[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5715 Placed on Calendar Senate (PCS)]
Calendar No. 722
110th CONGRESS
2d Session
H. R. 5715
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 28, 2008
Received; read the first time
April 29, 2008
Read the second time and placed on the calendar
_______________________________________________________________________
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:
LORRAINE C. MILLER,
Clerk.
Calendar No. 722
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.
_______________________________________________________________________
April 29, 2008
Read the second time and placed on the calendar