[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5715 Engrossed in House (EH)]

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
110th CONGRESS
  2d Session
                                H. R. 5715

_______________________________________________________________________

                                 AN ACT


 
To ensure continued availability of access to the Federal student loan 
                   program for students and families.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This title may be cited as the ``Ensuring Continued Access to 
Student Loans Act of 2008''.

SEC. 2. INCREASING UNSUBSIDIZED STAFFORD LOAN LIMITS FOR UNDERGRADUATE 
              AND GRADUATE STUDENTS.

    (a) Amendments.--Subsection (d) of section 428H of the Higher 
Education Act of 1965 (20 U.S.C. 1078-8(d)) is amended to read as 
follows:
    ``(d) Loan Limits.--
            ``(1) In general.--Except as provided in paragraphs (2), 
        (3), and (4), the annual and aggregate limits for loans under 
        this section shall be the same as those established under 
        section 428(b)(1), less any amount received by such student 
        pursuant to the subsidized loan program established under 
        section 428.
            ``(2) Limits for graduate and professional students.--
                    ``(A) Annual limits.--The maximum annual amount of 
                loans under this section a graduate or professional 
                student may borrow in any academic year (as defined in 
                section 481(a)(2)) or its equivalent shall be the 
                amount determined under paragraph (1), plus--
                            ``(i) in the case of such a student who is 
                        a graduate or professional student attending an 
                        eligible institution, $12,000; and
                            ``(ii) in the case of a graduate student 
                        enrolled in coursework specified in sections 
                        484(b)(3)(B) and 484(b)(4)(B), $7,000;
                except in cases where the Secretary determines that a 
                higher amount is warranted in order to carry out the 
                purpose of this part with respect to students engaged 
                in specialized training requiring exceptionally high 
                costs of education, but the annual insurable limit per 
                student shall not be deemed to be exceeded by a line of 
                credit under which actual payments by the lender to the 
                borrower will not be made in any years in excess of the 
                annual limit.
                    ``(B) Aggregate limit.--The maximum aggregate 
                amount of loans under this section a student described 
                in subparagraph (A) may borrow shall be the amount 
                described in paragraph (1), adjusted to reflect the 
                increased annual limits described in subparagraph (A), 
                as prescribed by the Secretary by regulation.
            ``(3) Limits for undergraduate dependent students.--
                    ``(A) Annual limits.--The maximum annual amount of 
                loans under this section an undergraduate dependent 
                student (except an undergraduate dependent student 
                whose parents are unable to borrow under section 428B 
                or the Federal Direct PLUS Loan Program) may borrow in 
                any academic year (as defined in section 481(a)(2)) or 
                its equivalent shall be the sum of the amount 
                determined under paragraph (1), plus $2,000.
                    ``(B) Aggregate limits.--The maximum aggregate 
                amount of loans under this section a student described 
                in subparagraph (A) may borrow shall be $31,000.
            ``(4) Limits for undergraduate independent students.--
                    ``(A) Annual limits.--The maximum annual amount of 
                loans under this section an undergraduate independent 
                student, or an undergraduate dependent student whose 
                parents are unable to borrow under section 428B or the 
                Federal Direct PLUS Loan Program, may borrow in any 
                academic year (as defined in section 481(a)(2)) or its 
                equivalent shall be the sum of the amount determined 
                under paragraph (1), plus--
                            ``(i) in the case of such a student 
                        attending an eligible institution who has not 
                        completed such student's first 2 years of 
                        undergraduate study--
                                    ``(I) $6,000, if such student is 
                                enrolled in a program whose length is 
                                at least one academic year in length; 
                                or
                                    ``(II) if such student is enrolled 
                                in a program of undergraduate education 
                                which is less than one academic year, 
                                the maximum annual loan amount that 
                                such student may receive may not exceed 
                                the amount that bears the same ratio to 
                                the amount specified in subclause (I) 
                                as the length of such program measured 
                                in semester, trimester, quarter, or 
                                clock hours bears to one academic year;
                            ``(ii) in the case of such a student at an 
                        eligible institution who has successfully 
                        completed such first and second years but has 
                        not successfully completed the remainder of a 
                        program of undergraduate education--
                                    ``(I) $7,000; or
                                    ``(II) if such student is enrolled 
                                in a program of undergraduate 
                                education, the remainder of which is 
                                less than one academic year, the 
                                maximum annual loan amount that such 
                                student may receive may not exceed the 
                                amount that bears the same ratio to the 
                                amount specified in subclause (I) as 
                                such remainder measured in semester, 
                                trimester, quarter, or clock hours 
                                bears to one academic year; and
                            ``(iii) in the case of such a student 
                        enrolled in coursework specified in sections 
                        484(b)(3)(B) and 484(b)(4)(B), $6,000 for 
                        coursework necessary for enrollment in an 
                        undergraduate degree or certificate program.
                    ``(B) Aggregate limits.--The maximum aggregate 
                amount of loans under this section a student described 
                in subparagraph (A) may borrow shall be $57,500.
            ``(5) Capitalized interest.--Interest capitalized shall not 
        be deemed to exceed a maximum aggregate amount determined under 
        subparagraph (B) of paragraph (2), (3), or (4).''.
    (b) Student Eligibility.--Loan limit increases authorized by the 
amendments made by this section shall be available only to students who 
meet the requirements of section 484(a) of the Higher Education Act of 
1965 (20 U.S.C. 1091(a)).
    (c) Effective Date.--The amendments made by this section shall be 
effective for loans issued on or after July 1, 2008.

SEC. 3. GRACE PERIOD FOR PARENT PLUS LOANS.

    (a) Amendment.--Section 428B(d) of the Higher Education Act of 1965 
(20 U.S.C. 1078-2(d)) is amended by amending paragraphs (1) and (2) to 
read as follows:
            ``(1) Commencement of repayment.--Repayment of principal on 
        loans made under this section shall--
                    ``(A) commence not later than--
                            ``(i) 60 days after the date such loan is 
                        disbursed by the lender, except as provided in 
                        clause (ii); and
                            ``(ii) if agreed upon by a parent borrower, 
                        the day after 6 months after the date the 
                        student for whom the loan is borrowed ceases to 
                        carry at least one-half the normal full-time 
                        academic workload (as determined by the 
                        institution); and
                    ``(B) be subject to deferral during any period 
                during which the graduate or professional student or 
                the parent meets the conditions required for a deferral 
                under section 427(a)(2)(C) or 428(b)(1)(M).
            ``(2) Capitalization of interest.--
                    ``(A) In general.--Interest on loans made under 
                this section--
                            ``(i) which accrues prior to the beginning 
                        of repayment under paragraph (1)(A)(i), shall 
                        be added to the principal amount of the loan; 
                        and
                            ``(ii) which accrues prior to the beginning 
                        of repayment under paragraph (1)(A)(ii) or 
                        during a period in which payments of principal 
                        are deferred pursuant to paragraph (1)(B) 
                        shall, if agreed upon by the borrower and the 
                        lender--
                                    ``(I) be paid monthly or quarterly; 
                                or
                                    ``(II) be added to the principal 
                                amount of the loan not more frequently 
                                than quarterly by the lender.
                    ``(B) Insurable limits.--Capitalization of interest 
                under this paragraph shall not be deemed to exceed the 
                annual insurable limit on account of the borrower.''.
    (b) Conforming Amendment.--Section 428(b)(7)(C) of such Act (20 
U.S.C. 1078(b)(7)(C)) is amended by striking ``, 428B,''.
    (c) Effective Date.--The amendments made by this section shall be 
effective for loans issued on or after July 1, 2008.

SEC. 4. SPECIAL RULES FOR PLUS LOANS.

    Section 428B(a)(3) of the Higher Education Act of 1965 (20 U.S.C. 
1078-2(a)(3)) is amended to read as follows:
            ``(3) Special rules.--
                    ``(A) Parent borrowers.--Whenever necessary to 
                carry out the provisions of this section, the terms 
                `student' and `borrower' as used in this part shall 
                include a parent borrower under this section.
                    ``(B)(i) Extenuating circumstances.--For loans made 
                on or after July 1, 2008, and before July 1, 2009, a 
                lender may determine that extenuating circumstances 
                exist under the regulations promulgated pursuant to 
                paragraph (1)(A) if an applicant for a loan under this 
                section is delinquent for 180 days or less on their 
                home mortgage payments and is not more than 89 days 
                delinquent on the repayment of any other debt.
                    ``(ii) Master calendar inapplicable.--Section 482 
                shall not apply to determinations made under clause 
                (i).''.

SEC. 5. LENDER-OF-LAST-RESORT.

    (a) In General.--Section 428(j) of the Higher Education Act of 1965 
(20 U.S.C. 1078(j)) is amended--
            (1) in the first sentence of paragraph (1), by striking 
        ``students eligible to receive interest benefits paid on their 
        behalf under subsection (a) of this section who are otherwise 
        unable to obtain loans under this part'' and inserting 
        ``eligible students and parents who are otherwise unable to 
        obtain loans under this part (except for consolidation loans 
        under section 428C) or who attend an institution of higher 
        education in the State that is designated under paragraph 
        (4)'';
            (2) in paragraph (2)(B), by inserting ``, in the case of 
        students and parents applying for loans under this subsection 
        because of an inability to otherwise obtain loans under this 
        part (except for consolidation loans under section 428C),'' 
        after ``lender, nor'';
            (3) in paragraph (3)(C)--
                    (A) in the first sentence, by inserting ``or 
                designates an institution of higher education for 
                participation in the program under this subsection 
                under paragraph (4)'' after ``under this part''; and
                    (B) in the third sentence, by inserting ``or to 
                eligible borrowers who attend an institution in the 
                State that is designated under paragraph (4)'' after 
                ``problems''; and
            (4) by adding at the end the following:
            ``(4) Institution-wide student qualification.--Upon the 
        request of an institution of higher education and pursuant to 
        standards developed by the Secretary, the Secretary shall 
        designate such institution for participation in the lender-of-
        last-resort program under this paragraph. If the Secretary 
        designates an institution under this paragraph, the guaranty 
        agency designated for the State in which the institution is 
        located shall make loans, in the same manner as such loans are 
        made under paragraph (1), to students and parent borrowers of 
        the designated institution, regardless of whether the students 
        or parent borrowers are otherwise unable to obtain loans under 
        this part (other than a consolidation loan under section 428C).
            ``(5) Standards developed by the secretary.--In developing 
        standards with respect to paragraph (4), the Secretary may 
        require--
                    ``(A) an institution of higher education to 
                demonstrate that, despite due diligence on the part of 
                the institution, the institution has been unable to 
                secure the commitment of lenders willing to make loans 
                to a significant number of students attending the 
                institution;
                    ``(B) that, prior to making a request under such 
                paragraph for designation for participation in the 
                lender-of-last-resort program, an institution of higher 
                education shall demonstrate that the institution has 
                met a minimum threshold, as determined by the 
                Secretary, for the number or percentage of students at 
                such institution who have received rejections from 
                eligible lenders for loans under this part; and
                    ``(C) any other standards and guidelines the 
                Secretary determines to be appropriate.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on the date of enactment of this Act.
    (c) Review of Inducements Limitations.--Within 90 days after the 
date of enactment of this Act, the Secretary of Education shall review, 
and as necessary revise, the Department of Education's regulations 
concerning prohibited guaranty agency inducements to eligible lenders 
(34 CFR 682.401(e)) to ensure that such agency's do not engage in 
improper inducements in the expansion of operations of the lender-of-
last-resort program as authorized by the amendments made by this 
section. The Secretary shall submit a report on the review and revision 
required by this subsection to the Committee on Education and Labor of 
the House of Representatives and the Committee on Health, Education, 
Labor, and Pensions of the Senate within 180 days after such date of 
enactment.

SEC. 6. MANDATORY ADVANCES.

    (a) In General.--Section 421(b) of the Higher Education Act of 1965 
(20 U.S.C. 1071(b)) is amended--
            (1) in paragraph (4), by striking ``programs, and'' and 
        inserting ``programs,'';
            (2) in paragraph (5), by striking ``agencies.'' and 
        inserting ``agencies, and''; and
            (3) by adding at the end the following:
            ``(6) there is authorized to be appropriated, and there are 
        appropriated, out of any money in the Treasury not otherwise 
        appropriated, such sums as may be necessary for the purpose of 
        carrying out section 422(c)(7).''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on the date of enactment of this Act.

SEC. 7. TEMPORARY AUTHORITY TO PURCHASE STUDENT LOANS.

    (a) Spending Authority.--
            (1) Authority granted.--The first sentence of section 
        451(a) of the Higher Education Act of 1965 (20 U.S.C. 1087a(a)) 
        is amended--
                    (A) by inserting ``(1)'' after ``as may be 
                necessary''; and
                    (B) by inserting before the period at the end of 
                such sentence the following: ``; and (2) for purchasing 
                loans under section 459A''.
            (2) Conforming amendment.--Section 451(a) of such Act (20 
        U.S.C. 1087a(a)) is further amended by striking ``Such loans 
        shall'' and inserting ``Loans made under this part shall''.
    (b) Temporary Authority.--Part D of title IV of the Higher 
Education Act of 1965 (20 U.S.C. 1087a et seq.) is amended by inserting 
after section 459 the following new section:

``SEC. 459A. TEMPORARY AUTHORITY TO PURCHASE STUDENT LOANS.

    ``(a) Authority To Purchase.--
            ``(1) Authority; determination required.--Upon a 
        determination by the Secretary that there is an inadequate 
        availability of loan capital to meet the demand for loans under 
        sections 428, 428B, or 428H, whether as a result of inadequate 
        liquidity for such loans or for other reasons, the Secretary, 
        in consultation with the Secretary of the Treasury, is 
        authorized to purchase, or enter into forward commitments to 
        purchase, from any eligible lender, as defined by section 
        435(d)(1), loans originated under sections 428, 428B, or 428H 
        on or after October 1, 2003, on such terms as the Secretary, 
        the Secretary of the Treasury, and the Director of the Office 
        of Management and Budget jointly determine are in the best 
        interest of the United States, except that any purchase under 
        this section shall not result in any net cost to the Federal 
        Government, as determined jointly by the Secretary, the 
        Secretary of the Treasury, and the Director of the Office of 
        Management and Budget.
            ``(2) Regulations required.--The Secretary, the Secretary 
        of the Treasury, and the Director of the Office of Management 
        and Budget shall jointly promulgate emergency regulations and 
        publish such emergency regulations promptly in the Federal 
        Register concerning the purchases authorized by paragraph (1).
            ``(3) Methodology and factors; justification required.--
        Such regulations shall outline the methodology and factors that 
        the Secretary, the Secretary of the Treasury, and the Director 
        of the Office of Management and Budget shall consider in 
        evaluating the price at which to purchase loans under sections 
        428, 428B, or 428H, and shall include a justification of how 
        the use of such methodology and consideration of such factors 
        used to determine purchase price will ensure that loan 
        purchases do not result in any net cost to the Federal 
        Government.
    ``(b) Proceeds.--The Secretary shall require, as a condition of any 
purchase under subsection (a), that the funds paid by the Secretary to 
any eligible lender under this section shall be used: (1) to ensure 
continued participation of such lender in the Federal student loan 
programs authorized under part B of this title; and (2) to originate 
new Federal loans to students, as authorized under part B of this 
title.
    ``(c) Maintaining Servicing Arrangements.--The Secretary may, if 
agreed upon by an eligible lender selling loans under this section, 
contract with such lender for the servicing of the loans purchased, 
provided that--
            ``(1) the cost of such servicing arrangement does not 
        exceed the cost the Federal Government would otherwise incur 
        for the servicing of loans purchased, as determined under 
        subsection (a); and
            ``(2) such servicing arrangement is in the best interest of 
        the borrowers whose loans are purchased.
    ``(d) Expiration of Authority.--The Secretary's authority to 
purchase loans under this section shall expire on July 1, 2009.''.
    (c) Contracting Authority.--Section 456(b) of the Higher Education 
Act of 1965 (20 U.S.C. 1087f(b)) is amended by inserting ``or 
purchased'' after ``loans made'' each place it appears in paragraphs 
(2) and (3).

SEC. 8. SENSE OF CONGRESS.

    It is a sense of Congress that, at a time when our economy is 
fragile and higher education and retraining opportunities are more 
important than ever--
            (1) the Federal financial institutions, such as the Federal 
        Financing Bank and Federal Reserve, and federally chartered 
        private entities such as the Federal Home Loan Banks and 
        others, should consider, in consultation with the Secretary of 
        Treasury and the Secretary of Education, using available 
        authorities in a timely manner, if needed, to assist in 
        ensuring that students and families can access Federal student 
        loans for academic year 2008-2009, and if needed in the 
        subsequent academic year, in a manner that results in no 
        increased costs to taxpayers; and
            (2) any action taken as a result of such consideration 
        should in no way limit or delay the Secretary of Education's 
        authority to operate the lender-of-last-resort provisions of 
        section 428(j) of the Higher Education Act of 1965 (as amended 
        by this Act), nor the authority to purchase Federal Family 
        Education Loan Program loans, as authorized by section 459A of 
        such Act (as added by this Act).

SEC. 9. GAO STUDY ON IMPACT OF INCREASED LOAN LIMITS.

    (a) Study Required.--The Comptroller General shall conduct a study 
to evaluate the impact of the increase in Federal loan limits provided 
for in section 2 of this Act and section 8005 of the Deficit Reduction 
Act of 2005 with respect to the impact on--
            (1) tuition, fees, and room and board at institutions of 
        higher education; and
            (2) private loan borrowing by students and parents for 
        attendance at institutions of higher education.
    (b) Study Components.--The study required under subsection (a) 
shall be conducted for each major sector of institutions of higher 
education over a 5-year time period. The report shall specifically 
analyze the following:
            (1) Whether, on average, tuition, fees, and room and board 
        increase, decrease, or remain unchanged in each such sector 
        after the increases in Federal loan limits take effect.
            (2) Whether the amount of private educational loans taken 
        out by students (and their parents) at institutions in each 
        such sector to pay tuition, fees, and room and board increase, 
        decrease, or remain unchanged.
    (c) Report.--Not later than one year after the date of enactment of 
this Act, the Comptroller General shall provide an interim report to 
the Committee on Education and Labor of the House of Representatives 
and the Committee on Health, Education, Labor, and Pensions of the 
Senate including the initial results of the study conducted under this 
section. The Comptroller General shall follow up with such Committees 
after the third year and the fifth year after such date of enactment.

            Passed the House of Representatives April 17, 2008.

            Attest:

                                                                 Clerk.
110th CONGRESS

  2d Session

                               H. R. 5715

_______________________________________________________________________

                                 AN ACT

To ensure continued availability of access to the Federal student loan 
                   program for students and families.