[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1793 Introduced in Senate (IS)]







108th CONGRESS
  1st Session
                                S. 1793

 To provide for college quality, affordability, and diversity, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 28, 2003

  Mr. Kennedy (for himself, Mr. Dodd, Mr. Bingaman, Mrs. Murray, Mr. 
 Reed, and Mrs. Clinton) introduced the following bill; which was read 
 twice and referred to the Committee on Health, Education, Labor, and 
                                Pensions

_______________________________________________________________________

                                 A BILL


 
 To provide for college quality, affordability, and diversity, 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 ``College Quality, Affordability, and 
Diversity Improvement Act of 2003''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Findings.
                   TITLE I--ACCESS TO COLLEGE FOR ALL

Sec. 101. Pell Grants.
Sec. 102. Expansion of Hope scholarships.
Sec. 103. Elimination of origination fees and adjustment of fees and 
                            terms.
Sec. 104. Direct Loan Reward Program.
Sec. 105. Costs of higher education.
Sec. 106. Credit for interest on higher education loans.
Sec. 107. Refinancing authority for Federal Direct Consolidation Loan.
Sec. 108. Loans funded through tax-exempt securities.
Sec. 109. Windfall profit offset.
Sec. 110. Support for working students.
Sec. 111. Student eligibility.
Sec. 112. Authorization of appropriations levels for campus-based aid.
Sec. 113. Special programs for students whose families are engaged in 
                            migrant and seasonal farmwork.
Sec. 114. Loan forgiveness and cancellation for certain teachers.
Sec. 115. Revision of tax table.
Sec. 116. Income contingent repayment for public sector employees.
                 TITLE II--TEACHER QUALITY ENHANCEMENT

Sec. 201. Amendment to title II.
      TITLE III--DIVERSITY, RETENTION, AND ENRICHED ACADEMICS FOR 
                         MATRICULATING STUDENTS

Sec. 301. Test preparation for low-income students.
Sec. 302. Admissions and retention.
Sec. 303. Federal Trio program.
Sec. 304. Gear Up.
Sec. 305. Leveraging educational assistance partnership program.
        TITLE IV--OPPORTUNITIES AT HISPANIC-SERVING INSTITUTIONS

Sec. 401. Postbaccalaureate opportunities for Hispanic Americans.
Sec. 402. Definitions.
Sec. 403. Authorized activities.
Sec. 404. Elimination of wait-out period.
Sec. 405. Application priority.
         TITLE V--HISTORICALLY BLACK COLLEGES AND UNIVERSITIES

Sec. 501. Professional or graduate institutions.
Sec. 502. Graduate and professional degree development program.
Sec. 503. Authorization of appropriations.
Sec. 504. Patsy T. Mink fellowship program.
   TITLE VI--RECRUITMENT OF TEACHERS TO TEACH AT TRIBAL COLLEGES OR 
                              UNIVERSITIES

Sec. 601. Loan repayment or cancellation for individuals who teach in 
                            Tribal Colleges or Universities.
Sec. 602. Amounts forgiven not treated as gross income.

SEC. 3. FINDINGS.

    Congress finds the following:
            (1) A college education is more important than ever, and 
        the Federal Government should do more to make it affordable and 
        accessible to all qualified students because--
                    (A) recent shifts in the economy have increased the 
                demand for college-educated workers and increased the 
                wage gap between college-educated workers and those 
                without a degree (workers with a Bachelor's degree earn 
                75 percent more than workers with just a high school 
                diploma); and
                    (B) jobs requiring some postsecondary education are 
                expected to account for about 42 percent of total job 
                growth from 2000 through 2010.
            (2) Increased access to college, reformed admissions 
        systems, and better retention of students are needed because--
                    (A) 65 percent of high-income students are on a 
                college-preparatory track, whereas only 28 percent of 
                low-income students are on a college-preparatory track;
                    (B) 7 times as many students from high-income 
                families (48 percent) graduate from college by age 24 
                as students from low-income families (7 percent);
                    (C) 80 percent of 4-year institutions of higher 
                education use the SAT in the admissions process;
                    (D) commercial SAT coaching classes, such as those 
                run by Kaplan, Inc. and Princeton Review, have 
                demonstrated effectiveness in raising a student's SAT 
                score by 100 points or more, which can significantly 
                improve a student's chance of getting into an elite 
                college;
                    (E) SAT coaching programs range from $700 to $3,000 
                per course and the costs are prohibitive for low-income 
                students;
                    (F) those students who receive SAT coaching tend to 
                be disproportionally middle or upper class;
                    (G) 34 percent of students who receive SAT coaching 
                are from families whose combined annual income is 
                between $40,000 and $80,000, and 43 percent are from 
                families whose combined annual income is more than 
                $80,000;
                    (H) applying to college early decision provides an 
                advantage to an applicant equal to an additional 100 
                points on the SAT;
                    (I) low-income students are less able to apply to 
                colleges early decision because such students need to 
                compare the financial aid packages at different 
                colleges;
                    (J) 40 percent of all Whites age 18 through 24 are 
                enrolled in institutions of higher education, whereas 
                only 30 percent of all African-Americans and only 16 
                percent of all Hispanics are enrolled in institutions 
                of higher education;
                    (K) nearly 4 out of every 10 Hispanics enrolled 
                full time in 4-year colleges drop out within 3 years of 
                their initial enrollment, African-Americans are half as 
                likely as White students to complete a Bachelor's 
                degree in 4 years, and low-income students are half as 
                likely as upper-income students to complete a 
                Bachelor's degree in 4 years;
                    (L) in 1990, 1 in 4 Americans was a member of a 
                minority group, and in 2001, 1 in 3 Americans was a 
                member of a minority group;
                    (M) low-income, college-qualified high school 
                graduates have an annual ``unmet need'' of $3,800 in 
                college expenses, expenses not covered by grants, 
                loans, work, or family savings;
                    (N) 46 percent of all students who work in addition 
                to being full-time students report 25 hours or more a 
                week of employment; and
                    (O) 50 percent of those employed more than 25 hours 
                a week report that working hurts their grades and 
                retention in college, and students who work more than 
                35 hours a week are considerably less likely to 
                complete a year of college than those who work less 
                than 15 hours a week.
            (3) Federal student aid is too focused on loans instead of 
        grant aid because--
                    (A) although approximately $55,000,000,000 is made 
                available annually in direct and indirect Federal aid 
                to postsecondary education students and their families, 
                in 2002, 60 percent of such Federal student aid was in 
                the form of loans while only 40 percent was in the form 
                of grants, a reversal of the distribution 20 years ago;
                    (B) the purchasing power of the Pell Grant has 
                declined since Pell Grants cover only 40 percent of 
                average fixed costs at 4-year public colleges, about 
                half of what they covered 25 years ago;
                    (C) 15 years ago Pell Grants covered 98 percent of 
                average tuition at 4-year public colleges, whereas 
                today Pell Grants only cover 64 percent on average;
                    (D) the Federal Government saves money under the 
                Direct Loan program and makes a profit of 3.5 cents on 
                every dollar lent under the Direct Lending program, 
                while it loses 10.37 cents on every dollar lent under 
                the Federal Family Education Loan Program; and
                    (E) average student indebtedness is $17,000, and 
                reaches over $120,000 for professional school 
                graduates.
            (4) The Federal Government should do more to help States, 
        local educational agencies, and schools ensure a qualified 
        teacher in every classroom because under the No Child Left 
        Behind Act of 2001, States are required to ensure that all 
        teachers teaching in core academic subjects within the State 
        are ``highly qualified'' not later than the end of the 2005-
        2006 school year. States need to do much more to meet the 
        challenges in the new Federal law. In the 1999-2000 school 
        year, 29 percent of elementary school students, 59 percent of 
        middle school students, and 29 percent of high school students 
        were taught by teachers without both a major and certification 
        in the subject in which they taught.
            (5) There is a severe shortage of qualified teachers, 
        especially in high-need fields and low-income areas because--
                    (A) approximately a third of America's teachers 
                leave teaching sometime during their first 3 years of 
                teaching and almost half leave during the first 5 
                years;
                    (B) overall turnover rate for teachers in high-
                poverty areas is almost a third higher than it is for 
                teachers in all schools;
                    (C) underqualified teachers are more often found in 
                high-poverty schools; and
                    (D) in low-poverty secondary schools, approximately 
                \1/3\ of students are taught by a teacher who lacks 
                either a college degree in the subject area in which 
                the teacher teaches or certification in such subject 
                area, while in high-poverty secondary schools, 
                approximately \1/2\ of students are taught by such a 
                teacher.
            (6) Teacher shortages are more severe in some fields than 
        in others:
                    (A) Employment opportunities in teaching special 
                education are expected to grow 21 to 35 percent through 
                2010, an increase of over 150,000 positions.
                    (B) The most recent data from a 1994 General 
                Accounting Office report estimates a shortage of 
                100,000 to 200,000 bilingual teachers, even as the 
                limited English proficient student population continues 
                to grow.
                    (C) It is estimated that of the 2,000,000 teachers 
                needed over the next 10 years, almost 200,000 will be 
                secondary school mathematics and science teachers.

                   TITLE I--ACCESS TO COLLEGE FOR ALL

SEC. 101. PELL GRANTS.

    (a) Appropriation of Funds for Pell Grants.--There are authorized 
to be appropriated and there are appropriated, out of any money in the 
Treasury not otherwise appropriated for the fiscal year ending 
September 30, 2004, for carrying out subpart 1 of part A of title IV of 
the Higher Education Act of 1965, $14,515,000,000.
    (b) Authorization Amount and Maximum Pell Grant.--Section 401(b) of 
the Higher Education Act of 1965 (20 U.S.C. 1070a(b)) is amended--
            (1) in paragraph (3)--
                    (A) in subparagraph (A), by striking 
                ``appropriation Act'' and inserting ``appropriation Act 
                or subparagraph (C)''; and
                    (B) by adding at the end the following:
            ``(C) The maximum Pell Grant for which a student shall be 
        eligible during award year 2004-2005 shall be $4,500.''; and
            (2) in paragraph (2)(A), by striking clauses (i) through 
        (v) and inserting the following:
            ``(i) $7,600 for academic year 2005-2006;
            ``(ii) $8,600 for academic year 2006-2007;
            ``(iii) $9,600 for academic year 2007-2008;
            ``(iv) $10,600 for academic year 2008-2009; and
            ``(v) $11,600 for academic year 2009-2010,''.

SEC. 102. EXPANSION OF HOPE SCHOLARSHIPS.

    (a) Expansion of Hope Scholarship Credit.--
            (1) Double maximum credit to $3,000.--Subsection (b) of 
        section 25A of the Internal Revenue Code of 1986 (relating to 
        Hope and Lifetime Learning credits) is amended by striking 
        ``2'' in paragraph (4) and inserting ``3''.
            (2) Credit available for 4 years.--Subsection (b) of 
        section 25A of such Code is amended by striking ``2'' each 
        place it appears in paragraphs (2)(A), (2)(C), and (4) and 
        inserting ``4''.
            (3) Refundable credit.--
                    (A) In general.--Section 25A of such Code is hereby 
                moved to subpart C of part IV of subchapter A of 
                chapter 1 of such Code (relating to refundable credits) 
                and inserted after section 35.
                    (B) Technical amendments.--
                            (i) Section 36 of such Code is redesignated 
                        as section 37.
                            (ii) Section 25A of such Code (as moved by 
                        subsection (a)) is redesignated as section 36.
                            (iii) Paragraph (1) of section 36(a) of 
                        such Code (as redesignated by paragraph (2)) is 
                        amended by striking ``this chapter'' and 
                        inserting ``this subtitle''.
                            (iv) Subparagraph (B) of section 72(t)(7) 
                        of such Code is amended by striking ``section 
                        25A(g)(2)'' and inserting ``section 36(g)(2)''.
                            (v) Subparagraph (A) of section 135(d)(2) 
                        of such Code is amended by striking ``section 
                        25A'' and inserting ``section 36''.
                            (vi) Section 221(d) of such Code is 
                        amended--
                                    (I) by striking ``section 
                                25A(g)(2)'' in paragraph (2)(B) and 
                                inserting ``section 36(g)(2)'',
                                    (II) by striking ``section 
                                25A(f)(2)'' in paragraph (2)(B) and 
                                inserting ``section 36(f)(2)'', and
                                    (III) by striking ``section 
                                25A(b)(3)'' in paragraph (3) and 
                                inserting ``section 36(b)(3)''.
                            (vii) Section 222 of such Code is amended--
                                    (I) by striking ``section 25A'' in 
                                subparagraph (A) of subsection (c)(2) 
                                and inserting ``section 36'',
                                    (II) by striking ``section 25A(f)'' 
                                in subsection (d)(1) and inserting 
                                ``section 36(f)'', and
                                    (III) by striking ``section 
                                25A(g)(2)'' in subsection (d)(1) and 
                                inserting ``section 36(g)(2)''.
                            (viii) Section 529 of such Code is 
                        amended--
                                    (I) by striking ``section 
                                25A(g)(2)'' in subclause (I) of 
                                subsection (c)(3)(B)(v) and inserting 
                                ``section 36(g)(2)'',
                                    (II) by striking ``section 25A'' in 
                                subclause (II) of subsection 
                                (c)(3)(B)(v) and inserting ``section 
                                36'', and
                                    (III) by striking ``section 
                                25A(b)(3)'' in clause (i) of subsection 
                                (e)(3)(B) and inserting ``section 
                                36(b)(3)''.
                            (ix) Section 530 of such Code is amended--
                                    (I) by striking ``section 
                                25A(g)(2)'' in subclause (I) of 
                                subsection (d)(2)(C)(i) and inserting 
                                ``section 36(g)(2)'',
                                    (II) by striking ``section 25A'' in 
                                subclause (II) of subsection 
                                (d)(2)(C)(i) and inserting ``section 
                                36'', and
                                    (III) by striking ``section 
                                25A(g)(2)'' in clause (iii) of 
                                subsection (d)(4)(B) and inserting 
                                ``section 36(g)(2)''.
                            (x) Subsection (e) of section 6050S of such 
                        Code is amended by striking ``section 25A'' and 
                        inserting ``section 36''.
                            (xi) Subparagraph (J) of section 6213(g)(2) 
                        of such Code is amended by striking ``section 
                        25A(g)(1)'' and inserting ``section 36(g)(1)''.
                            (xii) Paragraph (2) of section 1324(b) of 
                        title 31, United States Code, is amended by 
                        inserting before the period ``or from section 
                        36 of such Code''.
                            (xiii) The table of sections for subpart C 
                        of part IV of subchapter A of chapter 1 of the 
                        Internal Revenue Code of 1986 is amended by 
                        striking the item relating to section 36 and 
                        inserting the following:

                              ``Sec. 36. Hope and Lifetime Learning 
                                        credits.
                              ``Sec. 37. Overpayments of tax.''.
                            (xiv) The table of sections for subpart A 
                        of such part IV is amended by striking the item 
                        relating to section 25A.
            (4) Credit allowed for cost of attendance.--
                    (A) In general.--
                            (i) Subsection (b) of section 36 of such 
                        Code, as moved and redesignated by paragraph 
                        (3), is amended by striking ``qualified tuition 
                        and related expenses'' each place it occurs and 
                        inserting ``cost of attendance''.
                            (ii) Subsection (f) of such section 36 is 
                        amended by adding at the end the following new 
                        paragraph:
            ``(3) No pell reduction.--The term `cost of attendance' has 
        the meaning given such term in section 472 of the Higher 
        Education Act of 1965, except that the term shall not include 
        any costs described in paragraph (4) or (5) of such section.''.
                    (B) Conforming amendments.--
                            (i) Subsection (b)(1)(B) of such section 36 
                        is amended by striking ``such expenses'' and 
                        inserting ``such cost''.
                            (ii) Subsections (e) and (g) of such 
                        section 36 are amended by inserting ``the cost 
                        of attendance or'' before ``qualified'' each 
                        place it appears.
            (5) Expansion of limitation.--
                    (A) In general.--Subsection (d) of section 36 of 
                such Code, as moved and redesignated by paragraph (3), 
                is amended--
                            (i) in paragraph (1), by striking the 
                        period and inserting ``in the case of the 
                        Lifetime Learning Credit and paragraph (3) in 
                        the case of the Hope Scholarship Credit.'',
                            (ii) in paragraph (2), by inserting ``for 
                        the lifetime learning credit'' in the heading 
                        after ``reduction'', and
                            (iii) by redesignating paragraph (3) as 
                        paragraph (4) and by adding after paragraph (2) 
                        the following new paragraph:
            ``(3) Amount of reduction for hope scholarship credit.--The 
        amount determined under this paragraph is the amount which 
        bears the same ratio to the amount which would be so taken into 
        account as--
                    ``(A) the excess of--
                            ``(i) the taxpayer's modified adjusted 
                        gross income for such taxable year, over
                            ``(ii) the sum of--
                                    ``(I) the amount of any education 
                                assistance received by the student that 
                                is not subject to tax under this 
                                chapter, and
                                    ``(II) $40,000 ($80,000 in the case 
                                of a joint return), bears to
                    ``(B) $10,000 ($20,000 in the case of a joint 
                return).''.
                    (B) Conforming amendments.--Subsection (h) of such 
                section 36 is amended--
                            (i) in paragraph (2), by inserting ``for 
                        the lifetime learning credit'' in the heading 
                        after ``limits'', and
                            (ii) by inserting at the end the following 
                        new paragraph:
            ``(3) Income limits for hope scholarship credit.--
                    ``(A) In general.--In the case of a taxable year 
                beginning after 2003, the $40,000 and $80,000 amounts 
                in subsection (d)(3) shall each be increased by an 
                amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which the taxable year begins, 
                        determined by substituting `calendar year 2002' 
                        for `calendar year 1992' in subparagraph (B) 
                        thereof.
                    ``(B) Rounding.--If any amount as adjusted under 
                subparagraph (A) is not a multiple of $1,000, such 
                amount shall be rounded to the next lowest multiple of 
                $1,000.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2002.

SEC. 103. ELIMINATION OF ORIGINATION FEES AND ADJUSTMENT OF FEES AND 
              TERMS.

    (a) Direct Loans.--Section 455(c) of the Higher Education Act of 
1965 (20 U.S.C. 1087e(c)) is amended to read as follows:
    ``(c) Loan Fee.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        Secretary shall charge the borrower of a loan made under this 
        part an origination fee of 4.0 percent of the principal amount 
        of the loan.
            ``(2) Exception for subsidized loans.--The Secretary may 
        not charge the borrower of a loan made under this part an 
        origination fee if the borrower receives an interest subsidy 
        for such loan.''.
    (b) FFEL 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:
            ``(9) Termination of origination fees for subsidized 
        loans.--Notwithstanding any other provision of this subsection, 
        with respect to any loan made, insured, or guaranteed under 
        this part on or after the first July 1 after the date of 
        enactment of this paragraph for which a borrower receives an 
        interest subsidy under section 428(a)--
                    ``(A) no eligible lender may collect directly or 
                indirectly from the borrower any origination fee with 
                respect to such loan, or any other fee relating to the 
                origination of a loan however described; and
                    ``(B) the Secretary shall not collect any 
                origination fee from the lender under this 
                subsection.''.
    (c) Adjustment of Fees and Loans for Direct Loans.--Section 455 of 
the Higher Education Act of 1965 (20 U.S.C. 1087e) is amended by adding 
at the end the following:
    ``(m) Adjustment of Fees and Loans.--Notwithstanding any other 
provision of law, the Secretary shall adjust the fees and terms for 
Federal Direct Unsubsidized Stafford Loans to be equal to the fees and 
terms for loans made to borrowers under section 428H.''.

SEC. 104. DIRECT LOAN REWARD PROGRAM.

    Part D of title IV of the Higher Education Act of 1965 (20 U.S.C. 
1087a et seq.) is amended by adding at the end the following:

``SEC. 460A. DIRECT LOAN REWARD PROGRAM.

    ``(a) Short Title.--This section may be cited as the `Direct Loan 
Reward Act'.
    ``(b) Program Authorized.--The Secretary shall carry out a Direct 
Loan Reward Program to encourage institutions of higher education to 
participate in the student loan program under this part.
    ``(c) Program Requirements.--In carrying out the Direct Loan Reward 
Program, the Secretary shall--
            ``(1) provide to each institution of higher education 
        participating in the student loan program under this part a 
        financial reward payment, in an amount determined in accordance 
        with subsection (d), to encourage the institution to provide 
        student loans under this part;
            ``(2) require each institution of higher education 
        receiving a payment under this section to provide student loans 
        under this part for a period of 5 years from the date the 
        payment is made;
            ``(3) require that funds paid to institutions of higher 
        education under this section be used to award students Federal 
        Supplemental Educational Opportunity Grants in accordance with 
        subpart 3 of part A, except that an institution of higher 
        education shall not be required to provide any matching funds 
        with respect to such awards; and
            ``(4) for a period of 2 years beginning on the date of 
        enactment of this section, encourage all institutions of higher 
        education to participate in the Direct Loan Reward Program.
    ``(d) Amount.--The amount of a financial reward payment under this 
section shall be--
            ``(1) in the case of the first year of an institution of 
        higher education's participation in the Direct Loan Reward 
        Program, an amount equal to 50 percent of the savings to the 
        Federal Government generated by the institution's participation 
        in the student loan program under this part instead of the 
        institution's participation in the student loan program under 
        part B; and
            ``(2) in the case of the second through fifth years of an 
        institution of higher education's participation in the Direct 
        Loan Reward Program, an amount equal to 10 percent of the 
        savings to the Federal Government generated by the 
        institution's participation in the student loan program under 
        this part instead of the institution's participation in the 
        student loan program under part B.--
    ``(e) Trigger To Ensure Cost Neutrality.--
            ``(1) Limit to ensure cost neutrality.--Notwithstanding 
        subsection (d), the Secretary shall not distribute financial 
        reward payments under the Direct Loan Reward Program that, in 
        the aggregate, exceed the Federal savings resulting from 
        implementation of the Direct Loan Reward Program.
            ``(2) Federal savings.--In calculating Federal savings, as 
        used in paragraph (1), the Secretary shall determine any 
        Federal savings on loans made to students at institutions of 
        higher education that participate in the Direct Loan Reward 
        Program and that, on the date of enactment of the Direct Loan 
        Reward Program, participated in the student loan program under 
        part B, resulting from the difference of--
                    ``(A) the Federal cost of loan volume made under 
                this part; and
                    ``(B) the Federal cost of an equivalent type and 
                amount of loan volume made, insured, or guaranteed 
                under part B.
            ``(3) Distribution rules.--If the Federal savings 
        determined under paragraph (2) is not sufficient to distribute 
        full financial reward payments under the Direct Loan Reward 
        Program, the Secretary shall--
                    ``(A) first make financial reward payments to those 
                institutions of higher education that participated in 
                the student loan program under part B on the date of 
                enactment of the Direct Loan Reward Program; and
                    ``(B) with any remaining Federal savings after 
                making payments under subparagraph (A), make financial 
                reward payments to the institutions of higher education 
                not described in subparagraph (A) on a pro-rata basis.
            ``(4) Carry over.--Any institution of higher education that 
        receives a reduced financial reward payment under paragraph 
        (3)(B), shall remain eligible for the unpaid portion of such 
        institution's financial reward payment, as well as any 
        additional financial reward payments for which the institution 
        is otherwise eligible, in subsequent fiscal years.''.

SEC. 105. COSTS OF HIGHER EDUCATION.

    (a) Supporting Reduced Tuition Increases.--Part C of title I of the 
Higher Education Act of 1965 (20 U.S.C. 1015 et seq.) is amended by 
adding at the end the following:

``SEC. 132. ECONOMIES OF SCALE.

    ``(a) Authorization.--
            ``(1) In general.--The Secretary is authorized to award 
        grants, on a competitive basis, to university consortia to 
        enable such consortia to engage in endeavors to reduce college 
        costs.
            ``(2) University consortium.--In this section, the term 
        `university consortium' means a consortium of not less than 5 
        two- or four-year degree granting institutions of higher 
        education that receive assistance under title IV.
            ``(3) Duration.--Grants awarded under this section shall be 
        for a period of not more than 4 years.
    ``(b) Application.--
            ``(1) In general.--A university consortium that desires a 
        grant under this section shall submit an application to the 
        Secretary at such time, in such manner, and containing such 
information as the Secretary determines appropriate.
            ``(2) Content.--An application submitted under paragraph 
        (1) shall include--
                    ``(A) a list of the institutions of higher 
                education that are partners in the university 
                consortium;
                    ``(B) a letter of intent to participate in the 
                university consortium from each partner institution of 
                higher education;
                    ``(C) a general description of the nature of the 
                programs, activities, or other cost-cutting measures to 
                be carried out by the university consortium with funds 
                received under this section, and the cost of such 
                programs, activities, or other cost-cutting measures;
                    ``(D) a description of how such activities are 
                expected to result in cost savings for all partner 
                institutions of higher education;
                    ``(E) an estimation of how much money will be saved 
                through such activities;
                    ``(F) an assurance that when the university 
                consortium efforts begin to post savings for the 
                partner institutions of higher education, not less than 
                50 percent of the savings will be passed to students by 
                cutting or maintaining student tuition rates or 
                increasing student aid;
                    ``(G) an assurance that each partner institution of 
                higher education will not raise tuition more than twice 
                the inflation change tracked pursuant to section 
                131(c)(4) from academic year to subsequent academic 
                year during the life of the grant;
                    ``(H) a general timeline of how the university 
                consortium will carry out planned activities and when 
                savings are expected to be posted; and
                    ``(I) a statement as to how the university 
                consortium plans to provide matching funds required 
                under this section.
            ``(3) Peer review panel.--
                    ``(A) In general.--The Secretary shall submit to a 
                peer review panel each application submitted under 
                paragraph (1).
                    ``(B) Composition.--The peer review panel shall 
                consist of representatives from--
                            ``(i) higher education, including 
                        professors;
                            ``(ii) the Department; and
                            ``(iii) the business community.
                    ``(C) Approval or disapproval.--With respect to 
                each application, the peer review panel shall recommend 
                whether each applicant should be awarded a grant under 
                this section.
    ``(c) Awarding of Grants.--
            ``(1) Geographic distribution.--In awarding grants under 
        this section, the Secretary shall take into consideration 
        providing an equitable geographic distribution of the grants 
        throughout the United States.
            ``(2) Maximum award.--A grant award under this section 
        shall be not more than $200,000. Not more than $75,000 may be 
        awarded in the first year of the grant award and remaining 
        funds shall be evenly divided over the remaining 3 years.
    ``(d) Activities.--
            ``(1) Cost-cutting activities.--A university consortium 
        awarded a grant under this section shall use the grant funds to 
        cut partner institution of higher education costs by carrying 
        out 1 or more of the following activities:
                    ``(A) Cooperative purchasing of health care and 
                other employee benefit plans.
                    ``(B) Cooperative purchasing of technology 
                infrastructure.
                    ``(C) Joint degree programs.
                    ``(D) Expansion of joint distance education 
                programs across institutions of higher education.
                    ``(E) Shared library acquisitions.
                    ``(F) Development and implementation of a credit 
                transfer system among partner institutions of higher 
                education.
                    ``(G) Development and implementation of cooperative 
                billing structures.
                    ``(H) Development and implementation of joint 
                professional development for faculty and staff.
                    ``(I) Joint legal counsel.
                    ``(J) Other activities that have the effect of 
                cutting partner institution of higher education costs.
            ``(2) Further activities.--A university consortium may 
        carry out activities not listed in paragraph (1) in addition to 
        carrying out 1 or more activities listed in paragraph (1).
            ``(3) Cost savings to students.--Each partner institution 
        of higher education of a university consortium awarded a grant 
        under this section shall--
                    ``(A) not raise tuition more than twice the rate of 
                inflation from academic year to subsequent academic 
                year during the life of the grant; and
                    ``(B) pass on to the students at such institution 
                not less than 50 percent of the savings from the grant 
                by cutting or maintaining student tuition rates or 
                increasing student aid.
    ``(e) Matching Funds.--
            ``(1) In general.--Each university consortium awarded a 
        grant under this section shall provide matching funds from non-
        Federal sources to carry out activities under this section in 
        an amount equal to--
                    ``(A) 40 percent of the grant award in the first 
                year;
                    ``(B) 50 percent of the grant award in the second 
                year;
                    ``(C) 65 percent of the grant award in each of the 
                third and fourth years; and
                    ``(D) 80 percent of the grant award in the fifth 
                year.
            ``(2) In-kind contributions.--Not more than 50 percent of 
        the matching funds required under paragraph (1) may be provided 
in the form of in-kind contributions.
    ``(f) One-Time Award.--A university consortium may receive a grant 
under this section only one time.
    ``(g) Supplement, Not Supplant.--Funds made available under this 
section shall be used to supplement, not supplant, other funds 
available for institutional or campus-based student aid.
    ``(h) Reporting.--
            ``(1) Annual report.--
                    ``(A) In general.--Each university consortium 
                awarded a grant under this section shall submit an 
                annual report to the Secretary on progress toward 
                meeting the purposes of this section.
                    ``(B) Consequences of not making substantial 
                progress.--If the Secretary, after consultation with 
                the peer review panel described in subsection (b)(3), 
                determines that the university consortium is not making 
                substantial progress in meeting the purposes and goals 
                of this section, as appropriate, by the end of the 
                second year of the grant, the grant shall not be 
                continued for the third and fourth year of the grant.
            ``(2) Report by the secretary.--The Secretary shall--
                    ``(A) conduct an analysis on the overall 
                effectiveness of university consortia in cutting 
                college costs and passing savings on to students; and
                    ``(B) make the analysis under subparagraph (A) 
                available to Congress and the public biannually.
    ``(i) National Activities.--The Secretary may reserve not more than 
5 percent of the funds appropriated for this section for any fiscal 
year for--
            ``(1) peer review of applications;
            ``(2) conducting the analysis required under subsection 
        (h)(3); and
            ``(3) technical assistance.
    ``(j) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $5,000,000 for fiscal year 2004 
and such sums as may be necessary for each of the 5 succeeding fiscal 
years.''.
    (b) College Cost Summit.--Part C of title I of the Higher Education 
Act of 1965 (20 U.S.C. 1015 et seq.), as amended by subsection (a), is 
further amended by adding at the end the following:

``SEC. 133. COLLEGE COST SUMMIT.

    ``(a) In General.--The Secretary shall convene a college cost 
summit with representatives of competing peer institutions of higher 
education for the purpose of negotiating voluntarily agreed upon limits 
on future college tuition and fee increases.
    ``(b) Secretarial Approval.--No agreement reached pursuant to 
subsection (a) shall take effect absent approval by the Secretary.
    ``(c) Antitrust Exemption.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Antitrust laws.--The term `antitrust laws' 
                has the meaning given such term in subsection (a) of 
                the first section of the Clayton Act (15 U.S.C. 12(a)), 
                except that such term includes section 5 of the Federal 
                Trade Commission Act (15 U.S.C. 45) to the extent such 
                section 5 applies to unfair methods of competition.
                    ``(B) Institution of higher education.--The term 
                `institution of higher education'--
                            ``(i) means an institution of higher 
                        education as defined in section 101; and
                            ``(ii) includes any individual acting on 
                        behalf of such an institution.
            ``(2) Exemption.--The antitrust laws shall not apply to any 
        joint discussion, consideration, review, action, or agreement 
        by or among institutions of higher education or their 
        representatives pursuant to this section and for the purpose 
        of, and limited to, negotiating voluntarily agreed upon limits 
        on future college tuition and fee increases, approved by the 
        Secretary.''.
    (c) Maintenance of Effort.--Part A of title IV of the Higher 
Education Act of 1965 (20 U.S.C. 1070 et seq.) is amended by adding at 
the end the following:

                   ``Subpart 9--Maintenance of Effort

``SEC. 420K. MAINTENANCE OF EFFORT.

    ``(a) In General.--A public institution of higher education is 
eligible to receive the full amount of assistance under this title for 
any fiscal year only if the Secretary determines that the State in 
which the public institution of higher education is located maintains 
not less than 90 percent of its support for higher education from the 
preceding fiscal year, as demonstrated by the State aggregate 
expenditures with respect to the provision of higher education.
    ``(b) Waiver.--The Secretary may waive the requirements of this 
section if the Secretary determines that a waiver would be equitable 
due to--
            ``(1) exceptional or uncontrollable circumstances, such as 
        a natural disaster; or
            ``(2) a precipitous, unpredicted, and unprecedented decline 
        in State budget authority.
    ``(c) Consequences of Failure To Maintain Effort.--Notwithstanding 
any other provision of this Act, the Secretary shall adjust the level 
of assistance available to institutions described in subsection (a) by 
restoring the Pell Grant maximum under this part and student loan fees 
under parts B and D to their levels on June 30, 2004.''.
    (d) Truth-in-Tuition.--Part A of title IV of the Higher Education 
Act of 1965 (20 U.S.C. 1070 et seq.), as amended by subsection (c), is 
further amended by adding at the end the following:

                     ``Subpart 10--Truth-in-Tuition

``SEC. 420L. DISCLOSURE IN APPLICATION.

    ``An institution of higher education that receives Federal funds 
and is eligible for assistance under this title shall include in 
materials accompanying an application for admission to the institution 
up to date annual trend information regarding the extent and average 
amount of such institution's tuition and fee discounts.''.
    (e) College Consumer Price Information.--Section 131(c)(4) of the 
Higher Education Act of 1965 (20 U.S.C. 1015(c)(4)) is amended to read 
as follows:
            ``(4) Higher Education Market Basket.--
                    ``(A) In general.--The Bureau of Labor Statistics, 
                in consultation with the Commissioner for Education 
                Statistics, shall develop a higher education cost index 
                that tracks inflation changes in the necessary costs 
                associated with higher education.
                    ``(B) Authorization of appropriations.--There are 
                authorized to be appropriated to carry out this 
                paragraph $7,000,000 for fiscal year 2004 and such sums 
                as may be necessary for each of the 5 succeeding fiscal 
                years.''.

SEC. 106. CREDIT FOR INTEREST ON HIGHER EDUCATION LOANS.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to nonrefundable 
personal credits) is amended by inserting after section 25B the 
following new section:

``SEC. 25C. INTEREST ON HIGHER EDUCATION LOANS.

    ``(a) Allowance of Credit.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to the interest paid by the 
taxpayer during the taxable year on any qualified education loan.
    ``(b) Maximum Credit.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        credit allowed by subsection (a) for the taxable year shall not 
        exceed $1,500.
            ``(2) Limitation based on modified adjusted gross income.--
                    ``(A) In general.--If the modified adjusted gross 
                income of the taxpayer for the taxable year exceeds 
                $50,000 ($100,000 in the case of a joint return), the 
                amount which would (but for this paragraph) be 
                allowable as a credit under this section shall be 
                reduced (but not below zero) by the amount which bears 
                the same ratio to the amount which would be so 
                allowable as such excess bears to $10,000 ($20,000 in 
                the case of a joint return).
                    ``(B) Modified adjusted gross income.--The term 
                `modified adjusted gross income' means adjusted gross 
                income determined without regard to sections 911, 931, 
                and 933.
                    ``(C) Inflation adjustment.--In the case of any 
                taxable year beginning after 2004, the $50,000 and 
                $100,000 amounts referred to in subparagraph (A) shall 
                be increased by an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which the taxable year begins, 
                        by substituting `2003' for `1992'.
                    ``(D) Rounding.--If any amount as adjusted under 
                subparagraph (C) is not a multiple of $50, such amount 
                shall be rounded to the nearest multiple of $50.
    ``(c) Dependents Not Eligible for Credit.--No credit shall be 
allowed by this section to an individual for the taxable year if a 
deduction under section 151 with respect to such individual is allowed 
to another taxpayer for the taxable year beginning in the calendar year 
in which such individual's taxable year begins.
    ``(d) Limit on Period Credit Allowed.--A credit shall be allowed 
under this section only with respect to interest paid on any qualified 
education loan during the first 60 months (whether or not consecutive) 
in which interest payments are required. For purposes of this 
paragraph, any loan and all refinancings of such loan shall be treated 
as 1 loan.
    ``(e) Definitions.--For purposes of this section:
            ``(1) Qualified education loan.--The term `qualified 
        education loan' has the meaning given such term by section 
        221(d)(1).
            ``(2) Dependent.--The term `dependent' has the meaning 
        given such term by section 152.
    ``(f) Special Rules.--
            ``(1) Denial of double benefit.--No credit shall be allowed 
        under this section for any amount taken into account for any 
        deduction under any other provision of this chapter.
            ``(2) Married couples must file joint return.--If the 
        taxpayer is married at the close of the taxable year, the 
        credit shall be allowed under subsection (a) only if the 
        taxpayer and the taxpayer's spouse file a joint return for the 
        taxable year.
            ``(3) Marital status.--Marital status shall be determined 
        in accordance with section 7703.''.
    (b) Conforming Amendment.--The table of sections for subpart A of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after the item relating to section 25B the 
following new item:

                              ``Sec. 25C. Interest on higher education 
                                        loans.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to any qualified education loan (as defined in section 25C(e)(1) 
of the Internal Revenue Code of 1986, as added by this section) 
incurred on, before, or after the date of enactment of this Act, but 
only with respect to any loan interest payment due after December 31, 
2002.

SEC. 107. REFINANCING AUTHORITY FOR FEDERAL DIRECT CONSOLIDATION LOAN.

    Section 455(g) of the Higher Education Act of 1965 (20 U.S.C. 
1087e(g)) is amended--
            (1) by striking ``A borrower'' and inserting the following:
            ``(1) In general.--A borrower''; and
            (2) by adding at the end the following:
            ``(2) Refinancing authority.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this part, a borrower may refinance a 
                Federal Direct Consolidation Loan at the prevailing 
                fixed rate as determined by the Secretary, if the 
                interest rate on such borrower's Federal Direct 
                Consolidation Loan is not less than the sum of 3.3 
                percent and the average of the bond equivalent rates of 
                the 91-day Treasury bills auctioned for the previous 
                calendar quarter.
                    ``(B) One-time only.--A borrower may refinance 
                under subparagraph (A) only once.''.

SEC. 108. LOANS FUNDED THROUGH TAX-EXEMPT SECURITIES.

    (a) Repeal.--Subparagraph (B) of section 438(b)(2) of the Higher 
Education Act of 1965 (20 U.S.C. 1087-1(b)(2)) is repealed.
    (b) Loans Funded Through Tax-Exempt Securities.--Section 438(b)(2) 
of the Higher Education Act of 1965 is amended further by inserting 
after subparagraph (A) the following:
            ``(B) Notwithstanding any other provision of law, the 
        quarterly rate of the special allowance for the holders of 
        loans financed directly, indirectly, or derivatively with funds 
        obtained by the holders from the issuance of obligations, the 
        income from which is excluded from gross income under the 
        Internal Revenue Code of 1986, regardless of the date of the 
        issuance of the obligations, shall be the quarterly rate of the 
        special allowance established under subparagraph (A), (E), (F), 
        (G), or (H), as the case may be.''.

SEC. 109. WINDFALL PROFIT OFFSET.

    Section 438 of the Higher Education Act of 1965 (20 U.S.C. 1087-1) 
is amended by adding at the end the following:
    ``(g) Windfall Profit Offset.--
            ``(1) In general.--Except as provided in paragraph (2), at 
        the end of every fiscal quarter for which an eligible lender 
        does not receive a special allowance payment under this 
        section, the eligible lender shall pay to the Secretary of the 
        Treasury for deposit into the Treasury as miscellaneous 
        receipts a windfall profit offset payment for the fiscal 
        quarter equal to the amount by which--
                    ``(A) the aggregate amount of all payments of 
                interest received by the eligible lender from borrowers 
                on all loans made, insured, or guaranteed under this 
                part during the fiscal quarter; exceeds
                    ``(B) interest guaranteed the lender under this 
                section for the fiscal quarter, irrespective of the 
                amount received under subparagraph (A).
            ``(2) Exception.--An eligible lender shall not be subject 
        to the requirement of paragraph (1) if the eligible lender is 
        an organization described in section 501(c)(3) of the Internal 
        Revenue Code of 1986 and a nonprofit entity as defined by 
        applicable State law, and meets the following requirements:
                    ``(A) The eligible lender does not confer a salary 
                or benefits to any employee of the lender in an amount 
                that is in excess of the salary and benefits provided 
                to the Secretary by the Department.
                    ``(B) The eligible lender does not maintain an 
                ongoing relationship whereby it passes on revenue 
                directly or indirectly through lease, securitization, 
                resale, or any other financial instrument to a for-
                profit entity or to shareholders.
                    ``(C) The eligible lender does not offer benefits 
                to a borrower in a manner directly or indirectly 
                predicated on such borrower's participation in a 
                program under this part, part D, or with any particular 
                lender.
                    ``(D) The eligible lender certifies that it uses 
                the windfall profit amount described in paragraph (1) 
                to carry out the purposes of this Act through 
                activities such as the following:
                            ``(i) Conferring grants, scholarships, or 
                        loans.
                            ``(ii) Financing work-study student 
                        employment.
                            ``(iii) Carrying out activities authorized 
                        under chapters 1 and 2 of subpart 2 of part A.
                    ``(E) The eligible lender is subject to public 
                oversight through either a State charter, or not less 
                than 50 percent of the lender's board of directors 
                consists of State appointed representatives.
                    ``(F) The eligible lender does not engage in the 
                marketing of the relative value of programs under this 
                part as compared to programs under part D, nor does the 
                lender engage in the marketing of loans or programs 
                offered by for-profit lenders. This subparagraph shall 
                not be construed to prohibit the eligible lender from 
                conferring basic information on lenders under this part 
                and the related benefits offered by such lenders.''.

SEC. 110. SUPPORT FOR WORKING STUDENTS.

    (a) Dependent Students.--Section 475(g)(2) of the Higher Education 
Act of 1965 (20 U.S.C. 1087oo(g)(2)) is amended by striking 
subparagraph (D) and inserting the following:
                    ``(D) $9,000;''.
    (b) Independent Students Without Dependents Other Than a Spouse.--
Section 476(b)(1)(A) of the Higher Education Act of 1965 (20 U.S.C. 
1087pp(b)(1)(A)) is amended by striking clause (iv) and inserting the 
following:
                            ``(iv) $13,000;''.
    (c) Independent Students With Dependents Other Than a Spouse.--
Section 477(b) of the Higher Education Act of 1965 (20 U.S.C. 
1087qq(b)) is amended--
            (1) in paragraph (1)--
                    (A) by striking subparagraph (D) and inserting the 
                following:
                    ``(D) $18,000;''; and
                    (B) in subparagraph (E), by striking ``paragraph 
                (5)'' and inserting ``paragraph (4)'';
            (2) by striking paragraph (4); and
            (3) by redesignating paragraph (5) as paragraph (4).
    (d) Conforming Amendments.--Section 478 of the Higher Education Act 
of 1965 (20 U.S.C. 1087rr) is amended--
            (1) by striking subsection (b) and inserting the following:
    ``(b) Income Protection Allowance.--For each academic year after 
academic year 1993-1994, the Secretary shall publish in the Federal 
Register a revised table of income protection allowances for the 
purpose of section 475(c)(4). Such revised table shall be developed by 
increasing each of the dollar amounts contained in the table in such 
section by a percentage equal to the estimated percentage increase in 
the Consumer Price Index (as determined by the Secretary) between 
December 1992 and the December next preceding the beginning of such 
academic year, and rounding the result to the nearest $10.''; and
            (2) in subsection (h)--
                    (A) in the first sentence, by striking 
                ``477(b)(5)'' and inserting ``477(b)(4)''; and
                    (B) in the second sentence--
                            (i) by striking ``477(b)(5)(A)'' and 
                        inserting ``477(b)(4)(A)''; and
                            (ii) by striking ``477(b)(5)(B)'' and 
                        inserting ``477(b)(4)(B)''.

SEC. 111. STUDENT ELIGIBILITY.

    Section 484 of the Higher Education Act of 1965 (20 U.S.C. 1091) is 
amended by striking subsection (r).

SEC. 112. AUTHORIZATION OF APPROPRIATIONS LEVELS FOR CAMPUS-BASED AID.

    (a) Federal Supplemental Educational Opportunity Grants.--Section 
413A(b)(1) of the Higher Education Act of 1965 (20 U.S.C. 1070b(b)(1)) 
is amended by striking ``$675,000,000 for fiscal year 1999 and such 
sums as may be necessary for the 4 succeeding fiscal years'' and 
inserting ``$1,000,000,000 for fiscal year 2004 and such sums as may be 
necessary for each of the 5 succeeding fiscal years''.
    (b) Federal Work-Study Programs.--Section 441(b) of the Higher 
Education Act of 1965 (42 U.S.C. 2751(b)) is amended by striking 
``$1,000,000,000 for fiscal year 1999 and such sums as may be necessary 
for each of the 4 succeeding fiscal years'' and inserting 
``$1,500,000,000 for fiscal year 2004 and such sums as may be necessary 
for each of the 5 succeeding fiscal years''.
    (c) Federal Perkins Loans.--Section 461(b)(1) of the Higher 
Education Act of 1965 (20 U.S.C. 1087aa(b)(1)) is amended by striking 
``$250,000,000 for fiscal year 1999 and such sums as may be necessary 
for each of the 4 succeeding fiscal years'' and inserting 
``$300,000,000 for fiscal year 2004 and such sums as may be necessary 
for each of the 5 succeeding fiscal years''.

SEC. 113. SPECIAL PROGRAMS FOR STUDENTS WHOSE FAMILIES ARE ENGAGED IN 
              MIGRANT AND SEASONAL FARMWORK.

    Section 418A of the Higher Education Act of 1965 (20 U.S.C. 1070d-
2) is amended--
            (1) in subsection (f)--
                    (A) in paragraph (1), by striking ``$150,000'' and 
                inserting ``$225,000''; and
                    (B) in paragraph (2), by striking ``$150,000'' and 
                inserting ``$225,000''; and
            (2) in subsection (h)--
                    (A) in paragraph (1)--
                            (i) by striking ``$15,000,000'' and 
                        inserting ``$40,000,000'';
                            (ii) by striking ``1999'' and inserting 
                        ``2004''; and
                            (iii) by striking ``4'' and inserting 
                        ``5''; and
                    (B) in paragraph (2)--
                            (i) by striking ``$5,000,000'' and 
                        inserting ``$30,000,000'';
                            (ii) by striking ``1999'' and inserting 
                        ``2004''; and
                            (iii) by striking ``4'' and inserting 
                        ``5''.

SEC. 114. LOAN FORGIVENESS AND CANCELLATION FOR CERTAIN TEACHERS.

    (a) FFEL Loans.--Section 428J of the Higher Education Act of 1965 
(20 U.S.C. 1078-10) is amended--
            (1) in subsection (c), by adding at the end the following:
            ``(3) Additional amounts for highly qualified teachers in 
        mathematics, science, special education, or bilingual 
        education.--Notwithstanding the amount specified in paragraph 
        (1) and the requirements of subsection (b)(1), the Secretary 
        shall repay not more than $15,000 in the aggregate of the loan 
        obligation on a loan made under section 428 or 428H that is 
        outstanding after the completion of the fifth complete school 
        year of teaching described in subparagraphs (A) and (B) in the 
        case of a teacher--
                    ``(A) who has been employed as a full-time teacher 
                for 5 consecutive complete school years in a school 
                that qualifies under section 465(a)(2)(A) for loan 
                cancellation for Perkins loan recipients who teach in 
                such schools, except that the enrollment of children 
                counted under section 1124(c) of the Elementary and 
                Secondary Education Act of 1965 exceeds 40 percent of 
                the total enrollment of such school;
                    ``(B) whose qualifying employment is teaching 
                mathematics, science, special education, or bilingual 
                education; and
                    ``(C) who is highly qualified (as defined in 
                section 9101 of the Elementary and Secondary Education 
                Act of 1965).''; and
            (2) by adding at the end the following:
    ``(i) Early Education Teachers.--
            ``(1) Authorization.--The Secretary shall carry out a 
        program, through the holder of the loan, of assuming the 
        obligation to repay a qualified loan amount for a loan made 
        under section 428 or 428H, in accordance with paragraph (2), 
        for any new borrower on or after October 1, 1998, who--
                    ``(A) has been employed as a full-time teacher for 
                5 consecutive complete school years in a Head Start or 
                Early Head Start program under the Head Start Act (42 
                U.S.C. 9831 et seq.), or in another comparable 
                prekindergarten program that serves children not less 
                than 60 percent of whom are eligible to participate in 
                a Head Start or Early Head Start program; and
                    ``(B) is not in default on a loan for which the 
                borrower seeks forgiveness.
            ``(2) Qualified loan amount.--
                    ``(A) In general.--The Secretary shall repay not 
                more than $15,000 in the aggregate of the loan 
                obligation on a loan made under section 428 or 428H 
                that is outstanding after the completion of the fifth 
                complete school year of teaching described in paragraph 
                (1)(A).
                    ``(B) Treatment of consolidation loans.--A loan 
                amount for a loan made under section 428C may be a 
                qualified loan amount for the purposes of this 
                paragraph only to the extent that such loan amount was 
                used to repay a Federal Direct Stafford Loan, a Federal 
                Direct Unsubsidized Stafford Loan, or a loan made under 
                section 428 or 428H for a borrower who meets the 
                requirements of paragraph (1), as determined in 
                accordance with regulations prescribed by the 
                Secretary.''.
    (b) Direct Loans.--Section 460 of the Higher Education Act of 1965 
(20 U.S.C. 1087j) is amended--
            (1) in subsection (c), by adding at the end the following:
            ``(3) Additional amounts for highly qualified teachers in 
        mathematics, science, special education, or bilingual 
        education.--Notwithstanding the amount specified in paragraph 
        (1) and the requirements of subsection (b)(1)(A), the Secretary 
        shall cancel not more than $15,000 in the aggregate of the loan 
        obligation on a Federal Direct Stafford Loan or a Federal 
        Direct Unsubsidized Stafford Loan that is outstanding after the 
        completion of the fifth complete school year of teaching 
        described in subparagraphs (A) and (B) in the case of a 
        teacher--
                    ``(A) who has been employed as a full-time teacher 
                for 5 consecutive complete school years in a school 
                that qualifies under section 465(a)(2)(A) for loan 
                cancellation for Perkins loan recipients who teach in 
                such schools, except that the enrollment of children 
                counted under section 1124(c) of the Elementary and 
                Secondary Education Act of 1965 exceeds 40 percent of 
                the total enrollment of such school;
                    ``(B) whose qualifying employment is teaching 
                mathematics, science, special education, or bilingual 
                education; and
                    ``(C) who is highly qualified (as defined in 
                section 9101 of the Elementary and Secondary Education 
                Act of 1965).''; and
            (2) by adding at the end the following:
    ``(i) Early Education Teachers.--
            ``(1) Authorization.--The Secretary shall carry out a 
        program of canceling the obligation to repay a qualified loan 
        amount in accordance with paragraph (2) for Federal Direct 
        Stafford Loans and Federal Direct Unsubsidized Stafford Loans 
        made under this part for any new borrower on or after October 
        1, 1998, who--
                    ``(A) has been employed as a full-time teacher for 
                5 consecutive complete school years in a Head Start or 
                Early Head Start program under the Head Start Act (42 
                U.S.C. 9831 et seq.), or in another comparable 
                prekindergarten program that serves children not less 
                than 60 percent of whom are eligible to participate in 
                a Head Start or Early Head Start program; and
                    ``(B) is not in default on a loan for which the 
                borrower seeks cancellation.
            ``(2) Qualified loan amount.--
                    ``(A) In general.--The Secretary shall cancel not 
                more than $15,000 in the aggregate of the loan 
                obligation on a Federal Direct Stafford Loan or a 
                Federal Direct Unsubsidized Stafford Loan that is 
                outstanding after the completion of the fifth complete 
                school year of teaching described in paragraph (1)(A).
                    ``(B) Treatment of consolidation loans.--A loan 
                amount for a Federal Direct Consolidation Loan may be a 
                qualified loan amount for the purposes of this 
                paragraph only to the extent that such loan amount was 
                used to repay a Federal Direct Stafford Loan, a Federal 
                Direct Unsubsidized Stafford Loan, or a loan made under 
                section 428 or 428H for a borrower who meets the 
                requirements of paragraph (1), as determined in 
                accordance with regulations prescribed by the 
                Secretary.''.

SEC. 115. REVISION OF TAX TABLE.

    Section 478(g) of the Higher Education Act of 1965 (20 U.S.C. 
1087rr(g)) is amended by adding at the end the following: ``The 
Secretary shall develop such revised table only after consultation with 
appropriate committees of Congress.''.

SEC. 116. INCOME CONTINGENT REPAYMENT FOR PUBLIC SECTOR EMPLOYEES.

    Section 455(e) of the Higher Education Act of 1965 (20 U.S.C. 
1087e(e)) is amended by adding at the end the following:
            ``(7) Repayment plan for public sector employees.--
                    ``(A) In general.--The Secretary shall forgive the 
                balance due on any loan made under this part for a 
                borrower--
                            ``(i) who has made 120 payments on such 
                        loan pursuant to income contingent repayment; 
                        and
                            ``(ii) who is employed, and was employed 
                        for the 10-year period in which the borrower 
                        made the 120 payments described in clause (i), 
                        in a public sector job.
                    ``(B) Public sector job.--In this paragraph, the 
                term `public sector job' means a full-time job in 
                emergency management, government, public safety, law 
                enforcement, public health, education (including early 
                childhood education), or public interest legal services 
                (including prosecution or public defense).
            ``(8) Return to standard repayment.--A borrower who is 
        repaying a loan made under this part pursuant to income 
        contingent repayment may choose, at any time, to terminate 
        repayment pursuant to income contingent repayment and repay 
        such loan under the standard repayment plan.''.

                 TITLE II--TEACHER QUALITY ENHANCEMENT

SEC. 201. AMENDMENT TO TITLE II.

    Title II of the Higher Education Act of 1965 (20 U.S.C. 1021 et 
seq.) is amended to read as follows:

                ``TITLE II--TEACHER QUALITY ENHANCEMENT

      ``PART A--TEACHER QUALITY ENHANCEMENT GRANTS FOR STATES AND 
                              PARTNERSHIPS

``SEC. 201. PURPOSES; DEFINITIONS.

    ``(a) Purposes.--The purposes of this part are to--
            ``(1) improve student achievement;
            ``(2) increase the size and scope of programs funded under 
        this part to meet the goal of having 100 percent of teachers as 
        highly qualified teachers;
            ``(3) retain and recruit highly qualified individuals into 
        the teaching force through incentives;
            ``(4) hold institutions of higher education accountable for 
        preparing teachers, through coursework in pedagogy, with 
        effective methods of teaching as a means of better preparing 
        teachers for the modern day classroom;
            ``(5) improve the quality of the current and future 
        teaching force by improving the preparation of prospective 
        teachers and enhancing professional development activities;
            ``(6) hold institutions of higher education accountable for 
        preparing teachers who have the necessary teaching skills and 
        are highly competent in the academic content areas in which the 
        teachers plan to teach, such as mathematics, science, English, 
        reading or language arts, foreign languages, history, 
        economics, art, civics, Government, and geography, including 
        training in the effective uses of technology in the classroom;
            ``(7) recruit highly qualified individuals, including 
        individuals from other occupations, into the teaching force, 
        especially in subject areas of high need (including bilingual 
        education, special education, mathematics, science, and early 
        childhood education), geographic areas of high need, and in 
        geographic areas with teacher vacancy or retention problems; 
        and
            ``(8) encourage learning partnerships between students and 
        parents that lead to improving student academic achievement and 
        school performance.
    ``(b) Definitions.--In this part:
            ``(1) Arts and sciences.--The term `arts and sciences' 
        means--
                    ``(A) when referring to an organizational unit of 
                an institution of higher education, any academic unit 
                that offers 1 or more academic majors in disciplines or 
                content areas corresponding to the academic subject 
                matter areas in which teachers provide instruction; and
                    ``(B) when referring to a specific academic subject 
                matter area, the disciplines or content areas in which 
                academic majors are offered by the arts and science 
                organizational unit.
            ``(2) High need local educational agency.--The term `high 
        need local educational agency' means a local educational agency 
        in which--
                    ``(A)(i) 30 percent of the students served by the 
                agency are from families with incomes below the poverty 
                line; or
                    ``(ii) there are more than 20,000 students served 
                by the agency from families with incomes below the 
                poverty line; and
                    ``(B)(i) there is a high percentage of teachers who 
                are not highly qualified; or
                    ``(ii) there is a high teacher turnover rate.
            ``(3) High need school.--The term `high need school' means 
        an elementary school or secondary school--
                    ``(A) in which there is a high concentration of 
                students from families with incomes below the poverty 
                line; or
                    ``(B) that is identified as in need of school 
                improvement or corrective action pursuant to section 
                1116 of the Elementary and Secondary Education Act of 
                1965 (20 U.S.C. 6316).
            ``(4) Highly qualified.--The term `highly qualified' has 
        the meaning given the term in section 9101 of the Elementary 
        and Secondary Education Act of 1965.
            ``(5) Mentoring.--The term `mentoring' has the meaning 
        given the term in section 9101 of the Elementary and Secondary 
        Education Act of 1965.
            ``(6) Parent.--The term `parent' has the meaning given the 
        term in section 9101 of the Elementary and Secondary Education 
        Act of 1965.
            ``(7) Parental involvement.--The term `parental 
        involvement' has the meaning given the term in section 9101 of 
        the Elementary and Secondary Education Act of 1965.
            ``(8) Poverty line.--The term `poverty line' means the 
        poverty line (as defined by the Office of Management and 
        Budget, and revised annually in accordance with section 673(2) 
        of the Community Services Block Grant Act (42 U.S.C. 9902(2))) 
        applicable to a family of the size involved.
            ``(9) Professional development.--The term `professional 
        development' has the meaning given the term in section 9101 of 
        the Elementary and Secondary Education Act of 1965.
            ``(10) Teaching skills.--The term `teaching skills' means 
        skills--
                    ``(A) grounded in the disciplines of teaching and 
                learning that teachers use to create effective 
                instruction in subject matter content and that lead to 
                student achievement and the ability to apply knowledge; 
                and
                    ``(B) that require an understanding of the learning 
                process itself, including an understanding of--
                            ``(i) the use of strategies specific to the 
                        subject matter;
                            ``(ii) the application of on-going 
                        assessment of student learning;
                            ``(iii) individual differences in ability 
                        and instructional needs; and
                            ``(iv) effective classroom management.

``SEC. 202. PROGRAM AUTHORITY.

    ``(a) Competitive Grant Program.--If the amount appropriated to 
carry out this part for a fiscal year is less than $270,000,000, then 
the Secretary shall use--
            ``(1) 25 percent of such funds to carry out the competitive 
        State grant program under section 203; and
            ``(2) 75 percent of such funds to carry out the competitive 
        partnership grant program under section 204.
    ``(b) Formula Grant Program.--
            ``(1) In general.--
                    ``(A) Authorization of grants.--If the amount 
                appropriated to carry out this part for a fiscal year 
                is equal to or exceeds $270,000,000, then the Secretary 
                shall use such funds to award a grant to each State 
                from allotments under subparagraph (B).
                    ``(B) Allotments.--The Secretary shall make an 
                allotment to each State in an amount that bears the 
                same relation to the funds as the amount the State 
                received under part A of title I of the Elementary and 
                Secondary Education Act of 1965 for the preceding 
                fiscal year bears to the amount received by all States 
                under such part for the preceding fiscal year.
            ``(2) State use of funds.--A State that receives an 
        allotment under paragraph (1) shall expend--
                    ``(A) 25 percent of such funds to carry out State 
                level activities under subsections (d) and (e) of 
                section 203; and
                    ``(B) 75 percent of such funds to carry out the 
                competitive partnership grant program under section 
                204.

``SEC. 203. STATE GRANTS.

    ``(a) In General.--From amounts made available under section 210 
for a fiscal year, the Secretary is authorized to award grants under 
this section, on a competitive basis, to eligible States to enable the 
eligible States to carry out the activities described in subsections 
(d) and (e).
    ``(b) Eligible State.--
            ``(1) Definition.--In this part, the term `eligible State' 
        means a State educational agency.
            ``(2) Consultation.--The State educational agency shall 
        consult with the Governor, State board of education, or State 
        agency for higher education, as appropriate, with respect to 
        the activities assisted under this section.
            ``(3) Construction.--Nothing in this subsection shall be 
        construed to negate or supersede the legal authority under 
        State law of any State agency, State entity, or State public 
        official over programs that are under the jurisdiction of the 
        agency, entity, or official.
    ``(c) Application.--To be eligible to receive a grant under this 
section, an eligible State shall, at the time of the initial grant 
application, submit an application to the Secretary that--
            ``(1) meets the requirement of this section;
            ``(2) includes a description of how the eligible State 
        intends to use funds provided under this section; and
            ``(3) contains such other information and assurances as the 
        Secretary may require.
    ``(d) Required Uses of Funds.--A State that receives a grant under 
this section shall use the grant funds to carry out the following 
activities:
            ``(1) Rigorous teacher certification or licensure 
        programs.--Ensuring that the State's teacher certification or 
        licensure program is rigorous and has high standards.
            ``(2) Teacher recruitment.--
                    ``(A) In general.--Awarding scholarships to help 
                students pay the costs of tuition, room, board, and 
                other expenses of completing a teacher preparation 
                program.
                    ``(B) Support services.--Providing support 
                services, if needed, to enable scholarship recipients 
                to complete postsecondary education programs.
                    ``(C) Assistance to become highly qualified 
                teachers.--Providing teachers who are not highly 
                qualified with the opportunity to take coursework or 
                credentialing courses in order to become highly 
                qualified teachers.
                    ``(D) Followup services.--Providing followup 
                services to former scholarship recipients during the 
                recipients' first 3 years of teaching.
                    ``(E) Service requirement.--The Secretary shall 
                establish such requirements as the Secretary finds 
                necessary to ensure that recipients of scholarships 
                under this paragraph who complete teacher education 
                programs subsequently teach in a high need local 
                educational agency, for a period of time equivalent to 
                the period for which the recipients receive scholarship 
                assistance, or repay the amount of the scholarship. The 
                Secretary shall use any such repayments to carry out 
                additional activities under this section.
    ``(e) Allowable Uses of Funds.--A State that receives a grant under 
this section may use such funds to carry out any of the following 
activities:
            ``(1) Reforms.--Implementing reforms that hold institutions 
        of higher education with teacher preparation programs 
        accountable for preparing teachers who are highly competent in 
        the academic content areas in which the teachers plan to teach, 
        and possess strong teaching skills, which may include the use 
        of rigorous subject matter competency tests and the requirement 
        that a teacher have an academic major in the subject area, or 
        related discipline, in which the teacher plans to teach, and 
        instruction for such teachers on how to involve parents in 
        their children's education.
            ``(2) Certification or licensure requirements.--Reforming 
        teacher certification or licensure requirements to ensure that 
        teachers have the necessary teaching skills and academic 
        content knowledge in the subject areas in which teachers are 
assigned to teach. States are encouraged to use funds to develop or 
enhance existing licensure and certification requirements for subject 
areas of high need (including bilingual education, special education, 
mathematics, science, and early childhood education), including 
development of a State test.
            ``(3) Alternative routes to certification for teaching.--
        Providing prospective teachers with alternative routes to 
        traditional preparation for teaching through programs at 
        colleges of arts and sciences or at nonprofit educational 
        organizations that have a proven record of effectiveness and 
        include instruction in teaching skills. Strengthening or 
        developing alternative routes to State certification of 
        teachers programs that includes, at a minimum--
                    ``(A) a selective means for admitting individuals 
                into such programs that includes passage of State 
                teacher exams in appropriate subject areas;
                    ``(B) pedagogical course work, including formal 
                instruction that addresses the theories and practices 
                of teaching and monitoring student performance; and
                    ``(C) support services, including mentoring for the 
                individuals participating in the alternative State 
                certification of teachers programs that focuses on--
                            ``(i) helping the individuals develop 
                        effective teaching skills and strategies;
                            ``(ii) professional development; and
                            ``(iii) the disciplines of teaching and 
                        learning to ensure that prospective teachers 
                        have an understanding of research-based 
                        learning practices and possess skills related 
                        to the learning process.
            ``(4) Teacher support.--Carrying out programs that include 
        support during the initial teaching experience.
            ``(5) Recruiting and hiring teachers.--
                    ``(A) Effective mechanisms.--Developing and 
                implementing effective mechanisms to ensure that local 
                educational agencies and schools are able to 
                effectively recruit highly qualified teachers.
                    ``(B) Programs.--Establishing programs that--
                            ``(i) train and hire regular, special 
                        education, and bilingual education teachers 
                        (which may include hiring special education 
                        teachers to team-teach in classrooms that 
                        contain both children with disabilities and 
                        nondisabled children);
                            ``(ii) train and hire highly qualified 
                        teachers of special needs children and limited 
                        English proficient students, as well as 
                        teaching specialists in core academic subjects 
                        who will provide individualized instruction to 
                        students;
                            ``(iii) recruit qualified professionals 
                        from other fields, including highly qualified 
                        paraprofessionals (as defined in section 2102 
                        of the Elementary and Secondary Education Act 
                        of 1965), and provide such professionals with 
                        alternative routes to teacher certification, 
                        including developing and implementing hiring 
                        policies that ensure comprehensive recruitment 
                        efforts as a way to expand the applicant pool, 
                        such as through identifying teachers certified 
                        through alternative routes, and using a system 
                        of intensive screening designed to hire the 
                        most qualified applicants; and
                            ``(iv) provide increased opportunities for 
                        minorities, individuals with disabilities, and 
                        other individuals underrepresented in the 
                        teaching profession.
                    ``(C) Reduction in class size.--Recruiting and 
                hiring highly qualified teachers to reduce class size, 
                particularly in the early grades.
            ``(6) Social promotion.--Development and implementation of 
        efforts to address the problem of social promotion and to 
        prepare teachers to effectively address the issues raised by 
        ending the practice of social promotion.
            ``(7) Special certification for prospective ap teachers.--
        Developing and implementing teacher preparation programs that 
        provide special certification in advanced placement (AP)-level 
        or international baccalaureate (IB)-level content and pedagogy, 
        including undergraduate specializations in in-depth study of 
        subject-specific content and practical pedagogical experience 
        through student teaching, and master degree level programs that 
        lead to a master's degree in AP-level or IB-level content.
            ``(8) Financial incentives.--Providing financial incentives 
        for teachers to teach in high need schools in which there 
        exists a shortage of highly qualified teachers.

``SEC. 204. PARTNERSHIP GRANTS.

    ``(a) Grants.--The Secretary or State, as appropriate, shall use 
funds made available under section 202 to award grants under this 
section, on a competitive basis, to eligible partnerships to enable the 
eligible partnerships to carry out the activities described in 
subsections (d) and (e).
    ``(b) Definitions.--
            ``(1) Eligible partnerships.--In this part, the term 
        `eligible partnerships' means an entity that--
                    ``(A) shall include--
                            ``(i) a partner institution;
                            ``(ii) a school of arts and sciences; and
                            ``(iii) a high need local educational 
                        agency; and
                    ``(B) may include a Governor, State educational 
                agency, the State board of education, the State agency 
                for higher education, an institution of higher 
                education not described in subparagraph (A), a 
                community college, a public charter school, a public or 
                private elementary school or secondary school, a public 
                or private nonprofit educational organization, a 
business, a teacher organization, or a prekindergarten program.
            ``(2) Partner institution.--In this section, the term 
        `partner institution' means a private independent or State-
        supported public institution of higher education, the teacher 
        training program of which demonstrates that--
                    ``(A) graduates from the teacher training program 
                exhibit strong performance on State-determined 
                qualifying assessments for new teachers through--
                            ``(i) demonstrating that 80 percent or more 
                        of the graduates of the program who intend to 
                        enter the field of teaching have passed all of 
                        the applicable State qualification assessments 
                        for new teachers, which shall include an 
                        assessment of each prospective teacher's 
                        subject matter knowledge in the content area or 
                        areas in which the teacher intends to teach; or
                            ``(ii) being ranked among the highest-
                        performing teacher preparation programs in the 
                        State as determined by the State--
                                    ``(I) using criteria consistent 
                                with the requirements for the State 
                                report card under section 207(b); and
                                    ``(II) using the State report card 
                                on teacher preparation required under 
                                section 207(b), after the first 
                                publication of such report card and for 
                                every year thereafter; or
                    ``(B) the teacher training program requires all the 
                students of the program to participate in intensive 
                clinical experience, to meet high academic standards, 
                and--
                            ``(i) in the case of secondary school 
                        candidates, to successfully complete an 
                        academic major in the subject area in which the 
                        candidate intends to teach or to demonstrate 
                        competence through a high level of performance 
                        in relevant content areas; and
                            ``(ii) in the case of elementary school 
                        candidates, to successfully complete an 
                        academic major in the arts and sciences or to 
                        demonstrate competence through a high level of 
                        performance in core academic subject areas.
    ``(c) Application.--Each eligible partnership desiring a grant 
under this section shall submit an application to the Secretary or 
State, as appropriate, at such time, in such manner, and accompanied by 
such information as the Secretary or State, as appropriate, may 
require. Each such application shall--
            ``(1) contain a needs assessment of all the partners with 
        respect to teaching and learning and a description of how the 
        partnership will coordinate with other teacher training or 
        professional development programs, and how the activities of 
        the partnership will be consistent with State, local, and other 
        education reform activities that promote student achievement 
        and parent involvement;
            ``(2) contain a resource assessment that describes the 
        resources available to the partnership, the intended use of the 
        grant funds, including a description of how the grant funds 
        will be fairly distributed in accordance with subsection (f), 
        and the commitment of the resources of the partnership to the 
        activities assisted under this part, including financial 
        support, faculty participation, time commitments, and 
        continuation of the activities when the grant ends; and
            ``(3) contain a description of--
                    ``(A) how the partnership will meet the purposes of 
                this part;
                    ``(B) how the partnership will carry out the 
                activities required under subsection (d) and any 
                permissible activities under subsection (e); and
                    ``(C) the partnership's evaluation plan pursuant to 
                section 206(b).
    ``(d) Required Uses of Funds.--An eligible partnership that 
receives a grant under this section shall use the grant funds to carry 
out the following activities:
            ``(1) Reforms.--Implementing reforms within teacher 
        preparation programs to hold the programs accountable for 
        preparing teachers who are highly competent in the academic 
        content areas in which the teachers plan to teach, and for 
        promoting strong teaching skills, including working with a 
        school of arts and sciences and integrating reliable research-
        based teaching methods into the curriculum, which curriculum 
        shall include programs designed to successfully integrate 
        technology into teaching and learning.
            ``(2) Clinical experience and interaction.--Providing 
        sustained and high-quality preservice clinical experience 
        including the mentoring of prospective teachers by veteran 
        teachers, and substantially increasing interaction between 
        faculty at institutions of higher education and new and 
        experienced teachers, principals, and other administrators at 
        elementary schools or secondary schools, and providing support, 
        including preparation time, for such interaction.
            ``(3) Professional development.--Creating opportunities for 
        enhanced and ongoing professional development that improves the 
        academic content knowledge of teachers in the subject areas in 
        which the teachers are certified to teach or in which the 
        teachers are working toward certification to teach, and that 
        promotes strong teaching skills.
            ``(4) Ensuring adequate preparation to meet high 
        standards.--Developing and implementing accountability measures 
        for preservice--
                    ``(A) training in reading;
                    ``(B) training in addressing the needs of children 
                with disabilities and limited English proficient 
                individuals;
                    ``(C) training in data analysis and how to use 
                student achievement data to improve instruction; and
                    ``(D) optional training in teaching advanced 
                placement or international baccalaureate courses.
            ``(5) Teacher preparation and parental involvement.--
        Preparing teachers with the knowledge and skills to enable such 
        teachers to--
                    ``(A) provide instruction to diverse student 
                populations, including individuals with disabilities 
                and limited English proficient individuals; and
                    ``(B) work with and involve parents in their 
                children's education and in the teacher preparation 
                program reform process.
            ``(6) Teacher preparation enhancement internship.--
        Developing a 1-year paid internship program for students who 
        have completed a 4-year teacher education program to enable 
        such students to develop the skills and experience necessary 
        for success in teaching, including providing intensive clinical 
        training and combining in-service instruction in teacher 
        methods and assessments with classroom observations, 
        experiences, and practices. Such interns would have a reduced 
        teaching load and a mentor for assistance in the classroom.
    ``(e) Allowable Uses of Funds.--An eligible partnership that 
receives a grant under this section may use such funds to carry out any 
of the following activities:
            ``(1) Dissemination and coordination.--Broadly 
        disseminating information on effective practices used by the 
        partnership, and coordinating with the activities of the 
        Governor, State board of education, State higher education 
        agency, and State educational agency, as appropriate.
            ``(2) Managerial and leadership skills.--Developing and 
        implementing proven mechanisms to provide principals and 
        superintendents with effective managerial and leadership skills 
        that result in increased student achievement.
            ``(3) Scholarships.--
                    ``(A) In general.--Awarding scholarships to help 
                students pay the costs of tuition, room, board, and 
                other expenses of completing a teacher preparation 
                program.
                    ``(B) Support services.--Providing support 
                services, if needed, to enable scholarship recipients 
                to complete postsecondary education programs.
                    ``(C) Assistance to become highly qualified 
                teachers.--Providing teachers who are not highly 
                qualified with the opportunity to take coursework or 
                credentialing courses in order to become highly 
                qualified teachers.
                    ``(D) Followup services.--Providing followup 
                services to former scholarship recipients during the 
                recipients' first 3 years of teaching.
                    ``(E) Service requirement.--The Secretary or State, 
                as appropriate, shall establish such requirements as 
                the Secretary or State, as appropriate, finds necessary 
                to ensure that recipients of scholarships under this 
                paragraph who complete teacher education programs 
                subsequently teach in a high need local educational 
                agency, for a period of time equivalent to the period 
                for which the recipients receive scholarship 
                assistance, or repay the amount of the scholarship. The 
                Secretary or State, as appropriate, shall use any such 
                repayments to carry out additional activities under 
                this section.
            ``(4) Financial incentives.--Providing financial incentives 
        for teachers to teach in high need schools in which there 
        exists a shortage of highly qualified teachers.
            ``(5) Recruiting and hiring teachers.--
                    ``(A) In general.--Establishing programs that--
                            ``(i) train and hire regular and special 
                        education teachers (which may include hiring 
                        special education teachers to team-teach in 
                        classrooms that contain both children with 
                        disabilities and nondisabled children);
                            ``(ii) train and hire highly qualified 
                        teachers of special needs children, as well as 
                        teaching specialists in core academic subjects 
                        who will provide increased individualized 
                        instruction to students;
                            ``(iii) recruit qualified professionals 
                        from other fields, including highly qualified 
                        paraprofessionals (as defined in section 2102 
                        of the Elementary and Secondary Education Act 
                        of 1965), and provide such professionals with 
                        alternative routes to teacher certification, 
                        including developing and implementing hiring 
                        policies that ensure comprehensive recruitment 
                        efforts as a way to expand the applicant pool, 
                        such as through identifying teachers certified 
                        through alternative routes, and using a system 
                        of intensive screening designed to hire the 
                        most qualified applicants; and
                            ``(iv) provide increased opportunities for 
                        minorities, individuals with disabilities, and 
                        other individuals underrepresented in the 
                        teaching profession.
                    ``(B) Reduction in class size.--Recruiting and 
                hiring highly qualified teachers to reduce class size, 
                particularly in the early grades.
            ``(6) Faculty opportunity programs.--Awarding competitive 
        grants to institutions of higher education to enable such 
        institutions to fill education faculty vacancies in special 
        education, early childhood education, and bilingual education, 
        to create new faculty positions that are targeted toward 
        training highly qualified special education, early childhood 
        education, and bilingual education teachers, and to develop 
        doctoral programs in special education, early childhood 
        education, and bilingual education that will produce new 
        faculty at institutions of higher education in such subject 
        areas. Funds from such grants may be used to develop and carry 
        out recruitment strategies, subsidize moving expenses, provide 
        bonuses, provide fully subsidized salaries for not more than 2 
        years per new faculty member, and provide partially subsidized 
        salaries for not more than an additional 3 years per new 
        faculty member. If an institution of higher education receives 
        a grant under this paragraph and uses the grant funds to 
        provide faculty salaries, such institution shall continue to 
        fully fund such faculty positions for not less than 5 years 
        after the end of Federal funding under the grant.
    ``(f) Special Rule.--No individual member of an eligible 
partnership shall retain more than 50 percent of the funds made 
available to the partnership under this section.
    ``(g) Construction.--Nothing in this section shall be construed to 
prohibit an eligible partnership from using grant funds to coordinate 
with the activities of more than 1 Governor, State board of education, 
State educational agency, local educational agency, or State agency for 
higher education.

``SEC. 205. ADMINISTRATIVE PROVISIONS.

    ``(a) Duration; Increased Accountability; Payments.--
            ``(1) Duration.--
                    ``(A) Eligible states and eligible applicants.--
                Grants awarded to eligible States and eligible 
                applicants under this part shall be awarded for a 
                period not to exceed 3 years.
                    ``(B) Eligible partnerships.--Grants awarded to 
                eligible partnerships under this part shall be awarded 
                for a period of 5 years.
            ``(2) Increased accountability.--An eligible State, 
        eligible applicant, or eligible partnership that receives more 
        than 1 grant under this part has an increased accountability to 
        disseminate information gained from such grants to States and 
        local educational agencies.
            ``(3) Payments.--The Secretary shall make annual payments 
        of grant funds awarded under this part.
    ``(b) Peer Review.--
            ``(1) Panel.--The Secretary shall provide the applications 
        submitted under this part to a peer review panel for 
        evaluation. With respect to each application, the peer review 
        panel shall initially recommend the application for funding or 
        for disapproval.
            ``(2) Priority.--In recommending applications to the 
        Secretary for funding under this part, the panel shall--
                    ``(A) with respect to grants under section 203, 
                give priority to eligible States serving States that--
                            ``(i) have initiatives to reform State 
                        teacher certification requirements that are 
                        designed to ensure that current and future 
                        teachers possess the necessary teaching skills 
                        and academic content knowledge in the subject 
                        areas in which the teachers are certified or 
                        licensed to teach;
                            ``(ii) include innovative reforms to hold 
                        institutions of higher education with teacher 
                        preparation programs accountable for preparing 
                        teachers who are highly competent in the 
                        academic content area in which the teachers 
                        plan to teach and have strong teaching skills; 
                        or
                            ``(iii) involve the development of 
                        innovative efforts aimed at reducing the 
                        shortage of highly qualified teachers in high 
                        poverty urban and rural areas, and in subject 
                        areas of high need (including bilingual 
                        education, special education, mathematics, 
                        science, early childhood education, and 
                        vocational education); and
                    ``(B) with respect to grants under section 204--
                            ``(i) give priority to applications from 
                        eligible partnerships that involve businesses; 
                        and
                            ``(ii) take into consideration--
                                    ``(I) providing an equitable 
                                geographic distribution of the grants 
                                throughout the United States; and
                                    ``(II) the potential of the 
                                proposed activities for creating 
                                improvement and positive change.
            ``(3) Secretarial selection.--The Secretary shall 
        determine, based on the peer review process, which application 
        shall receive funding and the amounts of the grants. In 
        determining grant amounts, the Secretary shall take into 
        account the total amount of funds available for all grants 
        under this part and the types of activities proposed to be 
        carried out.
    ``(c) Matching Requirements.--
            ``(1) State grants.--Each eligible State receiving a grant 
        under section 203 shall provide, from non-Federal sources, an 
        amount equal to 50 percent of the amount of the grant (in cash 
        or in kind) to carry out the activities supported by the grant.
            ``(2) Partnership grants.--Each eligible partnership 
        receiving a grant under section 204 shall provide, from non-
        Federal sources (in cash or in kind), an amount equal to 25 
        percent of the grant for the first year of the grant, 35 
        percent of the grant for the second year of the grant, and 50 
        percent of the grant for each succeeding year of the grant.
    ``(d) Limitation on Administrative Expenses.--An eligible State or 
eligible partnership that receives a grant under this part may not use 
more than 2 percent of the grant funds for purposes of administering 
the grant.

``SEC. 206. ACCOUNTABILITY AND EVALUATION.

    ``(a) State Grant Accountability Report.--An eligible State that 
receives a grant under section 203 shall submit an annual 
accountability report to the Secretary. Such report shall include a 
description of the degree to which the eligible State, in using funds 
provided under such section, has made substantial progress in meeting 
the following goals:
            ``(1) Student achievement.--Increasing student achievement 
        for all students as defined by the eligible State.
            ``(2) Raising standards.--Raising the State academic 
        standards required to enter the teaching profession, including, 
        where appropriate, through the use of incentives to incorporate 
        the requirement of an academic major in the subject, or related 
        discipline, in which the teacher plans to teach.
            ``(3) Initial certification or licensure.--Increasing 
        success in the pass rate for initial State teacher 
        certification or licensure, and increasing the numbers of 
        highly qualified individuals being certified or licensed as 
        teachers, including through alternative routes.
            ``(4) Highly Qualified Teachers.--Ensuring that all 
        teachers teaching in core academic subjects within the State 
        are highly qualified not later than the end of the 2005-2006 
        school year pursuant to section 1119(a)(2) of the Elementary 
        and Secondary Education Act of 1965 (20 U.S.C. 6319(a)(2)).
            ``(5) Decreasing teacher shortages.--Decreasing shortages 
        of qualified teachers in poor urban and rural areas.
            ``(6) Increasing opportunities for professional 
        development.--Increasing opportunities for enhanced and ongoing 
        professional development that improves the academic content 
        knowledge of teachers in the subject areas in which the 
        teachers are certified or licensed to teach or in which the 
        teachers are working toward certification or licensure to 
        teach, and that promotes strong teaching skills.
            ``(7) Technology integration.--Increasing the number of 
        teachers prepared to integrate technology in the classroom.
    ``(b) Eligible Partnership Evaluation.--Each eligible partnership 
receiving a grant under section 204 shall establish and include in the 
application submitted under section 204(c), an evaluation plan that 
includes strong performance objectives. The plan shall include 
objectives and measures for--
            ``(1) increased student achievement for all students as 
        measured by the partnership;
            ``(2) increased teacher retention in the first 3 years of a 
        teacher's career;
            ``(3) increased success in the pass rate for initial State 
        certification or licensure of teachers;
            ``(4) increased percentage of secondary school classes in 
        core academic subject areas taught by highly qualified 
        teachers;
            ``(5) increasing the number of teachers trained in 
        technology; and
            ``(6) increasing the number of teachers prepared to work 
        effectively with parents.
    ``(c) Revocation of Grant.--
            ``(1) Report.--Each eligible State or eligible partnership 
        receiving a grant under this part shall report annually on the 
        progress of the eligible State or eligible partnership toward 
        meeting the purposes of this part and the goals, objectives, 
        and measures described in subsections (a) and (b).
            ``(2) Revocation.--
                    ``(A) Eligible states and eligible applicants.--If 
                the Secretary determines that an eligible State or 
                eligible applicant is not making substantial progress 
                in meeting the purposes, goals, objectives, and 
                measures, as appropriate, by the end of the second year 
                of a grant under this part, then the grant payment 
                shall not be made for the third year of the grant.
                    ``(B) Eligible partnerships.--If the Secretary 
                determines that an eligible partnership is not making 
                substantial progress in meeting the purposes, goals, 
                objectives, and measures, as appropriate, by the end of 
                the third year of a grant under this part, then the 
                grant payments shall not be made for any succeeding 
                year of the grant.
    ``(d) Evaluation and Dissemination.--The Secretary shall evaluate 
the activities funded under this part and report the Secretary's 
findings regarding the activities to the Committee on Health, 
Education, Labor, and Pensions of the Senate and the Committee on 
Education and the Workforce of the House of Representatives. The 
Secretary shall broadly disseminate successful practices developed by 
eligible States and eligible partnerships under this part, and shall 
broadly disseminate information regarding such practices that were 
found to be ineffective.

``SEC. 207. ACCOUNTABILITY FOR PROGRAMS THAT PREPARE TEACHERS.

    ``(a) Development of Definitions and Reporting Methods; High-
Quality Teacher Preparation Program.--
            ``(1) In general.--Within 9 months of the date of enactment 
        of the Higher Education Amendments of 1998, the Commissioner of 
        the National Center for Education Statistics, in consultation 
        with States and institutions of higher education, shall develop 
        key definitions for terms, and uniform reporting methods 
        (including the key definitions for the consistent reporting of 
        pass rates and program completers), related to the performance 
        of elementary school and secondary school teacher preparation 
        programs.
            ``(2) High-quality teacher preparation program.--Each 
        applicant for a grant under this part shall provide assurances 
        in such applicant's application that the applicant will meet 
        the following criteria:
                    ``(A) Provide each teacher with each of the 
                following skills and supports:
                            ``(i) A deep knowledge of the subjects such 
                        teacher teaches.
                            ``(ii) A firm understanding of how students 
                        learn.
                            ``(iii) Teaching skills necessary to help 
                        all students achieve high standards, including 
                        children with disabilities and limited English 
                        proficient students.
                            ``(iv) How to create a positive learning 
                        environment.
                            ``(v) The ability to integrate challenging 
                        State academic content standards and 
                        challenging student academic achievement 
                        standards, and accountability into classroom 
                        teaching.
                            ``(vi) The ability to use a variety of 
                        assessment strategies to diagnose and respond 
                        to individual learning needs.
                            ``(vii) The ability to integrate modern 
                        technology into curricula to support student 
                        learning.
                            ``(viii) Classroom management skills.
                            ``(ix) Opportunities to collaborate with 
                        the teacher's colleagues, with parents, 
                        community members, and other educators.
                            ``(x) The ability to work in partnership 
                        with parents and involve parents in their 
                        children's education.
                            ``(xi) How to reflect on practices in order 
                        to improve teaching and student learning.
                    ``(B) Ensure that each preservice teacher has the 
                necessary skills to succeed in the classroom, including 
                providing--
                            ``(i) some training in reading, addressing 
                        the needs of children with disabilities and 
                        limited English proficient students, data 
                        analysis, and how to use student achievement 
                        data to improve instruction; and
                            ``(ii) optional training in teaching 
                        advanced placement courses.
    ``(b) State Report Card on the Quality of Teacher Preparation.--
Each State that receives funds under this Act shall provide to the 
Secretary, within 2 years of the date of enactment of the Higher 
Education Amendments of 1998, and annually thereafter, in a uniform and 
comprehensible manner that conforms with the definitions and methods 
established in subsection (a), a State report card on the quality of 
teacher preparation in the State, which shall include at least the 
following:
            ``(1) A description of the teacher certification and 
        licensure assessments, and any other certification and 
        licensure requirements, used by the State.
            ``(2) The standards and criteria that prospective teachers 
        must meet in order to attain initial teacher certification or 
        licensure and to be certified or licensed to teach particular 
        subjects or in particular grades within the State.
            ``(3) A description of the extent to which the assessments 
        and requirements described in paragraph (1) are aligned with 
        the State's standards and assessments for students.
            ``(4) The percentage of teaching candidates who passed each 
        of the assessments used by the State for teacher certification 
        and licensure, and the passing score on each assessment that 
        determines whether a candidate has passed that assessment.
            ``(5) The percentage of teaching candidates who passed each 
        of the assessments used by the State for teacher certification 
        and licensure, disaggregated and ranked, by the teacher 
        preparation program in that State from which the teacher 
        candidate received the candidate's most recent degree, which 
        shall be made available widely and publicly.
            ``(6) Information on the extent to which teachers in the 
        State are given waivers of State certification or licensure 
        requirements, including the proportion of such teachers 
        distributed across high- and low-poverty school districts and 
        across subject areas.
            ``(7) A description of each State's alternative routes to 
        teacher certification, if any, and the percentage of teachers 
        certified through alternative certification routes who pass 
        State teacher certification or licensure assessments.
            ``(8) For each State, a description of proposed criteria 
        for assessing the performance of teacher preparation programs 
        within institutions of higher education in the State, including 
        indicators of teacher candidate knowledge and skills.
            ``(9) Information on the extent to which teachers or 
        prospective teachers in each State are required to take 
        examinations or other assessments of their subject matter 
        knowledge in the area or areas in which the teachers provide 
        instruction, the standards established for passing any such 
        assessments, and the extent to which teachers or prospective 
        teachers are required to receive a passing score on such 
        assessments in order to teach in specific subject areas or 
        grade levels.
    ``(c) Initial Report.--
            ``(1) In general.--Each State that receives funds under 
        this Act, not later than 6 months after the date of enactment 
        of the College Quality, Affordability, and Diversity 
        Improvement Act of 2003 and in a uniform and comprehensible 
        manner, shall submit to the Secretary the information described 
        in paragraphs (1), (5), and (6) of subsection (b). Such 
        information shall be compiled by the Secretary and submitted to 
        the Committee on Health, Education, Labor, and Pensions of the 
        Senate and the Committee on Education and the Workforce of the 
        House of Representatives not later than 9 months after the date 
        of enactment of the College Quality, Affordability, and 
        Diversity Improvement Act of 2003.
            ``(2) Construction.--Nothing in this subsection shall be 
        construed to require a State to gather information that is not 
        in the possession of the State or the teacher preparation 
        programs in the State, or readily available to the State or 
        teacher preparation programs.
    ``(d) Report of the Secretary on the Quality of Teacher 
Preparation.--
            ``(1) Report card.--The Secretary shall provide to 
        Congress, and publish and make widely available, a report card 
        on teacher qualifications and preparation in the United States, 
        including all the information reported in paragraphs (1) 
        through (9) of subsection (b). Such report shall identify 
        States for which eligible States and eligible partnerships 
        received a grant under this part. Such report shall be so 
        provided, published and made available not later than 2 years 6 
        months after the date of enactment of the Higher Education 
        Amendments of 1998 and annually thereafter.
            ``(2) Report to congress.--The Secretary shall report to 
        Congress--
                    ``(A) a comparison of States' efforts to improve 
                teaching quality; and
                    ``(B) regarding the national mean and median scores 
                on any standardized test that is used in more than 1 
                State for teacher certification or licensure.
            ``(3) Special rule.--In the case of teacher preparation 
        programs with fewer than 10 graduates taking any single initial 
        teacher certification or licensure assessment during an 
        academic year, the Secretary shall collect and publish 
        information with respect to an average pass rate on State 
        certification or licensure assessments taken over a 3-year 
        period.
            ``(4) Database.--The Secretary shall collect data and 
        develop a national and public database that provides reports on 
        States' passage rates on certification and licensure 
        assessments, the placement rates for teacher preparation 
        programs, the percentage of full-time faculty in institutions 
        of higher education in each State who teach classes offered by 
        a school of education, the tracking of graduates 3 years after 
        graduating from a teacher preparation program, and other 
        relevant information, as appropriate.
    ``(e) Coordination.--The Secretary, to the extent practicable, 
shall coordinate the information collected and published under this 
part among States for individuals who took State teacher certification 
or licensure assessments in a State other than the State in which the 
individual received the individual's most recent degree.
    ``(f) Institutional Report Cards on the Quality of Teacher 
Preparation.--
            ``(1) Report card.--Each institution of higher education 
        that conducts a teacher preparation program that enrolls 
        students receiving Federal assistance under this Act, not later 
        than 18 months after the date of enactment of the Higher 
        Education Amendments of 1998 and annually thereafter, shall 
        report to the State and the general public, in a uniform and 
        comprehensible manner that conforms with the definitions and 
        methods established under subsection (a), the following 
        information:
                    ``(A) Pass rate.--(i) For the most recent year for 
                which the information is available, the pass rate of 
the institution's graduates on the teacher certification or licensure 
assessments of the State in which the institution is located, but only 
for those students who took those assessments within 3 years of 
completing the program.
                    ``(ii) A comparison of the program's pass rate with 
                the average pass rate for programs in the State.
                    ``(iii) In the case of teacher preparation programs 
                with fewer than 10 graduates taking any single initial 
                teacher certification or licensure assessment during an 
                academic year, the institution shall collect and 
                publish information with respect to an average pass 
                rate on State certification or licensure assessments 
                taken over a 3-year period.
                    ``(B) Program information.--The number of students 
                in the program, the average number of hours of 
                supervised practice teaching required for those in the 
                program, and the faculty-student ratio in supervised 
                practice teaching.
                    ``(C) Statement.--In States that approve or 
                accredit teacher education programs, a statement of 
                whether the institution's program is so approved or 
                accredited.
                    ``(D) Designation as low-performing.--Whether the 
                program has been designated as low-performing by the 
                State under section 208(a).
                    ``(E) Percentage of faculty in school of 
                education.--The percentage of full-time faculty at the 
                institution of higher education who teach classes 
                offered by the school of education.
            ``(2) Requirement.--The information described in paragraph 
        (1) shall be reported through publications such as school 
        catalogs and promotional materials sent to potential 
        applicants, secondary school guidance counselors, and 
        prospective employers of the institution's program graduates.
            ``(3) Fines.--In addition to the actions authorized in 
        section 487(c), the Secretary may impose a fine not to exceed 
        $25,000 on an institution of higher education for failure to 
        provide the information described in this subsection in a 
        timely or accurate manner.
    ``(g) National Academy of Sciences Core Curriculum Study.--
            ``(1) In general.--The Secretary shall enter into a 
        contract with the National Academy of Sciences to conduct a 2-
        year study to develop a suggested core curriculum in pedagogy 
        for schools of education for such schools' teacher education 
        program that assists those within the education profession and 
        prospective teachers to understand what prospective teachers 
        need to know to become effective teachers.
            ``(2) Domains of foundational and pedagogical knowledge.--
        The study under paragraph (1) shall include each of the 
        following domains of foundational and pedagogical knowledge:
                    ``(A) Learning, which would include building on 
                existing knowledge and experience shaped by social and 
                cultural context in the community and in the classroom.
                    ``(B) Human development, which would include how 
                children and adolescents think and behave, taking in 
                account different ages, contexts, and learning styles.
                    ``(C) Assessment, which would include the 
                introduction of standards-based reform.
                    ``(D) Teaching strategies, which would include 
                providing all teachers with the tools needed to be 
                successful in the classroom, especially with students 
                who have specific learning disabilities or needs such 
                as language acquisition.
                    ``(E) Reading instruction, which would include 
                taking in account different ages, contexts, and 
                learning styles.
            ``(3) Best research; suggested training.--The suggested 
        core curriculum developed under paragraph (1) shall reflect the 
        best research into how students learn and on the content-
        specific methods shown to be effective with students, including 
        examining how children learn. The suggested core curriculum 
        shall include suggested training in working with diverse 
        populations, assessments in the classroom, and classroom 
        management.
            ``(4) Collaboration.--
                    ``(A) In general.--In conducting the study under 
                paragraph (1), the National Academy of Sciences shall 
                collaborate with interested parties in developing the 
                suggested core curriculum.
                    ``(B) Interested parties.--In this paragraph, the 
                term `interested parties' means--
                            ``(i) college presidents;
                            ``(ii) deans of teacher education programs;
                            ``(iii) teacher preparation faculty;
                            ``(iv) chief State school officers;
                            ``(v) school superintendents;
                            ``(vi) teacher organizations;
                            ``(vii) outstanding teachers; and
                            ``(viii) teacher preparation accrediting 
                        organizations.

``SEC. 208. STATE FUNCTIONS.

    ``(a) State Assessment.--In order to receive funds under this Act, 
a State, not later than 2 years after the date of enactment of the 
Higher Education Amendments of 1998, shall have in place a procedure to 
identify, and assist, through the provision of technical assistance, 
low-performing programs of teacher preparation within institutions of 
higher education. Such State shall provide the Secretary an annual list 
of such low-performing institutions that includes an identification of 
those institutions at risk of being placed on such list. Such levels of 
performance shall be determined solely by the State and may include 
criteria based upon information collected pursuant to this part. Such 
assessment shall be described in the report under section 207(b).
    ``(b) Termination of Eligibility.--Any institution of higher 
education that offers a program of teacher preparation in which the 
State has withdrawn the State's approval or terminated the State's 
financial support due to the low performance of the institution's 
teacher preparation program based upon the State assessment described 
in subsection (a)--
            ``(1) shall be ineligible for any funding for professional 
        development activities awarded by the Department of Education;
            ``(2) shall not be permitted to accept or enroll any 
        student that receives aid under title IV of this Act in the 
        institution's teacher preparation program; and
            ``(3) shall provide transitional support, including 
        remedial services if necessary, for students enrolled at the 
        institution at the time of termination of financial support or 
        withdrawal of approval.
    ``(c) Negotiated Rulemaking.--If the Secretary develops any 
regulations implementing subsection (b)(2), the Secretary shall submit 
such proposed regulations to a negotiated rulemaking process, which 
shall include representatives of States, institutions of higher 
education, and educational and student organizations.

``SEC. 209. GENERAL PROVISIONS.

    ``(a) Methods.--In complying with sections 207 and 208, the 
Secretary shall ensure that States and institutions of higher education 
use fair and equitable methods in reporting and that the reporting 
methods protect the privacy of individuals.
    ``(b) Special Rule.--For each State in which there are no State 
certification or licensure assessments, or for States that do not set 
minimum performance levels on those assessments--
            ``(1) the Secretary shall, to the extent practicable, 
        collect data comparable to the data required under this part 
        from States, local educational agencies, institutions of higher 
        education, or other entities that administer such assessments 
        to teachers or prospective teachers; and
            ``(2) notwithstanding any other provision of this part, the 
        Secretary shall use such data to carry out the requirements of 
        this part related to assessments or pass rates.
    ``(c) Limitations.--
            ``(1) Federal control prohibited.--Nothing in this part 
        shall be construed to permit, allow, encourage, or authorize 
        any Federal control over any aspect of any private, religious, 
        or home school, whether or not a home school is treated as a 
        private school or home school under State law. This section 
        shall not be construed to prohibit private, religious, or home 
        schools from participation in programs or services under this 
        part.
            ``(2) No change in state control encouraged or required.--
        Nothing in this part shall be construed to encourage or require 
        any change in a State's treatment of any private, religious, or 
        home school, whether or not a home school is treated as a 
        private school or home school under State law.
            ``(3) National system of teacher certification 
        prohibited.--Nothing in this part shall be construed to permit, 
        allow, encourage, or authorize the Secretary to establish or 
        support any national system of teacher certification.

``SEC. 210. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this part 
$300,000,000 for fiscal year 2004 and such sums as may be necessary for 
each of the 5 succeeding fiscal years.

  ``PART B--INNOVATIVE STRATEGIES TO RECRUIT, TRAIN, AND RETAIN HIGH 
                    QUALITY TEACHERS AND PRINCIPALS

``SEC. 215. INCENTIVES TO RECRUIT AND RETAIN HIGH QUALITY TEACHERS AND 
              ADMINISTRATORS.

    ``(a) Mentoring Program.--
            ``(1) Authorization.--
                    ``(A) In general.--The Secretary shall award 
                grants, on a competitive basis, to eligible 
                partnerships to enable the eligible partnerships to 
                develop mentoring programs that help train and retain 
                new teachers and provide professional routes for 
                experienced teachers.
                    ``(B) Priority.--In awarding grants under this 
                subsection, the Secretary shall give priority to 
                eligible partnerships that consist of a high need local 
                educational agency with--
                            ``(i) high rates of teacher turnover; and
                            ``(ii) shortages of teachers in subject 
                        areas of high need (including bilingual 
                        education, special education, mathematics, 
                        science, vocational education, and early 
                        childhood education) and teachers in rural 
                        areas.
            ``(2) Eligible partnership.--In this subsection, the term 
        `eligible partnership' means a partnership among an institution 
        of higher education, a high need local educational agency, and 
        a nonprofit entity (including teacher organizations) that has 
        an established record of providing effective teacher training.
            ``(3) Application.--An eligible partnership that desires a 
        grant under this subsection shall submit an application to the 
        Secretary at such time, in such manner, and containing such 
        information as the Secretary may require.
            ``(4) Use of funds.--
                    ``(A) Mandatory uses.--An eligible partnership that 
                receives a grant under this subsection shall develop a 
                mentoring program that is not less than 1 year in 
                duration and does each of the following:
                            ``(i) Provides--
                                    ``(I) training for experienced 
                                teachers to become mentors;
                                    ``(II) training from trained 
                                mentors to teach teachers in schools 
                                served by high need local educational 
                                agencies;
                                    ``(III) stipends to mentors; and
                                    ``(IV) release time or a reduced 
                                class load for mentors and the teachers 
                                being mentored, or both.
                            ``(ii) Outlines specific criteria for who 
                        can serve as mentors, coaches, and team 
                        leaders.
                            ``(iii) Requires mentors to--
                                    ``(I) be fully licensed;
                                    ``(II) be permanent 
                                (nonprobationary) classroom teachers;
                                    ``(III) have completed not less 
                                than 3 years of teaching;
                                    ``(IV) demonstrate mastery of 
                                pedagogy and the subject matter such 
                                mentor teaches;
                                    ``(V) have superior teaching and 
                                interpersonal skills;
                                    ``(VI) have the ability to 
                                integrate challenging State academic 
                                content standards and challenging 
                                student academic achievement standards 
                                and accountability into classroom 
                                teaching;
                                    ``(VII) use a variety of assessment 
                                strategies to respond to individual 
                                learning needs; and
                                    ``(VIII) reflect on their teaching 
                                practices in order to improve teaching 
                                and student learning.
                            ``(iv) Endeavors to match mentors and the 
                        teachers being mentored by geographic proximity 
                        or by the same grade level and subject matter 
                        area of teaching, or both.
                            ``(v) Ensures that teachers who have been 
                        mentored will work in schools served by high 
                        need local educational agencies for a specified 
                        period of time.
                            ``(vi) Provides a plan to evaluate the 
                        mentoring program.
                    ``(B) Permissible uses.--An eligible partnership 
                that receives a grant under this subsection may use the 
                grant funds to provide academic credit toward an 
                advanced degree for mentors and the teachers being 
                mentored.
            ``(5) Duration of grants.--Grants awarded under this 
        subsection shall be for 3 years in duration.
            ``(6) Evaluation.--
                    ``(A) In general.--Not later than the last day of 
                the grant award, an eligible partnership that receives 
                a grant under this subsection shall submit an 
                accountability report to the Secretary.
                    ``(B) Content.--The accountability report under 
                subparagraph (A) shall include, at a minimum--
                            ``(i) teacher retention rates for teachers 
                        participating in the mentoring program as 
                        compared with teachers in the high need local 
                        educational agency not participating in the 
                        mentoring program;
                            ``(ii) results of evaluations on mentor and 
                        teachers being mentored satisfaction with the 
                        mentoring program; and
                            ``(iii) results of the plan developed by 
                        the eligible partnership to evaluate the 
                        mentoring program.
            ``(7) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this subsection 
        $50,000,000 for fiscal year 2004 and such sums as may be 
        necessary for each of the 5 succeeding fiscal years.
    ``(b) Housing Incentives Program.--
            ``(1) Grant program authorized.--The Secretary shall award 
        grants, on a competitive basis, to eligible partnerships to 
        enable the eligible partnerships to develop a housing incentive 
        program that assists teachers who teach in schools served by 
        high need local educational agencies to afford housing.
            ``(2) Eligible partnership.--In this subsection:
                    ``(A) In general.--The term `eligible partnership' 
                means a partnership between--
                            ``(i)(I) a high need local educational 
                        agency; or
                            ``(II) a State educational agency; and
                            ``(ii) an institution of higher education.
                    ``(B) Other entities.--The term `eligible 
                partnership' may include other public entities or 
                private entities.
            ``(3) Application.--An eligible partnership that desires a 
        grant under this subsection shall submit an application to the 
        Secretary at such time, in such manner, and containing such 
        information as the Secretary may require.
            ``(4) Use of funds.--An eligible partnership that receives 
        a grant under this subsection shall use the grant funds to 
        develop a housing incentive program that--
                    ``(A) provides financial incentives to teachers who 
                teach in schools served by high need local educational 
                agencies by providing for such teachers funds for--
                            ``(i) a downpayment on a home;
                            ``(ii) closing costs associated with 
                        purchasing a home; or
                            ``(iii) moving expenses; or
                    ``(B) develops a partnership with a lender to 
                create a home loan program for teachers who teach in 
                schools served by high need local educational agencies 
                that provides home loans to such teachers that--
                            ``(i) are insured by the eligible 
                        partnership; or
                            ``(ii) require minimal or no downpayment.
            ``(5) Service requirement.--A teacher that receives 
        assistance under this subsection shall--
                    ``(A) teach in a school served by a high need local 
                educational agency for not less than 5 subsequent 
                school years; or
                    ``(B) repay the amount of assistance.
            ``(6) Evaluation.--
                    ``(A) In general.--An eligible partnership that 
                receives a grant under this subsection shall develop an 
                evaluation of the partnership's housing incentive 
                program that includes, at a minimum--
                            ``(i) how many teachers received assistance 
                        under the program and retention rates in 
                        schools served by high need local educational 
                        agencies for such teachers;
                            ``(ii) whether the program helped improve 
                        teacher shortages;
                            ``(iii) a description of the specific 
                        inactive model that was used to develop the 
                        housing incentive program;
                            ``(iv) if applicable, how partnerships with 
                        lenders worked; and
                            ``(v) successful practices.
                    ``(B) Submission of evaluation.--Not later than the 
                last day of the grant award, the eligible partnership 
                shall submit to the Secretary the evaluation developed 
                under subparagraph (A).
            ``(7) Tax exemption.--The amount of any financial 
        assistance received by a teacher under a housing incentive 
        program developed pursuant to this subsection shall not be 
        considered income for purposes of the Internal Revenue Code of 
        1986.
            ``(8) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this subsection 
        $50,000,000 for fiscal year 2004 and such sums as may be 
        necessary for each of the 5 succeeding fiscal years.
    ``(c) Community College as a Partner.--
            ``(1) Grant program authorized.--The Secretary shall award 
        grants, on a competitive basis, to eligible partnerships to 
        enable the eligible partnerships to strengthen teacher 
        preparation programs.
            ``(2) Eligible partnership.--In this subsection, the term 
        `eligible partnership' means a partnership between--
                    ``(A) a community college; and
                    ``(B) a 4-year institution of higher education that 
                has a teacher preparation program.
            ``(3) Application.--An eligible partnership that desires a 
        grant under this subsection shall submit an application to the 
        Secretary at such time, in such manner, and containing such 
        information as the Secretary may require.
            ``(4) Use of funds.--
                    ``(A) Mandatory uses.--An eligible partnership that 
                receives a grant under this subsection shall do both of 
                the following:
                            ``(i) Community college activities.--The 
                        community college of the eligible partnership 
                        shall develop and strengthen the core 
                        curriculum centered on a liberal arts education 
                        at such college that adequately prepares 
                        students to enter the teacher preparation 
                        program at the 4-year institution of higher 
                        education of the eligible partnership.
                            ``(ii) 4-year institution of higher 
                        education activities.--
                                    ``(I) In general.--The 4-year 
                                institution of higher education of the 
                                eligible partnership shall provide 
                                intensive support services for students 
                                that enter the teacher preparation 
                                program from the community college of 
                                the eligible partnership.
                                    ``(II) Support services.--The 
                                support services shall be offered prior 
                                to and during such student's tenure at 
                                the 4-year institution of higher 
                                education and shall include mentoring, 
                                and academic and career support.
                                    ``(III) Point person.--The 4-year 
                                institution of higher education shall 
                                provide a point person within the 
                                teacher preparation program whose sole 
                                job is to provide support services to 
                                the students described in subclause 
                                (I).
                    ``(B) Permissive uses.--An eligible partnership 
                that receives a grant under this subsection may use the 
                grant funds to provide compensation to staff in the 
                teacher preparation programs at the community college 
                and 4-year institution of higher education.
            ``(5) Duration of grants.--Grants awarded under this 
        subsection shall be for 5 years in duration.
            ``(6) Evaluation.--
                    ``(A) In general.--An eligible partnership that 
                receives a grant under this subsection shall develop an 
                evaluation of the partnerships's activities under this 
                subsection that--
                            ``(i) includes the number of student 
                        teachers served and the retention rate in the 
                        4-year institution of higher education of such 
                        student teachers;
                            ``(ii) addresses the qualification of such 
                        student teachers when graduating from the 4-
                        year institution of higher education, including 
                        whether such student teachers found teaching 
                        positions and whether they passed State 
                        certification examinations; and
                            ``(iii) includes successful practices.
                    ``(B) Submission of evaluation.--Not later than the 
                last day of the grant award, the eligible partnership 
                shall submit to the Secretary the evaluation developed 
                under subparagraph (A).
            ``(7) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this subsection 
        $25,000,000 for fiscal year 2004 and such sums as may be 
        necessary for each of the 5 succeeding fiscal years.
    ``(d) Paraprofessionals to Teachers.--
            ``(1) Grant program authorized.--The Secretary shall award 
        grants, on a competitive basis, to eligible partnerships to 
        enable the eligible partnerships to develop a Paraprofessionals 
        to Teachers Program (in this subsection referred to as the 
        `Program') to assist paraprofessionals employed by high need 
        local educational agencies to become teachers.
            ``(2) Eligible partnership.--In this subsection, the term 
        `eligible partnership' means a partnership among an institution 
        of higher education, a high need local educational agency, and 
        other entities that may include businesses, community colleges, 
        and teacher organizations.
            ``(3) Application.--An eligible partnership that desires a 
        grant under this subsection shall submit an application to the 
        Secretary at such time, in such manner, and containing such 
        information as the Secretary may require.
            ``(4) Use of funds.--
                    ``(A) In general.--An eligible partnership that 
                receives a grant under this subsection shall develop a 
                Program to assist paraprofessionals employed by the 
                high need local educational agency of the eligible 
                partnership to become teachers by--
                            ``(i) developing a teacher preparation 
                        program at the institution of higher education 
                        of the eligible partnership for 
                        paraprofessionals that allows for part-time 
                        study and flexible student teaching and 
                        coursework schedules;
                            ``(ii) ensuring that paraprofessionals 
                        enrolled in the teacher preparation program 
                        under clause (i) retain such paraprofessionals' 
                        benefit packages with the high need local 
                        educational agency while enrolled in the 
                        teacher preparation program;
                            ``(iii) providing support services for such 
                        paraprofessionals that include tutoring to meet 
                        teacher preparation program requirements, child 
                        care, career counseling, and financial aid 
                        guidance; and
                            ``(iv) providing mentoring for such 
                        paraprofessionals during their first 3 years of 
                        teaching.
                    ``(B) Permissible use of funds.--An eligible 
                partnership that receives a grant under this subsection 
                may use the grant funds for--
                            ``(i) tuition expenses of paraprofessionals 
                        in the teacher preparation program;
                            ``(ii) child care expenses of 
                        paraprofessionals;
                            ``(iii) release time for paraprofessionals;
                            ``(iv) compensation for mentors;
                            ``(v) support services for 
                        paraprofessionals;
                            ``(vi) salaries of staff at the institution 
                        of higher education and the high need local 
                        educational agency of the eligible partnership; 
                        and
                            ``(vii) stipends for paraprofessionals.
            ``(5) Activities of the high need local educational 
        agency.--The high need local educational agency of the eligible 
        partnership shall--
                    ``(A) make efforts to recruit paraprofessionals 
                employed by such agency to participate in the Program;
                    ``(B) arrange for administrative leave for 
                paraprofessionals employed by such agency who 
                participate in the Program; and
                    ``(C) guarantee a provisional teaching position to 
                paraprofessionals employed by such agency who 
                participate in the Program upon completion of the 
                Program.
            ``(6) Duration of grants.--Grants awarded under this 
        subsection shall be for 3 years in duration.
            ``(7) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this subsection 
        $50,000,000 for fiscal year 2004 and such sums as may be 
        necessary for each of the 5 succeeding fiscal years.
    ``(e) School Leadership Development Program for Principals, 
Assistant Principals, and Superintendents.--
            ``(1) Grant program authorized.--The Secretary shall award 
        grants, on a competitive basis, to eligible partnerships to 
        enable the eligible partnerships to provide practical training 
        to principals, assistant principals, and school superintendents 
        that focuses on developing and enhancing the skills necessary 
        to serve as instructional leaders of schools and school 
        systems.
            ``(2) Eligible partnership.--In this subsection, the term 
        `eligible partnership'--
                    ``(A) means a partnership between--
                            ``(i) an institution of higher education; 
                        and
                            ``(ii) 1 or more high need local 
                        educational agencies; and
                    ``(B) may include a school principal professional 
                organization.
            ``(3) Application.--An eligible partnership that desires a 
        grant under this subsection shall submit an application to the 
        Secretary at such time, in such manner, and containing such 
        information as the Secretary may require.
            ``(4) Use of funds.--
                    ``(A) In general.--An eligible partnership that 
                receives a grant under this subsection shall establish 
                a certificate program for principals, assistant 
                principals, and school superintendents that is 
                developed by education experts and practitioners and 
                that provides training in--
                            ``(i) diagnostic leadership skills 
                        assessment;
                            ``(ii) the development of knowledge and 
                        skills that contribute to the effective 
                        practice of instructional leadership behaviors;
                            ``(iii) research methodology for 
                        educational leaders that includes understanding 
                        of systematic and empirical research methods, 
                        application of rigorous data analyses, 
                        collections of reliable and valid data, 
                        knowledge of appropriate research designs, and 
                        the importance of peer review and other 
                        external scrutiny, and its application to the 
                        practice of school leadership; and
                            ``(iv) the development of knowledge and 
                        skills to develop and align curriculum, 
                        assessments, and instruction with standards, 
                        legislation, and regulations.
                    ``(B) Permissible use of funds.--An eligible 
                partnership that receives a grant under this subsection 
                may use the grant funds--
                            ``(i) to provide training in developing and 
                        enhancing the skills necessary to effectively 
                        run schools for individuals who are about to 
                        become principals, assistant principals, or 
                        school superintendents;
                            ``(ii) for a pre-induction year internship 
                        or apprenticeship with a successful 
                        practitioner to help train individuals who are 
                        about to become principals, assistant 
                        principals, or school superintendents, and, 
                        during an induction year, to support and 
                        develop the capacity of new principals, 
                        assistant principals, and school 
                        superintendents as instructional leaders; and
                            ``(iii) to provide mentoring and peer 
                        coaching services for principals, assistant 
                        principals, and school superintendents to 
                        enable exemplary principals, assistant 
                        principals, and school superintendents to serve 
                        as mentors and role models.
            ``(5) Technology.--In carrying out activities under this 
        subsection, an eligible partnership shall use, to the extent 
        practicable, technology as an outreach mechanism to expand 
        opportunities for professional development and ongoing support 
        services for principals, assistant principals, and school 
        superintendents.
            ``(6) Report.--An eligible partnership that receives a 
        grant under this subsection shall submit to the Secretary an 
        evaluation detailing the use of grant funds under this 
        subsection and the progress in meeting the goals of the 
        eligible partnership.
            ``(7) Duration of grants.--Grants awarded under this 
        subsection shall be for 3 years in duration.
            ``(8) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this subsection 
        $25,000,000 for fiscal year 2004 and such sums as may be 
        necessary for each of the 5 succeeding fiscal years.

       ``PART C--PREPARING TOMORROW'S TEACHERS TO USE TECHNOLOGY

``SEC. 221. PURPOSE AND PROGRAM AUTHORITY.

    ``(a) Purpose.--It is the purpose of this part to assist consortia 
of public and private entities--
            ``(1) to carry out programs that prepare prospective 
        teachers to use advanced technology to prepare all students to 
        meet challenging State and local academic content and student 
        academic achievement standards; and
            ``(2) to improve the ability of institutions of higher 
        education to carry out such programs.
    ``(b) Program Authority.--
            ``(1) In general.--The Secretary is authorized to award 
        grants to eligible applicants, or enter into contracts or 
        cooperative agreements with eligible applicants, on a 
        competitive basis in order to pay for the Federal share of the 
        cost of projects to develop or redesign teacher preparation 
        programs to enable prospective teachers to use advanced 
        technology effectively in their classrooms.
            ``(2) Period of awards.--The Secretary may award grants, or 
        enter into contracts or cooperative agreements, under this part 
        for periods that are not more than 5 years in duration.

``SEC. 222. ELIGIBILITY.

    ``(a) Eligible Applicants.--In order to receive a grant or enter 
into a contract or cooperative agreement under this part, an applicant 
shall be a consortium that includes the following:
            ``(1) At least one institution of higher education that 
        awards baccalaureate degrees and prepares teachers for their 
        initial entry into teaching.
            ``(2) At least one State educational agency or local 
        educational agency.
            ``(3) One or more of the following entities:
                    ``(A) An institution of higher education (other 
                than the institution described in paragraph (1)).
                    ``(B) A school or department of education at an 
                institution of higher education.
                    ``(C) A school or college of arts and sciences (as 
                defined in section 201(b)) at an institution of higher 
                education.
                    ``(D) A professional association, foundation, 
                museum, library, for-profit business, public or private 
                nonprofit organization, community-based organization, 
                or other entity, with the capacity to contribute to the 
                technology-related reform of teacher preparation 
                programs.
    ``(b) Application Requirements.--In order to receive a grant or 
enter into a contract or cooperative agreement under this part, an 
eligible applicant shall submit an application to the Secretary at such 
time, in such manner, and containing such information as the Secretary 
may require. Such application shall include the following:
            ``(1) A description of the proposed project, including how 
        the project would--
                    ``(A) ensure that individuals participating in the 
                project would be prepared to use advanced technology to 
                prepare all students, including groups of students who 
                are underrepresented in technology-related fields and 
                groups of students who are economically disadvantaged, 
                to meet challenging State and local academic content 
                and student academic achievement standards; and
                    ``(B) improve the ability of at least one 
                participating institution of higher education described 
                in section 222(a)(1) to ensure such preparation.
            ``(2) A demonstration of--
                    ``(A) the commitment, including the financial 
                commitment, of each of the members of the consortium 
                for the proposed project; and
                    ``(B) the active support of the leadership of each 
                organization that is a member of the consortium for the 
                proposed project.
            ``(3) A description of how each member of the consortium 
        will participate in project activities.
            ``(4) A description of how the proposed project will be 
        continued after Federal funds are no longer awarded under this 
        part for the project.
            ``(5) A plan for the evaluation of the project, which shall 
        include benchmarks to monitor progress toward specific project 
        objectives.
    ``(c) Matching Requirements.--
            ``(1) In general.--The Federal share of the cost of any 
        project funded under this part shall not exceed 50 percent. 
        Except as provided in paragraph (2), the non-Federal share of 
the cost of such project may be provided in cash or in kind, fairly 
evaluated, including services.
            ``(2) Acquisition of equipment.--Not more than 10 percent 
        of the funds awarded for a project under this part may be used 
        to acquire equipment, networking capabilities, or 
        infrastructure, and the non-Federal share of the cost of any 
        such acquisition shall be provided in cash.

``SEC. 223. USE OF FUNDS.

    ``(a) Required Uses.--A consortium that receives a grant or enters 
into a contract or cooperative agreement under this part shall use 
funds made available under this part for--
            ``(1) a project creating one or more programs that prepare 
        prospective teachers to use advanced technology to prepare all 
        students, including groups of students who are underrepresented 
        in technology-related fields and groups of students who are 
        economically disadvantaged, to meet challenging State and local 
        academic content and student academic achievement standards; 
        and
            ``(2) evaluating the effectiveness of the project.
    ``(b) Permissible Uses.--The consortium may use funds made 
available under this part for a project, described in the application 
submitted by the consortium under this part, that carries out the 
purpose of this part, such as the following:
            ``(1) Developing and implementing high-quality teacher 
        preparation programs that enable educators--
                    ``(A) to learn the full range of resources that can 
                be accessed through the use of technology;
                    ``(B) to integrate a variety of technologies into 
                curricula and instruction in order to expand students' 
                knowledge;
                    ``(C) to evaluate educational technologies and 
                their potential for use in instruction;
                    ``(D) to help students develop their technical 
                skills; and
                    ``(E) to use technology to collect, manage, and 
                analyze data to improve teaching and decisionmaking.
            ``(2) Developing alternative teacher development paths that 
        provide elementary schools and secondary schools with well-
        prepared, technology-proficient educators.
            ``(3) Developing achievement-based standards and 
        assessments aligned with the standards to measure the capacity 
        of prospective teachers to use technology effectively in their 
        classrooms.
            ``(4) Providing technical assistance to entities carrying 
        out other teacher preparation programs.
            ``(5) Developing and disseminating resources and 
        information in order to assist institutions of higher education 
        to prepare teachers to use technology effectively in their 
        classrooms.
            ``(6) Subject to section 222(c)(2), acquiring technology 
        equipment, networking capabilities, infrastructure, software, 
        and digital curricula to carry out the project.

``SEC. 224. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this part--
            ``(1) $150,000,000 for fiscal year 2004; and
            ``(2) such sums as may be necessary for each of the 5 
        succeeding fiscal years.''.

      TITLE III--DIVERSITY, RETENTION, AND ENRICHED ACADEMICS FOR 
                         MATRICULATING STUDENTS

SEC. 301. TEST PREPARATION FOR LOW-INCOME STUDENTS.

    Title I of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 6301 et seq.) is amended by adding at the end the following:

           ``PART J--TEST PREPARATION FOR LOW-INCOME STUDENTS

``SEC. 1910. DEFINITIONS.

    ``In this part:
            ``(1) Eligible entity.--The term `eligible entity' means a 
        public, private, or nonprofit entity (including a secondary 
        school or a local educational agency) that--
                    ``(A) offers a program to prepare students for 
                college admissions tests; and
                    ``(B) has a verified track record of not less than 
                3 years of increasing the average college admissions 
                test score of students who participate in such program.
            ``(2) Eligible local educational agency.--The term 
        `eligible local educational agency' means a local educational 
agency for which the number of children determined under section 
1124(c) for that local educational agency constitute more than--
                    ``(A) the percentage described in section 
                1125(c)(2)(B)(v) of the agency's total population aged 
                5 to 17; or
                    ``(B) the number described in section 
                1125(c)(2)(C)(v) of the agency's total population aged 
                5 to 17.
            ``(3) Eligible secondary school.--The term `eligible 
        secondary school'--
                    ``(A) means a secondary school that receives 
                Federal assistance under part A and is served by an 
                eligible local educational agency; and
                    ``(B) includes a secondary school that does not 
                receive Federal assistance under part A for a fiscal 
                year if such secondary school is served by an eligible 
                local educational agency that serves secondary schools, 
                none of which received Federal assistance under part A 
                for such fiscal year.

``SEC. 1911. ESTABLISHMENT.

    ``From amounts appropriated under section 1917 for a fiscal year, 
the Secretary shall award grants, on a competitive basis, to eligible 
local educational agencies to enable such agencies to fund college 
admissions test preparation programs for juniors and seniors at 
eligible secondary schools served by such agencies.

``SEC. 1912. APPLICATION.

    ``An eligible local educational agency that desires a grant under 
this part shall submit an application to the Secretary at such time, in 
such manner, and containing such information as the Secretary may 
require.

``SEC. 1913. DURATION.

    ``Grants awarded under this subpart shall be for a period of not 
less than 3 years.

``SEC. 1914. USE OF FUNDS.

    ``(a) In General.--An eligible local educational agency that 
receives a grant under this part shall use the grant funds to provide, 
through an eligible entity, a college admissions test preparation 
program for juniors and seniors at eligible secondary schools served by 
such agency that uses methods that have proven effective in preparing 
students for college admissions tests.
    ``(b) Methods.--
            ``(1) In general.--A college admissions test preparation 
        program funded under this part shall--
                    ``(A) use methods that have proven effective in 
                preparing students for college admissions tests;
                    ``(B) to the extent practicable, be administered 
                through instructor led, classroom-based courses; and
                    ``(C) consist of a minimum of 25 hours of 
                instructional (nontesting) time.
            ``(2) Online courses.--
                    ``(A) In general.--An eligible local educational 
                agency may enter into a contract with an eligible 
                entity to provide a college admissions test preparation 
                program that will be offered online if--
                            ``(i) a classroom-based college admissions 
                        test preparation program provided by an 
                        eligible entity is not available; and
                            ``(ii) the eligible entity providing such 
                        online program has a verified track record of 
                        not less than 3 years of increasing the average 
                        college admissions test score of students 
                        served through such online program.
                    ``(B) Supervision; administration.--An online 
                college admissions test preparation program shall be 
                supervised or administered by a teacher, administrator, 
                or coach who has received appropriate professional 
                development to support student success in such online 
                program.
    ``(c) Comparable Service.--An eligible entity that is not a school 
or local educational agency and that receives a contract under this 
section shall--
            ``(1) provide comparable services in programs offered under 
        this part as in programs such entity offers to such entity's 
        other customers; and
            ``(2) provide services in programs offered under this part 
        for not more than 75 percent of such entity's national average 
        rate per student for comparable programs.
    ``(d) Practice Examinations.--
            ``(1) Prior to preparation.--
                    ``(A) In general.--Programs provided under this 
                section shall require each participating student to 
                complete a practice examination of the college 
                admissions test the student will be preparing for, 
                prior to preparing such student for such college 
                admissions test.
                    ``(B) Previously administered; same timeframe and 
                setting.--The practice examination described under 
                subparagraph (A) shall be--
                            ``(i) an examination previously 
                        administered by the College Board, ACT Inc., or 
                        other college admissions tests' respective 
                        administrator; and
                            ``(ii) administered in a timeframe and 
                        setting similar to that of the examination when 
                        administered by the College Board, ACT Inc., or 
                        other college admissions tests' respective 
                        administrator.
            ``(2) After preparation.--
                    ``(A) In general.--Programs provided under 
                subsection (a) shall require each participating student 
                to complete a practice examination of the college 
                admissions test the student prepared for at the 
                completion of the program.
                    ``(B) Previously administered; same timeframe and 
                setting.--The practice examination described under 
                subparagraph (A)--
                            ``(i) shall be an examination previously 
                        administered by the College Board, ACT Inc., or 
                        other college admissions tests' respective 
                        administrator;
                            ``(ii) shall not be the same practice 
                        examination given at the start of the program, 
                        given at any time during the program, or used 
                        as a study aid during the program; and
                            ``(iii) shall be administered in a 
                        timeframe and setting similar to that of the 
                        examination when administered by the College 
                        Board, ACT Inc., or other college admissions 
                        tests' respective administrator.
    ``(e) Supplemental Preparation and Guidance.--An eligible entity 
that receives a contract under this section or an eligible local 
educational agency that develops and implements a school-based college 
admissions test preparation program under this section shall--
            ``(1) provide supplemental preparation for those students 
        that need such supplemental preparation to prepare for college 
        admissions tests in the form of prepreparation review of skills 
        and knowledge, including in mathematics, grammar, and 
        vocabulary;
            ``(2) ensure that students participating in programs funded 
        under this part receive counseling on college admissions, 
        including information on selecting an institution of higher 
        education, the application process and related requirements, 
        the availability of supports and services to facilitate 
        transition to and success in postsecondary education, and the 
        availability of financial aid; and
            ``(3) offer not less than 1 seminar or class on the 
        counseling described under paragraph (2) that shall be held 
        during evening or weekend hours and parents shall be invited to 
        attend such seminar or class.
    ``(f) Local Educational Agency Separate Programs.--An eligible 
local educational agency that enters into a contract with an eligible 
entity pursuant to this section--
            ``(1) may conduct activities described under subsection (e) 
        separate from such contract; and
            ``(2) may not use more than 5 percent of the grant funds to 
        conduct activities described under subsection (e) separate from 
        such contract.

``SEC. 1915. REPORTING REQUIREMENT.

    ``(a) Local Educational Agency.--An eligible local educational 
agency that develops and implements a school-based college admissions 
test preparation program under section 1914(a)(1) shall submit to the 
Secretary a report that includes--
            ``(1) the number of students who started the program, 
        disaggregated by race and gender where appropriate;
            ``(2) the number of students who completed the program, 
        disaggregated by race and gender where appropriate;
            ``(3) the number of students participating in the program 
        who subsequently take the officially administered college 
        admissions test for which such students were preparing, 
        disaggregated by race and gender where appropriate; and
            ``(4) average scores for participating students on the 
        preprogram test pursuant to section 1914(d)(1), and the end of 
        program test pursuant to section 1914(d)(2).
    ``(b) Eligible Entity.--An eligible entity that receives a contract 
under section 1914 shall submit to the eligible local educational 
agency that has contracted for such eligible entity's services a report 
that includes the information described in subsection (a) and any other 
information the eligible local educational agency shall reasonably 
require.
    ``(c) Failure To Submit Scores.--An eligible local educational 
agency or eligible entity that fails to submit the average scores for 
participating students on the preprogram test pursuant to section 
1914(d)(1), and the end of program test pursuant to section 1914(d)(2) 
shall have such agency or entity's grant terminated at the discretion 
of the Secretary.

``SEC. 1916. SCORE IMPROVEMENT.

    ``(a) Report.--Not less than once every 3 years, the Secretary 
shall review and report to Congress on all programs funded under this 
part to ensure that such programs are improving the scores of students 
participating in the program.
    ``(b) Non-Eligibility.--Programs funded under this part that are 
determined by the Secretary to have not significantly improved the 
average score of participating students shall no longer be eligible for 
grants under this part.

``SEC. 1917. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out this part 
$50,000,000 for fiscal year 2004 and such sums as may be necessary for 
each of the 5 succeeding fiscal years.''.

SEC. 302. ADMISSIONS AND RETENTION.

    (a) Prospective Student Information.--Part A of title IV of the 
Higher Education Act of 1965 (20 U.S.C. 1070 et seq.), as amended by 
section 105, is further amended by adding at the end the following:

             ``Subpart 11--Prospective Student Information

``SEC. 420M. REPORTING.

    ``(a) In General.--An institution of higher education that offers a 
baccalaureate degree and is eligible to receive assistance under this 
part shall include in such institution's application for assistance 
under this part the following information:
            ``(1) The percentage of freshman students enrolled at the 
        institution in the previous academic year who were self-
        identified members of the following disaggregated categories:
                    ``(A) Individual major racial and ethnic groups.
                    ``(B) Male.
                    ``(C) Female.
                    ``(D) The relative of an alumnus, disaggregated by 
                race and eligibility for Federal Pell Grants.
                    ``(E) Economically disadvantaged, as measured by 
                eligibility for Federal Pell Grants.
            ``(2) The percentage of freshman students enrolled at the 
        institution in the previous academic year who were admitted to 
        the institution through binding early decision, disaggregated 
        by race and eligibility for Federal Pell Grants.
            ``(3) The percentage of freshman students enrolled at the 
        institution in the previous academic year who were admitted to 
        the institution through regular decision, disaggregated by race 
        and eligibility for Federal Pell Grants.
    ``(b) Disaggregation.--An institution of higher education shall 
provide specific disaggregated subgroup information under subsection 
(a) only if the number of students in such subgroup is sufficient to 
yield statistically reliable information and reporting would not reveal 
personally identifiable information about an individual. If such number 
is not sufficient, the institution of higher education shall note that 
the institution enrolled too few of such students to report with 
confidence.''.
    (b) Antitrust Exemption.--
            (1) Definitions.--In this subsection:
                    (A) Antitrust laws.--The term ``antitrust laws'' 
                has the meaning given such term in subsection (a) of 
                the first section of the Clayton Act (15 U.S.C. 12(a)), 
                except that such term includes section 5 of the Federal 
                Trade Commission Act (15 U.S.C. 45) to the extent such 
                section 5 applies to unfair methods of competition.
                    (B) Institution of higher education.--The term 
                ``institution of higher education''--
                            (i) means an institution of higher 
                        education as defined in section 101 of the 
                        Higher Education Act of 1965 (20 U.S.C. 1001); 
                        and
                            (ii) includes any individual acting on 
                        behalf of such an institution.
            (2) Exemption.--The antitrust laws shall not apply to any 
        joint discussion, consideration, review, action, or agreement 
        by or among institutions of higher education, or their 
        representatives, for the purpose of, and limited to, developing 
        and disseminating guidelines designed to end binding early 
        decision admissions policies.
    (c) Retention.--
            (1) Grant program.--Part A of title III of the Higher 
        Education Act of 1965 (20 U.S.C. 1057 et seq.) is amended by 
        adding at the end the following:

``SEC. 318. GRANT PROGRAM TO INCREASE STUDENT RETENTION AND PROMOTE 
              ARTICULATION AGREEMENTS.

    ``(a) Authorization of Program.--The Secretary shall award grants, 
on a competitive basis, to eligible institutions to enable the 
institutions to--
            ``(1) focus on increasing traditional and nontraditional 
        student retention at such institutions; and
            ``(2) promote articulation agreements among different 
        institutions that will increase the likelihood of progression 
        of students at such institutions to baccalaureate degrees.
    ``(b) Definition of Eligible Institution.--In this section, the 
term `eligible institution' means an institution of higher education 
(as defined in section 101(a)) where not less than 40 percent of such 
institution's student body receives financial aid under subpart 1 of 
part A of title IV.
    ``(c) Application.--An eligible institution that desires a grant 
under this section shall submit an application to the Secretary at such 
time, in such manner, and containing such information as the Secretary 
may require.
    ``(d) Mandatory Activities.--An eligible institution that receives 
a grant under this section shall use the grant funds to carry out each 
of the following:
            ``(1) Offering counseling services to help students cope 
        with the challenges they are facing and identify the services 
        that are available to help them persist in their education.
            ``(2) Making mentors available to all students that are at 
        risk for not completing a degree.
            ``(3) Providing detailed assistance to all students who 
        request help in understanding--
                    ``(A) the options for financing their education, 
                including information on grants, loans, and loan 
                repayment programs;
                    ``(B) the process of applying for financial 
                assistance;
                    ``(C) the outcome of their financial assistance 
                application; and
                    ``(D) any unanticipated problems related to 
                financing their education that arise.
            ``(4) Offering tutoring to all students who request 
        assistance with any course or subject.
            ``(5) Conducting outreach activities so that all students 
        know that these services are available and are aware of how to 
        access the services.
            ``(6) Making services listed in paragraphs (1) through (4) 
        available in students' native languages, if it is not English, 
        if the percentage of students needing translation services in a 
        specific language exceeds 5 percent.
    ``(e) Permissible Activities.--An eligible institution that 
receives a grant under this section may use grant funds to carry out 
any of the following activities:
            ``(1) Providing intensive remedial academic instruction.
            ``(2) Designing innovative course schedules to meet the 
        needs of working adults, such as classes that are concentrated 
        on weekends or over short periods of time.
            ``(3) Designing and implementing online courses or 
        components of courses to allow nontraditional students to 
        obtain an education when their family or professional 
        responsibilities, or both, make it difficult for them to attend 
        class on campus at prespecified, regular times.
            ``(4) Offering childcare during the hours when students 
        have class or are studying.
            ``(5) Providing transportation assistance to students that 
        helps such students manage their schedules.
            ``(6) Partnering with local businesses to create flexible 
        work-hour programs so that students can balance work and 
        school.
            ``(7) Offering time management seminars or personal coaches 
        to help students improve their time management skills.
            ``(8) Any other activities the Secretary believes will 
        promote retention of students attending eligible institutions.
    ``(f) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $100,000,000 for fiscal year 
2004 and such sums as may be necessary for each of the 5 succeeding 
fiscal years.''.
            (2) Institutional support services.--Part B of title I of 
        the Higher Education Act of 1965 (20 U.S.C. 1011 et seq.) is 
        amended by adding at the end the following:

``SEC. 123. INSTITUTIONAL SUPPORT SERVICES TO INCREASE STUDENT 
              RETENTION.

    ``(a) Determination of Rates.--
            ``(1) In general.--Beginning on the date that is 2 years 
        after the date of enactment of this section, and annually 
        thereafter, an institution of higher education shall determine 
        for the preceding academic year the rates of baccalaureate 
        degree completion not later than 6 years after enrollment for 
        students enrolled at such institution, disaggregated by race, 
        gender, and eligibility for Federal Pell Grants, if the 
        institution of higher education--
                    ``(A) receives Federal funds;
                    ``(B) is eligible for assistance under title IV;
                    ``(C) is not eligible for assistance under section 
                318; and
                    ``(D) awards a baccalaureate degree.
            ``(2) Disaggregation.--An institution of higher education 
        shall provide specific disaggregated subgroup information under 
        paragraph (1) only if the number of students in such subgroup 
        is sufficient to yield statistically reliable information and 
        reporting would not reveal personally identifiable information 
        about an individual. If such number is not sufficient, the 
        institution of higher education shall note that the institution 
        enrolled too few of such students to report with confidence.
    ``(b) Support Services for At Risk Students.--
            ``(1) In general.--Beginning on the date that is 2 years 
        after the date of enactment of this section, and annually 
        thereafter, each institution of higher education that has a 
        disparity of 20 or more percentage points in the rates 
        determined under subsection (a) between any 2 or more subgroups 
        in all the disaggregated categories for an academic year shall 
        increase, from the level provided in such academic year and in 
        accordance with paragraph (2), support services for the 
        students in the subgroups in which the baccalaureate degree 
        completion rate is 20 or more percentage points below the 
        completion rate for the subgroup with the highest completion 
        rate.
            ``(2) Amount of increase and activities.--
                    ``(A) Increase.--The amount of the increase 
                required under paragraph (1) for an academic year shall 
                be equal to 5 percent of the amount of assistance 
                received by the institution of higher education under 
                part C of title IV and subpart 3 of part A of title IV 
                for such academic year.
                    ``(B) Activities.--
                            ``(i) Mandatory activities.--The amount of 
                        the increase required under paragraph (1) shall 
                        be used to carry out the following activities:
                                    ``(I) Offering counseling services 
                                to help students cope with the 
                                challenges they are facing and identify 
                                the services that are available to help 
                                them persist in their education.
                                    ``(II) Making mentors available to 
                                all students that are at risk for not 
                                completing a degree.
                                    ``(III) Providing detailed 
                                assistance to all students who request 
                                help in understanding--
                                            ``(aa) the options for 
                                        financing their education, 
                                        including information on 
                                        grants, loans, and loan 
                                        repayment programs;
                                            ``(bb) the process of 
                                        applying for financial 
                                        assistance;
                                            ``(cc) the outcome of their 
                                        financial assistance 
                                        application; and
                                            ``(dd) any unanticipated 
                                        problems related to financing 
                                        their education that arise.
                                    ``(IV) Offering tutoring to all 
                                students who request assistance with 
                                any course or subject.
                                    ``(V) Conducting outreach 
                                activities so that all students know 
                                that these services are available and 
                                are aware of how to access the 
                                services.
                                    ``(VI) Making services listed in 
                                subclauses (I) through (IV) available 
                                in students' native languages, if it is 
                                not English, if the percentage of 
                                students needing translation services 
                                in a specific language exceeds 5 
                                percent.
                            ``(ii) Permissible activities.--The amount 
                        of the increase required under paragraph (1) 
                        may be used to carry out any of the following 
                        activities:
                                    ``(I) Providing intensive remedial 
                                academic instruction.
                                    ``(II) Designing innovative course 
                                schedules to meet the needs of working 
                                adults, such as classes that are 
                                concentrated on weekends or over short 
                                periods of time.
                                    ``(III) Designing and implementing 
                                online courses or components of courses 
                                to allow nontraditional students to 
                                obtain an education when their family 
                                or professional responsibilities, or 
                                both, make it difficult for them to 
                                attend class on campus at prespecified, 
                                regular times.
                                    ``(IV) Offering childcare during 
                                the hours when students have class or 
                                are studying.
                                    ``(V) Providing transportation 
                                assistance to students that helps such 
                                students manage their schedules.
                                    ``(VI) Partnering with local 
                                businesses to create flexible work-hour 
                                programs so that students can balance 
                                work and school.
                                    ``(VII) Offering time management 
                                seminars or personal coaches to help 
                                students improve their time management 
                                skills.
                                    ``(VIII) Any other activities the 
                                Secretary believes will promote 
                                retention of students attending 
                                eligible institutions.''.

SEC. 303. FEDERAL TRIO PROGRAM.

    Section 402A of the Higher Education Act of 1965 (20 U.S.C. 1070a-
11) is amended--
            (1) in subsection (b)(3)--
                    (A) in subparagraph (A), by striking ``$170,000'' 
                and inserting ``$190,000'';
                    (B) in subparagraph (B), by striking ``$180,000'' 
                and inserting ``$200,000''; and
                    (C) in subparagraph (C), by striking ``$190,000'' 
                and inserting ``$220,000''; and
            (2) in subsection (f), by striking the first sentence and 
        inserting the following: ``For the purpose of making grants and 
        contracts under this chapter, there are authorized to be 
        appropriated $1,250,000,000 for fiscal year 2004 and such sums 
        as may be necessary for each of the 5 succeeding fiscal 
        years''.

SEC. 304. GEAR UP.

    (a) Early Intervention and College Awareness Program Authorized.--
Section 404A(b) of the Higher Education Act of 1965 (20 U.S.C. 1070a-
21(b)) is amended--
            (1) in paragraph (1), by inserting ``6 year'' after ``shall 
        make''; and
            (2) by adding at the end the following:
            ``(3) Current grantees.--An eligible entity that has 
        received an award under this section, has performed 
        successfully, and still has need for an award may apply for an 
        additional award under this section.''.
    (b) Authorization of Appropriations.--Section 404H of the Higher 
Education Act of 1965 (20 U.S.C. 1070a-28) is amended by striking 
``$200,000,000 for fiscal year 1999 and such sums as may be necessary 
for each of the 4 succeeding fiscal years'' and inserting 
``$500,000,000 for fiscal year 2004 and such sums as may be necessary 
for each of the 5 succeeding fiscal years''.

SEC. 305. LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP PROGRAM.

    (a) Authorization of Appropriations.--Section 415A(b) of the Higher 
Education Act of 1965 (20 U.S.C. 1070c(b)) is amended by striking 
paragraphs (1) and (2) and inserting the following:
            ``(1) In general.--There are authorized to be appropriated 
        $200,000,000 for fiscal year 2004, and such sums as may be 
        necessary for each of the 5 succeeding fiscal years.
            ``(2) Reservation.--For any fiscal year for which the 
        amount appropriated under paragraph (1)--
                    ``(A) exceeds $30,000,000, the excess amount up to 
                and including $67,000,000 shall be available to carry 
                out section 415E; and
                    ``(B) exceeds $67,000,000, the excess amount shall 
                be available to carry out section 415F.''.
    (b) Increase in Maximum Student Grants.--Section 415C(b)(2) of the 
Higher Education Act of 1965 (20 U.S.C. 1070c-2(b)(2)) is amended by 
striking ``$5,000'' and inserting ``$12,500''.
    (c) Special Leveraging Educational Assistance Partnership 
Program.--Section 415E(a) of the Higher Education Act of 1965 (20 
U.S.C. 1070c-3a(a) is amended by striking ``section 415A(b)(2)'' and 
inserting ``section 415A(b)(2)(A)''.
    (d) Grants for Access and Persistence.--Subpart 4 of part A of 
title IV of the Higher Education Act of 1965 (20 U.S.C. 1070c et seq.) 
is amended--
            (1) by redesignating section 415F as section 415G; and
            (2) by inserting after section 415E the following:

``SEC. 415F. GRANTS FOR ACCESS AND PERSISTENCE.

    ``(a) Authorization.--From amounts reserved under section 
415A(b)(2)(B) for each fiscal year, the Secretary shall make 
supplemental allotments among States in the same manner as the 
Secretary makes allotments among States under section 415B to pay the 
Federal share of the cost of the authorized activities under subsection 
(c).
    ``(b) Application.--
            ``(1) In general.--
                    ``(A) Submission.--A State that desires to receive 
                a supplemental allotment under this section shall 
                submit an application to the Secretary at such time, in 
                such manner, and containing such information as the 
                Secretary may require.
                    ``(B) Content.--An application submitted under 
                subparagraph (A) shall include both of the following:
                            ``(i) A description of the State's plan for 
                        using the supplemental allotment funds.
                            ``(ii) Assurances that the State will 
                        provide matching funds, from State, 
                        institutional, philanthropic, or private funds, 
                        of not less than 33.33 percent of the cost of 
                        carrying out the activities under subsection 
                        (c). The State shall specify the methods by 
                        which matching funds will be paid and include 
                        provisions designed to ensure that funds 
                        provided under this section will be used to 
supplement, and not supplant, non-Federal funds available for carrying 
out the activities under subsection (c).
                    ``(C) Approval.--The Secretary shall approve and 
                fund applications that meet the requirements of this 
                section.
            ``(2) State agency.--The State agency that submits an 
        application for a State under section 415C(a) shall be the same 
        State agency that submits an application under paragraph (1) 
        for such State.
            ``(3) Partnership.--
                    ``(A) Mandatory partners.--In applying for a 
                supplemental allotment under this section, the State 
                agency shall apply for a supplemental allotment in 
                partnership with not less than 1 public and 1 private 
                degree granting institution of higher education that 
                are located in the State.
                    ``(B) Permissive partners.--In addition to applying 
                for a supplemental allotment under this section in 
                partnership with degree granting institutions of higher 
                education, a State agency may also apply in partnership 
                with philanthropic organizations that are located in 
                the State and private corporations that do business in 
                the State.
    ``(c) Authorized Activities.--
            ``(1) In general.--
                    ``(A) Establishment of program.--Each State 
                receiving a supplemental allotment under this section 
                shall use the funds to establish a program to award 
                access and persistence grants to eligible low-income 
                students in order to increase the amount of financial 
                assistance such students receive under this subpart for 
                undergraduate education expenses.
                    ``(B) Amount.--
                            ``(i) Partnerships with less than a 
                        majority of institutions in the state.--
                                    ``(I) In general.--In the case 
                                where a State receiving a supplemental 
                                allotment under this section is in a 
                                partnership described in subparagraph 
                                (A) or (B) of subsection (d)(2), the 
                                amount of an access and persistence 
                                grant awarded by such State shall be 
                                not less than the amount that is equal 
                                to the average undergraduate tuition 
                                and mandatory fees at 4-year public 
                                institutions of higher education in the 
                                State where the student resides (less 
                                any other government sponsored grant 
                                amount or scholarship amount, or both, 
                                received by the student) and such 
                                amount shall be used toward the cost of 
                                attendance at an institution of higher 
                                education, located in the State, that 
                                is a partner in the program.
                                    ``(II) Cost of attendance.--A State 
                                that has a program, apart from the 
                                program under this section, of 
                                providing eligible low-income students 
                                with grants that are equal to the 
                                average undergraduate tuition and 
                                mandatory fees at 4-year public 
                                institutions of higher education in the 
                                State, may increase the amount of 
                                access and persistence grants awarded 
                                by such State to an amount that is 
                                equal to the average cost of attendance 
                                at 4-year public institutions of higher 
                                education in the State.
                            ``(ii) Partnership with a majority of 
                        institutions in the state.--In the case where a 
                        State receiving a supplemental allotment under 
                        this section is in a partnership described in 
                        subsection (d)(2)(C), the amount of an access 
                        and persistence grant awarded by such State 
                        shall be equal to the average cost of 
                        attendance at 4-year public institutions of 
                        higher education in the State where the student 
                        resides (less any other government sponsored 
                        grant amount or scholarship amount, or both, 
                        received by the student) and such amount shall 
                        be used by the student to attend an institution 
                        of higher education, located in the State, that 
                        is a partner in the program.
            ``(2) Eligible low-income students.--
                    ``(A) In general.--Each State receiving a 
                supplemental allotment under this section shall--
                            ``(i) annually make a determination of 
                        which students in grade 7 through grade 12 in 
                        the State are eligible to receive an access and 
                        persistence grant if such students graduate 
                        from secondary school and enroll at an 
                        institution of higher education that is a 
                        partner in the program; and
                            ``(ii) notify such students of their 
                        eligibility to receive an access and 
                        persistence grant.
                    ``(B) Priority.--In determining which students are 
                eligible to receive access and persistence grants, the 
                State shall give priority to students--
                            ``(i) with an expected family contribution 
                        equal to zero (as described in section 479(c));
                            ``(ii) who are participating in, or have 
                        participated in, a Federal, State, 
                        institutional, or community early intervention 
                        program, as recognized by the State agency 
                        administering the program; and
                            ``(iii) who qualify for a free or reduced 
                        price lunch under the Richard B. Russell 
                        National School Lunch Act (42 U.S.C. 1751 et 
                        seq.).
                    ``(C) Content of notice.--The notification under 
                subparagraph (A)(ii) shall include--
                            ``(i) information that a student's 
                        candidacy for an access and persistence grant 
                        is enhanced through participation in an early 
                        intervention program;
                            ``(ii) information that the grant award 
                        shall be used toward the cost of attendance at 
                        an institution of higher education that is a 
                        partner in the program and therefore such award 
                        is contingent upon the student's enrollment at 
                        such an institution;
                            ``(iii) an estimation of the amount of 
                        financial aid a student awarded an access and 
                        persistence grant could expect to receive, 
                        including an estimation of the amount of the 
                        access and persistence grant and an estimation 
                        of the amount of aid from the major Federal and 
                        State financial aid programs; and
                            ``(iv) instructions on how to apply for an 
                        access and persistence grant.
            ``(3) Grant award.--If an eligible student, as determined 
        under paragraph (2), has been accepted to an institution of 
        higher education that is a partner in the program, the State 
        shall--
                    ``(A) notify the student of the amount of the 
                access and persistence grant such student will receive 
                if such student enrolls at such institution; and
                    ``(B) inform the student that the access and 
                persistence grant will be awarded and grant funds will 
                be distributed when such student enrolls at such 
                institution.
            ``(4) Duration of award.--An eligible student that receives 
        an access and persistence grant under this section shall 
        receive such grant award for each year of such student's 
        undergraduate education.
    ``(d) Federal Share.--
            ``(1) In general.--The Federal share of the cost of the 
        authorized activities described in subsection (c) for any 
        fiscal year shall be not more than 66.66 percent.
            ``(2) Formula for federal share.--In awarding supplemental 
        allotments under this section, the Secretary shall provide a 
        match of the non-Federal funds provided by the State in 
        accordance with the following:
                    ``(A) If a State applies for a supplemental 
                allotment under this section in partnership with only 
                less than a majority of the degree granting 
                institutions of higher education located in the State, 
                then the Federal share shall be equal to 50 percent of 
                the cost of carrying out the activities under 
                subsection (c).
                    ``(B) If a State applies for a supplemental 
                allotment under this section in partnership with less 
                than a majority of the degree granting institutions of 
                higher education located in the State, philanthropic 
                organizations located in the State, and private 
                corporations doing business in the State, then the 
                Federal share shall be equal to 57 percent of the cost 
                of carrying out the activities under subsection (c).
                    ``(C) If a State applies for a supplemental 
                allotment under this section in partnership with a 
                majority of the degree granting institutions of higher 
                education located in the State, philanthropic 
                organizations located in the State, and private 
                corporations doing business in the State, then the 
                Federal share shall be equal to 66.66 percent of the 
                cost of carrying out the activities under subsection 
                (c).
    ``(e) Applicability Rule.--The provisions of this subpart which are 
not inconsistent with this section shall apply to the program 
authorized by this section.
    ``(f) Maintenance of Effort Requirement.--Each State receiving a 
supplemental allotment under this section for a fiscal year shall 
provide the Secretary an assurance that the aggregate amount expended 
per student or the aggregate expenditures by the State, from funds 
derived from non-Federal sources, for the authorized activities 
described in subsection (c) for the preceding fiscal year were not less 
than the amount expended per student or the aggregate expenditure by 
the State for the activities for the second preceding fiscal year.''.

        TITLE IV--OPPORTUNITIES AT HISPANIC-SERVING INSTITUTIONS

SEC. 401. POSTBACCALAUREATE OPPORTUNITIES FOR HISPANIC AMERICANS.

    (a) Establishment of Program.--Title V of the Higher Education Act 
of 1965 (20 U.S.C. 1101 et seq.) is amended--
            (1) by redesignating part B as part C;
            (2) by redesignating sections 511 through 518 as sections 
        521 through 528, respectively; and
            (3) by inserting after section 505 the following:

   ``PART B--PROMOTING POSTBACCALAUREATE OPPORTUNITIES FOR HISPANIC 
                               AMERICANS

``SEC. 511. FINDINGS AND PURPOSES.

    ``(a) Findings.--Congress finds the following:
            ``(1) According to the United States Census, by the year 
        2050, 1 in 4 Americans will be of Hispanic origin.
            ``(2) Despite the dramatic increase in the Hispanic 
        population in the United States, the National Center for 
        Education Statistics reported that in 1999, Hispanics accounted 
        for only 4 percent of the master's degrees, 3 percent of the 
        doctor's degrees, and 5 percent of first-professional degrees 
        awarded in the United States.
            ``(3) Although Hispanics constitute 10 percent of the 
        college enrollment in the United States, they comprise only 3 
        percent of instructional faculty in colleges and universities.
            ``(4) The future capacity for research and advanced study 
        in the United States will require increasing the number of 
        Hispanics pursuing postbaccalaureate studies.
            ``(5) Hispanic-serving institutions are leading the Nation 
        in increasing the number of Hispanics attaining graduate and 
        professional degrees.
            ``(6) Among Hispanics who received master's degrees in 
        1999-2000, 25 percent earned them at Hispanic-serving 
        institutions.
            ``(7) Between 1991 and 2000, the number of Hispanic 
        students earning master's degrees at Hispanic-serving 
        institutions grew 136 percent, the number receiving doctor's 
        degrees grew by 85 percent, and the number earning first-
        professional degrees grew by 47 percent.
            ``(8) It is in the National interest to expand the capacity 
        of Hispanic-serving institutions to offer graduate and 
        professional degree programs.
            ``(9) Research is a key element in graduate education and 
        undergraduate preparation, particularly in science and 
        technology, and Congress desires to strengthen the role of 
        research at Hispanic serving-institutions. University research, 
        whether performed directly or through a university's nonprofit 
        research institute or foundation, is considered an integral 
        part of the institution and mission of the university.
    ``(b) Purposes.--The purposes of this part are--
            ``(1) to expand postbaccalaureate educational opportunities 
        for, and improve the academic attainment of, Hispanic students; 
        and
            ``(2) to expand and enhance the postbaccalaureate academic 
        offerings of high quality that are educating the majority of 
        Hispanic college students and helping large numbers of Hispanic 
        students and low-income individuals complete postsecondary 
        degrees.

``SEC. 512. PROGRAM AUTHORITY AND ELIGIBILITY.

    ``(a) Program Authorized.--Subject to the availability of funds 
appropriated to carry out this part, the Secretary shall award 
competitive grants to eligible institutions.
    ``(b) Eligibility.--For the purposes of this part, an `eligible 
institution' means an institution of higher education that--
            ``(1) is a Hispanic-serving institution (as defined under 
        section 502); and
            ``(2) offers a postbaccalaureate certificate or degree 
        granting program.

``SEC. 513. AUTHORIZED ACTIVITIES.

    ``Grants awarded under this part shall be used for 1 or more of the 
following activities:
            ``(1) Purchase, rental, or lease of scientific or 
        laboratory equipment for educational purposes, including 
        instructional and research purposes.
            ``(2) Construction, maintenance, renovation, and 
        improvement in classroom, library, laboratory, and other 
        instructional facilities, including purchase or rental of 
        telecommunications technology equipment or services.
            ``(3) Purchase of library books, periodicals, technical and 
        other scientific journals, microfilm, microfiche, and other 
        educational materials, including telecommunications program 
        materials.
            ``(4) Support for needy postbaccalaureate students 
        including outreach, academic support services, mentoring, 
        scholarships, fellowships, and other financial assistance to 
        permit the enrollment of such students in postbaccalaureate 
        certificate and degree granting programs.
            ``(5) Support of faculty exchanges, faculty development, 
        faculty research, curriculum development, and academic 
        instruction.
            ``(6) Creating or improving facilities for Internet or 
        other distance learning academic instruction capabilities, 
        including purchase or rental of telecommunications technology 
        equipment or services.
            ``(7) Collaboration with other institutions of higher 
        education to expand postbaccalaureate certificate and degree 
        offerings.
            ``(8) Other activities proposed in the application 
        submitted pursuant to section 514 that--
                    ``(A) contribute to carrying out the purposes of 
                this part; and
                    ``(B) are approved by the Secretary as part of the 
                review and acceptance of such application.

``SEC. 514. APPLICATION AND DURATION.

    ``(a) Application.--Any eligible institution may apply for a grant 
under this part by submitting an application to the Secretary at such 
time and in such manner as determined by the Secretary. Such 
application shall demonstrate how the grant funds will be used to 
improve postbaccalaureate education opportunities for Hispanic and low-
income students and will lead to such students' greater financial 
independence.
    ``(b) Duration.--Grants under this part shall be awarded for a 
period not to exceed 5 years.
    ``(c) Limitation.--The Secretary shall not award more than 1 grant 
under this part in any fiscal year to any Hispanic-serving 
institution.''.
    (b) Cooperative Arrangements.--Section 524 of the Higher Education 
Act of 1965 (as redesignated by subsection (a)(2)) is amended by 
inserting ``and section 513'' after ``section 503''.
    (c) Authorization of Appropriations.--Section 528(a) of the Higher 
Education Act of 1965 (as redesignated by subsection (a)(2)) is amended 
to read as follows:
    ``(a) Authorizations.--
            ``(1) Part a.--There are authorized to be appropriated to 
        carry out part A of this title $175,000,000 for fiscal year 
        2004 and such sums as may be necessary for each of the 5 
        succeeding fiscal years.
            ``(2) Part b.--There are authorized to be appropriated to 
        carry out part B of this title $125,000,000 for fiscal year 
        2004 and such sums as may be necessary for each of the 5 
        succeeding fiscal years.''.
    (d) Conforming Amendments.--Title V of the Higher Education Act of 
1965 (20 U.S.C. 1101 et seq.) is amended--
            (1) in section 502--
                    (A) in subsection (a)(2)(A)(ii), by striking 
                ``section 512(b)'' and inserting ``section 522(b)''; 
                and
                    (B) in subsection (b)(2), by striking ``section 
                512(a)'' and inserting ``section 522(a)'';
            (2) in section 521(c)(6) (as redesignated by subsection 
        (a)(2)), by striking ``section 516'' and inserting ``section 
        526''; and
            (3) in section 526 (as redesignated by subsection (a)(2)), 
        by striking ``section 518'' and inserting ``section 528''.

SEC. 402. DEFINITIONS.

    Section 502(a) of the Higher Education Act of 1965 (20 U.S.C. 
1101a(a)) is amended--
            (1) in paragraph (5)--
                    (A) in subparagraph (A), by inserting ``and'' after 
                the semicolon;
                    (B) in subparagraph (B), by striking ``; and'' and 
                inserting a period; and
                    (C) by striking subparagraph (C); and
            (2) by striking paragraph (7).

SEC. 403. AUTHORIZED ACTIVITIES.

    Section 503(b)(7) of the Higher Education Act of 1965 (20 U.S.C. 
1101b(b)(7)) is amended to read as follows:
            ``(7) Articulation agreements and student support programs 
        designed to facilitate the transfer from 2-year to 4-year 
        institutions.''.

SEC. 404. ELIMINATION OF WAIT-OUT PERIOD.

    Section 504(a) of the Higher Education Act of 1965 (20 U.S.C. 
1101c(a)) is amended to read as follows:
    ``(a) Award Period.--The Secretary may award a grant to a Hispanic-
serving institution under this title for 5 years.''.

SEC. 405. APPLICATION PRIORITY.

    Section 521(d) of the Higher Education Act of 1965 (as redesignated 
by section 401(a)(2)) is amended by striking ``(from funds other than 
funds provided under this title)''.

         TITLE V--HISTORICALLY BLACK COLLEGES AND UNIVERSITIES

SEC. 501. PROFESSIONAL OR GRADUATE INSTITUTIONS.

    Section 326 of the Higher Education Act of 1965 (20 U.S.C. 1063b) 
is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by inserting ``business 
                administration, computer or information science, 
                nursing and allied health,'' after ``engineering,''; 
                and
                    (B) in paragraph (2), by striking ``$1,000,000'' 
                both places such term appears and inserting 
                ``$1,500,000'';
            (2) in subsection (d)(2), by striking ``$1,000,000'' and 
        inserting ``$1,500,000'';
            (3) in subsection (e)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (Q), by striking 
                        ``and'' after the semicolon;
                            (ii) in subparagraph (R), by striking the 
                        period at the end and inserting a semicolon; 
                        and
                            (iii) by adding at the end the following:
                    ``(S) Alabama State University qualified graduate 
                programs;
                    ``(T) Albany State University qualified graduate 
                programs;
                    ``(U) Alcorn State University qualified graduate 
                programs;
                    ``(V) Bowie State University qualified graduate 
                programs;
                    ``(W) Coppin State University qualified graduate 
                programs;
                    ``(X) Delaware State University qualified graduate 
                programs;
                    ``(Y) Feyetteville State University qualified 
                graduate programs;
                    ``(Z) Fisk University qualified graduate programs;
                    ``(AA) Grambling State University qualified 
                graduate programs;
                    ``(BB) Kentucky State University qualified graduate 
                programs;
                    ``(CC) Langston University qualified graduate 
                programs;
                    ``(DD) Lincoln University (MO) qualified graduate 
                programs;
                    ``(EE) Prairie View A&M University qualified 
                graduate programs;
                    ``(FF) South Carolina State University qualified 
                graduate programs;
                    ``(GG) Southern University & A&M College qualified 
                graduate programs;
                    ``(HH) University of the District of Columbia 
                qualified graduate programs; and
                    ``(II) Virginia State University qualified graduate 
                programs.''; and
                    (B) in paragraph (2)--
                            (i) in subparagraph (A), by inserting 
                        ``business administration, computer or 
                        information science, nursing and allied 
                        health,'' after ``physical or natural 
                        sciences,''; and
                            (ii) in subparagraph (B), by striking ``not 
                        more than 10 percent'' and inserting ``not more 
                        than 30 percent'';
            (4) by striking subsection (f) and inserting the following:
    ``(f) Funding Rule.--Subject to subsection (g), of the amount 
appropriated to carry out this section for any fiscal year--
            ``(1) the first $26,600,000 (or any lesser amount 
        appropriated) shall be available only for the purposes of 
        making grants to institutions or programs described in 
        subparagraphs (A) through (P) of subsection (e)(1);
            ``(2) any amount in excess of $26,600,000, but not in 
        excess of $28,600,000, shall be available for the purpose of 
        making grants to institutions or programs described in 
        subparagraphs (Q) and (R) of subsection (e)(1);
            ``(3) any amount in excess of $28,600,000, but not in 
        excess of $45,600,000, shall be available for the purpose of 
        making grants to institutions or programs described in 
        subparagraphs (S) through (II) of subsection (e)(1);
            ``(4) any amount in excess of $45,600,000, but not in 
        excess of $63,100,000, shall be available for the purpose of 
        increasing the grant amounts to not more than $1,500,000 to 
        each institution or program described in subparagraphs (A) 
        through (II) of subsection (e)(1); and
            ``(5) any amount in excess of $63,100,000, shall be made 
        available to each of the institutions or programs identified in 
        subparagraphs (A) through (II) of subsection (e)(1) pursuant to 
        a formula developed by the Secretary that uses the following 
        elements:
                    ``(A) The ability of the institution to match 
                Federal funds with non-Federal funds.
                    ``(B) The number of students enrolled in the 
                programs for which the eligible institution received 
                funding under this section in the previous year.
                    ``(C) The average cost of education per student, 
                for all full-time graduate or professional students (or 
                the equivalent) enrolled in the eligible professional 
                or graduate school, or for doctoral students enrolled 
                in the qualified graduate programs.
                    ``(D) The number of students in the previous year 
                who received their first professional or doctoral 
                degree from the programs for which the eligible 
institution received funding under this section in the previous year.
                    ``(E) The contribution, on a percent basis, of the 
                programs for which the institution is eligible to 
                receive funds under this section to the total number of 
                African-Americans receiving graduate or professional 
                degrees in the professions or disciplines related to 
                the programs for the previous year.''; and
            (5) in subsection (g), by striking ``paragraphs (2) and (3) 
        of subsection (f)'' and inserting ``subsection (f)''.

SEC. 502. GRADUATE AND PROFESSIONAL DEGREE DEVELOPMENT PROGRAM.

    Part B of title III of the Higher Education Act of 1965 (20 U.S.C. 
1060 et seq.) is amended--
            (1) by redesignating section 327 as section 328; and
            (2) by inserting after section 326 the following:

``SEC. 327. GRADUATE AND PROFESSIONAL DEGREE DEVELOPMENT PROGRAM.

    ``(a) Grant Authority.--The Secretary is authorized to award grants 
to eligible historically Black colleges and universities to enable such 
colleges and universities to--
            ``(1) develop masters, doctoral, or professional degree 
        programs; and
            ``(2) provide assistance, through fellowship awards, to 
        graduate students at such colleges and universities.
    ``(b) Eligible Grant Recipient.--Eligibility to receive grants 
under this section is limited to historically Black colleges and 
universities that are making a substantial contribution to the 
education of African-Americans.
    ``(c) Application.--An eligible historically Black college or 
university that desires to receive a grant under this section shall 
submit an application to the Secretary that--
            ``(1) demonstrates how the grant funds will be used to 
        improve--
                    ``(A) graduate educational opportunities for 
                African-American and low-income students; and
                    ``(B) the financial independence of such students;
            ``(2) provides, in the case of applications for grants in 
        excess of $500,000, the assurances required by subsection (g) 
        and specifies the manner in which the college or university is 
        going to pay the non-Federal share of the cost of the 
        application; and
            ``(3) contains such information as the Secretary may 
        require.
    ``(d) Priority.--In awarding grants under this section, the 
Secretary shall give priority consideration to those eligible 
historically Black colleges and universities desiring to support 
programs and graduate students in areas of national need or academic 
disciplines in which African-Americans are underrepresented.
    ``(e) Use of Funds.--An eligible historically Black college or 
university that receives a grant under this section may use the grant 
funds for--
            ``(1) purchase, rental, or lease of equipment for 
        educational purposes, including instructional and research 
        purposes;
            ``(2) construction, maintenance, renovation, and 
        improvement in classroom, library, laboratory, and other 
        instructional facilities, including purchase or rental of 
        telecommunications technology equipment or services;
            ``(3) purchase of library books, periodicals, journals, 
        microfilm, microfiche, and other educational materials, 
        including telecommunications program materials;
            ``(4) scholarships, fellowships, and other financial 
        assistance for needy graduate and professional students to 
        permit the enrollment of the students in and completion of the 
        graduate or professional degree; and
            ``(5) assistance in the establishment or maintenance of an 
        institutional endowment to facilitate financial independence 
        pursuant to section 331.
    ``(f) Duration.--Grants shall be made for a period not to exceed 5 
years.
    ``(g) Funding Rule.--No grant in excess of $500,000 may be made 
under this section unless the college or university provides assurances 
that 50 percent of the cost of the purposes for which the grant is made 
will be paid from non-Federal sources, except that no college or 
university shall be required to match any portion of the first $500,000 
of the college or university's award from the Secretary.
    ``(h) Two Grants per Institution.--The Secretary may award not more 
than 2 grants or an aggregate amount of $1,000,000 under this section 
in any fiscal year to any institution of higher education or university 
system.
    ``(i) Institutional Choice.--The president or chancellor of the 
college or university may select the program for which to seek funding.
    ``(j) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $30,000,000 for fiscal year 2004 
and such sums as may be necessary for each of the 5 succeeding fiscal 
years.''.

SEC. 503. AUTHORIZATION OF APPROPRIATIONS.

    (a) Grants to Institutions.--Section 323(a) of the Higher Education 
Act of 1965 (20 U.S.C. 1062(a)) is amended by striking ``section 
360(a)(2)'' and inserting ``section 399(a)(2)(C)''.
    (b) Authorization.--Section 399(a) of the Higher Education Act of 
1965 (20 U.S.C. 1068h(a)) is amended--
            (1) in paragraph (2)--
                    (A) in subparagraph (A), by striking ``section 
                326'' and inserting ``sections 323 and 326'';
                    (B) in subparagraph (B), by striking ``$35,000,000 
                for fiscal year 1999, and such sums as may be necessary 
                for each of the 4 succeeding fiscal years'' and 
                inserting ``$75,000,000 for fiscal year 2004, and such 
                sums as may be necessary for each of the 5 succeeding 
                fiscal years''; and
                    (C) by adding at the end the following:
            ``(C) There are authorized to be appropriated to carry out 
        section 323, $250,000,000 for fiscal year 2004, and such sums 
as may be necessary for each of the 5 succeeding fiscal years'';
            (2) in paragraph (3), by striking ``$10,000,000 for fiscal 
        year 1999, and such sums as may be necessary for each of the 4 
        succeeding fiscal years'' and inserting ``$25,000,000 for 
        fiscal year 2004, and such sums as may be necessary for each of 
        the 5 succeeding fiscal years''; and
            (3) in paragraph (5), by striking ``$10,000,000 for fiscal 
        year 1999, and such sums as may be necessary for each of the 4 
        succeeding fiscal years'' and inserting ``$20,000,000 for 
        fiscal year 2004, and such sums as may be necessary for each of 
        the 5 succeeding fiscal years''.

SEC. 504. PATSY T. MINK FELLOWSHIP PROGRAM.

    Part A of title VII of the Higher Education Act of 1965 (20 U.S.C. 
1134 et seq.) is amended--
            (1) by redesignating subpart 4 as subpart 5;
            (2) by redesignating section 731 as section 741;
            (3) in section 741 (as redesignated by paragraph (2))--
                    (A) in subsection (a), by striking ``and 3'' and 
                inserting ``3, and 4'';
                    (B) in subsection (b), by striking ``and 3'' and 
                inserting ``3, and 4''; and
                    (C) in subsection (d), by striking ``or 3'' and 
                inserting ``3, or 4''; and
            (4) by inserting after subpart 3 the following:

             ``Subpart 4--Patsy T. Mink Fellowship Program

``SEC. 731. PURPOSE AND DESIGNATION.

    ``(a) Purpose.--It is the purpose of this subpart to provide, 
through eligible institutions, a program of fellowship awards to assist 
highly qualified minorities and women to acquire the doctoral degree, 
or highest possible degree available, in academic areas in which such 
individuals are underrepresented for the purpose of enabling such 
individuals to enter the higher education professoriate.
    ``(b) Designation.--Each recipient of a fellowship award from an 
eligible institution receiving a grant under this subpart shall be 
known as a `Patsy T. Mink Graduate Fellow'.

``SEC. 732. DEFINITION OF ELIGIBLE INSTITUTION.

    ``In this subpart, the term `eligible institution' means an 
institution of higher education, or a consortium of such institutions, 
that offers a program of postbaccalaureate study leading to a graduate 
degree.

``SEC. 733. PROGRAM AUTHORIZED.

    ``(a) Grants by Secretary.--
            ``(1) In general.--The Secretary shall award grants to 
        eligible institutions to enable such institutions to make 
        fellowship awards to individuals in accordance with the 
        provisions of this subpart.
            ``(2) Priority consideration.--In awarding grants under 
        this subpart, the Secretary shall consider the eligible 
        institution's prior experience in producing doctoral degree, or 
        highest possible degree available, holders who are minorities 
        and women, and shall give priority consideration in making 
        grants under this subpart to those eligible institutions with a 
        demonstrated record of producing minorities and women who have 
        earned such degrees.
    ``(b) Applications.--
            ``(1) In general.--An eligible institution that desires a 
        grant under this subpart shall submit an application to the 
        Secretary at such time, in such manner, and containing such 
        information as the Secretary may require.
            ``(2) Applications made on behalf.--
                    ``(A) In general.--The following entities may 
                submit an application on behalf of an eligible 
                institution:
                            ``(i) A graduate school or department of 
                        such institution.
                            ``(ii) A graduate school or department of 
                        such institution in collaboration with an 
                        undergraduate college or university of such 
                        institution.
                            ``(iii) An organizational unit within such 
                        institution that offers a program of 
                        postbaccalaureate study leading to a graduate 
                        degree, including an interdisciplinary or an 
                        interdepartmental program.
                            ``(iv) A nonprofit organization with a 
                        demonstrated record of helping minorities and 
                        women earn postbaccalaureate degrees.
                    ``(B) Nonprofit organizations.--Nothing in this 
                paragraph shall be construed to permit the Secretary to 
                award a grant under this subpart to an entity other 
                than an eligible institution.
    ``(c) Selection of Applications.--In awarding grants under 
subsection (a), the Secretary shall--
            ``(1) take into account the number and distribution of 
        minority and female faculty nationally, as well as the current 
        and projected need for highly trained individuals in all areas 
        of the higher education professoriate;
            ``(2) take into account the number and distribution of 
        minority and female faculty nationally, as well as the present 
        and projected need for highly trained individuals in academic 
        career fields in which minorities and women are 
        underrepresented in the higher education professoriate; and
            ``(3) consider the need to prepare a large number of 
        minorities and women generally in academic career fields of 
        high national priority, especially in areas in which such 
        individuals are traditionally underrepresented in college and 
        university faculties.
    ``(d) Distribution and Amounts of Grants.--
            ``(1) Equitable distribution.--In awarding grants under 
        subsection (a), the Secretary shall, to the maximum extent 
        feasible, ensure an equitable geographic distribution of awards 
        and an equitable distribution among public and independent 
        eligible institutions that apply for grants under this subpart 
        and that demonstrate an ability to achieve the purpose of this 
        subpart.
            ``(2) Special rule.--To the maximum extent practicable, the 
        Secretary shall use not less than 50 percent of the amount 
        appropriated pursuant to section 736 to award grants to the 
        following eligible institutions:
                    ``(A) Eligible institutions that are eligible for 
                assistance under title III or title V.
                    ``(B) Eligible institutions that are eligible 
                institutions, as defined in section 312.
                    ``(C) Eligible institutions that are Tribal 
                Colleges or Universities, as defined in section 316.
                    ``(D) Eligible institutions that are Alaska Native-
                serving institutions, as defined in section 317.
                    ``(E) Eligible institutions that are Native-
                Hawaiian-serving institutions, as defined in section 
                317.
                    ``(F) Eligible institutions that are part B 
                institutions, as defined in section 322.
                    ``(G) Eligible institutions that are eligible 
                institutions, as defined in section 502.
                    ``(H) Consortia of eligible institutions that are 
                nonminority-serving institutions and eligible 
                institutions that are minority-serving institutions.
            ``(3) Allocation.--In awarding grants under this subpart, 
        the Secretary shall allocate appropriate funds to those 
        eligible institutions whose applications indicate an ability to 
        significantly increase the numbers of minorities and women 
        entering the higher education professoriate and that commit 
        institutional resources to the attainment of the purpose of 
        this subpart. An eligible institution that receives a grant 
        under this subpart shall make not less than 15 fellowship 
        awards.
            ``(4) Reallotment.--If the Secretary determines that an 
        eligible institution awarded a grant under this subpart is 
        unable to use all of the grant funds awarded to the 
        institution, the Secretary shall reallot, on such date during 
        each fiscal year as the Secretary may fix, the funds that are 
        not usable to other eligible institutions that demonstrate that 
        such institutions can use any reallocated grant funds to make 
        fellowship awards to individuals under this subpart.
    ``(e) Institutional Allowance.--
            ``(1) In general.--
                    ``(A) Number of allowances.--In awarding grants 
                under this subpart, the Secretary shall pay to each 
                eligible institution awarded a grant, for each 
                individual awarded a fellowship by such institution 
                under this subpart, an institutional allowance.
                    ``(B) Amount.--Except as provided in paragraph (3), 
                an institutional allowance shall be in an amount equal 
                to, for academic year 2005-2006 and succeeding academic 
                years, the amount of institutional allowance made to an 
                institution of higher education under section 715.
            ``(2) Use of funds.--Institutional allowances may be 
        expended in the discretion of the eligible institution and may 
        be used to provide, except as prohibited under paragraph (4), 
        academic support and career transition services for individuals 
        awarded fellowships by such institution.
            ``(3) Reduction.--The institutional allowance paid under 
        paragraph (1) shall be reduced by the amount the institution 
        charges and collects from a fellowship recipient for tuition 
        and other expenses as part of the recipient's instructional 
        program.
            ``(4) Use for overhead prohibited.--Funds made available 
        pursuant to this subpart may not be used for general 
        operational overhead of the academic department or institution 
        receiving funds under this subpart.

``SEC. 734. FELLOWSHIP RECIPIENTS.

    ``(a) Authorization.--An eligible institution that receives a grant 
under this subpart shall use the grant funds to make fellowship awards 
to minorities and women who are enrolled at such institution in a 
doctoral degree, or highest possible degree available, program and--
            ``(1) intend to pursue a career in instruction at--
                    ``(A) an institution of higher education (as 
                defined in section 101);
                    ``(B) an institution of higher education (as 
                defined in section 102(a)(1));
                    ``(C) an institution of higher education outside 
                the United States, as that term is described in section 
                102(a)(2); or
                    ``(D) a proprietary institution of higher education 
                (as defined in section 102(b)); and
            ``(2) sign an agreement with the Secretary agreeing to, 
        within 5 years of receiving the doctoral degree, or highest 
        possible degree available, begin employment at an institution 
        described in paragraph (1) for 1 year for each year of 
        fellowship assistance received under this subpart.
    ``(b) Failure To Comply.--If an individual who receives a 
fellowship award under this subpart fails to comply with the agreement 
signed pursuant to subsection (a)(2), then the Secretary shall do 1 or 
both of the following:
            ``(1) Require the individual to repay all or the applicable 
        portion of the total fellowship amount awarded to the 
        individual by converting the balance due to a loan at the 
        interest rate applicable to loans made under part B of title 
        IV.
            ``(2) Impose a fine or penalty in an amount to be 
        determined by the Secretary.
    ``(c) Waiver and Modification.--
            ``(1) Regulations.--The Secretary shall promulgate 
        regulations setting forth criteria to be considered in granting 
        a waiver for the service requirement under subsection (a).
            ``(2) Content.--The criteria under paragraph (1) shall 
        include whether compliance with the service requirement by the 
        fellowship recipient would be--
                    ``(A) inequitable and represent a substantial 
                hardship; or
                    ``(B) deemed impossible because the individual is 
                permanently and totally disabled at the time of the 
                waiver request.
    ``(d) Amount of Fellowship Awards.--Fellowship awards under this 
subpart shall consist of a stipend in an amount equal to the level of 
support provided to the National Science Foundation graduate fellows, 
except that such stipend shall be adjusted as necessary so as not to 
exceed the fellow's tuition and fees or demonstrated need (as 
determined by the institution of higher education where the graduate 
student is enrolled), whichever is greater.
    ``(e) Academic Progress Required.--An individual shall not be 
eligible to receive a fellowship award--
            ``(1) except during periods in which such student is 
        enrolled, such student is maintaining satisfactory academic 
        progress in, devoting essentially full time to, study or 
        research in the pursuit of the degree for which the fellowship 
        support was awarded; and
            ``(2) if the student is engaged in gainful employment other 
        than part-time employment involved in teaching, research, or 
        similar activity determined by the institution to be consistent 
        with and supportive of the student's progress toward the 
        appropriate degree.

``SEC. 735. RULE OF CONSTRUCTION.

    ``Nothing in this subpart shall be construed to require an eligible 
institution that receives a grant under this subpart to--
            ``(1) grant a preference or to differentially treat any 
        applicant for a faculty position as a result of the 
        institution's participation in the program under this subpart; 
        and
            ``(2) hire a Patsy T. Mink Fellow who completes this 
        program and seeks employment at such institution.

``SEC. 736. AUTHORIZATION OF APPROPRIATIONS.

    ``There is authorized to be appropriated to carry out this subpart 
$25,000,000 for fiscal year 2004 and such sums as may be necessary for 
each of the 5 succeeding fiscal years.''.

   TITLE VI--RECRUITMENT OF TEACHERS TO TEACH AT TRIBAL COLLEGES OR 
                              UNIVERSITIES

SEC. 601. LOAN REPAYMENT OR CANCELLATION FOR INDIVIDUALS WHO TEACH IN 
              TRIBAL COLLEGES OR UNIVERSITIES.

    (a) Short Title.--This title may be cited as the ``Tribal Colleges 
and Universities Teacher Loan Forgiveness Act''.
    (b) Perkins Loans.--
            (1) Amendment.--Section 465(a) of the Higher Education Act 
        of 1965 (20 U.S.C. 1087ee(a)) is amended--
                    (A) in paragraph (2)--
                            (i) in subparagraph (H), by striking ``or'' 
                        after the semicolon;
                            (ii) in subparagraph (I), by striking the 
                        period and inserting ``; or''; and
                            (iii) by adding at the end the following:
            ``(J) as a full-time teacher at a Tribal College or 
        University as defined in section 316(b).''; and
                    (B) in paragraph (3)(A)(i), by striking ``or (I)'' 
                and inserting ``(I), or (J)''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall be effective for service performed during academic year 
        1998-1999 and succeeding academic years, notwithstanding any 
        contrary provision of the promissory note under which a loan 
        under part E of title IV of the Higher Education Act of 1965 
        (20 U.S.C. 1087aa et seq.) was made.
    (c) FFEL and Direct Loans.--Part G of title IV of the Higher 
Education Act of 1965 (20 U.S.C. 1088 et seq.) is amended by adding at 
the end the following:

``SEC. 493C. LOAN REPAYMENT OR CANCELLATION FOR INDIVIDUALS WHO TEACH 
              IN TRIBAL COLLEGES OR UNIVERSITIES.

    ``(a) Program Authorized.--The Secretary shall carry out a program, 
through the holder of a loan, of assuming or canceling the obligation 
to repay a qualified loan amount, in accordance with subsection (b), 
for any new borrower on or after the date of enactment of this section, 
who--
            ``(1) has been employed as a full-time teacher at a Tribal 
        College or University as defined in section 316(b); and
            ``(2) is not in default on a loan for which the borrower 
        seeks repayment or cancellation.
    ``(b) Qualified Loan Amounts.--
            ``(1) Percentages.--Subject to paragraph (2), the Secretary 
        shall assume or cancel the obligation to repay under this 
        section--
                    ``(A) 15 percent of the amount of all loans made, 
                insured, or guaranteed after the date of enactment of 
                this section to a student under part B or D, for the 
                first or second year of employment described in 
                subsection (a)(1);
                    ``(B) 20 percent of such total amount, for the 
                third or fourth year of such employment; and
                    ``(C) 30 percent of such total amount, for the 
                fifth year of such employment.
            ``(2) Maximum.--The Secretary shall not repay or cancel 
        under this section more than $15,000 in the aggregate of loans 
        made, insured, or guaranteed under parts B and D for any 
        student.
            ``(3) Treatment of consolidation loans.--A loan amount for 
        a loan made under section 428C 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 made, insured, or 
        guaranteed under part B or D for a borrower who meets the 
        requirements of subsection (a), as determined in accordance 
        with regulations prescribed by the Secretary.
    ``(c) Regulations.--The Secretary is authorized to issue such 
regulations as may be necessary to carry out the provisions of this 
section.
    ``(d) Construction.--Nothing in this section shall be construed to 
authorize any refunding of any repayment of a loan.
    ``(e) Prevention of Double Benefits.--No 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. 
12571 et seq.).
    ``(f) Definition.--For purposes of this section, the term `year', 
when applied to employment as a teacher, means an academic year as 
defined by the Secretary.''.

SEC. 602. AMOUNTS FORGIVEN NOT TREATED AS GROSS INCOME.

    The amount of any loan that is assumed or canceled under an 
amendment made by this title shall not, consistent with section 108(f) 
of the Internal Revenue Code of 1986, be treated as gross income for 
Federal income tax purposes.
                                 <all>