[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5715 Enrolled Bill (ENR)]

        H.R.5715

                       One Hundred Tenth Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

          Begun and held at the City of Washington on Thursday,
            the third day of January, two thousand and eight


                                 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 
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 first disbursed 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 first disbursed 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.--An eligible lender may 
        determine that extenuating circumstances exist under the 
        regulations promulgated pursuant to paragraph (1)(A) if, during 
        the period beginning January 1, 2007, and ending December 31, 
        2009, an applicant for a loan under this section--
                ``(I) is or has been delinquent for 180 days or fewer 
            on mortgage loan payments or on medical bill payments 
            during such period; and
                ``(II) is not and has not been more than 89 days 
            delinquent on the repayment of any other debt during such 
            period.
            ``(ii) Definition of mortgage loan.--In this subparagraph, 
        the term `mortgage loan' means an extension of credit to a 
        borrower that is secured by the primary residence of the 
        borrower.
            ``(iii) Rule of construction.--Nothing in this subparagraph 
        shall be construed to limit an eligible lender's authority 
        under the regulations promulgated pursuant to paragraph (1)(A) 
        to determine that extenuating circumstances exist.''.
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)'';
        (1) in paragraph (1), by inserting after the second sentence 
    the following: ``No loan under section 428, 428B, or 428H that is 
    made pursuant to this subsection shall be made with interest rates, 
    origination or default fees, or other terms and conditions that are 
    more favorable to the borrower than the maximum interest rates, 
    origination or default fees, or other terms and conditions 
    applicable to that type of loan under this part.'';
        (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 
        eligible lenders willing to make loans under this part 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.
        ``(6) Expiration of authority.--The Secretary's authority under 
    paragraph (4) to designate institutions of higher education for 
    participation in the program under this subsection shall expire on 
    June 30, 2009.
        ``(7) Expiration of designation.--The eligibility of an 
    institution of higher education, or borrowers from such 
    institution, to participate in the program under this subsection 
    pursuant to a designation of the institution by the Secretary under 
    paragraph (4) shall expire on June 30, 2009. After such date, 
    borrowers from an institution designated under paragraph (4) shall 
    be eligible to participate in the program under this subsection as 
    such program existed on the day before the date of enactment of the 
    Ensuring Continued Access to Student Loans Act of 2008.
        ``(8) Prohibition on inducements and marketing.--Each guaranty 
    agency or eligible lender that serves as a lender-of-last-resort 
    under this subsection--
            ``(A) shall be subject to the prohibitions on inducements 
        contained in subsection (b)(3) and the requirements of section 
        435(d)(5); and
            ``(B) shall not advertise, market, or otherwise promote 
        loans under this subsection, except that nothing in this 
        paragraph shall prohibit a guaranty agency from fulfilling its 
        responsibilities under paragraph (2)(C).
        ``(9) Dissemination and reporting.--
            ``(A) In general.--The Secretary shall--
                ``(i) broadly disseminate information regarding the 
            availability of loans made under this subsection;
                ``(ii) during the period beginning July 1, 2008 and 
            ending June 30, 2010, provide to the Committee on Health, 
            Education, Labor, and Pensions of the Senate and the 
            Committee on Education and Labor of the House of 
            Representatives and make available to the public--

                    ``(I) copies of any new or revised plans or 
                agreements made by guaranty agencies or the Department 
                related to the authorities under this subsection;
                    ``(II) quarterly reports on--

                        ``(aa) the number and amounts of loans 
                    originated or approved pursuant to this subsection 
                    by each guaranty agency and eligible lender; and
                        ``(bb) any related payments by the Department, 
                    a guaranty agency, or an eligible lender; and

                    ``(III) a budget estimate of the costs to the 
                Federal Government (including subsidy and 
                administrative costs) for each 100 dollars loaned, of 
                loans made pursuant to this subsection between the date 
                of enactment of the Ensuring Continued Access to 
                Student Loans Act of 2008 and June 30, 2009, 
                disaggregated by type of loan, compared to such costs 
                to the Federal Government during such time period of 
                comparable loans under this part and part D, 
                disaggregated by part and by type of loan; and

                ``(iii) beginning July 1, 2010, provide to the 
            Committee on Health, Education, Labor, and Pensions of the 
            Senate and the Committee on Education and Labor of the 
            House of Representatives and make available to the public--

                    ``(I) copies of any new or revised plans or 
                agreements made by guaranty agencies or the Department 
                related to the authorities under this subsection; and
                    ``(II) annual reports on--

                        ``(aa) the number and amounts of loans 
                    originated or approved pursuant to this subsection 
                    by each guaranty agency and eligible lender; and
                        ``(bb) any related payments by the Department, 
                    a guaranty agency, or an eligible lender.
            ``(B) Separate reporting.--The information required to be 
        reported under subparagraph (A)(ii)(II) shall be reported 
        separately for loans originated or approved pursuant to 
        paragraph (4), or payments related to such loans, for the time 
        period in which the Secretary is authorized to make 
        designations under paragraph (4).''.
    (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 agencies 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 inserting before the matter following paragraph (5) 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 first disbursed under sections 
    428, 428B, or 428H on or after October 1, 2003, and before July 1, 
    2009, 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 (including the cost of servicing 
    the loans purchased), as determined jointly by the Secretary, the 
    Secretary of the Treasury, and the Director of the Office of 
    Management and Budget.
        ``(2) Federal register notice.--The Secretary, the Secretary of 
    the Treasury, and the Director of the Office of Management and 
    Budget, shall jointly publish a notice in the Federal Register 
    prior to any purchase of loans under this section that--
            ``(A) establishes the terms and conditions governing the 
        purchases authorized by paragraph (1);
            ``(B) includes an outline of the methodology and factors 
        that the Secretary, the Secretary of the Treasury, and the 
        Director of the Office of Management and Budget, will jointly 
        consider in evaluating the price at which to purchase loans 
        made under section 428, 428B, or 428H; and
            ``(C) describes 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 (including the cost of servicing the 
        loans purchased).
    ``(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.
  SEC. 10. ACADEMIC COMPETITIVENESS GRANTS.
    (a) Amendments.--Section 401A of the Higher Education Act of 1965 
(20 U.S.C. 1070a-1) is amended--
        (1) by striking subsection (a) and inserting the following:
    ``(a) Academic Competitiveness Grant Program Authorized.--The 
Secretary shall award grants, in the amounts specified in subsection 
(d)(1), to eligible students to assist the eligible students in paying 
their college education expenses.'';
        (2) in subsection (b)--
            (A) by striking ``academic year'' each place it appears and 
        inserting ``year''; and
            (B) in paragraph (2), by striking ``third or fourth'' and 
        inserting ``third, fourth, or fifth'';
        (3) in subsection (c)--
            (A) in the matter preceding paragraph (1)--
                (i) by striking ``full-time'';
                (ii) by striking ``academic'' and inserting ``award''; 
            and
                (iii) by striking ``is made'' and inserting ``is made 
            for a grant under this section'';
            (B) by striking paragraphs (1) and (2) and inserting the 
        following:
        ``(1) is eligible for a Federal Pell Grant;
        ``(2) is enrolled or accepted for enrollment in an institution 
    of higher education on not less than a half-time basis; and''; and
            (C) in paragraph (3)--
                (i) by striking ``academic'' each place the term 
            appears;
                (ii) in subparagraph (A)--

                    (I) by striking the matter preceding clause (i) and 
                inserting the following:

            ``(A) the first year of a program of undergraduate 
        education at a two- or four-year degree-granting institution of 
        higher education (including a program of not less than one year 
        for which the institution awards a 
        certificate)--'';

                    (II) by striking clause (i) and inserting the 
                following:

                ``(i) has successfully completed, after January 1, 
            2006, a rigorous secondary school program of study that 
            prepares students for college and is recognized as such by 
            the State official designated for such recognition, or with 
            respect to any private or home school, the school official 
            designated for such recognition for such school, consistent 
            with State law, which recognized program shall be reported 
            to the Secretary; and''; and

                    (III) in clause (ii), by inserting ``, except as 
                part of a secondary school program of study'' before 
                the semicolon;

                (iii) in subparagraph (B)--

                    (I) in the matter preceding clause (i), by striking 
                ``year of'' and all that follows through ``higher 
                education'' and inserting ``year of a program of 
                undergraduate education at a two- or four-year degree-
                granting institution of higher education (including a 
                program of not less than two years for which the 
                institution awards a certificate)''; and
                    (II) in clause (ii), by striking ``or'' after the 
                semicolon at the end;

                (iv) in subparagraph (C)--

                    (I) in the matter preceding subclause (I) of clause 
                (i), by inserting ``certified by the institution to 
                be'' after ``is'';
                    (II) by striking clause (i)(II) and inserting the 
                following:
                    ``(II) a critical foreign language; and''; and
                    (III) in clause (ii), by striking the period at the 
                end and inserting a semicolon; and

                (v) by adding at the end the following:
            ``(D) the third or fourth year of a program of 
        undergraduate education at an institution of higher education 
        (as defined in section 101(a)), is attending an institution 
        that demonstrates, to the satisfaction of the Secretary, that 
        the institution--
                ``(i) offers a single liberal arts curriculum leading 
            to a baccalaureate degree, under which students are not 
            permitted by the institution to declare a major in a 
            particular subject area, and the student--

                    ``(I)(aa) studies, in such years, a subject 
                described in subparagraph (C)(i) that is at least equal 
                to the requirements for an academic major at an 
                institution of higher education that offers a 
                baccalaureate degree in such subject, as certified by 
                an appropriate official from the institution; and
                    ``(bb) has obtained a cumulative grade point 
                average of at least 3.0 (or the equivalent as 
                determined under regulations prescribed by the 
                Secretary) in the relevant coursework; or
                    ``(II) is required, as part of the student's degree 
                program, to undertake a rigorous course of study in 
                mathematics, biology, chemistry, and physics, which 
                consists of at least--

                        ``(aa) 4 years of study in mathematics; and
                        ``(bb) 3 years of study in the sciences, with a 
                    laboratory component in each of those years; and
                ``(ii) offered such curriculum prior to February 8, 
            2006; or
            ``(E) the fifth year of a program of undergraduate 
        education that requires 5 full years of coursework, as 
        certified by the appropriate official of the degree-granting 
        institution of higher education, for which a baccalaureate 
        degree is awarded by a degree-granting institution of higher 
        education--
                ``(i) is certified by the institution of higher 
            education to be pursuing a major in--

                    ``(I) the physical, life, or computer sciences, 
                mathematics, technology, or engineering (as determined 
                by the Secretary pursuant to regulations); or
                    ``(II) a critical foreign language; and

                ``(ii) has obtained a cumulative grade point average of 
            at least 3.0 (or the equivalent, as determined under 
            regulations prescribed by the Secretary) in the coursework 
            required for the major described in clause (i).'';
        (4) in subsection (d)--
            (A) in paragraph (1)--
                (i) in subparagraph (A)--

                    (I) by striking ``The'' and inserting ``In 
                general.--The'';
                    (II) in clause (ii), by striking ``or'' after the 
                semicolon at the end;
                    (III) in clause (iii), by striking ``subsection 
                (c)(3)(C).'' and inserting ``subparagraph (C) or (D) of 
                subsection (c)(3), for each of the two years described 
                in such subparagraphs; or''; and
                    (IV) by adding at the end the following:

                ``(iv) $4,000 for an eligible student under subsection 
            (c)(3)(E).''; and
                (ii) in subparagraph (B)--

                    (I) by striking ``Notwithstanding'' and inserting 
                ``Limitation; ratable reduction.--Notwithstanding'';
                    (II) by redesignating clauses (i), (ii), and (iii), 
                as clauses (ii), (iii), and (iv), respectively; and
                    (III) by inserting before clause (ii), as 
                redesignated under subclause (II), the following:

                ``(i) in any case in which a student attends an 
            institution of higher education on less than a full-time 
            basis, the amount of the grant that such student may 
            receive shall be reduced in the same manner as a Federal 
            Pell Grant is reduced under section 401(b)(2)(B);'';
            (B) by striking paragraph (2) and inserting the following:
        ``(2) Limitations.--
            ``(A) No grants for previous credit.--The Secretary may not 
        award a grant under this section to any student for any year of 
        a program of undergraduate education for which the student 
        received credit before the date of enactment of the Higher 
        Education Reconciliation Act of 2005.
            ``(B) Number of grants.--The Secretary may not award more 
        than one grant to a student described in subsection (c)(3) for 
        each year of study described in such subsection.''; and
            (C) by adding at the end the following: and
        ``(3) Calculation of grant payments.--An institution of higher 
    education shall make payments of a grant awarded under this section 
    in the same manner, using the same payment periods, as such 
    institution makes payments for Federal Pell Grants under section 
    401.'';
        (5) by striking subsection (e)(2) and inserting the following:
        ``(2) Availability of funds.--Funds made available under 
    paragraph (1) for a fiscal year shall remain available for the 
    succeeding fiscal year.'';
        (6) in subsection (f)--
            (A) by striking ``at least one'' and inserting ``not less 
        than one''; and
            (B) by striking ``subsection (c)(3)(A) and (B)'' and 
        inserting ``subparagraphs (A) and (B) of subsection (c)(3)''; 
        and
        (7) in subsection (g), by striking ``academic'' and inserting 
    ``award''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on January 1, 2009.
  SEC. 11. INAPPLICABILITY OF MASTER CALENDAR AND NEGOTIATED RULEMAKING 
      REQUIREMENTS.
    Sections 482 and 492 of the Higher Education Act of 1965 (20 U.S.C. 
1089, 1098a) shall not apply to amendments made by sections 2 through 9 
of this Act, or to any regulations promulgated under such amendments.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.