[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4102 Introduced in House (IH)]






108th CONGRESS
  2d Session
                                H. R. 4102

To amend the Higher Education Act of 1965 to provide access and equity 
              in higher education, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 1, 2004

 Mr. Andrews (for himself, Mr. Cardin, Mrs. McCarthy of New York, Mr. 
 Hinojosa, Mr. Frost, Mr. Crowley, Mr. Hinchey, Mr. Brown of Ohio, Mr. 
   Engel, and Ms. McCollum) introduced the following bill; which was 
        referred to the Committee on Education and the Workforce

_______________________________________________________________________

                                 A BILL


 
To amend the Higher Education Act of 1965 to provide access and equity 
              in 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; REFERENCES; EFFECTIVE DATE.

    (a) Short Title.--This Act may be cited as the ``Access and Equity 
in Higher Education Act''.
    (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.).
    (c) Effective Date.--Except as otherwise provided in this Act, the 
amendments made by this Act shall apply with respect to any loan for 
which the first disbursement of principal is made on or after the date 
of enactment of this Act.

                      TITLE I--STUDENT ASSISTANCE

SEC. 101. LOAN LIMITS.

    (a) FFEL Loans.--
            (1) Increases in subsidized loan limits.--Section 428(b)(1) 
        (20 U.S.C. 1078(b)(1)) is amended--
                    (A) in subparagraph (A)(i), by striking ``$2,625'' 
                in subclause (I) and inserting ``$4,000'';
                    (B) in subparagraph (A)(ii), by striking ``$3,500'' 
                in subclause (I) and inserting ``$6,000'';
                    (C) in subparagraph (A)(iii), by striking subclause 
                (I) and inserting the following:
                                    ``(I) $20,000 minus any amount 
                                previously borrowed during any 
                                preceding academic year in such 
                                remainder of such program (but 
                                excluding amounts borrowed under clause 
                                (i) or (ii) for such first and second 
                                year); or'';
                    (D) in subparagraph (A)(v), by striking ``$8,500'' 
                and inserting ``$10,000'';
                    (E) in subparagraph (B)(i), by striking ``$23,000'' 
                and inserting ``$30,000''; and
                    (F) in subparagraph (B)(ii)--
                            (i) by striking ``$65,500'' and inserting 
                        ``$60,000'';
                            (ii) by striking ``and (I) including'' and 
                        inserting ``but (I) excluding''; and
                            (iii) by striking ``but (II)'' and 
                        inserting ``and (II)''.
            (2) Increases in unsubsidized loan limits.--Section 
        428H(d)(1) (20 U.S.C. 1078-8(d)(1)) is amended--
                    (A) in subparagraph (A)(i), by striking ``$4,000'' 
                and inserting ``$5,500'';
                    (B) in subparagraph (B)(i), by striking ``$5,000'' 
                and inserting ``$20,000 minus any amount previously 
                borrowed during any preceding academic year in such 
                remainder of such program (but excluding amounts 
                borrowed under subparagraph (A) for such first and 
                second year)''; and
                    (C) in subparagraph (C), by striking ``$10,000'' 
                and inserting ``$25,000 minus the amount borrowed for 
                the same academic year in a subsidized loan under 
                section 428 or part D''.
            (3) Authority to reduce loan limits.--Section 428(a)(2)(D) 
        (20 U.S.C. 1078(a)(2)(D)) is amended by adding at the end the 
        following new sentence: ``An eligible institution may, in 
        carrying out such subparagraphs, provide a statement which 
        certifies the eligibility of a student for a loan amount that 
        is less than such maximum amount, and that is less than the 
        amount for which the student shows financial need, if the 
        institution has established a lesser amount than such maximum 
        amount as the loan limit applicable to the students attending 
        such institution.''.
            (4) Conforming amendments to fisl.--
                    (A) Annual limits.--Section 425(a)(1)(A) (20 U.S.C. 
                1075(a)(1)(A)) is amended--
                            (i) in clause (i)(I), by striking 
                        ``$2,625'' in subclause (I) and inserting 
                        ``$4,000'';
                            (ii) in clause (ii)(I), by striking 
                        ``$3,500'' in subclause (I) and inserting 
                        ``$6,000'';
                            (iii) in clause (iii), by striking 
                        subclause (I) and inserting the following:
                                    ``(I) $20,000 minus the amount 
                                previously borrowed during any 
                                preceding academic year in such 
                                remainder of such program (and 
                                excluding amounts borrowed under clause 
                                (i) or (ii) for such first and second 
                                year); or''; and
                            (iv) in clause (iv), by striking ``$8,500'' 
                        and inserting ``$10,000''.
                    (B) Aggregate limits.--Section 425(a)(2)(A) is 
                amended--
                            (i) in clause (i), by striking ``$23,000'' 
                        and inserting ``$30,000''; and
                            (ii) in clause (ii)--
                                    (I) by striking ``$65,500'' and 
                                inserting ``$60,000'';
                                    (II) by striking ``and (I) 
                                including'' and inserting ``but (I) 
                                excluding''; and
                                    (III) by striking ``but (II)'' and 
                                inserting ``and (II)''.

SEC. 102. ORIGINATION FEES.

    (a) Federal Family Education Loan Program.--Section 438(c) of the 
Higher Education Act of 1965 (20 U.S.C. 1087-1(c)) is amended by adding 
at the end the following new paragraph:
            ``(9) Origination fees terminated.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this subsection except for subparagraph 
                (B) of this paragraph, with respect to any loan made, 
                insured, or guaranteed under this part on or after July 
                1, 2005, other than a loan made under section 428B or 
                428H--
                            ``(i) no eligible lender may collect 
                        directly or indirectly from any borrower any 
                        origination fee with respect to such loan; and
                            ``(ii) the Secretary shall not collect such 
                        origination fee from the lender under this 
                        subsection.
                    ``(B) Unsubsidized loans.--Notwithstanding 
                subparagraph (A), with respect to any loan made under 
                section 428H on or after July 1, 2005--
                            ``(i) an eligible lender may collect an 
                        origination fee with respect to such loan under 
                        paragraph (2), except that such paragraph shall 
                        be applied by substituting `1.5 percent' for 
                        `3.0 percent'; and
                            ``(ii) the Secretary shall collect any such 
                        origination fee from the lender under paragraph 
                        (1) of this subsection.''.
    (b) Federal Direct Loan Program.--
            (1) Amendment.--Section 455(c) (20 U.S.C. 1087e(c)) is 
        amended to read as follows:
    ``(c) Loan Fee.--The Secretary shall charge--
            ``(1) the borrower of a Federal Direct Stafford Loan an 
        origination fee of 1.0 percent of the principal amount of the 
        loan;
            ``(2) the borrower of a Federal Direct Stafford 
        Unsubsidized Stafford Loan an origination fee of 2.5 percent of 
        the principal amount of the loan; and
            ``(3) the borrower of a Federal Direct PLUS loan an 
        origination fee of 4.0 percent of the principal amount of the 
        loan.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply with respect to any loan made under part D of title 
        IV on an after July 1, 2005.

SEC. 103. LOAN FLEX.

    (a) Amendment.--Section 428(b)(9)(A) (20 U.S.C. 1078(b)(9)(A)) is 
amended by striking clauses (iii) and (iv) and inserting the following:
                            ``(iii) an income-sensitive repayment plan, 
                        with income-sensitive repayment amounts paid 
                        over an extended period of time prescribed by 
                        the Secretary, not to exceed 25 years, except 
                        that--
                                    ``(I) after 10 years, if the 
                                individual has not made adequate 
                                progress in repaying the principal of 
                                the loan (defined by the Secretary as 
                                percentage of principal) the lender may 
                                use an alternative formula, to be 
                                determined by the Secretary, by which 
                                the loan could be expected to be repaid 
                                in full within the remaining 15 years;
                                    ``(II) after 25 years, if the loan 
                                is not repaid, the Secretary shall 
                                acquire the loan from the lender and 
                                administer the loan under part D of 
                                this title; and
                                    ``(III) the other terms and 
                                conditions of which shall be comparable 
                                to the terms and conditions applicable 
                                to income contingent repayment under 
                                section 455(d)(1)(D) and 455(e); and
                            ``(iv) an extended repayment plan, with a 
                        fixed annual or graduated repayment amount paid 
                        over an extended period of time, not to exceed 
                        25 years, except that in the first 2 years of 
                        repayment, the borrower shall have the option 
                        of paying the interest as it accrues or having 
                        such interest be added to principal for 
                        repayment during the remainder of the repayment 
                        period.''.
    (b) Conforming Amendment.--Clause (i) of section 428(b)(1)(L) (20 
U.S.C. 1078(b)(1)(L)) is amended to read as follows:
                            ``(i) except as otherwise provided by a 
                        repayment plan selected by the borrower under 
                        clause (ii), (iii), or (iv) of paragraph 
                        (9)(A), during any year of any repayment period 
                        with respect to the aggregate amount of all 
                        loans to that borrower which are insured under 
                        this part shall not, unless the borrower and 
                        the lender otherwise agree, be less than $600 
                        or the balance of all such loans (together with 
                        interest thereon), whichever amount is less; 
                        and''.

SEC. 104. CONSOLIDATION LOAN INTEREST RATES.

    (a) Interest Rate Tied to Income.--Paragraph (3) of section 427A(l) 
(20 U.S.C. 1077a(n)) is amended to read as follows:
            ``(3) Consolidation loans.--
                    ``(A) In general.--With respect to any 
                consolidation loan under section 428C for which the 
                application is received by an eligible lender on or 
                after the date of enactment of the Access and Equity in 
                Higher Education Act, the applicable rate of interest 
                shall, during any 12-month period beginning on July 1 
                and ending on June 30, be determined on the preceding 
                June 1 and be equal to--
                            ``(i) the bond equivalent rate of 91-day 
                        Treasury bills auctioned at the final auction 
                        held prior to such June 1; plus
                            ``(ii) 2.3 percent,
                except that such rate shall not exceed 8.25 percent, 
                and except that for any loan under section 428C that is 
                used exclusively to consolidate loans made under 
                section 428B, clause (ii) shall be applied by 
                substituting `3.1 percent' for `2.3 percent'.
                    ``(B) Variation of interest rate based on income.--
                In the case of--
                            ``(i) a borrower who demonstrates to the 
                        lender, in accordance with regulations 
                        prescribed by the Secretary, that during such 
                        12-month period, the sum of the borrower's 
                        monthly payments during a year will exceed--
                                    ``(I) 8 percent of the borrower 
                                total income, subparagraph (A)(ii) 
                                shall be applied by substituting `1.0 
                                percent' for `2.3 percent'; or
                                    ``(II) 9 percent of the borrower's 
                                total income, subparagraph (A)(ii) 
                                shall be applied by substituting `0.0 
                                percent' for `2.3 percent'; and
                            ``(ii) a borrower who so demonstrates that 
                        the sum of the borrower's monthly payments 
                        during a year will exceed--
                                    ``(I) 10 percent of the borrower's 
                                total income, subparagraph (A) shall be 
                                applied by substituting `5 percent' for 
                                `8.25 percent';
                                    ``(II) 11 percent of the borrower's 
                                total income, subparagraph (A) shall be 
                                applied by substituting `4 percent' for 
                                `8.25 percent'; or
                                    ``(III) 12 percent of the 
                                borrower's total income, subparagraph 
                                (A) shall be applied by substituting `3 
                                percent' for `8.25 percent'.''.
    (b) Conforming Amendment.--Section 427A(k)(4) is amended by 
striking ``July 1, 2006,'' and inserting ``the date of enactment of the 
Access and Equity in Higher Education Act''.

SEC. 105. LOAN FORGIVENESS FOR PUBLIC SERVICE EMPLOYEES.

    Section 428K (20 U.S.C. 1078-11) is amended to read as follows:

``SEC. 428K. LOAN FORGIVENESS FOR PUBLIC SERVICE EMPLOYEES.

    ``(a) Purposes.--The purposes of this section are--
            ``(1) to reduce the burden of student debt, particularly 
        for Americans who dedicate their careers to meeting certain 
        urgent national needs; and
            ``(2) to attract more excellent individuals into important 
        public service careers.
    ``(b) Loan Forgiveness.--
            ``(1) In general.--The Secretary shall assume the 
        obligation to repay, pursuant to subsection (c), a loan made 
        under section 428, 428C, or 428H, a Federal Direct Stafford 
        Loan or Federal Direct Unsubsidized Stafford Loan, a Federal 
        Direct Consolidation Loan, to an individual who--
                    ``(A) has been employed full time in a qualified 
                public service position described in paragraph (2) for 
                at least 8 years;
                    ``(B) has been in an income contingent or income 
                sensitive repayment plan for 15 years; and
                    ``(C) is not in default on a loan for which the 
                borrower seeks forgiveness.
            ``(2) Qualified public service positions.--For purposes of 
        this section, an individual shall be treated as employed in a 
        qualified public service position if the individual is employed 
        in--
                    ``(A) any Federal, State, or local government 
                agency;
                    ``(B) any corporation which is exempt from income 
                taxation under section 501(c)(3) of the Internal 
                Revenue Code of 1986; or
                    ``(C) in any profession identified by the Secretary 
                of Education, in consultation with the Secretary of 
                Homeland Security and the Secretary of Health and Human 
                Services, to be providing important public service to 
                the United States.
    ``(c) Loan Repayment.--
            ``(1) In general.--The Secretary shall assume the 
        obligation to repay the remainder of a qualifying individual's 
        student obligations.
            ``(2) Treatment of consolidation loans.--A loan amount for 
        a loan made under section 428C or for a Federal Direct 
        Consolidation Loan may be a qualified loan amount for the 
        purposes of this subsection only to the extent that such loan 
        amount was used to repay a loan described in subsection (b)(1) 
        for a borrower who meets the requirements of subsection (b), as 
        determined in accordance with regulations prescribed by the 
        Secretary.
            ``(3) Construction.--Nothing in this section shall be 
        construed to authorize the refunding of any repayment of a 
        described in subsection (b)(1).
            ``(4) Interest.--If a portion of a loan is repaid by the 
        Secretary under this section for any year, the proportionate 
        amount of interest on such loan that accrues for such year 
        shall be repaid by the Secretary.
            ``(5) Ineligibility of national service award recipients.--
        No student borrower may, for the same service, receive a 
        benefit under both this section and subtitle D of title I of 
        the National and Community Service Act of 1990 (42 U.S.C. 12601 
        et seq.).
            ``(6) Ineligibility for double benefits.--No borrower may 
        receive a reduction of loan obligations under both this section 
        and section 428J or 460.
    ``(d) Repayment to Eligible Lenders and Holders.--The Secretary 
shall pay to each eligible lender or holder for each fiscal year an 
amount equal to the aggregate amount of the lender's or holder's loans 
that are subject to repayment pursuant to this section for such year.
    ``(e) Application for Repayment.--
            ``(1) In general.--Each eligible individual desiring loan 
        repayment under this section shall submit a complete and 
        accurate application to the Secretary at such time, in such 
        manner, and containing such information as the Secretary may 
        require.
            ``(2) Conditions.--An eligible individual may apply for 
        loan repayment under this section after completing the years of 
        qualifying service described in subsection (c)(2).
    ``(f) Regulations.--The Secretary is authorized to prescribe such 
regulations as may be necessary to carry out the provisions of this 
section.''.

               TITLE II--REAUTHORIZATION OF HBCU PROGRAMS

SEC. 201. REAUTHORIZATION OF PART B OF TITLE III.

    Paragraph (2) of section 399(a) (20 U.S.C. 1068h(a)) is amended to 
read as follows:
            ``(2) Part b.--There are authorized to be appropriated to 
        carry out part B (other than section 326), $335,000,000 for 
        fiscal year 2005, and such sums as may be necessary for each of 
        the 5 succeeding fiscal years.''.
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