[Congressional Record Volume 144, Number 50 (Wednesday, April 29, 1998)]
[House]
[Pages H2510-H2594]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  HIGHER EDUCATION AMENDMENTS OF 1998

  Mr. HASTINGS of Washington. Mr. Speaker, by direction of the 
Committee on Rules, I call up House Resolution 411 and ask for its 
immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 411

       Resolved, That at any time after the adoption of this 
     resolution the Speaker may, pursuant to clause 1(b) of rule 
     XXIII, declare the House resolved into the Committee of the 
     Whole House on the State of the Union for consideration of 
     the bill (H.R. 6) to extend the authorization of programs 
     under the Higher Education Act of 1965, and for other 
     purposes. The first reading of the bill shall be dispensed 
     with. All points of order against consideration of the bill 
     are waived. General debate shall be confined to the bill and 
     shall not exceed one hour equally divided and controlled by 
     the chairman and ranking minority member of the Committee on 
     Education and the Workforce. After general debate the bill 
     shall be considered for amendment under the five-minute rule. 
     It shall be in order to consider as an original bill for the 
     purpose of amendment under the five-minute rule the amendment 
     in the nature of a substitute recommended by the Committee on 
     Education and the Workforce now printed in the bill, modified 
     by the amendments printed in part 1 of the report of the 
     Committee on Rules accompanying this resolution. That 
     amendment in the nature of a substitute shall be considered 
     by title rather than by section. Each title shall be 
     considered as read. All points of order against that 
     amendment in the nature of a substitute are waived. Before 
     consideration of any other amendment it shall be in order to 
     consider the amendment printed in part 2 of the report of the 
     Committee on Rules, if offered by Representative Goodling or 
     his designee. That amendment shall be considered as read, 
     shall be debatable for 20 minutes equally divided and 
     controlled by the proponent and an opponent, shall not be 
     subject to amendment, and shall not be subject to a demand 
     for division of the question in the House or in the Committee 
     of the Whole. All points of order against that amendment are 
     waived. If that amendment is adopted, the provisions of the 
     amendment in the nature of a substitute as then perfected 
     shall be considered as original text for the purpose of 
     further amendment. No other amendment to the amendment in the 
     nature of a substitute shall be in order except those printed 
     in the portion of the Congressional Record designated for 
     that purpose in clause 6 of rule XXIII. Printed amendments 
     shall be considered as read. The chairman of the Committee of 
     the Whole may: (1) postpone until a time during further 
     consideration in the Committee of the Whole a request for a 
     recorded vote on any amendment; and (2) reduce to five 
     minutes the minimum time for electronic voting on any 
     postponed question that follows another electronic vote 
     without intervening business: Provided, That the minimum time 
     for electronic voting on the first in any series of questions 
     shall be 15 minutes. At the conclusion of consideration of 
     the bill for amendment the Committee shall rise and report 
     the bill to the House with such amendments as may have been 
     adopted. Any Member may demand a separate vote in the House 
     on any amendment adopted in the Committee of the Whole to the 
     bill or to the amendment in the nature of a substitute 
     ultimately considered as original text. The previous question 
     shall be considered as ordered on the bill and amendments 
     thereto to final passage without intervening motion except 
     one motion to recommit with or without instructions.

  The SPEAKER pro tempore. The gentleman from Washington (Mr. Hastings) 
is recognized for 1 hour.
  Mr. HASTINGS of Washington. Mr. Speaker, for the purposes of debate 
only, I yield the customary 30 minutes to the gentleman from Ohio (Mr. 
Hall), pending which I yield myself such time as I may consume. During 
consideration of this resolution, all time yielded is for the purposes 
of debate only.
  (Mr. HASTINGS of Washington asked and was given permission to revise 
and extend his remarks.)
  Mr. HASTINGS of Washington. Mr. Speaker, H.Res. 411 is a modified 
open rule waiving all points of order against consideration of the 
bill. The bill provides 1 hour of general debate to be divided equally 
between the chairman and ranking minority member of the Committee on 
Education and the Workforce.

[[Page H2511]]

  The rule also provides that the amendment in the nature of a 
substitute recommended by the Committee on Education and the Workforce 
now printed in the bill, as modified by the amendments printed in part 
1 of the report of the Committee on Rules, shall be considered as an 
original bill for the purpose of amendment.
  Furthermore, Mr. Speaker, the rule provides that the amendment in the 
nature of a substitute shall be considered by title and that each title 
shall be considered as read. All points of order are waived against the 
amendment in the nature of a substitute.
  The rule provides that before consideration of any other amendment, 
it shall be in order to consider the manager's amendment printed in 
part 2 of the report of the Committee on Rules, if offered by the 
gentleman from Pennsylvania (Mr. Goodling) or his designee.
  All points of order against that amendment are also waived, it shall 
be considered as read, and shall be debatable for 20 minutes equally 
divided and controlled by the proponent and an opponent. It shall not 
be subject to amendment and shall not be subject to a demand for 
division of the question in the House or in the Committee of the Whole.
  If that amendment is adopted, the provisions of that amendment in the 
nature of a substitute as then perfected shall be considered as 
original text for the purpose of further amendment.
  Mr. Speaker, H.Res. 411 provides that no other amendment to the 
amendment in the nature of a substitute shall be in order except those 
printed in the Congressional Record.
  The rule allows the Chairman of the Committee of the Whole to 
postpone votes during consideration of the bill and to reduce votes to 
5 minutes on a postponed question if the vote follows a 15-minute vote.
  Finally, the rule provides one motion to recommit, with or without 
instructions.
  Mr. Speaker, H.R. 6, the Higher Education Amendments of 1998, 
reauthorizes existing programs that provide Federal aid to students. It 
is designed to help to make college more affordable, simplify the 
student aid system and improve academic quality. Most importantly, Mr. 
Speaker, this legislation will ensure that all Americans wishing to 
pursue a higher education will continue to have that opportunity.
  First and foremost, H.R. 6 safeguards the student loan program by 
ensuring that student loans will remain available for all students and 
that students will receive the lowest interest rates in 17 years.
  Moreover, once this bill is enacted into law, deserving students from 
disadvantaged backgrounds will have more Federal support to attend 
college than ever before. H.R. 6 improves campus-based aid programs 
such as Work Study, Supplemental Educational Opportunity Grants, and 
Perkins Loans. It also expands flexibility in the Pell Grant program 
that provides vouchers to needy students, by permitting a larger 
portion of the grant to be used for purposes other than tuition, such 
as child care for parents attending classes.
  Mr. Speaker, encouraging students and their parents to work and save 
for educational expenses is a priority in this Congress. Accordingly, 
H.R. 6 increases the amount of income students may earn before it 
impacts their eligibility for financial aid. The bill also exempts 
veterans' benefits from being counted against students when they apply 
for financial aid.
  Incredibly, Mr. Speaker, the current financial aid formula treats the 
assets of students and their parents differently and separately, as 
though they are not part of the same family. H.R. 6 changes this 
provision by combining the assets of the student and his or her parents 
when calculating the total ability of the family to contribute towards 
college expenses.
  Finally, this legislation contains a number of administrative changes 
designed to streamline aid to education and eliminate bureaucratic red 
tape. In that regard, H.R. 6 can truly be described as a good deal for 
taxpayers as well as a good deal for students.
  I commend the Committee on Education and the Workforce, and in 
particular the gentleman from Pennsylvania (Mr. Goodling), the 
gentleman from California (Mr. McKeon), the gentleman from Missouri 
(Mr. Clay) and the gentleman from Michigan (Mr. Kildee) for their 
efforts in bringing this important legislation to the floor. The rule 
before the House today is designed to provide full and fair 
consideration of the committee's work product, while limiting the 
opportunity for Members desiring merely to score political points with 
this bipartisan legislation.
  Mr. Speaker, the quality of our higher education system in the United 
States has long been the envy of the entire world. At the same time, 
access to higher education for all deserving young people has been one 
of the driving forces behind two centuries of innovation and economic 
growth.
  I urge my colleagues to continue this tradition by putting America's 
students and their education first and adopting both this rule and H.R. 
6, the Higher Education Amendments of 1998.
  Mr. Speaker, I reserve the balance of my time.

                              {time}  1900

  Mr. HALL of Ohio. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I want to thank my colleague from Washington (Mr. 
Hastings) for yielding me the time.
  This is a modified open rule. It will allow debate on H.R. 6, which 
is the Higher Education Amendment of 1998. As my colleague has 
described, this rule provides 1 hour of general debate to be equally 
divided and controlled by the chairman and the ranking minority member 
of the Committee on Education and the Workforce.
  The rule makes in order only those amendments that have been 
preprinted in the Congressional Record. These amendments will be 
permitted under the 5-minute rule, the normal amending process in the 
House. The rule does permit germane amendments to those preprinted 
amendments.
  The bill continues and revises Federal student loans, Pell grants and 
other higher education programs. Federal grants, loans and college work 
study awards have made the dream of higher education a reality for 
millions of young people. These programs are essential to bring the 
opportunity for higher education to all Americans. This bill makes a 
number of important changes to the programs intended to make college 
affordable, simplify the student aid system and promote academic 
quality.
  Mr. Speaker, It is a bipartisan bill. It has strong support from both 
sides of the aisle. The Committee on Education and the Workforce 
reported the bill with all Democrats who were present supporting it.
  During testimony last night before the Committee on Rules, the 
gentleman from Missouri (Mr. Clay) the ranking minority member of the 
committee, and the gentleman from Michigan (Mr. Kildee) the ranking 
minority member of the subcommittee, requested a full and open rule. 
The Committee on Rules denied the request, instead requiring all floor 
amendments to be preprinted in the Congressional Record. Even though 
the minority's request was not fully granted, the rule will provide 
opportunity for Members to amend the bill on the House floor. Moreover, 
the bill is the result of a bipartisan process.
  Mr. Speaker, the Committee on Rules approved this modified open rule 
by a voice vote, and I would urge adoption of the rule.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HASTINGS of Washington. Mr. Speaker, I yield 4 minutes to the 
gentleman from Tennessee (Mr. Duncan).
  Mr. DUNCAN. Mr. Speaker, I rise in support of the rule and for the 
underlying bill, H.R. 6, which this rule brings to the floor, the 
Higher Education Amendments of 1998.
  I especially want to thank my good friend, the gentleman from 
Washington (Mr. Hastings) for yielding me this time; and also I would 
like to thank the chairman, the gentleman from Pennsylvania (Mr. 
Goodling) for including provisions in the bill in H.R. 6 which are 
similar to my bill, H.R. 715, the Accuracy in Campus Crime Reporting 
Act.
  I would briefly like to discuss H.R. 715, much of which has been 
incorporated into H.R. 6.
  This legislation, H.R. 715, currently has 71 cosponsors almost 
equally split between both parties. H.R. 715 is a

[[Page H2512]]

genuinely bipartisan bill. No college or university that has a safe 
campus should have any problems with the campus security provisions in 
H.R. 6, but for those institutions that do have crime problems, 
students and their parents should have a right to know about these 
dangers before they enroll.
  I became concerned about this issue after meeting with several 
families whose children had been murdered on college campuses. These 
families never dreamed that they should have to worry about the 
physical safety of their children on college campuses.
  The issue of campus crime last attracted the interest of many in the 
national media in the past year. Both CBS and ABC have devoted 
extensive time to this problem. Several leading publications have also 
covered this story. In fact, both the New Republic and USA Today have 
favorably written about my legislation, H.R. 715.
  After reading many of these articles and hearing these reports, it 
became painfully obvious to me that many colleges are doing a poor job 
in giving students and their parents an accurate picture of the dangers 
that lurk on some college campuses.
  On February 9, USA Today strongly endorsed H.R. 715 by stating, 
quote, in 1990, Congress passed a law requiring colleges to collect 
annual campus crime statistics, but the Education Department blocked 
the law's full implementation by threatening to withhold Federal funds 
from colleges opening their police logs.
  USA Today then hit the nail on the head by concluding, quote, it is a 
sad state of affairs when an act of Congress is necessary for the 
Education Department to protect student safety.
  I think, Mr. Speaker, that most of us look fondly on our college 
days, from the appealing image of ivy-lined brick buildings, the 
excitement of interacting with professors and, of course, making new 
friends who last for a lifetime. At least, that is what my colleagues 
and I probably remember.
  However, in the 1990s, unfortunately, the reality is far different. 
On many campuses, rapes, robberies and even murders are becoming far 
too common. Students now have reason to fear for their safety on some 
campuses.
  Mr. Speaker, I am very pleased that H.R. 6 contains campus security 
provisions that are modeled on H.R. 715. The campus security provisions 
of H.R. 6 require colleges and universities to maintain a daily log of 
all crimes committed and make those logs available for public 
inspection within 48 hours.
  Many States already require colleges and universities to make their 
police logs public. These provisions in H.R. 6 are a matter of fairness 
to those institutions which are making good-faith efforts to inform the 
public of the dangers on their campuses. The need for accurate police 
logs is crucial so that accurate crime statistics can be compiled. The 
public must be able to make informed decisions about where to attend 
college.
  While I would have liked to have seen more provisions from H.R. 715 
included in H.R. 6, I believe that the provisions that are included 
will go a long way in improving the public's awareness of the dangers 
that, unfortunately, lurk on some of our college campuses. I appreciate 
the cooperation of the gentleman from Pennsylvania (Mr. Goodling) in 
this regard, and I urge support for H.R. 6.
  Mr. HALL of Ohio. Mr. Speaker, I yield 4 minutes to the gentleman 
from South Carolina (Mr. Spratt).
  (Mr. SPRATT asked and was given permission to revise and extend his 
remarks.)
  Mr. SPRATT. Mr. Speaker, I thank the gentleman for yielding me the 
time.
  Mr. Speaker, I support student loans, and I support the kind of 
compromise that has been reached in this bill, but as the ranking 
democrat on the Committee on the Budget I have to raise concerns about 
this bill because I do not think it complies with the Budget Act, and I 
think those concerns should be expressed.
  For the first time in 30 years, we have got a balanced budget this 
year, and we have got a balanced budget in part because of disciplines 
and budget process changes we made in the Budget Summit Agreement of 
1990, the Omnibus Budget Reconciliation Act of 1993 and the Balanced 
Budget Act last year, 1997.
  One of those rules which we established in 1990 and have carried 
forward in each of those years was the so-called pay-go rule, which 
simply provides that any time anyone wants to liberalize or add to an 
entitlement the cost of it must be paid for either by identifying a 
revenue stream to pay for it or by reducing an entitlement somewhere 
else in the budget.
  When the rule was read, the gentleman noted that all points of order 
are raised. The reason all points of order have to be raised as to the 
Budget Act is that this particular bill increases direct spending for 
student loans by $2.8 billion, according to the Office of Management 
and Budget, over and above what was provided in the balanced budget 
agreement last year.
  In effect, what we have done here is lower the rates the students 
will pay, and that is good, I am for that, and raise to some extent 
what the banks will realize for these loans. We have increased the 
spread over and above what was anticipated for the next 5 years, and 
the cost is $2.8 billion, according to OMB.
  Now what does this mean? We have waived points of order. The bill 
cannot be withheld. I know the calamity it would cause if it were 
withheld because students are making decisions about how they will pay 
for college right now.
  But what this means is that we will have an entry on something called 
the pay-go score card. There is about $700 million in scored offsets to 
this bill so the entry will be $2.8 billion minus $700 million equals 
$2.1 billion. And if as of September 30 of this year we have not 
cleared that from the score card, it will trigger sequestration. It 
will mean across-the-board cuts in a host of programs, including 
educational programs, voc rehab. Ironically, it will increase student 
loan origination fees.
  Now I am not criticizing the group here that put this together. I am 
criticizing the way the House is run. We should have had well before 
now a budget resolution. We have a process by which these decisions are 
not made one by one, piecemeal. They are made in a comprehensive 
context where we have to identify the offsets, identify the tradeoffs. 
When we want to increase one thing, we have got to decrease something 
else. We have not done that.
  The most egregious violation of it was the BESTEA bill, the 
transportation bill that we had on the floor just a few weeks ago. That 
particular bill will increase spending by $35 billion over and above 
what we provided in the BBA. This is just another illustration of what 
happens when we do not have a budget agreement, when we do not have a 
budget resolution.
  The proper procedure would be to send this bill back to the committee 
and require maybe not this group but some group to identify the offsets 
better than the offsets that have been identified here. I know that is 
not going to happen.
  When the bill comes up, I am going to vote for it myself. But I could 
not let the bill come to the floor, could not let it be considered in 
this manner, could not let this routine incantation that all points of 
order are waived be made without raising the concern of the Committee 
on the Budget, my own personal concern that we are deviating from the 
disciplines that have brought us to a balanced budget for the first 
time in 30 years, and we are going to have a real pileup in September 
unless we get under way with the budget resolution in the process that 
we duly adopted.
  Mr. HASTINGS of Washington. Mr. Speaker, I yield 2\1/2\ minutes to 
the gentleman from Pennsylvania (Mr. Goodling) the chairman of the 
Committee on Education and the Workforce.
  Mr. GOODLING. Mr. Speaker, I thank the gentleman for yielding the 
time to me.
  First, I would like to say that I wish the previous speaker would 
have been sitting on our committee when we were marking up. I sure 
could have used him. Because we had amendment after amendment after 
amendment, and every time I asked where is the offset, they said there 
was not any. Now, fortunately, we were able to defeat them in a 
bipartisan way, but, otherwise, we had a serious problem.
  I think it is important to point out that we have asked the lending 
institutions to reduce yields by 30 basis points that they would 
normally expect to receive, so it is not a situation where

[[Page H2513]]

somebody came and gave them more. We asked them to reduce yields by 30 
points, and we did that to bring about an agreement with the students. 
And for the gentleman from California (Mr. McKeon) and the gentleman 
from Michigan (Mr. Kildee) I will not be so informal. They worked for a 
year and a half to bring about this agreement between the students and 
the lending institutions.
  The scoring has been a problem. There is no question about it. At one 
point, they were told that we have about $4 billion to $6 billion in 
savings. We were really swimming in good water. We had all sorts of 
money to spend. Next time they scored it, they used a different scoring 
method, and all of a sudden we are a billion dollars short.
  I would also tell the previous gentleman we have come up with at 
least half of that, and I believe that the Committee on the Budget is 
able to come up with the other half.
  So, again, it has been a very difficult thing, but we know that we 
must have it on the President's desk by May 15, unless my colleagues 
want to have total, a total disaster. We will have parents, we will 
have students, we will have schools sitting out there wondering are 
their loans? When will we find out?
  So we just positively have to move the legislation, and I cannot give 
the two congressmen I mentioned enough credit for the amount of hours 
that they have spent and the staffs have spent to bring together the 
students and the lending institutions.
  Above all, the students do not want to see their opportunity taken 
away from them simply because we in the Congress cannot come up with an 
agreement that will save the private sector as far as their ability to 
provide 70 percent of all Federal student loans. So I would hope that 
we can eliminate an awful lot of the amendments that are coming up 
because that could really drive us up the wall and then we will really 
have a scoring problem and, at the same time, get this legislation to 
the President quickly.
  Mr. HALL of Ohio. Mr. Speaker, I yield 3 minutes to the gentleman 
from Maryland (Mr. Hoyer).
  Mr. HOYER. Mr. Speaker, I thank the gentleman for yielding this time 
to me, my friend from Ohio.
  Mr. Speaker, I rise today in support of this rule and in support of 
this bill. However, I must say that I share the views of the gentleman 
from South Carolina (Mr. Spratt) the ranking member of the Committee on 
the Budget. I think his concerns are absolutely accurate; but, like 
him, I will vote for this bill and hope that we can work out some of 
the problems as it goes through.
  I am pleased that the committee was able to work together in a 
bipartisan fashion to draft this bill. However, Mr. Speaker, I am 
extremely concerned that the authorization for the National Board for 
Professional Teaching Standards was eliminated during markup of the 
bill.

                              {time}  1915

  I have talked to some of the staff of the committee on our side, and 
that was not our intent, and my understanding is we are not supportive 
of that, although it is a small component of a large bill.
  As education is one of our Nation's highest priorities, Mr. Speaker, 
we need to focus on improving the quality of the teachers in our 
schools. National board certification is, in my opinion, an important 
way to achieve this goal. Both the President and a bipartisan group of 
our Nation's Governors support the good work that the national board is 
doing to improve the quality of our teachers.
  Recently, Mr. Speaker, the Maryland Legislature passed a bill 
creating a pilot program to encourage up to 45 teachers to seek 
national board certification. In the city of Bowie, Maryland, just down 
the road, the City Council approved a $20,000 set-aside in its 1997-
1998 budget for initiatives to enhance the teaching skills and 
instructional environment in Bowie schools, including national board 
certification.
  Mr. Speaker, as President Clinton said last Friday, and I quote, now 
is no time to walk away from our commitment to public education. The 
National Board for Professional Teaching Standards, the President said, 
should not be a partisan issue, it should not be an ideological issue, 
it ought to be purely and simply what we can do to help you do what is 
best for our children and their future, close quote.
  Mr. Speaker, as I said, I will support this bill, but I am very, very 
hopeful that the National Board for Professional Teaching Standards is 
included in the Senate bill and will be included in the conference. I 
will be talking to my good friend, the gentleman from Missouri (Mr. 
Clay), the chairman-in-exile of this committee, and the gentleman from 
Pennsylvania (Mr. Goodling), chairman of this committee, in working 
toward that end.
  I think this is a critical component of our overall effort to upgrade 
the status of teaching, and, therefore, the quality of education in our 
schools. I would hope that we could come to an agreement between the 
two bodies on this, and I look forward to working toward that end.
  Mr. HASTINGS of Washington. Mr. Speaker, I yield 3 minutes to the 
gentleman from Texas (Mr. Paul).
  (Mr. PAUL asked and was given permission to revise and extend his 
remarks.)
  Mr. PAUL. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  I rise in support of this rule. It is obviously a very fair rule 
because I am allowed to offer an amendment later on, so I am pleased to 
be able to vote for this rule. I have an amendment that I am going to 
offer in Title I which will be designated so that the Social Security 
number cannot be used for the electronic personal identifier for any of 
the programs in this educational bill.
  The American people have become very worried about how often the 
Social Security number is being used as a national identification 
number, and we are working quickly toward a time where we have a 
national identification card. We certainly have abused the Social 
Security number as being the number. It was never intended that way. 
That is not what was intended when the Social Security was started that 
this number would be a universal number for everything.
  In 1974, it was stated rather explicitly that the Social Security 
number should not be used for programs like this, and I would like to 
just quote the Privacy Act of 1974: ``It shall be unlawful for any 
Federal, State or local government agency to deny any individual any 
right, benefit or privilege provided by law because of such 
individual's refusal to disclose his Social Security number.''
  I think this is a good idea, because today we are very much aware of 
the fact that if a company, if a loaning company, or if one is going 
into a store to buy something, and they get one's name and one's Social 
Security number, one knows that they can call up more information about 
somebody than they know about themselves. I think this is a serious 
threat to the privacy of every American citizen, and we should be 
cautious about using the Social Security number. It is being used all 
the time.
  Mr. Speaker, prior to coming to this Congress, I was an obstetrician 
delivering babies, and babies cannot leave the hospital these days 
without a Social Security number. So they are born, get a Social 
Security number, they do not leave the hospital without it, and do my 
colleagues know that one cannot have a death certificate without a 
Social Security number? They are everyplace. It is an intrusion on our 
privacy. We do not need to use a Social Security number.
  When I was in the Air Force, we used to have an identification 
number, but now, today, it is the Social Security number. Not too many 
years ago a law was passed here in the Congress that mandates that each 
State licensing agent for our automobile says that one has to have a 
Social Security number. So now they will be cross-checking with Social 
Security number and all of our driver's license numbers.
  We are losing our privacy in this country. The American people know 
it. We do not need this number to be used in this program for it to be 
successful, and we should move very cautiously, and I hope I can get 
support for this amendment so that we do not use the Social Security 
number as the electronic personal identifier.
  Mr. HALL of Ohio. Mr. Speaker, I yield 2 minutes to the gentlewoman 
from New York (Mrs. Lowey).

[[Page H2514]]

  (Mrs. LOWEY asked and was given permission to revise and extend her 
remarks.)
  Mrs. LOWEY. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, I rise to offer my strong support for this rule and the 
bipartisan amendments to the Higher Education Act. Education is 
society's great equalizer. It enables Americans to participate in 
democracy and pursue the American dream.
  We all recognize that a college education is as necessary today as a 
high school education was just a generation ago. In 1982, a worker with 
a college degree earned 40 percent more than a worker without one. 
Today, college graduates earn 75 percent more.
  A recent national survey showed that 9 in 10 Americans believe every 
interested qualified student should have the opportunity to attend 
college. My colleagues, that is a clear mandate for a strong higher 
education bill, and I believe such a measure is before us today.
  Just briefly, it increases Pell Grants by 50 percent next year and 
provides additional increases in the future. It preserves the Perkins 
Loan, the State Student Incentive Grant, the Supplemental Education 
Opportunity Grant programs, all important sources of financial aid. It 
will encourage more disadvantaged students to pursue higher education 
by strengthening TRIO, continuing my National Early Intervention 
Scholarships, and establishing a new High Hopes program that will work 
with low-income middle schools and community organizations.
  The new campus-based child care program will help young mothers 
attend college and become self-sufficient. The new loan forgiveness 
program will help fill America's growing need for qualified teachers. 
The bill will also help make college campuses safer and provide 
students and their families with the information they need and deserve 
about crime on campus.
  Of course, this bill is not perfect. It ends Federal support for the 
fine work of the National Board of Professional Teaching Standards and 
fails to include, as the Senate bill does, a Fair Play Act to encourage 
colleges to satisfy the interests and needs of young female athletes.
  However, despite some deficiencies, this is a strong bipartisan bill, 
and I urge my colleagues to support it.
  Mr. HASTINGS of Washington. Mr. Speaker, how much time remains on 
each side?
  The SPEAKER pro tempore (Mr. Gutknecht). The gentleman from 
Washington (Mr. Hastings) has 14\1/2\ minutes, and the gentleman from 
Ohio (Mr. Hall) has 18\1/2\ minutes.
  Mr. HASTINGS of Washington. Mr. Speaker, I yield 2 minutes to the 
gentleman from California (Mr. McKeon).
  Mr. McKEON. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  I rise in strong support of this rule and the bill H.R. 6, the Higher 
Education Amendments. First I would like to thank the gentleman from 
New York (Mr. Solomon), chairman of the Committee on Rules, for his 
help in crafting this rule. Through his efforts and those on the 
committee, we have been able to bring this bill to the floor in a 
timely and expeditious manner. He definitely will be missed when he 
retires.
  This rule will govern floor consideration of H.R. 6, which is one of 
the most important education bills that this Congress will consider 
this year. As many of my colleagues know, we are facing a July 1 
deadline that creates a crisis in the student loan program. H.R. 6 
contains a bipartisan compromise that fixes the problem, maintains the 
viability of the private loan program, and provides students with the 
lowest interest rate in 17 years.
  So through the swift adoption of this rule and passage of H.R. 6, we 
will move one step closer to meeting that deadline. Therefore, I urge 
all of my colleagues to support the rule and vote in favor of H.R. 6, 
the Higher Education Amendments of 1998.
  Mr. HALL of Ohio. Mr. Speaker, I yield 3 minutes to the gentleman 
from Guam (Mr. Underwood).
  Mr. UNDERWOOD. Mr. Speaker, I thank my friend from Ohio for yielding 
me this time.
  I rise in support of the rule on H.R. 6. I know that many of the 
members of this committee have worked hard on producing a bill which 
will increase the affordability for our institutions of higher 
education and advance social mobility in our country. As a retired 
educator and higher education administrator, we know that institutions 
of higher education advance knowledge, provide community service, and 
serve as the basis for social and economic mobility for millions of our 
young people who come from backgrounds with few social advantages and 
economic resources.
  Higher education institutions in our country are marked by their 
capacity to provide this opportunity which is vastly different than 
institutions in other countries. Higher education is the strength of 
our society and the engine of progress and opportunity, and this bill, 
as written, continues and ratifies this understanding of postsecondary 
institutions and deserves our support.
  Mr. Speaker, I would like to draw attention to the especially unique 
provisions that it has on Hispanic-serving institutions and the work of 
the gentleman from Texas (Mr. Hinojosa) in that regard. I would also 
like to draw attention to a provision which allows higher education 
institutions in the territories to compete for grants with a little bit 
more flexibility. I would like to really draw attention to the fact 
that it is making higher education affordable for millions of young 
people around the country, and the increase in Pell Grants. I know 
there is a problem with the Pell Grant provision, and I have spoken 
with the leadership on this issue.
  The bill, as currently written, says that students from the 
Micronesian Islands, the Republic of the Marshall Islands, and the 
Republic of Palau and the Federated States of Micronesia are not 
eligible for Pell Grants except if they go to institutions in those 
areas and Guam only. I feel very strongly that this is a violation of 
the compacts of free association and will attempt to limit educational 
opportunities for these people.
  The FAS territories of the Pacific islands was an American-
administered area of the Pacific under which some compacts were 
arranged in order to help to facilitate the growth of these areas, and 
for one reason or another, H.R. 6 does not take this into account. I 
trust that we can work towards a version of the bill on this particular 
provision which will restore the benefits of Pell Grants for the 
Micronesian students not only in Guam, and not only on their own home 
islands, but throughout the 50 States.
  Again, Mr. Speaker, this bill deserves our support. It is a good 
bill, and it is a bill that is the work of very strong bipartisan 
support and a good and healthy understanding of the role of 
postsecondary institutions in our society.
  Mr. HASTINGS of Washington. Mr. Speaker, I yield 2 minutes to the 
gentlewoman from New Jersey (Mrs. Roukema).
  (Mrs. ROUKEMA asked and was given permission to revise and extend her 
remarks.)
  Mrs. ROUKEMA. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, I rise in strong support of both the rule and the bill. 
I think this bill is one of the most significant bills that we will 
probably pass in this Congress, and these are the issues that count 
with the American people, without a doubt.
  To be competitive in the global economy, we need to provide our youth 
with the means to better their education. This is the essence of the 
American dream.
  Now, I know that there are going to be amendments during this 
process, and I do believe that there will be constructive colloquies 
and constructive dialogue and debates on those amendments, but this 
bill is fundamentally a very strong bill.
  I do want to point out that one of the issues that has been 
questioned is the resolution here of the potential crisis of the 
interest rate issue on this bill. The proposal in this legislation, I 
believe, is the best that we could have come up with, and it will help 
students while saving the program for higher education through the 
private banking system.
  Now, I am one of the longtime members of the Subcommittee on 
Postsecondary Education, Training and

[[Page H2515]]

Life-Long Learning, but I have another hat. I am the chairwoman of the 
Subcommittee on Financial Institutions and Consumer Credit, and perhaps 
from that point of view I understand both sides of this issue.
  This legislative fix, so to speak, is necessary, absolutely 
necessary, not only to protect the loans for the students at reasonable 
low interest rates, but also to ensure that the banks will not be 
forced to leave the market.

                              {time}  1930

  I think this is the best possible compromise that we could have 
reached. It works for the students and their families and it works for 
the private sector, the banks who provide the loans at low interest 
rates.
  Mr. HALL of Ohio. Mr. Speaker, I yield 2 minutes to the gentleman 
from New Jersey (Mr. Andrews).
  (Mr. ANDREWS asked and was given permission to revise and extend his 
remarks.)
  Mr. ANDREWS. Mr. Speaker, I thank the gentleman from Ohio (Mr. Hall) 
for yielding me this time.
  Mr. Speaker, I rise in support of the rule, and at a time when the 
people who cover politics are obsessed with what is scandalous and 
divisive, we have before us tonight something that is solid and 
unifying.
  Mr. Speaker, I want to commend the leaders of our committee, the 
gentleman from Pennsylvania (Chairman Goodling), the gentleman from 
California (Chairman McKeon), the gentleman from Missouri (Mr. Clay) 
and the gentleman from Michigan (Mr. Kildee) for all the time and 
effort they have put into this bill and all the very fine work that 
they have done.
  I also want to commend the Committee on Rules for putting before us a 
rule that lets anyone with any idea have the right to come to the floor 
and express his or her idea. That is why I support the rule.
  Mr. Speaker, I do want to associate myself, however, with the remarks 
of the gentleman from South Carolina (Mr. Spratt), the ranking 
Democratic member of the Committee on the Budget, with respect to the 
cost and payment mechanism for the interest rate compromise that has 
been referred to earlier.
  First of all, we do not really know what the cost is. We have an 
estimate from the Office of Management and Budget that tells us it will 
be net in excess of $2 billion. We have another estimate from the 
Congressional Budget Office which tells us that even with the offsets 
that have been identified, it is in the neighborhood of half a billion 
dollars.
  It is a very serious consideration that we are moving forward on this 
bill without identifying where the money is going to come from. It is 
sort of the-check-is-in-the-mail theory of budgeting that got us into 
this mess in the first place.
  I agree with those who say that we should move forward this evening, 
and I will vote with them to do so. But I also want to sound a note of 
caution that as we move this bill out of the House of Representatives 
and into the conference committee, I think it is imperative that we lay 
before the Members of this body and our constituents, the American 
people, the specifics of how much this compromise will cost the 
taxpayers and where the money is going to come from to pay for it.
  I believe it would be a disaster to fatten the profits of the banking 
industry at the expense of other student aid programs or other 
mandatory programs. We should be watching that as the time goes on.
  Mr. HASTINGS of Washington. Mr. Speaker, I reserve the balance of my 
time.
  Mr. HALL of Ohio. Mr. Speaker, I have no more speakers. I would urge 
a ``yes'' vote on the rule, and I will not be calling for a vote. I 
think it is a good bipartisan rule, and I yield back the balance of my 
time.
  Mr. HASTINGS of Washington. Mr. Speaker, I want to urge my colleagues 
to support this rule, and the underlying bill. This is clearly a 
product that is bipartisan in nature and that is something I think we 
can be proud of.
  Mr. Speaker, I yield back the balance of my time, and I move the 
previous question on the resolution.
  The previous question was ordered.
  The resolution was agreed to.
  A motion to reconsider was laid on the table.
  The SPEAKER pro tempore (Mr. Hastings of Washington). Pursuant to 
House Resolution 411 and rule XXIII, the Chair declares the House in 
the Committee of the Whole House on the State of the Union for the 
consideration of the bill, H.R. 6.

                              {time}  1934


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the State of the Union for the consideration of the bill 
(H.R. 6) to extend the authorization of programs under the Higher 
Education Act of 1965, and for other purposes, with Mr. Gutknecht in 
the chair.
  The Clerk read the title of the bill.
  The CHAIRMAN. Pursuant to the rule, the bill is considered as having 
been read the first time.
  Under the rule, the gentleman from Pennsylvania (Mr. Goodling) and 
the gentleman from Missouri (Mr. Clay) each will control 30 minutes.
  The Chair recognizes the gentleman from Pennsylvania (Mr. Goodling).
  Mr. GOODLING. Mr. Chairman, I yield myself 5 minutes.
  Mr. Chairman, I rise today in support of H.R. 6, the Higher Education 
Amendments of 1998. Considering H.R. 6 today, the House will complete a 
bipartisan process that began in the subcommittee chaired by the 
gentleman from California (Mr. McKeon) well over a year ago.
  This legislation will benefit millions of students across the country 
in their pursuit of a higher education. The bill will improve programs 
such as Work-Study, Pell grant, TRIO, and student loans that help 
millions of students pay for college.
  We will do a number of important things here today. However, none may 
be as important as our efforts to keep student loans available for all 
students. As all of my colleagues know, we have been struggling for the 
past year with the student loan interest rate issue that is the direct 
result of the Student Loan Reform Act of 1993. That act changed the 
index for establishing interest rates on these loans.
  Prior to the Student Loan Reform Act, interest rates had always been 
tied to 91-day Treasury bills. However, as part of the changes 
associated with the creation of the Federal Direct Student Loan 
program, the index for establishing interest rates changed to one based 
on the 10-year Treasury bond. This scheduled rate change is serious and 
has the potential to disrupt the Federal Family Education Loan Program 
which provides nearly 70 percent of this country's Federal student 
loans.
  As a parent I am keenly aware of the burden being placed on our youth 
by student loan debt. I am personally committed to ensuring that the 
interest rate on Federal student loans is kept as low as possible. 
However, I also realize that there is a point at which the lenders will 
get out of the program. That point is reached when their return on 
making these loans falls short of the return they could make by 
investing elsewhere.
  Under the bill we are considering today, students will receive 
historically low interest rates, the lowest in 17 years. The rates 
students pay on new loans will drop from the current rate of 8.25 down 
to 7.43 during the repayment period. At the same time, the amount the 
lenders are paid will be reduced by 30 basis points which will, I 
believe, ensure uninterrupted access to private capital for our 
Nation's students.
  The chairman of the Subcommittee on Postsecondary Education, Training 
and Life-Long Learning, the gentleman from California (Mr. McKeon) and 
the ranking member of that subcommittee, the gentleman from Michigan 
(Mr. Kildee) have worked very hard to find a solution to the crisis. 
That solution is contained in this legislation.
  Throughout this difficult process, the gentleman from California 
(Chairman McKeon) and the gentleman from Michigan (Mr. Kildee) never 
forgot the interests of the students. They never gave up when 
negotiations broke down. I know that the ranking member of the 
committee, the gentleman from Missouri (Mr. Clay) and the rest of the 
members of the committee are grateful for their efforts in resolving 
the issue.
  Mr. Chairman, I especially want to thank the Speaker of the House, 
the gentleman from Georgia (Mr. Gingrich), the gentleman from Texas 
(Mr. Armey), the majority leader, as well as

[[Page H2516]]

the gentleman from Ohio (Mr. Kasich) chairman of the Committee on the 
Budget. Without their help, this solution would not have been possible. 
All three contributed to ensuring that we could pay for this provision 
which is now budget neutral without passing any of the costs on to 
students.
  Many in the higher education community support the proposal and have 
joined me in praising the gentleman from California (Chairman McKeon) 
and the gentleman from Michigan (Mr. Kildee) for their leadership. The 
major student groups have described the proposal as, and I quote, ``A 
realistic, fair, and even-handed compromise that protects students' 
need for lower borrower rates.'' The American Council on Education and 
10 other major higher education groups representing over 3,600 colleges 
and universities praised the fact that the proposal ``ensures the 
continued availability of capital in the guaranteed student loan 
program.''
  Mr. Chairman, for the people back home, I hope they would notice that 
I am not quoting anything that the lending institutions or the lending 
organizations have had to say about this. Obviously, they are not 
nearly as pleased.
  I continue to welcome the help of everyone who is willing to work in 
good faith to get the problem solved. I thank those who have already 
shown a willingness to seek common ground in order to ensure that 
student loans remain both inexpensive and available.
  But, Mr. Chairman, I am sorry to say that despite the bipartisan 
example set by the leaders on both sides of this committee, there are 
those who would continue to play politics with this issue. A high-
ranking official at the Department of Education recently put out a 
press release about our bipartisan solution stressing that it 
recognizes the ``need to protect students from banks.''
  Now, if there is anything that students need to be protected from, it 
is the high cost of getting an education and the quality of service 
they get from the bureaucracy at the Department. This bill scores high 
on both counts: It helps make college more affordable and it simplifies 
the student aid delivery system.
  The committee is proud of the accomplishments made to date in making 
college affordable for all students. Since we have been in charge, for 
example, Pell grants and College Work-Study are funded at all-time 
highs, while provisions in the Taxpayer Relief Act created education 
IRAs and other tax credits to help low- and middle-income students 
obtain a postsecondary education. The legislation we are considering 
today will build on these important achievements by continuing the 
important programs that serve students well and by reforming burdensome 
requirements to best meet the needs of students, families, and colleges 
across the country.
  Mr. Chairman, I do want to caution all of my colleagues to please be 
very, very careful about their ambition to add all sorts of things to 
this legislation, because they could kill the wonderful work that the 
subcommittee and then eventually the full committee has done.
  Mr. Chairman, we have also made significant changes to the current 
need analysis formula in order to address concerns raised by many 
students and families about the need to encourage students to work and 
save for their education. The bill increases the amount of money that 
students may earn before it impacts their eligibility for financial 
aid. By doing this, we are encouraging students to work and save for 
college.
  It also combines the assets of a student and his or her parents when 
calculating the ability of the family to contribute towards college. 
The current formula treats that assets of parents and students 
differently and separately as though they are not part of the same 
family. We are changing this provisions so the formula truly considers 
the ability of the family to pay for college.
  The legislation we will consider today will also improve service to 
students. It addresses the need to reduce the administrative costs 
associated with the processing, delivery, and monitoring of the Federal 
financial aid programs. It gives the Secretary of Education the tools 
he needs to bring the Department into the 21st Century.
  Specifically, the Department will be required to put in place a 
Performance-Based Organization (PBO) to run the day-to-day operations 
of the student financial aid delivery system. Chairman McKeon and 
Representative Kildee introduced the PBO bill last fall with the full 
support of the students and the rest of the higher education community. 
I am glad to see that it has been included in our final bill.
  A more stable and more efficient delivery system coupled with 
regulatory reform should result in reduced administrative costs for the 
Department as well as for schools, lenders, guaranty agencies, and 
other program participants who must interact with the Department's 
delivery system. This is particularly important since we are forcing 
lenders and guaranty agencies to operate with less revenue and we 
expect colleges to keep their costs down for students. The Department 
needs to contribute to these efforts by operating more efficiently so 
others can do the same.
  I'd also like to note some provisions of H.R. 6 that were offered in 
Committee by Representatives McKeon and Castle to make college 
affordable. The McKeon--Castle amendment will implement a number of the 
recommendations of the Commission on the Cost of Higher Education. This 
is important, because if we are truly interested in making sure that 
all Americans can afford a quality postsecondary education, and if we 
are truly interested in reducing the debt burden placed on our 
students, then the single most important thing we can do is to get 
colleges to lower their prices. These provisions are a needed first 
step in that direction.
  In addition to making college more affordable and simplifying the 
delivery system, we have fulfilled our promise to improve the quality 
of higher education. H.R. 6 will help create safer campuses where our 
nation's students can learn. It improves the information made available 
to students and families about crimes occurring on college campuses. 
And although no one can guarantee safety, we are making sure that 
students have the information they need to protect themselves from 
becoming victims of crime. We are also ensuring families have accurate 
information about crime on college campuses so they can make informed 
choices when selecting a college for their children.
  H.R. 6 also provides strong incentives for students to stay off 
drugs. An amendment offered by the gentleman from Indiana, Mr. Souder, 
and accepted in Committee will eliminate student aid eligibility for 
students convicted of drug offenses. This provision is based on an 
amendment offered by Mr. Solomon in 1992, which was accepted by the 
House. Unfortunately, the Solomon amendment was later dropped in 
conference. If we want to ensure safety on our Nation's campuses, it is 
vital to keep them drug-free.
  H.R. 6 also focuses on improving teacher quality so that students 
will have high quality teachers trained in the subject areas in which 
they teach. It is alarming to find that  nearly one-third of all high 
school math teachers and over one fifth of all high school English 
teachers in this country have neither majored Nor minored in the 
subjects in which they teach. Given this fact, it should come as no 
surprise that American twelfth graders recently scored so low on the 
TIMMS international math and science test.

  Under this legislation, States will be encouraged to undertake a wide 
variety of efforts to improve the quality and ability of classroom 
teachers--beginning with the reform of institutions at which many of 
these teachers are prepared.
  Specifically, this bill amends the Higher Education Act by replacing 
16 unfunded teacher preparation programs with a single competitive 
block grant, which I'm pleased to mention, was developed through a 
bipartisan process within our Committee.
  Using funds from this competitive block grant, Governors will have 
significant flexibility in which activities to carry out. Specifically, 
such efforts may include strengthening State teacher certification 
procedures to better reflect current and future teacher's academic 
knowledge of the subjects they teach; reforming schools of education 
and holding them accountable for producing quality teachers; creating 
and/or expanding programs which provide alternative routes to teacher 
certification; undertaking teacher recruitment efforts; and 
implementing initiatives to expeditiously remove incompetent or 
unqualified teachers.
  To ensure that States receiving these funds are making progress to 
improve teacher quality, this legislation also makes future grants to 
States contingent upon meeting specific goals such as being able to 
demonstrate an increased percentage of teachers teaching in subject 
areas and an increase in ``first-time'' certification and licensure 
rates among education school graduates.
  I would like to especially highlight several provisions that were 
worked out in a bipartisan fashion which are now part of the manager's 
package of amendments.
  They include: an increased emphasis on partnerships consisting of the 
Governor of a participating State, exemplary schools of education and 
local educational agencies; an increased focus, with respect to the 
teacher recruitment provisions, on schools most in need

[[Page H2517]]

of quality teachers, such as in poor urban and rural areas; and a 
clarification that the Governor shall be the grant recipient except in 
those cases where State law or constitution dictates that another 
individual is responsible for education.
  I look forward to the support of my colleagues for this compromise so 
that we can help States really reform teacher preparation programs and 
provide high quality teachers to our students.
  I would also like to thank Representative Graham for his efforts in 
working with Representative Kildee, in crafting a truly bipartisan 
initiative under this legislation which provides loan forgiveness for 
prospective teachers who agree to teach in high poverty urban or rural 
schools.
  In addition to the improvements we will make in the preparation of 
teachers, there are a host of other changes that will improve 
educational quality and opportunities far beyond the college campus. 
Today, the House will increase opportunities for all Americans to get 
the education they need through the expanded use of distance learning 
techniques and new technologies. Today we will also encourage students 
to become involved in their communities and to help children learn to 
read by ensuring that colleges use more of the Work-Study dollars to 
fund these initiatives.
  Finally, let me just say that that the legislation before us today is 
one of the most important things that we in the 105th Congress will do 
this year. It will ensure that every American has access to a quality 
postsecondary education at an affordable price. This is a bipartisan 
bill that makes much needed reforms to help students, parents, and 
schools. I urge all of my colleagues to support it, and I urge a 
``yes'' vote on final passage.
  Mr. CLAY. Mr. Chairman, I yield myself 5 minutes.
  Mr. Chairman, I want to commend the gentleman from Michigan (Mr. 
Kildee) and the gentleman from California (Mr. McKeon) for their great 
bipartisan teamwork on this very important higher education initiative. 
They worked for better than a year to fashion legislation that I 
believe strengthens our country's commitment to higher education.
  I also want to commend the gentleman from Pennsylvania (Chairman 
Goodling) and all the committee members who made valuable contributions 
to the higher education reauthorization effort. I am pleased to give my 
enthusiastic support for this bill.
  The bill strengthens student aid financing by significantly reducing 
student loan interest rates, increasing Pell Grants and improving the 
calculations of benefits for independent and dependent students. The 
bill adopts a number of measures that enhance support for minority and 
disadvantaged students by strengthening the TRIO program and other 
programs supporting historically black colleges and universities, 
Hispanic-serving institutions and tribally controlled colleges.
  Mr. Chairman, I am also pleased that the committee adopted President 
Clinton's High Hopes program. And I commend the gentleman from 
Pennsylvania (Mr. Fattah) for his successful advocacy of this important 
initiative.
  Mr. Chairman, the bill also includes a number of provisions aimed at 
improving services to students on campus such as enhanced campus crime 
reporting, a new campus-based child care program and streamlining 
financial aid procedures.
  I am also pleased that teacher education and recruitment received a 
boost in this bill by the adoption of a loan forgiveness program for 
new teachers and strong teaching training partnerships. As we continue 
to work on this bipartisan bill, I hope that we can continue our 
efforts to resolve issues regarding loan consolidation interest rates, 
guarantee agencies, and the National Board for Teacher Certification.
  Finally, Mr. Chairman, I would like to express my hope that we will 
unanimously reject attempts to undermine this bipartisan bill through 
the introduction of a divisive anti-affirmative action amendment. The 
Riggs amendment has received universal condemnation among all those who 
care deeply about expanding educational opportunities for all 
Americans. Students, colleges, civil rights groups, editorial boards 
and women's groups across this country have urged us to reject this 
giant leap backwards.
  Last night, Secretary Riley and Attorney General Reno sent an urgent 
message to Congress expressing their strongest possible opposition to 
this very dangerous amendment. They would urge the President to veto 
H.R. 6 if the Riggs amendment is adopted. I hope that all Members will 
reject this reckless amendment that is designed to torpedo passage of 
the Higher Education Reauthorization Act.
  Mr. Chairman, I reserve the balance of my time.
  Mr. GOODLING. Mr. Chairman, I yield such time as he may consume to 
the gentleman from California (Mr. McKeon), the subcommittee chairman 
who did such a great job in putting this legislation together.
  Mr. McKEON. Mr. Chairman, I thank the gentleman from Pennsylvania 
(Mr. Goodling) for yielding me this time.
  Mr. Chairman, I rise today in support of H.R. 6, the Higher Education 
Amendments of 1998. Today we are assembled to consider the 
reauthorization of the Higher Education Act of 1965. I want to thank my 
fellow members of the Committee on Education and the Workforce for the 
bipartisan way in which they have worked to get us to this point. I 
especially want to thank the gentleman from Pennsylvania (Mr. 
Goodling), chairman of the committee, for his support and leadership on 
this important legislation.
  Mr. Chairman, throughout the process he has kept us focused on the 
goal of improving our financial aid system for students and parents. 
Whenever a particularly difficult problem would arise he would not give 
up. To the contrary, he would confront it head on and forge a 
consensus.

                              {time}  1945

  The gentleman from Missouri (Mr. Clay), the ranking member of the 
committee, and the gentleman from Michigan (Mr. Kildee), the ranking 
member of the subcommittee, also deserve a great deal of thanks for all 
of their dedication and hard work. For more than a year, we have worked 
closely together gathering representations from around the country to 
improve the way we provide support for higher education. The result is 
the legislation before us today.
  I want to begin by noting that this legislation, including the 
interest rate fix that is contained in it, is paid for. In fact, 
without the interest rate fix, H.R. 6 saves roughly $70 million in 
mandatory spending. However, due to the emergency nature of the 
interest rate problem, it became clear that an immediate fix is needed 
and that any fix would cost money.
  Under H.R. 6, the interest rate fix was paid for in a plan developed 
by the leadership which required half of the savings to come from the 
committee and the rest to be made up in offsets supplied by the 
Committee on the Budget.
  I want to personally thank Speaker Gingrich, the gentleman from Texas 
(Mr. Armey), the majority leader, and the gentleman from Ohio (Mr. 
Kasich), chairman of the Committee on the Budget for their hard work 
and support for making this solution possible.
  The legislation we are considering will be one of the most important 
things Congress will do for students and families this year. It will 
bring us closer to my goal of ensuring that every American who wants a 
quality education at an affordable price will be able to get it.
  As my colleagues know, the committee began this process with no 
predetermined changes in mind. We requested and received 
recommendations for change from individuals across the country and from 
more than 70 organizations representing schools, students, and other 
participants in our financial aid programs. We spent the better part of 
last year traveling around the country, holding hearings to fully 
understand what changes are needed to better serve our Nation's college 
students.
  We have developed this legislation through open and bipartisan 
discussions with the higher education community, students, parents, and 
our colleagues in the 105th Congress.
  Throughout this process, three compelling principles have guided us: 
making college affordable, simplifying the student aid system, and 
stressing academic quality for students.
  We have kept true to these three principles throughout the process. 
If we continue to do so as we move forward, the end result will be a 
new and improved Higher Education Act establishing quality Federal 
student aid policy for the years ahead.
  I want to focus my remarks today on a few very important areas. 
First, the

[[Page H2518]]

legislation before us today will simplify the student aid system. H.R. 
6 will eliminate 45 unfunded programs, including the State 
Postsecondary Review Entities, or SPREs, and terminate 11 studies and 
commissions.
  It will bring our student financial aid delivery system into the next 
century. It will create a performance-based organization within the 
Department of Education focused on providing quality service to 
students and parents.
  For the first time, the day-to-day management of our student aid 
programs will be in the hands of someone with real-world experience and 
financial services. This individual will be given the hiring and 
contracting flexibility necessary to get results and will be paid based 
on performance.
  For the first time, the Department's student financial aid systems 
will be run like a business, adopting the best practices from the 
private sector and focusing on bottom-line results. This performance-
based organization will manage the Department's computer systems and 
ensure that the Department of Education does not waste money due to 
poor contract management or duplication.
  The chief operating officer hired to manage this organization will 
simplify the process of applying for financial aid for students and 
their families and integrate student financial aid systems to improve 
efficiency, save money, and prevent fraud and abuse in the programs.
  This bill also requires the Secretary to work with the higher 
education community to adopt common and open electronic data standards 
for important parts of the delivery system. By adopting these common 
standards, we can greatly simplify the student aid system by 
eliminating paper forms and unnecessary steps in the process.
  Students and their families deserve a modern student aid system that 
meets their needs. This legislation will give the Secretary the tools 
he needs to provide it.
  Additionally, the legislation before us rationalizes the guaranty 
agency system and makes important changes to the incentives we give 
guaranty agencies. It will change the guaranty agency financing 
structure to give these entities the flexibility they need if we expect 
them to use the largest private sector business practices, operate more 
efficiently, and ensure program integrity.
  These changes will increase guaranty agencies incentives to become 
more efficient in their operations by designating payments for services 
as the property of the guaranty agency; increase their financial risk 
with respect to defaults in order to encourage stronger default 
prevention efforts; restructure the payments made to guaranty agencies 
in order to maintain a strong guaranteed loan program; and, most 
importantly, provide real savings to the Federal Government.
  Some will say that we should have gone further in our restructuring 
initiative. These are the same individuals who would have us dismantle 
the guaranty agencies and turn them into contractors for the Federal 
Government. It is clear to me that this would be a mistake.
  Throughout the history of the FFEL program, guaranty agencies have 
played a vital role in protecting the Federal fiscal interest while 
ensuring that billions of dollars in private capital remained available 
to needy students.
  Given the shortfalls we have seen in the Department's contracting 
abilities, shortfalls which have caused unacceptable delays in the 
processing of student financial aid forms and a complete shutdown of 
the direct loan consolidation process, it is clear that the approach 
taken in H.R. 6 is the right one.
  Second, this legislation continues and strengthens those programs 
that have served students well, making college more affordable.
  One of the biggest challenges we faced during this process was saving 
the student loan program. As my colleagues know, the scheduled change 
in the interest rate for student loans jeopardized access to private 
capital for students.
  Committee members faced the challenge of finding a solution that 
would ensure that student loans remain available to all students and 
their families, while also ensuring that students receive a real 
reduction in their interest rates. This was no easy task.

  After working extensively with all parties involved, the student 
groups, the higher education and lending communities and Republican and 
Democratic members of the committee, it became clear that there was a 
consensus in three key areas.
  First, everyone agreed that tying the interest rate to a long-term 
instrument like the 10-year Treasury bond would not work. Second, no 
one had any faith that the direct loan program could provide a viable 
alternative in the event that private loan capital became unavailable. 
Third, as our subcommittee hearing on March 5 showed, the interest 
rates for lenders proposed by the administration were too low to ensure 
lender participation.
  In the end, we found a solution that I hope fixes the interest rate 
problem. The solution contained in this legislation will ensure that 
student loans will remain available for all students and that students 
will receive the lowest interest rates in 17 years. While no one may be 
completely happy with this solution, I believe it will ensure that 
every student will continue to have access to student loans at the most 
affordable rate possible.
  Finally, H.R. 6 contains provisions offered in the committee by 
myself and the gentleman from Delaware (Mr. Castle) that implements a 
number of the recommendations of the National Commission on the Cost of 
Higher Education.
  Specifically, this legislation will provide students and parents with 
better information to keep colleges accountable and higher education 
affordable by requiring the Secretary of Education to work with 
institutions to develop a clear set of standards for reporting college 
costs and prices.
  Under our bill, the Secretary of Education will redesign the 
collection of Federal base information on college costs and prices to 
make it more useful and timely to the public.
  This legislation will allow students to make more informed choices 
about the level of education they pursue by requiring the Secretary of 
Education to collect separate data on the cost and price of both 
undergraduate and graduate education.
  It will help parents and students make informed decisions about the 
school they choose by requiring the Secretary of Education to make 
available for all schools on a yearly basis information on tuition, 
price, and the relationship between tuition increases and increases in 
institutional costs.
  It will also allow us to keep track of any progress made in reducing 
tuitions by requiring the United States General Accounting Office to 
issue a yearly report on college cost and tuition increases.
  H.R. 6 will reduce the costs imposed on colleges through unnecessary 
or overly burdensome Federal regulation by requiring the Secretary of 
Education to undertake a thorough review of regulations regarding 
student financial assistance every 2 years and, where possible, repeal, 
consolidate or simplify those regulations.
  The Secretary will also report to Congress any recommendations he has 
with regard to legislative changes which would allow increased 
regulatory simplification. This legislation will require the General 
Accounting Office to report to Congress on the extent to which 
unnecessary costs are being imposed on colleges and universities as a 
result of holding them to the same Federal regulations that are applied 
in industrial settings. I expect colleges and universities to pass on 
these savings to students.
  H.R. 6 will stress our commitment to keeping college affordable by 
strengthening our support for innovative projects addressing issues of 
productivity, efficiency, quality improvement, and cost control at 
postsecondary institutions.
  In addition, H.R. 6 allows colleges and universities to offer 
voluntary early retirement incentives to tenured professors. This will 
allow professors, at their choosing, to receive additional retirement 
benefits beyond what they otherwise would have, while allowing colleges 
to approve their academic programs while reducing costs. I urge my 
colleagues to support these provisions as well.
  Mr. Chairman, ensuring that a quality postsecondary education remains 
affordable is one of the most important things we can do for our 
children and for American families everywhere. If

[[Page H2519]]

we are truly interested in making sure that all Americans can afford a 
quality postsecondary education and if we are truly interested in 
reducing the debt burden placed on our students, then the single most 
important thing we can do is to get colleges to lower their prices. 
These provisions will be a needed first step in that direction.
  Once again, I want to thank my colleagues for the bipartisan way in 
which we have been able to work, and I look forward to our continued 
efforts to improve the Nation's higher education programs. I urge my 
colleagues to support H.R. 6 and to vote yes on final passage.
  Mr. Chairman, I reserve the balance of my time.
  The CHAIRMAN. Without objection, the gentleman from Michigan (Mr. 
Kildee) will control the balance of the time for the minority.
  There was no objection.
  Mr. KILDEE. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, well over a year ago, the gentleman from California 
(Mr. McKeon), the Chairman of the Subcommittee on Postsecondary 
Education, Training, and Life-Long Learning, and I set out to produce a 
higher education reauthorization bill that would enjoy widespread 
bipartisan support. From the outset, the gentleman and I have worked 
very closely together on this.
  We began with the understanding that this bill was too important to 
be bogged down by bipartisan differences, and we have held to that 
understanding very well. It has not always been easy, and I would be 
the first to admit that both of us have had to give ground and 
compromise.
  The result, however, is a strong piece of legislation worthy of 
support by Democrats and Republicans alike. The heart and soul of this 
bill are in its student aid provisions. They make up more than 90 
percent of this legislation, and they constitute 75 percent of all 
student aid available to help deserving Americans pay for a college 
education. Without them, a college education would simply be beyond the 
financial reach of millions of Americans. With them, and with a heavy 
dose of hard work, students can truly make the dream of a college 
education come true.
  I am extremely proud of the fact that we have protected and even 
strengthened important student aid programs. Next year, the 
authorization level for the maximum Pell Grant will be $4,500, a strong 
signal that, in Federal student aid, there should be a stronger 
reliance upon grant aid and less dependence upon loans.
  We have doubled the allowance for child care from $750 to $1,500. We 
have increased the income protection for dependent students from $2,250 
to $3,000, from $4,250 to $5,500 for single independent students, and 
from $6,000 to $8,500 for married independent students.
  We extend to the students the saving protection allowances that 
reward parents who save for their children's college education. The 
combined savings of students and their families would be protected up 
to $70,000.
  We believe there is an appropriate way to reward those who have saved 
without penalizing those who could not. We make sure that the free 
application for Federal student assistance remains free, whether in 
paper or electronic form.
  We also authorize this use as the application form for a loan. And, 
perhaps most important, need analysis will remain focused first upon 
serving those with the greatest need.
  We strengthen the Trio Programs, protect the emphasis of the 
Supplemental Grant Program, expand college work study to include a new 
focus on family literacy, simplify the Perkins Loan Program, give the 
SSIG Program a new structure and purpose, and establish a new High 
Hopes Program to help young people complete a high school education and 
go on to college.
  For the millions who must borrow to help pay for college, we have 
sought to keep the cost of borrowing down. We have accepted the 
administration's proposal to set the student interest rate at the 91-
day T-bill plus 1.7 percent while the student is in school and 2.3 
percent while the student is in repayment, with an overall cap of 8.25 
percent. For students, this will mean the lowest interest rates in over 
17 years.
  We reduce the special allowance paid to lenders from T-bills plus 
2\1/2\ percent to 2.2 percent while the student is in school, and from 
3.1 percent to 2.8 percent while the student is in repayment.

                              {time}  2000

  I am very encouraged that we have been able to include a limited loan 
forgiveness program in this legislation. An individual who enters 
teaching, remains in the profession, and teaches in a high-poverty 
school now has the chance to have up to $17,750 of their Stafford Loans 
forgiven.
  I am also very pleased we have managed to reach an agreement that 
keeps both direct lending and FFEL programs in place. In and of itself, 
this is a major accomplishment that many said could not be done.
  As important as the student aid provisions are, there are other 
provisions of H.R. 6 that also merit our support.
  In Title I we have forged a single definition of an institution of 
higher education.
  Prior to this, there has been one general definition and another more 
specific definition for the purposes of Title IV.
  We will now have one consolidated definition.
  We also propose to establish within the Department of Education a 
performance-based organization, which we believe will give the 
Secretary the tools he needs to make sure that our student air programs 
are managed in an effective and efficient manner and that, first and 
foremost, they serve the students they are designed to help.
  In Title II we continue the small, but effective urban community 
grant program.
  This has been an extremely important program in forging stronger 
linkages between my home community and the University of Michigan in 
Flint.
  I am also encouraged that passage of the manager's amendment will 
mean a significant improvement in the Title II teacher quality 
enhancement provisions. This will mean authorization of a significant 
program to improve the recruitment, training and professional 
development of our Nation's teachers.
  I am disappointed, however, that this legislation contains a 
prohibition on funding for the National Board of Professional Teaching 
Standards. I have long supported the excellent work done by the board. 
It has undertaken the difficult and painstaking task of establishing a 
set of voluntary standards for classroom teachers who want to 
demonstrate high proficiency and knowledge in their chosen field. We 
should be continuing our support for the board and not curtailing its 
important work.

  I am extremely pleased with the compromise we were able to reach in 
committee to establish a new Title V to aid Hispanic-serving 
institutions.
  I believe the agreement we reached in this area is a solid one that 
deserves the strong support of Members on both sides of the aisle.
  As co-chair of the Native American Caucus, I strongly support the 
tribal college provisions that are part of this legislation.
  I am proud of the fact that we will have a newly authorized Title III 
program specifically designed to help these institutions, and that we 
will continue all currently authorized Native American higher education 
programs in part B of Title IX of these amendments.
  Mr. Chairman, enactment of H.R. 6 is essential if our critically 
important student aid programs are not to be interrupted. Passage of 
this bill is an important step to ensure the continuation of these 
programs and the aid they provide to literally millions of Americans 
who rely upon our Federal student aid programs to help put them through 
college.
  And while there are areas and provisions where we disagree, this bill 
was reported out of committee by a vote of 38 to 3 with no Democrats in 
opposition. As we debate H.R. 6 on the House floor, I would hope that 
we might avoid action that would risk the widespread bipartisan support 
this bill now merits and enjoys.
  Mr. Chairman, I look forward to a lively, productive debate and 
passage of a bill which we can all be proud of.
  Mr. Chairman, I reserve the balance of my time.
  Mr. GOODLING. Mr. Chairman, I yield such time as he may consume to 
the gentleman from Wisconsin (Mr. Petri), a member of the committee.
  Mr. PETRI. Mr. Chairman, I thank the distinguished chairman of the 
committee for yielding me this time.
  Mr. Chairman, the Higher Education Act is one of the supremely 
important laws which comes before this House. It has wide ramifications 
for our society

[[Page H2520]]

and for our economy. I want to commend my full and my subcommittee 
chairmen and my colleagues on the Committee on Education and the 
Workforce who have worked so diligently on this reauthorization, even 
as I comment on one disturbing aspect of it.
  In the history of guaranteed student loans, what the students paid 
has always been what the banks received, with the exception of in-
school interest on subsidized loans and interest above a capped amount, 
which have been paid to the banks by the government. That has been true 
until now.
  Under this bill, H.R. 6, for the first time this link will be broken. 
The banks will receive one-half percent more interest than the student 
borrowers pay, with the taxpayer paying the extra one-half point to the 
banks on every loan for as long as that loan is outstanding. That is an 
administrative monster as well as a huge cost increaser.
  Why are we doing this? Because the banks swear on a stack of Bibles 
that they will lose money if we cut them further. They will drop out of 
the program and students will not get loans. Mr. Chairman, I have heard 
that particular Chicken Little before.
  When I first became a member of the committee 19 years ago, the banks 
got 3\1/2\ percent over T-bills on these loans, and they swore then on 
a stack of Bibles that if we cut them, they would drop out. So we cut 
them to 3.1 percent. Guess what? Nobody dropped out. Since then, it has 
been the same story every time we bring up this act. They swear on a 
stack of Bibles, we cut them a little bit anyway, and nobody drops out. 
Does anybody see a problem here?
  This whole process is fundamentally flawed. We are setting prices for 
private parties in a political negotiation. Congress should not be 
setting prices. We need a market process to do that. We have that in 
direct lending, where all private services are procured through 
competitive bidding. We do not have that in guaranteed lending.
  That is why the gentleman from New Jersey (Mr. Andrews) and I are 
proposing a loan rights auction process to determine how much the banks 
are paid and to get rid of the continuing extra half point bank subsidy 
now in the bill.
  Mr. KILDEE. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman 
from Indiana (Mr. Roemer).
  (Mr. ROEMER asked and was given permission to revise and extend his 
remarks.)
  Mr. ROEMER. Mr. Chairman, first of all, I want to associate myself 
with the bipartisan spirit and nature of this bill and commend my 
ranking member, the gentleman from Missouri (Mr. Clay), and my ranking 
member of the subcommittee, the gentleman from Michigan (Mr. Kildee), 
and also give accolades to the gentleman from California (Mr. McKeon) 
and the gentleman from Pennsylvania (Mr. Goodling) for bringing 
Republicans and Democrats together on such an important issue to all 
Americans across the board.
  One of my constituents was kiddingly saying to me the other day, he 
said, ``Tim, the American dream used to be to own your home. Now it is 
to get your children out of the home and into an affordable school.'' 
Well, this bill will help our Nation's parents get their children into 
affordable schools.
  When parents want to send their children to Indiana University or 
Purdue, it can be $13,000 a year, and if there are three children, it 
can cost those parents $156,000 through the course of those tuition 
payments. For affordability reasons, we have the lowest interest rate 
in 17 years in this bill. That is a tax cut for every individual with 
children in schools across America with the passage of this bill.
  In terms of accessibility, that complements the affordability. 
Children with no hope, we have now passed a program with high hopes, to 
give children the hope of getting into college. For simplification, 
students will be able to apply for financial aid with one single 
application for both loan programs. For quality, I have included an 
amendment for alternative certification for teachers to get certified 
so that we can bring in people from different professions, including 
the military, to teach in schools.
  I do, Mr. Chairman, have one concern about a new regulation for 
reporting requirements on colleges and universities and intend to offer 
an amendment during consideration of this bill to strike that 
particular provision.
  Mr. Chairman, I thank the distinguished Member, the gentleman from 
Michigan (Mr. Kildee), who has done such a great job on this bill, and 
conclude by saying that Thomas Jefferson, who founded the very first 
public institution in this country, the University of Virginia, once 
said, and I quote, ``The less wealthy people would be qualified to 
understand their rights, to maintain them, and to exercise with 
intelligence their parts in self-government.''
  Thomas Jefferson, I think today, would be very proud of the higher 
education system in this Nation that is the best in the world. This 
bipartisan bill complements that outstanding university system.
  Mr. KILDEE. Mr. Chairman, I yield 2 minutes to the gentleman from New 
Jersey (Mr. Andrews).
  (Mr. ANDREWS asked and was given permission to revise and extend his 
remarks.)
  Mr. ANDREWS. Mr. Chairman, I thank my friend from Michigan for 
yielding me this time, and I again want to say to the gentleman from 
Pennsylvania (Mr. Goodling) and the gentleman from California (Mr. 
McKeon), our chair people, and to the gentleman from Missouri (Mr. 
Clay) and the gentleman from Michigan (Mr. Kildee), our ranking 
members, that I am proud to be associated with their accomplishment 
that they have worked so hard on.
  This bill is the second installment in a two-part process that began 
last year to make higher education more affordable for more Americans. 
Last year, as part of the historic balanced budget agreement, this 
Congress gave people a tax cut to help people pay for college tuition. 
This Congress made it easier for people to save some money in IRA-type 
accounts for college and career school tuition.
  We finish that job or continue that job with this bill. This bill 
dramatically increases Pell Grants to a level of about $4,500 at the 
beginning. This bill makes more loans more affordable to more students 
and, in response to legislation I have introduced, makes those loans 
more affordable and more repayable. This bill expands work study 
programs and makes it more fair and reasonable as to how we calculate 
what a family must contribute to the education of a person in that 
family.
  What is most important about this bill, however, is why it does what 
it does. This bill is about honoring a commitment to the people of this 
country that says if they are willing to work hard and make sacrifices 
that they can go as high and as far as their ability and desire will 
take them.
  I am proud, Mr. Chairman, to stand before you tonight as the son of a 
father who did not graduate from high school, as the son of a mother 
who graduated from high school but had no further opportunities.
  Education has been very important in our family. My father-in-law was 
a lifelong career educator, my mother-in-law is someone who cares 
deeply about education, and I am just so proud to be a part of an 
effort that says to all of America's children and all of America's 
adults that the promise of a higher education is much closer to being a 
reality once we enact this legislation. I urge my colleagues to support 
it.
  Mr. GOODLING. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman 
from South Carolina (Mr. Graham), an important member of our committee.
  Mr. GRAHAM. Mr. Chairman, to take up where my colleague left off 
about families and about doing better and about hopes and dreams, this 
bill has a lot of that in it.
  I am the first person in my family to ever go to college because my 
parents worked hard. They died fairly early on in my life, and I helped 
put my sister through, and we got student loans and grants, and it 
really helped.
  But one of the debates about education is to provide quality. And, 
quite frankly, one of the problems we are facing in this country is a 
shortage of qualified teachers. In this bill, the higher education bill 
that we are about to, hopefully, pass here, there is a provision that I 
think the American public needs to know about that is a very good, 
common-sense step to solving that problem.

[[Page H2521]]

  About 30 percent of the teachers in our K through 12 schooling 
systems have been in teaching over 20 years and are going to retire, 
and we are going to have a tremendous teacher shortage in the first 
part of the 21st century. The number of emergency certificates being 
issued to get people into the teaching profession, like in New York 
City alone, is about 18 percent, is at an all-time high.
  We are having a hard time getting people into the teaching 
profession, especially in urban poor and rural poor districts. In this 
bill we have a program, thanks to the gentleman from Michigan (Mr. 
Kildee), the gentleman from California (Mr. George Miller), and the 
people on our side of the aisle. We have come together in very much a 
bipartisan fashion to address the teacher shortage facing this country.
  The loan forgiveness program goes as follows: If individuals graduate 
from college and are willing to go into the teaching profession and 
keep their certifications up, because we want quality, not just bodies, 
and they will go to a Title I school where 30 percent of the students 
are at the poverty level or below and they will stay in that school 
system and teach for 3 years and keep their certification levels 
current, in the fourth year of their teaching career we will start 
forgiving the student loan at 30 percent, and by the sixth year of 
their teaching careers we will forgive the student loans entirely, up 
to $17,750.
  We on this committee believe that it is a small step forward to 
addressing the teaching shortage in this country, and I cannot tell my 
colleagues the response I have gotten in South Carolina. I have a lot 
of Title I schools with 30 percent poverty level or below. The 
educators are excited. This will help us get the best and brightest as 
an incentive to go into teaching, to go into the schools that have a 
hard time recruiting.
  And this amount of money is $218 million, and it comes out of the 
bill itself. There is no new spending. I think it is Congress at its 
best, and I want to thank the people on the other side of the aisle, 
the gentleman from Michigan (Mr. Kildee) and the gentleman from 
California (Mr. Miller), for helping in this endeavor. A lot of lives 
are going to be changed very positively as a result of this, and I just 
think it is a good day for Congress, and I hope other Members will tell 
the folks back home about this new program.

                              {time}  2015

  Mr. KILDEE. Mr. Chairman, I yield 2 minutes to the gentlewoman from 
California (Ms. Woolsey).
  (Ms. Woolsey asked and was given permission to revise and extend her 
remarks.)
  Ms. WOOLSEY. Mr. Chairman, as a member of the Subcommittee on 
Postsecondary Education, Training and Life-Long Learning, which crafted 
this bill, I am truly proud to rise in support of H.R. 6, the Higher 
Education Act. This is a good bipartisan bill. It makes higher 
education more available and more affordable for all students.
  H.R. 6 also makes higher education safer, particularly for women on 
college campuses, because H.R. 6 includes grants to combat violent 
crimes against women on campuses. Currently, 20 percent of college 
women will be victims of sexual assault at some time during their 
college years. These are our daughters, our sisters, even our mothers. 
College is hard enough. Women should not have that added worry of 
sexual assault. These grants will be used for education, for 
prevention, for collaboration with local public safety departments to 
reduce violent crimes against women on college campuses.
  I want to thank the gentleman from Pennsylvania (Mr. Goodling) and I 
want to thank the gentleman from Missouri (Mr. Clay), and I want to 
thank them both for their willingness to work with me to include these 
grants in this bill. And at the same time, we should all be thanking 
the gentleman from California (Mr. McKeon) and the gentleman from 
Michigan (Mr. Kildee) for their leadership on this bill. Good job, my 
colleagues.
  On the other hand, I urge my colleagues to reject any amendment that 
will jeopardize final passage of this bill and to join the members of 
the Committee on Education and Workforce from both sides of the aisle 
and vote for a bill that puts the best interest of students and parents 
first.
  The CHAIRMAN. The Chair would advise that the gentleman from Michigan 
(Mr. Kildee) has 14 minutes remaining, and the gentleman from 
Pennsylvania (Mr. Goodling) has 8 minutes remaining.
  Mr. KILDEE. Mr. Chairman, I yield 2 minutes to the gentleman from 
California (Mr. Miller).
  Mr. MILLER of California. Mr. Chairman, I thank the gentleman for 
yielding.
  I want to join my colleagues in again congratulating our chairman the 
gentleman from Pennsylvania (Mr. Goodling) and the subcommittee 
chairman the gentleman from California (Mr. McKeon) and the gentleman 
from Missouri (Mr. Clay) and the gentleman from Michigan (Mr. Kildee) 
for all of the work here.
  This is one of the more unusual bipartisan coalitions we have put 
together in the last couple of years, but we have done it because I 
think everybody on the committee recognizes the importance of this 
legislation to America's families with children who are pursuing higher 
education and pursuing education for the purposes of taking their place 
in our economic system.
  This legislation is an important vehicle, and it opens the doors of 
opportunity for those families. I think as we look through this 
legislation, to my colleagues who are not part of the committee, they 
will start to see that the hearings in this committee made a 
difference, that this committee was willing to listen to people who 
were constructive critics of the current system and have made a series 
of changes that I think are terribly important.
  We provided loan forgiveness, as the gentleman from South Carolina 
(Mr. Graham) pointed out, to teachers to go to high-poverty schools, 
but we also said that those teachers have to be qualified. No longer 
should poor children have to suffer poor teachers. We have provided 
grants to States for upgrading the State teacher preparation and 
certification system. We created partnerships between colleges and 
school districts to provide new teachers intensive professional 
development and mentoring programs and better information to parents 
about the qualifications of the teachers of their children, the 
teachers who are spending many hours a day with their children.
  I think it is important for our colleagues to understand that we 
listen to these critics, we try and shape and mold this program, we try 
to reduce the cost of higher education to young people and to their 
families; and I think we successfully did so.
  Finally, I would just like to make one remark that was pointed out by 
our colleague the gentleman from Guam (Mr. Underwood). I am 
disappointed that the legislation, as currently written, will result in 
students from the Freely Associated States being denied access to Pell 
Grants. I think it is important that we try to honor our commitment to 
these people from the Federated States of Micronesia, Marshall Islands 
and Palau to make sure that they do have access to institutions of 
higher education here on the mainland; and I look forward to working 
with the committee on that matter.
  Mr. KILDEE. Mr. Chairman, I yield 2 minutes to the gentlewoman from 
New York (Mrs. McCarthy).
  (Mrs. McCarthy asked and was given permission to revise and extend 
her remarks.)
  Mrs. McCARTHY of New York. Mr. Chairman, I rise in strong support of 
H.R. 6. I want to commend the gentleman from California (Mr. McKeon) 
and the gentleman from Michigan (Mr. Kildee) for making this a truly 
bipartisan effort.
  H.R. 6 will give millions of Americans educational opportunities well 
into the next century. I am pleased that H.R. 6 includes the provisions 
of my bill, the American Teachers Preparation Improvement Act. H.R. 6 
will help new teachers by establishing partnerships between colleges 
and schools.
  I am also pleased that H.R. 6 includes legislation that the gentleman 
from New York (Mr. Engel) and I introduced to protect consumers. Our 
bill requires the Department of Education to put up-to-date information 
about financial aid and scholarships on its Web site.

[[Page H2522]]

  This bill does many great things to increase access to education, but 
we can do more. I am concerned that provisions which block schools from 
financial aid programs if their default rates are high end up denying 
access to education to many low-income students.
  However, earlier this month GAO reported that default behavior is 
primarily influenced by the characteristics of the borrower rather than 
that of the school. We need to hold schools accountable, but we need to 
look very closely at the measurements we use. Many good schools risk 
being kicked out of Federal aid programs simply because they serve low-
income students.
  Again, I want to commend the chairman and ranking member for their 
work, and I urge my colleagues to support H.R. 6. And again, through 
our educational committee, we have worked well together, and I 
appreciate that, because, in the end, we are serving our children, and 
I appreciate that very much.
  Mr. McKEON. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman 
from Nebraska (Mr. Barrett), an important gentleman on the committee.
  Mr. BARRETT of Nebraska. Mr. Chairman, I thank the gentleman for 
yielding this time.
  Mr. Chairman, I guess let me begin by expressing a certain 
disappointment this evening over the rule we passed earlier this 
evening. I was assured throughout committee consideration that the $1 
billion in extra money that we were looking for would be resolved prior 
to coming to the floor with the bill. In fact, I even cosponsored the 
bill with that assurance. Now, of course, we find in the rule that we 
waived the budget rule so that no one could raise a point of order 
against the bill for violating the Balanced Budget Act that we all 
agreed to about 8 months ago.
  I know, Mr. Chairman, that this is much needed legislation if we are 
going to have student loans available to the millions of needy students 
out there. But to make the student loans available today, the House 
apparently is willing to add another unpaid bill to tomorrow's 
generation of students, and I am very disappointed over this action.
  However, in the limited time that I do have before me, let me 
highlight just a few provisions that I do support in the bill. The 
bill, first of all, would create a student loan forgiveness program for 
teachers in low-income schools. Some teachers could have some or all of 
their student loans forgiven if they are teaching in their core area.
  H.R. 6 would also modify the needs analysis formula to permit people 
to keep more of what they earn and still qualify for Federal student 
financial assistance. If people are to move from welfare to work, or if 
young families are to afford to have one or both parents in school, 
then we must allow them to earn just a little bit more and still 
qualify for student aid.
  Finally, Mr. Chairman, the bill does embark on what may become a very 
complex issue in the next reauthorization. For example, how can Federal 
student aid programs be adapted to the new and emerging technologies 
and the methods of instruction used in distance learning programs? H.R. 
6 permits the Secretary to approve distance learning programs that are 
currently exempt from statutory or regulatory limitations. This could 
very well provide more flexibility and more oversight for emerging 
distance learning programs.
  Unfortunately, in my opinion, Mr. Chairman, some of these good 
provisions and many others are scarred by the budget-busting nature of 
the bill.
  Mr. KILDEE. Mr. Chairman, I yield 3 minutes to the gentleman from 
Texas (Mr. Hinojosa).
  Mr. HINOJOSA. Mr. Chairman, I rise in support of House bill H.R. 6. 
This is a strong bill giving students opportunities to access higher 
education for the next 5 years.
  First, I want to acknowledge the excellent work accomplished by the 
gentleman from Pennsylvania (Mr. Goodling). I applaud the leadership 
shown by the gentleman from California (Mr. McKeon), chair of the 
Subcommittee on Postsecondary Education, Training and Life-Long 
Learning; likewise, the gentleman from Missouri (Mr. Clay) and the 
gentleman from Michigan (Mr. Kildee), the ranking member of the 
Subcommittee on Postsecondary Education, Training and Life-Long 
Learning, have contributed greatly towards the education bill before us 
today. It is amazing that we forged an excellent bipartisan consensus 
agreement.
  Secondly, I want to express my appreciation to Secretary Riley and 
President Clinton for supporting our legislative and resource 
allocation concerns in regard to expanding opportunities for Hispanic 
students. I also want to acknowledge the personal contributions offered 
to us by the gentleman from Missouri (Mr. Gephardt), the minority 
leader, and his staff.
  Thirdly, a special mention is directed to all of the presidents of 
HSIs who rallied on our behalf. And last, but not least, thanks to the 
Hispanic Education Coalition, which provided us with very valuable 
insights and consistent support during this Congress.
  In September of last year, on behalf of the Congressional Hispanic 
Caucus, I introduced H.R. 2495. This bill contained a number of 
provisions intended to amend what is now H.R. 6. With the help and 
cooperation of our committee leadership, a number of these provisions 
have been incorporated.
  For example, in regards to Hispanic-serving institutions, we have 
reduced eligibility barriers, legislatively strengthened these 
institutions, increased the authorization levels, and provided for 
graduate and professional opportunity.
  Other provisions incorporated in H.R. 6 include support within title 
III for tribally-controlled colleges and universities, support for high 
school equivalency programs and college assistance migrant programs, 
Frank Tejeda Scholarship program, funding priorities in the Fund for 
the Improvement of Postsecondary Education, which emphasizes community 
colleges.
  All of the foregoing provisions are especially important to us on the 
Education Task Force of the Congressional Hispanic Caucus. They are of 
much greater importance to all the students impacted. The students are 
the winners with H.R. 6. This includes 1.2 million students and the 166 
Hispanic-serving institutions across nine States and Puerto Rico.
  In closing, Mr. Chairman, I urge all my colleagues to vote in support 
of H.R. 6.
  The CHAIRMAN. The Chair would advise that the gentleman from Michigan 
(Mr. Kildee) has 7\1/2\ minutes remaining, and the gentleman from 
Pennsylvania (Mr. Goodling) has 5\1/2\ minutes remaining.
  Mr. KILDEE. Mr. Chairman, I yield 2 minutes to the gentlewoman from 
California (Ms. Sanchez).
  Ms. SANCHEZ. Mr. Chairman, I join my colleagues today in supporting 
H.R. 6.
  I would first like to commend my committee colleagues for arriving at 
a bipartisan piece of legislation that we can stand behind and of which 
we can be proud. This is one of the most important bills that Congress 
will vote on for students and for families. It will enable every 
American who would like to do so to attend higher education.
  As America moves into a knowledge-intensive world of the future, the 
focus is turning to higher education. It used to be that a high school 
education was important, but today one really needs a college 
education. When I was in school, we could get away with typing skills, 
but future students will have to be prepared to access computers and be 
able to navigate the information highway.
  I believe that that bill accomplishes the goal of expanding 
educational opportunity, particularly for low-income individuals, and 
it increases the affordability of colleges for many families. It offers 
a better future for approximately 1 million students who attend 
Hispanic-serving institutions and tribally-controlled colleges in 
approximately 200 institutions across the Nation.
  I have an SAI in my Congressional district, Santa Ana College, which 
serves 3,000 students, and this bill will give Santa Ana College, other 
institutions around the country, increased funding, support, and 
recognition that they need to serve all of their students.
  We also included funding to expand and modernize active school 
programs, such as TRIO, but we did not stop at that.

                              {time}  2030

  We also created the High Hopes program which will do early 
intervention in middle schools across the country.

[[Page H2523]]

  I came to Congress to make sure that every child in my district had 
the same opportunities for education that I had. Passing this 
legislation will ensure that I will carry out that mission. H.R. 6 
gives struggling students the opportunity to excel and to take full 
advantage of their education. A ``yes'' vote on this bill is a vote for 
students and families and the future.
  Mr. GOODLING. Mr. Chairman, I yield 3 minutes to the gentleman from 
Delaware (Mr. Castle), another gentleman from the committee.
  Mr. CASTLE. Mr. Chairman, I thank the gentleman for yielding me the 
time and for his erstwhile and good work on this bill, as well as a lot 
of other Members who worked so hard on this. I, too, as I have heard 
everybody else tonight, rise in support of H.R. 6.
  There are a number of good reasons to support this bill but, since I 
only have a few minutes, I will focus on provisions to make college 
more affordable. While the bill includes a new low student loan 
interest rate and increases assistance to disadvantaged students, these 
provisions will not be of much help if tuition rates continue to 
increase, thus requiring students to take on more debt or minimizing 
the value of grant aid. By the way, tuition has increased more than any 
other commodity in this country in the last 20 years or so.
  To bring some subtle downward pressure on tuition rates, this bill 
includes an amendment offered by the gentleman from California (Mr. 
McKeon) and myself based on the recommendations of the National 
Commission on the Cost of Higher Education. The bill includes 
provisions requiring the Department of Education to review regulations 
regarding student financial assistance every 2 years and where possible 
repeal, consolidate or simplify those regulations.
  It also provides Federal support for innovative projects addressing 
issues of productivity, efficiency, quality, improvement and cost 
control. And it requires GAO to issue a yearly report to Congress on 
various college cost factors and tuition increases.
  But one of the most important provisions requires the Secretary of 
Education to work with colleges to develop a clear set of standards for 
reporting college costs and prices. Right now terms mean different 
things in different places, and it is not possible to compare costs at 
one school to costs at another.
  For example, what is encompassed under the term ``research''? What is 
encompassed under the term ``building and facilities''? Everyone needs 
to be on the same page before institutions can voluntarily report on 
their costs in a meaningful way.
  Once this occurs, then families will be able to make comparisons. 
They will have a clear sense of what their college tuition buys them, 
what schools spend their money on, what their financial priorities are. 
This valuable information could guide consumer choices and, more 
importantly, could guide institutions' spending choices.
  For this reason as well as the others mentioned by my colleagues, I 
urge Members to give this legislation their hearty support.
  Mr. KILDEE. Mr. Chairman, I yield 1\1/2\ minutes to the gentlewoman 
from California (Ms. Roybal-Allard).
  Ms. ROYBAL-ALLARD. Mr. Chairman, I rise in support of H.R. 6.
  Our commitment to making education a national priority must be 
reaffirmed. We must help our youth develop their talents and the skills 
they need to compete in today's highly technical and competitive global 
economy. If we do not, our businesses will not have a skilled 
workforce, our economy will suffer, and even worse, we will rob our 
youth of the opportunity to lead meaningful and productive lives.
  Mr. Chairman, H.R. 6 will help to end the tragic loss of our youth's 
talents, energies and abilities and prepare our country for the 
challenges of the 21st century. For example, H.R. 6 includes President 
Clinton's new High Hopes initiative which will make available outreach, 
mentoring and tutoring assistance for low-income students, providing 
the help and encouragement that many of our young people need to stay 
in school.
  Mr. Chairman, H.R. 6 is a good bill that will help our collective 
effort to ensure that higher education is accessible to all our 
children.
  Mr. KILDEE. Mr. Chairman, I yield 2 minutes to the gentleman from New 
York (Mr. Owens).
  (Mr. OWENS asked and was given permission to revise and extend his 
remarks.)
  Mr. OWENS. Mr. Chairman, I too rise in support of H.R. 6. I want to 
congratulate all of those who made it possible.
  We are grateful for the fact that there are no extremist and radical 
proposals in this bill, no radical proposals to roll back the Federal 
role in education of the kind we had in the 104th Congress, so we are 
grateful for that. We are grateful for the good housekeeping that has 
tidied up certain parts of the Higher Education Assistance Act. We are 
grateful for the important administrative changes that have been made. 
It is all good. We have some incremental increases, also, that we are 
grateful for.
  However, I want to voice my dissent in terms of what is not here. We 
have missed a great window of opportunity that will not be open again 
until 2003. We only reauthorize this act once every 5 years, so we are 
going into the 21st century and we have a status quo bill that we have 
polished up, it is great, but at a time when the economy is booming and 
the information technology revolution is underway in industry, we have 
neglected our duty to set priorities and make projections and target to 
meet critical needs.
  Two critical need areas we have neglected, one is we have neglected 
to address the information technology worker crisis. Right now there is 
a shortage, 300,000 vacancies across the country, and it is going to 
get worse. Only the Committee on the Judiciary is addressing the 
problem. They are going to bring in more foreign professionals to fill 
the gap. Instead of training our own, we are going to bring in foreign 
professionals.
  The other critical need is in the area of more opportunity needs to 
be provided. We have a very complex society that we are in already and 
it is going to become more complex. We need more Americans to go to 
college, more Americans to be in college. Fifteen million is not 
enough. Fifteen million may seem like a lot when you consider the 
junior colleges and the senior colleges, but 15 million is less than 10 
percent of the total population. In the complex world that we are 
looking at, we need more.
  We need to address this problem and provide more opportunities. 
Instead of quarreling about affirmative action, we need to open up the 
gates and let more people in. That is an affirmative way to proceed to 
provide the kind of human capital that we need for the future.
  Mr. GOODLING. Mr. Chairman, I yield 2 minutes to the gentleman from 
Colorado (Mr. Bob Schaffer), a very faithful and important member of 
the committee.
  (Mr. BOB SCHAFFER of Colorado asked and was given permission to 
revise and extend his remarks.)
  Mr. BOB SCHAFFER of Colorado. Mr. Chairman, I thank the gentleman for 
yielding me this time, the chairman of the committee and the 
distinguished Member from the State of Pennsylvania whose leadership on 
this issue has been exemplary.
  The government quite frankly can do more to reduce the default rate 
where student loans are concerned. I would submit this is an important 
thing for us to consider and for us to pursue, because the high default 
rate that we are experiencing presently essentially robs resources from 
other worthy students who have a right to an opportunity to achieve 
higher education in America. That is true with public resources as well 
as private resources.
  The reason this occurs, however, and the area where we ought to look 
to find a remedy is right in the Federal statute as it exists today. 
There is a definition in the Higher Education Act for what constitutes 
due diligence with respect to collecting these loans. The Department of 
Education unfortunately applies that standard differently under 
different circumstances.
  I had offered an amendment in committee which would have proposed to 
apply this definition of due diligence evenly throughout the law in a 
way that would cause greater efforts to collect delinquent loans and 
lower the delinquency rate. That amendment was withdrawn under my 
direction at the request of the chairman, and it was his

[[Page H2524]]

belief and promise that he would work with me and the sponsor of the 
bill in directing the Department of Education to increase its efforts 
at collecting loans that are in default in a way that will effectively 
lower the default rate.
  I am proud to say, Mr. Chairman, that the Department of Education to 
this point has been receptive. Just raising the level of discussion, 
not only in committee but right here on the floor, has done quite a lot 
to make progress in this regard. It is one of those examples where I 
think we are going to be able to resolve this problem and move in a 
positive direction without the necessity of additional statutes and 
additional regulatory law.
  With that in mind, Mr. Chairman, I just want to thank the gentleman 
from Pennsylvania for agreeing with me and the sponsor of the bill that 
we will continue to press privately with the Department of Education to 
resolve the problem of loan defaults.
  Mr. KILDEE. Mr. Chairman, I yield the balance of my time to the 
gentleman from Pennsylvania (Mr. Fattah).
  The CHAIRMAN. The gentleman from Pennsylvania (Mr. Fattah) is 
recognized for 2 minutes.
  (Mr. FATTAH asked and was given permission to revise and extend his 
remarks.)
  Mr. FATTAH. Mr. Chairman, let me first thank the gentleman from 
Pennsylvania (Mr. Goodling) and the gentleman from Missouri (Mr. Clay), 
and also the gentleman from California (Mr. McKeon) and the gentleman 
from Michigan (Mr. Kildee) for the excellent work product that has been 
produced.
  I too rise in support of favorable consideration of H.R. 6. I, 
however, want to add to what has been said by others about an important 
part of this bill which is the High Hopes program, the fact that not 
only has it been embraced by the Clinton administration, but this is a 
proposal that has been bipartisan since its inception. That is, it has 
enjoyed the support of Members on both sides of this aisle, both in the 
committee and in the full House. I want the record to fully reflect 
that this is a bipartisan initiative.
  I would also like to thank the staff who have worked so hard on this 
product, for Sally Stroup and also David Evans for their hard work. 
There are millions of American families who are going to benefit not 
just by the initiative that I referenced, but throughout this bill 
there are programs and projects that will appropriately intersect with 
the interests and aspirations of American families for their next 
generations to receive the highest possible opportunities to reach 
their academic potential.
  Finally, I want to say that I think it says a great deal about the 
105th Congress, at the same time that when we make it clear to young 
people that there are consequences when they act inappropriately, we 
are now through the High Hopes 21st century initiative making it clear 
when they do the right thing that there will be rewards and that we 
indeed expect of them the highest in terms of their achievements. Many 
of us will not be around in the next century when these sixth graders 
are going to college, but today we are not thinking about the next 
election, we are thinking about the next generation.
  Mr. GOODLING. Mr. Chairman, I yield myself the balance of my time.
  The CHAIRMAN. The gentleman from Pennsylvania is recognized for 1\1/
2\ minutes.
  Mr. GOODLING. Mr. Chairman, I just want to make two observations. 
First of all, I want to again repeat that we cut the lenders yields by 
30 basis points. The students are happy. The colleges and universities 
are happy. The lenders are not. But it was a compromise and I think a 
good compromise for students and parents.
  Then I do want to mention something about the National Board of 
Professional Teaching Standards. It was my belief that if we had 40 
percent of the students that are not reading well by the end of third 
grade, one of the things we should be looking at is teacher training, 
teacher preparation. I felt we should be looking at the other end, 
where these teachers are beginning to start to become teachers, so that 
as a matter of fact we would not have that problem later on.
  And so we had to find $18 million to have an offset in order to 
better prepare our teachers who are beginning to teach, and our 
teachers who are teaching who need remedial work. That is where we got 
that $18 million. We have to understand in 1992 when they came and 
asked for some money, they asked for a little bit of seed money. They 
said, ``That's all we want, a little bit of seed money, and then it 
will pay for itself.'' Since 1992, they have spent $100 million, they 
have certified 914 teachers, that is $100,000 apiece, none of which got 
into rural America and center city America where they are truly needed.
  Mr. RODRIGUEZ. Mr. Chairman, I rise to discuss an issue of importance 
to the families of my district and to our nation as a whole--access to 
higher education for all children.
  While I agree with many aspects of the legislation, I want to focus 
on significant sections of H.R. 6 that need improvement--teacher 
training and diversity on our college campuses.
  Let me first say that I applaud the bill's inclusion of the Frank 
Tejeda Scholarship Program--appropriately named after a Member of this 
Chamber who fought to advance the education of some of our neediest 
students. The initiative would help bilingual individuals pay for their 
college education in exchange for service in schools with large 
limited-English proficient student populations.
  While I applaud this effort we must first look at programs that will 
address some key problem areas such as teacher recruitment, retention 
and scarcity.
  The current proposal would put all teacher training funds into block 
grants to the States. This is unacceptable. It does not ensure that we 
will hire, train and keep the very best teachers for our students. And 
it will not ensure that smaller school districts receive necessary 
funds to pilot professional development programs. As a former State 
representative, I value local input and state control. But the Federal 
Government has a positive, affirmative role to play--and it is more 
than simply transferring money.
  Students not only need well trained teachers, they also need rich 
learning environments. We know that college students learn as much from 
each other as from the formal education they receive.
  Therefore, we have a duty here today to ensure that we keep our 
colleges as a place where diversity is welcomed and respected.
  My colleagues on the other side say they want a ``color-blind 
society''. The reality is that we don't have one and that equal 
opportunity does not exist for minority students. Because there is not 
equitable access to education we must use what we know works--
affirmative action.
  In my home State of Texas, overall Hispanic and African-American 
enrollment dropped sharply at the larger institutions of higher 
education as a result of he Hopwood decision, and we can't allow the 
trend to continue.
  I oppose the Riggs amendment. It would overturn the 1978 Supreme 
Court decision recognizing the value of affirmative action and would 
deny the substantial advances that have been made through affirmative 
action by women and minorities. Don't be fooled into believing that you 
are voting for equality. Voting to end affirmative action is a vote to 
perpetuate inequality.
  Mr. Chairman, protecting and ensuring our children's access to a good 
education is a most important goal. I applaud the efforts of my 
colleagues and the administration in bringing this important bill to 
the Floor, and I look forward to our collective work on this crucial 
issue.
  Mr. CASTLE. Mr. Chairman, I have concerns about a provision included 
in H.R.  6 which eliminates all federal funding for the National Board 
for Professional Teaching Standards.
  I've been aware of the Board's efforts for many years. I was Governor 
of Delaware when the National Governors Association called for the 
Board's creation in the late 1980s. I've worked with representatives of 
major Delaware corporations such as DuPont, who strongly support the 
Board's mission. And the State of Delaware, like many other states, is 
actively supporting the Board's objectives by providing funds to help 
teachers sit for Board certification, and by providing merit pay to 
teachers who achieve certification.
  There is broad and bipartisan support for the mission and the work of 
NBPTS from major stakeholders in education policy: ;the governors, 
business, the school boards, principals, and teachers. I submit for the 
record a letter in support of federal funding for NBPTS, signed by 
several Republican and Democrat governors.
  While questions have been raised about federal funding for the 
National Board, I believe it is possible to achieve a compromise that 
sets a time limit on federal funding, but allows the important work on 
teacher certification to be completed. I intend to work to resolve this 
issue in conference.

[[Page H2525]]

                                                   April 21, 1998.
     Hon. William F. Goodling,
     Chairman, House Committee on Education and the Workforce, 
         U.S. House of Representatives, Washington, DC.
       Dear Mr. Chairman: We are writing you today to tell you of 
     our support for the important work of the National Board for 
     Professional Teaching Standards. As Governors, each of us 
     believes that one of our highest priorities is to make our 
     system of education the very best it can be and that a 
     vitally important factor in achieving this is to improve the 
     quality of the teaching that takes place in our classrooms. 
     We support the voluntary process of National Board 
     Certification because it provides us with a tool for 
     achieving this goal. Each of us has crafted a plan to use the 
     high and rigorous standards and assessments of the National 
     Board in our states and we look forward to soon having the 
     full system available to all of our teachers.
       We applaud the United States Congress for providing 
     resources for the research that launched and continues to 
     support full development of the voluntary National Board 
     system. For a little over six years, this research and 
     development program has proceeded with the help of federal 
     dollars and with accountability to the Congress.
       We look to you for continued support of the federal funding 
     for the National Board for Professional Teaching Standards at 
     the level requested by the President for FY 1999.
           Sincerely,
         James B. Hunt, Jr.;
         Gary Locke;
         Lawton Chiles;
         Thomas R. Carper;
         George V. Voinovich;
         Marc Racicot;
         Terry E. Branstad; and
         Tommy G. Thompson.

  Mrs. MORELLA. Mr. Chairman, I rise in praise of Congressmen Goodling, 
McKeon, Kildee and Clay and all of the Members of the Committee on 
Education and the Workforce for their hard work and their leadership in 
bringing H.R. 6, the Higher Education Amendments of 1998 to the House 
floor in a timely manner. You deserve great credit for this thoughtful 
and carefully-crafted bill that will increase access to a higher 
education for millions of Americans.
  For most Americans, student loans are the primary source of education 
funding. From the G.I. Bill to Pell Grants and the Stafford Loan 
Program, financial aid has enabled millions of working class families 
to send their children to college. College graduates earn, on average, 
50 percent more than those with only a high school diploma.
  This legislation will provide college students with the lowest 
interest rates for academic loans in 17 years.
  The bill expands the Pell Grant Program which helps youngsters from 
disadvantaged backgrounds, and improves campus-based aid programs like 
Supplemental Education Opportunity Grants, Work Study, and Perkins 
Loans.
  The process of applying for student loans has been simplified, and 
there has been an effort to reduce the regulatory burden on most 
colleges and universities.
  Students will have more timely access to crime statistics and 
information that will allow them to have an accurate picture of campus 
safety. In addition, the bill gives the Secretary of Education the 
unprecedented authority to study distance learning techniques that will 
expand student access to a higher education.
  I am particularly pleased that Congresswoman Marge Roukema offered 
legislation that I introduced as an amendment during the mark-up of 
H.R. 6. My legislation, College Access Means Parents in School (CAMPUS) 
Act, has been incorporated into H.R. 6 and will enable more low-income 
women to get a college education by providing campus-based child care 
centers. Often, finding affordable quality child care can be an 
insurmountable barrier for students who have children. The CAMPUS Act 
will tear down this barrier by providing financial incentives for 
colleges and universities to establish campus-based child care centers.
  The good news is that students who have access to campus-based child 
care centers are more likely to stay in school and graduate than the 
average college student. Peace of mind that their children are being 
well cared for enables most of these students to achieve a higher grade 
point average and to complete their college education in less time than 
the norm.
  Again, I want to commend the members of the Education and Workforce 
Committee for their excellent endeavors and I urge all of my colleagues 
to support this bill.
  Mr. FAWELL. Mr. Chairman, I am very pleased to announce that the 
Higher Education Amendments Act of 1998, H.R. 6, which will be passed 
by the House today, includes compromise language permitting colleges 
and universities to offer voluntary age-based early retirement 
incentives to tenured faculty. Title X of H.R. 6 reflects compromise 
language acceptable to all interested parties, including Democrat and 
Republican leaders of the Education and Workforce Committee, the 
Administration, the higher education community, the American 
Association of University Professors (AAUP)--the well known faculty 
union, and other groups. This language still accomplishes the basic 
purposes of the bipartisan bill H.R. 3473, which I introduced on March 
17, 1998 (and which was incorporated in the version of H.R. 6 reported 
by the Committee).
  This legislation would amend the Age Discrimination in Employment Act 
of 1967 (ADEA) to provide a ``safe harbor'' for certain age-based 
voluntary early retirement incentive plans (VERIPs) offered by colleges 
and universities to tenured faculty. The new Title X clarifies the 
scope of that safe harbor in several respects from the Committee-
reported version.
  I support the principles of the ADEA and believe that the unique 
nature of faculty tenure justifies this amendment. Moreover, the ADEA 
already recognized the unique nature of faculty tenure. In 1986, when 
Congress amended the ADEA to abolish the mandatory retirement age, it 
included a seven year exemption for tenured faculty. When the exemption 
expired in December 1993, a National Academy of Sciences report raised 
concerns that the tenure system and diminished faculty turnover--
particularly at research universities--could increase costs and limit 
institutional flexibility in responding to changing academic needs, 
particularly with regard to necessary hires in new and expanding fields 
and disciplines. It thus predicated its recommendation for ending 
mandatory retirement on the enactment of several proposals, including 
this legislation.
  This legislation has been endorsed by the AAUP, the widely recognized 
union that represents university faculty. According to the AAUP, 
voluntary early retirement incentives are beneficial for both the 
faculty members who choose to retire and the institutions that need to 
encourage turnover to make necessary hires. Further, the voluntary 
nature of the proposed incentives and the double protections available 
to tenured faculty--the age discrimination laws and the tenure system--
insure that this ``safe harbor'' cannot be used to penalize faculty 
members who choose not to retire. The AAUP has written to the Committee 
that it supports the legislation because ``the retirement incentives 
under discussion are offered on a voluntary basis . . . [and] the 
legislation would permit an offer of additional benefits. It would not 
permit institutions to reduce or eliminate retirement benefits that 
would otherwise have been available to faculty after a certain age.''
  The Older Workers' Benefit Protection Act (OWBPA) did allow for two 
very limited age-based early retirement subsidies. When the OWBPA was 
enacted, the authors did discuss in detail the need for a safe harbor 
in defined benefit plans and noted that any plans (i.e., defined 
contribution plans, the plans used primarily by colleges and 
universities, and defined benefit plans) could utilize other early 
retirement incentive plans. The Committee has now decided that another 
very limited age-based early retirement subsidy should be permissible. 
This exception will be available only for faculty members with tenure 
at an institution of higher education. I believe that the unique nature 
of the tenure system and the extra protections it affords over and 
above the age discrimination laws justifies the creation of this 
exception solely for higher education institutions.
  Moreover, this past January, the bipartisan National Commission on 
the Cost of Higher Education included this legislative initiative in 
its recommendations to check the skyrocketing cost of a college 
education. The Commission recommended that ``Congress enact a 
clarification to the Age Discrimination in Employment Act to ensure 
that institutions offering defined contribution retirement programs are 
able to offer early retirement incentives to tenured faculty members. 
The Commission endorses pending Senate Bill 153, which would accomplish 
this purpose.''
  Title X is similar to S. 153, introduced by Senators Moynihan and 
Ashcroft. However, unlike the Senate version, this provision assures 
that no professor is denied an opportunity to receive the retirement 
incentive because the professor is too old. The provision requires that 
each otherwise eligible faculty member will have one opportunity of at 
least 180 days to elect to retire and receive the maximum benefit that 
could then be elected if the faculty member were younger. The provision 
clarifies that this 180-day opportunity must be afforded not only to 
faculty members who have attained the minimum age and satisfied the 
other eligibility requirements at the time the plan is established, but 
also to faculty members who satisfy these eligibility requirements at 
some later time while the plan remains in effect. The provision also 
requires that faculty members be given at least 180 days to plan for 
retirement after making their election.
  The compromise language for Title X also clarifies that the ``safe 
harbor'' applies only to VERIPs that offer supplemental benefits, and 
would not apply where an institution implements any age-based reduction 
or cessation of benefits that would otherwise have been

[[Page H2526]]

available to tenured faculty. The new Title X clarifies that an 
institution may not cease offering a retirement or severance benefit 
that has been generally available to tenured faculty and, within 365 
days thereafter, begin offering that benefit solely to faculty members 
who retire under the VERIP. The provision would not, however, preclude 
an institution from discontinuing benefits under an existing early 
retirement or exit incentive plan and substituting a VERIP within 365 
days.
  Finally, the new Title X clarifies that the enactment of this safe 
harbor is not intended to effect the application of the ADEA to any 
other plans or employers.
  It is my hope that this legislation will contribute to containing the 
costs of higher education, and will be beneficial both to colleges and 
universities and to their faculty members who choose to retire. In the 
words of the AAUP, the legislation will ``provide greater flexibility 
in faculty retirement planning, offer a substantial retirement benefit 
to those professors who choose to retire under the terms of an 
incentive plan, and leave other professors whole in their choice to 
continue their careers.''
  Mrs. ROUKEMA. Mr. Chairman, I rise in strong support of the Higher 
Education Act that we have before us today.
  This bill is one of the biggest bills we will complete this Congress. 
These are the issues that count for the American people.
  To be competitive in the global economy, we need to provide our 
country's youth with the means to better their education.
  Mr. Speaker, we should be calling this bill ``the American Act!'' 
This is the legislation that will enable young people across this 
nation to obtain the education they need to develop their skills so 
that they may get the good job at good wages. In this exchange, our 
students get the job they want, the roof over their head and America 
gets hard-working, productive members of our society.
  Among the many important provisions of this bill, are that this bill 
saves the student loan program, encourages the provision of campus-
based child care, cuts down on scam schools and works on the training 
of our teachers.
  It is a good bill that makes sense for today's students!


                               pell grant

  Clearly, one of the biggest problems facing students today is the 
cost of higher education. While we must do everything we can to put 
higher education within reach of every student, we also must do 
everything we can to ensure to protect our scarce resources--to ensure 
that they are not misused or wasted or squandered.
  With this in mind I (along with Representative Bart Gordon of 
Tennessee) introduced the ``Pell Grant Student/Taxpayer Protection 
Act'' that is now a part of this Higher Education Act package.
  This provision prevents a postsecondary school from participating in 
the Pell Grant program if that school is already ineligible to 
participate in the federally guaranteed student loan program.
  This is a critical time for our country. Congress is trying to save 
taxpayer dollars while improving the quality of post-secondary 
education for all Americans. We took strong steps toward that goal when 
we last reauthorized the Higher Education Act and implemented nearly 
100 sorely needed reforms that were good for students and good for 
taxpayers.
  One of those reforms was to make schools ineligible for guaranteed 
student loans if their loan default rates were above 25 percent three 
years in a row. Today's reauthorization goes further by also taking 
Pell Grant eligibility away from schools with high default rates. This 
will recover millions of dollars currently being squandered and instead 
put that money to work with hard-working students at legitimate 
schools.
  Reforms such as the three-year 25 percent default criteria were 
intended to put an end to risk-free federal subsidies for unscrupulous, 
for-profit trade schools who promise students a good education that 
leads to a good job and then fail to deliver on that promise--at the 
expense of both students and the taxpayer. If these schools violate 
these rules, then they would be bounced from the program.
  We have already determined that schools with unacceptably high 
student loan default rates should not be permitted to participate in 
the federally guaranteed student loan program. I submit that if a 
school is deemed ineligible to participate in the student loan program, 
then it should not be permitted to participate in the Pell Grant 
program.
  I should note that when we temporarily put this restriction on abuse 
of Pell Grant money into effect for one year by making it a part of the 
Omnibus Consolidated Rescissions and Appropriations Act of 1996, we 
redistributed approximately $8 million to responsible schools. Since it 
was a part of an appropriations act, that accomplishment was only 
temporary. Today's action will make this provision permanently a part 
of the law.
  This is an opportunity to stretch our Pell Grant funds by 
disqualifying those schools that we have already disqualified from the 
federally guaranteed student loan program. This allows us to make the 
most of our limited federal dollars!


                    student loan interest rate issue

  But there is another aspect of finding funds for access to college 
that I believe we have resolved here--the federal student loan interest 
rate issue. The proposal in this legislation will help save access to 
higher education, while helping students save on the cost of higher 
education.
  On July 1, a change in the student loan interest rate is scheduled to 
take place that is believed by many independent organizations, 
including CRS and GAO, to possibly drive many private lenders from the 
student loan market.
  I recognize that the change would have reduced the rate for students 
paying back their loans. However it would have made the loans virtually 
unprofitable for the banks--leading many banks to leave the market.
  I am speaking today wearing two hats. One--as a longtime Member of 
the Postsecondary Education Subcommittee. The other hat--I serve as 
Chairwoman of the House Subcommittee on Financial Institutions of the 
House Banking Committee.
  So I know this program from both sides--so to speak.
  Currently, 70% of all student loans are originated by private 
lenders, such as the banks. Further, about 5000 banks participate in 
the student loan market today. If the market becomes virtually 
unprofitable, then many of these banks will leave the market, and leave 
many students without the means to a loan.
  The result--student and their families being shut out of the federal 
student loan program and unable to obtain funds for college--is 
unacceptable.
  Which is why we believe we have devised a plan which would retain 
these private lenders in the student loan program. And it is included 
as part of today's Higher Education Act Amendments.
  This compromise provides students with a cut in the interest rate by 
80 bases points, while providing banks a different interest rate, with 
the difference being paid by the federal government.
  To students this means savings of over $1,000 per student for a 
$20,000 loan. But just as importantly, this means access! By providing 
banks with this small profit margin, they will remain in the guaranteed 
lending program, and will continue to make it possible for students to 
further their education!


                            teacher training

  Another strong proposal in this Higher Education Act deals with the 
issue of teacher training. As we talk about raising standards for 
students, we should also talk about raising standards for teachers. To 
help our nation's students, we need to help our nation's teachers.
  This bill will focus on strengthening State teacher certification 
requirements to improve the academic knowledge of teachers in the 
subject areas in which they are certified to teach. Teachers who teach 
math should have knowledge in math, and teachers who teach science 
should have knowledge in science.
  This bill provides competitive grants to the Governors. It will help 
raise the State academic standards required to enter the teaching 
profession.
  In some states it is harder to graduate from high school than to 
become a certified teacher. Something is wrong here!
  According to a U.S. Department of Education report, 39.5% of science 
teachers had not studied science as a major or minor, 34% of 
mathematics teachers and 25% of English teachers were similarly 
teaching ``out of field.''
  How can our nation's students learn science or math when their 
teachers do not know it?
  Every classroom should have a well-educated, knowledgeable teacher.


                               child care

  This bill includes an amendment I offered at Committee to help 
society with today's child care problems. It is a sad reality that 
today's headlines are filled with stories that spring from the everyday 
struggle of families to secure safe and dependable child care. This 
problem is especially great for men and women who want to further their 
education to make a better life for them and their family.
  The trends in society and the American workforce show a necessity for 
education beyond high school. Market demands require a higher level of 
educational achievement than high school. This is near impossible to 
achieve when reliable, quality child care is not available.
  This bill includes this proposal to encourage a new public-private 
partnership between institutions and businesses to develop solutions to 
meet students' child care needs. This initiative is in the form of 
competitive grants to higher education institutions that would go 
directly to the institution to assist them in providing campus-based 
child care service to low-income students.

[[Page H2527]]

  This legislation does not mandate a Federal program for child care 
that imposes some Washington-based requirements on local communities. 
In fact, this bill combines the concept of state and local control of 
education with the time-tested concept of the public-private 
partnership. This bill makes it possible for local institutions and 
businesses to work together to create their own program that meets the 
needs of their own community, whatever they may be.
  We need to help students solve the child care problem. And we need to 
give institutions the means to put their proposals to the test. This 
bill helps us do that!


                               conclusion

  For all of these reasons, and many others that I do not have time to 
discuss today, this legislation is critical to all students.
  Let's pass this legislation.
  Thank you.
  Mr. STUMP. Mr. Chairman, I rise today to express my appreciation for 
the provisions in H.R. 6 that put Montgomery GI Bill education benefits 
on an equal footing with benefits provided under other programs.
  Unfortunately, veterans are penalized when they apply for other 
Federal education assistance benefits like Pell Grants.
  Under current law, veterans education benefits are counted against 
the amount of assistance a veteran may receive from other Federal 
education benefit programs.
  On the other hand, AmeriCorps education benefits don't reduce 
assistance from other Federal education assistance programs.
  Thus, veterans who serve their Nation in often-hostile environments 
and at great risk to their lives are denied benefits solely due to 
their military service, and that is not right.
  This bill corrects that inequity.
  Mr. Chairman, I congratulate Chairman Goodling, Subcommittee Chairman 
McKeon, and their respective ranking Members, Mr. Clay and Mr. Kildee, 
for the way they have responded to this problem.
  I know they have dedicated a significant amount of scarce resources 
to our veterans.
  What they are doing will make a measurable difference in the lives of 
veterans pursuing an education.
  Mr. Chairman, I strongly urge my colleagues to support H.R. 6.
  The CHAIRMAN. All time for general debate has expired.
  Pursuant to the rule, the committee amendment in the nature of a 
substitute printed in the bill, modified by the amendments printed in 
part 1 of House Report 105-499, shall be considered as an original bill 
for the purpose of amendment under the 5-minute rule by title, and each 
title shall be considered read.
  Before consideration of any other amendment, it shall be in order to 
consider the amendment printed in part 2 of the report if offered by 
the gentleman from Pennsylvania (Mr. Goodling) or his designee. That 
amendment shall be considered read, shall be debatable for 20 minutes, 
equally divided and controlled by the proponent and an opponent, shall 
not be subject to amendment, and shall not be subject to a demand for 
division of the question.
  If that amendment is adopted, the bill, as amended, shall be 
considered as an original bill for the purpose of further amendment.
  No other amendment to the committee amendment in the nature of a 
substitute is in order unless printed in the Congressional Record. 
Those amendments shall be considered read.
  The Chairman of the Committee of the Whole may postpone until a time 
during further consideration in the Committee of the Whole a request 
for a recorded vote on any amendment and may reduce to not less than 5 
minutes the time for voting by electronic device on any postponed 
question that immediately follows another vote by electronic device 
without intervening business, provided that the time for voting by 
electronic device on the first in any series of questions shall not be 
less than 15 minutes.

                              {time}  2045


                Amendment No. 1 Offered by Mr. Goodling

  Mr. GOODLING. Mr. Chairman, pursuant to the rule, I offer an 
amendment printed in Part 2 of the report.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Part 2 amendment printed in House Report 105-499 offered by 
     Mr. Goodling:
       Page 8, line 5, strike ``is redesignated'' and insert ``is 
     amended by striking subsection (a), and by redesignating 
     subsection (b)''.
       Page 23, line 21, insert ``or veterinary'' after 
     ``medical''; and on lines 23 and 24, strike ``a graduate 
     medical school'' and insert ``such school''.
       Page 24, strike lines 22 through 24 and insert the 
     following:

       ``(II) the institution has a clinical training program that 
     was approved by a State as of January 1, 1992, or the 
     institution's students complete their clinical training at an 
     approved veterinary school located in the United States.

       Page 33, line 7, strike ``105(b)'' and insert ``105''.
       Page 58, beginning on line 21, strike part E through page 
     68, line 11, and insert the following:

              ``PART E--TEACHER QUALITY ENHANCEMENT GRANTS

     ``SEC. 271. PURPOSE.

       ``The purposes of this part are--
       ``(1) to provide competitive grants to States for 
     assistance in strengthening the quality of the teaching force 
     by improving the academic knowledge of teachers in the 
     subject areas in which they teach;
       ``(2) to hold institutions of higher education with teacher 
     preparation programs accountable for preparing teachers who 
     are highly competent in the academic content areas in which 
     they plan to teach, including training in the effective uses 
     of technologies in the classroom; and
       ``(3) to recruit high quality individuals, including 
     individuals from other occupations, into the teaching force.

     ``SEC. 272. ELIGIBILITY.

       ``(a) Definitions.--For purposes of this part:
       ``(1) Eligible grant recipient.--The term `eligible grant 
     recipient' means--
       ``(A) other than for the purpose of section 273(b), a 
     Governor of a State, except that if, pursuant to the law or 
     constitution of such State, another individual, entity, or 
     agency in a State that is responsible for the teacher 
     certification and preparation activities contained in the 
     application, such term means that individual, entity, or 
     agency; and
       ``(B) for the purpose of section 273(b), an eligible 
     partnership.
       ``(2) Eligible partnership.--The term `eligible 
     partnership' means an entity consisting of an exemplary 
     private independent or State-supported public institution of 
     higher education which prepares teachers, and a local 
     educational agency, and which may also consist of the 
     eligible grant recipient, other institutions of higher 
     education, public charter schools, public and private 
     nonprofit elementary and secondary schools, or other public 
     and private nonprofit agencies or organizations.
       ``(b) Applications.--To be eligible to receive a grant 
     under this part, an eligible grant recipient shall, at the 
     time of the initial grant application, submit an application 
     to the Secretary that meets the requirements of this part.
       ``(c) Contents of Application.--Such application shall 
     include a description of how the eligible grant recipient 
     intends to use funds provided under this part and such other 
     information and assurances as the Secretary may require.

     ``SEC. 273. USE OF FUNDS.

       ``(a) General Activities.--The eligible grant recipient of 
     a State that receives a grant under this subpart shall use a 
     portion of such grant to carry out 1 or more of the following 
     activities:
       ``(1) Reforming State teacher certification requirements to 
     ensure that current and future teachers possess the necessary 
     academic content knowledge in the subject areas in which they 
     are certified and assigned to teach.
       ``(2) Providing prospective teachers alternatives to 
     schools of education through programs at colleges of arts and 
     sciences or at nonprofit organizations.
       ``(3) Funding programs which establish or expand 
     alternative routes to State certification for highly 
     qualified individuals, including mid-career professionals 
     from other occupations, paraprofessionals, and former 
     military personnel.
       ``(4) Implementing reforms which hold institutions of 
     higher education with teacher preparation programs 
     accountable for preparing teachers who are highly competent 
     in the academic content areas in which they plan to teach.
       ``(5) Developing and implementing effective mechanisms to 
     expeditiously remove incompetent or unqualified teachers.
       ``(6) Recruiting minorities, and others, into the teaching 
     and counseling professions, including education 
     paraprofessionals, former military personnel, and mid-career 
     professionals, by providing financial and other assistance 
     related to instruction, induction, mentoring, and support 
     services that include pre-service and in-service components, 
     to serve within schools which have--
       ``(A) a high percentage of children in poverty;
       ``(B) low retention rates for teachers; or
       ``(C) a high percentage of teachers teaching subjects for 
     which they are not qualified to teach.
       ``(b) Partnership Activities.--An eligible partnership that 
     receives a grant under this subpart shall use such funds to 
     carry out 1 or more of the following activities:
       ``(1) Implementing reforms which hold institutions of 
     higher education with teacher preparation programs 
     accountable for preparing teachers who are highly competent 
     in the academic content areas in which they plan to teach;
       ``(2) Creating opportunities for enhanced and ongoing 
     professional development which improves the academic content 
     knowledge of

[[Page H2528]]

     teachers in the subject areas in which they are certified to 
     teach or in which they are working toward certification to 
     teach.
       ``(3) Providing programs designed to implement the 
     successful integration of technology into teaching and 
     learning.
       ``(4) Recruiting minorities, and others, into the teaching 
     and counseling professions, including education 
     paraprofessionals, former military personnel, and mid-career 
     professionals, by providing financial and other assistance 
     related to instruction, induction, mentoring, and support 
     services that include pre-service and in-service components, 
     to serve within schools which have--
       ``(A) a high percentage of children in poverty;
       ``(B) low retention rates for teachers; or
       ``(C) a high percentage of teachers teaching subjects for 
     which they are not qualified to teach.

     ``SEC. 274. COMPETITIVE AWARDS.

       ``(a) Competitive Grants.--
       ``(1) Applicability.--The Secretary shall make grants in 
     accordance with the requirements of this subsection for any 
     fiscal year for which the amount appropriated under section 
     276 does not equal or exceed $250,000,000.
       ``(2) Competitive basis for awards.--The Secretary shall 
     make annual grants under this subsection on a competitive 
     basis.
       ``(3) Peer review panel.--The Secretary shall provide the 
     applications submitted by eligible grant recipients under 
     section 272 to a peer review panel for evaluation. With 
     respect to each application, the peer review panel shall 
     initially recommend the application for funding or for 
     disapproval.
       ``(4) Priority.--In recommending applications to the 
     Secretary, the panel shall give priority to--
       ``(A) applications from States with proposals which promise 
     initiatives to reform State teacher certification 
     requirements which are designed to ensure that current and 
     future teachers possess the necessary academic content 
     knowledge in the subject areas in which they are certified to 
     teach or which include innovative reforms to hold 
     institutions of higher education with teacher preparation 
     programs accountable for preparing teachers who are highly 
     competent in the academic content areas in which they plan to 
     teach; and
       ``(B) eligible partnership applications which--
       ``(i) include the eligible grant recipient and demonstrate 
     a high degree of collaboration with the State agency 
     responsible for teacher certification and preparation; and
       ``(ii) include a local educational agency which includes a 
     school with--

       ``(I) a high percentage of children in poverty;
       ``(II) low retention rates for teachers; or
       ``(III) a high percentage of teachers teaching subjects for 
     which they are not qualified to teach.

       ``(5) Ranking of applications.--With respect to each 
     application recommended for funding, the panel shall assign 
     the application a rank, relative to other recommended 
     applications, based on the priority described in subsection 
     (c), the extent to which the application furthers the 
     purposes of this part, and the overall quality of the 
     application, based on the quality and scope of State-
     supported strategies to improve quality of teacher 
     preparation and their teaching force.
       ``(6) Recommendation of amount.--With respect to each 
     application recommended for funding, the panel shall make a 
     recommendation to the Secretary with respect to the amount of 
     the grant that should be made. The Secretary shall use \1/3\ 
     of the funds made available under this part to fund 
     applications submitted by eligible partnerships.
       ``(7) Secretarial selection.--
       ``(A) In general.--Subject to subparagraph (B), the 
     Secretary shall determine, based on the peer review panel's 
     recommendations, which applications shall receive funding and 
     the amounts of such grants. In determining grant amounts, the 
     Secretary shall take into account the total amount of funds 
     available for all grants under this part and the types of 
     activities proposed to be carried out.
       ``(B) Effect of ranking by panel.--In making grants under 
     this part, the Secretary shall select applications according 
     to the ranking of the applications by the peer review panel, 
     except in cases where the Secretary determines, for good 
     cause, that a variation from that order is appropriate.
       ``(b) Formula Grants.--
       ``(1) Allotment.--For any fiscal year for which the amount 
     appropriated to carry out this part exceeds $250,000,000, the 
     Secretary shall make allotments to the eligible grant 
     recipient of each State, pursuant to the formula described in 
     paragraph (2), to enable the eligible grant recipient to 
     carry out the activities under this part, including the 
     funding of eligible partnerships to carry out activities 
     described in section 273(b).
       ``(2) Allotment formula.--For any such fiscal year, an 
     eligible grant recipient from each State that submits an 
     application under section 272(a) shall receive an allotment 
     under this part in an amount that bears the same ratio to the 
     amount appropriated as the school age population ages 5 
     through 17 of the State bears to the school age population 
     ages 5 through 17 of all the States, except that no State 
     shall receive less than an amount equal to \1/4\ of 1 percent 
     of the total amount.
       ``(c) Additional Requirements.--
       ``(1) Matching requirement.--Each State receiving funds 
     under this part shall provide, from non-Federal sources, an 
     amount equal to \1/2\ of the amount of the grant in cash or 
     in kind to carry out the activities supported by the grant.
       ``(2) Limitation on administrative expenses.--An eligible 
     recipient that receives a grant under this part may use not 
     more than 2 percent of the grant funds for administrative 
     costs.
       ``(3) Reporting.--
       ``(A) In general.--An eligible grant recipient that 
     receives a grant under this section shall submit an 
     accountability report to the Secretary and the Committee on 
     Education and the Workforce of the House of Representatives 
     and the Committee on Labor and Human Resources of the Senate. 
     Such reports shall include a description of the degree to 
     which substantial progress has been made in meeting the 
     following goals:
       ``(i) Raising the State academic standards required to 
     enter the teaching profession.
       ``(ii) Increasing the percentage of classes taught in core 
     academic subject areas by teachers fully certified by the 
     State to teach in those subject areas.
       ``(iii) Decreasing shortages of qualified teachers in poor 
     urban and rural areas.
       ``(iv) Increasing opportunities for enhanced and ongoing 
     professional development which improves the academic content 
     knowledge of teachers in the subject areas in which they are 
     certified to teach or in which they are working toward 
     certification to teach.
       ``(B) Accountability of state institution of higher 
     education.--Prior to receiving funds under this part, an 
     eligible grant recipient shall demonstrate that at least 80 
     percent of graduates of each of the exemplary institutions of 
     higher education in any eligible partnership described in 
     section 273(a)(2) who enter the field of teaching pass all 
     applicable State qualification assessments of new teachers, 
     which must include assessments of each prospective teacher's 
     subject matter knowledge in the content area or areas in 
     which the teacher provides instruction. Prior to each 
     subsequent receipt of funds under this part, such State shall 
     demonstrate that 70 percent of the graduates of each 
     institution of higher education in the State have met such 
     goal and continue to progress to exceed such goal. Such 
     assessment shall be at least as rigorous as those in place on 
     the date of enactment of this Act and shall have qualifying 
     scores no lower than those in place on the date of enactment 
     of this Act.
       ``(C) Provision to peer review panel.--The Secretary shall 
     provide the reports submitted under subparagraph (A) to the 
     peer review panel convened under subsection (a)(3). The panel 
     shall use such accountability report in recommending 
     applications for subsequent funding under this section.
       ``(4) Teachers qualifications provided to parent upon 
     request.--Any local educational agency that participates as 
     an eligible recipient or partner under this part shall make 
     available, upon request and in an understandable and uniform 
     format, to any parent of a student attending any school in 
     the local educational agency, information regarding the 
     qualifications of the student's classroom teacher, both 
     generally and with regard to the subject matter in which the 
     teacher provides instruction.

     ``SEC. 275. LIMITATIONS.

       ``(a) Federal Control Prohibited.--Nothing in this part 
     shall be construed to permit, allow, encourage, or authorize 
     any Federal control over any aspect of any private, 
     religious, or home school, whether or not a home school is 
     treated as a private school or home school under State law. 
     This section shall not be construed to bar private, 
     religious, or home schools from participation in programs or 
     services under this part.
       ``(b) No Change in State Control Encouraged or Required.--
     Nothing in this part shall be construed to encourage or 
     require any change in a State's treatment of any private, 
     religious, or home school, whether or not a home school is 
     treated as a private school or home school under State law.
       ``(c) National System of Teacher Certification 
     Prohibited.--Nothing in this part shall be construed to 
     permit, allow, encourage, or authorize any national system of 
     teacher certification.

     ``SEC. 276. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     part such sums as may be necessary for each of the fiscal 
     years 1999 through 2003.''.
       Page 68, after line 11, insert the following new sections 
     (and redesignate the succeeding section and conform the table 
     of contents accordingly):

     SEC. 206. CAMPUS SAFETY.

       (a) Grants to Combat Violent Crimes Against Women on 
     Campuses.--Title II is further amended by adding at the end 
     the following new part:

  ``PART F--GRANTS TO COMBAT VIOLENT CRIMES AGAINST WOMEN ON CAMPUSES

     ``SEC. 281. GRANTS TO COMBAT VIOLENT CRIMES AGAINST WOMEN ON 
                   CAMPUSES.

       ``(a) Grants Authorized.--
       ``(1) In general.--The Secretary is authorized to make 
     grants to institutions of higher education for use to provide 
     training to administrators, security personnel, and campus 
     personnel and student organizations for the purpose of 
     developing and strengthening effective security and 
     investigation strategies to combat violent crimes against 
     women on campuses, and to develop and strengthen victim 
     services in cases involving violent crimes against women on 
     campuses, which may include partnerships with local criminal 
     justice authorities and community-based victims services 
     agencies.

[[Page H2529]]

       ``(2) Award basis.--The Secretary shall award grants and 
     contracts under this section on a competitive basis.
       ``(3) Equitable participation.--The Secretary shall make 
     every effort to ensure the equitable participation of private 
     and public institutions of higher education and to ensure the 
     equitable geographic participation of such institutions in 
     the activities assisted under this part.
       ``(4) Priority.--In the award of grants and contracts under 
     this section, the Secretary shall give priority to 
     institutions of higher education or consortia of such 
     institutions that show the greatest need for the sums 
     requested.
       ``(b) Use of Grant Funds.--Funds provided under this part 
     may be used for the following purposes:
       ``(1) To provide training for campus security and college 
     personnel, including campus disciplinary or judicial boards, 
     that address the issues of sexual assaults, stalking, and 
     domestic violence.
       ``(2) To implement and operate education programs for the 
     prevention of violent crimes against women.
       ``(3) To develop, enlarge, or strengthen support services 
     programs including medical or psychological counseling for 
     victims of sexual offense crimes.
       ``(4) To create, disseminate, or otherwise provide 
     assistance and information about victims' options on and off 
     campus to bring disciplinary or other legal action.
       ``(5) To train campus administrators and campus security 
     personnel to more effectively identify and respond to violent 
     crimes against women on campus, including the crimes of 
     sexual assault, stalking, and domestic violence.
       ``(6) To develop and implement more effective campus 
     policies, protocols, orders, and services specifically 
     devoted to prevent, identify, and respond to violent crimes 
     against women on campus, including the crimes of sexual 
     assault, stalking, and domestic violence.
       ``(7) To develop, enlarge, or strengthen victim services 
     programs for local campuses and to improve delivery of victim 
     services on campuses.
       ``(8) To provide capital improvements (including improved 
     lighting and communications facilities but not including the 
     construction of buildings) on campuses to address violent 
     crimes against women on campus, including the crimes of 
     sexual assault, stalking, and domestic violence.
       ``(9) To support improved coordination between campus 
     administrators, campus security personnel, and local law 
     enforcement to reduce violent crimes against women on campus.
       ``(c) Applications.--
       ``(1) In general.--In order to be eligible to be awarded a 
     grant under this section for any fiscal year, an institution 
     of higher education shall submit an application to the 
     Secretary at such time and in such manner as the Secretary 
     shall prescribe.
       ``(2) Contents.--Each application submitted under paragraph 
     (1) shall--
       ``(A) describe the need for grant funds and the plan for 
     implementation for any of the purposes described in 
     subsection (b);
       ``(B) describe how the campus authorities shall consult and 
     coordinate with nonprofit and other victim services programs, 
     including sexual assault and domestic violence victim 
     services programs;
       ``(C) provide measurable goals and expected results from 
     the use of the grants funds;
       ``(D) provide assurances that the Federal funds made 
     available under this section shall be used to supplement and, 
     to the extent practical, increase the level of funds that 
     would, in the absence of Federal funds, be made available by 
     the applicant for the purpose described in this part; and
       ``(E) include such other information and assurances as the 
     Secretary reasonably determines to be necessary.
       ``(3) Compliance with campus crime reporting required.--No 
     institution of higher education shall be eligible for a grant 
     under this section unless such institution is in compliance 
     with the requirements of section 485(f) of this Act.
       ``(d) Reporting.--Not later than 180 days after the end of 
     the fiscal year for which grants are made under this part, 
     the Secretary shall submit to the committees of the House of 
     Representatives and the Senate responsible for issues 
     relating to higher education and crime, a report that 
     includes--
       ``(1) the number of grants and funds distributed under this 
     part;
       ``(2) a summary of the purposes for which these grants were 
     provided and an evaluation of their progress;
       ``(3) a statistical summary of the persons served, 
     detailing the nature of victimization, and providing data on 
     age, sex, race, ethnicity, disability, relationship to 
     offender, geographic distribution, and type of campus; and
       ``(4) an evaluation of the effectiveness of programs funded 
     under this part, including an evaluation based on the 
     reduction observed in crimes reported pursuant to section 
     485(f).
       ``(f) Grantee Reporting.--Upon completion of the grant or 
     contract period under this section, the grantee institution 
     or consortium of such institutions shall file a performance 
     report with the Secretary explaining the activities carried 
     out together with an assessment of the effectiveness of those 
     activities in achieving the purposes of this section. The 
     Secretary shall suspend funding for an approved application 
     if an applicant fails to submit an annual performance report.
       ``(g) Definitions.--In this part--
       ``(1) the term `domestic violence' includes acts or threats 
     of violence, not including acts of self-defense, committed by 
     a current or former spouse of the victim, by a person with 
     whom the victim shares a child in common, by a person who is 
     cohabitating with or has cohabitated with the victim, by a 
     person similarly situated to a spouse of the victim under the 
     domestic or family violence laws of the jurisdiction, or by 
     any other person against a victim who is protected from that 
     person's acts under the domestic or family violence laws of 
     the jurisdiction;
       ``(2) the term `sexual assault' means any conduct 
     proscribed by chapter 109A of title 18, United States Code, 
     whether or not the conduct occurs in the special maritime and 
     territorial jurisdiction of the United States or in a Federal 
     prison and includes both assaults committed by offenders who 
     are strangers to the victim and assaults committed by 
     offenders who are known or related by blood or marriage to 
     the victim; and
       ``(3) the term `victim services' means a nonprofit, 
     nongovernmental organization that assists domestic violence 
     or sexual assault victims, including campus women's centers, 
     rape crisis centers, battered women's shelters, and other 
     sexual assault or domestic violence programs including campus 
     counseling support and victim advocate organizations with 
     domestic violence, stalking, and sexual assault programs, 
     whether or not organized and staffed by students.
       ``(h) Authorization of Appropriations.--For the purpose of 
     carrying out this part, there are authorized to be 
     appropriated $10,000,000 for fiscal year 1999 and such sums 
     as may be necessary for each of the 4 succeeding fiscal 
     years.''.
       Page 108, line 19, insert ``State agencies,'' after ``such 
     as''.
       Page 132, line 15, strike ``computer-related careers'' and 
     insert ``careers in information technology''.
       Page 135, line 12, strike ``September 30, 2001'' and insert 
     ``the earlier of the date of enactment of the Higher 
     Education Amendments of 1998 or October 1, 1998''.
       Page 141, beginning on line 22, strike paragraph (5) 
     through page 142, line 4, and insert the following:
       ``(5) interest earned on the Federal Fund during the first 
     3 years after the date of enactment of this section by a 
     limited number of guaranty agencies (not to exceed 10) that 
     demonstrate to the Secretary the potential for a negative 
     cash flow in the Operating Fund during the restructuring of 
     their operations in accordance with the requirements of this 
     section and section 422A.
       Page 144, line 23, strike ``$30,000,000'' and insert 
     ``$43,000,000''.
       Page 145, line 16, strike ``$150,000,000'' and insert 
     ``$215,000,000''.
       Page 145, line 21, insert ``agency'' after ``guaranty''.
       Page 148, strike lines 10 through 17 and insert the 
     following:
       (3) Guaranty agency reserve level.--Section 428(c)(9) is 
     amended--
       (A) in subparagraph (A), by striking ``.5 percent'' and 
     inserting ``0.25 percent''; and
       (B) in subparagraph (C)--
       (i) by striking ``80 percent pursuant to section 
     428(c)(1)(B)(ii)'' and inserting ``85 percent pursuant to 
     paragraph (1)(B)(i) of this subsection''; and
       (ii) by striking ``30 working days'' and inserting ``45 
     working days''.
       Page 149, beginning on line 23, strike ``presented that the 
     guaranty agency successfully brings'' and insert ``paid as a 
     result of the loan being brought''.
       Page 150, beginning on line 8, strike ``the borrower'' and 
     all that follows through the period on line 10 and insert the 
     following: ``at least 12 months has elapsed between the date 
     the borrower became current in his or her payments and the 
     date the lender filed a subsequent default aversion 
     assistance request.''.
       Page 153, strike lines 5 through 12 and insert the 
     following:
       ``(3) PLUS loans.--With respect to any loan under section 
     428B for which the first disbursement is made on or after 
     July 1, 1998, the applicable rate of interest shall, during 
     any 12-month period beginning on July 1 and ending on June 
     30, be determined on the preceding June 1 and be equal to the 
     lesser of--
       ``(A)(i) the bond equivalent rate of 91-day Treasury bills 
     auctioned at the final auction held prior to such June 1; 
     plus
       ``(ii) 3.1 percent; or
       ``(B) 9.0 percent.
       ``(4) Consolidation loans.--With respect to any 
     consolidation loan under section 428C for which the 
     application is received by an eligible lender on or after 
     October 1, 1998, the applicable rate of interest shall be at 
     an annual rate on the unpaid principal balance of the loan 
     that is equal to the lesser of--
       ``(A) the weighted average of the interest rates on the 
     loans consolidated, rounded to the nearest higher one-eighth 
     of one percent; or
       ``(B) 8.25 percent.
       Page 154, line 8, after ``paragraph,'' insert ``and except 
     as provided in subparagraph (B),''.
       Page 155, line 10, strike ``clause (iv)'' and insert 
     ``clause (v)''.
       Page 155, strike lines 12 through 23 and insert the 
     following:
       ``(iv) Consolidation loans.--In the case of any 
     consolidation loan for which the application is received by 
     an eligible lender on or

[[Page H2530]]

     after October 1, 1998, and for which the applicable interest 
     rate is determined under section 427A(a)(4), clause (i)(III) 
     of this subparagraph shall be applied by substituting `3.1 
     percent' for `2.8 percent', subject to clause (v) of this 
     subparagraph.
       ``(v) Limitation on special allowances for PLUS and 
     consolidation loans.--In the case of PLUS loans made under 
     section 428B and disbursed on or after July 1, 1998, for 
     which the interest rate is determined under 427A(a)(3), a 
     special allowance shall not be paid for such loan unless the 
     rate determined under subparagraph (A) of such section 
     (without regard to subparagraph (B) of such section) exceeds 
     9.0 percent. In the case of consolidation loans made under 
     section 428C for which the application is received by an 
     eligible lender on or after October 1, 1998, and for which 
     the applicable interest rate is determined under section 
     427A(a)(4), a special allowance shall not be paid for such 
     loan unless the rate determined under subparagraph (A) of 
     such section (without regard to subparagraph (B) of such 
     section) exceeds 8.25 percent.''.
       (2) Consolidation loans.--Section 428C(c)(1) (20 U.S.C. 
     1078-3) is amended--
       (A) by striking everything preceding subparagraph (D) and 
     inserting the following:
       ``(1) Interest rate.--(A) Except as provided in 
     subparagraph (B), with respect to any loan made under this 
     section for which the application is received by an eligible 
     lender on or after October 1, 1998, the applicable interest 
     rate shall be determined under section 427A(a)(4).''; and
       (B) by redesignating subparagraph (D) as subparagraph (B).
       (3) Conforming amendment.--Section 438(b)(2)(C)(ii) is 
     amended by striking ``In the case'' and inserting ``Subject 
     to subparagraph (F), in the case''.
       Page 156, strike line 21 and all that follows through page 
     157, line 5, and insert the following:
     that sets forth a schedule for disbursement of the proceeds 
     of the loan in installments, consistent with the requirements 
     of section 428G.
       Page 157, line 6, strike ``clause (ii) of''.
       Page 164, strike lines 21 and 22 and insert the following:
       ``(2) Limitations on blanket certificate of guaranty.--(A) 
     An eligible lender may not make a loan to a borrower under 
     this section after such lender receives a notification from 
     the guaranty agency that the borrower is not an eligible 
     borrower.
       ``(B) A guaranty agency and eligible lender
       Page 171, strike line 23 and all that follows through page 
     172, line 6, and insert the following:

     statement that sets forth a schedule for disbursement of the 
     proceeds of the loan in installments, consistent with the 
     requirements of section 428G.''.
       Page 172, after line 22, insert the following new 
     subsection (and redesignate the succeeding subsections 
     accordingly):
       (c) Capitalization of Interest.--Section 428H(e)(2) is 
     amended to read as follows:
       ``(2) Capitalization of interest.--Interest on loans made 
     under this section for which payments of principal are not 
     required during the in-school and grace periods or for which 
     payments are deferred under sections 427(a)(2)(C) and 
     428(b)(1)(M) shall, if agreed upon by the borrower and the 
     lender--
       ``(A) be paid monthly or quarterly; or
       ``(B) be added to the principal amount of the loan by the 
     lender only--
       ``(i) when the loan enters repayment;
       ``(ii) at the expiration of a grace period, in the case of 
     a loan that qualifies for a grace period;
       ``(iii) at the expiration of a period of deferment; and
       ``(iv) when the borrower defaults.
     Such capitalization of interest shall not be deemed to exceed 
     the annual insurable limit on account of the student.''.
       Page 176, line 5, insert ``in accordance'' after ``note''.
       Page 184, after line 16, insert the following new 
     subsections:
       (d) Definition of Default.--
       (1) Amendment.--Section 435(l) is amended--
       (A) by striking ``180 days'' and inserting ``270 days''; 
     and
       (B) by striking ``240 days'' and inserting ``330 days''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply with respect to loans for which the first day of 
     delinquency occurs on or after the date of enactment of this 
     Act.
       (e) Cohort Default Rate: Rehabilitation.--Section 
     435(m)(2)(C) is amended by adding at the end the following 
     new sentences: ``Within 2 years after the date of enactment 
     of the Higher Education Amendments of 1998, the Secretary 
     shall, by regulation, require guaranty agencies to collect 
     data with respect to defaulted loans in a manner that will 
     permit the identification of any defaulted loan for which (i) 
     the borrower is currently making payments and has made not 
     less than 6 consecutive on-time payments by the end of such 
     following fiscal year, and (ii) a guaranty agency has renewed 
     the borrower's title IV eligibility as provided in section 
     428F(b). Upon a determination by the Secretary that such data 
     is available, the Secretary shall, by regulation, prescribe 
     the extent to which any such defaulted loan may be excluded 
     from the calculation of the cohort default rate under this 
     subsection.''.
       Page 184, beginning on line 18, strike subsection (a) 
     through line 22 (and redesignate the succeeding subsections 
     accordingly).
       Page 184, line 23, strike ``(b) Discharge.--''.
       Page 203, after line 2, insert the following new paragraph 
     (and redesignate the succeeding paragraphs accordingly):
       ``(4) Consolidation loans.--Any Federal Direct 
     Consolidation loan for which the application is received on 
     or after October 1, 1998, shall bear interest at an annual 
     rate on the unpaid principal balance of the loan that is 
     equal to the lesser of--
       ``(i) the weighted average of the interest rates on the 
     loans consolidated, rounded to the nearest higher one-eighth 
     of one percent; or
       ``(ii) 8.25 percent.
       Page 203, line 23, strike ``The amendments'' and insert 
     ``Except as otherwise provided therein, the amendments''.
       Page 220, line 14, strike ``and'' and after line 14 insert 
     the following new subparagraph (and redesignate the 
     succeeding subparagraph accordingly):
       (F) in paragraph (3)(A)(i), by striking ``(H), or (I)'' and 
     inserting ``(H), (I), (J), or (K)''; and
       Page 224, strike lines 15 though 21 and insert the 
     following:
       ``(6) Allowance for parents' negative adjusted available 
     income.--The allowance for parents' negative adjusted 
     available income is the amount, if any, by which the sum of 
     the amounts deducted under subparagraphs (A) through (F) of 
     paragraph (2) exceeds the sum of the parents' total income 
     (as defined in section 480) and the family contribution from 
     assets (as determined in accordance with subsection (c).''.
       Page 227, line 17, strike ``1997-1998'' and insert ``1999-
     2000''.
       Page 227, line 25, strike ``1996'' and insert ``1998''.
       Page 228, after line 2, insert the following new section 
     (and redesignate the succeeding sections and conform the 
     table of contents accordingly):

     SEC. 452. SIMPLIFIED NEEDS TEST; ZERO EXPECTED FAMILY 
                   CONTRIBUTION.

       Section 479 is amended--
       (1) in subsection (b)(3)--
       (A) in the matter preceding subparagraph (A), by striking 
     ``this paragraph'' and inserting ``this subsection, or 
     subsection (c), as the case may be,'';
       (B) in subparagraph (A), by striking ``or'' at the end 
     thereof;
       (C) by redesignating subparagraph (B) as subparagraph (C); 
     and
       (D) by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) a form 1040 (including any prepared or electronic 
     version of such form) required pursuant to the Internal 
     Revenue Code of 1986, except that such form shall be 
     considered a qualifying form only if the student or family 
     files such form in order to take a tax credit under section 
     25A of the Internal Revenue Code of 1986, and would otherwise 
     be eligible to file a form described in subparagraph(A); 
     or'';
       (2) in subsection (c)--
       (A) by amending paragraph (1)(A) to read as follows:
       ``(A) the student's parents file, or are eligible to file, 
     a form described in subsection (b)(3), or certify that they 
     are not required to file an income tax return and the student 
     files, or is eligible to file, such a form, or certifies that 
     the student is not required to file an income tax return; 
     and''; and
       (B) by amending paragraph (2)(A) to read as follows:
       ``(A) the student (and the student's spouse, if any) files, 
     or is eligible to file, a form described in subsection 
     (b)(3), or certifies that the student (and the student's 
     spouse, if any) is not required to file an income tax return; 
     and''.
       Page 231, line 15, strike ``and'', and after such line 
     insert the following new subparagraph (and redesignate the 
     succeeding subparagraph accordingly):
       (C) by striking the second sentence and inserting the 
     following: ``The Secretary shall include on the form 
     developed under this subsection such data items as the 
     Secretary determines are appropriate for inclusion, selected 
     in consultation with States to assist in the awarding of 
     State financial assistance, except that in no case shall the 
     number of such data items be less than the number included on 
     the form on the date of enactment of the Higher Education 
     Amendments of 1998.''; and
       Page 232, line 12, strike ``graph'' and insert ``graphs''.
       Page 233, strike lines 6 through 18, and on line 19, strike 
     ``No fee shall'' and insert the following:
       ``(C) No fee shall
       Page 234, line 17, strike the close quotation marks and 
     following period and after such line insert the following new 
     paragraph:
       ``(6) Support to third party servicers and private software 
     providers.--The Secretary shall support private organizations 
     and consortia thereof in the development of software used by 
     eligible institutions for the administration of funds under 
     this title. The Secretary shall provide in a timely manner to 
     such organizations and consortia all necessary specifications 
     that data and software developed, produced, and distributed 
     (including any diskette, modem, or network communications) 
     must meet. These specifications shall contain record layouts 
     for required data and test cases that such organizations or 
     consortia may use to test the accuracy of its software. The 
     Secretary shall develop in advance of each processing cycle 
     an annual schedule for providing such specifications. The 
     Secretary shall, to the extent

[[Page H2531]]

     practicable, use means of providing such support, including 
     conferences and other meetings, outreach, and technical 
     support mechanisms (including telephone support, training and 
     printed reference materials). The Secretary shall, from time 
     to time, solicit from such organizations and consortia means 
     of improving the support provided by the Secretary.''.
       Page 235, line 12, strike ``and''; on line 17, strike the 
     period and insert ``; and''; and after line 17 insert the 
     following new paragraph:
       (3) in paragraph (5), by striking ``Trust Territory of the 
     Pacific Islands'' and inserting ``the Federated States of 
     Micronesia, the Republic of the Marshall Islands, or the 
     Republic of Palau''.
       Page 235, strike lines 18 through 20 and insert the 
     following:
       (b) Termination of Eligibility.--Section 484(j) is amended 
     to read as follows:
       ``(j) Assistance Under Subparts 1 and 3, of Part A, and 
     Part C.--Notwithstanding any other provision of law, a 
     student shall be eligible until September 30, 2001, if 
     otherwise qualified, for assistance under subparts 1 and 3 of 
     part A, and part C, of this title, if the student is 
     otherwise qualified and--
       ``(1) is a citizen of the Federated States of Micronesia, 
     the Republic of the Marshall Islands, or the Republic of 
     Palau, and attends an institution of higher education in Guam 
     or a public or nonprofit private institution of higher 
     education in the Federated States of Micronesia, the Republic 
     of the Marshall Islands, or the Republic of Palau; or
       ``(2) meets the requirements of subsection (a)(5) and 
     attends a public or nonprofit private institution of higher 
     education in the Federated States of Micronesia, the Republic 
     of the Marshall Islands, or the Republic of Palau.''.
       Page 236, line 2, after ``income,'' insert ``Federal income 
     taxes paid,''.
       Page 245, line 17, strike the close quotation marks and 
     following period and after such line insert the following:
       ``(10) Nothing in this section shall require the reporting 
     or disclosure of privileged information.''.
       Page 252, line 16, after the period insert the following:

     Each application shall include--
       ``(1) a description of the institution or consortium's 
     consultation with a recognized accrediting agency or 
     association with respect to quality assurances for the 
     distance education programs to be offered;
       ``(2) a description of the statutory and regulatory 
     requirements described in subsection (b)(2) for which a 
     waiver is sought and the reasons for which the waiver is 
     sought;
       ``(3) a description of the distance education programs to 
     be offered;
       ``(4) a description of the students to whom distance 
     education programs will be offered;
       ``(5) an assurance that the institution or consortium will 
     offer full cooperation with the ongoing evaluations of the 
     demonstration program provided for in this section; and
       ``(6) such other information as the Secretary may require.
       Page 252, line 18, insert ``of'' after ``sample''.
       Page 253, strike lines 9 and 10 and insert the following:
       ``(A) the extent to which the institution or consortia of 
     institutions has met the goals set forth in its application 
     to the Secretary, including the measures of program quality 
     assurance;
       Page 262, line 15, insert ``and'' after the semicolon, and 
     strike lines 16 through 20 and insert the following:
       (I) by striking ``(J), and (L)'' and inserting ``and (K)'';
       Page 306, strike line 14, and insert the following: ``this 
     part for''.
       Page 335, after line 15, insert the following new section 
     (and conform the table of contents accordingly):

     SEC. 808. PROCEDURES FOR CANCELLATIONS AND DEFERMENTS FOR 
                   ELIGIBLE DISABLED VETERANS.

       The Secretary shall, in consultation with the Secretary of 
     Veterans Affairs, develop and implement a procedure under 
     which Department of Veterans Affairs physicians shall provide 
     the certification and affidavits needed to enable eligible 
     disabled veterans to document their eligibility for 
     deferments and cancellations of student loans made, insured, 
     or guaranteed under this title. Not later than 6 months after 
     the date of the enactment of this Act, the Secretaries of 
     Education and Veterans Affairs shall jointly report to 
     Congress on the progress made in developing and implementing 
     this procedure.
       Page 345, beginning on line 9, strike subsection (c) (and 
     redesignate the succeeding subsections accordingly).
       Page 347, beginning on line 1, strike title X and insert 
     the following:
                 TITLE X--FACULTY RETIREMENT PROVISIONS

     SEC. 1001. VOLUNTARY RETIREMENT INCENTIVE PLANS.

       (a) In general.--Section 4 of the Age Discrimination in 
     Employment Act of 1967 (29 U.S.C. 623) is amended by adding 
     at the end the following:
       ``(m) Notwithstanding subsection (f)(2)(B), it shall not be 
     a violation of subsection (a), (b), (c), or (e) solely 
     because a plan of an institution of higher education (as 
     defined in section 1201(a) of the Higher Education Act of 
     1965 (20 U.S.C. 1141(a))) offers employees who are serving 
     under a contract of unlimited tenure (or similar arrangement 
     providing for unlimited tenure) supplemental benefits upon 
     voluntary retirement that are reduced or eliminated on the 
     basis of age, if--
       ``(1) such institution does not implement with respect to 
     such employees any age-based reduction or cessation of 
     benefits that are not such supplemental benefits, except as 
     permitted by other provisions of this Act;
       ``(2) such supplemental benefits are in addition to any 
     retirement or severance benefits which have been offered 
     generally to employees serving under a contract of unlimited 
     tenure (or similar arrangement providing for unlimited 
     tenure), independent of any early retirement or exit-
     incentive plan, within the preceding 365 days; and
       ``(3) any employee who attains the minimum age and 
     satisfies all non-age-based conditions for receiving a 
     benefit under the plan has an opportunity lasting not less 
     than 180 days to elect to retire and to receive the maximum 
     benefit that could then be elected by a younger but otherwise 
     similarly situated employee, and the plan does not require 
     retirement to occur sooner than 180 days after such 
     election.''.
       (b) Plans Permitted.--Section 4(i)(6) of the Age 
     Discrimination in Employment Act of 1967 (29 U.S.C. 
     623(i)(6)) is amended by adding after the word ``accruals'' 
     the following: ``or it is a plan permitted by subsection 
     (m).''
       (c) Construction.--Nothing in the amendment made by 
     subsection (a) shall affect the application of section 4 of 
     the Age Discrimination in Employment Act of 1967 (29 U.S.C. 
     623) with respect to--
       (1) any plan described in subsection (m) of section 4 of 
     such Act (as added by subsection (a)), for any period prior 
     to enactment of such Act;
       (2) any plan not described in subsection (m) of section 4 
     of such Act (as added by subsection (a)); or
       (3) any employer other than an institution of higher 
     education (as defined in section 1201(a) of the Higher 
     Education Act of 1965).
       (d) Effective Date.--
       (1) In general.--This section shall take effect on the date 
     of enactment of this Act.
       (2) Effect on causes of action existing before date of 
     enactment.--The amendment made by subsection (a) shall not 
     apply with respect to any cause of action arising under the 
     Age Discrimination in Employment Act of 1967 prior to the 
     date of enactment of this Act.

  The CHAIRMAN. Pursuant to the rule, the gentleman from Pennsylvania 
(Mr. Goodling) and a Member opposed each will control 10 minutes.
  The Chair recognizes the gentleman from Pennsylvania (Mr. Goodling).
  Mr. GOODLING. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, the manager's amendment makes several significant 
changes to H.R. 6 as reported by the committee. We did not stop working 
after we voted this out of committee. We continued working to try to 
iron out some differences that had arisen during the markup.
  The amendment reflects a bipartisan agreement with respect to an 
issue in which Members on both sides of the aisle have expressed much 
concern, the quality of our Nation's teachers. It is alarming to find 
that nearly one-third of all high school math teachers and over one-
fifth of all high school English teachers in this country have neither 
majored nor minored in those subjects. It is our intent to provide 
support to efforts that many States have begun to undertake to improve 
the quality and ability of classroom teachers, beginning with the 
institution at which many of these teachers are prepared.
  Provisions that were worked out in a bipartisan manner which are now 
part of this amendment include: an increased emphasis on partnerships 
consisting of a Governor of a participating State, exemplary schools of 
education and local educational agencies; focusing the teacher 
recruitment provisions on those schools most in need of quality 
teachers, such as in poor urban and rural areas; and including a 
trigger to change this program from a competitive to a formula grant 
program if appropriations are over $250 million.
  I look forward to the support of my colleagues for this compromise so 
that we can help States really reform teacher preparation programs and 
provide high-quality teachers for all of our States.
  This amendment also includes a program to provide grants to combat 
violent crimes against women on college campuses, which was discussed 
by the committee during the markup. The program authorizes the 
Secretary of Education to provide grant assistance to institutions of 
higher education for use in providing training to administrators, 
security personnel, campus personnel and student organizations in order 
to strengthen security measures

[[Page H2532]]

and improve victim services for women who are victims of violent 
crimes. However, institutions that fail to comply with the current 
campus crime reporting requirements found in the Higher Education Act 
will not be eligible for any assistance under this program.
  We have made modifications to the development of the Free Application 
for Federal Student Aid that were requested by States in order to 
ensure that data items necessary to assist States in the awarding of 
State financial assistance are included on the form.
  We have established interest rates for consolidation loans made on or 
after October 1, 1998, that will provide borrowers with an interest 
rate based on the weighted average of their loans consolidated, capped 
at a maximum rate of 8.25 percent. This new rate will afford students 
additional interest rate relief, particularly for those students who 
borrow Stafford loans at the new rate of 91-day Treasury bill plus 2.3 
percent and consolidate those with other loans at higher interest 
rates.
  The amendment establishes clear application requirements for 
institutions of higher education that wish to offer expanded distance 
education programs to students. The application requirements are 
designed to ensure that students are being provided quality education 
through distance education program.
  Finally, the amendment includes offsets from the Committee on 
Education and the Workforce jurisdiction needed in order to bring H.R. 
6 to the floor and provide Members with an assurance the bill will be 
budget neutral.
  I want to thank the gentleman from Georgia (Mr. Gingrich), the 
gentleman from Texas (Mr. Armey) and the gentleman from Ohio (Mr. 
Kasich) for their cooperation in this effort. Without their assistance, 
it would have been impossible for us to be here today talking about a 
bill to provide students the lowest interest rates in 17 years.
  There are many more technical changes and corrections that I will not 
review in detail. I want to thank my colleagues on the other side of 
the aisle for their hard work and cooperation in putting this package 
of amendments together, and I urge its adoption.
  Mr. Chairman, I reserve the balance of my time.
  Mr. KILDEE. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, I rise to urge my colleagues to join me in supporting 
the manager's amendment that is now before us.
  Mr. Chairman, this amendment makes several changes that significantly 
improve the bill as it was reported out of committee. The changes in 
the Teacher Quality Enhancement Grants are especially important.
  The overall authorization of such sums and the provision that the 
program will become a State grant when appropriations reach $250 
million mean that the authorizers intend that this be a major teacher 
initiative. The provision that partnerships involving institutions of 
higher education and local education agencies receive one-third of the 
funds means that we will have a ``ground up'' reform not only of 
teaching but also in the recruitment of teachers.
  The emphasis on serving school districts with a high level of 
poverty, low teacher retention rates or a high percentage of teachers 
teaching outside their specialization means we will be focusing funds 
on those areas most in need.
  The new grant program to combat violent crimes against women in 
college campuses is a very important provision. I commend the 
gentlewoman from California (Ms. Woolsey) for her deep commitment to 
this issue and for her persistence in seeing it through to a most 
successful conclusion.
  The loan consolidation provision will give students the ability to 
consolidate their outstanding loans at a weighted interest rate not to 
exceed 8.25 percent. While these provisions could be improved, they 
undoubtedly represent a considerable improvement over current law.
  We have also significantly improved the faculty retirement 
provisions. They now enjoy the support of both the college community 
and organizations representing retired persons. These provisions have 
required a considerable amount of work and give and take, and I am 
exceptionally pleased at the result.
  Mr. Chairman, I urge the passage of the manager's amendment.
  Mr. Chairman, I reserve the balance of my time.
  Mr. GOODLING. Mr. Chairman, I yield back the balance of my time.
  Mr. KILDEE. Mr. Chairman, I yield 1 minute to the gentleman from 
Virginia (Mr. Scott).
  Mr. SCOTT. Mr. Chairman, I would like to thank my friend from 
Michigan for yielding this time to me, and I want to express my thanks 
to the chairman and ranking members of the full committee and 
subcommittee for agreeing to include in the manager's amendment an 
amendment I offered during full committee consideration. This amendment 
will help improve the accuracy and reliability of student loan data and 
further reduce the rate of student loan defaults.
  Many schools have made progress in decreasing the rate of loan 
defaults. My amendment will encourage more vigorous efforts by schools 
and the lending community to bring defaulters back into repayment 
status through a process called loan rehabilitation. The result will be 
that more schools will be able to participate in the loan program and 
more students will be able to achieve their dreams by attending 
college.
  Mr. Chairman, I want to thank our committee leadership for 
accommodating this request and working with me to ensure that this 
amendment was incorporated in H.R. 6 through the manager's amendment.
  Mr. KILDEE. Mr. Chairman, I yield 2 minutes to the gentleman from New 
Jersey (Mr. Andrews).
  (Mr. ANDREWS asked and was given permission to revise and extend his 
remarks.)
  Mr. ANDREWS. Mr. Chairman, I would like to thank the ranking member 
for yielding this time to me, and I rise in support of the manager's 
amendment.
  I would like to thank the chairman and the subcommittee chairman and 
the ranking members for their cooperation in solving what I believe is 
a significant problem with respect to the age discrimination law by 
including in the manager's amendment an excellent provision which will 
permit institutions around the country to offer early retirement 
incentive packages to members of the faculty at those universities.
  I think this is an excellent piece of legislation that accomplishes 
three important objectives.
  First of all, it is very fair and balanced and treats the members of 
the faculty in a very fair and evenhanded way. It is very important to 
note that everyone under this plan will receive full health benefits, 
and it is purely voluntary with respect to participation.
  Second, this is an important cost-saving mechanism for universities 
and institutions around the country. I believe it is a very solid first 
step toward the goal of the gentleman from California (Mr. McKeon) of 
trying to make college more affordable by addressing the issue of 
college cost inflation.
  Third, I believe that this is an important mechanism for the 
recruitment of new young faculty. Particularly, I believe this will 
open the tenure track to many women and minority faculty who have not 
had the opportunity to advance up through the ranks in prior years.
  In summation, Mr. Chairman, I would like to thank those who have 
worked with us on making this provision a reality, and I urge support 
of this amendment in its entirety.
  Mr. KILDEE. Mr. Chairman, I urge a yes vote, and I yield back the 
balance of my time.
  The CHAIRMAN. All time has expired.
  The question is on the amendment offered by the gentleman from 
Pennsylvania (Mr. Goodling).
  The amendment was agreed to.
  The CHAIRMAN. The Chair announces that there are four sections 
preceding title I.
  The Clerk will designate section 1.
  The text of section 1 is as follows:
       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Higher Education Amendments 
     of 1998''.


[[Page H2533]]


  The CHAIRMAN. Are there any amendments to section 1?
  If not, the Clerk will designate section 2.
  The text of section 2 is as follows:

     SEC. 2. TABLE OF CONTENTS.

       The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. References.
Sec. 4. General effective date.

                      TITLE I--GENERAL PROVISIONS

          Part A--Extension and Revision of General Provisions

Sec. 101. Redesignation and transfer of provisions.
Sec. 102. Definitions.
Sec. 103. Regulatory reform.

  Part B--Performance-based Organization for the Delivery of Federal 
                     Student Financial Assistance.

Sec. 111. Performance-based organization for the delivery of Federal 
              student financial assistance.

         TITLE II--POSTSECONDARY EDUCATION IMPROVEMENT PROGRAMS

Sec. 201. Urban community service.
Sec. 202. Fund for the Improvement of Postsecondary Education.
Sec. 203. Grants to States for workplace and community transition 
              training for incarcerated youth offenders.
Sec. 204. Advanced placement fee payment program.
Sec. 205. Teacher quality enhancement grants.
Sec. 206. Additional repeal.

                      TITLE III--INSTITUTIONAL AID

Sec. 301. Strengthening institutions.
Sec. 302. Historically black colleges and universities.
Sec. 303. Minority science and engineering improvement program.
Sec. 304. General provisions.

                      TITLE IV--STUDENT ASSISTANCE

                       Part A--Grants to Students

Sec. 401. Pell grants.
Sec. 402. Federal TRIO programs.
Sec. 403. National early intervention and partnership program.
Sec. 404. Repeals.
Sec. 405. Establishment of new programs.
Sec. 406. Federal supplemental educational opportunity grants.
Sec. 407. Grants to States for State student incentives.
Sec. 408. Special programs for students whose families are engaged in 
              migrant and seasonal farmwork.
Sec. 409. Byrd scholarships.

             Part B--Federal Family Education Loan Program

Sec. 411. Limitation repealed.
Sec. 412. Advances to reserve funds.
Sec. 413. Guaranty agency reforms.
Sec. 414. Scope and duration of program.
Sec. 415. Limitations on individual federally insured loans and Federal 
              loan insurance.
Sec. 416. Applicable interest rates.
Sec. 417. Federally guaranteed student loans.
Sec. 418. Voluntary agreements with guaranty agencies.
Sec. 419. Federal consolidation loans.
Sec. 420. Disbursement.
Sec. 421. Unsubsidized Stafford loans.
Sec. 422. Repeal of loan forgiveness.
Sec. 423. Legal powers and responsibilities.
Sec. 424. Student loan information.
Sec. 425. Definitions.
Sec. 426. Discharge.
Sec. 427. Cancellation of loans for certain public service.
Sec. 428. Debt management options.
Sec. 429. Special allowances.

                  Part C--Federal Work-Study Programs

Sec. 435. Amendments to part C.

          Part D--William D. Ford Federal Direct Loan Program

Sec. 436. Selection of institutions.
Sec. 437. Terms and conditions.
Sec. 438. Contracts.
Sec. 439. Funds for administrative expenses.
Sec. 440. Authority to sell loans.
Sec. 441. Cancellation of loans for certain public service.

                     Part E--Federal Perkins Loans

Sec. 445. Amendments to part E.

                         Part F--Need Analysis

Sec. 446. Cost of attendance.
Sec. 447. Data elements.
Sec. 448. Family contribution for dependent students.
Sec. 449. Family contribution for independent students without 
              dependents other than a spouse.
Sec. 450. Family contribution for independent students with dependents 
              other than a spouse.
Sec. 451. Regulations; updated tables and amounts.
Sec. 452. Discretion of student financial aid administrators.
Sec. 453. Treatment of other financial assistance.

                       Part G--General Provisions

Sec. 461. Definitions.
Sec. 462. Master calendar.
Sec. 463. Forms and regulations.
Sec. 464. Student eligibility.
Sec. 465. State court judgments.
Sec. 466. Information for students.
Sec. 467. National student loan data system.
Sec. 468. Program participation agreements.
Sec. 469. Quality assurance and regulatory simplification.
Sec. 470. Distance education demonstration programs.
Sec. 471. Garnishment requirements.
Sec. 472. Administrative subpoena authority.
Sec. 473. Advisory committee on student financial assistance.
Sec. 474. Meetings and negotiated rulemaking.

                       Part H--Program Integrity

Sec. 476. State postsecondary review program.
Sec. 477. Accrediting agency recognition.
Sec. 478. Eligibility and certification procedures.
Sec. 479. Program review and data.

                    TITLE V--DEVELOPING INSTITUTIONS

Sec. 501. Establishment of new title V.

        TITLE VI--INTERNATIONAL AND GRADUATE EDUCATION PROGRAMS

Sec. 601. International and foreign language studies.
Sec. 602. Business and international education programs.
Sec. 603. Institute for international public policy.
Sec. 604. General provisions.
Sec. 605. Transfer and reauthorization of graduate assistance in areas 
              of national need program.

  TITLE VII--CONSTRUCTION, RECONSTRUCTION, AND RENOVATION OF ACADEMIC 
                               FACILITIES

Sec. 701. Extension of prior rights and obligations.
Sec. 702. Repeal of part A.
Sec. 703. Extension of authorization of part B.
Sec. 704. Extension of authorization of part C.

                   TITLE VIII--ADDITIONAL PROVISIONS

Sec. 801. Study of transfer of credits.
Sec. 802. Study of market mechanisms in Federal student loan programs.
Sec. 803. Improvements in market information and public accountability 
              in higher education.
Sec. 804. Differential regulation.
Sec. 805. Annual report on cost of higher education.
Sec. 806. Repeals of previous higher education amendments provisions.
Sec. 807. Limitation.

                   TITLE IX--AMENDMENTS TO OTHER LAWS

                   Part A--Education of the Deaf Act


                     SUBPART 1--GALLAUDET UNIVERSITY

Sec. 901. Board of Trustees membership.
Sec. 902. Elementary and secondary education programs.
Sec. 903. Agreement with Gallaudet University.


                SUBPART 2--NATIONAL INSTITUTE FOR THE DEAF

Sec. 911. Agreement for the National Technical Institute for the Deaf.


                      SUBPART 3--GENERAL PROVISIONS

Sec. 921. Definitions.
Sec. 922. Audits.
Sec. 923. Reports.
Sec. 924. Monitoring, evaluation, and reporting.
Sec. 925. Responsibility of the liaison.
Sec. 926. Federal endowment programs.
Sec. 927. Scholarship program.
Sec. 928. Oversight and effect of agreements.
Sec. 929. International students.
Sec. 930. Authorization of appropriations.

   Part B--Extension and Revision of Indian Higher Education Programs

Sec. 951. Tribally controlled colleges and universities.
Sec. 952. Reauthorization of provisions from Higher Education 
              Amendments of 1992.
Sec. 953. Reauthorization of Navajo Community College Act.

                 TITLE X--FACULTY RETIREMENT PROVISIONS

Sec. 1001. Voluntary retirement incentive plans.

  The CHAIRMAN. Are there any amendments to section 2?
  If not, the Clerk will designate section 3.
  The text of section 3 is as follows:

     SEC. 3. 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.).

  The CHAIRMAN. Are there any amendments to section 3?
  If not, the Clerk will designate section 4.
  The text of section 4 is as follows:

     SEC. 4. GENERAL EFFECTIVE DATE.

       Except as otherwise provided in this Act or the amendments 
     made by this Act, the amendments made by this Act shall take 
     effect on October 1, 1998.

  The CHAIRMAN. Are there any amendments to section 4?
  If not, the Clerk will designate title I.
  The text of title I is as follows:
                      TITLE I--GENERAL PROVISIONS

          PART A--EXTENSION AND REVISION OF GENERAL PROVISIONS

     SEC. 101. REDESIGNATION AND TRANSFER OF PROVISIONS.

       (a) In General.--
       (1) Repeal of title i.--Title I (20 U.S.C. 1001 et seq.) is 
     repealed.
       (2) Repeal of title xii provisions.--The following sections 
     of title XII are repealed: sections 1206, 1211, and 1212 (20 
     U.S.C. 1145a, 1145e, 1145f).
       (3) Redesignations.--
       (A) Title XII is redesignated as title I.

[[Page H2534]]

       (B) Sections 1201, 1202, and 1203 (20 U.S.C. 1141, 1142, 
     1143) are redesignated as sections 101, 102, and 103, 
     respectively.
       (C) Section 1204(b), as redesignated by section 251 of the 
     Higher Education Amendments of 1968 (20 U.S.C. 1144(b); 82 
     Stat. 1042), is redesignated as section 104.
       (D) Section 1204, as added by section 1201 of the Education 
     Amendments of 1980 (20 U.S.C. 1144a; 94 Stat. 1495), is 
     redesignated as section 105.
       (E) Sections 1205, 1207, 1208, 1209, 1210, and 1213 (20 
     U.S.C. 1145, 1145b, 1145c, 1145d, 1145d-1, and 1145g) are 
     redesignated as sections 106 through 111, respectively.
       (4) Transfer.--Title I (including sections 101 through 
     111), as redesignated by paragraph (3), is transferred to 
     immediately follow the short title of the Higher Education 
     Act of 1965 (20 U.S.C. 1001 note).
       (b) Internal Cross-References.--The Higher Education Act of 
     1965 is amended--
       (1) in section 106 (as redesignated by subsection (a)(3)), 
     by striking ``481(a)'' and inserting ``101(a)'';
       (2) in section 485(f)(1)(I), by striking ``section 1213'' 
     and inserting ``section 111'';
       (3) in section 498(j)(2), by striking ``section 
     1201(a)(2)'' and inserting ``section 101(a)(2)'';
       (4) in section 591(d)(2), by striking ``section 1201(a)'' 
     and inserting ``section 101(a)(1)''; and
       (5) in section 631(a)(8), by striking ``section 1201(a)'' 
     each place it appears and inserting ``section 101(a)(1)''.
       (c) Conforming Amendments.--
       (1) Title 10, united states code.--Sections 2193(c)(1) and 
     2199(2) of title 10, United States Code, are each amended by 
     striking ``1201(a) of the Higher Education Act of 1965 (20 
     U.S.C. 1141(a))'' and inserting ``101(a)(1) of the Higher 
     Education Act of 1965''.
       (2) Title 18, united states code.--Section 207(j)(2)(B) of 
     title 18, United States Code, is amended by striking 
     ``1201(a)'' and inserting ``101(a)(1)''.
       (3) Title 39, united states code.--Section 3626(b)(3) of 
     title 39, United States Code, is amended by striking 
     ``1201(a) of the Higher Education Act of 1965 (20 U.S.C. 
     1141(a))'' and inserting ``101(a)(1) of the Higher Education 
     Act of 1965''.
       (4) Anti-drug abuse act of 1988.--Section 3601(7) of the 
     Anti-Drug Abuse Act of 1988 (42 U.S.C. 11851(7)) is amended 
     by striking ``1201(a) of the Higher Education Act of 1965 (20 
     U.S.C. 1141(a))'' and inserting ``101(a)(1) of the Higher 
     Education Act of 1965''.
       (5) Cranston-gonzalez national affordable housing act.--
     Section 457(9) of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 12899f(9)) is amended by striking 
     ``1201(a)'' and inserting ``101(a)(1)''.
       (6) Department of state authorization act, fiscal years 
     1984 and 1985.--Section 803(1) of the Department of State 
     Authorization Act, Fiscal Years 1984 and 1985 (22 U.S.C. 
     4502(1)) is amended by striking ``1201(a)'' and inserting 
     ``101(a)(1)''.
       (7) Education for economic security act.--Section 3(6) of 
     the Education for Economic Security Act (20 U.S.C. 3902(6)) 
     is amended by striking ``1201(a)'' and inserting 
     ``101(a)(1)''.
       (8) Elementary and secondary education act of 1965.--The 
     Elementary and Secondary Education Act of 1965 is amended--
       (A) in section 7501(4) (20 U.S.C. 7601(4)) by striking 
     ``1201(a)'' and inserting ``101(a)(1)''; and
       (B) in section 14101(17) (20 U.S.C. 8801(17)), by striking 
     ``1201(a)'' and inserting ``101(a)(1)''.
       (9) Federal agriculture improvement and reform act of 
     1996.--Section 922 of the Federal Agriculture Improvement and 
     Reform Act of 1996 (7 U.S.C. 2279c) is amended in subsections 
     (a)(1)(B) and (b)(1) by striking ``1201 of the Higher 
     Education Act of 1965 (20 U.S.C. 1141)'' and inserting 
     ``101(a)(1) of the Higher Education Act of 1965''.
       (10) Follow through act.--Section 670G(5) of the Follow 
     Through Act (42 U.S.C. 9877(5)) is amended by striking ``1201 
     of the Higher Education Act of 1965'' and inserting 
     ``101(a)(1) of the Higher Education Act of 1965''.
       (11) Food and agriculture act of 1977.--Section 
     1417(h)(1)(A) of the Food and Agriculture Act of 1977 (7 
     U.S.C. 3152(h)(1)(A)) is amended by striking ``1201(a) of the 
     Higher Education Act of 1965 (20 U.S.C. 1141(a))'' and 
     inserting ``101(a)(1) of the Higher Education Act of 1965''.
       (12) Foreign relations authorization act, fiscal years 1986 
     and 1987.--Section 603(d) of the Foreign Relations 
     Authorization Act, Fiscal Years 1986 and 1987 (20 U.S.C. 
     4703(d)) is amended by striking ``1201(a)'' and inserting 
     ``101(a)(1)''.
       (13) General education provisions act.--Section 
     429(d)(2)(B)(ii) of the General Education Provisions Act (20 
     U.S.C. 1228c(d)(2)(B)(ii)) is amended by striking ``1201(a)'' 
     and inserting ``101(a)(1)''.
       (14) Harry s truman memorial scholarship act.--Section 3(4) 
     of the Harry S Truman Memorial Scholarship Act (20 U.S.C. 
     2002(4)) is amended by striking ``1201(a)'' and inserting 
     ``101(a)(1)''.
       (15) Head start act.--Section 649(c)(3) of the Head Start 
     Act (42 U.S.C. 9844(c)(3)) is amended by striking ``1201(a) 
     of the Higher Education Act of 1965 (20 U.S.C. 1141(a))'' and 
     inserting ``101(a)(1) of the Higher Education Act of 1965''.
       (16) Higher education amendments of 1992.--Section 
     1371(a)(1)(B) of the Higher Education Amendments of 1992 (25 
     U.S.C. 3371(a)(1)(B)) is amended by striking ``1201(a)'' and 
     inserting ``101(a)(1)''.
       (17) Intelligence authorization act, fiscal year 1992.--
     Section 808(3) of the Intelligence Authorization Act, Fiscal 
     Year 1992 (20 U.S.C. 1908(3)) is amended by striking 
     ``1201(a) of the Higher Education Act of 1965 (20 U.S.C. 
     1141(a))'' and inserting ``101(a)(1) of the Higher Education 
     Act of 1965''.
       (18) Job training partnership act.--The Job Training 
     Partnership Act is amended--
       (A) in section 4(12) (29 U.S.C. 1503(12)), by striking 
     ``1201(a)'' and inserting ``101(a)(1)''; and
       (B) in section 141(d)(3)(B) (29 U.S.C. 1551(d)(3)(B)), by 
     striking ``1201(a) of the Higher Education Act of 1965 (20 
     U.S.C. 1141(a))'' and inserting ``101(a)(1) of the Higher 
     Education Act of 1965''.
       (19) Justice system improvement act of 1979.--Section 
     901(a)(17) of the Justice System Improvement Act of 1979 (42 
     U.S.C. 3791(a)(17)) is amended by striking ``1201(a) of the 
     Higher Education Act of 1965 (20 U.S.C. 1141(a))'' and 
     inserting ``101(a)(1) of the Higher Education Act of 1965''.
       (20) Mutual educational and cultural exchange act of 
     1961.--Section 112(a)(8) of the Mutual Educational and 
     Cultural Exchange Act of 1961 (22 U.S.C. 2460(a)(8)) is 
     amended by striking ``1201(a) of the Higher Education Act of 
     1965 (20 U.S.C. 1141(a))'' and inserting ``101(a)(1) of the 
     Higher Education Act of 1965''.
       (21) National and community service act of 1990.--Sections 
     101(13) and 166(6) of the National and Community Service Act 
     of 1990 (42 U.S.C. 12511(13); 12626(6)) are each amended by 
     striking ``1201(a) of the Higher Education Act of 1965 (20 
     U.S.C. 1141(a))'' and inserting ``101 of the Higher Education 
     Act of 1965''.
       (22) National defense authorization act for fiscal year 
     1987.--Section 1403(4) of the National Defense Authorization 
     Act for Fiscal Year 1987 (20 U.S.C. 4702(4)) is amended by 
     striking ``1201(a) of the Higher Education Act of 1965 (20 
     U.S.C. 1141(a))'' and inserting ``101(a)(1) of the Higher 
     Education Act of 1965''.
       (23) National defense authorization act for fiscal year 
     1993.--The National Defense Authorization Act for Fiscal Year 
     1993 is amended in section 4451(b)(1) (10 U.S.C. 2701 note) 
     by striking ``1201(a) of the Higher Education Act of 1965 (20 
     U.S.C. 1141(a))'' and inserting ``101(a)(1) of the Higher 
     Education Act of 1965''.
       (24) National defense authorization act for fiscal years 
     1992 and 1993.--Section 3132(b)(1) of the National Defense 
     Authorization Act for Fiscal Years 1992 and 1993 (42 U.S.C. 
     7274e(b)(1)) is amended by striking ``1201(a) of the Higher 
     Education Act of 1965 (20 U.S.C. 1141(a))'' and inserting 
     ``101(a)(1) of the Higher Education Act of 1965''.
       (25) National defense authorization act for fiscal year 
     1994.--The National Defense Authorization Act for Fiscal Year 
     1994 is amended--
       (A) in section 841(c)(2) (10 U.S.C. 2324(2) note), by 
     striking ``1201(a) of the Higher Education Act of 1965 (20 
     U.S.C. 1141(a))'' and inserting ``101(a)(1) of the Higher 
     Education Act of 1965'';
       (B) in section 1333(i)(3) (10 U.S.C. 2701 note), by 
     striking ``1201(a) of the Higher Education Act of 1965 (20 
     U.S.C. 1141(a))'' and inserting ``101(a)(1) of the Higher 
     Education Act of 1965''; and
       (C) in section 1334(k)(3) (10 U.S.C. 2701 note), by 
     striking ``1201(a) of the Higher Education Act of 1965 (20 
     U.S.C. 1141(a))'' and inserting ``101(a)(1) of the Higher 
     Education Act of 1965''.
       (26) National education statistics act of 1994.--Section 
     402(c)(3) of the National Education Statistics Act of 1994 
     (20 U.S.C. 9001(c)(3)) is amended by striking ``1201(a)'' and 
     inserting ``101(a)(1)''.
       (27) Older americans act of 1965.--Section 102(32) of the 
     Older Americans Act of 1965 (42 U.S.C. 3002(32)) is amended 
     by striking ``1201(a) of the Higher Education Act of 1965 (20 
     U.S.C. 1141(a))'' and inserting ``101(a)(1) of the Higher 
     Education Act of 1965''.
       (28) Omnibus parks and public lands management act of 
     1996.--Section 1007(c)(5) of the Omnibus Parks and Public 
     Lands Management Act of 1996 (16 U.S.C. 698u-5) is amended by 
     striking ``1201(a) of the Higher Education Act of 1965 (20 
     U.S.C. 1141(a))'' and inserting ``101(a)(1) of the Higher 
     Education Act of 1965''.
       (29) Public law 85 of the 67th congress.--Public Law 85 of 
     the 67th Congress (42 Stat. 208; 25 U.S.C. 13), popularly 
     referred to as the Snyder Act, is amended by striking 
     ``1201'' and inserting ``101(a)(1)''.
       (30) Communication act of 1934.--Section 223(h)(4) of the 
     Communication Act of 1934 (47 U.S.C. 223(h)(4)) is amended by 
     striking ``1201 of the Higher Education Act of 1965 (20 
     U.S.C. 1141)'' and inserting ``101(a)(1) of the Higher 
     Education Act of 1965''.
       (31) Federal water pollution control act.--Section 
     112(a)(1) of the Federal Water Pollution Control Act (33 
     U.S.C. 1262(a)(1)) is amended by striking ``1201'' and 
     inserting ``101(a)(1)''.
       (32) Carl d. perkins vocational and applied technology 
     education act.--Section 347(2)(A) of the Carl D. Perkins 
     Vocational and Applied Technology Education Act (20 U.S.C. 
     2394(2)(A)) is amended by striking ``1201(a)'' and inserting 
     ``101(a)(1)''.
       (33) Energy policy and conservation act.--Section 
     362(f)(5)(A) of the Energy Policy and Conservation Act (42 
     U.S.C. 6322(f)(5)(A)) is amended by striking ``1201(a) of the 
     Higher Education Act of 1965 (20 U.S.C. 1141(a))'' and 
     inserting ``101(a)(1) of the Higher Education Act of 1965''.
       (34) James madison memorial fellowship act.--Section 815 of 
     the James Madison Memorial Fellowship Act (20 U.S.C. 4514) is 
     amended--
       (A) in paragraph (3), by striking ``1201(a)'' and inserting 
     ``101(a)(1)''; and
       (B) in paragraph (4), by striking ``1201(d)'' and inserting 
     ``101(a)(1)''.
       (35) Rehabilitation act of 1973.--Sections 7(32) and 
     101(a)(7)(A)(iv)(II) of the Rehabilitation Act of 1973 (29 
     U.S.C. 706(32); 29 U.S.C. 721(a)(7)(A)(iv)(II)) are each 
     amended by striking ``1201(a) of the Higher Education Act of 
     1965

[[Page H2535]]

     (20 U.S.C. 1141(a))'' and inserting ``101(a)(1) of the Higher 
     Education Act of 1965''.
       (36) Technology related assistance for individuals with 
     disabilities act of 1988.--Section 3(8) of the Technology 
     Related Assistance for Individuals with Disabilities Act of 
     1988 (29 U.S.C. 2202(8)) is amended by striking ``1201(a) of 
     the Higher Education Act of 1965 (20 U.S.C. 1141(a))'' and 
     inserting ``101(a)(1) of the Higher Education Act of 1965''.
       (37) Tribally controlled community college assistance act 
     of 1978.--The Tribally Controlled Community College 
     Assistance Act of 1978 is amended--
       (A) in section 2(a)(5) (25 U.S.C. 1801(a)(5)), by striking 
     ``1201(a)'' and inserting ``101(a)(1)''; and
       (B) in section 113(b)(2) (25 U.S.C. 1813(b)(2)), by 
     striking ``1201(a) of the Higher Education Act of 1965 (20 
     U.S.C. 1141(a))'' and inserting ``101(a)(1) of the Higher 
     Education Act of 1965''.
       (38) Violent crime control and law enforcement act of 
     1994.--The Violent Crime Control and Law Enforcement Act of 
     1994 is amended--
       (A) in sections 200103 and 200202 (42 U.S.C. 14092; 14111), 
     by striking ``1201(a) of the Higher Education Act of 1965 (20 
     U.S.C. 1141(a))'' and inserting ``101(a)(1) of the Higher 
     Education Act of 1965''; and
       (B) in section 30401(b) (42 U.S.C. 13791(b)), by striking 
     ``a public'' through ``that Act'' and inserting ``an 
     elementary school as defined in section 14101(14) of the 
     Elementary and Secondary Education Act of 1965, and a 
     secondary school as defined by section 14101(25) of such Act, 
     which are public institutions''.
       (39) School-to-work opportunities act of  1994.--Section 4 
     of the School-to-Work Opportunities Act of 1994 (20 U.S.C. 
     6103) is amended--
       (A) in paragraph (11)(B)(viii), by striking ``section 
     481(b)'' and inserting ``section 101(a)(3)''; and
       (B) in paragraph (12), by striking ``section 481'' and 
     inserting ``section 101(a)(2)''.
       (40) National and community service act of 1990.--Section 
     148(g) of the National and Community Service Act of 1990 (42 
     U.S.C. 12604(g)) is amended by striking ``section 481(a) of 
     the Higher Education Act of 1965 (20 U.S.C. 1088(a))'' and 
     inserting ``section 101(a)(2) of the Higher Education Act of 
     1965''.

     SEC. 102. DEFINITIONS.

       (a) Institution of Higher Education.--Section 101 (as 
     redesignated by section 101(a)(3) of this Act) is amended by 
     striking subsections (a) and (b) and inserting the following:
       ``(a) Institution of Higher Education.--
       ``(1) In general.--Subject to paragraphs (2) through (4) of 
     this subsection:
       ``(A) Principal criteria.--The term `institution of higher 
     education' means an educational institution in any State 
     that--
       ``(i) admits as regular students only persons having a 
     certificate of graduation from a school providing secondary 
     education, or the recognized equivalent of such a 
     certificate;
       ``(ii) is legally authorized within such State to provide a 
     program of education beyond secondary education;
       ``(iii) provides an educational program for which it awards 
     a bachelor's degree or provides not less than a two-year 
     program that is acceptable for full credit toward such a 
     degree;
       ``(iv) is a public or other nonprofit institution; and
       ``(v) is accredited by a nationally recognized accrediting 
     agency or association, or if not so accredited, is an 
     institution that has been granted preaccreditation status 
     by such an agency or association that has been recognized 
     by the Secretary for the granting of preaccreditation 
     status, and the Secretary has determined that there is 
     satisfactory assurance that the institution will meet the 
     accreditation standards of such an agency or association 
     within a reasonable time.
       ``(B) Additional institutions included.--The term 
     `institution of higher education' also includes--
       ``(i) any school that provides not less than a one-year 
     program of training to prepare students for gainful 
     employment in a recognized occupation and that meets the 
     provision of clauses (i), (ii), (iv), and (v) of subparagraph 
     (A); and
       ``(ii) a public or nonprofit private educational 
     institution in any State that, in lieu of the requirement in 
     subparagraph (A)(i), admits as regular students persons who 
     are beyond the age of compulsory school attendance in the 
     State in which the institution is located.
       ``(C) List of accrediting agencies.--For purposes of this 
     subsection, the Secretary shall publish a list of nationally 
     recognized accrediting agencies or associations that he 
     determines, pursuant to subpart 2 of part H of title IV of 
     this Act, to be reliable authority as to the quality of the 
     education or training offered.
       ``(2) Definition for purposes of title iv programs.--
       ``(A) Inclusion of additional institutions.--Subject to 
     subparagraphs (B) through (D) of this paragraph, the term 
     `institution of higher education' for purposes of title IV of 
     this Act includes, in addition to the institutions covered by 
     the definition in paragraph (1) of this subsection--
       ``(i) a proprietary institution of higher education;
       ``(ii) a postsecondary vocational institution; and
       ``(iii) only for the purposes of part B of title IV, an 
     institution outside the United States that is comparable to 
     an institution of higher education as defined in paragraph 
     (1) of this subsection and that has been approved by the 
     Secretary for the purpose of part B of title IV.
       ``(B) Institutions outside the united states.--
       ``(i) For the purpose of qualifying as an institution under 
     subparagraph (A)(iii) of this paragraph, the Secretary shall 
     establish criteria by regulation for the approval of 
     institutions outside the United States and for the 
     determination that such institutions are comparable to an 
     institution of higher education as defined in paragraph (1) 
     of this subsection. In the case of a graduate medical school 
     outside the United States, such criteria shall include a 
     requirement that a student attending a graduate medical 
     school outside the United States is ineligible for loans 
     made, insured, or guaranteed under part B of this title 
     unless--

       ``(I)(aa) at least 60 percent of those enrolled and at 
     least 60 percent of the graduates of the graduate medical 
     school outside the United States were not persons described 
     in section 484(a)(5) in the year preceding the year for which 
     a student is seeking a loan under part B of title IV; and
       ``(bb) at least 60 percent of the individuals who were 
     students or graduates of the graduate medical school outside 
     the United States (both nationals of the United States and 
     others) taking the examinations administered by the 
     Educational Commission for Foreign Medical Graduates received 
     a passing score in the year preceding the year for which a 
     student is seeking a loan under part B of title IV; or
       ``(II) the institution's clinical training program was 
     approved by a State as of January 1, 1992.

       ``(ii) For the purpose of qualifying as an institution 
     under subparagraph (A)(iii) of this paragraph, the Secretary 
     shall establish an advisory panel of medical experts that 
     shall--

       ``(I) evaluate the standards of accreditation applied to 
     applicant foreign medical schools; and

       ``(II) determine the comparability of those standards to 
     standards for accreditation applied to United States medical 
     schools.

     If such accreditation standards are determined not to be 
     comparable, the foreign medical school shall be required to 
     meet the requirements of paragraph (1) of this subsection.
       ``(iii) The failure of an institution outside the United 
     States to provide, release, or authorize release to the 
     Secretary of such information as may be required by clause 
     (i) of this subparagraph shall render such institution 
     ineligible for the purpose of part B of title IV.
       ``(iv) If, pursuant to this subparagraph, an institution 
     loses eligibility to participate in the programs under title 
     IV, then a student enrolled at such institution may, 
     notwithstanding such loss of eligibility, continue to be 
     eligible to receive a loan under part B while attending such 
     institution for the academic year succeeding the academic 
     year in which such loss of eligibility occurred.
       ``(C) Limitations based on course of study or enrollment.--
     An institution shall not be considered to meet the definition 
     of an institution of higher education in subparagraph (A) of 
     this paragraph if such institution--
       ``(i) offers more than 50 percent of such institution's 
     courses by correspondence, unless the institution is an 
     institution that meets the definition in section 521(4)(C) of 
     the Carl D. Perkins Vocational and Applied Technology 
     Education Act;
       ``(ii) enrolls 50 percent or more of its students in 
     correspondence courses, unless the institution is an 
     institution that meets the definition in such section, except 
     that the Secretary, at the request of such institution, may 
     waive the applicability of this clause to such institution 
     for good cause, as determined by the Secretary in the case of 
     an institution of higher education that provides a 2-year or 
     4-year program of instruction for which the institution 
     awards an associate or baccalaureate degree;
       ``(iii) has a student enrollment in which more than 25 
     percent of the students are incarcerated, except that the 
     Secretary may waive the prohibition of this clause for a 
     nonprofit institution that provides a 4-year or a 2-year 
     program of instruction (or both) for which it awards a 
     bachelor's or associate's degree or diploma, respectively; or
       ``(iv) has a student enrollment in which more than 50 
     percent of the students do not have a high school diploma or 
     its recognized equivalent and does not provide a 4-year or a 
     2-year program of instruction (or both) for which it awards a 
     bachelor's or associate's degree, respectively, except that 
     the Secretary may waive the limitation contained in this 
     clause if a nonprofit institution demonstrates to the 
     satisfaction of the Secretary that it exceeds such limitation 
     because it serves, through contracts with Federal, State, or 
     local government agencies, significant numbers of students 
     who do not have a high school diploma or its recognized 
     equivalent.
       ``(D) Limitations based on management.--An institution 
     shall not be considered to meet the definition of an 
     institution of higher education in subparagraph (A) of this 
     paragraph if--
       ``(i) the institution, or an affiliate of the institution 
     that has the power, by contract or ownership interest, to 
     direct or cause the direction of the management or policies 
     of the institution, has filed for bankruptcy; or
       ``(ii) the institution, its owner, or its chief executive 
     officer has been convicted of, or has pled nolo contendere or 
     guilty to, a crime involving the acquisition, use, or 
     expenditure of funds under title IV, or has been judicially 
     determined to have committed fraud involving funds under 
     title IV.
       ``(E) Certification.--The Secretary shall certify an 
     institution's qualification as an institution of higher 
     education in accordance with the requirements of subpart 2 of 
     part H.
       ``(F) Loss of eligibility.--An institution of higher 
     education shall not be considered to meet the definition of 
     an institution of higher education in subparagraph (A) of 
     this paragraph if such institution is removed from 
     eligibility for

[[Page H2536]]

     funds under title IV as a result of an action pursuant to 
     part H of title IV.
       ``(3) Proprietary institution of higher education.--
       ``(A) Principal criteria.--For the purpose of this 
     subsection, the term `proprietary institution of higher 
     education' means a school that--
       ``(i) provides an eligible program of training to prepare 
     students for gainful employment in a recognized occupation;
       ``(ii) meets the requirements of clauses (i) and (ii) of 
     paragraph (1)(A) of this subsection;
       ``(iii) does not meet the requirement of clause (iv) of 
     paragraph (1)(A) of this subsection;
       ``(iv) is accredited by a nationally recognized accrediting 
     agency or association approved by the Secretary pursuant to 
     part H of title IV;
       ``(v) has been in existence for at least 2 years; and
       ``(vi) has at least 15 percent of its revenues from sources 
     that are not derived from funds provided under title IV, as 
     determined in accordance with regulations prescribed by the 
     Secretary.

     In determining such 15 percent of revenues for purposes of 
     clause (vi), funds from programs of education and training 
     that do not meet the definition of an eligible program in 
     section 481(b), but are provided on a contractual basis under 
     Federal, State, or local training programs, or under 
     specialized business and industry training requests, shall be 
     counted.
       ``(B) Additional institutions.--The term `proprietary 
     institution of higher education' also includes a proprietary 
     educational institution in any State that, in lieu of the 
     requirement in clause (i) of paragraph (1)(A) of this 
     subsection, admits as regular students persons who are beyond 
     the age of compulsory school attendance in the State in which 
     the institution is located.
       ``(4) Postsecondary vocational institution.--
       ``(A) Principal criteria.--For the purpose of this 
     subsection, the term `postsecondary vocational institution' 
     means a school that--
       ``(i) provides an eligible program of training to prepare 
     students for gainful employment in a recognized occupation;
       ``(ii) meets the requirements of clauses (i), (ii), (iv), 
     and (v) of paragraph (1)(A) of this subsection; and
       ``(iii) has been in existence for at least 2 years.
       ``(B) Additional institutions.--The term `postsecondary 
     vocational institution also includes an educational 
     institution in any State that, in lieu of the requirement in 
     clause (i) of paragraph (1)(A) of this subsection, admits as 
     regular students persons who are beyond the age of compulsory 
     school attendance in the State in which the institution is 
     located.
       ``(b) State; Freely Associated States.--
       ``(1) State.--The term `State' includes, in addition to the 
     several States of the Union, the Commonwealth of Puerto Rico, 
     the District of Columbia, Guam, American Samoa, the Virgin 
     Islands, the Commonwealth of the Northern Mariana Islands, 
     and the Freely Associated States.
       ``(2) Freely associated states.--The term `Freely 
     Associated States' means the Republic of the Marshall 
     Islands, the Republic of Palau, and the Federated States of 
     Micronesia.''.
       (b) Conforming Amendments.--
       (1) Section 481 (20 U.S.C. 1088) is amended--
       (A) by striking subsections (a), (b), and (c); and
       (B) by redesignating subsections (d) through (f) as 
     subsections (a) through (c), respectively.
       (2) Each of the following provisions are amended by 
     striking ``section 481'' and inserting ``section 101(a)(2)'': 
     sections 435(a)(1), 487(d), and 496(j) and (k).
       (3) Section 498(i) (20 U.S.C. 1099c) is amended by striking 
     ``section 481 (other than the requirements in subsections 
     (b)(5) and (c)(3))'' and inserting ``section 101(a) (other 
     than the requirements in paragraphs (3)(A)(v) and 
     (4)(A)(iii))''.
       (4) Section 498(j) is amended by striking ``sections 
     481(b)(5) and 481(c)(3)'' and inserting ``paragraphs 
     (3)(A)(v) and (4)(A)(iii) of section 101(a)''.
       (5) Section 105(b) (as redesignated by section 
     101(a)(3)(D)) is amended by adding at the end the following 
     new sentence: ``This subsection shall cease to be effective 
     on October 1, 2001.''.

     SEC. 103. REGULATORY REFORM.

       Title I is amended by adding at the end the following new 
     section:

     ``SEC. 112. REGULATORY REFORM.

       ``(a) Biennial Review of Regulations.--In every even-
     numbered year (beginning with 1998), the Secretary--
       ``(1) shall review all regulations issued under title IV of 
     the Higher Education Act of 1965 in effect at the time of the 
     review that apply to the operations or activities of any 
     participant in those programs; and
       ``(2) shall determine whether any such regulation is no 
     longer necessary in the public interest.
       ``(b) Effect of Determination.--The Secretary shall repeal, 
     consolidate, simplify, or otherwise modify any regulation the 
     Secretary determines to be no longer necessary in the public 
     interest.
       ``(c) Report to Congress.--The Secretary shall report to 
     the Congress any legislative changes necessary to permit 
     regulatory simplification under this section.''.

  PART B--PERFORMANCE-BASED ORGANIZATION FOR THE DELIVERY OF FEDERAL 
                      STUDENT FINANCIAL ASSISTANCE

     SEC. 111. PERFORMANCE-BASED ORGANIZATION FOR THE DELIVERY OF 
                   FEDERAL STUDENT FINANCIAL ASSISTANCE.

       Title I (as amended by part A of this title) is amended--
       (1) by striking the heading of such title and inserting the 
     following:
            ``TITLE I--GENERAL AND ADMINISTRATIVE PROVISIONS

                    ``PART A--GENERAL PROVISIONS'';

     and
       (2) by adding at the end the following new part:

 ``PART B--ADMINISTRATIVE PROVISIONS FOR DELIVERY OF STUDENT FINANCIAL 
                               ASSISTANCE

     ``SEC. 131. PERFORMANCE-BASED ORGANIZATION FOR THE DELIVERY 
                   OF FEDERAL STUDENT FINANCIAL ASSISTANCE.

       ``(a) Establishment and Purpose.--
       ``(1) Establishment.--There is established in the 
     Department a Performance-Based Organization (hereafter 
     referred to as the `PBO') which shall be a discrete 
     management unit responsible for managing the information 
     systems supporting the programs authorized under title IV of 
     this Act, as specified in subsection (b).
       ``(2) Purposes.--The purposes of the PBO are--
       ``(A) to improve the level of service to students and 
     participants in the programs;
       ``(B) to reduce the costs of administering the Federal 
     student financial assistance programs authorized under title 
     IV;
       ``(C) to increase the accountability of the officials 
     responsible for administering the operational aspects of 
     these programs;
       ``(D) to provide greater flexibility in the management of 
     the operational functions of the Federal student financial 
     assistance programs;
       ``(E) to integrate the information systems supporting the 
     Federal student financial assistance programs; and
       ``(F) to implement an open, common, integrated system for 
     the delivery of student financial assistance under title IV.
       ``(b) Authority.--
       ``(1) Authority of secretary.-- Notwithstanding any other 
     provision of this Act, the Secretary shall maintain 
     responsibility for the development and promulgation of policy 
     relating to the programs of student financial assistance 
     under title IV. In the exercise of its functions, the PBO 
     shall be subject to the direction of the Secretary. The 
     Secretary shall--
       ``(A) request the advice of, and work in cooperation with, 
     the Chief Operating Officer in developing regulations, 
     policies, administrative guidance, or procedures affecting 
     the information systems administered by the PBO, and other 
     functions performed by the PBO;
       ``(B) request cost estimates from the Chief Operating 
     Officer for system changes required by specific policies 
     proposed by the Secretary;
       ``(C) consider the Chief Operating Officer's comments and 
     estimates prior to finalizing such regulations, policies, 
     administrative guidance, or procedures;
       ``(D) assist the Chief Operating Officer in identifying 
     goals for the administration and modernization of the 
     delivery system for student financial assistance under title 
     IV; and
       ``(E) if necessary, arrange for additional funding to 
     ensure that the PBO can efficiently perform its functions.
       ``(2) Functions.--The PBO shall carry out the following 
     functions:
       ``(A) All aspects of contracting for the data and 
     information systems supporting student financial assistance 
     under title IV, including the operational administration of 
     the William D. Ford Federal Direct Loan Program, but not 
     including the development of policy relating to such 
     programs.
       ``(B) The administrative, accounting, and financial 
     management functions of the delivery system for Federal 
     student assistance, including--
       ``(i) the collection, processing and transmission of 
     applicant data to students, institutions and authorized third 
     parties, as provided for in section 483;
       ``(ii) technical specifications for software development 
     and systems supporting the delivery of student financial 
     assistance under title IV;
       ``(iii) information technology and systems infrastructure 
     related to the delivery and management of student financial 
     assistance under title IV;
       ``(iv) all software and hardware acquisitions and all 
     information technology contracts related to the delivery and 
     management of student financial assistance under title IV; 
     and
       ``(v) all customer service, training and user support 
     related to the functions described in clauses (i) through 
     (iv).
       ``(C) Annual development of a budget for the operations and 
     services of the PBO, in consultation with the Secretary, and 
     for consideration and inclusion in the Department's annual 
     budget submission.
       ``(D) Annual development of goals, in consultation with the 
     Secretary, for the administration and modernization of the 
     system for delivery of student financial assistance under 
     title IV.
       ``(E) Other functions proposed by the Secretary, and agreed 
     to by the Chief Operating Officer as are not inconsistent 
     with the functions of the PBO.
       ``(3) Independence.--In carrying out its functions, the PBO 
     shall exercise independent control of its budget allocations 
     and expenditures, personnel decisions and processes, 
     procurements, and other administrative and management 
     functions.
       ``(4) Review of pbo.--The PBO shall be subject to the usual 
     and customary Federal audit procedures, and be subject to 
     review by the Inspector General of the Department.
       ``(c) Authorization of Appropriations.--For the purpose of 
     funding the administrative costs incurred by the PBO in 
     administering systems supporting programs under this part, 
     there are authorized to be appropriated such sums as may be 
     necessary for fiscal year 1999 and each of the 4 succeeding 
     fiscal years, except that funds authorized under section 458 
     shall be made available to the PBO by the Secretary for 
     administrative costs authorized to be funded under that 
     section.

[[Page H2537]]

       ``(d) Organizational Reports.--
       ``(1) Performance plan.--Within 6 months of the hiring of 
     the Chief Operating Officer, and every 12 months thereafter, 
     the Secretary and the Chief Operating Officer of the 
     Department shall develop a performance plan for the PBO that 
     establishes measurable goals and objectives for the 
     organization. In developing this performance plan, the 
     Secretary and the Chief Operating Officer shall consult with 
     the Committee on Education and the Workforce of the House of 
     Representatives, the Committee on Labor and Human Resources 
     of the Senate, and the Advisory Committee on Student 
     Financial Assistance. The performance plan shall include a 
     concise statement of goals for a modernized system for the 
     delivery of student financial assistance under title IV and 
     identify action steps necessary to achieve such goals. Such 
     goals shall be used in evaluating the performance of the 
     Chief Operating Officer and the PBO pursuant to paragraph 
     (2).
       ``(2) Annual accountability report.--The Chief Operating 
     Officer shall prepare and submit an annual accountability 
     report to the Secretary and the Committee on Education and 
     the Workforce of the House of Representatives and the 
     Committee on Labor and Human Resources of the Senate. The 
     accountability report shall include--
       ``(A) an independent financial audit of the expenditures of 
     both the PBO and programs administered by it;
       ``(B) financial and performance requirements applicable to 
     the PBO under the Chief Financial Officer Act of 1990 and the 
     Government Performance and Results Act of 1993;
       ``(C) the results achieved by the PBO during the year 
     relative to the goals established in the organization's 
     performance plan;
       ``(D) the results of the evaluations of performance of the 
     Chief Operating Officer and senior managers under subsections 
     (e)(2) and (f)(2), including the amounts of bonus 
     compensation awarded to these individuals;
       ``(E) a discussion of the effectiveness of coordination 
     between the PBO and the Secretary;
       ``(F) recommendations for legislative and regulatory 
     changes to improve service to students and their families, 
     and to improve program efficiency and integrity; and
       ``(G) other such information as the Director of the Office 
     of Management and Budget shall prescribe for performance 
     based organizations.
       ``(e) Chief Operating Officer.--
       ``(1) In general.--The management of the PBO shall be 
     vested in a Chief Operating Officer who shall be appointed by 
     the Secretary to a 5-year term and compensated without regard 
     to chapters 33, 51, and 53 of title 5, United States Code. 
     The Secretary shall appoint the Chief Operating Officer 
     within 6 months of the date of enactment of this part. The 
     Secretary shall consult with the Chairmen of the Committee on 
     Education and the Workforce of the House of 
     Representatives and the Committee on Labor and Human 
     Resources of the Senate prior to making an appointment. 
     The appointment shall be made on the basis of demonstrated 
     management ability and expertise in information 
     technology, including extensive experience in the 
     financial services industry, and without regard to 
     political affiliation or activity. The Secretary may 
     reappoint the Chief Operating Officer to subsequent terms 
     so long as the performance of the Chief Operating Officer, 
     as set forth in the performance agreement, is satisfactory 
     or better. The Chief Operating Officer may be removed by--
       ``(A) the President; or
       ``(B) the Secretary, for misconduct or failure to meet 
     performance goals set forth in the performance agreement in 
     paragraph (2).

     The President or Secretary shall communicate the reasons for 
     any such removal to the appropriate committees of Congress.
       ``(2) Performance agreement.--The Secretary and the Chief 
     Operating Officer shall enter into an annual performance 
     agreement which shall set forth measurable organization and 
     individual goals for the Chief Operating Officer in key 
     operational areas. The agreement shall be subject to review 
     and renegotiation at the end of each term. The final 
     agreement shall be transmitted to the Committee on Education 
     and the Workforce of the House of Representatives and the 
     Committee on Labor and Human Resources of the Senate, and 
     made publicly available.
       ``(3) Compensation.--The Chief Operating Officer is 
     authorized to be paid at an annual rate of basic pay not to 
     exceed the maximum rate of basic pay for the Senior Executive 
     Service under section 5382 of title 5, United States Code, 
     including any applicable locality-based comparability payment 
     that may be authorized under section 5304(h)(2)(B) of such 
     title 5. In addition, the Chief Operating Officer may receive 
     a bonus in an amount up to, but not in excess of, 50 percent 
     of such annual rate of basic pay, based upon the Secretary's 
     evaluation of the Chief Operating Officer's performance in 
     relation to the performance goals set forth in the 
     performance agreement described in paragraph (2). Payment of 
     a bonus under this paragraph may be made to the Chief 
     Operating Officer only to the extent that such payment does 
     not cause the Chief Operating Officer's total aggregate 
     compensation in a calendar year to equal or exceed the amount 
     of the President's salary under section 102 of title 3, 
     United States Code.
       ``(f) Senior Management.--
       ``(1) In general.--The Chief Operating Officer may appoint 
     up to 5 senior managers as may be necessary without regard to 
     the provisions of title 5, United States Code, governing 
     appointments in the competitive service, and who may be paid 
     without regard to the provisions of chapter 51 and subchapter 
     III of chapter 53 of such title relating to classification 
     and General Schedule pay rates.
       ``(2) Performance agreement.--The Chief Operating Officer 
     shall enter into an annual performance agreement with each 
     senior manager appointed under this subsection which shall 
     set forth measurable organization and individual goals in key 
     operational areas. The agreement shall be subject to review 
     and renegotiation at the end of each term.
       ``(3) Compensation.--The Chief Operating Officer is 
     authorized to pay senior managers at an annual rate of basic 
     pay not to exceed 75 percent of the maximum rate of basic pay 
     for the Senior Executive Service under section 5382 of title 
     5, United States Code, including any applicable locality-
     based comparability payment that may be authorized under 
     section 5304(h)(2)(C) of such title 5. In addition, a senior 
     manager may receive a bonus in an amount up to, but not in 
     excess of, 50 percent of such annual rate of basic pay, based 
     upon the Chief Operating Officer's evaluation of the 
     manager's performance in relation to the performance goals 
     set forth in the performance agreement described in paragraph 
     (2).
       ``(g) Personnel Flexibility.--
       ``(1) Personnel ceilings.--The PBO shall not be subject to 
     any ceiling relating to the number or grade of employees.
       ``(2) Administrative flexibility.--The Chief Operating 
     Officer shall work with the Office of Personnel Management to 
     develop and implement personnel flexibilities in staffing, 
     classification, and pay that meet the needs of the PBO, 
     subject to compliance with title 5, United States Code.
       ``(h) Establishment of a Fair and Equitable System for 
     Measuring Staff Performance.--The PBO shall establish an 
     annual performance management system, subject to compliance 
     with title 5, United States Code and consistent with 
     applicable provisions of law and regulations, which 
     strengthens the organizational effectiveness of the PBO by 
     providing for establishing goals or objectives for 
     individual, group, or organizational performance (or any 
     combination thereof), consistent with the performance plan of 
     the PBO and its performance planning procedures, including 
     those established under the Government Performance and 
     Results Act of 1993, and communicating such goals or 
     objectives to employees.
       ``(i) Procurement Flexibility.--
       ``(1) In general.--Except as provided in this subsection, 
     the PBO shall abide by all applicable Federal procurement 
     laws and regulations when procuring property and services. 
     The PBO shall--
       ``(A) enter into contracts for information systems 
     supporting the programs authorized under title IV to carry 
     out the functions set forth in subsection (b)(2); and
       ``(B) obtain the services of experts and consultants 
     without regard to section 3109 of title 5, United States Code 
     and set pay in accordance with such section.
       ``(2) Performance based servicing contracts.--The Chief 
     Operating Officer shall, to the extent practicable, maximize 
     the use of performance based servicing contracts, consistent 
     with guidelines for such contracts published by the Office of 
     Federal Procurement Policy, to achieve cost savings and 
     improve service.
       ``(3) Fee for service arrangements.--The Chief Operating 
     Officer shall, to the extent practicable and consistent with 
     the purpose of the PBO, utilize services available outside of 
     the Federal Government in the delivery of Federal student 
     financial assistance. To achieve this purpose, the PBO is 
     authorized to pay fees to an organization that are equivalent 
     to those paid by other entities for such services, if the 
     Chief Operating Officer determines that such organization 
     currently provides an information system or service that 
     meets the requirements of the PBO.
       ``(j) Focus Groups.--To facilitate information sharing and 
     customer involvement, the Chief Operating Officer may 
     establish focus groups composed of students, institutions, 
     and other participants in the programs authorized by title IV 
     to provide advice on student aid delivery matters.

     ``SEC. 132. ADMINISTRATIVE SIMPLIFICATION OF STUDENT AID 
                   DELIVERY.

       ``(a) In General.--The Secretary, and the Chief Operating 
     Officer shall improve the efficiency and effectiveness of the 
     student aid delivery system by encouraging and participating 
     in the establishment of voluntary consensus standards and 
     requirements for the electronic transmission of information 
     necessary for the administration of programs under title IV.
       ``(b) Adoption of Voluntary Consensus Standards.--Except 
     with respect to the common financial reporting form under 
     section 483(a), the Secretary shall adopt voluntary consensus 
     standards for transactions required under title IV, and 
     common data elements for such transactions, to enable 
     information to be exchanged electronically between systems 
     administered by the Department and among participants in the 
     Federal student aid delivery system.
       ``(c) Requirements for Adoption of Voluntary Consensus 
     Standards.--Any voluntary consensus standard adopted under 
     this section shall--
       ``(1) be a standard that has been developed, adopted, or 
     modified by a standard setting organization that is open to 
     the participation of the various entities engaged in the 
     delivery of Federal student financial assistance; and
       ``(2) be consistent with the objective of reducing the 
     administrative costs of delivering student financial 
     assistance under title IV.
       ``(d) Participation in Standard Setting Organizations.--
       ``(1) The Chief Operating Officer shall participate in the 
     activities of standard setting organizations in carrying out 
     the provisions of this section.
       ``(2) The Chief Operating Officer shall encourage higher 
     education groups seeking to develop common forms, standards, 
     and procedures in

[[Page H2538]]

     support of the delivery of Federal student financial 
     assistance to conduct these activities within a standard 
     setting organization.
       ``(3) The Chief Operating Officer may pay necessary dues 
     and fees associated with participating in standard setting 
     organizations pursuant to this subsection from funds 
     available under subsection (j).
       ``(e) Procedures for Adoption and Implementation of 
     Voluntary Consensus Standards.--In adopting voluntary 
     consensus standards and implementation timetables under this 
     section, including modifications of existing standards, the 
     Secretary shall follow the procedures for negotiated 
     rulemaking in section 492.
       ``(f) Initial Voluntary Consensus Standards To Be 
     Adopted.--Through coordinated participation between the Chief 
     Operating Officer and standard setting organizations, the 
     initial standards adopted by the Secretary shall include the 
     following:
       ``(1) Electronic personal identifier number.--The Secretary 
     shall adopt standards for a single electronic personal 
     identifier number for students receiving assistance under 
     title IV.
       ``(2) Electronic signature.--The Secretary, in coordination 
     with the Secretary of Commerce, shall adopt standards 
     specifying procedures for the electronic transmission and 
     authentication of signatures with respect to transactions 
     requiring a signature under title IV.
       ``(3) Single institutional identifier.--The Secretary shall 
     adopt standards for a single identifier for eligible 
     institutions under title IV.
       ``(g) Use of Clearinghouses.--Nothing in this section shall 
     restrict the ability of participating institutions and 
     lenders from using a clearinghouse to comply with the 
     standards for the exchange of information established under 
     this section.
       ``(h) Applicability to Current Systems.--
       ``(1) General rule.--Except as provided in paragraph (2) 
     and (3), this section shall apply to all Department of 
     Education information systems supporting the delivery of 
     programs under title IV no later than 12 months from the date 
     of enactment of this part.
       ``(2) National student loan data system.--This section 
     shall apply to sections 485B(e) and (f) no later than 18 
     months after the date of enactment of this part.
       ``(3) Integrated postsecondary education data system.--The 
     Secretary shall coordinate the adoption of voluntary 
     consensus standards under this section to ensure that 
     standards are compatible with the integrated postsecondary 
     education data system (IPEDS).
       ``(i) Data Security.--Any entity that maintains or 
     transmits information under a transaction covered by this 
     section shall maintain reasonable and appropriate 
     administrative, technical, and physical safeguards--
       ``(1) to ensure the integrity and confidentiality of the 
     information; and
       ``(2) to protect against any reasonably anticipated 
     security threats, or unauthorized uses or disclosures of the 
     information.
       ``(j) Authorization of Appropriations.--There are 
     authorized to be appropriated in any fiscal year or made 
     available from funds appropriated to carry out activities in 
     this section in any fiscal year such sums as may be necessary 
     to carry out the provisions of this section, except that if 
     no funds are appropriated pursuant to this subsection, the 
     Secretary shall make funds available to carry out this 
     section from amounts appropriated for the operations and 
     expenses of the Department of Education.
       ``(k) Definitions.--For purposes of this section:
       ``(1) The term `voluntary consensus standard' means a 
     standard developed or used by a standard setting organization 
     accredited by the American National Standards Institute.
       ``(2) The term `standard setting organization' means a 
     standard setting organization accredited by the American 
     National Standards Institute that develops standards for 
     information transactions, data elements, or any other 
     standard that is necessary to, or will facilitate, the 
     implementation of this section.
       ``(3) For purposes of this section, the term 
     `clearinghouse' means a public or private entity that 
     processes or facilitates the processing of nonstandard data 
     elements into data elements conforming to standards adopted 
     under this section.''.
  The CHAIRMAN. Are there any amendments to title 1?


                  Amendment No. 3 Offered by Mr. Paul

  Mr. PAUL. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 3 offered by Mr. Paul:
       Page 50, line 13, at the end of paragraph (1) add the 
     following new sentence: ``The Secretary shall not use the 
     social security account numbers issued under title II of the 
     Social Security Act as the electronic personal identifier, 
     and shall not use any identifier used in any other Federal 
     program as the electronic personal identifier.''.

  (Mr. PAUL asked and was given permission to revise and extend his 
remarks.)
  Mr. PAUL. Mr. Chairman, this amendment is not a complex amendment. It 
merely states that Social Security numbers cannot be used to identify 
the individuals who will be participating in this program.
  This is a common practice, obviously, today. The Social Security 
number is used just for about everything. As a matter of fact, many 
Americans think way too often.
  There are 40 Federal programs now where the Social Security number is 
required. Not only that, the Federal Government now has been mandating 
the uses of the Social Security number for similar purposes even on 
State programs such as obtaining our driver's license.
  The concern that I have and that many Americans have is that 
government is too intrusive, wants too many records and knows too much 
about everybody. The government and nongovernment people can get our 
names and they can get our Social Security numbers and find out more 
about us than we know about ourselves, and that is not the intent of 
our Constitution. It certainly is not the intent of the Privacy Act.
  The Privacy Act concerns were expressed through this legislation in 
1974 stating that, yes, we have overstepped our bounds, there is too 
much intrusiveness, and we are moving in the direction of a national 
identification card, something that is unknown and should be unheard of 
in a free society.

                              {time}  2100

  We should not have an identity card to carry our papers to get jobs, 
open bank accounts, move about the country, but we are moving rapidly 
in that direction. This is a token effort to make this point and 
require the government to use some other identification method for this 
program. It can be done. There is nothing sacred about the Social 
Security number. The program can be run without the use of Social 
Security.
  I would like to just read very briefly some passages from the Privacy 
Act of 1974 to make my colleagues stop and think about what we are 
doing.
  ``It shall be unlawful for any Federal, State or local government 
agency to deny any individual any right, benefit or privilege provided 
by law because of such individual's refusal to disclose his Social 
Security number.''
  If one does not give his Social Security number, one is in big 
trouble in this country. One cannot even get out of the hospital if one 
is born without a Social Security number, and one cannot open up a 
savings account for a child if one does not have a Social Security 
number. One is not even allowed to die at this time without a Social 
Security number, because one needs a Social Security number on one's 
death certificate. Talk about cradle to grave.
  ``Any Federal, State or local government agency which requests an 
individual disclose his Social Security number shall inform that 
individual whether that disclosure is mandatory or voluntary, by what 
statutory or other authority the number is listed and what uses will be 
made of it.'' We do not have that happening. Numbers are just demanded, 
and too many people have complied with it, and we go along with it, but 
more and more Americans are getting upset with this monitoring of 
everything that we do through the Social Security number.
  Every single government program is now requiring it. Like I said, 
there are 40, 40 programs. Immigration, think about how the immigration 
programs are monitored through Social Security numbers. There have been 
attempts to use the Social Security number to monitor people in their 
voting. We do not need this. We do not need more government 
surveillance in promoting this kind of a program. The program can 
survive, can work.
  Some would argue, well, possibly, just possibly, the efficiency of 
the program may be diminished. That will be the argument that I will 
probably hear. The efficiency of the program will be diminished. Well, 
if this is the argument, then we are saying that we are here to protect 
the efficiency of the State. I see an important role for us to be here 
is to protect the privacy and the civil liberties of the citizen. So we 
are in conflict. Which should our role be, to protect privacy and civil 
liberties, or is it to protect the efficiency of the State?
  Well, it is not difficult for me to figure that out, and it is not 
like I am saying this program would not exist, it is just saying that 
we will put a small amount of surveillance on this where the government 
is not so casual in expanding its role for the Social Security number.
  In the Privacy Act of 1974, in the findings, they made a comment 
which I

[[Page H2539]]

think is very important, and this is in 1974 when it was not really 
bad. ``The Congress finds the opportunities for an individual to secure 
employment, insurance and credit and his right to due process and other 
legal protections are endangered by the misuse of certain information 
systems.''
  I ask my colleagues to support this amendment. This is a positive 
amendment; this is an amendment to protect civil liberties of every 
American.
  Mr. McKEON. Mr. Chairman, I rise in opposition to the gentleman's 
amendment.
  Mr. Chairman, I agree with many of the things that the gentleman from 
Texas (Mr. Paul) has said, and I agree that we have to be alert and 
vigilant in seeing how the government can impose itself in our lives, 
but this use of a Social Security number is not new, it has been used 
for identifying student loan applications since the inception of the 
program.
  I would like to make just a couple of points as to why it is 
important to have it. It is good to know who we are giving the money 
out to, especially when we want to collect on the loans. Information 
provided by students and families in order to receive Federal aid is 
based on income information which is verified against IRS records to 
prevent fraud and abuse in the student aid programs.
  I think while there are concerns about the intrusiveness of 
government, there are also a great many concerns as to fraud in 
programs. It is important that we protect against fraud and abuse in 
these programs. This is very important to use the Social Security 
number to do that.
  Applications are also matched with the Social Security records to 
make sure the person applying for aid has a valid Social Security 
number. I know the gentleman has made point of the fact that we put a 
Social Security number on death certificates. That is so that when 
people die, we make sure that they do not apply for student aid. I 
think that is an important thing to do.
  This check is also done to ensure that the correct person is using 
his or her correct Social Security number and not a fraudulent number.
  Social Security numbers are also used for skip tracing in tracking 
down the current addresses of student who are delinquent or who default 
on their loans so that they can be contacted to repay the debt. This 
practice saves taxpayers millions of dollars. I think it is incumbent 
upon us to be very diligent in the use of taxpayer dollars.
  The safeguards afforded the student loan program and the taxpayer by 
allowing the use of Social Security numbers should not be done away 
with until such time as another viable alternative exists for matching 
records and verifying information, which is critical to preventing 
fraud and abuse in the Federal student aid programs.
  While I agree with some of the gentleman's concerns, I think it is 
very important that we defeat his amendment and use the Social Security 
number to make this program viable.
  Mr. KILDEE. Mr. Chairman, I move to strike the last word.
  I know the gentleman from Texas (Mr. Paul) is very sincere on this; I 
have talked to him, and I know the issues. But really, the purpose of 
using the Social Security number in these instances is really to 
prevent fraud and abuse.
  We have millions and millions of dollars involved in these programs 
to assist students to go to college, and I think that the taxpayers 
certainly are willing to have a person use their Social Security number 
to make sure that there is no fraud and abuse in this program. I think 
it is very important. I just filled out my income tax a few weeks ago, 
and put my Social Security number on the income tax and did not feel 
threatened by that. So I would oppose the amendment.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Texas (Mr. Paul).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.
  Mr. PAUL. Mr. Chairman, I demand a recorded vote.
  The CHAIRMAN. Pursuant to House Resolution 411, further proceedings 
on the amendment offered by the gentleman from Texas (Mr. Paul) will be 
postponed.
  Are there further amendments to title I?
  If not, the Clerk will designate title II.
  The text of title II is as follows:
         TITLE II--POSTSECONDARY EDUCATION IMPROVEMENT PROGRAMS

     SEC. 201. URBAN COMMUNITY SERVICE.

       (a) Designation of Title.--The Higher Education Act of 1965 
     is amended by inserting at the end of title I (20 U.S.C. 1001 
     et seq.) the following:
      ``TITLE II--POSTSECONDARY EDUCATION IMPROVEMENT PROGRAMS''.
       (b) Redesignation and Transfer of Urban Community Service 
     Program.--
       (1) Internal cross-references.--Part A of title XI is 
     amended--
       (A) in section 1102(b), by striking ``section 1104'' and 
     inserting ``section 204'';
       (B) in section 1104(12), by striking ``section 
     1103(a)(2)(B)'' and inserting ``section 203(a)(2)(B)''; and
       (C) in section 1108(1), by striking ``section 1103'' and 
     inserting ``section 203''.
       (2) Redesignation.--Part A of title XI (20 U.S.C. 1136 et 
     seq.) is redesignated as part A of title II, and sections 
     1101 through 1109 are redesignated as sections 201 through 
     209.
       (3) Transfer.--Part A of title II (including sections 201 
     through 209), as redesignated by paragraph (2), is 
     transferred to immediately follow the heading inserted by 
     subsection (a) of this section.
       (4) Repeal.--Part B of title XI (20 U.S.C. 1137 et seq.) 
     and the heading of title XI are repealed.
       (c) Allowable Activities.--Section 204 (as redesignated by 
     subsection (b)(2)) is amended by adding at the end the 
     following new paragraph:
       ``(14) Improving access to technology in local 
     communities.''.
       (d) Designation of Urban Grant Institutions.--Section 207 
     (as redesignated by subsection (b)(2)) is amended by adding 
     at the end the following new sentence: ``The information 
     developed as a result of this section shall be made available 
     to Urban Grant Institutions and to any other interested 
     institution of higher education by any appropriate means, 
     including the Internet.''.
       (e) Authorization of Appropriations.--Section 209 (as 
     redesignated by subsection (b)(2)) is amended by striking 
     ``1993'' and inserting ``1999''.

     SEC. 202. FUND FOR THE IMPROVEMENT OF POSTSECONDARY 
                   EDUCATION.

       (a) Redesignation and Transfer of Programs.--
       (1) Redesignation.--Part A of title X (20 U.S.C. 1135 et 
     seq.) is redesignated as part B of title II (as amended by 
     section 201) and--
       (A) sections 1001 through 1003 (20 U.S.C. 1135 et seq.) are 
     redesignated as sections 221 through 223; and
       (B) section 1011 (20 U.S.C. 1135a-11) is redesignated as 
     section 224.
       (2) Transfer.--Part B of title II (including sections 221 
     through 224), as redesignated by paragraph (1), is 
     transferred to follow part A of title II.
       (3) Repeal.--Section 1004 and parts B, C, and D of title X 
     (20 U.S.C. 1135a-3, 1135e et seq.) and the heading of title X 
     are repealed.
       (b) Endowment Grants.--Section 221(a) (as redesignated by 
     subsection (a)(2)) is amended--
       (1) by striking ``and'' at the end of paragraph (7);
       (2) by striking the period at the end of paragraph (8) and 
     inserting ``; and''; and
       (3) by adding at the end the following new paragraph:
       ``(9) awarding an endowment grant, on a competitive basis, 
     to a national organization to enable such organization to 
     support the establishment or ongoing work of area program 
     centers that foster the development of local affiliated 
     chapters in high-poverty areas to improve graduation rates 
     and postsecondary attendance through the provision of 
     academic support services and scholarship assistance for the 
     pursuit of postsecondary education.''.
       (c) Special Projects.--Section 224 (as redesignated by 
     subsection (a)(2)(B)) is amended--
       (1) by striking paragraphs (1), (2), and (3) of subsection 
     (c) and inserting the following:
       ``(1) institutional restructuring to improve learning and 
     promote productivity, efficiency, quality improvement, and 
     cost and price control;
       ``(2) articulation agreements between two-year and four-
     year institutions;
       ``(3) evaluation and dissemination of model programs; and
       ``(4) international cooperation and student exchange among 
     postsecondary educational institutions.''; and
       (2) by striking subsection (d).
       (d) Authorization of Appropriations.--
       (1) Combination of subparts.--Part B of title II (as 
     redesignated by subsection (a)) is amended by striking the 
     subpart designations and headings.
       (2) Authorization.--Part B of title II (as so redesignated) 
     is amended by adding at the end the following:

     ``SEC. 225. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     part $30,000,000 for fiscal year 1999 and such sums as may be 
     necessary for each of the 4 succeeding fiscal years.''.

     SEC. 203. GRANTS TO STATES FOR WORKPLACE AND COMMUNITY 
                   TRANSITION TRAINING FOR INCARCERATED YOUTH 
                   OFFENDERS.

       (a) Redesignation and Transfer of Programs.--
       (1) Redesignation.--Part E of title X (20 U.S.C. 1135g) is 
     redesignated as part C of title II and section 1091 is 
     redesignated as section 231.
       (2) Transfer.--Part C of title II (including section 231), 
     as redesignated by paragraph (1), is

[[Page H2540]]

     transferred to follow part B of title II (as amended by 
     section 202 of this Act).
       (b) Reauthorization.--Section 231(j) (as so redesignated) 
     is amended to read as follows:
       ``(j) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $5,000,000 for fiscal year 1999 and such sums as may be 
     necessary for each of the four succeeding fiscal years.''.

     SEC. 204. ADVANCED PLACEMENT FEE PAYMENT PROGRAM.

       (a) Redesignation and Transfer of Programs.--
       (1) Redesignation.--Part G of title XV of the Higher 
     Education Amendments of 1992 (20 U.S.C. 1170) is redesignated 
     as part D of title II and section 1545 of such Act is 
     redesignated as section 241.
       (2) Transfer.--Part D of title II (including section 241), 
     as redesignated by paragraph (1), is transferred to follow 
     part C of title II (as amended by section 203 of this Act).
       (b) Reauthorization.--Section 241(f) (as so redesignated) 
     is amended by striking ``1993'' and inserting ``1999''.

     SEC. 205. TEACHER QUALITY ENHANCEMENT GRANTS.

       Title II is further amended by adding at the end the 
     following new part:

              ``PART E--TEACHER QUALITY ENHANCEMENT GRANTS

     ``SEC. 271. PURPOSE.

       ``The purposes of this part are--
       ``(1) to provide competitive grants to States for 
     assistance in strengthening the quality of the teaching force 
     by improving the academic knowledge of teachers in the 
     subject areas in which they teach;
       ``(2) to hold institutions of higher education with teacher 
     preparation programs accountable for preparing teachers who 
     are highly competent in the academic content areas in which 
     they plan to teach, including training in the effective uses 
     of technologies in the classroom; and
       ``(3) to recruit high quality individuals, including 
     individuals from other occupation, into the teaching force.

     ``SEC. 272. ELIGIBILITY.

       ``(a) Applications.--To be eligible to receive a grant 
     under this part, a Governor shall, at the time of the initial 
     grant application, submit an application to the Secretary 
     that meets the requirements of this part.
       ``(b) Contents of Application.--Such application shall 
     include a description of how the State intends to use funds 
     provided under this part and such other information and 
     assurances as the Secretary may require.
       ``(c) State Authority.--Nothing under this part shall be 
     construed to negate or supersede the legal authority, under 
     State law of any State agency, State entity, or State public 
     official over programs that are under the jurisdiction of the 
     agency, entity, or official.

     ``SEC. 273. USE OF FUNDS.

       ``The Governor of a State that receives a grant under this 
     subpart shall--
       ``(1) use a portion of such grant to carry out one or more 
     of the following activities:
       ``(A) reforming State teacher certification requirements to 
     ensure that current and future teachers possess the necessary 
     academic content knowledge in the subject areas in which they 
     are certified and assigned to teach;
       ``(B) providing prospective teachers alternatives to 
     schools of education through programs at colleges of arts and 
     sciences or at nonprofit organizations;
       ``(C) funding programs which establish or expand 
     alternative routes to State certification for highly 
     qualified individuals from other occupations;
       ``(D) developing and implementing effective mechanisms to 
     expeditiously remove incompetent or unqualified teachers; and
       ``(E) implementing reforms which hold institutions of 
     higher education with teacher preparation programs 
     accountable for preparing teachers who are highly competent 
     in the academic content areas in which they plan to teach; 
     and
       ``(2) use a portion of such grant to establish a lighthouse 
     partnership consisting of the Governor, an exemplary 
     institution of higher education which prepares teachers, and 
     a local educational agency and which may also consist of 
     other institutions of higher education, public charter 
     schools, and public and private nonprofit elementary and 
     secondary schools, for the purpose of carrying out one or 
     more of the following activities:
       ``(A) creating opportunities for enhance and ongoing 
     professional development which improves the academic content 
     knowledge of teachers in the subject areas in which they are 
     certified to teach or in which they are working toward 
     certification to teach;
       ``(B) providing programs designed to implement the 
     successful integration of technology into teaching and 
     learning;
       ``(C) implementing reforms which hold institutions of 
     higher education with teacher preparation programs 
     accountable for preparing teachers who are highly competent 
     in the academic content areas in which they plan to teach;
       ``(D) reforming State certification requirements to ensure 
     that current and future teachers possess the necessary 
     academic content knowledge in the subject areas in which they 
     are certified to teach; and
       ``(E) recruiting minorities, and others, into the teaching 
     and counseling profession, including education 
     paraprofessionals, former military personnel, and mid-career 
     professionals, by providing financial and other assistance 
     related to instruction, induction, mentoring and support 
     services.

     ``SEC. 274. COMPETITIVE AWARDS.

       ``(a) Competitive Basis for Awards.--The Secretary shall 
     make annual grants under this part on a competitive basis.
       ``(b) Peer Review Panel.--The Secretary shall provide the 
     applications submitted by Governors under section 272 to a 
     peer review panel for evaluation. With respect to each 
     application, the peer review panel shall initially recommend 
     the application for funding or for disapproval.
       ``(c) Priority.--In recommending applications to the 
     Secretary, the panel shall give priority to applications from 
     States with proposals which promise initiatives to reform 
     State teacher certification requirements which are designed 
     to ensure that current and future teachers possess the 
     necessary academic content knowledge in the subject areas in 
     which they are certified to teach or which include innovative 
     reforms to hold institutions of higher education with teacher 
     preparation programs accountable for preparing teachers who 
     are highly competent in the academic content areas in which 
     they plan to teach.
       ``(d) Ranking of Applications.--With respect to each 
     application recommended for funding, the panel shall assign 
     the application a rank, relative to other recommended 
     applications, based on the priority described in subsection 
     (c), the extent to which the application furthers the 
     purposes of this part, and the overall quality of the 
     application, based on the quality and scope of State-
     supported strategies to improve quality of teacher 
     preparation and their teaching force.
       ``(e) Recommendation of Amount.--With respect to each 
     application recommended for funding, the panel shall make a 
     recommendation to the Secretary with respect to the amount of 
     the grant that should be made.
       ``(f) Secretarial Selection.--
       ``(1) In general.--Subject to paragraph (2), the Secretary 
     shall determine, based on the peer review panel's 
     recommendations, which applications shall receive funding and 
     the amounts of such grants. In determining grant amounts, the 
     Secretary shall take into account the total amount of funds 
     available for all grants under this part and the types of 
     activities proposed to be carried out.
       ``(2) Effect of ranking by panel.--In making grants under 
     this part, the Secretary shall select applications according 
     to the ranking of the applications by the peer review panel, 
     except in cases where the Secretary determines, for good 
     cause, that a variation from that order is appropriate.
       ``(g) Matching Requirement.--Each State receiving funds 
     under this part shall provide, from non-Federal sources, an 
     amount equal to 1/2 of the amount of the grant in cash or in 
     kind to carry out the activities supported by the grant.
       ``(h) Limitation on Administrative Expenses.--A State that 
     receives a grant under this part may use not more than 2 
     percent of the grant funds for administrative costs.
       ``(i) Reporting.--
       ``(1) In general.--A Governor that receives a grant under 
     this section shall submit an accountability report to the 
     Secretary and the Committee on Education and the Workforce of 
     the House of Representatives and the Committee on Labor and 
     Human Resources of the Senate. Such reports shall include a 
     description of the degree to which the State, in using these 
     funds, has made substantial progress in meeting the following 
     goals:
       ``(A) Raising the State academic standards required to 
     enter the teaching profession.
       ``(B) Increasing the percentage of classes taught in core 
     academic subject areas by teachers fully certified by the 
     State to teach in those subject areas.
       ``(C) Decreasing shortages of qualified teachers in poor 
     urban and rural areas.
       ``(D) Increasing opportunities for enhanced and ongoing 
     professional development which improves the academic content 
     knowledge of teachers in the subject areas in which they are 
     certified to teach or in which they are working toward 
     certification to teach.
       ``(2) Accountability of state institution of higher 
     education.--Prior to receiving funds under this part, a State 
     shall demonstrate that at least 80 percent of graduates of 
     each of the exemplary institutions of higher education in any 
     partnership described in section 273(a)(2) who enter the 
     field of teaching pass all applicable State qualification 
     assessments of new teachers, which must include assessments 
     of each prospective teacher's subject matter knowledge in the 
     content area or areas in which the teacher provides 
     instruction. Prior to each subsequent receipt of funds under 
     this part, such State shall demonstrate that 70 percent of 
     the graduates of each institution of higher education in the 
     State have met such goal and continue to progress to exceed 
     such goal. Such assessment shall be at least as rigorous as 
     those in place on the date of enactment of this Act and shall 
     have qualifying scores no lower than those in place on date 
     of enactment of this Act.
       ``(3) Provision to peer review panel.--The Secretary shall 
     provide the reports submitted under paragraph (1) to the peer 
     review panel convened under subsection (b). The panel shall 
     use such accountability report in recommending applications 
     for subsequent funding under this section.
       ``(j) Teachers Qualifications Provided to Parent Upon 
     Request.--Any local educational agency that participates as 
     an eligible applicant or partner under this part shall make 
     available, upon request and in an understandable and uniform 
     format, to any parent of a student attending any school in 
     the local educational agency, information regarding the 
     qualifications of the students classroom teacher, both 
     generally and with regard to the subject matter in which the 
     teacher provides instruction.

     ``SEC. 275. LIMITATIONS.

       ``(a) Federal Control Prohibited.--Nothing in this part 
     shall be construed to permit, allow, encourage, or authorize 
     any Federal control over any aspect of any private, 
     religious, or

[[Page H2541]]

     home school, whether or not a home school is treated as a 
     private school or home school under State law. This section 
     shall not be construed to bar private, religious, or home 
     schools from participation in programs or services under this 
     part.
       ``(b) No Change in State Control Encouraged or Required.--
     Nothing in this part shall be construed to encourage or 
     require any change in a State's treatment of any private, 
     religious, or home school, whether or not a home school is 
     treated as a private school or home school under State law.
       ``(c) National System of Teacher Certification 
     Prohibited.--Nothing in this part shall be construed to 
     permit, allow, encourage, or authorize any national system of 
     teacher certification.

     ``SEC. 276. AUTHORIZATION OF APPROPRIATIONS.

       ``(a) Authorization.--There are authorized to be 
     appropriated to carry out this part, $18,500,000 for fiscal 
     years 1999 and such sums as may be necessary for each of the 
     4 succeeding fiscal years.
       ``(b) Transition.--Notwithstanding any other provision of 
     law, the Secretary may use funds appropriated under 
     subsection (a) to complete awards under the original grant 
     period for projects that were funded under subpart 2 of part 
     E of title V of this Act, as in effect prior to enactment of 
     the Higher Education Amendments of 1998.''.

     SEC. 206. ADDITIONAL REPEAL.

       Title VIII (20 U.S.C. 1133 et seq.), relating to 
     cooperative education, is repealed.

  The CHAIRMAN. Are there amendments to title II?


                Amendment No. 55 offered by Mr. Sanders

  Mr. SANDERS. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 55 offered by Mr. Sanders:
       Page 56, after line 18, insert the following new paragraph 
     (and redesignate the succeeding paragraphs accordingly):
       ``(5) cooperation between institutions to encourage cost 
     saving initiatives through joint purchase of goods and 
     services, and shared use of facilities and faculty 
     resources.''

  Mr. SANDERS. Mr. Chairman, I will be very brief, and I want to thank 
both the majority and the minority for accepting this amendment.
  Mr. Chairman, as we attempt to make higher education more affordable 
and more accessible for the middle-income and working families of our 
country, we need, in fact, to do a much better job in controlling the 
escalating cost of a college education.
  The cost of a college degree from many institutions in this country 
today is truly shocking. According to the National Commission on the 
Cost of Higher Education, and I quote, ``In the 20 years between 1976 
and 1996, the average tuition at public universities increased from 
$642 to $3,151, and the average tuition at private universities 
increased from $2,881 to $15,581.''
  Tuitions at public 2-year colleges, the least expensive of all types 
of institutions, they have increased 5 times over. So it seems to me 
while we do all that we can to increase Federal aid for those middle-
income and working families that need a college education, we are doing 
relatively little, I think, to hold down the costs of college. In fact, 
the number 1 recommendation of the National Commission on the Cost of 
Higher Education is to strengthen institutional cost control. That is 
their number 1 recommendation.
  Mr. Chairman, the very simple amendment that I am offering would help 
institutions in some ways to reduce their costs and hopefully allow 
them to use those savings to lower the cost of tuition and college 
fees. In the State of Vermont, where my wife has served as provost of a 
small college and has been involved in this area, and in many other 
regions of the country, colleges are beginning to come together to form 
partnerships or consortia that enables them to share resources and 
reduce their collective costs.
  For example, in some cases, significant cost savings can be realized 
by joint purchasing of goods and services when schools come together to 
purchase things like fuel, and in the State of Vermont fuel is an 
expensive cost, or insurance; if they pool their resources, they can 
save money and use those savings to lower the cost of tuition. The 
problem right now, however, is that many hard-pressed schools, many of 
the smaller schools, simply do not have the resources or the available 
technical expertise to figure out how they can do those things and how 
they can work with other colleges to reduce costs.
  This amendment, which would add no additional costs to any of the 
higher education programs, would instead give the Fund for the 
Improvement of Postsecondary Education, which administers a competitive 
grant program for higher education institutions, a broader mission and 
allow them to make competitive grants available to institutions which 
seek to cooperate and reduce costs through the joint purchase of goods 
and services.
  Mr. Chairman, this amendment is consistent with the National 
Commission on the Cost of Higher Education which recommends: ``Greater 
institutional and regional cooperation in using existing facilities and 
institutions of higher education,'' and that is what this amendment 
does.
  I thank both the majority and the minority for accepting this 
amendment.
  Mr. McKEON. Mr. Chairman, I rise in support of the amendment. We 
thank the gentleman from Vermont (Mr. Sanders) for his efforts to 
improve the bill, and we gladly accept his amendment.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Vermont (Mr. Sanders).
  The amendment was agreed to.
  The CHAIRMAN. Are there any further amendments to title II?


           Amendment No. 20 Offered by Mr. Farr of California

  Mr. FARR of California. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 20 offered by Mr. Farr of California:
       Insert at the end of section 271(1) of the Higher Education 
     Act of 1965 as amended by the manager's amendment offered by 
     the Gentleman from Pennsylvania the following: ``, such as 
     math, science, English, foreign languages, history, 
     economics, art, and civics''.

  Mr. FARR of California. Mr. Chairman, I just want to say that I 
really enjoy seeing this wonderful bipartisan support for education 
here on the House floor. I cannot think of any issue that is more of 
interest to the people in this country now than education, and it is 
wonderful that we are at a time when education has become our most 
important product, and I would like to acknowledge and compliment the 
leadership on both sides of the aisle, the gentleman from Pennsylvania 
(Mr. Goodling) for his great leadership and the gentleman from Michigan 
(Mr. Kildee).
  I have a quick amendment. This amendment is to Part E of the Teacher 
Quality Enforcement Enhancement Grants, which is section 271(i). This 
section is the one that consolidates 17 existing higher education 
programs into a new competitive grant program to improve teacher 
training.
  Section 271(i) provides competitive grants to the States to 
strengthen the quality of teaching force in the core subject areas. My 
language would merely list those core subject areas as math, science, 
English, foreign languages, history, economics, art and civics.


   Modification to Amendment No. 20 Offered by Mr. Farr of California

  Mr. FARR of California. Mr. Chairman, I also discovered there was a 
drafting error that omitted government and geography from the list, so 
I would ask unanimous consent to modify my amendment to add government 
and geography.

                              {time}  2115

  The CHAIRMAN. The Clerk will report the modification.
  The Clerk read as follows:

       Modification to amendment offered by Mr. Farr of 
     California:
       In the matter proposed to be inserted strike out ``and'', 
     and insert before the closing quotation mark ``government and 
     geography''.

  The CHAIRMAN. Is there objection to the modification to the amendment 
offered by the gentleman from California (Mr. Farr)?
  There was no objection.
  The CHAIRMAN. The question is on the amendment, as modified, offered 
by the gentleman from California (Mr. Farr).
  The amendment, as modified, was agreed to.
  The CHAIRMAN. Are there any further amendments?


                 Amendment no. 51 offered by mr. owens

  Mr. OWENS. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.

[[Page H2542]]

  The text of the amendment is as follows:

       Amendment No. 51 offered by Mr. Owens:
       Page 68, after line 11, insert the following new section 
     (and redesignate the succeeding section accordingly):

     SEC. 206. POSTSECONDARY INFORMATION TECHNOLOGY EDUCATION 
                   RECRUITMENT

       (a) Findings.--The Congress finds the following:
       (1) There are more than 200,000 to 400,000 vacancies in 
     various categories of information technology jobs.
       (2) From 1996 to 2005, more than 1,300,000 new computer 
     scientists, engineers, and systems analysts will be required 
     in the United States to fill vacant jobs, which equals 
     136,800 new workers per year.
       (3) Systems analysts will experience the largest job 
     growth, accounting for a 103 percent increase in the number 
     of new positions from 1996 (506,000) to 2005 (1,025,000).
       (4) The shortage of information technology workers 
     transcends industries, affecting the manufacturing, service, 
     transportation, health care, education, and government 
     sectors. Within each sector, vacancies exist at all levels 
     from aides and mechanics to programmers and designers.
       (5) The information technology worker shortage is having an 
     adverse effect on the viability of businesses in the United 
     States and on the Nation's competitiveness. Industry surveys 
     report that half of industry executives cite the lack of 
     workers skilled in technology as the number one obstacle to 
     their company's growth. An additional 20 percent of industry 
     executives identify the lack of information technology 
     workers as a major obstacle to their company's growth.
       (6) A major factor affecting the short supply of 
     information technology workers is the mismatch between what 
     universities teach and what industry needs.
       (7) It is in the national interest to promote special 
     initiatives which effectively educate and train our domestic 
     workforce to keep pace with these expanding job 
     opportunities.
       (8) Institutions of higher education have the capacity and 
     resources to provide a role of oversight and technical 
     assistance to a wide range of local entities, including 
     community-based organizations, participating in a 
     comprehensive education and training program for potential 
     technology workers.
       (9) Higher education institutions must be responsive to the 
     digital environment and expand both their outreach efforts 
     and on-campus activities to train and certify individuals to 
     close the information technology worker gap.
       (b) Amendment.--Title II is amended by adding at the end 
     the following:

         ``PART G--INFORMATION TECHNOLOGY EDUCATION RECRUITMENT

     ``SEC. 281. PARTNERSHIPS FOR POSTSECONDARY INFORMATION 
                   TECHNOLOGY EDUCATION RECRUITMENT

       ``(a) Grants Authorized.--
       ``(1) In general.--The Secretary may make grants under this 
     section, in accordance with competitive criteria established 
     by the Secretary, to institutions of higher education, in 
     order to establish, oversee the operation of, and provide 
     technical assistance to, projects described in paragraph (2).
       ``(2) Projects.--Projects under this section shall be 
     projects implemented by a community-based organization 
     described in subsection (b), or by the institution of higher 
     education receiving the grant, to provide postsecondary 
     information technology education and employment procurement 
     assistance to eligible individuals described in subsection 
     (c).
       ``(3) Restrictions.--An institution of higher education 
     shall be eligible to receive only one grant under this 
     section, but may, subject to the requirements of this 
     section, use the grant to enter into contracts with more than 
     one community-based organization. A community-based 
     organization shall not be eligible to enter into a contract 
     under this section with more than one institution of higher 
     education.
       ``(4) Period of grant.--The provision of payments under a 
     grant under this section shall not exceed 5 fiscal years and 
     shall be subject to the annual approval of the Secretary and 
     subject to the availability of appropriations for each fiscal 
     year involved.
       ``(b) Community-Based Organizations.--
       ``(1) In general.--Subject to paragraph (2), a community-
     based organization described in this subsection is an entity 
     that, at the time the entity enters into a contract with an 
     institution of higher education for a project under this 
     section, and throughout the duration of that contract--
       ``(A) is--
       ``(i) a governmental agency; or
       ``(ii) an organization described in section 501(c)(3) of 
     the Internal Revenue Code of 1986 and exempt from tax under 
     section 501(a) of such Code; and
       ``(B) is one of the following:
       ``(i) A local partnership (as defined in section 4 of the 
     School-to-Work Opportunities Act of 1994) receiving a grant 
     under section 302 of such Act.
       ``(ii) An entity organized and operated for religious 
     purposes.
       ``(iii) An entity furnishing school-age child care services 
     after school.
       ``(iv) A community-based college computer recruitment 
     center.
       ``(v) An entity furnishing adult education.
       ``(vi) A library.
       ``(vii) A museum.
       ``(viii) Any other entity organized and operated for 
     cultural, literary, or educational purposes.
       ``(2) Limitation.--An entity shall not be considered a 
     community-based organization described in this subsection 
     unless, at the time the entity enters into a contract with an 
     institution of higher education for a project under this 
     section, it has demonstrated to the satisfaction of the 
     Secretary that--
       ``(A) it has the capacity successfully to recruit eligible 
     individuals described in subsection (c) for participation in 
     a project described in subsection (a), consistent with the 
     enrollment requirements in subsection (d)(2)(E);
       ``(B) it is providing an educational service, social 
     service, or employment procurement service; and
       ``(C) in the case of an entity that independently manages 
     its own finances, it has been in existence 2 years or more.
       ``(c) Eligible Individuals.--An eligible individual 
     described in this subsection is an individual who--
       ``(1) has submitted a satisfactory application to receive 
     postsecondary information technology education recruitment 
     assistance through a project under this section; and
       ``(2) has a certificate of graduation from a school 
     providing secondary education, or the recognized equivalent 
     of such a certificate.
       ``(d) Duties.--
       ``(1) Institutions of higher education.--An institution of 
     higher education receiving a grant under this section shall 
     use the funds provided under the grant to carry out the 
     following duties:
       ``(A) Final selection of community-based organizations 
     described in subsection (b) desiring to provide, at one or 
     more sites, in accordance with a contract with the 
     institution of higher education and this section, 
     postsecondary information technology education and employment 
     procurement assistance to eligible individuals described in 
     subsection (c).
       ``(B) Entering into a contract with each community-based 
     organization selected under subparagraph (A) under which the 
     institution and the organization agree to carry out the 
     duties respectively required of them under this section with 
     respect to each site described in subparagraph (A).
       ``(C) With respect to each site described in subparagraph 
     (A)--
       ``(i) design of a process for the recruitment of students 
     from site to enroll in college courses or matriculate in 
     college programs;
       ``(ii) provision of such funding for the establishment and 
     initial operation of the site as was specified in the grant 
     application submitted by the institution to the Secretary;
       ``(iii) approval of final site selection and preparation;
       ``(iv) initial orientation and training of personnel 
     employed to manage and operate the site;
       ``(v) design and certification of the instructional and 
     academic programs, and oversight of the implementation of the 
     programs;
       ``(vi) oversight of equipment purchases and contracts for 
     equipment maintenance; and
       ``(vii) selection of an outside contractor for periodic 
     evaluation of the management and operation of the site.
       ``(2) Community-based organizations.--
       ``(A) In general.--A community-based organization 
     implementing a project under this section with an institution 
     of higher education, at one or more sites, shall carry out 
     the duties described in this paragraph, with respect to each 
     such site, subject to the oversight and guidance of the 
     institution.
       ``(B) General duties.--The organization--
       ``(i) shall undertake final site selection and preparation;
       ``(ii) shall recruit and hire a site director;
       ``(iii) shall carry out any supplementary instructional, 
     academic, or educational activities specified in the contract 
     with the institution of higher education that are not 
     described in subparagraph (D);
       ``(iv) shall assemble an advisory committee composed of 
     individuals residing in the community in which the site is 
     located, as well as industry representatives, who desire to 
     assist the organization in ensuring that the goals of the 
     organization are consistent with the goals and needs of the 
     community population;
       ``(v) shall provide to the institution other evidence of 
     volunteer support from among individuals residing in the 
     community in which the site is located and industry 
     representatives;
       ``(vi) shall recruit eligible individuals for enrollment, 
     subject to subparagraph (E);
       ``(vii) shall maintain waiting lists of eligible 
     individuals desiring to enroll in the project's programs;
       ``(C) Site requirements.--The organization shall ensure 
     that each site--
       ``(i) has a minimum of 20 fully functioning computers with 
     sufficient capacity to perform all of the computer operations 
     that are the subject of the curriculum specified in 
     subparagraph (D);
       ``(ii) in addition to the space for the computers described 
     in clause (i), has--

       ``(I) a classroom space with the capacity for seating a 
     minimum of 30 students;
       ``(II) a separate office for the site director;

       ``(iii) is real property subject to the control of the 
     organization or the institution, through a lease or other 
     legal instrument, for a period of not less than 5 years;
       ``(iv) is open to enrolled individuals not less than 12 
     hours per day; and
       ``(v) is located within walking distance of public 
     transportation.
       ``(D) Information technology curriculum.--

[[Page H2543]]

       ``(i) In general.--The organization shall ensure that each 
     site offers enrollees a curriculum that includes a broad 
     range of course work in information technology.
       ``(ii) Courses leading to certification.--Such curriculum 
     shall include course work leading to a certification of 
     competence in areas of information technology recognized by 
     the National Skill Standards Board established under the 
     National Skill Standards Act of 1994.
       ``(iii) Specific courses.--The computer training offered 
     shall include courses in basic computer competence, on-the-
     job upgrade assistance, and advanced computer competence.
       ``(E) Enrollment requirements.--The organization shall 
     ensure that its enrollment of eligible individuals at each 
     site is consistent with the following:
       ``(i) Not less than 50 percent of the eligible individuals 
     shall be, at the time of enrollment, individuals--

       ``(I) to whom a credit was allowed under section 32 of the 
     Internal Revenue Code of 1986 for the preceding taxable year;
       ``(II) who are recipients of assistance under a State 
     program funded under part A of title IV of the Social 
     Security Act;
       ``(III) who are a member of a household participating in 
     the food stamp program; or
       ``(IV) who are considered low-income pursuant to 
     regulations promulgated by the Secretary under this section.

       ``(ii) Not less than 50 percent of the eligible individuals 
     shall be, at the time of enrollment, under 25 years of age.
       ``(iii) No prerequisite relating to net worth, income, or 
     assets may be applied to any eligible individual who, at the 
     time of enrollment, is over 50 years of age, except that this 
     requirement shall not be construed to supersede clause (i).
       ``(e) Implementation of Projects Solely by Institutions.--
     The Secretary may make a grant under this section to an 
     institution of higher education that desires to implement a 
     project under this section without the participation of a 
     community-based organization described in subsection (b), if 
     the institution agrees to carry out all of the duties 
     required of such an organization under this section, in 
     addition to the duties otherwise required of an institution 
     of higher education. The Secretary shall, in awarding grants 
     under this section, give priority to institutions of higher 
     education whose grant application includes an assurance that 
     the institution will contract with one or more community-
     based organizations in accordance with this section.
       ``(f) Applications.--To apply for a grant under this 
     section for any fiscal year, an institution of higher 
     education shall submit an application to the Secretary in 
     accordance with the procedures established by the Secretary. 
     The application shall specify the institution's preliminary 
     selections for the community-based organizations (if any) 
     with which the institution proposes to contract, and shall 
     include information with respect to preliminary site 
     selections.
       ``(g) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $100,000,000 for fiscal year 1999 and such sums as may be 
     necessary for each of the 4 succeeding fiscal years.
       ``(h) Definitions.--For purposes of this section:
       ``(1) Adult education.--The term `adult education' has the 
     meaning given such term in section 312 of the Adult Education 
     Act.
       ``(2) Community-based college computer recruitment 
     center.--The term `community-based computer center' means a 
     computer center--
       ``(A) funded by both the Federal Government and at least 
     one private sector entity;
       ``(B) located in a low-income community (as determined by 
     the Secretary); and
       ``(C) organized and operated for the purpose of providing 
     families with access to computer resources that otherwise 
     would not be available to them.
       ``(3) Food stamp program.--The term `food stamp program' 
     has the meaning given such term in section 3(h) of the Food 
     Stamp Act of 1977.
       ``(4) Library.--The term `library' has the meaning given 
     such term in section 213 of the Library Services and 
     Technology Act.
       ``(5) Museum.--The term `museum' has the meaning given such 
     term in section 272 of the Museum and Library Services 
     Act.''.

  Mr. OWENS. Mr. Chairman, this amendment seeks to deal with the 
omission which I cited earlier. There is a problem, there is a crisis, 
there is a great need for more information technology workers. There is 
a crisis that will be met with legislation from this House of 
Representatives in the 105th Congress. There are a number of different 
committees looking at the problem, and this committee should do its 
duty and address the problem.
  Government analyses, industry reports, media headlines, and lobbying 
activities from businesses point to a crisis in the American education 
system and the workplace. There are not enough workers to fill 200,000 
to 400,000 current vacancies in various categories of information 
technology jobs.
  It has been reported that ``a major factor affecting the short supply 
of information technology workers is a mismatch between what 
universities teach and what industry needs.'' One industry executive 
likened the current situation to ``running out of iron ore in the 
middle of the industrial revolution.''
  While I commend the chairmen and ranking members of both the 
committee and the subcommittee for fashioning a palatable bill, H.R. 6 
does not comprehensively address the anchor role that our higher 
education institutions could play in eliminating America's newest 
deficit of high skilled technology workers. The Information Technology 
Partnership Amendment which I am offering here would correct this gross 
oversight in H.R. 6.
  This amendment would authorize a competitive grant program for 
colleges and universities to establish and oversee information 
technology education recruitment projects. Higher education 
institutions would be expected to expand existing resources to 
establish computer training centers off campus. Priority would be given 
to those colleges and universities that enter into partnerships with 
community-based organizations such as after-school centers and 
nonprofit cultural and educational organizations and even churches.
  Many of my colleagues in Congress understand the severity of the 
shortage of workers with the necessary education to compete in this new 
millennium. Several reports have documented this crisis: The Commerce 
Department report entitled ``America's New Deficit''; reports from the 
Bureau of Labor Statistics; another Commerce report entitled ``The 
Emerging Digital Economy''; and a report from an industry trade 
association called ``Help Wanted: A Call for Deliberative Action for 
the New Millennium.'' These analyses draw a dramatic conclusion about 
the gross shortages that will exist now and into the year 2005.
  Because of the crisis, the Information Technology Association of 
America has pledged its support for this amendment. As the trade 
association that represents information technology workers and 
businesses, ITAA documents how businesses are themselves complaining 
for assistance.
  Mr. Chairman, I submit a letter from ITAA which supports this 
amendment:

                                                         ITAA,

                                    Arlington, VA, April 28, 1998.
     Hon. Major R. Owens,
     U.S. House of Representatives, Rayburn House Office Building, 
         Washington, DC.
       Dear Congressman Owens: I understand that you are soon to 
     introduce a bill, the ``Workforce Investment Partnership 
     Act.'' Based on a review of your draft legislation, it 
     appears it addresses the information technology (IT) training 
     needs that are critical to the growth of American industry. 
     As the industry association with leadership on growing the 
     domestic IT workforce, the Information Technology Association 
     of America (ITAA) is pleased to see the way you are 
     attempting to deal with creatively the workforce shortage.
       ITAA's recently released a study conducted by Virginia 
     Polytechnic Institute and State University (VA Tech), Help 
     Wanted 1998: A call for Collaborative Action for the New 
     Millennium. This study found that there are currently 346,000 
     vacant IT positions in American companies. These vacancies 
     exist both at high tech companies and in other industry 
     sectors, including banking, retail, insurance, and 
     hospitality. Every region of the country is impacted by this 
     lack of IT talent. The IT skills gap represents thousands of 
     missed opportunities for American workers, because these high 
     paying, high growth jobs remain vacant.
       ITAA supports partnerships among stakeholders in business, 
     academia, and government which create opportunities for 
     Americans to pursue IT jobs. ITAA is especially supportive of 
     those partnerships that leverage existing resources (such as 
     college faculties and community-based organizations) for new 
     types of training programs, as your legislation suggest. ITAA 
     looks forward to working with you and your staff to develop 
     this project and include industry leaders in the process.
       Thank you for your leadership on this critical issue. If 
     you have any questions or comments please feel free to 
     contact me at [email protected] or 703-284-5340, or contact 
     Lauren Brownstein, ITAA's Workforce Education Program 
     Manager, at [email protected] or 703-284-5318.
       Sincerely,
                                                 Harris N. Miller,
                                                        President.

                         ITAA Member Companies

       3Com Corporation; A.I.H. Systems Group, Inc.; ABT 
     Corporation; Accelr8 Technology Corporation; Adobe Systems, 
     Inc. Federal Systems Division; Advanced Information Network 
     Systems; Advanced Technology Systems Corporation; Affiliated 
     Computer Services, Inc.; AH&T Technology Brokers; AITECH 
     Research, Inc.; Albers & Company; ALIT Inc.; Altenbern, 
     Douglas Honorary ITAA Member; Ambassador Capital Corporation; 
     Amdahl Corporation; America Online,

[[Page H2544]]

     Inc.; ANATEC; Andersen Consulting LLP; ANSTEC, Inc.; ARKSYS; 
     Arter & Hadden; AT&T Atkinson & Associates, Inc.; Atlantic 
     Data Services, Inc.; AVATAR Solutions, Inc.;
       BDM International, Inc.; BEA Systems; Beach, Stephen H. 
     Honorary ITTA Member; Bellcore; Best Computer Consultants, 
     Inc.; Billennium L.P.; Bob Lejeune, Honorary Member; Boeing; 
     Boston Technology, Inc.; BrightStar Information Technology 
     Group, Inc.; Brookline Technologies Inc.; BTG, Inc.; Business 
     Representation Inc.
       CACI International Inc.; Caine Farber and Gordon, Inc.; 
     Caliber Learning Network, Inc.; Cap Gemini America; Capital 
     Technology Information Services: Capricorn Systems, Inc.; 
     Carpenter Associates; Carr, Ambrose A., Jr. Honorary ITAA 
     Member; CCD Online Systems, Inc.; Center For Innovative 
     Technology; Century for Innovative Technology; Century 
     Staffing Consultants; Chuck Wheeler Associates, Inc.; 
     CIBER 2000, Inc.; Claremont Technology Group, Inc.; Class 
     Solutions Ltd.; Cognos Corporation; COLMAR Corporation; 
     Complete Business Solutions, Inc.; Computec International 
     Resources Inc.; Computer Associates International, Inc.; 
     Computer Generated Solutions, Inc.; Computer Horizons 
     Corporation; Computer People Inc.; Computer Sciences 
     Corporation; Computer Task Group, Inc. (CTG); COMSYS 
     Technical Services, Inc.; Consist International, Inc.; 
     Contract Solutions, Inc.; Coopers & Lybrand L.L.P.; 
     Corporate Executive Computing, Inc.; Cotelligent Group, 
     Inc.; CROSS ACCESS Corporation; CrossRoute Software, Inc.; 
     Crowell & Moring; CTA Incorporated; CyberCash, Inc.; 
     Cyborg Systems, Inc.
       Data Dimensions, Inc.; Data General Corporation; Data 
     Processing & Accounting Services; Data Processing Resources 
     Corporation; Data Systems Analysts, Inc.; Dataccount 
     Corporation; De Bellas & Co.; Doloitte & Touche LLP; DemoNet 
     Inc.; Dickstein, Shapiro & Morin, LLP; Digital Commerce 
     Corp.; Digital Equipment Corporation; Distributed Software 
     Development, Inc.; DSQ Software Corporation; DynCorp.
       Edge Information Group; EDS Corporation; Emerald Solutions, 
     Inc.; Envision, Inc.; Epsilon Software Development Company; 
     Ernst & Young.
       Fargo Provisioning; Federal Data Corporation; Federal 
     Sources, Inc.; First Floor Software; Forecross Corporation; 
     Foursight Seminars, Inc.; Fujitsu Limited; Fundamental 
     Software.
       G2R; Galland, Kharasch & Garfinkle, P.C.; GE Information 
     Services; Geac Computer Systems, Inc.; General Dynamics 
     Information Systems; Global Data Solutions; GMR Technologies 
     International; GMRTI; Goel & Associates, P.C.; Goetz 
     Associates Honorary ITAA Member; Golder, Thoma, Cressey, 
     Rauner, Inc.; Government Strategy Advisors; Government 
     Technology Services, Inc.; Grant Thornton LLP; Great Lakes 
     Technologies Group; Greenbrier & Russel, Inc.; GTE 
     Internetworking; GTE Technology and Systems.
       Hanover & Associates, Ltd.; Hazel & Thomas, PC; Highmark 
     Blue Cross Blue Shield; Hinton Industries, Inc.; Hogan & 
     Hartson; Holland & Knight LLP; Howard Systems 
     International, Inc.
       IBM Corporation; IBM Global Services; IBS Conversions, 
     Inc.; IDC Governments, Inc.; IMI Systems, Inc.; Immigration 
     Law Group, LLP; Information Management Resources, Inc.; 
     Information Systems Resources, Inc.; INPUT; Intermetrics, 
     Inc.; INTERSOLV, Inc.; Intertec Communications, Inc.; Into 
     2000 Inc.; Introspect Corporation; IONA Technologies.
       J.G. Van Dyke Associates, Inc.; James Martin Government 
     Consulting, Inc.; James, Luanne Honorary ITAA Member; Jerger 
     Associates.
       Keane, Inc.; Kearney & Company; Keith Bates & Associates, 
     Inc.; Kirkpatrick & Lockhart LLP; Knautz, Allan Honorary ITAA 
     Member; KPMG Peat Marwick LLP.
       Landmark Systems Corporation; Levi, Ray & Shoup, Inc.; 
     LexiBridge Corporation; Litton PRC; Locate In Kent; Lockheed 
     Martin Federal Systems; Lyons & Associates, Inc.
       Manley, Robert Honorary ITAA Member; MAPSYS; Marimba, Inc.; 
     Market* Access International; Martec Computer Services 
     Company; MASTECH Corporation; MatchPoint Systems, Inc.; 
     MAXIMUS, Inc.; Maxxion Systems Inc.; McCabe & Associates, 
     Inc.; McGuire, Woods, Battle & Booth; MCI Inc.; McKenna & 
     Cuneo, L.L.P.; Mercer Computer Systems, Inc.; Merrill Lynch; 
     Micro Focus, Inc.; Microsoft Corporation; Millennia III; 
     Millennium Dynamics, Inc.; MCL Group, Inc.; modis.
       Napersoft, Inc.; National Comprehensive Services Corp.; NBS 
     Systems, Inc.; NeoMedia Technologies, Inc.; NEPS Inc.; NETCOM 
     On-Line Communication Services, Inc.; Netscape Communications 
     Corp.; New Art Technologies, Inc.; Next Millennium 
     Consulting, Inc.; NIIT (USA) Inc.; Northrop Grumman Corp--
     Data Systems & Serv. Div.; Novadyne Computer Systems, Inc.
       O'Grady-Peyton International; Olympic Staffing Services; 
     Onstad, Phillip C. Honorary ITAA Member; Open Market, Inc.; 
     Oracle Corporation; Oracle Corporation.
       Paragon Computer Professionals, Inc.; Pentamation 
     Enterprises, Inc.; Peopleware Technical Resources, Inc.; 
     Performance Technology Group; Phil Butler & Associates, 
     Ltd.;  Phoenix Software International; Pierre Audoin 
     Conseil; Piscopo, J.A. Honorary ITAA Member; PLATINUM 
     Technology, Inc.; Price Waterhouse LLP; PRINCE Software, 
     Inc.; Princeton Information Ltd.; Prodigy Services 
     Corporation; PSDI.
       Quality Engineering Software Automation (QES).
       Rapasky, John R. Honorary ITAA Member; Rational Software 
     Corp.; RCG Information Technology, Inc.; Reasoning, Inc.; 
     Renaissance Solutions, Inc.; Renaissance Worldwide; Robbins-
     Gioia, Inc.; Robert Half International, Inc.; Rollins, Arthur 
     Honorary ITAA Member.
       Sachs, Spector, Glasser & Waxman, P.C.; Sam Albert 
     Associates; SCB Computer Technology, Inc.; Schoenberg, 
     Lawrence ITAA Honorary Member; Science Applications 
     International Corporation (SAIC); SCO; Secure Computing 
     Corp.; Government Division; Sentry Technology Group; Sequent 
     Computer Systems, Inc. (Federal Division); SERENA Software 
     International; Serendipity Consulting; Seyfarth, Shaw, 
     Fairweather & Geraldson; Shaw Pittman Potts & Trowbridge; 
     Signet Bank; Silicon Graphics, Inc.; Silverline Industries, 
     Inc.; Softech International; Software AG Americas; Software 
     Productivity Consortium; Software Services Corporation; 
     Software Synergy, Inc.; SOFTWORKS, Inc.; Solomon Software; 
     Southbridge Financial Corporation; Southwestern Business 
     Resources; Specifics, Inc.; SPR Inc.; Sprint; Spyglass, Inc.; 
     SRA International, Inc.; SRI Consulting; STA America; 
     Standard Data Corporation; Stanford Consulting Group; 
     Sterling Commerce, Inc.; Sterling Software, Inc.; Strategia 
     Corporation; Sun Microsystems/Gov't Software Group; SunGard 
     Data Systems Inc.; Superlative Technologies, Inc.; SVI 
     America Corporation; Sybase Federal; Symantec Federal Region; 
     Syntel, Inc.; System One Technical, Inc.; Systems & Computer 
     Technology Corporation.
       TCG Software, Inc.; TechnoPraxis Group Inc.; Techquest, 
     Inc.; The Comdyn Group; The Dun & Bradstreet Corporation; The 
     Jefferson Group; The Software Factory; The Updata Group, 
     Inc.; Thinking Tools, Inc.; Tone Software Corporation; Tracor 
     Enterprise Solutions, Inc.; Transition Software Corporation; 
     Transportation Consulting Group, Inc.; Triad Data Inc.; TRW; 
     TSI International Software, Ltd.
       Ultim--IT Solutions Inc.; Ultradata Corporation; Ultradata 
     Systems Inc.; Ulysses Group Associates, Inc.; Unisys Federal 
     Systems Division; USF&G Corporation.
       Vanstar Corp., Gov't Systems Group; Vector Consulting; 
     VentureTech 2000, Inc.; Veronex Technologies, Inc.; Vertex 
     Inc.; Veson, Inc.; VIASOFT, Inc.; Village Information 
     Solutions, L.L.C.; Virtual Consulting.
       Wang Federal; Wang, Inc.; Waterfield Technology Group, 
     Inc.; Wellinger & Associates, Inc.; Welsh, Carson, Anderson & 
     Stowe; Wheat International Communications Corp.; William M. 
     Mercer, Inc.
       Y2K Solutions Group, Inc.; Y2Kplus, Inc.; Year 2000 
     Inventory Management Ltd.; Zitel Corporation; Zmax 
     Corporation.
  Mr. Chairman, I might add also that there is another solution being 
proposed by the Committee on the Judiciary. The Committee on the 
Judiciary proposes to meet this crisis by importing, or by changing the 
visa quota by increasing it from 60,000 to 115,000 and bringing in 
professionals from foreign countries, trained professionals in this 
area from foreign countries. They will solve the problem that way 
instead of addressing the need to prepare more of our own citizens for 
this very important set of jobs.
  Mr. Chairman, these jobs will be around for a long time. There is a 
stratification. It is not only the people at the very top who are 
designers and the engineers for computers and for software. It is not 
only the computer programmers, but also technicians and technologists.
  All of the estimates of the vacancies so far have not taken into 
consideration the needs outside of business. They are only looking at 
business needs. They have not looked at the needs of the schools and 
the colleges where there is a shortage of people who can deal with 
educational information technology. Education technology will require 
more teachers and teachers will have to have technology assistants and 
technicians.
  Just as we have an automobile culture in this country that has built 
up over many decades of the automobile existing, we are going to have a 
culture of the computer and a culture of information technology which 
will have people at all strata and we should prepare for that now.
  This amendment recognizes that higher education institutions have the 
capacity and the resources to provide the major role for a 
comprehensive information technology education recruitment program. The 
Information Technology Partnerships Amendment offers an incentive for 
colleges and universities to leverage their existing resources, enter 
into partnerships with community groups and obtain input from industry 
groups to help educate and prepare American citizens for these vast job 
opportunities.
  Colleges and universities would be expected to recruit the 
participants

[[Page H2545]]

who will be trained at the computer education centers. Those recruits 
would go on for college study. This amendment would encourage colleges 
to recruit actively those individuals who would normally not be exposed 
to such computer training and to the college environment.
  In low-income communities, as has been documented by several articles 
in The Washington Post and the New York Times, the exposure to 
computers is not there. Students cannot learn this field or get 
involved in it unless they have the opportunity to practice on 
computers.
  So I urge that this amendment be adopted, that we go into the 21st 
century with the participation of this committee on this particular 
piece of legislation to place us in the bargaining process that is 
going to take place among all the committees to solve this problem.
  Mr. McKEON. Mr. Chairman, I rise in opposition to the gentleman's 
amendment.
  Mr. Chairman, the gentleman's heart is in the right place, he is 
trying to do what is right, and I think has some very good things that 
he is trying to do in this amendment. This is a bipartisan bill and we 
worked together on a lot of these areas, but it was one amendment that 
we were not able to accept.
  Mr. Chairman, we just cannot do everything with a Federal program. 
According to the Department of Education, more than 550,000 students 
were enrolled in computer science programs in the 1995-96 academic 
year. The current student aid program provides millions of individuals 
with the opportunity to pursue any field they choose as workforce 
demands change for different occupations. Students can choose programs 
as short as 6 months or as long as a Ph.D.
  States that have shortages in finding employees to fill technical 
jobs can use funds they match under the State Student Incentive Program 
which is currently authorized and appropriated for providing student 
financial aid programs targeted to those fields.
  Or, as a last resort, we can do it without the Federal Government. We 
can do a program like is being done in my district. We have a community 
college that joined with a city that joined with several industries and 
put together a program on their own to train employees.
  I agree wholeheartedly with the gentleman from New York (Mr. Owens) 
that we should not be importing employees. We should be doing a better 
job of training them. I think that there are just better ways to do it 
than in this new amendment, and I would urge a ``no'' vote on the 
gentleman's amendment.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from New York (Mr. Owens).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.
  Mr. OWENS. Mr. Chairman, I demand a recorded vote, and pending that, 
I make the point of order that a quorum is not present.
  The CHAIRMAN. Pursuant to House Resolution 411, further proceedings 
on the amendment offered by the gentleman from New York (Mr. Owens) 
will be postponed.
  The point of no quorum is considered withdrawn.
  Are there any further amendments to title II?


                Amendment No. 19 Offered by Mr. Edwards

  Mr. EDWARDS. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 19 Offered by Mr. Edwards:
       In section 271 of the Higher Education Act of 1965, as 
     amended by the manager's amendment offered by the gentleman 
     from Pennsylvania, strike ``and'' at the end of paragraph 
     (2), strike the period at the end of paragraph (3) and insert 
     ``; and'', and after such paragraph (3) insert the following 
     new paragraph:
       ``(4) to provide competitive grants to States for 
     assistance in improving the managerial skills of school 
     principals and superintendents.
       In section 273(a) of the Higher Education Act of 1965, as 
     amended by the manager's amendment offered by the gentleman 
     from Pennsylvania, add at the end the following new 
     paragraphs:
       ``(7) Developing and implementing effective mechanisms to 
     provide principals and superintendents with advanced 
     managerial skills.
       ``(8) Creating opportunities for school principals and 
     superintendents to further their professional development by 
     providing advanced managerial skills training.


        Modification to Amendment No. 19 Offered by Mr. Edwards

  Mr. EDWARDS. Mr. Chairman, I ask unanimous consent that the amendment 
be modified in the new form at the desk, which I believe is acceptable 
to the committee chairman, subcommittee chairman and full committee 
ranking member.
  The CHAIRMAN. The Clerk will report the modification.
  The Clerk read as follows:

       Modification to amendment No. 19 offered by Mr. Edwards:
       In section 273(a) of the Higher Education Act of 1965, as 
     amended by the manager's amendment offered by the gentleman 
     from Pennsylvania, add at the end the following new 
     paragraphs:
       ``(7) Developing and implementing effective mechanisms to 
     provide principals and superintendents with advanced 
     managerial skills.
       ``(8) Creating opportunities for school principals and 
     superintendents to further their professional development by 
     providing advanced managerial skills training.

  The CHAIRMAN. Is there objection to the modification to the amendment 
offered by the gentleman from Texas (Mr. Edwards)?
  There was no objection.
  Mr. EDWARDS. Mr. Chairman, this bill wisely brings together State and 
local officials in a commitment to improving the quality of training 
for our Nation's teachers. I strongly support that effort.
  My amendment would expand the focus of job development grants to 
include management training for school superintendents and principals.
  I believe it is critical for the future of our children that we 
provide better management training to our school principals and 
superintendents, because they play a very significant role in the lives 
of our students, they play a vital role in our public school system in 
America.
  Mr. Chairman it is interesting if we look at dozens and dozens of 
cases of school turnarounds around the country where a school district 
had essentially the same amount of funds, the same students, the same 
teachers, and yet from one year to the next over a period of 2 years 
there was a significant turnaround and improvement of morale and 
student achievement. The one common bond we find in all of those cases 
is that there was a strong leader as a principal or as a superintendent 
that came into that school or district and used all of the many 
management skills necessary to lead an educational institution.
  It is no coincidence that corporations provide millions of dollars 
for management training for their mid-level and upper-level management 
personnel. And yet historically our Nation has provided but a pittance 
for management training of those principals and superintendents who 
oversee products, our children, far more important than a product of 
any corporation in this country.
  Providing professional development opportunities and management 
training will allow school administrators to improve their skills. 
Improved management at both the school and district level will have a 
positive effect on students, teachers and parents.
  Students will learn more effectively in a positive environment and 
teachers, like all employees anywhere, are happier and more effective 
under good leadership and strong management. Better trained 
administrators will improve the overall quality of our Nation's 
education system.
  I believe it makes sense to focus on management training in business, 
and I believe in this bill it will make sense to focus a small amount 
of resources on management training of our Nation's school 
superintendents and principals.
  For that reason, I urge the passage of this amendment.
  Mr. ROEMER. Mr. Chairman, will the gentleman yield?
  Mr. EDWARDS. I yield to the gentleman from Indiana.
  Mr. ROEMER. Mr. Chairman, I thank the gentleman from Texas (Mr. 
Edwards) for yielding.
  Mr. Chairman, I want to salute my good friend and classmate from the 
State of Texas for coming up with this idea on this amendment. I 
support this

[[Page H2546]]

amendment for three reasons: First of all because it expands the 
quality management to the very top level. It does not make any sense 
for us in business to say that the middle managers are going to get 
trained but then it is CEOs are not going to be eligible for that 
training.
  Secondly, I am going to support this amendment because I believe 
sharing this expertise is one of the most critical functions in 
professional development. We have an award where we have a local 
teacher who just won it, the Christa McAuliffe award. She came back 
from spending several days in California with fellow teachers and came 
back to school in South Bend, Indiana, and never had the time to share 
the knowledge and the good things that she gleaned from the other 
teachers with her fellow teachers in South Bend. We need to provide 
more opportunities for this quality enhancement in management.
  And lastly, because the world is changing so quickly, we have 
technology and software that many teachers who have been teaching for 
20 years are not keeping up with this technology and software 
improvement. We need to be able to get into the classrooms, whether 
they be principals or whether they be teachers, all of the people 
together working on professional development and enhancing the quality 
of teaching in our schools.
  So I salute the gentleman. I applaud him for this good amendment, and 
I encourage my colleagues to vote for it.

                              {time}  2130

  Mr. McKEON. Mr. Chairman, I move to strike the last word.
  Mr. Chairman, I want to commend the gentleman from Texas. He is not a 
member of the committee, but he has great appreciation for education, 
and he has put a lot of thought in this amendment, and I think it 
really strengthens the bill. I would be happy to accept it.
  Mr. EDWARDS. Mr. Chairman, if the gentleman will yield, I thank the 
Chairman and full committee chairman and the ranking member for their 
support and help and leadership on this issue.
  The CHAIRMAN. Is there further discussion on the amendment?
  The question is on the amendment, as modified, offered by the 
gentleman from Texas (Mr. Edwards).
  The amendment, as modified, was agreed to.


          Amendment No. 49 Offered by Mr. Miller of California

  Mr. MILLER of California. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 49 offered by Mr. Miller of California:
       Page 68, line 12, redesignate section 206 as section 207, 
     and before such line insert the following new section (and 
     conform the table of contents accordingly):

     SEC. 206. ACCOUNTABILITY FOR INSTITUTIONS OF HIGHER EDUCATION 
                   THAT PREPARE TEACHERS.

       Title II is further amended by adding at the end the 
     following new part:

  ``PART F--ACCOUNTABILITY FOR INSTITUTIONS OF HIGHER EDUCATION THAT 
                            PREPARE TEACHERS

     ``SEC. 281. DATA COLLECTION.

       ``(a) Data Required.--Within one year after the date of 
     enactment of the Higher Education Amendments of 1998, and 
     annually thereafter, the Secretary shall collect from each 
     State receiving funds under this Act and publish the 
     following information:
       ``(1) A description of the teacher licensing and 
     credentialing assessments used by each State, including any 
     and all assessments required in the subject matter area or 
     areas in which a teacher provides instruction.
       ``(2) The standards and criteria established by each State 
     that teachers or prospective teachers must meet in order to 
     receive a passing score on such assessments, including 
     information on the extent to which passing such examinations 
     is required in order for an individual to be a classroom 
     teacher.
       ``(3) Information on the extent to which teachers or 
     prospective teachers in each State are required to take 
     examinations or other assessments of their subject matter 
     knowledge in the area or areas in which they provide 
     instruction, the standards established for passing any such 
     assessments, and the extent to which teachers or prospective 
     teachers are required to receive a passing score on such 
     assessments in order to teach in specific subject areas or 
     grade levels.
       ``(4) Information on the extent to which each State waives 
     teacher credentialing and licensing requirements, including 
     the proportion of all teachers or prospective teachers in the 
     State for whom such licensing and credentialing requirements 
     have been waived and the distribution of such individuals 
     across high- and low-poverty schools and across grade levels 
     and subject areas.
       ``(5) The pass rate, for the preceding year, on all teacher 
     licensing and credentialing assessments for all individuals 
     in the State who took such assessments, disaggregated by the 
     institution of higher education from which the teacher 
     received his or her most recent degree.
       ``(b) Coordination.--The Secretary, to the extent 
     practicable, shall coordinate the information collected and 
     published under this part among States for individuals who 
     took State teacher licensing or credentialing assessments in 
     a State other than the State in which the individual received 
     his or her most recent degree.
       ``(c) Use of Local Agencies.--For each State in which there 
     are no State licensing or credentialing assessments, the 
     Secretary shall, to the extent practicable, collect data 
     comparable to the data described in paragraphs (1) through 
     (5) of subsection (a) from local educational agencies, 
     colleges and universities, or other entities that administer 
     such assessments to teachers or prospective teachers.

     ``SEC. 282. DATA DISSEMINATION.

       ``(a) Effective Date of Requirements.--The data required to 
     be distributed under this section shall be distributed 
     beginning within 3 years after the date of enactment of the 
     Higher Education Amendments of 1998 and annually thereafter.
       ``(b) Passing Rates.--Each institution of higher education 
     that has a course of study that prepares elementary and 
     secondary school teachers and receives Federal funds will 
     report and distribute widely, including through prominent 
     publications such as catalogs and promotional materials sent 
     to potential applicants, high school guidance counselors, and 
     the employers of graduates of such institutions, their pass 
     rate for graduates of the institution on each of the State's 
     initial teacher certification and licensing assessments for 
     the most recent year for which data are available at the time 
     of publication of such materials.
       ``(c) Identification of Institutions With Passing Rates 
     Below 70 Percent.--Each State shall submit to the Secretary a 
     list of institutions of higher education that prepare 
     teachers and receive Federal funds under this Act for which, 
     for the preceding year, less than 70 percent of graduates who 
     took any of the State's initial teacher licensing and 
     credentialing assessments failed to receive a passing score 
     on any such assessment. For each assessment, data shall be 
     disaggregated by the institution of higher education from 
     which the student received his or her most recent degree, 
     unless such degree was granted more than 3 years prior to the 
     date such assessment was administered.

     ``SEC. 283. STATE FUNCTIONS.

       ``(a) State Assessment.--In order to receive funds under 
     this Act, a State shall, no later than one year after the 
     date of enactment of the Higher Education Amendments of 1998, 
     have in place a procedure to identify low performing programs 
     of teacher preparation within institutions of higher 
     education. Such levels of performance shall be determined 
     solely by the State and may include criteria based upon 
     information collected pursuant to this part. Such assessment 
     shall be described in the report under section 281.
       ``(b) Termination of Eligibility.--Any institution of 
     higher education that offers a program of teacher preparation 
     in which the State has withdrawn its approval or terminated 
     its financial support due to the low performance of its 
     teacher preparation program based upon the State assessment 
     described in section (a)--
       ``(1) shall be ineligible for any funding for professional 
     development activities awarded by the Department of 
     Education; and
       ``(2) shall not be permitted to accept or enroll any 
     student that receives aid under title IV of this Act in its 
     teacher preparation program.

     ``SEC. 284. NEGOTIATED RULEMAKING.

       ``If the Secretary develops any regulations implementing 
     section 283(b)(2), the Secretary shall submit such proposed 
     regulations to a negotiated rulemaking process which shall 
     include representatives of States and institutions of higher 
     education for their review and comment.

  Mr. MILLER of California. Mr. Chairman, teacher preparation is the 
foundation of our entire educational system. All across the Nation, 
States and local school districts are raising the standards for what 
students should know and be able to do. If we are truly serious about 
helping all of these students meet these new standards, we must ensure 
that the teachers of the future have the requisite knowledge and skills 
to get them there.
  One important step in meeting that goal is to strengthen the quality 
of programs that prepare our prospective teachers. While many colleges 
and universities do a fine job of preparing teachers, others fall 
short, sometimes far short, in providing the prospective teachers with 
the education and training that they need. This bill presents an 
opportunity.
  In the committee, I offered an amendment which would have cut off

[[Page H2547]]

funding for teacher colleges that did not meet a certain test. That 
amendment was not accepted. Since that time, I have been spending time 
with the minority and other members of the committee to work on this 
amendment to see whether or not we can get it acceptable. I want to 
thank the gentleman from Pennsylvania (Mr. Goodling), the chairman, and 
the gentleman from California (Mr. McKeon), the subcommittee chairman, 
for all of their help and support on this amendment. I want to thank 
the gentleman from Tennessee (Mr. Ford) for all of his help with this 
amendment.
  We offer this amendment to try to encourage States and to increase, 
one, the information about their schools of education and how they are 
doing, and to make sure that that information is disseminated to 
prospective candidates to those schools so that they will understand 
when they go to that school what is the passage rate at that school; 
and also to disseminate to the policymakers within that State exactly 
what is the status of that school.
  I think this is very important because the Federal Government 
provides about $1.8 billion in Federal support to schools of education, 
that is grants, loans, and work studies, in 1995 and 1996 alone and 
does not count other Federal monies that flows to these schools.
  I think it is important that we know and the prospective students in 
these schools know what it is that they will get when they enroll in 
these schools. What my amendment would do, after much conversation and 
consultation with the minority and others, it would see to it that the 
schools of education would try and prepare the students who want to 
become teachers of the future to meet the quality standards set by 
those States; not quality standards set by the Federal Government, but 
quality standards set by those States.
  It is intended to spur the schools of education to undertake reforms 
that will upgrade the quality of the teacher preparation programs. It 
is designed to send a message to schools and to colleges and 
universities that they should raise the status of teacher education to 
a level similar to the programs of other professionals.
  We very often hear that we do not pay teachers enough or we do not 
treat them like professionals. But until such time as we have the 
quality standards to gain the confidence of the American public, it is 
likely that we will continue to underpay our teachers. I think that 
that is most unfortunate.
  This amendment is also designed to provide greater accountability for 
the money that the Federal Government spends. Why do we do this? We do 
this because teacher quality is important.
  Earlier this evening, I talked about how our committee held hearings 
and listened to constructive critics of the current system of higher 
education and teaching and education and all that went with it, and we 
heard a lot of evidence.
  One of the things we heard over and over and over, we heard it from 
conservatives and from liberals, from professionals in the field and 
from critics in the field, the teacher quality is arguably the most 
important factor outside of family affecting student achievement.
  I believe that this amendment directs both information to people who 
want to become teachers and that hold teacher colleges accountable 
should those States decide to do it.
  We ought to understand that teacher quality accounts, according to 
information given to our committee, for 43 percent of the variance in 
student achievement scores. Other information from the University of 
Tennessee indicates that poor teachers in early grades have serious and 
long-lasting effects on the achievement of our students.
  That is what this amendment is designed to remedy. It does it in a 
far different fashion than I offered it in committee. I think it is 
consistent with the concerns the minority had that the States be able 
to continue to keep control of these systems. It does it in a 
consistent way with actions that were seen taken in States like New 
York, Florida, Texas, California, Pennsylvania, and others that are all 
moving in this direction.
  It augments, I think, some very important steps that have already 
been taken in this legislation to increase the ability of this 
legislation to address teacher quality through student loan forgiveness 
for qualified teachers who teach in high-priority schools, grants to 
States for upgrading student teacher preparation, and certification 
systems and partnerships between colleges and school districts to 
provide intensive professional development program.
  The CHAIRMAN. The time of the gentleman from California (Mr. Miller) 
has expired.
  (By unanimous consent, Mr. Miller of California was allowed to 
proceed for 1 additional minute.)
  Mr. MILLER of California. Mr. Chairman, I do this because we have got 
to make sure that, for the quality education that we know our economy 
and American society and the world economy are going to demand of our 
children and the children, future graduates, of our systems of higher 
education, that we have got to provide them with quality education.
  No longer can we have a situation where barely a quarter of the 
applicants in New York who were seeking a teaching position on Long 
Island could pass the high school graduation English test. We can no 
longer accept that.
  Teachers deserve to have professional status. They deserve to have 
professional pay. I believe this goes a long way toward helping that 
situation out and providing some accountability for schools where 
taxpayers invest billions of dollars.
  Again, I want to thank the gentleman from California (Mr. McKeon), 
the subcommittee chairman, and the gentleman from Pennsylvania (Mr. 
Goodling), chairman, for all of their help and their effort and their 
counsel in coming to an agreement on this amendment.
  Mr. GOODLING. Mr. Chairman, I move to strike the last word.
  Mr. Chairman, I want to point out that the initial amendment that the 
gentleman from California (Mr. Miller) had offered I had considerable 
problems with. It has been dramatically modified, and I would like to 
explain that.
  I want to highlight what I believe represents a significant 
difference between this amendment and the earlier versions that were 
offered by the gentleman from California (Mr. Miller) during the full 
committee of this legislation.
  Specifically, this amendment does not include a minimum Federal pass 
rate standard. Under that proposal, institutions of higher education 
failing to meet this Federal standard would have automatically lost 
access to title IV student loan funding.
  I had several problems with that approach, because I do not support 
placing a Federal standard on States and institutions that would 
dictate when Federal funds would be terminated. I do not believe that 
Washington should set such a standard.
  Second, I thought the approach was too arbitrary given that nearly 
all States have different tests which they require for teacher 
licensure, and those that have similar tests often score them very 
differently. I believe that this approach would have, in effect, 
penalized those States with the hardest tests while at the same time 
provide a disincentive to States which, under our block grants, we have 
encouraged to strengthen our exams and focus more on content knowledge.
  I was concerned about terminating title IV student aid to an 
institution based on this arbitrary Federal standard. Under the new 
amendment, there is no Federal pass rate standard. Instead, States will 
implement procedures to identify low-performing teacher preparation 
programs based upon performance determined solely by the State.
  In the event a State ends financial assistance or approval for a low-
performing teacher preparation program, this amendment would also 
ensure that such institution would not be eligible for any Federal 
professional development funds from the U.S. Department of Education, 
nor would such programs be permitted to accept or enroll students in 
its teacher preparation program.
  The bottom line is that the Federal Government should not fund the 
teacher preparation program which the State itself does not support due 
to its poor quality and in which the State has terminated State funds.

[[Page H2548]]

  Let me make a point with respect to the information which States will 
have to collect and disseminate. It is my understanding that this 
information, such as pass rates for teacher license exams, is already 
collected by many States and institutions. However, this information is 
rarely provided to prospective students who are trying to make informed 
decisions regarding which program or institution to attend. By ensuring 
this information is made available, I believe there will be more 
competition between these programs resulting in better programs.
  With the modifications and with the changes, we accept the amendment 
offered by the gentleman from California (Mr. Miller).
  Mr. KILDEE. Mr. Chairman, I move to strike the requisite number of 
words.
  Mr. Chairman, this is certainly a better amendment than was offered 
in committee, but it does add elaborate and costly new comprehensive 
reporting requirements for States.
  Some States, under this amendment, would be required to provide 
information they do not currently collect. It also adds new substantial 
and costly reporting requirements for higher education institutions.
  This information, as it is required to be reported under the 
amendment, gives potentially misleading information about the 
performance of education programs and should not become the basis for 
terminating Federal or State support alone.
  Finally, the amendment appears to condition future eligibility for 
Federal student loans and grants for education programs based solely on 
the level of State financial support.
  The full effect of this amendment is not really known; however, it 
could have an adverse effect upon certain institutions such as 
historically black colleges and universities as well as others.
  It is also reminiscent, Mr. Chairman, of the State postsecondary 
review entities which H.R. 6 repeals. I recently received a letter from 
the American Council on Education which urges our vigorous opposition 
to this, quote, heavy-handed Federal intrusion.
  I certainly would like to work with the sponsor of this amendment, 
the gentleman from California (Mr. Miller), in conference to address 
his goal of improving the quality of teacher instruction, but I feel 
this is a defective device to achieve that.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from California (Mr. Miller).
  The amendment was agreed to.
  The CHAIRMAN. Are there further amendments to title II?
  The Clerk will designate title III.
  The text of title III is as follows:
                      TITLE III--INSTITUTIONAL AID

     SEC. 301. STRENGTHENING INSTITUTIONS.

       (a) Program Purpose; Use of Funds.--Section 311 (20 U.S.C. 
     1057) is amended--
       (1) in subsection (b)(2), by striking ``or'' at the end of 
     subparagraph (A) and inserting ``and'';
       (2) by amending paragraph (3) of subsection (b) to read as 
     follows:
       ``(3) Special consideration shall be given to applications 
     which propose, pursuant to the institution's plan, the use of 
     funds for integrating computer technology into institutional 
     facilities to create smart buildings.''; and
       (3) by adding at the end the following new subsections:
       ``(c) Authorized Activities.--Grants awarded under this 
     section shall be used for one or more of the following 
     activities:
       ``(1) purchase, rental, or lease of scientific or 
     laboratory equipment for educational purposes, including 
     instructional and research purposes;
       ``(2) construction, maintenance, renovation, and 
     improvement in classrooms, libraries, laboratories, and other 
     instructional facilities;
       ``(3) support of faculty exchanges, faculty development, 
     and faculty fellowships to assist in attaining advanced 
     degrees in their field of instruction;
       ``(4) purchase of library books, periodicals, and other 
     educational materials, including telecommunications program 
     material;
       ``(5) tutoring, counseling, and student service programs 
     designed to improve academic success;
       ``(6) funds management, administrative management, and 
     acquisition of equipment for use in strengthening funds 
     management;
       ``(7) joint use of facilities, such as laboratories and 
     libraries;
       ``(8) establishing or improving a development office to 
     strengthen or improve contributions from alumni and the 
     private sector;
       ``(9) establishing or improving an endowment fund;
       ``(10) creating or improving facilities for Internet or 
     other distance learning academic instruction capabilities, 
     including purchase or rental of telecommunications technology 
     equipment or services; and
       ``(11) other activities proposed in the application 
     submitted pursuant to subsection (c) that--
       ``(A) contribute to carrying out the purposes of this 
     section; and
       ``(B) are approved by the Secretary as part of the review 
     and acceptance of such application.
       ``(d) Endowment Fund Limitations.--
       ``(1) Portion of grant.--An institution may not use more 
     than 20 percent of its grant under this part for any fiscal 
     year for establishing or improving an endowment fund.
       ``(2) Matching required.--An institution that uses any 
     portion of its grant under this part for any fiscal year for 
     establishing or improving an endowment fund shall provide an 
     equal or greater amount for such purposes from non-Federal 
     funds.
       ``(3) Regulations.--The Secretary shall publish rules and 
     regulations specifically governing the use of funds for 
     establishing or improving an endowment fund.''.
       (b) Endowment Fund Definition.--Section 312 (20 U.S.C. 
     1058) is amended by adding at the end the following new 
     subsection:
       ``(g) Endowment Fund.--For the purpose of this part, the 
     term `endowment fund' means a fund that--
       ``(1) is established by State law, by an institution of 
     higher education, or by a foundation that is exempt from 
     Federal income taxation;
       ``(2) is maintained for the purpose of generating income 
     for the support of the institution; and
       ``(3) does not include real estate.''.
       (c) Duration of Grant.--Section 313 (20 U.S.C. 1059) is 
     amended--
       (1) in subsection (a), by inserting before the period at 
     the end the following: ``, except that no institution shall 
     be eligible to secure a subsequent 5-year grant award under 
     this part until two calendar years have elapsed since the 
     expiration of its most recent 5-year grant award''; and
       (2) in subsection (b), by inserting ``subsection (c) and a 
     grant under'' before ``section 354(a)(1)''.
       (d) Applications.--Title III is amended by striking section 
     314 (20 U.S.C. 1059a) and inserting the following:

     ``SEC. 314. APPLICATIONS.

       ``Each eligible institution desiring to receive assistance 
     under this part shall submit an application in accordance 
     with the requirements of section 351.''.
       (e) Program for Tribally Controlled Colleges and 
     Universities.--Section 316 (20 U.S.C. 1059c) is amended to 
     read as follows:

     ``SEC. 316. AMERICAN INDIAN TRIBALLY CONTROLLED COLLEGES AND 
                   UNIVERSITIES.

       ``(a) Program Authorized.--The Secretary shall provide 
     grants and related assistance to American Indian Tribal 
     Colleges and Universities to enable such institutions to 
     improve and expand their capacity to serve Indian students.
       ``(b) Definitions.--For the purposes of this section:
       ``(1) The term `Indian' has the same meaning as in section 
     2 of the Tribally Controlled Community Colleges Act of 1978.
       ``(2) The term `Indian tribe' has the same meaning as in 
     section 2 of such Act.
       ``(3) The term `Tribal College or University' has the 
     meaning given the term `tribally controlled college or 
     university' in section 2 of such Act, and includes an 
     institution listed in the Equity in Educational Land Grant 
     Status Act of 1994.
       ``(4) The term `institution of higher education' means an 
     institution of higher education as defined by section 
     101(a)(1) of this Act, except that subparagraph (A)(ii) of 
     such section shall not be applicable.
       ``(c) Authorized Activities.--Grants awarded under this 
     section shall be used by Tribal Colleges or Universities to 
     assist such institutions to plan, develop, undertake, and 
     carry out authorized activities. Such authorized activities 
     may include--
       ``(1) purchase, rental, or lease of scientific or 
     laboratory equipment for educational purposes, including 
     instructional and research purposes;
       ``(2) construction, maintenance, renovation, and 
     improvement in classrooms, libraries, laboratories, and other 
     instructional facilities, including purchase or rental of 
     telecommunications technology equipment or services;
       ``(3) support of faculty exchanges, faculty development, 
     and faculty fellowships to assist in attaining advanced 
     degrees in their field of instruction;
       ``(4) academic instruction in disciplines in which American 
     Indians are underrepresented;
       ``(5) purchase of library books, periodicals, and other 
     educational materials, including telecommunications program 
     material;
       ``(6) tutoring, counseling, and student service programs 
     designed to improve academic success;
       ``(7) funds management, administrative management, and 
     acquisition of equipment for use in strengthening funds 
     management;
       ``(8) joint use of facilities, such as laboratories and 
     libraries;
       ``(9) establishing or improving a development office to 
     strengthen or improve contributions from alumni and the 
     private sector;
       ``(10) establishing or enhancing a program of teacher 
     education designed to qualify students to teach in elementary 
     or secondary schools, with a particular emphasis on teaching 
     American Indian children and youth, that shall include, as 
     part of such program, preparation for teacher certification;
       ``(11) establishing community outreach programs which will 
     encourage American Indian elementary and secondary students 
     to develop the academic skills and the interest to pursue 
     postsecondary education;
       ``(12) establishing or improving an endowment fund; and
       ``(13) other activities proposed in the application 
     submitted pursuant to this subsection that--

[[Page H2549]]

       ``(A) contribute to carrying out the purposes of this 
     section; and
       ``(B) are approved by the Secretary as part of the review 
     and acceptance of such application.
       ``(d) Application Process.--
       ``(1) Institutional eligibility.--To be eligible to receive 
     assistance under this section, an institution shall be an 
     institution which--
       ``(A) is an eligible institution under section 312(b);
       ``(B) is eligible to receive assistance under the Tribally 
     Controlled Community College Assistance Act of 1978 (Public 
     Law 95-471); or
       ``(C) is eligible to receive funds under the Equity in 
     Educational Land Grant Status Act of 1994.
       ``(2) Application.--Any institution desiring to receive 
     assistance under this section shall submit an application to 
     the Secretary at such time, and in such manner, as the 
     Secretary may by regulation reasonably require. Each such 
     application shall include--
       ``(A) a 5-year plan for improving the assistance provided 
     by the Tribal College or university to Indian students, 
     increasing the rates at which Indian high school students 
     enroll in higher education, and increasing overall 
     postsecondary retention rates for Indian students; and
       ``(B) such enrollment data and other information and 
     assurances as the Secretary may require to demonstrate 
     compliance with subparagraphs (A) and (B) of paragraph (1).
       ``(3) Special rule.--For the purposes of this part, no 
     Tribal College or University which is eligible for and 
     receives funds under this section may concurrently receive 
     other funds under this part or part B.''.

     SEC. 302. HISTORICALLY BLACK COLLEGES AND UNIVERSITIES.

       (a) Uses of Funds.--Section 323(a) (20 U.S.C. 1062(a)) is 
     amended--
       (1) by redesignating paragraph (12) as paragraph (13); and
       (2) by inserting after paragraph (11) the following new 
     paragraph:
       ``(12) Establishing or improving an endowment fund.''.
       (b) Limitations.--Section 323(b) is amended by striking 
     paragraph (3) and inserting the following:
       ``(3)(A) An institution may not use more than 20 percent of 
     its grant under this part for any fiscal year for 
     establishing or improving an endowment fund.
       ``(B) An institution that uses any portion of its grant 
     under this part for any fiscal year for establishing or 
     improving an endowment fund shall provide an equal or greater 
     amount for such purposes from non-Federal funds.
       ``(C) The Secretary shall publish rules and regulations 
     specifically governing the use of funds for establishing or 
     improving an endowment fund.''.
       (c) Professional or Graduate Institutions.--
       (1) General authorization.--Section 326(a) (20 U.S.C. 
     1063b(a)) is amended--
       (A) in paragraph (1), by inserting ``in mathematics or the 
     physical or natural sciences'' after ``graduate education 
     opportunities''; and
       (B) in paragraph (2), by striking ``except that'' and all 
     that follows and inserting the following: ``, except that no 
     institution shall be required to match any portion of the 
     first $500,000 of its award from the Secretary. After 
     allocations are made to each eligible institution under the 
     funding rules provided in subsection (f), the Secretary shall 
     reallocate, on a pro rata basis, any amounts which remain 
     unallocated (by reason of the failure of an institution to 
     comply with the matching requirements of this paragraph) 
     among the institutions that have complied with such matching 
     requirement.''.
       (2) Use of funds.--Section 326(c) (20 U.S.C. 1063b(c)) is 
     amended by striking paragraphs (1) through (3) and inserting 
     the following:
       ``(1) purchase, rental or lease of scientific or laboratory 
     equipment for educational purposes, including instructional 
     and research purposes;
       ``(2) construction, maintenance, renovation, and 
     improvement in classroom, library, laboratory, and other 
     instructional facilities used exclusively for the purposes of 
     this section, including purchase or rental of 
     telecommunications technology equipment or services;
       ``(3) purchase of library books, periodicals, technical and 
     other scientific journals, microfilm, microfiche, and other 
     educational materials, including telecommunications program 
     materials;
       ``(4) scholarships, fellowships, and other financial 
     assistance for needy graduate and professional students to 
     permit their enrollment in and completion of the doctoral 
     degree in medicine, dentistry, pharmacy, veterinary medicine, 
     law, and the doctorate degree in the physical or natural 
     sciences, engineering, mathematics, or other scientific 
     disciplines in which African Americans are underrepresented;
       ``(5) establish or improve a development office to 
     strengthen and increase contributions from alumni and the 
     private sector;
       ``(6) assist in the establishment or maintenance of an 
     institutional endowment to facilitate financial independence 
     pursuant to section 331 of this title; and
       ``(7) funds and administrative management, and the 
     acquisition of equipment, including software, for use in 
     strengthening funds management and management information 
     systems.''.
       (3) Eligibility.--Section 326(e) (20 U.S.C. 1063b(e)) is 
     amended--
       (A) in paragraph (1)
       (i) by striking ``include--'' and inserting ``are the 
     following:'';
       (ii) by inserting ``and other qualified graduate programs'' 
     before the semicolon at the end of subparagraphs (F) through 
     (J);
       (iii) by striking ``and'' at the end of subparagraph (O);
       (iv) by inserting ``University'' after ``Jackson State'' in 
     subparagraph (P);
       (v) by striking the period at the end of such subparagraph 
     and inserting a semicolon; and
       (vi) by inserting after such subparagraph the following new 
     subparagraphs:
       ``(Q) Norfolk State University qualified graduate program; 
     and
       ``(R) Tennessee State University qualified graduate 
     program.''; and
       (B) by striking paragraphs (2) and (3) and inserting the 
     following:
       ``(2) Qualified graduate program.--For the purposes of this 
     section, the term `qualified graduate program' means a 
     graduate or professional program that provides an accredited 
     program of instruction in the physical or natural sciences, 
     engineering, mathematics, or other scientific discipline in 
     which African Americans are underrepresented and has students 
     enrolled in such program at the time of application for a 
     grant under this section.
       ``(3) Special rule.--Institutions that were awarded grants 
     under this section prior to October 1, 1998, shall continue 
     to receive such grants, subject to the availability of 
     appropriated funds, regardless of the eligibility of the 
     institutions described in subparagraphs (Q) and (R) of 
     paragraph (1).''; and
       (C) in paragraph (4), by inserting before the period at the 
     end the following: ``, except that the president or 
     chancellor of the institution may decide which graduate or 
     professional school or qualified graduate program will 
     receive funds under the grant in any one fiscal year''.
       (4) Funding rule.--Section 326(f) (20 U.S.C. 1063b(f)) is 
     amended--
       (A) by striking ``Of the amount appropriated'' and 
     inserting ``Subject to subsection (g), of the amount 
     appropriated'';
       (B) in paragraph (1)--
       (i) by striking ``$12,000,000'' and inserting 
     ``$26,000,000''; and
       (ii) by striking ``(A) through (E)'' and inserting ``(A) 
     through (P)''.
       (C) by striking paragraph (2) and inserting the following:
       ``(2) the next $1,000,000 in excess of $26,000,000 shall be 
     available for the purpose of making grants to institutions or 
     programs identified in subparagraphs (Q) and (R) of 
     subsection (e)(1); and
       ``(3) if the amount appropriated exceeds $27,000,000, the 
     Secretary shall develop a formula for making allotments of 
     such excess to each of the institutions or programs 
     identified in subparagraphs (A) through (R) using the 
     following elements:
       ``(A) the number of students enrolled in the eligible 
     institution's professional or graduate school, or qualified 
     graduate program which received funding under this section in 
     the previous year;
       ``(B) the average cost of education per student for all 
     full-time graduate or professional students (or the 
     equivalent) enrolled in the eligible professional school, 
     graduate school or doctoral students in the qualified 
     graduate program; and
       ``(C) the number of students who received their first 
     professional or doctoral degree at the professional or 
     graduate school or the qualified graduate program in the 
     preceding year for which the institution received funding 
     under this section.''.
       (5) Hold harmless rule.--Section 326 is further amended by 
     adding at the end the following new subsection:
       ``(g) Hold Harmless Rule.--Notwithstanding paragraphs (2) 
     and (3) of subsection (f), no institution or qualified 
     program identified in subsection (e)(1) that received a grant 
     for fiscal year 1998 and that is eligible to receive a grant 
     in a subsequent fiscal year shall receive a grant amount in 
     any such subsequent fiscal year that is less than the grant 
     amount received for fiscal year 1998, unless the amount 
     appropriated is not sufficient to provide such grant amounts 
     to all such institutions and programs.''.

     SEC. 303. MINORITY SCIENCE AND ENGINEERING IMPROVEMENT 
                   PROGRAM.

       (a) Amendment.--Title III (20 U.S.C. 1051) is amended--
       (1) by redesignating part D as part E; and
       (2) by inserting after part C the following new part:

     ``PART D--MINORITY SCIENCE AND ENGINEERING IMPROVEMENT PROGRAM

     ``SEC. 341. PROGRAM AUTHORIZED.

       ``The Secretary shall, in accordance with the provisions of 
     this part, carry out a program of making grants to 
     institutions of higher education that are designed to effect 
     long-range improvements in science and engineering education, 
     and improve support programs for minority students enrolled 
     in science and engineering programs at predominantly minority 
     institutions.

     ``SEC. 342. USE OF FUNDS.

       ``Funds appropriated for the purpose of this subpart may be 
     made available for--
       ``(1) providing needed services to groups of minority 
     institutions or providing training for scientists and 
     engineers from eligible minority institutions;
       ``(2) providing needed services to groups of institutions 
     serving significant numbers of minority students or providing 
     training for scientists and engineers from such institutions 
     to improve their ability to train minority students in 
     science or engineering;
       ``(3) assisting minority institutions to improve the 
     quality of preparation of their students for graduate work or 
     careers in science, mathematics, and technology;
       ``(4) improving access of undergraduate students at 
     minority institutions to careers in the sciences, 
     mathematics, and engineering;
       ``(5) improving access of minority students, particularly 
     minority women, to careers in the sciences, mathematics, and 
     engineering;
       ``(6) improving access for pre-college minority students to 
     careers in science, mathematics, and

[[Page H2550]]

     engineering through community outreach programs conducted 
     through colleges and universities eligible for support 
     through the Minority Science and Engineering Improvement 
     Programs;
       ``(7) disseminating activities, information, and 
     educational materials designed to address specific barriers 
     to the entry of minorities into science and technology, and 
     conducting activities and studies concerning the flow of 
     underrepresented ethnic minorities into scientific careers;
       ``(8) supporting curriculum models to encourage minority 
     student participation in research careers in science, 
     mathematics, and technology; and
       ``(9) improving the capability of minority institutions for 
     self-assessment, management, and evaluation of their science, 
     mathematics, and engineering programs and dissemination of 
     their results.

     ``SEC. 343. ELIGIBILITY FOR GRANTS.

       ``The Secretary may make grants under this part to minority 
     institutions (as defined in section 347), organizations, and 
     entities to enable them to carry out programs and activities 
     authorized by this part:
       ``(1)(A) institutions of higher education granting 
     baccalaureate degrees; and
       ``(B) institutions of higher education granting associate 
     degrees which--
       ``(i) have a curriculum including science or engineering 
     subjects;
       ``(ii) apply jointly with institutions described in 
     subparagraph (A); and
       ``(iii) have an articulation agreement with institutions 
     described in subparagraph (A) for its science or engineering 
     students; and
       ``(2) consortia of--
       ``(A) institutions which have a curriculum in science or 
     engineering;
       ``(B) graduate institutions which have a curriculum in 
     science or engineering;
       ``(C) Federal Education Research Centers;
       ``(D) research laboratories of, or under contract with, the 
     Department of Energy;
       ``(E) private organizations which have science or 
     engineering facilities; or
       ``(F) quasi-governmental entities which have a significant 
     scientific or engineering mission;
     to enable such institutions and consortia to carry programs 
     and activities authorized by this part.

     ``SEC. 344. GRANT APPLICATION.

       ``(a) Submission and Contents of Applications.--An eligible 
     applicant (as determined under section 343) that desires to 
     receive a grant under this part shall submit to the Secretary 
     an application therefor at such time or times, in such 
     manner, and containing such information as the Secretary may 
     prescribe by regulation. Such application shall set forth--
       ``(1) a program of activities for carrying out one or more 
     of the purposes described in section 342 in such detail as 
     will enable the Secretary to determine the degree to which 
     such program will accomplish such purpose or purposes; and
       ``(2) such other policies, procedures, and assurances as 
     the Secretary may require by regulation.
       ``(b) Approval Based on Likelihood of Progress.--The 
     Secretary shall approve an application only if the Secretary 
     determines that the application sets forth a program of 
     activities which are likely to make substantial progress 
     toward achieving the purposes of this part.

     ``SEC. 345. CROSS PROGRAM AND CROSS AGENCY COOPERATION.

       ``The Minority Science and Engineering Improvement Programs 
     shall cooperate and consult with other programs within the 
     Department and within Federal, State, and private agencies 
     which carry out programs to improve the quality of science, 
     mathematics, and engineering education.

     ``SEC. 346. ADMINISTRATIVE PROVISIONS.

       ``(a) Technical Staff.--The Secretary shall appoint, 
     without regard to the provisions of title 5 of the United 
     States Code governing appointments in the competitive 
     service, not less than one technical employees with 
     appropriate scientific and educational background to 
     administer the programs under this part who may be paid 
     without regard to the provisions of chapter 51 and subchapter 
     III of chapter 53 of such title relating to classification 
     and General Schedule pay rates.
       ``(b) Procedures for Grant Review.--The Secretary shall 
     establish procedures for reviewing and evaluating grants and 
     contracts made or entered into under such programs. 
     Procedures for reviewing grant applications, based on the 
     peer review system, or contracts for financial assistance 
     under this title may not be subject to any review outside of 
     officials responsible for the administration of the Minority 
     Science and Engineering Improvement Program.

     ``SEC. 347. DEFINITIONS.

       ``For the purpose of this part--
       ``(1) The term `minority institution' means an institution 
     of higher education whose enrollment of a single minority or 
     a combination of minorities (as defined in paragraph (2)) 
     exceeds 50 percent of the total enrollment. The Secretary 
     shall verify this information from the data on enrollments in 
     the higher education general information surveys (HEGIS) 
     furnished by the institution to the Office for Civil Rights, 
     Department of Education.
       ``(2) The term `minority' means American Indian, Alaskan 
     Native, Black (not of Hispanic origin), Hispanic (including 
     persons of Mexican, Puerto Rican, Cuban, and Central or South 
     American origin), Pacific Islander or other ethnic group 
     underrepresented in science and engineering.
       ``(3) The term `science' means, for the purpose of this 
     program, the biological, engineering, mathematical, physical, 
     behavioral, and social sciences, and history and philosophy 
     of science; also included are interdisciplinary fields which 
     are comprised of overlapping areas among two or more 
     sciences.''.

     SEC. 304. GENERAL PROVISIONS.

       (a) Applications for Assistance.--Section 351(a) (20 U.S.C. 
     1066(a)) is amended to read as follows:
       ``(a) Applications.--
       ``(1) Applications Required.--Any institution which is 
     eligible for assistance under this title shall submit to the 
     Secretary an application for assistance at such time, in such 
     form, and containing such information, as may be necessary to 
     enable the Secretary to evaluate its need for assistance. 
     Subject to the availability of appropriations to carry out 
     this title, the Secretary may approve an application for a 
     grant under this title only if the Secretary determines 
     that--
       ``(A) the application meets the requirements of subsection 
     (b);
       ``(B) the applicant is eligible for assistance in 
     accordance with the part of this title under which the 
     assistance is sought; and
       ``(C) the applicant's performance goals are sufficiently 
     rigorous as to meet the purposes of this title and the 
     performance objectives and indicators for this title 
     established by the Secretary pursuant to the Government 
     Performance and Results Act.
       ``(2) Preliminary applications.--In carrying out paragraph 
     (1), the Secretary shall develop a preliminary application 
     for use by eligible institutions applying under part A prior 
     to the submission of the principal application.''.
       (b) Contents of Applications.--Section 351(b) is amended--
       (1) in paragraph (5)(A), by inserting ``and the Government 
     Performance and Results Act'' after ``under this title''; and
       (2) in paragraph (6), by inserting before the semicolon the 
     following: ``, except that for purposes of section 316, 
     paragraphs (2) and (3) shall not apply''.
       (c) Waivers.--Section 352(a) (20 U.S.C. 1067(a)) is 
     amended--
       (1) by striking ``or'' at the end of paragraph (5);
       (2) by redesignating paragraph (6) as paragraph (7); and
       (3) by inserting after paragraph (5) the following new 
     paragraph:
       ``(6) that is a tribally controlled community college as 
     defined in the Tribally Controlled Community College Act of 
     1978; or''.
       (d) Application Review Process.--Section 353(a) (20 U.S.C. 
     1068(a)) is amended--
       (1) in paragraph (2), by striking ``Native American 
     colleges and universities'' and inserting ``Tribal Colleges 
     and Universities''; and
       (2) in paragraph (3)--
       (A) by striking subparagraph (A); and
       (B) by redesignating subparagraphs (B) and (C) as 
     subparagraphs (A) and (B), respectively.
       (e) Continuation Awards.--Part D of title III is amended by 
     inserting after section 354 (20 U.S.C. 1069) the following 
     new section:

     ``SEC. 355. CONTINUATION AWARDS.

       ``The Secretary shall make continuation awards under this 
     title for the second and succeeding years of a grant only 
     after determining that the recipient is making satisfactory 
     progress in carrying out the grant.''.
       (f) Authorization of Appropriations.--Section 360 (20 
     U.S.C. 1069f) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Authorizations.--
       ``(1) Part a.--(A) There are authorized to be appropriated 
     to carry out part A (other that sections 316), $135,000,000 
     for fiscal year 1999, and such sums as may be necessary for 
     each of the 4 succeeding fiscal years.
       ``(B) There are authorized to be appropriated to carry out 
     section 316, $10,000,000 for fiscal year 1999, and such sums 
     as may be necessary for each of the 4 succeeding fiscal 
     years.
       ``(2) Part b.--(A) There are authorized to be appropriated 
     to carry out part B (other than section 326), $135,000,000 
     for fiscal year 1999, and such sums as may be necessary for 
     each of the 4 succeeding fiscal years.
       ``(B) There are authorized to be appropriated to carry out 
     section 326, $35,000,000 for fiscal year 1999, and such sums 
     as may be necessary for each of the 4 succeeding fiscal 
     years.
       ``(3) Part c.--There are authorized to be appropriated to 
     carry out part C, $10,000,000 for fiscal year 1999, and such 
     sums as may be necessary for each of the 4 succeeding fiscal 
     years.
       ``(4) Part d.--There are authorized to be appropriated to 
     carry out Part D, $10,000,000 for fiscal year 1999, and such 
     sums as may be necessary for each of the 4 succeeding fiscal 
     years.''; and
       (2) by striking subsections (c), (d) and (e).

  The CHAIRMAN. Are there any amendments to title III.
  If not, the Clerk will designate title IV.
  The text of title IV is as follows:

                      TITLE IV--STUDENT ASSISTANCE

                       PART A--GRANTS TO STUDENTS

     SEC. 401. PELL GRANTS.

       (a) Extension of Authority.--Section 401(a) (20 U.S.C. 
     1070a(a)) is amended--
       (1) in paragraph (1)--
       (A) by striking ``September 30, 1998'' and inserting 
     ``September 30, 2004''; and
       (B) by striking the second sentence; and
       (2) in paragraph (2), by striking ``the disbursement system 
     required by paragraph (1)'' and inserting ``the disbursement 
     of Federal Pell Grants''.
       (b) Amount of Grant.--Section 401(b)(2)(A) is amended to 
     read as follows:
       ``(2)(A) The amount of the Federal Pell Grant for a student 
     eligible under this part shall be--
       ``(i) $4,500 for academic year 1999-2000,
       ``(ii) $4,700 for academic year 2000-2001,
       ``(iii) $4,900 for academic year 2001-2002,

[[Page H2551]]

       ``(iv) $5,100 for academic year 2002-2003, and
       ``(v) $5,300 for academic year 2003-2004,

     less an amount equal to the amount determined to be the 
     expected family contribution with respect to that student for 
     that year.''.
       (c) Relation of Maximum Grant to Tuition and Expenses.--
     Section 401(b)(3) is amended--
       (1) by striking ``$2,400'' each place it appears and 
     inserting ``$3,000''; and
       (2) by adding at the end the following new subparagraph:
       ``(C) An institution that charged only fees in lieu of 
     tuition as of January 31, 1997, may include in its 
     determination of tuition charged, fees that would normally 
     constitute tuition.''.
       (d) Dependent Care and Disability Related Expenses.--
     Section 401(b)(3)(B) is amended by striking ``$750'' and 
     inserting ``$1,500''.
       (e) Institutional Ineligibility Based on Default Rates.--
     Section 401 is amended by adding at the end the following new 
     subsection:
       ``(j) Institutional Ineligibility Based on Default Rates.--
       ``(1) In general.--No institution of higher education shall 
     be an eligible institution for purposes of this section if 
     such institution of higher education is ineligible to 
     participate in a loan program under this title as a result of 
     a final default rate determination made by the Secretary 
     under part B or D of this title, or both, after the final 
     publication of fiscal year 1996 cohort default rates.
       ``(2) Sanctions subject to appeal opportunity.--No 
     institution may be subject to the terms of this subsection 
     unless it has had the opportunity to appeal its default rate 
     determination under regulations issued by the Secretary for 
     the Federal Family Education Loan or Federal Direct Loan 
     Program, as applicable. This subsection shall not apply to an 
     institution that was not participating in the loan programs 
     authorized under part B or D of this title on the date of 
     enactment of the Higher Education Amendments of 1998, unless 
     the institution subsequently participates in the loan 
     programs.''.
       (f) Conforming Amendments.--
       (1) Section 400(a)(1) (20 U.S.C. 1070(a)(1)) is amended by 
     striking ``basic educational opportunity grants'' and 
     inserting ``Federal Pell Grants''.
       (2) The heading of subpart 1 of part A of title IV is 
     amended to read as follows:

                  ``Subpart 1--Federal Pell Grants''.

       (3) Section 401 is amended--
       (A) in the heading of the section, by striking ``basic 
     educational opportunity'' and inserting ``federal pell'';
       (B) in subsection (a)(3), by striking ``Basic grants'' and 
     inserting ``Grants'';
       (C) by striking ``basic grant'' each place it appears and 
     inserting ``Federal Pell Grant''; and
       (D) by striking ``basic grants'' each place it appears and 
     inserting ``Federal Pell Grants''.
       (4) Section 401(f)(3) is amended by striking ``Education 
     and Labor'' and inserting ``Education and the Workforce''.
       (5) Section 452(c) (20 U.S.C. 1087b(c)) is amended by 
     striking ``basic grants'' and inserting ``Federal Pell 
     Grants''.
       (6) Subsections (j)(2) and (k)(3) of section 455 (20 U.S.C. 
     1087e) are each amended by striking ``basic grants'' and 
     inserting ``Federal Pell Grants''.

     SEC. 402. FEDERAL TRIO PROGRAMS.

       (a) Program Authority; Authorization of Appropriations.--
       (1) Duration of grants.--Section 402A(b)(2) (20 U.S.C. 
     1070a-11(b)(2)) is amended--
       (A) by striking subparagraph (A);
       (B) by striking the period at the end of subparagraph (B) 
     and inserting ``; and'';
       (C) by redesignating subparagraph (B) as subparagraph (A); 
     and
       (D) by adding at the end the following new subparagraph:
       ``(B) grants under section 402H shall be awarded for a 
     period determined by the Secretary.''.
       (2) Minimum grants.--Section 402A(b)(3) is amended to read 
     as follows:
       ``(3) Minimum grants.--Unless the institution or agency 
     requests a smaller amount, individual grants under this 
     chapter shall be no less than--
       ``(A) $170,000 for programs authorized by sections 402D and 
     402G;
       ``(B) $180,000 for programs authorized by sections 402B and 
     402F; and
       ``(C) $190,000 for programs authorized by sections 402C and 
     402E.''.
       (3) Procedures for awarding grants and contracts.--
     Subsection (c) of section 402A is amended to read as follows:
       ``(c) Procedures for Awarding Grants and Contracts.--
       ``(1) Application requirements.--An eligible entity that 
     desires to receive a grant or contract under this chapter 
     shall submit an application to the Secretary in such manner 
     and form, and containing such information and assurances, as 
     the Secretary may reasonably require.
       ``(2) Prior experience.--In making grants under this 
     chapter, the Secretary shall consider each applicant's prior 
     experience of service delivery under the particular program 
     for which funds are sought. The level of consideration 
     given the factor of prior experience shall not vary from 
     the level of consideration given such factor during fiscal 
     years 1994 through 1997, except that grants made under 
     section 402H shall not be given prior experience 
     consideration.
       ``(3)  Order of awards; program fraud.--(A) Except with 
     respect to grants made under sections 402G and 402H and as 
     provided in subparagraph (B), the Secretary shall award 
     grants and contracts under this chapter in the order of the 
     scores received by the application for such grant or contract 
     in the peer review process required under section 110 and 
     adjusted for prior experience in accordance with paragraph 
     (2) of this subsection.
       ``(B) The Secretary is not required to provide assistance 
     to a program otherwise eligible for assistance under this 
     chapter, if the Secretary has determined that such program 
     has involved the fraudulent use of funds under this chapter.
       ``(4) Peer review process.--(A) The Secretary shall assure 
     that, to the extent practicable, members of groups 
     underrepresented in higher education, including African 
     Americans, Hispanics, Native Americans, Alaska Natives, Asian 
     Americans, Native American Pacific Islanders (including 
     Native Hawaiians), are represented as readers of applications 
     submitted under this chapter. The Secretary shall also assure 
     that persons from urban and rural backgrounds are represented 
     as readers.
       ``(B) The Secretary shall ensure that each application 
     submitted under this chapter is read by at least 3 readers 
     who are not employees of the Federal Government (other than 
     as readers of applications).
       ``(5) Number of applications for grants and contracts.--The 
     Secretary shall not limit the number of applications 
     submitted by an entity under any program authorized under 
     this chapter if the additional applications describe programs 
     serving different populations or campuses.
       ``(6) Coordination with other programs for disadvantaged 
     students.--The Secretary shall encourage coordination of 
     programs assisted under this chapter with other programs for 
     disadvantaged students operated by the sponsoring institution 
     or agency, regardless of the funding source of such programs. 
     The Secretary shall not limit an entity's eligibility to 
     receive funds under this chapter because such entity sponsors 
     a program similar to the program to be assisted under this 
     chapter, regardless of the funding source of such program. 
     The Secretary shall permit the Director of a program 
     receiving funds under this chapter to administer one or more 
     additional programs for disadvantaged students operated by 
     the sponsoring institution or agency, regardless of the 
     funding sources of such programs.
       ``(7)  Application status.--The Secretary shall inform each 
     entity operating programs under this chapter regarding the 
     status of their application for continued funding at least 8 
     months prior to the expiration of the grant or contract. The 
     Secretary, in the case of an entity that is continuing to 
     operate a successful program under this chapter, shall ensure 
     that the start-up date for a new grant or contract for such 
     program immediately follows the termination of preceding 
     grant or contract so that no interruption of funding occurs 
     for such successful reapplicants. The Secretary shall inform 
     each entity requesting assistance under this chapter for a 
     new program regarding the status of their application at 
     least 8 months prior to the proposed startup date of such 
     program.''.
       (4) Authorization of appropriations.--Section 402A(f) is 
     amended--
       (A) by striking ``$650,000,000 for fiscal year 1993'' and 
     inserting ``$800,000,000 for fiscal year 1999''; and
       (B) by striking everything after the first sentence.
       (b) Talent Search.--Section 402B(b) (20 U.S.C. 1070a-12(b)) 
     is amended--
       (1) by striking paragraph (4) and inserting the following:
       ``(4) guidance on and assistance in secondary school 
     reentry, entry to general educational development (GED) 
     programs, other alternative education programs for secondary 
     school dropouts, or postsecondary education;''; and
       (2) in paragraph (8), by striking ``parents'' and inserting 
     ``families''.
       (c) Upward Bound.--Section 402C (20 U.S.C. 1070a-13) is 
     amended--
       (1) in subsection (b)--
       (A) in paragraph (2), by striking ``personal counseling'' 
     and inserting ``counseling and workshops'';
       (B) in paragraph (6)--
       (i) by inserting ``work-study and other'' before 
     ``activities''; and
       (ii) by inserting before the semicolon at the end the 
     following: ``, including careers requiring a postsecondary 
     degree'';
       (C) in paragraph (9), by striking ``and'' at the end;
       (D) in paragraph (10), by striking ``through (9)'' and 
     inserting ``through (10)''; and
       (E) by redesignating paragraph (10) as paragraph (11) and 
     by inserting after paragraph (9) the following new paragraph:
       ``(10) special services to enable veterans to make the 
     transition to postsecondary education; and''; and
       (2) in subsection (c), by inserting ``, other than a 
     project a majority of the participants in which are 
     veterans,'' after ``this chapter''.
       (d) Student Support Services.--Section 402D(c)(6) (20 
     U.S.C. 1070a-14(c)(6)) is amended by inserting before the 
     period at the end the following: ``and minimize the student's 
     loan burden''.
       (e) Postbaccalaureate Achievement Program.--Section 402E 
     (20 U.S.C. 1070a-15) is amended--
       (1) in subsection (c)(3), by inserting ``or accepted in a 
     graduate program'' after ``degree program''; and
       (2) in subsection (e)(1), by striking ``$2,400'' and 
     inserting ``$3,200''.
       (f) Staff Development Activities.--Section 402G(b) (20 
     U.S.C. 1070a-17(b)) is amended by inserting after paragraph 
     (3) the following new paragraph:
       ``(4) The use of appropriate educational technology in the 
     operation of projects assisted under this chapter.''.
       (g) Evaluation for Project Improvement.--Section 402H(b) 
     (20 U.S.C. 1070a-18(b)) is amended by adding at the end the 
     following new sentence: ``Such evaluations shall also 
     investigate the effectiveness of alternative and innovative 
     methods within Federal TRIO programs of increasing access to, 
     and retention of, students in postsecondary education.''.

[[Page H2552]]

     SEC. 403. NATIONAL EARLY INTERVENTION AND PARTNERSHIP 
                   PROGRAM.

       Section 404G (20 U.S.C. 1070a-27) is amended by striking 
     ``1993'' and inserting ``1999''.

     SEC. 404. REPEALS.

       (a) Repeals of Subpart 2 Provisions.--The following 
     provisions of subpart 2 of part A of title IV are repealed:
       (1) Chapter 3 (20 U.S.C. 1070a-31 et seq.).
       (2) Chapter 4 (20 U.S.C. 1070a-41 et seq.).
       (3) Chapter 5 (20 U.S.C. 1070a-51 et seq.).
       (4) Chapter 6 (20 U.S.C. 1070a-61 et seq.).
       (5) Chapter 7 (20 U.S.C. 1070a-71 et seq.).
       (6) Chapter 8 (20 U.S.C. 1070a-81 et seq.).
       (b) Subpart 8.--Subpart 8 of part A of title IV (20 U.S.C. 
     1070f) is repealed.
       (c) Conforming Amendment.--Section 400(b) (20 U.S.C. 
     1070(b)) is amended by striking ``subparts 1 through 8'' and 
     inserting ``subparts 1 through 6''.

     SEC. 405. ESTABLISHMENT OF NEW PROGRAMS.

       Subpart 2 of part A of title IV is amended by inserting 
     after chapter 2 (20 U.S.C. 1070a-81) the following new 
     chapters:

                  ``CHAPTER 3--HIGH HOPES FOR COLLEGE

           ``Subchapter A--21st Century Scholar Certificates

     ``SEC. 406A. 21ST CENTURY SCHOLAR CERTIFICATES.

       ``(a) Findings.--The Congress makes the following findings:
       ``(1) Among low-income students who, despite high test 
     scores, are not planning on attending college, nearly 60 
     percent cite an inability to afford school as the reason.
       ``(2) About 80 percent of our 12th graders who are 
     interested in continuing their education after high school go 
     on to college if their parents read materials about financial 
     aid, compared to only 55 percent of such students if their 
     parents do not read this material.
       ``(3) In 1996, the American Council on Education found that 
     the public overestimated the tuition of public 2-year 
     colleges by about 3 times the actual average tuition, of 
     public 4-year colleges by over twice the actual average 
     tuition, and of private 4-year universities by almost one-
     third more than the actual average tuition.
       ``(4) There is a need for, and a significant benefit from, 
     providing students, and through them their parents, with 
     information about the variety of Federal student financial 
     assistance programs, such as Pell grants, Federal work-study 
     and loans, and the AmeriCorps Education Awards that make 
     college more affordable than ever before.
       ``(b) Authority.--
       ``(1) The Secretary, using funds appropriated under section 
     407H(a) of this Act--
       ``(A) shall ensure that certificates, to be known as 21st 
     Century Scholar Certificates, are provided to all students 
     participating in projects under chapter 2; and
       ``(B) may, as practicable, ensure that such certificates 
     are provided to all students in grades 6 through 12 who 
     attend schools at which at least 50 percent of the students 
     enrolled are eligible for free or reduced-price lunch.
       ``(2) A 21st Century Scholar Certificate shall be 
     personalized for each student and indicate the amount of 
     Federal financial aid for college for which a student may be 
     eligible.

                ``Subchapter B--High Hopes Partnerships

     ``SEC. 407A. PURPOSE.

       ``It is the purpose of this chapter to encourage and 
     prepare students in low-income communities, beginning not 
     later than the 7th grade, to prepare for, enter, and 
     successfully complete college by assisting college-school-
     community partnerships to--
       ``(1) provide in-school and on-campus early college 
     awareness activities to these students and their parents;
       ``(2) ensure ongoing adult guidance and other support to 
     these students;
       ``(3) provide useful, early information to these students 
     and their parents on the need for, options related to, and 
     financing (including the availability of financial 
     assistance) of a college education; and
       ``(4) help ensure that these students have access to 
     rigorous core courses, such as algebra and geometry, that 
     prepare them for college.

     ``SEC. 407B. GRANTS.

       ``(a) Grants Authorized.--From funds appropriated under 
     section 407H(a), the Secretary shall make grants to college-
     school-community partnerships for activities under section 
     407D.
       ``(b) Eligible Partnership.--For purposes of this chapter, 
     an eligible partnership shall include--
       ``(1) one or more local educational agencies acting on 
     behalf of--
       ``(A) one or more participating schools; and
       ``(B) the public secondary schools that students from these 
     schools would normally attend;
       ``(2) one or more degree granting institutions of higher 
     education; and
       ``(3) at least two community organizations or entities, 
     such as businesses, professional associations, community-
     based organizations, or other public or private agencies or 
     organizations.
       ``(c) Definitions.--For the purpose of this chapter--
       ``(1) `participating school' means a public school in 
     which--
       ``(A) there is a 7th grade;
       ``(B) one or more cohorts of students receive services 
     under this chapter; and
       ``(C) at least 50 percent of the students enrolled are 
     eligible for free or reduced-price lunch; and
       ``(2) `cohort of students' means--
       ``(A) an entire grade level of students in a participating 
     school; or
       ``(B) if the partnership determines that it would promote 
     the effectiveness of a project, an entire grade level of 
     students, beginning not later than the 7th grade, who reside 
     in public housing as defined in section 3(b)(1) of the United 
     States Housing Act of 1937.
       ``(d) Duration.--Each grant awarded under this chapter 
     shall be for a 6-year period.
       ``(e) Cost Sharing.--
       ``(1) Federal funds shall provide no more than 80 percent 
     of the cost of the project in the first year, 70 percent of 
     the cost in the second year, 60 percent of the cost in the 
     third year, 50 percent of the cost in the fourth year, 40 
     percent of the cost in the fifth year, and 30 percent of the 
     cost in the sixth year.
       ``(2) The non-Federal share of grants awarded under this 
     chapter may--
       ``(A) be in cash or in kind, fairly evaluated, including 
     services, supplies, or equipment; and
       ``(B) include the non-Federal share of work-study grants 
     under part C of title IV of this Act awarded to students who 
     serve as tutors or mentors in projects under this chapter.
       ``(3) The Secretary may waive the cost sharing requirement 
     described in paragraph (1) for any eligible partnership that 
     demonstrates to the satisfaction of the Secretary an 
     extraordinary hardship that prevents compliance with that 
     requirement.
       ``(f) Equitable Geographic Distribution.--To the extent 
     possible, the Secretary shall award grants under this chapter 
     in a manner that achieves an equitable geographic 
     distribution of those grants.
       ``(g) Priority Awards Under Chapter 2.--Before making 
     grants under this chapter for fiscal year 1999, the Secretary 
     shall, as appropriate, make awards to recipients eligible for 
     continuation awards under chapter 2 of subpart 2 of this 
     title as it was in effect prior to the enactment of the 
     Higher Education Amendments of 1998.

     ``SEC. 407C. GRANT APPLICATION; PREFERENCES.

       ``(a) Application Required.--An eligible partnership 
     desiring to receive a grant under this chapter shall submit 
     an application to the Secretary, in such form and 
     containing such information, as the Secretary may require.
       ``(b) Application Contents.--Each application shall 
     include--
       ``(1) the name of each partner and a description of its 
     responsibilities, including the designation of either an 
     institution of higher education or a local educational agency 
     as the fiscal agent for the partnership;
       ``(2) a description of the need for the project, including 
     a description of how the project will build on existing 
     services and activities, if any;
       ``(3) a listing of the human, financial (other than funds 
     under this chapter), and other resources that each member of 
     the partnership will contribute to the partnership, and a 
     description of the efforts each member of the partnership 
     will make in seeking additional resources;
       ``(4) a description of how the project will operate, 
     including how grant funds will be used to meet the purpose of 
     this chapter;
       ``(5) a description of how services will be coordinated 
     with, and will complement and enhance, services received by 
     participating schools and students under other related 
     Federal and non-Federal programs, including programs under 
     title I, part A of title VII, and part 1 of title X of the 
     Elementary and Secondary Education Act of 1965, the School-
     to-Work Opportunities Act of 1994, section 402 of this Act, 
     and the Individuals with Disabilities Education Act;
       ``(6) a description of how the partnership will support and 
     continue the services under this chapter after the grant has 
     expired;
       ``(7) an assurance from each local educational agency using 
     funds under this chapter that--
       ``(A) at least 50 percent of the students enrolled in each 
     participating school are eligible for free or reduced-price 
     lunch;
       ``(B) its aggregate expenditures per student for activities 
     described in this chapter will not be reduced from the level 
     of such expenditures in the year prior to the grant; and
       ``(C) someone at each participating school will be 
     designated as the primary point of contact for the 
     partnership;
       ``(8) an assurance that participating students will have 
     access to rigorous core academic courses that reflect 
     challenging State or local academic standards; and
       ``(9) an assurance that members will provide the 
     performance information required by the Secretary, which 
     would be used to base continuation of the grant.
       ``(c) Preferences.--In reviewing applications under this 
     chapter, the Secretary shall give preference to projects 
     that--
       ``(1) will serve participating schools in which at least 75 
     percent of the students enrolled are eligible for free or 
     reduced-price lunch;
       ``(2) provide a commitment from non-Federal sources to pay 
     all or part of the cost of college, through tuition 
     assistance or guarantees (not already available), such as 
     `last-dollar grants', for participating students; and
       ``(3) hold participating students responsible for school or 
     community service and high academic performance.

     ``SEC. 407D. PROGRAM REQUIREMENTS; USES OF FUNDS.

       ``(a) Program Requirements.--Projects under this chapter 
     shall--
       ``(1) have a program coordinator who is either full-time or 
     whose primary responsibility is the project under this 
     chapter;
       ``(2) provide services to at least one cohort of students, 
     beginning not later than the 7th grade;
       ``(3) ensure that the services authorized under this 
     chapter are provided through the 12th grade to students in 
     the cohort, including students who attend another 
     participating school or a secondary school identified under 
     section 407B(b)(1)(B);

[[Page H2553]]

       ``(4) include activities and information that foster and 
     improve parent involvement in promoting postsecondary 
     education for their children, including the provision of 
     useful early information on the advantages of a college 
     education, academic admissions requirements, and the need to 
     take core courses, admissions and achievement tests, 
     application procedures, college costs and options, and the 
     availability of student financial aid;
       ``(5) include academic counseling, career awareness, and 
     tutoring or mentoring from trained personnel, as well as 
     other student support services that enable students to 
     succeed academically and apply for, enter, and complete 
     college;
       ``(6) include training in promoting early college awareness 
     for classroom teachers, guidance counselors, and staff of the 
     schools involved in the project; faculty and program 
     personnel in participating institutions of higher education; 
     and participating mentors and tutors;
       ``(7) include activities on college campuses and enrichment 
     activities associated with postsecondary education; and
       ``(8) include arrangements that ensure that all 
     participating students have access to rigorous core courses 
     that reflect challenging State or local academic standards 
     and that prepare them for college.
       ``(b) Use of Funds.--In addition to the activities 
     described in subsection (a), a recipient of funds under this 
     chapter may use them--
       ``(1) where necessary and appropriate to ensure active 
     participation, to pay stipends to participating students and 
     their mentors;
       ``(2) where necessary and appropriate to ensure active 
     participation, to pay transportation costs for participants 
     to attend project-sponsored activities;
       ``(3) to provide out-of-school and summer activities 
     related to the project;
       ``(4) for project evaluation; and
       ``(5) to recognize the responsibility and achievement of 
     participating students through ceremonies, awards, and other 
     means.

     ``SEC. 407E. SERVICES FOR STUDENTS ATTENDING PRIVATE SCHOOLS.

       ``A local educational agency that participates in an 
     eligible partnership shall provide services supported with 
     Federal funds under this chapter on an equitable basis, 
     consistent with section 14503 of Elementary and Secondary 
     Education Act of 1965, to students in private schools that--
       ``(1) have a 7th grade;
       ``(2) have students at least 50 percent of whom are 
     eligible for free or reduced-price lunch; and
       ``(3) are located in the normal attendance area of a 
     participating school.

     ``SEC. 407F. EVALUATION.

       ``In order to improve the operation of the program assisted 
     under this chapter, the Secretary shall, with funds 
     appropriated under section 407H(a), make grants to, and enter 
     into contracts and cooperative agreements with, institutions 
     of higher education and other public and private institutions 
     and organizations to evaluate the effectiveness of the 
     program assisted under this chapter and, as appropriate, 
     disseminate such results.

     ``SEC. 407G. PEER REVIEW.

       ``The Secretary shall use a peer review process to review 
     applications under this chapter and make recommendations for 
     funding to the Secretary.

     ``SEC. 407H. AUTHORIZATION OF APPROPRIATIONS.

       ``(a) Authorization of Appropriation.--There are authorized 
     to be appropriated $140,000,000 for fiscal year 1999 and such 
     sums as may be necessary for each of the 5 succeeding fiscal 
     years to carry out this chapter.
       ``(b) Reservation for Technical Assistance and Peer 
     Review.--From the amount appropriated under subsection (a) 
     for any fiscal year, the Secretary may reserve up 0.5 percent 
     of that amount to obtain additional qualified readers and 
     additional staff to review applications, to increase the 
     level of oversight monitoring, to support impact studies, 
     program assessments and reviews, and to provide technical 
     assistance to potential applicants and current grantees.

             ``CHAPTER 4--FRANK TEJEDA SCHOLARSHIP PROGRAM

     ``SEC. 408A. STATEMENT OF PURPOSE.

       ``It is the purpose of this chapter to establish a Frank 
     Tejeda Scholarship Program to recruit and train teachers who 
     are proficient in both Spanish and English and who show 
     promise of academic achievement.

     ``SEC. 408B. SCHOLARSHIPS AUTHORIZED.

       ``(a) Program Authority.--The Secretary is authorized, in 
     accordance with the provisions of this chapter, to award 
     scholarships to individuals consistent with the purposes of 
     this chapter.
       ``(b) Tejeda Scholars.--Individuals awarded scholarships 
     under this chapter shall be known as `Tejeda Scholars'.

     ``SEC. 408C. ALLOCATION AMONG STATES.

       ``(a) Allocation Formula.--From the sums appropriated 
     pursuant to the authority of section 408H for any fiscal 
     year, the Secretary shall allocate to each State an amount 
     equal to $5,000 multiplied by the number of scholarships 
     determined by the Secretary to be available to such State in 
     accordance with subsection (b).
       ``(b) Number of Scholarships Available.--The number of 
     scholarships to be made available in a State for any fiscal 
     year shall bear the same ratio to the number of scholarships 
     made available to all States as the State's population ages 5 
     through 17 bears to the population ages 5 through 17 in all 
     the States, except that not less than 10 scholarships shall 
     be made available to any State.
       ``(c) Use of Census Data.--For the purpose of this section, 
     the population ages 5 through 17 in a State and in all the 
     States shall be determined by the most recently available 
     data, satisfactory to the Secretary, from the Bureau of the 
     Census. The Bureau of the Census shall produce and publish 
     intercensal data for Puerto Rico and the other territories.

     ``SEC. 408D. ELIGIBILITY OF SCHOLARS.

       ``(a) High School Graduation or Equivalent and Admission to 
     Institution Required.--Each student awarded a scholarship 
     under this chapter shall--
       ``(1) be--
       ``(A) a low-income individual, as that term is defined in 
     section 402A(g)(2) of this title; or
       ``(B) an individual who is eligible for a Pell Grant under 
     subpart 1 of this part;
       ``(2) be a citizen of the United States;
       ``(3) be a resident of the State in which he or she 
     applies;
       ``(4) be enrolled or accepted for enrollment on a full- or 
     part-time basis, at a graduate or undergraduate level, in an 
     institution of higher education that has an accredited 
     teacher preparation program;
       ``(5) have demonstrated proficiency in the English and 
     Spanish languages, as certified by the applicant's academic 
     institution; and
       ``(6) have agreed, upon graduation from such program--
       ``(A) to serve no less than one year for each year of 
     scholarship assistance, but no fewer than two years of 
     service in total, as a teacher in a public elementary or 
     secondary school in which there is a demonstrated need for 
     Spanish-speaking teachers and professionals, as determined by 
     the Secretary;
       ``(B) to complete such service within 6 years of 
     graduation; and
       ``(C) that if the student is unable to complete such 
     service, the student will, except as provided in subsection 
     (c), repay the Secretary the total amount, or a pro rata 
     amount of the scholarship received under this chapter in 
     proportion to the amount of service completed, plus interest 
     and collection costs in the same manner as repayment of a 
     student loan made under part D of this title.
       ``(b) Selection Based on Promise of Academic Achievement.--
     Each student awarded a scholarship under this chapter must 
     demonstrate outstanding academic achievement and show promise 
     of continued academic achievement, as certified by the 
     student's academic institution.
       ``(c) Exception to Repayment Obligation.--
       ``(1) Deferral during certain periods.--A recipient shall 
     not be considered in violation of the agreement entered into 
     pursuant to subsection (a)(4)(C) during any period in which 
     the recipient--
       ``(A) is pursuing a full-time course of study related to 
     the field of teaching at an eligible institution;
       ``(B) is serving, not in excess of 3 years, as a member of 
     the armed services of the United States;
       ``(C) is temporarily totally disabled for a period of time 
     not to exceed 3 years as established by sworn affidavit of a 
     qualified physician;
       ``(D) is unable to secure employment for a period not to 
     exceed 12 months by reason of having to care for a spouse, 
     child, parent, or immediate family member who is disabled;
       ``(E) is seeking and unable to find full-time employment 
     for a single period not to exceed 12 months;
       ``(F) is seeking and unable to find full-time employment as 
     a teacher in a public or private nonprofit preschool, 
     elementary or secondary school, or education program for a 
     single period not to exceed 27 months; or
       ``(G) satisfies the provisions of additional repayment 
     exceptions that may be prescribed by the Secretary in 
     regulations issued pursuant to this subpart.
       ``(2) Forgiveness if permanently totally disabled.--A 
     recipient shall be excused from repayment of any scholarship 
     assistance received under this chapter if the recipient 
     becomes permanently totally disabled as established by sworn 
     affidavit of a qualified physician.

     ``SEC. 408E. SELECTION OF SCHOLARS.

       ``(a) Establishment of Criteria.--The Secretary shall 
     establish criteria for the selection of scholars under this 
     chapter that meet the requirements of section 408D.
       ``(b) Timing of Selection.--The selection process shall be 
     completed, and the awards made, no later than May 1 of the 
     academic year preceding the academic year for which the award 
     will be used.

     ``SEC. 408F. STIPENDS AND SCHOLARSHIP CONDITIONS.

       ``(a) Amount of Award.--Each student awarded a scholarship 
     under this chapter shall receive a stipend of $5,000 for the 
     academic year of study for which the scholarship is awarded, 
     except that in no case shall the total amount of financial 
     aid awarded to such student exceed such student's total cost-
     of-attendance.
       ``(b) Use of Award.--The State educational agency shall 
     establish procedures to assure that a scholar awarded a 
     scholarship under this chapter pursues a course of study at 
     an institution of higher education.

     ``SEC. 408G. CONSTRUCTION OF NEEDS PROVISIONS.

       ``Notwithstanding section 471, nothing in this chapter, or 
     any other Act, shall be construed to permit the receipt of a 
     scholarship under this chapter to be counted for any needs 
     test in connection with the awarding of any grant or the 
     making of any loan under this Act or any other provision of 
     Federal law relating to educational assistance.

     ``SEC. 408H. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated for this chapter 
     $5,000,000 for fiscal year 1998 and such sums as may be 
     necessary for each of the 4 succeeding fiscal years.

                  ``CHAPTER 5--CAMPUS-BASED CHILD CARE

     ``SEC. 410A. CAMPUS-BASED CHILD CARE.

       ``(a) Program Authorized.--

[[Page H2554]]

       ``(1) Authority.--The Secretary may award grants to 
     institutions of higher education to assist the institutions 
     in providing campus-based child care services to low-income 
     students.
       ``(2) Amount of grants.--
       ``(A) In general.--The amount of a grant awarded to an 
     institution of higher education under this section for a 
     fiscal year shall not exceed 1 percent of the total amount of 
     all Federal Pell Grant funds awarded to students enrolled at 
     the institution of higher education for the preceding fiscal 
     year.
       ``(B) Minimum.--A grant under this section shall be awarded 
     in an amount that is not less than $10,000.
       ``(3) Duration and payments.--
       ``(A) Duration.--The Secretary shall award a grant under 
     this section for a period of 3 years.
       ``(B) Payments.--Subject to paragraph (2), the Secretary 
     shall make annual grant payments under this section.
       ``(4) Eligible institutions.--An institution of higher 
     education shall be eligible to receive a grant under this 
     section for a fiscal year if the total amount of all Federal 
     Pell Grant funds awarded to students enrolled at the 
     institution of higher education for the preceding fiscal year 
     equals or exceeds $350,000.
       ``(5) Use of funds.--Grant funds under this section shall 
     be used by an institution of higher education to support or 
     establish a campus-based child care program serving the needs 
     of low-income students enrolled at the institution of higher 
     education.
       ``(6) Definition of low-income student.--For the purpose of 
     this section, the term `low-income student' means a student 
     who is eligible to receive a Federal Pell Grant for the 
     fiscal year for which the determination is made.
       ``(b) Applications.--An institution of higher education 
     desiring a grant under this section shall submit an 
     application to the Secretary at such time, in such manner, 
     and accompanied by such information as the Secretary may 
     require. Each application shall--
       ``(1) demonstrate that the institution is an eligible 
     institution described in subsection (a)(4);
       ``(2) specify the amount of funds requested;
       ``(3) demonstrate the need of low-income students at the 
     institution for campus-based child care services by including 
     in the application student demographics and other relevant 
     data;
       ``(4) identify the resources the institution will draw upon 
     to support the child care program and the participation of 
     low-income students in the program, such as accessing social 
     services funding, using student activity fees to help pay the 
     costs of child care, using resources obtained by meeting the 
     needs of parents who are not low-income students, accessing 
     foundation, corporate, or other institutional support, 
     and demonstrating that the use of the resources will not 
     result in increases in student tuition;
       ``(5) contain an assurance that the institution will meet 
     the child care needs of low-income students through the 
     provision of services, or through a contract for the 
     provision of services;
       ``(6) provide a timeline, covering the period from receipt 
     of the grant through the provision of the child care 
     services, delineating the specific steps the institution will 
     take to achieve the goal of providing low-income students 
     with child care services;
       ``(7) specify any measures the institution will take to 
     assist low-income students with child care during the period 
     before the institution provides child care services;
       ``(8) include a plan for identifying resources needed for 
     the child care services, including space in which to provide 
     child care services, and technical assistance if necessary;
       ``(9) contain an assurance that any child care facility 
     assisted under this section will meet the applicable State or 
     local government licensing, certification, approval, or 
     registration requirements; and
       ``(10) contain a plan for any child care facility assisted 
     under this section to become accredited within 3 years of the 
     date the institution first receives assistance under this 
     section.
       ``(c) Reporting Requirements; Continuing Eligibility.--
       ``(1) Reporting requirements.--
       ``(A) Reports.--Each institution of higher education 
     receiving a grant under this section shall report to the 
     Secretary 18 months and 36 months after receiving the first 
     grant payment under this section.
       ``(B) Contents.--The report shall include--
       ``(i) data on the population served under this section;
       ``(ii) information on campus and community resources and 
     funding used to help low-income students access child care 
     services;
       ``(iii) information on progress made toward accreditation 
     of any child care facility; and
       ``(iv) information on the impact of the grant on the 
     quality, availability, and affordability of campus-based 
     child care services.
       ``(2) Continuing eligibility.--The Secretary shall make the 
     third annual grant payment under this section to an 
     institution of higher education only if the Secretary 
     determines, on the basis of the 18-month report submitted 
     under paragraph (1), that the institution is making a good 
     faith effort to ensure that low-income students at the 
     institution have access to affordable, quality child care 
     services.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $30,000,000 for fiscal year 1999 and such sums as may be 
     necessary for each of the 4 succeeding fiscal years.''.

     SEC. 406. FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY 
                   GRANTS.

       (a) Extension of Authority.--Section 413A(b)(1) (20 U.S.C. 
     1070b(b)(1)) is amended by striking ``1993'' and inserting 
     ``1999''.
       (b) Use of Funds for Less-Than-Full-Time Students.--
     Subsection (d) of section 413C (20 U.S.C. 1070b-2(d)) is 
     amended by striking ``and if the total financial need'' and 
     all that follows and inserting the following: ``, then grant 
     funds shall be made available to such independent and less-
     than-full-time students.''.
       (c) Allocation of Funds.--Section 413D (20 U.S.C. 1070b-3) 
     is amended--
       (1) by striking subsection (b); and
       (2) in subsection (c)(1), by striking ``three-quarters of 
     the remainder'' and inserting ``the remainder'';
       (3) in subsection (c)(2)(A)(i), by striking ``subsection 
     (d)'' and inserting ``subsection (c)'';
       (4) by redesignating subsections (c), (d), (e), and (f) as 
     subsections (b), (c), (d), and (e), respectively; and
       (5) by inserting after subsection (e) (as so redesignated) 
     the following new subsection:
       ``(f) Carry-Over/Carry-Back Authority.--
       ``(1) Carry-over authority.--
       ``(A) Carry-over up to 10 percent.--Of the sums granted to 
     an eligible institution under this subpart for any fiscal 
     year, 10 percent may, at the discretion of the institution, 
     remain available for expenditure during the succeeding fiscal 
     year to carry out the program under this subpart.
       ``(B) Reallocation of excess.--Any of the sums so granted 
     to an institution for a fiscal year which are not needed by 
     that institution to operate programs under this subpart 
     during that fiscal year, and which it does not wish to use 
     during the next fiscal year as authorized in the preceding 
     sentence, shall remain available to the Secretary for making 
     grants under section 413B to other institutions in the same 
     State until the close of the second fiscal year next 
     succeeding the fiscal year for which such funds were 
     appropriated.
       ``(2) Carry-back authority.--
       ``(A) Carry-back up to 10 percent.--Up to 10 percent of the 
     sums the Secretary determines an eligible institution may 
     receive from funds which have been appropriated for a fiscal 
     year may be used by the institution for expenditure during 
     the fiscal year preceding the fiscal year for which the sums 
     were appropriated.
       ``(B) Use of carried-back funds.--An eligible institution 
     may make grants to students after the end of the academic 
     year, but prior to the beginning of the succeeding fiscal 
     year, from such succeeding fiscal year's appropriations.''.

     SEC. 407. GRANTS TO STATES FOR STATE STUDENT INCENTIVES.

       (a) Authorization of Appropriations.--Section 415A(b) of 
     the Higher Education Act of 1965 (20 U.S.C. 1070c(b)) is 
     amended--
       (1) in paragraph (1), by striking ``1993'' and inserting 
     ``1999'';
       (2) by redesignating paragraph (2) as paragraph (3); and
       (3) by inserting after paragraph (1) the following:
       ``(2) Reservation.--For any fiscal year for which the 
     amount appropriated under paragraph (1) exceeds $25,000,000, 
     the excess shall be available to carry out section 415E.''.
       (b) Special Leveraging Educational Assistance Partnership 
     Program.--Subpart 4 of part A of title IV of the Higher 
     Education Act of 1965 (20 U.S.C. 1070c et seq.) is amended--
       (1) by redesignating section 415E as section 415F; and
       (2) by inserting after section 415D the following:

     ``SEC. 415E. SPECIAL LEVERAGING EDUCATIONAL ASSISTANCE 
                   PARTNERSHIP PROGRAM.

       ``(a) In General.--From amounts reserved under section 
     415A(b)(2) for each fiscal year, the Secretary shall--
       ``(1) make allotments among States in the same manner as 
     the Secretary makes allotments among States under section 
     415B; and
       ``(2) award grants to States, from allotments under 
     paragraph (1), to enable the States to pay the Federal share 
     of the cost of the authorized activities described in 
     subsection (c).
       ``(b) Authorized Activities.--Each State receiving a grant 
     under this section may use the grant funds for--
       ``(1) increasing the dollar amount of grants awarded under 
     section 415B to eligible students who demonstrate financial 
     need;
       ``(2) carrying out transition programs from secondary 
     school to postsecondary education for eligible students who 
     demonstrate financial need;
       ``(3) carrying out a financial aid program for eligible 
     students who demonstrate financial need and wish to enter 
     teaching or computer-related careers, or other fields of 
     study determined by the State to be critical to the State's 
     workforce needs;
       ``(4) carrying out early intervention programs, mentoring 
     programs, and career education programs for eligible students 
     who demonstrate financial need; and
       ``(5) awarding merit or academic scholarships to eligible 
     students who demonstrate financial need.
       ``(c) Maintenance of Effort Requirement.--Each State 
     receiving a grant under this section for a fiscal year shall 
     provide the Secretary an assurance that the aggregate amount 
     expended per student or the aggregate expenditures by the 
     State, from funds derived from non-Federal sources, for the 
     authorized activities described in subsection (b) for the 
     preceding fiscal year were not less than the amount expended 
     per student or the aggregate expenditures by the State for 
     the activities for the second preceding fiscal year. The 
     Secretary may waive this subsection for good cause, as 
     determined by the Secretary.
       ``(d) Federal Share.--The Federal share of the cost of the 
     authorized activities described in subsection (b) for any 
     fiscal year shall be 25 percent.''.
       (c) Technical and Conforming Amendments.--
       (1) Purpose.--Subsection (a) of section 415A of the Higher 
     Education Act of 1965 (20 U.S.C. 1070c(a)) is amended to read 
     as follows:
       ``(a) Purpose of Subpart.--It is the purpose of this 
     subpart to make incentive grants available to States to 
     assist States in--

[[Page H2555]]

       ``(1) providing grants to--
       ``(A) eligible students attending institutions of higher 
     education or participating in programs of study abroad that 
     are approved for credit by institutions of higher education 
     at which such students are enrolled; and
       ``(B) eligible students for campus-based community service 
     work-study; and
       ``(2) carrying out the activities described in section 
     415F.''.
       (2) Allotment.--Section 415B(a)(1) of the Higher Education 
     Act of 1965 (20 U.S.C. 1070c-1(a)(1)) is amended by inserting 
     ``and not reserved under section 415A(b)(2)'' after 
     ``415A(b)(1)''.

     SEC. 408. SPECIAL PROGRAMS FOR STUDENTS WHOSE FAMILIES ARE 
                   ENGAGED IN MIGRANT AND SEASONAL FARMWORK.

       (a) Coordination.--Section 418A(d) (20 U.S.C. 1070d-2(d)) 
     is amended by inserting after ``contains assurances'' the 
     following: ``that the grant recipient will coordinate its 
     project, to the extent feasible, with other local, State, and 
     Federal programs to maximize the resources available for 
     migrant students, and''.
       (b) Extension of Authority.--Section 418A(g) is amended by 
     striking ``1993'' each place it appears and inserting 
     ``1999''.
       (c) Data Collection.--Section 418A is amended by adding at 
     the end the following new subsection:
       ``(h) Data Collection.--The National Center for Education 
     Statistics shall collect postsecondary education data on 
     migrant students.''.
       (d) Technical Amendments.--Section 418A(e) is amended by 
     striking ``authorized by subpart 4 of this part in accordance 
     with section 417A(b)(2)'' and inserting ``in accordance with 
     section 402A(c)(1)''.

     SEC. 409. BYRD SCHOLARSHIPS.

       (a) Eligibility.--Section 419G (20 U.S.C. 1070d-37) is 
     amended by adding at the end the following new subsection:
       ``(e) Termination of Eligibility.--The eligibility of 
     students from the Federated States of Micronesia, the 
     Republic of the Marshall Islands, and Palau shall expire on 
     September 30, 2001.''.
       (b) Authorization of Appropriations.--Section 419K (20 
     U.S.C. 1070d-41) is amended by striking ``$10,000,000 for 
     fiscal year 1993'' and inserting ``$40,000,000 for fiscal 
     year 1999''.

             PART B--FEDERAL FAMILY EDUCATION LOAN PROGRAM

     SEC. 411. LIMITATION REPEALED.

       Section 421 (20 U.S.C. 1071) is amended by striking 
     subsection (d).

     SEC. 412. ADVANCES TO RESERVE FUNDS.

       Section 422 (20 U.S.C. 1072) is amended--
       (1) in subsection (a)(2), by striking ``428(c)(10)(E)'' and 
     inserting ``428(c)(9)(E)'';
       (2) in subsection (c)(6)(B)(i), by striking ``handle 
     written'' and inserting ``handle written, electronic,'';
       (3) in subsection (c)(7)
       (A) by striking ``to a guaranty agency--'' and everything 
     that follows through ``(B) if the Secretary'' and inserting 
     ``to a guaranty agency, if the Secretary'';
       (B) by striking ``428(c)(10)(F)(v)'' and inserting 
     ``428(c)(9)(F)(v)'';
       (C) by inserting ``and'' after ``cash needs,''; and
       (D) by striking ``or ensure'' and everything that follows 
     and inserting a period; and
       (4) in the first and second sentences of subsection (g)(1), 
     by striking ``or the program authorized by part D of this 
     title'' each place it appears.

     SEC. 413. GUARANTY AGENCY REFORMS.

       (a) Federal Student Loan Reserve Fund.--Part B of title IV 
     is amended by inserting after section 422 (20 U.S.C. 1072) 
     the following new section:

     ``SEC. 422A. FEDERAL STUDENT LOAN RESERVE FUND.

       ``(a) Establishment.--Each guaranty agency shall, not later 
     than 60 days after the date of enactment of this section, 
     deposit all funds, securities, and other liquid assets 
     contained in the reserve fund established pursuant to section 
     422 of this part into a Federal Student Loan Reserve Fund (in 
     this section and section 422B referred to as the `Federal 
     Fund') which shall be an account of a type selected by the 
     agency, with the approval of the Secretary.
       ``(b) Investment of Funds.--Funds maintained in the Federal 
     Fund shall be invested in obligations issued or guaranteed by 
     the United States or a State, or in other similarly low-risk 
     securities selected by the guaranty agency.
       ``(c) Additional Deposits.--After the establishment of the 
     Federal Fund, a guaranty agency shall deposit into the 
     Federal Fund--
       ``(1) all amounts received from the Secretary as payment of 
     reinsurance on loans pursuant to section 428(c)(1);
       ``(2) from amounts collected on behalf of the obligation of 
     a defaulted borrower, a percentage amount equal to the 
     complement of the reinsurance percentage in effect when 
     payment under the guaranty agreement was made with respect to 
     the defaulted loan pursuant to sections 428(c)(6)(A) and 
     428F(a)(1)(B); and
       ``(3) insurance premiums collected from borrowers pursuant 
     to sections 428(b)(1)(H) and 428H(h).
       ``(d) Uses of Funds.--Subject to subsection (f), the 
     Federal Fund may only be used by a guaranty agency--
       ``(1) to pay lender claims pursuant to section 
     428(b)(1)(G), section 428(j), section 437, and section 
     439(q); and
       ``(2) to pay into the Agency Operating Fund established 
     pursuant to section 422B a default prevention fee in 
     accordance with section 428(l).
       ``(e) Ownership of Federal Fund.--
       ``(1) In general.--The Federal Fund of the guaranty agency, 
     and any assets purchased or developed with funds from the 
     Federal Fund or any other funds considered reserve funds on 
     the date of enactment of this section, regardless of who 
     holds or controls the reserves or assets, shall be considered 
     to be the property of the United States to be used in the 
     operation of the program authorized by this part, as provided 
     in subsection (d) of this section.
       ``(2) Nonliquid reserve fund and other assets.--
     Notwithstanding any other provision of law, nonliquid reserve 
     fund assets, such as buildings and equipment purchased or 
     developed by the guaranty agency with funds from the Federal 
     Fund, or any other funds considered reserve funds on the date 
     of enactment of this section shall--
       ``(A) remain the property of the United States;
       ``(B) be used only for such purposes as the Secretary 
     determines are appropriate; and
       ``(C) be subject to such restrictions on the disposition of 
     such assets (which may include a requirement that any sale of 
     such assets be at not less than fair market value) as the 
     Secretary determines are appropriate.
       ``(f) Transition.--
       ``(1) In general.--In order to establish the Agency 
     Operating Fund authorized by section 422B, each guaranty 
     agency may transfer up to 180 days cash expenses for normal 
     operating expenses, as a working capital reserve as defined 
     in Office of Management and budget circular A-87 (Cost 
     Accounting Standards) from the Federal Fund for deposit into 
     the Agency Operating Fund for use in the performance of its 
     duties under this part. Such transfers may occur during the 
     first three years following the establishment of the 
     Operating Fund. However, no agency may transfer in excess of 
     50 percent of the Federal Fund balance to its Operating Fund 
     during any fiscal year. In determining the transfer amount, 
     the agency shall insure that sufficient funds remain in the 
     Federal Fund to pay lender claims within the required time 
     periods and to meet the reserve recall requirements of the 
     Balanced Budget Act of 1997.
       ``(2) Repayment provisions.--Each guaranty agency shall 
     begin repayment of sums transferred pursuant to this 
     subsection no later than the start of the fourth year after 
     the establishment of the Agency Operating Fund, and shall 
     repay all amounts transferred no later than 5 years from the 
     date of the establishment of the Agency Operating Fund. Each 
     guaranty agency shall provide to the Secretary, on an annual 
     basis, a financial analysis demonstrating its ability to 
     repay all outstanding amounts while any transferred amounts 
     are owned to the Federal Fund.
       ``(3) Special rule.--In applying the minimum reserve level 
     required by section 428(c)(9)(A), the Secretary shall include 
     all amounts owed to the Federal Fund by the agency due to 
     transfers allowed under paragraph (1) in the calculation.''.
       (b) Agency Operating Fund Established.--Part B of title IV 
     is further amended by inserting after section 422A (as added 
     by subsection (a)) the following new section:

     ``SEC. 422B. AGENCY OPERATING FUND.

       ``(a) Establishment.--Each guaranty agency shall, not later 
     than 60 days after the date of enactment of this section, 
     establish a fund designated as the Agency Operating Fund 
     (hereinafter referred to as the `Operating Fund').
       ``(b) Investment of Funds.--Funds deposited into the 
     Operating Fund shall be invested at the discretion of the 
     guaranty agency in accordance with prudent investor 
     standards.
       ``(c) Additional Deposits.--After the establishment of the 
     Operating Fund, the guaranty agency shall deposit into the 
     Operating Fund--
       ``(1) the loan processing and issuance fee paid by the 
     Secretary pursuant to section 428(f);
       ``(2) the portfolio maintenance fee paid by the Secretary 
     pursuant to section 458;
       ``(3) the default prevention fee paid in accordance with 
     section 428(l);
       ``(4) amounts retained by the guaranty agency pursuant to 
     section 428(c)(6)(B) from collection on defaulted loans held 
     by the agency, after payment of the Secretary's equitable 
     share, excluding amounts deposited in the Federal Fund 
     pursuant to section 422A(c)(2); and
       ``(5) interest earned on the Federal Fund during the first 
     3 years after the date of enactment of this section, but only 
     to the extent permitted by regulations prescribed by the 
     Secretary to permit a limited number of guaranty agencies 
     (not to exceed 10) essential resources to maintain sufficient 
     operating funds and to restructure their operations in 
     accordance with the requirements of this section and section 
     422A.
       ``(d) Uses of Funds.--
       ``(1) In general.--Funds in the Operating Fund shall be 
     used for activities related to student financial aid, 
     including application processing, loan disbursement, 
     enrollment and repayment status management, default 
     prevention activities, default collection activities, school 
     and lender training, financial awareness and outreach 
     activities, compliance monitoring, other loan program related 
     activities in support of postsecondary education and other 
     student financial aid related activities as determined by the 
     guaranty agency.
       ``(2) Special rule.--The guaranty agency may, in its 
     discretion, transfer funds from the Operating Fund to the 
     Federal Student Loan Reserve Fund for use in accordance with 
     section 422A. Such transfer shall be irrevocable, and any 
     funds so transferred shall become the property of the United 
     States.
       ``(3) Definitions.--For purposes of this subsection:
       ``(A) The term `default collection activities' means 
     activities of a guaranty agency which are directly related to 
     the collection of the loan on which a default claim has been 
     paid to the participating lender, including the due diligence 
     activities required pursuant to regulations of the Secretary.
       ``(B) The term `default prevention activities' means 
     activities of a guaranty agency which are directly related to 
     providing collection assistance to the lender on a delinquent 
     loan, prior to

[[Page H2556]]

     the loan's being legally in a default status, including due 
     diligence activities required pursuant to regulations of the 
     Secretary.
       ``(C) The term `enrollment and repayment status management' 
     means activities of a guaranty agency which are directly 
     related to ascertaining the student's enrollment status, 
     including prompt notification to the lender of such status, 
     an audit of the note or written agreement to determine if the 
     provisions of that note or agreement are consistent with the 
     records of the guaranty agency as to the principal amount of 
     the loan guaranteed, and an examination of the note or 
     agreement to assure that the repayment provisions are 
     consistent with the provisions of this part.
       ``(e) Ownership of Operating Fund.--The Operating Fund of 
     the guaranty agency shall be considered to be the property of 
     the guaranty agency. The Secretary may regulate the uses or 
     expenditure of moneys in the Operating Fund with respect to 
     activities required under guaranty agency agreements under 
     subsections (b) and (c) of section 428 until such time as a 
     guaranty agency has repaid to the Federal Fund all reserve 
     funds transferred under section 422A(f). During any period in 
     which funds are owed to the Federal Fund as a result of a 
     transfer under 422A(f), moneys in the Operating Fund may only 
     be used for expenses related to the student loan programs 
     authorized under this part. The Secretary may require such 
     necessary reports and audits as provided in section 
     428(b)(2).''.
       (c) Additional Recall of Reserves.--Section 422 (as amended 
     by section 412) is further amended by adding at the end the 
     following new subsection:
       ``(i) Additional Recall of Reserves.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, the Secretary shall recall $30,000,000 for each of the 
     fiscal years 1999, 2000, 2001, 2002, and 2003 from the 
     reserve funds held by guaranty agencies.
       ``(2) Deposit.--Funds recalled by the Secretary under this 
     subsection shall be deposited in the Treasury.
       ``(3) Required share.--The Secretary shall require each 
     guaranty agency to return annually reserve funds under 
     paragraph (1) based on one-fifth of the agency's required 
     share. For purposes of this paragraph, a guaranty agency's 
     required share shall be determined as follows:
       ``(A) The Secretary shall impose on each guaranty agency an 
     equal percentage reduction in the amount of the agency's 
     reserve funds held as of September 30, 1996.
       ``(B) The equal percentage reduction shall be the 
     percentage obtained by dividing--
       ``(i) $150,000,000 by
       ``(ii) the total amount of all such agencies' reserve funds 
     held as of September 30, 1996.
       ``(4) Offset of required shares.--If any guaranty returns 
     to the Secretary any reserves in excess of the amount 
     required under this subsection or subsection (h), the total 
     amount required to be returned under paragraph (1) shall be 
     reduced by the amount of such additional reserve return.
       ``(5) Definition of reserve funds.--The term `reserve 
     funds' when used with respect to a guaranty agency--
       ``(A) includes any reserve funds in cash or liquid assets 
     held by the guaranty agency, or held by, or under the control 
     of, any other entity; and
       ``(B) does not include building, equipment, or other 
     nonliquid assets.''.
       (d) Conforming Amendments.--
       (1) Reinsurance payments.--
       (A) Amendments.--Section 428(c)(1) (20 U.S.C. 1078(c)(1)) 
     is amended--
       (i) in subparagraph (A), by striking ``98 percent'' and 
     inserting ``95 percent'';
       (ii) in subparagraph (B)(i), by striking ``88 percent'' and 
     inserting ``85 percent''; and
       (iii) in subparagraph (B)(ii), by striking ``78 percent'' 
     and inserting ``75 percent'';
       (iv) in subparagraph (E)--

       (I) by striking ``for `98 percent';'' and inserting ``for 
     `95 percent';'';

       (II) by striking ``for `88 percent';'' and inserting ``for 
     `85 percent';''; and
       (III) by striking ``for `78 percent'.'' and inserting ``for 
     `75 percent'.'';

       (v) in subparagraph (F)--

       (I) by striking ``for `98 percent';'' and inserting ``for 
     `95 percent';'';
       (II) by striking ``for `88 percent';'' and inserting ``for 
     `85 percent';''; and
       (III) by striking ``for `78 percent'.'' and inserting ``for 
     `75 percent'.'';

       (vi) by striking subparagraph (D) and redesignating 
     subparagraphs (E) and (F) as subparagraphs (D) and (E), 
     respectively.
       (B) Effective date.--The amendments made by subparagraph 
     (A) of this paragraph apply to loans for which the first 
     disbursement is made on or after October 1, 1998.
       (2) Equitable share.--Section 428(c)(6) is amended--
       (A) in subparagraph (A)--
       (i) by striking ``(A) For the purpose'' and inserting ``For 
     the purpose''; and
       (ii) by striking clause (ii) and inserting the following:
       ``(ii) an amount equal to 24 percent of such payments for 
     use in accordance with section 422B.'';
       (B) by striking subparagraphs (B) and (C); and
       (C) by redesignating clauses (i) and (ii) as subparagraphs 
     (A) and (B).
       (3) Guaranty agency reserve level.--Section 428(c)(9)(C) is 
     amended--
       (A) by striking ``80 percent pursuant to section 
     428(c)(1)(B)(ii)'' and inserting ``85 percent pursuant to 
     paragraph (1)(B)(i) of this subsection''; and
       (B) by striking ``30 working days'' and inserting ``45 
     working days''.
       (4) Payment of certain costs.--Section 428(f) is amended--
       (A) by striking paragraph (1)(A) and inserting the 
     following:
       ``(1) Payment for certain activities.--(A) The Secretary 
     shall, in accordance with the provisions of this paragraph, 
     pay to each guaranty agency for each fiscal year a loan 
     processing and issuance fee equal to 0.65 percent of the 
     total principal amount of the loans on which insurance was 
     issued under this part during such fiscal year by such 
     agency.''; and
       (B) in paragraph (1)(B), by striking the first sentence and 
     inserting the following: ``The payment required by 
     subparagraph (A) shall be paid on a quarterly basis.''.
       (5) Default aversion assistance.--Section 428(l) is amended 
     to read as follows:
       ``(l) Default Aversion Assistance.--
       ``(1) Assistance required.--Upon receipt of a proper 
     request from a lender received not earlier than the 60th day 
     of delinquency, a guaranty agency having an agreement with 
     the Secretary under subsection (c) of this section shall 
     engage in default aversion activities designed to prevent the 
     default by a borrower on a loan covered by such agreement.
       ``(2) Reimbursement.--(A) A guaranty agency may, in 
     accordance with the provisions of this paragraph, transfer 
     from the Federal Student Loan Reserve Account to the 
     Operating Account a default aversion fee. Such fee shall be 
     paid for any loan on which a claim for default has not been 
     presented that the guaranty agency successfully brings into 
     current repayment status on or before the 210th day after the 
     loan becomes 60 days delinquent.
       ``(B) The default aversion fee shall be equal to 1 percent 
     of the total unpaid principal and accrued interest on the 
     loan at the time the request is submitted by the lender. Such 
     fee shall not be paid more than once on any loan for which 
     the guaranty agency averts the default unless the borrower 
     remained current in payments for at least 12 months prior to 
     the subsequent delinquency. A guaranty agency may transfer 
     such fees earned under this subsection no more frequently 
     than monthly.
       ``(C) For the purpose of earning the default aversion fee, 
     the term `current repayment status' means that the borrower 
     is not delinquent in the payment of any principal or interest 
     on the loan.''.

     SEC. 414. SCOPE AND DURATION OF PROGRAM.

       Section 424(a) (20 U.S.C. 1074(a)) is amended--
       (1) by striking ``October 1, 2002'' and inserting ``October 
     1, 2004''; and
       (2) by striking ``September 30, 2006'' and inserting 
     ``September 30, 2008''.

     SEC. 415. LIMITATIONS ON INDIVIDUAL FEDERALLY INSURED LOANS 
                   AND FEDERAL LOAN INSURANCE.

       Section 425(a)(1)(A) (20 U.S.C. 1075(a)(1)(A)) is amended--
       (1) in clause (i)--
       (A) by inserting ``and'' after the semicolon at the end of 
     subclause (I); and
       (B) by striking subclauses (II) and (III) and inserting the 
     following:
       ``(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;''; and
       (2) by inserting ``and'' after the semicolon at the end of 
     clause (iii).

     SEC. 416. APPLICABLE INTEREST RATES.

       (a) Applicable Interest Rates.--
       (1) Amendment.--Section 427A (20 U.S.C. 1077a) is amended 
     to read as follows:

     ``SEC. 427A. APPLICABLE INTEREST RATES.

       ``(a) Interest Rates for New Loans On or After July 1, 
     1998.--
       ``(1) In general.--Subject to paragraph (2), with respect 
     to any loan made, insured, or guaranteed under this part 
     (other than a loan made pursuant to section 428B or 428C) for 
     which the first disbursement is made on or after July 1, 
     1998, the applicable rate of interest shall, during any 12-
     month period beginning on July 1 and ending on June 30, be 
     determined on the preceding June 1 and be equal to--
       ``(A) the bond equivalent rate of 91-day Treasury bills 
     auctioned at the final auction held prior to such June 1; 
     plus
       ``(B) 2.3 percent,
     except that such rate shall not exceed 8.25 percent.
       ``(2) In school and grace period Rules.--With respect to 
     any loan under this part (other than a loan made pursuant to 
     section 428B or 428C) for which the first disbursement is 
     made on or after July 1, 1998, the applicable rate of 
     interest for interest which accrues--
       ``(A) prior to the beginning of the repayment period of the 
     loan; or
       ``(B) during the period in which principal need not be paid 
     (whether or not such principal is in fact paid) by reason of 
     a provision described in section 428(b)(1)(M) or 
     427(a)(2)(C),
     shall be determined under paragraph (1) by substituting `1.7 
     percent' for `2.3 percent'.
       ``(3) PLUS loans.--With respect to any loan under section 
     428B for which the first disbursement is made on or after 
     July 1, 1998, the applicable rate of interest shall be 
     determined under paragraph (1)--
       ``(A) by substituting `3.1 percent' for `2.3 percent'; and
       ``(B) by substituting `9.0 percent' for `8.25 percent'.
       ``(b) Lesser Rates Permitted.--Nothing in this section or 
     section 428C shall be construed to prohibit a lender from 
     charging a borrower interest at a rate less than the rate 
     which is applicable under this part.
       ``(c) Consultation.--The Secretary shall determine the 
     applicable rate of interest under this

[[Page H2557]]

     section after consultation with the Secretary of the Treasury 
     and shall publish such rate in the Federal Register as soon 
     as practicable after the date of determination.''.
       (2) Conforming amendment.--Section 428B(d)(4) (20 U.S.C. 
     1078-2(d)(4)) is amended by striking ``section 427A(c)'' and 
     inserting ``section 427A(a)(3)''.
       (b) Special Allowances.--
       (1) Amendment.--Section 438(b)(2)(F) (20 U.S.C. 1087-
     1(b)(2)(F)) is amended to read as follows:
       ``(F) Loans disbursed after july 1, 1998.--
       ``(i) In general.--Subject to paragraph (4) and clauses 
     (ii), (iii), and (iv) of this subparagraph, the special 
     allowance paid pursuant to this subsection on loans for which 
     the first disbursement is made on or after July 1, 1998, 
     shall be computed--
       ``(I) by determining the average of the bond equivalent 
     rates of 91-day Treasury bills auctioned for such 3-month 
     period;
       ``(II) by subtracting the applicable interest rates on such 
     loans from such average bond equivalent rate;
       ``(III) by adding 2.8 percent to the resultant percent; and
       ``(IV) by dividing the resultant percent by 4.
       ``(ii) In school and grace period.--In the case of any loan 
     for which the first disbursement is made on or after July 1, 
     1998, and for which the applicable rate of interest is 
     described in section 427A(a)(2), clause (i)(III) of this 
     subparagraph shall be applied by substituting `2.2 
     percent' for `2.8 percent'.
       ``(iii) PLUS loans.--In the case of any loan for which the 
     first disbursement is made on or after July 1, 1998, and for 
     which the applicable rate of interest is described in section 
     427A(a)(3), clause (i)(III) of this subparagraph shall be 
     applied by substituting `3.1 percent' for `2.8 percent', 
     subject to clause (iv) of this subparagraph.
       ``(iv) Limitation on special allowances for PLUS loans.--In 
     the case of loans disbursed on or after July 1, 1998, for 
     which the interest rate is determined under 427A(a)(3), a 
     special allowance shall not be paid for a loan made under 
     section 428B unless the rate determined for any 12-month 
     period under section 427A(a)(3) exceeds 9 percent.''.
       (2) Conforming amendment.--Section 438(b)(2)(C)(ii) is 
     amended by striking ``In the case'' and inserting ``Subject 
     to subparagraph (F), in the case''.
       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to any loan made, insured, or 
     guaranteed under part B of title IV of the Higher Education 
     Act of 1965 for which the first disbursement is made on or 
     after July 1, 1998.

     SEC. 417. FEDERALLY GUARANTEED STUDENT LOANS.

       (a) Requirements for Federal Interest Subsidies.--Section 
     428(a)(2) (20 U.S.C. 1078(a)(2)) is amended by striking 
     everything preceding subparagraph (D) and inserting the 
     following:
       ``(2) Additional requirements to receive subsidy.--(A) Each 
     student qualifying for a portion of an interest payment under 
     paragraph (1) shall provide to the lender a statement from 
     the eligible institution, at which the student has been 
     accepted for enrollment, or at which the student is in 
     attendance, which certifies the eligibility of the student to 
     receive a loan under this part and the amount of the loan for 
     which such student is eligible.
       ``(B) A student shall qualify for a portion of an interest 
     payment under paragraph (1) if the eligible institution has 
     provided the lender with a statement that--
       ``(i) at the lender's request, sets forth such student's 
     estimated cost of attendance (as determined under section 
     472);
       ``(ii) sets forth such student's estimated financial 
     assistance; and
       ``(iii) sets forth a schedule for disbursement of the 
     proceeds of the loan in installments, consistent with the 
     requirements of section 428G.
       ``(C) For the purpose of clause (ii) of subparagraph (B), a 
     student shall qualify for a portion of an interest payment 
     under paragraph (1) if the eligible institution has provided 
     the lender with a statement evidencing a determination of 
     need for a loan (as determined under part F of this title) 
     and the amount of such need, subject to the provisions of 
     subparagraph (D).''.
       (b) Duration of Authority.--Section 428(a)(5) is amended--
       (1) by striking ``September 30, 2002'' and inserting 
     ``September 30, 2004''; and
       (2) by striking ``September 30, 2006'' and inserting 
     ``September 30, 2008''.
       (c) Annual Loan Limits.--Section 428(b)(1)(A) is amended--
       (1) in clause (i)--
       (A) by inserting ``and'' after the semicolon at the end of 
     subclause (I); and
       (B) by striking subclauses (II) and (III) and inserting the 
     following:

       ``(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;''; and

       (2) by inserting ``and'' after the semicolon at the end of 
     clause (iii).
       (d) Selection of Repayment Plans.--Section 428(b)(1)(D) is 
     amended by striking ``and (iii)'' and inserting the 
     following: ``(iii) the student borrower may annually change 
     the selection of a repayment plan under this part, and 
     (iv)''.
       (e) Coinsurance.--Section 428(b)(1)(G) is amended by 
     striking ``not less than''.
       (f) Deferments.--Section 428(b)(1)(M) is amended--
       (1) in clause (i)(I), by inserting before the semicolon the 
     following: ``, except that no borrower, notwithstanding the 
     provisions of the promissory note, shall be required to 
     borrow an additional loan under this title in order to be 
     eligible to receive a deferment under this clause''; and
       (2) in clause (ii), by inserting before the semicolon the 
     following: ``, except that no borrower who qualifies for 
     unemployment benefits shall be required to provide any 
     additional paperwork for a deferment under this clause''.
       (g) Limitation, Suspension, and Termination.--Section 
     428(b)(1)(U) is amended--
       (1) by striking ``emergency action,,'' each place it 
     appears and inserting ``emergency action,''; and
       (2) by striking ``a compliance audit of each lender'' and 
     inserting the following: ``in the case of any lender that 
     originates or holds more than $5,000,000 in loans made under 
     this title during an annual audit period, a compliance audit 
     of such lender''.
       (h) Additional Insurance Program Requirements.--Section 
     428(b)(1) is further amended--
       (1) by striking ``and'' at the end of subparagraph (W);
       (2) in subparagraph (X)--
       (A) by striking ``428(c)(10)'' and inserting ``428(c)(9)''; 
     and
       (B) by striking the period at the end and inserting ``; 
     and''; and
       (3) by adding at the end the following new subparagraph:
       ``(Y) provides that the lender shall determine the 
     eligibility of a borrower for a deferment described in 
     subparagraph (M)(i) based on receipt of (i) a request for 
     deferment from the borrower, (ii) a newly completed loan 
     application that documents the borrower's eligibility for a 
     deferment, or (iii) student status information received by 
     the lender that the borrower is enrolled on at least a half-
     time basis.''.
       (i) Restrictions on Inducements.--Section 428(b)(3) is 
     amended--
       (1) by striking subparagraph (C) and inserting the 
     following:
       ``(C) conduct unsolicited mailings of student loan 
     application forms to students enrolled in secondary school or 
     a postsecondary institution, or to parents of such students, 
     except that applications may be mailed to students who have 
     previously received loans guaranteed under this part by the 
     guaranty agency; or''; and
       (2) by adding at the end the following new sentence:

     ``It shall not be a violation of this paragraph for a 
     guaranty agency to provide assistance to institutions of 
     higher education comparable to the kinds of assistance 
     provided to institutions of higher education by the 
     Department of Education.''.
       (j) Guaranty Agency Information to Eligible Institutions.--
     Section 428(c)(2)(H)(ii) is amended to read as follows:
       ``(ii) the guaranty agency shall not require the payment 
     from the institution of any fee for such information; and''.
       (k) Forbearance.--Section 428(c)(3) is amended--
       (1) in subparagraph (A)(i), by striking ``written'';
       (2) in subparagraph (B), by inserting before the semicolon 
     the following: ``, including forbearance granted after 
     consideration of a borrower's total debt burden''; and
       (3) in the last sentence--
       (A) by striking ``and (ii)'' and inserting ``(ii)''; and
       (B) by inserting before the period at the end the 
     following: ``, and (iii) forbearance for periods not to 
     exceed 60 days if the lender reasonably determines that such 
     suspensions are necessary to research or process information 
     relative to such loan or to collect appropriate documentation 
     relating to the borrower's request for a deferment or 
     forbearance''.
       (l) Assignment.--Section 428(c)(8) is amended--
       (1) by striking ``(A)''; and
       (2) by striking subparagraph (B).
       (m) Agency Termination.--Section 428(c)(9) is amended--
       (1) in subparagraph (E)--
       (A) by inserting ``or'' at the end of clause (iv);
       (B) by striking ``; or'' at the end of clause (v) and 
     inserting a period; and
       (C) by striking clause (vi);
       (2) in subparagraph (F)(vii), by striking ``to avoid 
     disruption'' and everything that follows and inserting ``and 
     to avoid disruption of the student loan program.'';
       (3) in subparagraph (I), by inserting ``on the record'' 
     after ``for a hearing''; and
       (4) in subparagraph (K)--
       (A) by striking ``and Labor'' and inserting ``and the 
     Workforce''; and
       (B) by striking everything after ``guaranty agency system'' 
     and inserting a period.
       (n) Lender Referral.--Section 428(e) is amended--
       (1) in paragraph (1)(B)(ii), by striking ``during the 
     transition'' and everything that follows through ``part D of 
     this title''; and
       (2) in paragraph (3), by striking ``for costs of 
     transition''.
       (o) Action on Agreements.--Section 428(g) is amended by 
     striking ``and Labor'' and inserting ``and the Workforce''.
       (p) Lenders-of-Last Resort.--Section 428(j) is amended by 
     striking paragraph (3).
       (q) Income Contingent Repayment.--Section 428(m) is amended 
     by striking ``shall require at least 10 percent of the 
     borrowers'' and inserting ``may require borrowers''.
       (r) State Share of Default Costs.--Subsection (n) of 
     section 428 is repealed.
       (s) Blanket Certificate of Guaranty.--Section 428 of the 
     Act is amended by adding at the end the following new 
     subsection:
       ``(n) Blanket Certificate of Loan Guaranty.--
       ``(1) In general.--Any guaranty agency that has or enters 
     into any insurance program agreement with the Secretary under 
     this part may--

[[Page H2558]]

       ``(A) offer eligible lenders participating in the agency's 
     guaranty program blanket certificates of loan guaranty that 
     permit the lender to make loans without receiving prior 
     approval from the guaranty agency of individual loans for 
     eligible borrowers enrolled in eligible programs at eligible 
     institutions; and
       ``(B) provide eligible lenders with the ability to transmit 
     electronically data to the agency concerning loans the lender 
     has elected to make under the agency's insurance program via 
     standard reporting formats, such reporting to occur at 
     reasonable, mutually acceptable intervals.
       ``(2) Limitations on Blanket certificate of guaranty.--A 
     guaranty agency and eligible lender may establish by mutual 
     agreement limitations or restrictions on the number or volume 
     of loans issued by a lender under the blanket certificate of 
     guaranty.''.

     SEC. 418. VOLUNTARY AGREEMENTS WITH GUARANTY AGENCIES.

       Part B of title IV is amended by inserting after section 
     428 (20 U.S.C. 1078) the following new section:

     ``SEC. 428A. VOLUNTARY FLEXIBLE AGREEMENTS WITH GUARANTY 
                   AGENCIES.

       ``(a) Voluntary Agreements.--
       ``(1) Authority.--Notwithstanding any other provision of 
     law, the Secretary may enter into a voluntary, flexible 
     agreement with not more than 6 guaranty agencies under this 
     section, in lieu of agreements with a guaranty agency under 
     subsections (b) and (c) of section 428, under which the 
     Secretary may waive or modify any requirement under this 
     title applicable to the responsibilities of the Secretary and 
     a guaranty agency.
       ``(2) Eligibility.--Any guaranty agency that had one or 
     more agreements with the Secretary under subsections (b) and 
     (c) of section 428 as of the day before the date of enactment 
     of this section may enter into an agreement with the 
     Secretary under this subsection.
       ``(b) Terms of Agreement.--An agreement between the 
     Secretary and a guaranty agency under this section--
       ``(1) shall be developed by the Secretary, in consultation 
     with the guaranty agency;
       ``(2) shall be for a period not to exceed five years, and 
     may be renewed upon the agreement of the parties;
       ``(3) may include provisions--
       ``(A) specifying the responsibilities of the guaranty 
     agency under the agreement, such as--
       ``(i) administering the issuance of insurance on loans made 
     under this part on behalf of the Secretary;
       ``(ii) monitoring insurance commitments made under this 
     part;
       ``(iii) default prevention activities;
       ``(iv) review of default claims made by lenders;
       ``(v) payment of default claims;
       ``(vi) collection of defaulted loans;
       ``(vii) adoption of internal systems of accounting and 
     auditing that are acceptable to the Secretary, and reporting 
     the result thereof to the Secretary on a timely, accurate, 
     and auditable basis;
       ``(viii) timely and accurate collection and reporting of 
     such other data as the Secretary may require to carry out the 
     purposes of the programs under this title;
       ``(ix) monitoring of institutions and lenders participating 
     in the program under this part; and
       ``(x) the performance of other program functions by the 
     guaranty agency.
       ``(B) regarding the fees the Secretary shall pay, in lieu 
     of revenues that the guaranty agency may otherwise receive 
     under this part, to the guaranty agency under the agreement, 
     and other funds that the guaranty agency may receive or 
     retain under the agreement, except that in no case may the 
     cost to the Secretary of the agreement, as reasonably 
     projected by the Secretary, exceed the cost to the Secretary, 
     as similarly projected, in the absence of the agreement;
       ``(C) regarding the use of net revenues, as described in 
     the agreement under this section, for such other activities 
     in support of postsecondary education as may be agreed to by 
     the Secretary and the guaranty agency;
       ``(D) regarding the standards by which the guaranty 
     agency's performance of its responsibilities under the 
     agreement will be assessed, and the consequences for a 
     guaranty agency's failure to achieve a specified level of 
     performance on 1 or more performance standards;
       ``(E) regarding the circumstances in which a guaranty 
     agency's agreement under this section may be ended in advance 
     of its expiration date;
       ``(F) regarding such other businesses, previously purchased 
     or developed with reserve funds, that relate to the program 
     under this part and in which the Secretary permits the 
     guaranty agency to engage; and
       ``(G) such other provisions as the Secretary may determine 
     to be necessary to protect the United States from the risk of 
     unreasonable loss and to promote the purposes of this part; 
     and
       ``(4) shall provide for uniform lender participation with 
     the guaranty agency under the terms of the agreement.
       ``(c) Termination.--At the expiration or early termination 
     of an agreement under this section, the Secretary shall 
     reinstate the guaranty agency's prior agreements under 
     subsections (b) and (c) of section 428, subject only to such 
     additional requirements as the Secretary determines to be 
     necessary in order to ensure the efficient transfer of 
     responsibilities between the agreement under this section and 
     the agreements under subsections (b) and (c) of section 428, 
     including the guaranty agency's compliance with reserve 
     requirements under sections 422 and 428.''.

     SEC. 419. FEDERAL CONSOLIDATION LOANS.

       (a) Agreements With Lenders.--Section 428C(a) (20 U.S.C. 
     1078-3(a)) is amended--
       (1) by striking subclause (II) of paragraph (3)(B)(i) and 
     inserting the following:
       ``(II) that loans received during the 180-day period 
     following the making of the consolidation loan may be added 
     to the consolidation loan.''; and
       (2) by striking subparagraph (C) of paragraph (4) and 
     inserting the following:
       ``(C) made under part D of this title;''.
       (b) Contents of Agreements.--Section 428C(b) is amended--
       (1) in paragraph (1)(A), by striking ``under this section 
     and (i)'' and everything that follows and inserting ``under 
     this section;'';
       (2) in paragraph (4)(C)(ii)--
       (A) by redesignating subclause (III) as subclause (IV);
       (B) by inserting after subclause (II) the following new 
     clause:
       ``(III) by the Secretary, in the case of a consolidation 
     loan for which the application is received by an eligible 
     lender on or after October 1, 1998, except that the Secretary 
     shall pay such interest only on that portion of the loan that 
     repays Federal Stafford Loans for which the student borrower 
     received an interest subsidy under section 428 or Federal 
     Direct Stafford Loans for which the borrower received an 
     interest subsidy under section 455; or''; and
       (C) in subclause (IV) (as redesignated), by striking 
     ``subclause (I) or (II)'' and inserting ``subclause (I), 
     (II), or (III)''; and
       (3) in paragraph (6)(A), by inserting before the semicolon 
     at the end the following: ``except that (i) a lender is not 
     required to consolidate loans described in subparagraph (D) 
     or (E) of subsection (a)(4); and (ii) a lender is not 
     prohibited from establishing a minimum loan balance for which 
     it will process a consolidation loan application''.
       (c) Extension of Authority.--Section 428C(e) is amended by 
     striking ``September 30, 2002'' and inserting ``September 30, 
     2004''.

     SEC. 420. DISBURSEMENT.

       (a) Requirements.--Section 428G(a)(1) (20 U.S.C. 1078-
     7(a)(1)) is amended by inserting ``greater than one semester, 
     one trimester, one quarter, or four months'' after ``period 
     of enrollment''.
       (b) Disbursement.--Section 428G(b)(1) is amended by adding 
     at the end the following new sentence: ``An institution whose 
     cohort default rate (as determined under section 435(a)) for 
     each of the three most recent fiscal years for which data are 
     available is less than 10 percent shall be exempt from the 
     requirements of this paragraph.''.
       (c) Withholding of Second Disbursement.--Section 428G(d)(2) 
     is amended by inserting ``by more than $300'' after ``under 
     this title''.

     SEC. 421. UNSUBSIDIZED STAFFORD LOANS.

       (a) Eligible Borrowers.--Section 428H(b) (20 U.S.C. 1078-
     8(b)) is amended by striking ``which--'' and everything that 
     follows and inserting the following:
     ``which certifies the eligibility of the student to receive a 
     loan under this part and the amount of the loan for which 
     such student is eligible. A student shall qualify for a loan 
     if the eligible institution has provided the lender with a 
     statement that--
       ``(1) at the lender's request, sets forth such student's 
     estimated cost of attendance (as determined under section 
     472);
       ``(2) sets forth such student's estimated financial 
     assistance, including a loan which qualifies for subsidy 
     payments under section 428; and
       ``(3) sets forth a schedule for disbursement of the 
     proceeds of the loan in installments, consistent with the 
     requirements of section 428G.''.
       (b) Loan Limits.--Section 428H(d)(2)(A) is amended--
       (1) by inserting ``and'' after the semicolon at the end of 
     clause (i); and
       (2) by striking clauses (ii) and (iii) and inserting the 
     following:
       ``(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 clause (i) as the length of such program 
     measured in semester, trimester, quarter, or clock hours 
     bears to one academic year;''.
       (c) Qualification.--Section 428H(e) is amended by adding at 
     the end the following new paragraph:
       ``(7) Qualification for forbearance, deferment, and income-
     sensitive repayment.--A borrower of a loan made under this 
     section may qualify for a forbearance or deferment, or an 
     income-sensitive repayment plan for which the borrower is 
     eligible, immediately upon receipt by the lender or holder of 
     a request from the borrower. Any necessary supporting 
     documentation shall be secured by the lender or holder within 
     30 days of the request in order to continue the forbearance, 
     deferment, or income-sensitive repayment plan.''.
       (d) Repeal.--Section 428H(f) is repealed.

     SEC. 422. REPEAL OF LOAN FORGIVENESS.

       Section 428J (20 U.S.C. 1078-10) is repealed.

     SEC. 423. LEGAL POWERS AND RESPONSIBILITIES.

       (a) General Powers.--Section 432(a)(2) (20 U.S.C. 
     1082(a)(2)) is amended by inserting ``except that this 
     section shall not be deemed to limit court review under 
     chapter 7 of title 5, United States Code'' after 
     ``Secretary's control''.
       (b) Audit of Financial Transactions.--Section 432(f)(1) is 
     amended--
       (1) in subparagraph (B), by striking ``section 435(d)(1) 
     (D), (F), or (H);'' and inserting ``section 435(d)(1); and'';
       (2) in subparagraph (C)--
       (A) by striking ``and Labor'' and inserting ``and the 
     Workforce''; and
       (B) by striking ``; and'' and inserting a period; and

[[Page H2559]]

       (3) by striking subparagraph (D).
       (c) Program of Assistance.--Section 432(k)(3) is amended by 
     striking ``Within 1 year'' and everything that follows 
     through ``1992, the'' and inserting ``The''.
       (d) Common Forms and Formats.--Section 432(m) is amended--
       (1) in paragraph (1)(A), by striking ``The Secretary'' and 
     inserting ``Subject to paragraph (2), the Secretary'';
       (2) by striking subparagraph (C) of paragraph (1);
       (3) in subparagraph (D), by striking ``Nothing'' and 
     inserting ``Subject to paragraph (2), nothing'';
       (4) by redesignating subparagraph (D) of such paragraph as 
     subparagraph (C);
       (5) by redesignating paragraphs (2) and (3) as paragraphs 
     (3) and (4), respectively;
       (6) by inserting after paragraph (1) the following new 
     paragraph:
       ``(2) Free application for federal student aid.--For 
     academic year 1999-2000 and thereafter, the Secretary shall 
     prescribe the Free Application for Federal Student Aid as 
     the application form under this part (other than sections 
     428B and 428C).''; and
       (7) by adding at the end the following new paragraph:
       ``(5) Master promissory note.--
       ``(A) Development and approval.--Within 180 days of 
     enactment of this Act, the Secretary, in cooperation with 
     representatives of guaranty agencies, eligible lenders, 
     institutions, students, and organizations involved in student 
     financial assistance, shall develop and approve a master 
     promissory note that will allow for a multiyear line of 
     credit. Such note shall address the needs of participants in 
     the programs under this part. The Secretary shall also 
     develop and approve a corresponding master promissory note 
     for use under part D of this title that addresses the needs 
     of participants in the programs under such part.
       ``(B) Sale and assignment; enforcement.--Notwithstanding 
     the preceding provisions of this section, each loan made 
     under a master promissory note providing for a line of credit 
     may be sold and assigned independently of any other loan made 
     under the same promissory note, and each such loan shall be 
     separately enforceable in all State and Federal courts on the 
     basis of an original or copy of the master promissory note 
     with its terms.''.
       (e) Default Reduction Management.--Section 432(n) is 
     amended--
       (1) in paragraph (1), by striking ``1993'' and inserting 
     ``1999''; and
       (2) in paragraph (3), by striking ``and Labor'' and 
     inserting ``and the Workforce''.
       (f) Reporting Requirement.--Section 432(p) is amended by 
     striking ``State postsecondary reviewing entities designated 
     under subpart 1 of part H,''.

     SEC. 424. STUDENT LOAN INFORMATION.

       Section 433 (20 U.S.C. 1083) is amended--
       (1) in the first sentence of subsection (a), by inserting 
     ``in simple and understandable terms'' after ``to the 
     borrower''; and
       (2) in the first sentence of subsection (b), by inserting 
     ``in simple and understandable terms'' after ``under this 
     subsection''.

     SEC. 425. DEFINITIONS.

       (a) Cohort Default Rate.--Section 435(a) (20 U.S.C. 
     1085(a)) is amended--
       (1) in subparagraph (A) of paragraph (2)--
       (A) by striking ``or'' at the end of clause (i); and
       (B) by striking clause (ii) and inserting the following:
       ``(ii) there are exceptional mitigating circumstances 
     within the meaning of paragraph (4); or
       ``(iii) there are, in the judgment of the Secretary, other 
     exceptional mitigating circumstances that would make the 
     application of this paragraph inequitable.'';
       (2) in subparagraph (C) of paragraph (2), by striking 
     ``July 1, 1998,'' and inserting ``July 1, 1999,'';
       (3) in paragraph (3), by inserting ``or, at the request of 
     the institution, a complete copy of the records for loans 
     made under this part or of the direct loan servicer for loans 
     made under part D'' after ``and loan servicers''; and
       (4) by adding at the end the following new paragraphs:
       ``(4) Definition of mitigating circumstances.--For purposes 
     of paragraph (2), an institution shall be treated as having 
     exceptional mitigating circumstances that make application of 
     that paragraph inequitable if such institution is certified 
     by a certified public accountant to meet each of the 
     following criteria:
       ``(A) at least two-thirds of the students enrolled on at 
     least a half-time basis at the institution--
       ``(i) are eligible to receive a Federal Pell Grant award 
     that is at least equal to one-half the maximum Federal Pell 
     Grant award for which the student would be eligible based on 
     his or her enrollment status; or
       ``(ii) have an adjusted gross income of the student, and 
     his or her parents (unless the student is an independent 
     student), of less than the poverty level, as determined under 
     criteria established by the Department of Health and Human 
     Services;
       ``(B) at least two-thirds of the students enrolled on a 
     full-time basis at the institution in any 12-month period 
     ending not more than six months prior to the date the 
     institution submits its appeal, and who remain enrolled 
     beyond the point at which the student would be entitled to a 
     tuition refund of 100 percent--
       ``(i) complete the educational program in which they are 
     enrolled within the time normally required to complete that 
     program, as specified in the institution's enrollment 
     contract, catalog, or other materials; or
       ``(ii) continue to be enrolled and are making satisfactory 
     academic progress toward completion of their program; or
       ``(iii) have entered active duty in the armed forces of the 
     United States; and
       ``(C) at least two-thirds of the students enrolled on a 
     full-time basis at the institution who complete the 
     educational program in which they are enrolled within any 12-
     month period ending not more than six months prior to the 
     date the institution submits its appeal are placed for at 
     least 13 weeks in an employment position for which they have 
     been trained, or are enrolled for at least 13 weeks in higher 
     level education program for which the educational program of 
     the institution provided substantial preparation, or have 
     entered active duty in the armed forces of the United States.
       ``(5) Reduction of default rates at certain minority 
     institutions.--
       ``(A) Beneficiaries of exception required to establish 
     management plan.--After July 1, 1998, any institution that 
     has a cohort default rate that equals or exceeds 25 percent 
     for each of the three most recent fiscal years for which data 
     are available and that relies on the exception in paragraph 
     (2)(C) of this subsection to continue to be an eligible 
     institution shall--
       ``(i) submit to the Secretary a default management plan 
     which the Secretary, in his discretion, after consideration 
     of the institution's history, resources, dollars in default, 
     and targets for default reduction, determines is acceptable 
     and provides reasonable assurance that the institution will, 
     by July 1, 2001, have a cohort default rate that is less than 
     25 percent;
       ``(ii) engage an independent third party (which may be paid 
     with funds received under part B of title III) to provide 
     technical assistance in implementing such default management 
     plan; and
       ``(iii) provide to the Secretary, on an annual basis or at 
     such other intervals as the Secretary may require, evidence 
     of cohort default rate improvement and successful 
     implementation of such default management plan.
       ``(B) Discretionary eligibility conditioned on 
     improvement.--Notwithstanding the expiration of the exception 
     in paragraph (2)(C), the Secretary may, in his discretion, 
     continue to treat an institution described in subparagraph 
     (A) of this paragraph as an eligible institution for each of 
     the one-year periods beginning on July 1, 1999, and July 1, 
     2000, only if the institution submits by the beginning of 
     such period evidence satisfactory to the Secretary that--
       ``(i) such institution has complied and is continuing to 
     comply with the requirements of subparagraph (A); and
       ``(ii) such institution has made substantial improvement, 
     during each of the preceding one-year periods, in its cohort 
     default rate.
       ``(6) Special rule based on participation rate indices.--
     (A) An institution that demonstrates to the Secretary that 
     its participation rate index (as defined in regulations in 
     effect on July 1, 1996) is equal to or less than .0375 for 
     any of the three most recent fiscal years for which data are 
     available shall not be subject to paragraph (2).
       ``(B) An institution shall provide the Secretary with 
     sufficient data to determine its participation rate index 
     within 30 days after receiving an initial notification of its 
     draft cohort default rate.
       ``(C) Prior to publication of a final cohort default rate 
     for an institution that provides the data under subparagraph 
     (B), the Secretary shall notify the institution of its 
     compliance or noncompliance with subparagraph (A).''.
       (b) Eligible Lender.--Section 435(d) is amended--
       (1) in paragraph (1)(A)(ii)--
       (A) by striking ``or'' at the end of subclause (I); and
       (B) by inserting before the semicolon at the end of 
     subclause (II) the following: ``, or (III) it is a bank that 
     is a wholly owned subsidiary of a nonprofit foundation, the 
     foundation 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 and has been participating in the program 
     authorized by this part for three years as of the date of 
     enactment of the Higher Education Amendments of 1998 and 
     only makes loans to undergraduate students who are 22 
     years of age or younger and has a portfolio of not more 
     than $10,000,000; and in determining whether the making or 
     holding of loans to students and parents under this part 
     is the primary consumer credit function of the eligible 
     lender, all loans (including student loans and other 
     consumer loans) made or held as trustee or in a trust 
     capacity for the benefit of a third party shall be 
     considered'';
       (2) in paragraph (1)--
       (A) by striking ``and'' at the end of subparagraph (I);
       (B) by striking the period at the end of subparagraph (J) 
     and inserting ``; and''; and
       (C) by adding at the end the following new subparagraph:
       ``(K) a wholly owned subsidiary of a publicly held holding 
     company which, for the three years preceding the date of 
     enactment of this subparagraph, through one or more 
     subsidiaries (i) acts as a finance company, and (ii) 
     participates in the program authorized by this part pursuant 
     to subparagraph (C).''; and
       (3) in paragraph (5), by adding at the end the following 
     new sentence:
     ``It shall not be a violation of this paragraph for a lender 
     to provide assistance to institutions of higher education 
     comparable to the kinds of assistance provided to 
     institutions of higher education by the Department of 
     Education.''.
       (c) Line of Credit.--Section 435(e) is amended to read as 
     follows:
       ``(e) Line of Credit.--The term `line of credit' means an 
     agreement between the lender and the borrower pursuant to a 
     master promissory note under which the lender may make and 
     disburse, in addition to the initial loan, additional loans 
     in subsequent years.''.

[[Page H2560]]

     SEC. 426. DISCHARGE.

       (a) Documentation.--Section 437(a) (20 U.S.C. 1087(a)) is 
     amended by adding at the end the following: ``A certification 
     of permanent and total disability from a Veteran's Hospital 
     shall be acceptable documentation for discharge under this 
     subsection.''.
       (b) Discharge.--Section 437(c)(1) is amended--
       (1) by inserting after ``falsely certified by the eligible 
     institution,'' the following: ``or if the institution failed 
     to make a refund of loan proceeds which it owed to such 
     student's lender,''; and
       (2) by adding at the end the following new sentences: ``In 
     the case of a discharge based upon a failure to refund, the 
     amount of the discharge shall not exceed that portion of the 
     loan which should have been refunded. The Secretary shall 
     report to the Committee on Education and the Workforce of the 
     House of Representatives and the Committee on Labor and Human 
     Resources of the Senate annually as to the dollar amount of 
     loan discharges attributable to failures to make refunds.''.

     SEC. 427. CANCELLATION OF LOANS FOR CERTAIN PUBLIC SERVICE.

       Section 437 is further amended--
       (1) in the section heading, by striking out the period at 
     the end thereof and inserting in lieu thereof a semicolon and 
     ``loan forgiveness for teaching.'';
       (2) by amending the heading for subsection (c) to read as 
     follows: ``Discharge Related to School Closure or False 
     Certification.--''; and
       (3) by adding at the end thereof the following new 
     subsection:
       ``(e) Cancellation of Loans for Teaching.--
       ``(1) Functions of secretary.--The Secretary shall 
     discharge the liability of a borrower of a qualifying loan by 
     repaying the amount owed on the loan, to the extent specified 
     in paragraph (4), for service described in paragraph (3).
       ``(2) Qualifying loans.--
       ``(A) In general.--For purposes of this subsection, a loan 
     is a qualifying loan if--
       ``(i) the loan was made under section 428 on or after the 
     date of enactment of the Higher Education Amendments of 1998 
     to a borrower who, on the date of entering into the note or 
     other written evidence of the loan, had no outstanding 
     balance of principal or interest on any loan made before such 
     date; and
       ``(ii) the loan was obtained to cover the cost of 
     instruction for an academic year after the first and second 
     year of undergraduate education.
       ``(B) Limitation.--The Secretary may not repay loans 
     described in subparagraph (A) to cover the costs of 
     instruction for more than two academic years, or three 
     academic years in the case of a program of instruction 
     normally requiring five years.
       ``(C) Treatment of consolidation loans.--A loan made under 
     section 428C may be a qualifying loan for the purposes of 
     this subsection only to the extent that such loan was used to 
     repay a loan or loans that meet the requirements of 
     subparagraphs (A) and (B), as determined in accordance with 
     regulations prescribed by the Secretary.
       ``(3) Qualifying service.--A loan shall be discharged under 
     paragraph (1) for service by the borrower as a full-time 
     teacher for each complete academic year of service, after 
     completion of the second academic year of service, in a 
     public or other nonprofit private elementary or secondary 
     school--
       ``(A) which is in the school district of a local 
     educational agency which is eligible in such year for 
     assistance pursuant to title I of the Elementary and 
     Secondary Education Act of 1965; and
       ``(B) which for the purpose of this paragraph and for that 
     year has been determined by 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 section 
     1124(c) of the Elementary and Secondary Education Act of 1965 
     exceeds 30 percent of the total enrollment of that school.
       ``(4) Rate of discharge.--(A) Loans shall be discharged 
     under this subsection at the rate of--
       ``(i) 30 percent for the first or second complete academic 
     year of qualifying service as described in paragraph (3) 
     (after completion of two years of service); and
       ``(ii) 40 percent for the third complete year of such 
     qualifying service.
       ``(B) The total amount that may be discharged under this 
     subsection for any borrower shall not exceed $17,750.
       ``(C) If a portion of a loan is discharged under 
     subparagraph (A) for any year, the entire amount of interest 
     on that loan that accrues for that year shall also be 
     discharged by the Secretary.
       ``(D) Nothing in this section shall be construed to 
     authorize refunding of any repayment of a loan.
       ``(5) Limitation on teacher eligibility.--
       ``(A) Secondary school teachers.--A borrower may not 
     receive assistance under this subsection by virtue of 
     teaching in a secondary school unless such borrower majored 
     in the subject area in which they are teaching.
       ``(B) Elementary school teachers.--A borrower may not 
     receive assistance under this subsection by virtue of 
     teaching in a elementary school unless such borrower 
     demonstrates, in accordance with State teacher certification 
     or licensing requirements, subject matter knowledge and 
     teaching skills in reading, writing, mathematics, and other 
     subjects taught in elementary schools.
       ``(6) Prevention of double benefits.--No borrower may, for 
     the same service, receive a benefit under both this 
     subsection and subtitle D of title I of the National and 
     Community Service Act of 1990 (42 U.S.C. 12571 et seq.).
       ``(7) Method of payment.--The Secretary shall specify in 
     regulations the manner in which lenders shall be reimbursed 
     for loans made under this part, or portions thereof, that are 
     discharged under this subsection.
       ``(8) List.--If the list of schools in which a teacher may 
     perform service pursuant to paragraph (3) is not available 
     before May 1 of any year, the Secretary may use the list for 
     the year preceding the year for which the determination is 
     made to make such service determination.
       ``(9) Continuing eligibility.--Any teacher who performs 
     service in a school which--
       ``(A) meets the requirements of paragraph (3) in any year 
     during such service; and
       ``(B) in a subsequent year fails to meet the requirements 
     of such subsection,
     may continue to teach in such school and shall be eligible 
     for loan cancellation pursuant to this subsection with 
     respect to such subsequent years.''.

     SEC. 428. DEBT MANAGEMENT OPTIONS.

       Section 437A (20 U.S.C. 1087-O) is repealed.

     SEC. 429. SPECIAL ALLOWANCES.

       (a) Computation.--Section 438(b)(2) (20 U.S.C. 1087-
     1(b)(2)) is amended--
       (1) in subparagraph (A), by striking ``(E), and (F)'' and 
     inserting ``and (E)''; and
       (2) in subparagraph (B)(iv), by striking ``, (E), or (F)'' 
     and inserting ``or (E)''.
       (b) Origination Fees.--Section 438(c) is amended--
       (1) in paragraph (2)--
       (A) by striking ``(other than'' and inserting ``(including 
     loans made under section 428H, but excluding''; and
       (B) by adding at the end the following new sentence: 
     ``Except as provided in paragraph (8), a lender is not 
     authorized to assess an origination fee under this paragraph 
     unless the lender assesses the same fee to all student 
     borrowers.''; and
       (2) by adding at the end the following new paragraph:
       ``(8) Exception.--Notwithstanding paragraph (2), a lender 
     may assess a lesser origination fee for a borrower 
     demonstrating greater financial need as determined by such 
     borrower's adjusted gross family income.''.
       (c) Lending From Proceeds of Tax Exempt Obligations.--
     Section 438 is amended--
       (1) by striking subsection (e); and
       (2) by redesignating subsection (f) as subsection (e).
       (d) Study.--Section 438 is amended by adding at the end the 
     following new subsection:
       ``(f) Study.--The Comptroller General shall conduct a 
     statistical analysis of the subsidized and unsubsidized 
     student loan programs under part B to gather data on lenders' 
     policies on charging origination fees and to determine if 
     there are any anomalies that would indicate any 
     institutional, programmatic, or socioeconomic discrimination 
     in the assessing or waiving of such fees. The Comptroller 
     General shall report to the appropriate committees of 
     Congress within two years after the date of enactment of the 
     Higher Education Amendments of 1998.''.

                  PART C--FEDERAL WORK-STUDY PROGRAMS

     SEC. 435. AMENDMENTS TO PART C.

       (a) Extension of Authority; Definition.--
       (1) Eligible students.--Section 441(a) (20 U.S.C. 2751(a)) 
     is amended by inserting after ``professional students'' the 
     following: ``, including students participating in an 
     internship or practicum, or as a research assistant, as 
     determined by the Secretary,''.
       (2) Extension of authority.--Section 441(b) is amended by 
     striking ``$800,000,000 for fiscal year 1993'' and inserting 
     ``$1,000,000,000 for fiscal year 1999''.
       (3) Definition of community service.--Section 441(c) is 
     amended by striking ``which are'' and inserting ``that are 
     performed off-campus or on-campus and that are''.
       (b) Allocation of Funds.--Section 442 (42 U.S.C. 2752) is 
     amended--
       (1) by striking subsection (b);
       (2) in subsection (c)(1), by striking ``three-quarters of 
     the remainder'' and inserting ``the remainder'';
       (3) in subsection (c)(2)(A)(i), by striking ``subsection 
     (d)'' and inserting ``subsection (c)'';
       (4) in subsection (e)(1), by striking ``subsection (c)'' 
     and inserting ``subsection (b)''; and
       (5) by redesignating subsections (c), (d), (e), and (f) as 
     subsections (b), (c), (d), and (e), respectively.
       (c) Tutoring and Literacy Activities.--
       Section 443 of the Higher Education Act of 1965 (42 U.S.C. 
     2753) is amended--
       (1) in subsection (b)(2)--
       (A) by striking ``and'' at the end of subparagraph (A);
       (B) by redesignating subparagraph (B) as subparagraph (C); 
     and
       (C) by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) in academic year 1999 and succeeding academic years, 
     an institution shall use at least 2 percent of the total 
     amount of funds granted to such institution under this 
     section for such academic year in accordance with subsection 
     (d); and''; and
       (2) by adding at the end the following new subsection:
       ``(d) Tutoring and Literacy Activities.--
       ``(1) Use of funds.--In any academic year to which 
     subsection (b)(2)(B) applies, an institution shall use the 
     amount required to be used in accordance with this subsection 
     to compensate (including compensation for time spent in 
     directly related training and travel) students--
       ``(A) employed as a reading tutor for children who are in 
     preschool through elementary school; or
       ``(B) employed in family literacy projects.
       ``(2) Priority for schools.--An institution shall--

[[Page H2561]]

       ``(A) give priority, in using such funds, to the employment 
     of students in the provision of tutoring services in schools 
     that--
       ``(i) are identified for school improvement under section 
     1116(c) of the Elementary and Secondary Education Act of 
     1965; or
       ``(ii) are selected by a local educational agency under 
     section 15104(a)(2) of such Act; and
       ``(B) ensure that any student compensated with such funds 
     who is employed in a school selected under section 
     15104(a)(2) of the Elementary and Secondary Education Act of 
     1965 is trained in the instructional practices based on 
     reliable, replicable research on reading used by the school 
     pursuant to such section 15104.
       ``(3) Federal share.--The Federal share of the compensation 
     of work study students compensated under this subsection may 
     exceed 75 percent.
       ``(4) Waiver.--The Secretary may waive the requirements of 
     this subsection if the Secretary determines that enforcing 
     such requirements would cause a hardship for students at the 
     institution.
       ``(5) Return of funds.--Any institution that does not use 
     the amount required under this subsection, and that does not 
     request and receive a waiver from the Secretary under 
     paragraph (4), shall return to the Secretary, at such time as 
     the Secretary may require for reallocation under paragraph 
     (6), any balance of such amount that is not used as so 
     required.
       ``(6) Reallocation.--The Secretary shall reallot any 
     amounts returned pursuant to paragraph (5) among institutions 
     that used at least 4 percent of the total amount of funds 
     granted to such institution under this section to compensate 
     students employed in tutoring and literacy activities in the 
     preceding academic year. Such funds shall be reallotted among 
     such institutions on the same basis as excess eligible 
     amounts are allocated to institutions pursuant to section 
     442(c). Funds received by institutions pursuant to this 
     paragraph shall be used in the same manner as amounts 
     required to be used in accordance with this subsection.''.
       (d) Grant Requirements.--
       (1) Community service.--Section 443(b)(2)(A) (42 U.S.C. 
     2753(b)(2)(A)) is amended--
       (A) by striking ``in fiscal year 1994 and succeeding fiscal 
     years,''; and
       (B) by inserting ``(including time spent in travel or 
     training, or both, directly related to such community 
     service)'' after ``community service''.
       (2) Use of funds for independent and less-than-full-time 
     students.--Section 443(b)(3) (42 U.S.C. 2753(b)(3)) is 
     amended to read as follows:
       ``(3) provide that in the selection of students for 
     employment under such work-study program, only students, who 
     demonstrate financial need in accordance with part F of this 
     title, and who meet the requirements of section 484 will be 
     assisted, except that if the institution's grant under this 
     part is directly or indirectly based in part on the financial 
     need demonstrated by students who are (A) attending the 
     institution less than full time, or (B) independent students, 
     then grant funds shall be made available to such less than 
     full-time and independent students;''.
       (3) Availability of employment.--Section 443(b)(6) is 
     amended by striking everything after ``in need thereof'' and 
     inserting a semicolon.
       (4) Academic relevance.--Section 443(c)(4) is amended by 
     inserting before the semicolon at the end the following: ``, 
     to the maximum extent practicable''.
       (e) Flexible Use of Funds.--Section 445(b) (42 U.S.C. 
     2755(b)) is amended by adding at the end the following new 
     paragraph:
       ``(3) An eligible institution may, with the permission of a 
     student, make payments to the student under this part by 
     crediting the student's account at the institution or by 
     making a direct deposit to the student's account at a 
     depository institution. An eligible institution may only 
     credit the student's account at the institution for (A) 
     tuition and fees, (B) in the case of institutionally owned 
     housing, room and board, and (C) other institutionally 
     provided goods and services.''.
       (f) Job Location and Development Programs.--Section 446 (42 
     U.S.C. 2756) is amended--
       (1) in subsection (a)(1)--
       (A) by striking ``$50,000'' and inserting ``$60,000''; and
       (B) by striking ``community service jobs, for currently 
     enrolled students'' and inserting ``community service jobs 
     and cooperative education jobs, for currently enrolled 
     students, including students participating in work-study 
     programs under this part''; and
       (2) in subsection (b)--
       (A) by redesignating paragraphs (4) through (6) as 
     paragraphs (5) through (7); and
       (B) by inserting after paragraph (3) the following new 
     paragraph:
       ``(4) provide that the institution will notify the 
     Secretary if the institution will use funds under this 
     section to develop cooperative education jobs and will 
     provide assurances that--
       ``(A) the funds provided under this paragraph will 
     supplement and not supplant any cooperative education funds 
     available to the institution;
       ``(B) in the case of 2-year programs, funds will be used to 
     develop and expand cooperative education, jobs for associate 
     degree or certificate students only;
       ``(C) the work portion of a cooperative education job 
     developed or expanded under this paragraph will be related to 
     a student's academic program; and
       ``(D) the institution will furnish the Secretary a report 
     on cooperative education jobs expanded and developed under 
     this paragraph, including--
       ``(i) how the funds were used;
       ``(ii) a list of employers and whether the employer is a 
     for-profit or not-for-profit entity; and
       ``(iii) the employers' role in the cooperative education 
     job.''.
       (g) Work Colleges Extension of Authority.--Section 448(f) 
     (42 U.S.C. 2756b(f)) is amended by striking ``1993'' and 
     inserting ``1999''.

          PART D--WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM

     SEC. 436. SELECTION OF INSTITUTIONS.

       (a) General Authority.--Section 453(a) (20 U.S.C. 1087c(a)) 
     is amended--
       (1) by striking ``Phase-In'' and everything that follows 
     through ``General authority.--'' and inserting ``General 
     Authority.--''; and
       (2) by striking paragraphs (2), (3), and (4).
       (b) Selection Criteria.--Section 453(b)(2) is amended by 
     striking ``prescribe,'' and everything that follows through 
     the end of subparagraph (B) and inserting ``prescribe.''.
       (c) Origination.--Section 453(c) is amended--
       (1) in paragraph (2)--
       (A) in the heading, by striking ``Transition selection 
     criteria'' and inserting ``Selection criteria'';
       (B) by striking ``For academic year 1994-1995, the 
     Secretary'' and inserting ``The Secretary'';
       (C) by striking subparagraph (A); and
       (D) in subparagraph (E), by striking everything after 
     ``deficiencies'' and inserting a semicolon; and
       (E) by redesignating subparagraphs (B) through (H) as 
     subparagraphs (A) through (G); and
       (2) in paragraph (3)--
       (A) in the heading, by striking ``after transition''; and
       (B) by striking ``For academic year 1995-1996 and 
     subsequent academic years, the Secretary'' and inserting 
     ``The Secretary''.

     SEC. 437. TERMS AND CONDITIONS.

       (a) Interest Rates.--
       (1) Amendment.--Section 455(b) (20 U.S.C. 1087e(b)) is 
     amended to read as follows:
       ``(b) Interest Rate.--
       ``(1) Rates for fdsl and fdusl.--For Federal Direct 
     Stafford Loans and Federal Direct Unsubsidized Stafford Loans 
     for which the first disbursement is made on or after July 1, 
     1998, the applicable rate of interest shall, during any 12-
     month period beginning on July 1 and ending on June 30, be 
     determined on the preceding June 1 and be equal to--
       ``(A) the bond equivalent rate of 91-day Treasury bills 
     auctioned at the final auction held prior to such June 1; 
     plus
       ``(B) 2.3 percent,
     except that such rate shall not exceed 8.25 percent.
       ``(2) In school and grace period rules.--With respect to 
     any Federal Direct Stafford Loan or Federal Direct 
     Unsubsidized Stafford Loan for which the first disbursement 
     is made on or after July 1, 1995, the applicable rate of 
     interest for interest which accrues--
       ``(A) prior to the beginning of the repayment period of the 
     loan; or
       ``(B) during the period in which principal need not be paid 
     (whether or not such principal is in fact paid) by reason of 
     a provision described in section 428(b)(1)(M) or 
     427(a)(2)(C),
     shall be determined under paragraph (1) by substituting `1.7 
     percent' for `2.3 percent'.
       ``(3) PLUS loans.--With respect to Federal Direct PLUS Loan 
     for which the first disbursement is made on or after July 1, 
     1998, the applicable rate of interest shall be determined 
     under paragraph (1)--
       ``(A) by substituting `3.1 percent' for `2.3 percent'; and
       ``(B) by substituting `9.0 percent' for `8.25 percent'.
       ``(4) Repayment incentives.--Notwithstanding any other 
     provision of this part, the Secretary is authorized to 
     prescribe in regulation such reductions in the interest rate 
     paid by a borrower of a loan made under this part as the 
     Secretary determines appropriate to encourage on-time 
     repayment. Such reductions may be offered only if the 
     Secretary determines they are both cost neutral and in the 
     best financial interest of the Federal Government. Any 
     increase in subsidy costs resulting from such reductions must 
     be completely offset by corresponding savings in funds 
     available for the Direct Loan Program in that fiscal year 
     from section 458 and other administrative accounts.
       ``(5) Publication.--The Secretary shall determine the 
     applicable rates of interest under this subsection after 
     consultation with the Secretary of the Treasury and shall 
     publish such rate in the Federal Register as soon as 
     practicable after the date of determination.''.
       (2) Effective date.--The amendments made by this section 
     shall apply with respect to any loan made under part D of 
     title IV of the Higher Education Act of 1965 for which the 
     first disbursement is made on or after July 1, 1998.
       (b) Consolidation Loans.--The first sentence of section 
     455(g) is amended by striking everything after ``section 
     428C(a)(4)'' and inserting a period.

     SEC. 438. CONTRACTS.

       Section 456(b) (20 U.S.C. 1087f(b)) is amended--
       (1) by inserting ``and'' after the semicolon at the end of 
     paragraph (3);
       (2) by striking paragraph (4); and
       (3) by redesignating paragraph (5) as paragraph (4).

     SEC. 439. FUNDS FOR ADMINISTRATIVE EXPENSES.

       Section 458 (20 U.S.C. 1087h) is amended--
       (1) in subsection (a)(1), by striking subparagraph (B) and 
     everything that follows and inserting the following:
       ``(B) account maintenance fees payable to guaranty agencies 
     under part B and calculated in accordance with paragraph (2),

     not to exceed (from such funds not otherwise appropriated) 
     $626,000,000 in fiscal year 1999,

[[Page H2562]]

     $726,000,000 in fiscal year 2000, $770,000,000 in fiscal year 
     2001, $780,000,000 in fiscal year 2002, and $795,000,000 in 
     fiscal year 2003. Account maintenance fees under subparagraph 
     (B) of this paragraph shall be paid quarterly and deposited 
     in the Operating Fund established under 422B. The Secretary 
     may carry over funds available under this section to a 
     subsequent fiscal year.'';
       (2) by striking paragraph (2) of subsection (a) and 
     inserting the following:
       ``(2) Calculation basis.--Account maintenance fees payable 
     to guaranty agencies under paragraph (1)(B) shall be 
     calculated for fiscal year 1999 and fiscal year 2000, on the 
     basis of 0.12 percent of the original principal amount of 
     outstanding loans on which insurance was issued under part B, 
     and for fiscal years 2001 and succeeding fiscal years, shall 
     be calculated on the basis of 0.10 percent of the original 
     principal amount of outstanding loans on which insurance was 
     issued under part B.''; and
       (3) by striking subsection (d).

     SEC. 440. AUTHORITY TO SELL LOANS.

       Part D of title IV (20 U.S.C. 1087a et seq.) is amended by 
     adding at the end the following new section:

     ``SEC. 459. AUTHORITY TO SELL LOANS.

       ``The Secretary, in consultation with the Secretary of the 
     Treasury, is authorized to sell loans made under this part on 
     such terms as the Secretary determines are in the best 
     interest of the United States, except that any such sale 
     shall not result in any cost to the Federal Government. 
     Notwithstanding any other provision of law, the proceeds of 
     any such sale may be used by the Secretary to offer 
     reductions in the interest rate paid by a borrower of a loan 
     made under this part as the Secretary determines appropriate 
     to encourage on-time repayment. Such reductions may be 
     offered only if the Secretary determines they are in the best 
     financial interests of the Federal Government.''.

     SEC. 441. CANCELLATION OF LOANS FOR CERTAIN PUBLIC SERVICE.

       Part D of title IV is amended by inserting after section 
     459, as added by section 440, the following new section:

     ``SEC. 459A. CANCELLATION OF LOANS FOR CERTAIN PUBLIC 
                   SERVICE.

       ``(a) Cancellation of Percentage of Debt Based on Years of 
     Qualifying Service.--
       ``(1) Functions of secretary.--The percent specified in 
     paragraph (4) of the total amount of any qualifying loan 
     shall be canceled for each complete year of service by the 
     borrower described in paragraph (3).
       ``(2) Qualifying loans.--
       ``(A) In general.--For purposes of this subsection, a loan 
     is a qualifying loan if--
       ``(i) the loan was a Federal Direct Stafford Loan made on 
     or after the date of enactment of the Higher Education 
     Amendments of 1998 to a borrower who, on the date of entering 
     into the note or other written evidence of the loan, had no 
     outstanding balance of principal or interest on any loan made 
     before such date; and
       ``(ii) the loan was obtained to cover the cost of 
     instruction for an academic year after the first and second 
     year of undergraduate education.
       ``(B) Limitation.--The Secretary may not repay loans 
     described in subparagraph (A) to cover the costs of 
     instruction for more than two academic years, or three 
     academic years in the case of a program of instruction 
     normally requiring five years.
       ``(C) Treatment of consolidation loans.--A Federal Direct 
     Consolidation Loan may be a qualifying loan for the purposes 
     of this subsection only to the extent that such loan was used 
     to repay a loan or loans that meet the requirements of 
     subparagraphs (A) and (B), as determined in accordance with 
     regulations prescribed by the Secretary.
       ``(3) Qualifying service.--A loan shall be cancelled under 
     paragraph (1) for service by the borrower as a full-time 
     teacher for each complete academic year of service, after 
     completion of the second academic year of service, in a 
     public or other nonprofit private elementary or secondary 
     school--
       ``(A) which is in the school district of a local 
     educational agency which is eligible in such year for 
     assistance pursuant to title I of the Elementary and 
     Secondary Education Act of 1965; and
       ``(B) which for the purpose of this paragraph and for that 
     year has been determined by 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 section 
     1124(c) of the Elementary and Secondary Education Act of 1965 
     exceeds 30 percent of the total enrollment of that school.
       ``(4) Percentage of cancellation.--(A) The percent of a 
     loan which shall be canceled under paragraph (1) of this 
     subsection is at the rate of--
       ``(i) 30 percent for the first or second complete academic 
     year of qualifying service as described in paragraph (3) 
     (after completion of two years of service); and
       ``(ii) 40 percent for the third complete year of such 
     qualifying service.
       ``(B) The total amount that may be canceled under this 
     subsection for any borrower shall not exceed $17,750.
       ``(C) If a portion of a loan is canceled under this 
     subsection for any year, the entire amount of interest on 
     such loan which accrues for such year shall be canceled.
       ``(D) Nothing in this section shall be construed to 
     authorize refunding of any repayment of a loan.
       ``(5) Limitation on teacher eligibility.--
       ``(A) Secondary school teachers.--A borrower may not 
     receive assistance under this subsection by virtue of 
     teaching in a secondary school unless such borrower majored 
     in the subject area in which they are teaching.
       ``(B) Elementary school teachers.--A borrower may not 
     receive assistance under this subsection by virtue of 
     teaching in a elementary school unless such borrower 
     demonstrates, in accordance with State teacher certification 
     or licensing requirements, subject matter knowledge and 
     teaching skills in reading, writing, mathematics, and other 
     subjects taught in elementary schools.
       ``(6) Definition.--For the purpose of this section, the 
     term `year' where applied to service as a teacher means an 
     academic year as defined by the Secretary.
       ``(7) Prevention of double benefits.--No borrower may, for 
     the same volunteer service, receive a benefit under both this 
     section and subtitle D of title I of the National and 
     Community Service Act of 1990 (42 U.S.C. 12571 et seq.).
       ``(b)  Special Rules.--
       ``(1) List.--If the list of schools in which a teacher may 
     perform service pursuant to subsection (a)(3) is not 
     available before May 1 of any year, the Secretary may use the 
     list for the year preceding the year for which the 
     determination is made to make such service determination.
       ``(2) Continuing eligibility.--Any teacher who performs 
     service in a school which--
       ``(A) meets the requirements of subsection (a)(3) in any 
     year during such service; and
       ``(B) in a subsequent year fails to meet the requirements 
     of such subsection,

     may continue to teach in such school and shall be eligible 
     for loan cancellation pursuant to subsection (a)(1) with 
     respect to such subsequent years.''.

                     PART E--FEDERAL PERKINS LOANS

     SEC. 445. AMENDMENTS TO PART E.

       (a) Extension of Authority.--Section 461(b) (20 U.S.C. 
     1087aa(b)) is amended--
       (1) in paragraph (1), by striking ``1993'' and inserting 
     ``1999''; and
       (2) in paragraph (2), by striking ``1997'' each place it 
     appears and inserting ``2003''.
       (b) Allocation of Funds.--Section 462 (20 U.S.C. 1087bb) is 
     amended--
       (1) by striking subsection (b);
       (2) in subsection (c)(1), by striking ``three-quarters of 
     the remainder'' and inserting ``the remainder'';
       (3) in subsection (c)(2), by striking ``subsection (g)'' 
     and inserting ``subsection (f)'';
       (4) in subsection (c)(3)--
       (A) by striking ``subsection (d)'' and inserting 
     ``subsection (c)'';
       (B) by striking ``subsection (f)'' and inserting 
     ``subsection (e)''; and
       (C) by striking ``subsection (g)'' and inserting 
     ``subsection (f)'';
       (5) in subsection (f)(1), by striking ``subsection (g)'' 
     and inserting ``subsection (f)'';
       (6) in subsection (j)(2)--
       (A) by striking ``subsection (c)'' and inserting 
     ``subsection (b)''; and
       (B) by striking ``subsection (c) of section 462'' and 
     inserting ``subsection (b)''; and
       (7) by redesignating subsections (c) through (j) as 
     subsections (b) through (i), respectively.
       (c) Default Reduction Penalties.--Section 462(e)(2)(A) (as 
     redesignated by subsection (b)(7) of this section) is amended 
     by inserting before the semicolon at the end the following: 
     ``, except that a plan shall not be required with respect to 
     any such institution that has a default rate of less than 20 
     percent and has less than 100 students who have loans under 
     this part in any academic year''.
       (d) Definitions for Default Rate Calculations.--Section 
     462(g) (as redesignated by subsection (b)(7) of this section) 
     is amended by adding at the end the following new paragraph:
       ``(5) For the purpose of this subsection, the term 
     `satisfactory arrangements to resume payment' includes--
       ``(A) receipt of voluntary monthly payments for three 
     consecutive months after the time periods specified in 
     paragraph (4);
       ``(B) receipt of voluntary payments sufficient to bring the 
     loan current prior to the calculation being made for any 
     award year under paragraph (3);
       ``(C) obtaining any deferment, postponement, 
     rehabilitation, forbearance, or cancellation of the loan 
     after the time periods specified in paragraph (4), but prior 
     to the calculation being made for any award year under 
     paragraph (3);
       ``(D) receipt of the full amount due on the loan after the 
     time periods specified in paragraph (4), but prior to the 
     calculation being made for any award year under paragraph 
     (3); or
       ``(E) any other arrangements to resume payment which the 
     Secretary determines to be satisfactory.''.
       (e) Reports to Credit Bureaus of Payment Resumptions.--
     Section 463(c) (20 U.S.C. 1087cc(c)) is amended by adding at 
     the end the following new paragraph:
       ``(5) Each institution of higher education shall notify the 
     appropriate credit bureau organizations whenever a borrower 
     of a loan that is made and held by the institution and that 
     is in default makes 12 consecutive monthly payments on such 
     loan, for the purpose of encouraging such organizations to 
     update the status of information maintained with respect to 
     that borrower.''.
       (f) Incentive Repayment Programs.--Section 463 is amended 
     by adding at the end the following new subsection:
       ``(f) Incentive Repayment Programs.--
       ``(1) Program authorized.--Any institution of higher 
     education participating in the program under this part may 
     establish, with the approval of the Secretary, an incentive 
     repayment program designed to reduce defaults on loans under 
     this part and to assist in replenishing the student loan fund 
     established under this part.
       ``(2) Contents of program.--An incentive repayment program 
     under this part may contain provisions that--

[[Page H2563]]

       ``(A) offer a reduction in the interest rate on a loan on 
     which the borrower has made 48 consecutive monthly payments, 
     but in no event may the interest rate be reduced by more than 
     one percent;
       ``(B) provide for a discount on the balance owed on a loan 
     on which the borrower pays the principal and interest in full 
     prior to the end of the applicable repayment period, but in 
     no event shall such discount exceed 5 percent of the unpaid 
     principal balance due on the loan at the time the early 
     repayment is made; and
       ``(C) include such other incentive repayment options as the 
     institution determines, with the approval of the Secretary, 
     will carry out the objectives of this subsection.
       ``(3) No net cost to the government.--No incentive option 
     contained in a program authorized by this subsection may be 
     charged to the Federal Government.''.
       (g) Terms of Loans.--
       (1) Aggregate amount.--Section 464(a)(2)(B) (20 U.S.C. 
     1087dd(a)(2)(B)) is amended by striking ``the aggregate of 
     the loans for all years'' and inserting ``the aggregate 
     unpaid principal amount for all loans''.
       (2) Allocation to less-than-full-time students.--Section 
     464(b) is amended--
       (A) by striking ``(1)''; and
       (B) by striking paragraph (2).
       (3) Qualification for deferments.--Section 464(c)(2) is 
     amended by adding at the end the following new subparagraph:
       ``(C) An individual with an outstanding loan balance who 
     meets the eligibility criteria for a deferment described in 
     subparagraph (A) as in effect on the date of enactment of 
     this subparagraph shall be eligible for deferment under this 
     paragraph notwithstanding any contrary provision of the 
     promissory note under which the loan or loans were made, and 
     notwithstanding any amendment (or effective date provision 
     relating to any amendment) to this section made prior to the 
     date of such deferment.''.
       (4) Clerical amendment.--The matter following clause (iv) 
     of section 464(c)(2)(A) is amended by striking ``subparagraph 
     (B)'' and inserting ``subparagraph (A) of paragraph (1)''.
       (h) Rehabilitation and Discharge of Loans.--Section 464 is 
     further amended by adding at the end the following new 
     subsections:
       ``(g) Rehabilitation of Loans.--(1)(A) If the borrower of a 
     loan made under this part who has defaulted on the loan makes 
     12 on-time, consecutive, monthly payments of amounts owed on 
     the loan, the loan shall be considered rehabilitated, and the 
     institution that made the loan (or the Secretary, in the case 
     of a loan held by the Secretary) shall instruct any credit 
     reporting organization to which the default was reported to 
     remove the default from the borrower's credit history.
       ``(B) As long as the borrower continues to make scheduled 
     repayments on a loan rehabilitated under this paragraph, the 
     rehabilitated loan shall be subject to the same terms and 
     conditions, and qualify for the same benefits and privileges, 
     as other loans made under this part.
       ``(C) The borrower of a rehabilitated loan shall not be 
     precluded by section 484 from receiving additional grant, 
     loan, or work assistance under this title (for which he or 
     she is otherwise eligible) on the basis of defaulting on the 
     loan prior to such rehabilitation.
       ``(D) A borrower may obtain the benefit of this paragraph 
     with respect to rehabilitating the loan only once.
       ``(2) If the borrower of loan made under this part who has 
     defaulted on that loan makes 6 on-time, consecutive, monthly 
     payments of amounts owed on such loan, the borrower's 
     eligibility for grant, loan, or work assistance under this 
     title shall be restored. A borrower may obtain the benefit of 
     this paragraph with respect to restored eligibility only 
     once.
       ``(h) Discharge.--
       ``(1) In general.--If a student borrower who received a 
     loan made under this part on or after January 1, 1986, is 
     unable to complete the program in which such student is 
     enrolled due to the closure of the institution, then the 
     Secretary shall discharge the borrower's liability on the 
     loan (including interest and collection fees) by repaying the 
     amount owed on the loan and shall subsequently pursue any 
     claim available to such borrower against the institution and 
     its affiliates and principals, or settle the loan obligation.
       ``(2) Assignment.--A borrower whose loan has been 
     discharged pursuant to this subsection shall be deemed to 
     have assigned to the United States the right to a loan refund 
     up to the amount discharged against the institution and its 
     affiliates and principals.
       ``(3) Eligibility for additional assistance.--The period of 
     a student's assistance at an institution at which the student 
     was unable to complete a course of study due to the closing 
     of the institution shall not be considered for purposes of 
     calculating the student's period of eligibility for 
     additional assistance under this title.
       ``(4) Special rule.--A borrower whose loan has been 
     discharged pursuant to this subsection shall not be 
     precluded, because of that discharge, from receiving 
     additional grant, loan, or work assistance under this title 
     for which the borrower would be otherwise eligible (but for 
     the default on the discharged loan). The amount discharged 
     under this subsection shall be treated the same as loans 
     under section 465(a)(5).
       ``(5) Reporting.--The Secretary or institution, as the case 
     may be, shall report to credit bureaus with respect to loans 
     that have been discharged pursuant to this subsection.''.
       (i) Cancellation.--Section 465 (20 U.S.C. 1087ee) is 
     amended--
       (1) in subsection (a)--
       (A) in paragraph (2)(C), by striking ``section 676(b)(9)'' 
     and inserting ``section 635(a)(10)'';
       (B) by striking subparagraph (H) of paragraph (2) and 
     inserting the following:
       ``(H) as a full-time nurse or medical technician providing 
     health care services;'';
       (C) by striking the period at the end of subparagraph (I) 
     of such paragraph and inserting a semicolon;
       (D) by adding at the end of such paragraph the following 
     new subparagraphs:
       ``(J) as a member of the Commissioned Corps of the Public 
     Health Service of the United States; or
       ``(K) as a non-physician mental health professional 
     providing health care services in a health professional 
     shortage area designated under section 332 of the Public 
     Health Service Act.'';
       (E) in the last sentence of paragraph (2), by striking 
     ``section 602(a)(1)'' and inserting ``section 602(3)''; and
       (F) by adding at the end the following new paragraph:
       ``(7) An individual with an outstanding loan obligation who 
     performs service of any type that is described in paragraph 
     (2) as in effect on the date of enactment of this paragraph 
     shall be eligible for cancellation under this section for 
     such service notwithstanding any contrary provision of the 
     promissory note under which the loan or loans were made, and 
     notwithstanding any amendment (or effective date provision 
     relating to any amendment) to this section made prior to the 
     date of such service.''; and
       (2) in subsection (b), by adding at the end the following 
     new sentence: ``To the extent feasible, the Secretary shall 
     pay the amounts for which any institution qualifies under 
     this subsection no later than three months after the 
     institution files an institutional application for campus-
     based funds.''.
       (j) Distribution of Assets.--Section 466 (20 U.S.C. 1087ff) 
     is amended--
       (1) by striking ``1996'' each place it appears and 
     inserting ``2003''; and
       (2) by striking ``1997'' each place it appears and 
     inserting ``2004''.
       (k) Collection of Defaulted Loans.--
       (1) Repeal.--Subsection (c) of section 467 (20 U.S.C. 
     1087gg(c)) is repealed.
       (2) Deposit.--Any funds in the Perkins Revolving Loan Fund 
     on the date of enactment of this Act shall be deposited in 
     the general fund of the Treasury.
       (l) Status Confirmation Reports.--Section 468 (20 U.S.C. 
     1087hh) is amended--
       (1) by inserting ``(a) In General.--'' before ``In carrying 
     out''; and
       (2) by adding at the end the following new subsection:
       ``(b) Student Status Confirmation Reports.--The Secretary 
     shall ensure that borrowers under this part are included in 
     the student status confirmation report required by the 
     Secretary in the same manner as borrowers under parts B and D 
     of this title.''.

                         PART F--NEED ANALYSIS

     SEC. 446. COST OF ATTENDANCE.

       Section 472 (20 U.S.C. 1087ll) is amended--
       (1) in paragraph (2), by inserting after ``personal 
     expenses'' the following: ``, including a reasonable 
     allowance for the rental or purchase of a personal 
     computer,''; and
       (2) in paragraph (10), by striking everything after 
     ``determining costs'' and inserting a semicolon.

     SEC. 447. DATA ELEMENTS.

       Section 474(b)(3) (20 U.S.C. 1087nn(b)(3)) is amended by 
     inserting ``, excluding the student's parents,'' after 
     ``family of the student''.

     SEC. 448. FAMILY CONTRIBUTION FOR DEPENDENT STUDENTS.

       (a) Parents' Contribution From Adjusted Available Income.--
     Section 475(b)(3) (20 U.S.C. 1087oo(b)(3)) is amended by 
     inserting ``, excluding the student's parents,'' after 
     ``number of the family members''.
       (b) Family Contribution From Assets.--Section 475 is 
     amended--
       (1) in subsection (b)(1)(B), by striking ``parents' 
     contribution'' and inserting ``family contribution'';
       (2) in the heading of subsection (d), by striking 
     ``Parents' Contribution'' and inserting ``Family 
     Contribution'';
       (3) in subsection (d)(1)--
       (A) by striking ``parents' contribution'' and inserting 
     ``family contribution''; and
       (B) by striking ``parental net worth'' in subparagraph (A) 
     and inserting ``family net worth'';
       (4) in subsection (d)(2)--
       (A) by striking ``Parental'' in the heading and inserting 
     ``Family'';
       (B) by striking ``parental net worth'' and inserting 
     ``family net worth''; and
       (C) by inserting ``, for both the parents and the dependent 
     student'' after ``by adding'';
       (5) by striking subsection (h); and
       (6) by redesignating subsection (i) as subsection (h).
       (c) Student Contribution From Available Income.--Section 
     475(g) is amended--
       (1) in paragraph (2)--
       (A) in subparagraph (D), by striking ``$1,750; and'' and 
     inserting ``$3,000, or a successor amount prescribed by the 
     Secretary under section 478;'';
       (B) by striking the period at the end of subparagraph (E) 
     and inserting ``; and''; and
       (C) by inserting after subparagraph (E) the following new 
     subparagraph:
       ``(F) an allowance for parents' negative available income, 
     determined in accordance with paragraph (6).''; and
       (2) by adding at the end the following new paragraph:
       ``(6) Allowance for parents' negative available income.--
     The allowance for parents' negative available income is the 
     amount, if any, by which the sum of the amounts deducted 
     under subparagraphs (A) through (F) of paragraph (2) exceeds 
     the parents' total income (as defined in section 480).''.
       (e) Adjustments to Students Contribution for Enrollment 
     Periods Other Than Nine

[[Page H2564]]

     Months.--Section 475 is amended by adding at the end the 
     following new subsection:
       ``(i) Adjustments to Students Contribution for Enrollment 
     Periods of Less Than Nine Months.--For periods of enrollment 
     of less than nine months, the student's contribution from 
     adjusted available income (as determined under subsection 
     (g)) is determined, for purposes other than subpart 2 of part 
     A, by dividing amount determined under such subsection by 
     nine, and multiplying the result by the number of months in 
     the period of enrollment.''.

     SEC. 449. FAMILY CONTRIBUTION FOR INDEPENDENT STUDENTS 
                   WITHOUT DEPENDENTS OTHER THAN A SPOUSE.

       (a) Adjustments for Enrollment Periods Other Than Nine 
     Months.--Section 476(a) (20 U.S.C. 1087pp(a)) is amended--
       (1) by striking ``and'' at the end of paragraph (1)(B);
       (2) by inserting ``and'' after the semicolon at the end of 
     paragraph (2); and
       (3) by inserting after paragraph (2) the following new 
     paragraph:
       ``(3) for periods of enrollment of other than 9 months, for 
     purposes other than subpart 2 of part A--
       ``(A) dividing the quotient resulting under paragraph (2) 
     by nine; and
       ``(B) multiplying the result by the number of months in the 
     period of enrollment;''.
       (b) Contribution From Available Income.--Section 
     476(b)(1)(A)(iv) is amended--
       (1) by striking ``allowance of--'' and inserting 
     ``allowance of the following amount (or a successor amount 
     prescribed by the Secretary under section 478)--'';
       (2) by striking ``$3,000'' each place it appears in 
     subclauses (I) and (II) and inserting ``$5,500''; and
       (3) by striking ``$6,000'' in subclause (III) and inserting 
     ``$8,500''.

     SEC. 450. FAMILY CONTRIBUTION FOR INDEPENDENT STUDENTS WITH 
                   DEPENDENTS OTHER THAN A SPOUSE.

       Section 477(a) (20 U.S.C. 1087qq(a)) is amended--
       (1) by striking ``and'' at the end of paragraph (2);
       (2) by inserting ``and'' after the semicolon at the end of 
     paragraph (3); and
       (3) by inserting after paragraph (3) the following new 
     paragraph:
       ``(4) for periods of enrollment of other than 9 months, for 
     purposes other than subpart 2 of part A--
       ``(A) dividing the quotient resulting under paragraph (3) 
     by nine; and
       ``(B) multiplying the result by the number of months in the 
     period of enrollment;''.

     SEC. 451. REGULATIONS; UPDATED TABLES AND AMOUNTS.

       Section 478(b) (20 U.S.C. 1087rr(b)) is amended--
       (1) by striking ``For each academic year'' and inserting 
     the following:
       ``(1) Revised tables.--For each academic year''; and
       (2) by adding at the end the following new paragraph:
       ``(2) Revised amounts.--For each academic year after 
     academic year 1997-1998, the Secretary shall publish in the 
     Federal Register revised income protection allowances for the 
     purpose of sections 475(g)(2)(D) and 476(b)(1)(A)(iv). Such 
     revised allowances shall be developed by increasing each of 
     the dollar amounts contained in such section by a percentage 
     equal to the estimated percentage increase in the Consumer 
     Price Index (as determined by the Secretary) between December 
     1996 and the December next preceding the beginning of such 
     academic year, and rounding the result to the nearest $10.''.

     SEC. 452. DISCRETION OF STUDENT FINANCIAL AID ADMINISTRATORS.

       (a) Special Circumstances.--Section 479A(a) (20 U.S.C. 
     1087tt(a)) is amended--
       (1) in the first sentence, by inserting after ``(or both)'' 
     the following: ``or, in extraordinary circumstances, the 
     amount of the expected family contribution,''; and
       (2) by inserting after the second sentence the following 
     new sentence: ``Special circumstances may include tuition 
     expenses at an elementary or secondary school, medical or 
     dental expenses not covered by insurance, unusually high 
     child care costs, recent unemployment of a family member, or 
     other changes in a family's income or assets or a student's 
     status. Extraordinary circumstances shall be defined by the 
     Secretary by regulation.''.
       (b) Refusal or Adjustment of Loan Certifications.--Section 
     479A is amended by striking subsection (c) and inserting the 
     following:
       ``(c) Refusal or Adjustment of Loan Certifications.--On a 
     case-by-case basis, an eligible institution may refuse to 
     certify a statement which permits a student to receive a loan 
     under part B, or refuse to make a loan under part D, or 
     may certify a loan amount or make a loan that is less than 
     the student's determination of need (as determined under 
     this part), if the reason for the action is documented and 
     provided in written form to the student and the student is 
     afforded an opportunity to appeal the action in a timely 
     fashion. No eligible institution shall discriminate 
     against any borrower or applicant in obtaining a loan on 
     the basis of race, national origin, religion, sex, marital 
     status, age, or handicapped status.''.

     SEC. 453. TREATMENT OF OTHER FINANCIAL ASSISTANCE.

       Section 480(j)(3) (20 U.S.C. 1087vv(j)(3)) is amended by 
     inserting after ``paragraph (1),'' the following: ``a post-
     service benefit under chapter 30 of title 38, United States 
     Code, or''.

                       PART G--GENERAL PROVISIONS

     SEC. 461. DEFINITIONS.

       Section 481 (20 U.S.C. 1088), as amended by section 102(b), 
     is further amended by adding at the end the following new 
     subsection:
       ``(d) Distance Learning.--For the purpose of any program 
     under this title, the term `distance learning' means an 
     educational process that is characterized by the separation, 
     in time or place, between instructor and student. Distance 
     learning may include courses offered principally through the 
     use of--
       ``(1) television, audio, or computer transmission, such as 
     open broadcast, closed circuit, cable, microwave, or 
     satellite transmission;
       ``(2) audio or computer conferencing;
       ``(3) video cassettes or discs; or
       ``(4) correspondence.''.

     SEC. 462. MASTER CALENDAR.

       (a) Required Schedule.--Section 482(a) (20 U.S.C. 1089(a)) 
     is amended by adding at the end the following new paragraphs:
       ``(3) The Secretary shall, to the extent practicable, 
     notify eligible institutions, guaranty agencies, lenders, 
     interested software providers, and, upon request, other 
     interested parties, by December 1 prior to the start of an 
     award year of minimal hardware and software requirements 
     necessary to administer programs under this title.
       ``(4) The Secretary shall attempt to conduct training 
     activities for financial aid administrators and others in an 
     expeditious and timely manner prior to the start of such 
     award year in order to ensure that all participants are 
     informed of all administrative requirements.''.
       (b) Delay of Effective Date.--Section 482(c) is amended by 
     striking the second sentence and inserting the following: 
     ``The Secretary shall provide a period for public comment of 
     not less than 60 days after publication of any notice of 
     proposed rulemaking affecting programs under this title.''.

     SEC. 463. FORMS AND REGULATIONS.

       (a) Common Financial Aid Form.--Section 483(a) (20 U.S.C. 
     1090(a)) is amended--
       (1) in paragraph (1)--
       (A) by striking ``A, C, D, and E'' and inserting ``A 
     through E'';
       (B) by striking ``and to determine the need of a student 
     for the purpose of part B of this title''; and
       (C) by striking the last sentence and inserting the 
     following: ``The Secretary shall include, on the first page 
     of the form, a prominently displayed notice to students and 
     parents advising them to check with the college financial aid 
     office in the event that they have unusual circumstances 
     which may affect their eligibility for financial aid.'';
       (2) in paragraph (2)--
       (A) by striking ``A, C, D, and E'' each place it appears 
     and inserting ``A through E'';
       (B) by striking ``and the need of a student for the purpose 
     of part B of this title,''; and
       (C) by striking ``or have the student's need established 
     for the purpose of part B of this title'';
       (3) in the first sentence of paragraph (3), by inserting 
     ``processing loan applications and'' after ``for the purposes 
     of''; and
       (4) by adding at the end the following new paragraph:
       ``(5) Electronic forms.--(A) The Secretary, in cooperation 
     with representatives of agencies and organizations involved 
     in student financial assistance, including private computer 
     software providers, shall develop an electronic version of 
     the form described in paragraph (1). Such an electronic 
     version shall not require a signature to be collected at the 
     time such version is submitted, as permitted by the 
     Secretary. The Secretary shall prescribe such version no 
     later than 120 days after the date of enactment of the Higher 
     Education Amendments of 1998.
       ``(B) Nothing in this section shall prohibit the use of the 
     version of the form developed by the Secretary pursuant to 
     subparagraph (A) by an eligible institution, eligible lender, 
     guaranty agency, State grant agency, private computer 
     software providers, a consortium thereof, or such other 
     entities as the Secretary may designate.
       ``(C) The Secretary shall provide to such organization or 
     consortium necessary specifications that software developed, 
     produced, distributed (including any diskette, modem or 
     network communications, or otherwise) must meet. Included in 
     the specifications shall be test cases that such organization 
     or consortia must use to prove accuracy of its cases to the 
     Secretary. If the results of the test cases are inconsistent 
     with the provisions of this part, the Secretary shall notify 
     the submitting organizations or consortium of his objection 
     within 30 days of such submission. In the absence of such an 
     objection the organization or consortium may use the 
     electronic form as submitted. No fee shall be charged to 
     students in connection with the use of the electronic form, 
     or of any other electronic forms used in conjunction with 
     such form in applying for Federal or State student financial 
     assistance.
       ``(D) The Secretary shall ensure that data collection 
     complies with section 552a of title 5, United States Code, 
     and that any entity using the version of the form 
     developed by the Secretary pursuant to subparagraph (A) 
     shall maintain reasonable and appropriate administrative, 
     technical, and physical safeguards to ensure the integrity 
     and confidentiality of the information, and to protect 
     against security threats, or unauthorized uses or 
     disclosures of the information provided on the version of 
     the form. Data collected by such version of the form shall 
     be used only for the application, award, and 
     administration of aid awarded under this title, State aid, 
     or aid awarded by eligible institutions or such entities 
     as the Secretary may designate. No data collected by such 
     version of the form shall be used for making final aid 
     awards under this title until such data have been 
     processed by the Secretary or a contractor or designee of 
     the Secretary.''.

[[Page H2565]]

       (b) Streamlined Reapplication Process.--Section 483(b)(1) 
     is amended by striking ``, within 240 days'' and everything 
     that follows through ``of 1992,''.
       (c) Information to Committees.--Section 483(c) is amended 
     by striking ``and Labor'' and inserting ``and the 
     Workforce''.
       (d) Toll-Free Information.--Section 483(d) is amended by 
     striking ``section 633(c)'' and inserting ``section 
     685(d)(2)(C)''.
       (e) Repeal.--Subsection (f) of section 483 is repealed.

     SEC. 464. STUDENT ELIGIBILITY.

       (a) In General.--Section 484(a) (20 U.S.C. 1091(a))--
       (1) in paragraph (4), by striking ``the institution'' and 
     everything that follows through ``lender), a document'' and 
     inserting ``the Federal Government, as part of the original 
     financial aid application process, a certification''; and
       (2) in paragraph (4)(B), by inserting after ``social 
     security number,'' the following: ``and if a dependent 
     student, the social security number of any parent of such 
     student whose income information is required to be included 
     on the form,''.
       (b) Termination of Eligibility.--Section 484(j) is amended 
     by inserting ``until September 30, 2001'' after ``a student 
     shall be eligible''.
       (c) Verification of Income Data.--Section 484 is amended by 
     adding at the end the following new subsection:
       ``(q) Verification of Income Data.--
       ``(1) Confirmation with irs.--The Secretary of Education, 
     in cooperation with the Secretary of the Treasury, is 
     authorized to confirm with the Internal Revenue Service the 
     adjusted gross income, filing status, and exemptions reported 
     by applicants (including parents) under this title on their 
     Federal income tax returns for the purpose of verifying the 
     information reported by applicants on student financial aid 
     applications.
       ``(2) Notification.--The Secretary shall establish 
     procedures under which an applicant is notified that the 
     Internal Revenue Service will disclose to the Secretary tax 
     return information as authorized under section 6103(l)(13) of 
     the Internal Revenue Code of 1986.''.
       (d) Suspension of Eligibility for Drug-Related Offenses.--
       (1) Amendment.--Section 484 is further amended by adding at 
     the end thereof the following new subsection:
       ``(r) Suspension of Eligibility for DrugRelated Offenses.--
       ``(1) In general.--An individual student who has been 
     convicted of any offense under any Federal or State law 
     involving the possession or sale of a controlled substance 
     shall not be eligible to receive any grant, loan, or work 
     assistance under this title during the period beginning on 
     the date of such conviction and ending after the interval 
     specified in the following table:

 
 
 
``If convicted of an offense
 involving:
 
    The possession of a controlled  Ineligibility period is:
     substance:
      First offense...............    1 year
      Second offense..............    2 years
      Third offense...............    indefinite
 
    The sale of a controlled
     substance:
      First offense...............    2 years
      Second offense..............    indefinite
 

       ``(2) Rehabilitation.--A student whose eligibility has been 
     suspended under paragraph (1) may resume eligibility before 
     the end of the period determined under such paragraph if the 
     student satisfactorily completes a drug rehabilitation 
     program that complies with such criteria as the Secretary 
     shall prescribe for purposes of this paragraph.
       ``(3) Definitions.--As used in this subsection, the term 
     `controlled substance' has the meaning given in section 
     102(6) of the Controlled Substances Act (21 U.S.C. 
     802(6)).''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply with respect to financial assistance to cover the 
     costs of attendance for periods of enrollment beginning after 
     the date of enactment of this Act.

     SEC. 465. STATE COURT JUDGMENTS.

       Section 484A (20 U.S.C. 1091a) is amended by adding at the 
     end the following new subsection:
       ``(c) State Court Judgments.--A judgment of a State court 
     for the recovery of money provided as grant, loan, or work 
     assistance under this title that has been assigned or 
     transferred to the Secretary under this title may be 
     registered in any district court by filing a certified copy 
     of the judgment and the assignment or other transfer to the 
     Secretary. A judgment so registered shall have the same force 
     and effect, and may be enforced in the same manner, as a 
     judgment of the district court of the district in which the 
     judgment is registered.''.

     SEC. 466. INFORMATION FOR STUDENTS.

       (a) Information Dissemination.--Section 485(a) (20 U.S.C. 
     1092(a)) is amended--
       (1) in paragraph (1), by striking the second sentence and 
     inserting the following: ``The information required by this 
     section shall be produced and be made readily available upon 
     request, through appropriate publications, mailings, and 
     electronic media to all current students and to any 
     prospective student. Each eligible institution shall, on an 
     annual basis, provide to all enrolled students a list of the 
     information that is required to be provided by institutions 
     to students by this Act and section 444 of the General 
     Education Provisions Act (also referred to as the Family 
     Educational Rights and Privacy Act of 1974), together with a 
     statement of the procedures required to obtain such 
     information.'';
       (2) in paragraph (3)--
       (A) in the first sentence, by striking ``, or enrolled in 
     any program of an eligible institution for which the prior 
     program provides substantial preparation''; and
       (B) by striking subparagraph (A) and inserting the 
     following:
       ``(A) shall be made available by July 1 each year to 
     current and prospective students prior to enrolling or 
     entering into any financial obligation; and''; and
       (3) by adding at the end the following new paragraph:
       ``(6) Each institution may, but is not required to, provide 
     supplemental information to enrolled and prospective students 
     showing the completion or graduation rate for students 
     transferring into the institution or information showing the 
     rate at which students transfer out of the institution.''.
       (b) Departmental Publications.--Section 485(d) is amended--
       (1) by striking ``(1) assist'' and inserting ``(A) 
     assist'';
       (2) by striking ``(2) assist'' and inserting ``(B) 
     assist'';
       (3) by inserting ``(1)'' before ``The Secretary'' the first 
     place it appears; and
       (4) by adding at the end the following new paragraphs:
       ``(2) The Secretary shall, to the extent such information 
     is available, compile information describing State prepaid 
     tuition programs and disseminate such information to States, 
     eligible institutions, students, and parents in departmental 
     publications.
       ``(3) The Secretary shall, to the extent practicable, 
     update the Department's Internet site to include direct links 
     to databases which contain information on public and private 
     financial assistance programs. The Secretary shall only 
     provide direct links to databases which can be accessed 
     without charge and shall verify with appropriate parties that 
     the databases included in the direct link are not in any way 
     providing fraudulent information. The Secretary shall 
     prominently display adjacent to the direct link a disclaimer 
     indicating that a direct link to a database does not 
     constitute an endorsement or recommendation of the database 
     or its provider or any services or products of such provider. 
     The Secretary shall provide additional direct links to 
     information resources from which students may obtain 
     information about fraudulent and deceptive practices in the 
     provision of services related to student financial aid.''.
       (c) Disclosures.--Section 485(e) is amended--
       (1) in paragraph (2)--
       (A) by striking ``his parents, his guidance'' and inserting 
     ``the student's parents, guidance''; and
       (B) by adding at the end the following new sentence: ``If 
     the institution is a member of a national collegiate athletic 
     association that compiles graduation rate data on behalf of 
     its member institutions that the Secretary determines is 
     substantially comparable to the information described in 
     paragraph (1), the distribution of the compilation of such 
     data to all secondary schools in the United States shall 
     fulfill the responsibility of the institution to provide 
     information to a prospective student athlete's guidance 
     counselor and coach.'';
       (2) in paragraph (4), by striking ``when such completion or 
     graduation rate includes students transferring into and out 
     of such institution'' and inserting ``for students 
     transferring into the institution or information showing the 
     rate at which students transfer out of the institution''; and
       (3) by striking paragraph (9) and inserting the following:
       ``(9) The reports required by this subsection shall be due 
     on each July 1 and shall cover the 1-year period ending 
     August 31 of the preceding year.''.
       (d) Campus Crime Reporting and Disclosure.--Section 485(f) 
     is amended--
       (1) in paragraph (1)--
       (A) by striking subparagraph (F) and inserting the 
     following:
       ``(F) Statistics concerning the occurrence on campus, 
     during the most recent calendar year, and during the 2 
     preceding calendar years, of the following criminal offenses 
     or arrests reported to campus security authorities, campus 
     officials who have direct administrative responsibility for 
     student or campus activities, disciplinary officers and other 
     officials responsible for resolving student disciplinary 
     matters, athletic department officials, or local police 
     agencies (including offenses handled through the campus 
     disciplinary system):
       ``(i) murder;
       ``(ii) sex offenses, forcible or nonforcible;
       ``(iii) robbery;
       ``(iv) aggravated assault;
       ``(v) burglary;
       ``(vi) motor vehicle theft;
       ``(vii) manslaughter;
       ``(viii) larceny;
       ``(ix) arson; and
       ``(x) arrests or persons referred for campus disciplinary 
     action for liquor law violations, drug-related violations, 
     and weapons possession.'';
       (B) by striking subparagraph (H); and
       (C) by redesignating subparagraph (I) as subparagraph (H);
       (2) in paragraph (4)--
       (A) by striking ``Upon request of the Secretary, each'' and 
     inserting ``On an annual basis, each'';
       (B) by striking ``paragraphs (1)(F) and (1)(H)'' and 
     inserting ``paragraph (1)(F)'';
       (C) by striking ``and Labor'' and inserting ``and the 
     Workforce'';
       (D) by striking ``1995'' and inserting ``2000'';
       (E) by striking ``and'' at the end of subparagraph (A);
       (F) by redesignating subparagraph (B) as subparagraph (C); 
     and
       (G) by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) make copies of the statistics submitted to the 
     Secretary available to the public; and'';

[[Page H2566]]

       (3) in paragraph (6)--
       (A) by striking ``paragraphs (1)(F) and (1)(H)'' and 
     inserting ``paragraph (1)(F)''; and
       (B) by adding at the end the following new sentence: ``Such 
     statistics shall not identify victims of crimes or persons 
     accused of crimes.''; and
       (4) by adding at the end the following new paragraphs:
       ``(8)(A) Each institution participating in any program 
     under this title that maintains either a police or security 
     department of any kind shall make, keep, and maintain a daily 
     log, written in a form that can be easily understood, 
     recording in chronological order all crimes reported to such 
     police or security department, including the nature, date, 
     time, and general location of each crime and the disposition 
     of the complaint, if known.
       ``(B) All entries that are required by this paragraph shall 
     be open to public inspection during normal business hours 
     within two business days of the initial report being made to 
     the department, unless--
       ``(i) disclosure of such information is prohibited by law; 
     or
       ``(ii) the release of such information is likely to 
     jeopardize an ongoing criminal investigation or the safety of 
     an individual, cause a suspect to flee or evade detection, or 
     result in the destruction of evidence.

     Any information withheld under clause (ii) shall be open to 
     public inspection as soon as the damage that is the basis for 
     such withholding is no longer likely to occur.
       ``(9) The Secretary shall provide technical assistance in 
     complying with the provisions of this section to an 
     institution of higher education who requests such 
     assistance.''.
       (e) Data Required.--Section 485(g) is amended--
       (1) in paragraph (1), by adding at the end the following 
     new subparagraphs:
       ``(I)(i) The total revenues, and the revenues from 
     football, men's basketball, women's basketball, all other 
     men's sports combined and all other women's sports combined, 
     derived by the institution from its intercollegiate athletics 
     activities.
       ``(ii) For the purpose of clause (i), revenues from 
     intercollegiate athletics activities allocable to a sport 
     shall include (without limitation) gate receipts, broadcast 
     revenues, appearance guarantees and options, concessions, and 
     advertising, but revenues such as student activities fees or 
     alumni contributions not so allocable shall be included in 
     the calculation of total revenues only.
       ``(J)(i) The total expenses, and the expenses attributable 
     to football, men's basketball, women's basketball, all other 
     men's sports combined, and all other women's sports combined, 
     made by the institution for its intercollegiate athletics 
     activities.
       ``(ii) For the purpose of clause (i) expenses for 
     intercollegiate athletics activities allocable to a sport 
     shall include (without limitation) grants-in-aid, salaries, 
     travel, equipment, and supplies, but expenses such as general 
     and administrative overhead not so allocable shall be 
     included in the calculation of total expenses only.
       ``(K) A statement of any reduction that may or is likely to 
     occur during the ensuing 4 academic years in the number of 
     athletes that will be permitted to participate in any 
     collegiate sport, or in the financial resources that the 
     institution will make available to any such sport, and the 
     reasons for any such reduction.''; and
       (2) by striking paragraph (5).

     SEC. 467. NATIONAL STUDENT LOAN DATA SYSTEM.

       Section 485B(a) (20 U.S.C. 1092b(a)) is amended by 
     inserting before the period at the end of the third sentence 
     the following: ``no later than one year after the date of 
     enactment of the Higher Education Amendments of 1997''.

     SEC. 468. PROGRAM PARTICIPATION AGREEMENTS.

       (a) Required Content.--Section 487(a) (20 U.S.C. 1094(a)) 
     is amended--
       (1) in the first sentence, by striking ``, except with 
     respect to a program under subpart 4 of part A,'';
       (2) in paragraph (3), by striking subparagraph (B) and 
     inserting the following:
       ``(B) the appropriate State agency;'';
       (3) in paragraph (4), by striking ``subsection (b)'' and 
     inserting ``subsection (c)'';
       (4) in paragraph (15), by striking ``State review entities 
     under subpart 1 of part H'' and inserting ``appropriate State 
     agencies'';
       (5) by striking paragraph (18) and inserting the following:
       ``(18) The institution will meet the requirements 
     established pursuant to section 485(g).''; and
       (6) by striking paragraph (21) and inserting the following:
       ``(21) The institution will meet the requirements 
     established by the Secretary, appropriate State agencies, and 
     accrediting agencies, pursuant to part H of this title.''.
       (b) Audits; Financial Responsibility.--Section 487(c) is 
     amended--
       (1) in paragraph (1)(A)(i), by striking ``State agencies'' 
     and everything that follows through the semicolon and 
     inserting ``and appropriate State agencies;'';
       (2) in paragraph (2), by striking ``subpart 3'' and 
     inserting ``subpart 2'';
       (3) in paragraph (4), by striking ``, after consultation'' 
     and everything that follows through ``part H,''; and
       (4) in paragraph (5), by striking ``State review'' and 
     everything that follows through ``part H'' and inserting 
     ``appropriate State agencies''.

     SEC. 469. QUALITY ASSURANCE AND REGULATORY SIMPLIFICATION.

       Section 487A (20 U.S.C. 1094a) is amended to read as 
     follows:

     ``SEC. 487A. QUALITY ASSURANCE AND REGULATORY SIMPLIFICATION 
                   PROGRAM.

       ``(a) In General.--The Secretary is authorized to select 
     institutions for voluntary participation in a Regulatory 
     Simplification Program that provides participating 
     institutions with the opportunity to develop and implement an 
     alternative management program that--
       ``(1) shall allow alternative methods of complying with 
     regulations issued with respect to parts A through E and G of 
     this title;
       ``(2) shall not modify or waive the application of any 
     requirement or other provision of this Act; and
       ``(3) may include a Quality Assurance Program through which 
     individual schools develop and implement their own 
     comprehensive systems to verify student financial aid 
     application data, thereby enhancing program integrity within 
     the student aid delivery system.
       ``(b) Selection Criteria.--The criteria for selecting 
     institutions for participation in the Regulatory 
     Simplification Program shall be based on criteria that 
     include demonstrated institutional performance, as determined 
     by the Secretary, and shall take into consideration 
     regulatory simplification goals, as determined by the 
     Secretary. The selection criteria shall ensure the 
     participation of representatives of institutions of higher 
     education according to size, mission, and geographical 
     distribution.
       ``(c) Removal From the Program.--The Secretary is 
     authorized to determine--
       ``(1) when an institution that is unable to administer the 
     Regulatory Simplification Program must be removed from such 
     program, and
       ``(2) when institutions desiring to cease participation in 
     such Program will be required to complete the current award 
     year under the requirements of the Program.
       ``(d) Experimental Sites.--The Secretary is authorized to 
     designate institutions selected for participation in the 
     Regulatory Simplification Program as Experimental Sites.
       ``(e) Definitions.--For purposes of this section, the term 
     `current award year' means the award year during which the 
     participating institution indicates its intention to cease 
     participation.''.

     SEC. 470. DISTANCE EDUCATION DEMONSTRATION PROGRAMS.

       Part G of title IV is amended--
       (1) by redesignating section 487B (20 U.S.C. 1094b) as 
     section 487C; and
       (2) by inserting after section 487A (as amended by section 
     469) the following new section:

     ``SEC. 487B. DISTANCE EDUCATION DEMONSTRATION PROGRAMS.

       ``(a) Purpose.--It is the purpose of this section--
       ``(1) to allow demonstration programs that are strictly 
     monitored by the Department of Education to test the quality 
     and viability of expanded distance education programs 
     currently restricted under this Act;
       ``(2) to provide for increased student access to higher 
     education through distance education programs;
       ``(3) to help determine the most effective means of 
     delivering quality education via distance education course 
     offerings; and
       ``(4) to help determine the appropriate level of Federal 
     assistance for students enrolled in distance education 
     programs.
       ``(b) Demonstration Programs Authorized.--
       ``(1) In general.--The Secretary is authorized to select 
     institutions or a consortia of institutions for voluntary 
     participation in a Distance Education Demonstration Program 
     that provides participating institutions with the ability 
     to offer distance education programs without regard to the 
     current restrictions in part F or G of this title or part 
     A of title I.
       ``(2) Exemptions.--The Secretary is authorized to exempt 
     any institution or consortia participating in a Distance 
     Education Demonstration Program from any of the requirements 
     of parts F or G of this title, or part A of title I, or the 
     regulations prescribed under such parts.
       ``(c) Application.--Each institution or consortia of 
     institutions desiring to participate in a demonstration 
     program under this section shall submit an application to the 
     Secretary at such time, in such manner, and accompanied by 
     such information as the Secretary may require.
       ``(d) Selection.--To the extent feasible, the Secretary 
     shall select a representative sample institutions for 
     participation in the demonstration program authorized under 
     this section. In selecting institutions for participation, 
     the Secretary shall take into consideration the institution's 
     financial and administrative capability and the type of 
     program or programs being offered via distance education 
     course offerings. The Secretary shall, in the exercise of his 
     discretion, determine the number of demonstration programs to 
     be allowed based on the number and quality of applications 
     received and the Department's capacity to oversee and monitor 
     each demonstration program.
       ``(e) Evaluation and Report.--
       ``(1) Evaluation.--The Secretary shall, on an annual basis, 
     evaluate the demonstration programs authorized under this 
     section. Such evaluations shall specifically review--
       ``(A) the quality of the programs being offered;
       ``(B) issues related to student financial assistance for 
     distance education; and
       ``(C) effective technologies for delivering distance 
     education course offerings.
       ``(2) Policy analysis.--In addition, the Secretary shall 
     review current policies and identify those policies which 
     present impediments to the development and use of distance 
     learning and other nontraditional methods of expanding access 
     to education.
       ``(3) Report.--The Secretary shall report to the 
     appropriate committees of Congress with respect to--

[[Page H2567]]

       ``(A) the evaluations of the demonstration programs 
     authorized under this section; and
       ``(B) any proposed legislative changes designed to enhance 
     the use of distance education.''.

     SEC. 471. GARNISHMENT REQUIREMENTS.

       (a) Maximum Percentage.--Section 488A(a)(1) (20 U.S.C. 
     1095a(a)(1)) is amended by striking ``10 percent'' and 
     inserting ``15 percent''.
       (b) No Attachment of Student Assistance.--Section 488A is 
     further amended--
       (1) by redesignating subsection (d) as subsection (e); and
       (2) by inserting after subsection (c) the following new 
     subsection:
       ``(d) No Attachment of Student Assistance.--Except as 
     authorized in this section, notwithstanding any other 
     provision of Federal or State law, no grant, loan, or work 
     assistance awarded under this title, or property traceable to 
     such assistance, shall be subject to garnishment or 
     attachment in order to satisfy any debt owed by the student 
     awarded such assistance, other than a debt owed to the 
     Secretary and arising under this title.''.

     SEC. 472. ADMINISTRATIVE SUBPOENA AUTHORITY.

       Part G of title IV of the Act is further amended by 
     inserting immediately after section 490 (20 U.S.C. 1097) the 
     following new section:

     ``SEC. 490A. ADMINISTRATIVE SUBPOENAS.

       ``(a) Authority.--To assist the Secretary in the conduct of 
     investigations of possible violations of the provisions of 
     this title, the Secretary is authorized to require by 
     subpoena the production of information, documents, reports, 
     answers, records, accounts, papers, and other documentary 
     evidence pertaining to participation in any program under 
     this title. The production of any such records may be 
     required from any place in a State.
       ``(b) Enforcement.--In case of contumacy by, or refusal to 
     obey a subpoena issued to, any person, the Secretary may 
     request the Attorney General to invoke the aid of any court 
     of the United States where such person resides or transacts 
     business for a court order for the enforcement of this 
     section.''.

     SEC. 473. ADVISORY COMMITTEE ON STUDENT FINANCIAL ASSISTANCE.

       Section 491 (20 U.S.C. 1098) is amended--
       (1) in subsection (b)--
       (A) by inserting ``staffing levels,'' after ``allocations 
     and expenditures,'' the first place it appears; and
       (B) by striking the fourth and fifth sentences and 
     inserting the following: ``Reports, publications, and other 
     documents, including documents in electronic form, shall not 
     be subject to review by the Secretary.'';
       (2) in subsection (c)(1)--
       (A) by striking ``11 members'' and inserting ``15 
     members''; and
       (B) by striking ``3 members'' each place it appears in 
     subparagraphs (A) and (B) and inserting ``5 members'';
       (3) in subsection (c)(2), by striking ``7 members'' and 
     inserting ``11 members'';
       (4) in subsection (e)--
       (A) by striking everything after ``except that,'' in 
     paragraph (1) and inserting the following:

     ``within 90 days after the date of enactment of the Higher 
     Education Amendments of 1998, 2 additional members shall be 
     appointed by the President pro tempore of the Senate (one 
     upon the recommendation of the Majority Leader and one upon 
     the recommendation of the Minority Leader) and 2 additional 
     members shall be appointed by the Speaker of the House (one 
     upon the recommendation of the Majority Leader and one upon 
     the recommendation of the Minority Leader). Of the additional 
     members--
       ``(A) 2 shall be appointed for a term of 1 year;
       ``(B) 1 shall be appointed for a term of 2 years; and
       ``(C) 1 shall be appointed for a term of 3 years.'';
       (B) by striking ``Six members'' in paragraph (4) and 
     inserting ``Eight members''; and
       (C) by adding at the end the following new paragraph:
       ``(6) No officer or full-time employee of the United States 
     shall serve as members of the Advisory Committee.'';
       (5) by striking subsection (g) and inserting the following:
       ``(g) Compensation and Expenses.--Members of the Advisory 
     Committee may each receive reimbursement for travel expenses 
     incident to attending Advisory Committee meetings, including 
     per diem in lieu of subsistence, as authorized by section 
     5703 of title 5, United States Code, for persons in the 
     Government service employed intermittently.'';
       (6) in subsection (h)(1), by striking ``may be necessary by 
     the Chairman without regard to'' and inserting ``may be 
     deemed necessary by the Chairman without regard to personnel 
     ceilings or'';
       (7) in subsection (i), by striking ``$750,000'' and 
     inserting ``$850,000'';
       (8) by striking subsection (j) and inserting the following:
       ``(j) Special Analyses and Activities.--The committee 
     shall--
       ``(1) monitor and evaluate the modernization of student 
     financial aid systems and delivery processes;
       ``(2) monitor and evaluate the implementation of a 
     performance-based organization within the Department of 
     Education and report to Congress, on not less than an annual 
     basis, including recommendations for improvements; and
       ``(3) assess the adequacy of current methods for 
     disseminating information about programs under this title and 
     recommend improvements, as appropriate, regarding early needs 
     assessment and information for first-year high school 
     students.'';
       (9) in subsection (k), by striking ``1998'' and inserting 
     ``2004''; and
       (10) by striking subsection (l).

     SEC. 474. MEETINGS AND NEGOTIATED RULEMAKING.

       Section 492 (20 U.S.C. 1098a) is amended to read as 
     follows:

     ``SEC. 492. NEGOTIATED RULEMAKING.

       ``(a) In General.--
       ``(1) Regulation development.--In developing regulations 
     and revisions thereof under this title, the Secretary shall 
     obtain the advice and recommendations of individuals and 
     representatives of the groups involved in student financial 
     assistance programs under this title, such as students, legal 
     assistance organizations that represent students, 
     institutions of higher education, guaranty agencies, lenders, 
     secondary markets, loan servicers, guaranty agency servicers, 
     and collection agencies.
       ``(2) Input.--Such advice and recommendations may be 
     obtained through such mechanisms as national meetings and 
     electronic exchanges of information.
       ``(b) Proposed Regulations.--After obtaining such advice 
     and recommendations, and prior to publishing any proposed 
     regulations and revisions thereof under this title in the 
     Federal Register, the Secretary shall prepare draft 
     regulations and submit such regulations to a negotiated 
     rulemaking process. In establishing the negotiated rulemaking 
     process under this section, the Secretary shall--
       ``(1) follow the procedural requirements used in 
     implementing section 1601(b) of the Elementary and Secondary 
     Education Act of 1965;
       ``(2) select participants in the negotiations process from 
     individuals and groups participating in the exchanges 
     described in subsection (a)(1), including both 
     representatives of such groups from the District of Columbia, 
     and industry participants, and to the extent possible, the 
     Secretary shall select individuals reflecting the diversity 
     in the industry, representing both large and small 
     participants, as well as individuals serving local areas and 
     national markets;
       ``(3) conduct the negotiations process in a timely manner 
     in order that final regulations may be issued by the 
     Secretary within the 240-day period described in section 
     431(g) of the General Education Provisions Act, and any 
     subsequent revisions to regulations under this title may be 
     issued in accordance with the master calendar provisions of 
     section 482 of this title; and
       ``(4) prepare a transcript of the negotiated rulemaking 
     proceedings that shall be available to the public prior to 
     the issuance of any final regulations.
       ``(c) Federal Advisory Committee Act.--The Federal Advisory 
     Committee Act shall not apply to activities carried out under 
     this section.''.

                       PART H--PROGRAM INTEGRITY

     SEC. 476. STATE POSTSECONDARY REVIEW PROGRAM.

       (a) Amendments.--Part H of title IV is amended--
       (1) in the heading of the part, by striking ``TRIAD'';
       (2) by striking subpart 1 (20 U.S.C. 1099a through 1099a-
     3); and
       (3) by redesignating subparts 2 and 3 as subparts 1 and 2, 
     respectively.
       (b) Conforming Amendments.--Section 496 (20 U.S.C. 1099b) 
     is amended by striking ``subpart 3'' each place it appears in 
     subsections (j) and (k) and inserting ``subpart 2''.

     SEC. 477. ACCREDITING AGENCY RECOGNITION.

       (a) Recognition.--
       (1) The heading of subpart 1 of part H (as redesignated by 
     section 476(a)(3)) is amended by striking ``APPROVAL'' and 
     inserting ``RECOGNITION''.
       (2) The heading of section 496 is amended by striking 
     ``APPROVAL'' and inserting ``RECOGNITION''.
       (b) Standards.--Section 496(a) is amended--
       (1) by striking ``Standards'' and inserting ``Criteria'';
       (2) by striking ``standards'' each place it appears and 
     inserting ``criteria'';
       (3) in paragraph (5)--
       (A) by striking ``of accreditation'' and inserting ``for 
     accreditation'';
       (B) by inserting ``the quality (including the quality of 
     distance learning programs or courses) of'' before ``the 
     institution's'';
       (C) in subparagraph (G), by striking ``program length and 
     tuition and fees in relation to the subject matters taught'' 
     and inserting ``measures of program length'';
       (D) by striking subparagraph (J);
       (E) in subparagraph (L), by inserting ``the most recent 
     student loan default rate data provided by the Secretary 
     and'' after ``including'';
       (F) by striking ``and'' at the end of subparagraph (K);
       (G) by inserting ``and'' after the semicolon at the end of 
     subparagraph (L);
       (H) by redesignating subparagraphs (K) and (L) as 
     subparagraphs (J) and (K), respectively;
       (I) by inserting after subparagraph (K) (as so 
     redesignated) the following new subparagraph:
       ``(L) refund policy;''; and
       (J) by striking ``(J), and (L)'' and inserting ``(K) and 
     (L)'';
       (4) in paragraph (7), by striking ``State postsecondary 
     review entity'' and inserting ``State licensing or 
     authorizing agency''; and
       (5) in paragraph (8), by striking ``State postsecondary'' 
     and everything that follows through ``is located'' and 
     inserting ``State licensing or authorizing agency''.
       (c) Operating Procedures.--Section 496(c) is amended--
       (1) by striking ``approved by the Secretary'' and inserting 
     ``recognized by the Secretary'';
       (2) in paragraph (1), by striking ``(at least'' and 
     everything that follows through ``unannounced),'' and 
     inserting ``(which may include unannounced site visits)''; 
     and
       (3) in paragraph (3), by inserting before the semicolon at 
     the end the following: ``, except

[[Page H2568]]

     that new sites offered through telecommunications for 
     programs previously included in the scope of accreditation 
     approval need not be subject to such on-site visits''.
       (d) Conforming Amendments.--Section 496 is further 
     amended--
       (1) in subsection (d)--
       (A) by striking ``Approval'' in the heading of such 
     subsection and inserting ``Recognition''; and
       (B) by striking ``approved'' and inserting ``recognized'';
       (2) in subsection (f), by striking ``approved'' and 
     inserting ``recognized'';
       (3) in subsection (g)--
       (A) by striking ``Standards'' and inserting ``Criteria''; 
     and
       (B) by striking ``standards'' and inserting ``criteria'';
       (4) in subsection (k)(2), by striking ``standards'' and 
     inserting ``criteria'';
       (5) in subsection (l)--
       (A) by striking ``Approval'' in the heading of such 
     subsection and inserting ``Recognition'';
       (B) by striking ``the standards'' each place it appears and 
     inserting ``its standards''; and
       (C) by striking ``approval'' and inserting ``recognition''; 
     and
       (6) in subsection (n)--
       (A) by striking ``standards'' each place it appears and 
     inserting ``criteria'';
       (B) in paragraph (3)--
       (i) by striking ``approval or disapproval'' and inserting 
     ``recognition or denial of recognition''; and
       (ii) by striking ``approval process'' and inserting 
     ``recognition process''; and
       (C) by striking paragraph (4) and inserting the following:
       ``(4) The Secretary shall maintain sufficient documentation 
     to support the conclusions reached in the recognition 
     process, and, if the Secretary does not recognize any 
     accreditation agency or association, shall make publicly 
     available the reason for denying recognition, including 
     reference to the specific criteria under this section which 
     have not been fulfilled.''.

     SEC. 478. ELIGIBILITY AND CERTIFICATION PROCEDURES.

       (a) Single Application Form.--Section 498(b)(1) (20 U.S.C. 
     1099c(b)(1)) is amended by striking ``accreditation, and 
     capability'' and inserting ``accreditation, financial 
     responsibility, and administrative capacity''.
       (b) Financial Responsibility Standards.--Section 498(c) is 
     amended--
       (1) in paragraph (1), in the matter preceding subparagraph 
     (A), by striking ``is able'' and inserting ``has sufficient 
     resources to ensure against the precipitous closure of the 
     institution and is able'';
       (2) in paragraph (2)--
       (A) in the first sentence, by striking ``operating losses, 
     net worth, asset-to-liabilities ratios, or operating fund 
     deficits'' and inserting ``to ratios that demonstrate 
     financial responsibility,'';
       (B) in the second sentence, by inserting ``, public,'' 
     after ``for profit''; and
       (C) by inserting before the period at the end the 
     following: ``, and develop an appropriate and cost effective 
     process under this subpart that does not duplicate other 
     reporting requirements for assessing and reviewing financial 
     responsibility''; and
       (3) in paragraph (4)--
       (A) in the first sentence, by striking ``ratio of current 
     assets to current liabilities'' and inserting ``criteria''; 
     and
       (B) in subparagraph (C), by striking ``current operating 
     ratio requirement'' and inserting ``criteria imposed by the 
     Secretary pursuant to paragraph (2)''.
       (c) Administrative Capacity.--Section 498(d)(1) is 
     amended--
       (1) in subparagraph (A), by striking ``student aid 
     programs; and'' and inserting ``student financial assistance 
     under this title;'';
       (2) by redesignating subparagraph (B) as subparagraph (D); 
     and
       (3) by inserting after subparagraph (A) the following new 
     subparagraphs:
       ``(B) written procedures for, or written information 
     relating to, each office with respect to, the approval, 
     disbursement, and delivery of student financial assistance 
     under this title;
       ``(C)(i) a division of functions for authorizing payments 
     of student financial assistance under this title and the 
     disbursement or delivery of such assistance, so that no 
     office at the institution has responsibility for both 
     functions; and
       ``(ii) an adequate system of checks and balances for 
     internal control at the institution with respect to student 
     financial assistance under this title; and''.
       (d) Actions on Applications.--Section 498(f) is amended--
       (1) by striking ``shall conduct'' and inserting ``may 
     conduct'';
       (2) by striking ``may establish'' and inserting ``shall 
     establish'';
       (3) by striking ``may coordinate'' and inserting ``shall, 
     to the extent practicable, coordinate''; and
       (4) by adding at the end the following new sentence: ``The 
     Secretary may exempt from the site visit requirement any 
     institution that is participating in the Quality Assurance 
     Program established under section 487A at the time such site 
     visit would be required under this subsection.''.
       (e) Time Limitations.--Section 498(g) is amended to read as 
     follows:
       ``(g) Time Limitations.--(1) After the expiration of the 
     certification of any institution or upon request for initial 
     certification from an institution not previously certified, 
     the Secretary may certify the eligibility for the purposes of 
     any program authorized under this title of each such 
     institution for a period not to exceed 6 years.
       ``(2) The Secretary shall notify each institution of the 
     expiration of its eligibility no later than six months prior 
     to such expiration.''.
       (f) Conforming Amendment.--Section 498(h)(2) is amended by 
     striking ``approval'' and inserting ``recognition''.
       (g) Provisional Certification.--Section 498(i) is amended 
     by adding at the end the following new paragraph:
       ``(4)(A) The Secretary may provisionally certify an 
     institution seeking approval of a change in ownership based 
     on the preliminary review by the Secretary of a materially 
     complete application that is received by the Secretary within 
     10 business days of the transaction for which the approval is 
     sought.
       ``(B) A provisional certification under this paragraph 
     shall expire no later than the end of the month following the 
     month in which the transaction occurred, except that if the 
     Secretary has not issued a decision on the application for 
     the change of ownership within that period, the Secretary may 
     continue such provisional certification on a month-to-month 
     basis until such decision has been issued.''.

     SEC. 479. PROGRAM REVIEW AND DATA.

       (a) General Authority.--Section 498A(a) (20 U.S.C. 1099c-
     1(a)) is amended--
       (1) in paragraph (2)--
       (A) by striking ``may give'' and inserting ``shall give'';
       (B) by inserting before the semicolon at the end of 
     subparagraph (C) the following: ``, that are not accounted 
     for by changes in those programs'';
       (C) in subparagraph (D), by striking ``the appropriate'' 
     and everything that follows through ``of this part'' and 
     inserting ``the State licensing or authorizing agency'';
       (D) by striking subparagraph (F); and
       (E) by redesignating subparagraph (G) as subparagraph (F); 
     and
       (2) in paragraph (3)(A), by inserting ``relevant'' after 
     ``all''.
       (b) Special Administrative Rules.--Section 498A(b) is 
     amended to read as follows:
       ``(b) Special Administrative Rules.--(1) In carrying out 
     paragraphs (1) and (2) of subsection (a), the Secretary 
     shall--
       ``(A) establish guidelines designed to ensure uniformity of 
     practice in the conduct of program reviews of institutions; 
     and
       ``(B) inform the appropriate State agency and accrediting 
     agency or association whenever taking action against an 
     institution under this section, section 498, or section 432.
       ``(2) The Secretary shall review the regulations of the 
     Department and the application of such regulations to ensure 
     the uniformity of interpretation and application of the 
     regulations. In conducting such review, the Secretary shall 
     consult with relevant representatives of institutions 
     participating in the programs authorized by this title.''.
  The CHAIRMAN. Are there amendments to title IV?


                 Amendment No. 53 Offered By Mr. Petri

  Mr. PETRI. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 53 offered by Mr. Petri:
       Page 192, after line 10, insert the following new section 
     (and conform the table of contents accordingly):

     SEC. 430. MARKET-BASED DETERMINATIONS OF INTEREST SUBSIDIES.

       (a) Amendment.--Section 438 (20 U.S.C. 1087-1) is amended 
     by adding at the end the following new subsection:
       ``(g) Market-based Determinations of Interest Subsidies.--
       ``(1) Applicability.--Notwithstanding the preceding 
     provisions of this section, no special allowance or other 
     payment shall be paid under this section with respect to any 
     loan disbursed on or after July 1, 1999, except as provided 
     pursuant to this subsection.
       ``(2) Use of auctions to apportion lending authority.--
       ``(A) Auctions required.--The Secretary shall conduct an 
     auction in accordance with paragraph (3) to allocate the 
     authority to make loans under this part among eligible 
     lenders for any academic year. The Secretary shall estimate 
     the amount of lending authority that will be required by 
     eligible students for such an academic year, and shall by 
     auction allocate such amount, plus a reasonable margin for 
     unexpected loan demand.
       ``(B) Lending authority required.--A lender may not make a 
     loan under this part that is disbursed on or after July 1, 
     1999, except pursuant to an allocation of lending authority 
     pursuant to this paragraph.
       ``(C) Transferability of lending authority.--An eligible 
     lender may transfer any lending authority acquired pursuant 
     to this subsection to another eligible lender upon such terms 
     as may be agreed upon between such lenders, except that the 
     acquiring lender may not extend loans pursuant to such 
     authority except after notice to the Secretary in such form 
     and manner as the Secretary may require by regulation.
       ``(D) Exercise of lending authority.--The Secretary shall, 
     by regulation, provide for verification that a lender is not 
     making loans under this part in excess of the amounts of 
     lending authority obtained in accordance with this paragraph. 
     Such regulations shall provide that any lender who acquires, 
     directly or pursuant to subparagraph (C), lending authority 
     that was obtained at auction pursuant to two or more bids of 
     different amounts shall be deemed to exercise such authority 
     in descending order based on the amounts of such bids.
       ``(3) Conduct of auction.--

[[Page H2569]]

       ``(A) In general.--The Secretary shall allocate the amount 
     of lending authority determined under paragraph (2)(A) among 
     eligible lenders submitting bids in descending order by the 
     unit price bid, but permitting each bidding lender to acquire 
     such authority at the unit price bid by the next lower 
     ranking bid, except that the Secretary may establish by 
     regulation a different procedure for the conduct of the 
     auction if the Secretary determines that such procedure will 
     secure more receipts for the United States. The Secretary 
     shall not permit any lender to acquire more than one-third of 
     the amount of the lending authority offered at any auction 
     conducted under this subsection, but a lender shall not be 
     prohibited from acquiring more than such amount pursuant to 
     paragraph (2)(C).
       ``(B) Bids greater than zero.--Any lender whose bid is 
     accepted pursuant to subparagraph (A) shall, if such bid is 
     made at a unit price exceeding zero, promptly pay to the 
     Secretary an amount equal to (i) the unit price, multiplied 
     by (ii) the amount of lending authority allocated to such 
     lender. A lender making such a payment shall have no claim to 
     a refund or remuneration based on the lender making loans in 
     an amount that is less than the amount of lending authority 
     obtained.
       ``(C) Bids less than zero.--The Secretary shall pay to any 
     lender whose bid is accepted pursuant to subparagraph (A), if 
     such bid is made at a unit price that is less than zero, an 
     amount equal to--
       ``(i) the amount by which the unit price is less than zero, 
     multiplied by
       ``(ii) the amount of lending authority that the lender 
     demonstrates, in accordance with regulations prescribed by 
     the Secretary, has exercised by making and disbursing loans 
     under this part.
       ``(D) Contractual right of holders to special allowance.--
     Any lender whose bid is accepted pursuant to subparagraph 
     (A), if such bid is made at a unit price that is less than 
     zero, shall be deemed to have a contractual right against the 
     United States, to receive the payment required by 
     subparagraph (C). Such payment shall be made promptly and 
     without administrative delay after receipt of an accurate and 
     complete request for payment, pursuant to procedures 
     established by regulations promulgated under this subsection.
       ``(E) Penalty for late payment.--If a payment required by 
     subparagraphs (C) and (D) has not been made within 30 days 
     after the Secretary has received an accurate, timely, and 
     complete request for payment thereof, the amount payable to 
     such lender shall be increased by an amount equal to the 
     daily interest accruing on the payments due the lender. For 
     such purpose, the daily interest shall be the daily 
     equivalent of the applicable rate of interest determined 
     under section 427A(a)(1).
       ``(4) Measures to facilitate exercise of lending 
     authority.--
       ``(A) Information.--The Secretary shall provide for the 
     establishment of facilities for the communication of 
     information that permits eligible borrowers to be informed of 
     the identity of, and means to contact, lenders holding 
     unexercised lending authority pursuant to this subsection.
       ``(B) Coordination.--The Secretary shall, by regulation, 
     coordinate the availability of loans pursuant to section 
     428(j) to the extent necessary--
       ``(i) to permit lenders to exercise the lending authority 
     secured pursuant to this subsection; and
       ``(ii) to ensure that eligible borrowers obtain loans under 
     this part.
       ``(5) Authority to prepare for program.--Notwithstanding 
     paragraph (1), the Secretary may, before July 1, 1999--
       ``(A) prescribe regulations to carry out this subsection; 
     and
       ``(B) expend funds appropriated pursuant to this part to 
     carry out activities necessary to the implementation of the 
     programs authorized by this subsection.''.
       (b) Conforming Amendment.--Section 428(j)(1) (20 U.S.C. 
     1078(j)(1)) is amended by adding at the end the following new 
     sentence: ``The availability of loans under this subsection 
     shall be coordinated in accordance with regulations 
     prescribed by the Secretary under section 438(g)(5).''.

  Mr. PETRI. Mr. Chairman, this amendment which I am offering along 
with the gentleman from New Jersey (Mr. Andrews) would institute an 
auction process to allocate to private lenders the rights to make 
federally-guaranteed student loans.
  Under our amendment, private lenders would submit bids to the 
Secretary in a yearly auction somewhat similar to the auctions of 
Treasury securities. In this way, a market mechanism would be used to 
determine the payments required by banks to provide the Nation's 
students with loans at reasonable interest rates.
  The amendment would end the recurring battle between student groups 
and lenders over the industry on student loans, which results in the 
price of private sector services being set by political negotiation 
without regard to the actual cost of the services.
  The amendment also has the potential to save the American taxpayers 
billions of dollars through competition for this profitable business. 
Up to now, with the exceptions of in-school interest and the overall 
interest cap, the banks have always received the same interest the 
students paid on student loans.
  This bill breaks that link for the first time. Under this bill, the 
banks will receive one-half percent more interest than the borrowers 
pay, with the American taxpayers picking up the difference on every 
loan for as long as it is outstanding. That will be an administrative 
monster as well as a drain on the Treasury.
  Our amendment would keep the students' interest rates the same as 
they are in the bill. However, the banks, depending on whether winning 
bids were positive or negative, would either make a one-time payment 
for the right to make blocks of loans on those terms or would receive a 
one-time payment from the government to make it worth their while to 
make these loans.

                              {time}  2145

  In either case, the process would be simpler and use a market-based 
price discovery mechanism.
  If the banks are right that these loans are unprofitable even under 
the terms provided by the bill, this process provides them an 
opportunity to get better terms. I personally do not believe for a 
minute that that would happen, however. I am convinced that the 
competition produced by this approach will drive down by a substantial 
amount the cost of these loans to the U.S. Government.
  I urge all my colleagues to support this amendment.
  Mr. McKEON. Mr. Chairman, will the gentleman yield?
  Mr. PETRI. I yield to the gentleman from California.
  Mr. McKEON. Mr. Chairman, I know the gentleman from Wisconsin has 
worked very hard for many years in efforts to improve the student loan 
program. I commend him for his effort on his amendment. In fact, I 
agree with its general thrust.
  The gentleman is correct that up to now we have tried to figure out 
how much to pay the lenders for providing student loans in a political 
negotiation and we in Congress really have no way of knowing what the 
right price is. It would be much better if we had market process to 
determine that.
  I am interested in working in that direction. That is why we have a 
provision in the bill to study this whole issue. In fact, I understand 
there also is interest in this subject in the other body, and it could 
even come up in the conference on this bill.
  However, I believe that the gentleman's amendment is simply too much, 
too fast. It was not offered in committee, and we simply are not ready 
at this point to adopt one particular full-blown market process from 
among the many alternatives in the manner the gentleman's amendment 
provides.
  Therefore, I would urge the gentleman to withdraw his amendment, and 
I will be happy to work with him to move toward incorporating a market 
mechanism in this program in the future.
  Mr. KILDEE. Mr. Chairman, will the gentleman yield?
  Mr. PETRI. I yield to the gentleman from Michigan.
  Mr. KILDEE. Mr. Chairman, I share the views of the chairman, the 
gentleman from California (Mr. McKeon). I would be very happy to work 
with the gentleman to see if we can resolve this in conference, and if 
the gentleman would withdraw, the three of us could work together to 
see if we can resolve this.
  Mr. ANDREWS. Mr. Chairman, will the gentleman yield?
  Mr. PETRI. I yield to the gentleman from New Jersey.
  Mr. ANDREWS. Mr. Chairman, I thank the gentleman; and I was proud to 
coauthor this amendment with my friend from Wisconsin, who I would like 
to acknowledge as, I think, the most knowledgeable person in the House 
on the issue of student loans.
  I am also pleased that the subcommittee chairman and the ranking 
member have agreed they will continue to discuss with us and negotiate 
with us this issue beyond conference and up through conference. I 
happen to think that the debate of the last number of months proves the 
validity of the underlying idea here.

[[Page H2570]]

  Some of us believe that the subsidy of the guaranteed student loan 
program is too high. Others believe it is too low. I think that what 
this amendment says is that it is not a judgment that we should make in 
this body as to whether the subsidy rate is too high or too low. 
Instead, we should turn to the marketplace and let interested lenders 
step forward and bid for the right to receive these government 
guaranteed franchises.
  This is not a new idea. It is an idea that, frankly, works in the FHA 
mortgage context in much larger quantities of dollars with great 
success.
  The CHAIRMAN. The time of the gentleman from Wisconsin (Mr. Petri) 
has expired.
  (On request of Mr. Andrews, and by unanimous consent, Mr. Petri was 
allowed to proceed for 1 additional minute.)
  Mr. ANDREWS. If the gentleman will continue to yield, Mr. Chairman, I 
would like to commend my coauthor of this amendment. I also commend the 
subcommittee chairman and ranking member for their willingness to work 
together with us on this.
  I believe that the right answer to this conundrum, as to whether it 
is too much or too little, is to turn to the marketplace and let the 
marketplace answer that question for us.
  Mr. PETRI. Reclaiming my time, Mr. Chairman, I thank my colleague. 
And in light of the interest from Senator Kennedy and others in the 
other body, and in light of the interest on both sides of the aisle in 
this body in pursuing this approach and the study that is in the bill.
  Mr. Chairman, I would ask unanimous consent to withdraw my amendment 
at this time.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Wisconsin?
  There was no objection.
  The CHAIRMAN. The amendment is withdrawn.
  Are there further amendments to title IV?


                 Amendment No. 54 Offered by Mr. Roemer

  Mr. ROEMER. Mr. Chairman, I offer Amendment No. 54.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 54 offered by Mr. Roemer:
       Page 172, after line 22, insert the following new 
     subsection (and redesignate the succeeding subsections 
     accordingly):
       (c) Additional Annual Loan Limit Flexibility.
       (1) In general.--Section 428H(d)(2) is amended--
       (A) by striking subparagraph (C); and
       (B) by inserting after subparagraph (B) the following new 
     subparagraphs:
       ``(C) notwithstanding subparagraph (A) and (B), in the case 
     of such a student who is pursuing a program of study at an 
     eligible institution leading to the baccalaureate degree--
       ``(i) $7,200 if such student is enrolled in a program whose 
     length is at least 1 academic year (as determined under 
     section 481);
       ``(ii) $4,500 if such student is enrolled in a program 
     whose length is less than 1 academic year, but at least \2/3\ 
     of such an academic year; and
       ``(iii) $2,700 if such student is enrolled in a program 
     whose length is less than \2/3\, but at least \1/3\, of such 
     an academic year;
       ``(D) in the case of such a student who is a graduate or 
     professional student enrolled at an eligible institution, an 
     amount not to exceed the student's estimated cost of 
     attendance (as determined under section 472), less the sum 
     of--
       ``(i) any loan for which the student is eligible under 
     section 428; and
       ``(ii) an estimate of any financial assistance reasonably 
     available to such student.''.
       (2) Dependent students amendment.--Section 428H(d) is 
     amended--
       (A) by redesignating paragraph (3) as paragraph (4); and
       (B) by inserting after paragraph (2) the following new 
     paragraph:
       ``(3) Annual limits for dependent students.--
     Notwithstanding paragraph (2), in the case of a dependent 
     student who is enrolled in a program leading to the 
     baccalaureate degree whose length is at least 1 academic year 
     (as determined under section 481), the maximum annual amount 
     of loans under this section such a student may borrow in any 
     academic year or its equivalent or in any period of 7 
     consecutive months, whichever is longer, shall be the amount 
     determined under paragraph (1) plus $1,500.''

  Mr. ROEMER. Mr. Chairman, as we moved into hearings on this very 
important bipartisan higher education bill, what we heard both in 
Washington, D.C., and in field hearings in Indiana and across the 
country was the resounding call for more flexibility, not more mandates 
upon our institutions of higher education, and trying to do things to 
reduce the cost and the debt to students as they come out of college.
  This amendment, the loan flexibility amendment, achieves both of 
those objectives. It tries to provide more flexibility to our schools 
and to our students. It also enhances the ability to combine the loan 
programs and give the students a reduced rate. This amendment would 
retain the aggregate loan limits while giving students greater 
borrowing flexibility under the Federal student loan programs.
  In the subsidized loan program, student lending has both aggregate 
and annual loan limits. The annual loan limit forces many students into 
the more expensive private loan market. This amendment would apply only 
to unsubsidized loans for students at 4 year degree granting 
institutions and would not change the total amount students may borrow 
in the Federal programs under current law. Therefore, students will not 
be incurring additional debt.
  We have tried to work an agreement out with the Democrat and 
Republican side on this amendment from the full committee.
  This amendment would retain the aggregate loan limits, while giving 
students greater borrowing flexibility under the federal student loan 
programs.
  In the subsidized loan program, student lending has both aggregate 
and annual loan limits. The annual loan limits force many students into 
the more expensive private loan market.
  This amendment would apply only to unsubsidized loans for students at 
four-year, degree-granting institutions, and would not change the total 
amount students may borrow in the federal programs under current law--
therefore, students will not be incurring additional debt.
  The amendment has three parts, which apply respectively to dependent 
undergraduate students, independent undergraduates, and graduate 
students.
  Dependent Undergraduates--Currently dependent undergraduates may 
borrow unsubsidized loans only under limited circumstances, forcing 
them into private loan programs with uncapped interest rates. This 
amendment would permit full-time dependent undergraduates to borrow up 
to $1500 a year in unsubsidized loans in addition to the subsidized 
loans they may borrow under current law--but the combined total of 
subsidized and unsubsidized borrowing could not exceed the existing 
undergraduate maximum of $2300.
  Independent Undergraduates--Currently independent undergraduates are 
limited to $4000 in unsubsidized maximums for their freshman and 
sophomore years, and $5000 for their junior and senior years, forcing 
them into private loan programs to make up the difference. Independent 
undergraduates would be permitted to borrow up to $7200 per year in 
unsubsidized loans, which again keeps total borrowing under the 
existing cumulative limits.
  Graduate Students--Under current law, graduate students may borrow 
$8500 in subsidized loans and $10,000 in unsubsidized loans per year, 
meaning that amounts over those limits must be borrowed from private 
programs. Graduate students would be permitted to borrow unsubsidized 
loans up to the cost of attendance minus subsidized loans and other 
aid, provided that there is no change to the cumulative amounts 
graduate students are permitted to borrow under current law.
  Mr. GOODLING. Mr. Chairman, I move to strike the last word.
  We are willing to accept the amendment with the understanding that we 
will have a rollcall vote on it; and so if we find out tomorrow that it 
does cost money, then, of course, we would have to have that vote. But 
we would accept it tonight with the understanding that I will call for 
a rollcall vote.
  Mr. ROEMER. Mr. Chairman, will the gentleman yield?
  Mr. GOODLING. I yield to the gentleman from Indiana.
  Mr. ROEMER. Mr. Chairman, I wish to, first of all, I want to 
compliment the chairman on his willingness when I offered this 
amendment in committee to continue to work with me and my staff to try 
to perfect this amendment, to make sure that we attain the goals of 
flexibility and reduce costs to the students and, therefore, reduced 
debt to the students. We have worked with the gentleman, and I want to 
compliment the gentleman and his staff for working through those 
issues.
  We are hopeful that this will not be costed by CBO. We are also 
hopeful that we will not have a vote on this and that the gentleman 
will accept it and that we may not have a rollcall vote.
  We also would prefer, if we could, in the morning, once we get CBO to 
score

[[Page H2571]]

it, if in fact there is a way that we can continue to have the 
gentleman support this amendment and further perfect it in conference, 
we would maintain that flexibility as well.
  Mr. GOODLING. Mr. Chairman, reclaiming my time, we would be happy to 
continue to work as we go into conference. It is just, I think, 
necessary to say that we would have a rollcall vote even though we 
would accept it, to see whether or not there is a cost involved.
  Mr. ROEMER. Mr. Chairman, if the gentleman will continue to yield, we 
would be happy to work with the chairman. We appreciate all his 
expertise and help up to this point, and I am happy with the Chairman's 
acceptance of the amendment.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Indiana (Mr. Roemer).
  The question was taken; and the Chairman announced that the ayes 
appeared to have it.
  Mr. GOODLING. Mr. Chairman, I demand a recorded vote.
  The CHAIRMAN. Pursuant to House Resolution 411, further proceedings 
on the amendment offered by the gentleman from Indiana (Mr. Roemer) 
will be postponed.
  Are there further amendments to title IV?


          Amendment No. 33, as Modified, Offered by Mrs. Kelly

  Mrs. KELLY. Mr. Chairman, I offer Amendment No. 33, and I ask 
unanimous consent that the amendment I have submitted at the desk be 
considered as a substitute to the amendment I had preprinted in the 
Congressional Record.

       The text of Amendment No. 33 is as follows:
       Page 128, line 12, strike the close quotation marks and 
     following period and after such line insert the following new 
     chapter:

       ``CHAPTER 6--PUBLIC SAFETY OFFICER MEMORIAL SCHOLARSHIPS.

     ``SEC. 411A. SCHOLARSHIPS AUTHORIZED.

       ``(a) In General.--
       ``(1) Scholarship awards.--The Secretary is authorized to 
     award a scholarship to any eligible applicant who is 
     enrolled, or has been accepted for enrollment, in an eligible 
     institution as a full-time or part-time postsecondary level 
     student.
       ``(2) Application.--To receive a scholarship award under 
     this chapter, each eligible applicant shall submit an 
     application to the Secretary in such time and manner as may 
     be determined appropriate by the Secretary, accompanied by a 
     certification from the head of the agency that employed the 
     public safety officer to whom the applicant was married (in 
     the case of a surviving spouse), or with whom the applicant 
     was living or from whom the applicant was receiving support 
     contributions (in the case of a dependent child), stating 
     that such officer died as a result of the performance of the 
     officer's official duties.
       ``(b) Maximum Award.--For any academic year, the maximum 
     amount of a scholarship award under this section for a 
     postsecondary student may equal, but not exceed, the lesser 
     of the following:
       ``(1) The average cost of attendance (as defined in section 
     472), at a State university in the State in which the student 
     resides, for a State resident carrying the same academic 
     workload as the student, with the same number of dependents 
     as the student, and residing in the same type of housing as 
     the student.
       ``(2) The actual cost of attendance (as defined in section 
     472) of such student.
       ``(c) Award Period.--The duration of each award under this 
     chapter for a postsecondary student, shall be the lesser of--
       ``(1) the time actually required by the student to complete 
     a course of study and obtain a diploma; and
       ``(2) 6 years in the case of a student engaged in 
     undergraduate studies and 3 years in the case of a student 
     engaged in postgraduate studies.
       ``(d) Notification.--The Secretary shall notify the 
     recipient and the eligible institution of the applicant's 
     selection for receipt of an award under this chapter, the 
     conditions pertaining to award eligibility and continuance.
       ``(e) Fiscal Agent.--The Secretary shall, if practicable, 
     use the eligible institution as fiscal agent for payment of 
     an award.

     ``SEC. 411B. ADDITIONAL AWARD REQUIREMENTS.

       ``A student awarded a scholarship grant under this chapter, 
     as a condition for initial receipt of such award and 
     periodically thereafter as a condition for its continuation, 
     shall demonstrate to the satisfaction of the Secretary that 
     the student is--
       ``(1) maintaining satisfactory progress in the course of 
     study the student is pursuing consistent with section 484(c);
       ``(2) committed to remaining drug-free; and
       ``(3) attending class on a regular basis as to not 
     interfere with normal course of studies except for excused 
     absence for vacation, illness, military service and such 
     other periods deemed good cause by the eligible institution 
     or the Secretary.

     ``SEC. 411C. AGREEMENTS WITH ELIGIBLE INSTITUTIONS.

       ``For the purposes of this chapter, the Secretary is 
     authorized to enter into agreements with eligible 
     institutions in which any student receiving a scholarship 
     award under this chapter has enrolled or has been accepted 
     for enrollment. Each such agreement shall--
       ``(1) provide that an eligible institution will cooperate 
     with the Secretary in carrying out the provisions of this 
     chapter, including the provision of information necessary for 
     a student to satisfy the requirements in section 411B;
       ``(2) provide that the institution will conduct a periodic 
     review to determine whether students enrolled and receiving 
     scholarship awards continue to be entitled to payments under 
     this chapter and will notify the Secretary of the results of 
     such reviews; and
       ``(3) provide for control and accounting procedures as may 
     be necessary to assure proper disbursements and accounting of 
     funds paid under to the institution under section 411A(e).

     ``SEC. 411D. DEFINITIONS.

       ``In this chapter:
       ``(1) Dependent child.--The term `dependent child' means a 
     child who is either living with or receiving regular support 
     contributions from a public safety officer at the time of the 
     officer's death, including a stepchild or an adopted child.
       ``(2) Eligible applicant.--The term `eligible applicant' 
     means a person residing in a State who is--
       ``(A) a surviving spouse; or
       ``(B) a dependent child.
       ``(3) Eligible institution.--The term `eligible 
     institution' means an eligible institution as defined in 
     section 435(a) that--
       ``(A) is located in a State; and
       ``(B) complies with the antidiscrimination provisions of 
     section 601 of the Civil Rights Act of 1964 and does not 
     discriminate on the basis of race.
       ``(4) Public safety officer.--The term `public safety 
     officer' means a person serving a public agency of a State or 
     of a unit of general local government, with or without 
     compensation, as--
       ``(A) a law enforcement officer, including a corrections or 
     a court officer engaged in--
       ``(i) apprehending or attempting to apprehend of any 
     person--

       ``(I) for the commission of a criminal act; or
       ``(II) who at the time was sought as a material witness in 
     a criminal proceeding; or

       ``(ii) protecting or guarding a person held for the 
     commission of a criminal act, or held as a material witness 
     in connection with a criminal act; or
       ``(iii) lawfully preventing of, or lawfully attempting to 
     prevent the commission of, a criminal act or an apparent 
     criminal act in the performance of his official duty; or
       ``(B) a firefighter.
       ``(5) Surviving spouse.--The term `surviving spouse' means 
     the legally married husband or wife of a public safety 
     officer at the time of the officer's death.
       ``(6) Unit of general local government.--The term `unit of 
     general local government' means any city, county, township, 
     town, borough, parish, village, or any other general purpose 
     subdivision of a State, or any Indian tribe which the 
     Secretary of the Interior determines performs law enforcement 
     functions.''

  The CHAIRMAN. The Clerk will report the modification.
  The Clerk read as follows:

       Amendment No. 33, as modified, offered by Mrs. Kelly:
       Page 128, line 12, strike the close quotation marks and 
     following period and after such line insert the following new 
     chapter:

       ``CHAPTER 6--PUBLIC SAFETY OFFICER MEMORIAL SCHOLARSHIPS.

     ``SEC. 411A.. SCHOLARSHIPS AUTHORIZED.

       ``(a) In General.--
       ``(1) Scholarship awards.--The Secretary is authorized to 
     award a scholarship to any eligible applicant who is 
     enrolled, or has been accepted for enrollment, in an eligible 
     institution as a full-time or part-time postsecondary level 
     student.
       ``(2) Application.--To receive a scholarship award under 
     this chapter, each eligible applicant shall submit an 
     application to the Secretary in such time and manner as may 
     be determined appropriate by the Secretary--
       ``(A) accompanied by a certification from the head of the 
     agency that employed the public safety officer to whom the 
     applicant was married (in the case of a surviving spouse), or 
     with whom the applicant was living or from whom the applicant 
     was receiving support contributions (in the case of a 
     dependent child), stating that such officer died as a result 
     of the performance of the officer's official duties; and
       ``(B) demonstrating the applicant's need for financial aid 
     under part F of this title, determined without regard to any 
     assets derived from death benefits for such officer, to 
     pursue a program of postsecondary education.
       ``(b) Maximum Award.--For any academic year, the maximum 
     amount of a scholarship award under this section for a 
     postsecondary student may equal, but not exceed, the lesser 
     of the following:
       ``(1) The average cost of attendance (as defined in section 
     472), at a State university in the State in which the student 
     resides, for a State resident carrying the same academic

[[Page H2572]]

     workload as the student, with the same number of dependents 
     as the student, and residing in the same type of housing as 
     the student.
       ``(2) The actual cost of attendance (as defined in section 
     472) of such student.
       ``(c) Award Period.--The duration of each award under this 
     chapter for a postsecondary student, shall be the lesser of--
       ``(1) the time actually required by the student to complete 
     a course of study and obtain a diploma; and
       ``(2) 6 years in the case of a student engaged in 
     undergraduate studies and 3 years in the case of a student 
     engaged in postgraduate studies.
       ``(d) Notification.--The Secretary shall notify the 
     recipient and the eligible institution of the applicant's 
     selection for receipt of an award under this chapter, the 
     conditions pertaining to award eligibility and continuance.
       ``(e) Fiscal Agent.--The Secretary shall, if practicable, 
     use the eligible institution as fiscal agent for payment of 
     an award.

     ``SEC. 411B. ADDITIONAL AWARD REQUIREMENTS.

       ``A student awarded a scholarship grant under this chapter, 
     as a condition for initial receipt of such award and 
     periodically thereafter as a condition for its continuation, 
     shall demonstrate to the satisfaction of the Secretary that 
     the student is--
       ``(1) maintaining satisfactory progress in the course of 
     study the student is pursuing consistent with section 484(c);
       ``(2) committed to remaining drug-free; and
       ``(3) attending class on a regular basis as to not 
     interfere with normal course of studies except for excused 
     absence for vacation, illness, military service and such 
     other periods deemed good cause by the eligible institution 
     or the Secretary.

     ``SEC. 411C. AGREEMENTS WITH ELIGIBLE INSTITUTIONS.

       ``For the purposes of this chapter, the Secretary is 
     authorized to enter into agreements with eligible 
     institutions in which any student receiving a scholarship 
     award under this chapter has enrolled or has been accepted 
     for enrollment. Each such agreement shall--
       ``(1) provide that an eligible institution will cooperate 
     with the Secretary in carrying out the provisions of this 
     chapter, including the provision of information necessary for 
     a student to satisfy the requirements in section 411B;
       ``(2) provide that the institution will conduct a periodic 
     review to determine whether students enrolled and receiving 
     scholarship awards continue to be entitled to payments under 
     this chapter and will notify the Secretary of the results of 
     such reviews; and
       ``(3) provide for control and accounting procedures as may 
     be necessary to assure proper disbursements and accounting of 
     funds paid under to the institution under section 411A(e).

     ``SEC. 411D. DEFINITIONS.

       ``In this chapter:
       ``(1) Dependent child.--The term `dependent child'' means a 
     child who is either living with or receiving regular support 
     contributions from a public safety officer at the time of the 
     officer's death, including a stepchild or an adopted child.
       ``(2) Eligible applicant.--The term `eligible applicant'' 
     means a person residing in a State who is--
       ``(A) a surviving spouse; or
       ``(B) a dependent child.
       ``(3) Eligible institution.--The term `eligible 
     institution' means an eligible institution as defined in 
     section 435(a) that--
       ``(A) is located in a State; and
       ``(B) complies with the antidiscrimination provisions of 
     section 601 of the Civil Rights Act of 1964 and does not 
     discriminate on the basis of race.
       ``(4) Public safety officer.--The term `public safety 
     officer'' means a person serving a public agency of a State 
     or of a unit of general local government, with or without 
     compensation, as--
       ``(A) a law enforcement officer, including a corrections or 
     a court officer engaged in--
       ``(i) apprehending or attempting to apprehend of any 
     person--

       ``(I) for the commission of a criminal act; or
       ``(II) who at the time was sought as a material witness in 
     a criminal proceeding; or

       ``(ii) protecting or guarding a person held for the 
     commission of a criminal act, or held as a material witness 
     in connection with a criminal act; or
       ``(iii) lawfully preventing of, or lawfully attempting to 
     prevent the commission of, a criminal act or an apparent 
     criminal act in the performance of his official duty; or
       ``(B) a firefighter.
       ``(5) Surviving spouse.--The term `surviving spouse'' means 
     the legally married husband or wife of a public safety 
     officer at the time of the officer's death.
       ``(6) Unit of general local government.--The term `unit of 
     general local government'' means any city, county, township, 
     town, borough, parish, village, or any other general purpose 
     subdivision of a State, or any Indian tribe which the 
     Secretary of the Interior determines performs law enforcement 
     functions.''.

  Mrs. KELLY (during the reading). Mr. Chairman, I ask unanimous 
consent that the amendment, as modified, be considered as read and 
printed in the Record.
  The CHAIRMAN. Is there objection to the request of the gentlewoman 
from New York?
  There was no objection.
  The CHAIRMAN. Is there objection to the modification offered by the 
gentlewoman from New York?
  There was no objection.
  The CHAIRMAN. The modification is accepted.
  Mrs. KELLY. Mr. Chairman, I rise today to introduce an amendment that 
provides needed assistance to the family members of public safety 
officers who are killed in the line of duty.
  Police officers and firefighters lay their lives on the lines on a 
daily basis, Mr. Chairman, and, sadly, all too often they make the 
ultimate sacrifice in their service of their communities.
  This tragic fact was illustrated most recently in my district in New 
York when a volunteer firefighter, Michael Neuner, who was also a 
police officer, was killed last summer while fighting a fire in the 
town of Southeast.
  This unfortunate story is repeated around the country, Mr. Chairman. 
These are our friends, our neighbors, our loved ones, and they leave 
behind families who must continue on. The death of a father or mother 
takes an obvious emotional toll, but it has an impact on the financial 
security of the family, particularly when it comes to meeting 
educational expenses.
  Oftentimes, for the sake of putting food on the table and a roof over 
their family's heads, a single parent who has lost their spouse will 
forsake providing for their children's education for the sake of 
survival. We can prevent this phenomenon by passing the amendment 
before us today.
  This amendment seeks to address this particular problem. 
Specifically, the bill authorizes the Secretary of Education to award 
education scholarships to the spouse or dependent child of a public 
safety officer, police, firefighter or corrections officer who is 
killed in the line of duty. These scholarships may be used to cover 
education expenses to attend a postsecondary institution as a full-time 
or part-time student.
  This version of my amendment differs from the original preprinted 
version because it makes these scholarships need-based and extracts 
from the calculation of that need any death benefits received by the 
family on account of the officer's death.
  The last Congress adopted similar legislation to award education 
assistance to family members of Federal law enforcement officers killed 
in the line of duty. I was pleased to support that legislation, which 
passed both the House and the Senate by voice votes and was signed into 
law by President Clinton. I am proud to introduce this amendment, which 
takes the next logical step and extends this benefit to the families of 
all public safety officers who are killed while serving their 
communities.
  Crime is a reality in our Nation, and we should acknowledge those 
brave and dedicated people who devote their careers to fighting crime 
in our neighborhoods. Our public safety officers deserve our respect, 
gratitude and support. I urge my colleagues to join me in support of 
this important amendment.
  Mr. FOX of Pennsylvania. Mr. Chairman, I move to strike the last 
word.
  Mr. Chairman, I join the gentlewoman from New York (Mrs. Kelly) in 
this outstanding amendment. We have an outstanding bill here, but this 
amendment also makes it better.
  To establish a memorial scholarship program, to assist families of 
State and local public safety officials, law enforcement officers and 
firefighters who are killed in the line of duty with educational 
assistance is certainly an all-American ideal and an all-American idea.
  I worked with the gentlewoman from New York last year on the bill for 
the Federal officers along with Senator Specter of Pennsylvania. That 
was inspired, of course, by the Federal officer, Marshal Degan, who 
died at Ruby Ridge, as well as an officer in my district, Chuck Reed, 
who was the first Federal officer at the FBI ever killed out of the 
Philadelphia office.
  The fact is, these people do put their lives on the line everyday. 
When they leave their family, they do not know whether they will come 
back. And the fact is, their families have to go on, hopefully as well 
as they can to try to make a whole life while knowing that their spouse 
has sacrificed greatly to keep our communities safe, free of

[[Page H2573]]

crime and also free of the fire tragedies that can occur.

                              {time}  2200

  And so, by establishing this memorial scholarship, the gentlewoman 
from New York (Mrs. Kelly) is leading the fight for us across America 
in making sure that our communities, while they remain safe, will also 
make sure we remember the families.
  So I rise, Mr. Speaker, and other Members of the House on both sides 
of the aisle, this is a truly a bipartisan idea for a bipartisan bill, 
and I look for unanimous adoption here in the House and an eventual 
adoption into law.
  Mr. McKEON. Mr. Chairman, I move to strike the requisite number of 
words.
  I want to congratulate the gentlewoman from New York (Mrs. Kelly) for 
her amendment. It is very commendable to want to provide assistance to 
the sons and daughters of public safety officers who died as a result 
of the performance of their official duties.
  The awards made under this program will be need-based, so the money 
will be going to a student who has financial need as determined under 
the Higher Education Act. I would support this amendment.
  Mr. KILDEE. Mr. Chairman, I move to strike the requisite number of 
words.
  Mr. Chairman, as one who has seen too many police and firefighters 
and correction officers in my own district killed in the line of duty, 
I commend the gentlewoman from New York (Mrs. Kelly) for her amendment. 
I think it is a very good amendment, and we accept it on this side.
  The CHAIRMAN. The question is on the amendment offered by the 
gentlewoman from New York (Mrs. Kelly), as modified.
  The amendment, as modified, was agreed to.
  The CHAIRMAN. Are there other amendments to title IV?


                 Amendment No. 11 Offered by Mr. Allen

  Mr. ALLEN. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 11 Offered by Mr. Allen:
       Page 267, after line 11, insert the following new 
     subsection (and redesignate the succeeding subsections 
     accordingly):
       (d) Financial Responsibility for Refunds and During 
     Provisional Certification.--
       (1) Amendment.--Section 498(e) is amended by adding at the 
     end the following new paragraphs:
       ``(6) Notwithstanding any other provision of law, any 
     person required to pay, on behalf of a student or borrower, a 
     refund of unearned institutional charges to a lender, or the 
     Secretary, who willfully fails to pay such refund or 
     willfully attempts in any manner to evade payment of such 
     refund, shall, in addition to other penalties provided by 
     law, be liable to the Secretary for the amount of the refund 
     not paid, to the same extent with respect to such refund that 
     such an individual would be liable as a responsible person 
     for a penalty under section 6672(a) of title 26, United 
     States Code, with respect to the nonpayment of taxes.
       ``(7) Notwithstanding any other provision of law, a 
     proprietary institution of higher education, as defined in 
     section 481(b), may be provisionally certified under 
     subsection (h) only if it provides the Secretary with 
     financial guarantees from one or more individuals whom the 
     Secretary determines, in accordance with subsection (e)(2), 
     exercise substantial control over such institution. Such 
     financial guarantees shall be in addition to any financial 
     guarantees otherwise required from the institution and shall 
     be in an amount determined by the Secretary to be sufficient 
     to satisfy the institution's potential liability to the 
     Federal Government, student assistance recipients, and other 
     program participants for funds under this title during the 
     period of provisional certification.''.
       (2) Effective date.--The amendments made by paragraph (1)--
       (A) relating to responsibility for unpaid refunds, shall be 
     effective with respect to any unpaid refunds that were first 
     required to be paid to a lender or to the Secretary on or 
     after 90 days after the date of enactment of this Act;
       (B) relating to financial guarantees required for 
     provisional certification, shall be effective with respect to 
     any proprietary institution of higher education provisionally 
     certified by the Secretary on or after the date of enactment 
     of this Act.
       Page 269, after line 4, insert the following new 
     subsection:
       (i) Change in Status.--
       (1) Amendment.--Section 498(i)(2) is amended by striking 
     subparagraph (E) and inserting the following new 
     subparagraph:
       ``(E) the change in tax filing status of an institution 
     from for-profit to non-profit; or''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall be effective on the date of the enactment of this Act.


         Modification To Amendment No. 11 Offered By Mr. Allen

  Mr. ALLEN. Mr. Chairman, I ask unanimous consent that the amendment 
be modified in the form at the desk.
  The CHAIRMAN. The Clerk will report the modification.
  The Clerk read as follows:

       Amendment No. 11, as modified, offered by Mr. Allen:
       Page 267, after line 11, insert the following new 
     subsection (and redesignate the succeeding subsections 
     accordingly):
       (d) Financial Responsibility for Refunds and During 
     Provisional Certification.--
       (1) Amendment.--Section 498(e) is amended by adding at the 
     end the following new paragraph:
       ``(6) Notwithstanding any other provision of law, any 
     person required to pay, on behalf of a student or borrower, a 
     refund of unearned institutional charges to a lender, or the 
     Secretary, who willfully fails to pay such refund or 
     willfully attempts in any manner to evade payment of such 
     refund, shall, in addition to other penalties provided by 
     law, be liable to the Secretary for the amount of the refund 
     not paid, to the same extent with respect to such refund that 
     such an individual would be liable as a responsible person 
     for a penalty under section 6672(a) of title 26, United 
     States Code, with respect to the nonpayment of taxes.''.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall be effective with respect to any unpaid refunds that 
     were first required to be paid to a lender or to the 
     Secretary on or after 90 days after the date of enactment of 
     this Act.

  Mr. ALLEN (during the reading). Mr. Chairman, I ask unanimous consent 
that the amendment, as modified, be considered as read and printed in 
the Record.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Maine?
  There was no objection.
  The CHAIRMAN. Without objection, the modification is agreed to.
  There was no objection.
  The CHAIRMAN. The gentleman from Maine (Mr. Allen) is recognized for 
5 minutes.
  Mr. ALLEN. Mr. Chairman, I wanted to thank the chairman and ranking 
member of the subcommittee and chairman and ranking member of the full 
committee and say that the modified version of my amendment removes the 
requirement of financial guarantees from prospective owners of for-
profit educational institutions during provisional certification.
  The modified amendment maintains the provisions which ensure that 
owners of higher education institutions may be held liable for 
repayment of funds that taxpayers intended for eligible students.
  In Maine, students and families are owed hundreds of thousands of 
dollars in refunds by owners of for-profit institutions which have been 
closed down due to mismanagement. An owner of one such institution has 
been able to move his business to another State and continue to draw 
Federal financial aid dollars.
  This situation is not peculiar to Maine. Students and families all 
over the country are owed money by owners of schools that have failed. 
I have been told by the Inspector General's Office that between 85 and 
95 percent of their open cases concerning for-profit institutions 
involve student loan refund problems.
  Students should be able to attend an educational institution and 
trust that their tuition and financial aid dollars are being handled 
properly. When this is not the case, the Secretary should have the 
power to impose appropriate sanctions not only against the institution 
involved, but also against the owner of the institution.
  My amendment will solidify the Secretary's power to hold the 
institution of a proprietary higher education institution liable for 
financial losses to the Federal Government and student loan recipients. 
Presently, the Secretary has only been able to seek recourse from 
institutions, not their owners; however, many such institutions are 
bankrupt, so no money is recovered.
  My amendment provides the Secretary with a mechanism to collect the 
funds. It does so by holding the owner liable in the same way that an 
individual would be responsible for penalties for the nonpayment of 
taxes. Taxpayer dollars must be protected to ensure the continued 
availability and viability of student financial aid programs.
  I urge my colleagues to accept this amendment, support this 
amendment.

[[Page H2574]]

  Mr. McKEON. Mr. Chairman, I move to strike the last word.
  Again, the gentleman from Maine (Mr. Allen) is not a member of the 
committee, but has added a good, thoughtful amendment, and I would 
support that amendment.
  Mr. ANDREWS. Mr. Chairman, I move to strike the requisite number of 
words.
  I rise in support of the amendment of the gentleman from Maine. I 
would like to make a couple comments about it. First of all, I thank 
him for his modification. I think it is very important that we continue 
the custom and tradition in this bill of treating all schools on a 
level playing field, not singling out any category of higher education 
for special favored or disfavored treatment. I think the gentleman has 
remained consistent with that tradition by making the modification to 
this amendment. I appreciate that.
  I would like to point out one concern that I have, for the Record, 
which I would hope that we would address at conference with the 
gentleman's participation, and that is clearing up any ambiguity about 
the definition of the word ``person'' in what is subparagraph 6 of his 
amendment, where it says, ``Any person required to pay, on behalf of a 
student or borrower, a refund shall, in addition to other penalties 
provided by law, be liable to the Secretary for the amount of the 
refund not paid.''
  I think it is very important that we be clear as to who the person 
is, for the following reasons: If the institution that is on the hook 
for this is a community college, let us say we want to be very clear 
that the comptroller of the community college will not be personally 
liable for this obligation unless he or she committed some kind of 
crime.
  I am sure that is not the intent of the gentleman. The same would be 
true of a for-profit school if an individual is not financially 
involved, but the corporation for which the individual is. And I would 
hope that we would have the cooperation of the gentleman in resolving 
those matters as we proceed.
  Mr. ALLEN. Mr. Chairman, will the gentleman yield?
  Mr. ANDREWS. I yield to the gentleman from Maine.
  Mr. ALLEN. Mr. Chairman, I am happy to work through those issues with 
my colleague. It is certainly not our intent to hold the comptroller of 
any institution liable. We have felt that this amendment would apply 
only to for-profit institutions and not to any public universities or 
nonprofits. But if it is written in a way to apply to everyone, it 
should only apply to those who are owners in the sense that they own 
stock in the institution. That is the intention.
  Mr. ANDREWS. Reclaiming my time, I again understand that this is 
designed to keep the same level playing field we have always had on 
that basis, and with that reservation, I will be happy to support the 
amendment of the gentleman.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Maine (Mr. Allen), as modified.
  The amendment, as modified, was agreed to.
  The CHAIRMAN. Are there further amendments to title IV?


            Amendment No. 7 Offered by Mr. Lazio of New York

  Mr. LAZIO of New York. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 7 offered by Mr. Lazio of New York:
       Page 192, after line 10, insert the following new section 
     (and conform the table of contents accordingly):

     SEC. 430. LOAN FORGIVENESS FOR CHILD CARE PROVIDERS.

       (a) Purpose.--It is the purpose of this section--
       (1) to bring more highly trained individuals into the early 
     child care profession; and
       (2) to keep more highly trained child care providers in the 
     early child care field for longer periods of time.
       (b) Loan Forgiveness for Child Care Providers.--Part B (20 
     U.S.C. 1071 et seq.) is amended by inserting after section 
     428J (as added by section 432) (20 U.S.C. 1078-10) the 
     following:

     ``SEC. 428K. LOAN FORGIVENESS FOR CHILD CARE PROVIDERS.

       ``(a) Definitions.--In this section:
       ``(1) Child care facility.--The term `child care facility' 
     means a facility, including a home, that--
       ``(A) provides child care services; and
       ``(B) meets applicable State or local government licensing, 
     certification, approval, or registration requirements, if 
     any.
       ``(2) Child care services.--The term `child care services' 
     means activities and services provided for the education and 
     care of children from birth through age 5 by an individual 
     who has a degree in early childhood education.
       ``(3) Degree.--The term `degree' means an associate's or 
     bachelor's degree awarded by an institution of higher 
     education.
       ``(4) Early childhood education.--The term `early childhood 
     education' means education in the areas of early child 
     education, child care, or any other educational area related 
     to child care that the Secretary determines appropriate.
       ``(b) Demonstration Program.--
       ``(1) In general.--The Secretary may carry out a 
     demonstration program of assuming the obligation to repay, 
     pursuant to subsection (c), a loan made, insured or 
     guaranteed under this part or part D (excluding loans made 
     under sections 428B and 428C) for any new borrower after the 
     date of enactment of the Higher Education Amendments of 1998, 
     who--
       ``(A) completes a degree in early childhood education; and
       ``(B) obtains employment in a child care facility.
       ``(2) Award basis; priority.--
       ``(A) Award basis.--Subject to subparagraph (B), loan 
     repayment under this section shall be on a first-come, first-
     served basis and subject to the availability of 
     appropriations.
       ``(B) Priority.--The Secretary shall give priority in 
     providing loan repayment under this section for a fiscal year 
     to student borrowers who received loan repayment under this 
     section for the preceding fiscal year.
       ``(3) Regulations.--The Secretary is authorized to 
     prescribe such regulations as may be necessary to carry out 
     the provisions of this section.
       ``(c) Loan Repayment.--
       ``(1) In general.--The Secretary shall assume the 
     obligation to repay--
       ``(A) after the second year of employment described in 
     subparagraphs (B) and (C) of subsection (b)(1), 20 percent of 
     the total amount of all loans made after date of enactment of 
     the Higher Education Amendments of 1998, to a student under 
     this part or part D;
       ``(B) after the third year of such employment, 20 percent 
     of the total amount of all such loans; and
       ``(C) after each of the fourth and fifth years of such 
     employment, 30 percent of the total amount of all such loans.
       ``(2) Construction.--Nothing in this section shall be 
     construed to authorize the refunding of any repayment of a 
     loan made under this part or part D.
       ``(3) Interest.--If a portion of a loan is repaid by the 
     Secretary under this section for any year, the proportionate 
     amount of interest on such loan which accrues for such year 
     shall be repaid by the Secretary.
       ``(4) Special rule.--In the case where a student borrower 
     who is not participating in loan repayment pursuant to this 
     section returns to an institution of higher education after 
     graduation from an institution of higher education for the 
     purpose of obtaining a degree in early childhood education, 
     the Secretary is authorized to assume the obligation to repay 
     the total amount of loans made under this part or part D 
     incurred for a maximum of two academic years in returning to 
     an institution of higher education for the purpose of 
     obtaining a degree in early childhood education. Such loans 
     shall only be repaid for borrowers who qualify for loan 
     repayment pursuant to the provisions of this section, and 
     shall be repaid in accordance with the provisions of 
     paragraph (1).
       ``(5) Ineligibility of national service award recipients.--
     No student borrower may, for the same volunteer service, 
     receive a benefit under both this section and subtitle D of 
     title I of the National and Community Service Act of 1990 (42 
     U.S.C. 12601 et seq.).
       ``(d) Repayment to Eligible Lenders.--The Secretary shall 
     pay to each eligible lender or holder for each fiscal year an 
     amount equal to the aggregate amount of loans which are 
     subject to repayment pursuant to this section for such year.
       ``(e) Application for Repayment.--
       ``(1) In general.--Each eligible individual desiring loan 
     repayment under this section shall submit a complete and 
     accurate application to the Secretary at such time, in such 
     manner, and containing such information as the Secretary may 
     require.
       ``(2) Conditions.--An eligible individual may apply for 
     loan repayment under this section after completing each year 
     of qualifying employment. The borrower shall receive 
     forbearance while engaged in qualifying employment unless the 
     borrower is in deferment while so engaged.
       ``(f) Evaluation.--
       ``(1) In general.--The Secretary shall conduct, by grant or 
     contract, an independent national evaluation of the impact of 
     the demonstration program assisted under this section on the 
     field of early childhood education.
       ``(2) Competitive basis.--The grant or contract described 
     in subsection (a) shall be awarded on a competitive basis.
       ``(3) Contents.--The evaluation described in this 
     subsection shall--

[[Page H2575]]

       ``(A) determine the number of individuals who were 
     encouraged by the demonstration program assisted under this 
     section to pursue early childhood education;
       ``(B) determine the number of individuals who remain 
     employed in a child care facility as a result of 
     participation in the program;
       ``(C) identify the barriers to the effectiveness of the 
     program;
       ``(D) assess the cost-effectiveness of the program in 
     improving the quality of--
       ``(i) early childhood education; and
       ``(ii) child care services;
       ``(E) identify the reasons why participants in the program 
     have chosen to take part in the program;
       ``(F) identify the number of individuals participating in 
     the program who received an associate's degree and the number 
     of such individuals who received a bachelor's degree; and
       ``(G) identify the number of years each individual 
     participates in the program.
       ``(4) Interim and final evaluation reports.--The Secretary 
     shall prepare and submit to the President and the Congress 
     such interim reports regarding the evaluation described in 
     this subsection as the Secretary deems appropriate, and shall 
     prepare and so submit a final report regarding the evaluation 
     by January 1, 2002.
       ``(g) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $10,000,000 for fiscal year 1999, and such sums as may be 
     necessary for each of the 4 succeeding fiscal years.''.
  Mr. LAZIO of New York. Mr. Speaker, the Lazio-Gilman-Tauscher 
amendment will address a matter of dire importance to American 
families, the need for high-quality child care.
  As a parent of two, I know how difficult it is to leave our children 
in the care of others. While most of us agree that a parent would 
provide the best care for a young child, many of our young families 
simply do not have the option of doing so. Today in America, more and 
more parents work outside the home. In fact, 62 percent of moms with 
children under 6 are in the work force. While we fight to reduce the 
tax burden that forces families into this economic situation, we need 
to assure the parents who must work that their children will be taken 
care of by qualified, competent individuals.
  We know that parents want the best for their children. They want to 
know that if their children cannot be at home, they are in a healthy 
and nurturing environment. Today, 13 million children under the age of 
6 are in child care programs. For these children the care and attention 
that they receive from child care staff is critical. When children have 
stable and caring educators, they feel secure and are ready to learn.
  A study by the National Institutes of Health shows that staff-child 
ratio and teacher education contribute to the quality of a child care 
program. Children in quality facilities have fewer behavioral problems, 
stronger language ability, and a higher level of school readiness. 
Unfortunately, because of high staff turnover and low staff salary, 
quality is something many child care programs lack.
  The NIH report shows that a low staff-child care ratio clearly 
benefits children. In fact, an article from Monday's New York Times 
highlights this very issue at a child care center in Houston. According 
to the article, workers at facilities with fewer adults see their role 
more as managing children than in interacting with them. Staff in these 
Houston centers do not have the time to engage the children who are 
playing or attend to babies unless they need immediate attention. 
Despite these findings, we have seen the average ratio of children to 
caregivers increase considerably from 6.8 to 8.5 children per worker 
between 1976 and 1990.
  Mr. Speaker, as more parents return to work, we can expect the number 
of children in child care to increase. In order to provide our children 
with quality care, we must have more caregivers per child. Bringing 
more well-educated, dedicated early child care graduates into the field 
would help alleviate the problem.
  Most students who choose a child care career want the best for 
children and value the care and education they can provide for each 
child. However, child care professionals are paid on average about 
$6.90 per hour and receive few, if any, benefits. For students 
graduating with $12,000 to $15,000 in college loans, and many more than 
that, there is very little incentive to stay in the profession.
  As a result, Mr. Speaker, many of the country's best qualified early 
education graduates either do not enter or do not remain in the field. 
In fact, the turnover rate for child care workers is four times higher 
than for their counterparts in the public schools.
  As large numbers of the early childhood work force consider leaving 
their positions, we have the opportunity to offer a modest yet 
meaningful incentive to the most qualified staff members who stay in 
the field, loan forgiveness. Our amendment would offer student loan 
forgiveness to individuals who earn a degree in early child education 
and work in a licensed child care facility, including a home-based 
child care center.
  In order to maintain stability in the industry, my amendment would 
provide an incentive to enter and remain in the child care field. After 
the second and third year of service, a child care worker would be 
eligible to receive 20 percent loan forgiveness. After the fourth and 
fifth years, the child care provider would qualify for 30 percent loan 
forgiveness.
  In order to ensure efficiency at the end of this 5-year demonstration 
program, the Secretary of Education would publish a report on the 
initiative. Rather than create an enormous mandatory spending program 
to address the need for quality child care, this amendment offers a 
focused, reasonable approach to resolving the problem.
  By offering loan forgiveness to child care staff, we can begin to 
recruit and maintain a more qualified work force. An early child care 
work force composed of staff with specialized knowledge about young 
children and how they learn and grow will significantly increase the 
quality of care in this country. We can expect these graduates to be 
effective teachers who provide meaningful learning experiences during 
the most critical period of a child's development.
  Of course, parents carry the major responsibility for their children. 
Part of this responsibility for parents who must work is finding 
dependable child care professionals to provide responsible care for 
their children. Without the availability of stable care, employers find 
that their employees are apt to miss work or in some cases leave their 
jobs altogether.
  As we try to move forward individuals from welfare to the work force, 
we must provide families with the support of a highly trained and 
reliable child care work force.
  Mr. Chairman, as long as our current economic climate forces parents 
to work outside the home, we must provide some assurance that their 
children are properly cared for by encouraging bright and qualified 
early child care graduates to enter and stay with the profession. This 
amendment will help give more families access to quality child care. I 
urge my colleagues to adopt it.
  Mrs. TAUSCHER. Mr. Chairman, I move to strike the last word.
  Mr. Speaker, I rise in support of the Lazio-Gilman-Tauscher amendment 
and urge my colleagues to support this important provision. This 
amendment is based on a measure recently introduced by the gentleman 
from New York (Mr. Lazio) and was included as part the Senate-based 
Higher Education Act.
  This amendment would authorize funding for a demonstration project 
that would forgive Federal student loans for individuals who have an 
associate or bachelor's degree in early childhood education and who 
work in a licensed child care facility for 5 years.
  I believe it is imperative that we as a Nation do more to provide 
stability in the lives of our young children. Part of that stability 
comes from them having the same providers teaching them and taking care 
of them every day. However, trained individuals who want to work for 
child care centers often cannot enter this field because they are 
unable to find a job that gives them adequate financial footing to pay 
back their student loans.
  On average, the cost of a 2-year degree at a private college is about 
$12,500. And, unfortunately, child care teaching staff earn on average 
less than $8 per hour, or only $13,000 per year, for the very valuable 
work that they do.

                              {time}  2215

  They earn these low wages despite the fact that they are better 
educated than the general population.

[[Page H2576]]

  The average salary for child care providers in center-based care is 
only about $4500 higher than the Federal poverty guidelines for a 
single adult and is nowhere near the $16,000 per year salary which is 
considered to be a livable wage for a single adult.
  It is no wonder, then, that 31 percent of all child care teachers 
leave their jobs each year for other employment. They simply cannot 
afford to simultaneously pay back any student loans that they may have 
and financially support themselves.
  The Lazio-Gilman-Tauscher amendment would help lower this 
astronomically high attrition rate among qualified child care providers 
by providing loan forgiveness for student loans, thus making it 
financially feasible for knowledgeable providers to actually stay and 
work in the field for which they were trained. The language in this 
amendment is based on the Lazio bill, H.R. 3727, a similar provision is 
in my bill, H.R. 3686, the Model States Child Care Enhancement Act 
which I introduced a month ago with the gentleman from Maine (Mr. 
Allen) and the gentleman from Virginia (Mr. Moran). Although slightly 
different in design, the intent is the same.
  We must do more to help qualified child care providers make ends 
meet, and we must do more to provide our kids with that level of 
security in their lives that they require. We must not underestimate 
the effect this stability has on our Nation's children.
  Quality is a function of experience. Nationwide, only 32 percent of 
child care teachers have been employed in their centers for at least 5 
years. When teachers have the dual benefit of education and experience, 
then we as parents can be assured that our children are receiving the 
highest quality in child care. Let us help those people who have made 
the educational commitment to caring for children stay in the field and 
get that valuable experience.
  I am pleased to work so closely with the gentleman from New York (Mr. 
Lazio) and the gentleman from New York (Mr. Gilman) and I urge 
acceptance of this bipartisan, bicameral amendment.
  Mr. FOX of Pennsylvania. Mr. Chairman, I move to strike the requisite 
number of words. I would like to thank the gentleman from New York (Mr. 
Lazio), the gentleman from New York (Mr. Gilman) and the gentlewoman 
from California (Mrs. Tauscher) for offering this important amendment 
to the Higher Education Amendments.
  Child care is an issue that concerns all families. Making sure that 
American families have access to quality child care should be one of 
our top priorities in the Congress. As Members may know, an average 
child care worker earns less than $7 per hour. It is easy to see that 
this does not provide enormous incentive for young graduates to enter 
the child care profession.
  Moreover, the best child care is provided by educated workers. We all 
know the majority of students graduating from college are burdened with 
thousands of dollars of student loan debt. This is a further 
disincentive to entering the child care field.
  The aim of this amendment is to provide an incentive for students to 
enter into child care professions. This amendment would forgive a 
percentage of the debt owed by graduates that choose to enter the child 
care field.
  The challenge here is that while students may strongly desire to work 
in child care and teach young children, they know that their income 
will be so modest that there will be no way possible that they could 
ever realistically repay their student loans. This amendment provides a 
much-needed incentive for students to choose this vitally important 
career path. The amendment would also seek to retain these workers in 
the child care field by increasing the percentage of loan forgiveness 
the longer they work.
  It is very difficult for parents to, of course, leave their children 
in the care of others. Unfortunately this is necessary because of our 
current economic climate, with many parents working more than one job 
and both parents working. Although most parents would prefer to stay 
home with their children, about 75 percent of married couples with 
children work outside the home. This amendment will go a long way 
towards ensuring that our children are left in qualified, well-trained 
hands. It will also provide parents important peace of mind.
  Again, I would like to thank the gentleman from New York (Mr. Lazio) 
for his leadership on this issue. I urge my colleagues to vote for this 
important initiative.
  Mrs. CLAYTON. Mr. Chairman, I move to strike the requisite number of 
words.
  Mr. Chairman, I also want to rise to support the Lazio-Gilman-
Tauscher amendment. I want to speak about the importance of providing 
quality child care and doing all that we can to increase the supply of 
well-trained individuals to provide for our precious children.
  A tragic story most poignantly pointed out the need of providing 
child care. Recently in the Washington Post we all heard about a police 
officer who found that she had to choose between having child care and 
taking care of her children. Since she had no child care, she had only 
one day job. You heard the story. On her first day of being jobless and 
with her children at her side, she held her colleagues who came to her 
home at bay with a gun.
  While none of us condone her action, we all have to recognize the 
pressure, the agony and the desperation she must have felt in trying to 
keep her job and to care for her children as well.
  We understand that this Nation's future, millions of our babies, 
children and youth, spend large quantities of their time in the child 
care environment. Therefore, it is understandable that we need to 
provide the best-trained individuals to make sure that they are taken 
care of.
  This modest amendment will have a major impact, because it will help 
produce more competent child care workers. These child care providers 
are crucial to the health and the welfare of our children. They are 
crucial to the parents who must support their families. I urge that 
this amendment be adopted so that we can provide the necessary care.
  Mr. KILDEE. Mr. Chairman, I move to strike the requisite number of 
words. I rise to support the amendment.
  I introduced the first child care bill in this House since Richard 
Nixon had proposed child care many years ago. Richard Nixon did some 
good things, among them his child care bill. In analyzing and studying 
child care at the time, I discovered that the workers at our Nation's 
zoos, who earn every penny that they earn, they certainly earn it all, 
but they make more than child care workers. I have always felt that 
those who take care of children should at least be making the amount of 
money as those who would take care of the animals at our Nation's zoos.
  We have had a desperate situation in child care and the remuneration 
to our workers there. I think that the amendment that the gentleman 
from New York (Mr. Lazio) is offering will help alleviate that to a 
great degree. I support the amendment.
  Mr. ANDREWS. Mr. Chairman, I move to strike the requisite number of 
words. I also rise in support of the amendment offered by the gentleman 
from New York (Mr. Lazio), the gentleman from New York (Mr. Gilman) and 
the gentlewoman from California (Mrs. Tauscher).
  I think it is important that we understand how much of a sacrifice 
people make when they go to work in the child care field. The gentleman 
from New York (Mr. Lazio) and the gentlewoman from California (Mrs. 
Tauscher) have spoken very clearly and eloquently about that, but I 
think there are some numbers that were in the newspaper, in the New 
York Times today, which dramatically illustrate the economic priority 
we put on taking care of our children as opposed to the rhetoric that 
we talk about taking care of our children.
  There was a study done which indicates that the median hourly wage of 
animal caretakers, people who take care of our pets, is $6.90 an hour; 
the median hourly wage of parking lot attendants, people who watch our 
cars, is $6.38 an hour; and the median wage of child care workers, who 
care for and watch our children, was $6.12 an hour. So we literally pay 
people more to watch our pets and our cars than we do our children.
  One of the ways that we begin to redress that grievance, and it is a 
grievance, is this proposal which suggests that a limited number of 
child care

[[Page H2577]]

workers will be able to finance their education by working in quality, 
affordable child care.
  This is an example, and I know that both the gentlewoman from 
California (Mrs. Tauscher) and the gentleman from New York (Mr. Lazio) 
are the parents of young children, as am I, so they know this issue 
very personally. It is an example of how the two sides of the aisle can 
come together on a very practical idea. I commend the authors and 
heartily support the amendment.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, will the gentleman yield?
  Mr. ANDREWS. I yield to the gentlewoman from Texas.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, we do appreciate very much 
this very forthright and forward thinking legislation.
  Another number I would like to share with my colleagues is that the 
average salary of a child care worker may be barely $12,000. It is very 
important that we provide the opportunities for professionalism, for 
training, for incentives, for learning creative techniques and styles 
of teaching our very young children.
  As Mrs. Clinton has indicated in her emphasis on the zero to 3 
development, early development, it is so very important the kind of 
exposure our children have, safe and secure environment, and the kind 
of caretaker who not only cares and loves them but also has a 
professional attitude and an ability to train them.
  I want to add my accolades but as well my support enthusiastically to 
the kind of legislation that will provide opportunities for 
professional child care providers, making this the kind of system that 
we can be proud of. I think this will particularly help our mothers 
moving from welfare to work. I thank the gentleman for yielding.
  Mr. McKEON. Mr. Chairman, I move to strike the requisite number of 
words. I want to commend the gentleman from New York (Mr. Lazio), 
classmate, subcommittee chairman on another committee, for a well 
thought out and good amendment. I want to support his amendment.
  This program was patterned after the loan forgiveness for teachers 
already included in H.R. 6. Students cannot receive loan forgiveness 
until after they have completed their second year of employment, at 
which time 20 percent of their loans may be forgiven, 20 percent after 
the third year, and 30 percent after the fourth and fifth years of 
employment, which guarantees that people will continue to work in the 
program for a period of time, which is very beneficial. Loan 
forgiveness programs structured in this manner serve as good incentives 
to attract and retain qualified teachers, especially in low paying 
professions or areas. I urge a ``yes'' vote on the amendment.
  Mr. GOODLING. Mr. Chairman, I move to strike the requisite number of 
words. I rise to bring reality to the discussion. We are making each 
other feel good. The last amendment was a good amendment. This is a 
good amendment.
  Where is the gentleman from South Carolina (Mr. Spratt) when I need 
him? Obviously we know very well that if any of these amendments get 
funded, money must be taken from some other place. I do not know where 
that will be, but it might be one of your other favorite programs or, 
even worse, it might be one of my favorite programs.
  I just want to have a little reality check here and make sure 
everybody understands. We are feeling good. But if they take money from 
us in order to fund these programs, we will not be feeling so good.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from New York (Mr. Lazio).
  The amendment was agreed to.


          Amendment No. 29 Offered by Ms. Jackson-Lee of Texas

  Ms. JACKSON-LEE of Texas. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 29 offered by Ms. Jackson-Lee of Texas:
       Page 182, line 14, strike the close quotation marks and 
     following period and after such line insert the following new 
     paragraph:
       ``(7) Authority of the Secretary to Assist Distressed 
     Institution.--The Secretary is authorized to provide 
     administrative, fiscal, management, strategic planning and 
     technical assistance through a qualified third-party 
     consultant identified by the institution or an organization 
     representing such institutions. Institutions eligible for 
     such assistance include those institutions which qualify for 
     the exemption in paragraph (2)(C)(i), (ii), and (iii) of this 
     subsection, or which have submitted a default management plan 
     under paragraph (5) which has been accepted by the Secretary.


  Modification to Amendment No. 29 Offered by Ms. Jackson-Lee of Texas

  Ms. JACKSON-LEE of Texas. Mr. Chairman, I ask unanimous consent that 
my amendment be modified with the modification at the desk.
  The CHAIRMAN. The Clerk will report the modification.
  The Clerk read as follows:

       Amendment No. 29 offered Ms. Jackson-Lee of Texas, as 
     modified:
       Page 182, line 14, strike the close quotation marks and 
     following period and after such line insert the following new 
     paragraph:
       ``(7) Authority of the Secretary to Assist Distressed 
     Institutions.--The Secretary is authorized pursuant to 
     section 326(c)(7) to provide administrative, fiscal, 
     management, strategic planning, and technical assistance 
     through a qualified third-party consultant identified by the 
     institution or an organization representing such 
     institutions. Institutions eligible for such assistance 
     include those institutions which qualify for the exemption in 
     paragraph (2)(C)(i), (ii), and (iii) of this subsection, or 
     which have submitted a default management plan under 
     paragraph (5) which has been accepted by the Secretary.

  Ms. JACKSON-LEE of Texas (during the reading). Mr. Chairman, I ask 
unanimous consent that the amendment be considered as read and printed 
in the Record.
  The CHAIRMAN. Is there objection to the request of the gentlewoman 
from Texas?
  There was no objection.
  The CHAIRMAN. Without objection, the modification is accepted.
  There was no objection.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, particularly I would like to 
thank the leadership of this committee which includes, of course, the 
gentleman from Missouri (Mr. Clay), the gentleman from Michigan (Mr. 
Kildee), certainly the gentleman from Pennsylvania (Mr. Goodling) and 
various other subcommittee chairs for really the cooperative effort and 
spirit of this legislation.
  It is important for the American people to see that all of the 
Congress supports education. This bill I think will help us, Mr. 
Chairman, do something that we would really like to see occur, and that 
is to see our student loans repaid. This amendment requests a study of 
default rates. It will make the lenders happy, it will make the 
students happy, it will make the government happy, because it will 
provide us with the kind of analysis that will help us determine why 
there may be a high default rate, what are the approaches we are using 
or not using.

                              {time}  2230

  I would hope that the Micro Computer Technology Institute located in 
the City of Houston, which provides technology education to the 
residents of the Eighteenth Congressional District, would benefit from 
this. Eighty-seven students from my congressional district were 
included in the cohort for fiscal year 1993. Of that number, 54 were 
adversely effected by what appeared to be improper servicing of their 
loans.
  There are many issues, Mr. Chairman, that impact why loans are 
defaulted. I believe in student loans. I had student loans. I paid back 
student loans. I want to see student loans being a viable element of 
our higher education. It helps so many of our constituents.
  So I would offer this amendment so that we can get, if my colleagues 
will, to the bottom of it, provide the kind of information and possibly 
avoid the kind of default rates that we have had and the criticism of 
our very viable loan programs.
  Mr. GOODLING. Mr. Chairman, will the gentlewoman yield?
  Ms. JACKSON-LEE of Texas. I yield to the gentleman from Pennsylvania.
  Mr. GOODLING. Mr. Chairman, I want to make sure that we have this 
clear. We are accepting her amendment, but she said she was offering 
29, but she talked about 27. But we are going to accept 29 and 27, but 
her discussion was on 27 rather than on 29.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, the gentleman may be right. 
Because I have had them both here,

[[Page H2578]]

and the gentleman is absolutely right. One was on distressed 
institutions.
  Mr. GOODLING. We are going to accept both of them.
  Ms. JACKSON-LEE of Texas. Great. Then I will not add anything to it 
other than to say the one I was speaking about originally was 29, and 
that was distressed institutions, and that is the opportunity to use a 
third party consultant. Is that the gentleman's understanding?
  Mr. GOODLING. Mr. Chairman, the gentlewoman had said 29, but her 
discussion was on 27.
  Ms. JACKSON-LEE of Texas. Right.
  Mr. GOODLING. And we are going to accept both 27 and 29.
  Ms. JACKSON-LEE of Texas. And 29 was on distressed institutions that 
had to do with using a third party consultant.
  Mr. GOODLING. Yes.
  Ms. JACKSON-LEE of Texas. And the gentleman will accept that one and 
27.
  Mr. GOODLING. Right.
  Ms. JACKSON-LEE of Texas. All right, Mr. Chairman. I thank the 
gentleman.
  Mr. Chairman, I rise today in support of my amendment to H.R. 6, the 
Higher Education Amendments of 1998, which would allow distressed 
institutions that are already provided for in the text of this bill, 
the opportunity to utilize a third party consultant, if they so desire, 
to conduct their administrative, fiscal and technical assistance. This 
addition is not simply about the fact that a third party consultant, 
specifically trained and prepared to offer this kind of assistance, 
will generally provide a higher level of quality and performance than 
an advisor assigned by a federal agency to consult an institution of 
higher education, but there are serious ethical issues at play here as 
well.
  A Department of Education official that is assigned to consult a 
college or university about possible improvements in their 
administrative or fiscal management procedures is not only charged to 
improve the quality of the college's or university's procedures, but as 
well, they are required to report any violations of federal law or 
regulations conducted by the college/university that they observe. It 
is one thing for our larger colleges and universities with seemingly 
unlimited resources to hold to this high standard of review, but it is 
highly unlikely that a Harvard or Yale or a University of Texas, even, 
would ever need fiscal, administrative or technical assistance from the 
Department of Education.
  No, it will be our smaller colleges and universities that will be 
requesting help from the government, and they often make mistakes in 
their procedures and policies that they need not be penalized for by 
the very group that they are requesting help from. But the Department 
of Education's officials have an ethical mandate to report any 
infractions that they observe whether they are done by omission or by 
commission. On the other hand, however, a valid technical argument can 
be made by our smaller colleges and universities against Department of 
Education consultation. Essentially, why should a college or university 
be forced to take into counsel a representative from a group that has 
an oversight relationship with them? It makes no sense. Our small 
colleges and universities should be able to have impartial consultation 
about their administrative or fiscal needs without facing consequences 
for previous actions from the federal government.
  The only logical solution to this ethical dilemma for both the 
Department of Education and our small colleges and universities, is to 
allow a third-party consultant to advise the institution about its 
needs and concerns, if they so desire. This way, a college or 
university can begin steps to correct any procedural mistakes they may 
be making, without experiencing the unfair possibility of facing future 
Department of Education penalties. We must not punish those who 
sincerely need our help, but encourage them to make their institution 
the very best that it can be. So I urge you to support this amendment 
to level the playing field for our many distressed institutions of 
higher learning in need of comprehensive assistance.
  The CHAIRMAN. The question is on the amendment offered by the 
gentlewoman from Texas (Ms. Jackson-Lee), as modified.
  The amendment, as modified, was agreed to.


          Amendment No. 27 Offered by Ms. Jackson-Lee of Texas

  Ms. JACKSON-LEE of Texas. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 27 offered by Ms. Jackson-Lee of Texas:
       Page 136, line 19 add the following new section:

                   TITLE IV--GUARANTY AGENCY REFORMS

     SEC. 413. GUARANTY AGENCY REFORMS.

       Directs the Secretary to conduct a study to investigate to 
     what extent the actions of the lenders and the guarantors 
     impact upon the default rates of student borrowers as it 
     relates to the servicing of the loans or the due diligence of 
     the loan.

  Ms. JACKSON-LEE of Texas. Mr. Chairman, because of the kindness of 
the gentleman from Pennsylvania (Mr. Goodling) the gentleman from 
Michigan (Mr. Kildee) the gentleman from Missouri (Mr. Clay) and 
others, I will be brief on this.
  This, again, has to do with guarantee agency reforms which is to 
allow the Secretary of Education to conduct a study to determine if the 
actions and guarantors of student loans impact default rates. Simply, 
this provides us with information; and, as I said earlier in my 
comments, this helps to avoid some of the dilemma that we face with 
default rates. Let us find out why, let us try to improve it, and let 
us insure that student loans remains a viable part of our educational 
process.
  With that, Mr. Chairman, I ask my colleagues to support this 
amendment that can only help to enhance our educational system for 
higher education.
  Mr. Chairman, I rise to offer the following amendment to H.R. 6, the 
Higher Education Amendment of 1998.
  This amendment would result in a study to determine to what extent 
the actions of the lenders and the guarantors impact upon the default 
rates of student borrowers as it relates to the servicing of the loans 
or the due diligence of the loan. The goal of this study will be to 
determine the source of default rates of student loans.
  The Microcomputer Technology Institute located in the City of Houston 
provides technology educations to residents of the 18th Congressional 
District which I represent. Eighty-seven students from my Congressional 
district were included in the Cohort for Fiscal year 1993. Of that 
number, 54 were adversely affected by what appeared to be improper 
servicing of their loans by one of the lender/guarantor units used by 
the Microcomputer Technology Institute during that period. The 
remaining 33 students did much better, their loans having been serviced 
by a different lender/guarantor combination, which resulted in a cohort 
default rate approximately one-third that of the first group.
  It is evident that the way and manner that loans are serviced can and 
will affect certain students ability to pay back the loans as well as 
the resultant cohort default rate assigned to an institution.
  If Microcomputer Technology Institute had placed all of its students 
loans with the first lender that had a high default rate then its 
potential default rate could have been greater than 40%--defining 
Microcomputer Technology Institute as a bad school for the purpose of 
Department of Education approval of Federal Student Loans.

  Currently, under the Department of Education rule, if the borrower 
made even a single payment on the loan, the default can not be due to 
improper servicing, no matter how deficient the servicing has been.
  Lending institutions and guarantors may accomplish servicing in a 
wide variety of ways from those which do an excellent job of providing 
payment coupons, and reminder calls to those which rely on a letter 
serving notice that repayment of a loan is due.
  I would contend that the level of repayment is directly related to 
the due diligence of the loan, because the effort put into generating 
payments once a student has concluded their education is of vital 
importance in securing repayment.
  I believe that we should not let this issue continue without study 
because the results of high loan default rates are penalties to the 
educationally institution.
  There are many factors that may contribute to student loan default 
rates, but without this study there will be no way to determine if more 
should or could be done to reduce the number of loan defaults.
  Congress recognized the responsibility of lenders and guaranty 
agencies when the Higher Education Amendments of 1992 amended the 
Higher Education Act of 1965 to require the Department to calculate and 
publish cohort default rates for original lenders, current holders, and 
guaranty agencies.
  Congress should pursue its interest in student loan defaults with a 
study to learn what if any thing could be done to improve student 
repayment rates. In Fiscal Year 1995 of the 7,644 schools reviewed with 
a total of 1,918,453 borrowers there were a total of 199,346 defaults.
  I ask my colleagues to join me in support of this important 
amendment.
  The CHAIRMAN. The question is on the amendment offered by the 
gentlewoman from Texas (Ms. Jackson-Lee).

[[Page H2579]]

  The amendment was agreed to.


          Amendment No. 30 Offered by Ms. Jackson-Lee of Texas

  Ms. JACKSON-LEE of Texas. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 30 offered by Ms. Jackson-Lee:
       Page 270, after line 16, insert the following new section:

     SEC. 480. RELIEF FROM OBLIGATION.

       To the extent authorized in advance in an appropriation 
     Act, the Secretary may, in settlement of claims found or 
     arising under audits and program reviews under title IV of 
     the Higher Education Act of 1965, forgive the obligations to 
     pay such claims of Texas Southern University relating to the 
     administration of programs under such title, subject to such 
     terms and conditions as Secretary may require with respect to 
     conduct of programs under such title on and after the date of 
     enactment of this Act.

  Ms. JACKSON-LEE of Texas. Mr. Chairman, simply, my amendment deals 
specifically with concerns of an institution that has a great history 
in our community. Texas Southern University was a State or is a State 
institution founded in 1948. It was founded on the basis of students in 
Texas, African Americans, not being allowed to go to the white 
institutions in Texas out of segregation. And over the years Texas 
Southern University has educated a high degrees of our pharmacists, our 
lawyers, our educators. In fact, Texas Southern University has educated 
most of the teachers in the State of Texas.
  It particularly serves a significant number of low-income minority 
students in Texas. It trains a significant percentage of the State's 
legal and pharmaceutical students as well as it trains a huge number of 
our Hispanic attorneys in the State of Texas.
  Texas Southern University has historically been underfunded by the 
State of Texas. That is something that we are trying to work on. 
However, this has resulted in its reduced ability to marginize many of 
its internal systems, some of them so very important to keeping the 
appropriate or the kinds of records necessary in this fast-paced 
economy. As a result of this historical underfunding, it has not been 
able to maintain sufficient staff to provide total administrational 
support that is necessary.
  Problems created by prior inadequate funding have been identified and 
are in the process of being resolved, currently negotiating with the 
Department of Education to resolve its prior deficiencies and to 
identify such deficiencies and result in a settlement.
  My amendment acknowledges the historical role that Texas Southern 
University has and would ask that we would, if my colleagues will, 
forgive any settlement that might come about so that Texas Southern 
University might move forward, establishing a more proper procedure and 
as well to survive in this particular competitive climate.
  I would hope that the point made about Texas Southern University is 
that it is trying to correct its deficiencies, that it is a valuable 
institution and that, hopefully, we would be able to agree with the 
fact that an institution such as Texas Southern University needs to be 
preserved.
  Mr. Chairman, I ask the gentleman from Pennsylvania, as he responds 
to me, I may want to have this amendment withdrawn, and I would like to 
have enough time to be able to speak on that point.
  Mr. GOODLING. Mr. Chairman, will the gentlewoman yield?
  Ms. JACKSON-LEE of Texas. I yield to the gentleman from Pennsylvania.
  Mr. GOODLING. Mr. Chairman, I was under the impression that the 
gentlewoman was going to withdraw this amendment.
  Ms. JACKSON-LEE of Texas. And I am, Mr. Chairman.
  Mr. GOODLING. Of course, the major reason is we have already had four 
requests similar, and we have a pay-go problem, and so they will have 
to deal with the secretaries to try to get it all straightened out.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I will take the gentleman's 
remarks as a positive. They will have to deal with the secretary. It 
certainly does not speak against the historical nature of Texas 
Southern University, but we are in the process of doing that. We hope 
that we will have positive results, and I was hoping to get relief here 
on the floor of the House, and I respect the chairman.
  Mr. Chairman, I rise today in support of my amendment to forgive the 
debt obligation of Texas Southern University to the United States 
Department of Education incurred as a result of difficulties that arose 
in the Administration of their Title IX Student Financial Aid program. 
This amendment, Mr. Chairman, seeks only to give the same protections 
to some of our smaller institutions of higher learning, which 
desperately need financial and technical assistance from the Department 
of Education, that the Department of Commerce and the Small Business 
Administration currently give to our small and disadvantaged 
businesses. Essentially, the relationship is no different.
  Our small colleges and universities in this country are a valuable 
resource in giving certain people an opportunity to receive an 
undergraduate education that might not otherwise be able to do so. A 
prime example of one of these colleges and universities is Texas 
Southern University in Houston, Texas. Texas Southern University, or 
TSU as it is popularly called, was founded as a compromise in the 
settlement of a lawsuit between a man named Herman Sweatt and the 
University of Texas. Sweatt, the plaintiff in the famous 1950 Supreme 
Court case of Sweatt v. Painter, was fighting the Texas Constitutional 
provision which mandated separate treatment of Blacks and Whites, so 
that he might be able to attend the University of Texas Law School. In 
the midst of Sweatt's four year long protracted legal battle, state 
officials thought he might be pacified by the creation of a ``Negro'' 
university that was also funded by the State. So in 1947, the Texas 
State University for Negroes was created, and in 1951, after Sweatt's 
victory in the Supreme Court, the university's name was changed to 
Texas Southern University.
  And even though Texas Southern's mandate from the State was to 
provide ``courses equivalent'' to those provided by other state-
supported universities, over the last 4 decades, the University has 
been consistently underfunded. This open secret culminated in 1981 when 
the Office of Civil Rights found that the State of Texas was operating 
``a dual and unequal system of higher education''. The bottomline is 
that for too long, our small colleges and universities have been 
treated like ``unwanted stepchildren'' by our state funding agencies. 
Despite all of this, TSU has become an institution that enrolls 
students of all racial, religious, cultural, and ethnic backgrounds 
from Texas, the nation, and the world. It is more than just a 
collection of students, it is a conduit between cultures, races and 
lifestyles; truly a constant source of viable political, civic, and 
business leaders for the Greater Houston community. So why not help our 
small colleges and universities like TSU?
  These institutions need our technical assistance and long-term 
financial support in order to encourage greater institutional 
stability, a trademark of our larger colleges and universities. Today, 
I ask for only Texas Southern University, because I recognize that this 
forgiveness from financial obligation must not be abused. But as 
special and worthwhile cases may arise, like this one, we should not, 
we can not, we must not, shrink from our responsibility to help those 
institutions of higher learning that need us most. We are not forgiving 
the debt of a ``fat cat'', multinational corporation; quite to the 
contrary, we are setting forth an honorable act of absolution to an 
institution that genuinely needs our help. Simply stated, we are 
allowing tens of thousands of children the opportunity to maximize the 
potential; to someday realize their dreams. For this reason, above all, 
I ask all of my colleagues to support this amendment, and preserve the 
sacred gift of education.
  Mr. Chairman, I ask unanimous consent to withdraw the amendment.
  The CHAIRMAN. Is there objection to the request of the gentlewoman 
from Texas?
  There was no objection.
  The CHAIRMAN. The amendment is withdrawn.


                 Amendment No. 59 Offered by Mr. Souder

  Mr. SOUDER. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 59 offered by Mr. Souder:
       Page 237, strike lines 4 through 10 and insert the 
     following:
       ``(2) Rehabilitation.--A student whose eligibility has been 
     suspended under paragraph (l) may resume eligibility before 
     the end of the period determined under such paragraph if the 
     student satisfactorily completes a drug rehabilitation 
     program that complies with such criteria as the Secretary 
     shall prescribe for purposes of this paragraph and that 
     includes two unannounced drug tests.

  Mr. SOUDER. Mr. Chairman, my amendment is very simple. On page 237

[[Page H2580]]

it strikes lines 4 through 10 and inserts the following: Under 
rehabilitation, a student whose eligibility has been suspended under 
paragraph 1 may resume eligibility before the end of the period 
determined under such paragraph if the student satisfactorily completes 
a drug rehabilitation program that complies with such criteria as the 
Secretary shall prescribe for purposes of this paragraph and that 
includes two unannounced drug tests.
  The addition to the underlying bill is that it includes 2 unannounced 
drug tests.
  This amendment has no estimated drug spending, unless, of course, 
somebody would fail the drug test and then, while that is not our goal, 
it would actually save money. But our goal is to make sure that, 
actually, the students are clean when they come back.
  Now let me go through the history of how this got in the main bill 
and then discuss particularly my change which I hope will be considered 
a friendly amendment and can be supported. It is not general drug 
testing. It is not testing of anyone other than people who have been 
convicted of drug use and are now under this bill going through drug 
rehab and making sure they are actually clean.
  But I want to go through the actual epidemic that we are facing. We 
have a major crisis in this country, and the question is are we serious 
about it or not. And this bill has an important first step, and I would 
like to just refine this a little bit more. It is easy for us to 
criticize Mexico; it is easy for us to criticize Columbia. The question 
is, are we really committed in this country?
  The Chronicle of Higher Education, March 21, 1997, states that crime 
data from 489 of the largest colleges and universities in this country 
indicate that drug arrests on college campuses jumped by close to 18 
percent in 1995 when they have the data in the fourth consecutive year 
with a double digit increase. By comparison, all other crimes, 
including murder, robbery, aggravated assault, burglary, vehicle theft 
and violations of weapons laws declined. So it is clear in our 
universities we have had drug use as an increasing problem. This 18 
percent jump is even more troubling when you consider that those are 
the kids that get caught.
  According to this same article, researchers at the University of 
Michigan found that 33.5 percent of the college students surveyed in 
1995 had used illegal drugs within that year up 2.1 percent from 1994 
and up even further from an earlier survey.
  I have recently seen the survey study, and it included 17-year-olds 
who are just about to head to college. They are seniors in high school, 
and in there two-thirds said that they knew where they could get 
marijuana within a day, and 44 percent within an hour or less, that our 
schools are, in fact, not drug-free even in high school. Thirty-seven 
percent of the principles said they were drug-free; 46 percent of the 
teachers. But 76 percent of the students said that their school was not 
drug-free. They understand they are at risk when they were asked, 17-
year-olds, what they thought their greatest problem was. Drugs were not 
seen as much of a problem, as their major problem, as all the other 
issues combined.
  Now this suggests that our children know they are at risk, and we 
need to take some steps to make sure they are not in danger.
  This amendment, to go through some of the history, has been in our 
bill before coming through the House, the full underlying amendment 
that came through committee before this adjustment, and my colleague 
and friend, the gentleman from New York (Mr. Solomon) has been the 
pioneer and the leader with this. He is a great American, and I am 
going to miss him, and many others are. He has been a crusader for the 
values that made this country great.
  He had this in the Higher Ed Reauthorization bill in 1992. We lost it 
in conference, and we are coming back again with the underlying 
treatment amendment in the beginning, and let me explain what the 
underlying amendment does:
  One loses their taxpayer subsidized loan for 1 year for first 
offense, 2 years for their second offense and indefinitely for the 
third. If they sell drugs, they get suspended for 2 years for a first 
offense and indefinitely on a second offense.
  The point here is not to get people out of college. That is why we 
have the treatment program and then they come back in. We want to get 
people rehabbed so they can learn. But the problem here is we need to 
make sure not just that they are going through treatment programs and 
insurance companies can make a lot of money and treatment programs can 
make a lot of money, but that, in fact, people are cured.
  This can be done, quite frankly, faster than the suspension period. 
If they successfully complete a rehab program and they get through a 
drug test that is clean, they are back in school.
  I have no desire to eliminate anybody's opportunity to climb out of 
the situation they are in to advance their career, but the best way to 
do that is to make sure one is clean of drugs. And I believe that this 
amendment will actually make the underlying amendment that we had in 
committee even stronger and put teeth in that, and I hope that it can 
be supported by all sides. Because, once again, I want to say it is not 
a general testing amendment; it is only for people who have been 
convicted and lost their student loan.
  Mr. GOODLING. Mr. Chairman, I rise in support of the amendment 
offered by the gentleman from Indiana.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Indiana (Mr. Souder).
  The amendment was agreed to.
  The CHAIRMAN. Are there further amendments to title IV?


                Amendment No. 18 Offered by Mrs. Clayton

  Mrs. Clayton. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 18 offered by Mrs. Clayton:
       Page 248, line 4, strike ``and''; on line 10, strike the 
     second period and insert ``; and'', and after line 10 insert 
     the following:
       (7) by adding at the end the following new paragraph:
       ``(23) The institution will distribute to each student, 
     during registration for enrollment in its instructional 
     program, the mail voter registration application form 
     described in section 9(a)(2) of the National Voter 
     Registration Act of 1993, unless the student, in writing, 
     declines to receive such form.''.

  Mrs. CLAYTON. Mr. Chairman, this is an amendment to allow that 
college students, as they begin their career as college students, to 
have the opportunity to begin their careers also as citizens 
participating in our great democracy. As my colleagues well know, the 
ages between 18 and 24 happened to be the lowest rate of participation. 
All Americans really should be ashamed at the rate we are participating 
but, simply put, this allows a simple access to a college student 
coming to register to also be able to register to vote.

                              {time}  2245

  To our knowledge, this does not require any Federal funds, so it 
should not be a question about the funding of this.
  This amendment simply addresses access and opportunity. Currently, 
the Motor Voter registration allows for anyone to register at a 
library. It simply means that the Board of Elections of those 
particular cities will send this information or registration form to 
the colleges.
  This is not a partisan amendment; this does not have added costs. 
This is simply a way for college students to participate in the 
democracy.
  Mr. Chairman, with that, I will yield to the gentleman from 
Pennsylvania (Mr. Goodling).
  Mr. GOODLING. Mr. Chairman, I am going to say the same thing that the 
gentleman from California (Mr. McKeon) was told to say, which is the 
same thing that he mentioned.
  We are accepting this amendment this evening with the understanding 
that if it creates too much heartburn, we will discuss it in 
conference.
  Mrs. CLAYTON. Mr. Chairman, reclaiming my time, we appreciate the 
gentleman's willingness to accept the amendment.
  The CHAIRMAN. The question is on the amendment offered by the 
gentlewoman from North Carolina (Mrs. Clayton).
  The amendment was agreed to.


                Amendment No. 16 Offered by Mr. Andrews

  Mr. ANDREWS. Mr. Chairman, I offer an amendment numbered 16.

[[Page H2581]]

  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 16 offered by Mr. Andrews:
       Page 164, after line 25, insert the following new 
     subsection:
       (t) Notice of Availability of Income-sensitive Repayment 
     Option.--
       (1) Amendment.--Section 428 is further amended by adding at 
     the end the following new subsection:
       ``(o) Notice of Availability of Income-sensitive Repayment 
     Option.--At the time of offering a borrower a loan under this 
     part, and at the time of offering the borrower the option of 
     repaying a loan in accordance with this subsection, the 
     lender shall provide the borrower with a notice that informs 
     the borrower, in a form prescribed by the Secretary by 
     regulation--
       ``(1) that all borrowers are eligible for income-sensitive 
     repayment through loan consolidation under section 428C;
       ``(2) the procedures by which the borrower may elect 
     income-sensitive repayment; and
       ``(3) where and how the borrower may obtain additional 
     information concerning income-sensitive repayment.''.
       (2) Conforming amendments.--
       (A) Section 428(b)(1)(E)(i) is amended by inserting before 
     the semicolon the following: ``or of repaying the loan in 
     accordance with an income-sensitive repayment schedule 
     offered pursuant to section 428C''.
       (B) Section 485(b)(1)(A) is amended--
       (i) by striking ``and'' at the end of clause (i);
       (ii) by striking the period at the end of clause (ii) and 
     inserting ``; and''; and
       (iii) by adding at the end the following new clause:
       ``(iii) the information required to be disclosed by lenders 
     pursuant to section 428(o).''.

  Mr. ANDREWS. Mr. Chairman, the purpose of this amendment is to help 
deal with the very real problem of people who graduate from school with 
a significant student loan debt. I think we widely agree that the best 
solution is to try to find a way to moderate the cost of higher 
education. I think there are many things we have in this bill that 
begin to do that. The second best solution is more scholarship aid so 
more people are able to earn and win scholarships, whether based on 
merit or need.
  We are still faced with the reality, though, that many students are 
required to borrow in order to finance their education. I believe that 
it is therefore imperative that we try to find ways that make that 
borrowing easier for students and their families to deal with.
  One such way is to encourage the use of income-contingent or income-
sensitive loans. In short, this concept means that one's obligation to 
pay one's loan back is based in large part upon their income, upon 
their ability to pay. So the less one makes, the less of an obligation 
one has to pay, but as their income rises, so does their obligation to 
pay.
  This is the first of 2 amendments I am going to offer on this 
subject. This one makes it clear that whether students are under the 
direct loan program or the bank-based guarantee loan program, they are 
fully aware of their right to have all of their loans consolidated into 
the Department of Education and then converted through the income-
sensitive option.
  What this means is that a young man or a young woman who graduates 
with a significant debt, with a $20,000 or $30,000 or $40,000 debt, who 
chooses to go into a job or profession, or must go into a job or 
profession that earns a lower salary will have the opportunity to make 
that choice, will not be compelled to choose between pursuing the 
highest and best education they can get or accepting a job that they do 
not wish to pursue.
  I think this is a sensible amendment. I believe it will encourage 
people to borrow prudently, but give them an opportunity to repay their 
loan on a fair and reasonable basis. It is a way to deal with the 
burgeoning problem of too much debt upon graduation.
  Mr. Chairman, I yield to my friend, the gentleman from New Jersey 
(Mr. Pascrell), who has proposed legislation that is very similar in 
concept to this. He accomplishes this goal by extending the period of 
time that people can pay back their loans, and I believe it is very 
much in sync with this idea.
  Mr. PASCRELL. Mr. Chairman, I believe that the amendment of the 
gentleman is right on target. One of the largest and most severe 
problems facing college students is an ever-mounting debt. When I look 
at the students in my own State and how that debt has increased over 
the past several years, moving up to close to $13,000 on the average, 
and by another 2 years, that debt will increase to perhaps a little bit 
more than $20,000. I think that the indirect loan program to those 
students who are not taking advantage of the direct loans, 10 years is 
certainly questionable at this time.
  I am not offering an amendment, Mr. Chairman. What I would like to do 
is in conference, if it is possible with the leadership, to consider 
the possibility of extending from 10 to 25 years those indirect loans. 
If we do not, then I think that we are in jeopardy for those students 
who graduate who want to take on some noble service like teaching or 
social work or joining the Peace Corps, that becomes impossible if one 
has to pay that loan off, that debt in 10 years. I hope we could extend 
it to 25 years. We have looked at the numbers on it and I think it is 
very doable. This will allow students more flexibility in their 
repayment schedules and make it easier for them to both adjust to the 
working world and take low-paying, public service-oriented jobs.
  I have asked the students in my district about this, Mr. Chairman. 
They support this idea and I believe it is best for them, best for 
education, and best for America.
  Mr. ANDREWS. Mr. Chairman, reclaiming my time, I yield to the 
gentleman from California (Mr. McKeon), the chairman of the 
subcommittee on this issue.
  Mr. McKEON. Mr. Chairman, I want to thank the gentleman from New 
Jersey, Mr. Andrews, for this amendment. I think it does strengthen the 
bill, as others do, and I would be happy to support it.
  Mr. ANDREWS. Mr. Chairman, I thank the gentleman.
  Mr. FOX of Pennsylvania. Mr. Chairman, I move to strike the last 
word, and I rise in support of the Andrews amendment.
  I believe this is certainly a key issue for this Congress. When I 
speak to people from my district, they always talk about how can we 
help assist students in need who want to have college loans and grants. 
Students frankly across America want to make sure they achieve the 
American dream by community service, by helping their country. If they 
cannot get the college loan or grant, then they may be foreclosed from 
higher education just because we in Congress did not take advantage of 
the Andrews amendment.
  By seizing the moment here tonight in a bipartisan fashion, we are 
able to work with the gentleman from New Jersey (Mr. Andrews) and 
others to make sure that the vision that we have for America, to make 
sure our young people have the chance, through this flexible system, to 
be able to have more college loans and grants available, and that is 
certainly the idea of why people sent us to Congress.
  So I ask my colleagues to unanimously support it.
  Mr. ANDREWS. Mr. Chairman, will the gentleman yield?
  Mr. FOX of Pennsylvania. I yield to the gentleman from New Jersey.
  Mr. ANDREWS. Mr. Chairman, I would like to thank my friend from 
Pennsylvania for his support. I also wanted to make special note of the 
cosponsorship of the gentleman from Wisconsin (Mr. Petri) of this 
amendment and thank him for his help on it.
  Mr. FOX of Pennsylvania. Mr. Chairman, reclaiming my time, the fact 
is that this kind of amendment is what the American vision has been 
working on where it is bipartisan, where it shows that across the aisle 
when it comes to our children, we can work together for education and 
for opportunity.
  I ask again that my colleagues support this wholeheartedly.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from New Jersey (Mr. Andrews).
  The amendment was agreed to.


                Amendment No. 15 Offered by Mr. Andrews

  Mr. ANDREWS. Mr. Chairman, I offer an amendment No. 15.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 15 offered by Mr. Andrews:
       Page 163, strike out lines 16 and 17 and insert in lieu 
     thereof the following:
       (p) Lenders-of-Last-Resort.--Section 428(j)(3) is amended--

[[Page H2582]]

       (1) in subparagraph (A)--
       (A) in the heading thereof, by striking ``during transition 
     to direct lending'';
       (B) by striking out ``during the transition from the 
     Federal Family Education Loan Program under this part to the 
     Federal Direct Student Loan Program under part D of the 
     title,'' and inserting a comma;
       (C) by inserting ``designated for a State'' immediately 
     after ``a guaranty agency''; and
       (D) by inserting ``subparagraph (C) and immediately before 
     ``section 422(c)(7),''; and
       (2) by adding at the end thereof the following new 
     subparagraph:
       ``(C) The Secretary shall exercise the authority described 
     in subparagraph (A) only if the Secretary determines that 
     eligible borrowers are seeking and are unable to obtain loans 
     under this part, and that the guaranty agency designated for 
     that State has the capability to provide lender-of-last-
     resort loans in a timely manner, in accordance with its 
     obligations under paragraph (1), but cannot do so without 
     advances provided by the Secretary under this paragraph. If 
     the Secretary makes the determinations described in the 
     preceding sentence and determines that it would be cost-
     effective to do so, the Secretary may provide advances under 
     this paragraph to that guaranty agency. If the Secretary 
     determines that guaranty agency does not have such 
     capability, or will not provide such loans in a timely 
     fashion, the Secretary may provide such advances to enable 
     another guaranty agency, that the Secretary determines to 
     have such capability, to make lender-of-last-resort loans to 
     eligible borrowers in that State who are experiencing loan 
     access problems.''.

  Mr. ANDREWS. Mr. Chairman, this amendment is an important priority of 
the Department of Education and the administration, and I believe all 
of us on both sides of the aisle want to clarify the status of the 
Lender of Last Resort program.
  I would like to first of all thank the gentleman from Pennsylvania 
(Mr. Goodling), the chairman of the committee, and the gentleman from 
California (Mr. McKeon) and their staffs for their cooperation, and of 
course the gentleman from Missouri (Mr. Clay), and the gentleman from 
Michigan (Mr. Kildee) and their staffs for their cooperation.
  The purpose of this amendment is to make it clear that under the law, 
when a student is unable to secure a bank-based loan or does not attend 
a direct lending institution, that that student has the right under law 
and under this bill to go to a guarantee agency or other credit 
facilitators named in the bill as a lender of last resort.
  Put simply, this is the safety net when all of the other mechanisms 
fail to students not at a direct lending school. If there is a problem 
obtaining a bank loan, this is the safety net that assures that man or 
woman that a student loan is available under the terms and conditions 
of this law.
  It is my understanding that both sides of the aisle are in accord 
with this objective, and I would be happy to yield to the gentleman 
from California (Mr. McKeon), the subcommittee chairman at this time.
  Mr. McKEON. Mr. Chairman, I want to thank the gentleman again for his 
amendment. We have been working hard to avoid a disaster, and I am 
hopeful that our bill will be passed and signed into law before we hit 
the wall. But I think this makes good sense to make sure that in the 
event that there is a disaster, we do have this money there available 
for these lenders of last resort. So I am happy to support the 
amendment.
  Mr. ANDREWS. Mr. Chairman, I thank the gentleman for his cooperation.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from New Jersey (Mr. Andrews).
  The amendment was agreed to.


                Amendment No. 44 Offered by Mr. McGovern

  Mr. McGOVERN. Mr. Chairman, I offer amendment No. 44.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 44 offered by Mr. McGovern:
       Page 96, after line 7, insert the following new subsection 
     (and redesignate the succeeding subsections accordingly):
       (f) Pell Grant Incentives.--Subpart 1 of part A of title IV 
     of the Higher Education Act of 1965 is amended by inserting 
     after section 401 (20 U.S.C. 1070a) the following new 
     section:

     ``SEC. 401A. PELL GRANT INCENTIVES.

       ``(a) Program Authority.--From the amounts appropriated 
     pursuant to subsection (d), the Secretary shall establish a 
     program to increase the Pell grant awards under section 401 
     during their first two academic years of undergraduate 
     education to students who graduate after May 1, 1998, in the 
     top 10 percent of their high school graduating class.
       ``(b) Amount of Increase.--The additional amount of Pell 
     grant that shall be awarded under this section to any student 
     who qualifies under this section shall be an amount equal to 
     the amount for which the student is eligible under section 
     401 (determined without regard to the provisions of this 
     section), except that if the amount appropriated pursuant to 
     subsection (d) is less than the amount required to award such 
     additional amounts to all such students, the additional 
     amount awarded to each such student under this section shall 
     be ratably reduced.
       ``(c) Determinations of Eligibility.--
       ``(1) Procedures established by regulation.--The Secretary 
     shall establish by regulation procedures for the 
     determination of eligibility of students for increased Pell 
     grant awards under this section. Such procedures shall 
     include measures to prevent any secondary school from 
     certifying more than 10 percent of it's students for 
     eligibility under this section.
       ``(2) Coordination with need analysis.--In prescribing 
     procedures under paragraph (1), the Secretary shall ensure 
     that the determination of eligibility and the amount of the 
     increase in the Pell grant award is determined in a timely 
     manner consistent with the requirements of section 482 and 
     the submission of the financial aid form required by section 
     483. For such purposes, the Secretary may provide that, for 
     the first of a student's two academic years of eligibility 
     under this section, class rank may be determined prior to 
     graduation, at such time and in such manner as the Secretary 
     may specify in the regulations prescribed under this 
     subsection.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to award increased Pell grants 
     under this section $240,000,000 for fiscal year 1999 and such 
     sums as may be necessary for each of the 4 succeeding fiscal 
     years.''.

  Mr. McGOVERN. Mr. Chairman, the amendment I offer today provides both 
an incentive and a reward for Pell-eligible students who pursue and 
achieve academic excellence by graduating in the top 10 percent of 
their high school class. Too often we exhort parents and students, 
teachers and communities to do more, to do better, to do it all, but we 
offer few incentives and even fewer rewards.
  This amendment that I am offering today will provide those Pell-
eligible students who, against all odds, graduate in the top 10 percent 
of their high school class, an achievement benefit for their first two 
years of postsecondary education. The amount of that achievement 
benefit will match the amount of the Pell Grant awarded to that 
individual.
  For example, Bill Smith graduates in the top 10 percent of his high 
school class and receives a $900 Pell Grant. The achievement benefit 
that matches that award is an additional $900 grant. So Bill Smith 
receives Federal assistance of $1,800 for years 1 and 2 of his college 
education, and his Pell Grant continues at $900 for years 3 and 4.
  According to the Congressional Research Service, over 84,000 young 
men and women nationwide would benefit from this achievement award. 
This amendment will increase the affordability of a higher education 
without increasing the debt of students and their families. But 
everyone in this Chamber recognizes that we need to increase grant 
assistance for higher education, not just at the Federal level, but at 
the State and local level; not just in the public sector, but from the 
private sector as well. My amendment is just one modest proposal to do 
just that, while encouraging students to achieve the very highest 
academic level.
  This amendment increases the accessibility of a higher education and 
expands the options of college choice available to students and their 
families. This amendment will not alter the Pell Grant formula or 
program. Let me emphasize that again. This amendment will not affect 
the Pell Grant program or its funding. It will not penalize those Pell-
eligible students who do not graduate in the top 10 percent of their 
class. Instead, it provides a matching grant, if you will, that would 
double the amount of a student's Pell Grant award should the 
achievement benefit become fully funded.
  This amendment is endorsed by the American Council on Education, the 
Association of Jesuit Colleges and Universities, and many others.
  Regarding this amendment the Association of Jesuit Colleges and 
Universities has stated that this program would send the encouraging 
message to students struggling to achieve under difficult circumstances 
that their hard

[[Page H2583]]

work and perseverance will be well rewarded.
  The American Council on Education has said that early information 
about the availability of increased grant assistance could have a 
profoundly positive impact on students' academic performance and 
aspirations.
  No one knows better than low-income, college-bound students that the 
cost of an education is often perceived as a major barrier to the 
fulfillment of their dreams. We need to do all that we can to encourage 
these students, especially those with exceptional ability and 
determination, to strive for their ultimate potential in higher 
education and beyond.
  This amendment will require a separate appropriation, and in order to 
be sensitive to the budget constraints in which we are all working, the 
amendment includes a provision to rateably reduce the achievement 
benefit based on the appropriations. What this means is that if the 
full amount to carry out this provision is appropriated, then the 
achievement benefit we will match will be 100 percent, dollar for 
dollar.

                              {time}  2300

  However if the appropriations were only half the amount needed, then 
the achievement benefit would be equal to half the amount of the 
student's Pell Grant, and so on.
  Mr. Chairman I recognize and support current funding priorities in 
higher education, to resolve the question of student loan interest 
rates, to increase overall funding for Pell Grants, to establish the 
High Hopes program and so on. But there will not be another opportunity 
for 6 years to authorize the establishment of this grant benefit.
  It is my hope over the next few years, we might explore this type of 
achievement incentive. And if in fiscal year 2000 or 2001, we as a 
Congress decide to fund such an achievement award, then we need to 
create its authorization in this bill.
  Mr. Chairman, this amendment is wholly subject to an appropriation. 
It breaks no budget authority or spending caps. No one has been more 
supportive of Pell Grants or grant assistance than the gentleman from 
Pennsylvania (Chairman Goodling), the gentleman from Missouri (Mr. 
Clay), or the gentleman from California (Mr. McKeon), or the gentleman 
from Michigan (Mr. Kildee), and I want thank them for their leadership 
and persistence on this issue.
  Mr. Chairman, this amendment will reduce student debt, increase the 
affordability and accessibility of a college education, motivate young 
people to strive for academic excellence, and reassure families that a 
college education is not out of financial reach for their determined, 
hard-working daughter or son.
  I hope that my House colleagues will support this amendment 
overwhelmingly and establish this achievement benefit.
  Mr. Chairman, I submit the following for the Record:


                                American Council on Education,

                                Washington, DC, February 17, 1998.
     Hon. James P. McGovern,
     U.S. House of Representatives,
     Washington, DC.
       Dear Representative McGovern: I write to express my 
     interest in and appreciation for the bill you are sponsoring, 
     the ``Incentives for Achievement Through Pell Grants Act,'' 
     which will establish a program to increase Pell Grant awards 
     to students who graduate in the top 10 percent of their high 
     school class. This bill is clear evidence of your commitment 
     to providing greater access to higher education for students 
     from low- and middle-income families.
       Your proposal to provide an incentive to students with 
     early information about the availability of an increased Pell 
     Grant could have a profoundly positive impact on students' 
     academic performances and aspirations. This will help to 
     mitigate students' concern that resources necessary to fund a 
     postsecondary education are beyond their financial reach, and 
     will instead motivate them to achieve greater academic 
     success.
       I congratulate you for introducing this innovative 
     legislation. I look forward to working with you as 
     reauthorization of the Higher Education Act progresses.
           Sincerely,
                                                  Terry W. Hartle,
     Senior Vice President.
                                  ____

                                                    Association of


                             Jesuit Colleges and Universities,

                                Washington, DC, February 17, 1998.
     Hon. James P. McGovern,
     U.S. House of Representatives,
     Washington, DC.
       Dear Congressman McGovern: On behalf of the Association of 
     Jesuit Colleges and Universities, I want to commend and 
     support your initiative in introducing the ``Incentives for 
     Achievement Through Pell Grants Act,'' for needy students who 
     have demonstrated special achievement.
       The doubling of the Pell Grant for recipients who graduate 
     in the top 10% of their high school class can provide both an 
     incentive and a reward for those students. This program would 
     send the encouraging message to students struggling to 
     achieve under difficult circumstances that their hard work 
     and perseverance will be rewarded.
       The new Hope Tax Scholarship Credit and Life-Long Learning 
     Tax Credit assist middle income families in providing an 
     education for their children. Your program addresses the 
     needs of lower income families.
       Pell Grants have long been a critical component of federal 
     student financial aid programs on our campuses. Our 
     association has consistently worked diligently to preserve 
     these and all campus-based programs at the same time we have 
     significantly increased our own institutional commitment to 
     financial aid for our students. Your new program very 
     importantly supplements these efforts, rather than replacing 
     them.
       Our special thanks to you for this latest example of your 
     leadership, this time in support of deserving and needy 
     students who will help create our nation's future.
           Sincerely and gratefully,
                                          Charles L. Currie, S.J.,
     President.
                                  ____


 Assumption College News . . . Dr. Charles L. Flynn, Jr. Endorses Pell 
                           Grant Legislation

       Worcester.--Dr. Charles L. Flynn Jr., acting president and 
     provost of Assumption College, spoke in support of 
     Congressman James J. McGovern's Pell Grant legislation today.
       Dr. Flynn remarked, ``On behalf of Assumption College, it 
     is my pleasure to commend Congressman McGovern for leading 
     the effort to increase Pell Grants. Pell is the federal 
     government's largest, most important program of need-based 
     financial aid. More than any other federal program, it 
     targets low and middle-income students.
       ``Congressman McGovern's proposal to create a `Double' Pell 
     Grant for students of high academic achievement is 
     particularly impressive. This proposal simultaneously 
     addresses two important national needs. First is the need to 
     make educational opportunity available to all citizens 
     without regard to family wealth. Second is the importance of 
     encouraging outstanding student achievement. Congressman 
     McGovern's legislation will help to keep the doors of higher 
     education open to students who need financial assistance; it 
     will also reward high school students who strive hard, learn 
     more, and earn better grades.
       ``Last year, 16 percent of Assumption students who applied 
     for financial aid were eligible to receive Pell Grants. The 
     average award to these students was $1,500. Those Pell Grants 
     were supplemented by other federal and state loans and 
     grants. And by far, the largest amount of financial aid came 
     to students and their families from the College itself. The 
     system I am describing, therefore, is a partnership of 
     colleges, state government, and the federal government. This 
     partnership is essential if we are to continue to be a nation 
     of true opportunity.
       ``Congressman McGovern, you are playing a vital role in the 
     Congress of the United States. At Assumption, we share your 
     view that Congress should do more to ensure opportunity for 
     low and middle-income students. I hope that everyone here 
     today will send a message to our congressional leadership 
     that the McGovern Bill is important, not only to Central 
     Massachusetts, but also to higher education nationally.
       ``Higher education serves several purposes. As chief 
     academic officer of this liberal arts college, I am 
     particularly aware of the humanizing role of a college 
     education. At Assumption, in reason and in faith, we prepare 
     citizens. We prepare students for the good use of their 
     talents, the responsible exercise of their rights, and the 
     fulfillment of their obligations to others. That is true for 
     our graduates at work, at home, and in the public square. In 
     that way, too, I am keenly aware of the importance of higher 
     education to the future of Central Massachusetts. If we are 
     to have a community of hope and economic opportunity, we must 
     have a highly skilled workforce. The McGovern Bill promises 
     to keep the doors of higher education wide open, and thus to 
     further both the noble and practical ends of our colleges and 
     universities.''
                                  ____


   Statement of Paul J. Lynskey, Director of EDCENTRAL, Colleges of 
                          Worcester Consortium

       ``Those of us who work with low income college bound 
     students know that the cost of an education is often 
     perceived as a major barrier. We need to do all that we can 
     to encourage these students especially those with exceptional 
     ability, to strive for their ultimate potential in higher 
     education and beyond.''

  Mr. GOODLING. Mr. Chairman, I rise in opposition to the amendment.
  Mr. Chairman, the gentleman is correct when he says it would not take 
from one low-income student and give to another student because it does 
call for a separate authorization. However, if it got the second 
authorization, then

[[Page H2584]]

the money would have to come from somewhere if they were going to 
appropriate it.
  This is the problem we get into. The Presidential Access Scholarship 
Program in 1992 was designed to do just this. Now, it has never been 
funded. It has never been funded simply because every time we raise a 
Pell Grant by $100, it costs $300 million. So I rise in opposition to 
this amendment for that reason.
  The second reason that I would bring to the House's attention is the 
fact that an A student here may be a B student in another school. There 
is no question about that. And, therefore, we could be rewarding 
someone who really is not doing all that well if they were in this 
school. But they are in this school so they are doing quite well.
  And so I would rise in opposition for those two reasons and remind 
everyone again, if we get a separate authorization, which this would 
do, and then the appropriators would happen to say, ``Gee, this does 
not sound too bad,'' and they would appropriate, they would then have 
to find money elsewhere in order to do that. And so I rise in 
opposition to the amendment.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Massachusetts (Mr. McGovern).
  The question was taken; and the Chairman announced that the noes 
appeared to have it.
  Mr. McGOVERN. Mr. Speaker, I demand a recorded vote.
  The CHAIRMAN. Pursuant to House Resolution 411, further proceedings 
on the amendment offered by the gentleman from Massachusetts (Mr. 
McGovern) will be postponed.
  Are there further amendments to title IV?


                 Amendment No. 25 Offered by Mr. Gordon

  Mr. GORDON. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 25 offered by Mr. Gordon:
       Page 154, beginning on line 5, strike subparagraph (F) 
     through page 155, line 19, and insert the following:
       ``(F) Subject to paragraph (4), the special allowances paid 
     pursuant to this subsection on loans made on or after July 1, 
     1998 for which the applicable interest rate is determined 
     under section 427A(a) shall be computed--
       ``(i) by determining the bond equivalent rate of the 
     average of the quotes as reported by the Federal Reserve of 
     the 3-month commercial paper (financial) rate in effect for 
     each of the days in the quarter for which the rate is being 
     determined;
       ``(ii) by subtracting the applicable interest rate on such 
     loan from such applicable bond equivalent rate;
       ``(iii)(I) for Stafford loans during any period in which 
     principal need not be paid (whether or not such principal is 
     in fact paid) by reason of provision described in section 
     428(b)(1)(M) or 427(a)(2)(C), by adding 1.8 percent to the 
     resultant percent, (II) for Stafford loans during any other 
     periods, by adding 2.39 percent to the resultant percent, or 
     (III) or PLUS loans, by adding 3.1 percent to the resultant 
     percent; and
       ``(iv) by dividing the resultant percent by 4.''.

  Mr. GORDON. Mr. Chairman, there have been a number of accolades, 
well-deserved accolades given to the gentleman from Pennsylvania 
(Chairman Goodling), the gentleman from Missouri (Mr. Clay), the 
gentleman from California (Chairman McKeon), and the gentleman from 
Michigan (Mr. Kildee). As I say, those are well-deserved and I just 
have to say that it is just a pleasant experience tonight to see a 
constructive committee working on an important issue and their 
leadership I think is making the whole committee and the House work 
together. It is just hopefully a model that we can follow some more in 
this body. I hope we could do that in the future.
  The amendment that the gentleman from Pennsylvania (Mr. Kanjorski) 
and I have offered tonight will add greater efficiency to the 
compromise that was reached by the Committee on Education and the 
Workforce to address the 1998 interest rate problem. If nothing is 
done, the change that is set to go into effect on July 1 would 
destabilize the student loan program that has provided $240 billion to 
students over the past 30 years resulting in a $25 billion increase in 
the annual volume of loans for the Department of Education, which I 
fear such a shift to the Department could create a complete collapse of 
the student loan system. Then no student would be able to get a loan. 
And if a student could not get a loan, the interest rate does not 
matter.
  I have concerns about the increasing volatility of the current and 
proposed mechanism for determining the loan interest rates, the 91-day 
T bill. As we all know, the budget is becoming balanced and we are 
looking ahead to a surplus. This has caused a reduction in the issuance 
of the 91-day T bill by the Treasury. In fact, the amount of 91-day T 
bills auctioned weekly has declined 56 percent over the past year. This 
volatility creates tremendous financial risk.
  Mr. Chairman, this amendment would change the basis for the student 
loan interest rates from the 91-day T bill to an index which is a large 
and growing source of short-term financing, 3-month commercial paper. 
And though we would make this change, the rate paid by the students and 
returned to the lenders would be equal to the committee solution in 
this bill. Let me repeat, the interest rate and the rate of return 
would stay the same as they are in this bill.
  This proposal does not hurt anyone, not students nor the government. 
All it will do is provide a more efficient way for lenders to finance 
the loans they are making. Commercial paper is a widely used index 
which many U.S. corporations use for short-term financing. There has 
been concern about this proposal incurring an additional Federal cost. 
I have addressed these concerns and will tell the House that the 
proposal actually saves money.
  Mr. Chairman, for the last 8 years I have been working hard to 
eliminate wasteful spending in the student loan programs making them 
more efficient and effective. The change to commercial paper will allow 
lenders to use a more efficient means for financing these loans. This 
is a common sense proposal to ensure the longevity of our student loan 
program.
  I have had a number of conversations with the gentleman from 
California (Mr. McKeon), our committee chairman, as well as our ranking 
member, and I would like to take just a moment to address the gentleman 
and ask for his view on the commercial paper amendment.
  Mr. McKEON. Mr. Chairman, will the gentleman yield?
  Mr. GORDON. I yield to the gentleman from California.
  Mr. McKEON. Mr. Chairman, I appreciate the opportunity to engage in 
this colloquy, and I was thinking back many months ago when the 
gentleman from Tennessee (Mr. Gordon) and the gentleman from Michigan 
(Mr. Kildee) and I drew many of these people together to begin the 
process on this. Does the gentleman remember that meeting?
  Mr. GORDON. Yes, sir.
  Mr. McKEON. Mr. Chairman, it has been an interesting process and it 
is good to be together on this part of it as we are moving this far 
along on the issue. And it has been a real pleasure working with the 
gentleman from Tennessee.
  I want to thank the gentleman for his efforts to find the most 
efficient index for student loan interest rates. I think it is clear to 
everyone that indexing interest rates for these loans to the 10- or 20-
year bond rate just does not work. I believe we need to ensure access 
to loans while reducing interest rates to students basing those loans 
on the most efficient index.
  As we move towards conference, I am committed to working towards the 
inclusion of the most efficient index and examining commercial paper 
within that context as part of the conference report.
  Mr. KILDEE. Mr. Chairman, will the gentleman yield?
  Mr. GORDON. I yield to the gentleman from Michigan.
  Mr. KILDEE. Mr. Chairman, I too am interested in looking at 
commercial paper as a possible index for student loan interest rates. 
Unfortunately, the committee has not had enough time to thoroughly 
assess the gentleman's proposal. The interest rate compromise is a 
delicate one and any changes will have to be carefully studied.
  I, along with the gentleman from California (Chairman McKeon), will 
use the time between now and conference with the other body to assess 
the option of using commercial paper as the index.

[[Page H2585]]

  Mr. GORDON. Mr. Chairman, reclaiming my time, I thank the gentleman 
from Michigan and the gentleman from California. With those encouraging 
words, I ask unanimous consent to withdraw my amendment.
  The CHAIRMAN. Without objection, the amendment is withdrawn.
  There was no objection.
  The CHAIRMAN. Are there further amendments to title IV.


                 Amendment No. 41 Offered by Mr. McKeon

  Mr. McKEON. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment offered by Mr. McKeon:
       Page 161, after line 9, insert the following new subsection 
     (and redesignate the succeeding subsections accordingly):
       (j) Delay in Commencement of Repayment Period.--Section 
     428(b(7) is amended by inserting after subparagraph (C) the 
     following new subparagraph:
       ``(D) There shall be excluded from the 6 months determined 
     under subparagraph (A)(i) any period during which the student 
     was called or ordered to active duty in a reserve component 
     of the Armed Forces of the United States.''.

  Mr. McKEON. Mr. Chairman, currently a student must begin repayment of 
his or her student loan six months after he or she ceases to take 
classes on at least a half-time basis. But a college student serving as 
a reservist may be called to active duty for more than six months, 
forcing him or her to begin repayment.
  Mr. Chairman, it does not seem fair that a student called to serve 
his or her country should be forced to begin repayment, especially when 
they did not leave school by choice. This goes against the whole 
purpose of the repayment and of the six-month grace period.
  The amendment which I offer, along with the gentleman from Wisconsin 
(Mr. Klug) would allow those student reservists to forgo prepayment 
while serving on active duty. I urge all Members to support this 
amendment.
  Mr. KILDEE. Mr. Chairman, I move to strike the last word.
  Mr. Chairman, as the father of two sons in the military, I find this 
a very attractive amendment and I support it.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from California (Mr. McKeon).
  The amendment was agreed to.
  The CHAIRMAN. Are there further amendments to title IV?


                Amendment No. 14 Offered by Mr. Andrews

  Mr. ANDREWS. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 14 offered by Mr. Andrews:
       Page 156, after line 3, insert the following new section 
     (and redesignate the succeeding sections and conform the 
     table of contents accordingly):

     SEC. 417. INCOME CONTINGENT REPAYMENT UNDER THE FFEL PROGRAM.

       Part B of title IV is amended by inserting after section 
     427A (20 U.S.C. 1077a) the following new section:

     ``SEC. 427B. INCOME CONTINGENT REPAYMENT OPTION

       ``(a) Availability of Option.--
       ``(1) Individual loans.--An individual who has only one 
     loan outstanding under this part shall, not more than 6 
     months prior to the date on which the borrower's first 
     payment is due, be offered by the lender the option of 
     repaying the loan in accordance with this section.
       ``(2) Multiple loans.--An individual who has two or more 
     loans outstanding under this part may obtain a consolidation 
     loan under section 428C for the purposes of obtaining the 
     option of repaying the loan in accordance with this section.
       ``(3) Direct loans.--An individual who has one or more 
     loans under part D of this title may obtain income contingent 
     repayment pursuant to section 455(e).
       ``(4) Restriction of option to new borrowers.--
     Notwithstanding paragraphs (1) through (3), the option of 
     repaying a loan in accordance with this section shall be 
     available only to borrowers who, on the date of enactment of 
     this section, do not have any outstanding balance of 
     principal or interest on any loan made under this part or 
     part D.
       ``(b) Terms of Repayment under Option.--
       ``(1) Loan obligations under option.--A loan that is 
     subject to repayment under this section shall be repaid in 
     installments that--
       ``(A) are determined in accordance with paragraph (2) for 
     each one year period beginning on July 1; and
       ``(B) notwithstanding the note or other written evidence of 
     the loan and subparagraphs (D) and (E) of section 428(b)(1), 
     shall continue to be paid until--
       ``(i) the borrower has repaid the principal and any accrued 
     or capitalized interest on the loan; or
       ``(ii) the remaining obligations of the borrower are 
     discharged under subsection (c).
       ``(2) Calculation of installments.--
       ``(A) Installment amounts.--The total amount that a 
     borrower shall be required to pay as installments on a loan 
     of such borrower that is subject to repayment under this 
     section is equal to--
       ``(i) one-fourth of the annual amount determined under 
     subparagraph (B), in the case of a loan that is repaid in 
     quarterly installments; or
       ``(ii) one-twelfth of such annual amount, in the case of a 
     loan that is repaid in monthly installments.
       ``(B) Annual amount.--The annual amount for a loan that is 
     subject to repayment under this section is determined for 
     each one year period beginning on July 1 of each calendar 
     year. The annual amount is determined by reference to the 
     taxable income of the borrower for the taxable year ending in 
     the calendar year preceding the calendar year in which the 
     determination is made. The annual amount is determined in 
     accordance with the following table:
       

                              Annual limit
------------------------------------------------------------------------
If the taxable income of the borrower is--   Then the annual amount is--
------------------------------------------------------------------------
Less than $20,000.........................  3% of taxable income
$20,001-$40,000...........................  5% of taxable income
$40,001-$60,000...........................  7% of taxable income
$60,001-$90,000...........................  10% of taxable income
$90,001-$120,000..........................  15% of taxable income
$120,001 or more..........................  20% of taxable income
------------------------------------------------------------------------

       ``(C) Special rule for joint returns.--If an individual who 
     is a borrower of a loan that is subject to repayment under 
     this section files a joint return for the taxable year on 
     which the annual amount is based, then the annual amount for 
     such individual is determined under subparagraph (B) by 
     treating the taxable income of such individual as equal to 
     one-half the taxable income indicated on such joint return.
       ``(3) Capitalization of unpaid interest.--If the amount 
     that any borrower pays as an installment under paragraph (2) 
     on a loan that is subject to repayment under this section is 
     less than the interest that has accrued since the preceding 
     installment, then the remaining unpaid interest shall be 
     added, not more frequently than quarterly, to the principal 
     amount of the loan. Such capitalization of interest shall not 
     be deemed to exceed the annual insurable limit on the account 
     of the borrower.
       ``(c) Discharge of Obligation.--
       ``(1) Unpaid balance remaining after 25 years.--If the 
     unpaid balance on a loan that is subject to repayment under 
     this section has not been repaid in full at the end of 25 
     years of repayment, then--
       ``(A) the Secretary shall repay the holder of such loan 
     such unpaid balance and the holder of the loans shall be 
     deemed to have a contractual right, as against the United 
     States, to receive from the Secretary such unpaid balance 
     without administrative delay after the receipt by the 
     Secretary of an accurate and complete request for payment; 
     and
       ``(B) such payment by the Secretary shall be applied to 
     discharge the borrower from any remaining obligation with 
     respect to the loan.
       ``(2) Unpaid balance.--For the purposes of paragraph (1), 
     the unpaid balance of a loan is the sum of unpaid principal 
     and unpaid accrued and capitalized interest, and any fees, 
     such as late charges, assessed on such loan in accordance 
     with the requirements of this part and the regulations 
     thereunder.
       ``(e) Information Needed for Collection.--
       ``(1) Access to taxpayer information.--The Secretary may 
     obtain such information as is reasonably necessary regarding 
     the taxable income of a borrower (and the borrower's spouse, 
     if applicable) of a loan that is subject to repayment under 
     this section for the purpose of determining the installment 
     caps under subsection (b)(2). Returns and return information 
     (as defined in section 6103 of the Internal Revenue Code of 
     1986) may be obtained under the preceding sentence only to 
     the extent authorized by section 6103(l)(13) of such Code.
       ``(2) Additional documents.--A borrower of a loan that is 
     subject to repayment under this section and for whom taxable 
     income is unavailable or does not reasonably reflect the 
     borrower's current income, shall provide to the Secretary 
     other documentation of income satisfactory to the Secretary.
       ``(3) Transmission of data to lenders.--The Secretary 
     shall, by regulation, establish procedures for the 
     transmission of data gathered under (1) and (2) to the lender 
     or holder of a loan that is subject to repayment under this 
     section.
       ``(4) Notification to borrowers.--The Secretary shall 
     establish procedures under which a borrower of a loan that is 
     subject to repayment under this section is notified of the 
     terms and conditions of such loan, including notification of 
     such borrower--
       ``(A) that the Internal Revenue Service will disclose to 
     the Secretary tax return information as authorized under 
     section 6103(l)(13) of the Internal Revenue Code of 1986; and
       ``(B) that if a borrower considers that special 
     circumstances, such as a loss of employment by the borrower 
     or the borrower's spouse, warrant an adjustment in the 
     borrower's loan repayment as determined using

[[Page H2586]]

     the information described in subparagraph (A), or the 
     alternative documentation described in paragraph (2), the 
     borrower may contact the Secretary, who shall determine 
     whether such adjustment is appropriate, in accordance with 
     criteria established by the Secretary.
       ``(f) Definitions.--For purposes of this section:
       ``(1) Taxable income.--The taxable income of a borrower is 
     determined in the manner provided in section 63 of the 
     Internal Revenue Code of 1986.
       ``(2) Taxable year.--The term `taxable year' means the 
     taxable year of a taxpayer for purposes of subtitle A of such 
     Code.''.
       Page 204, after line 5, insert the following new section 
     (and redesignate the succeeding sections and conform the 
     table of contents accordingly):

     SEC. 438. INCOME CONTINGENT REPAYMENT UNDER THE FEDERAL 
                   DIRECT LOAN PROGRAM.

       Section 455(e) of the Higher Education Act of 1965 (20 
     U.S.C. 1087e(e)) is amended to read as follows:
       ``(e) Parallel income contingent repayment.--
       ``(1) In general.--The Secretary shall offer borrowers 
     under this part the option of repaying their loans in the 
     same manner as loans that are subject to repayment in 
     accordance with section 427B.
       ``(2) Exceptions.--The Secretary shall prescribe any 
     regulations necessary to implement the requirements of 
     paragraph (1).''.
  Mr. ANDREWS. Mr. Chairman, this is the second amendment I am offering 
on the issue of income-contingent or income-sensitive loans. Let me say 
at the outset, and pursuant to my discussion with the subcommittee 
staff of the gentleman from California (Mr. McKeon), I intend to simply 
explain the concept and ask for unanimous consent to withdraw it, based 
upon the assumption we can continue talking about this basic idea.
  First, I wish to reiterate my appreciation for the acceptance of the 
first amendment on this subject. I think it gives us an excellent base 
on which to build. The purpose of this second amendment is to build on 
that base by specifying two things. One is that I believe that loans 
under the FFEL program should also have the income-contingent loan 
feature without consolidation, as this bill would now call for. And 
second, I believe in a different structure of income-sensitive 
repayment. I think there should be a specific gradation where the 
student's income is then tied to a percentage repayment.
  My proposal calls for students making a taxable income of $20,000 or 
less to pay 3 percent of their income as their repayment. Students 
making $40,000 or less and down to $20,000, to pay 5 percent, and have 
similar gradations beyond that.
  I believe that when this issue is fully scored by the Congressional 
Budget Office, it will show a very, very nominal cost, and yet have a 
great benefit for students as it will permit them to repay their loans 
in rising payments as their incomes rise. I believe another benefit of 
this proposal will be a substantial reduction in loan defaults. This is 
because the obligation of the student to pay will be more closely tied 
to the ability of the student to pay.
  Mr. Chairman, I am aware of the fact that there are jurisdictional 
and budgetary issues that need to be discussed. I also know there are 
some substantive disagreements, but I did want to get on the record my 
adherence to this principle. Again, I express my appreciation for the 
adoption of the basic idea and amendment in No. 16.
  Mr. McKEON. Mr. Chairman, will the gentleman yield?
  Mr. ANDREWS. I yield to the gentleman from California.
  Mr. McKEON. Mr. Chairman, I want to thank the gentleman for 
presenting his amendment, and withdrawing it, and we will continue to 
work on that issue.
  Mr. ANDREWS. Mr. Chairman, reclaiming my time, I ask unanimous 
consent to withdraw my amendment.
  The CHAIRMAN. Without objection, the amendment is withdrawn.
  There was no objection.
  The CHAIRMAN. Are there further amendments to title IV?


                 Amendment No. 39 Offered by Mr. Klink

  Mr. KLINK. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 39 offered by Mr. Klink:
       Page 164, after line 25, insert the following new 
     subsections:
       (t) Notice to Institutions of Defaults.--
       (1) Administrative and fiscal procedures.--Section 
     428(c)(2)(A) is amended by striking ``proof that reasonable 
     attempts were made'' and inserting ``proof that the 
     institution and the State licensing board were contacted and 
     other reasonable attempts were made''
       (2) Reimbursement.--Section 428(c)(2)(G) (20 U.S.C. 
     1078(c)(2)(G)) is amended by striking ``certifies to the 
     Secretary that diligent attempts have been made'' and 
     inserting ``demonstrates to the Secretary that diligent 
     attempts, including direct contact with the institution and 
     the State licensing board, have been made.''.
       (3) Notice to secretary and payment of loss.--The third 
     sentence of section 430(a) (20 U.S.C. 1080(a)) is amended by 
     inserting ``the institution and the State licensing board 
     were contacted and other'' after ``submit proof that''.


         Modification to Amendment No. 39 Offered by Mr. Klink

  Mr. KLINK. Mr. Chairman, I ask unanimous consent that the 
modifications that we have at the desk be included in my amendment.
  The CHAIRMAN. The Clerk will report the modification.
  The Clerk read as follows:

       Modification to amendment No. 39 offered by Mr. Klink:
       Page 164, after line 25, insert the following new 
     subsection:
       (t) Notice to Institutions of Defaults.--
       (1) Administrative and fiscal procedures.--Section 
     428(c)(2)(A) is amended by striking ``proof that reasonable 
     attempts were made'' and inserting ``proof that the 
     institution was contacted and other reasonable attempts were 
     made''.
       (2) Reimbursement.--Section 428(c)(2)(G) (20 U.S.C. 
     1078(c)(2)(G)) is amended by striking ``certifies to the 
     Secretary that diligent attempts have been made'' and 
     inserting ``demonstrates to the Secretary that diligent 
     attempts, including direct contact with the institution have 
     been made.''.
       (3) Notice to secretary and payment of loss.--The third 
     sentence of section 430(a) (20 U.S.C. 1080(a)) is amended by 
     inserting ``the institution was contacted and other'' after 
     ``submit proof that''.

  Mr. KLINK (during the reading). Mr. Chairman, I ask unanimous consent 
that the amendment be considered as read and printed in the Record.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Pennsylvania?
  There was no objection.
  The CHAIRMAN. Is there objection to the modification to the amendment 
offered by the gentleman from Pennsylvania?
  There was no objection.

                              {time}  2315

  Mr. KLINK. Mr. Chairman, for my friend, we have taken out the line 
about the State licensing boards. That was the agreement that we had on 
the amendment. This is simply to say that before the loan goes into 
default that we should have some communications, that the school should 
be notified by the guaranty agency.
  Mr. GOODLING. Mr. Chairman, will the gentleman yield?
  Mr. KLINK. I yield to my friend, the gentleman from Pennsylvania.
  Mr. GOODLING. Mr. Chairman, we accept the amendment.
  Mr. KLINK. Mr. Chairman, I thank the gentleman. I always learned that 
when the jury starts nodding their heads, you stop talking.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Pennsylvania (Mr. Klink).
  The amendment was agreed to.


                 Amendment No. 40 Offered By Mr. Klink

  Mr. KLINK. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 40 offered by Mr. Klink:
       Page 177, after line 1, insert the following new 
     subparagraph (and redesignate the succeeding subparagraph 
     accordingly):
       (A) by striking ``for the fiscal year for which the 
     determination is made and for the two succeeding fiscal 
     years'' and inserting ``for the period determined under 
     subparagraph (D);
       Page 177, after line 14, insert the following new paragraph 
     (and redesignate the succeeding paragraphs accordingly):
       (3) by adding at the end of paragraph (2) the following new 
     subparagraph:
       ``(D) An institution that is ineligible to participate 
     pursuant to a determination under paragraph (A) shall be 
     ineligible for a period beginning with the fiscal year for 
     which the determination is made and ending on the earlier 
     of--
       ``(1) the expiration of the two succeeding fiscal years; or
       ``(1) the date on which the final cohort default rates 
     published with respect to such institution are less than the 
     threshold percentage specified in subparagraph (B) for any 
     two of the three most recent fiscal years for which data are 
     available.'';


[[Page H2587]]


  Mr. KLINK. Again, I really want to commend both chairmen for the 
wonderful work that they have done, and the ranking members, too.
  This is another common sense, I think a good government reform 
amendment to the student loan program. I think it will save money. I 
think it will reduce student loan defaults and help maintain student 
access to educational resources.
  This amendment is a little more complex. Currently, an institution of 
higher education would become ineligible for participation in the 
student loan program if it has three consecutive annual default rates 
over 25 percent. That is very good. There really has to be some 
accountability for the schools that cannot manage their default rates. 
They should be held accountable.
  An institution currently can regain its eligibility after 2 years if 
it has one default rate under 25 percent during that period. I do not 
think that is really enough incentive for schools to really make a 
commitment to default management.
  This amendment would offer another path for those schools to regain 
their eligibility. If an ineligible institution can post two default 
rates under 25 percent, it would then regain its eligibility regardless 
of the time it has been ineligible. I want emphasis put on the rates, 
not on the time served. We really want to bring the rates down.
  The CBO has scored this amendment as having a very minimal cost. Let 
me say this for the budget conscious: We think that providing an 
incentive for schools to lower their default rate would mean better 
management and fewer defaults, which would mean savings, I believe. 
This amendment will, in fact, save money in the long run, and I would 
urge my colleagues to support it.
  I understand that the majority, if we would withdraw this amendment, 
would work with us on this in conference. If that is the case, I would 
yield to the gentleman from Pennsylvania (Mr. Goodling), the chairman, 
to see if that is the agreement we have. If we could work with the 
gentleman in conference on this, I would then withdraw the amendment.
  Mr. GOODLING. Mr. Chairman, if the gentleman will yield, we would be 
very happy to work with the gentleman on this.
  Mr. KLINK. Mr. Chairman, I thank the gentleman. He is a gentleman, a 
scholar, and a great friend from Pennsylvania, and I am happy to work 
with him.
  Mr. Chairman, I ask unanimous consent to withdraw the amendment.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Pennsylvania?
  There was no objection.
  The CHAIRMAN. The amendment is withdrawn.


                Amendment No. 13 Offered by Mr. Andrews

  Mr. ANDREWS. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 13 offered by Mr. Andrews:
       Page 154, line 18 strike ``2.8 percent'' and insert ``2.3 
     percent''.
       Page 155, strike lines 2 and 3 and insert the following:

     paragraph shall be applied by substituting `1.7 percent' for 
     `2.3 percent.'
       In clause (iv) as amended by the Manager's amendment to 
     page 155, lines 12 though 23, relating to consolidation 
     loans, strike ``for 2.8 percent', subject'' and insert ``for 
     2.3 percent', subject''.

  Mr. ANDREWS. Mr. Chairman, this Congress, working with President 
Clinton and Vice-President Gore and Secretary Riley and the Department 
of Education, I think has built a laudable record of achievement in 
higher education. The Hope Scholarship tax credits that were enacted 
last year are a matter that is benefiting millions of families across 
the country. Virtually every family in my district has the opportunity 
to benefit from it in one way or the other.
  Working with this committee and this Congress, Pell grants are at 
their highest level ever. More students are benefiting from Pell 
grants, and those students who benefit are benefiting at a higher 
level.
  We have been able to enact and improve work-study programs and 
national service and many, many other areas. The administration and the 
Congress, I believe, have an exemplary record also in the area of 
student loans. Loan default costs have fallen precipitously.
  I think Members of both parties and this committee deserve a lot of 
credit for that, working with the Department of Education. It is with 
that context in mind that I think the administration's proposal on the 
interest rate issue merits some consideration.
  I realize that the gentleman from California (Mr. McKeon) and the 
gentleman from Michigan (Mr. Kildee) and the gentleman from 
Pennsylvania (Mr. Goodling) and other leaders of this committee have 
worked to construct a very delicate balance on this compromise. For 
that reason, it is not my intention to press this matter for a vote at 
this time. It is, in fact, my intention to ask for unanimous consent to 
withdraw the amendment at the conclusion of these remarks.
  But I do believe, and I think that belief is shared by many others in 
this body, that the administration's proposal of the subsidy number, 
which is the 91-day T-bill rate plus 1.7 percent for in-school interest 
and 2.3 percent for out-of-school interest, is a better number. That 
truly represents the level at which this program could operate 
efficiently for the lenders, profitably for the lenders, at a lower 
cost for the students, and perhaps most importantly, at a lower cost 
for the taxpayer.
  I would repeat an admonition that the gentleman from South Carolina 
(Mr. Spratt) made earlier this evening, that some of us have also 
embraced, that there is a lingering question as to how this compromise 
would be paid for.
  I fully respect and appreciate the long-standing effort that the 
leadership of this committee has made to construct this compromise. It 
is not my desire to upset it or to be unduly critical of it.
  I do wish to go on record, though, that I believe the administration 
position is the right one. As we proceed in negotiations with the other 
body and the administration, I would hope that we continue to have an 
open mind about this. With the intention of withdrawing the amendment, 
I would yield to either the full or subcommittee chairman at this 
point.
  Mr. McKEON. Mr. Chairman, if the gentleman will yield, I would be 
happy to discuss this just shortly with the gentleman from New Jersey. 
I wish we had the wisdom of Solomon.
  Mr. ANDREWS. Does the gentleman mean the chairman of the Committee on 
Rules?
  Mr. McKEON. Yes, that is exactly who I was speaking about.
  Mr. Chairman, I wish I could say this is a perfect number, but we 
talk about banks and we talk about lending institutions, and each of 
them has a different profit margin. Some of them this will drive out. 
Some of them will be able to stay in. Some we could go to a lower 
number and still keep some in and drive some out.
  I think what we really need to look at is where is the risk. I guess 
the driving pitfall for me has been we need to protect the students. My 
concern is, as we drive banks out of the system, the ones that will get 
hurt first will be the students that need the help the most.
  I looked at weighing the risk. If you put the risk here, if we put 
the number a little bit too high, the risk is that some banks will make 
a little bit extra profit and pay a little bit more taxes; whereas if 
we put the number too low and drive banks out, some of those students 
that rely heavily on this, that are maybe not the 18 or 19-year-old 
students, but there are some that come back that have been out in the 
workplace and now come back, they are going to community colleges or 
going to proprietary schools or going to night school, they really need 
that loan or they really need that help. They are the ones I am most 
concerned about in this process.
  Mr. ANDREWS. Mr. Chairman, reclaiming my time, I freely acknowledge 
and commend both the gentleman from Pennsylvania (Mr. Goodling), the 
committee chairman, and the gentleman from California (Mr. McKeon), the 
subcommittee chairman, for making significant reductions in payments to 
both lenders and guaranty agencies in this and prior bills.
  They certainly recognize the ability to have efficiencies. We may 
disagree about where that efficiency lies, but I

[[Page H2588]]

certainly respect the effort and appreciate the time.
  Mr. Chairman, I ask unanimous consent to withdraw the amendment.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Pennsylvania?
  There was no objection.
  The CHAIRMAN. The amendment is withdrawn.
  The CHAIRMAN. Are there further amendments to title IV?


                Amendment No. 12 offered by Mr. Andrews

  Mr. ANDREWS. Mr. Chairman, I offer one more amendment listed as No. 
12.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 12 offered by Mr. Andrews:
       Page 153, before line 13, insert the following new 
     subsection (and redesignate the succeeding subsections 
     accordingly):
       ``(b) Consolidation Loans.--Notwithstanding any provision 
     of subsection (a), with respect to any consolidation loan 
     made under section 428C for which the first disbursement is 
     made on or after July 1, 1998, the applicable rate of 
     interest shall, during any 12-month period beginning on July 
     1 and ending on June 30, be determined on the preceding June 
     1 and be equal to--
       ``(1) the bond equivalent rate of 91-day Treasury bills 
     auctioned at the final auction held prior to such June 1; 
     plus
       ``(2) 2.3 percent, except that such rate shall not exceed 
     8.25 percent.

  Mr. ANDREWS. Mr. Chairman, there is an issue here as to the interest 
rate that students pay when they consolidate their loans, when they 
consolidate their direct loans in this case. The question is whether or 
not the students should pay a blended rate, which is to say the rate of 
all of the loans that he or she is consolidating, averaged and blended 
in as a weighted average, or whether the students should pay the 
interest rate paid on newly issued direct loans.
  I believe that the students should pay the interest rate on newly 
issued direct loans. I do not believe there is a significant cost 
consideration here. I think that this is effectively a benefit to 
students in this way.
  If interest rates in the long term continue to moderate or even drop, 
as we have been fortunate to see in the last 3 or 4 years, I think 
students should get the benefit of that. I think if rates dropped, then 
students who consolidate their loan should get the same kind of benefit 
that homeowners get when they refinance their home mortgage.
  I understand that there are some issues of parity between the FFEL 
Program and the direct loan program. I frankly would like to see those 
issues resolved by giving persons who consolidate an FFEL loan the same 
low rate that students who consolidate direct loans get. I think this 
parity matter should be resolved in favor of the students rather than 
the lenders or the government.
  Having said that, I understand there are issues respecting the pay-
as-you-go rules here. I also understand the desire to promote the 
continuing parity between the direct loan and guaranty loan programs.
  With the understanding that this also is an issue that is open to 
continued discussion among those of us in this House, the Senate, the 
Department of Education and the administration, it would be my 
intention to withdraw this amendment.
  Mr. Chairman, I am happy to yield to the subcommittee chairman or 
full committee chairman at this time.
  Mr. McKEON. Mr. Chairman, I gave my speech last time, and I would 
just like to thank the gentleman for his presentation and for 
withdrawing his amendment.
  Mr. ANDREWS. Would the gentleman like to accept the amendment?
  Mr. McKEON. My colleague heard me. I thank the gentleman for 
withdrawing the amendment.
  Mr. ANDREWS. I appreciate the gentleman's indulgence.
  Mr. Chairman, I ask unanimous consent to withdraw the amendment.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
New Jersey?
  There was no objection.
  The CHAIRMAN. The amendment is withdrawn.
  Are there further amendments to title IV?
  The Clerk will designate title V.
  The text of title V is as follows:
                    TITLE V--DEVELOPING INSTITUTIONS

     SEC. 501. ESTABLISHMENT OF NEW TITLE V.

       Title V is amended to read as follows:
                   ``TITLE V--DEVELOPING INSTITUTIONS

                ``PART A--HISPANIC-SERVING INSTITUTIONS

     ``SEC. 501. PROGRAM AUTHORIZED.

       ``The Secretary shall provide grants and related assistance 
     to Hispanic-serving institutions to enable such institutions 
     to improve and expand their capacity to serve Hispanic and 
     other low-income students.

     ``SEC. 502. ELIGIBILITY; DEFINITIONS.

       ``(a) Definitions.--For the purpose of this part:
       ``(1) Hispanic-serving institution.--The term `Hispanic-
     serving institution' means an institution of higher education 
     which--
       ``(A) is an eligible institution;
       ``(B) at the time of application, has an enrollment of 
     undergraduate full-time equivalent students that is at least 
     25 percent Hispanic students; and
       ``(C) provides assurances that not less than 50 percent of 
     its Hispanic students are low-income individuals.
       ``(2) Eligible institution.--The term `eligible 
     institution' means--
       ``(A) an institution of higher education--
       ``(i) which has an enrollment of needy students as required 
     by subsection (b) of this section;
       ``(ii) except as provided in section 522(b), the average 
     educational and general expenditures of which are low, per 
     full-time equivalent undergraduate student, in comparison 
     with the average educational and general expenditures per 
     full-time equivalent undergraduate student of institutions 
     that offer similar instruction;
       ``(iii) which is--

       ``(I) legally authorized to provide, and provides within 
     the State, an educational program for which such institution 
     awards a bachelor's degree; or
       ``(II) a junior or community college;

       ``(iv) which is accredited by a nationally recognized 
     accrediting agency or association determined by the Secretary 
     to be reliable authority as to the quality of training 
     offered or which is, according to such an agency or 
     association, making reasonable progress toward accreditation;
       ``(v) which meets such other requirements as the Secretary 
     may prescribe; and
       ``(vi) which is located in a State; and
       ``(B) any branch of any institution of higher education 
     described under subparagraph (A) which by itself satisfies 
     the requirements contained in clauses (i) and (ii) of such 
     subparagraph.

     For purposes of the determination of whether an institution 
     is an eligible institution under this paragraph, the factor 
     described under subparagraph (A)(i) shall be given twice the 
     weight of the factor described under subparagraph (A)(ii).
       ``(3) Low-income individual.--The term `low-income 
     individual' means an individual from a family whose taxable 
     income for the preceding year did not exceed 150 percent of 
     an amount equal to the poverty level determined by using 
     criteria of poverty established by the Bureau of the Census.
       ``(4) Full-time equivalent students.--The term `full-time 
     equivalent students' means the sum of the number of students 
     enrolled full time at an institution, plus the full-time 
     equivalent of the number of students enrolled part time 
     (determined on the basis of the quotient of the sum of the 
     credit hours of all part-time students divided by 12) at 
     such institution.
       ``(5) Junior or community college.--The term `junior or 
     community college' means an institution of higher education--
       ``(A) that admits as regular students persons who are 
     beyond the age of compulsory school attendance in the State 
     in which the institution is located and who have the ability 
     to benefit from the training offered by the institution;
       ``(B) that does not provide an educational program for 
     which it awards a bachelor's degree (or an equivalent 
     degree); and
       ``(C) that--
       ``(i) provides an educational program of not less than 2 
     years that is acceptable for full credit toward such a 
     degree, or
       ``(ii) offers a 2-year program in engineering, mathematics, 
     or the physical or biological sciences, designed to prepare a 
     student to work as a technician or at the semiprofessional 
     level in engineering, scientific, or other technological 
     fields requiring the understanding and application of basic 
     engineering, scientific, or mathematical principles of 
     knowledge.
       ``(6) Educational and general expenditures.--For the 
     purpose of this part, the term `educational and general 
     expenditures' means the total amount expended by an 
     institution of higher education for instruction, research, 
     public service, academic support (including library 
     expenditures), student services, institutional support, 
     scholarships and fellowships, operation and maintenance 
     expenditures for the physical plant, and any mandatory 
     transfers which the institution is required to pay by law.
       ``(7) Endowment fund.--For the purpose of this part, the 
     term `endowment fund' means a fund that--
       ``(A) is established by State law, by an institution of 
     higher education, or by a foundation that is exempt from 
     Federal income taxation;
       ``(B) is maintained for the purpose of generating income 
     for the support of the institution; and
       ``(C) does not include real estate.
       ``(b) Enrollment of Needy Students.--For the purpose of 
     this part, the term `enrollment of needy students' means an 
     enrollment at an institution of higher education or a junior 
     or community college which includes--
       ``(1) at least 50 percent of the degree students so 
     enrolled who are receiving need-based assistance under title 
     IV of this Act in the second fiscal year preceding the fiscal 
     year for which the

[[Page H2589]]

     determination is being made (other than loans for which an 
     interest subsidy is paid pursuant to section 428), or
       ``(2) a substantial percentage of students receiving Pell 
     Grants in the second fiscal year preceding the fiscal year 
     for which determination is being made, in comparison with the 
     percentage of students receiving Pell Grants at all such 
     institutions in the second fiscal year preceding the fiscal 
     year for which the determination is made, unless the 
     requirement of this subdivision is waived under section 
     522(a).

     ``SEC. 503. AUTHORIZED ACTIVITIES.

       ``(a) Types of Activities Authorized.--Grants awarded under 
     this part shall be used by Hispanic-serving institutions of 
     higher education to assist such institutions to plan, 
     develop, undertake, and carry out programs.
       ``(b) Authorized Activities.--Grants awarded under this 
     section shall be used for one or more of the following 
     activities:
       ``(1) purchase, rental, or lease of scientific or 
     laboratory equipment for educational purposes, including 
     instructional and research purposes;
       ``(2) construction, maintenance, renovation, and 
     improvement in classrooms, libraries, laboratories, and other 
     instructional facilities;
       ``(3) support of faculty exchanges, faculty development, 
     curriculum development, academic instruction, and faculty 
     fellowships to assist in attaining advanced degrees in their 
     field of instruction;
       ``(4) purchase of library books, periodicals, and other 
     educational materials, including telecommunications program 
     material;
       ``(5) tutoring, counseling, and student service programs 
     designed to improve academic success;
       ``(6) funds management, administrative management, and 
     acquisition of equipment for use in strengthening funds 
     management;
       ``(7) joint use of facilities, such as laboratories and 
     libraries;
       ``(8) establishing or improving a development office to 
     strengthen or improve contributions from alumni and the 
     private sector;
       ``(9) establishing or improving an endowment fund;
       ``(10) creating or improving facilities for Internet or 
     other distance learning academic instruction capabilities, 
     including purchase or rental of telecommunications technology 
     equipment or services;
       ``(11) establishing or enhancing a program of teacher 
     education designed to qualify students to teach in public 
     elementary and secondary schools;
       ``(12) establishing community outreach programs which will 
     encourage elementary and secondary school students to develop 
     academic skills and the interest to pursue postsecondary 
     education;
       ``(13) improving and expanding graduate and professional 
     opportunities for Hispanic students; and
       ``(14) other activities proposed in the application 
     submitted pursuant to section 504 that--
       ``(A) contribute to carrying out the purposes of this 
     section; and
       ``(B) are approved by the Secretary as part of the review 
     and acceptance of such application.
       ``(c) Endowment Fund Limitations.--
       ``(1) Portion of grant.--An institution may not use more 
     than 20 percent of its grant under this part for any fiscal 
     year for establishing or improving an endowment fund.
       ``(2) Matching required.--An institution that uses any 
     portion of its grant under this part for any fiscal year for 
     establishing or improving an endowment fund shall provide an 
     equal or greater amount for such purposes from non-Federal 
     funds.
       ``(3) Regulations.--The Secretary shall publish rules and 
     regulations specifically governing the use of funds for 
     establishing or improving an endowment fund.

     ``SEC. 504. APPLICATION PROCESS.

       ``(a) Institutional Eligibility.--Each Hispanic-serving 
     institution desiring to receive assistance under this part 
     shall submit to the Secretary such enrollment data as may be 
     necessary to demonstrate that it is a Hispanic-serving 
     institution, along with such other information and data as 
     the Secretary may by regulation require.
       ``(b) Applications.--Any institution which is determined by 
     the Secretary to be a Hispanic-serving institution (on the 
     basis of the information and data submitted under subsection 
     (a)) may submit an application for assistance under this 
     section to the Secretary. Such application shall include--
       ``(1) a 5-year plan for improving the assistance provided 
     by the Hispanic-serving institution to Hispanic and other 
     low-income students; and
       ``(2) such other information and assurance as the Secretary 
     may require.
       ``(c) Priority.--The Secretary shall give priority to 
     applications that contain satisfactory evidence that such 
     institution has entered into or will enter into a 
     collaborative arrangement with at least one local educational 
     agency or community-based organization having demonstrated 
     effectiveness to provide such agency with assistance (from 
     funds other than funds provided under this part) in reducing 
     Hispanic dropout rates, improving Hispanic rates of academic 
     achievement, and increasing the rates at which Hispanic high 
     school graduates enroll in higher education.
       ``(d) Special Rule.--For the purposes of this part, no 
     Hispanic-serving college or university which is eligible for 
     and receives funds under this part may concurrently receive 
     other funds under title III.

     ``SEC. 505. DURATION OF GRANT.

       ``(a) Award Period.--The Secretary may award a grant to an 
     eligible institution under this part for 5 years, except that 
     no institution shall be eligible to secure a subsequent 5-
     year grant award under this part until two years have elapsed 
     since the expiration of its most recent 5-year grant award.
       ``(b) Limitations.--In awarding grants under this part the 
     Secretary shall give priority to applicants who are not 
     already receiving a grant under this part, except that for 
     the purpose of this subsection a grant under section 
     524(a)(1) shall not be considered a grant under this part.
       ``(c) Planning Grants.--Notwithstanding subsection (a), the 
     Secretary may award a grant to an eligible institution under 
     this part for a period of one year for the purpose of 
     preparation of plans and applications for a grant under this 
     part.

                      ``PART B--GENERAL PROVISIONS

     ``SEC. 521. APPLICATIONS FOR ASSISTANCE.

       ``(a) Applications.--
       ``(1) Applications Required.--Any institution which is 
     eligible for assistance under this title shall submit to the 
     Secretary an application for assistance at such time, in such 
     form, and containing such information, as may be necessary to 
     enable the Secretary to evaluate its need for assistance. 
     Subject to the availability of appropriations to carry out 
     this title, the Secretary may approve an application for a 
     grant under this title only if the Secretary determines 
     that--
       ``(A) the application meets the requirements of subsection 
     (b);
       ``(B) the applicant is eligible for assistance in 
     accordance with the part of this title under which the 
     assistance is sought; and
       ``(C) the applicant's performance goals are sufficiently 
     rigorous as to meet the purposes of this title and the 
     performance objectives and indicators for this title 
     established by the Secretary pursuant to the Government 
     Performance and Results Act.
       ``(2) Preliminary applications.--In carrying out paragraph 
     (1), the Secretary shall develop a preliminary application 
     for use by eligible institutions applying under part A prior 
     to the submission of the principal application.
       ``(b) Contents.--An institution, in its application for a 
     grant, shall--
       ``(1) set forth, or describe how the institution will 
     develop, a comprehensive development plan to strengthen the 
     institution's academic quality and institutional management, 
     and otherwise provide for institutional self-sufficiency and 
     growth (including measurable objectives for the institution 
     and the Secretary to use in monitoring the effectiveness of 
     activities under this title);
       ``(2) set forth policies and procedures to ensure that 
     Federal funds made available under this title for any fiscal 
     year will be used to supplement and, to the extent practical, 
     increase the funds that would otherwise be made available for 
     the purposes of section 503, and in no case supplant those 
     funds;
       ``(3) set forth policies and procedures for evaluating the 
     effectiveness in accomplishing the purpose of the activities 
     for which a grant is sought under this title;
       ``(4) provide for such fiscal control and fund accounting 
     procedures as may be necessary to ensure proper disbursement 
     of and accounting for funds made available to the applicant 
     under this title;
       ``(5) provide (A) for making such reports, in such form and 
     containing such information, as the Secretary may require to 
     carry out the functions under this title and the Government 
     Performance and Results Act, including not less than one 
     report annually setting forth the institution's progress 
     toward achieving the objectives for which the funds were 
     awarded, and (B) for keeping such records and affording such 
     access thereto, as the Secretary may find necessary to assure 
     the correctness and verification of such reports;
       ``(6) provide that the institution will comply with the 
     limitations set forth in section 526;
       ``(7) describe in a comprehensive manner any proposed 
     project for which funds are sought under the application and 
     include--
       ``(A) a description of the various components of the 
     proposed project, including the estimated time required to 
     complete each such component;
       ``(B) in the case of any development project which consists 
     of several components (as described by the applicant pursuant 
     to subparagraph (A)), a statement identifying those 
     components which, if separately funded, would be sound 
     investments of Federal funds and those components which would 
     be sound investments of Federal funds only if funded under 
     this title in conjunction with other parts of the development 
     project (as specified by the applicant);
       ``(C) an evaluation by the applicant of the priority given 
     any proposed project for which funds are sought in relation 
     to any other projects for which funds are sought by the 
     applicant under this title, and a similar evaluation 
     regarding priorities among the components of any single 
     proposed project (as described by the applicant pursuant to 
     subparagraph (A));
       ``(D) a detailed budget showing the manner in which funds 
     for any proposed project would be spent by the applicant; and
       ``(E) a detailed description of any activity which involves 
     the expenditure of more than $25,000, as identified in the 
     budget referred to in subparagraph (D); and
       ``(8) include such other information as the Secretary may 
     prescribe.
       ``(c) Priority Criteria Publication Required.--The 
     Secretary shall publish in the Federal Register, pursuant to 
     chapter 5 of title 5, United States Code, all policies and 
     procedures required to exercise the authority set forth in 
     subsection (a). No other criteria, policies, or procedures 
     shall apply.
       ``(d) Eligibility Data.--The Secretary shall use the most 
     recent and relevant data concerning the number and percentage 
     of students receiving need-based assistance under title IV of 
     this Act in making eligibility determinations and shall 
     advance the base-year forward following each annual grant 
     cycle.

[[Page H2590]]

     ``SEC. 522. WAIVER AUTHORITY AND REPORTING REQUIREMENT.

       ``(a) Waiver Requirements; Need-Based Assistance 
     Students.--The Secretary may waive the requirements set forth 
     in section 502(a)(2)(A)(i) in the case of an institution--
       ``(1) which is extensively subsidized by the State in which 
     it is located and charges low or no tuition;
       ``(2) which serves a substantial number of low-income 
     students as a percentage of its total student population;
       ``(3) which is contributing substantially to increasing 
     higher education opportunities for educationally 
     disadvantaged, underrepresented, or minority students, who 
     are low-income individuals;
       ``(4) which is substantially increasing higher educational 
     opportunities for individuals in rural or other isolated 
     areas which are unserved by postsecondary institutions; or
       ``(5) wherever located, if the Secretary determines that 
     the waiver will substantially increase higher education 
     opportunities appropriate to the needs of Hispanic Americans.
       ``(b) Waiver Determinations; Expenditures.--(1) The 
     Secretary may waive the requirements set forth in section 
     502(a)(2)(A)(ii) if the Secretary determines, based 
     on persuasive evidence submitted by the institution, that 
     the institution's failure to meet that criterion is due to 
     factors which, when used in the determination of 
     compliance with such criterion, distort such 
     determination, and that the institution's designation as 
     an eligible institution under part A is otherwise 
     consistent with the purposes of such part.
       ``(2) The Secretary shall submit to the Congress every 
     other year a report concerning the institutions which, 
     although not satisfying the criterion contained in section 
     502(a)(2)(A)(ii), have been determined to be eligible 
     institutions under part A institutions which enroll 
     significant numbers of Black American, Hispanic, Native 
     American, Asian American, or Native Hawaiian students under 
     part A, as the case may be. Such report shall--
       ``(A) identify the factors referred to in paragraph (1) 
     which were considered by the Secretary as factors that 
     distorted the determination of compliance with section 
     502(a)(2)(A)(ii); and
       ``(B) contain a list of each institution determined to be 
     an eligible institution under part A including a statement of 
     the reasons for each such determination.

     ``SEC. 523. APPLICATION REVIEW PROCESS.

       ``(a) Review Panel.--All applications submitted under this 
     title by institutions of higher education shall be read by a 
     panel of readers composed of individuals selected by the 
     Secretary. The Secretary shall assure that no individual 
     assigned under this section to review any application has any 
     conflict of interest with regard to the application which 
     might impair the impartiality with which the individual 
     conducts the review under this section.
       ``(2) All readers selected by the Secretary shall receive 
     thorough instruction from the Secretary regarding the 
     evaluation process for applications submitted under this 
     title and consistent with the provisions of this title, 
     including--
       ``(A) an enumeration of the factors to be used to determine 
     the quality of applications submitted under this title; and
       ``(B) an enumeration of the factors to be used to determine 
     whether a grant should be awarded for a project under this 
     title, the amount of any such grant, and the duration of any 
     such grant.
       ``(b) Recommendations of Panel.--In awarding grants under 
     this title, the Secretary shall take into consideration the 
     recommendations of the panel made under subsection (a).
       ``(c) Notification.--Not later than June 30 of each year, 
     the Secretary shall notify each institution of higher 
     education making an application under this title of--
       ``(1) the scores given the applicant by the panel pursuant 
     to this section;
       ``(2) the recommendations of the panel with respect to such 
     application; and
       ``(3) the reasons for the decision of the Secretary in 
     awarding or refusing to award a grant under this title, and 
     any modifications, if any, in the recommendations of the 
     panel made by the Secretary.

     ``SEC. 524. COOPERATIVE ARRANGEMENTS.

       ``(a) General Authority.--The Secretary may make grants to 
     encourage cooperative arrangements with funds available to 
     carry out part A, between institutions eligible for 
     assistance under part A and between such institutions and 
     institutions not receiving assistance under this title for 
     the activities described in section 503 so that the resources 
     of the cooperating institutions might be combined and shared 
     to achieve the purposes of such part and avoid costly 
     duplicative efforts and to enhance the development of part A 
     eligible institutions.
       ``(b) Priority.--The Secretary shall give priority to 
     grants for the purposes described under subsection (a) 
     whenever the Secretary determines that the cooperative 
     arrangement is geographically and economically sound or will 
     benefit the applicant institution.
       ``(c) Duration.--Grants to institutions having a 
     cooperative arrangement may be made under this section for a 
     period as determined under section 505.

     ``SEC. 525. ASSISTANCE TO INSTITUTIONS UNDER OTHER PROGRAMS.

       ``(a) Assistance Eligibility.--Each institution which the 
     Secretary determines to be an institution eligible under part 
     A may be eligible for waivers in accordance with subsection 
     (b).
       ``(b) Waiver Applicability.--(1) Subject to, and in 
     accordance with, regulations promulgated for the purpose of 
     this section, in the case of any application by an 
     institution referred to in subsection (a) for assistance 
     under any programs specified in paragraph (2), the Secretary 
     is authorized, if such application is otherwise approvable, 
     to waive any requirement for a non-Federal share of the cost 
     of the program or project, or, to the extent not inconsistent 
     with other law, to give, or require to be given, priority 
     consideration of the application in relation to applications 
     from other institutions.
       ``(2) The provisions of this section shall apply to any 
     program authorized by title IV or VII of this Act.
       ``(c) Limitation.--The Secretary shall not waive, under 
     subsection (b), the non-Federal share requirement for any 
     program for applications which, if approved, would require 
     the expenditure of more than 10 percent of the appropriations 
     for the program for any fiscal year.

     ``SEC. 526. LIMITATIONS.

       The funds appropriated under section 528 may not be used--
       ``(1) for a school or department of divinity or any 
     religious worship or sectarian activity;
       ``(2) for an activity that is inconsistent with a State 
     plan for desegregation of higher education applicable to such 
     institution;
       ``(3) for an activity that is inconsistent with a State 
     plan of higher education applicable to such institution; or
       ``(4) for purposes other than the purposes set forth in the 
     approved application under which the funds were made 
     available to the institution.

     ``SEC. 527. PENALTIES.

       Whoever, being an officer, director, agent, or employee of, 
     or connected in any capacity with, any recipient of Federal 
     financial assistance or grant pursuant to this title 
     embezzles, willfully misapplies, steals, or obtains by fraud 
     any of the funds which are the subject of such grant or 
     assistance, shall be fined not more than $10,000 or 
     imprisoned for not more than 2 years, or both.

     ``SEC. 528. AUTHORIZATIONS OF APPROPRIATIONS.

       ``(a) Authorizations.--There are authorized to be 
     appropriated to carry out part A, $80,000,000 for fiscal year 
     1999, and such sums as may be necessary for each of the 4 
     succeeding fiscal years.
       ``(b) Use of Multiple Year Awards.--In the event of a 
     multiple year award to any institution under this title, the 
     Secretary shall make funds available for such award from 
     funds appropriated for this title for the fiscal year in 
     which such funds are to be used by the recipient.''.

  The CHAIRMAN. Are there amendments to title V?


                  Amendment No. 57 Offered By Mr. Clay

  Mr. CLAY. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 57 offered by Mr. Clay:
       Page 271, strike line 14 and insert the following:
       ``(A)(i) is an eligible institution; or
       ``(ii) is an institution of higher education (as such term 
     is defined in section 101(a)(2)) that provides a 4-year 
     baccalaureate program, is regionally accredited, and serves 
     at least 1,500 Hispanic students;

  Mr. CLAY. Mr. Chairman, this is an amendment offered by the gentleman 
from New York (Mr. Serrano) which would expand the definition of 
Hispanic serving institutions. I understand that the majority is 
willing to accept the amendment, so I will leave it at that.
  Mr. GOODLING. Mr. Chairman, will the gentleman yield to me?
  Mr. CLAY. I yield to the gentleman from Pennsylvania.
  Mr. GOODLING. Mr. Chairman, we accept the amendment.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Missouri (Mr. Clay).
  The amendment was agreed to.
  The CHAIRMAN. Are there further amendments to title V?
  The Clerk will designate title VI.
  The text of title VI is as follows:
        TITLE VI--INTERNATIONAL AND GRADUATE EDUCATION PROGRAMS

     SEC. 601. INTERNATIONAL AND FOREIGN LANGUAGE STUDIES.

       (a) Statutory Structure.--Title VI is amended--
       (1) by striking

         ``PART A--INTERNATIONAL AND FOREIGN LANGUAGE STUDIES''

     and inserting the following:

                   ``PART A--INTERNATIONAL EDUCATION

       ``Subpart 1--International and Foreign Language Studies'';

       (2) by striking

       ``PART B--BUSINESS AND INTERNATIONAL EDUCATION PROGRAMS''

     and inserting the following:

     ``Subpart 2--Business and International Education Programs'';

       (3) by striking

         ``PART C--INSTITUTE FOR INTERNATIONAL PUBLIC POLICY''

     and inserting the following:

     ``Subpart 3--Institute for International Public Policy''; and

       (4) by striking

                     ``PART D--GENERAL PROVISIONS''

     and inserting the following:

                   ``Subpart 4--General Provisions''.

       (b) Findings and Purposes.--Section 601 (20 U.S.C. 1121) is 
     amended to read as follows:

[[Page H2591]]

     ``SEC. 601. FINDINGS AND PURPOSES.

       ``(a) Findings.--The Congress finds as follows:
       ``(1) The security, stability, and economic vitality of the 
     United States in a complex global era depend upon American 
     experts in and citizens knowledgeable about world regions, 
     foreign languages and international affairs, as well as on a 
     strong research base in these areas.
       ``(2) Advances in communications technology and the growth 
     of regional and global problems make knowledge of other 
     countries and the ability to communicate in other languages 
     more essential to the promotion of mutual understanding and 
     cooperation among nations and their peoples.
       ``(3) Dramatic post-Cold War changes in the world's 
     geopolitical and economic landscapes are creating needs for 
     American expertise and knowledge about a greater diversity of 
     less commonly taught foreign languages and nations of the 
     world.
       ``(4) Systematic efforts are necessary to enhance the 
     capacity of institutions of higher education in the United 
     States and to encourage a broader cross-section of 
     institutions of higher education to develop and expand 
     programs for producing graduates with international and 
     foreign language expertise and knowledge, and research on 
     such areas, in a variety of disciplines and at all levels of 
     graduate and undergraduate education.
       ``(5) Cooperative efforts among the Federal Government, 
     institutions of higher education, and the private sector are 
     necessary to promote the generation and dissemination of 
     information about world regions, foreign languages, and 
     international affairs throughout education, government, 
     business, civic, and nonprofit sectors in the United States.
       ``(b) Purposes.--The purposes of this part are--
       ``(1)(A) to support centers, programs and fellowships in 
     institutions of higher education in the United States for 
     producing increased numbers of trained personnel and research 
     in foreign languages, area and other international studies;
       ``(B) to develop a pool of international experts to meet 
     national needs;
       ``(C) to develop and validate specialized materials and 
     techniques for foreign language acquisition and fluency, 
     emphasizing (but not limited to) the less commonly taught 
     languages;
       ``(D) to promote access to research and training overseas; 
     and
       ``(E) to advance the internationalization of a variety of 
     disciplines throughout undergraduate and graduate education;
       ``(2) to support cooperative efforts promoting access to 
     and the dissemination of international and foreign language 
     knowledge, teaching materials and research throughout 
     education, government, business, civic and nonprofit sectors 
     in the United States through the use of advanced 
     technologies; and
       ``(3) to coordinate the programs of the Federal Government 
     in the areas of foreign language, area and other 
     international studies, including professional international 
     affairs education and research.''.
       (c) Graduate and Undergraduate National Resource Centers.--
       (1) National resource centers.--Section 602(a) (20 U.S.C. 
     1122(a)) is amended--
       (A) in the heading, by striking ``National Language and 
     Area Centers Authorized'' and inserting ``National Resource 
     Centers for Foreign Language and Area or International 
     Studies Authorized'';
       (B) in paragraph (1)(A), by striking ``comprehensive 
     language and area centers'' and inserting ``comprehensive 
     foreign language and area or international studies centers'';
       (C) in paragraph (1)(B), by striking ``language and area 
     centers'' and inserting ``foreign language and area or 
     international studies centers''; and
       (D) by striking paragraph (2) and inserting the following:
       ``(2) Authorized activities.--
       ``(A) In general.--Any grant made under paragraph (1) may 
     be used to pay all or part of the cost of establishing or 
     operating a center or program, in accordance with this 
     subsection.
       ``(B) Mandatory activities.--Activities to be conducted by 
     centers assisted under this subsection shall include--
       ``(i) support for the instruction of foreign languages and 
     the offering of courses in a variety of nonlanguage 
     disciplines that cover the center's subject area or topic, 
     and the incorporation of such instruction in baccalaureate 
     and graduate programs of study in a variety of disciplinary, 
     interdisciplinary, or professional fields;
       ``(ii) support for teaching and research materials, 
     including library acquisitions, in the center's subject area 
     or topic;
       ``(iii) programs of outreach or linkage with State and 
     local educational agencies, postsecondary education 
     institutions at all levels, professional schools, government, 
     business, media, or the general public; and
       ``(iv) program coordination and development, curriculum 
     planning and development, and student advisement.
       ``(C) Permissible activities.--Activities to be conducted 
     by centers assisted under this subsection may include--
       ``(i) support for the creation of faculty positions in 
     disciplines that are underrepresented in the center's 
     instructional program;
       ``(ii) establishment and maintenance of linkages with 
     overseas institutions of higher education for the purpose of 
     contributing to the teaching and research of the center;
       ``(iii) support for bringing visiting scholars and faculty 
     to the center to teach or conduct research;
       ``(iv) professional development of the center's faculty and 
     staff;
       ``(v) projects conducted in cooperation with other National 
     Resource Centers addressing themes of world regional, cross-
     regional, international, or global importance;
       ``(vi) summer institutes in the United States or abroad 
     designed to provide language and area training in the 
     center's field or topic; and
       ``(vii) support for faculty, staff, and student travel in 
     foreign areas, regions, or countries, and for the development 
     and support of educational programs abroad for students.''.
       (2) Graduate fellowships; expense limitations.--Section 602 
     is further amended by striking subsections (b) and (c) and 
     inserting the following:
       ``(b) Graduate Fellowships for Foreign Language and Area or 
     International Studies.--
       ``(1) Authority.--The Secretary is authorized to make 
     grants to institutions of higher education or combinations of 
     such institutions for the purpose of paying fellowships to 
     individuals undergoing advanced training in any center or 
     program approved by the Secretary under this part.
       ``(2) Eligible students.--Students receiving fellowships 
     described in paragraph (1) shall be individuals who are 
     engaged in an instructional program with stated performance 
     goals for functional foreign language use or in a program 
     developing such performance goals, in combination with area 
     studies, international studies, or the international aspects 
     of a professional studies program, including predissertation 
     level studies, preparation for dissertation research, 
     dissertation research abroad, and dissertation writing.
       ``(c) Rules With Respect to Expenses.--
       ``(1) Undergraduate travel.--No funds may be expended under 
     this part for undergraduate travel except in accordance with 
     rules prescribed by the Secretary setting forth policies and 
     procedures to assure that Federal funds made available for 
     such travel are expended as part of a formal program of 
     supervised study.
       ``(2) Graduate dependent and travel expenses.--Fellowships 
     awarded to graduate level recipients may include allowances 
     for dependents and for travel for research and study in the 
     United States and abroad.''.
       (d) Language Resource Centers.--Section 603(a) (20 U.S.C. 
     1123(a)) is amended--
       (1) by striking paragraph (5) and inserting the following:
       ``(5) a significant focus on the teaching and learning 
     needs of the less commonly taught languages, including an 
     assessment of the strategic needs, the determination of ways 
     to meet those needs nationally, and the publication and 
     dissemination of instructional materials in the less commonly 
     taught languages;'';
       (2) by striking the period at the end of paragraph (6) and 
     inserting ``; and''; and
       (3) by inserting after paragraph (6) the following new 
     paragraph:
       ``(7) the operation of intensive summer language institutes 
     to train advanced foreign language students, provide 
     professional development, and improve language instruction 
     through preservice and inservice language training for 
     teachers.''.
       (e) Undergraduate International Studies and Foreign 
     Language Programs.--Section 604 (20 U.S.C. 1124) is amended--
       (1) in the heading of subsection (a), by striking 
     ``Incentives'' and all that follows through ``Programs'' and 
     inserting ``Program Incentives'';
       (2) in subsection (a)(1)--
       (A) by striking ``or combinations of such institutions'' in 
     the first sentence and inserting ``, combinations of such 
     institutions, or partnerships between nonprofit educational 
     organizations and such institutions,'';
       (B) by striking ``a program'' and inserting ``programs''; 
     and
       (C) by striking the second sentence and inserting the 
     following: ``Such grants shall be awarded for the purpose of 
     seeking to create new programs or to strengthen existing 
     programs in undergraduate area studies, foreign languages, 
     and other international fields.'';
       (3) by striking paragraphs (2) and (3) and inserting the 
     following:
       ``(2) Use of funds.--Grants made under this section may be 
     used for Federal share of the cost of projects and activities 
     which are an integral part of such a program, such as--
       ``(A) planning for the development and expansion of 
     programs in undergraduate international studies, and foreign 
     languages and the internationalization of undergraduate 
     education;
       ``(B) teaching, research, curriculum development, and other 
     related activities;
       ``(C) training of faculty members in foreign countries;
       ``(D) expansion of existing and development of new 
     opportunities for learning foreign languages, including the 
     less commonly taught languages;
       ``(E) programs under which foreign teachers and scholars 
     may visit institutions as visiting faculty;
       ``(F) international education programs designed to develop 
     or enhance linkages between two- and four-year institutions 
     of higher education, or baccalaureate and postbaccalaureate 
     programs or institutions;
       ``(G) the development of an international dimension in 
     preservice and inservice teacher training;
       ``(H) the development of undergraduate educational programs 
     in locations abroad where such opportunities are not 
     otherwise available or which serve students for whom such 
     opportunities are not otherwise available and which provide 
     courses that are closely related to on-campus foreign 
     language and international curricula;
       ``(I) the integration of new and continuing education 
     abroad opportunities for undergraduate students into 
     curricula of specific degree programs;

[[Page H2592]]

       ``(J) the development of model programs to enrich or 
     enhance the effectiveness of educational programs abroad, 
     including predeparture and postreturn programs, and the 
     integration of educational programs abroad into the 
     curriculum of the home institution;
       ``(K) the expansion of library and teaching resources;
       ``(L) the development of programs designed to integrate 
     professional and technical education with area studies, 
     foreign languages, and other international fields;
       ``(M) the establishment of linkages overseas with 
     institutions of higher education and organizations that 
     contribute to the educational objectives of this subsection;
       ``(N) the conduct of summer institutes in foreign area and 
     other international fields to provide faculty and curriculum 
     development, including the integration of professional and 
     technical education with foreign area and other international 
     studies, and to provide foreign area and other international 
     knowledge or skills to government personnel or private sector 
     professionals in international activities;
       ``(O) the development of partnerships between institutions 
     of higher education and the private sector, government, and 
     elementary and secondary education institutions to enhance 
     international knowledge and skills; and
       ``(P) the use of innovative technology to increase access 
     to international education programs.
       ``(3) Non-federal share.--The non-Federal share of the cost 
     of the programs assisted under this subsection may be 
     provided in cash from the private sector corporations or 
     foundations in an amount equal to one-third of the total 
     requested grant amount, or may be provided as in-cash or in-
     kind contribution from institutional and noninstitutional 
     funds, including State and private sector corporation or 
     foundation contributions, equal to one-half of the total 
     requested grant amount.'';
       (4) by adding at the end of subsection (a) the following 
     new paragraphs:
       ``(5) Special rule.--The Secretary may waive or reduce the 
     required non-Federal share for title III-eligible 
     institutions which have submitted a grant application under 
     this section.
       ``(6) Evaluation criteria and report.--As a condition for 
     the award of any grant under this subsection, the Secretary 
     may establish criteria for evaluating programs and require an 
     annual report which evaluates the progress and performance of 
     students in such programs.''.
       (5) by striking subsection (b);
       (6) by redesignating subsection (c) as subsection (b); and
       (7) by adding at the end the following new subsection:
       ``(c) Funding Support.--The Secretary may use no more than 
     10 percent of the total amount appropriated for this title, 
     other than amounts appropriated for part D, for carrying out 
     the purposes of this section.''.
       (f) Intensive Summer Language Institutes.--Section 605 (20 
     U.S.C. 1124a) is repealed.
       (g) Research; Studies; Annual report.--Section 606(a) (20 
     U.S.C. 1125(a)) is amended--
       (1) in paragraph (4), by inserting before the semicolon at 
     the end the following: ``, area studies, or other 
     international fields'';
       (2) by striking ``and'' at the end of paragraph (5);
       (3) by striking the period at the end of paragraph (6) and 
     inserting ``; and''; and
       (4) by inserting after paragraph (6) the following new 
     paragraph:
       ``(7) studies and surveys of the uses of technology in 
     foreign language, area and international studies programs.''.
       (h) Periodicals.--Section 607 (20 U.S.C. 1125a) is amended 
     to read as follows:

     ``SEC. 607. TECHNOLOGICAL INNOVATION AND COOPERATION FOR 
                   FOREIGN INFORMATION ACCESS.

       ``(a) Authority.--The Secretary is authorized to make 
     grants to institutions of higher education, public or 
     nonprofit private library institutions, or consortia of such 
     institutions, to develop innovative techniques or programs 
     using new electronic technologies to collect, organize, 
     preserve and widely disseminate information on world regions 
     and countries other than the United States that address the 
     nation's teaching and research needs in international 
     education and foreign languages.
       ``(b) Authorized Activities.--Grants under this section may 
     be used--
       ``(1) to facilitate access to or preserve foreign 
     information resources in print or electronic forms;
       ``(2) to develop new means of immediate, full-text document 
     delivery for information and scholarship from abroad;
       ``(3) to develop new means of shared electronic access to 
     international data;
       ``(4) to support collaborative projects of indexing, 
     cataloging, and other means of bibliographic access for 
     scholars to important research materials published or 
     distributed outside the United States;
       ``(5) to develop methods for the wide dissemination of 
     resources written in non-Roman language alphabets;
       ``(6) to assist teachers of less commonly taught languages 
     in acquiring, via electronic and other means, materials 
     suitable for classroom use; and
       ``(7) to promote collaborative technology based projects in 
     foreign languages, area and international studies among grant 
     recipients under this title.
       ``(c) Application.--Each institution or consortium desiring 
     a grant under this section shall submit an application to the 
     Secretary at such time, in such manner, and accompanied by 
     such information and assurances as the Secretary may 
     reasonably require.
       ``(d) Match Required.--The Federal share of the total cost 
     of carrying out a program supported by a grant under this 
     section shall not be more than 66\2/3\ percent. The non-
     Federal share of such cost may be provided either in-kind or 
     in cash, and may include contributions from private sector 
     corporations or foundations.''.
       (i) Development Grants.--Section 610 (20 U.S.C. 1127) is 
     amended by adding at the end the following new subsection:
       ``(d) Development Grants Authorized.--The Secretary is 
     encouraged to consider the establishment of new centers, and 
     may use at least 10 percent of the funds available for this 
     section to make grants for the establishment of such new 
     centers.''.
       (j) Authorization of Appropriations.--Section 610A (20 
     U.S.C. 1128) is amended by striking ``1993'' and inserting 
     ``1999''.
       (k) Conforming Amendment.--Title VI is further amended by 
     redesignating sections 606, 607, 608, 609, 610, and 610A as 
     sections 605 through 610, respectively.

     SEC. 602. BUSINESS AND INTERNATIONAL EDUCATION PROGRAMS.

       (a) Centers for International Business Education.--Section 
     612 (20 U.S.C. 1130-1) is amended--
       (1) in subsection (c)(1)(B), by striking ``advanced'';
       (2) in subsection (c)(1)(C), by striking ``evening or 
     summer programs,'' and inserting ``programs''; and
       (3) in subsection (d)(2)(G), by inserting before the period 
     at the end the following: ``, such as a representative of a 
     community college in the region served by the center''.
       (b) Authorization of Appropriations.--Section 614 (20 
     U.S.C. 1130b) is amended by striking ``1993'' each place it 
     appears and inserting ``1999''.
       (c) Technical Amendment.--The heading of section 611 (20 
     U.S.C. 1130) is amended to read as follows:

     ``SEC. 611. FINDINGS AND PURPOSES.''.

     SEC. 603. INSTITUTE FOR INTERNATIONAL PUBLIC POLICY.

       (a) Minority Foreign Service Professional Development 
     Program.--Section 621(e) (20 U.S.C. 1131(e)) is amended by 
     striking ``one-fourth'' and inserting ``one-half''.
       (b) Junior Year and Summer Abroad Program.--Section 622 (20 
     U.S.C. 1131a) is amended--
       (1) in the heading of such section, by inserting ``AND 
     SUMMER'' after ``YEAR'';
       (2) in subsection (a)--
       (A) by striking ``shall conduct'' and inserting ``is 
     authorized to conduct'';
       (B) by inserting ``and summer'' after ``junior year'' each 
     place it appears in the first and second sentences;
       (C) by inserting ``in a junior year abroad program'' after 
     ``Each student'' in the last sentence;
       (3) in subsection (b)(2), by inserting ``or summer'' after 
     ``junior year''; and
       (4) in subsection (c)--
       (A) by inserting ``or summer abroad program'' after 
     ``junior year abroad program'' each place it appears; and
       (B) by striking ``abroad or internship'' and inserting 
     ``abroad, summer abroad, or internship''.
       (c) Internships.--Section 624 (20 U.S.C. 1132c) is 
     amended--
       (1) by striking ``The Institute'' and inserting ``(a) In 
     General.--The Institute''; and
       (2) by adding at the end the following new subsection:
       ``(b) Postbaccalaureate Internships.--The Institute shall 
     enter into agreements with institutions of higher education 
     described in the first sentence of subsection (a) to conduct 
     internships in Washington, DC, for students who have 
     completed study for the baccalaureate degree. The 
     Internship program authorized by this subsection shall--
       ``(1) be designated to assist the students to prepare for a 
     master's degree program;
       ``(2) be carried out with the assistance of the Woodrow 
     Wilson Fellowship program;
       ``(3) contain work experience for the students designated 
     to contribute to the objectives set forth in paragraph (1); 
     and
       ``(4) contain such other elements as the Institute 
     determines will carry out the objectives of this 
     subsection.''.
       (d) New Programs.--Title VI is further amended--
       (1) by redesignating sections 625 through 627 (20 U.S.C. 
     1131d-1131f) as sections 627 through 629; and
       (2) by inserting after section 624 the following new 
     sections:

     ``SEC. 625. INSTITUTIONAL DEVELOPMENT.

       ``(a) In General.--The Institute shall make grants, from 
     amounts available to it in each fiscal year, to Historically 
     Black Colleges and Universities, Hispanic-serving 
     Institutions, Tribally Controlled Indian Community Colleges, 
     and minority institutions, to enable such colleges, 
     universities, and institutions to strengthen international 
     affairs programs.
       ``(b) Application.--No grant may be made by the Institute 
     under this section unless an application is made by the 
     college, university, or institution at such time, in such 
     manner, and accompanied by such information as the Institute 
     may require.
       ``(c) Definitions.--As used in this section--
       ``(1) the term `Historically Black College and University' 
     has the same meaning given the term by section 322(2) of this 
     Act;
       ``(2) the term `Hispanic-serving Institution' has the same 
     meaning given the term by section 316(b)(1) of this Act;
       ``(3) the term `Tribally controlled Indian community 
     college' has the same meaning given that term by the Tribally 
     Controlled Community College Assistance Act of 1978; and
       ``(4) the term `minority institution' has the same meaning 
     given that term in section 347 of this Act.

     ``SEC. 626. INTERAGENCY COMMITTEE ON MINORITY CAREERS IN 
                   INTERNATIONAL AFFAIRS.

       ``(a) Establishment.--There is established in the executive 
     branch of the Federal Government

[[Page H2593]]

     an Interagency Committee on Minority Careers in International 
     Affairs composed of 7 members. The members of the Committee 
     shall be--
       ``(1) the Undersecretary for International Affairs and 
     Commodity Programs of the Department of Agriculture, 
     appointed by the Secretary of Agriculture;
       ``(2) the Assistant Secretary and Director General, the 
     Commercial Service of the Department of Commerce, appointed 
     by the Secretary of Commerce;
       ``(3) the Undersecretary of Defense for Personnel and 
     Readiness of the Department of Defense, appointed by the 
     Secretary of Defense;
       ``(4) the Assistant Secretary for Postsecondary Education 
     in the Department of Education, appointed by the Secretary of 
     Education;
       ``(5) the Director General of the Foreign Service of the 
     Department of State, appointed by the Secretary of State;
       ``(6) the General Counsel of the Agency for International 
     Development, appointed by the Administrator; and
       ``(7) the Associate Director for Educational and Cultural 
     Affairs of the United States Information Agency, appointed by 
     the Director.
       ``(b) Functions.--The Interagency Committee established by 
     this section shall--
       ``(1) advise the Secretary and the Institute with respect 
     to programs authorized by this part; and
       ``(2) promote policies in each department and agency 
     participating on the Committee that are designed to carry out 
     the objectives of this part.''.
       (e) Authorization.--Section 629 (20 U.S.C. 1131f) (as 
     redesignated by subsection (d)) is amended by striking 
     ``1993'' and inserting ``1999''.

     SEC. 604. GENERAL PROVISIONS.

       (a) Definitions.--Section 631(a) (20 U.S.C. 1132(a)) is 
     amended--
       (1) by striking ``and'' at the end of paragraph (7);
       (2) by striking the period at the end of paragraph (8) and 
     inserting ``; and''; and
       (3) by inserting after paragraph (8) the following new 
     paragraphs:
       ``(9) the term `internationalization of undergraduate 
     education' means the incorporation of foreign languages and 
     area and international studies perspectives in any 
     undergraduate course or curriculum in order to provide 
     international content for that course of study; and
       ``(10) the term `educational programs abroad' means 
     programs of study, internships, or service learning outside 
     the United States which are part of a foreign language or 
     other international curriculum at the undergraduate or 
     graduate education levels.''.
       (b) Repeal.--Section 632 (20 U.S.C. 1132-1) is repealed.

     SEC. 605. TRANSFER AND REAUTHORIZATION OF GRADUATE ASSISTANCE 
                   IN AREAS OF NATIONAL NEED PROGRAM.

       (a) Amendment.--Title VI is amended by adding at the end 
     the following new part:

        ``PART B--GRADUATE ASSISTANCE IN AREAS OF NATIONAL NEED

     ``SEC. 651. PURPOSE.

       ``In order to sustain and enhance the capacity for graduate 
     education in areas of national need, it is the purpose of 
     this part to provide, through academic departments and 
     programs of institutions of higher education, a fellowship 
     program to assist graduate students of superior ability who 
     demonstrate financial need.

     ``SEC. 652. GRANTS TO ACADEMIC DEPARTMENTS AND PROGRAMS OF 
                   INSTITUTIONS.

       ``(a) Grant Authority.--
       ``(1) In general.--The Secretary shall make grants to 
     academic departments and programs and other academic units of 
     institutions of higher education that provide courses of 
     study leading to a graduate degree in order to enable such 
     institutions to provide assistance to graduate students in 
     accordance with this part. The Secretary shall coordinate the 
     administration and regulation of programs under this part 
     with other Federal programs providing graduate assistance to 
     minimize duplication and improve efficiency.
       ``(2) Additional grants.--The Secretary may also make 
     grants to such departments and programs and to other units of 
     institutions of higher education granting graduate degrees 
     which submit joint proposals involving nondegree granting 
     institutions which have formal arrangements for the support 
     of doctoral dissertation research with degree-granting 
     institutions. Nondegree granting institutions eligible for 
     awards as part of such joint proposals include any 
     organization which--
       ``(A) is described in section 501(c)(3) of the Internal 
     Revenue Code of 1986, and is exempt from tax under section 
     501(a) of such Code;
       ``(B) is organized and operated substantially to conduct 
     scientific and cultural research and graduate training 
     programs;
       ``(C) is not a private foundation;
       ``(D) has academic personnel for instruction and counseling 
     who meet the standards of the institution of higher education 
     in which the students are enrolled; and
       ``(E) has necessary research resources not otherwise 
     readily available in such institutions to such students.
       ``(b) Award and Duration of Grants.--
       ``(1) Awards.--The principal criterion for the allocation 
     of awards shall be the relative quality of the graduate 
     programs presented in competing applications. Consistent with 
     an allocation of awards based on quality of competing 
     applications, the Secretary shall, in making such grants, 
     promote an equitable geographic distribution among eligible 
     public and private institutions of higher education.
       ``(2) Duration.--The Secretary shall approve a grant 
     recipient under this part for a 3-year period. From the sums 
     appropriated under this part for any fiscal year, the 
     Secretary shall not make a grant to any academic department 
     or program of an institution of higher education of less than 
     $125,000 or greater than $750,000 per fiscal year.
       ``(3) Reallotment.--Whenever the Secretary determines that 
     an academic department or program of an institution of higher 
     education is unable to use all of the amounts available to it 
     under this part, the Secretary shall, on such dates during 
     each fiscal year as the Secretary may fix, reallot the 
     amounts not needed to academic departments and programs of 
     institutions which can use the grants authorized by this 
     part.

     ``SEC. 653. INSTITUTIONAL ELIGIBILITY.

       ``(a) Eligibility Criteria.--Any academic department or 
     program of an institution of higher education that offers a 
     program of postbaccalaureate study leading to a graduate 
     degree in an area of national need (as designated under 
     subsection (b)) may apply for a grant under this part. No 
     department or program shall be eligible for a grant unless 
     the program of postbaccalaureate study has been in existence 
     for at least 4 years at the time of application for 
     assistance under this part.
       ``(b) Designation of Areas of National Need.--After 
     consultation with appropriate Federal and nonprofit agencies 
     and organizations, the Secretary shall designate areas of 
     national need. In making such designations, the Secretary 
     shall take into account the extent to which the interest is 
     compelling, the extent to which other Federal programs 
     support postbaccalaureate study in the area concerned, and an 
     assessment of how the program could achieve the most 
     significant impact with available resources.

     ``SEC. 654. CRITERIA FOR APPLICATIONS.

       ``(a) Selection of Applications.--The Secretary shall make 
     grants to academic departments and programs of institutions 
     of higher education on the basis of applications submitted in 
     accordance with subsection (b). Applications shall be ranked 
     on program quality by review panels of nationally recognized 
     scholars and evaluated on the quality and effectiveness of 
     the academic program and the achievement and promise of the 
     students to be served. To the extent possible (consistent 
     with other provisions of this section), the Secretary shall 
     make awards that are consistent with recommendations of the 
     review panels.
       ``(b) Contents of Applications.--An academic department or 
     program of an institution of higher education, in its 
     application for a grant, shall--
       ``(1) describe the current academic program of the 
     applicant for which the grant is sought;
       ``(2) provide assurances that the applicant will provide, 
     from other non-Federal funds, for the purposes of the 
     fellowship program under this part an amount equal to at 
     least 25 percent of the amount of the grant received under 
     this part, which contribution may be in cash or in kind 
     fairly valued;
       ``(3) describe the number, types, and amounts of the 
     fellowships that the applicant intends to offer under the 
     grant;
       ``(4) set forth policies and procedures to assure that, in 
     making fellowship awards under this part, the institution 
     will make awards to individuals who--
       ``(A) have financial need, as determined under part F of 
     title IV;
       ``(B) have excellent academic records in their previous 
     programs of study; and
       ``(C) plan to pursue the highest possible degree available 
     in their course of study;
       ``(5) set forth policies and procedures to ensure that 
     Federal funds made available under this part for any fiscal 
     year will be used to supplement and, to the extent practical, 
     increase the funds that would otherwise be made available for 
     the purpose of this part and in no case to supplant those 
     funds;
       ``(6) provide assurances that, in the event that funds made 
     available to the academic department or program under this 
     part are insufficient to provide the assistance due a student 
     under the commitment entered into between the academic 
     department or program and the student, the academic 
     department or program will, from any funds available to it, 
     fulfill the commitment to the student;
       ``(7) provide that the applicant will comply with the 
     limitations set forth in section 655;
       ``(8) provide assurances that the academic department will 
     provide at least 1 year of supervised training in instruction 
     for students; and
       ``(9) include such other information as the Secretary may 
     prescribe.

     ``SEC. 655. AWARDS TO GRADUATE STUDENTS.

       ``(a) Commitments to Graduate Students.--
       ``(1) In general.--An academic department or program of an 
     institution of higher education shall make commitments to 
     eligible graduate students as defined in section 484 
     (including students pursuing a doctoral degree after having 
     completed a master's degree program at an institution of 
     higher education) at any point in their graduate study to 
     provide stipends for the length of time necessary for a 
     student to complete the course of graduate study, but in no 
     case longer than 3 years.
       ``(2) Special rule.--No such commitments shall be made to 
     students under this part unless the academic department or 
     program has determined adequate funds are available to 
     fulfill the commitment either from funds received or 
     anticipated under this part, or from institutional funds.
       ``(b) Amount of Stipends.--The Secretary shall make 
     payments to institutions of higher education for the purpose 
     of paying stipends to individuals who are awarded fellowships 
     under this part. The stipends the Secretary establishes shall 
     reflect the purpose of this program to encourage highly 
     talented students to undertake graduate study as described in 
     this part. In the

[[Page H2594]]

     case of an individual who receives such individual's first 
     stipend under this part in academic year 1999-2000 or any 
     succeeding academic year, such stipend shall be set at a 
     level of support equal to that provided by the National 
     Science Foundation graduate fellowships, except such amount 
     shall be adjusted as necessary so as not to exceed the 
     fellow's demonstrated level of need as determined under part 
     F of title IV.
       ``(c) Treatment of Institutional Payments.--An institution 
     of higher education that makes institutional payments for 
     tuition and fees on behalf of individuals supported by 
     fellowships under this part in amounts that exceed the 
     institutional payments made by the Secretary pursuant to 
     section 656(a) may count the excess of such payments toward 
     the amounts the institution is required to provide pursuant 
     to section 654(b)(2).
       ``(d) Academic Progress Required.--Notwithstanding the 
     provisions of subsection (a), no student shall receive an 
     award--
       ``(1) except during periods in which such student is 
     maintaining satisfactory progress in, and devoting 
     essentially full time to, study or research in the field in 
     which such fellowship was awarded, or
       ``(2) if the student is engaging in gainful employment 
     other than part-time employment involved in teaching, 
     research, or similar activities determined by the institution 
     to be in support of the student's progress towards a degree.

     ``SEC. 656. ADDITIONAL ASSISTANCE FOR COST OF EDUCATION.

       ``(a) Institutional Payments.--(1) The Secretary shall (in 
     addition to stipends paid to individuals under this part) pay 
     to the institution of higher education, for each individual 
     awarded a fellowship under this part at such institution, an 
     institutional allowance. Except as provided in paragraph (2), 
     such allowance shall be--
       ``(A) $10,000 annually with respect to individuals who 
     first received fellowships under this part prior to academic 
     year 1999-2000; and
       ``(B) with respect to individuals who first receive 
     fellowships during or after academic year 1999-2000--
       ``(i) $10,000 for the academic year 1999-2000; and
       ``(ii) for succeeding academic years, $10,000 adjusted 
     annually thereafter in accordance with inflation as 
     determined by the Department of Labor's Consumer Price Index 
     for the previous calendar year.
       ``(2) The institutional allowance paid under paragraph (1) 
     shall be reduced by the amount the institution charges and 
     collects from a fellowship recipient for tuition and other 
     expenses as part of the recipient's instructional program.
       ``(b) Use for Overhead Prohibited.--Funds made available 
     pursuant to this part may not be used for the general 
     operational overhead of the academic department or program.

     ``SEC. 657. CONTINUATION AWARDS.

       ``Before making new awards under this part for any fiscal 
     year, the Secretary shall, as appropriate, making 
     continuation awards to recipients of awards under parts B, C, 
     and D of title IX as in effect prior to the enactment of the 
     Higher Education Amendments of 1998.

     ``SEC. 658. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated $40,000,000 for 
     fiscal year 1999 and such sums as may be necessary for each 
     of the 4 succeeding fiscal years to carry out this part.''.
       (b) Repeal.--Title IX (20 U.S.C. 1134 et seq.) is repealed.

  The CHAIRMAN. Are there any amendments to title VI?


                 Amendment No. 21 Offered By Mr. Kildee

  Mr. KILDEE. Mr. Chairman, I offer an amendment on behalf of the 
gentleman from California (Mr. Farr).
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 21 offered by Mr. Kildee:
       Page 310, strike line 3 and insert the following (and 
     redesignate the succeeding paragraph accordingly):
       (3) in subsection (c)(2)--
       (A) by striking ``and'' at the end of subparagraph (E);
       (B) by redesignating subparagraph (F) as subparagraph (G); 
     and
       (C) by inserting after subparagraph (E) the following new 
     subparagraph;
       ``(F) professional graduate degrees in translation and 
     interpretation; and''; and

  Mr. KILDEE. Mr. Chairman, I will be very brief. This provides funds 
under section F for professional graduate degrees in translation and 
interpretation. It adds those being eligible for funds.
  Mr. GOODLING. Mr. Chairman, will the gentleman yield to me?
  Mr. KILDEE. I yield to the gentleman from Pennsylvania.
  Mr. GOODLING. Mr. Chairman, we accept the amendment.
  Mr. KILDEE. Mr. Chairman, I thank the gentleman for accepting the 
amendment.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Michigan (Mr. Kildee).
  The amendment was agreed to.
  The CHAIRMAN. Are there further amendments to title VI?
  The Clerk will designate title VII.
  The text of title VII is as follows:
  TITLE VII--CONSTRUCTION, RECONSTRUCTION, AND RENOVATION OF ACADEMIC 
                               FACILITIES

     SEC. 701. EXTENSION OF PRIOR RIGHTS AND OBLIGATIONS.

       Section 702(a) (20 U.S.C. 1132a-1(a)) is amended by 
     striking ``fiscal year 1993'' and inserting ``fiscal year 
     1999''.

     SEC. 702. REPEAL OF PART A.

       (a) Repeal.--Part A of title VII (20 U.S.C. 1132b et seq.) 
     is repealed.
       (b) Conforming Amendments.--
       (1) Section 701(b) (20 U.S.C. 1132a(b)) is amended by 
     striking ``part A or B'' and inserting ``part B''.
       (2) Part B of title VII is amended by striking section 726 
     (20 U.S.C. 1132c-5).
       (3) Section 781 (20 U.S.C. 1132i) is amended by striking 
     ``part A of this title, or'' each place it appears.

     SEC. 703. EXTENSION OF AUTHORIZATION OF PART B.

       Section 727(c) (20 U.S.C. 1132c-6(c)) is amended by 
     striking ``fiscal year 1993'' and inserting ``fiscal year 
     1999''.

     SEC. 704. EXTENSION OF AUTHORIZATION OF PART C.

       Section 735 (20 U.S.C. 1132d-4) is amended by striking 
     ``fiscal year 1993'' and inserting ``fiscal year 1999''.

  Mr. GOODLING. Mr. Chairman, I move that the Committee do now rise.
  The motion was agreed to.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. 
Riggs) having assumed the chair, Mr. Gutknecht, Chairman of the 
Committee of the Whole House on the State of the Union, reported that 
that Committee, having had under consideration the bill (H.R. 6) to 
extend the authorization of programs under the Higher Education Act of 
1965, and for other purposes, had come to no resolution thereon.

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