[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3479 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 3479

 To provide for the implementation of recommendations of the National 
  Commission on the Cost of Higher Education, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 17, 1998

 Mr. McKeon (for himself, Mr. Goodling, and Mr. Castle) introduced the 
 following bill; which was referred to the Committee on Education and 
                             the Workforce

_______________________________________________________________________

                                 A BILL


 
 To provide for the implementation of recommendations of the National 
  Commission on the Cost of Higher Education, 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.

    This Act may be cited as the ``Tuition Reduction and Information 
Act of 1998''.

SEC. 2. IMPROVEMENTS IN MARKET INFORMATION AND PUBLIC ACCOUNTABILITY IN 
              HIGHER EDUCATION.

    (a) Improved Data Collection.--
            (1) Development of uniform methodology.--The Secretary 
        shall convene a series of forums to develop a nationally 
        uniform methodology for reporting costs incurred by 
        postsecondary institutions in providing postsecondary 
        education.
            (2) Separation of undergraduate and graduate costs.--Such 
        uniform methodology shall permit the Secretary to collect and 
        disseminate separate data with respect to the costs incurred in 
        providing undergraduate and graduate postsecondary education.
            (3) Redesign of ipeds.--On the basis of the methodology 
        developed pursuant to paragraph (1), the Secretary shall 
        redesign relevant parts of the integrated postsecondary 
        education data system to improve the usefulness and timeliness 
        of the data collected by such system.
    (b) Data Dissemination.--The Secretary shall establish a system for 
the publication, in both printed and electronic form, of the data 
collected pursuant to subsection (a). Such data shall be available in a 
form that permits the review and comparison of the data submissions of 
individual institutions of higher education. Such data shall be 
presented in a form that is easily understandable and allows parents 
and students to make informed decisions based on--
            (1) tuition charges published by the institution;
            (2) the institution's cost of educating students on a full-
        time equivalent basis;
            (3) the general subsidy on a full-time equivalent basis;
            (4) instructional cost by level of instruction;
            (5) the total price of attendance; and
            (6) the average amount of per student financial aid 
        received, including and excluding assistance in the form of 
        loans.

SEC. 3. REGULATORY REFORM.

    Title XII of the Higher Education Act of 1965 is amended by adding 
at the end the following new section:

``SEC. 1211. REGULATORY REFORM.

    ``(a) Biennial Review of Regulations.--In every even-numbered year 
(beginning with 1998), the Secretary--
            (1) shall review all regulations issued under title IV of 
        the Higher Education Act of 1965 in effect at the time of the 
        review that apply to the operations or activities of any 
        participant in those programs; and
            (2) shall determine whether any such regulation is no 
        longer necessary in the public interest.
    ``(b) Effect of Determination.--The Secretary shall repeal, 
consolidate, simplify or otherwise modify any regulation the Secretary 
determines to be no longer necessary in the public interest.
    ``(c) Report to Congress.--The Secretary shall report to the 
Congress any legislative changes necessary to permit regulatory 
simplification under this section.''.

SEC. 4. DIFFERENTIAL REGULATION.

    (a) GAO Study.--The Comptroller General shall conduct a study of 
the extent to which unnecessary costs are imposed on postsecondary 
education as a consequence of the applicability to postsecondary 
facilities and equipment of regulations prescribed for purposes of 
regulating industrial and commercial enterprises.
    (b) Report Required.--Within one year after the date of enactment 
of this Act, the Comptroller General shall submit a report to the 
Congress on the results of the study required by subsection (a).

SEC. 5. ANNUAL REPORT ON COST OF HIGHER EDUCATION.

    (a) GAO Report Required.--The Comptroller General shall conduct an 
on-going analysis of the following:
            (1) The increase in tuition compared with other commodities 
        and services.
            (2) Trends in college and university administrative costs, 
        including administrative staffing, ratio of administrative 
        staff to instructors, ratio of administrative staff to 
        students, remuneration of administrative staff, and 
        remuneration of college and university presidents or 
        chancellors.
            (3) Trends in (A) faculty workload and remuneration 
        (including the use of adjunct faculty), (B) faculty-to-student 
        ratios, (C) number of hours spent in the classroom by faculty, 
        and (D) tenure practices, and the impact of such trends on 
        tuition.
            (4) Trends in (A) the construction and renovation of 
        academic and other collegiate facilities, and (B) the 
        modernization of facilities to access and utilize new 
        technologies, and the impact of such trends on tuition.
            (5) The extent to which increases in institutional 
        financial aid and tuition discounting have affected tuition 
        increases, including the demographics of students receiving 
        such aid, the extent to which such aid is provided to students 
        with limited need in order to attract such students to 
        particular institutions or major fields of study, and the 
        extent to which Federal financial aid, including loan aid, has 
        been used to offset such increases.
            (6) The extent to which Federal, State, and local laws, 
        regulations, or other mandates contribute to increasing 
        tuition, and recommendations on reducing those mandates.
            (7) The establishment of a mechanism for a more timely and 
        widespread distribution of data on tuition trends and other 
        costs of operating colleges and universities.
            (8) The extent to which student financial aid programs have 
        contributed to changes in tuition.
            (9) Trends in State fiscal policies that have affected 
        college costs.
            (10) Other related topics determined to be appropriate by 
        the Comptroller General.
    (b) Annual Report to Congress.--The Comptroller General shall 
submit to the Congress an annual report on the results of the analysis 
required by subsection (a).

SEC. 6. VOLUNTARY RETIREMENT INCENTIVE PLANS OR ARRANGEMENTS.

    (a) In General.--Section 4 of the Age Discrimination in Employment 
Act of 1967 (29 U.S.C. 623) is amended by adding at the end the 
following:
    ``(m) Notwithstanding subsection (f)(2)(B), it shall not be a 
violation of subsection (a), (b), (c), (e), or (i) solely because a 
plan of an institution of higher education (as defined in section 
1201(a) of the Higher Education Act of 1965 (20 U.S.C. 1141(a))) offers 
employees who are serving under a contract of unlimited tenure (or 
similar arrangement providing for unlimited tenure) additional benefits 
upon voluntary retirement that are reduced or eliminated on the basis 
of age, if--
            ``(1) such institution does not implement with respect to 
        such employees any age-based reduction or elimination of 
        benefits that are not such additional benefits, except as 
        permitted by other provisions of this Act; and
            ``(2) with respect to each of such employees who have, as 
        of the time the plan is adopted, attained the minimum age and 
        satisfied all non-age-based conditions for receiving a benefit 
        under the plan, such employee is not precluded on the basis of 
        age from having 1 opportunity lasting not less than 180-days to 
        elect to retire and to receive the maximum benefit that would 
        be available to a younger employee if such younger employee 
        were otherwise similarly situated to such employee.''.
    (b) Construction.--
            (1) Application.--Nothing in the amendment made by 
        subsection (a) shall be construed to affect the application of 
        section 4 of the Age Discrimination in Employment Act of 1967 
        (29 U.S.C. 623) with respect to--
                    (A) any employer other than an institution of 
                higher education (as defined in section 1201(a) of the 
                Higher Education Act of 1965); or
                    (B) any plan not described in subsection (m) of 
                section 4 of such Act (as added by subsection (a)).
            (2) Relationship to provisions relating to voluntary early 
        retirement incentive plans.--Nothing in the amendment made by 
        subsection (a) shall be construed to imply that a plan 
        described in subsection (m) of section 4 of such Act (as added 
        by subsection (a)) may not be considered to be a plan described 
        in section 4(f)(2)(B)(ii) of such Act (29 U.S.C. 
        623(f)(2)(B)(ii)).
    (c) Effective Date.--
            (1) In general.--This section shall take effect on the date 
        of enactment of this Act.
            (2) Effect on causes of action existing before date of 
        enactment.--The amendment made by subsection (a) shall not 
        apply with respect to any cause of action arising under the Age 
        Discrimination in Employment Act of 1967 prior to the date of 
        enactment of this Act.

SEC. 7. FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION.

    (a) Special Projects.--Section 1011 of the Higher Education Act of 
1965 (20 U.S.C. 1035a-11) is amended--
            (1) by striking paragraphs (1), (2), and (3) of subsection 
        (c) and inserting the following:
            ``(1) institutional restructuring to improve learning and 
        promote productivity, efficiency, quality improvement, and cost 
        and price control;
            ``(2) articulation agreements between two-year and four-
        year institutions;
            ``(3) evaluation and dissemination of model programs; and
            ``(4) international cooperation and student exchange among 
        postsecondary educational institutions.''; and
            (2) by striking subsection (d).
    (b) Authorization of Appropriations.--Section 1004 of such Act (20 
U.S.C. 1035a-3) is amended to read as follows:

``SEC. 1004. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this part 
$30,000,000 for fiscal year 1999 and such sums as may be necessary for 
each of the 4 succeeding fiscal years.''.

SEC. 8. PERFORMANCE-BASED ORGANIZATION FOR THE DELIVERY OF FEDERAL 
              STUDENT FINANCIAL ASSISTANCE.

    Title I (as amended by part A of this title) is amended--
            (1) by striking ``TITLE I--GENERAL PROVISIONS'' and 
        inserting the following:

            ``TITLE I--GENERAL AND ADMINISTRATIVE PROVISIONS

                    ``PART A--GENERAL PROVISIONS'';

        and
            (2) by adding at the end the following new part:

 ``PART B--ADMINISTRATIVE PROVISIONS FOR DELIVERY OF STUDENT FINANCIAL 
                               ASSISTANCE

``SEC. 131. PERFORMANCE-BASED ORGANIZATION FOR THE DELIVERY OF FEDERAL 
              STUDENT FINANCIAL ASSISTANCE.

    ``(a) Establishment and Purpose.--
            ``(1) Establishment.--There is established in the 
        Department a Performance-Based Organization (hereafter referred 
        to as the `PBO') which shall be a discrete management unit 
        responsible for managing the information systems supporting the 
        programs authorized under title IV of this Act, as specified in 
        subsection (b).
            ``(2) Purposes.--The purposes of the PBO are--
                    ``(A) to improve the level of service to students 
                and participants in the programs;
                    ``(B) to reduce the costs of administering the 
                Federal student financial assistance programs 
                authorized under title IV;
                    ``(C) to increase the accountability of the 
                officials responsible for administering the operational 
                aspects of these programs;
                    ``(D) to provide greater flexibility in the 
                management of the operational functions of the Federal 
                student financial assistance programs;
                    ``(E) to integrate the information systems 
                supporting the Federal student financial assistance 
                programs; and
                    ``(F) to implement an open, common, integrated 
                system for the delivery of student financial assistance 
                under title IV.
    ``(b) Authority.--
            ``(1) Authority of secretary.-- Notwithstanding any other 
        provision of this Act, the Secretary shall maintain 
        responsibility for the development and promulgation of policy 
        relating to the programs of student financial assistance under 
        title IV. In the exercise of its functions, the PBO shall be 
        subject to the direction of the Secretary. The Secretary 
        shall--
                    ``(A) request the advice of, and work in 
                cooperation with, the Chief Operating Officer in 
                developing regulations, policies, administrative 
                guidance, or procedures affecting the information 
                systems administered by the PBO, and other functions 
                performed by the PBO;
                    ``(B) request cost estimates from the Chief 
                Operating Officer for system changes required by 
                specific policies proposed by the Secretary;
                    ``(C) consider the Chief Operating Officer's 
                comments and estimates prior to finalizing such 
                regulations, policies, administrative guidance, or 
                procedures;
                    ``(D) assist the Chief Operating Officer in 
                identifying goals for the administration and 
                modernization of the delivery system for student 
                financial assistance under title IV; and
                    ``(E) if necessary, arrange for additional funding 
                to ensure that the PBO can efficiently perform its 
                functions.
            ``(2) Functions.--The PBO shall carry out the following 
        functions:
                    ``(A) All aspects of contracting for the data and 
                information systems supporting student financial 
                assistance under title IV, including the operational 
                administration of the William D. Ford Federal Direct 
                Loan Program, but not including the development of 
                policy relating to such programs.
                    ``(B) The administrative, accounting, and financial 
                management functions of the delivery system for Federal 
                student assistance, including--
                            ``(i) the collection, processing and 
                        transmission of applicant data to students, 
                        institutions and authorized third parties, as 
                        provided for in section 483;
                            ``(ii) technical specifications for 
                        software development and systems supporting the 
                        delivery of student financial assistance under 
                        title IV;
                            ``(iii) information technology and systems 
                        infrastructure related to the delivery and 
                        management of student financial assistance 
                        under title IV;
                            ``(iv) all software and hardware 
                        acquisitions and all information technology 
                        contracts related to the delivery and 
                        management of student financial assistance 
                        under title IV; and
                            ``(v) all customer service, training and 
                        user support related to the functions described 
                        in clauses (i) through (iv).
                    ``(C) Annual development of a budget for the 
                operations and services of the PBO, in consultation 
                with the Secretary, and for consideration and inclusion 
                in the Department's annual budget submission.
                    ``(D) Annual development of goals, in consultation 
                with the Secretary, for the administration and 
                modernization of the system for delivery of student 
                financial assistance under title IV.
                    ``(E) Other functions proposed by the Secretary, 
                and agreed to by the Chief Operating Officer as are not 
                inconsistent with the functions of the PBO.
            ``(3) Independence.--In carrying out its functions, the PBO 
        shall exercise independent control of its budget allocations 
        and expenditures, personnel decisions and processes, 
        procurements, and other administrative and management 
        functions.
            ``(4) Review of pbo.--The PBO shall be subject to the usual 
        and customary Federal audit procedures, and be subject to 
        review by the Inspector General of the Department.
    ``(c) Authorization of Appropriations.--For the purpose of funding 
the administrative costs incurred by the PBO in administering systems 
supporting programs under this part, there are authorized to be 
appropriated such sums as may be necessary for fiscal year 1999 and 
each of the 4 succeeding fiscal years, except that funds authorized 
under section 458 shall be made available to the PBO by the Secretary 
for administrative costs authorized to be funded under that section.
    ``(d) Organizational Reports.--
            ``(1) Performance plan.--Within 6 months of the hiring of 
        the Chief Operating Officer, and every 12 months thereafter, 
        the Secretary and the Chief Operating Officer of the Department 
        shall develop a performance plan for the PBO that establishes 
        measurable goals and objectives for the organization. In 
        developing this performance plan, the Secretary and the Chief 
        Operating Officer shall consult with the Committee on Education 
        and the Workforce of the House of Representatives, the 
        Committee on Labor and Human Resources of the Senate, and the 
        Advisory Committee on Student Financial Assistance. The 
        performance plan shall include a concise statement of goals for 
        a modernized system for the delivery of student financial 
        assistance under title IV and identify action steps necessary 
        to achieve such goals. Such goals shall be used in evaluating 
        the performance of the Chief Operating Officer and the PBO 
        pursuant to paragraph (2).
            ``(2) Annual accountability report.--The Chief Operating 
        Officer shall prepare and submit an annual accountability 
        report to the Secretary and the Committee on Education and the 
        Workforce of the House of Representatives and the Committee on 
        Labor and Human Resources of the Senate. The accountability 
        report shall include--
                    ``(A) an independent financial audit of the 
                expenditures of both the PBO and programs administered 
                by it;
                    ``(B) financial and performance requirements 
                applicable to the PBO under the Chief Financial Officer 
                Act of 1990 and the Government Performance and Results 
                Act of 1993;
                    ``(C) the results achieved by the PBO during the 
                year relative to the goals established in the 
                organization's performance plan;
                    ``(D) the results of the evaluations of performance 
                of the Chief Operating Officer and senior managers 
                under subsections (e)(2) and (f)(2), including the 
                amounts of bonus compensation awarded to these 
                individuals;
                    ``(E) a discussion of the effectiveness of 
                coordination between the PBO and the Secretary;
                    ``(F) recommendations for legislative and 
                regulatory changes to improve service to students and 
                their families, and to or improve program efficiency 
                and integrity; and
                    ``(G) other such information as the Director of the 
                Office of Management and Budget shall prescribe for 
                performance based organizations.
    ``(e) Chief Operating Officer.--
            ``(1) In general.--The management of the PBO shall be 
        vested in a Chief Operating Officer who shall be appointed by 
        the Secretary to a 5-year term and compensated without regard 
        to chapters 33, 51, and 53 of title 5, United States Code. The 
        Secretary shall appoint the Chief Operating Officer within 6 
        months of the date of enactment of this part. The Secretary 
        shall consult with the Chairmen of the Committee on Education 
        and the Workforce of the House of Representatives and the 
        Committee on Labor and Human Resources of the Senate prior to 
        making an appointment. The appointment shall be made on the 
        basis of demonstrated management ability and expertise in 
        information technology, including extensive experience in the 
        financial services industry, and without regard to political 
        affiliation or activity. The Secretary may reappoint the Chief 
        Operating Officer to subsequent terms so long as the 
        performance of the Chief Operating Officer, as set forth in the 
        performance agreement, is satisfactory or better. The Chief 
        Operating Officer may be removed by--
                    ``(A) the President; or
                    ``(B) the Secretary, for misconduct or failure to 
                meet performance goals set forth in the performance 
                agreement in paragraph (2).
        The President or Secretary shall communicate the reasons for 
        any such removal to the appropriate committees of Congress.
            ``(2) Performance agreement.--The Secretary and the Chief 
        Operating Officer shall enter into an annual performance 
        agreement which shall set forth measurable organization and 
        individual goals for the Chief Operating Officer in key 
        operational areas. The agreement shall be subject to review and 
        renegotiation at the end of each term. The final agreement 
        shall be transmitted to the Committee on Education and the 
        Workforce of the House of Representatives and the Committee on 
        Labor and Human Resources of the Senate, and made publicly 
        available.
            ``(3) Compensation.--The Chief Operating Officer is 
        authorized to be paid at an annual rate of basic pay not to 
exceed the maximum rate of basic pay for the Senior Executive Service 
under section 5382 of title 5, United States Code, including any 
applicable locality-based comparability payment that may be authorized 
under section 5304(h)(2)(B) of such title 5. In addition, the Chief 
Operating Officer may receive a bonus in an amount up to, but not in 
excess of, 50 percent of such annual rate of basic pay, based upon the 
Secretary's evaluation of the Chief Operating Officer's performance in 
relation to the performance goals set forth in the performance 
agreement described in paragraph (2). Payment of a bonus under this 
paragraph may be made to the Chief Operating Officer only to the extent 
that such payment does not cause the Chief Operating Officer's total 
aggregate compensation in a calendar year to equal or exceed the amount 
of the President's salary under section 102 of title 3, United States 
Code.
    ``(f) Senior Management.--
            ``(1) In general.--The Chief Operating Officer may appoint 
        up to 5 senior managers as may be necessary without regard to 
        the provisions of title 5, United States Code, governing 
        appointments in the competitive service, and 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.
            ``(2) Performance agreement.--The Chief Operating Officer 
        shall enter into an annual performance agreement with each 
        senior manager appointed under this subsection which shall set 
        forth measurable organization and individual goals in key 
        operational areas. The agreement shall be subject to review and 
        renegotiation at the end of each term.
            ``(3) Compensation.--The Chief Operating Officer is 
        authorized to pay senior managers at an annual rate of basic 
        pay not to exceed 75 percent of the maximum rate of basic pay 
        for the Senior Executive Service under section 5382 of title 5, 
        United States Code, including any applicable locality-based 
        comparability payment that may be authorized under section 
        5304(h)(2)(C) of such title 5. In addition, a senior manager 
        may receive a bonus in an amount up to, but not in excess of, 
        50 percent of such annual rate of basic pay, based upon the 
        Chief Operating Officer's evaluation of the manager's 
        performance in relation to the performance goals set forth in 
        the performance agreement described in paragraph (2).
    ``(g) Personnel Flexibility.--
            ``(1) Personnel ceilings.--The PBO shall not be subject to 
        any ceiling relating to the number or grade of employees.
            ``(2) Administrative flexibility.--The Chief Operating 
        Officer shall work with the Office of Personnel Management to 
        develop and implement personnel flexibilities in staffing, 
        classification, and pay that meet the needs of the PBO, subject 
        to compliance with title 5, United States Code.
    ``(h) Establishment of a Fair and Equitable System for Measuring 
Staff Performance.--The PBO shall establish an annual performance 
management system, subject to compliance with title 5, United States 
Code and consistent with applicable provisions of law and regulations, 
which strengthens the organizational effectiveness of the PBO by 
providing for establishing goals or objectives for individual, group, 
or organizational performance (or any combination thereof), consistent 
with the performance plan of the PBO and its performance planning 
procedures, including those established under the Government 
Performance and Results Act of 1993, and communicating such goals or 
objectives to employees.
    ``(i) Procurement Flexibility.--
            ``(1) In general.--Except as provided in this subsection, 
        the PBO shall abide by all applicable Federal procurement laws 
        and regulations when procuring property and services. The PBO 
        shall--
                    ``(A) enter into contracts for information systems 
                supporting the programs authorized under title IV to 
                carry out the functions set forth in subsection (b)(2); 
                and
                    ``(B) obtain the services of experts and 
                consultants without regard to section 3109 of title 5, 
                United States Code, and set pay in accordance with such 
                section.
            ``(2) Performance based servicing contracts.--The Chief 
        Operating Officer shall, to the extent practicable, maximize 
        the use of performance based servicing contracts, consistent 
        with guidelines for such contracts published by the Office of 
        Federal Procurement Policy, to achieve cost savings and improve 
        service.
            ``(3) Fee for service arrangements.--The Chief Operating 
        Officer shall, to the extent practicable and consistent with 
        the purpose of the PBO, utilize services available outside of 
        the Federal Government in the delivery of Federal student 
        financial assistance. To achieve this purpose, the PBO is 
        authorized to pay fees to an organization that are equivalent 
        to those paid by other entities for such services, if the Chief 
        Operating Officer determines that such organization currently 
        provides an information system or service that meets the 
        requirements of the PBO.
    ``(j) Focus Groups.--To facilitate information sharing and customer 
involvement, the Chief Operating Officer may establish focus groups 
composed of students, institutions, and other participants in the 
programs authorized by title IV to provide advice on student aid 
delivery matters.

``SEC. 132. ADMINISTRATIVE SIMPLIFICATION OF STUDENT AID DELIVERY.

    ``(a) In General.--The Secretary and the Chief Operating Officer 
shall improve the efficiency and effectiveness of the student aid 
delivery system by encouraging and participating in the establishment 
of voluntary consensus standards and requirements for the electronic 
transmission of information necessary for the administration of 
programs under title IV.
    ``(b) Adoption of Voluntary Consensus Standards.--Except with 
respect to the common financial reporting form under section 483(a), 
the Secretary shall adopt voluntary consensus standards for 
transactions required under title IV, and common data elements for such 
transactions, to enable information to be exchanged electronically 
between systems administered by the Department and among participants 
in the Federal student aid delivery system.
    ``(c) Requirements for Adoption of Voluntary Consensus Standards.--
Any voluntary consensus standard adopted under this section shall--
            ``(1) be a standard that has been developed, adopted, or 
        modified by a standard setting organization that is open to the 
        participation of the various entities engaged in the delivery 
        of Federal student financial assistance; and
            ``(2) be consistent with the objective of reducing the 
        administrative costs of delivering student financial assistance 
        under title IV.
    ``(d) Participation in Standard Setting Organizations.--
            ``(1) The Chief Operating Officer shall participate in the 
        activities of standard setting organizations in carrying out 
        the provisions of this section.
            ``(2) The Chief Operating Officer shall encourage higher 
        education groups seeking to develop common forms, standards, 
        and procedures in support of the delivery of Federal student 
        financial assistance to conduct these activities within a 
standard setting organization.
            ``(3) The Chief Operating Officer may pay necessary dues 
        and fees associated with participating in standard setting 
        organizations pursuant to this subsection from funds available 
        under subsection (j).
    ``(e) Procedures for Adoption and Implementation of Voluntary 
Consensus Standards.--In adopting voluntary consensus standards and 
implementation timetables under this section, including modifications 
of existing standards, the Secretary shall follow the procedures for 
negotiated rulemaking in section 492.
    ``(f) Initial Voluntary Consensus Standards To Be Adopted.--Through 
coordinated participation between the Chief Operating Officer and 
standard setting organizations, the initial standards adopted by the 
Secretary shall include the following:
            ``(1) Electronic personal identifier number.--The Secretary 
        shall adopt standards for a single electronic personal 
        identifier number for students receiving assistance under title 
        IV.
            ``(2) Electronic signature.--The Secretary, in coordination 
        with the Secretary of Commerce, shall adopt standards 
        specifying procedures for the electronic transmission and 
        authentication of signatures with respect to transactions 
        requiring a signature under title IV.
            ``(3) Single institutional identifier.--The Secretary shall 
        adopt standards for a single identifier for eligible 
        institutions under title IV.
    ``(g) Use of Clearinghouses.--Nothing in this section shall 
restrict the ability of participating institutions and lenders from 
using a clearinghouse to comply with the standards for the exchange of 
information established under this section.
    ``(h) Applicability to Current Systems.--
            ``(1) General rule.--Except as provided in paragraphs (2) 
        and (3), this section shall apply to all Department of 
        Education information systems supporting the delivery of 
        programs under title IV no later than 12 months from the date 
        of enactment of this part.
            ``(2) National student loan data system.--This section 
        shall apply to sections 485B(e) and (f) no later than 18 months 
        after the date of enactment of this part.
            ``(3) Integrated postsecondary education data system.--The 
        Secretary shall coordinate the adoption of voluntary consensus 
        standards under this section to ensure that standards are 
        compatible with the integrated postsecondary education data 
        system (IPEDS).
    ``(i) Data Security.--Any entity that maintains or transmits 
information under a transaction covered by this section shall maintain 
reasonable and appropriate administrative, technical, and physical 
safeguards--
            ``(1) to ensure the integrity and confidentiality of the 
        information; and
            ``(2) to protect against any reasonably anticipated 
        security threats, or unauthorized uses or disclosures of the 
        information.
    ``(j) Authorization of Appropriations.--There are authorized to be 
appropriated in any fiscal year or made available from funds 
appropriated to carry out activities in this section in any fiscal year 
such sums as may be necessary to carry out the provisions of this 
section, except that if no funds are appropriated pursuant to this 
subsection, the Secretary shall make funds available to carry out this 
section from amounts appropriated for the operations and expenses of 
the Department of Education.
    ``(k) Definitions.--For purposes of this section:
            ``(1) The term `voluntary consensus standard' means a 
        standard developed or used by a standard setting organization 
        accredited by the American National Standards Institute.
            ``(2) The term `standard setting organization' means a 
        standard setting organization accredited by the American 
        National Standards Institute that develops standards for 
        information transactions, data elements, or any other standard 
        that is necessary to, or will facilitate, the implementation of 
        this section.
            ``(3) For purposes of this section, the term 
        `clearinghouse' means a public or private entity that processes 
        or facilitates the processing of nonstandard data elements into 
        data elements conforming to standards adopted under this 
        section.''.
                                 <all>