to be 
gainfully employed during a reasonable period of recovery from such 
injury or illness not to exceed three years. Such term when used with 
respect to the spouse of a borrower means a spouse who, by reason of 
injury or illness, cannot be expected to be gainfully employed during 
a reasonable period of recovery from such injury or illness not to 
exceed three years and who during such period required continuous 
nursing or other similar services.". 
STATE AGENCIES AS LENDERS OF LAST RESORT 
20 use 1078. 
SEC. 414. Section 428 of the Act is amended by adding at the end 
thereof the following new subsection: 
"(hXD From sums advanced by the Association pursuant to section 
Post, p. 1430. 
439(p), each State agency and nonprofit private institution or organi-
zation with which the Secretary has an agreement under subsection 
(b) of this section or an eligible lender in a State described in section 
20 use 1085. 
435(g)(1) (D) or (F) of the Act is authorized to make loans directly to 
students otherwise unable to obtain loans under this part. 
"(2XA) Each State agency or nonprofit private institution or organi-
zation which has an agreement under subsection (b) of this section or 
an eligible lender in a State described in section 435(gXl) (D) or (F) 
and which has an application approved under section 439(pX2) may 
receive advances under section 439(p) for each fiscal year in an 
amount necessary to meet the demand for loans under this section. 
The amount such agency, institution, organization, or lender is 
eligible to receive may not exceed 25 per centum of the average of the 
loans guaranteed by that agency, institution, organization, or lender 
for the three years preceding the fiscal year for which the determina-
tion is made. Whenever the determination required by the preceding 
sentence cannot be made because the agency, institution, organiza-
tion, or lender does not have three years previous experience, the 
amount such agency, institution, organization, or lender is eligible to 
receive may not exceed 25 per centum of the loans guaranteed under 
a program of a State of comparable size. 
"(B) Each State agency or nonprofit private institution or organiza-
tion which has an agreement under subsection (b) of this section and 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1419 
each eligible lender in a State described in section 435(g)(1) (D) or (F) 20 use 1085. 
shall repay advances made under section 439(p) in accordance with Post, p. 1430. 
agreements entered between the Association and such agency, insti-
tution, organization, or lender. 
"(3) Loans made pursuant to this subsection shall have the same 
terms, conditions, and benefits as all other loans made under this 
part.". 
INTEREST RATE AND PAYMENT 
SEC. 415. (a)(1) Part B of the Act is amended by inserting immedi-
ately after section 427 the following new section: 
"APPLICABLE INTEREST RATES 
"SEC. 427A. (a) With respect to any loan to cover the cost of 20 USC 1077a. 
instruction for any period of instruction beginning on or after 
January 1, 1981, the rate of interest applicable to any borrower 
shall— 
"(1) not exceed 7 per centum per annum on the unpaid 
principal balance of the loan in the case of any borrower who, on 
the date of entering into the note or other written evidence of 
that loan, has an outstanding balance of principal or interest on 
any loan made, insured, or guaranteed under this part, other 
than a loan for which the interest rate is determined under 
paragraph (2) or (3) of this subsection; 
"(2) except as provided in paragraph (3), be 9 per centum per 
annum on the unpaid principal balance of the loan in the case of 
any borrower who, on the date of entering into the note or other 
written evidence of that loan, has no outstanding balance of 
principal or interest on any loan made, insured, or guaranteed 
under this part, or who has such an outstanding balance on a 
loan for which the interest rate is determined under this para-
graph; or 
"(3) be 8 per centum per annum on the unpaid principal 
balance of the loan in the case of any borrower not subject to 
paragraph (1) or (2) for any loan to cover the cost of education for 
any period of enrollment beginning on or after a date which is 
three months after a determination made under subsection (b). 
"(b) If for any twelve-month period beginning on or after January 1, 
1981, the Secretary, after consultation with the Secretary of the 
Treasury, determines that the average of the bond equivalent rates of 
ninety-one-day Treasury bills auctioned for such twelve-month 
period is equal to or less than 9 per centum, the interest rate for loans 
under this part shall be the rate prescribed in subsection (a)(3) for 
borrowers described in such subsection. 
"(c) Nothing in this section shall be construed to prohibit a lender 
from charging a borrower interest at a rate less than the rate which is 
applicable under this part.". 
(2) Section 427(b) of the Act is amended by striking "No maximum" 20 USC 1077. 
and inserting in lieu thereof "Except as provided in section 427A, no 
maximum". 
(3) Section 428(a)(3)(B)(ii) of the Act is amended by striking out "7 20 USC 1078. 
per centum per annum on the unpaid principal balance" and insert-
ing in lieu thereof "the applicable interest rate under this part". 
(4) Section 428(bXlKF) of the Act is amended by inserting immedi-
ately before the semicolon at the end thereof a comma and the 
following: "except as otherwise required by section 427A". 
94 STAT. 1420 
PUBLIC LAW 96-374—OCT. 3, 1980 
20 u s e 1078. 
20 u s e 1077. 
20 u s e 1078. 
(5) Section 428(d) of the Act is amended by striking out "7 per 
centum per annum" and inserting in lieu thereof "the rate specified 
in this part". 
(b)(1)(A) Section 427(a)(2)(B) of the Act is amended by striking out 
"nine-to-twelve-month period" the first time it appears and inserting 
in lieu thereof "six months". 
(B) Such section 427(a)(2)(B) is further amended by striking out 
"nine months nor later than one year" and inserting in lieu thereof 
"six months". 
(2)(A) Section 428(b)(1)(E) of the Act is amended by striking out 
"nine-to-twelve-month period" the first time it appears and inserting 
in lieu thereof "six months". 
(B) Such section 428(b)(lXE) is further amended by striking out 
"nine months nor later than one year" in both places that it appears 
and inserting in lieu thereof "six months". 
20 u s e 1080. 
eredit bureau 
organizations, 
cooperative 
agreements. 
15 u s e 1681 
note. 
20 u s e 1087. 
COLLECTION PRACTICES 
SEC. 416. (a)(1) Section 430(b) of the Act is amended by inserting 
"(1)" after "(b)" and by adding at the end thereof the following new 
paragraph: 
"(2)(A) For the purpose of promoting responsible repayment of 
loans covered by Federal loan insurance pursuant to this part, the 
Secretary shall enter into cooperative agreements with credit bureau 
organizations providing for the exchange of information concerning 
student borrowers in accordance with the requirements of this 
paragraph. For the purpose of assisting such organizations to comply 
with the Fair Credit Reporting Act, such agreements may provide for 
timely response by the Secretary to requests from such organizations 
for responses to objections raised by such borrowers. Subject to the 
requirements of subparagraph (C), such agreements shall provide for 
the disclosure by the Secretary to such organizations with respect to 
any loan for which the Secretary has received a notice of default 
under subsection (a) of this section o
f
— 
"(i) the date of disbursement and the amount of any such loan; 
"(ii) information concerning collection of any such loan, includ-
ing information concerning the status of any defaulted loan on 
which the Secretary has made a payment pursuant to subsection 
(a) of this section; and 
"(iii) the date of cancellation of the note upon completion of 
repayment by the borrower of any such loan or payment by the 
Secretary pursuant to section 437. 
"(B) Such agreements may also provide for the disclosure by such 
organizations to the Secretary, upon receipt from the Secretary of a 
notice under subparagraph (A)(ii) that such a loan is in default, of 
information concerning the borrower's location or other information 
which may assist the Secretary in proceeding to collection of the 
defaulted amount. 
"(C) Agreements entered into pursuant to this paragraph shall 
contain such provisions as may be necessary to ensure that— 
"(i) no information is disclosed by the Secretary unless its 
accuracy and completeness have been verified, and no informa-
tion stating that a loan is in default is disclosed until the 
Secretary has made a reasonable effort to collect the debt; 
"(ii) as to any information so disclosed, such organizations will 
be promptly notified of, and will promptly record, any change 
submitted by the Secretary with respect to such information, or 
any objections by the borrower with respect to any such informa-
disclosure. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1421 
tion, as required by section 611 of the Fair Credit Reporting Act 
(15U.S.C.1681i); 
"(iii) no use will be made of any such information which would 
result in the use of collection practices with respect to such a 
borrower that are not fair and reasonable or that involve 
harassment, intimidation, false or misleading representations, or 
unnecessary communication concerning the existence of such 
loan or concerning any such information; and 
"(iv) except for disclosures made to obtain the borrower's 
location, the Secretary (I) shall not disclose any such information 
until he has notified the borrower that such information will be 
disclosed to credit bureau organizations unless the borrower 
enters into repayment of his loan, but (II) shall, if the borrower 
has not entered into repayment within a reasonable period of 
time, but not less than thirty days, from the date such notice has 
been sent to the borrower, disclose the information required by 
this subsection. 
"(D)(i) The Secretary shall, within ninety days after the date of ^^^°^^^^^^^ 
enactment of this paragraph, take such steps as may be necessary to 
establish the disclosure of information described in subparagraph (A) 
(i), (ii), and (iii) as a routine use in accordance with section 552a(b)(3) 
of title 5, United States Code, and to establish a system for the prompt 
notification of any borrower of any disclosure made pursuant to this 
paragraph. 
"(ii) Information disclosed by the Secretary to credit bureau organi-
zations under the requirements of this paragraph shall not constitute 
a system of records within the meaning of section 552a of title 5, 
United States Code (the Privacy Act of 1974); and credit bureau 
organizations which enter into agreements with the Secretary under 
this paragraph shall not be considered Government contractors 
within the meaning of that Act.". 
(2) Section 427(a)(2) of the Act is amended by redesignating subpar- 20 USC 1077. 
agraphs (H) and (I) as subparagraphs (I) and (J), respectively, and by 
inserting after subparagraph (G) the following new subparagraph: 
"(H)(i) contains a notice of the system of disclosure of 
information concerning such loan to credit bureau organiza-
tions under section 430(b)(2), and (ii) provides that the lender Ante, p. 1420. 
on request of the borrower will provide information on the 
repayment status of the note to such organizations,". 
(b) Section 430(c) of the Act is amended by adding at the end thereof 
the following new sentence: "Any forbearance which is approved by 
the Secretary under this subsection with respect to the repayment of 
a loan shall not be considered as indicating that a holder of a 
federally insured loan has failed to exercise reasonable care and due 
diligence in the collection of the loan.". 
(c) Section 432 of the Act is amended by adding at the end thereof 20 usc 1082. 
the following new subsection: 
"(e) Notwithstanding any other provision of law, the Secretary may 
provide to eligible lenders, and to any State or any nonprofit private 
institution or organization having a guaranty agreement under 
section 428(c)(1), any information with respect to the names and 20 USC 1078. 
addresses of borrowers or other relevant information which is availa-
ble to the Secretary, from whatever source such information may be 
derived.". 
94 STAT. 1422 
PUBLIC LAW 96-374—OCT. 3, 1980 
ADMINISTRATIVE IMPROVEMENTS 
20 use 1078. 
SEC. 417. (a) Section 428(b)(1)(H) of the Act is amended by inserting 
before the semicolon a comma and the following: "and insures that 
the proceeds of the premium will not be used for incentive payments 
to lenders". 
(b)(1) Section 428(c)(6)(A)(ii) of the Act is amended— 
(A) by striking out "and" the first time it appears and inserting 
in lieu thereof a comma; and 
(B) by inserting after "prevention" a comma and the following: 
"and the administrative costs of monitoring the enrollment and 
repayment status of students". 
(2) Section 428(c)(6)(B) is amended— 
(A) by striking out "and" at the end of clause (i) and inserting 
in lieu thereof a comma; 
(B) by inserting "and" at the end of clause (ii); and 
(C) by adding after clause (ii) the following: 
Definition. 
"(iji) 'administrative costs of monitoring the enrollment and 
repayment status of students' means any administrative costs by 
a guaranty agency which are directly related to ascertaining the 
student's enrollment status, prompt notification to the lender of 
such status, an audit of the note agreement to determine if the 
provisions of that agreement are consistent with the records of 
the guaranty agency as to the principal amount of the loan 
guaranteed, and an examination of the note to assure that the 
repayment provisions are consistent with the provisions of this 
part,". 
(3) Section 428(f)(1)(A) of the Act is amended— 
(A) by striking out "or" at the end of clause (iii); 
(B) by redesignating clause (iv) as clause (v); and 
(C) by inserting after clause (iii) the following new clause: 
"(iv) the administrative costs of monitoring the enrollment and 
repayment status of students; or". 
(4)(A) Section 428(f)(1) of the Act is amended by striking out 
"(f)(1)(A)" and inserting in lieu thereof "(f)(1)" and by striking out 
subparagraphs (B) and (C). 
(B) Such section is further amended by redesignating clauses (i) 
through (v) as clauses (A) through (E), respectively. 
(5) Section 428(f)(2) of the Act is amended— 
(A) by striking out "or" at the end of clause (iii); 
(B) by redesignating clause (iv) as clause (v); and 
(C) by inserting after clause (iii) the following new clause: 
"(iv) the administrative costs of monitoring the enrollment and 
repayment status of students; or". 
(6) Section 428(f)(3) of the Act is amended— 
(A) by striking out "and" at the end of clause (B); 
(B) by striking out the period at the end of clause (C) and 
inserting in lieu thereof a comma and the word "and"; and 
(C) by adding after clause (C) the following new clause: 
"(D) 'administrative costs of monitoring the enrollment and 
repayment status of students' means any administrative costs by 
a guaranty agency which are directly related to ascertaining the 
student's enrollment status, prompt notification to the lender of 
such status, an audit of the note agreement to determine if the 
provisions of that agreement are consistent with the records of 
the guaranty agency as to the principal amount of the loan 
guaranteed, and an examination of the note to assure that the 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1423 
repayment provisions are consistent with the provisions of this 
part,". 
(c) Section 428(f)(3)(A) of the Act is amended by redesignating 20 USC 1078. 
clauses (iv) and (v) as clauses (vi) and (vii) respectively, and by 
inserting after clause (iii) the following new clauses: "(iv) the costs of 
providing interest and special allowance computation and billing 
services to lenders, (v) the amount of non-Federal funds expended by 
an insurer as incentive payments to lenders to induce them to 
improve or expand their program participation,". 
(d) Section 428 of the Act is amended by adding at the end thereof 
the following new subsection: 
"(i)(l) Any State agency or any nonprofit private institution or 
organization which has an agreement under subsection (b) of this 
section may enter into an agreement with any eligible lender (other 
than an eligible institution or an agency or instrumentality of the 
State) for the purpose of authorizing multiple disbursements of the 
proceeds of a loan under which the lender will pay the proceeds of 
such loans into an escrow account to be administered by the State 
agency or any nonprofit private institution or organization in accord-
ance with the provisions of paragraph (2) of this subsection. 
"(2) Each State agency or each nonprofit private institution or 
organization entering into an agreement under paragraph (1) of this 
subsection is authorized to— 
"(A) make the disbursements in accordance with the note 
evidencing the loan; 
"(B) commingle the proceeds of all loans paid to it pursuant to 
the escrow agreement entered into under such paragraph (1); 
"(C) invest the proceeds of such loans in obligations of the 
Federal Government or obligations which are insured or guaran-
teed by the Federal Government; 
"(D) retain interest or other earnings on such investment; and 
"(E) return to the eligible lender undisbursed funds when the 
student ceases to carry at an eligible institution at least one-half 
of the normal full-time academic workload as determined by the 
institution.". 
LOAN INFORMATION PROGRAM AUTHORIZED 
SEC. 418. Title IV of the Act is amended by adding after section 433 
the following new section: 
"STUDENT LOAN INFORMATION BY ELIGIBLE LENDERS 
"SEC. 433A. Each eligible lender shall enter into an agreement with 20 USC 1083a. 
the Secretary under which the eligible lender will, at the time such 
lender makes a loan to a student borrower which is insured or 
guaranteed under this part, provide thorough and accurate loan 
information on loans insured or guaranteed under this part to the 
student borrower. The loan information required by this section shall 
include— 
"(1) the yearly and cumulative maximum amounts that may be 
borrowed by a student; 
"(2) the terms on which repayment will begin; 
"(3) the maximum number of years in which the loan must be 
repaid; 
"(4) the interest rate that will be repaid, and the minimum 
amount of required monthly payment; 
79-194 
0 - 8 1 - p t . 2 
10 : QL3 
94 STAT. 1424 
PUBLIC LAW 96-374—OCT. 3, 1980 
"(5) any special options the borrower may have for deferral, 
cancellation, prepayment, consolidation, or other refinancing of 
the loan; 
"(6) a definition of default and the consequences to the 
borrower if the borrower should default, including a description 
of any arrangements made with credit bureau organizations; and 
"(7) to the extent practicable, the effect of accepting the loan on 
the eligibility of the borrower for other forms of student 
assistance.". 
LOANS TO PARENTS 
SEC. 419. Part B of title IV of the Act is amended by inserting 
immediately after section 428A the following new section: 
20 u s e 1078-2. 
"Student" and 
"student 
borrower." 
Limitation. 
20 u s e 1078. 
Ante, p. 1419. 
Loan insurance. 
LOANS TO PARENTS OF DEPENDENT UNDERGRADUATE STUDENTS 
"SEC. 428B. (a) Parents of a dependent undergraduate student (as 
defined by regulations by the Secretary) shall be eligible to borrow 
funds under this part in amounts specified in subsection Qo\ and 
unless otherwise specified in subsections (c) and (d), such loans shall 
have the same terms, conditions, and benefits as all other loans made 
under this part. Whenever necessary to carry out the provisions of 
this section the terms 'student' and 'student borrower' used in this 
part shall include a parent borrower under this section. 
"(b)(1) Subject to paragraphs (2) and (3), the maximum amount 
parents may borrow for one student in any academic year or its 
equivalent (as defined by regulation by the Secretary) is $3,000. 
"(2) The aggregate insured principal amount for insured loans 
made to parents on account of an undergraduate dependent student 
shall not exceed $15,000. 
"(3) No loan may be made to any parent or student under this part 
which would cause their combined loans for any academic year to 
exceed the student's estimated cost of attendance minus such stu-
dent's estimated financial assistance as certified by the eligible 
institution under section 428(a)(2)(A) of this part. The annual insur-
able limit on account of any student shall not be deemed to be 
exceeded by a line of credit under which actual payments to the 
borrower will not be made in any year in excess of the annual limit. 
"(c)(1) Repayment of principal on loans made under this section 
shall commence not later than sixty days after the date such loan is 
disbursed by a lender. 
"(2) No payments to reduce interest costs shall be paid pursuant to 
section 428(a) of this part on loans made pursuant to this section. 
"(3) Interest on loans made pursuant to this section shall be at the 
rate of 9 per centum per annum on the unpaid principal balance of 
the loan, except that, if the loan is to cover the cost of education for a 
period of enrollment which begins on or after a date which is three 
months after the date on which the Secretary has made a determina-
tion under section 427A(b) and that borrower, on the date of entering 
into the note or other written evidence of the loan, has no obligation 
to repay any amount of principal or interest on any other loan made 
under this section with respect to the same student, then the interest 
shall be at the rate of 8 per centum per annum on the unpaid 
principal balance of the loan. 
"(d) Loans made under this section shall be insured by the Secre-
tary in a State only if— 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1425 
"(1) the State is not served by a State agency or nonprofit 
private institution or organization having an agreement with the 
Secretary pursuant to section 428(b), or 
"(2) an agency, institution, or organization in a State having 
such an agreement does not authorize loans under this section 
(A) within one hundred and twenty days after the effective date 
of this amendment, or (B) if a State is prohibited from authoriz-
ing loans under this section because of existing State law, one 
hundred and twenty days after the adjournment of the next 
regular session of the State legislature which convenes after the 
effective date of this amendment.". 
SPECIAL ALLOWANCES 
SEC. 420. (a) Section 438 of the Act is amended to read as follows: 
"SPECIAL ALLOWANCES 
"SEC. 438. (a) In order to assure (1) that the limitation on interest 20 use 1087-1. 
payments or other conditions (or both) on loans made or insured 
under this part, do not impede or threaten to impede the carrying out 
of the purposes of this part or do not cause the return to holders of 
loans to be less than equitable, (2) that incentive payments on such 
loans are paid promptly to eligible lenders, and (3) that appropriate 
consideration of relative administrative costs and money market 
conditions is made in setting the quarterly rate of such payments, the 
Congress finds it necessary to establish an improved method for the 
determination of the quarterly rate of the special allowances on such 
loans, and to provide for a thorough, expeditious and objective 
examination of alternative methods for the determination of the 
quarterly rate of such allowances. 
"(b)(1) A special allowance shall be paid for each of the three-month 
periods ending March 31, June 30, September 30, and December 31 of 
every year and the amount of such allowance paid to any holder with 
respect to any three-month period shall be a percentage of the 
average unpaid balance of principal (not including unearned interest 
added to principal) of all eligible loans held by such holder during 
such period. 
"(2)(A) Subject to subparagraph (D) and paragraph (4), the special 
allowance paid pursuant to this subsection on loans for which the 
applicable interest rate is 7 per centum per annum or less shall be 
computed (i) by determining the average of the bond equivalent rates 
of the ninety-one-day Treasury bills auctioned for such three-month 
period, (ii) by subtracting 3.5 per centum from such average, (iii) by 
rounding the resultant per centum upward to the nearest one-eighth 
of 1 per centum, and (iv) by dividing the resultant per centum by four. 
"(B) Subject to subparagraph (D) and paragraph (4), the special 
allowance paid pursuant to this subsection on loans for which the 
applicable interest rate is 8 per centum per annum shall be computed 
(i) by determining the average of the bond equivalent rates of the 
ninety-one-day Treasury bills auctioned for such three-month period, 
(ii) by subtracting 4.5 per centum from such average, (iii) by rounding 
the resultant per centum upward to the nearest one-eighth of 1 per 
centum, and (iv) by dividing the resultant per centum by four. 
"(C) Subject to subparagraph (D) and paragraph (4), the special 
allowance paid pursuant to this subsection on loans for which the 
applicable interest rate is 9 per centum per annum shall be computed 
(i) by determining the average of the bond equivalent rates of the 
94 STAT. 1426 
PUBLIC LAW 96-374—OCT. 3, 1980 
26 use 1. 
Ante, p. 1425. 
20 u s e 1078. 
Reports to 
eongress. 
"Eligible loan. 
ninety-one-day Treasury bills auctioned for such three-month period, 
(ii) by subtracting 5.5 per centum from such average, (iii) by rounding 
the resultant per centum upward to the nearest one-eighth of 1 per 
centum, and (iv) by dividing the resultant per centum by four. 
"(D)(i) The quarterly rate of the special allowance for holders of 
loans which were made or purchased with funds obtained by the 
holder from the issuance of obligations, the income from which is 
exempt from taxation under the Internal Revenue Code of 1954 shall 
be one-half the quarterly rate of the special allowance established 
under subparagraph (A), (B), or (C). Such rate shall also apply to 
holders of loans which were made or purchased with funds obtained 
by the holder from collections or default reimbursements on, or 
interests or other income pertaining to, eligible loans made or 
purchased with funds described in the preceding sentence of this 
subparagraph or from income on the investment of such funds. This 
subparagraph shall not apply to loans which were made or insured 
prior to October 1,1980. 
"(ii) The rate set under division (i) shall not be less than (I) 2.5 per 
centum per annum in the case of loans for which the applicable 
interest rate is 7 per centum per annum, (II) 1.5 per centum per 
annum in the case of loans for which the applicable interest rate is 8 
per centum per annum, or (III) 0.5 per centum in the case of loans for 
which the applicable rate is 9 per centum per annum. 
"(iii) No special allowance may be paid under this subparagraph 
unless the issuer of such obligations complies with section 420(b) of 
the Education Amendments of 1980. 
"(3) The holder of an eligible loan shall be deemed to have a 
contractual right against the United States, during the life of such 
loan, to receive the special allowance according to the provisions of 
this section. Subject to paragraph (4) the special allowance deter-
mined for any such three-month period shall be payable at such time, 
after the close of such period, as may be specified by or pursuant to 
regulations promulgated under this section. 
X4)(A) If payments of the special allowances payable under this 
section or of interest payments under section 428(a) with respect to a 
loan have not been made within thirty days after the Secretary has 
received an accurate, timely, and complete request for payment 
thereof, the special allowance payable to such holder shall be in-
creased by an amount equal to the daily interest accruing on the 
special allowance and interest benefits payments due the holder. 
"(B) Such daily interest shall be computed at the daily equivalent 
rate of the sum of the special allowance rate computed pursuant to 
paragraph (2) and the interest rate applicable to the loan and shall be 
paid for the later of (i) the thirty-first day after the receipt of such 
request for payment from the holder, or (ii) the thirty-first day after 
the final day of the period or periods covered by such request, and 
shall be paid for each succeeding day until, and including, the date on 
which the Secretary authorizes payment. 
"(C) For purposes of reporting to the Congress the amounts of 
special allowances paid under this section, amounts of special 
allowances paid pursuant to this paragraph shall be segregated and 
reported separately. 
(5) As used in this section, the term 'eligible loan' means a loan 
which is insured under this part, or made under a program covered 
by an agreement under section 428(b) of this Act. 
"(6) The Secretary shall pay the holder of an eligible loan, at such 
time or times as are specified in regulations, a special allowance 
prescribed pursuant to this subsection subject to the condition that 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1427 
Regulations. 
Plans, submittal. 
20 u s e 1087-la. 
26 use 1. 
such holder shall submit to the Secretary, at such time or times and 
in such a manner as he may deem proper, such information as may be 
required by regulation for the purpose of enabling the Secretary to 
carry out his functions under this section and to carry out the 
purposes of this section, 
"(c) The Secretary shall adopt or amend appropriate regulations 
pertaining to programs carried on under this part to prevent, where 
practicable, any practices which he finds have denied loans to a 
substantial number of eligible students.". 
(b) In order for the holders of loans which were made or purchased 
with funds obtained by the holder from an Authority issuing obliga-
tions, the income from which is exempt from taxation under the 
Internal Revenue Code of 1954, to be eligible to receive a special 
allowance under section 438(b)(2XD) of the Higher Education Act of 
1965, the Authority shall submit to the Secretary a plan for doing Ante, p. 1425. 
business. The Secretary shall approve or disapprove such plan within 
30 days after the date of its submission. Each such plan shall contain 
provisions designed to assure that— 
(1) no eligible lender in the area served by the Authority will be 
excluded from participation in the program of the Authority and 
that all eligible lenders may participate in the program on the 
same terms and conditions if eligible lenders are going to 
participate in the program; 
(2) no director or staff member of the Authority who receives 
compensation from the Authority may own stock in, or receive 
compensation from any agency that would contract to service 
and collect the loans of the Authority; 
(3) student loans will not be purchased from participating 
lenders at a premium or discount amounting to more than 1 per 
centum of the unpaid principal amount borrowed plus accrued 
interest to the date of acquisition, but a reasonable loan transfer 
fee may be paid by the purchaser; 
(4) the Authority will, within the limit of funds available and 
subject to applicable State and Federal law, make loans to, or 
purchase loans incurred by, all eligible students who are resi-
dents of, or who attend an eligible institution within, the area 
served by the Authority; 
(5) the Authority has a plan under which the Authority will 
pursue the development of new lender participation in a continu-
ing program of benefits to students together with assurances of 
existing lender commitments to the program; and 
(6) there will be an annual audit of the Authority by a certified 
public accounting firm which will include review of compliance 
by the Authority with the provisions of the plan. 
THE STUDENT LOAN MARKETING ASSOCIATION 
SEC. 421. (a)(1) Section 439(a)(1) of the Act is amended by striking 20 use 1087-2. 
out "Government-sponsored". 
(2) Section 439(f) of the Act is amended to read as follows: 
"(f)(1) The Association shall have common stock having such par Common stock. 
value as may be fixed by its Board of Directors from time to time 
which may be issued only to lenders under this part, pertaining to 
guaranteed student loans, who are qualified as insured lenders under 
this part or who are eligible institutions, as defined in section 435(a), 20 use 1085. 
other than an institution outside of the United States. 
94 STAT. 1428 
PUBLIC LAW 96-374—OCT. 3, 1980 
Nonvoting 
preferred stock. 
20 use 1087-2. 
Warehousing 
advance. 
Securities, 
issuance. 
"(2) Each share of common stock shall be entitled to one vote with 
rights of cumulative voting at all elections of Directors. Voting shall 
be by classes as described in subsection (c)(3). 
"(3) The maximum number of shares of common stock that the 
Association may issue and have outstanding at any one time shall be 
fixed by the Board of Directors from time to time. Any common share 
issued shall be fully transferable, except that, as to the Association, it 
shall be transferred only on the books of the Association. 
"(4) To the extent that net income is earned and realized, subject to 
subsection (g)(2), dividends may be declared on common stock and 
nonvoting common stock by the Board of Directors. Such dividends as 
may be declared by the Board shall be paid to the holders of 
outstanding shares of common stock and nonvoting common stock, 
except that no such dividends shall be payable with respect to any 
share which has been called for redemption past the effective date of 
such call. 
"(5) The Association is authorized to issue nonvoting common stock 
having such par value as may be fixed by its Board of Directors from 
time to time. Any nonvoting common stock shall be freely transfer-
able, except that, as to the Association, it shall be transferable only 
on the books of the Association.". 
(3) The first sentence of section 439(gXl) of the Act is amended to 
read as follows: "The Association is authorized to issue nonvoting 
preferred stock having such par value as may be fixed by its Board of 
Directors from time to time. . 
(b)(1) Section 439(d) of the Act is amended— 
(A) in paragraph (1), by inserting "or repurchase," after 
"purchase' and by inserting "or resell, offer participations, or 
pooled interests," after "sell"; 
(B) by amending paragraph (2) to read as follows: 
"(2) Any warehousing advance made under paragraph (1) of this 
subsection shall be made on the security of (A) insured loans, (B) 
marketable obligations and securities issued, guaranteed or insured 
by, the United States, or for which the full faith and credit of the 
United States is pledged for the repayment of principal and interest 
thereof, or (C) marketable obligations issued, guaranteed, or insured 
by any agency, instrumentality or corporation of the United States 
for which the credit of such agency, instrumentality or corporation is 
pledged for the repayment of principal and interest thereof, in an 
amount equal to the amount of such advance. The proceeds of any 
such advance secured by insured loans shall either be invested in 
additional insured loans or the lender shall provide assurances to the 
Association that during the period of the borrowing it will maintain a 
level of insured loans in its portfolio not less than the aggregate 
outstanding balance of such loans held at the time of the borrowing. 
The proceeds from any such advance secured by collateral described 
in clauses (B) and (C) shall be invested in additional insured student 
loans."; and 
(C) by adding at the end thereof the following new paragraph: 
"(4) Securities issued pursuant to the offering of participations or 
pooled interests under paragraph (1) of this subsection may be in the 
form of debt obligations, or trust certificates of beneficial ownership, 
or both. Student loans set aside pursuant to the offering of participa-
tions or pooled interests shall at all times be adequate to ensure the 
timely principal and interest pajrments on such securities.". 
(2) Section 439(1) of the Act is amended by inserting "including 
those made under subsection (d)(4)" immediately after "All obliga-
tions issued by the Association". 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1429 
Outstanding 
obligations, 
issuance. 
(c) Section 439(e)(A) of the Act is amended by striking out 20 use 1087-2. 
"$50,000,000" and inserting in lieu thereof "$75,000,000". 
(d)(1) Section 439(h)(1) of the Act is amended to read as follows: 
"(h)(1) The Association is authorized with the approval of the 
Secretary of Education and the Secretary of the Treasury to issue and 
have outstanding obligations having such maturities and bearing 
such rate or rates of interest as may be determined by the Associ-
ation. The authority of the Secretary of Education to approve the 
issuance of such obligations is limited to obligations issued by the 
Association and guaranteed by the Secretary pursuant to paragraph 
(2) of this subsection. Such obligations may be redeemable at the 
option of the Association before maturity in such manner as may be 
stipulated therein. The Secretary of the Treasury may not direct as a 
condition of his approval that any such issuance of obligations by the 
Association be made or sold to the Federal Financing Bank.". 
(2) Section 439(h)(2) of the Act is amended— 
(A) by striking out "July 1,1982" and inserting in lieu thereof 
"October 1,1984"; and 
(B) by adding at the end thereof the following new sentence: 
"Nothing in this section shall be construed so as to authorize the 
Secretary of Education or the Secretary of the Treasury to limit, 
control, or constrain programs of the Association or support of 
the Guaranteed Student Loan Program by the Association.". 
(3) Section 439(h) of the Act is amended by adding at the end thereof 
the following new paragraphs: 
"(4) Upon receipt of a request from the Association under this 
subsection requiring approvals by the Secretary of Education or the 
Secretary of the Treasury, the Secretary of Education or the Secre-
tary of the Treasury shall act promptly either to grant approval or to 
advise the Association of the reasons for withholding approval. In no 
case shall such an approval be withheld for a period longer than sixty 
days unless, prior to the end of such period, the Secretary of 
Education and the Secretary of the Treasury submit to the Congress a 
detailed explanation of reasons for doing so. 
"(5) The Secretary of the Treasury is authorized to purchase any 
obligations issued by the Association pursuant to this subsection as 
now or hereafter in force, and for such purpose the Secretary of the 
Treasury is authorized to use as a public debt transaction the 
proceeds of the sale of any securities hereafter issued under the 
Second Liberty Bond Act, as now or hereafter in force, and the 31 USC 774. 
purposes for which securities may be issued under the Second Liberty 
Bond Act, as now or hereafter in force are extended to include such 
purchases. The Secretary of the Treasury shall not at any time 
purchase any obligations under this subsection if such purchase 
would increase the aggregate principal amount of his then outstand-
ing holdings of such obligations under this subsection to an amount 
greater than $1,000,000,000. Each purchase of obligations by the 
Secretary of the Treasury under this subsection shall be upon such 
terms and conditions as to yield a return at a rate determined by the 
Secretary of the Treasury, taking into consideration the current 
average rate on outstanding marketable obligations of the United 
States of comparable maturities as of the last day of the month 
preceding the making of such purchase. The Secretary of the Treas-
ury may, at any time, sell, upon such terms and conditions and at 
such price or prices as he shall determine, any of the obligations 
acquired by him under this subsection. All redemptions, purchases, 
and sales by the Secretary of the Treasury of such obligations under 
Obligations, 
purchase 
authorization. 
94 STAT. 1430 
PUBLIC LAW 96-374—OCT. 3, 1980 
this subsection shall be treated as public debt transactions of the 
United States. 
"(6) Notwithstanding any other provision of law the Association is 
authorized to sell or issue obligations on the security of student loans, 
the payment of interest or principal of which has at any time been 
20 use 1078, 
guaranteed under section 428 or 429 of this part, to the Federal 
10T9. 
Financing Bank.". 
20 use 1087-2. 
(eXD Section 439 of the Act is amended by adding at the end thereof 
the following new subsections: 
Loans. 
"(oXlXA) The Association or its designated agent may, upon re-
quest of a borrower who has received loans under this title from two 
or more programs or lenders, or has received any other federally 
insured or guaranteed student loan, and where the borrower's aggre-
gate outstanding indebtedness is in excess of $5,000, or where the 
borrower's aggregate outstanding indebtedness is in excess of $7,500 
from a single lender under this part, make, notwithstanding any 
other provision of this part limiting the maximum insured principal 
amount for all insured loans made to a borrower, a new loan to the 
borrower in an amount equal to the unpaid principal and accrued 
unpaid interest on the old loans. The proceeds of the new loan shall be 
used to discharge the liability on such old loans. 
"(B) The Association in making loans pursuant to this subsection in 
any State served by a State agency or nonprofit private institution or 
organization with which the Secretary heis an agreement under 
section 4280b) or an eligible lender in a State described in section 
20 use 1085. 
435(gXl) (D) or (F) may designate as its agent such agency, institution, 
organization, or lender to perform such functions as the Association 
determines appropriate. Any agreements made pursuant to this 
subparagraph shall be on such terms and conditions as agreed upon 
by the Association and such agency, institution, organization, or 
lender. 
"(2) Loans made pursuant to this subsection shall be insurable 
20 use 1079. 
either by the Secretary under section 429 with a certificate of 
comprehensive insurance coverage provided for under section 
429(bXl) or by a State or nonprofit private institution or organization 
with which the Secretary has an agreement under section 428(b), 
except that such State or nonprofit private institution or organiza-
tion shgill provide the Association with a certificate of comprehensive 
insurance coverage. The terms of loans made under this subsection 
shall be such as may be agreed upon by the borrower and the 
20 use 1077. 
Association and meet the requirements of section 427, except that (A) 
the ten-year maximum period referred to in section 427(a)(2XB) may 
be extended to no more than twenty years, and (B) clause (ii) of 
section 427(aX2XB) shall not be applicable. 
"(3XA) Notwithstanding any other provision of this part, the 
Association, with the agreement of the borrower, may establish such 
repajrment terms as it determines will promote the objectives of this 
subsection including, but not limited to, the establishment of gradu-
ated, income sensitive repayment schedules. 
"(B) For any borrower who has received two or more loans under 
this part bearing interest at the rate of 9 per centum per annum on 
the unpaid principal balance of the loan and who requests a new loan 
under this subsection for the purpose of consolidation on a date after 
the date on which the Secretary has made a determination under 
Ante, p. 1419. 
section 427A(b), the rate of interest on such new loan shall not exceed 
8 per centum per annum on the unpaid principgil balance of such new 
loan. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1431 
"(4) The Association shall develop a program to ensure the dissemi-
nation of information to students, lenders, and institutions of higher 
education regarding the loans authorized by this subsection. 
"(pXD The Association shall make advances in each fiscal year 
from amounts available to it to each State agency, nonprofit institu-
tion or organization, and eligible lender described in subsection 
428(hXl) which has an agreement with the Association which sets -^"^fi' P- 1^18. 
forth that advances are necessary to enable such agency, institution, 
oi^anization or lender to make student loans in accordance with 
section 428(h) of this title and that such advances will be repaid to the 
Association in accordance with such terms and conditions as may be 
set forth in the agreement and agreed to by the Association and such 
agency, institution, organization, or lender. Advances made under 
this subsection shall not be subject to section 439(dX2) of this Act. ^n^' P- 1428. 
"(2) No advance may be made under this subsection unless the 
State agency or nonprofit private institution, organization, or lender 
makes an application to the Association, which shall be accompanied 
by such information as the Association determines to be reasonably 
necessary. 
"(qXlXA) Whenever the Secretary determines that eligible bor-
rowers in a State not served by a State agency or nonprofit private 
institution or organization having an agreement pursuant to section 
428(b), or an eligible lender in a State described in section 435(gXl) (D) f use 1078. 
or (F) are seeking and are unable to obtain loans under this part, the ^^ ^^ ^^^^• 
Association or its designated agent may begin making loans in 
accordance with this subsection at the request of the Secretary. The 
Association shall give preference to such States in making loans 
under this subsection. 
"(B) Loans made pursuant to this subsection shall be insurable by 
the Secretary under section 429 with a certificate of comprehensive 20 use 1079. 
insurance coverage provided for under section 429(bXl). 
"(2)(A) Whenever the Secretary, after consultation with, and with 
the agreement of, representatives of the agency in a State or 
nonprofit private institution or organization having an agreement 
pursuant to section 428(b), or an eligible lender in a State described in 
section 435(gXl)(D), determines that a substantial portion of eligible 
borrowers in such State or within an area of such State are seeking 
and are unable to obtain loans under this part, the Association or its 
designated agent may begin making loans in accordance with this 
subsection at the request of the Secretary. 
"(B) Loans made pursuant to this subsection shall be insurable by 
the agency identified in subparagraph (A) having an agreement 
pursuant to section 428(b). For loans insured by such agency, the 
agency shall provide the Association with a certificate of comprehen-
sive insurance coverage, if the Association and the agency have 
mutually agreed upon a means to determine that the agency has not 
already guaranteed a loan under this part to a student which would 
cause a subsequent loan made by the Association to be in violation of 
anV provision under this part. 
'(3) The Association or its designated gigent shall cease making 
loans under this part in any State at such time as it is determined by 
the Secretary, with regard to loans made under paragraph (1), or by 
any party to the agreement required by paragraph (2), that— 
"(A) the conditions which caused the implementation of this 
subsection have ceased to exist; or 
"(B) the implementation of this subsection has either (i) fur-
ther reduced the availability of loans from other sources in the 
applicable geographical area, or (ii) inhibited the formation in a 
94 STAT. 1432 
PUBLIC LAW 96-374—OCT. 3, 1980 
State of an agency which would have an agreement pursuant to 
20 use 1078. 
section 428(b) of tnis part which would have the responsibility of 
developing local sources of 
funds for student loans.". 
20 use 1085. 
(2) Section 435(gXl) of the Act is amended by striking out "and" at 
the end of subparagraph (E), by striking out the period at the end of 
subparagraph (F)> and by adding at the end thereof the following: 
Ante, p. 1430. 
«(Q) fyj, purposes of making loans under section 439 (o) and (q), 
the Student Loan Marketing Association; and 
"(H) for purposes of making loans under section 428(j), a State 
agenpy or a nonprofit private institution or organization having 
an agreement under section 428(b).". 
PROMPT DUE DIUGENCE DETERMINATIONS 
20 use 1080. 
SEC. 422. Section 43(Ka) of the Act is amended by adding at the end 
thereof the following new sentence: "The Secretary shall make the 
determination required to carry out the provisions of this section not 
later than ninety days after the notification by the insurance benefi-
ciary and shall make pa3mient in full on the amount of the benefic-
iarjrs loss pending completion of his due diligence investigation.". 
MISCELLANEOUS AMENDMENTS 
20 use 1077. 
SEC. 423. (aXD Section 427(aXl) of the Act is amended to read as 
follows: 
"(1) made to a student who (A) is an eligible student under 
Post, p. 1448. 
section 484, and (B) has agreed to notify promptly the holder of 
the loan concerning any change of address; and . 
20 use 1078. 
(2) Section 428(aX2XBXi) of the Act is amended to read as follows: 
"(i) a student's estimated cost of attendance means the cost 
of attendance for such student determined in accordance 
Post, p. 1445. 
^ t h section 482(d);". 
(b) The first sentence of 
section 428(cXlXA) of 
the Act is amended by 
striking out everything after "of any insured loan" and inserting in 
lieu thereof a period. 
(c) Section 428(e) of 
the Act is amended to read as follows: 
"(e) From funds appropriated to carry out this part in any fiscal 
year, the Secretai^ shall pay to each eligible institution the amount 
of $10 per acadenuc year for each student enrolled in that institution 
who is in receipt of a loan described in paragraph (1) of subsection (a) 
Ante, p. 1424. 
of t^jg section or made under section 428B, for that year. Payments 
received by an institution under this subsection shall be used solely 
for the purpose of offsetting the costs to the institution for the 
program under this part.". 
(d) Section 428(f) of the Act is amended by adding at the end thereof 
the following new paragraph: 
"(5XA) The Secretary shall make pajmients in accordance with this 
paragraph to an agency, institution, or organization in any State 
which has an agreement under subsection (b) of this section which 
provides a lender referral service for students who meet the require-
ments of 
subparagraph (B). 
"(B) A student is eligible to apply for lender referral services to an 
agency, institution, or organization in a State if (i) such student is 
either a resident of such State or is accepted for enrollment in or is 
attending an eligible institution in such State, and (ii) such student 
has sought and was unable to find a lender willing to make a loan 
under this part. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1433 
"(C) The amount which the Secretary shall pay to any eligible 
agency, institution, or organization under this paragraph shall be 
equal to one-half of 1 per centum of the total principal amount of the 
loans upon which insurance was issued under this part on loans made 
to a student described in subparagraph (B) who subsequently ob-
tained such loans because of such agency's, institution's, or organiza-
tion's referral service. 
"(D) Nothing in this or any law shall prohibit an agency from using 
all or a portion of the funds received under this part for the pajnient 
of incentive fees to lenders who agree to participate in a loan referral 
service. 
"(E) There is authorized to be appropriated such sums as are Appropriation 
necessary to carry out the provisions of this paragraph.". 
authorization. 
PART C—WORK-STUDY PROGRAMS 
PURPOSE; APPROPRIATIONS AUTHORIZED 
SEC. 431. Section 441 of the Act is amended to read as follows: 
"PURPOSE; APPROPRIATIONS AUTHORIZED 
"SEC. 441. (a) The purpose of this part is to stimulate and promote 42 use 2751. 
the part-time emplo5maent of students, particularly students who are 
in need of earnings from employment to pursue courses of study at 
eligible institutions. 
(b) There are authorized to be appropriated for carrsdng out this 
part $670,000,000 for fiscal year 1981, $720,000,000 for fiscal year 
1982, $760,000,000 for fiscal year 1983, $800,000,000 for fiscal year 
1984, and $830,000,000 for fiscal year 1985.". 
ALLOTMENT TO STATES 
SEC. 432. Section 442 of 
the Act is amended— 
42 use 2752. 
(1) by striking out "2 per centum" in subsection (aXD and 
inserting in lieu thereof "1 per centum"; 
(2) by striking out "Puerto Rico," in subsection (aXD; 
(3) by striking out "subsection (e)" in subsection (aX2) and 
inserting in lieu thereof "subsection (f)", 
(4) by inserting "second" immediately after "until the close of 
the" in subsection (d): and 
(5) by striking out Puerto Rico," in subsection (e). 
USE OF CERTAIN UNUSED COLLEGE WORK-STUDY PROGRAM FUNDS FOR THE 
SUPPORT OF COOPERATIVE EDUCATION PROGRAMS 
SEC. 433. (a) The first sentence of section 442(d) of the Act is 
amended by inserting before the period a comma and the following: 
"except that the Secretary shall give preference for the first 50 per 
centum of such reallotments to eligible institutions for use for 
initiating, improving, and expanding programs of cooperative educa-
tion conducted in accordance with title VIII of 
this Act . 
2
0 use 1133. 
(b) Section 442(d) of the Act is amended by inserting "(1)" after the 
subsection designation and by adding at the end thereof the following 
new paragraph: 
"(2) The requirement for preference under reallotment contained 
in the exception of the first sentence of paragraph (1) of this 
subsection shall be made upon application by the eligible institution 
to the Secretary in such manner and such form as the Secretary may 
94 STAT. 1434 
PUBLIC LAW 96-374—OCT. 3, 1980 
require. The Secretary shall allot funds under such preference based 
upon the ratio of the number of students assisted under the coopera-
20 use 1133. 
tive education program authorized by title VIII for the fiscal year for 
which the determination is made enrolled in the eligible institution 
making application under this paragraph to the number of such 
students for such year enrolled in all eligible institutions applying 
under this part.". 
42 u s e 2753, 
2754. 
42 u s e 2753. 
Grant 
agreements, 
requirements. 
29 u s e 206. 
Post, p. 1453. 
42 u s e 2756a. 
Post, p. 1452. 
Post, p. 1445. 
Post, p. 1448. 
GRANTS FOR WORK-STUDY PROGRAMS 
SEC. 434. Part C of title IV of the Act is amended by striking out 
sections 443 and 444 and inserting in lieu thereof the following: 
"GRANTS FOR WORK-STUDY PROGRAMS 
"SEC. 443. (a) The Secretary is authorized to enter into agreements 
with institutions of higher education under which the Secretary will 
make grants to such institutions to assist in the operation of work-
study programs as provided in this part. 
"(b) An agreement entered into pursuant to this section shall— 
"(1) provide for the operation by the institution of a program 
for the part-time emplo5mient of its students in work for the 
institution itself (except in the case of a proprietary institution of 
higher education) or work in the public interest for a Federal, 
State, or local public agency or private nonprofit organization 
under an arrangement between the institution and such agency 
or organization, and such work— 
"(A) will not result in the displacement of employed 
workers or impair existing contracts for services; 
"(B) will be governed by such conditions of employment as 
will be appropriate and reasonable in light of such factors as 
type of work performed, geographical region, and proficiency 
of the employee; 
"(C) does not involve the construction, operation, or main-
tenance of so much of any facility as is used or is to be used 
for sectarian instruction or as a place for religious worship; 
and 
"CD) will not pay any wage to students employed under 
this subpart that is less than the current Federal minimum 
wage as mandated by section 6(a) of the Fair Labor Stand-
ards Act of 1938; 
"(2) provide that funds granted an institution of higher educa-
tion, pursuant to section 443, may be used only to make pay-
ments to students participating in work-study programs, except 
that an institution may use a portion of the sums granted to it to 
meet administrative expenses in accordance with section 489 of 
this Act, may use a portion of the sums granted to it to meet the 
cost of a job location and development program in accordance 
with section 447 of this part, and may transfer funds in accord-
ance with the provisions of section 488 of this Act; 
"(3) provide that in the selection of students for employment 
under such work-study program, only students who demonstrate 
financial need in accordance with the provisions of section 482, 
and who meet the requirements of section 484 will be assisted, 
except that each eligible institution may reserve and award not 
more than 10 per centum of the funds made available under this 
part for each fiscal year for less-than-half-time students who are 
determined by the institution to be in need of such grants and 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1435 
who meet the requirements of section 484, other than the ^o^^- P 1448. 
requirement of clause (2) of section 484(a); 
(4) provide that no student in a work-study program under 
this part shall be required to terminate that employment during 
a semester (or other regular enrollment period) at the time 
income derived from any employment (including work-study or 
nonwork-study or both) is in excess of the determination of the 
amount of such student's need for that semester under clause (3) 
of this subsection, but when such excess income equals $200 or 
more, continued emplojnnent under a work-study program shall 
not be subsidized with funds appropriated under this part; 
"(5) provide that the institution will meet the requirements of 
section 487(2) of this Act (relating to maintenance of effort); Post, p. 1451. 
"(6) provide that the Federal share of the compensation of 
students employed in the work-study program in accordance 
with the agreement will not exceed 80 per centum of such 
compensation; except that the Federal share may exceed 80 per 
centum of such compensation if the Secretary determines, pursu-
ant to regulations adopted and promulgated by him establishing 
objective criteria for such determinations, that a Federal share 
in excess of 80 per centum is required in furtherance of the 
purposes of this part; 
"(7) include provisions to make emplo)niient under such work-
study program reasonably available (to the extent of available 
funds) to all eligible students in the institution in need thereof, 
and to make equivalent emplojmient offered or arranged by the 
institution reasonably available (to the extent of available funds) 
to all students in the institution who desire such employment; 
"(8) provide assurances that employment made available from 
funds under this part will, to the maximum extent practicable, 
complement and reinforce the educational program or vocational 
goals of each student receiving assistance under this part; and 
"(9) include such other provisions as the Secretary shall deem 
necessary or appropriate to carry out the purposes of this part.". 
DISTRIBUTION OF ASSISTANCE 
SEC. 435. (a) Section 446(a) of the Act is amended by inserting at the 42 use 2756. 
end thereof the following new sentence: "The criteria established 
under this subsection shall not result in any institution's receiving an 
amount less than the institution used under this section for fiscal 
year 1979, unless there is a substantial decline in the student 
enrollment of the institution.". 
O
b
) Section 446 of the Act is amended by striking out subsection (b) 
and inserting in lieu thereof the following new subsections: 
"GJ) Of the sums granted to an eligible institution under this part 
for any fiscal year, 10 per centum may, at the discretion of the 
institution, remain available for expenditure during the succeeding 
fiscal year to carry out programs under this part. Any of the sums so 
granted to an institution for a fiscal year which are not needed by 
that institution to operate work-study programs during that fiscal 
year, and which it does not wish to use during the next fiscal year as 
authorized in the preceding sentence, shall remain available to the 
Secretary for making grants under section 443 to other institutions in 
the same State until the close of the second fiscal year next succeed-
ing the fiscal year for which such funds were appropriated. 
\c) Up to 10 per centum of the sums the Secretary determines an 
eligible institution may receive from funds which have been appro-
94 STAT. 1436 
PUBLIC LAW 96-374—OCT. 3, 1980 
42 u s e 2756a. 
priated for a fiscal year may be used by the Secretary to make grants 
under this part to such institution for expenditure during the 
fiscal year preceding the fiscal year for which the sums were 
appropriated.". 
JOB LOCATION AND DEVELOPMENT 
SEC. 436. Section 447 of the Act is amended by striking out 
"$15,000" and inserting in lieu thereof "$25,000". 
WORK STUDY FOR COMMUNITY SERVICE-LEARNING 
SEC. 437. Part C of title IV of the Act is amended by adding at the 
end thereof the following new section: 
"WORK STUDY FOR COMMUNITY SERVICE-LEARNING ON BEHALF OF LOW-
INCOME INDIVIDUALS AND FAMILIES 
42 use 2756b. 
"SEC. 448. (a) The purpose of this section is to encourage and enable 
institutions of higher education to develop work study programs 
involving eligible students in community service-learning designed to 
develop, improve, or expand services for low-income individuals and 
families or to solve particular problems related to the needs of low-
income individuals. 
Definitions. 
"(b) For the purpose of this section— 
"(1) 'community service-learning' means a program of student 
work that— 
"(A) provides tangible community services for or on behalf 
of low-income individuals or families; and 
"(B) provides participating students with work-learning 
opportunities related to their educational or vocational pro-
grams or goals; and 
"(2) 'community services' means direct service, planning or 
applied research activities designed to improve the quality of life 
for community residents, particularly low-income individuals, or 
to solve particular problems related to their needs including, but 
not limited to, such fields as health care, education, welfare, 
social services, public safety, crime prevention and control, 
transportation, recreation, housing and neighborhood improve-
ment, rural development, and community improvement. 
"(c) Each institution participating under this part may use funds 
Post, p. 1453. 
made available under the last sentence of section 489(a) to conduct 
that 
institution's 
program 
of community 
service-learning, 
including— 
"(1) development of mechanisms to assure the academic qual-
ity of the student experience, 
"(2) assuring student access to educational resources, exper-
tise, and supervision necessary to achieve community service 
objectives, and 
*(3) collaboration with public and private nonprofit agencies in 
the planning and administration of such programs.". 
PART D—NATIONAL DIRECT STUDENT LOANS 
Appropriation 
authorization. 
20 u s e 1087aa. 
EXTENSION OF PROGRAM 
SEC. 441. (a) Section 461(b)(1) of the Act is amended to read as 
follows: 
"(b)(1) For the purpose of enabling the Secretary to make contribu-
tions to student loan funds established under this part, there are 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1437 
authorized to be appropriated $400,000,000 for each of the fiscal years 
1981 and 1982, $475,000,000 for fiscal year 1983, $550,000,000 for fiscal 
year 1984, and $625,000,000 for fiscal year 1985, except that no funds 
are authorized to be approi)riated for any fiscal year which begins 
after there has been a capital distribution under section 466(a).". 
(b) Section 461(bX2) of 
the Act is amended— 
(1) by striking out "for the fiscal year ending September 30, 
1980, and each of the three succeeding 
fiscal 
years'' and inserting 
in lieu thereof "for fiscal year 1985 and each of the five succeed-
ing 
fiscal 
years"; and 
(2) by striking out "October 1, 1980" and inserting in lieu 
thereof "October 1,1985". 
20 u s e 1087ff. 
20 u s e 1087aa. 
ALTERNATIVE FUNDING FOR DIRECT LOANS; RECAPTURE OF CURRENT 
BALANCES 
SEC. 442. (a) Part E of 
title IV of the Act is amended by adding at the 
end thereof the following new sections: 
ALTERNATIVE SOURCE OF FUNDS 
"SEC. 468. (aXD The Secretary shall, not later than April 1 of each 
fiscal year, issue and have outstanding at any one time notes, 
debentures, bonds, or other obligations in such amounts as shall be 
necessary to carry out functions under this part, subject to such 
annual limitations as may be provided in an appropriation Act with 
respect to such fiscal year, except that the Secretary shall not issue 
any such obligation without the prior concurrence of the Secretary of 
the Treasury as to the terms and conditions of such obligations. The 
Secretary of the Treasury may direct that any such issuance by the 
Secretary be sold to the Department of the Treasury for its own 
account or to the Federal Financing Bank. 
"(2) The Secretary of the Treasury is authorized and directed to 
purchase any obligations issued under this section, and for that 
purpose, the Secretary of the Treasury is authorized to use as a public 
debt transaction the proceeds from the sale of any securities here-
after issued under the Second Liberty Bond Act, and the purposes for 
which securities may be issued under the Second Liberty Bond Act 
are extended to include such purchases. Each purchsise of obligations 
by the Secretary of 
the Treasury under this section shall be upon such 
terms and conditions as to yield a return at a rate not less than a rate 
determined by the Secretsury of the Treasury, taking into considera-
tion the current average yield on outstanding marketable obligations 
of the United States of comparable maturity. Interest due on obliga-
tions of the Secretary held by the Treasury may be deferred, at the 
discretion of the Secretary, but any such deferred interest shall bear 
interest at the rate specified in this section. The Secretary of the 
Treasury may sell, upon such terms and conditions and at such price 
or prices as he shall determine, any of the obligations acquired by 
him under this section. All redemptions, purchases, and sales by the 
Secretary of the Treasury of such obligations under this section shall 
be treated as public debt transactions of the United States. 
"(3) All obligations of the Secretary issued under this section shall 
be fully and unconditionally guaranteed as to principal and interest 
and shall constitute general obligations of the United States, backed 
by the full faith and credit of the Government of the United States of 
America. Such guarantee shall be expressed on the face of all such 
obligations. 
Obligations. 
20 u s e 1087hh. 
31 u s e 774. 
94 STAT. 1438 
PUBLIC LAW 96-374—OCT. 3, 1980 
Federal capital 
contributions. 
20 use 1087CC. 
Post, p. 1445. 
20 use 1070. 
42 use 2751. 
20 use 1071. 
20 use 1087dd. 
"(4) Obligations of the Secretary issued pursuant to this section 
shall be lawful investments, and may be accepted as security for all 
fiduciary, trust, and public funds the investment or deposit of which 
shall be under the authority or control of the United States or any 
officer or officers thereof. AH stock and obligations issued by the 
Secretary pursuant to this section shall be deemed to be exempt 
securities within the meaning of laws administered by the Securities 
and Exchange Commission, to the same extent as securities which are 
direct obligations of, or obligations guaranteed as to principal or 
interest by, the United States. 
"(5) In order that the Secretary may be supplied with such forms of 
notes, debentures, bonds, or other such obligations as it may need for 
issuance under this section, the Secretary of the Treasury is author-
ized to prepare such forms as shall be suitable and approved by the 
Secretary, to be held in the Treasury subject to delivery, upon order 
of the Secretary. The engraved plates, dies, bed pieces, and so forth, 
executed in connection therewith shall remain in the custody of the 
Secretary of the Treasury. The Secretary shall reimburse the Secre-
tary of the Treasury for any expenses incurred in the preparation, 
custody, and delivery of such notes, debentures, bonds, or other 
obligations. 
"(6) All moneys of the Secretary not otherwise employed may be— 
"(A) deposited with the Treasury of the United States subject 
to withdrawal by the Secretary, by check drawn on the Treasury 
of the United States by a Treasury disbursing officer, or 
"(B) with the approval of the Secretary of the Treasury, 
deposited in any Federal Reserve bank, or 
"(C) with the approval of the Secretary of the Treasury, and by 
authorization of the Secretary, used in the purchase for redemp-
tion and retirement of any notes, debentures, bonds, or other 
obligations issued by the Secretary. 
"(b)(1) The Secretary shall make payments under this section for 
any fiscal year to each institution of higher education having an 
agreement under section 463 on the basis of the estimated needs of 
that institution for making student loans taking into consideration— 
"(A) the cost of attendance at that institution, 
"(B) the financial need of students at that institution to meet 
the cost of attendance as determined under section 482, and 
"(C) the financial assistance received by students at that 
institution under parts A and C of this title, or any other 
provision of Federal law (other than part B), and other scholar-
ship, grant, work, and loan assistance received by students, 
subject to the limitations specified in section 464(a)(2). No application 
under subsection (c) shall be approved which requests an amount 
greater than the amount determined under this subsection to be 
needed by that institution. 
"(2) If the total amount of Federal capital contributions requested 
in applications under subsection (c) exceeds the amount available 
under this section for a fiscal year, the request from each institution 
shall be ratably reduced, except that no reduction may be made 
under this sentence to an amount which, together with funds avail-
able to the institution of higher education under section 463(a)(2) (A) 
and (B) for that fiscal year, is less than the amount which was used by 
that institution for making loans under this part during fiscal year 
1980. In case additional amounts become available for such contribu-
tions in any fiscal year in which requests have been so reduced, such 
requests shall be increased on the same basis as they were reduced, 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1439 
except that no such request shall be increased above the amount 
requested in the application. 
"(c) Any institution of higher education desiring to receive pay-
ments of Federal capital contributions from the apportionment under 
subsection (b) shall submit an application therefor to the Secretary at 
such time as the Secretary prescribes. 
"(d) There are authorized to be appropriated such sums as may be 
necessary to pay the differential between the rate of return on 
obligations of the Secretary made under this section and the interest 
collected on student loans made under this part. 
"(e) In carrying out the provisions of this part, the Secretary is 
authorized— 
"(1) to consent to modification, with respect to rate of interest, 
time of payment of any installment of principal and interest or 
any portion thereof, or any other provision of any note evidenc-
ing a loan which has been made under this part; 
"(2) to enforce, pay, compromise, waive, or release any right, 
title, claim, lien, or demand, however acquired, including any 
equity or any right of redemption; 
"(3) to conduct litigation in accordance with the provisions of 
section 432(a)(2); and 
"(4) to enter into a contract or other arrangement with State or 
nonprofit agencies and, on a competitive basis, with collection 
agencies for servicing and collection of loans under this part. 
Application 
submittal. 
Appropriation 
authorization. 
20 use 1082. 
RECAPTURE 
OF 
CURRENT 
BALANCE 
OP 
STUDENT 
LOAN 
FUNDS 
"SEC. 469. If, by April 1 of any fiscal year, the Secretary has made 20 use I087ii. 
available for deposit in student loan funds pursuant to section 
463(a)(2)(C) an amount which equals or exceeds $1,000,000,000 to be infra. 
available for loans for such fiscal year, there shall be collected from 
each student loan fund established under this part the current 
balance of such student loan fund as follows: 
"(1) The Secretary shall first be paid an amount which bears 
the same ratio to the balance in such fund (excluding any portion 
of such balance which was deposited pursuant to section 
463(a)(2)(C)) as the total amount of Federal capital contributions 
to such fund by the Secretary from funds appropriated under 
section 461 or under title II of the National Defense Education 20 use I087aa. 
Act of 1958 bears to the sum of such Federal capital contributions 20 use 421. 
and the institution's capital contribution to such fund. Such 
amounts shall be deposited in the Treasury of the United States. 
"(2) The remainder of such balance, excluding any portion of 
such balance which was deposited pursuant 
to section 
463(a)(2)(C), shall be paid to the institution. 
"(3) Any portion of such balance which was deposited pursuant 
to section 463(aX2)(C) shall be retained in the student loan fund 
for use in accordance with this part.". 
(b)(1) Section 463(a)(2) of the Act is amended to read as follows: 20 use I087cc. 
"(2) provide for the deposit in such fund of— 
"(A) Federal capital contributions from funds appropri-
ated under section 461; 
"(B) a capital contribution by such institution in an 
amount equal to not less than one-ninth of the amount of the 
Federal capital contributions described in subparagraph (A); 
"(C) Federal capital contributions from funds provided by 
the Secretary under section 468; 
Ante, p. 1437. 
79-194 
O—81—pt. 2 
11: QL3 
94 STAT. 1440 
PUBLIC LAW 96-374—OCT. 3, 1980 
20 u s e 1087dd. 
20 u s e 1087CC. 
Student loans. 
Principal and 
interest 
collections. 
20 u s e 1087dd. 
20 u s e 1087ee. 
Ante, p. 1437. 
20 u s e 1087ff. 
"(D) collections of principal and interest on student loans 
made from deposited funds other than those described in 
subparagraph (C); 
"(E) charges collected pursuant to regulations under sec-
tion 464(c)(lXH); and 
"(F) any other earnings of the funds;". 
(2) Section 463(a)(3)(D) of the Act is amended by striking out 
"section 464(c)(1)(G)" and inserting in lieu thereof 
"section 
464(c)(1)(H)". 
(3) Section 463(a) of the Act is further amended by striking out 
"and" at the end of paragraph (5), by redesignating paragraph (6) as 
paragraph (9), and by inserting immediately after paragraph (5) the 
following new paragraph: 
"(6)(A) provide that collections of principal and interest on 
student loans made from funds described in paragraph (2)(C), 
after deduction of any costs of litigation and other servicing and 
collection costs agreed to by the Secretary in connection with the 
servicing and collection of such a loan (and interest thereon) or a 
charge 
assessed 
pursuant 
to 
regulations 
under 
section 
464(c)(lXH), shall be paid to the Secretary at such time and in 
such manner as the Secretary may prescribe by regulation and 
shall be deposited in the Treasury of the United States; or 
"(B) provide that, if an institution of higher education deter-
mines not to service and collect student loans made from funds 
described in paragraph (2)(C), the institution will assign, at the 
beginning of the repayment period, notes or evidence of obliga-
tions of student loans made from funds described in such para-
graph to the Secretary;". 
(4) Section 463(b) of the Act is amended by inserting "(1)" after the 
subsection designation and by adding at the end thereof the following 
new paragraph: 
"(2) An institution which has entered into an agreement under 
subsection (a) and has elected to assign the notes or evidence of 
obligations of student loans in accordance with paragraph (6)(B) of 
such subsection shall be eligible to receive, from fiinds available to 
the Secretary, an amount equal to $10 per academic year for each 
student enrolled in that institution who in that year received a loan 
from funds described in paragraph (2)(C) of subsection (a) of this 
section. Pa3nments received by an institution under this paragraph 
shall be used for the purpose of offsetting the costs to the institution 
for the program under this part.". 
(5) Section 464(c)(1)(G) of the Act is amended by inserting before the 
semicolon a comma and the following: "and except as necessary to 
carry out section 463(a)(6)(B)". 
(6) Section 465(b) of the Act is amended by inserting immediately 
before the period at the end of the first sentence the following: 
", minus an amount equal to the aggregate of the amounts of any 
such loans so canceled which were made from Federal capital 
contributions to its student loan fund provided by the Secretary 
under section 468". 
(c) Section 466 of the Act is amended— 
(1) by striking out "September 30, 1984" each place it appears 
in subsection (a) and inserting in lieu thereof "September 30, 
1990"; 
(2) by striking out "March 31, 1985" each place it appears in 
subsections (a) and (b) and inserting in lieu thereof "March 31, 
1991"; 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1441 
(3) by striking out "September 30,1978" in subsection Qoi) and 
inserting in lieu thereof "September 30,1981"; and 
(4) by striking out "October 1, 1984" in subsection (c) and 
inserting in lieu thereof "October 1,1990". 
LOAN UMITATIONS 
SEC. 443. Section 464(a)(2) of this Act is amended— 
(1) by striking out "$10,000" in clause (A) and inserting in lieu 
thereof "$12,000"; 
(2) by striking out "$5,000" in clause (B) and inserting in lieu 
thereof "$6,000"; and 
(3) by striking out "$2,500" in clause (C) and inserting in lieu 
thereof "$3,000". 
20 u s e 1087dd. 
DEFERRAL OF REPAYMENT 
SEC. 444. (a) Section 464(c)(2)(A) of the Act is amended— 
(1) by inserting "or is an officer in the Commissioned Corps of 
the Public Health Service" immediately after "Armed Forces of 
the United States" in clause (ii); 
(2) by striking out "or" at the end of clause (iii), by striking out 
the period at the end of clause (iv) and inserting in lieu thereof a 
semicolon, and by inserting after clause (iv) the following new 
clauses: 
"(v) is in service, comparable to the service referred to in 
clauses (iii) and (iv), as a full-time volunteer for an organization 
which is exempt from taxation under section 501(cX3) of the 
Internal Revenue Code of 1954; 
26USC501. 
"(vi) is serving an internship, the successful completion of 
which is required in order to receive professional recognition 
required to begin professional practice or service; or 
"(vii) is temporarily totally disabled (as defined in section 
435())), as established by sworn affidavit of a qualified physician, Ante, p. 1418. 
or during which the borrower is unable to secure employment bv 
reason of the care required by a spouse who is so disabled.'; 
(3) by striking "clause (ii), (iii), or (iv)" in the second sentence of 
such section and inserting in lieu thereof "clause (ii), (iii), (iv), (v), 
or (vii)"; and 
(4) by inserting immediately after such sentence the following Limitation. 
new sentence: "The period during which repayment may be 
deferred by reason of clause (vi) shall not exceed two years.". 
(b) Section 464(c)(1)(A) of the Act is amended by striking out "nine 
months" each place it appears and inserting in lieu thereof "six 
months". 
(c) Section 464(c)(2) of the Act is amended by adding at the end 
thereof the following new subparagraph: 
"(C) No repayment of principal of, or interest on, any loan for any 
period of study, service, or disability described in subparagraph (A) or 
any combination thereof shall begin until six months after the 
completion of such period of study, service, disability, or combination 
thereof". 
(d) Section 464(c)(3) of the Act is amended by inserting "(A)" 
immediately after "(3)" and by adding at the end thereof the 
following: 
"(B) Pursuant to uniform criteria established by the Secretary, the 
repayment period for any student borrower who during the repay-
ment period is a low-income individual may be extended for a period 
94 STAT. 1442 
PUBLIC LAW 96-374—OCT. 3, 1980 
not to exceed ten years and the repayment schedule may be adjusted 
to reflect the income of that individual.". 
Cooperative 
agreements with 
credit bureaus. 
20 u s e 1087gg. 
Ante, p. 1420. 
COLLECTION PRACTICES 
20 use 1
0
8
7
C
C
. 
SEC. 445. (a) Section 463(a) of the Act (as amended by section 
Ante, p. 1440. 
442(b)(3)) is further amended by inserting after paragraph (6) the 
following new paragraph: 
"(7) provide that, notwithstanding any other provision of law, 
the Secretary will provide to the institution any information 
with respect to the names and addresses of borrowers or other 
relevant information which is available to him, from whatever 
source such information may be derived;". 
(b)(1) Section 463 of the Act is amended by adding at the end thereof 
the following new subsection: 
"(c)(1) For the purpose of promoting responsible repajnnent of loans 
made pursuant to this part, the Secretary shall enter into cooperative 
agreements with credit bureau organizations to provide for the 
exchange of information concerning student borrowers concerning 
whom the Secretary has received a referral pursuant to section 467. 
"(2) Each cooperative agreement made pursuEint to paragraph (1) 
shall be made in accordance with requirements of section 430(b)(2) 
except that such agreement shall provide for the disclosure by the 
Secretary to such organizations, with respect to any loan for which 
the Secretary is responsible, of^ 
"(A) the date of disbursement and the amount of any such loan; 
"(B) information concerning collection of any such loan, in-
cluding information concerning the status of any defaulted loan; 
and 
"(C) the date of cancellation of the note upon completion of 
repayment by the borrower of any such loan.". 
20 use I087dd. 
(2) Section 464(cXl) of such Act is amended bv striking out "and" at 
the end of subparagraph (G), by striking out tne period at the end of 
subparagraph (H) and inserting in lieu thereof "; and", and by adding 
at the end thereof the following new subparagraph: 
"(I) shall contain a notice of the system of disclosure of 
information concerning default on such loan to credit bureau 
Supra. 
organizations under section 463(c).". 
20 use lOSTgg. 
(c) Section 467 of the Act is amended by inserting "(a)" after "SEC. 
467." and by adding at the end thereof the following new subsection: 
"(b) The Secretary shall continue to attempt to collect any loan 
assigned under section 463(a) (5) or (6) or referred under subsection (a) 
of this section until a date which is not earlier than four years after 
the date of default (determined in a manner consistent with section 
20 use 1080. 
430(e)).". 
INTEREST RATES 
20 use I087dd. 
SEC. 446. Section 464(c)(lXD) of the Act is amended by inserting 
immediately after "3 per centum per annum" the following: "or 4 per 
centum per annum in the case of any loan made on or after October 1, 
1980". 
STUDENT LOAN INFORMATION PROGRAM AUTHORIZED 
20 use 1
0
8
7
C
C
. 
SEC. 447. (a) Section 463(a) of the Act (as amended by section 
442flbX3)) is amended by inserting immediately after paragraph (7) 
the following new paragraph: 
"(8) provide assurances that the institution will comply with 
Post, p. 1443. 
the provisions of section 463A;". 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1443 
(b) Part E of title IV of the Act is amended by adding after section 
463 the following new section: 
"STUDENT LOAN INFORMATION BY INSTITUTIONS 
"SEC. 463A. Each institution of higher education, in order to carry 20 use I087cc-i. 
out the provisions of section 463(a)(7), shall, at the time such institu- ^nte, p. 1442. 
tion makes a loan to a student borrower which is made under this 
part, provide thorough and adequate loan information on loans made 
under this part to the student borrower. The loan information 
required by this section shall include— 
"(1) the yearly and cumulative maximum amounts that may be 
borrowed by a student; 
"(2) the terms on which repayment will begin; 
"(3) the maximum number of years in which the loan must be 
repaid; 
"(4) the interest rate that will be repaid and the minimum 
amount of required monthly payment; 
"(5) any special options the borrower may have for deferral, 
cancellation, prepayment, consolidation, or other refinancing of 
the loan; 
"(6) a definition of default and the consequences to the bor-
rower if the borrower should default, including a description of 
any arrangements made with credit bureau organizations; and 
"(7) to the extent practicable, the effect of accepting the loan on 
the eligibility of the borrower for other forms of student 
assistance.". 
MISCELLANEOUS AMENDMENTS 
SEC. 448. (a) Section 462 of the Act is amended by striking out 20 use I087bb. 
subsection (d). 
(b) Section 463(b) of the Act is amended by striking out "section 20 use I087cc. 
493" and inserting in lieu thereof "section 485". 
(c)(1) Section 464(b) of the Act is amended to read as follows: 
"(b) A loan from a student loan fund assisted under this part may 
be made only to a student who demonstrates financial need in 
accordance with section 482 and who meets the requirements of 
section 484.". 
(2) Section 464(e) of the Act is repealed. 
(d) Section 465(a)(2) of the Act is amended by striking out the last 20 use I087ee. 
sentence and inserting in lieu thereof the following: "For purposes of 
this paragraph, the term 'handicapped children' has the meaning set 
forth in section 602(1) of the Education of the Handicapped Act.". 
(e) Section 465(a) of the Act is amended by adding at the end thereof 
the following new paragraph: 
"(5) The amount of a loan, and interest on a loan, which is canceled 
under this section shall not be considered income for purposes of the 
Internal Revenue Code of 1954.". 
26 use i. 
20 u s e 1087dd. 
Post, p. 1445. 
Post, p. 1448. 
PART E—GENERAL PROVISIONS 
STUDENT ASSISTANCE GENERAL PROVISIONS 
SEC. 451. (a) Part F of title IV of the Act is amended to read as 
follows: 
94 STAT. 1444 
PUBLIC LAW 96-374—OCT. 3, 1980 
"PART F—GENERAL PROVISIONS RELATING TO STUDENT ASSISTANCE 
PROGRAMS 
"DEFINITIONS 
20 use 1088. 
"SEC. 481. (aXD For the purposes of this title, except subpart 6 of 
20 use l
O
T
O
e
, 
part A and part B, the term 'institution of higher education* includes, 
in addition to the institutions covered by the definition contained in 
20 use 1141. 
section 1201(a)— 
"(A) a proprietary institution of 
higher education; 
"(B) a postsecondary vocational institution; 
"(C) a department, division, or other administrative unit in a 
college or university which provides primarily or exclusively an 
accredited program of education in professional nursing and 
allied subjects leading to the degree of bachelor of nursing, or to 
an equivalent degree, or to a graduate degree in nursing; and 
"(D) a department, division, or other administrative unit in a 
junior college, community college, college, or university which 
provides primarily or exclusively an accredited two-year pro-
gram of education in professional nursing and allied subjects 
leading to an associate degree in nursing or to an equivalent 
degree. 
"(2) The term 'accredited' when applied to any program of nurse 
education means a program accredited by a recognized body or bodies 
approved for such purpose by the Secretary. 
"(b) For the purposes of this section, the term 'proprietary institu-
tion of higher education' means a school (1) which provides not less 
than a six-month program of training to prepare students for gainful 
employment in a recognized occupation, (2) which meets the require-
ments of clauses (1) and (2) of section 1201(a), (3) which does not meet 
the requirement of clause (4) of section 1201(a), (4) which is accredited 
by a nationally recognized accrediting agency or association approved 
by the Secretary for this purpose, and (5) which has been in existence 
for at least two years. Such term also includes a proprietary educa-
tional institution in any State which, in lieu of the requirement in 
clause (1) of section 1201(a), 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. For purposes of this 
subsection, the Secretary shall publish a list of nationally recognized 
accrediting agencies or associations which he determines to be 
reliable authority as to the quality of 
training offered. 
"(c) For the purposes of this section, the term 'postsecondary 
vocational institution* means a school (1) which provides not less than 
a six-month program of training to prepare students for gainful 
employment in a recognized occupation, (2) which meets the require-
ments of clauses (1), (2), (4), and (5) of section 1201(a), and (3) which has 
been in existence for at least two years. Such term also includes an 
educational institution in any State which, in lieu of the requirement 
in clause (1) of section 1201(a), 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. 
"(d) For the purpose of any program under this title, the term 
'academic year' shall be defined by the Secretary by regulation. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1445 
NEED ANALYSIS 
"SEC. 482. (aXD For the purpose of determining a student's need for 
financial assistance under this title (other than under subpart 3 of 
part A and under part B), the Secretary shall publish in the Federal 
Register, no later than July 1, 1981, April 1, 1982, and on April 1 of 
each succeeding calendar year, a proposed schedule of expected 
family contributions for the academic year which begins after July 1 
of the calendar year which succeeds such calendar year for various 
levels of family income, which, except as is otherwise provided in 
paragraph (2), together with any amendments thereto, shall become 
effective July 1 of the calendar year which succeeds such calendar 
year. During the thirty-day period following such publication the 
Secretary shall provide interested parties with an opportunity to 
present their views and make recommendations with respect to such 
schedule. Such schedule shall be adjusted annually. 
"(2) The schedule of expected family contributions required for 
each academic year shall be submitted to the President of the Senate 
and the Speaker of the House of Representatives not later than the 
time of its publication in the Federal Register. If either the Senate or 
the House of Representatives adopts, prior to October 1,1981, July 1, 
1982, or July 1 of any succeeding year following the submission of 
such schedule as required by this paragraph, a resolution of disap-
proval of such schedule, in whole or in part, the Secretary shall 
publish a new schedule of expected family contributions in the 
Federcd Register not later than fifteen days after the adoption of such 
resolution of disapproval. Such new schedule shall take into consider-
ation such recommendations as may be made in either House in 
connection with such resolution. If within fifteen days following the 
submission of the revised schedule either the Senate or the House of 
Representatives again adopts a resolution of disapproval, in whole or 
in part, of such revised schedule, the Secretary shall publish a new 
schedule of expected family contributions in the Federal Register not 
later than fifteen days after the adoption of such resolution of 
disapproval. This procedure shall be repeated until neither the 
Senate nor the House of Representatives adopts a resolution of 
disapproval. The Secretary shall publish together with each new 
schedule a statement identifying the recommendations made in 
either House in connection with such resolution of disapproval and 
explaining his reasons for the new schedule. 
'(3) The Secretary, in cooperation with representatives of agencies 
and organizations involved in student financial assistance, shall 
develop a proposed schedule of expected family contributions each 
year for publication in the Federal Register. 
"(bXD For the purposes of this section, the term 'family contribu-
tion' with respect to any student means the amount which the 
student and his family may be reasonably expected to contribute 
toward his postsecondary education for the academic year for which 
the determination is made, as determined in accordance with regula-
tions. In promulgating such regulations, the Secretary shall follow 
the basic criteria set forth in paragraph (2) of this subsection. 
"(2) The basic criteria to be followed in promulgating regulations 
with respect to expected family contributions are as follows: 
"(A) The amount of the effective income of the student or the 
effective family income of the student's parents. 
"(B) The number of dependents of the family of the student. 
"(C) The number of dependents of the student s family who are 
in attendance in a program of postsecondary education and for 
Publication in 
Federal 
Register. 
20 u s e 1089. 
20 u s e 1070c, 
1071. 
Effective date. 
Expected family 
contributions 
schedule. 
Publication in 
Federal 
Register. 
"Family 
contributions. 
eriteria. 
94 STAT. 1446 
PUBLIC LAW 96-374—OCT. 3, 1980 
"Effective family 
income." 
38 u s e 1651 et 
seq., 1700 et seq. 
Regulations. 
whom the family may be reasonably expected to contribute for 
their postsecondary education. 
"(D) The amount of the assets of the student and the assets of 
the student's family. 
"(E) Any unusual expenses of the student or his family, such as 
unusual medical expenses and those which may arise from a 
catastrophe. 
"(F) Any educational expenses of other dependent children in 
the family. 
"(3) For purposes of subparagraph (A) of paragraph (2), the term 
'effective family income' with respect to a student, means the annual 
adjusted family income, as determined in accordance with regula-
tions prescribed by the Secretary, received by the parents or legal 
guardians of the student minus Federal, State and local taxes paid or 
payable with respect to such income, and includes any amount paid 
under the Social Security Act to, or on account of, the student which 
would not be paid if he were.not a student and one-half any amount 
paid the student under chapters 34 and 35 of title 38, United States 
Code. The term 'effective family income' includes any effective 
student income after any offset as determined by regulations pre-
scribed by the Secretary. 
"(4) In determining the expected family contribution under this 
section for any academic year after academic year 1978-1979, an 
assessment rate of not more than 14 per centum shall be applied to 
parental discretionary income for families with adjusted gross family 
income which does not exceed $25,000 for each such year. The 
Secretary may set an assessment rate or a series of assessment rates 
to be applied to parental discretionary income for families with 
adjusted gross incomes which exceed $25,000 for each such year for 
income in excess of $25,000. 
"(5) For the purposes of paragraph (2)(D), the assets shall be 
determined by— 
"(A) excluding all equity in a single principal place of residence 
from the computation of assets; 
"(B) deducting an asset reserve of not less than $10,000 from 
the net value of all assets; and 
"(C) if net assets include farm or business assets, deducting an 
additional asset reserve of not less than $50,000 from the net 
assets. 
"(c)(1) The Secretary shall promulgate special regulations for 
determining the expected family contribution and effective family 
income of an independent student. Such special regulations shall be 
consistent with the basic criteria set forth in paragraph (2) of 
subsection (b). In addition, such regulations shall— 
"(A) provide that the portion of assets which shall be exempt 
from assessment for contribution for an independent student 
who has one or more dependents shall be the same as the portion 
so exempt for the family of a dependent student; 
"(B) provide that the rate of assessment for contribution on 
that portion of assets of such an independent student which is 
not exempt under subparagraph (A) shall be the same as the rate 
applied to the comparable portion of assets of the family of a 
dependent student; 
"(C) in establishing a portion of effective family income which 
shall be exempt from assessment for contribution by reason of 
subsistence requirements of independent students who have no 
dependents, use the same method for computation of such 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1447 
portion for such students as is used for dependent students and 
for independent students who have dependents; 
"(D) in determining the family contribution for an independ-
ent student who has one or more dependents, provide that the 
assessment rate which is to be appUed to the student's discretion-
ary income shall be the same as the assessment rate applied to 
discretionary income of the family of a dependent student; and 
"(E) provide that a married student shall be considered inde-
pendent if, notwithstanding prior depjBndency status, such stu-
dent certifies that in the year of application he (i) will not live 
with parents for more than six weeks; (ii) will not be claimed by 
parents as a dependent on any tax return filed for purposes of 
Federal income taxes; and (iii) will not receive more than $750 in 
support from parents. 
"(2) For purposes of this title, the term 'independent student' 
means a student who is determined, pursuant to regulations of the 
Secretary, to be independent of the parents or legal guardians of the 
student. 
"(d) For the purposes of this title, the term 'cost of attendance' 
mesms— 
"(1) tuition and fees normally assessed a full-time student at 
the institution at which the student is in attendance; 
"(2) an allowance for books, supplies, transportation, and 
miscellaneous personal expenses; 
"(3) an allowance for room and board costs incurred by the 
student which— 
"(A) beginning in academic year 1981-1982 shall be an 
allowance of not less than $1,100 for a student without 
dependents residing at home with parents; 
(B) for students without dependents residing in institu-
tionally owned or operated housing, shall be a standard 
allowance determined by the institution based on the 
amount normally assessed most of its residents for room and 
board; 
"(C) for all other students without dependents, shall be a 
standard allowance determined by the institution based on 
the expenses reasonably incurred by such students for room 
and board; and 
"(D) for students with dependents, shall be an allowance 
based on the expenses reasonably incurred by such students 
for room and board; 
"(4) for a student engaged in a program of study by correspond-
ence, only tuition and fees and, if required, books and supplies, 
and travel and room and board costs incurred specifically in 
fulfilling a required period of residential training; 
"(5) for a student enrolled in an academic program which 
normally includes a formal program of study abroad, reasonable 
costs associated with such study; 
"(6) for a student with dependent children, an allowance based 
on the expenses reasonably incurred for child care; and 
"(7) for a handicapped student, an allowance for those expenses 
related to his handicap, including special services, transporta-
tion, equipment, and supplies that are reeisonably incurred and 
not provided for by other assisting agencies. 
"(e) Nothing in this section shall prohibit an institution, in individ-
ual C£ises, from adjusting the financial need determination for a 
student aided under subpart 2 of part A or part C or E of this title if 
the basis for such adjustment is documented. 
"Independent 
student." 
"Cost of 
attendance." 
Financial need 
determination. 
20 use 1070b, 42 
use 2751, 20 
use 1088. 
94 STAT. 1448 
PUBLIC LAW 96-374—OCT. 3, 1980 
20 u s e 1090. 
20 u s e 1070c, 
1071. 
Contract 
authority. 
eontract 
authority. 
Ante, p. 1407. 
20 u s e 1091. 
FORMS AND REGULATIONS 
"SEC. 483. (a) The Secretary, in cooperation with representatives of 
agencies and organizations involved in student financial assistance, 
shall prescribe a common Federal financial aid application form to be 
used to determine the need and eligibility of a student for financial 
assistance under this title (other than under subpart 3 of part A and 
under part B). No student or parent of a student shall be charged a fee 
for processing the data elements of the form prescribed by the 
Secretary. The Secretary shall, to the extent practicable, enter into 
not less than three contracts with States, institutions of higher 
education, or private organizations for the purpose of processing the 
application required under this subsection and issuing eligibility 
reports. The Secretary may also contract for additional services to 
assure coordination of financial aid from both Federal and non-
Federal sources, and to provide information, training, and similar 
services to institutions, aid officers, counselors, lenders, parents and 
students. Nothing in this section shall prohibit States, institutions, or 
private organizations from simultaneously collecting data elements, 
in addition to the data elements prescribed by the Secretary, as may 
be necessary to determine the eligibility of a student for financial aid 
funds not covered by this title (or covered under subpart 3 of part A or 
under part B of this title). 
"(b) Copies of all rules, regulations, guidelines, instructions, and 
application forms published or promulgated pursuant to this title 
shall be provided to the Committee on Labor and Human Resources 
of the Senate and the Committee on Education and Labor of the 
House of Representatives at least thirty days prior to their effective 
date. 
"(c) To help insure access to postsecondary education by providing 
early notice to students of their potential eligibility for financial aid, 
the Secretary is authorized to enter into contracts with States, 
institutions of higher education, and private organizations for the 
purpose of— 
"(1) developing a common pre-eligibility Federal financial aid 
form, 
"(2) distributing and processing such form on a year-round 
basis free of charge to students, and 
"(3) issuing on the basis of information reported by the student 
on such form a pre-eligibility index designed to estimate the 
amount of Federal (and, if feasible, non-Federal) funds for which 
the student might qualify in later completing and submitting the 
application form called for under this section. 
The Secretary shall widely disseminate the pre-eligibility form 
through post offices and other appropriate Federal installations, 
schools, postsecondary institutions, libraries, and community-based 
agencies, including projects assisted under subpart 4 of part A of this 
title. 
"STUDENT ELIGIBIUTY 
"SEC. 484. (a) In order to receive any grant, loan, or work assistance 
under this title, a student must— 
"(1) be enrolled or accepted for enrollment at an institution of 
higher education that is an eligible institution in accordance 
with the provisions of section 487; 
"(2) except as otherwise specifically provided, be carrying or 
planning to carry at least one-half the normal full-time workload 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1449 
for the course of study the student is pursuing, as determined by 
the institution; 
"(3) if the student is presently enrolled at an institution, be 
maintaining satisfactory progress in the course of study the 
student is pursuing according to the standards and practices of 
the institution at which the student is in attendance; 
"(4) not owe a refund on grants previously received at such 
institution under this title, or be in default on any loan from a 
student loan fund at such institution provided for in part E, or a 20 use 1088. 
loan made, insured, or guaranteed by the Secretary under this 
title for attendance at such institution; and 
"(5) file with the institution of higher education which the 
student intends to attend, or is attending (or in the case of a loan 
or loan guarantee with the lender), a statement of educational 
purpose (which need not be notarized) stating that the money 
attributable to such grant, loan, or loan guarantee will be used 
solely for expenses related to attendance or continued attend-
ance at such institution. 
"(b) Any permanent resident of the Trust Territory of the Pacific 
Islands or of the Northern Mariana Islands shall be eligible for 
assistance under this title to the same extent that citizens of the 
United States are eligible for such assistance. 
"INSTITUTIONAL AND FINANCIAL ASSISTANCE INFORMATION FOR 
STUDENTS 
"SEC. 485. (a)(1) Each eligible institution participating in any 20 use 1092. 
program under this title shall carry out information dissemination 
activities for prospective and enrolled students regarding the institu-
tion and financial assistance under this title. The information 
required by this section shall be produced and be made readily 
available, through appropriate publications and mailings, to all 
current students, and to any prospective student upon request. The 
information required by this section shall accurately describe— 
"(A) the student financial assistance programs available to 
students who enroll at such institution; 
"(B) the methods by which such assistance is distributed 
among student recipients who enroll at such institution; 
"(C) any means, including forms, by which application for 
student financial assistance is made and requirements for accu-
rately preparing such application; 
"(D) the rights and responsibilities of students receiving finan-
cial assistance under this title; 
"(E) the cost of attending the institution, including (i) tuition 
and fees, (ii) books and supplies, (iii) estimates of typical student 
room and board costs or typical commuting costs, and (iv) any 
additional cost of the program in which the student is enrolled or 
expresses a specific interest; 
'(F) a statement of the refund policy of the institution for the 
return of unearned tuition and fees or other refundable portion 
of cost, as described in clause (E) of this paragraph; 
"(G) the academic program of the institution, including (i) the 
current degree programs and other educational and training 
programs, (ii) the instructional, laboratory, and other physical 
plant facilities which relate to the academic program, and (iii) 
the faculty and other instructional personnel; 
"(H) each person designated under subsection O
b
) of this sec-
tion, and the methods by which and locations in which any 
94 STAT. 1450 
PUBLIC LAW 96-374—OCT. 3, 1980 
"Prospective 
student." 
Waiver. 
Federal student 
assistance 
programs, 
descriptions. 
person so designated may be contacted by students and prospec-
tive students who are seeking information required by this 
subsection; 
"(I) special facilities and services available to handicapped 
students; 
"(J) the names of associations, agencies, or governmental 
bodies which accredit, approve, or license the institution and its 
programs, and the procedures under which any current or 
prospective student may obtain or review upon request a copy of 
the documents describing the institution's 
accreditation, 
approval, or licensing; and 
(K) the standards which the student must maintain in order 
to be considered to be making satisfactory progress, pursuant to 
section 484(aX3). 
"(2) For purposes of this section, the term 'prospective student' 
means any individual who has contacted an eligible institution 
requesting information concerning admission to that institution, 
(b) Each eligible institution shall designate an employee or group 
of employees who shall be available on a full-time basis to assist 
students or potential students in obtaining information as specified 
in subsection (a). The Secretary may, by regulation, waive the 
requirement that an employee or employees be available on a full-
time basis for carrying out responsibilities required under this 
section whenever an institution in which the total enrollment, or the 
portion of the enrollment participating in programs under this title 
at that institution, is too small to necessitate such employee or 
employees being avcdlable on a full-time basis. No such waiver may 
include permission to exempt any such institution from designating a 
specific individual or a group of individuals to carry out the provi-
sions of this section, 
"(c) The Secretary shall make available to eligible institutions 
descriptions of Federal student assistance programs including the 
rights and responsibilities of student and institutional participants, 
in order to (1) assist students in gaining information through institu-
tional sources, and (2) assist institutions in carrying out the provi-
sions of this section, so that individual and institutional participants 
will be fully aware of their rights and responsibilities under such 
programs. 
Contract 
authority. 
20 u s e 1093. 
20 u s e 1051. 
TRAINING IN FINANCIAL AID AND STUDENT SUPPORT SERVICES 
"SEC. 486. (a) The Secretary is authorized to enter into contracts 
with appropriate public agencies or nonprofit private organizations 
or institutions of higher education to provide training for financial 
aid administrators, student peer counselors, student staff or volun-
teers, and other part-time staff and volunteers who provide financial 
aid, admissions and academic counseling and outreach, and student 
support programs in postsecondary education in postsecondary insti-
tutions, communities or statewide programs. 
"(h) Fingmcial assistance under this section may be used for— 
"(1) development of materials and inservice training and 
career awareness programs; 
"(2) operation of short-term training institutes designed to 
improve the skills and career awareness of participants in such 
institutes; and 
"(3) special programs to assist in training of students and part-
time staff or volunteers at institutions eligible for assistance 
under title III of this Act. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1451 
"(c) There are authorized to be appropriated $1,000,000 to carry out 
the provisions of this section for fiscal year 1981 and for each of the 
succeeding fiscal years ending prior to October 1,1985. 
Appropriation 
authorization. 
20 u s e 1070c. 
20 u s e 1070b, 42 
u s e 2751. 
PROGRAM PARTICIPATION AGREEMENTS 
"SEC. 487. (a) In order to be an eligible institution for the purposes 20 use 1094. 
of any program authorized under this title, an institution must be an 
institution of higher education or an eligible institution (as that term 
is defined for purposes of that program) and shall, except with respect 
to a program under subpart 3 of part A, enter into a program 
participation agreement with the Secretary. The agreement shall 
condition the initial and continuing eligibility of an institution to 
participate in a program upon compliance with the following 
requirements: 
"(1) The institution will use funds received by it for any 
program under this title solely for the purposes specified in, and 
in accordance with, the provisions of that program. 
"(2) In the case of an institution participating in any program 
authorized under subpart 2 of part A or part C of this title for any 
fiscal year, the institution will continue to spend in its own 
scholarship and student aid program, from sources other than 
funds received under such parts, not less than the average 
expenditures per year made for that purpose during the most 
recent period of three fiscal years preceding the effective date of 
the program participation agreement, except that, under special 
and unusual circumstances prescribed by regulation, the Secre-
tarv is authorized to waive the requirements of this paragraph. 
' (3) The institution will establish and maintain such adminis-
trative and fiscal procedures and records as may be necessary to 
ensure proper and efficient administration of funds received 
from the Secretary or from students under this title. 
"(4) The institution will comply with the provisions of subsec-
tion (b) of this section and the regulations prescribed under that 
subsection, relating to fiscal eligibility. 
"(5) The institution will submit reports to the Secretary and, in 
the case of an institution participating in a program under part B 
or part E, to holders of loans made to the institution's students 
under such parts at such times and containing such information 
as the Secretary may reasonably require to carry out the pur-
poses of this title. 
"(6) The institution will comply with the requirements of 
section 485. 
"(b)(1) Notwithstanding any other provisions of this title, the Regulations. 
Secretary is authorized to prescribe such regulations as may be 
necessary to provide for— 
"(A) a fiscal audit of an eligible institution with regard to any 
funds obtained by it under this title or obtained from a student 
who has a loan insured or guaranteed by the Secretary under 
this title; 
"(B) the establishment of reasonable standards of financial 
responsibility and appropriate institutional capability for the 
administration by an eligible institution of a program of student 
financial aid under this title; 
"(C) the establishment, by each eligible institution under part 
B responsible for furnishing to the lender the statement required 
by section 428(a)(2)(A)(i), of policies and procedures by which the 20 use 1078. 
latest known address and enrollment status of any student who 
20 u s e 1071, 
1088. 
94 STAT. 1452 
PUBLIC LAW 96-374—OCT. 3, 1980 
Eligibility 
status, 
suspension or 
termination. 
Civil penalties. 
"Eligible 
institution." 
20 u s e 1085. 
20 u s e 1095. 
20 u s e 1070b-3, 
42 u s e 2756. 
has had a loan insured under this part and who has either 
formally terminated his enrollment, or failed to re-enroll on at 
least a half-time basis, at such institution, shall be furnished 
either to the holder (or if unknown, the insurer) of the note, not 
later than sixty days after such termination or failure to re-
enroll; and 
"(D) the limitation, suspension, or termination of the eligibility 
for any program under this title of any otherwise eligible 
institution, or the imposition of a civil penalty under paragraph 
(2)(B) whenever the Secretary has determined, after reasonable 
notice and opportunity for hearing on the record, that such 
institution has violated or failed to carry out any provision of this 
title or any regulation prescribed under this title, except that no 
period of suspension under this section shall exceed sixty days 
unless the institution and the Secretary agree to an extension or 
unless limitation or termination proceedings are initiated by the 
Secretary within that period of time. 
"(2)(A) Upon determination, after reasonable notice and opportu-
nity for a hearing on the record, that an eligible institution has 
engaged in substantial misrepresentation of the nature of its educa-
tional program, its financial charges, or the employability of its 
graduates, the Secretary may suspend or terminate the eligibility 
status for any or all programs under this title of any otherwise 
eligible institution, in accordance with procedures specified in para-
graph (1)(D) of this subsection, until the Secretary finds that such 
practices have been corrected. 
"(B)(i) Upon determination, after reasonable notice and opportu-
nity for a hearing on the record, that an eligible institution— 
"(I) has violated or failed to carry out any provision of this title 
or any regulation prescribed under this title; or 
"(11) has engaged in substantial misrepresentation of the 
nature of its educational program, its financial charges, and the 
employability of its graduates, 
the Secretary may impose a civil penalty upon such institution of not 
to exceed $25,000 for each violation or misrepresentation. 
"(ii) Any civil penalty may be compromised by the Secretary. In 
determining the amount of such penalty, or the amount agreed upon 
in compromise, the appropriateness of the penalty to the size of the 
institution of higher education subject to the determination, and the 
gravity of the violation, failure, or misrepresentation shall be consid-
ered. The amount of such penalty, when finally determined, or the 
amount agreed upon in compromise, may be deducted from any sums 
owing by the United States to the institution charged. 
"(3) The Secretary shall publish a list of State agencies which the 
Secretary determines to be reliable authority as to the quality of 
public postsecondary vocational education in their respective States 
for the purpose of determining eligibility for all Federal student 
assistance programs. 
"(c) For the purpose of this section the term 'eligible institution* 
means any such institution described in section 435(a) of this Act. 
"TRANSFER OF ALLOTMENTS 
"SEC. 488. Up to 10 per centum of the allotment of an eligible 
institution for a fiscal year under section 413D or 446 of this Act, may 
be transferred to, and used for the purposes of, the institution's 
allotment under the other section within the discretion of such 
institution in order to offer an arrangement of types of aid, including 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1453 
institutional and State aid, which best fits the needs of each individ-
ual student. The Secretary shall have no control over such transfer, 
except as specifically authorized, except for the collection and dis-
semination of information. 
20 u s e 1070b, 42 
u s e 2751, ante, 
p. 1436, 20 u s e 
1088. 
ADMINISTRATIVE EXPENSES 
"SEC. 489. (a) From the sums appropriated for any fiscal year for 20 use 1096. 
purposes of the program authorized under subpart 1 of part A, the 20 use I070a. 
Secretary shall reserve such sums as may be necessary to pay to each 
institution with which he has an agreement under section 487, an 
amount equal to $10 for each student at that institution who receives 
assistance under subpart 1 of part A. In addition, an institution which 
has entered into an agreement with the Secretary under subpart 2 of 
part A or part C (other than section 448), of this title or under part E 
of this title shall be entitled for each fiscal year for which it receives 
an allotment by payment under any such part to a payment for the 
purposes set forth in subsection (b). The payment for a fiscal year 
shall be payable from each such allotment by payment in accordance 
with regulations of the Secretary and shall be equal to 5 per centum 
of the institution's first $2,750,000 of expenditures plus 4 per centum 
of the institution's expenditures greater than $2,750,000 and less 
than $5,500,000, plus 3 per centum of the institution's expenditures in 
excess of $5,500,000 during the fiscal year from the sum of its grants 
to students under subpart 2 of part A, its expenditures during such 
fiscal year under part C for compensation of students, and the 
principal amount of loans made during such fiscal year from its 
student loan fund established under part E, excluding the principal 
amount of any such loans which the institution has agreed to assign 
under section 463(aX6)(B). The payment for a fiscal year for the Ante, p. 1440. 
purpose of subsection (b) with respect to section 448 shall be payable ^"-te, p. 1436. 
from each allotment under part C in accordance with regulations of 
the Secretary, and shall be 10 per centum of the institution's 
expenditures during such fiscal year under such section. 
"(b) The sums paid to institutions under this part are for the sole 
purpose of offsetting the administrative costs of the programs de-
scribed in subsection (a). 
CRIMINAL PENALTIES 
"SEC. 490. (a) Any person who knowingly and willfully embezzles, 20 use 1097. 
misapplies, steals, or obtains by fraud, false statement, or forgery any 
funds, assets, or property provided or insured under this title shall be 
fined not more than $10,000 or imprisoned for not more than five 
years, or both; but if the amount so embezzled, misapplied, stolen, or 
obtained by fraud, false statement, or forgery does not exceed $200, 
the fine shall not be more than $1,000 and imprisonment shall not 
exceed one year, or both. 
"(b) Any person who knowingly and willfully makes any false 
statement, furnishes any false information, or conceals any material 
information in connection with the assignment of a loan which is 
made or insured under this title shall, upon conviction thereof, be 
fined not more than $1,000 or imprisoned not more than one year, or 
both. 
"(c) Any person who knowingly and willfully makes an unlawful 
payment to an eligible lender under part B as an inducement to 20 use 1071. 
make, or to acquire by assignment, a loan insured under that part 
94 STAT. 1454 
PUBLIC LAW 96-374—OCT. 3, 1980 
shall, upon conviction thereof, be fined not more than $1,000 or 
imprisoned not more than one year, or both. 
"(d) Any person who knowingly and willfully destroys or conceals 
any record relating to the provision of assistance under this title with 
intent to defraud the United States or to prevent the United States 
from enforcing any right obtained by subrogation under this part, 
shall upon conviction thereof, be fined not more than $10,000 or 
imprisoned not more than five years, or both. 
NATIONAL COMMISSION ON STUDENT FINANCIAL ASSISTANCE 
Establishment. 
"SEC. 491. (a) There is established, as an independent agency within 
20 use 1098. 
the executive branch, a National Commission on Student Financial 
Assistance (referred to in this section as the 'Commission'). 
Appointments. 
"(bXl) The Commission shall be composed of twelve members. Four 
of the members shall be appointed by the President. Four of the 
members shall be appointed by the Speaker of the House, including 
two Members of the House, one from each political party. Four of the 
members shall be appointed by the President pro tempore of the 
Senate, including two Members of the Senate, one from each political 
party. 
"(2) The Chairman shall be designated by the President from 
among the members appointed by him. If the President has not 
appointed four members of the Commission and designated a Chair-
man within sixty days of the enactment of this Act, the members of 
the Commission appointed by the Speaker of the House and the 
President pro tempore of the Senate shall elect a Chairman who shall 
continue to serve for the duration of the Commission. 
"(8) Any vacancy in the Commission shall be filled by appointment 
of the same person who appointed the person who has left the 
Commission. 
Studies. 
"(c)(1) The Commission shall make a study of the following issues: 
"(A) more effective means to reduce default, fraud, abuse, and 
delinquency in the programs authorized by this title; 
"(B) the appropriate balance between loans and other sources 
of financing postsecondary education from the point of view of 
the needs and welfare of students and their parents; 
"(C) the adequacy of capital to serve the postsecondary educa-
tional needs of students or their parents for credit; if adequate 
credit is available, the likelihood it will continue to remain 
available; if adequate credit is not available, the likelihood it will 
become available and the steps that can be taken to provide 
adequate credit for the postsecondary educational needs of stu-
dents; 
"(D) the impact of various levels of student borrowing, grants, 
gift aid, and employment on the educational performance, future 
career choices, and future educational choices of students; 
"(E) the impact of various levels of parent borrowing for 
postsecondary education on parents; 
"(F) the appropriate annual and aggregate self-help limits and 
gift aid for parents, dependent students, and independent stu-
dents; 
"(G) the most appropriate mechanism for the effective and 
efficient origination, servicing, and collection of student loans 
and for the effective and efficient delivery of other forms of 
student assistance; 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1455 
"(H) the most appropriate source or sources of student loan 
capital considering both the cost and the reliability of adequate 
capital availability; 
(I) the appropriate level of public subsidy to students and 
parents for the cost of capital for student loans; 
"(J) the impact of the availability of Federal student financial 
assistance on the availability of student financial assistance from 
all other sources; 
"(K) the impact of the availability of student assistance, 
particularly from Federal sources, on the level of postsecondary 
education costs; 
"(L) the most appropriate mechanism to provide students and 
parents with the flexible repayment options and opportunities 
for consolidation of student loan indebtedness; 
"(M) means to remove barriers to capital availability caused by 
patterns of lender discrimination; 
"(N) the cost to the Federal Government of the arbitrage 
derived from revenue bonds issued by agencies for the purpose of 
making or purchasing loans under part B of this title and the 
appropriate role of such bonds as a mechanism for raising 
student loan capital; and 
"(O) the effectiveness in serving the purposes of this title of the 
existing formulas for allotment among the States in subpart 2 of 
part A and in parts C and E of this title. 
"(2) The Commission shall make a study of the insurance premium 
charged by an insurer pursuant to section 428(bXlXH) in order to 
determine if the rate of the insuremce premium exceeds the rate 
necessary to protect the reserves of the insurer and to determine if a 
statutory limit should be enacted for the rate of such premium. 
"(3XA) The Commission shall make a study of an improved method 
or methods for determination of the quarterly rate of special 
allowances p£dd under part B of this title which the Commission 
determines will carry out the objectives set forth in section 438(a). 
"(B) The Commission shall make every effort to reach a unanimous 
decision with respect to the method for determination of the quar-
terly rate of the special allowances required to be studied by this 
paragraph. 
"(C) In developing the method for the determination of the quar-
terly rate of the special allowances under this paragraph, the Com-
mission shall consider— 
"(i) the experiences of students and eligible lenders under the 
method in operation during the period of the study, 
"(ii) the administrative costs of various types of eligible lenders 
under part B of title IV, 
"(iii) relevant and widely available financial indicators which 
accurately reflect the costs of capital invested in programs under 
such part, or substitute financial indicators which equitably 
represent the cost of such capital, 
'(iv) an administrative mechanism necessary to produce a 
prompt and rapidly disseminated determination of the quarterly 
rate of the special allowances, in order to avoid delays in the 
determination and dissemination of that rate and in the actual 
pavment of the special allowances to eligible lenders, and 
'(v) such other factors as the Commission considers necessary 
to carry out the purposes of section 438(a). 
"(4) The Commission shall conduct a study to determine if institu-
tions of higher education which meet the requirements of section 
1201(a) (other than the provisions of subclauses (A) and (B) of clause 
20 u s e 1071. 
20 u s e 1070b, 42 
u s e 2751, 20 
u s e 1088. 
Insurance 
premiums. 
Ante, p. 1422. 
Quarterly rate of 
special 
allowances, 
determination. 
Ante, p. 1425. 
20 u s e 1071. 
20 u s e 1141. 
79-194 
O—81—pt. 2 
12 : QL3 
94 STAT. 1456 
PUBLIC LAW 96-374—OCT. 3, 1980 
Financial 
assistance, 
student 
eligibility. 
Postsecondary 
education. 
Graduate 
education. 
(5) of such section), but fail to meet such requirements because the 
institution is not located in a State, should be included in the 
definition of institution of higher education under section 481. 
"(5) The Commission shall conduct a study to determine if student 
eligibility for financial assistance under section 484 on the basis of 
maintaining satisfactory academic progress should include provi-
sions which would require that a student complete successfully a 
specified portion of the workload undertaken during the academic 
period for which assistance was received by the student. 
"(6) The Commission shall, in consultation with the National 
Center for Education Statistics, conduct longitudinal studies of high 
school students in order to determine the effect of federally author-
ized student assistance programs upon postsecondary education 
access and choices of high school students. 
"(7XA) The Commission shall, in consultation with appropriate 
higher education associations and representatives from institutions 
of higher education, collect data necessary for the study of graduate 
education throughout the United States required by this paragraph. 
Such study shall— 
"(i) analyze trends and shortcomings in the sources of support 
available to students for the financing of graduate education, and 
compare the nature and level of support available in the various 
academic disciplines, including sources of support from student 
assistance and research programs sponsored by— 
"(I) the Federal Government, 
"(II) State and local governments, 
"(III) foundations, corporations, and other private entities, 
and 
"(IV) institutions of higher education, and 
in addition, consider the resources of the students and the 
students' families; 
"(ii) examine the extent to which students may be dissuaded 
from pursuing graduate education on financial grounds, to the 
consequent detriment o
f
—
-
"(I) the major fields of knowledge which need to attract the 
most able and talented students of each generation if they 
are to remain strong and vigorous; and 
"(II) the Nation as a whole, if some of its most promising 
students are precluded because of financial circumstances 
from developing their capacities and abilities to the fullest 
possible extent; 
"(iii) investigate existing and projected levels of graduate 
student indebtedness, and consider the implications (for the 
students involved and for the health of graduate education 
generally) or existing and projected expectations for borrowing to 
meet the costs of graduate education; 
"(iv) assess the desirability of modifying existing Federal 
fellowship and student assistance programs or establishing a 
new Federal graduate student assistance program in which the 
selection of students and the amounts of their awards are based 
on merit or financial need or both, particularly with regard to 
the special needs of students in the humanities and social 
sciences or other disciplines; and 
"(v) examine and assess the financial and educational needs of 
individuals from disadvantaged backgrounds in order to enhance 
their participation in graduate and professional education and 
their potential for employment in occupational areas where 
these individuals are underrepresented. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1457 
"(B) In conducting the study described in this paragraph, the 
Commission shall consult with representatives of the National Sci-
ence Foundation, the National Endowment for the Humanities, the 
National Endowment for the Arts, and representatives of higher 
education institutions and associations, learned societies, and profes-
sional organizations. 
"(8XA) The Commission shall conduct a study of a proposal to 
amend the guaranteed student loan program authorized by part B of 
title IV by recapturing interest subsidies from borrowers who do not 
obtain loans for undergraduate study under such part by reason of 
need or who borrow under such part for graduate study to the extent 
such loans are made for graduate study. In conducting such study, the 
Commission shall analyze the long term effect on the Budget of the 
United States of recapturing the interest subsidy in accordance with 
such proposal outlined in this paragraph and the impact of such 
proposal on the availability of funds for postsecondary education for 
students. 
"(B) In conducting the study under this paragraph, the Commission 
shall also consider other alternative proposals designed to reduce the 
cost of the guaranteed student loan program under part B of title IV 
in fiscal years subsequent to fiscal year 1982 and the impact of such 
proposes on the availability of funds for postsecondary education for 
students. 
"(dXD The Commission shall prepare and submit reports and 
recommendations to the President and to the Congress on the studies 
required to be conducted under subsection (c) of this section. The 
reports for the studies required by paragraphs (2), (3), (5), and (8) of 
such subsection shall be submitted as soon as practicable but in no 
event later than one year after the date of the first meeting of the 
Commission. The reports for the studies required by paragraphs (1), 
(4), (6), and (7) shall be submitted as soon as practicable but in no 
event later than July 1,1983. 
"(2) Any recommendations and reports submitted under this para-
graph which contemplate changes in Federal legislation shall include 
draft legislation to accomplish the recommendations. 
"(3) The Commission shall cease to exist 90 days following the 
submission of 
its final report. 
"(e)(1) Members of the Commission who are officers or full-time 
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; but they 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 the Government service employed 
intermittently. 
"(2) Members of the Commission who are not officers or full-time 
employees of the United States may each receive $150 per diem when 
engaged in the actual performance of duties vested in the Commis-
sion. In addition, they 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 the Government service employed 
intermittently. 
"(f) Such personnel as the Commission deems necessary may be 
appointed by the Commission without regard to the provisions of title 
5, United States Code, governing appointments in the competitive 
service, and may be paid without regard to the provisions of chapter 
51 and subtitle III of chapter 53 of such title relating to classification 
and General Schedule pay rates, but no individual so appointed shall 
Guaranteed 
student loan 
program, 
proposed 
amendment. 
20 u s e 1071. 
Reports to 
President and 
Congress. 
Draft legislation. 
Termination. 
Travel expenses 
and per diem. 
Personnel 
appointments. 
5 u s e 5101 et 
seq., 5331. 
94 STAT. 1458 
PUBLIC LAW 96-374—OCT. 3, 1980 
5 u s e 5332 note. 
Hearings. 
Contract 
authority. 
Consultants, 
authorization. 
Monetary 
grants, gifts or 
bequests. 
Appropriation 
authorization. 
Repeal. 
20 u s e 1087-4. 
Effective date. 
20 u s e 1088 
note. 
20 u s e 1088. 
20 u s e 1087-1. 
be paid in excess of the rate authorized for GS-18 of the Gteneral 
Schedule. 
"(g)(1) The Commission or, on the authorization of the Commission, 
any committee thereof, may, for the purpose of carrying out the 
provisions of the Act, hold such hearings and sit and act at such times 
and such places within the United States as the Commission or such 
committee may deem advisable. 
"(2) In carrying out its duties under the Act, the Commission shall 
consult with other Federal agencies, representatives of State and 
local governments, and private organizations to the extent feasible. 
"(3) The Commission is authorized to secure directly from any 
executive department, bureau, agency, board, commission, office, 
independent establishment, or instrumentality, information, sugges-
tions, estimates, and statistics for the purpose of this section, and 
each such department, bureau, agency, board, commission, office, 
establishment, or instrumentality is authorized and directed, to the 
extent permitted by law, to furnish such information, suggestions, 
estimates, and statistics directly to the (Dommission, upon request 
made by the Chairman. 
"(4) For the purpose of securing the necessary data and information 
the CJommission may enter into contracts with universities, research 
institutions, foundations, and other competent public or private 
agencies. For such purpose, the Commission is authorized to obtain 
the services of experts and consultants in accordance with section 
3109 of title 5, United States Code. 
"(5) The heads of all Federal agencies are, to the extent not 
prohibited by law, directed to cooperate with the Commission in 
carrying out this section. 
"(6) The (Commission is authorized to utilize, with their consent, the 
services, personnel, information and facilities of other Federal, State, 
local and private agencies with or without reimbursement. 
"(7) The Commission shall have authority to accept in the name of 
the United States, grants, gifts, or bequests of money for immediate 
disbursement in furtherance of the functions of the Commission. 
Such grants, gifts, or bequests, after acceptance by the Commission, 
shall be paid by the donor or his representative to the Treasurer of 
the United States whose receipts shall be their acquittance. The 
Treasurer of the United States shall enter them in a special account 
to the credit of the Commission for the purposes in each case 
specified. 
"(8) Six members of the Commission shall constitute a quorum, but 
a lesser number of two or more may conduct hearings. 
"(h) There is authorized to be appropriated an amount not to 
exceed a total of $10,000,000 for fiscal years beginning on or after 
October 1,1980, to carry out the provisions of this section, which shall 
remain available until expended or until the termination of the 
Commission, whichever occurs first.". 
(b) Section 440 of the Act is repealed. 
(c) The amendments made by section 6 of the Middle Income 
Student Assistance Act shall take effect on July 1,1972. 
(d) Section 438 of the Act is amended by striking out subsections (e), 
(f),and(g). 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1459 
TITLE V—AMENDMENT AND EXTENSION OF TITLE V OF THE 
fflGHER EDUCATION ACT OF 1965 
EXTENSION OF PROGRAMS 
SEC. 501. (a) Section 511(b) of the Act is amended to read as follows: 20 use 1101. 
"(b) For the purpose of carrying out the provisions of this part, 
there are authorized to be appropriated $45,0(50,000 for the fiscal year 
1981, $50,000,000 for the fiscal year 1982, $60,000,000 for the fiscal 
year 1983, $70,000,000 for the fiscal year 1984, and $80,000,000 for the 
fiscal year 1985.". 
O
t
>
) The first sentence of 
section 531 of 
the Act is amended to read as 20 use 1119. 
follows: "There are authorized to be appropriated $20,000,000 for the 
fiscal year 1981, $30,000,000 for the fiscal year 1982, $40,000,000 for 
the fiscal year 1983, $50,000,000 for the fiscal year 1984, and 
$55,000,000 for the fiscal year 1985 to carry out the provisions of this 
part.". 
TEACHER CORPS AMENDMENTS 
SEC. 502. (a) Section 513(a) of the Act is amended by striking out 20 use 1103. 
"and" at the end of paragraph (8), by striking out the period at the 
end of paragraph (9) and inserting in lieu thereof "; and" and by 
inserting after such paragraph the following: 
"(10) make grants to schools, colleges and departments of 
education and local educational agencies with high concentra-
tions of low income students for the purpose o
f
— 
"(A) developing, improving or expanding curriculum offer-
ings or instructional materials for the purpose of improving 
instruction in the areas o
f
— 
"(i) biological sciences, natural sciences and earth 
sciences, 
"(ii) physical sciences, and 
"(iii) mathematics; and 
"(B) providing training opportunities for teachers to in-
crease their effectiveness in developing instructional materi-
als and teaching science and mathematics related subject 
matter.". 
Qo) Section 513(cX2) of 
the Act is amended— 
(1) by striking out "Not to exceed 5 per centum" and inserting 
in lieu thereof Not to exceed 2 per centum"; and 
(2) by striking out "Puerto Rico," each place it appears. 
(c) Section 513(d) of the Act is amended by striking out "section 
205(a)(2) of Public Law 874, Eighty-first Congress, as amended," and 
inserting in lieu thereof "section 130 of the Elementary and Second-
ary Education Act of 1965". 
(d) Section 513(f) of the Act is amended by striking out "goal" and 
inserting in lieu thereof "the goal". 
(e) Section 514(aX2) of the Act is amended by striking out", not to 2
0 use ii04. 
exceed $150 per week plus $15 per week for each dependent". 
TEACHER CENTERS AMENDMENTS 
SEC. 503. (a) Section 531 of the Act is amended by striking out "In 2
0 use 1119. 
the event that sums exceeding $50,000,000 are appropriated in any 
fiscal year for purposes of carrying out this part, each and inserting 
in lieu thereof''Each". 
O
k
)
) Section 532(aX2) of 
the Act is amended— 
20 use iii9a. 
94 STAT. 1460 
PUBLIC LAW 96-374—OCT. 3, 1980 
(1) by striking out "local educational agency (or a combination 
of such agencies) which serve" and inserting in lieu thereof 
"local educational agency, a combination of such agencies, or an 
educational service agency which serves"; 
(2) by inserting "and, where desirable, in collaboration with 
one or more institutions of higher education which serve teach-
ers" immediately after "experts as may be necessary"; 
(3) by inserting ", including the use of technology and telecom-
munications" immediately before the semicolon in subparagraph 
(A); 
(4) by inserting ", testing," immediately after "curriculum 
development" in subparagraph (B). 
20 use 1119a. 
(c) The first sentence of section 532(b) of the Act is amended by 
inserting before the period "and, where appropriate, bilingual educa-
tion teachers". 
TEACHER TRAINING 
SEC. 504. Section 533 of the Act is amended to read as follows: 
"TRAINING FOR HIGHER EDUCATION PERSONNEL 
Grants. 
"SEC. 533. (a) The Secretary is authorized to make grants to schools 
20 use iii9a-i. of education for the purposes of— 
"(1) developing model projects within schools of education to 
carry out improved preservice or support activities for preparing 
elementary or secondary school teachers; 
"(2) achieving diversification and redirection of education 
programs for elementary and secondary school teachers in order 
to make maximum use of human resources in the fields of 
education and public service; 
"(3) retraining faculty members of such schools of education to 
provide courses of study for training elementary and secondary 
school teachers to teach in programs of career education, educa-
tion of the gifted and talented children, education of handicapped 
individuals, community education, adult education programs, 
earth sciences, and other related programs; 
"(4) training and orientation projects for faculty members of 
schools of education designed to prepare the faculty to teach and 
train personnel to work in conjunction with personnel who carry 
out projects under the Comprehensive Employment and Train-
29 use 801 note. 
ing Act and under title VIII of this Act, relating to cooperative 
Post, p. 1481. 
education and training of individuals to prepare for the work-
place; and 
"(5) training educational personnel who will specialize in the 
implementation of the urban and environmental policies of the 
United States, and for other areas of critical need within educa-
tion which are developing or are likely to develop as provided in 
20 use I22ie-i. 
section 406(b)(5) of the General Education Provisions Act. 
"Ot)) The Secretary is authorized to make grants to schools of 
education for the fiscal year 1981 and for each of the four succeeding 
years to carry out model projects for the purposes set forth in 
subsection (a). No grant may be made under this subsection unless an 
application is made to the Secretary, at such time, in such manner, 
and containing or accompanied by such information as the Secretary 
may reasonably require. 
Agreements. 
"(c)(1) The Secretary is authorized to enter into agreements with 
consortia of schools of education for planning programs designed to 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1461 
help member schools of the consortium to diversify and redirect 
programs and curricula of the member schools of education. 
"(2)(A) The Secretary shall develop criteria for determining the 
regions of the country in which consortia of schools of education are 
to be established. 
"(B) No consortium may receive a grant in excess of $200,000 in any 
fiscal year under this section. 
"(C) No cooperative agreement may be entered into under this 
section unless an application is submitted through the State educa-
tion agency of the State in which the applicant is located. Each such 
State agency will review and approve the application to assure its 
consistency with the comprehensive plan mandated by sections 
404(aX12) and 522(2) of the Elementary and Secondary Education Act 
of 1965. Such application shall be submitted at such time, in such 
manner, and containing or accompanied by such other information as 
the Secretary may reasonably require. 
"(d) For purposes of this section, the term 'schools of education' 
means institutions of higher education, and administrative units of 
institutions of higher education, specializing in the training of 
individuals to serve as teachers, guidance and counseling personnel, 
administrative personnel, or other education specialists.". 
20 use 3084, 
3162. 
"Schools of 
education." 
TRAINING FOR TEACHERS OF HANDICAPPED CHILDREN IN AREAS WITH A 
SHORTAGE 
SEC. 505. (a) Title V of the Act is amended by adding after part B the 
following new part: 
"PART C—TRAINING FOR ELEMENTARY AND SECONDARY SCHOOL 
TEACHERS TO TEACH HANDICAPPED CHILDREN IN AREAS WITH A 
SHORTAGE 
"GRANTS AUTHORIZED 
"SEC. 541. (a) The Secretary is authorized to make grants, in 
accordance with the provisions of this part, to State educational 
agencies to enable such agencies to support a fellowship program of 
stipends and allowances to institutions of higher education for 
teachers to be trained to provide special education for handicapped 
children. 
"(b) The Secretary shall establish criteria for— 
"(1) determining if there is a shortage of teachers in the area of 
special education for handicapped children in the State; 
"(2) assuring that the institutions of higher education, at which 
recipients of fellowships awarded under this part are pursuing 
courses of study, offer a program designed to prepare such 
recipients in the area of special education for handicapped 
children; and 
"(3) assuring that individuals trained with assistance under 
this part receive specialized training in the subject areas in 
which there is the greatest need for such teachers. 
"(c) The Secretary shall assure an equitable distribution among the 
States of grants made under this part, consistent with criteria 
established under subsection (b). 
20 use 1119b. 
eriteria, 
establishment. 
94 STAT. 1462 
PUBLIC LAW 96-374—OCT. 3, 1980 
20 u s e 1119b-l. 
Recipient's 
responsibilities. 
APPLICATION 
"SEC. 542. (a) No grant may be made under this part unless an 
application is made by a State educational agency at such time, in 
such manner, and containing or accompanied by such information as 
the Secretary may reasonably require. Each such application shall— 
"(1) describe a fellowship program under which the State will 
make stipends to recipients and make allowances to institutions 
of higher education, in accordance with the provisions of this 
part, for teachers and other specialists to be trained in special 
education for handicapped children; 
"(2) provide assurances that each recipient of a fellowship 
under this part will enter into an agreement with the State 
under which the recipient will— 
"(A) within the five-year period after the completion of the 
training for which the fellowship was awarded, teach for a 
period of not less than two years in an elementary or 
secondary school of a local educational agency of that State, 
a public elementary or secondary school of that State, or a 
public educational program approved by the local educa-
tional agency or the State, which has, or has provided 
assurances that it will have, a special education program for 
handicapped children, or 
"(B) repay all of the stipend awarded to the recipient plus 
the allowances paid to any institution of higher education 
based upon that fellowship in the event that the conditions 
of clause (A) are not complied with, except when such 
conditions are not complied with for reasons beyond a 
recipient's control; 
"(3) provide procedures under which recipients of fellowships 
who teach, for reasons beyond their control, less than the two-
year period required under clause (2) of this subsection will have 
the repajnnent requirement reduced according to a schedule 
established by the State agency; 
"(4) provide procedures under which stipends and institution of 
higher education allowances will be paid by the State agency in 
accordance with the provisions of this part; and 
"(5) provide that the State agency will make continuing efforts 
to encourage recipients of fellowships under this part to continue 
to provide special education for handicapped children in areas 
where there is a shortage of such teachers. 
"
O
t
>
) The Secretary shall approve any application which meets the 
requirements of subsection (a) of this section. Prior to approving any 
applications under this section, the Secretary shall prepare regula-
tions setting forth detailed requirements with respect to clauses (2) 
and (3) of subsection (a). 
STIPENDS AND INSTITUTION OF HIGHER EDUCATION ALLOWANCES 
20 use iii9b-2. 
"SEC 543. (a)(1) Each State educational agency receiving a grant 
under this part shall pay to individuals awarded fellowships under 
this part such stipends (including such allowances for subsistence and 
other expenses for such persons and their dependents) as the Secre-
tary may determine to be consistent with prevailing practices under 
comparable federally supported programs. 
"(2) No stipend may be paid to any single recipient in any one year 
in excess of $9,000. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1463 
"(b) Each State educational agency receiving a grant under this 
part shall (in addition to the stipends paid to persons under subsec-
tion (a)) pay to the institution of higher education at which such 
individu£d is pursuing a course of study such amounts as the Secre-
tary may determine to be consistent with prevailing practices under 
comparable federally supported programs, except that such amount 
charged to a fellowship recipient and collected from such recipient by 
the institution for tuition and other expenses required by the institu-
tion as part of the recipient's instructional program shall be deducted 
from the pa3nnents to the institution under this subsection. 
"FELLOWSHIP CX)NDITI0NS 
"SEC. 544. (a) An individual awarded a fellowship under the 20 use iii9b-3. 
provisions of this part shall continue to receive the payments pro-
vided in this part only during such periods as the State educational 
agency finds that the individual is maintaining satisfactory progress 
and devoting at least one-half of the full-time academic workload to 
study in the field in which such fellowship was awarded in an 
institution of higher education, and is not engaging in gainful 
employment other than employment approved by the Secretary by or 
pursuant to regulation. The amount of any payment to an individual 
engaged in such gainful emplo5mient shall be appropriately reduced 
pursuant to regulation. 
"(b) The State educational agency is authorized to require reports Reports. 
containing such information in such form and to be filed at such 
times as it determines necessary from any individual awarded a 
fellowship under the provisions of this part. Such reports shall be 
accompanied by a certificate from an appropriate official at the 
institution of higher education approved by the State educational 
agency, stating that such individual is making satisfactory progress 
in, and is devoting at least one-half of the full-time academic 
workload to, the program for which the fellowship was awarded. 
"(c) No fellowship shall be awarded under this part for study at a 
school or department of divinity. 
"DEFINITION 
"SEC. 545. As used in this part 'special education' has the same 20 USC lll9b-4. 
meaning as prescribed by section 602(16) of the Education of the 
Handicapped Act. 
20 USC 1401. 
APPROPRIATIONS AUTHORIZED 
"SEC. 546. There are authorized to be appropriated $2,000,000 for 20 use iii9b-5. 
the fiscal year 1981, $3,000,000 for the fiscal year 1982, and $5,000,000 
for the fiscal year 1983 and for each of the fiscal years ending prior to 
October 1,1985 to carry out the provisions of this part.". 
(b) The Secretary shall promulgate regulations to carry out the 
amendment made by subsection (a) of this section not later than 30 
days after the date of enactment of the Education Amendments of 
1980. 
Ante, p. 1367. 
EDUCATION PROFESSIONAL DEVELOPMENT 
SEC. 506. Title V of the Act is further amended by adding after part 
C (as added by section 504) the following new part: 
Regulations. 
20 use 1119b 
note. 
94 STAT. 1464 
PUBLIC LAW 96-374—OCT. 3, 1980 
"PART D—COORDINATION OP EDUCATION PROFESSIONAL DEVELOPMENT 
"FINDINGS 
20 use 1119c. 
"SEC. 551. The Congress finds that— 
"(1) many Federal programs have been enacted to tram and 
develop education professionals; 
"(2) such programs make Federal funds available to States, 
local education agencies, colleges and universities, and other 
agencies; 
"(3) such programs should be coordinated at the Federal level 
to avoid unnecessary duplication of 
effort; and 
"(4) such programs should be responsive to State needs and 
priorities for education professional development. 
"POLICY 
20 use 1119C-1. 
"SEC. 552. Federal programs which support education professional 
development should be administered in a coordinated manner, and 
the activities authorized under such programs should have comple-
mentary purposes whenever possible in order to provide the most 
effective use of Federal funds. 
Establishment 
and functions. 
20 u s e 1119C-2. 
Review. 
Report to 
eongress. 
OFFICE OF EDUCATION PROFESSIONAL DEVELOPMENT 
"SEC. 553. (a) There is established in the Department an Office of 
Education Professional Development, the function of which is to 
review the operations of and to coordinate program activities among 
the various Federal education professional development programs 
within the Department to eliminate unnecessary duplication of 
effort. 
"(b) The Office shall review on a biennial basis each education 
professional development program administered by the Department 
and shall— 
"(1) identify inconsistencies in program policies and proce-
dures; 
"(2) identify overlap in program purpose and operations; and 
"(3) coordinate program activities among the various Federal 
education professional development programs, and wherever 
necessary, make legislative recommendations to coordinate such 
programs. 
"(c) The Secretary shall report biennially to the Congress on the 
findings and recommendations of 
the Office.". 
TITLE VI—ESTABLISHMENT OF A NEW TITLE VI OF THE 
HIGHER EDUCATION ACT OF 1965 
PROGRAMS AUTHORIZED 
SEC. 601. (a) Title VI of the Higher Education Act is amended to 
read as follows: 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1465 
"TITLE VI—INTERNATIONAL EDUCATION PROGRAMS 
"PART A—INTERNATIONAL AND FOREIGN LANGUAGE STUDIES 
FINDINGS AND PURPOSES 
"SEC. 601. (a) The Congress finds t h a t -
'll) knowledge of other countries is important in promoting 
mutual understanding and cooperation between nations; 
"(2) strong American educational resources are a necessary 
base for strengthening our relations with other countries; 
"(3) present and future generations of Americans should be 
given the opportunity to develop to the fullest extent possible 
their intellectual capacities in all areas of knowledge pertaining 
to other countries, peoples, and cultures; and 
"(4) the economy of the United States and the long range 
security of the Nation are dependent upon acquiring such 
knowledge. 
"(b) It is the purpose of this part to assist in the development of 
resources and trained personnel for international study, interna-
tional research, and foreign language study and to coordinate 
programs of the Federal Government in the areas of international 
study and research and foreign language study. 
"GRADUATE AND UNDERGRADUATE LANGUAGE AND AREA CENTERS 
20 u s e 1121. 
Grants or 
contracts. 
20 u s e 1122. 
"SEC. 602. (a)(1) The Secretary is authorized to make grants to, and 
enter into contracts with, institutions of higher education, or combi-
nation of such institutions, for the purpose of establishing, strength-
ening, and operating graduate and undergraduate centers and 
programs which will be national resources for the teaching of any 
modern foreign language, for instruction in fields needed to provide a 
full understanding of the areas, regions, or countries in which such 
language is commonly used, or for research and training in interna-
tional studies and the international aspects of professional and other 
fields of study. 
"(2) Any such grant or contract may be used to pay all or part of the 
cost of establishing or operating a center or program, including the 
cost of faculty, staff, and student travel in foreign areas, regions, or 
countries, the cost of teaching and research materials, the cost of 
curriculum planning and development, the cost of bringing visiting 
scholars and faculty to the center to teach or to conduct research, and 
the cost of training and improvement of the staff, for the purpose of, 
and subject to such conditions as the Secretary finds necessary for, 
carrying out the objectives of this section. 
"(3) The Secretary may make grants to centers described in 
paragraph (1) having important library collections for the mainte-
nance of such collections. 
"(b) The Secretary is also authorized to pay stipends to individuals Stipends. 
undergoing such advanced training in any center or program ap-
proved by the Secretary under this part, including allowances for 
dependents and for travel for research and study in the United States 
and abroad. 
"(c) No funds may be expended under this part for undergraduate Travel expenses. 
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 supervised study. 
94 STAT. 1466 
PUBLIC LAW 96-374—OCT. 3, 1980 
Graduate and 
undergraduate 
centers, 
grants. 
20 u s e 1123. 
INTERNATIONAL STUDIES CENTERS 
"SEC. 603. (a)(1) The Secretary is authorized to make grants to 
institutions of higher education, or combinations of such institutions, 
for the purpose of establishing, strengthening, and operating gradu-
ate and undergraduate centers which will be regional resources to 
increase access to research and training in international and foreign 
language studies and the international aspects of professional and 
other fields of study. Activities carried out in such centers may be 
concentrated either on specific geographical areas of the world or on 
particular fields or issues in world affairs which concern one or more 
countries, or on both. In addition to providing training to students 
enrolled in the institution of higher education in which the center is 
located, the centers serving as regional resources shall, in order to 
qualify for assistance under this section, offer programs to strengthen 
international studies and foreign languages in the two-year and four-
year colleges and universities in the region served by each such 
center. 
"(2) The Secretary may eilso make grants to public and private 
nonprofit agencies and organizations, including professional and 
scholarly associations, whenever the Secretary determines that such 
grants will make an especially significant contribution to attaining 
the objectives of this section. 
"(b) Grants under this section may be used to pay part or all of the 
cost of establishing, strengthening, equipping, and operating re-
search and training centers, including the cost of teaching and 
research materials and resources, the cost of programs for bringing 
visiting scholars and faculty to the center, and the cost of training, 
improvement, and travel of the staff for the purposes of carrying out 
the provisions of this section. Such grants may also include funds for 
stipends (in such amounts as may be determined in accordance with 
regulations of the Secretary) to individuals undergoing training in 
such centers, including allowances for dependents and for travel for 
research and study in the United States and abroad. 
"(c) Grants under this section shall be made on such conditions as 
the Secretary determines to be necessary to carry out the purposes of 
this section. 
Grants. 
20 u s e 1124. 
UNDERGRADUATE INTERNATIONAL STUDIES AND FOREIGN LANGUAGE 
PROGRAMS 
"SEC. 604. (a) The Secretary is authorized to make grants to 
institutions of higher education, or combinations of such institutions, 
to assist them in planning, developing, and carrying out a compre-
hensive program to strengthen and improve undergraduate instruc-
tion in international studies and foreign languages. Grants made 
under this section may be for projects and activities which are an 
integral part of 
such a comprehensive program, such as— 
"(1) planning for the development and expansion of undergrad-
uate programs in international studies; 
"(2) teaching, research, curriculum development, and other 
related activities; 
"(3) training of 
faculty members in foreign countries; 
"(4) expansion of foreign language courses; 
"(5) programs under which foreign teachers and scholars may 
visit institutions as visiting faculty; 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1467 
"(6) programs designed to integrate undergraduate education 
with terminal Masters Degree programs having an international 
emphasis; and 
(7) the development of an international dimension in teacher 
training. 
"(b) The Secretary may also make grants to public and private 
nonprofit agencies and organizations, including professional and 
scholarly associations, whenever the Secretary determines such 
grants will make an especially significant contribution to attaining 
the objective of this section. 
"RESEARCH; STUDIES; ANNUAL REPORT 
"SEC. 605. (a) The Secretary may, directly or through grants or 20 use 1125. 
contracts, conduct research and studies which contribute to the 
purposes of this part and part N of title III of the Elementary and 
Secondary Education Act of 1965. Such research and studies may Post, p. 1471. 
include but are not limited to— 
"(1) studies and surveys to determine the need for increased or 
improved instruction in modern foreign languages and in other 
fields needed to provide a full understanding of the places in 
which such languages are commonly used; 
"(2) research on more effective methods of providing instruc-
tion and evaluating competency in such foreign languages and 
other fields; and 
"(3) the development of specialized materials for use in provid-
ing such instruction and evaluation or for use in training 
individuals to provide such instruction and evaluation. 
"(b) The Secretary shall prepare and publish an annual report 
which shall include an index and analysis of the books and research 
materials produced with assistance under this title. 
"EQUITABLE DISTRIBUTION OF FUNDS 
"SEC. 606. (a) The Secretary shall make excellence the criterion for 20 use 1126. 
selection of grants awarded under section 602. 
"(b) 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 manner as will achieve an equitable 
distribution of funds throughout the Nation. 
"AUTHORIZATION OF APPROPRIATIONS 
"SEC. 607. There are authorized to be appropriated $45,000,000 for 20 use 1127. 
fiscal year 1981, $50,000,000 for fiscal year 1982, $60,000,000 for fiscal 
year 1983, $70,000,000 for fiscal year 1984, and $80,000,000 for fiscal 
year 1985, to carry out the provisions of this part. 
"PART B—BUSINESS AND INTERNATIONAL EDUCATION PROGRAMS 
"FINDINGS AND PURPOSES 
"SEC. 611. (a) The Congress finds that— 
20 use 1130. 
"(1) the future economic welfare of the United States will 
depend substantially on increasing international skills in the 
business community and creating an awareness among the 
American public of the internationalization of our economy; 
"(2) concerted efforts are necessary to engage business schools, 
language and area study programs, public and private sector 
94 STAT. 1468 
PUBLIC LAW 96-374—OCT. 3, 1980 
organizations, and United States business in a mutually produc-
tive relationship which benefits the Nation's future economic 
interests; 
"(3) few linkages presently exist between the manpower and 
information needs of United States business and the interna-
tional education, language training and research capacities of 
institutions of higher education in the United States, and public 
and private organizations; and 
"(4) organizations such as world trade councils, world trade 
clubs, chambers of commerce and State departments of com-
merce are not adequately used to link universities and business 
for joint venture exploration and program development. 
"(jo) It is the purpose of this part— 
"(1) to enhance the broad objective of this Act by increasing 
and promoting the Nation's capacity for international under-
standing and economic enterprise through the provision of suit-
able international education and training for business personnel 
in various stages of professional development; and 
"(2) to promote institutional and noninstitutional educational 
and training activities that will contribute to the ability of 
United States business to prosper in an international economy. 
"EDUCATION AND TRAINING PROGRAMS 
Grants. 
"SEC. 612. (a) The Secretary shall make grants to, and enter into 
20 use 1130a. 
contracts with, institutions of higher education to pay the Federal 
share of the cost of programs designed to promote linkages between 
such institutions and the American business community engaged in 
international economic activity. Each program assisted under this 
part shall both enhance the international academic programs of 
institutions of higher education and provide appropriate services to 
the business community which will expand its capacity to engage in 
commerce abroad. 
Activities. 
"(b) Eligible activities to be conducted by institutions of higher 
education under this section shall include, but are not limited to— 
"(1) innovation and improvement in international education 
curricula to serve the needs of the business community, includ-
ing development of new programs for nontraditional, mid-career, 
or part-time students; 
"(2) development of programs to inform the public of increas-
ing international economic interdependence and the role of 
American business within the international economic system; 
"(3) internationalization of curricula at the junior and commu-
nity college level, and at undergraduate and graduate schools of 
business; 
"(4) development of area studies programs and interdisciplin-
ary international programs; 
"(5) establishment of export education programs through coop-
erative arrangements with regional and world trade centers and 
councils, and with bilateral and multilateral trade associations; 
"(6) research for and development of specialized teaching 
materials, including language materials, and facilities appropri-
ate to business-oriented students; 
"(7) establishment of student and faculty fellowships and 
internships for training and education in international business 
activities; 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1469 
"(8) development of opportunities for junior business and other 
professional school faculty to acquire or strengthen international 
skills and perspectives; and 
"(9) development of research programs on issues of common 
interest to institutions of higher education and private sector 
organizations and associations engaged in or promoting interna-
tional economic activity. 
"(c) No grant may be made and no contract may be entered into Applications. 
under the provisions of this part unless an institution of higher 
education submits an application at such time and in such manner as 
the Secretary may reasonably require. Each such application shall be 
accompanied by a copy of the agreement entered into by the institu-
tion of higher education with a business enterprise, trade organiza-
tion or association engaged in international economic activity, or a 
combination or consortium of such enterprises, organizations or 
associations, for the purpose of establishing, developing, improving or 
expanding activities eligible for assistance under subsection (b) of this 
section. Each such application shall contain assurances that the 
institution of higher education will use the assistance provided under 
this part to supplement and not to supplant activities conducted by 
institutions of higher education described in subsection (b). 
"(d) The Federal share under this part for each fiscal year shall not 
exceed 50 per centum of the cost of such program. 
"AUTHORIZATION OF APPROPRIATIONS 
"SEC. 613. There are authorized to be appropriated $7,500,000 for 20 USC ll30b. 
fiscal year 1981 and for each of the succeeding fiscal years ending 
prior to October 1, 1985, to carry out the provisions of this part. 
"PART C—GENERAL PROVISIONS 
ADVISORY BOARD 
"SEC. 621. (a) Not less than four times each year the Secretary shall 
convene meetings of an advisory board on the conduct of programs 
under this title. The board shall consist of— 
"(1) one member selected by the Secretary of State; 
"(2) one member selected by the Secretary of Defense; 
"(3) one member selected by the Secretary of the Treasury; 
"(4) one member selected by the Secretary of Commerce; 
"(5) one member selected by the Secretary to serve as Chair-
man and coordinator of the activities of the board; 
"(6) one member selected by the Chairman of the National 
Endowment for the Humanities; 
"(7) one member selected by the Director of the International 
Development Cooperation Agency; 
"(8) one member selected by the Director of the International 
Communication Agency; 
"(9) one member selected by the President and Chairman of 
the Export-Import Bank of the United States; 
"(10) one member selected by the Administrator, Small Busi-
ness Administration; 
"(11) five members selected by the Secretary from among 
representatives of the postsecondary educational community; 
"(12) two members selected by the Secretary from among 
representatives of the elementary and secondary education com-
munity; 
Membership. 
20 USC 1131. 
94 STAT. 1470 
PUBLIC LAW 96-374—OCT. 3, 1980 
"(13) three members selected by the Secretary from among 
members of the pubUc; and 
"(14) three members selected by the Secretary from among 
representatives of the business community. 
Subcommittees. 
"(bXD The Advisory Board shall establish two subcommittees to 
carry out the functions described in paragraphs (2) and (3) of this 
subsection. 
"(2) The first such subcommittee shall consider the grants made, or 
contracts entered into, under part A and part N of title III of the 
Ante, p. 1391, 
Elementary and Secondary Education Act of 1965. The board shall 
post, p. 1471. 
advise the Secretary on (A) any geographic areas of special need or 
concern to the United States, (6) the specific foreign languages to be 
designated under section 394(bX3) of the Elementary and Secondary 
Education Act of 1965, (C) innovative approaches which may help to 
fulfill the purposes of this title, (D) activities which are duplicative of 
programs operated under other provisions of Federal law, (E) changes 
which should be made in the operation of programs under this part to 
ensure that the attention of scholars is attracted to problems of 
critical concern to United States international relations, and (F) the 
administrative and staffing requirements of international education 
programs in the Department. 
"(3) The second such subcommittee shall review the programs 
under section 612 and shsQl advise the Secretary, who shall seek the 
advice of the Secretary of Commerce, on (A) changes which should be 
made to advance the purposes of part B and to assure the success of 
the programs authorized by part B, (B) special needs of such pro-
grams, and (C) any program elements which are duplicative of 
programs operated under other provisions of Federal law. 
"DEFINITIONS 
2
0 use 1132. 
"SEC. 622. (a) As used in this title— 
"(1) the term 'area studies' means a program of comprehensive 
study of the aspects of a society or societies, including study of its 
history, culture, economy, politics, international relations and 
languages; 
"(2) the term 'international business' means profit-oriented 
business relationships conducted across national boundaries and 
includes activities such as the buying and selling of goods; 
investments in industries; the licensing of processes, patents and 
trademarks; and the supply of services; 
"(3) the term 'export education' means educating, teaching and 
training to provide general knowledge and specific skills perti-
nent to the selling of goods and services to other countries, 
including knowledge of market conditions, financial arrange-
ments, laws and procedures; and 
"(4) the term 'internationalization of curricula' means the 
incorporation of international or comparative perspectives in 
existing courses of study or the addition of new components to 
the curricula to provide an international context for American 
business education. 
"(b) All references to individuals or organizations, unless the 
context otherwise requires, mean individuals who are citizens or 
permanent residents of the United States or organizations which are 
organized or incorporated in the United States.'. 
(b) Title III of the Elementary and Secondary Education Act of 1965 
is amended by adding at the end thereof the following new part: 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1471 
"PART N—INTERNATIONAL UNDERSTANDING 
'SHORT TITLE; DECLARATION OP FINDINGS; PURPOSE 
International 
Understanding 
Act. 
Grants and 
contracts. 
20 u s e 3064. 
"SEC. 393. (a) This part may be cited as the International Under- 20 use 3063. 
standing Act'. 
"(b) The Congress finds that— 
"(1) the well-being of the United States and its citizens is 
affected by policies adopted and actions taken by, or with respect 
to, other nations and areas; and 
"(2) the United States must afford its citizens adequate access 
to the information which will enable them to make informed 
judgments with respect to the international policies and actions 
of the United States. 
"(c) It is the purpose of this part to support educational programs 
which will increase the availability of such information to students in 
the United States. 
"PROGRAM AUTHORIZED 
"SEC. 394. (aXD The Secretary is authorized, by grant or contract, to 
stimulate educational programs to increase the understanding of 
students and the public in the United States about the cultures, 
actions and interconnections of nations and peoples in order better to 
evaluate the international and domestic impact of major national 
policies. 
"(2) Grants or contracts under this section may be made to any 
public or private agency or organization, including, but not limited to, 
institutions of higher education, State and local educational agencies, 
professional associations, education consortia, and organizations of 
teachers. 
"(bXD Financial assistance under this part may be used for assist-
ance for inservice training of teachers and other education personnel, 
the development of materials to link language learning to interna-
tional studies, the compilation of existing information and resources 
about other nations in forms useful to various t5rpes of educational 
progremis, and the dissemination of information and resources to 
educators and educational officials upon their request, but such 
assistance may not be used for the acquisition of equipment or 
remodeling of facilities. 
"(2) Financial assistance under this part may be made for projects 
and programs at all levels of education, and may include projects and 
programs carried on as part of community, adult, and continuing 
education programs. 
"(3) Financial assistance under this part may be used by local 
educational agencies to introduce instruction in foreign languages 
designated by the Secretary as having critical importance for the 
Nation which have not been offered by the schools of the local 
educational agency in the three academic years preceding the year in 
which the grant is made. 
"AUTHORIZATION OF APPROPRIATIONS 
"SEC. 395. There are authorized to be appropriated $5,250,000 for 20 use 3065. 
fiscal year 1981, $6,750,000 for fiscal year 1982, $8,250,000 for fiscal 
year 1983, and $9,000,000 each for fiscal years 1984 and 1985 to carry 
out the provisions of this part,". 
(c)(1) Title VI of the National Defense Education Act of 1958 is Repeal. 
repealed. 
20 use 511-513. 
Financial 
assistance. 
79-194 
O—81—pt. 2 
13 : QL3 
94 STAT. 1472 
PUBLIC LAW 96-374—OCT. 3, 1980 
i^epeai 
(2) Title I of the International Education Act of 1966 is repealed. 
20 
use 1172-
1174, 1176, 
1177. 
TITLE Vn—AMENDMENT TO TITLE Vn OF THE HIGHER 
EDUCATION ACT OF 1965 
AMENDMENT 
SEC. 701. Title Vn of the Act is amended to read as follows: 
"TITLE Vn-CONSTRUCTION, RECONSTRUCTION, AND 
RENOVATION OF ACADEMIC FACILITIES 
42 use 4151 
note. 
29 use 794. 
GENERAL PURPOSES 
2
0 use 1132a. 
"SEC. 701. The Secretary shall carry out programs of financial 
assistance to institutions of higher education and to higher education 
building agencies for the construction, reconstruction, or renovation 
of academic facilities and the acquisition of special equipment if the 
primary purpose of 
such assistance is— 
"(1) to enable such institutions to economize on the use of 
energy resources, with a priority for the use of coal, solar, and 
renewable resources; 
"(2) to enable such institutions to bring their academic facili-
ties into conformity with the requirements o
f
— 
"(A) the Act of August 12,1968, commonly known as the 
Architectural Barriers Act of 1968, 
"(B) section 504 of the Rehabilitation Act of 1973, or 
"(C) environmental protection or health and safety pro-
grams mandated by Federal, State, or local law, if such 
requirements were not in efTect at the time such facilities 
were constructed; 
"(3) to enable such institutions to construct, reconstruct, or 
renovate the Nation's research facilities, including libraries, and 
to acquire special research equipment; 
"(4) to enable institutions with unusual increases in enroll-
ment (according to data and criteria established by the Secre-
tary) to construct, reconstruct, or renovate their facilities; or 
"(5) to enable such institutions to detect, remove, or otherwise 
contain asbestos hazards in academic or other facilities used by 
students, in accordance with regulations prescribed by the Secre-
tary. 
"APPROPRIATIONS AUTHORIZED 
20 use ii32a-i. 
"SEC. 702. There are authorized to be appropriated $100,000,000 for 
fiscal year 1981 and for each succeeding fiscal year ending prior to 
October 1,1985, for part A. There are authorized to be appropriated 
$80,000,000 for the fiscal year 1981 and for each succeeding fiscal year 
encCuig prior to October 1,1985, for part B. There are authorized to be 
appropriated $80,000,000 for the fiscal year 1981 and for each succeed-
ing fiscal year ending prior to October 1,1985, for part C, and such 
sums as may be necessary for each such fiscal year for section 734. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1473 
"PART A—GRANTS FOR THE CONSTRUCTION, RECONSTRUCTION, AND 
RENOVATION OP UNDERGRADUATE ACADEMIC FACIUTIES 
"STATE PLAN 
"SEC. 711. (a) Any State desiring to participate in the grant 20USCii32b. 
program authorized by this part shall have an agreement pursuant to 
section 1203 and submit annually to the Secretary, through the State Post, p. 1493. 
agency designated in such agreement, a State plan which shall— 
"(1) provide that the plan shall be administered by the State 
entity having an agreement under section 1203; 
"(2) set forth objective standards and methods which are 
consistent with basic criteria established under section 712, for— 
"(A) determining the relative priorities of eligible projects 
submitted by institutions of higher education within the 
State, and 
"(B) certifjdng the Federal share of the cost of each project; 
"(3) provide for every applicant an opportunity for a hearing 
before the State agency regarding the priority assigned to such 
project, or any other decision by the State agency adversely 
affecting such applicant; and 
"(4) provide for accounting procedures necessary to assure 
proper disbursement of Federal funds. 
"0)) The Secretary shall not disapprove any State plan, or modifica-
tion thereof, without first affording the State agency reasonable 
notice and opportunity for a hearing. 
"(c) Whenever the Secretary finds that the State plan substantially Compliance, 
fails to comply with this section, the Secretary shall notify the State f^ii"""^ 
that it is ineligible to participate in the program under this part until 
a determination is made that there is no longer a failure to comply. 
"BASIC CRITERIA 
"SEC. 712. (a) The Secretary shall, by regulation, prescribe basic 20 use il32b-i. 
criteria for the consideration of State plans which ensure— 
"(1) flexibility for States to accommodate the varied needs of 
institutions in the States; 
"(2) consideration of the degree to which applicant institutions 
are effectively using existing facilities; and 
"(3) that the Federal share shall not exceed 50 percent of the 
development costs of a project. 
"(b) Section 553 of title 5, United States Code, shall apply to the 
prescription of regulations under this section. 
"ALLOTMENT OF FUNDS 
"SEC. 713. (a) From the sums appropriated pursuant to section 702 20 use ii32b-2. 
to carry out the purposes of this part, not less than 24 per centum 
shall be allotted to States under subsection (b) for public community 
colleges and public technical institutes. The remainder of such sums 
shall be allotted States under subsection (c) for all other institutions 
of higher education. 
"(bXD For the purpose of making grants to public community 
colleges and public technical institutes, the Secretary shall allot to 
each State an amount which bears the same ratio to the amount 
available for allotment under this subsection as the product of— 
94 STAT. 1474 
PUBLIC LAW 96-374—OCT. 3, 1980 
Computation. 
Allotment 
ratios. 
"(A) the number of persons in the State who have graduated 
from high school or received an equivalent certificate during the 
previous school year, and 
"(B) the State's allotment ratio, 
bears to the sum of the corresponding products for all the States. 
"(2)(A) Except as provided in subparagraph (B), the allotment ratio 
shall be 1.00 less the product of— 
"(i) 0.50, and 
"(ii) the quotient obtained by dividing the income per person 
for the State by the income per person for all States (not 
including Puerto Rico, the Virgin Islands, American Samoa, the 
Trust Territory of the Pacific Islands, and Guam). 
"(B) Notwithstanding subparagraph (A)— 
"(i) the allotment ratio shall in no case be less than 0.33% or 
more than 0.66%; 
"(ii) the allotment ratio for Puerto Rico, the Virgin Islands, 
American Samoa, the Trust Territory of the Pacific Islands, and 
Guam shall be 0.66%; and 
"(iii) the allotment ratio of any State shall be 0.50 for any fiscal 
year if the Secretary finds that the cost of school construction in 
such State exceeds twice the median of such costs in all the 
States as determined by him on the basis of statistics and data as 
the Secretary shall deem adequate and appropriate. 
"(C) Allotment ratios shall be promulgated annually by the Secre-
tary on the basis of the average personal income in the State and in 
all the States for the three most recent consecutive calendar years for 
which data are available from the Department of Commerce. 
"(c) For the purpose of making grants to all other institutions of 
higher education, the Secretary shall allot to each State— 
"(1) an amount which bears the same ratio to 50 per centum of 
the amount available for allotment under this subsection as the 
number of students enrolled in institutions of higher education 
in such State bears to the number of students so enrolled in all 
States; and 
"(2) an amount which bears the same ratio to 50 per centum of 
the amount available for allotment under this subsection as the 
number of students enrolled in grades nine through twelve of 
schools in such State bears to the total number of students so 
enrolled in all the States. 
"(d) The aggregate amount allotted to any State under subsections 
(b) and (c) for any fiscal year shall not be less than $100,000. If the 
sums appropriated pursuant to section 702 are not sufficient to make 
payments to each State, then the amount of each State's allotment 
shall be ratably reduced. 
"(e) Any portion of a State's allotment under subsections (b) and (c) 
for any fiscal year for which applications from qualified institutions 
have not been received by the State agency prior to January 1 of such 
fiscal year shall, by request, be available for payment of the Federal 
share of cost of other approved projects. 
"(f) Amounts allotted under this section for any fiscal year which 
are not used by the close of the fiscal year, shall be reallotted by the 
Secretary among the States which are able to use these funds without 
delay during the next fiscal year. 
"(g) Funds available under this part may be used for construction, 
reconstruction, or renovation of undergraduate facilities and com-
bined graduate and undergraduate facilities. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1475 
"PART B—GRANTS FOR CONSTRUCTION, RECONSTRUCTION, AND 
RENOVATION OF GRADUATE ACADEMIC FACIUTIES 
"GRANTS 
"SEC. 721. (a)(1) Funds available for this part shall be used by the 2
0 use ii32c 
Secretary to make grants to graduate institutions of 
higher education 
whose applications for assistance are consistent with the objectives of 
this title. 
"(2) The total pajnnent for any fiscal year made to institutions of 
higher education in any State shall not exceed 12.5 per centum of 
sums appropriated for this part. 
"(b) In making grants under this section, the Secretary shall seek 
the advice and recommendations of a panel of specialists who are not 
regular full-time employees of the Federal Government and are 
competent to evaluate such applications. 
"(c) The amount of the grant shall not exceed 50 per centum of the 
development cost of the project. 
"PART C—LOANS FOR CONSTRUCTION, RECONSTRUCTION, AND 
RENOVATION OF ACADEMIC FACILITIES 
Panel recom-
mendations. 
EUGIBIUTY CONDITIONS, AMOUNTS, AND TERMS 
"SEC. 731. (a) From the sums available for this part, the Secretary 20 use ii32d. 
shall make and insure loans to institutions of higher education and to 
higher education building agencies for programs consistent with the 
purposes of this title. No lo£m shall be made unless the Secretary 
finds that— 
"(1) not less than 20 per centum of the development cost of the 
project will be financed from non-Federal sources; 
"(2) the applicant is unable to secure the loan from other 
sources upon terms and conditions equally as favorable as those 
applicable to loans under this part; 
(3) the project will be undertaken in an economical manner; 
and 
"(4) for any project with regard to an infirmary or other 
outpatient care facility for students and institutional personnel, 
assistance will not be provided under title IV of the Housing Act 
of 1950. 
1
2 use 1749. 
"(b) Loans shall be repaid within fifty years and shall bear interest Repayment. 
at (1) a rate annually determined by the Secretary which shall be not 
less than one-quarter of 1 percentage point above the average annual 
interest rate on all interest-bearing obligations of the United States 
forming a part of the public debt as computed at the end of the 
preceding fiscal year, adjusted to the nearest one-eighth of 1 per 
centum, or (2) the rate of 4 per centum per annum, whichever is less. 
"GENERAL PROVISIONS FOR LOAN PROGRAM 
"SEC. 732. (a) Financial transactions of the Secretary, except with 2
0 use ii32d-i. 
respect to administrative expenses, shall be final and conclusive on 
all officers of the Government and shall not be reviewable by any 
court. 
"(b) In the performance of, and with respect to, the functions vested 
in him by this part, the Secretary may— 
"(1) prescribe such rules and regulations as may be necessary Regulations. 
to carry out the purposes of this part; 
94 STAT. 1476 
PUBLIC LAW 96-374—OCT. 3, 1980 
Suits. 
Foreclosure. 
Repayment 
"(2) sue and be sued in any court of record of a State having 
general jurisdiction or in any district court of the United States, 
and such district courts shall have jurisdiction of civil actions 
arising under this part without regard to the amount in contro-
versy, and any action instituted under this subsection by or 
against the Secretary shall survive notwithstanding any change 
in the person occupying the office of the Secretary or any 
vacancy in such office; but no attachment, injunction, garnish-
ment, or other similar process, mesne or final, shall be issued 
against the Secretary or property under his control, and nothing 
herein shall be construed to except litigation arising out of 
activities under this part from the application of sections 5O70t)) 
and 517 and 2679 of title 28, United States Code; 
"(3) foreclose on any property and bid for and purchase at any 
foreclosure, or any other sale, any property in connection with 
which he has made a loan pursuant to this part; in the event of 
such an acquisition, notwithstanding any other provisions of law 
relating to the acquisition, handling, or disposal of real property 
by the United States, the Secretary may complete, administer, 
remodel and convert, dispose of, lease and otherwise deal with, 
such property; except that (A) such action shall not preclude any 
other action by him to recover any deficiency in the amounts 
loaned and (B) any such acquisition of real property shall not 
deprive any State or political subdivision thereof of its civil or 
criminal jurisdiction in and over such property or impair the 
civil rights under the State or local laws of the inhabitants on 
such property; 
"(4) sell, exchange, or lease real or personal property and 
securities or obligations; 
"(5) modify, with respect to the rate of interest, the time of 
payment of principal, interest, security, or any other term of any 
contract or agreement to which he is a party, including (A) 
granting a moratorium on the repayment of principal or interest 
to a party temporarily unable to make such repayment without 
undue financial hardship provided the applicant files, and the 
Secretary approves, a plan to make repayment, and (B) for any 
party for which a loan has been authorized prior to January 1, 
1976, granting the option to pay into the fund pursuant to section 
733, 75 per centum of the party's total obligation if the party 
desiring to exercise such option makes payment from non-
Federal sources prior to October 1,1985; and 
"(6) include in any contract such other covenants, conditions, 
or provisions necessary to ensure that the purposes of this title 
will be achieved. 
Establishment. 
20 u s e 1132d-2 
Funds, 
transfer. 
REVOLVING LOAN AND INSURANCE FUND 
"SEC. 733. (a) There is created within the Treasury a revolving loan 
fund for the purpose of making and insuring loans under this part 
(hereafter called the 'fund') which shall be available to the Secretary 
without fiscal year limitation. The total of any loans made from the 
fund in any fiscal year shall not exceed limitations specified in 
appropriations Acts. 
(bXD The Secretary shall transfer to the fund appropriations 
provided under section 702 to provide capital for making loans. 
Interest and principal payments on loans, and any other moneys, 
property, or assets derived from activities under this part shall be 
deposited in the fund. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1477 
42 u s e 1450. 
Interest 
payments. 
"(2) All loans, expenses, and payments pursuant to operation of this 
part shall be paid from the fund, including expenses and payments in 
connection with sale, pursuant to section 302(c) of the Federal 
National Mortgage Association Charter Act, of participations in 
obligations acquired under this part. At the close of each fiscal year, 
the Secretary shall pay interest on the cumulative amount of funds 
paid out for loans under this part less the average undisbursed cash 
balance in the fund during the year. The interest rate shall be 
determined by the Secretary of the Treasury, taking into considera-
tion the average market yield on outstanding Treasury obligations of 
maturity comparable to the average maturity of loans made from the 
fund during the month preceding each fiscal year. Interest payments 
may be deferred with the approval of the Secretary of the Treasury, 
but interest pajnnents so deferred shall themselves bear interest. If Funds, transfer. 
the Secretary determines that moneys in the fund exceed the present 
and prospective needs of the fund, the excess may be transferred to 
the general fund of the Treasury. 
ANNUAL INTEREST GRANTS 
"SEC. 734. (a) To assist institutions of higher education and higher 20 USC ll32d-3. 
education building agencies in reducing the cost of borrowing from 
other sources for projects under this part, the Secretary may make 
annual interest grants to such institutions and agencies with respect 
to any project made over a fixed period not exceeding forty years, and 
provision for the grants shall be embodied in the contract guarantee-
ing their payment. Grants shall not be greater than the difference 
between (1) the average annual debt service which would be required 
to be paid during the life of the loein on the amount borrowed from 
other sources for the construction of such facilities, and (2) the 
average annual debt service which the institution or agency would 
have been required to pay during the life of the loan if the applicable 
interest rate had been determined by the Secretary in accordance 
with section 73103). 
"0)) The total amount of annual interest grants which may be paid 
to institutions of higher education and higher education building 
agencies in any year pursuant to contracts entered into for such year 
under this section shall not exceed $13,500,000. 
"(c) The total payment for any fiscal year made to institutions of 
higher education and higher education building agencies in any State 
shall not exceed 12.5 per centum of sums appropriated for this 
section. 
"(d) No annual interest grant shall be made unless (1) assurance is 
provided that not less than 10 per centum of the costs of the project 
will be financed from non-Federal sources, (2) the applicant is unable 
to secure a loan from other sources upon terms and conditions £is 
favorable as those applicable to loans under this title, and (3) the 
project will be undertaken in an economical manner. Loans for which 
an interest grant is made shall, for purposes of this section only, not 
be considered financing from a non-Federal source. 
ACADEMIC FACIUTIES LOAN INSURANCE 
"SEC. 735. (aXD In order to assist institutions of higher education 20 USC ll32d-4. 
and higher education building agencies to procure loans for programs 
consistent with the purposes of this title, the Secretary may insure 
the payment of interest and principal on such loans if such institu-
94 STAT. 1478 
PUBLIC LAW 96-374—OCT. 3, 1980 
Waiver. 
tions and agencies meet criteria prescribed under section 734 for the 
making of annual interest grants. 
"(2) No loan insurance may apply to any loan principal which 
exceeds 90 per centum of the development cost of the academic 
facility. 
"(b)(1) The United States shall be entitled to recover from any 
institution or agency to which loan insurance has been issued under 
this section the amount of any payment made pursuant to that 
insurance, unless the Secretary waives its right of recovery. Upon 
making any such pa5mient, the United States shall be subrogated to 
all of the rights of the recipient of the payment with respect to which 
the payment was made. 
"(2) Any insurance issued under subsection (a) shall be incontest-
able in the hands of the institution or agency on whose behalf 
insurance is issued, and as to any lenders which make or contract to 
make a loan to such institution or agency in reliance thereon, except 
for fraud or misrepresentation on the part of such institution or 
agency or on the part of the lender who makes or contracts to make 
such loan. 
"(c) Insurance may be issued by the Secretary under subsection (a) 
only if he determines that the terms, conditions, maturity, security (if 
any), and schedule and amounts of repayments with respect to the 
loan are sufficient to protect the financial interests of the United 
States and are otherwise reasonable and in accord with regulations, 
including a determination that the rate of interest does not exceed a 
per centum per annum on the principal obligation outstanding as the 
Secretary determines to be reasonable, considering interest rates 
prevailing in the private market for similar loans and the risks 
assumed by the United States, The Secretary may charge a premium 
for such insurance in an amount determined by him to be necessary 
to cover administrative expenses and probable losses under subsec-
tions (a) and (b). Such insurance shall be subject to such further terms 
and conditions as the Secretary determines to be necessary. 
"PART D—GENERAL 
20 u s e 1132e. 
Ante, pp. 1473, 
1475. 
Academic 
facility. 
RECOVERY OF PAYMENTS 
"SEC. 741. (a) The Congress declares that, if a facility constructed 
with the aid of a grant under part A or B of this title is used as an 
academic facility for twenty years following completion of such 
construction, the public benefit accruing to the United States will 
equal in value the amount of the grant. The period of twenty years 
after completion of such construction shall therefore be deemed to be 
the period of Federal interest in such facility for the purposes of this 
title. 
"(b) If, within twenty years after completion of construction of an 
academic facility which has been constructed, in part with a grant 
under part A or B of this title— 
*(1) the applicant (or its 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', 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 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1479 
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) Notwithstanding the provisions of subsections (a) and (b), no 
project assisted with funds under this title shall ever be used for 
religious worship or a sectarian activity or for a school or department 
of divinity. 
"DEFINITIONS 
"SEC. 742. The following definitions apply to terms used in this 
title: 
"(IXA) Except as provided in subparagraph (B) of this para-
graph, the term 'academic facilities means structures suitable 
for use £is classrooms, laboratories, libraries, and related facili-
ties necessary or appropriate for instruction of students, or for 
research, or for administration of the educational or research 
programs, of an institution of higher education, and mainte-
nance, storage, or utility facilities essential to operation of the 
foregoing facilities. For purposes of part A or C, such term 
includes infirmaries or other facilities designed to provide pri-
marily for outpatient care of student and instructional person-
nel. Plans for such facilities shall be in compliance with such 
standards as the Secretary may prescribe or approve in order to 
insure that projects assisted with the use of Federal funds under 
this title shall be, to the extent appropriate in view of the uses to 
be made of the facilities, accessible to and usable by handicapped 
persons. 
"(B) The term 'academic facilities' shall not include (i) any 
facility intended primarily for events for which admission is to be 
charged to the general public, or (ii) any gymnasium or other 
facility specially designed for athletic or recreational activities, 
other than for an academic course in physical education or where 
the Secretary finds that the physical integration of such facilities 
with other academic facilities included under this title is re-
quired to carry out the objectives of this title, or (iii) any facility 
used or to be used for sectarian instruction or £is a place for 
religious worship, or (iv) any facility which (although not a 
facility described in the preceding clause) is used or to be used 
primarily in connection with any part of the program of a school 
or department of divinity, or (v) any facility used or to be used by 
a school of medicine, school of dentistry, school of osteopathy, 
school of pharmacy, school of optometry, school of podiatry, or 
school of public health as these terms are defined in section 724 
of the Public Health Service Act, or a school of nursing as defined 
in section 843 of that Act, except that the term 'academic 
facilities' may include any facility described in clause (v) to the 
degree that such facility is owned, operated, and maintained by 
the institution of higher education requesting the approval of a 
project; and that funds available for such facility under such 
project shall be used solely for the purpose of conversion or 
modernization of energy utilization techniques to economize on 
the use of energy resources; and that such project is not limited 
to facilities described in clause (v) of this subsection. 
"(2)(A) The term 'construction' means (i) erection of new or 
expansion of existing structures, and the acquisition and instal-
lation of initial equipment therefor; or (ii) acquisition of existing 
Funds, usage 
restrictions. 
20 use 1132e-l. 
42 use 293d 
note. 
42 u s e 298b. 
94 STAT. 1480 
PUBLIC LAW 96-374—OCT. 3, 1980 
Development 
cost 
exclusions. 
structures not owned by the institution involved; or (iii) a 
combination of either of the foregoing. For the purposes of the 
preceding sentence, the term 'equipment' includes, in addition to 
machinery, utilities, and built-in equipment and any necessary 
enclosures or structures to house them, all other items necessary 
for the functioning of a particular facility as an academic facility, 
including necessary furniture, except books, curricular, and 
program materials, and items of current and operating expense 
such as fuel, supplies, and the like; the term 'initial equipment' 
means equipment acquired and installed in connection with 
construction; and the terms 'equipment', 'initial equipment', and 
'built-in equipment', shall be more particularly defined by the 
Secretary by regulation. 
"(B) The term 'reconstruction or renovation' means rehabilita-
tion, alteration, conversion, or improvement (including the ac-
quisition and installation of initial equipment, or modernization 
or replacement of such equipment) of existing structures. For the 
purposes of the preceding sentence, the term 'equipment' in-
cludes, in addition to machinery, utilities, and built-in equipment 
and any necessary enclosures or structures to house them, all 
other items necessary for the functioning of a particular facility 
as an academic facility, including necessary furniture, except 
books, curricular, and program materials, and items of current 
and operating expense such as fuel, supplies, and the like; the 
term 'initial equipment' means equipment acquired and in-
stalled either in connection with construction as defined in 
paragraph (2)(A), or as part of the rehabilitation, alteration, 
conversion, or improvement of an existing structure, which 
structure would otherwise not be adequate for use as an aca-
demic facility; the terms 'equipment', 'initial equipment', and 
'built-in equipment' shall be more particularly defined by the 
Secretary by regulation; and the term 'rehabilitation, alteration, 
conversion, or improvement' includes such action as may be 
necessary to provide for the architectural needs of, or to remove 
architectural barriers to, handicapped persons with a view 
toward increasing the accessibility to, and use of, academic 
facilities by such persons. 
"(3)(A) The term 'development cost', with respect to an aca-
demic facility, means the amount found by the Secretary to be 
the cost, to the applicant for a grant or loan under this title, of 
the construction, reconstruction, or renovation involved and the 
cost of necessary acquisition of the land on which the facility is 
located and of necessary site improvements to permit its use for 
such facility. There shall be excluded from the development 
cost— 
"(i) in determining the amount of any grant under part A 
or B, an amount equal to the sum of (I) any Federal grant 
which the institution has obtained or is assured of obtaining, 
under any law other than this title, with respect to the 
construction, reconstruction, or renovation that is to be 
financed with the aid of a grant under part A or B, and (II) 
the amount of any non-Federal funds required to be ex-
pended as a condition of such other Federal grant; and 
"(ii) in determining the amount of any loan under part C, 
an amount equal to the amount of any Federal financial 
assistance which the institution has obtained, or is assured 
of obtaining, under any law other than this title, with 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1481 
respect to the construction, reconstruction, or renovation 
that is to be financed with the aid of a loan under part C. 
"(B) In determining the development cost with respect to an 
academic facility, the Secretary may include expenditures for 
works of art for the facility of not to exceed 1 per centum of the 
total cost (including such expenditures) to the applicant of 
construction, reconstruction, or renovation of, and land acquisi-
tion and site improvements for, such facility. 
"(4) The term 'Federal share' means in the case of any project a 
percentage (as determined under the applicable State plan) not 
in excess of 50 per centum of its development cost. 
"(5) The term 'higher education building agency' means (A) an 
agency, public authority, or other instrumentality of a State 
authorized to provide, or finance the construction, reconstruc-
tion, or renovation of, academic facilities for institutions of 
higher education (whether or not also authorized to provide or 
finance other facilities for such or other educational institutions, 
or for their students or faculty), or (B) any corporation (no part of 
the net earnings of which inures or may lawfully inure to the 
benefit of any private shareholder or individual (i) established by 
an institution of higher education for the sole purpose of provid-
ing academic facilities for the use of such institution, and (ii) 
upon dissolution of which, all title to any property purchased or 
built from the proceeds of any loan made under part C will pass 
to such institution), or (C) an institution of postsecondary 
education. 
"(6) The term 'public community college and public technical 
institute' means an institution of higher education which is 
under public supervision and control, and is organized and 
administered principally to provide a two-year program which is 
acceptable for full credit toward a bachelor's degree, or a two-
year program in engineering, mathematics, or the physical or 
biological sciences which is designed to prepare the student to 
work as a technician and at a semiprofessional level in engineer-
ing, scientific, or other technological fields which require the 
understanding and application of basic engineering, scientific, or 
mathematical principles or knowledge; and the term includes a 
branch of an institution of higher education offering four or more 
years of higher education which is located in a community 
different from that in which its parent institution is located. 
"(7) The term 'public educational institution' does not include 
a school or institution of any agency of the United States. 
"(8) The term 'State' includes in addition to the several States 
of the Union, the Commonwealth of Puerto Rico, the District of 
Columbia, Guam, American Samoa, the Virgin Islands, and the 
Trust Territory of the Pacific Islands.". 
TITLE VIII—COOPERATIVE EDUCATION 
EXTENSION OF PROGRAM 
SEC. 801. (a) Section 801(a) of the Act is amended— 
20 use 1133. 
(1) by striking out "fiscal year 1979" in paragraph (4) and 
inserting in lieu thereof "fiscal years 1979 and 1980 ; 
(2) by striking out "for each of the fiscal years 1980, 1981, and 
1982, $25,000,000" in paragraph (5) and inserting in lieu thereof 
"for each of the fiscal years 1981, 1982, 1983, 1984, and 1985, 
$30,000,000"; and 
94 STAT. 1482 
PUBLIC LAW 96-374—OCT. 3, 1980 
(3) by striking out "alternating periods" and inserting in lieu 
thereof "alternating or parallel periods". 
2
0 use 1133. 
(b) Section 801(b) of 
the Act is amended— 
(1) by striking out "and" at the end of paragraph (3); 
(2) by striking out "fiscal years 1978, 1979, 1980, 1981, and 
1982," in paragraph (4) and inserting in lieu thereof "fiscal years 
1978,1979, and 1980; and"; 
(3) by inserting immediately after paragraph (4) the following 
new paragraph: 
"(5) $5,000,000 for each of the fiscal years 1981, 1982, 1983, 
1984, and 1985,". 
20 use 1133a. 
(c) Section 802(a) of 
the Act is amended— 
(1) by striking out "$175,000" and inserting in lieu thereof 
"$325,000"; and 
(2) by striking out "$125,000" and inserting in lieu thereof 
"$250,000". 
(d) Section 802(c) of the Act is amended by inserting "individual 
unit of immediately before "institution of higher education". 
TITLE IX-GRADUATE PROGRAMS 
GRANTS TO INSTITUTIONS OP HIGHER EDUCATION 
20 use 1134. 
SEC. 901. (a) Section 901 of 
the Act is amended— 
(1) in subsection (aXD, by striking out "to strengthen, improve 
and where necessary expand" and inserting in lieu thereof "to 
maintain, strengthen, and improve"; and 
(2) in subsection (c), by striking out "1980" and inserting in lieu 
thereof"1985". 
20 use 1134b. 
(b) Section 903(bX2) of the Act is amended by striking out "expan-
sion" and inserting in lieu thereof "maintenance and improvement of 
quality". 
GRADUATE FELLOWSHIPS 
SEC. 902. (a) Part B of title IX of such Act is amended to read as 
follows: 
"PART B—FELLOWSHIPS FOR GRADUATE AND PROFESSIONAL STUDY 
"STATEMENT OF PURPOSE 
2
0 use ii34d. 
"SEC. 921. It is the purpose of this part to provide, through 
institutions of higher education, a program of grants to assist in 
making available the benefits of post-baccalaureate education to 
graduate and professional students who demonstrate financial need. 
PROGRAM AUTHORIZED 
Grants. 
"SEC. 922. (a) The Secretary shall make grants to institutions of 
20 use ii34e. 
higher education to enable such institutions to make grants in 
accordance with the provisions of 
this part. 
"(bKX) In making such grants the Secretary shall, to the maximum 
extent feasible, ensure an equitable geographic distribution of awards 
and an equitable distribution among eligible public and independent 
institutions of 
higher education. 
"(2) The Secretary shall not make a grant to a single institution of 
higher education of less than $75,000 from the sums appropriated 
under this part for any fiscal year. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1483 
"(3) Whenever the Secretary determines that an institution of 
higher education is unable to use all of the amounts available to it 
under this part, the Secretary shall, on such dates during each fiscal 
year as the Secretary may fix, reallot such amounts not needed to 
institutions which can use the grants authorized by this part. 
"(c) Any eligible institution of higher education offering a program 
of post-baccalaureate study leading to a graduate or professional 
degree may apply for grants under this part. Each such institution 
may make an application to the Secretary at such time, in such 
manner, and containing or accompanied by such information as the 
Secretary may reasonably require. 
"(d) In making grants to institutions of higher education, the 
Secretary shall— 
"(1) take into account present and projected needs for highly 
trained individuals in all areas of education beyond high school; 
"(2) take into account present and projected needs for highly 
trained individuals in other than academic career fields of high 
national priority; and 
"(3) consider the need to prepare a larger number of individ-
uals from minority groups, especially from among such groups 
which have been traditionally underrepresented in colleges and 
universities, but nothing contained in this paragraph shall be 
interpreted to require any educational institution to grant pref-
erence or disparate treatment to the members of one minority 
group on account of an imbalance which may exist with respect 
to the total number or percentage of individuals of such group 
participating in or receiving the benefits of the program author-
ized in this section, in comparison with the total number or 
percentage of individuals of such group in any community. State, 
section, or other area. 
"(e) The Secretary shall assure that, in making grants under this Awards. 
part, awards are made to— 
"(1) individuals who plan to pursue a career in public service; 
"(2) individuals who plan to pursue advanced study in domestic 
mining and mineral and mineral fuel conservation, including oil, 
gas, coal, oil shale, and uranium; and 
"(3) individuals from traditionally underrepresented groups, 
as determined by the Secretary, undertaking graduate or profes-
sional study. 
The Secretary shall assure that the amount expended for categories Fellowships 
of fellowships described in paragraphs (1), (2), and (3) of this subsec-
tion for each fiscal year is not less than the amount expended for each 
category in fiscal year 1979. 
"(f) From sums required to be expended by the Secretary for grants 
under subsection (e), the Secretary may (in addition to the awards 
made to individuals) pay to the institution of higher education at 
which such person is pursuing his course of study such amounts as 
the Secretary may determine to be consistent with prevailing prac-
tices under comparable federally supported programs, except that 
such amount charged to a fellowship recipient and collected from 
such recipient by the institution for tuition and other expenses 
required by the institution as part of the recipient's instructional 
program shall be deducted from the payments to the institution 
under this subsection. 
"(g) No fellowship shall be awarded under this part for study at a 
school or department of divinity. 
Fellowship 
restriction. 
94 STAT. 1484 
PUBLIC LAW 96-374—OCT. 3, 1980 
20 u s e 1134f. 
AWARD OF FELLOWSHIPS 
"SEC. 923. (a) An institution of higher education receiving funds 
under this part shall make available to financially needy graduate 
and professional students an award determined by such institution of 
higher education, except that no award under this part may exceed 
$4,500, or the demonstrated level of financial need according to 
measurements of need approved by the Secretary, whichever is lower. 
"(b) No student shall receive an award 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 and is not engaging in gainful 
employment other than part-time employment by the institution of 
higher education involved in teaching, research, or similar activities, 
approved by the Secretary. Such period shall not exceed a total of 3 
years, except that the Secretary may provide by regulation for the 
granting of such fellowships for a period of study not to exceed one 
twelve-month period, in addition to the 3 year period set forth in this 
section, under special circumstances which the Secretary determines 
would most effectively serve the purposes of this part. The Secretary 
shall make a determination to provide such twelve-month extension 
of an award to an individual fellowship recipient upon review of an 
application for such extension by the recipient. 
20 u s e 1134g. 
Repeal. 
20 u s e 11341-
1134s. 
AUTHORIZATION OF APPROPRIATIONS 
"SEC. 924. There are authorized to be appropriated to carry out the 
provisions of this part $60,000,000 for each of the fiscal years 1981 and 
1982 and such sums as may be necessary for the fiscal year 1983 and 
each of the succeeding fiscal years ending before October 1, 1985.". 
(jo) Parts C, D, E, and F of such title IX are repealed. 
NEW PROGRAM AUTHORIZED 
SEC. 903. Title IX of the Act is amended by inserting after part B (as 
amended by this Act) the following new part: 
"PART C—NATIONAL GRADUATE FELLOWS PROGRAM 
20 u s e 1134h. 
Independent 
study. 
AWARD OF NATIONAL GRADUATE FELLOWSHIPS 
"SEC. 931. (a) During the fiscal year ending September 30,1981, and 
each of the succeeding fiscal years ending prior to October 1,1985, the 
Secretary is authorized to award not more than 450 fellowships in 
accordance with the provisions of this part for graduate study in the 
arts, humanities, and social sciences by students of superior ability 
selected on the basis of demonstrated achievement and exceptional 
promise. Such fellowships shall be awarded for such periods as the 
Secretary may determine, but not in excess of forty-eight months. 
"(b) The Secretary may allow a fellowship recipient to interrupt 
periods of study for a period not to exceed twelve 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 
academic program, except that for such period the Secretary shall 
make no payments to the fellowship recipients or payments to 
institutions pursuant to the fellowship award of the recipient. 
"(c) There are authorized to be appropriated such sums as may be 
necessary to carry out the provisions of this part. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1485 
ALLOCATION OF FELLOWSHIPS 
"SEC. 932. (aXD The President shall appoint a National Graduate 
Fellows Program Fellowship Board consisting of not less than nine 
and not more than fifteen individuals representative of both public 
and private institutions of higher education especially qualified to 
serve on the Board. In making appointments, the President shall give 
due consideration to the appointment of individuals who are highly 
respected in the academic community. 
'X2) The Board shall— 
"(A) establish general policies for the program established by 
this part and oversee its operation; 
"(B) select each year the fields in which fellowships under this 
part are to be awarded; 
"(C) determine the number of fellowships each year to be 
awarded under this part in each designated field; 
"(D) appoint distinguished panels in each field for the purpose 
of selecting fellows; and 
"(E) prepare and submit to the Congress, at least once in every 
three year period, a report on any modifications in the program 
that the Board determines to be appropriate. 
"(3) In carr3dng out its responsibilities, the Board shall consult on a 
regular basis with representatives of the National Science Founda-
tion, 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 
professional organizations. 
"(4) The term of office of each member of the Board shall be six 
years; except that (A) the members first taking office shall serve £is 
designated by the President, one-third of the members for terms of 
two years, one-third of the members for terms of four years, and one-
third of the members for terms of six years, and (B) any member 
appointed to fill a vacancy shall serve for the remainder of the term 
for which his predecessor was appointed. No member may serve for a 
period in excess of eight years. 
"(5) The President shall call the first meeting of the Board, at 
which the first order of business shall be the election of a Chairman 
and a Vice Chairman, who shall serve until one year after the date of 
their appointment. Thereafter each officer shall be elected for a term 
of two years. In case a vacancy occurs in either office, the Board shall 
elect an individual from among the members of the Board to fill such 
vacancv. 
"(6)(A) A majority of the members of the Board shall constitute a 
quorum. 
"(B) The Board shall meet at least four times a year. 
"(7) Members of the Board, while serving on the business of the 
Board, shall be entitled to receive compensation at rates fixed by the 
President, but not exceeding the rate prescribed for GS-18 of the 
General Schedule under section 5332, title 5, United States Code, 
including traveltime; and while so serving away from their homes or 
regular places of business, they 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 intermittently. 
(b) The recipients of fellowships shall be selected in each desig-
nated field from among all applicants nationwide in each field by 
distinguished panels appointed by the Fellowship Board to make such 
selections under criteria established by the Board. The number of 
National 
Graduate 
Fellows Program 
Fellowship 
Board. 
Establishment. 
20 u s e 11341. 
Report to 
Congress. 
Consultations. 
Term of office. 
Travel and per 
diem expenses. 
Fellowship 
recipients, 
selection. 
94 STAT. 1486 
PUBLIC LAW 96-374—OCT. 3, 1980 
recipients in each field in each year shall not exceed the number of 
fellows allocated to that field for that year by the Fellowship Board. 
"(c) Each recipient shall be entitled to use the fellowsnip in a 
doctoral program at any accredited institution of higher education in 
which the recipient may decide to enroll. 
"STIPENDS 
20 use 1134J. 
"SEC. 933. (a) The Secretary shall pay to individuals awarded 
fellowships under this part sucn stipends (including such allowances 
for subsistence and other expenses for such individuals and their 
dependents) as the Secretary may determine to be appropriate, 
adjusting such stipends as necessary so as not to exceed the fellow's 
demonstrated level of need according to measurements of need 
approved by the Secretary. 
(b) The Secretary snail (in addition to the stipends paid to 
individuals under subsection (a)) pay to the institution of higher 
education at which such person is pursuing his course of study such 
amount as the Secretary may determine to be appropriate, except 
that such amount charged to a fellowship recipient and collected 
from such recipient by the institution for tuition and other expenses 
required by the institution as part of the recipient's instructional 
program shall be deducted from the payments to the institution 
under this subsection. 
"FELLOWSHIP CONDITIONS 
20 use 1134k. 
"SEC. 934. (a) An individual awarded a fellowship under the 
provisions of this part shall continue to receive payments provided in 
section 933 only during such periods as the Secretary finds that he is 
maintaining satisfactory proficiency in, and devoting essentially full 
time to, study or research in the field in which such fellowship was 
awarded, in an institution of higher education, and is not engaging in 
gainful emplo5anent other than part-time employment by such insti-
tution in teaching, research, or similar activities, approved by the 
Secretary. 
Reports. 
"(b) The Secretary is authorized to require reports containing such 
information in sucn form and to file at such times as the Secretary 
determines necessary from any person awarded a fellowship under 
the provisions of this 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 prog-
ress in, and is devoting essentially full time to the program for which 
the fellowship was awarded." 
TRAINING AND LEGAL ASSISTANCE PROFESSION PROGRAM AUTHORIZED 
SEC. 904. Title IX of the Act is amended by adding after part C (as 
added by section 904 of this Act) the following new part: 
"PART D—ASSISTANCE FOR TRAINING IN THE LEGAL PROFESSION 
Grants. 
20 u s e 1134Z. 
PROGRAM AUTHORIZED 
"SEC. 941. (a) The Secretary is authorized prior to October 1,1985, 
to make grants to, or enter into contracts with, public and private 
agencies and organizations other than institutions of higher educa-
tion for the purpose of assisting individuals from disadvantaged 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1487 
backgrounds, as determined in accordance with criteria prescribed by 
the Secretary, to undertake training for the legal profession. 
"(b) Grants made, and contracts entered into, under subsection (a) 
may cover, in accordance with regulations of the Secretary, all or 
part of the cost of— 
"(1) selecting individuals from disadvantaged backgrounds for 
training for the legal profession, 
"(2) facilitating the entry of such individuals into institutions 
of higher education for the purpose of pursuing such training, 
"(3) providing counseling or other services designed to assist 
such individuals to complete successfully such training, 
"(4) providing, for not more than six months prior to the entry 
of such individuals upon their courses of training for the legal 
profession, preliminary training for such individuals designed to 
assist them to complete successfully such training for the legal 
profession, 
"(5) paying such stipends (including allowances for travel and 
for dependents) as the Secretary may determine for such individ-
uals for any such period of preliminary training or for any period 
of training for the legal profession during which such individuals 
maintain satisfactory academic proficiency, as determined by the 
Secretary, and 
"(6) paying for administrative activities of the agencies and 
organizations which receive such grants, or with which such 
contracts are entered into, to the extent such activities are for 
the purpose of furthering activities described in clauses (1) 
through (5). 
"AUTHORIZATION OF APPROPRIATIONS 
"SEC. 942. There are authorized to be appropriated to carry out the 20 USC ll34m. 
provisions of this part $5,000,000 for fiscal year 1981, $5,000,000 for 
fiscal year 1982, $7,500,000 for fiscal year 1983, $7,500,000 for fiscal 
year 1984, and $10,000,000 for fiscal year 1985.". 
LAW SCHOOL PROGRAMS INCLUDED IN TITLE IX 
SEC. 905. Title IX of the Act is amended by adding at the end 
thereof the following new part: 
"PART E—LAW SCHOOL CLINICAL EXPERIENCE PROGRAMS 
PROGRAM AUTHORIZATION 
"SEC. 951. (a) The Secretary is authorized to enter into grants or 
contracts with accredited law schools in the States for the purpose of 
paying not to exceed 90 per centum of the costs of establishing or 
expanding programs in such schools to provide clinical experience to 
students in the practice of law, which includes any form of law 
student work involving performance in the role of a lawyer exercising 
legal skills and roles such as those of an advocate, counselor, 
negotiator, investigator, and ethical practitioner, whether by way of 
the provision of representation of or services to an identifiable client 
in actual cases or situations (subject to existing State or local 
limitations upon such provision) or by way of simulation of such 
provision through appropriate exercises. The cases and situations 
handled in actuality or by simulation may encompass any one or 
more of the following: 
Grants. 
20 USC 1134n. 
79-194 O—81—pt. 2 
14 : QL3 
94 STAT. 1488 
PUBLIC LAW 96-374—OCT. 3, 1980 
"Accredited law 
school." 
"(1) judicial, administrative, executive, or legislative proceed-
ings, including the full range of preparation therefor; 
"(2) office or house counsel problems; or 
"(3) factual investigation, empirical research, or policy or legal 
analysis. 
"(b) Such costs may include necessary expenditures incurred for— 
"(1) planning; 
"(2) training of faculty members and salary for additional 
faculty members; 
"(3) travel and per diem for faculty and students; 
"(4) reasonable stipends for students for work in the public 
service performed as part of any such program at a time other 
than during the regular academic year; 
"(5) equipment and library resources; 
"(6) involving practicing lawyers in the process of training law 
students to perform as lawyers; and 
"(7) such other items as are allowed pursuant to regulations 
issued by the Secretary. 
"(c) No law school may receive more than $100,000 in any fiscal 
year pursuant to this part, no part of which may be used to pay for 
indirect costs or charges. 
"(d) For the purpose of this part the term 'accredited law school' 
means any law school which is accredited by a nationally recognized 
accrediting agency or association approved by the Secretary for this 
purpose, including any combination or consortium of such schools. 
20 u s e 11340. 
Reports and 
records. 
Grants or 
contracts. 
APPUCATIONS 
"SEC. 952. (a) A grant or contract authorized by this part may be 
made by the Secretary upon application which— 
"(1) is made at such time or times and contains such informa-
tion as he may prescribe; 
"(2) provides for such fiscal control and fund accounting 
procedures as may be necessary to assure proper disbursement of 
and accounting for Federal funds paid to the applicant under this 
part; and 
"(3) provides for making such reports, in such form and 
containing such information as the Secretary may require to 
carry out his functions under this part, and for keeping such 
records and for affording such access thereto as the Secretary 
may find necessary to assure the correctness and verification of 
such reports. 
"(b) The Secretary shall allocate grants or contracts under this part 
in such manner as will provide an equitable distribution of such 
grants or contracts throughout the United States among law schools 
which show promise of being able to use funds effectively for the 
purposes of this part. 
AUTHORIZATION OF APPROPRIATIONS 
20 use ll34p. 
"SEC. 953. There are authorized to be appropriated $5,000,000 for 
the fiscal year 1981, $8,000,000 for the fiscal year 1982, $8,000,000 for 
the fiscal year 1983, $9,000,000 for the fiscal year 1984, and 
$10,000,000 for the fiscal year 1985, to carry out the purposes of this 
part.". 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1489 
TITLE X—ESTABLISHMENT OF A NEW TITLE X OF THE 
HIGHER EDUCATION ACT OF 1965 
FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION 
SEC. 1001. (a) Title X of the Act is amended by striking out 
everything preceding part C and inserting in lieu thereof the 
following: 
"TITLE X—FUND FOR THE IMPROVEMENT OF 
POSTSECONDARY EDUCATION 
"PART A—ESTABUSHMENT AND OPERATION OF FUND 
AUTHORIZATION OF PROGRAM 
"SEC. 1001. Subject to the provisions of section 1002, the Secretary 
is authorized to make grants to, and contracts with, institutions of 
postsecondary education (including combinations of such institu-
tions) and other public and private educationsd institutions and 
agencies (except that no grant shall be made to an educational 
institution or agency other than a nonprofit institution or agency) to 
improve postsecondary educational opportunities by providing assist-
ance to such educational institutions and agencies for— 
"(1) encouraging the reform, innovation, and improvement of 
postsecondary education, and providing equal educational oppor-
tunity for all; 
"(2) the creation of institutions and progremis involving new 
paths to career and professional training, and new combinations 
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 institutions 
of changes in internal structure £md operations designed to 
clarify institutional priorities and purposes; 
"(5) the design and introduction of cost-effective methods of 
instruction and operation; 
"(6) the introduction of institutional reforms designed to 
expand individual opportunities for entering and reentering 
institutions and pursuing programs of study tailored to indi-
vidual 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 examin-
ing and awarding credentials to individuals, smd the introduction 
of reforms in current institutional practices related thereto. 
Grants. 
20 u s e 1135. 
CONSULTATION 
"SEC. 1002. No grant shall be made or contract entered into under 
section 1001 for a project or program with any institution of postsec-
ondary education unless it has been submitted to the appropriate 
State entity having an agreement under section 1203, and an oppor-
tunity has been afforded such entity to submit its comments and 
recommendations to the Secretary. 
Comments and 
recommenda-
tions. 
20 u s e 1135a. 
Post, p. 1498. 
94 STAT. 1490 
PUBLIC LAW 96-374—OCT. 3, 1980 
Establishment. 
20 u s e 1135a-l. 
Membership. 
Duties. 
Information 
availability. 
20 u s e 1135a-2. 
5 u s e 101. 
5 u s e 5101 et 
seq. 
5 u s e 5331. 
Review. 
NATIONAL BOARD OF THE FUND FOR THE IMPROVEMENT OF 
POSTSECONDARY EDUCATION 
"SEC. 1003. (a) There is established a National Board of the Fund 
for the Improvement of Postsecondary Education. The Board shall 
consist of fifteen members appointed by the Secretary for overlapping 
three-year terms. A majority of the Board shall constitute a quorum. 
Any member of the Board who has served for six consecutive years 
shall thereafter be ineligible for appointment to the Board during a 
two-year period following the expiration of such sixth year. 
"O^) The Secretary shall designate one of the members as Chair-
man. A majority of the members of the Board shall be public interest 
representatives, including students, and a minority shall be educa-
tional representatives. All members selected shall be individuals able 
to contribute an important perspective on priorities for improvement 
in postsecondary education and strategies of educational and institu-
tional change. 
"(c) The Board shall— 
"(1) advise the Secretary and the Director of the Fund for the 
Improvement of Postsecondary Education on priorities for the 
improvement of postsecondary education and make such recom-
mendations as it may deem appropriate for the improvement of 
postsecondary education and for the evaluation, dissemination, 
and adaptation of demonstrated improvements in postsecondary 
educational practice; 
"(2) advise the Secretary and the Director of the Fund on the 
development of programs to be carried out by the Fund and on 
the selection of projects under consideration for support by the 
Fund in its competitions; 
"(3) advise the Secretary and the Director of the Fund on the 
operation of the Fund, including advice on planning documents, 
guidelines, and procedures for grant competitions prepared by 
the Fund; and 
"(4) meet at the call of the Chairman, except that it shall meet 
(A) at least four times during each fiscal year, or (B) whenever 
one-third of the members request in writing that a meeting be 
held. 
"(d) The Director shall make available to the Board such informa-
tion and assistance as may be necessary to enable the Board to carry 
out its functions. 
"ADMINISTRATIVE PROVISIONS 
"SEC. 1004. (a) The Secretary may appoint, for terms not to exceed 
three years, without regard to the provisions of title 5 of the United 
States Code governing appointments in the competitive service, not 
more than five technical employees to administer this title 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) The Director shall establish procedures for reviewing and 
evaluating grants and contracts made or entered into under this title. 
Procedures for reviewing grant applications or contracts for financial 
assistance under this section may not be subject to any review outside 
of officials responsible for the administration of the Fund for the 
Improvement of Postsecondary Education. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1491 
"AUTHORIZATION OF APPROPRIATIONS 
"SEC. 1005. There are authorized to be appropriated to carry out 20 use ii35a-3. 
this title $20,000,000 for fiscal year 1981, $30,000,000 for fiscal year 
1982, $40,000,000 for fiscal year 1983, $45,000,000 for fiscal year 1984, 
and $50,000,000 for fiscal year 1985.". 
(b)(1) Part C of title X of the Act is redesignated as part B, and 20 use ii35c, 
sections 1071 and 1072 thereof are redesignated as sections 1021 and ^^^^^ ^ 
1022, respectively. 
(2) Section 1021(a) of the Act (as so redesignated) is amended by 20 use ii35c. 
striking out "this title,". 
(c) Section 404 of the General Education Provisions Act is repealed. Repeal. 
20 use 1221d. 
TITLE XI—ESTABLISHMENT OF A NEW TITLE XI OF THE 
HIGHER EDUCATION ACT OF 1965 
PROGRAM AUTHORIZED 
SEC. 1101. Title XI of the Act is amended to read as follows: 
"TITLE XI—URBAN GRANT UNIVERSITY PROGRAM 
"FINDINGS AND PURPOSE 
"SEC. 1101. (a) The Congress finds and declares— 
20 use 1136. 
"(1) that there exists within the Nation's urban universities an 
underutilized reservoir of skills, talents, and knowledge appli-
cable toward the amelioration of the multitude of problems that 
face the Nation's urban centers; 
"(2) that the skills, talents, and knowledge of urban universi-
ties must be applied in a systematic and sustained manner to 
make a significant contribution toward the solution of these 
problems; 
"(3) that the application of the skills, talents, and knowledge of 
urban universities is hindered by the limited funds available to 
sustain their commitment; and 
"(4) that it is the policy of the United States to encourage and 
facilitate the application of the skills, talents, and knowledge of 
urban universities toward serving the needs of urban centers of 
the Nation. 
"(b) The Secretary shall carry out programs in accordance with the 
provisions of this title, for the purpose of aiding urban universities to 
help find answers to urban problems, and aiding such universities to 
make their resources more readily and effectively available to the 
urban communities in which they are located. 
"APPROPRIATIONS AUTHORIZED 
"SEC. 1102. (a) For the purpose of carrying out the provisions of this 20 use ii36a. 
title there is authorized to be appropriated $15,000,000 for fiscal year 
1981, $25,000,000 for fiscal year 1982, $35,000,000 for fiscal year 1983, 
$45,000,000 for fiscal year 1984, and $55,000,000 for fiscal year 1985. 
"(b) In the event of a multiple-year grant to any urban university 
under this title, the Secretary shall make funds available for such 
grant from funds appropriated for this title for the fiscal year in 
which such funds are to be used by the recipient. 
94 STAT. 1492 
PUBLIC LAW 96-374—OCT. 3, 1980 
Grants. 
20 u s e 1136b. 
Applications. 
"Urban grant 
university." 
PROJECT ASSISTANCE 
"SEC. 1103. (a)(1) The Secretary shall make grants to urban univer-
sities to pay the Federal share of the cost of carrying out projects 
consistent with the purposes of this title. 
"(2) The Secretary shall give priority to applications containing 
cooperative arrangements between urban universities within an 
urban area. 
"(b) An application submitted under this section shall contain 
provisions designed to show that the chief executive of the local 
agency or agencies of general government within whose jurisdiction 
fall the need or needs to be addressed by the project or projects 
described has been afforded a reasonable opportunity to review and 
comment upon the proposed project or projects. In making grants 
under this title, the Secretary shall consider the degree to which 
there is evidence in the application of (1) the participation of such 
local agency or agencies of general government and of the community 
in the development of the project or projects for which assistance is 
requested under this section; (2) local government and community 
participation in the implementation of the proposed project or 
projects; and (3) a commitment by such local agency or agencies of 
general government to pay the portion of the non-Federal share of 
the cost of such project or projects required by subsection (d) of this 
section. Not more than one-half of such non-Federal share may be in 
the form of services, supplies, or equipment. 
"(c) The Secretary may request the advice of any Federal agency 
the Secretary considers appropriate before approving an application 
for project assistance under this section. 
"(d) Each grant under this section shall be 90 per centum of the cost 
of the project for which assistance is granted. 
"(e) An institution of higher education which receives a grant 
under this section shall be designated by the Secretary as an 'urban 
grant university'. The Secretary shall annually publish a list of the 
institutions of higher education which have been so designated. 
LIMITATION 
20 use 1136c. 
"SEC. 1104. (a) The total amount of payments in any fiscal year 
under section 1103 to institutions within any one State shall not 
exceed 15 per centum of the total amount paid. 
"(b) In allocating assistance under section 1103 of this title, the 
Secretary shall endeavor to achieve broad and equitable geographical 
distribution throughout the Nation. 
DEFINITIONS 
20 use il36d. 
"SEC. 1105. As used in this title— 
"(1) 'urban area' means a standard metropolitan statistical 
area having a population of not less than five hundred thousand 
persons; or, in any State which has no standard metropolitan 
statistical area within its borders which has such a population, 
the entity of the State having an agreement under section 1203 
may, or if no such entity has an agreement, the Secretary shall 
designate one urban area for the purposes of this part; 
"(2) 'urban university' means an institution of higher educa-
tion which (A) is located in an urban area, (B) draws a substantial 
portion of its undergraduate students from the urban area in 
which it is located or contiguous urban areas, (C) carries out 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1493 
programs to make postsecondary education opportunities more 
accessible to residents of such urban area or contiguous areas, (D) 
has the present capacity to provide resources responsible to the 
needs and priorities of such urban area and contiguous areas, (E) 
offers a range of professional or graduate programs sufficient to 
sustain its capacity to provide such resources, and (F) has 
demonstrated and sustained a sense of responsibility to such 
urban area and contiguous areas and its people; 
"(3) for the purposes of paragraphs (2) and (4) of this section, 
'institution of higher education' includes any combination of 
such institutions, any one of which meets all the qualifications of 
paragraph (2); and 
"(4) 'resources' are programs of institutions of higher educa-
tion including specialized training, research services, and techni-
cal assistance responsible to the needs and priorities of the urban 
area and contiguous areas.". 
TITLE XII—GENERAL PROVISIONS 
AMENDMENTS 
SEC. 1201. Title XII of the Act is amended by striking out sections 
1202, 1203, 1205, 1206, and 1208, by redesignating section 1207 as 20 use 1142, 
section 1202, and by adding after such section the following new ii45 iilsa 
sections: 
ii45c. 
"FEDERAL-STATE RELATIONSHIPS; STATE AGREEMENTS 
"SEC. 1203. (a) Any State which desires to receive assistance under 20 use 1143. 
an applicable program, as described in subsection (f), shall enter into 
an agreement with the Secretary pursuant to subsection (b) setting 
forth the terms and conditions for the relationship between the 
Federal Government and that State for the purposes set forth in the 
applicable programs. 
(b) Such agreement shall consist of assurances by the State, 
including a description of the means to be used by the State to fulfill 
the assurances, that— 
"(1) the State will provide for such methods of administration 
as are necessary for the proper and efficient administration of 
any program in keeping with the purposes of the applicable 
programs described in subsection (f); 
"(2) the State will provide such fiscal control and fund account-
ing procedures as may be necessary to ensure proper disburse-
ment of, and accounting for. Federal funds paid to the State 
under any title of this Act; 
"(3) the State will follow policies and practices of administra-
tion that will ensure that non-Federal funds will not be sup-
planted by Federal funds, and that equitable and appropriate 
criteria will be used in evaluation of applications or proposals 
for grants or contracts under any such applicable program; and 
"(4) the State has a comprehensive planning or policy formula-
tion process which— 
"(A) considers the relation between State administration 
of any such applicable program, and administration of 
similar State programs or processes; 
"(B) encourages State policies designed to consider effects 
on declining enrollments on all sectors of postsecondary 
education in the State; 
94 STAT. 1494 
PUBLIC LAW 96-374—OCT. 3, 1980 
"(C) considers the postsecondary education needs of un-
served and underserved individuals within the State, includ-
ing individuals beyond the traditional college age; 
'(D) considers the resources of institutions, organizations, 
or agencies (both public and private) within the State ca-
pable of providing postsecondary educational opportunities 
in the State; and 
"(E) provides for direct, equitable and active participation 
in the comprehensive planning or policy formulation process 
or processes of representatives of institutions of higher 
education (including community colleges, proprietary insti-
tutions, and independent colleges and universities), stu-
dents, other providers of postsecondary education services, 
and the general public in the State. 
Participation under subclause (E) shall, consistent with State law, be 
achieved through membership on State planning commissions, State 
advisory councils, or other State entities established by the State 
to conduct federally assisted comprehensive planning or policy 
formulation. 
"(c) The information and assurances provided by a State in accord-
ance with paragraphs (1), (2), and (3) of subsection (b), and regulations 
issued by the Secretary related directly to such assurances, shall be 
satisfactory for the purposes of, and shall be considered in lieu of, any 
comparable requirements for information and assurances in any 
applicable program described in subsection (f). 
Xd)(l) An agreement of a State shall remain in effect subject to 
modification as changes in information or circumstances require. 
Notice and 
"(2) Whenever the Secretary, after reasonable notice and opportu-
hearing. 
nity for a hearing has been given to the State, finds that there is a 
failure to comply substantially with the assurances required in 
paragraph (1), (2), or (3) of subsection (b), the Secretary shall notify 
the State that it is no longer eligible to participate in any applicable 
program described in subsection (f) until the Secretary is satisfied 
that there is no longer any such failure to comply. 
"(e)(1) For the purpose of this section, the selection of the State 
entity or entities authorized to act on behalf of the State for the 
purpose of entering into an agreement with the Secretary shall be in 
accordance with the State law of each individual State with respect to 
the authority to make legal agreements between the State and the 
Federal Government. 
"(2)(A) Nothing in this section shall be construed to authorize the 
Secretary to require any State to adopt, as a condition for entering 
into an agreement, or for participation in an applicable program as 
defined in subsection (f), a specific State organizational structure for 
achieving participation in the planning, or administration of pro-
grams, or for statewide planning, coordination, governing, regu-
lating, or administering of postsecondary education agencies, 
institutions, or programs in the State. 
"(B) Nothing in this section shall be construed as a limitation on 
the authority of any State to adopt a State organizational structure 
for postsecondary education agencies, institutions, or programs 
which is appropriate to the needs, traditions, and circumstances of 
that State, or as a limitation on the authority of a State entering into 
an agreement pursuant to this section to modify the State organiza-
tional structure at any time subsequent to entering into such an 
agreement. 
"Applicable 
"(f) For the purposes of this section an 'applicable program' is 
program." 
defined as— 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1495 
"(1) title I; 
"(2) subpart 3 of part A of title IV; and 
"(3) part A of title Vn. 
Ante, p. 1373. 
20 u s e 1070c. 
Ante, p. 1473. 
Educational 
needs, analysis. 
Report to 
Congress. 
TREATMENT OP TERRITORIES AND TERRITORIAL STUDENT ASSISTANCE 
"SEC. 1204. (a) The Secretary is authorized to provide such modifi- 20 use il44a 
cations of any programs under this Act as the Secretary deems 
necessary in order to adapt such programs to the needs of Guam, the 
Virgin Islands, American Samoa, the Trust Territory of the Pacific 
Islands, and the Northern Mariana Islands. Such program modifica-
tions may include the consolidation of grants for any single program 
on a regional or interterritorial basis. Such program modifications 
shall be established in cooperation with the governments of such 
territories and shall be governed by a memorandum of understanding 
between such governments and the Department of Education. 
"(b) In conjunction with the development of program modifications 
under subsection (a), the Secretary shall, within eighteen months 
after the date of enactment of this section, conduct an analysis of the 
unique educational needs of Guam, the Virgin Islands, American 
Samoa, the Trust Territory of the Pacific Islands, and the Northern 
Mariana Islands, and report to the Congress on the results of such 
analysis. Such report shall include recommendations of the Secretary 
with respect to the most appropriate form of Federal postsecondary 
education assistance for such territories, an evaluation of the effec-
tiveness of the authority contained in subsection (a), and whether 
such authority should be extended or modified. 
"(c) Pending legislative implementation of the recommendations 
submitted by the Secretary under subsection (b), there are authorized 
to be appropriated $2,000,000 for each fiscal year ending prior to 
October 1, 1985 to support the cost of providing postsecondary 
education programs on Guam for nonresident students from the 
Trust Territory of the Pacific Islands, the Northern Mariana Islands, 
and American Samoa. Such sums shall be allocated by the Secretary 
among the educational institutions on Guam providing such pro-
grams on the basis of the number of students enrolled from the Trust 
Territory of the Pacific Islands, the Northern Mariana Islands, and 
American Samoa. Sums authorized under this subsection shall 
remain available until appropriated and sums appropriated under 
this subsection shall remain available until expended. 
Appropriation 
authorization. 
NATIONAL ADVISORY COMMITTEE ON ACCREDITATION AND 
INSTITUTIONAL EUGIBILITY 
"SEC. 1205. (a) There is established in the Department of Education 
a National Advisory Committee on Accreditation and Institutional 
Eligibility which shall be composed of 15 members appointed by the 
Secretary from among individuals knowledgeable concerning educa-
tion, and including persons who are (1) representative of institutions, 
(2) representative of students and youth, (3) representative of profes-
sional associations, (4) representative of State educational agencies, 
and (5) representative of the general public. The Chairman of the 
Committee shall be appointed by the Secretary. 
"(b) The term of office of each member of the Committee shall be 
three years, except that— 
"(1) the members first appointed to the Committee shall serve 
as designated by the Secretary, five for a term of one year, five 
for a term of two years, and five for a term of three years, and 
Establishment. 
20 u s e 1145. 
94 STAT. 1496 
PUBLIC LAW 96-374—OCT. 3, 1980 
"(2) any member appointed to fill a vacancy occurring prior to 
the expiration of the term for which his predecessor was 
appointed shall be appointed for the remainder of that term. 
Responsibilities. 
"(c) The Committee shall, with respect to all matters pertaining to 
institutional eligibility— 
"(1) advise the Secretary with regard to the responsibility to 
publish a list of nationally recognized accrediting agencies and 
associations which he determines to be reliable authority as to 
the quality of training offered, including advising the Secretary 
with respect to the criteria and procedures for carrying out such 
responsibility; 
"(2) advise the Secretary with regard to the responsibility to 
designate State agencies as reliable authorities on the quality of 
public postsecondary vocational education or training; 
"(3) develop and recommend to the Secretary standards and 
criteria for specific categories of vocational training institutions 
and institutions of higher education for which there are no 
recognized accrediting agencies, associations, or State agencies, 
in order to establish the eligibility of such institutions on an 
interim basis for participation in federally funded programs; and 
"(4) carry out such other advisory functions relating to accredi-
tation and institutional eligibility as may be assigned by the 
Secretary. 
"(d) The Committee shall meet not less than twice each year at the 
call of the Chairman. The date of, and agenda for, each meeting of the 
Committee shall be submitted in advance to the Secretary for 
approval. A representative of the Secretary shall be present at all 
meetings of the Committee. 
Report to 
"(e) The Committee shall, not later than November 30 of each year. 
Congress. 
make an annual report through the Secretary to the Congress. The 
annual report shall contain a list of the members of the Committee 
and their addresses, a list of the Committee's functions, a list of dates 
and places of each meeting during the preceding fiscal year, and a 
summary of the activities, findings, and recommendations made by 
the Committee during the preceding fiscal year. 
"(f) Subject to section 448(b) of the General Education Provisions 
2
0 use I233g. 
Act, the Committee shall continue to exist until September 30,1985.". 
TITLE Xm—MISCELLANEOUS PROVISIONS 
PART A—GENERAL EDUCATION PROVISIONS 
CONTINGENT EXTENSION 
SEC. 1301. (a) The first sentence of section 414 of the General 
20 use 1226a. 
Education Provisions Act is amended by striking out "for one 
additional fiscal year" and inserting in lieu thereof the following: 
"for-
"(i) two additional fiscal years for any applicable program 
authorized to be included in the Appropriation Act for the fiscal 
year preceding the fiscal year for which appropriations are 
available for obligation, or 
"(ii) one additional fiscal year for any other applicable pro-
gram", 
(b) The second sentence of such section is amended by striking out 
"for such additional year" and inserting in lieu thereof "for each 
£ddition£il 
fiscal 
year . 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1497 
ENFORCEMENT OP THE RULES 
SEC. 1302. The second sentence of section 431(d)(1) of that Act is 20 use 1232. 
amended by inserting before the period a comma and the following: 
"in whole or in part". 
SCIENCE EDUCATION PROGRAMS 
SEC. 1303. The General Education Provisions Act is amended by 
inserting after section 406 the following new section: 
"AUTHORIZATION OP APPROPRIATIONS POR SCIENCE EDUCATION 
PROGRAMS 
"SEC. 406A. There is authorized to be appropriated to the Secretary 
of Education for fiscal year 1981— 
"(1) $2,500,000 for the purpose of carrying out the Pre-CoUege 
Science Teacher Training program, and 
"(2) $5,000,000 for the purpose of canying out the Minority 
Institutions Science Improvement program 
transferred to the Secretary from the National Science Foundation 
by section 304 of the Department of Education Organization Act.". 
COMMISSION ON THE REVIEW OP THE PEDERAL IMPACT AID PROGRAM 
20 use 1221e-
Ib. 
20 use 3444. 
SEC. 1304. (a) Section 1015(d) of the Education Amendments of 1978, 20 use 236 note. 
relating to the impact aid study, is amended by striking out "Decem-
ber 1, 1980" and inserting in lieu thereof "September 1, 1981". 
(b) AH funds available to the Commission for its operating expenses 20 use 236 note. 
shall, notwithstanding any other provision of law, be made available 
to such Commission, and remain avedlable to such Commission to 
carry out the amendment made by subsection (a) of this section. The 
Secretary of Education shall, notwithstanding any other provision of 
law, make available to such Commission, from funds appropriated to 
the Department of Education, such funds as may be necessary to 
enable the Commission to maintain its level of operations, consistent 
with the amendment made by subsection (a) of this section, except 
that the total amount so available for any month shall not exceed 110 
per centum of the average monthly amount available for expenditure 
by the Commission during the fiscal year 1980. 
(c) The terms of office of the members of such Commission shall be Term o
f office. 
coterminous with the duration of the Commission and the number of 
such members shall be equal to the number who are in office at any 
time, except that such number shall not exceed the number specified 
in such section 1015. A quorum of the Commission shall be equal to a 
majority of the members of the Commission who have qualified. 
(d) The Commission shall terminate September 30,1981. 
Termination. 
EVALUATION REPORTS 
SEC. 1305. Section 417(aXlXF) of the General Education Provisions 
Act is amended by inserting immediately before the period a comma 20 use I226c. 
and the following: "including tabulations of available data to indicate 
the effectiveness of the programs and projects by the sex, race, and 
age of its beneficiaries". 
94 STAT. 1498 
PUBLIC LAW 96-374—OCT. 3, 1980 
EDUCATION IMPACT STATEMENT 
SEC. 1306. Part A of the General Education Provisions Act is 
amended by adding at the end thereof the following new section: 
Publication in 
Federal 
Register. 
20 u s e 1221e-4. 
EDUCATION IMPACT STATEMENT 
"SEC. 409. Notwithstanding any other provision of law, no regula-
tion affecting any institution of higher education in the United 
States, promulgated on or after the date of enactment of this Act, 
shall become effective unless such agency causes to be published in 
the Federal Register a copy of such proposed regulation together with 
an educational impact assessment statement which shall determine 
whether any information required to be transmitted under such 
regulation is already being gathered by or is available from any other 
agency or authority of the United States. Notwithstanding the 
exception provided under section 553(b) of title 5, United States Code, 
such statement shall be based upon the record established under the 
provisions of section 553 of title 5, United States Code, compiled 
during the rulemaking proceeding regarding such regulation.". 
PART B—NATIONAL INSTITUTE OF EDUCATION 
EXTENSION OF AUTHORITY 
20 use I22ie. 
SEC. 1311. Section 405(j) of the General Education Provisions Act is 
amended to read as follows: 
"(jXl) There are authorized to be appropriated to carry out the 
provisions of this section, $120,000,000 for fiscal year 1981, 
$130,000,000 for fiscal year 1982, $145,000,000 for fiscal year 1983, 
$160,000,000 for fiscal year 1984, and $175,000,000 for fiscal year 1985. 
"(2) Sums so appropriated shall, notwithstanding any other provi-
sion of law unless enacted in express limitation of this subsection, 
remain available for the purposes of this subsection unless 
expended.". 
DECLARATION OF POUCY 
SEC. 1312. The first sentence of section 405(aXl) of the General 
Education Provisions Act is amended by inserting after "sex" a 
comma and "age, handicap". 
RESEARCH AND DEVELOPMENT PRIORITIES 
SEC. 1313. Section 405(bX2) of the General Education Provisions Act 
is amended by— 
(1) striking out "and" at the end of clause (D); 
(2) by redesignating clause (E) as clause (G); 
(3) by adding after clause (D) the following new clauses: 
"(E) overcoming the special problems of the nontraditional 
student, including the older student (with special considera-
tion for students over age 45) and the part-time student, and 
the institution which the student attends; 
"(F) encouraging the study of languages and cultures and 
addressing both national and international education con-
cerns; and"; and 
(4) by adding at the end the following sentence: "In carrying 
out this paragraph, the Institute shall give attention to the needs 
of early adolescents and the schools which serve them.". 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1499 
REPEALER 
SEC. 1314. (a) Section 405(f)(3) of the General Education Provisions 20 use i22ie. 
Act is repealed. 
(b) Paragraph (4) of section 405(f) of such Act is redesignated as 
paragraph (3). 
PART C—AMENDMENTS TO THE REHABILITATION ACT OF 1973 
COMPOSITION OF THE ARCHITECTURAL AND TRANSPORTATION BARRIERS 
COMPLIANCE BOARD AND TRANSMISSION OF REPORT 
SEC. 1321. (aXD Section 502(aXl)(BXi) of the Rehabilitation Act of 
1973 is amended to read as follows: 
"(i) Department of Health and Human Services.". 
(2) Section 502(a) of such Act is amended by adding the following 
clause immediately after clause (x): 
"(xi) Department of EJducation.". 
(b) Section 502(h) of such Act is amended by adding at the end 
thereof the following new paragraph: 
"(3) The Board shall, at the same time that the Board transmits the 
report required under section 7(b) of the Act entitled 'An Act to 
ensure that certain buildings financed with Federal funds are so 
designated and constructed as to be accessible to the physically 
handicapped', approved August 12, 1968 (commonly known as the 
Architectural Barriers Act of 1968) transmit that report to the 
Committee on Labor and Human Resources of the Senate and the 
Committee 
on Education 
and Labor 
of the House of 
Representatives.". 
29 u s e 792. 
Report to 
congressional 
committees. 
42 u s e 4157. 
INFORMATION CLEARINGHOUSE FOR HANDICAPPED INDIVIDUALS 
SEC. 1322. (a) The first sentence of section 15(a) of the Rehabilita-
tion Act of 1973 is amended by striking out "may" and inserting in 2
9 use 714. 
lieu thereof "shall". 
(b) Section 15(c) of such Act is amended by striking out "Any" and 
inserting in lieu thereof "The". 
PART D—NATIVE HAWAIIAN EDUCATION STUDY 
STUDY AUTHORIZED 
SEC. 1331. (aXD The Congress finds that— 
2
0 use 1221-1 
(A) like other Native Americans, Native Hawaiians rank "
°
*
®
-
among the lowest in level of educational attainment and per 
capita income; and 
(B) existing Federal, State, and local assistance in the field of 
education fails to address the basic and special needs of Native 
Hawaiians. 
(2) The Congress declares its commitment to assist in providing the 
educational services and opportunities which Native Hawaiians 
need. 
(b) There is established the Advisory Council on Native Hawaiian Advisory 
Education which shall consist of seven members appointed by the Native °^ 
Secretary of Education, after consultation with the Governor of Hawaiian 
Hawaii, from among individuals who are professionals in the various Education. 
fields relating to human development, and who are familiar with the Establishment. 
educational problems of Native Hawaiians. 
(c) The Council shall— 
94 STAT. 1500 
PUBLIC LAW 96-374—OCT. 3, 1980 
(1) advise the Secretary with respect to the operation of 
programs administered by the Department of Education and 
other programs making educational assistance available to 
Native Hawaiians; 
Study. 
(2) conduct a study which shall (A) evaluate the effectiveness of 
State and federally assisted educational programs in serving 
Native Hawaiian children and the extent to which such pro-
grams achieve their purposes with respect to such children, and 
(B) take into account the special health, social, and psychological 
needs of Native Hawaiian children; and 
Report to 
(3) submit a report to the Secretary and to the Congress not 
Secretary and 
later than January 31,1983, containing the findings and recom-
tvongress. 
mendations of the Council with respect to the matters described 
in paragraphs (1) and (2). 
Termination. 
(d) The Council shall terminate 60 days after the submission of its 
report under subsection (c). 
Appropriation 
(e) There are authorized to be appropriated a total amount of not 
authorization. 
more than $500,000 for the fiscal years 1981,1982, and 1983 to carry 
out this section. 
PART E—SPECIAL IMPACT AID PROGRAM 
PROGRAM AUTHORIZED 
SEC. 1341. The Act of September 30, 1950 (Public Law 874, 81st 
Cong.), relating to impact aid, is amended by adding after section 4 
the following new section: 
"SPECIAL PROGRAM 
20 use 239a. 
"SEC. 4A. (aXD Any local educational agency that experiences an 
enrollment increase in any school year of at least 20 students as a 
result of the entry into any school supported by such agency of 
eligible children shall be eligible to receive pa3mient for such children 
enrolled in its schools in accordance with the provisions of this 
section. 
"Eligible 
"(2) For purposes of this section the term 'eligible children' 
children. 
means— 
"(A) aliens who fled from Cambodia, Vietnam, or Laos and 
who, on or after January 1,1979— 
"(i) were admitted into the United States as refugees 
Ante, p. 103. 
under section 207 of the Immigration and Nationality Act; 
"(ii) are applicants for asylum or have been granted 
asylum in the United States; or 
"(iii) were paroled into the United States as refugees 
8 use 1182. 
under section 212(d)(5) of the Immigration and Nationality 
Act; or 
"(B) aliens who fled from Cuba or Haiti and who, on or after 
November 1,1979— 
"(i) were admitted into the United States as refugees 
under section 207 of the Immigration and Nationality Act; 
"(ii) are applicants for asylum or have been granted 
asylum in the United States; 
"(iii) are paroled into the United States as refugees under 
section 212(d)(5) of the Immigration and Nationality Act; or 
"(iv) are Cuban-Haitian entrants (status pending) who 
entered the United States on or after such date. 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1501 
"(3)(A) Each such local educational agency is authorized to receive 
for the fiscal year 1981 an amount equal to the product of the number 
of eligible children in average daily attendance in the schools of such 
agency in excess of 20 such eligible children multiplied by the current 
local expenditure rate of that local educational agency, plus $200 for 
each such eligible child in excess of 20. 
"(B) For the purpose of this paragraph the current local expendi-
ture rate shall be deemed to be the non-Federal expenditure rate of 
the local educational agency. 
"(4) No provision of this Act which is inconsistent with the 
provisions of this section shall apply to the administration of this 
section. 
"(5) Each local educational agency which is authorized to receive 
assistance under this section shall provide the Secretary with assur-
ances that no eligible child counted for the purpose of this section 
shall be counted for payments made under any other provision of this 
Act. 
"(b) There are authorized to be appropriated for the fiscal year 1981 
such sums as may be necessary to carry out the provisions of this 
section.". 
Payment 
computation. 
PART F—THE NAVAJO COMMUNITY COLLEGE ASSISTANCE PROGRAM 
AMENDMENTS TO THE NAVAJO COMMUNITY COLLEGE ACT 
SEC. 1351. (a) Section 5(a)(1) of the Navajo Community College Act 25 use 640c-i. 
is amended by striking out "two" and inserting in lieu thereof 
"three". 
(b) Section 5(b) of such Act is amended by striking out paragraphs 
(1) and (2), by redesignating paragraph (3) as paragraph (2), and by 
inserting immediately before such paragraph the following: 
"(b)(1) There is further authorized to be appropriated for grants to Grant funds. 
the Navajo Community College, for any fiscal year beginning on or 
after October 1, 1979, an amount equal to the amount necessary for 
operation and maintenance of the college, including, but not limited 
to, administrative, academic, and operations and maintenance 
costs.". 
(c) Such Act is further amended by adding at the end thereof the 
following new section: 
EFFECT ON OTHER LAWS 
"SEC. 6. Except as specifically provided by law, eligibility for 
assistance under this Act shall not, by itself, preclude the eligibility of 
the Navajo Community College to receive Federal financial assist-
ance under any program authorized under the Higher Education Act 
of 1965 or any other applicable program for the benefit of institutions 
of higher education, community colleges, or postsecondary educa-
tional institutions.". 
25 u s e 640C-2. 
20 u s e 1001 
note. 
PART G—NEW LAND GRANT COLLEGES 
AMERICAN SAMOA AND MICRONESIA LAND GRANT COLLEGES 
SEC. 1361. (a) Section 506 of the Education Amendments of 1972 is "
7 use 30i note. 
amended— 
(1) by inserting ", the Community College of American Samoa, 
the College of Micronesia," immediately after "The College of the 
Virgin Islands" in subsection (a); 
94 STAT. 1502 
PUBLIC LAW 96-374—OCT. 3, 1980 
(2) by striking out "Virgin Islands and Guam" each place it 
appears in subsection (b) and inserting in lieu thereof "Virgin 
Islands, Guam, American Samoa, and Micronesia"; and 
(3) by striking out "Guam." in such subsection and inserting in 
lieu thereof "Guam and an equal amount to American Samoa 
and to Micronesia.". 
7 use 326a. 
(b) Section 5 of the Act of August 30,1890 (7 U.S.C. 327), commonly 
referred to as the Second Morrill Act, is amended by inserting ", 
American Samoa, and Micronesia," immediately after "the Virgin 
Islands". 
7 use 301 note. 
(c) Any provision of any Act of Congress relating to the operation of 
or provision of assistance to a land grant college in the Virgin Islands 
or Guam shall apply to the land grant college in American Samoa 
and in Micronesia in the same manner and to the same extent. 
7 use 301 note. 
(d) Nothing in this section shall be construed to interfere with or 
affect any of the provisions of the April 17, 1900 Treaty of Cession of 
Tutuila and Aunu'u Islands or the July 16, 1904 Treaty of Cession of 
the Manu'a Islands as ratified by the Act of February 20, 1929 (45 
48 use 1661. 
Stat. 1253) and the Act of May 22,1929 (46 Stat. 4). 
PART H—MEMORIALS 
Robert A. Taft 
Subpart 1—The Robert A. Taft Institute 
Institute Assist-
ance Act. 
SHORT TITLE 
SEC. 1371. This subpart may be cited as the "Robert A. Taft 
Institute Assistance Act". 
GRANTS FOR DEVELOPMENT 
SEC. 1372. (a) In recognition of the public service of Senator Robert 
A. Taft, the Secretary of Education is authorized to make grants to 
the Robert A. Taft Institute of Government, located in New York, 
New York. 
(b) The total amount of grants under this section in any fiscal year 
may not exceed the total amount of private contributions received by 
the Institute for the fiscal year for which the grants are made. 
(c) No payment may be made under this subpart except upon an 
application at such time, in such manner, and containing or accompa-
nied by such information as the Secretary of Education may require. 
AUTHORIZATION OF APPROPRIATIONS 
SEC. 1373. There are authorized to be appropriated $750,000 for the 
fiscal year 1981 and for each fiscal year ending prior to October 1, 
1985. 
Subpart 2—General Daniel James Memorial Health Education 
Center 
FINANCIAL ASSISTANCE AUTHORIZED 
SEC. 1376. (a) In recognition of the public service of General Daniel 
James and as a memorial to General Daniel James, the Secretary of 
Education shall, in accordance with the provisions of this title, make 
a grant to establish the General Daniel James Memorial Health 
PUBLIC LAW 96-374—OCT. 3, 1980 
94 STAT. 1503 
Education Center to be located at Tuskegee Institute, Tuskegee, 
Alabama. 
(b) No grant may be made under subsection (a) of 
this section unless Applications. 
an application is made to the Secretary at such time and in such 
manner as the Secretary may provide. The application shall contain 
provisions designed to assure that— 
(1) the building known £is the General Daniel James Memorial 
Health Education Center will be located on the campus of 
Tuskegee Institute, Tuskegee, Alabama; 
(2) the memorial will serve as a regional center for preventive 
health education and as a repository for papers and memorabilia 
relating to the life of General Daniel James; and 
(3) such other reasonable conditions as the Secretary may 
require. 
AUTHORIZATION OF APPROPRIATIONS 
SEC. 1377. (a) There are authorized to be appropriated $6,000,000 for 
the fiscal year 1981 to carry out the provisions of this title. 
03) Funds appropriated pursuant to this title shall remain available 
until expended. 
Subpart 3—The William Levi Dawson Chair of Public Affairs 
SHORT TITLE 
SEC. 1381. This subpart may be cited as the "William Levi Dawson 
Chair of Public Affairs Act". 
ASSISTANCE FOR THE ESTABLISHMENT OF THE WILLIAM LEVI DAWSON 
CHAIR OF PUBLIC AFFAIRS 
SEC. 1382. (a) The Secretary of Education is authorized to provide 
financial assistance in accordance with the provision of this section to 
establish the William Levi Dawson Chair of Public Affairs at Fisk 
University, Nashville, Tennessee. 
OD) NO financial assistance under this title may be made except 
upon an application at such time, in such manner, and containing or 
accompanied by such information, as the Secretary may reasonably 
require. 
AUTHORIZATION OF APPROPRIATIONS 
SEC. 1383. (a) There are authorized to be appropriated such sums, 
not to exceed $750,000, for the fiscal year 1981, as may be necessary to 
carry out the provisions of section 1802 of this title. 
Qy) Funds appropriated pursuant to this title shall remain available 
until expended. 
PART I—TECHNICAL PROVISIONS 
William Levi 
Dawson Chair of 
Public Affairs 
Act. 
ADMINISTRATIVE AMENDMENTS 
SEC. 1391. (a)(1) The Act is amended by striking out "Commis-
sioner" wherever it appears (except in section 1201(f)) and inserting 
in lieu thereof "Secretary". 
(2) The Act is further amended by striking out "Commissioner's" 
wherever it appears and inserting in lieu thereof "Secretary's". 
(3) The Act is further amended by striking out "Secretary of 
Health, Education, and Welfare" wherever it appears (except in 
section 1201(e)) and inserting in lieu thereof "Secretary". 
Oi))(l) Section 1201(e) of the Act is amended to read as follows: 
20 u s e 1001 
note. 
20 u s e 1141. 
79-194 
O—81 —pt. 2 
15: QL3 
94 STAT. 1504 
PUBLIC LAW 96-374—OCT. 3, 1980 
"Secretary." 
20 u s e 1141. 
"Department.' 
20 u s e 1146. 
"(e) The term 'Secretary' means the Secretary of Education.". 
(2) Section 1201(f) of 
the Act is repealed. 
(3) Section 1201 of the Act is amended by adding at the end thereof 
the following: 
"(m) The term 'Department' means the Department of Education.". 
CONTRACT AUTHORITY 
SEC. 1392. The authorization to enter into contracts or other 
obligations under the Act, as amended by this Act, shall be effective 
for fiscal year 1981 and any succeeding fiscal year only to the extent 
or in such amounts as are provided in advance in appropriation Acts. 
EFFECTIVE DATES 
20 use 1001 
SEC. 1393. (a) Except as provided in subsection (bX this Act and the 
note. 
amendments made by this Act shall take effect on October 1,1980. 
(bXD The amendment made by section 301 of this Act to title m of 
Ante, p. 1390. 
the Act shall take effect October 1,1981. 
(2) The amendment made by section 404(cX4) of this Act to section 
Ante, p. 1406. 
415C(bX4) of 
the Act shall be effective October 1,1979. 
(3) The amendment made by section 405 to subpart 4 of part A of 
Ante, p. 1407. 
title IV of 
the Act shall take effect October 1,1981. 
Ante, p. 1415. 
(4) The amendments made by part B of 
title IV of this Act shall take 
effect, except as otherwise provided therein, on January 1,1981, and 
to the extent such amendments make changes in such part B which 
affect student loans, such changes shall apply to outstanding loans as 
well as to loans made after the amendments take effect, except that 
Ante, p. 1419. 
the amendments made by section 415(b) shall appty with respect to 
any loan to cover the cost of instruction for any period of instruction 
beginning on or after Januai^ 1,1981, to any student borrower who 
has no outstanding balance of principal or interest on any loan made, 
insured, or guaranteed under part B of title IV of the Higher 
20 use 1071. 
Education Act of 1965 on the date on which the borrower enters into 
the note or other written evidence of 
the loan. 
Ante, p. 1436. 
(5) The amendments made by part D of title IV of this Act shall 
Ante, p. 1443. 
apply to loans made imder part E of the Act on or after October 1, 
1980. 
Ante, p. 1472. 
(6) The amendment made by section 701 of this Act adding section 
731 of the Act shall apply to loans made under section 731 on or after 
October 1,1980. 
Approved October 3, 1980. 
LEGISLATIVE HISTORY: 
HOUSE REPORTS: No. 96-520 (eomm. on Education and Labor) and No. 96-1251 and 
No. 96-1337 (eomms. of eonference). 
SENATE REPORT No. 96-733 accompanying S. 1839 (eomm. on Labor and Human 
Resources). 
eONGRESSIONAL REOORD: 
Vol. 125 (1979): Oct. 29, Nov. 2, 7, considered and passed House. 
Vol. 126 (1980): June 23, S. 1839 considered in Senate. 
June 24, H.R. 5192 considered and passed Senate, amended, in 
lieu of S. 1839. 
Aug. 28, House agreed to conference report. 
Sept. 4, Senate rejected conference report. 
Sept. 18, House agreed to second conference report. 
Sept. 25, Senate agreed to second conference report. 
WEEKLY eOMPILATION OF PRESIDENTIAL DOeUMENTS: 
Vol. 16, No. 40 (1980): Oct. 3, Presidential statement.