[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 1507 Engrossed in Senate (ES)]

103d CONGRESS

  1st Session

                                S. 1507

_______________________________________________________________________

                                 AN ACT

To make technical amendments to the Higher Education Amendments of 1992 
     and the Higher Education Act of 1965, and for other purposes.
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
103d CONGRESS
  1st Session
                                S. 1507

_______________________________________________________________________

                                 AN ACT


 
To make technical amendments to the Higher Education Amendments of 1992 
     and the Higher Education Act of 1965, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; REFERENCES.

    (a) Short Title.--This Act may be cited as the ``Higher Education 
Technical Amendments Act of 1993''.
    (b) References.--Except as otherwise expressly provided, whenever 
in this Act an amendment or repeal is expressed in terms of an 
amendment to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provision of the 
Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).

SEC. 2. EFFECTIVE DATE FOR PELL GRANTS FOR INCARCERATED INDIVIDUALS.

    Section 410 of the Higher Education Amendments of 1992 (20 U.S.C. 
1070a note) is amended--
            (1) by redesignating paragraphs (2) and (3) as paragraphs 
        (3) and (4), respectively; and
            (2) by inserting after paragraph (1) the following new 
        paragraph:
            ``(2) that the changes made in section 401(b)(8)(B), 
        relating to Federal Pell Grants for incarcerated individuals, 
        shall apply to the awarding of Federal Pell Grants for periods 
        of enrollment on or after July 1, 1996;''.

SEC. 3. BASIC EDUCATIONAL OPPORTUNITY GRANTS.

    The second sentence of section 401(a)(1) (20 U.S.C. 1070a(a)(1)) is 
amended by inserting ``, except that this sentence shall not be 
construed to limit the authority of the Secretary to place an 
institution on a reimbursement system of payment'' before the period.

SEC. 4. EARLY INTERVENTION APPLICATION.

    Section 404G (20 U.S.C. 1070a-27) is amended--
            (1) in the first sentence, by striking ``an appropriation'' 
        and inserting ``to be appropriated''; and
            (2) by striking the second sentence.

SEC. 5. INTEREST RATES FOR NEW BORROWERS AFTER OCTOBER 1, 1992.

    The matter preceding subparagraph (A) of section 427A(e)(1) (20 
U.S.C. 1077a(e)(1)) is amended by inserting ``(other than a loan made, 
insured or guaranteed under section 428A)'' after ``this part''.

SEC. 6. FORBEARANCE CLARIFICATION.

    Subparagraph (A) of section 428(c)(3) (20 U.S.C. 1078(c)(3)(A)) is 
amended by striking ``for the benefit of the student borrower serving 
in a medical or dental internship or residency program''.

SEC. 7. UNSUBSIDIZED LOAN INTEREST RATES.

    Paragraph (4) of section 428H(e) (20 U.S.C. 1978-8(e)(4)) is 
amended by striking ``427A(e)'' and inserting ``427A''.

SEC. 8. PRESERVATION OF BORROWER CLAIMS AS DEFENSES.

    Paragraph (1) of section 432(m) (20 U.S.C. 1082(m)(1)) is amended 
by adding at the end the following new subparagraph:
            ``(E) Preservation of borrower claims as defenses.--
                    ``(i) The promissory note prescribed by the 
                Secretary shall include the following provision:
                    ```any holder of this note is subject to all claims 
                and defenses which i could assert against the school if 
                (1) this loan is made by the school or (2) the proceeds 
                of this loan are used to pay tuition and charges of a 
                school that refers loan applicants to the lender, or 
                that is affiliated with the lender by common control, 
                contract or business arrangement. my recovery under 
                this provision shall not exceed the amount i paid on 
                this loan.'
                    ``(ii) For purposes of this subparagraph--
                            ``(I) an institution shall be considered to 
                        refer loan applicants to a particular lender if 
                        the institution urges, suggests, or otherwise 
                        recommends that loan applicants borrow from the 
                        lender and the lender is on notice of such 
                        recommendation by the institution at the time 
                        the loan is made, unless the institution does 
                        no more than identify the lender as an 
                        available source of student loans; and
                            ``(II) a business arrangement exists if the 
                        lender and the institution agree to engage in 
                        cooperative activity with regard to the making 
                        of loans for students in attendance at the 
                        institution, except for activity specifically 
                        and expressly required by this Act or 
                        regulations issued by the Secretary.
                    ``(iii) Notwithstanding the provisions of section 
                433.2 of title 16, Code of Federal Regulations, the 
                provisions of clauses (i) and (ii) shall apply to all 
                loans made, insured or guaranteed under this part.''.

SEC. 9. COHORT DEFAULT RATE.

    (a) Findings.--The Congress finds that--
            (1) many institutions of higher education with high cohort 
        default rates have avoided or sought to avoid loss of 
        eligibility under the Federal Family Education Loan Program by 
        alleging improper servicing or collection of the defaulted 
        loans taken into account in determining their default rates;
            (2) institutions of higher education bear a fair share of 
        the blame for the increased level of defaults in such program;
            (3) since a borrower remains responsible for paying on a 
        loan even if there is improper loan servicing or collection it 
        would not be fair to forgive the institution of higher 
        education for the default based on such errors, and exclusion 
        of such loans would result in a misleading cohort default rate 
        which is not reflective of the institution's performance;
            (4) providing institutions of higher education with access 
        to servicing or collection records relating to loans taken into 
        account in determining the institution's cohort default rate, 
        for the purpose of appealing the loss of eligibility, would 
        frustrate the statutory purpose of reducing student loan 
        defaults because collection and review of the records could not 
        be completed within the statutory time frames for such review; 
        and
            (5) it is unnecessary to afford institutions of higher 
        education such access to loan records because the statutory 
        threshold percentages for loss of eligibility due to high 
        cohort default rates are substantially above the preferred 
        level of such rates for eligible institutions.
    (b) Simplification of Definition of Cohort Default Rate.--
Subparagraph (B) of section 435(m)(1) (20 U.S.C. 1085(m)(1)(B)) is 
amended by striking all beginning with ``, and,'' through ``calculation 
of the cohort default rate''.
    (c) Effective Date and Savings Provision.--
            (1) Effective date.--The amendment made by subsection (b) 
        shall be effective on the date of enactment of this Act and 
        shall apply to all determinations made by the Secretary under 
        section 435(m)(1)(B) of the Higher Education Act of 1965 on or 
        after that date, including determinations made on or after such 
        date for fiscal years for which the Secretary made 
        determinations under such section prior to such date.
            (2) Savings provision.--The amendment made by subsection 
        (b) shall not affect a determination of institutional 
        eligibility made before the date of enactment of this Act.

SEC. 10. FEDERAL WORK-STUDY PROGRAMS.

    Paragraph (5) of section 443(b) (20 U.S.C. 2753(b)(5) is amended to 
read as follows:
            ``(5) provide that the Federal share of the compensation of 
        students employed in the work-study program in accordance with 
        the agreement shall not exceed 75 percent for academic year 
        1993-1994 and succeeding academic years, except that the 
        Federal share may exceed such amounts of such compensation if 
        the Secretary determines, pursuant to regulations promulgated 
        by the Secretary establishing objective criteria for such 
        determinations, that a Federal share in excess of such amounts 
        is required in furtherance of the purpose of this part;''.

SEC. 11. COST OF ATTENDANCE.

    Section 472 (20 U.S.C. 1087ll) is amended--
            (1) in paragraph (10), by striking ``and'' after the 
        semicolon;
            (2) in paragraph (11), by striking the period and inserting 
        ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(12) for a student who receives a loan under part B or D 
        of this title (or on whose behalf the parent of such student 
        receives a loan under section 428B or part D), an allowance for 
        the actual cost of any loan fee, origination fee, or insurance 
        premium charged to such student or such parent on such loan, or 
        the average cost of any such fee or premium charged by the 
        Secretary, eligible lender, or guaranty agency making or 
        insuring such loan, as the case may be.''.

SEC. 12. CLARIFICATION REGARDING IRS FILINGS.

    Section 479 (20 U.S.C. 1087ss) is amended--
            (1) in subsection (b)(3)--
                    (A) in subparagraph (A), by inserting ``(including 
                any prepared or electronic version of such form)'' 
                before ``required''; and
                    (B) in subparagraph (B), by inserting ``(including 
                any prepared or electronic version of such return)'' 
                before ``required''; and
            (2) in subsection (c)--
                    (A) by amending subparagraph (A) of paragraph (1) 
                to read as follows:
                    ``(A) the student's parents were not required to 
                file an income tax return under section 6012(a)(1) of 
                the Internal Revenue Code of 1986; and''; and
                    (B) by amending subparagraph (A) of paragraph (2) 
                to read as follows:
                    ``(A) the student (and the student's spouse, if 
                any) was not required to file an income tax return 
                under section 6012(a)(1) of the Internal Revenue Code 
                of 1986; and''.

SEC. 13. DISCRETION OF STUDENT FINANCIAL AID OFFICER.

    Section 479A (20 U.S.C. 1087tt) is amended by adding at the end the 
following new subsection:
    ``(c) Adjustments for Special Circumstances.--
            ``(1) In general.--A student financial aid administrator 
        shall be considered to be making an adjustment for special 
        circumstances in accordance with subsection (a) if--
                    ``(A) in the case of a dependent student--
                            ``(i) such student received a Federal Pell 
                        Grant as a dependent student in academic year 
                        1992-1993 and the amount of such student's 
                        Federal Pell Grant for academic year 1993-1994 
                        is at least $500 less than the amount of such 
                        student's Federal Pell Grant for academic year 
                        1992-1993; and
                            ``(ii) the decrease described in clause (i) 
                        is the direct result of a change in the 
                        determination of such student's need for 
                        assistance in accordance with this part that is 
                        attributable to the enactment of the Higher 
                        Education Amendments of 1992; and
                    ``(B) in the case of a single independent student--
                            ``(i) such student received a Federal Pell 
                        Grant as a single independent student in 
                        academic year 1992-1993 and qualified as an 
                        independent student in accordance with section 
                        480(d) for academic year 1993-1994, and the 
                        amount of such student's Federal Pell Grant for 
                        academic year 1993-1994 is at least $500 less 
                        than the amount of such student's Federal Pell 
                        Grant for academic year 1992-1993; and
                            ``(ii) the decrease described in clause (i) 
                        is the direct result of a change in the 
                        determination of such student's need for 
                        assistance in accordance with this part that is 
                        attributable to the enactment of the Higher 
                        Education Amendments of 1992.
            ``(2) Amount.--A financial aid administrator shall not make 
        an adjustment for special circumstances pursuant to this 
        subsection in an amount that exceeds one-half of the difference 
        between the amount of a student's Federal Pell Grant for 
        academic year 1992-1993 and the amount of such student's 
        Federal Pell Grant for academic year 1993-1994.
            ``(3) Academic year limitation.--A financial aid 
        administrator only shall make adjustments under this subsection 
        for Federal Pell Grants awarded for academic years 1993-1994, 
        1994-1995, and 1995-1996.
            ``(4) Special rule.--Adjustments under this subsection 
        shall only be made in fiscal year 1993 if an Act that contains 
        an appropriation for fiscal year 1993 to carry out this 
        subsection is enacted on or after the date of enactment of the 
        Higher Education Technical Amendments of 1993.''.

SEC. 14. CORRESPONDENCE RULE WAIVER.

    Subparagraph (B) of section 481(a)(3) (20 U.S.C. 1088(a)(3)(B)) is 
amended by inserting ``, except that the Secretary, for good cause as 
determined by the Secretary, may deem a nonprofit institution that 
provides a 4-year or 2-year program of instruction for which such 
institution awards a bachelor's or associate's degree to be in 
compliance with the provisions of this subparagraph'' before the 
semicolon.

SEC. 15. WAIVER OF ABILITY TO BENEFIT RULE FOR CERTAIN SCHOOLS.

    Subparagraph (D) of section 481(a)(3) (20 U.S.C. 1088(a)(3)(D)) is 
amended by inserting ``, except that the Secretary, for good cause as 
determined by the Secretary, may deem an institution that has entered 
into a contract with a Federal, State or local government entity to 
serve students described in section 484(d) to be in compliance with the 
provisions of this subparagraph'' before the period.

SEC. 16. DEFINITION OF ACADEMIC YEAR.

    Paragraph (2) of section 481(d) (20 U.S.C. 1088(d)(2)) is amended 
by inserting ``, except that the Secretary may waive the 30-week 
requirement described in this paragraph for good cause as determined by 
the Secretary'' before the period.

SEC. 17. TREATMENT OF UNCOMPENSATED FINANCIAL AID APPLICATION 
              PREPARERS.

    Subsection (f) of section 483 (20 U.S.C. 1090(f)) is amended by 
striking ``the preparer of such financial aid application'' and 
inserting ``any individual who receives compensation from an applicant 
or an applicant's family for the purpose of preparing such financial 
aid application, and nothing in this paragraph shall be construed to 
require an individual who does not receive such compensation to include 
such information on such application''.

SEC. 18. STUDENT ELIGIBILITY FOR FORMER TRUST TERRITORIES.

    Subparagraph (B) of section 484(a)(4) (20 U.S.C. 1091(a)(4)(B)) is 
amended by inserting ``, except that the provisions of this 
subparagraph shall not apply to students from the Republic of the 
Marshall Islands, the Federated States of Micronesia, or the Republic 
of Palau'' after ``number''.

SEC. 19. DISCLOSURE OF COMPLETION OR GRADUATION RATE.

    Subparagraph (A) of section 485(a)(3) (20 U.S.C. 1092(a)(3)(A) is 
amended by striking ``beginning on July 1, 1993, and each year'' and 
inserting ``within 270 days after the date on which the Secretary 
issues final regulations implementing the provisions of this paragraph 
and each July 1''.

SEC. 20. INDEPENDENCE OF ACCREDITING AGENCIES.

    Subparagraph (A) of section 496(a)(3) (20 U.S.C. 1099b(a)(3)(A)) is 
amended by striking ``subparagraph (A) of paragraph (2)'' and inserting 
``clause (i) of paragraph (2)(A)''.

SEC. 21. OPERATING PROCEDURES FOR ACCREDITING AGENCIES.

    The matter preceding paragraph (1) of section 496(c) (20 U.S.C. 
1099b(c)(1)) is amended by inserting ``determining an institution of 
higher education's eligibility to participate in programs under'' after 
``purpose of''.

SEC. 22. FINANCIAL RESPONSIBILITY STANDARDS.

    Subsection (c) of section 498 (20 U.S.C. 1099c(c)) is amended--
            (1) in paragraph (3)--
                    (A) in the matter preceding subparagraph (A)--
                            (i) by striking ``may'' and inserting 
                        ``shall''; and
                            (ii) by inserting ``that provides a 2-year 
                        or 4-year program of instruction for which the 
                        institution awards an associate's or bachelor's 
                        degree'' before ``to be''; and
                    (B) by amending subparagraph (C) to read as 
                follows:
                    ``(C) such institution submits a report to the 
                Secretary from an independent certified public 
                accountant that certifies that the institution has 
                sufficient resources to ensure against the precipitous 
                closure of such institution, including the ability to 
                meet all of such institution's financial obligations 
                (including refunds of institutional charges and 
                repayments to the Secretary for liabilities and debts 
                incurred in programs administered by the Secretary); 
                or''; and
            (2) by adding at the end the following new paragraph:
            ``(6)(A) In carrying out the provisions of this subsection 
        the Secretary shall establish financial responsibility 
        standards that include requiring an institution of higher 
        education to maintain an asset-to-liability ratio of 1:1.
            ``(B) For the purpose of computing an asset-to-liability 
        ratio described in subparagraph (A) and paragraph (2), an 
        institution--
                    ``(i) may count as a current asset the equity (the 
                difference between book cost and the mortgage owed) in 
                facilities (land and buildings) owned and occupied by 
                such institution and used to provide education and 
                training services described in such institution's 
                official publications;
                    ``(ii) in the case of an application for 
                recertification under this section, shall take into 
                consideration the depreciation and current value of 
                such facilities determined in accordance with a 
                professional appraisal; and
                    ``(iii) shall use the lesser value between the 
                equity value and the current value of such 
                facilities.''.

SEC. 23. NATIONAL BOARD FOR PROFESSIONAL TEACHING STANDARDS.

    Section 551 (20 U.S.C. 1107) is amended--
            (1) in paragraph (1) of subsection (b), by striking ``the 
        Federal share of'';
            (2) in subparagraph (B) of subsection (e)(1), by striking 
        ``share of the cost of the activities of the Board is'' and 
        inserting ``contributions described in subsection (f) are''; 
        and
            (3) by amending subsection (f) to read as follows:
    ``(f) Matching Funds Requirement.--
            ``(1) In general.--The Secretary shall not provide 
        financial assistance under this subpart to the Board unless the 
        Board agrees to expend non-Federal contributions equal to $1 
        for every $1 of the Federal funds provided pursuant to such 
        financial assistance.
            ``(2) Non-federal contributions.--The non-Federal 
        contributions described in paragraph (1)--
                    ``(A) may include all non-Federal funds raised by 
                the Board on or after January 1, 1987; and
                    ``(B) may be used for outreach, implementation, 
                administration, operation, and other costs associated 
                with the development and implementation of national 
                teacher assessment and certification procedures under 
                this subpart.''.

SEC. 24. COOPERATIVE EDUCATION.

    The matter preceding paragraph (1) of section 802(b) (20 U.S.C. 
1133a(b)(1)) is amended by inserting ``the Secretary shall reserve such 
amount as is necessary to make payments in such fiscal year, in 
accordance with section 802 of the Higher Education Act of 1965 (as 
such Act was in effect on July 22, 1992) to each institution of higher 
education that was, on the date of enactment of the Higher Education 
Amendments of 1992, operating a cooperative education program under 
such section pursuant to a multiyear award. Of the remainder of the 
amount appropriated in such fiscal year'' after ``fiscal year''.

SEC. 25. PACIFIC REGIONAL EDUCATIONAL LABORATORY.

    The matter preceding paragraph (1) of section 101A(b) of the Carl 
D. Perkins Vocational and Applied Technology Education Act (20 U.S.C. 
2311a(b)) is amended--
            (1) by striking ``Center for the Advancement of Pacific 
        Education, Honolulu, Hawaii, or its successor entity as the 
        Pacific regional educational laboratory'' and inserting 
        ``Pacific Regional Educational Laboratory, Honolulu, Hawaii''; 
        and
            (2) by inserting ``or provide direct services regarding'' 
        after ``grants for''.

SEC. 26. DISTRIBUTION OF FUNDS TO POSTSECONDARY AND ADULT PROGRAMS.

    Section 232 of the Carl D. Perkins Vocational and Applied 
Technology Education Act (20 U.S.C. 2341a) is amended--
            (1) in subsection (a)--
                    (A) in the first sentence, by inserting ``or 
                consortia thereof'' before ``within''; and
                    (B) in the second sentence--
                            (i) by inserting ``or consortium'' before 
                        ``shall''; and
                            (ii) by inserting ``or consortium'' before 
                        ``in the preceding'';
            (2) in subsection (b)--
                    (A) in paragraph (1), by inserting ``or consortia'' 
                after ``institutions''; and
                    (B) in the matter preceding subparagraph (A) of 
                paragraph (2), by inserting ``or consortia'' after 
                ``institutions''; and
            (3) in subsection (c)--
                    (A) in paragraph (1), by inserting ``or 
                consortium'' after ``institution''; and
                    (B) in paragraph (2), by inserting ``or consortia'' 
                after ``institutions''.

SEC. 27. GRADUATE PROGRAMS.

    Notwithstanding any other provision of law, if an individual 
received multiyear fellowship assistance under part B, C, or D of title 
IX of the Higher Education Act of 1965 in fiscal year 1992, then the 
Secretary of Education shall apply the provisions of such parts (as 
such parts were in effect on July 22, 1992) for the remainder of the 
duration of such multiyear fellowship assistance.

SEC. 28. PATRICIA ROBERTS HARRIS FELLOWSHIP PROGRAM.

    The Secretary of Education may use funds made available to carry 
out part B of title IX of the Higher Education Act of 1965 (20 U.S.C. 
1134d et seq.) for fiscal year 1994 to carry out the provisions of 
section 27 for individuals eligible for multiyear fellowship assistance 
under part B (as such part was in effect on July 22, 1992) in fiscal 
year 1993.

            Passed the Senate October 7 (legislative day, September 
      27), 1993.

            Attest:






                                                             Secretary.

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