[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2477 Introduced in Senate (IS)]
108th CONGRESS
2d Session
S. 2477
To amend the Higher Education Act of 1965 to expand college access and
increase college persistence, to simplify the process of applying for
student assistance, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 21, 2004
Mr. Reed (for himself, Ms. Collins, Mr. Kennedy, and Mrs. Murray)
introduced the following bill; which was read twice and referred to the
Committee on Health, Education, Labor, and Pensions
_______________________________________________________________________
A BILL
To amend the Higher Education Act of 1965 to expand college access and
increase college persistence, to simplify the process of applying for
student assistance, 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 ``Accessing College through
Comprehensive Early Outreach, State Partnerships, and Simplification
Act''.
SEC. 2. GRANTS FOR ACCESS AND PERSISTENCE.
(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
to carry out this subpart $500,000,000 for fiscal year 2005,
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) exceeds $30,000,000,
the excess amount shall be available to carry out section
415E.''.
(b) Applications for Leveraging Educational Assistance Partnership
Programs.--Section 415C(b) of the Higher Education Act of 1965 (20
U.S.C. 1070c-2(b)) is amended--
(1) in paragraph (2), by striking ``$5,000'' and inserting
``$12,500'';
(2) in paragraph (9), by striking ``and'' after the
semicolon;
(3) in paragraph (10), by striking the period at the end
and inserting ``; and''; and
(4) by adding at the end the following:
``(11) provides notification to eligible students that such
grants are--
``(A) Leveraging Educational Assistance Partnership
Grants; and
``(B) funded by the Federal Government and the
State.''.
(c) Grants for Access and Persistence.--Section 415E of the Higher
Education Act of 1965 (20 U.S.C. 1070c-3a) is amended to read as
follows:
``SEC. 415E. GRANTS FOR ACCESS AND PERSISTENCE.
``(a) Purpose.--It is the purpose of this section to expand college
access and increase college persistence by making allotments to States
to enable the States to--
``(1) expand and enhance partnerships with institutions of
higher education, early information and intervention,
mentoring, or outreach programs, private corporations,
philanthropic organizations, and other interested parties to
carry out activities under this section and to provide
coordination and cohesion among Federal, State, and local
governmental and private efforts that provide financial
assistance to help low-income students attend college;
``(2) provide need-based access and persistence grants to
eligible low-income students;
``(3) provide early notification to low-income students of
their eligibility for financial aid; and
``(4) encourage increased participation in early
information and intervention, mentoring, or outreach programs.
``(b) Allotments to States.--
``(1) In general.--
``(A) Authorization.--From sums reserved under
section 415A(b)(2) for each fiscal year, the Secretary
shall make an allotment to each State that submits an
application for an allotment in accordance with
subsection (c) to enable the State to pay the Federal
share of the cost of carrying out the activities under
subsection (d).
``(B) Determination of allotment.--In making
allotments under subparagraph (A), the Secretary shall
consider the following:
``(i) Continuation of award.--If a State
continues to meet the specifications
established in its application under subsection
(c), the Secretary shall make an allotment to
such State that is not less than the allotment
made to such State for the previous fiscal
year.
``(ii) Priority.--The Secretary shall give
priority in making allotments to States that
meet the requirements under paragraph
(2)(B)(iii).
``(2) Federal share.--
``(A) In general.--The Federal share of the cost of
carrying out the activities under subsection (d) for
any fiscal year may not exceed 66.66 percent.
``(B) Different percentages.--The Federal share
under this section shall be determined in accordance
with the following:
``(i) If a State applies for an allotment
under this section in partnership with any
number of degree granting institutions of
higher education in the State whose combined
full-time enrollment represents less than a
majority of all students attending institutions
of higher education in the State, then the
Federal share of the cost of carrying out the
activities under subsection (d) shall be equal
to 50 percent.
``(ii) If a State applies for an allotment
under this section in partnership with any
number of degree granting institutions of
higher education in the State whose combined
full-time enrollment represents less than a
majority of all students attending institutions
of higher education in the State, and
philanthropic organizations that are located
in, or who provide funding in, the State or
private corporations that are located in, or
who do business in, the State, then the Federal
share of the cost of carrying out the
activities under subsection (d) shall be equal
to 57 percent.
``(iii) If a State applies for an allotment
under this section in partnership with any
number of degree granting institutions of
higher education in the State whose combined
full-time enrollment represents a majority of
all students attending institutions of higher
education in the State, philanthropic
organizations that are located in, or who
provide funding in, the State, and private
corporations that are located in, or who do
business in, the State, then the Federal share
of the cost of carrying out the activities
under subsection (d) shall be equal to 66.66
percent.
``(c) Application for Allotment.--
``(1) In general.--
``(A) Submission.--A State that desires to receive
an 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 the following:
``(i) A description of the State's plan for
using the allotted 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
(d). 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, Federal and non-
Federal funds available for carrying out the
activities under this title. A State that uses
non-Federal funds to create or expand existing
partnerships with nonprofit organizations or
community-based organizations in which such
organizations match State funds for student
scholarships, may apply such matching funds
from such organizations toward fulfilling the
State's matching obligation under this clause.
``(iii) Assurances that early information
and intervention, mentoring, or outreach
programs exist within the State or that there
is a plan to make such programs widely
available.
``(iv) A description of the organizational
structure that the State has in place to
administer the activities under subsection (d),
including a description of the system the State
will use to track the participation of students
who receive grants under this section to degree
completion.
``(v) Assurances that the State has a
method in place, such as acceptance of the
automatic zero expected family contribution
determination described in section 479, to
identify eligible low-income students and award
State grant aid to such students.
``(vi) Assurances that the State will
provide notification to eligible low-income
students that grants under this section are--
``(I) Leveraging Educational
Assistance Partnership Grants; and
``(II) funded by the Federal
Government and the State.
``(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 an
allotment under this section, the State agency shall
apply for the allotment in partnership with--
``(i) not less than 1 public and 1 private
degree granting institution of higher education
that are located in the State; and
``(ii) new or existing early information
and intervention, mentoring, or outreach
programs located in the State.
``(B) Permissive partners.--In addition to applying
for an allotment under this section in partnership with
degree granting institutions of higher education and early information
and intervention, mentoring, or outreach programs, a State agency may
also apply in partnership with philanthropic organizations that are
located in, or who provide funding in, the State and private
corporations that are located in, or who do business in, the State.
``(C) Roles of partners.--
``(i) State agency.--A State agency that is
in a partnership receiving an allotment under
this section--
``(I) shall--
``(aa) serve as the primary
administrative unit for the
partnership;
``(bb) provide or
coordinate matching funds, and
coordinate activities among
partners;
``(cc) encourage each
institution of higher education
in the State to participate in
the partnership;
``(dd) make determinations
and early notifications of
assistance as described under
subsection (d)(2); and
``(ee) annually report to
the Secretary on the
partnership's progress in
meeting the purpose of this
section; and
``(II) may provide early
information and intervention,
mentoring, or outreach programs.
``(ii) Degree granting institutions of
higher education.--A degree granting
institution of higher education that is in a
partnership receiving an allotment under this
section--
``(I) shall--
``(aa) recruit and admit
participating qualified
students and provide such
additional institutional grant
aid to participating students
as agreed to with the State
agency;
``(bb) provide support
services to students who
receive an access and
persistence grant under this
section and are enrolled at
such institution; and
``(cc) assist the State in
the identification of eligible
students and the dissemination
of early notifications of
assistance as agreed to with
the State agency; and
``(II) may provide funding for
early information and intervention,
mentoring, or outreach programs or
provide such services directly.
``(iii) Programs.--An early information and
intervention, mentoring, or outreach program
that is in a partnership receiving an allotment
under this section shall provide direct
services, support, and information to
participating students.
``(iv) Permissive partners.--A
philanthropic organization or private
corporation that is in a partnership receiving
an allotment under this section shall provide
funds for access and persistence grants for
participating students, or provide funds or
support for early information and intervention,
mentoring, or outreach programs.
``(d) Authorized Activities.--
``(1) In general.--
``(A) Establishment of partnership.--Each State
receiving an allotment under this section shall use the
funds to establish a partnership 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 institutions
serving less than a majority of students in the
state.--
``(I) In general.--In the case
where a State receiving an allotment
under this section is in a partnership
described in clause (i) or (ii) of
subsection (b)(2)(B), 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 Federal
or State sponsored grant amount,
college work study amount, and
scholarship amount 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 partnership.
``(II) Cost of attendance.--A State
that has a program, apart from the
partnership 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 up to an amount that is
equal to the average cost of attendance
at 4-year public institutions of higher
education in the State (less any other
Federal or State sponsored grant amount, college work study amount, and
scholarship amount received by the student).
``(ii) Partnership with institutions
serving the majority of students in the
state.--In the case where a State receiving an
allotment under this section is in a
partnership described in subsection
(b)(2)(B)(iii), the amount of an access and
persistence grant awarded by such State shall
be up to an amount that is 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
Federal or State sponsored grant amount,
college work study amount, and scholarship
amount 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 partnership.
``(2) Early notification.--
``(A) In general.--Each State receiving an
allotment under this section shall annually notify low-
income students, such as students who are eligible to
receive a free lunch under the school lunch program
established under the Richard B. Russell National
School Lunch Act, in grade 7 through grade 12 in the
State of their potential eligibility for student
financial assistance, including an access and
persistence grant, to attend an institution of higher
education.
``(B) Content of notice.--The notification under
subparagraph (A)--
``(i) shall include--
``(I) information about early
information and intervention,
mentoring, or outreach programs
available to the student;
``(II) information that a student's
candidacy for an access and persistence
grant is enhanced through participation
in an early information and
intervention, mentoring, or outreach
program;
``(III) an explanation that student
and family eligibility and
participation in other Federal means-
tested programs may indicate
eligibility for an access and
persistence grant and other student aid
programs;
``(IV) a nonbinding estimation of
the total amount of financial aid a
low-income student with a similar
income level may expect to receive,
including an estimation of the amount
of an access and persistence grant and
an estimation of the amount of grants,
loans, and all other available types of
aid from the major Federal and State
financial aid programs;
``(V) an explanation that in order
to be eligible for an access and
persistence grant, at a minimum, a
student shall meet the requirement
under paragraph (3), graduate from
secondary school, and enroll at an
institution of higher education that is
a partner in the partnership;
``(VI) information on any
additional requirements (such as a
student pledge detailing student
responsibilities) that the State may
impose for receipt of an access and
persistence grant under this section;
and
``(VII) instructions on how to
apply for an access and persistence
grant; and
``(ii) may include a disclaimer that access
and persistence grant awards are contingent
upon--
``(I) a determination of the
student's financial eligibility at the
time of the student's enrollment at an
institution of higher education that is
a partner in the partnership;
``(II) annual Federal and State
appropriations; and
``(III) other aid received by the
student at the time of the student's
enrollment at an institution of higher
education that is a partner in the
partnership.
``(3) Eligibility.--In determining which students are
eligible to receive access and persistence grants, the State
shall ensure that each such student meets not less than 2 of
the following criteria and give priority to students meeting
all of the following criteria:
``(A) Has an expected family contribution equal to
zero (as described in section 479) or a comparable
alternative based upon the State's approved criteria in
section 415C(b)(4).
``(B) Is participating in, or has participated in,
a Federal, State, institutional, or community early
information and intervention, mentoring, or outreach
program, as recognized by the State agency
administering activities under this section.
``(C) Has qualified for a free lunch, or at the
State's discretion a reduced price lunch, under the
school lunch program established under the Richard B.
Russell National School Lunch Act.
``(D) Qualifies for the State's maximum
undergraduate award, as authorized under section
415C(b).
``(E) Receives, or has received, an access and
persistence grant under this section.
``(4) Grant award.--Once a student, including those who
have received early notification under paragraph (2) from the
State, applies for admission to an institution that is a
partner in the partnership, files a Free Application for
Federal Student Aid and any related existing State form, and is
determined eligible by the State under paragraph (3), the State
shall--
``(A) issue the student a preliminary access and
persistence grant award certificate with tentative
award amounts; and
``(B) inform the student that payment of the access
and persistence grant award amounts is subject to
certification of enrollment and award eligibility by
the institution of higher education.
``(5) 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 in which the student remains eligible
for assistance under this title, including pursuant to section
484(c), and remains financially eligible as determined by the
State, except that the State may impose reasonable time limits
to baccalaureate degree completion.
``(e) Administrative Cost Allowance.--A State that receives an
allotment under this section may reserve not more than 3.5 percent of
the funds made available annually through the allotment for State
administrative functions required to carry out this section.
``(f) Statutory and Regulatory Relief for Institutions of Higher
Education.--The Secretary may grant, upon the request of an institution
of higher education that is in a partnership described in subsection
(b)(2)(B)(iii) and that receives an allotment under this section, a
waiver for such institution from statutory or regulatory requirements
that inhibit the ability of the institution to successfully and
efficiently participate in the activities of the partnership.
``(g) Applicability Rule.--The provisions of this subpart which are
not inconsistent with this section shall apply to the program
authorized by this section.
``(h) Maintenance of Effort Requirement.--Each State receiving an
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 (d) 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.
``(i) Reports.--Not later than 3 years after the date of enactment
of the Accessing College through Comprehensive Early Outreach, State
Partnerships, and Simplification Act, and annually thereafter, the
Secretary shall submit a report describing the activities and the
impact of the partnerships under this section 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.''.
(d) Continuation and Transition.--During the 2-year period
commencing on the date of enactment of this Act, the Secretary shall
continue to award grants under section 415E of the Higher Education Act
of 1965 (20 U.S.C. 1070c-3a), as such section existed on the day before
the date of enactment of this Act, to States that choose to apply for
grants under such predecessor section.
(e) Implementation and Evaluation.--Section 491(j) of the Higher
Education Act of 1965 (20 U.S.C. 1098(j)) is amended--
(1) in paragraph (4), by striking ``and'' after the
semicolon; and
(2) by striking paragraph (5) and inserting the following:
``(5) not later than 6 months after the date of enactment
of the Accessing College through Comprehensive Early Outreach,
State Partnerships, and Simplification Act, advise the
Secretary on means to implement the activities under section
415E, and the Advisory Committee shall continue to monitor,
evaluate, and make recommendations on the progress of
partnerships that receive allotments under such section; and''.
SEC. 3. SIMPLIFIED NEEDS TEST AND AUTOMATIC ZERO IMPROVEMENTS.
(a) Simplified Needs Test.--Section 479 of the Higher Education Act
of 1965 (20 U.S.C. 1087ss) is amended--
(1) in subsection (b)--
(A) in paragraph (1)--
(i) by striking subparagraph (A)(i) and
inserting the following:
``(i) the student's parents--
``(I) file, or are eligible to
file, a form described in paragraph
(3);
``(II) certify that they are not
required to file an income tax return;
``(III) 1 of whom is a dislocated
worker; or
``(IV) or the student received
benefits at some time during the
previous 24-month period under a means-
tested Federal benefit program as
defined under subsection (d); and'';
and
(ii) by striking subparagraph (B)(i) and
inserting the following:
``(i) the student (and the student's
spouse, if any)--
``(I) files, or is eligible to
file, a form described in paragraph
(3);
``(II) certifies that the student
(and the student's spouse, if any) is
not required to file an income tax
return;
``(III) is a dislocated worker; or
``(IV) received benefits at some
time during the previous 24-month
period under a means-tested Federal
benefit program as defined under
subsection (d); and''; and
(B) in paragraph (3), by striking ``A student or
family files a form described in this subsection, or
subsection (c), as the case may be, if the student or
family, respectively, files'' and inserting ``In the
case of an independent student, the student, or in the
case of a dependent student, the family, files a form
described in this subsection, or subsection (c), as the
case may be, if the student or family, as appropriate,
files'';
(2) in subsection (c)--
(A) in paragraph (1)--
(i) by striking subparagraph (A) and
inserting the following:
``(A) the student's parents--
``(i) file, or are eligible to file, a form
described in subsection (b)(3);
``(ii) certify that they are not required
to file an income tax return;
``(iii) 1 of whom is a dislocated worker;
or
``(iv) or the student received benefits at
some time during the previous 24-month period
under a means-tested Federal benefit program as
defined under subsection (d); and''; and
(ii) by striking subparagraph (B) and
inserting the following:
``(B) the sum of the adjusted gross income of the
parents is less than or equal to $25,000; or'';
(B) in paragraph (2)--
(i) by striking subparagraph (A) and
inserting the following:
``(A) the student (and the student's spouse, if
any)--
``(i) files, or is eligible to file, a form
described in subsection (b)(3);
``(ii) certifies that the student (and the
student's spouse, if any) is not required to
file an income tax return;
``(iii) is a dislocated worker; or
``(iv) received benefits at some time
during the previous 24-month period under a
means-tested Federal benefit program as defined
under subsection (d); and''; and
(ii) by striking subparagraph (B) and
inserting the following:
``(B) the sum of the adjusted gross income of the
student and spouse (if appropriate) is less than or
equal to $25,000.''; and
(C) by striking the flush matter at the end and
inserting the following:
``The Secretary shall annually adjust the income level necessary to
qualify an applicant for the zero expected family contribution. The
income level shall be adjusted according to increases in the Consumer
Price Index, as defined in section 478(f).''; and
(3) by adding at the end the following:
``(d) Definitions.--In this section:
``(1) Dislocated worker.--The term `dislocated worker' has
the same meaning given the term in section 101 of the Workforce
Investment Act of 1998 (29 U.S.C. 2801).
``(2) Means-tested federal benefit program.--The term
`means-tested Federal benefit program' means a mandatory
spending program of the Federal Government in which eligibility
for the program's benefits, or the amount of such benefits, or
both, are determined on the basis of income or resources of the
individual or family seeking the benefit, and includes the
supplemental security income program under title XVI of the
Social Security Act, the food stamp program under the Food
Stamp Act of 1977, and the free and reduced price school lunch
program established under the Richard B. Russell National
School Lunch Act.''.
(b) Discretion of Student Financial Aid Administrators.--Section
479A(a) of the Higher Education Act of 1965 (20 U.S.C. 1087tt(a)) is
amended in the third sentence by inserting ``a family member who is a
dislocated worker (as defined in section 101 of the Workforce
Investment Act of 1998 (29 U.S.C. 2801)),'' after ``recent unemployment
of a family member,''.
SEC. 4. IMPROVING PAPER AND ELECTRONIC FORMS.
(a) Simplified Needs Test.--Section 479(a) of the Higher Education
Act of 1965 (20 U.S.C. 1087ss(a)) is amended by adding at the end the
following:
``(3) Simplified forms.--The Secretary shall make special
efforts to notify families meeting the requirements of
subsection (c) that such families may use the FAFSA-EZ or the
simplified electronic application form established under
section 483(a).''.
(b) Common Financial Aid Form Development and Processing.--Section
483 of the Higher Education Act of 1965 (20 U.S.C. 1090) is amended--
(1) in subsection (a)--
(A) by striking paragraphs (1), (2), and (5);
(B) by redesignating paragraphs (3), (4), (6), and
(7), as paragraphs (7), (8), (9), and (10),
respectively;
(C) by inserting before paragraph (7), as
redesignated by subparagraph (B), the following:
``(1) In general.--The Secretary, in cooperation with
representatives of agencies and organizations involved in
student financial assistance, shall produce, distribute, and
process free of charge common financial reporting forms as
described in this subsection to be used for application and
reapplication to determine the need and eligibility of a
student for financial assistance under parts A through E (other
than subpart 4 of part A). These forms shall be made available
to applicants in both paper and electronic formats and shall be
referred to as the `Free Application for Federal Student Aid'.
``(2) Paper format.--
``(A) In general.--The Secretary shall produce,
distribute, and process common forms in paper format to
meet the requirements of paragraph (1). The Secretary
shall develop a common paper form for applicants who do
not meet the requirements of subparagraph (B).
``(B) FAFSA-EZ.--
``(i) In general.--The Secretary shall
develop and use a simplified paper application
form, to be known as the `FAFSA-EZ', to be used
for applicants meeting the requirements of
section 479(c).
``(ii) Reduced data requirements.--The
FAFSA-EZ shall permit an applicant to submit
for financial assistance purposes, only the
data elements required to make a determination
of whether the applicant meets the requirements
under section 479(c).
``(iii) State data.--The Secretary shall
include on the FAFSA-EZ space for information
that needs to be submitted from the applicant
to be eligible for State financial assistance,
as provided under paragraph (5), except the
Secretary shall not include a State's data if
that State does not permit its applicants for
State assistance to use the FAFSA-EZ.
``(iv) Free availability and processing.--
The provisions of paragraph (6) shall apply to
the FAFSA-EZ, and the data collected by means
of the FAFSA-EZ shall be available to
institutions of higher education, guaranty
agencies, and States in accordance with
paragraph (7).
``(v) Testing.--The Secretary shall conduct
appropriate field testing on the FAFSA-EZ.
``(C) Phasing out the paper form for students who
do not meet the requirements of the automatic zero
expected family contribution.--
``(i) In general.--The Secretary shall make
all efforts to encourage all applicants to
utilize the electronic forms described in
paragraph (3).
``(ii) Phaseout of full fafsa.--Not later
than award year 2009-2010, the Secretary shall
phaseout the long paper form for applicants who
do not qualify for the FAFSA-EZ.
``(iii) Use of savings to address the
digital divide.--The Secretary shall utilize
savings accrued by moving more applicants to
the electronic forms to improve access to the
electronic forms for applicants meeting the
requirements of section 479(c).
``(3) Electronic format.--
``(A) In general.--The Secretary shall produce,
distribute, and process common forms in electronic
format to meet the requirements of paragraph (1). The
Secretary shall develop a common electronic form for
applicants who do not meet the requirements of
subparagraph (B).
``(B) Simplified application: fafsa on the web.--
``(i) In general.--The Secretary shall
develop and use a simplified electronic
application form to be used by applicants
meeting the requirements under subsection (b)
or (c) of section 479.
``(ii) Reduced data requirements.--The
simplified electronic application form shall
permit an applicant to submit for financial
assistance purposes, only the data elements
required to make a determination of whether the
applicant meets the requirements under
subsection (b) or (c) of section 479.
``(iii) State data.--The Secretary shall
include on the simplified electronic
application form space for information that
needs to be submitted from the applicant to be
eligible for State financial assistance, as
provided under paragraph (5), except the
Secretary shall not include a State's data if
that State does not permit its applicants for
State assistance to use the simplified
electronic application form.
``(iv) Free availability and processing.--
The provisions of paragraph (6) shall apply to
the simplified electronic application form, and
the data collected by means of the simplified
electronic application form shall be available
to institutions of higher education, guaranty
agencies, and States in accordance with
paragraph (7).
``(v) Testing.--The Secretary shall conduct
appropriate field testing on the form developed
under this subparagraph.
``(C) Rule of construction.--Nothing in this
subsection shall be construed to prohibit the use of
the form developed by the Secretary pursuant to this
paragraph by an eligible institution, eligible lender,
guaranty agency, State grant agency, private computer
software providers, a consortium thereof, or such other
entities as the Secretary may designate.
``(D) Privacy.--The Secretary shall ensure that
data collection under this paragraph complies with
section 552a of title 5, United States Code, and that
any entity using the electronic version of the forms
developed by the Secretary pursuant to this paragraph
shall maintain reasonable and appropriate
administrative, technical, and physical safeguards to
ensure the integrity and confidentiality of the
information, and to protect against security threats,
or unauthorized uses or disclosures of the information
provided on the electronic version of the form. Data
collected by such electronic version of the form shall
be used only for the application, award, and
administration of aid awarded under this title, State
aid, or aid awarded by eligible institutions or such
entities as the Secretary may designate. No data
collected by such electronic version of the form shall be used for
making final aid awards under this title until such data have been
processed by the Secretary or a contractor or designee of the
Secretary, except as may be permitted under this title.
``(E) Signature.--Notwithstanding any other
provision of this Act, the Secretary may permit an
electronic form to be submitted without a signature, if
a signature is subsequently submitted by the applicant.
``(F) Personal identification numbers authorized.--
The Secretary is authorized to assign to applicants
personal identification numbers--
``(i) to enable the applicants to use such
numbers in lieu of a signature for purposes of
completing a form under this paragraph; and
``(ii) for any purpose determined by the
Secretary to enable the Secretary to carry out
this title.
``(4) Reapplication.--
``(A) In general.--The Secretary shall develop
streamlined reapplication forms and processes,
including both paper and electronic reapplication
processes, consistent with the requirements of this
subsection, for an applicant who applies for financial
assistance under this title in the next succeeding
academic year subsequent to the year in which such
applicant first applied for financial assistance under
this title.
``(B) Updated.--The Secretary shall determine, in
cooperation with States, institutions of higher
education, agencies and organizations involved in
student financial assistance, the data elements that
can be updated from the previous academic year's
application.
``(C) Rule of construction.--Nothing in this title
shall be construed as limiting the authority of the
Secretary to reduce the number of data elements
required of reapplicants.
``(D) Zero family contribution.--Applicants
determined to have a zero family contribution pursuant
to section 479(c) shall not be required to provide any
financial data in a reapplication form, except that
which is necessary to determine eligibility under such
section.
``(5) State requirements.--
``(A) In general.--The Secretary shall include on
the forms developed under this subsection, such State-
specific nonfinancial data items as the Secretary
determines are necessary to meet State requirements for
need-based State aid. Such items shall be selected in
consultation with States to assist in the awarding of
State financial assistance in accordance with the terms
of this subsection. The number of such data items shall
not be less than the number included on the form on
October 7, 1998, unless States notify the Secretary
that they no longer require those data items for the
distribution of State need-based aid.
``(B) Annual review.--The Secretary shall conduct
an annual review process to determine which
nonfinancial data items the States require to award
need-based State aid and other application requirements
that the States may impose.
``(C) Federal register notice.--The Secretary shall
publish on an annual basis a notice in the Federal
Register requiring State agencies to inform the
Secretary--
``(i) if they are unable to permit
applicants to utilize the FAFSA-EZ or the
simplified electronic application form; and
``(ii) of the State-specific nonfinancial
data that the State agency requires for
delivery of State need-based financial aid.
``(D) State notification to the secretary.--
``(i) In general.--Each State shall notify
the Secretary whether it permits an applicant
to file a form described in paragraph (2)(B) or
(3)(B) for purposes of determining eligibility
for State need-based grant aid.
``(ii) No permission.--In the event that a
State does not permit an applicant to file a
form described in paragraph (2)(B) or (3)(B)
for purposes of determining eligibility for
State need-based grant aid--
``(I) the State shall notify the
Secretary if it is not permitted to do
so because of either State law or
because of agency policy; and
``(II) the notification under
subclause (I) shall include an estimate
of the program cost to permit
applicants to complete FAFSA-EZs and
simplified electronic application
forms.
``(iii) Lack of notification by the
state.--If a State does not notify the
Secretary pursuant to clause (i), the Secretary
shall--
``(I) permit residents of that
State to complete a FAFSA-EZ or a
simplified electronic application form;
and
``(II) not require any resident of
that State to complete any nonfinancial
data previously required by that State.
``(E) Restriction.--The Secretary shall not require
applicants to complete any nonfinancial data or
financial data that are not required by the applicant's
State agency, except as may be required for applicants
who use the common paper form.
``(6) Charges to students and parents for use of forms
prohibited.--The common financial reporting forms prescribed by
the Secretary under this subsection shall be produced,
distributed, and processed by the Secretary and no parent or
student shall be charged a fee by the Secretary, a contractor,
a third party servicer or private software provider, or any
other public or private entity for the collection, processing,
or delivery of financial aid through the use of such forms. The
need and eligibility of a student for financial assistance
under parts A through E (other than under subpart 4 of part A)
may only be determined by using a form developed by the
Secretary pursuant to this subsection. No student may receive
assistance under parts A through E (other than under subpart 4
of part A), except by use of a form developed by the Secretary
pursuant to this subsection. No data collected on a paper or
electronic form, worksheet, or other document for which a fee
is charged shall be used to complete the form prescribed under
this subsection. No person, commercial entity, or other entity
shall request, obtain, or utilize an applicant's Personal
Identification Number for purposes of submitting an application
on an applicant's behalf except State agencies that have
entered into an agreement with the Secretary to streamline
applications, eligible institutions, or programs under this
title as permitted by the Secretary.'';
(2) by striking subsection (b) and inserting the following:
``(b) Early Notification of Aid Eligibility.--
``(1) In general.--The Secretary shall make every effort to
provide students with early information about potential
financial aid eligibility.
``(2) Availability of means to determine eligibility.--
``(A) In general.--The Secretary shall provide, in
cooperation with States, institutions of higher
education, agencies, and organizations involved in
student financial assistance, both through a widely
disseminated printed form and the Internet or other
electronic means, a system for individuals to determine
easily, by entering relevant data, approximately the
amount of grant, work-study, and loan assistance for
which an individual would be eligible under this title
upon completion and verification of form under
subsection (a).
``(B) Determination of whether to use simplified
application.--The system established under this
paragraph shall also permit users to determine whether
or not they may apply for aid using a FAFSA-EZ or a
simplified electronic application form under subsection
(a).
``(3) Availability of means to communicate eligibility.--
``(A) Lower-income students.--The Secretary shall--
``(i) make special efforts to notify
students who qualify for a free or reduced
price lunch under the school lunch program
established under the Richard B. Russell
National School Lunch Act, benefits under the
food stamp program under the Food Stamp Act of
1977, or benefits under such programs as the
Secretary shall determine, of such students'
potential eligibility for a maximum Federal
Pell Grant under subpart 1 of part A; and
``(ii) disseminate informational materials
regarding the linkage between eligibility for
means-tested Federal benefit programs and
eligibility for a Federal Pell Grant, as
determined necessary by the Secretary.
``(B) Middle school students.--The Secretary shall,
in cooperation with States, middle schools, programs
under this title that serve middle school students, and
other cooperating independent outreach programs, make
special efforts to notify middle school students of the
availability of financial assistance under this title
and of the approximate amounts of grant, work-study,
and loan assistance an individual would be eligible for
under this title.
``(C) Secondary school students.--The Secretary
shall, in cooperation with States, secondary schools,
programs under this title that serve secondary school
students, and cooperating independent outreach
programs, make special efforts to notify students in
their junior year of secondary school the approximate
amounts of grant, work-study, and loan assistance an
individual would be eligible for under this title upon
completion and verification of an application form
under subsection (a).'';
(3) in subsection (c), by striking ``Labor and Human
Resources'' and inserting ``Health, Education, Labor, and
Pensions'';
(4) by striking subsection (d); and
(5) by redesignating subsection (e) as subsection (d).
(c) Toll-Free Application and Information.--Section 479 of the
Higher Education Act of 1965 (20 U.S.C. 1087ss), as amended by section
3, is further amended by adding at the end the following:
``(e) Toll-Free Application and Information.--The Secretary shall
contract for, or establish, and publicize a toll-free telephone service
to provide an application mechanism and timely and accurate information
to the general public. The information provided shall include specific
instructions on completing the application form for assistance under
this title. Such service shall also include a service accessible by
telecommunications devices for the deaf (TDD's) and shall, in addition
to the services provided for in the previous sentence, refer such
students to the national clearinghouse on postsecondary education that
is authorized under section 685(d)(2)(C) of the Individuals with
Disabilities Education Act. Not later than 2 years after the date of
enactment of the Accessing College through Comprehensive Early
Outreach, State Partnerships, and Simplification Act, the Secretary
shall test and implement a toll-free telephone-based application system
to permit applicants to utilize the FAFSA-EZ or simplified electronic
application form under section 483(a) over such system.''.
(d) Master Calendar.--Section 482(a)(1)(B) of the Higher Education
Act of 1965 (20 U.S.C. 1089) is amended to read as follows:
``(B) by March 1: proposed modifications and
updates pursuant to sections 478 and 483(a)(5)
published in the Federal Register;''.
SEC. 5. ALLOWANCE FOR STATE AND OTHER TAXES.
Section 478(g) of the Higher Education Act of 1965 (20 U.S.C.
1087rr(g)) is amended to read as follows:
``(g) State and Other Tax Allowance.--For each award year after
award year 2004-2005, the Secretary shall publish in the Federal
Register a revised table of State and other tax allowances for the
purpose of sections 475(c)(2), 475(g)(3), 476(b)(2), and 477(b)(2). The
Secretary shall develop such revised table after review of the
Department of the Treasury's Statistics of Income file and
determination of the percentage of income that each State's taxes
represent. Updates shall be phased in proportionately over a period of
time equal to the number of years since the last update.''.
SEC. 6. SUPPORT FOR WORKING STUDENTS.
(a) Dependent Students.--Section 475(g)(2)(D) of the Higher
Education Act of 1965 (20 U.S.C. 1087oo(g)(2)(D)) is amended to read as
follows:
``(D) $9,000;''.
(b) Independent Students Without Dependents Other Than a Spouse.--
Section 476(b)(1)(A)(iv) of the Higher Education Act of 1965 (20 U.S.C.
1087pp(b)(1)(A)(iv)) is amended to read as follows:
``(iv) an income protection allowance of
the following amount (or a successor amount
prescribed by the Secretary under section
478)--
``(I) $10,000 for single students;
``(II) $10,000 for married students
where both are enrolled pursuant to
subsection (a)(2); and
``(III) $13,000 for married
students where 1 is enrolled pursuant
to subsection (a)(2);''.
(c) Independent Students With Dependents Other Than a Spouse.--
Section 477(b)(4) of the Higher Education Act of 1965 (20 U.S.C.
1087qq(b)(4)) is amended to read as follows:
``(4) Income protection allowance.--The income protection
allowance is determined by the following table (or a successor
table prescribed by the Secretary under section 478):
``Income Protection Allowance
----------------------------------------------------------------------------------------------------------------
Number in College
Family Size ----------------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
2 $17,580 $15,230
3 20,940 17,610 $16,260
4 24,950 22,600 20,270 $17,930
5 28,740 26,390 24,060 21,720 $19,390
6 32,950 30,610 28,280 25,940 23,610
----------------------------------------------------------------------------------------------------------------
NOTE: For each additional family member, add $3,280.
For each additional college student, subtract $2,330.''.
SEC. 7. TREATMENT OF PREPAYMENT AND SAVINGS PLANS UNDER STUDENT
FINANCIAL AID NEEDS ANALYSIS.
(a) Definition of Assets.--Section 480(f) of the Higher Education
Act of 1965 (20 U.S.C. 1087vv(f)) is amended--
(1) in paragraph (1), by inserting ``qualified education
benefits (except as provided in paragraph (3)),'' after ``tax
shelters,''; and
(2) by adding at the end the following:
``(3) A qualified education benefit shall not be considered
an asset of a student for purposes of section 475.
``(4) In this subsection, the term `qualified education
benefit' means--
``(A) a program that is described in clause (i) of
section 529(b)(1)(A) of the Internal Revenue Code of
1986 and that meets the requirements of section
529(b)(1)(B) of such Code;
``(B) a State tuition program described in clause
(ii) of section 529(b)(1)(A) of the Internal Revenue
Code of 1986 that meets the requirements of section
529(b)(1)(B) of such Code; and
``(C) a Coverdell education savings account (as
defined in section 530(b)(1) of the Internal Revenue
Code of 1986).''.
(b) Definition of Other Financial Assistance.--Section 480(j) of
the Higher Education Act of 1965 (20 U.S.C. 1087vv(j)) is amended--
(1) in the heading, by striking ``; Tuition Prepayment
Plans'';
(2) by striking paragraph (2); and
(3) by redesignating paragraph (3) as paragraph (2).
(c) Effective Date.--The amendments made by this section shall
apply with respect to determinations of need under part F of title IV
of the Higher Education Act of 1965 (20 U.S.C. 1087kk et seq.) for
academic years beginning on or after July 1, 2005.
SEC. 8. ADVISORY COMMITTEE ON STUDENT FINANCIAL ASSISTANCE.
Section 491 of the Higher Education Act of 1965 (20 U.S.C. 1098),
as amended by section 2, is further amended--
(1) in subsection (a)(2)--
(A) in subparagraph (B), by striking ``and'' after
the semicolon;
(B) in subparagraph (C), by striking the period at
the end and inserting a semicolon; and
(C) by adding at the end the following:
``(D) to provide knowledge and understanding of
early intervention programs and make recommendations
that will result in early awareness by low- and
moderate-income students and families of their
eligibility for assistance under this title, and, to
the extent practicable, their eligibility for other
forms of State and institutional need-based student
assistance; and
``(E) to make recommendations that will expand and
improve partnerships among the Federal Government,
States, institutions, and private entities to increase
the awareness and total amount of need-based student
assistance available to low- and moderate-income
students.'';
(2) in subsection (d)--
(A) in paragraph (6), by striking ``, but nothing
in this section shall authorize the committee to
perform such studies, surveys, or analyses'';
(B) in paragraph (8), by striking ``and'' after the
semicolon;
(C) by redesignating paragraph (9) as paragraph
(10); and
(D) by inserting after paragraph (8) the following:
``(9) monitor the adequacy of total need-based aid
available to low- and moderate-income students from all
sources, assess the implications for access and persistence,
and report those implications annually to Congress and the
Secretary; and'';
(3) in subsection (j), by adding at the end the following:
``(6) monitor and assess implementation of improvements
called for under this title, make recommendations to the
Secretary that ensure the timely design, testing, and
implementation of the improvements, and report annually to
Congress and the Secretary on progress made toward simplifying
overall delivery, reducing data elements and questions,
incorporating the latest technology, aligning Federal, State,
and institutional eligibility, enhancing partnerships, and
improving early awareness of total student aid eligibility for
low- and moderate-income students and families.''; and
(4) in subsection (k), by striking ``2004'' and inserting
``2010''.
<all>