[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2669 Enrolled Bill (ENR)]
H.R.2669
One Hundred Tenth Congress
of the
United States of America
Begun and held at the City of Washington on Thursday,
the fourth day of January, two thousand and seven
An Act
To provide for reconciliation pursuant to section 601 of the concurrent
resolution on the budget for fiscal year 2008.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCES.
(a) Short Title.--This Act may be cited as the ``College Cost
Reduction and Access Act''.
(b) References.--Except as otherwise expressly provided, whenever
in this Act an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provision of the
Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).
(c) Effective Date.--Except as otherwise expressly provided, the
amendments made by this Act shall be effective on October 1, 2007.
TITLE I--GRANTS TO STUDENTS IN ATTENDANCE AT INSTITUTIONS OF HIGHER
EDUCATION
SEC. 101. TUITION SENSITIVITY.
(a) Amendment.--Section 401(b) (20 U.S.C. 1070a(b)) is amended--
(1) by striking paragraph (3); and
(2) by redesignating paragraphs (4) through (9) as paragraphs
(3) through (8), respectively.
(b) Effective Date.--The amendments made by subsection (a) shall be
effective with respect to determinations of Federal Pell Grant amounts
for award years beginning on or after July 1, 2007.
(c) Authorization and Appropriation of Funds.--There is authorized
to be appropriated, and there is appropriated, out of any money in the
Treasury not otherwise appropriated, for the Department of Education to
carry out the amendment made by subsection (a), $11,000,000 for fiscal
year 2008.
SEC. 102. MANDATORY PELL GRANT INCREASES.
(a) Extension of Authority.--Section 401(a) (20 U.S.C. 1070a(a)) is
amended by striking ``fiscal year 2004'' and inserting ``fiscal year
2017''.
(b) Funding for Increases.--Section 401(b) (20 U.S.C. 1070a(b)) is
amended by adding at the end the following new paragraph:
``(9) Additional funds.--
``(A) In general.--There are authorized to be appropriated,
and there are appropriated, to carry out subparagraph (B) of
this paragraph (in addition to any other amounts appropriated
to carry out this section and out of any money in the Treasury
not otherwise appropriated) the following amounts--
``(i) $2,030,000,000 for fiscal year 2008;
``(ii) $2,090,000,000 for fiscal year 2009;
``(iii) $3,030,000,000 for fiscal year 2010;
``(iv) $3,090,000,000 for fiscal year 2011;
``(v) $5,050,000,000 for fiscal year 2012;
``(vi) $105,000,000 for fiscal year 2013;
``(vii) $4,305,000,000 for fiscal year 2014;
``(viii) $4,400,000,000 for fiscal year 2015;
``(ix) $4,600,000,000 for fiscal year 2016; and
``(x) $4,900,000,000 for fiscal year 2017.
``(B) Increase in federal pell grants.--The amounts made
available pursuant to subparagraph (A) of this paragraph shall
be used to increase the amount of the maximum Federal Pell
Grant for which a student shall be eligible during an award
year, as specified in the last enacted appropriation Act
applicable to that award year, by--
``(i) $490 for each of the award years 2008-2009 and
2009-2010;
``(ii) $690 for each of the award years 2010-2011 and
2011-2012; and
``(iii) $1,090 for award year 2012-2013.
``(C) Eligibility.--The Secretary shall only award an
increased amount of a Federal Pell Grant under this section for
any award year pursuant to the provisions of this paragraph to
students who qualify for a Federal Pell Grant award under the
maximum grant award enacted in the annual appropriation Act for
such award year without regard to the provisions of this
paragraph.
``(D) Formula otherwise unaffected.--Except as provided in
subparagraphs (B) and (C), nothing in this paragraph shall be
construed to alter the requirements of this section, or
authorize the imposition of additional requirements, for the
determination and allocation of Federal Pell Grants under this
section.
``(E) Ratable increases and decreases.--The amounts
specified in subparagraph (B) shall be ratably increased or
decreased to the extent that funds available under subparagraph
(A) exceed or are less than (respectively) the amount required
to provide the amounts specified in subparagraph (B).
``(F) Use of fiscal year funds for award years.--The
amounts made available by subparagraph (A) for any fiscal year
shall be available and remain available for use under
subparagraph (B) for the award year that begins in such fiscal
year.''.
SEC. 103. UPWARD BOUND.
Section 402C is further amended by adding at the end the following
new subsection:
``(f) Additional Funds.--
``(1) Authorization and appropriation.--There are authorized to
be appropriated, and there are appropriated to the Secretary, from
funds not otherwise appropriated, $57,000,000 for each of the
fiscal years 2008 through 2011 to carry out paragraph (2), except
that any amounts that remain unexpended for such purpose for each
of such fiscal years may be available for technical assistance and
administration costs for the Upward Bound program. The authority to
award grants under this subsection shall expire at the end of
fiscal year 2011.
``(2) Use of funds.--The amounts made available by paragraph
(1) shall be available to provide assistance to all Upward Bound
projects that did not receive assistance in fiscal year 2007 and
that have a grant score above 70. Such assistance shall be made
available in the form of 4-year grants.''.
SEC. 104. TEACH GRANTS.
Part A of title IV (20 U.S.C. 1070 et seq.) is amended by adding at
the end the following new subpart:
``Subpart 9--TEACH Grants
``SEC. 420L. DEFINITIONS.
``For the purposes of this subpart:
``(1) Eligible institution.--The term `eligible institution'
means an institution of higher education, as defined in section
102, that the Secretary determines--
``(A) provides high quality teacher preparation and
professional development services, including extensive clinical
experience as a part of pre-service preparation;
``(B) is financially sound;
``(C) provides pedagogical course work, or assistance in
the provision of such coursework, including the monitoring of
student performance, and formal instruction related to the
theory and practices of teaching; and
``(D) provides supervision and support services to
teachers, or assistance in the provision of such services,
including mentoring focused on developing effective teaching
skills and strategies.
``(2) Post-baccalaureate.--The term `post-baccalaureate' means
a program of instruction for individuals who have completed a
baccalaureate degree, that does not lead to a graduate degree, and
that consists of courses required by a State in order for a teacher
candidate to receive a professional certification or licensing
credential that is required for employment as a teacher in an
elementary school or secondary school in that State, except that
such term shall not include any program of instruction offered by
an eligible institution that offers a baccalaureate degree in
education.
``(3) Teacher candidate.--The term `teacher candidate' means a
student or teacher described in subparagraph (A) or (B) of section
420N(a)(2).
``SEC. 420M. PROGRAM ESTABLISHED.
``(a) Program Authority.--
``(1) Payments required.--The Secretary shall pay to each
eligible institution such sums as may be necessary to pay to each
teacher candidate who files an application and agreement in
accordance with section 420N, and who qualifies under paragraph (2)
of section 420N(a), a TEACH Grant in the amount of $4,000 for each
academic year during which that teacher candidate is in attendance
at the institution.
``(2) References.--Grants made under paragraph (1) shall be
known as `Teacher Education Assistance for College and Higher
Education Grants' or `TEACH Grants'.
``(b) Payment Methodology.--
``(1) Prepayment.--Not less than 85 percent of any funds
provided to an eligible institution under subsection (a) shall be
advanced to the eligible institution prior to the start of each
payment period and shall be based upon an amount requested by the
institution as needed to pay teacher candidates until such time as
the Secretary determines and publishes in the Federal Register with
an opportunity for comment, an alternative payment system that
provides payments to institutions in an accurate and timely manner,
except that this sentence shall not be construed to limit the
authority of the Secretary to place an institution on a
reimbursement system of payment.
``(2) Direct payment.--Nothing in this section shall be
interpreted to prohibit the Secretary from paying directly to
teacher candidates, in advance of the beginning of the academic
term, an amount for which teacher candidates are eligible, in cases
where the eligible institution elects not to participate in the
disbursement system required by paragraph (1).
``(3) Distribution of grants to teacher candidates.--Payments
under this subpart shall be made, in accordance with regulations
promulgated by the Secretary for such purpose, in such manner as
will best accomplish the purposes of this subpart. Any disbursement
allowed to be made by crediting the teacher candidate's account
shall be limited to tuition and fees and, in the case of
institutionally-owned housing, room and board. The teacher
candidate may elect to have the institution provide other such
goods and services by crediting the teacher candidate's account.
``(c) Reductions in Amount.--
``(1) Part-time students.--In any case where a teacher
candidate attends an eligible institution on less than a full-time
basis (including a teacher candidate who attends an eligible
institution on less than a half-time basis) during any academic
year, the amount of a grant under this subpart for which that
teacher candidate is eligible shall be reduced in proportion to the
degree to which that teacher candidate is not attending on a full-
time basis, in accordance with a schedule of reductions established
by the Secretary for the purposes of this subpart, computed in
accordance with this subpart. Such schedule of reductions shall be
established by regulation and published in the Federal Register in
accordance with section 482 of this Act.
``(2) No exceeding cost.--The amount of a grant awarded under
this subpart, in combination with Federal assistance and other
student assistance, shall not exceed the cost of attendance (as
defined in section 472) at the eligible institution at which that
teacher candidate is in attendance. If, with respect to any teacher
candidate for any academic year, it is determined that the amount
of a TEACH Grant exceeds the cost of attendance for that year, the
amount of the TEACH Grant shall be reduced until such grant does
not exceed the cost of attendance at the eligible institution.
``(d) Period of Eligibility for Grants.--
``(1) Undergraduate and post-baccalaureate students.--The
period during which an undergraduate or post-baccalaureate student
may receive grants under this subpart shall be the period required
for the completion of the first undergraduate baccalaureate or
post-baccalaureate course of study being pursued by the teacher
candidate at the eligible institution at which the teacher
candidate is in attendance, except that--
``(A) any period during which the teacher candidate is
enrolled in a noncredit or remedial course of study as
described in paragraph (3) shall not be counted for the purpose
of this paragraph; and
``(B) the total amount that a teacher candidate may receive
under this subpart for undergraduate or post-baccalaureate
study shall not exceed $16,000.
``(2) Graduate students.--The period during which a graduate
student may receive grants under this subpart shall be the period
required for the completion of a master's degree course of study
pursued by the teacher candidate at the eligible institution at
which the teacher candidate is in attendance, except that the total
amount that a teacher candidate may receive under this subpart for
graduate study shall not exceed $8,000.
``(3) Remedial course; study abroad.--Nothing in this section
shall be construed to exclude from eligibility courses of study
which are noncredit or remedial in nature (including courses in
English language acquisition) which are determined by the eligible
institution to be necessary to help the teacher candidate be
prepared for the pursuit of a first undergraduate baccalaureate or
post-baccalaureate degree or certificate or, in the case of courses
in English language instruction, to be necessary to enable the
teacher candidate to utilize already existing knowledge, training,
or skills. Nothing in this section shall be construed to exclude
from eligibility programs of study abroad that are approved for
credit by the home institution at which the teacher candidate is
enrolled.
``SEC. 420N. APPLICATIONS; ELIGIBILITY.
``(a) Applications; Demonstration of Eligibility.--
``(1) Filing required.--The Secretary shall periodically set
dates by which teacher candidates shall file applications for
grants under this subpart. Each teacher candidate desiring a grant
under this subpart for any year shall file an application
containing such information and assurances as the Secretary may
determine necessary to enable the Secretary to carry out the
functions and responsibilities of this subpart.
``(2) Demonstration of teach grant eligibility.--Each
application submitted under paragraph (1) shall contain such
information as is necessary to demonstrate that--
``(A) if the applicant is an enrolled student--
``(i) the student is an eligible student for purposes
of section 484;
``(ii) the student--
``(I) has a grade point average that is determined,
under standards prescribed by the Secretary, to be
comparable to a 3.25 average on a zero to 4.0 scale,
except that, if the student is in the first year of a
program of undergraduate education, such grade point
average shall be determined on the basis of the
student's cumulative secondary school grade point
average; or
``(II) displayed high academic aptitude by
receiving a score above the 75th percentile on at least
one of the batteries in an undergraduate, post-
baccalaureate, or graduate school admissions test; and
``(iii) the student is completing coursework and other
requirements necessary to begin a career in teaching, or
plans to complete such coursework and requirements prior to
graduating; or
``(B) if the applicant is a current or prospective teacher
applying for a grant to obtain a graduate degree--
``(i) the applicant is a teacher or a retiree from
another occupation with expertise in a field in which there
is a shortage of teachers, such as mathematics, science,
special education, English language acquisition, or another
high-need subject; or
``(ii) the applicant is or was a teacher who is using
high-quality alternative certification routes, such as
Teach for America, to get certified.
``(b) Agreements to Serve.--Each application under subsection (a)
shall contain or be accompanied by an agreement by the applicant that--
``(1) the applicant will--
``(A) serve as a full-time teacher for a total of not less
than 4 academic years within 8 years after completing the
course of study for which the applicant received a TEACH Grant
under this subpart;
``(B) teach in a school described in section 465(a)(2)(A);
``(C) teach in any of the following fields--
``(i) mathematics;
``(ii) science;
``(iii) a foreign language;
``(iv) bilingual education;
``(v) special education;
``(vi) as a reading specialist; or
``(vii) another field documented as high-need by the
Federal Government, State government, or local educational
agency, and approved by the Secretary;
``(D) submit evidence of such employment in the form of a
certification by the chief administrative officer of the school
upon completion of each year of such service; and
``(E) comply with the requirements for being a highly
qualified teacher as defined in section 9101 of the Elementary
and Secondary Education Act of 1965; and
``(2) in the event that the applicant is determined to have
failed or refused to carry out such service obligation, the sum of
the amounts of any TEACH Grants received by such applicant will be
treated as a loan and collected from the applicant in accordance
with subsection (c) and the regulations thereunder.
``(c) Repayment for Failure to Complete Service.--In the event that
any recipient of a grant under this subpart fails or refuses to comply
with the service obligation in the agreement under subsection (b), the
sum of the amounts of any TEACH Grants received by such recipient
shall, upon a determination of such a failure or refusal in such
service obligation, be treated as a Federal Direct Unsubsidized
Stafford Loan under part D of title IV, and shall be subject to
repayment, together with interest thereon accruing from the date of the
grant award, in accordance with terms and conditions specified by the
Secretary in regulations under this subpart.
``SEC. 420O. PROGRAM PERIOD AND FUNDING.
``Beginning on July 1, 2008, there shall be available to the
Secretary to carry out this subpart, from funds not otherwise
appropriated, such sums as may be necessary to provide TEACH Grants in
accordance with this subpart to each eligible applicant.''.
TITLE II--STUDENT LOAN BENEFITS, TERMS, AND CONDITIONS
SEC. 201. INTEREST RATE REDUCTIONS.
(a) FFEL Interest Rates.--
(1) Section 427A(l) (20 U.S.C. 1077a(l)) is amended by adding
at the end the following new paragraph:
``(4) Reduced rates for undergraduate subsidized loans.--
Notwithstanding subsection (h) and paragraph (1) of this
subsection, with respect to any loan to an undergraduate student
made, insured, or guaranteed under this part (other than a loan
made pursuant to section 428B, 428C, or 428H) for which the first
disbursement is made on or after July 1, 2006, and before July 1,
2012, the applicable rate of interest shall be as follows:
``(A) For a loan for which the first disbursement is made
on or after July 1, 2006, and before July 1, 2008, 6.8 percent
on the unpaid principal balance of the loan.
``(B) For a loan for which the first disbursement is made
on or after July 1, 2008, and before July 1, 2009, 6.0 percent
on the unpaid principal balance of the loan.
``(C) For a loan for which the first disbursement is made
on or after July 1, 2009, and before July 1, 2010, 5.6 percent
on the unpaid principal balance of the loan.
``(D) For a loan for which the first disbursement is made
on or after July 1, 2010, and before July 1, 2011, 4.5 percent
on the unpaid principal balance of the loan.
``(E) For a loan for which the first disbursement is made
on or after July 1, 2011, and before July 1, 2012, 3.4 percent
on the unpaid principal balance of the loan.''.
(2) Special allowance cross reference.--Section
438(b)(2)(I)(ii)(II) (20 U.S.C. 1087-1(b)(2)(I)(ii)(II)) is amended
by striking ``section 427A(l)(1)'' and inserting ``section
427A(l)(1) or (l)(4)''.
(b) Direct Loan Interest Rates.--Section 455(b)(7) (20 U.S.C.
1087e(b)(7)) is amended by adding at the end the following new
subparagraph:
``(D) Reduced rates for undergraduate fdsl.--
Notwithstanding the preceding paragraphs of this subsection and
subparagraph (A) of this paragraph, for Federal Direct Stafford
Loans made to undergraduate students for which the first
disbursement is made on or after July 1, 2006, and before July
1, 2012, the applicable rate of interest shall be as follows:
``(i) For a loan for which the first disbursement is
made on or after July 1, 2006, and before July 1, 2008, 6.8
percent on the unpaid principal balance of the loan.
``(ii) For a loan for which the first disbursement is
made on or after July 1, 2008, and before July 1, 2009, 6.0
percent on the unpaid principal balance of the loan.
``(iii) For a loan for which the first disbursement is
made on or after July 1, 2009, and before July 1, 2010, 5.6
percent on the unpaid principal balance of the loan.
``(iv) For a loan for which the first disbursement is
made on or after July 1, 2010, and before July 1, 2011, 4.5
percent on the unpaid principal balance of the loan.
``(v) For a loan for which the first disbursement is
made on or after July 1, 2011, and before July 1, 2012, 3.4
percent on the unpaid principal balance of the loan.''.
SEC. 202. STUDENT LOAN DEFERMENT FOR CERTAIN MEMBERS OF THE ARMED
FORCES.
(a) Federal Family Education Loans.--Section 428(b)(1)(M)(iii) (20
U.S.C. 1078(b)(1)(M)(iii)) is amended--
(1) in the matter preceding subclause (I), by striking ``not in
excess of 3 years'';
(2) in subclause (II), by striking ``; or'' and inserting a
comma; and
(3) by adding at the end the following:
``and for the 180-day period following the demobilization
date for the service described in subclause (I) or (II);
or''.
(b) Direct Loans.--Section 455(f)(2)(C) (20 U.S.C. 1087e(f)(2)(C))
is amended--
(1) in the matter preceding clause (i), by striking ``not in
excess of 3 years'';
(2) in clause (ii), by striking ``; or'' and inserting a comma;
and
(3) by adding at the end the following:
``and for the 180-day period following the demobilization date
for the service described in clause (i) or (ii); or''.
(c) Perkins Loans.--Section 464(c)(2)(A)(iii) (20 U.S.C.
1087dd(c)(2)(A)(iii)) is amended--
(1) in the matter preceding subclause (I), by striking ``not in
excess of 3 years'';
(2) in subclause (II), by striking the semicolon and inserting
a comma; and
(3) by adding at the end the following:
``and for the 180-day period following the demobilization date for the
service described in subclause (I) or (II);''.
(d) Applicability.--Section 8007(f) of the Higher Education
Reconciliation Act of 2005 (20 U.S.C. 1078 note) is amended by striking
``loans for which'' and all that follows through the period at the end
and inserting ``all loans under title IV of the Higher Education Act of
1965.''.
SEC. 203. INCOME-BASED REPAYMENT.
(a) Amendment.--Part G of title IV (20 U.S.C. 1088 et seq.) is
amended by adding at the end the following:
``SEC. 493C. INCOME-BASED REPAYMENT.
``(a) Definitions.--In this section:
``(1) Excepted plus loan.--The term `excepted PLUS loan' means
a loan under section 428B, or a Federal Direct PLUS Loan, that is
made, insured, or guaranteed on behalf of a dependent student.
``(2) Excepted consolidation loan.--The term `excepted
consolidation loan' means a consolidation loan under section 428C,
or a Federal Direct Consolidation Loan, if the proceeds of such
loan were used to the discharge the liability on an excepted PLUS
loan.
``(3) Partial financial hardship.--The term `partial financial
hardship', when used with respect to a borrower, means that for
such borrower--
``(A) the annual amount due on the total amount of loans
made, insured, or guaranteed under part B or D (other than an
excepted PLUS loan or excepted consolidation loan) to a
borrower as calculated under the standard repayment plan under
section 428(b)(9)(A)(i) or 455(d)(1)(A), based on a 10-year
repayment period; exceeds
``(B) 15 percent of the result obtained by calculating, on
at least an annual basis, the amount by which--
``(i) the borrower's, and the borrower's spouse's (if
applicable), adjusted gross income; exceeds
``(ii) 150 percent of the poverty line applicable to
the borrower's family size as determined under section
673(2) of the Community Services Block Grant Act (42 U.S.C.
9902(2)).
``(b) Income-Based Repayment Program Authorized.--Notwithstanding
any other provision of this Act, the Secretary shall carry out a
program under which--
``(1) a borrower of any loan made, insured, or guaranteed under
part B or D (other than an excepted PLUS loan or excepted
consolidation loan) who has a partial financial hardship (whether
or not the borrower's loan has been submitted to a guaranty agency
for default aversion or is already in default) may elect, during
any period the borrower has the partial financial hardship, to have
the borrower's aggregate monthly payment for all such loans not
exceed the result described in subsection (a)(3)(B) divided by 12;
``(2) the holder of such a loan shall apply the borrower's
monthly payment under this subsection first toward interest due on
the loan, next toward any fees due on the loan, and then toward the
principal of the loan;
``(3) any interest due and not paid under paragraph (2)--
``(A) shall, on subsidized loans, be paid by the Secretary
for a period of not more than 3 years after the date of the
borrower's election under paragraph (1), except that such
period shall not include any period during which the borrower
is in deferment due to an economic hardship described in
section 435(o); and
``(B) be capitalized--
``(i) in the case of a subsidized loan, subject to
subparagraph (A), at the time the borrower--
``(I) ends the election to make income-based
repayment under this subsection; or
``(II) begins making payments of not less than the
amount specified in paragraph (6)(A); or
``(ii) in the case of an unsubsidized loan, at the time
the borrower--
``(I) ends the election to make income-based
repayment under this subsection; or
``(II) begins making payments of not less than the
amount specified in paragraph (6)(A);
``(4) any principal due and not paid under paragraph (2) shall
be deferred;
``(5) the amount of time the borrower makes monthly payments
under paragraph (1) may exceed 10 years;
``(6) if the borrower no longer has a partial financial
hardship or no longer wishes to continue the election under this
subsection, then--
``(A) the maximum monthly payment required to be paid for
all loans made to the borrower under part B or D (other than an
excepted PLUS loan or excepted consolidation loan) shall not
exceed the monthly amount calculated under section
428(b)(9)(A)(i) or 455(d)(1)(A), based on a 10-year repayment
period, when the borrower first made the election described in
this subsection; and
``(B) the amount of time the borrower is permitted to repay
such loans may exceed 10 years;
``(7) the Secretary shall repay or cancel any outstanding
balance of principal and interest due on all loans made under part
B or D (other than a loan under section 428B or a Federal Direct
PLUS Loan) to a borrower who--
``(A) at any time, elected to participate in income-based
repayment under paragraph (1); and
``(B) for a period of time prescribed by the Secretary, not
to exceed 25 years, meets 1 or more of the following
requirements--
``(i) has made reduced monthly payments under paragraph
(1) or paragraph (6);
``(ii) has made monthly payments of not less than the
monthly amount calculated under section 428(b)(9)(A)(i) or
455(d)(1)(A), based on a 10-year repayment period, when the
borrower first made the election described in this
subsection;
``(iii) has made payments of not less than the payments
required under a standard repayment plan under section
428(b)(9)(A)(i) or 455(d)(1)(A) with a repayment period of
10 years;
``(iv) has made payments under an income-contingent
repayment plan under section 455(d)(1)(D); or
``(v) has been in deferment due to an economic hardship
described in section 435(o);
``(8) a borrower who is repaying a loan made under part B or D
pursuant to income-based repayment may elect, at any time, to
terminate repayment pursuant to income-based repayment and repay
such loan under the standard repayment plan; and
``(9) the special allowance payment to a lender calculated
under section 438(b)(2)(I), when calculated for a loan in repayment
under this section, shall be calculated on the principal balance of
the loan and on any accrued interest unpaid by the borrower in
accordance with this section.
``(c) Eligibility Determinations.--The Secretary shall establish
procedures for annually determining the borrower's eligibility for
income-based repayment, including verification of a borrower's annual
income and the annual amount due on the total amount of loans made,
insured, or guaranteed under part B or D (other than an excepted PLUS
loan or excepted consolidation loan), and such other procedures as are
necessary to effectively implement income-based repayment under this
section. The Secretary shall consider, but is not limited to, the
procedures established in accordance with section 455(e)(1) or in
connection with income sensitive repayment schedules under section
428(b)(9)(A)(iii) or 428C(b)(1)(E).''.
(b) Conforming Amendments.--
(1) Section 428C (20 U.S.C. 1078-3) is amended--
(A) in subsection (a)(3)(B)(i), by amending subclause (V)
to read as follows:
``(V) an individual may obtain a subsequent
consolidation loan under section 455(g) only--
``(aa) for the purposes of obtaining an income
contingent repayment plan, and only if the loan has
been submitted to the guaranty agency for default
aversion; or
``(bb) for the purposes of using the public
service loan forgiveness program under section
455(m).'';
(B) in the first sentence of subsection (b)(5), by
inserting ``or chooses to obtain a consolidation loan for the
purposes of using the public service loan forgiveness program
offered under section 455(m),'' after ``from such a lender,'';
and
(C) in the second sentence of such subsection, by inserting
before the period the following: ``, except that if a borrower
intends to be eligible to use the public service loan
forgiveness program under section 455(m), such loan shall be
repaid using one of the repayment options described in section
455(m)(1)(A)''.
(2) Section 428C (20 U.S.C. 1078-3) (as amended by paragraph
(1) of this subsection) is amended--
(A) in subsection (a)(3)(B)(i)(V)(aa)--
(i) by striking ``an income contingent repayment
plan,'' and inserting ``income contingent repayment or
income-based repayment,''; and
(ii) by inserting ``or if the loan is already in
default'' before the semicolon;
(B) in the first sentence of subsection (b)(5), by
inserting ``or income-based repayment terms'' after ``income-
sensitive repayment terms''; and
(C) in the second sentence of such subsection, by inserting
``, pursuant to income-based repayment under section 493C,''
after ``part D of this title''.
(3) Section 455(d)(1)(D) (20 U.S.C. 1087e(d)(1)(D)) is amended
by inserting ``made on behalf of a dependent student'' after ``PLUS
loan''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall be effective on July 1, 2009.
(2) Exception.--The amendments made by subsection (b)(1) shall
be effective on July 1, 2008.
SEC. 204. DEFERRAL OF LOAN REPAYMENT FOLLOWING ACTIVE DUTY.
Part G of title IV is further amended by adding after section 493C
(as added by section 203 of this Act) the following new section:
``SEC. 493D. DEFERRAL OF LOAN REPAYMENT FOLLOWING ACTIVE DUTY.
``(a) Deferral of Loan Repayment Following Active Duty.--In
addition to any deferral of repayment of a loan made under this title
pursuant to section 428(b)(1)(M)(iii), 455(f)(2)(C), or
464(c)(2)(A)(iii), a borrower of a loan under this title who is a
member of the National Guard or other reserve component of the Armed
Forces of the United States, or a member of such Armed Forces in a
retired status, is called or ordered to active duty, and is enrolled,
or was enrolled within six months prior to the activation, in a program
of instruction at an eligible institution, shall be eligible for a
deferment during the 13 months following the conclusion of such
service, except that a deferment under this subsection shall expire
upon the borrower's return to enrolled student status.
``(b) Active Duty.--Notwithstanding section 481(d), in this
section, the term `active duty' has the meaning given such term in
section 101(d)(1) of title 10, United States Code, except that such
term--
``(1) does not include active duty for training or attendance
at a service school; but
``(2) includes, in the case of members of the National Guard,
active State duty.''.
SEC. 205. MAXIMUM REPAYMENT PERIOD.
Section 455(e) (20 U.S.C. 1087e(e)) is amended by adding at the end
the following:
``(7) Maximum repayment period.--In calculating the extended
period of time for which an income contingent repayment plan under
this subsection may be in effect for a borrower, the Secretary
shall include all time periods during which a borrower of loans
under part B, part D, or part E--
``(A) is not in default on any loan that is included in the
income contingent repayment plan; and
``(B)(i) is in deferment due to an economic hardship
described in section 435(o);
``(ii) makes monthly payments under paragraph (1) or (6) of
section 493C(b);
``(iii) makes monthly payments of not less than the monthly
amount calculated under section 428(b)(9)(A)(i) or subsection
(d)(1)(A), based on a 10-year repayment period, when the
borrower first made the election described in section
493C(b)(1);
``(iv) makes payments of not less than the payments
required under a standard repayment plan under section
428(b)(9)(A)(i) or subsection (d)(1)(A) with a repayment period
of 10 years; or
``(v) makes payments under an income contingent repayment
plan under subsection (d)(1)(D).''.
TITLE III--FEDERAL FAMILY EDUCATION LOAN PROGRAM
SEC. 301. GUARANTY AGENCY COLLECTION RETENTION.
Clause (ii) of section 428(c)(6)(A) (20 U.S.C. 1078(c)(6)(A)(ii))
is amended to read as follows:
``(ii) an amount equal to 24 percent of such payments
for use in accordance with section 422B, except that--
``(I) beginning October 1, 2003 and ending
September 30, 2007, this clause shall be applied by
substituting `23 percent' for `24 percent'; and
``(II) beginning October 1, 2007, this clause shall
be applied by substituting `16 percent' for `24
percent'.''.
SEC. 302. ELIMINATION OF EXCEPTIONAL PERFORMER STATUS FOR LENDERS.
(a) Elimination of Status.--Part B of title IV (20 U.S.C. 1071 et
seq.) is amended by striking section 428I (20 U.S.C. 1078-9).
(b) Conforming Amendments.--Part B of title IV is further amended--
(1) in section 428(c)(1) (20 U.S.C. 1078(c)(1))--
(A) by striking subparagraph (D); and
(B) by redesignating subparagraphs (E) through (H) as
subparagraphs (D) through (G), respectively; and
(2) in section 438(b)(5) (20 U.S.C. 1087-1(b)(5)), by striking
the matter following subparagraph (B).
(c) Effective Date.--The amendments made by subsections (a) and (b)
shall be effective on October 1, 2007, except that section 428I of the
Higher Education Act of 1965 (as in effect on the day before the date
of enactment of this Act) shall apply to eligible lenders that received
a designation under subsection (a) of such section prior to October 1,
2007, for the remainder of the year for which the designation was made.
SEC. 303. REDUCTION OF LENDER INSURANCE PERCENTAGE.
(a) Amendment.--Subparagraph (G) of section 428(b)(1) (20 U.S.C.
1078(b)(1)(G)) is amended to read as follows:
``(G) insures 95 percent of the unpaid principal of loans
insured under the program, except that--
``(i) such program shall insure 100 percent of the
unpaid principal of loans made with funds advanced pursuant
to section 428(j) or 439(q); and
``(ii) notwithstanding the preceding provisions of this
subparagraph, such program shall insure 100 percent of the
unpaid principal amount of exempt claims as defined in
subsection (c)(1)(G);''.
(b) Effective Date.--The amendment made by subsection (a) shall be
effective on October 1, 2012, and shall apply with respect to loans
made on or after such date.
SEC. 304. DEFINITIONS.
Section 435 (20 U.S.C. 1085) is amended--
(1) in subsection (o)(1)--
(A) in subparagraph (A)(ii)--
(i) by striking ``100 percent of the poverty line for a
family of 2'' and inserting ``150 percent of the poverty
line applicable to the borrower's family size''; and
(ii) by inserting ``or'' after the semicolon;
(B) by striking subparagraph (B); and
(C) by redesignating subparagraph (C) as subparagraph (B);
(2) in subsection (o)(2), by striking ``(1)(C)'' and inserting
``(1)(B)''; and
(3) by adding at the end the following:
``(p) Eligible Not-for-Profit Holder.--
``(1) Definition.--Subject to the limitations in paragraph (2)
and the prohibition in paragraph (3), the term `eligible not-for-
profit holder' means an eligible lender under subsection (d)
(except for an eligible lender described in subsection (d)(1)(E))
that requests a special allowance payment under section
438(b)(2)(I)(vi)(II) or a payment under section 771 and that is--
``(A) a State, or a political subdivision, authority,
agency, or other instrumentality thereof, including such
entities that are eligible to issue bonds described in section
1.103-1 of title 26, Code of Federal Regulations, or section
144(b) of the Internal Revenue Code of 1986;
``(B) an entity described in section 150(d)(2) of such Code
that has not made the election described in section 150(d)(3)
of such Code;
``(C) an entity described in section 501(c)(3) of such
Code; or
``(D) a trustee acting as an eligible lender on behalf of a
State, political subdivision, authority, agency,
instrumentality, or other entity described in subparagraph (A),
(B), or (C).
``(2) Limitations.--
``(A) Existing on date of enactment.--
``(i) In general.--An eligible lender shall not be an
eligible not-for-profit holder under this Act unless such
lender--
``(I) was a State, political subdivision,
authority, agency, instrumentality, or other entity
described in paragraph (1)(A), (B), or (C) that was, on
the date of the enactment of the College Cost Reduction
and Access Act, acting as an eligible lender under
subsection (d) (other than an eligible lender described
in subsection (d)(1)(E)); or
``(II) is a trustee acting as an eligible lender
under this Act on behalf of such a State, political
subdivision, authority, agency, instrumentality, or
other entity described in subclause (I) of this clause.
``(ii) Exception.--Notwithstanding clause (i), a State
may elect, in accordance with regulations of the Secretary,
to waive the requirements this subparagraph for a new not-
for-profit holder determined by the State to be necessary
to carry out a public purpose of such State, except that a
State may not make such election with respect the
requirements of clause (i)(II).
``(B) No for-profit ownership or control.--No political
subdivision, authority, agency, instrumentality, or other
entity described in paragraph (1)(A), (B), or (C) shall be an
eligible not-for-profit holder under this Act if such entity is
owned or controlled, in whole or in part, by a for-profit
entity.
``(C) Sole ownership of loans and income.--No State,
political subdivision, authority, agency, instrumentality, or
other entity described in paragraph (1)(A), (B), or (C) shall
be an eligible not-for-profit holder under this Act with
respect to any loan, or income from any loan, unless the State,
political subdivision, authority, agency, instrumentality, or
other entity described in paragraph (1)(A), (B), or (C) is the
sole owner of the beneficial interest in such loan and the
income from such loan.
``(D) Trustee compensation limitations.--A trustee
described in paragraph (1)(D) shall not receive compensation as
consideration for acting as an eligible lender on behalf of an
entity described in described in paragraph (1)(A), (B), or (C)
in excess of reasonable and customary fees.
``(E) Rule of construction.--For purposes of subparagraphs
(B), (C), and (D) of this paragraph, a State, political
subdivision, authority, agency, instrumentality, or other
entity described in paragraph (1)(A), (B), or (C) shall not--
``(i) be deemed to be owned or controlled, in whole or
in part, by a for-profit entity, or
``(ii) lose its status as the sole owner of a
beneficial interest in a loan and the income from a loan by
that political subdivision, authority, agency,
instrumentality, or other entity,
by granting a security interest in, or otherwise pledging as
collateral, such loan, or the income from such loan, to secure
a debt obligation in the operation of an arrangement described
in paragraph (1)(D).
``(3) Prohibition.--In the case of a loan for which the special
allowance payment is calculated under section 438(b)(2)(I)(vi)(II)
and that is sold by the eligible not-for-profit holder holding the
loan to an entity that is not an eligible not-for-profit holder
under this Act, the special allowance payment for such loan shall,
beginning on the date of the sale, no longer be calculated under
section 438(b)(2)(I)(vi)(II) and shall be calculated under section
438(b)(2)(I)(vi)(I) instead.
``(4) Regulations.--Not later than 1 year after the date of
enactment of the College Cost Reduction and Access Act, the
Secretary shall promulgate regulations in accordance with the
provisions of this subsection.''.
SEC. 305. SPECIAL ALLOWANCES.
(a) Reduction of Lender Special Allowance Payments.--Section
438(b)(2)(I) (20 U.S.C. 1087-1(b)(2)(I)) is amended--
(1) in clause (i), by striking ``clauses (ii), (iii), and
(iv)'' and inserting ``the following clauses'';
(2) in clause (v)(III), by striking ``clauses (ii), (iii), and
(iv)'' and inserting ``clauses (ii), (iii), (iv), and (vi)''; and
(3) by adding at the end the following:
``(vi) Reduction for loans disbursed on or after
october 1, 2007.--With respect to a loan on which the
applicable interest rate is determined under section
427A(l) and for which the first disbursement of principal
is made on or after October 1, 2007, the special allowance
payment computed pursuant to this subparagraph shall be
computed--
``(I) for loans held by an eligible lender not
described in subclause (II)--
``(aa) by substituting `1.79 percent' for `2.34
percent' each place the term appears in this
subparagraph;
``(bb) by substituting `1.19 percent' for `1.74
percent' in clause (ii);
``(cc) by substituting `1.79 percent' for `2.64
percent' in clause (iii); and
``(dd) by substituting `2.09 percent' for `2.64
percent' in clause (iv); and
``(II) for loans held by an eligible not-for-profit
holder--
``(aa) by substituting `1.94 percent' for `2.34
percent' each place the term appears in this
subparagraph;
``(bb) by substituting `1.34 percent' for `1.74
percent' in clause (ii);
``(cc) by substituting `1.94 percent' for `2.64
percent' in clause (iii); and
``(dd) by substituting `2.24 percent' for `2.64
percent' in clause (iv).''.
(b) Increased Loan Fees From Lenders.--Paragraph (2) of section
438(d) (20 U.S.C. 1087-1(d)(2)) is amended to read as follows:
``(2) Amount of loan fees.--The amount of the loan fee which
shall be deducted under paragraph (1), but which may not be
collected from the borrower, shall be equal to--
``(A) except as provided in subparagraph (B), 0.50 percent
of the principal amount of the loan with respect to any loan
under this part for which the first disbursement was made on or
after October 1, 1993; and
``(B) 1.0 percent of the principal amount of the loan with
respect to any loan under this part for which the first
disbursement was made on or after October 1, 2007.''.
SEC. 306. ACCOUNT MAINTENANCE FEES.
Section 458(b) (20 U.S.C. 1087h(b)) is amended by striking ``0.10
percent'' and inserting ``0.06 percent''.
TITLE IV--LOAN FORGIVENESS
SEC. 401. LOAN FORGIVENESS FOR PUBLIC SERVICE EMPLOYEES.
Section 455 (20 U.S.C. 1087e) is further amended by adding at the
end the following:
``(m) Repayment Plan for Public Service Employees.--
``(1) In general.--The Secretary shall cancel the balance of
interest and principal due, in accordance with paragraph (2), on
any eligible Federal Direct Loan not in default for a borrower
who--
``(A) has made 120 monthly payments on the eligible Federal
Direct Loan after October 1, 2007, pursuant to any one or a
combination of the following--
``(i) payments under an income-based repayment plan
under section 493C;
``(ii) payments under a standard repayment plan under
subsection (d)(1)(A), based on a 10-year repayment period;
``(iii) monthly payments under a repayment plan under
subsection (d)(1) or (g) of not less than the monthly
amount calculated under subsection (d)(1)(A), based on a
10-year repayment period; or
``(iv) payments under an income contingent repayment
plan under subsection (d)(1)(D); and
``(B)(i) is employed in a public service job at the time of
such forgiveness; and
``(ii) has been employed in a public service job during the
period in which the borrower makes each of the 120 payments
described in subparagraph (A).
``(2) Loan cancellation amount.--After the conclusion of the
employment period described in paragraph (1), the Secretary shall
cancel the obligation to repay the balance of principal and
interest due as of the time of such cancellation, on the eligible
Federal Direct Loans made to the borrower under this part.
``(3) Definitions.--In this subsection:
``(A) Eligible federal direct loan.--The term `eligible
Federal Direct Loan' means a Federal Direct Stafford Loan,
Federal Direct PLUS Loan, or Federal Direct Unsubsidized
Stafford Loan, or a Federal Direct Consolidation Loan.
``(B) Public service job.--The term `public service job'
means--
``(i) a full-time job in emergency management,
government, military service, public safety, law
enforcement, public health, public education (including
early childhood education), social work in a public child
or family service agency, public interest law services
(including prosecution or public defense or legal advocacy
in low-income communities at a nonprofit organization),
public child care, public service for individuals with
disabilities, public service for the elderly, public
library sciences, school-based library sciences and other
school-based services, or at an organization that is
described in section 501(c)(3) of the Internal Revenue Code
of 1986 and exempt from taxation under section 501(a) of
such Code; or
``(ii) teaching as a full-time faculty member at a
Tribal College or University as defined in section 316(b)
and other faculty teaching in high-needs areas, as
determined by the Secretary.''.
TITLE V--FEDERAL PERKINS LOANS
SEC. 501. DISTRIBUTION OF LATE COLLECTIONS.
Section 466(b) (20 U.S.C. 1087ff(b)) is amended by striking ``March
31, 2012'' and inserting ``October 1, 2012''.
TITLE VI--NEED ANALYSIS
SEC. 601. SUPPORT FOR WORKING STUDENTS.
(a) Dependent Students.--Subparagraph (D) of section 475(g)(2) (20
U.S.C. 1087oo(g)(2)(D)) is amended to read as follows:
``(D) an income protection allowance of the following
amount (or a successor amount prescribed by the Secretary under
section 478)--
``(i) for academic year 2009-2010, $3,750;
``(ii) for academic year 2010-2011, $4,500;
``(iii) for academic year 2011-2012, $5,250; and
``(iv) for academic year 2012-2013, $6,000;''.
(b) Independent Students Without Dependents Other Than a Spouse.--
Clause (iv) of section 476(b)(1)(A) (20 U.S.C. 1087pp(b)(1)(A)) 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) for single or separated students, or married
students where both are enrolled pursuant to subsection
(a)(2)--
``(aa) for academic year 2009-2010, $7,000;
``(bb) for academic year 2010-2011, $7,780;
``(cc) for academic year 2011-2012, $8,550; and
``(dd) for academic year 2012-2013, $9,330; and
``(II) for married students where 1 is enrolled
pursuant to subsection (a)(2)--
``(aa) for academic year 2009-2010, $11,220;
``(bb) for academic year 2010-2011, $12,460;
``(cc) for academic year 2011-2012, $13,710;
and
``(dd) for academic year 2012-2013, $14,960;''.
(c) Independent Students With Dependents Other Than a Spouse.--
Paragraph (4) of section 477(b) (20 U.S.C. 1087qq(b)) is amended to
read as follows:
``(4) Income protection allowance.--The income protection
allowance is determined by the tables described in subparagraphs
(A) through (D) (or a successor table prescribed by the Secretary
under section 478).
``(A) Academic year 2009-2010.--For academic year 2009-
2010, the income protection allowance is determined by the
following table:
``Income Protection Allowance
----------------------------------------------------------------------------------------------------------------
Family Size Number in College
----------------------------------------------------------------------------------------------------------------
For each
(including student) 1 2 3 4 5 additional
subtract:
----------------------------------------------------------------------------------------------------------------
2 $17,720 $14,690
3 22,060 19,050 $16,020
4 27,250 24,220 21,210 $18,170
5 32,150 29,120 26,100 23,070 $20,060
6 37,600 34,570 31,570 28,520 25,520 $3,020
For each
additional
add: 4,240 4,240 4,240 4,240 4,240
----------------------------------------------------------------------------------------------------------------
``(B) Academic year 2010-2011.--For academic year 2010-
2011, the income protection allowance is determined by the
following table:
``Income Protection Allowance
----------------------------------------------------------------------------------------------------------------
Family Size Number in College
----------------------------------------------------------------------------------------------------------------
For each
(including student) 1 2 3 4 5 additional
subtract:
----------------------------------------------------------------------------------------------------------------
2 $19,690 $16,330
3 24,510 21,160 $17,800
4 30,280 26,910 23,560 $20,190
5 35,730 32,350 29,000 25,640 $22,290
6 41,780 38,410 35,080 31,690 28,350 $3,350
For each
additional
add: 4,710 4,710 4,710 4,710 4,710
----------------------------------------------------------------------------------------------------------------
``(C) Academic year 2011-2012.--For academic year 2011-
2012, the income protection allowance is determined by the
following table:
``Income Protection Allowance
----------------------------------------------------------------------------------------------------------------
Family Size Number in College
----------------------------------------------------------------------------------------------------------------
For each
(including student) 1 2 3 4 5 additional
subtract:
----------------------------------------------------------------------------------------------------------------
2 $21,660 $17,960
3 26,960 23,280 $19,580
4 33,300 29,600 25,920 $22,210
5 39,300 35,590 31,900 28,200 $24,520
6 45,950 42,250 38,580 34,860 31,190 $3,690
For each
additional
add: 5,180 5,180 5,180 5,180 5,180
----------------------------------------------------------------------------------------------------------------
``(D) Academic year 2012-2013.--For academic year 2012-
2013, the income protection allowance is determined by the
following table:
``Income Protection Allowance
----------------------------------------------------------------------------------------------------------------
Family Size Number in College
----------------------------------------------------------------------------------------------------------------
For each
(including student) 1 2 3 4 5 additional
subtract:
----------------------------------------------------------------------------------------------------------------
2 $23,630 $19,590
3 29,420 25,400 $21,360
4 36,330 32,300 28,280 $24,230
5 42,870 38,820 34,800 30,770 $26,750
6 50,130 46,100 42,090 38,030 34,020 $4,020
For each
additional
add: 5,660 5,660 5,660 5,660 5,660 ''.
----------------------------------------------------------------------------------------------------------------
''. (d) Updated Tables and Amounts.--Section 478(b) (20 U.S.C.
1087rr(b)) is amended--
(1) by striking paragraph (1) and inserting the following:
``(1) Revised tables.--
``(A) In general.--For each academic year after academic
year 2008-2009, the Secretary shall publish in the Federal
Register a revised table of income protection allowances for
the purpose of sections 475(c)(4) and 477(b)(4), subject to
subparagraphs (B) and (C).
``(B) Table for independent students.--
``(i) Academic years 2009-2010 through 2012-2013.--For
each of the academic years 2009-2010 through 2012-2013, the
Secretary shall not develop a revised table of income
protection allowances under section 477(b)(4) and the table
specified for such academic year under subparagraphs (A)
through (D) of such section shall apply.
``(ii) Other academic years.--For each academic year
after academic year 2012-2013, the Secretary shall develop
the revised table of income protection allowances by
increasing each of the dollar amounts contained in the
table of income protection allowances under section
477(b)(4)(D) by a percentage equal to the estimated
percentage increase in the Consumer Price Index (as
determined by the Secretary) between December 2011 and the
December next preceding the beginning of such academic
year, and rounding the result to the nearest $10.
``(C) Table for parents.--For each academic year after
academic year 2008-2009, the Secretary shall develop the
revised table of income protection allowances under section
475(c)(4) by increasing each of the dollar amounts contained in
the table 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 paragraph (2), by striking ``shall be developed'' and
all that follows through the period at the end and inserting
``shall be developed for each academic year after academic year
2012-2013, by increasing each of the dollar amounts contained in
such section for academic year 2012-2013 by a percentage equal to
the estimated percentage increase in the Consumer Price Index (as
determined by the Secretary) between December 2011 and the December
next preceding the beginning of such academic year, and rounding
the result to the nearest $10.''.
(e) Effective Date.--The amendments made by this section shall be
effective on July 1, 2009.
SEC. 602. SIMPLIFIED NEEDS TEST AND AUTOMATIC ZERO IMPROVEMENTS.
(a) Simplified Needs Test.--Section 479 (20 U.S.C. 1087ss) is
amended--
(1) in subsection (b)--
(A) in paragraph (1)(A)(i)--
(i) in subclause (II), by striking ``or'' after the
semicolon;
(ii) by redesignating subclause (III) as subclause
(IV);
(iii) by inserting after subclause (II) the following:
``(III) 1 of whom is a dislocated worker; or''; and
(iv) in subclause (IV) (as redesignated by clause
(ii)), by striking ``12-month'' and inserting ``24-month'';
and
(B) in paragraph (1)(B)(i)--
(i) in subclause (II), by striking ``or'' after the
semicolon;
(ii) by redesignating subclause (III) as subclause
(IV);
(iii) by inserting after subclause (II) the following:
``(III) 1 of whom is a dislocated worker; or''; and
(iv) in subclause (IV) (as redesignated by clause
(ii)), by striking ``12-month'' and inserting ``24-month'';
(2) in subsection (c)--
(A) in paragraph (1)--
(i) in subparagraph (A)--
(I) in clause (ii), by striking ``or'' after the
semicolon;
(II) by redesignating clause (iii) as clause (iv);
(III) by inserting after clause (ii) the following:
``(iii) 1 of whom is a dislocated worker; or''; and
(IV) in clause (iv) (as redesignated by subclause
(II)), by striking ``12-month'' and inserting ``24-
month''; and
(ii) in subparagraph (B), by striking ``$20,000'' and
inserting ``$30,000''; and
(B) in paragraph (2)--
(i) in subparagraph (A)--
(I) in clause (ii), by striking ``or'' after the
semicolon;
(II) by redesignating clause (iii) as clause (iv);
(III) by inserting after clause (ii) the following:
``(iii) 1 of whom is a dislocated worker; or''; and
(IV) in clause (iv) (as redesignated by subclause
(II)), by striking ``12-month'' and inserting ``24-
month''; and
(ii) in subparagraph (B), by striking ``$20,000'' and
inserting ``$30,000''; and
(C) in the flush matter following paragraph (2)(B), by
adding at the end 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) in subsection (d)--
(A) by redesignating paragraphs (1) through (6) as
subparagraphs (A) through (F), respectively and moving the
margins of such subparagraphs 2 ems to the right; and
(B) by striking ``(d) Definition'' and all that follows
through ``the term'' and inserting the following:
``(d) Definitions.--In this section:
``(1) Dislocated worker.--The term `dislocated worker' has the
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''.
(b) Effective Date.--The amendments made by this section shall be
effective on July 1, 2009.
SEC. 603. DISCRETION OF STUDENT FINANCIAL AID ADMINISTRATORS.
(a) Amendments.--The third sentence of section 479A(a) (20 U.S.C.
1087tt(a)) is amended--
(1) by inserting ``or an independent student'' after ``family
member'';
(2) by inserting ``a family member who is a dislocated worker
(as defined in section 101 of the Workforce Investment Act of
1998),'' before ``the number of parents''; and
(3) by inserting ``a change in housing status that results in
an individual being homeless (as defined in section 103 of the
McKinney-Vento Homeless Assistance Act),'' after ``under section
487,''.
(b) Effective Date.--The amendments made by this section shall take
effect on July 1, 2009.
SEC. 604. DEFINITIONS.
(a) In General.--Section 480 (20 U.S.C. 1087vv) is amended--
(1) in subsection (a)(2)--
(A) by striking ``and no portion'' and inserting ``no
portion''; and
(B) by inserting ``and no distribution from any qualified
education benefit described in subsection (f)(3) that is not
subject to Federal income tax,'' after ``1986,'';
(2) by striking subsection (b) and inserting the following:
``(b) Untaxed Income and Benefits.--
``(1) The term `untaxed income and benefits' means--
``(A) child support received;
``(B) workman's compensation;
``(C) veteran's benefits such as death pension, dependency,
and indemnity compensation, but excluding veterans' education
benefits as defined in subsection (c);
``(D) interest on tax-free bonds;
``(E) housing, food, and other allowances (excluding rent
subsidies for low-income housing) for military, clergy, and
others (including cash payments and cash value of benefits);
``(F) cash support or any money paid on the student`s
behalf, except, for dependent students, funds provided by the
student's parents;
``(G) untaxed portion of pensions;
``(H) payments to individual retirement accounts and Keogh
accounts excluded from income for Federal income tax purposes;
and
``(I) any other untaxed income and benefits, such as Black
Lung Benefits, Refugee Assistance, or railroad retirement
benefits, or benefits received through participation in
employment and training activities under title I of the
Workforce Investment Act of 1998 (29 U.S.C. 2801 et seq.).
``(2) The term `untaxed income and benefits' shall not include
the amount of additional child tax credit claimed for Federal
income tax purposes.'';
(3) in subsection (d)--
(A) by redesignating paragraphs (1), (2), (3) through (6),
and (7) as subparagraphs (A), (B), (D) through (G), and (I),
respectively, and indenting appropriately;
(B) by striking ``The term'' and inserting the following:
``(1) Definition.--The term'';
(C) by striking subparagraph (B) (as redesignated by
subparagraph (A)) and inserting the following:
``(B) is an orphan, in foster care, or a ward of the court,
at any time when the individual is 13 years of age or older;
``(C) is an emancipated minor or is in legal guardianship
as determined by a court of competent jurisdiction in the
individual's State of legal residence;'';
(D) in subparagraph (G) (as redesignated by subparagraph
(A)), by striking ``or'' after the semicolon;
(E) by inserting after subparagraph (G) (as redesignated by
subparagraph (A)) the following:
``(H) has been verified during the school year in which the
application is submitted as either an unaccompanied youth who
is a homeless child or youth (as such terms are defined in
section 725 of the McKinney-Vento Homeless Assistance Act), or
as unaccompanied, at risk of homelessness, and self-supporting,
by--
``(i) a local educational agency homeless liaison,
designated pursuant to section 722(g)(1)(J)(ii) of the
McKinney-Vento Homeless Assistance Act;
``(ii) the director of a program funded under the
Runaway and Homeless Youth Act or a designee of the
director;
``(iii) the director of a program funded under subtitle
B of title IV of the McKinney-Vento Homeless Assistance Act
(relating to emergency shelter grants) or a designee of the
director; or
``(iv) a financial aid administrator; or''; and
(F) by adding at the end the following:
``(2) Simplifying the dependency override process.--A financial
aid administrator may make a determination of independence under
paragraph (1)(I) based upon a documented determination of
independence that was previously made by another financial aid
administrator under such paragraph in the same award year.'';
(4) in subsection (e)--
(A) in paragraph (3), by striking ``and'' after the
semicolon;
(B) in paragraph (4), by striking the period at the end and
inserting ``; and''; and
(C) by adding at the end the following:
``(5) special combat pay.'';
(5) in subsection (f), by striking paragraph (3) and inserting
the following:
``(3) A qualified education benefit shall be considered an
asset of--
``(A) the student if the student is an independent student;
or
``(B) the parent if the student is a dependent student,
regardless of whether the owner of the account is the student
or the parent.'';
(6) in subsection (j)--
(A) in paragraph (2), by inserting ``, or a distribution
that is not includable in gross income under section 529 of
such Code, under another prepaid tuition plan offered by a
State, or under a Coverdell education savings account under
section 530 of such Code,'' after ``1986''; and
(B) by adding at the end the following:
``(4) Notwithstanding paragraph (1), special combat pay shall
not be treated as estimated financial assistance for purposes of
section 471(3).''; and
(7) by adding at the end the following:
``(n) Special Combat Pay.--The term `special combat pay' means pay
received by a member of the Armed Forces because of exposure to a
hazardous situation.''.
(b) Effective Date.--The amendments made by this section shall be
effective on July 1, 2009.
TITLE VII--COMPETITIVE LOAN AUCTION PILOT PROGRAM
SEC. 701. COMPETITIVE LOAN AUCTION PILOT PROGRAM.
Title IV (20 U.S.C. 1070 et seq.) is further amended by adding at
the end the following:
``PART I--COMPETITIVE LOAN AUCTION PILOT PROGRAM
``SEC. 499. COMPETITIVE LOAN AUCTION PILOT PROGRAM.
``(a) Definitions.--In this section:
``(1) Eligible federal plus loan.--The term `eligible Federal
PLUS Loan' means a loan described in section 428B made to a parent
of a dependent student who is a new borrower on or after July 1,
2009.
``(2) Eligible lender.--The term `eligible lender' has the
meaning given the term in section 435.
``(b) Pilot Program.--The Secretary shall carry out a pilot program
under which the Secretary establishes a mechanism for an auction of
eligible Federal PLUS Loans in accordance with this subsection. The
pilot program shall meet the following requirements:
``(1) Planning and implementation.--During the period beginning
on the date of enactment of this section and ending on June 30,
2009, the Secretary shall plan and implement the pilot program
under this subsection. During the planning and implementation, the
Secretary shall consult with other Federal agencies with knowledge
of, and experience with, auction programs, including the Federal
Communication Commission and the Department of the Treasury.
``(2) Origination and disbursement; applicability of section
428b.--Beginning on July 1, 2009, the Secretary shall arrange for
the origination and disbursement of all eligible Federal PLUS Loans
in accordance with the provisions of this subsection and the
provisions of section 428B that are not inconsistent with this
subsection.
``(3) Loan origination mechanism.--The Secretary shall
establish a loan origination auction mechanism that meets the
following requirements:
``(A) Auction for each state.--The Secretary administers an
auction under this paragraph for each State, under which
eligible lenders compete to originate eligible Federal PLUS
Loans under this paragraph at all institutions of higher
education within such State.
``(B) Prequalification process.--The Secretary establishes
a prequalification process for eligible lenders desiring to
participate in an auction under this paragraph that contains,
at a minimum--
``(i) a set of borrower benefits and servicing
requirements each eligible lender shall meet in order to
participate in such an auction; and
``(ii) an assessment of each such eligible lender's
capacity, including capital capacity, to participate
effectively.
``(C) Timing and origination.--Each State auction takes
place every 2 years, and the eligible lenders with the winning
bids for the State are the only eligible lenders permitted to
originate eligible Federal PLUS Loans made under this paragraph
for the cohort of students at the institutions of higher
education within the State until the students graduate from or
leave the institutions of higher education.
``(D) Bids.--Each eligible lender's bid consists of the
amount of the special allowance payment (after the application
of section 438(b)(2)(I)(v)) the eligible lender proposes to
accept from the Secretary with respect to the eligible Federal
PLUS Loans made under this paragraph in lieu of the amount
determined under section 438(b)(2)(I).
``(E) Maximum bid.--The maximum bid allowable under this
paragraph shall not exceed the amount of the special allowance
payable on eligible Federal PLUS Loans made under this
paragraph computed under section 438(b)(2)(I) (other than
clauses (ii), (iii), (iv), and (vi) of such section), except
that for purposes of the computation under this subparagraph,
section 438(b)(2)(I)(i)(III) shall be applied by substituting
`1.79 percent' for `2.34 percent'.
``(F) Winning bids.--The winning bids for each State
auction shall be the 2 bids containing the lowest and the
second lowest proposed special allowance payments, subject to
subparagraph (E).
``(G) Agreement with secretary.--Each eligible lender
having a winning bid under subparagraph (F) enters into an
agreement with the Secretary under which the eligible lender--
``(i) agrees to originate eligible Federal PLUS Loans
under this paragraph to each borrower who--
``(I) seeks an eligible Federal PLUS Loan under
this paragraph to enable a dependent student to attend
an institution of higher education within the State;
``(II) is eligible for an eligible Federal PLUS
Loan; and
``(III) elects to borrow from the eligible lender;
and
``(ii) agrees to accept a special allowance payment
(after the application of section 438(b)(2)(I)(v)) from the
Secretary with respect to the eligible Federal PLUS Loans
originated under clause (i) in the amount proposed in the
second lowest winning bid described in subparagraph (F) for
the applicable State auction.
``(H) Sealed bids; confidentiality.--All bids are sealed
and the Secretary keeps the bids confidential, including
following the announcement of the winning bids.
``(I) Eligible lender of last resort.--
``(i) In general.--In the event that there is no
winning bid under subparagraph (F), the students at the
institutions of higher education within the State that was
the subject of the auction shall be served by an eligible
lender of last resort, as determined by the Secretary.
``(ii) Determination of eligible lender of last
resort.--Prior to the start of any auction under this
paragraph, eligible lenders that desire to serve as an
eligible lender of last resort shall submit an application
to the Secretary at such time and in such manner as the
Secretary may determine. Such application shall include an
assurance that the eligible lender will meet the
prequalification requirements described in subparagraph
(B).
``(iii) Geographic location.--The Secretary shall
identify an eligible lender of last resort for each State.
``(iv) Notification timing.--The Secretary shall not
identify any eligible lender of last resort until after the
announcement of all the winning bids for a State auction
for any year.
``(v) Maximum special allowance.--The Secretary is
authorized to set a special allowance payment that shall be
payable to a lender of last resort for a State under this
subparagraph, which special allowance payment shall be kept
confidential, including following the announcement of
winning bids. The Secretary shall set such special
allowance payment so that it incurs the lowest possible
cost to the Federal Government, taking into consideration
the lowest bid that was submitted in an auction for such
State and the lowest bid submitted in a similar State, as
determined by the Secretary.
``(J) Guarantee against losses.--The Secretary guarantees
the eligible Federal PLUS Loans made under this paragraph
against losses resulting from the default of a parent borrower
in an amount equal to 99 percent of the unpaid principal and
interest due on the loan.
``(K) Loan fees.--The Secretary shall not collect a loan
fee under section 438(d) with respect to an eligible Federal
Plus Loan originated under this paragraph.
``(L) Consolidation.--
``(i) In general.--An eligible lender who is permitted
to originate eligible Federal PLUS Loans for a borrower
under this paragraph shall have the option to consolidate
such loans into 1 loan.
``(ii) Notification.--In the event a borrower with
eligible Federal PLUS Loans made under this paragraph
wishes to consolidate the loans, the borrower shall notify
the eligible lender who originated the loans under this
paragraph.
``(iii) Limitation on eligible lender option to
consolidate.--The option described in clause (i) shall not
apply if--
``(I) the borrower includes in the notification in
clause (ii) verification of consolidation terms and
conditions offered by an eligible lender other than the
eligible lender described in clause (i); and
``(II) not later than 10 days after receiving such
notification from the borrower, the eligible lender
described in clause (i) does not agree to match such
terms and conditions, or provide more favorable terms
and conditions to such borrower than the offered terms
and conditions described in subclause (I).
``(iv) Consolidation of additional loans.--If a
borrower has a Federal Direct PLUS Loan or a loan made on
behalf of a dependent student under section 428B and seeks
to consolidate such loan with an eligible Federal PLUS Loan
made under this paragraph, then the eligible lender that
originated the borrower's loan under this paragraph may
include in the consolidation under this subparagraph a
Federal Direct PLUS Loan or a loan made on behalf of a
dependent student under section 428B, but only if--
``(I) in the case of a Federal Direct PLUS Loan,
the eligible lender agrees, not later than 10 days
after the borrower requests such consolidation from the
lender, to match the consolidation terms and conditions
that would otherwise be available to the borrower if
the borrower consolidated such loans in the loan
program under part D; or
``(II) in the case of a loan made on behalf of a
dependent student under section 428B, the eligible
lender agrees, not later than 10 days after the
borrower requests such consolidation from the lender,
to match the consolidation terms and conditions offered
by an eligible lender other than the eligible lender
that originated the borrower's loans under this
paragraph.
``(v) Special allowance on consolidation loans that
include loans made under this paragraph.--The applicable
special allowance payment for loans consolidated under this
paragraph shall be equal to the lesser of--
``(I) the weighted average of the special allowance
payment on such loans, except that in calculating such
weighted average the Secretary shall exclude any
Federal Direct PLUS Loan included in the consolidation;
or
``(II) the result of--
``(aa) the average of the bond equivalent rates
of the quotes of the 3-month commercial paper
(financial) rates in effect for each of the days in
such quarter as reported by the Federal Reserve in
Publication H-15 (or its successor) for such 3-
month period; plus
``(bb) 1.59 percent.
``(vi) Interest payment rebate fee.--Any loan under
section 428C consolidated under this paragraph shall not be
subject to the interest payment rebate fee under section
428C(f).''.
TITLE VIII--PARTNERSHIP GRANTS
SEC. 801. COLLEGE ACCESS CHALLENGE GRANT PROGRAM.
Title VII (20 U.S.C. 1133 et seq.) is amended by adding at the end
the following new part:
``PART E--COLLEGE ACCESS CHALLENGE GRANT PROGRAM
``SEC. 771. COLLEGE ACCESS CHALLENGE GRANT PROGRAM.
``(a) Authorization and Appropriation.--There are authorized to be
appropriated, and there are appropriated, to carry out this section
$66,000,000 for each of the fiscal years 2008 and 2009. The authority
to award grants under this section shall expire at the end of fiscal
year 2009.
``(b) Program Authorized.--
``(1) Grants authorized.--From amounts appropriated under
subsection (a), the Secretary shall award grants, from allotments
under subsection (c), to States (and to philanthropic organization,
as appropriate under paragraph (3)) having applications approved
under subsection (d), to enable the State (or philanthropic
organization) to pay the Federal share of the costs of carrying out
the activities and services described in subsection (f).
``(2) Federal share; non-federal share.--
``(A) Federal share.--The amount of the Federal share under
this section for a fiscal year shall be equal to \2/3\ of the
costs of the activities and services described in subsection
(f) that are carried out under the grant.
``(B) Non-federal share.--The amount of the non-Federal
share under this section shall be equal to \1/3\ of the costs
of the activities and services described in subsection (f). The
non-Federal share may be in cash or in-kind, and may be
provided from State resources, contributions from private
organizations, or both.
``(3) Reduction for failure to pay non-federal share.--If a
State fails to provide the full non-Federal share required under
this subsection, the Secretary shall reduce the amount of the grant
payment under this section proportionately, and may award the
proportionate reduction amount of the grant directly to a
philanthropic organization, as defined in subsection (i), to carry
out this section.
``(4) Temporary ineligibility for subsequent payments.--
``(A) In general.--The Secretary shall determine a grantee
to be temporarily ineligible to receive a grant payment under
this section for a fiscal year if--
``(i) the grantee fails to submit an annual report
pursuant to subsection (h) for the preceding fiscal year;
or
``(ii) the Secretary determines, based on information
in such annual report, that the grantee is not effectively
meeting the conditions described under subsection (g) and
the goals of the application under subsection (d).
``(B) Reinstatement.--If the Secretary determines that a
grantee is ineligible under subparagraph (A), the Secretary may
enter into an agreement with the grantee setting forth the
terms and conditions under which the grantee may regain
eligibility to receive payments under this section.
``(c) Determination of Allotment.--
``(1) Amount of allotment.--Subject to paragraph (2), in making
grant payments to grantees under this section, the allotment to
each grantee for a fiscal year shall be equal to the sum of--
``(A) the amount that bears the same relation to 50 percent
of the amount appropriated under subsection (a) for such fiscal
year as the number of residents in the State aged 5 through 17
who are living below the poverty line applicable to the
resident's family size (as determined under section 673(2) of
the Community Service Block Grant Act) bears to the total
number of such residents in all States; and
``(B) the amount that bears the same relation to 50 percent
of the amount appropriated under subsection (a) for such fiscal
year as the number of residents in the State aged 15 through 44
who are living below the poverty line applicable to the
individual's family size (as determined under section 673(2) of
the Community Service Block Grant Act) bears to the total
number of such residents in all States.
``(2) Minimum amount.--The allotment for each State under this
section for a fiscal year shall not be an amount that is less than
0.5 percent of the total amount appropriated under subsection (a)
for such fiscal year.
``(d) Submission and Contents of Application.--
``(1) In general.--For each fiscal year for which a grantee
desires a grant payment under subsection (b), the State agency with
jurisdiction over higher education, or another agency designated by
the Governor or chief executive of the State to administer the
program under this section, or a philanthropic organization, in
accordance with subsection (b)(3), shall submit an application to
the Secretary at such time, in such manner, and containing the
information described in paragraph (2).
``(2) Application.--An application submitted under paragraph
(1) shall include the following:
``(A) A description of the grantee's capacity to administer
the grant under this section and report annually to the
Secretary on the activities and services described in
subsection (f).
``(B) A description of the grantee's plan for using the
grant funds to meet the requirements of subsections (f) and
(g), including plans for how the grantee will make special
efforts to--
``(i) provide such benefits to students in the State
that are underrepresented in postsecondary education; or
``(ii) in the case of a philanthropic organization that
operates in more than one State, provide benefits to such
students in each such State for which the philanthropic
organization is receiving grant funds under this section.
``(C) A description of how the grantee will provide or
coordinate the provision of the non-Federal share from State
resources or private contributions.
``(D) A description of--
``(i) the structure that the grantee has in place to
administer the activities and services described in
subsection (f); or
``(ii) the plan to develop such administrative
capacity.
``(e) Subgrants to Nonprofit Organizations.--A State receiving a
payment under this section may elect to make a subgrant to one or more
nonprofit organizations in the State, including an eligible not-for-
profit holder (as defined in section 435(p) of the Higher Education Act
of 1965, as amended by section 303 of this Act), or a partnership of
such organizations, to carry out activities or services described in
subsection (f), if the nonprofit organization or partnership--
``(1) was in existence on the day before the date of the
enactment of this Act; and
``(2) as of such day, was participating in activities and
services related to increasing access to higher education, such as
those activities and services described in subsection (f).
``(f) Allowable Uses.--
``(1) In general.--Subject to paragraph (3), a grantee may use
a grant payment under this section only for the following
activities and services, pursuant to the conditions under
subsection (g):
``(A) Information for students and families regarding--
``(i) the benefits of a postsecondary education;
``(ii) postsecondary education opportunities;
``(iii) planning for postsecondary education; and
``(iv) career preparation.
``(B) Information on financing options for postsecondary
education and activities that promote financial literacy and
debt management among students and families.
``(C) Outreach activities for students who may be at risk
of not enrolling in or completing postsecondary education.
``(D) Assistance in completion of the Free Application for
Federal Student Aid or other common financial reporting form
under section 483(a) of the Higher Education Act of 1965.
``(E) Need-based grant aid for students.
``(F) Professional development for guidance counselors at
middle schools and secondary schools, and financial aid
administrators and college admissions counselors at
institutions of higher education, to improve such individuals'
capacity to assist students and parents with--
``(i) understanding--
``(I) entrance requirements for admission to
institutions of higher education; and
``(II) State eligibility requirements for Academic
Competitiveness Grants or National SMART Grants under
section 401A, and other financial assistance that is
dependent upon a student's coursework;
``(ii) applying to institutions of higher education;
``(iii) applying for Federal student financial
assistance and other State, local, and private student
financial assistance and scholarships;
``(iv) activities that increase students' ability to
successfully complete the coursework required for a
postsecondary degree, including activities such as tutoring
or mentoring; and
``(v) activities to improve secondary school students'
preparedness for postsecondary entrance examinations.
``(G) Student loan cancellation or repayment (as
applicable), or interest rate reductions, for borrowers who are
employed in a high-need geographical area or a high-need
profession in the State, as determined by the State.
``(2) Prohibited uses.--Funds made available under this section
shall not be used to promote any lender's loans.
``(3) Use of funds for administrative purposes.--A grantee may
use not more than 6 percent of the total amount of the sum of the
Federal share provided under this section and the non-Federal share
required under this section for administrative purposes relating to
the grant under this section.
``(g) Special Conditions.--
``(1) Availability to students and families.--A grantee
receiving a grant payment under this section shall--
``(A) make the activities and services described in
subparagraphs (A) through (F) of subsection (f)(1) that are
funded under the payment available to all qualifying students
and families in the State;
``(B) allow students and families to participate in the
activities and services without regard to--
``(i) the postsecondary institution in which the
student enrolls;
``(ii) the type of student loan the student receives;
``(iii) the servicer of such loan; or
``(iv) the student's academic performance;
``(C) not charge any student or parent a fee or additional
charge to participate in the activities or services; and
``(D) in the case of an activity providing grant aid, not
require a student to meet any condition other than eligibility
for Federal financial assistance under title IV of the Higher
Education Act of 1965, except as provided for in the loan
cancellation or repayment or interest rate reductions described
in subsection (f)(1)(G).
``(2) Priority.--A grantee receiving a grant payment under this
section shall, in carrying out any activity or service described in
subsection (f)(1) with the grant funds, prioritize students and
families who are living below the poverty line applicable to the
individual's family size (as determined under section 673(2) of the
Community Service Block Grant Act).
``(3) Disclosures.--
``(A) Organizational disclosures.--In the case of a State
that has chosen to make a payment to an eligible not-for-profit
holder in the State in accordance with subsection (e), the
holder shall clearly and prominently indicate the name of the
holder and the nature of the holder's work in connection with
any of the activities carried out, or any information or
services provided, with such funds.
``(B) Informational disclosures.--Any information about
financing options for higher education provided through an
activity or service funded under this section shall--
``(i) include information to students and the students'
parents of the availability of Federal, State, local,
institutional, and other grants and loans for postsecondary
education; and
``(ii) present information on financial assistance for
postsecondary education that is not provided under title IV
of the Higher Education Act of 1965 in a manner that is
clearly distinct from information on student financial
assistance under such title.
``(4) Coordination.--A grantee receiving a grant payment under
this section shall attempt to coordinate the activities carried out
with the grant payment with any existing activities that are
similar to such activities, and with any other entities that
support the existing activities in the State.
``(h) Report.--A grantee receiving a payment under this section
shall prepare and submit an annual report to the Secretary on the
activities and services carried out under this section, and on the
implementation of such activities and services. The report shall
include--
``(1) each activity or service that was provided to students
and families over the course of the year;
``(2) the cost of providing each activity or service;
``(3) the number, and percentage, if feasible and applicable,
of students who received each activity or service; and
``(4) the total contributions from private organizations
included in the grantee's non-Federal share for the fiscal year.
``(i) Definitions.--In this section:
``(1) Philanthropic organization.--The term `philanthropic
organization' means a non-profit organization--
``(A) that does not receive funds under title IV of the
Higher Education Act of 1965 or under the Elementary and
Secondary Education Act of 1965;
``(B) that is not a local educational agency or an
institution of higher education;
``(C) that has a demonstrated record of dispersing grant
aid to underserved populations to ensure access to, and
participation in, higher education;
``(D) that is affiliated with an eligible consortia (as
defined in paragraph (2)) to carry out this section; and
``(E) the primary purpose of which is to provide financial
aid and support services to students from underrepresented
populations to increase the number of such students who enter
and remain in college.
``(2) Eligible consortia.--The term `eligible consortia' means
a partnership of 2 or more entities that have agreed to work
together to carry out this section that--
``(A) includes--
``(i) a philanthropic organization, which serves as the
manager of the consortia;
``(ii) a State that demonstrates a commitment to
ensuring the creation of a Statewide system to address the
issues of early intervention and financial support for
eligible students to enter and remain in college; and
``(iii) at the discretion of the philanthropic
organization described in clause (i), additional partners,
including other non-profit organizations, government
entities (including local municipalities, school districts,
cities, and counties), institutions of higher education,
and other public or private programs that provide mentoring
or outreach programs; and
``(B) conducts activities to assist students with entering
and remaining in college, which may include--
``(i) providing need-based grants to students;
``(ii) providing early notification to low-income
students of their potential eligibility for Federal
financial aid (which may include assisting students and
families with filling out FAFSA forms), as well as other
financial aid and other support available from the eligible
consortia;
``(iii) encouraging increased student participation in
higher education through mentoring or outreach programs;
and
``(iv) conducting marketing and outreach efforts that
are designed to--
``(I) encourage full participation of students in
the activities of the consortia that carry out this
section; and
``(II) provide the communities impacted by the
activities of the consortia with a general knowledge
about the efforts of the consortia.
``(3) Grantee.--The term `grantee' means--
``(A) a State awarded a grant under this section; or
``(B) with respect to such a State that has failed to meet
the non-Federal share requirement of subsection (b), a
philanthropic organization awarded the proportionate reduction
amount of such a grant under subsection (b)(3).''.
SEC. 802. INVESTMENT IN HISTORICALLY BLACK COLLEGES AND
UNIVERSITIES AND MINORITY-SERVING INSTITUTIONS.
Title IV (20 U.S.C. 1070 et seq.) is further amended by adding
after part I (as added by section 701 of this Act) the following new
part:
``PART J--STRENGTHENING HISTORICALLY BLACK COLLEGES AND UNIVERSITIES
AND OTHER MINORITY-SERVING INSTITUTIONS
``SEC. 499A. INVESTMENT IN HISTORICALLY BLACK COLLEGES AND UNIVERSITIES
AND OTHER MINORITY-SERVING INSTITUTIONS.
``(a) Eligible Institution.--An institution of higher education is
eligible to receive funds from the amounts made available under this
section if such institution is--
``(1) a part B institution (as defined in section 322 (20
U.S.C. 1061));
``(2) a Hispanic-serving institution (as defined in section 502
(20 U.S.C. 1101a));
``(3) a Tribal College or University (as defined in section 316
(20 U.S.C. 1059c));
``(4) an Alaska Native-serving institution or a Native
Hawaiian-serving institution (as defined in section 317(b) (20
U.S.C. 1059d(b)));
``(5) a Predominantly Black Institution (as defined in
subsection (c));
``(6) an Asian American and Native American Pacific Islander-
serving institution (as defined in subsection (c)); or
``(7) a Native American-serving nontribal institution (as
defined in subsection (c)).
``(b) New Investment of Funds.--
``(1) In general.--There shall be available to the Secretary to
carry out this section, from funds not otherwise appropriated,
$255,000,000 for each of the fiscal years 2008 and 2009. The
authority to award grants under this section shall expire at the
end of fiscal year 2009.
``(2) Allocation and allotment.--
``(A) In general.--Of the amounts made available under
paragraph (1) for each fiscal year--
``(i) $100,000,000 shall be available for allocation
under subparagraph (B);
``(ii) $100,000,000 shall be available for allocation
under subparagraph (C); and
``(iii) $55,000,000 shall be available for allocation
under subparagraph (D).
``(B) HSI stem and articulation programs.--The amount made
available for allocation under this subparagraph by
subparagraph (A)(i) for any fiscal year shall be available for
Hispanic-serving Institutions for activities described in
section 503, with a priority given to applications that
propose--
``(i) to increase the number of Hispanic and other low
income students attaining degrees in the fields of science,
technology, engineering, or mathematics; and
``(ii) to develop model transfer and articulation
agreements between 2-year Hispanic-serving institutions and
4-year institutions in such fields.
``(C) Allocation and allotment hbcus and pbis.--From the
amount made available for allocation under this subparagraph by
subparagraph (A)(ii) for any fiscal year--
``(i) 85 percent shall be available to eligible
institutions described in subsection (a)(1) and shall be
made available as grants under section 323 and allotted
among such institutions under section 324, treating such
amount, plus the amount appropriated for such fiscal year
in a regular or supplemental appropriation Act to carry out
part B of title III, as the amount appropriated to carry
out part B of title III for purposes of allotments under
section 324, for use by such institutions with a priority
for--
``(I) activities described in paragraphs (1), (2),
(4), (5), and (10) of section 323(a); and
``(II) other activities, consistent with the
institution's comprehensive plan and designed to
increase the institution's capacity to prepare students
for careers in the physical or natural sciences,
mathematics, computer science or information technology
or sciences, engineering, language instruction in the
less-commonly taught languages or international
affairs, or nursing or allied health professions; and
``(ii) 15 percent shall be available to eligible
institutions described in subsection (a)(5) and shall be
available for a competitive grant program to award 25
grants of $600,000 annually for programs in any of the
following areas:
``(I) science, technology, engineering, or
mathematics (STEM);
``(II) health education;
``(III) internationalization or globalization;
``(IV) teacher preparation; or
``(V) improving educational outcomes of African
American males.
``(D) Allocation and allotment to other minority-serving
institutions.--From the amount made available for allocation
under this subparagraph by subparagraph (A)(iii) for any fiscal
year--
``(i) $30,000,000 for such fiscal year shall be
available to eligible institutions described in subsection
(a)(3) and shall be made available as grants under section
316, treating such $30,000,000 as part of the amount
appropriated for such fiscal year in a regular or
supplemental appropriation Act to carry out such section,
and using such $30,000,000 for purposes described in
subsection (c) of such section;
``(ii) $15,000,000 for such fiscal year shall be
available to eligible institutions described in subsection
(a)(4) and shall be made available as grants under section
317, treating such $15,000,000 as part of the amount
appropriated for such fiscal year in a regular or
supplemental appropriation Act to carry out such section
and using such $15,000,000 for purposes described in
subsection (c) of such section;
``(iii) $5,000,000 for such fiscal year shall be
available to eligible institutions described in subsection
(a)(6) for activities described in section 311(c); and
``(iv) $5,000,000 for such fiscal year shall be
available to eligible institutions described in subsection
(a)(7)--
``(I) to plan, develop, undertake, and carry out
activities to improve and expand such institutions'
capacity to serve Native Americans, which may include--
``(aa) the purchase, rental, or lease of
scientific or laboratory equipment for educational
purposes, including instructional and research
purposes;
``(bb) renovation and improvement in classroom,
library, laboratory, and other instructional
facilities;
``(cc) support of faculty exchanges, faculty
development, and faculty fellowships to assist
faculty in attaining advanced degrees in the
faculty's field of instruction;
``(dd) curriculum development and academic
instruction;
``(ee) the purchase of library books,
periodicals, microfilm, and other educational
materials;
``(ff) funds and administrative management, and
acquisition of equipment for use in strengthening
funds management;
``(gg) the joint use of facilities such as
laboratories and libraries; and
``(hh) academic tutoring and counseling
programs and student support services; and
``(II) to which the Secretary, to the extent
possible and consistent with a competitive process
under which such grants are awarded, allocates funds
under this clause to ensure maximum and equitable
distribution among all such eligible institutions.
``(c) Definitions.--
``(1) Asian american.--The term `Asian American' has the
meaning given the term `Asian' in the Office of Management and
Budget's Standards for Maintaining, Collecting, and Presenting
Federal Data on Race and Ethnicity as published on October 30, 1997
(62 Fed. Reg. 58789).
``(2) Asian american and native american pacific islander-
serving institution.--The term `Asian American and Native American
Pacific Islander-serving institution' means an institution of
higher education that--
``(A) is an eligible institution under section 312(b); and
``(B) at the time of application, has an enrollment of
undergraduate students that is at least 10 percent Asian
American and Native American Pacific Islander students.
``(3) Enrollment of needy students.--The term `enrollment of
needy students' means the enrollment at an institution of higher
education with respect to which not less than 50 percent of the
undergraduate students enrolled in an academic program leading to a
degree--
``(A) in the second fiscal year preceding the fiscal year
for which the determination is made, were Federal Pell Grant
recipients for such year;
``(B) come from families that receive benefits under a
means-tested Federal benefit program (as defined in paragraph
(5));
``(C) attended a public or nonprofit private secondary
school--
``(i) that is in the school district of a local
educational agency that was eligible for assistance under
part A of title I of the Elementary and Secondary Education
Act of 1965 for any year during which the student attended
such secondary school; and
``(ii) which for the purpose of this paragraph and for
that year was determined by the Secretary (pursuant to
regulations and after consultation with the State
educational agency of the State in which the school is
located) to be a school in which the enrollment of children
counted under a measure of poverty described in section
1113(a)(5) of such Act exceeds 30 percent of the total
enrollment of such school; or
``(D) are first-generation college students (as that term
is defined in section 402A(g)), and a majority of such first-
generation college students are low-income individuals.
``(4) Low-income individual.--The term `low-income individual'
has the meaning given such term in section 402A(g).
``(5) Means-tested federal benefit program.--The term `means-
tested Federal benefit program' means a program of the Federal
Government, other than a program under title IV, in which
eligibility for the programs' benefits or the amount of such
benefits are determined on the basis of income or resources of the
individual or family seeking the benefit.
``(6) Native american.--The term `Native American' means an
individual who is of a tribe, people, or culture that is indigenous
to the United States.
``(7) Native american pacific islander.--The term `Native
American Pacific Islander' means any descendant of the aboriginal
people of any island in the Pacific Ocean that is a territory or
possession of the United States.
``(8) Native american-serving nontribal institution.--The term
`Native American-serving nontribal institution' means an
institution of higher education that--
``(A) at the time of application--
``(i) has an enrollment of undergraduate students that
is not less than 10 percent Native American students; and
``(ii) is not a Tribal College or University (as
defined in section 316); and
``(B) submits to the Secretary such enrollment data as may
be necessary to demonstrate that the institution is described
in subparagraph (A), along with such other information and data
as the Secretary may by regulation require.
``(9) Predominantly black institution.--The term `Predominantly
Black institution' means an institution of higher education that--
``(A) has an enrollment of needy students as defined by
paragraph (3);
``(B) has an average educational and general expenditure
which is low, per full-time equivalent undergraduate student in
comparison with the average educational and general expenditure
per full-time equivalent undergraduate student of institutions
of higher education that offer similar instruction, except that
the Secretary may apply the waiver requirements described in
section 392(b) to this subparagraph in the same manner as the
Secretary applies the waiver requirements to section
312(b)(1)(B);
``(C) has an enrollment of undergraduate students--
``(i) that is at least 40 percent Black American
students;
``(ii) that is at least 1,000 undergraduate students;
``(iii) of which not less than 50 percent of the
undergraduate students enrolled at the institution are low-
income individuals or first-generation college students (as
that term is defined in section 402A(g)); and
``(iv) of which not less than 50 percent of the
undergraduate students are enrolled in an educational
program leading to a bachelor's or associate's degree that
the institution is licensed to award by the State in which
the institution is located;
``(D) is legally authorized to provide, and provides within
the State, an educational program for which the institution of
higher education awards a bachelor's degree, or in the case of
a junior or community college, an associate's degree;
``(E) is accredited by a nationally recognized accrediting
agency or association determined by the Secretary to be a
reliable authority as to the quality of training offered, or
is, according to such an agency or association, making
reasonable progress toward accreditation; and
``(F) is not receiving assistance under part B of title
III.''.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.