[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2861 Introduced in Senate (IS)]







108th CONGRESS
  2d Session
                                S. 2861

 To prevent abuse of the special allowance subsidies under the Federal 
                     Family Education Loan Program.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 29, 2004

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

_______________________________________________________________________

                                 A BILL


 
 To prevent abuse of the special allowance subsidies under the Federal 
                     Family Education Loan Program.

    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 ``Student Loan Abuse Prevention Act''.

SEC. 2. TERMINATION OF EXCESSIVE ALLOWANCES.

    Section 438(b)(2)(B) of the Higher Education Act of 1965 (20 U.S.C. 
1087-1(b)(2)(B)) is amended--
            (1) in clause (iv), by inserting ``or refunded on or after 
        the date of enactment of the Student Loan Abuse Prevention 
        Act,'' after ``October 1, 1993,''; and
            (2) by adding at the end the following new clause:
                            ``(v) Notwithstanding clauses (i) and (ii), 
                        the quarterly rate of the special allowance 
                        shall be the rate determined under subparagraph 
                        (A), (E), (F), (G), (H), or (I) of this 
                        paragraph, or paragraph (4), as the case may 
                        be, for loans--
                                    ``(I) originated, transferred, or 
                                purchased on or after the date of 
                                enactment of the Student Loan Abuse 
                                Prevention Act;
                                    ``(II) financed by an obligation 
                                that has matured, been retired, or 
                                defeased on or after the date of 
                                enactment of the Student Loan Abuse 
                                Prevention Act;
                                    ``(III) refinanced on or after the 
                                date of enactment of the Student Loan 
                                Abuse Prevention Act, with funds 
                                obtained from a source other than funds 
                                described in subclause (II) of this 
                                clause; or
                                    ``(IV) sold or transferred to any 
                                other holder on or after the date of 
                                enactment of the Student Loan Abuse 
                                Prevention Act.''.

SEC. 3. EXPENDITURE OF SAVINGS ON INCREASED PELL GRANTS.

    From any amounts in the Treasury not otherwise appropriated, there 
is appropriated for each of the fiscal years beginning after the date 
of enactment of this Act an additional amount for the purposes of 
increasing the maximum Pell grant in each Act providing annual 
appropriations for the Pell grant program under subpart 1 of part A of 
title IV of the Higher Education Act of 1965 (20 U.S.C. 1070a) that is 
equal to the amount that is determined annually by the Congressional 
Budget Office to be the amount by which expenditures under section 438 
of such Act (20 U.S.C. 1087-1) are reduced for such fiscal year by the 
enactment of section 2 of this Act.
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