[Congressional Record Volume 144, Number 90 (Thursday, July 9, 1998)]
[Senate]
[Pages S7723-S7759]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  HIGHER EDUCATION AMENDMENTS OF 1998

  Mr. JEFFORDS. Mr. President, I ask unanimous consent that the Senate 
now turn to the consideration of S. 1882, the higher education bill, 
under the consent agreement of June 25, 1998.
  The PRESIDING OFFICER. Under the previous order, the clerk will 
report the bill.
  The bill clerk read as follows:

       A bill (S. 1882) to reauthorize the Higher Education Act of 
     1965, and for other purposes.


[[Page S7724]]


  There being no objection, the Senate proceeded to consider the 
bill which had been reported from the Committee on Labor and Human 
Resources, with an amendment to strike all after the enacting clause 
and inserting in lieu thereof the following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Higher 
     Education Amendments of 1998''.
       (b) Table of Contents.--The table of contents is as 
     follows:

Sec. 1. Short title; table of contents.
Sec. 2. References.

                      TITLE I--GENERAL PROVISIONS

Sec. 101. General provisions.
Sec. 102. Federal control of education prohibited.
Sec. 103. National Advisory Committee on Institutional Quality and 
              Integrity.
Sec. 104. Prior rights and obligations; recovery of payments.
Sec. 105. Technical and conforming amendments.

                  TITLE II--IMPROVING TEACHER QUALITY

Sec. 201. Improving teacher quality.

                      TITLE III--INSTITUTIONAL AID

Sec. 301. Transfers and redesignations.
Sec. 302. Findings.
Sec. 303. Strengthening institutions.
Sec. 304. Strengthening HBCU's.
Sec. 305. Endowment challenge grants.
Sec. 306. HBCU capital financing.
Sec. 307. Minority science and engineering improvement program.
Sec. 308. General provisions.

                      TITLE IV--STUDENT ASSISTANCE

  Part A--Grants to Students in Attendance at Institutions of Higher 
                               Education

Sec. 411. Repeals and redesignations.
Sec. 412. Federal Pell grants.
Sec. 413. TRIO programs.
Sec. 414. National early intervention scholarship and partnership 
              program.
Sec. 415. Federal supplemental educational opportunity grants.
Sec. 416. Leveraging educational assistance partnership program.
Sec. 417. HEP and CAMP.
Sec. 418. Robert C. Byrd honors scholarship program.
Sec. 419. Child care access means parents in school.

             Part B--Federal Family Education Loan Program

Sec. 421. Advances for reserve funds.
Sec. 422. Federal Student Loan Reserve Fund.
Sec. 423. Agency Operating Fund.
Sec. 424. Applicable interest rates.
Sec. 425. Federal payments to reduce student interest costs.
Sec. 426. Voluntary flexible agreements with guaranty agencies.
Sec. 427. Federal PLUS loans.
Sec. 428. Federal consolidation loans.
Sec. 429. Requirements for disbursements of student loans.
Sec. 430. Default reduction program.
Sec. 431. Unsubsidized loans.
Sec. 432. Loan forgiveness for teachers.
Sec. 433. Loan forgiveness for child care providers.
Sec. 434. Common forms and formats.
Sec. 435. Student loan information by eligible lenders.
Sec. 436. Definitions.
Sec. 437. Delegation of functions.
Sec. 438. Special allowances.
Sec. 439. Study of market-based mechanisms for determining student loan 
              interest rates.

                  Part C--Federal Work-Study Programs

Sec. 441. Authorization of appropriations; community services.
Sec. 442. Grants for Federal work-study programs.
Sec. 443. Work colleges.

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

Sec. 451. Selection of institutions.
Sec. 452. Terms and conditions.
Sec. 453. Contracts.
Sec. 454. Funds for administrative expenses.
Sec. 455. Loan cancellation for teachers.

                     Part E--Federal Perkins Loans

Sec. 461. Authorization of appropriations.
Sec. 462. Allocation of funds.
Sec. 463. Agreements with institutions of higher education.
Sec. 464. Terms of loans.
Sec. 465. Distribution of assets from student loan funds.
Sec. 466. Perkins Loan Revolving Fund.

                         Part F--Need Analysis

Sec. 471. Cost of attendance.
Sec. 472. Family contribution for dependent students.
Sec. 473. Family contribution for independent students without 
              dependents other than a spouse.
Sec. 474. Regulations; updated tables and amounts.
Sec. 475. Refusal or adjustment of loan certifications.

                       Part G--General Provisions

Sec. 481. Master calendar.
Sec. 482. Forms and regulations.
Sec. 483. Student eligibility.
Sec. 484. Institutional refunds.
Sec. 485. Institutional and financial assistance information for 
              students.
Sec. 486. National student loan data bank system.
Sec. 487. Training in financial aid services.
Sec. 488. Program participation agreements.
Sec. 489. Regulatory relief and improvement.
Sec. 489A. Distance education demonstration programs.
Sec. 489B. Advisory Committee on Student Financial Assistance.
Sec. 489C. Regional meetings and negotiated rulemaking.

                    Part H--Program Integrity Triad

Sec. 491. State role and responsibilities.
Sec. 492. Accrediting agency recognition.
Sec. 493. Eligibility and certification procedures.
Sec. 494. Program review and data.

  Part I--Administrative Provisions for Delivery of Student Financial 
                               Assistance

Sec. 495. Performance-based organization for the delivery of Federal 
              student financial assistance.

        TITLE V--GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS

Sec. 501. Repeals, transfers, and redesignations.
Sec. 502. Purpose.

               Part A--Jacob K. Javits Fellowship Program

Sec. 511. Award of fellowships.

         Part B--Graduate Assistance in Areas of National Need

Sec. 521. Graduate assistance in areas of national need.

                    Part C--Urban Community Service

Sec. 531. Urban community service.

      Part D--Fund for the Improvement of Postsecondary Education

Sec. 541. Fund for the improvement of postsecondary education.

    Part E--Higher Education Access for Students With Disabilities; 
           Hispanic-Serving Institutions; General Provisions

Sec. 551. Higher education access for students with disabilities; 
              Hispanic-serving institutions; general provisions.

               TITLE VI--INTERNATIONAL 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.

        TITLE VII--RELATED PROGRAMS AND AMENDMENTS TO OTHER ACTS

                   Part A--Indian Education Programs

Sec. 711. Tribally Controlled Community College Assistance Act of 1978.
Sec. 712. American Indian, Alaska Native, and Native Hawaiian culture 
              and art development.

              Part B--Advanced Placement Incentive Program

Sec. 721. Advanced placement incentive program.

                Part C--United States Institute of Peace

Sec. 731. Authorities of the United States Institute of Peace.

               Part D--Community Scholarship Mobilization

Sec. 741. Short title.
Sec. 742. Findings.
Sec. 743. Definitions.
Sec. 744. Purpose, endowment grant authority.
Sec. 745. Grant agreement and requirements.
Sec. 746. Authorization of appropriations.

    Part E--Grants to States for Workplace and Community Transition 
               Training for Incarcerated Youth Offenders

Sec. 751. Grants to States for workplace and community transition 
              training for incarcerated youth offenders.

                     Part F--Education of the Deaf

Sec. 761. Short title.
Sec. 762. Elementary and secondary education programs.
Sec. 763. Agreement with Gallaudet University.
Sec. 764. Agreement for the National Technical Institute for the Deaf.
Sec. 765. Definitions.
Sec. 766. Gifts.
Sec. 767. Reports.
Sec. 768. Monitoring, evaluation, and reporting.
Sec. 769. Investments.
Sec. 770. International students.
Sec. 771. Research priorities.
Sec. 772. Authorization of appropriations.
Sec. 773. Commission on Education of the Deaf.

                            Part G--Repeals

Sec. 781. Repeals.

                         Part H--Miscellaneous

Sec. 791. Year 2000 computer problem.

     SEC. 2. 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.).

                      TITLE I--GENERAL PROVISIONS

     SEC. 101. GENERAL PROVISIONS.

       (a) Repeal; Transfer and Redesignation.--The Act (20 U.S.C. 
     1001 et seq.) is amended--
       (1) by repealing title I (20 U.S.C. 1001 et seq.);
       (2) by repealing sections 1203, 1206, 1211, and 1212 (20 
     U.S.C. 1143, 1145a, 1145e, and 1145f);
       (3) by striking the heading for title XII (20 U.S.C. 1141 
     et seq.);
       (4) by inserting before title III (20 U.S.C. 1051 et seq.) 
     the following:

                    ``TITLE I--GENERAL PROVISIONS'';

       (5) by transferring sections 1201, 1202, 1204 (as 
     renumbered by Public Law 90-575), 1204 (as added by Public 
     Law 96-374), 1205, 1207, 1208, 1209, 1210, and 1213 (20 
     U.S.C. 1141, 1142, 1144,

[[Page S7725]]

     1144a, 1145, 1145b, 1145c, 1145d, 1145d-1, and 1145g) to 
     follow the heading for title I (as inserted by paragraph 
     (4)); and
       (6) by redesignating sections 1201, 1202, 1204 (as 
     renumbered by Public Law 90-575), 1204 (as added by Public 
     Law 96-374), 1205, 1207, 1208, 1209, 1210, and 1213 as 
     sections 101, 102, 103, 104, 105, 106, 107, 108, 109, and 
     110, respectively.

     SEC. 102. FEDERAL CONTROL OF EDUCATION PROHIBITED.

       Section 103 (as redesignated by section 101(a)(6)) (20 
     U.S.C. 1144) is amended by striking ``(b)''.

     SEC. 103. NATIONAL ADVISORY COMMITTEE ON INSTITUTIONAL 
                   QUALITY AND INTEGRITY.

       Section 105 (as redesignated by section 101(a)(6)) (20 
     U.S.C. 1145) is amended--
       (1) by striking the last sentence of subsection (a);
       (2) by redesignating subsections (c) through (f) as 
     subsections (d) through (g), respectively;
       (3) by inserting after subsection (b) the following:
       ``(c) Public Notice.--The Secretary shall--
       ``(1) annually publish in the Federal Register a list 
     containing the name of each member of the Committee and the 
     date of the expiration of the term of office of the member; 
     and
       ``(2) publicly solicit nominations for each vacant position 
     or expiring term of office on the Committee.'';
       (4) in subsection (d) (as redesignated by paragraph (2))--
       (A) by striking paragraph (6); and
       (B) by redesignating paragraphs (7) and (8) as paragraphs 
     (6) and (7), respectively; and
       (5) in subsection (g) (as redesignated by paragraph (2)), 
     by striking ``1998'' and inserting ``2004''.

     SEC. 104. PRIOR RIGHTS AND OBLIGATIONS; RECOVERY OF PAYMENTS.

       Title I (20 U.S.C. 1001 et seq.) is amended by adding after 
     section 110 (as redesignated by section 101(a)(6)) the 
     following:

     ``SEC. 111. PRIOR RIGHTS AND OBLIGATIONS.

       ``(a) Authorization of Appropriations.--
       ``(1) Pre-1987 parts c and d of title vii.--There are 
     authorized to be appropriated such sums as may be necessary 
     for fiscal year 1999 and for each of the 4 succeeding fiscal 
     years to pay obligations incurred prior to 1987 under parts C 
     and D of title VII, as such parts were in effect before the 
     effective date of the Higher Education Amendments of 1992.
       ``(2) Post-1992 and pre-1998 part c of title vii.--There 
     are authorized to be appropriated such sums as may be 
     necessary for fiscal year 1999 and for each of the 4 
     succeeding fiscal years to pay obligations incurred prior to 
     the date of enactment of the Higher Education Amendments of 
     1998 under part C of title VII, as such part was in effect 
     during the period--
       ``(A) after the effective date of the Higher Education 
     Amendments of 1992; and
       ``(B) prior to the date of enactment of the Higher 
     Education Amendments of 1998.
       ``(b) Legal Responsibilities.--
       ``(1) Pre-1987 title vii.--All entities with continuing 
     obligations incurred under parts A, B, C, and D of title VII, 
     as such parts were in effect before the effective date of the 
     Higher Education Amendments of 1992, shall be subject to the 
     requirements of such part as in effect before the effective 
     date of the Higher Education Amendments of 1992.
       ``(2) Post-1992 and pre-1998 part c of title vii.--All 
     entities with continuing obligations incurred under part C of 
     title VII, as such part was in effect during the period--
       ``(A) after the effective date of the Higher Education 
     Amendments of 1992; and
       ``(B) prior to the date of enactment of the Higher 
     Education Amendments of 1998,
     shall be subject to the requirements of such part as such 
     part was in effect during such period.

     ``SEC. 112. RECOVERY OF PAYMENTS.

       ``(a) Public Benefit.--Congress declares that, if a 
     facility constructed with the aid of a grant under part A of 
     title VII as such part A was in effect prior to the date of 
     enactment of the Higher Education Amendments of 1998, or part 
     B of such title as such part B was in effect prior to the 
     date of enactment of the Higher Education Amendments of 1992, 
     is used as an academic facility for 20 years following 
     completion of such construction, the public benefit accruing 
     to the United States will equal in value the amount of the 
     grant. The period of 20 years after completion of such 
     construction shall therefore be deemed to be the period of 
     Federal interest in such facility for the purposes of such 
     title as so in effect.
       ``(b) Recovery Upon Cessation of Public Benefit.--If, 
     within 20 years after completion of construction of an 
     academic facility which has been constructed, in part with a 
     grant under part A of title VII as such part A was in effect 
     prior to the date of enactment of the Higher Education 
     Amendments of 1998, or part B of title VII as such part B was 
     in effect prior to the date of enactment of the Higher 
     Education Amendments of 1992--
       ``(1) the applicant under such parts as so in effect (or 
     the applicant's successor in title or possession) ceases or 
     fails to be a public or nonprofit institution, or
       ``(2) the facility ceases to be used as an academic 
     facility, or the facility is used as a facility excluded from 
     the term `academic facility' (as such term was defined under 
     title VII, as so in effect), unless the Secretary determines 
     that there is good cause for releasing the institution from 
     its obligation,

     the United States shall be entitled to recover from such 
     applicant (or successor) an amount which bears to the value 
     of the facility at that time (or so much thereof as 
     constituted an approved project or projects) the same ratio 
     as the amount of Federal grant bore to the cost of the 
     facility financed with the aid of such grant. The value shall 
     be determined by agreement of the parties or by action 
     brought in the United States district court for the district 
     in which such facility is situated.
       ``(c) Prohibition on Use for Religion.--Notwithstanding the 
     provisions of subsections (a) and (b), no project assisted 
     with funds under title VII (as in effect prior to the date of 
     enactment of the Higher Education Amendments of 1998) shall 
     ever be used for religious worship or a sectarian activity or 
     for a school or department of divinity.''.

     SEC. 105. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Conforming Amendments Correcting References to Section 
     1201.--
       (1) Agriculture.--
       (A) Student internship programs.--Section 922 of the 
     Federal Agriculture Improvement and Reform Act of 1996 (7 
     U.S.C. 2279c) is amended--
       (i) in subsection (a)(1)(B)--

       (I) by striking ``1201'' and inserting ``101''; and
       (II) by striking ``(20 U.S.C. 1141)''; and

       (ii) in subsection (b)(1)--

       (I) by striking ``1201'' and inserting ``101''; and
       (II) by striking ``(20 U.S.C. 1141)''.

       (B) Agricultural sciences education.--Section 1417(h)(1)(A) 
     of the National Agricultural Research, Extension, and 
     Teaching Policy Act of 1977 (7 U.S.C. 3152(h)(1)(A)) is 
     amended--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (2) Armed forces.--
       (A) Science and mathematics education improvement 
     program.--Section 2193(c)(1) of title 10, United States Code, 
     is amended--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (B) Support of science, mathematics, and engineering 
     education.--Section 2199(2) of title 10, United States Code, 
     is amended--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (C) Allowable costs under defense contracts.--Section 
     841(c)(2) of the National Defense Authorization Act for 
     fiscal year 1994 (10 U.S.C. 2324 note) is amended--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (D) Environmental restoration institutional grants for 
     training dislocated defense workers and young adults.--
     Section 1333(i)(3) of the National Defense Authorization Act 
     for fiscal year 1994 (10 U.S.C. 2701 note) is amended--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (E) Environmental education opportunities program.--Section 
     1334(k)(3) of the National Defense Authorization Act for 
     fiscal year 1994 (10 U.S.C. 2701 note) is amended--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (F) Environmental scholarship and fellowship programs.--
     Section 4451(b)(1) of the National Defense Authorization Act 
     for 1993 (10 U.S.C. 2701 note) is amended--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (3) Application of antitrust laws to award of need-based 
     educational aid.--Section 568(c)(3) of the Improving 
     America's Schools Act of 1994 (15 U.S.C. 1 note) is amended--
       (A) by striking ``1201(a)'' and inserting ``101(a)''; and
       (B) by striking ``(20 U.S.C. 1141(a))''.
       (4) Restrictions on former officers, employees, and elected 
     officials of the executive and legislative branches.--Section 
     207(j)(2)(B) of title 18, United States Code, is amended by 
     striking ``1201(a)'' and inserting ``101(a)''.
       (5) Education.--
       (A) Higher education amendments of 1992.--Section 1(c) of 
     the Higher Education Amendments of 1992 (20 U.S.C. 1001 note) 
     is amended by striking ``1201'' and inserting ``101''.
       (B) Part f definitions.--Section 481 of the Higher 
     Education Act of 1965 (20 U.S.C. 1088) is amended--
       (i) in subsection (a)--

       (I) in the matter preceding paragraph (1)(A), by striking 
     ``1201(a)'' and inserting ``101(a)'';
       (II) in paragraph (1)(C), by striking ``1201(a)'' and 
     inserting ``101(a)'';
       (III) in the first sentence of the matter preceding clause 
     (i) of paragraph (2)(A), by striking ``1201(a)'' and 
     inserting ``101(a)''; and
       (IV) in the matter following paragraph (2)(B)(ii), by 
     striking ``1201(a)'' and inserting ``101(a)'';

       (ii) in subsection (b)--

       (I) in the first sentence--

       (aa) in paragraph (2), by striking ``1201(a)'' and 
     inserting ``101(a)''; and
       (bb) in paragraph (3), by striking ``1201(a)'' and 
     inserting ``101(a)''; and

       (II) in the second sentence, by striking ``1201(a)'' and 
     inserting ``101(a)''; and

       (iii) in subsection (c)--

       (I) in the first sentence, by striking ``1201(a)'' and 
     inserting ``101(a)''; and
       (II) in the second sentence, by striking ``1201(a)'' and 
     inserting ``101(a)''.

       (C) Treatment of branches.--Section 498(j)(2) of the Higher 
     Education Act of 1965 (20 U.S.C. 1099c(j)(2)) is amended by 
     striking ``1201(a)(2)'' and inserting ``101(a)(2)''.
       (D) International education programs.--Section 631(a)(8) of 
     the Higher Education Act of 1965 (20 U.S.C. 1132(a)(8)) is 
     amended by striking ``1201(a)'' each place it appears and 
     inserting ``101(a)''.

[[Page S7726]]

       (E) Dwight d. eisenhower leadership program.--Section 
     1081(d) of the Higher Education Act of 1965 (20 U.S.C. 
     1135f(d)) is amended by striking ``1201'' and inserting 
     ``101''.
       (F) Disclosure requirements.--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)''.
       (G) Harry s. truman scholarships.--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)''.
       (H) Tech-prep education.--Section 347(2)(A) of the Carl D. 
     Perkins Vocational and Applied Technology Education Act (20 
     U.S.C. 2394e(2)(A)) is amended by striking ``1201(a)'' and 
     inserting ``101(a)''.
       (I) Education for economic security.--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)''.
       (J) James madison memorial fellowships.--Section 815 of the 
     James Madison Memorial Fellowship Act (20 U.S.C. 4514) is 
     amended--
       (i) in paragraph (3), by striking ``1201(a)'' and inserting 
     ``101(a)''; and
       (ii) in paragraph (4), by striking ``1201(d) of the Higher 
     Education Act of 1965'' and inserting ``14101 of the 
     Elementary and Secondary Education Act of 1965''.
       (K) Barry goldwater scholarships.--Section 1403(4) of the 
     Barry Goldwater Scholarship and Excellence in Education Act 
     (20 U.S.C. 4702(4)) is amended--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (L) Morris k. udall scholarships.--Section 4(6) of the 
     Morris K. Udall Scholarship and Excellence in National 
     Environmental and Native American Public Policy Act of 1992 
     (20 U.S.C. 5602(6)) is amended by striking ``1201(a)'' and 
     inserting ``101(a)''.
       (M) Bilingual education, and language enhancement and 
     acquisition.--Section 7501(4) of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 7601(4)) is amended by 
     striking ``1201(a)'' and inserting ``101(a)''.
       (N) General definitions.--Section 14101(17) of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     8801(17)) is amended by striking ``1201(a)'' and inserting 
     ``101(a)''.
       (O) National education statistics.--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)''.
       (6) Foreign relations.--
       (A) Environment and sustainable development exchange 
     program.--Section 240(d) of the Foreign Relations 
     Authorization Act, Fiscal Years 1994 and 1995 (22 U.S.C. 2452 
     note) is amended by striking ``1201(a)'' and inserting 
     ``101(a)''.
       (B) Samantha smith memorial exchange program.--Section 
     112(a)(8) of the Mutual Educational and Cultural Exchange Act 
     of 1961 (22 U.S.C. 2460(a)(8)) is amended--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (C) Soviet-eastern european training.--Section 803(1) of 
     the Soviet-Eastern European Research and Training Act of 1983 
     (22 U.S.C. 4502(1)) is amended by striking ``1201(a)'' and 
     inserting ``101(a)''.
       (D) Developing country scholarships.--Section 603(d) of the 
     Foreign Relations Authorization Act, Fiscal Years 1986 and 
     1987 (22 U.S.C. 4703(d)) is amended by striking ``1201(a)'' 
     and inserting ``101(a)''.
       (7) Indians.--
       (A) Snyder act.--The last paragraph of section 410 of the 
     Act entitled ``An Act authorizing appropriations and 
     expenditures for the administration of Indian Affairs, and 
     for other purposes'', approved November 2, 1921 (25 U.S.C. 
     13) (commonly known as the Snyder Act) is amended by striking 
     ``1201'' and inserting ``101''.
       (B) Tribally controlled community college assistance.--
     Section 2(a)(5) of the Tribally Controlled Community College 
     Assistance Act (25 U.S.C. 1801(a)(5)) is amended by striking 
     ``1201(a)'' and inserting ``101(a)''.
       (C) Construction of new facilities.--Section 113(b)(2) of 
     the Tribally Controlled Community College Assistance Act (25 
     U.S.C. 1813(b)(2)) is amended--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (D) American indian teacher training.--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)''.
       (8) Labor.--
       (A) Rehabilitation definitions.--Section 7(32) of the 
     Rehabilitation Act of 1973 (29 U.S.C. 706(32)) is amended--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (B) State plans.--Section 101(a)(7)(A)(iv)(II) of the 
     Rehabilitation Act of 1973 (29 U.S.C. 721(a)(7)(A)(iv)(II)) 
     is amended--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (C) JTPA definitions.--Section 4(12) of the Job Training 
     Partnership Act (29 U.S.C. 1503(12)) is amended by striking 
     ``1201(a)'' and inserting ``101(a)''.
       (D) Tuition charges.--Section 141(d)(3)(B) of the Job 
     Training Partnership Act (29 U.S.C. 1551(d)(3)(B)) is 
     amended--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (9) Surface mining control.--Section 701(32) of the Surface 
     Mining Control and Reclamation Act of 1977 (30 U.S.C. 
     1291(32)) is amended by striking ``1201(a)'' and inserting 
     ``101(a)''.
       (10) Pollution prevention.--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''.
       (11) Postal service.--Section 3626(b)(3) of title 39, 
     United States Code, is amended--
       (A) by striking ``1201(a)'' and inserting ``101(a)''; and
       (B) by striking ``(20 U.S.C. 1141(a))''.
       (12) Public health and welfare.--
       (A) Scientific and technical education.--Section 3(g) of 
     the Scientific and Advanced-Technology Act of 1992 (42 U.S.C. 
     1862i(g)) is amended--
       (i) in paragraph (2)--

       (I) by striking ``1201(a)'' and inserting ``101(a)''; and
       (II) by striking ``(20 U.S.C. 1141(a))''; and

       (ii) in paragraph (3)--

       (I) by striking ``1201(a)'' and inserting ``101(a)''; and
       (II) by striking ``(20 U.S.C. 1141(a))''.

       (B) Older americans.--Section 102(32) of the Older 
     Americans Act of 1965 (42 U.S.C. 3002(32)) is amended--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (C) Justice system improvement.--Section 901(17) of the 
     Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 
     3791(17)) is amended--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (D) Energy technology commercialization services program.--
     Section 362(f)(5)(A) of the Energy Policy and Conservation 
     Act (42 U.S.C. 6322(f)(5)(A)) is amended--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (E) Environmental restoration and waste management.--
     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--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (F) Head start.--Section 649(c)(3) of the Head Start Act 
     (42 U.S.C. 9844(c)(3)) is amended--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (G) State dependent care development grants.--Section 
     670G(5) of the Child Care and Development Block Grant Act of 
     1990 (42 U.S.C. 9877(5)) is amended by striking ``1201(a)'' 
     and inserting ``101(a)''.
       (H) Instructional activities for low-income youth.--The 
     matter preceding subparagraph (A) of section 682(b)(1) of the 
     Community Services Block Grant Act (42 U.S.C. 9910c(b)(1)) is 
     amended by striking ``1201(a)'' and inserting ``101(a)''.
       (I) Drug abuse education.--Section 3601(7) of the Anti-Drug 
     Abuse Act of 1988 (42 U.S.C. 11851(7)) is amended--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (J) National and community service.--Section 101(13) of the 
     National and Community Service Act of 1990 (42 U.S.C. 
     12511(13)) is amended--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (K) Civilian community corps.--Section 166(6) of the 
     National and Community Service Act of 1990 (42 U.S.C. 
     12626(6)) is amended--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (L) Community schools youth services and supervision grant 
     program.--The definition of public school in section 30401(b) 
     of the Community Schools Youth Services and Supervision Grant 
     Program Act of 1994 (42 U.S.C. 13791(b)) is amended--
       (i) by striking ``1201'' each place it appears and 
     inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(i))''.
       (M) Police corps.--The definition of institution of higher 
     education in section 200103 of the Police Corps Act (42 
     U.S.C. 14092) is amended--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (N) Law enforcement scholarship program.--The definition of 
     institution of higher education in section 200202 of the Law 
     Enforcement Scholarship and Recruitment Act (42 U.S.C. 14111) 
     is amended--
       (i) by striking ``1201(a)'' and inserting ``101(a)''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (13) T e l e c o m m u n i c a t i o n s.--Section 
     223(h)(4) of the Telecommunications Act of 1934 (47 U.S.C. 
     223(h)(4)) is amended--
       (A) by striking ``1201'' and inserting ``101''; and
       (B) by striking ``(20 U.S.C. 1141)''.
       (14) War and national defense.--Section 808(3) of the David 
     L. Boren National Security Education Act of 1991 (50 U.S.C. 
     1908(3)) is amended--
       (A) by striking ``1201(a)'' and inserting ``101(a)''; and
       (B) by striking ``(20 U.S.C. 1141(a))''.
       (b) Cross References.--The Act (20 U.S.C. 1001 et seq.) is 
     amended--
       (1) in section 402A(c)(2) (20 U.S.C. 1070a-11(c)(2)), by 
     striking ``1210'' and inserting ``110'';
       (2) in section 481 (20 U.S.C. 1088)--
       (A) in subsection (a)--
       (i) in paragraph (1)--

       (I) in the matter preceding subparagraph (A), by striking 
     ``1201(a)'' and inserting ``101(a)''; and

[[Page S7727]]

       (II) in subparagraph (C), by striking ``1201(a)'' and 
     inserting ``101(a)''; and

       (ii) in paragraph (2)--

       (I) in the matter preceding clause (i) of subparagraph (A), 
     by striking ``1201(a)'' and inserting ``101(a)''; and
       (II) in the matter following clause (ii) of subparagraph 
     (B), by striking ``1201(a)'' and inserting ``101(a)'';

       (B) in subsection (b), by striking ``1201(a)'' each place 
     the term appears and inserting ``101(a)''; and
       (C) in subsection (c), by striking ``1201(a)'' each place 
     the term appears and inserting ``101(a)'';
       (3) in section 485(f)(1)(I) (20 U.S.C. 1092(f)(1)(I)), by 
     striking ``1213'' and inserting ``111'';
       (4) in section 498(j)(2) (20 U.S.C. 1099c(j)(2)), by 
     striking ``1201(a)(2)'' and inserting ``101(a)(2)'';
       (5) in section 591(d)(2) (20 U.S.C. 1115(d)(2)), by 
     striking ``1201(a)'' and inserting ``101(a)'';
       (6) in section 631(a)(8) (20 U.S.C. 1132(a)(8))--
       (A) by striking ``section 1201(a)'' each place the term 
     appears and inserting ``section 101(a)''; and
       (B) by striking ``of 1201(a)'' and inserting ``of section 
     101(a)''; and
       (7) in section 1081(d) (20 U.S.C. 1135f(d)), by striking 
     ``1201'' and inserting ``101(a)''.

                  TITLE II--IMPROVING TEACHER QUALITY

     SEC. 201. IMPROVING TEACHER QUALITY.

       The Act (20 U.S.C. 1001) is amended by inserting after 
     section 112 (as added by section 104) the following:

                 ``TITLE II--IMPROVING TEACHER QUALITY

     ``SEC. 201. PURPOSES.

       ``The purpose of this title is to--
       ``(1) improve student achievement;
       ``(2) improve the quality of the current and future 
     teaching force by improving the preparation of prospective 
     teachers and enhancing professional development activities; 
     and
       ``(3) hold institutions of higher education accountable for 
     preparing teachers who have the necessary teaching skills and 
     are highly competent in the academic content areas in which 
     the teachers plan to teach, including training in the 
     effective uses of technologies in the classroom.

                       ``PART A--TEACHER QUALITY

            ``Subpart 1--Teacher Quality Enhancement Grants

     ``SEC. 211. GRANTS AUTHORIZED.

       ``(a) In General.--The Secretary is authorized to award 
     grants to States to enable the States to carry out the 
     activities described in section 212. Each grant may be 
     awarded for a period of not more than 5 years.
       ``(b) State Designation.--
       ``(1) In general.--A State desiring a grant under this 
     subpart shall, consistent with State law, designate the chief 
     individual or entity in the State responsible for the State 
     supervision of education, to administer the activities 
     assisted under this subpart.
       ``(2) Consultation.--The individual or entity designated 
     under paragraph (1) shall consult with the Governor, State 
     board of education, or State educational agency, as 
     appropriate.
       ``(3) Construction.--Nothing in this subpart 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.
       ``(c) Matching Requirement.--Each State receiving a grant 
     under this subpart 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 through the 
     grant.

     ``SEC. 212. USE OF FUNDS.

       ``A State that receives a grant under this subpart shall 
     use the grant funds to reform teacher preparation 
     requirements, and to ensure that current and future teachers 
     possess the necessary teaching skills and academic content 
     knowledge in the subject areas in which the teachers are 
     assigned to teach, by carrying out 1 or more of the following 
     activities:
       ``(1) Reforms.--Implementing reforms that hold institutions 
     of higher education with teacher preparation programs 
     accountable for preparing teachers who are highly competent 
     in the academic content areas in which the teachers plan to 
     teach, which may include the use of rigorous subject matter 
     competency tests and the requirement that a teacher have an 
     academic major in the subject area, or related discipline, in 
     which the teacher plans to teach.
       ``(2) Certification or licensure requirements.--Reforming 
     teacher certification or licensure requirements to ensure 
     that new teachers have the necessary teaching skills and 
     academic content knowledge in the subject areas in which 
     teachers are assigned to teach.
       ``(3) Alternatives to traditional preparation for 
     teaching.--Providing prospective teachers alternatives to 
     traditional preparation for teaching through programs at 
     colleges of arts and sciences or at nonprofit educational 
     organizations.
       ``(4) Alternative routes.--Funding programs that establish, 
     expand, or improve alternative routes to State certification 
     for highly qualified individuals from other occupations and 
     recent college graduates with records of academic 
     distinction, including support during the initial teaching 
     experience.
       ``(5) Recruitment; pay; removal.--Developing and 
     implementing effective mechanisms to ensure that schools are 
     able to effectively recruit highly qualified teachers, to 
     financially reward those teachers and principals whose 
     students have made significant progress toward high academic 
     performance, such as through performance-based compensation 
     systems and access to ongoing professional development 
     opportunities for teachers and administrators, and to remove 
     teachers who are not qualified.
       ``(6) Innovative efforts.--Development and implementation 
     of innovative efforts aimed at reducing the shortage of 
     highly qualified teachers in high poverty urban and rural 
     areas, that may include the recruitment of highly qualified 
     individuals from other occupations through alternative 
     certification programs.
       ``(7) Social promotion.--Development and implementation of 
     efforts to address the problem of social promotion and to 
     prepare teachers to effectively address the issues raised by 
     ending the practice of social promotion.

     ``SEC. 213. COMPETITIVE AWARDS.

       ``(a) Annual Awards; Competitive Basis.--The Secretary 
     shall award grants under this subpart annually and on a 
     competitive basis.
       ``(b) Peer Review Panel.--The Secretary shall provide the 
     applications submitted by States under section 214 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 for funding 
     to the Secretary, the panel shall give priority to 
     applications from States that describe activities that--
       ``(1) 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 the teachers plan to 
     teach; and
       ``(2) involve the development of innovative efforts aimed 
     at reducing the shortage of highly qualified teachers in high 
     poverty urban and rural areas.

     ``SEC. 214. APPLICATIONS.

       ``(a) In General.--Each State desiring a grant under this 
     subpart shall submit an application to the Secretary at such 
     time, in such manner and accompanied by such information as 
     the Secretary may require.
       ``(b) Content of Applications.--Such application shall 
     include a description of how the State intends to use funds 
     provided under this subpart.

           ``Subpart 2--Teacher Training Partnerships Grants

     ``SEC. 221. GRANTS AUTHORIZED.

       ``(a) In General.--The Secretary is authorized to award 
     grants to teacher training partnerships to enable the 
     partnerships to carry out the activities described in section 
     222. Each grant may be awarded for a period of not more than 
     5 years.
       ``(b) Definitions.--In this part:
       ``(1) Teacher training partnerships.--
       ``(A) In general.--The term `teacher training partnership' 
     means a partnership that--
       ``(i) shall include a school of arts and sciences, a school 
     or program of education, a local educational agency, and a 
     kindergarten through grade 12 school;
       ``(ii) shall include a high need local educational agency 
     or kindergarten through grade 12 school; and
       ``(iii) may include a State educational agency, a pre-
     kindergarten program, a nonprofit educational organization, a 
     business, or a teacher organization.
       ``(B) High need.--A local educational agency or 
     kindergarten through grade 12 school shall be considered high 
     need for purposes of subparagraph (A)(ii) if the agency or 
     school serves an area within a State in which there is--
       ``(i) a large number of individuals from families with 
     incomes below the poverty line;
       ``(ii) a high percentage of teachers not teaching in the 
     content area in which the teachers were trained to teach; or
       ``(iii) a high teacher turnover rate.
       ``(2) Kindergarten through grade 12 school.--The term 
     `kindergarten through grade 12 school' means a school having 
     any one of the grades kindergarten through grade 12.
       ``(c) Priority.--In awarding grants under this subpart the 
     Secretary shall give priority to partnerships that involve 
     businesses.
       ``(d) Consideration.--In awarding grants under this subpart 
     the Secretary shall take into consideration--
       ``(1) providing an equitable geographic distribution of the 
     grants throughout the United States; and
       ``(2) the proposed project's potential for creating 
     improvement and positive change.
       ``(e) Matching Funds.--Each partnership receiving a grant 
     under this subpart shall provide, from sources other than 
     this subpart, an amount equal to 25 percent of the grant in 
     the first year, 35 percent in the second such year, and 50 
     percent in each succeeding such year, of the amount of the 
     grant, in cash or in kind, to carry out the activities 
     supported by the grant.
       ``(f) One-Time Award.--A partnership may receive a grant 
     under this section only once.

     ``SEC. 222. USE OF FUNDS.

       ``(a) In General.--Grant funds under this part shall be 
     used to--
       ``(1) coordinate with the activities of the Governor, State 
     board of education, and State educational agency, as 
     appropriate;
       ``(2) provide sustained and high quality preservice 
     clinical experiences including the mentoring of prospective 
     teachers by veteran teachers;
       ``(3) work with a school of arts and sciences to provide 
     increased academic study in a proposed teaching specialty 
     area, through activities such as--
       ``(A) restructuring curriculum;
       ``(B) changing core course requirements;
       ``(C) increasing liberal arts focus;
       ``(D) providing preparation for board certification; and
       ``(E) assessing and improving alternative certification, 
     including mentoring and induction support;
       ``(4) substantially increasing interaction and 2-way 
     collaboration between--

[[Page S7728]]

       ``(A) faculty at institutions of higher education; and
       ``(B) new and experienced teachers, principals, and other 
     administrators at elementary schools or secondary schools;
       ``(5) prepare teachers to use technology effectively in the 
     classroom;
       ``(6) integrate reliable research-based teaching methods 
     into the curriculum;
       ``(7) broadly disseminate information on effective 
     practices used by the partnership; and
       ``(8) provide support, including preparation time, for 
     interaction between faculty at an institution of higher 
     education and classroom teachers.
       ``(b) Special Rule.--No individual member of a partnership 
     shall retain more than 50 percent of the funds made available 
     to the partnership under this subpart.

     ``SEC. 223. APPLICATIONS.

       ``Each teacher training partnership desiring a grant under 
     this subpart shall submit an application to the Secretary at 
     such time, in such manner, and accompanied by such 
     information as the Secretary may require. Each such 
     application shall--
       ``(1) describe the composition of the partnership and the 
     involvement of each partner in the development of the 
     application;
       ``(2) contain a needs assessment that includes an analysis 
     of the needs of all the partners with respect to teaching and 
     learning;
       ``(3) contain a resource assessment that includes--
       ``(A) an analysis of resources available to the 
     partnership;
       ``(B) a description of the intended use of the grant funds;
       ``(C) a description of how the partnership will coordinate 
     with other teacher training or professional development 
     programs, including Federal, State, local, private, and other 
     programs;
       ``(D) a description of how the activities assisted under 
     this subpart are consistent with educational reform 
     activities that promote student achievement; and
       ``(E) a description of the commitment of the resources of 
     the partnership to the activities assisted under this 
     subpart, including financial support, faculty participation, 
     and time commitments;
       ``(4) describe how the partnership will include the 
     participation of the schools, colleges, or departments of 
     arts and sciences within an institution of higher education 
     to ensure the integration of teaching techniques and content 
     in teaching preparation;
       ``(5) describe how the partnership will restructure and 
     improve teaching, teacher training, and development programs, 
     and how such systemic changes will contribute to increased 
     student achievement;
       ``(6) describe how the partnership will prepare teachers to 
     work with diverse student populations, including individuals 
     with disabilities and limited English proficient individuals;
       ``(7) describe how the partnership will prepare teachers to 
     use technology;
       ``(8) contain a dissemination plan regarding knowledge and 
     information with respect to effective teaching practices, and 
     a description of how such knowledge and information will be 
     implemented in elementary schools or secondary schools as 
     well as institutions of higher education;
       ``(9) describe the commitment of the partnership to 
     continue the activities assisted under this subpart without 
     grant funds provided under this subpart; and
       ``(10) describe how the partnership will involve and 
     include parents in the reform process.

                    ``Subpart 3--General Provisions

     ``SEC. 231. ACCOUNTABILITY AND EVALUATION.

       ``(a) Teacher Quality Enhancement Grants.--
       ``(1) Accountability report.--A State that receives a grant 
     under subpart 1 shall submit an annual accountability report 
     to the Secretary, the Committee on Labor and Human Resources 
     of the Senate, and the Committee on Education and the 
     Workforce of the House of Representatives. Such report shall 
     include a description of the degree to which the State, in 
     using funds provided under subpart 1, has made substantial 
     progress in meeting the following goals:
       ``(A) Student achievement.--Increasing student achievement 
     for all students, as measured by increased graduation rates, 
     decreased dropout rates, or higher scores on local, State or 
     other assessments.
       ``(B) Raising standards.--Raising the State academic 
     standards required to enter the teaching profession, 
     including, where appropriate, incentives to incorporate the 
     requirement of an academic major in the subject, or related 
     discipline, in which the teacher plans to teach.
       ``(C) Initial certification or licensure.--Increasing 
     success in the passage rate for initial State teacher 
     certification or licensure, or increasing numbers of highly 
     qualified individuals being certified or licensed as teachers 
     through alternative programs.
       ``(D) Core academic subjects.--(i) Increasing the 
     percentage of secondary school classes taught in core 
     academic subject areas by teachers--
       ``(I) with academic majors in those areas or in a related 
     field;
       ``(II) who can demonstrate a high level of competence 
     through rigorous academic subject area tests; or
       ``(III) who can demonstrate high levels of competence 
     through experience in relevant content areas.
       ``(ii) Increasing the percentage of elementary school 
     classes taught by teachers--
       ``(I) with academic majors in the arts and sciences; or
       ``(II) who can demonstrate high levels of competence 
     through experience in relevant content areas.
       ``(E) Decreasing shortages for professional development.--
     Decreasing shortages of qualified teachers in poor urban and 
     rural areas.
       ``(F) Increasing opportunities.--Increasing opportunities 
     for enhanced and ongoing professional development that 
     improves the academic content knowledge of teachers in the 
     subject areas in which the teachers are certified to teach or 
     in which the teachers are working toward certification to 
     teach.
       ``(G) Technology integration.--Increasing the number of 
     teachers prepared to integrate technology in the classroom.
       ``(2) Teacher qualifications provided to parent upon 
     request.--Any local educational agency that benefits from the 
     activities assisted under subpart 1 shall make available, 
     upon request and in an understandable and uniform format, to 
     any parent of a student attending any school served by the 
     local educational agency, information regarding the 
     qualifications of the student's classroom teacher with regard 
     to the subject matter in which the teacher provides 
     instruction. The local educational agency shall inform 
     parents that the parents are entitled to receive the 
     information upon request.
       ``(b) Teacher Training Partnership Evaluation Plan.--Each 
     teacher training partnership receiving a grant under subpart 
     2 shall establish an evaluation plan that includes strong 
     performance objectives established in negotiation with the 
     Secretary at the time of the grant award. The plan shall 
     include objectives and measures for--
       ``(1) increased student achievement for all students as 
     measured by increased graduation rates, decreased dropout 
     rates, or higher scores on local, State, or other assessments 
     for a year compared to student achievement as determined by 
     the rates or scores, as the case may be, for the year prior 
     to the year for which a grant under this part is received;
       ``(2) increased teacher retention in the first 3 years of a 
     teacher's career;
       ``(3) increased success in the passage rate for initial 
     State certification or licensure of teachers;
       ``(4) increased percentages of secondary school classes 
     taught in core academic subject areas by teachers--
       ``(A) with academic majors in those areas or in a related 
     field;
       ``(B) who can demonstrate a high level of competence 
     through rigorous academic subject area tests; and
       ``(C) increasing the percentage of elementary school 
     classes taught by teachers with academic majors in the arts 
     and sciences;
       ``(5) increased integration of technology in teacher 
     preparation and in classroom instruction;
       ``(6) restructuring or change of methodology courses to 
     reflect best practices learned from elementary schools, 
     secondary schools or other entities;
       ``(7) increased dissemination of information about 
     effective teaching strategies and practices; and
       ``(8) other effects of increased integration among members 
     of the partnership.

     ``SEC. 232. REVOCATION OF GRANT.

       ``Each State or teacher training partnership receiving a 
     grant under this part shall report annually on progress 
     toward meeting the purposes of this part, and the goals, 
     objectives and measures described in section 231. If the 
     Secretary, after consultation with the peer review panel 
     described in section 213(b) determines that the State or 
     partnership is not making substantial progress in meeting the 
     purposes, goals, objectives and measures, as appropriate, by 
     the end of the second year of the grant, the grant shall not 
     be continued for the third year of the grant.

     ``SEC. 233. EVALUATION AND DISSEMINATION.

       ``The Secretary shall evaluate the activities funded under 
     this part and report the Secretary's findings to the 
     Committee on Labor and Human Resources of the Senate and the 
     Committee on Education and the Workforce of the House of 
     Representatives. The Secretary shall broadly disseminate 
     successful practices developed by the States and teacher 
     training partnerships under this part, and shall broadly 
     disseminate information regarding such practices so developed 
     that were found to be ineffective.

     ``SEC. 234. INTERNATIONAL STUDY AND REPORT.

       ``(a) Study.--The Secretary shall conduct a study through 
     the National Center for Education Statistics regarding the 
     ways teachers are trained and the extent to which teachers in 
     the United States and other comparable countries are teaching 
     in areas other than the teachers' field of study or 
     expertise. The study will examine specific fields and will 
     outline the nature and extent of the problem of out-of-field 
     teaching in the United States and in other countries that are 
     considered comparable to the United States. The study shall 
     include, at a minimum, all the countries that participated in 
     the Third International Mathematics and Science Study 
     (TIMSS).
       ``(b) Report.--The Secretary shall report to Congress 
     regarding the results of the study described in subsection 
     (a).

     ``SEC. 235. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     part $300,000,000 for fiscal year 1999 and such sums as 
     necessary for each of the 4 succeeding fiscal years, of 
     which--
       ``(1) 50 percent shall be available for each fiscal year to 
     carry out subpart 1; and
       ``(2) 50 percent shall be available for each fiscal year to 
     carry out subpart 2.

        ``PART B--RECRUITING NEW TEACHERS FOR UNDERSERVED AREAS

     ``SEC. 251. STATEMENT OF PURPOSE.

       ``It is the purpose of this part to--
       ``(1) provide scholarships and, as necessary, support 
     services for students with high potential

[[Page S7729]]

     to become effective teachers, particularly minority students;
       ``(2) increase the quality and number of new teachers 
     nationally; and
       ``(3) increase the ability of schools in underserved areas 
     to recruit a qualified teaching staff.

     ``SEC. 252. DEFINITIONS.

       ``In this part--
       ``(1) Eligible partnership.--
       ``(A) In general.--The term `eligible partnership' means a 
     partnership consisting of--
       ``(i) an institution of higher education that awards 
     baccalaureate degrees and prepares teachers for their initial 
     entry into the teaching profession; and
       ``(ii) one or more local educational agencies that serve 
     underserved areas.
       ``(B) Additional partners.--Such a partnership may also 
     include--
       ``(i) 2-year institutions of higher education that operate 
     teacher preparation programs and maintain articulation 
     agreements, with the institutions of higher education that 
     award baccalaureate degrees for the transfer of credits in 
     teacher preparation;
       ``(ii) State agencies that have responsibility for policies 
     related to teacher preparation and teacher certification or 
     licensure; and
       ``(iii) other public and private, nonprofit agencies and 
     organizations that serve, or are located in, communities 
     served by the local educational agencies in the partnership, 
     and that have an interest in teacher recruitment, 
     preparation, and induction.
       ``(2) Support services.--The term `support services' 
     means--
       ``(A) academic advice and counseling;
       ``(B) tutorial services;
       ``(C) mentoring; and
       ``(D) child care and transportation, if funding for those 
     services cannot be arranged from other sources.
       ``(3) Underserved area.--The term `underserved area' 
     means--
       ``(A) the area served by the 3 local educational agencies 
     in the State that have the highest numbers of children, ages 
     5 through 17, from families below the poverty level (based on 
     data satisfactory to the Secretary); and
       ``(B) the area served by any other local educational agency 
     in which the percentage of such children is at least 20 
     percent, or the number of such children is at least 10,000.

     ``SEC. 253. GRANT AUTHORITY AND CONDITIONS.

       ``(a) Grants Authorized.--
       ``(1) Grants.--
       ``(A) In general.--From amounts appropriated under section 
     262 the Secretary shall award grants, on a competitive basis, 
     to eligible partnerships to enable the eligible partnerships 
     to pay the Federal share of the cost of carrying out the 
     activities described in section 255.
       ``(B) Duration.--Each grant awarded under subparagraph (A) 
     shall be awarded for a period not to exceed 5 years.
       ``(2) Continuing eligibility; review of progress.--The 
     Secretary shall--
       ``(A) continue to make grant payments for the second and 
     succeeding years of a grant awarded under this part, only 
     after determining that the eligible partnership is making 
     satisfactory progress in carrying out the activities under 
     the grant; and
       ``(B) conduct an intensive review of the eligible 
     partnerships's progress under the grant, with the assistance 
     of outside experts, before making grant payments for the 
     fourth year of the grant.
       ``(3) Maximum number.--No eligible partnership may receive 
     more than 2 grants under this subsection.
       ``(b) Matching Requirement.--
       ``(1) Federal share.--The Federal share of the cost of 
     activities carried out under a grant made under subsection 
     (a) shall not exceed--
       ``(A) 70 percent of the cost in the first year of the 
     grant;
       ``(B) 60 percent in the second year;
       ``(C) 60 percent in the third year;
       ``(D) 50 percent in the fourth year; and
       ``(E) 50 percent in the fifth year and any succeeding year 
     (including each year of the second grant, if any).
       ``(2) Non-federal share.--The non-Federal share of 
     activities carried out with a grant under subsection (a) may 
     be provided in cash or in kind, fairly evaluated, and may be 
     obtained from any non-Federal public or private source.
       ``(c) Planning Grants.--
       ``(1) In general.--The Secretary may award planning grants 
     to eligible partnerships that are not ready to implement 
     programs under subsection (a).
       ``(2) Duration.--Each planning grant shall be for a period 
     of not more than 1 year, which shall be in addition to the 
     period of any grant under subsection (a).
       ``(3) Requirement.--Any recipient of a planning grant under 
     this subsection that wishes to receive a grant under 
     subsection (a)(1) shall separately apply for a grant under 
     that subsection.

     ``SEC. 254. GRANT APPLICATIONS.

       ``(a) Applications Required.--Any eligible partnership 
     desiring to receive a grant under this part shall submit an 
     application to the Secretary at such time, in such form, and 
     containing such information as the Secretary may require.
       ``(b) Application Contents.--Each application for a grant 
     under section 253(a) shall include--
       ``(1) a designation of the institution or agency, within 
     the eligible partnership, that will serve as the fiscal agent 
     for the grant;
       ``(2) information on the quality of the teacher preparation 
     program of the institution of higher education participating 
     in the eligible partnership and how the eligible partnership 
     will ensure, through improvements in the eligible 
     partnership's teacher preparation practices or other 
     appropriate strategies, that scholarship recipients will 
     receive high-quality preparation;
       ``(3) a description of the assessment the members of the 
     eligible partnership have undertaken--
       ``(A) to determine--
       ``(i) the most critical needs of the local educational 
     agencies, particularly the needs of schools in high-poverty 
     areas, for new teachers (which may include teachers in 
     particular subject areas or at certain grade levels); and
       ``(ii) how the project carried out under the grant will 
     address those needs; and
       ``(B) that reflects the input of all significant entities 
     in the community (including organizations representing 
     teachers and parents) that have an interest in teacher 
     recruitment, preparation, and induction;
       ``(4) a description of the project the eligible partnership 
     will carry out with the grant, including information 
     regarding--
       ``(A) the recruitment and outreach efforts the eligible 
     partnership will undertake to publicize the availability of 
     scholarships and other assistance under the program;
       ``(B)(i) the number and types of students that the eligible 
     partnership will serve under the program, which may include 
     education paraprofessionals seeking to achieve full teacher 
     certification or licensure; teachers whom the partner local 
     educational agencies have hired under emergency certification 
     or licensure procedures; or former military personnel, mid-
     career professionals, or AmeriCorps or Peace Corps 
     volunteers, who desire to enter teaching; and
       ``(ii) the criteria that the eligible partnership will use 
     in selecting the students, including criteria to determine 
     whether individuals have the capacity to benefit from the 
     program, complete teacher certification requirements, and 
     become effective teachers;
       ``(C) the activities the eligible partnership will carry 
     out under the grant, including a description of, and 
     justification for, any support services the institution of 
     higher education participating in the eligible partnership 
     will offer to participating students;
       ``(D) the number and funding range of the scholarships the 
     institution will provide to students; and
       ``(E) the procedures the institution will establish for 
     entering into, and enforcing, agreements with scholarship 
     recipients regarding the recipients' fulfillment of the 
     service commitment described in section 259;
       ``(5) a description of how the institution will use funds 
     provided under the grant only--
       ``(A) to increase the number of students--
       ``(i) with high potential to be effective teachers;
       ``(ii) participating in the institution's teacher 
     preparation programs; or
       ``(iii) in the particular type or types of preparation 
     programs that the grant will support; or
       ``(B) to increase the number of graduates, who are minority 
     individuals, with high potential to be effective teachers;
       ``(6) a description of the commitments, by the local 
     educational agencies participating in the partnership, to 
     hire qualified scholarship recipients in the schools served 
     by the agencies and in the subject areas or grade levels for 
     which the scholarship recipients will be trained, and a 
     description of the actions the participating institution of 
     higher education, the participating local educational 
     agencies, and the other partners will take to facilitate the 
     successful transition of the recipients into teaching; and
       ``(7) a description of the eligible partnership's plan for 
     institutionalizing the activities the partnership is carrying 
     out under this part, so that the activities will continue 
     once Federal funding ceases.

     ``SEC. 255. USES OF FUNDS.

       ``(a) In General.--Each eligible partnership receiving a 
     grant under section 523(a) shall use the grant funds for the 
     following:
       ``(1) Scholarships.--Scholarships to help students pay the 
     costs of tuition, room, board, and other expenses of 
     completing a teacher preparation program.
       ``(2) Support services.--Support services, if needed to 
     enable scholarship recipients to complete postsecondary 
     education programs.
       ``(3) Followup services.--Followup services provided to 
     former scholarship recipients during the recipients' first 3 
     years of teaching.
       ``(4) Payments.--Payments to partner local educational 
     agencies, if needed to enable the agencies to permit 
     paraprofessional staff to participate in teacher preparation 
     programs (such as the cost of release time for the staff).
       ``(5) Additional courses.--If appropriate, and if no other 
     funds are available for, paying the costs of additional 
     courses taken by former scholarship recipients during the 
     recipients' initial 3 years of teaching.
       ``(b) Planning Grants.--A recipient of a planning grant 
     under section 253(c) shall use the grant funds for the costs 
     of planning for the implementation of a grant under section 
     253(a).

     ``SEC. 256. SELECTION OF APPLICANTS.

       ``(a) Peer Review.--The Secretary, using a peer review 
     process, shall select eligible partnerships to receive 
     funding under this part on the basis of--
       ``(1) the quality of the teacher preparation program 
     offered by the institution participating in the partnership;
       ``(2) the quality of the program carried out under the 
     application; and
       ``(3) the capacity of the partnership to carry out the 
     grant successfully.
       ``(b) Criteria.--
       ``(1) In general.--In awarding grants under section 253(a), 
     the Secretary shall seek to ensure that--
       ``(A) in the aggregate, eligible partnerships carry out a 
     variety of approaches to preparing new teachers; and
       ``(B) there is an equitable geographic distribution of the 
     grants.

[[Page S7730]]

       ``(2) Special consideration.--In addition to complying with 
     paragraph (1), the Secretary shall give special consideration 
     to--
       ``(A) applications most likely to result in the preparation 
     of increased numbers of individuals with high potential for 
     effective teaching who are minority individuals; and
       ``(B) applications from partnerships that have as members 
     of the partnerships historically Black colleges and 
     universities, Hispanic-serving institutions, and Tribal 
     Colleges and Universities.
       ``(c) Second Five-Year Grants.--In selecting eligible 
     partnerships to receive second year grant payments under this 
     part, the Secretary shall give a preference to eligible 
     partnerships whose projects have resulted in--
       ``(1) the placement and retention of a substantial number 
     of high-quality graduates in teaching positions in 
     underserved, high-poverty schools;
       ``(2) the adoption of effective programs that meet the 
     teacher preparation needs of high-poverty urban and rural 
     areas; and
       ``(3) effective partnerships with elementary schools and 
     secondary schools that are supporting improvements in student 
     achievement.

     ``SEC. 257. DURATION AND AMOUNT OF ASSISTANCE; RELATION TO 
                   OTHER ASSISTANCE.

       ``(a) Duration of Assistance.--No individual may receive 
     scholarship assistance under this part--
       ``(1) for more than 5 years of postsecondary education; and
       ``(2) unless that individual satisfies the requirements of 
     section 484(a)(5).
       ``(b) Amount of Assistance.--No individual may receive a 
     scholarship awarded under this part that exceeds the cost of 
     attendance, as defined in section 472, at the institution of 
     higher education the individual is attending.
       ``(c) Relation to Other Assistance.--A scholarship awarded 
     under this part--
       ``(1) shall not be reduced on the basis of the individual's 
     receipt of other forms of Federal student financial 
     assistance; and
       ``(2) shall be regarded as other financial assistance 
     available to the student, within the meaning of sections 
     471(3) and 480(j)(1), in determining the student's 
     eligibility for grant, loan, or work assistance under title 
     IV.

     ``SEC. 258. SCHOLARSHIP CONDITIONS.

       ``(a) In General.--A recipient of a scholarship under this 
     part shall continue to receive the scholarship assistance 
     only as long as the recipient is--
       ``(1) enrolled as a full-time student and pursuing a course 
     of study leading to teacher certification, unless the 
     recipient is working in a public school (as a 
     paraprofessional, or as a teacher under emergency 
     credentials) while participating in the program; and
       ``(2) maintaining satisfactory progress as determined by 
     the institution of higher education participating in the 
     partnership.
       ``(b) Special Rule. Each eligible partnership shall modify 
     the application of section 257(a)(1) and of subsection (a)(1) 
     to the extent necessary to accommodate the rights of 
     individuals with disabilities under section 504 of the 
     Rehabilitation Act of 1973.

     ``SEC. 259. SERVICE REQUIREMENTS.

       ``(a) Requirement.--Each eligible partnership receiving a 
     grant under this part shall enter into an agreement, with 
     each student to whom the partnership awards a scholarship 
     under this part, providing that a scholarship recipient who 
     completes a teacher preparation program under this part 
     shall, within 7 years of completing that program, teach full-
     time for at least 5 years in a high-poverty school in an 
     underserved geographic area or repay the amount of the 
     scholarship, under the terms and conditions established by 
     the Secretary.
       ``(b) Regulations. The Secretary shall prescribe 
     regulations relating to the requirements of subsection (a), 
     including any provisions for waiver of those requirements.

     ``SEC. 260. EVALUATION.

       ``The Secretary shall provide for an evaluation of the 
     program carried out under this part, which shall asses such 
     issues as--
       ``(1) whether institutions participating in the eligible 
     partnerships are successful in preparing scholarship 
     recipients to teach to high State and local standards;
       ``(2) whether scholarship recipients are successful in 
     completing teacher preparation programs, becoming fully 
     certified teachers, and obtaining teaching positions in 
     underserved areas, and whether the recipients continue 
     teaching in those areas over a period of years;
       ``(3) the national impact of the program in assisting local 
     educational agencies in underserved areas to recruit, 
     prepare, and retain diverse, high-quality teachers in the 
     areas in which the agencies have the greatest needs;
       ``(4) the long-term impact of the grants on teacher 
     preparation programs conducted by institutions of higher 
     education participating in the eligible partnership and on 
     the institutions' relationships with their partner local 
     educational agencies and other members of the partnership; 
     and
       ``(5) the relative effectiveness of different approaches 
     for preparing new teachers to teach in underserved areas, 
     including their effectiveness in preparing new teachers to 
     teach to high content and performance standards.

     ``SEC. 261. NATIONAL ACTIVITIES.

       ``The Secretary may reserve not more than 5 percent of the 
     funds appropriated for this part for any fiscal year for--
       ``(1) peer review of applications;
       ``(2) conducting the evaluation required under section 260; 
     and
       ``(3) technical assistance.

     ``SEC. 262. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     part $37,000,000 for fiscal year 1999 and such sums as may be 
     necessary for each of the 4 succeeding fiscal years.''.

                      TITLE III--INSTITUTIONAL AID

     SEC. 301. TRANSFERS AND REDESIGNATIONS.

       (a) In General.--Title III (20 U.S.C. 1051 et seq.) is 
     amended--
       (1) by redesignating part D as part F;
       (2) by redesignating sections 351, 352, 353, 354, 356, 357, 
     358, and 360 (20 U.S.C. 1066, 1067, 1068, 1069, 1069b, 1069c, 
     1069d, and 1069f) as sections 391, 392, 393, 394, 395, 396, 
     397, and 398, respectively;
       (3) by transferring part B of title VII (20 U.S.C. 1132c et 
     seq.) to title III to follow part C of title III (20 U.S.C. 
     1065 et seq.), and redesignating such part B as part D;
       (4) by redesignating sections 721 through 728 (20 U.S.C. 
     1132c and 1132c-7) as sections 341 through 348, respectively;
       (5) by transferring subparts 1 and 3 of part B of title X 
     (20 U.S.C. 1135b et seq. and 1135d et seq.) to title III to 
     follow part D of title III (as redesignated by paragraph 
     (3)), and redesignating such subpart 3 as subpart 2;
       (6) by inserting after part D of title III (as redesignated 
     by paragraph (3)) the following:

           ``PART E--MINORITY SCIENCE IMPROVEMENT PROGRAM'';

       (7) by redesignating sections 1021 through 1024 (20 U.S.C. 
     1135b and 1135b-3), and sections 1041, 1042, 1043, 1044, 
     1046, and 1047 (20 U.S.C. 1135d, 1135d-1, 1135d-2, 1135d-3, 
     1135d-5, and 1135d-6) as sections 351 through 354, and 
     sections 361, 362, 363, 364, 365, and 366, respectively; and
       (8) by repealing section 366 (as redesignated by paragraph 
     (7)) (20 U.S.C. 1135d-6).
       (b) Conforming Amendment.--Section 361 (as redesignated by 
     subsection (a)(7)) (20 U.S.C. 1135d) is amended--
       (1) in paragraph (1), by inserting ``and'' after the 
     semicolon;
       (2) in paragraph (2), by striking ``; and'' and inserting a 
     period; and
       (3) by striking paragraph (3).
       (c) Cross References.--Title III (20 U.S.C. 1051 et seq.) 
     is amended--
       (1) in section 311(b) (20 U.S.C. 1057(b)), by striking 
     ``360(a)(1)'' and inserting ``398(a)(1)'';
       (2) in section 312 (20 U.S.C. 1058)--
       (A) in subsection (b)(1)(B), by striking ``352(b)'' and 
     inserting ``392(b)''; and
       (B) in subsection (c)(2), by striking ``352(a)'' and 
     inserting ``392(a)'';
       (3) in section 313(b) (20 U.S.C. 1059(b)), by striking 
     ``354(a)(1)'' and inserting ``394(a)(1)'';
       (4) in section 342 (as redesignated by subsection (a)(4)) 
     (20 U.S.C. 1132c-1)--
       (A) in paragraph (3), by striking ``723(b)'' and inserting 
     ``343(b)'';
       (B) in paragraph (4), by striking ``723'' and inserting 
     ``343'';
       (C) in the matter preceding subparagraph (A) of paragraph 
     (5), by striking ``724(b)'' and inserting ``344(b)'';
       (D) in paragraph (8), by striking ``725(1)'' and inserting 
     ``345(1)''; and
       (E) in paragraph (9), by striking ``727'' and inserting 
     ``347'';
       (5) in section 343 (as redesignated by subsection (a)(4)) 
     (20 U.S.C. 1132c-2)--
       (A) in subsection (a), by striking ``724'' and inserting 
     ``344''; and
       (B) in subsection (b)--
       (i) in the matter preceding paragraph (1), by striking 
     ``725(1) and 726'' and inserting ``345(1) and 346'';
       (ii) in paragraph (10), by striking ``724'' and inserting 
     ``344''; and
       (iii) in subsection (d), by striking ``723(c)(1)'' and 
     inserting ``343(c)(1)'';
       (6) in section 345(2) (as redesignated by subsection 
     (a)(4)) (20 U.S.C. 1132c-4(2)), by striking ``723'' and 
     inserting ``343'';
       (7) in section 348 (as redesignated by subsection (a)(4)) 
     (20 U.S.C. 1132c-7), by striking ``725(1)'' and inserting 
     ``345(1)'';
       (8) in section 353(a) (as redesignated by subsection 
     (a)(7)) (20 U.S.C. 1135b-2(a))--
       (A) in paragraph (1), by striking ``1046(6)'' and inserting 
     ``365(6)'';
       (B) in paragraph (2), by striking ``1046(7)'' and inserting 
     ``365(7)'';
       (C) in paragraph (3), by striking ``1046(8)'' and inserting 
     ``365(8)''; and
       (D) in paragraph (4), by striking ``1046(9)'' and inserting 
     ``365(9)'';
       (9) in section 361(1) (as redesignated by subsection 
     (a)(7)) (20 U.S.C. 1135d(1)), by striking ``1046(3)'' and 
     inserting ``365(3)'';
       (10) in section 362(a) (as redesignated by subsection 
     (a)(7)) (20 U.S.C. 1135d-1(a))--
       (A) in the matter preceding paragraph (1), by striking 
     ``1041'' and inserting ``361''; and
       (B) in paragraph (1), by striking ``1021(b)'' and inserting 
     ``351(b)''; and
       (11) in section 391(b)(6) (as redesignated by subsection 
     (a)(2)), by striking ``357'' and inserting ``396''.

     SEC. 302. FINDINGS.

       Section 301(a) (20 U.S.C. 1051(a)) is amended--
       (1) by redesignating paragraphs (3) through (7) as 
     paragraphs (4) through (8), respectively; and
       (2) by inserting after paragraph (2) the following:
       ``(3) in order to be competitive and provide a high-quality 
     education for all, institutions of higher education should 
     improve their technological capacity and make effective use 
     of technology;''.

     SEC. 303. STRENGTHENING INSTITUTIONS.

       (a) Grants.--Section 311 (20 U.S.C. 1057) is amended--
       (1) in subsection (b)(3)(D), by inserting ``, including 
     high technology equipment,'' after ``equipment''; and
       (2) by adding at the end the following:
       ``(c) Endowment Fund.--
       ``(1) In general.--An eligible institution may use not more 
     than 20 percent of the grant funds

[[Page S7731]]

     provided under this part to establish or increase an 
     endowment fund at such institution.
       ``(2) Matching requirement.--In order to be eligible to use 
     grant funds in accordance with paragraph (1), the eligible 
     institution shall provide matching funds, in an amount equal 
     to the Federal funds used in accordance with paragraph (1), 
     for the establishment or increase of the endowment fund.
       ``(3) Comparability.--The provisions of part C, regarding 
     the establishment or increase of an endowment fund, that the 
     Secretary determines are not inconsistent with this 
     subsection, shall apply to funds used under paragraph (1).''.
       (b) Duration of Grant.--Section 313 (20 U.S.C. 1059) is 
     amended by adding at the end the following:
       ``(d) Wait-Out-Period.--Each eligible institution that 
     received a grant under this part for a 5-year period shall 
     not be eligible to receive an additional grant under this 
     part until 2 years after the date on which the 5-year grant 
     period terminates.
       (c) American Indian 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.--In this section:
       ``(1) Indian.--The term `Indian' has the meaning given the 
     term in section 2 of the Tribally Controlled College or 
     University Assistance Act of 1978.
       ``(2) Indian tribe.--The term `Indian tribe' has the 
     meaning given the term in section 2 of the Tribally 
     Controlled College or University Assistance Act of 1978.
       ``(3) Tribal college or university.--The term `Tribal 
     College or University' has the meaning give the term 
     `tribally controlled college or university' in section 2 of 
     the Tribally Controlled College or University Assistance Act 
     of 1978, and includes an institution listed in the Equity in 
     Educational Land Grant Status Act of 1994.
       ``(4) Institution of higher education.--The term 
     `institution of higher education' means an institution of 
     higher education as defined in section 1201(a), except that 
     paragraph (2) of such section shall not apply.
       ``(c) Authorized Activities.--
       ``(1) In general.--Grants awarded under this section shall 
     be used by Tribal Colleges or Universities to assist such 
     institutions to plan, develop, undertake, and carry out 
     activities to improve and expand such institutions' capacity 
     to serve Indian students.
       ``(2) Examples of authorized activities.--The activities 
     described in paragraph (1) may include--
       ``(A) purchase, rental, or lease of scientific or 
     laboratory equipment for educational purposes, including 
     instructional and research purposes;
       ``(B) construction, maintenance, renovation, and 
     improvement in classrooms, libraries, laboratories, and other 
     instructional facilities, including purchase or rental of 
     telecommunications technology equipment or services;
       ``(C) support of faculty exchanges, faculty development, 
     and faculty fellowships to assist in attaining advanced 
     degrees in the faculty's field of instruction;
       ``(D) academic instruction in disciplines in which American 
     Indians are underrepresented;
       ``(E) purchase of library books, periodicals, and other 
     educational materials, including telecommunications program 
     material;
       ``(F) tutoring, counseling, and student service programs 
     designed to improve academic success;
       ``(G) funds management, administrative management, and 
     acquisition of equipment for use in strengthening funds 
     management;
       ``(H) joint use of facilities, such as laboratories and 
     libraries;
       ``(I) establishing or improving a development office to 
     strengthen or improve contributions from alumni and the 
     private sector;
       ``(J) establishing or enhancing a program of teacher 
     education designed to qualify students to teach in elementary 
     schools 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;
       ``(K) establishing community outreach programs that 
     encourage American Indian elementary school and secondary 
     school students to develop the academic skills and the 
     interest to pursue postsecondary education;
       ``(L) other activities proposed in the application 
     submitted pursuant to subsection (d) that--
       ``(i) contribute to carrying out the activities described 
     in subparagraphs (A) through (K); and
       ``(ii) are approved by the Secretary as part of the review 
     and acceptance of such application.
       ``(3) Endowment fund.--
       ``(A) In general.--A Tribal College or University may use 
     not more than 20 percent of the grant funds provided under 
     this section to establish or increase an endowment fund at 
     the institution.
       ``(B) Matching requirement.--In order to be eligible to use 
     grant funds in accordance with subparagraph (A), the Tribal 
     College or University shall provide matching funds, in an 
     amount equal to the Federal funds used in accordance with 
     subparagraph (A), for the establishment or increase of the 
     endowment fund.
       ``(C) Comparability.--The provisions of part C regarding 
     the establishment or increase of an endowment fund, that the 
     Secretary determines are not inconsistent with this 
     paragraph, shall apply to funds used under subparagraph (A).
       ``(d) Application Process.--
       ``(1) Institutional eligibility.--To be eligible to receive 
     assistance under this section, a Tribal College or University 
     shall be an institution that--
       ``(A) is an eligible institution under section 312(b);
       ``(B) is eligible to receive assistance under the Tribally 
     Controlled College or University Assistance Act of 1978; or
       ``(C) is eligible to receive funds under the Equity in 
     Educational Land Grant Status Act of 1994.
       ``(2) Application.--Any Tribal College or University 
     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 secondary 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 subparagraph (A) or (B) of paragraph (1).
       ``(3) Special rule.--For the purposes of this part, no 
     Tribal College or University that is eligible for and 
     receives funds under this section may concurrently receive 
     other funds under this part or part B.''.

     SEC. 304. STRENGTHENING HBCU'S.

       (a) Grants.--Section 323 (20 U.S.C. 1062) is amended--
       (1) by redesignating subsection (b) as subsection (c); and
       (2) by inserting after subsection (a) the following:
       ``(b) Endowment Fund.--
       ``(1) In general.--An institution may use not more than 20 
     percent of the grant funds provided under this part to 
     establish or increase an endowment fund at the institution.
       ``(2) Matching requirement.--In order to be eligible to use 
     grant funds in accordance with paragraph (1), the eligible 
     institution shall provide matching funds, in an amount equal 
     to the Federal funds used in accordance with paragraph (1), 
     for the establishment or increase of the endowment fund.
       ``(3) Comparability.--The provisions of part C regarding 
     the establishment or increase of an endowment fund, that the 
     Secretary determines are not inconsistent with this 
     subsection, shall apply to funds used under paragraph (1).''.
       (b) Professional or Graduate Institutions.--Section 326 (20 
     U.S.C. 1063b) is amended--
       (1) in subsection (a), by adding at the end of paragraph 
     (2) the following: ``If a grant of less than $500,000 is made 
     under this section, matching funds provided from non-Federal 
     sources are not required. If a grant equal to or in excess of 
     $500,000 is made under this section, match funds provided 
     from non-Federal sources are required only with respect to 
     the amount of the grant that exceeds $500,000.''; and
       (2) in subsection (e)(1)--
       (A) in subparagraph (E), by inserting ``, and any Tuskegee 
     University qualified graduate program'' before the semicolon;
       (B) in subparagraph (F), by inserting ``, and any Xavier 
     University qualified graduate program'' before the semicolon;
       (C) in subparagraph (G), by inserting ``, and any Southern 
     University qualified graduate program'' before the semicolon;
       (D) in subparagraph (H), by inserting ``, and any Texas 
     Southern University qualified graduate program'' before the 
     semicolon;
       (E) in subparagraph (I), by inserting ``, and any Florida 
     A&M University qualified graduate program'' before the 
     semicolon; and
       (F) in subparagraph (J), by inserting ``, and any North 
     Carolina Central University qualified graduate program'' 
     before the semicolon.

     SEC. 305. ENDOWMENT CHALLENGE GRANTS.

       Paragraph (2) of section 331(b) (20 U.S.C. 1065(b)) is 
     amended by striking subparagraphs (B) and (C) and inserting 
     the following:
       ``(B) The Secretary may make a grant under this part to an 
     eligible institution in any fiscal year if the institution--
       ``(i) applies for a grant in an amount not exceeding 
     $500,000; and
       ``(ii) has deposited in the eligible institution's 
     endowment fund established under this section an amount which 
     is equal to \1/2\ of the amount of such grant.
       ``(C) An eligible institution of higher education that is 
     awarded a grant under subparagraph (B) shall not be eligible 
     to receive an additional grant under subparagraph (B) until 
     10 years after the date on which the grant period 
     terminates.''.

     SEC. 306. HBCU CAPITAL FINANCING.

       (a) Definition.--Section 342(5) (as redesignated by section 
     301(a)(4)) (20 U.S.C. 1132c-1(5)) is amended--
       (1) by redesignating subparagraphs (B), (C), and (D) as 
     subparagraphs (C), (F), and (G);
       (2) by inserting after subparagraph (A) the following:
       ``(B) a facility for the administration of an educational 
     program, or a student center or student union, except that 
     not more than 5 percent of the loan proceeds provided under 
     this part may be used for the facility, center or union if 
     the facility, center or union is owned, leased, managed, or 
     operated by a private business, that, in return for such use, 
     makes a payment to the eligible institution;'';
       (3) by inserting after subparagraph (C) (as redesignated by 
     paragraph (1)) the following:
       ``(D) a maintenance, storage, or utility facility that is 
     essential to the operation of a facility, a library, a 
     dormitory, equipment, instrumentation, a fixture, real 
     property or an interest therein, described in this paragraph;

[[Page S7732]]

       ``(E) a facility designed to provide primarily outpatient 
     health care for students or faculty;''; and
       (4) in subparagraph (G) (as redesignated by paragraph (2)), 
     by striking ``(C)'' and inserting ``(F)''.
       (b) Full Faith and Credit.--Section 343 (as redesignated by 
     section 301(a)(4)) (20 U.S.C. 1132c-2) is amended by adding 
     at the end the following:
       ``(e) Notwithstanding any other provision of law, the 
     Secretary may sell a qualified bond guaranteed under this 
     part to any party that offers terms that the Secretary 
     determines are in the best interest of the eligible 
     institution.''.

     SEC. 307. MINORITY SCIENCE AND ENGINEERING IMPROVEMENT 
                   PROGRAM.

       Section 365(4) (as redesignated by section 301(a)(7)) (20 
     U.S.C. 1135d-5(4)) is amended by inserting ``behavioral,'' 
     after ``physical,''.

     SEC. 308. GENERAL PROVISIONS.

       (a) Applications.--Paragraph (1) of section 391(b) (as 
     redesignated by section 301(a)(2)) (20 U.S.C. 1066(b)) is 
     amended by inserting ``, D or E'' after ``part C''.
       (b) Application Review Process.--Section 393 (as 
     redesignated by section 301(a)(2)) (20 U.S.C. 1068) is 
     amended by adding at the end the following:
       ``(d) Exclusion.--The provisions of this section shall not 
     apply to applications submitted under part D.''.
       (c) Waivers.--Paragraph (2) of section 395(b) (as 
     redesignated by section 301(a)(2)) (20 U.S.C. 1069b(b)) is 
     amended by striking ``title IV, VII, or VIII'' and inserting 
     ``part D or title IV''.
       (d) Authorization of Appropriations.--Section 398(a) (as 
     redesignated by section 301(a)(2)) (20 U.S.C. 1069f) is 
     amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A), by striking ``1993'' and inserting 
     ``1999''; and
       (B) in subparagraph (B)--
       (i) in clause (i), by striking ``$45,000,000 for fiscal 
     year 1993'' and inserting ``$5,000,000 for fiscal year 
     1999'';
       (ii) by striking clause (ii); and
       (iii) by striking ``(B)(i) There'' and inserting ``(B) 
     There'';
       (2) in paragraph (2)--
       (A) in subparagraph (A), by striking ``1993'' and inserting 
     ``1999''; and
       (B) in subparagraph (B), by striking ``$20,000,000 for 
     fiscal year 1993'' and inserting ``$30,000,000 for fiscal 
     year 1999'';
       (3) in paragraph (3), by striking ``$50,000,000 for fiscal 
     year 1993'' and inserting ``$10,000,000 for fiscal year 
     1999''; and
       (4) by adding at the end the following:
       ``(4) Part d.--There are authorized to be appropriated to 
     carry out part D, $110,000 for fiscal year 1999, and such 
     sums as may be necessary for each of the 4 succeeding fiscal 
     years.
       ``(5) Part e.--There are authorized to be appropriated to 
     carry out part E, $10,000,000 for fiscal year 1999, and such 
     sums as may be necessary for each of the 4 succeeding fiscal 
     years.''.

                      TITLE IV--STUDENT ASSISTANCE

  PART A--GRANTS TO STUDENTS IN ATTENDANCE AT INSTITUTIONS OF HIGHER 
                               EDUCATION

     SEC. 411. REPEALS AND REDESIGNATIONS.

       Title IV (20 U.S.C. 1070 et seq.) is amended--
       (1) in part A (20 U.S.C. 1070 et seq.)--
       (A) in subpart 2 (20 U.S.C. 1070a-11), by repealing 
     chapters 3 through 8 (20 U.S.C. 1070a-31 et seq. and 1070a-81 
     et seq.); and
       (B) by repealing subpart 8 (20 U.S.C. 1070f); and
       (2) in part H (20 U.S.C. 1099a et seq.)--
       (A) by repealing subpart 1 (20 U.S.C. 1099a et seq.); and
       (B) by redesignating subparts 2 and 3 (20 U.S.C. 1099b et 
     seq. and 1099c et seq.) as subparts 1 and 2, respectively.

     SEC. 412. FEDERAL PELL GRANTS.

       (a) Amendment to Subpart Heading.--The heading for subpart 
     1 of part A of title IV (20 U.S.C. 1070a et seq.) is amended 
     by striking ``Basic Educational Opportunity Grants'' and 
     inserting ``Federal Pell Grants''.
       (b) Federal Pell Grants.--Section 401 (20 U.S.C. 1070a) is 
     amended--
       (1) in the section heading, by striking ``BASIC EDUCATIONAL 
     OPPORTUNITY GRANTS'' and inserting ``FEDERAL PELL GRANTS'';
       (2) in subsection (a)(1)--
       (A) in the first sentence, by striking ``shall, during the 
     period beginning July 1, 1972, and ending September 30, 
     1998,'' and inserting ``, for each fiscal year through fiscal 
     year 2004, shall''; and
       (B) in the second sentence, by inserting ``until such time 
     as the Secretary determines and publishes in the Federal 
     Register with an opportunity for comment, an alternative 
     payment system that provides payments to institutions in an 
     accurate and timely manner,'' after ``pay eligible 
     students'';
       (3) in subsection (b)--
       (A) in paragraph (2)(A), by striking clauses (i) through 
     (v), and inserting the following:
       ``(i) $5,000 for academic year 1999-2000;
       ``(ii) $5,200 for academic year 2000-2001;
       ``(iii) $5,400 for academic year 2001-2002;
       ``(iv) $5,600 for academic year 2002-2003; and
       ``(v) $5,800 for academic year 2003-2004.'';
       (B) by amending paragraph (3) to read as follows:
       ``(3) For any academic year for which an appropriation Act 
     provides a maximum basic grant in an amount in excess of 
     $2,400, the amount of a student's basic grant shall equal 
     $2,400 plus--
       ``(A) one-half of the amount by which such maximum basic 
     grant exceeds $2,400; plus
       ``(B) the lesser of--
       ``(i) the remaining one-half of such excess; or
       ``(ii) the sum of the student's tuition, fees, and if the 
     student has dependent care expenses (as described in section 
     472(8) or disability-related expenses (as described in 
     section 472(9)), an allowance determined by the institution 
     for such expenses.'';
       (C) in paragraph (5), by striking ``$400, except'' and all 
     that follows through ``grant of $400'' and insert ``$200''; 
     and
       (D) in paragraph (6)--
       (i) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii), respectively;
       (ii) by inserting ``(A)'' after the paragraph designation; 
     and
       (iii) by adding at the end the following:
       ``(B) The Secretary shall promulgate regulations 
     implementing this paragraph.''; and
       (4) in subsection (c)--
       (A) by amending paragraph (1) to read as follows: ``(1)(A) 
     Except as provided in subparagraph (B), the period during 
     which a student may receive a basic grant shall be the 
     period, required for the completion of the first 
     undergraduate baccalaureate course of study pursued by the 
     student at the institution at which the student is in 
     attendance, that does not exceed 150 percent of the period 
     normally required by a full-time student (or the equivalent 
     period, in the case of a part-time student) to complete the 
     course of study at the institution, as determined by the 
     institution.
       ``(B) A student may receive basic grants under this subpart 
     for a period that exceeds the period described in 
     subparagraph (A) to the extent the institution in which the 
     student is enrolled determines necessary to accommodate the 
     rights of students with disabilities under section 504 of the 
     Rehabilitation Act of 1973.''; and
       (B) in paragraph (2)--
       (i) by striking ``Nothing'' and inserting ``(A) Except as 
     provided in subparagraph (B), nothing'';
       (ii) by striking ``or, in the case'' and all that follows 
     through ``or skills''; and
       (iii) by adding at the end the following:
       ``(B)(i) A student may receive a basic grant to attend 
     English language instruction that is a separate course of 
     instruction only if--
       ``(I) students enrolled in such a course are required to 
     take an independently administered standardized test of 
     English language proficiency upon completion of the course; 
     and
       ``(II) not less than a minimum percentage of such students 
     achieve a passing score on that test.
       ``(ii) The Secretary shall promulgate regulations that 
     specify 1 or more standardized tests of English proficiency, 
     the minimum percentage of students who must achieve a passing 
     score on the tests, and such other requirements as the 
     Secretary determines are necessary to implement clause 
     (i).''.

     SEC. 413. TRIO PROGRAMS.

       (a) Program Authority.--Section 402A (20 U.S.C. 1070a-11) 
     is amended--
       (1) in subsection (b)(3)--
       (A) in subparagraph (A), by striking ``$170,000 for fiscal 
     year 1993'' and inserting ``$190,000 for each fiscal year'';
       (B) in subparagraph (B), by striking ``$180,000 for fiscal 
     year 1994'' and inserting ``$200,000 for each fiscal year''; 
     and
       (C) in subparagraph (C), by striking ``$190,000 for fiscal 
     year 1995'' and inserting ``$210,000 for each fiscal year'';
       (2) in subsection (c)(6), by amending the last sentence to 
     read as follows: ``The Secretary shall permit a Director of a 
     program assisted under this chapter to also administer 1 or 
     more additional programs for disadvantaged students operated 
     by the sponsoring entity regardless of the funding source of 
     such additional program.''; and
       (3) in subsection (f), by striking ``$650,000,000 for 
     fiscal year 1993'' and inserting ``$700,000,000 for fiscal 
     year 1999''.
       (b) Talent Search.--Section 402B(b)(5) (20 U.S.C. 1070a-
     12(b)(5)) is amended by inserting ``, or activities designed 
     to acquaint individuals from disadvantaged backgrounds with 
     careers in which the individuals are particularly 
     underrepresented'' before the semicolon.
       (c) Upward Bound.--Section 402C (20 U.S.C. 1070a-13) is 
     amended--
       (1) in subsection (b)--
       (A) in paragraph (9), by striking ``and'' after the 
     semicolon;
       (B) by redesignating paragraph (10) as paragraph (11);
       (C) by inserting after paragraph (9) the following:
       ``(10) work-study positions where youth participating in 
     the project are exposed to careers requiring a postsecondary 
     degree; and''; and
       (D) in paragraph (11) (as redesignated by subparagraph 
     (B)), by striking ``(9)'' and inserting ``(10)''; and
       (2) in subsection (e), by striking ``and not in excess of 
     $40 per month during the remaining period of the year.'' and 
     inserting ``except that youth participating in a work-study 
     position under subsection (b)(10) may be paid a stipend of 
     $300 per month during June, July, and August. Youths 
     participating in a project proposed to be carried out under 
     any application may be paid stipends not in excess of $40 per 
     month during the remaining period of the year.''.
       (d) Student Support Services.--Paragraph (6) of section 
     402D(c) (20 U.S.C. 1070a-14(c)(6)) is amended to read as 
     follows:
       ``(6) consider, in addition to such other criteria as the 
     Secretary may prescribe, the institution's effort, and where 
     applicable past history, in--
       ``(A) providing sufficient financial assistance to meet the 
     full financial need of each student at the institution; and
       ``(B) maintaining the loan burden of each such student at a 
     manageable level.''.
       (e) Evaluation and Dissemination.--Section 402H (20 U.S.C. 
     1070a-18) is amended to read as follows:

     ``SEC. 402H. EVALUATIONS AND GRANTS FOR PROJECT IMPROVEMENT 
                   AND DISSEMINATION PARTNERSHIP PROJECTS.

       ``(a) Evaluations.--

[[Page S7733]]

       ``(1) In general.--For the purpose of improving the 
     effectiveness of the programs and projects assisted under 
     this subpart, the Secretary may make grants to or enter into 
     contracts with institutions of higher education and other 
     public and private institutions and organizations to evaluate 
     the effectiveness of the programs and projects assisted under 
     this subpart.
       ``(2) Practices.--The evaluations described in paragraph 
     (1) shall identify institutional, community, and program or 
     project practices that are particularly effective in 
     enhancing the access of low-income individuals and first-
     generation college students to postsecondary education, the 
     preparation of the individuals and students for postsecondary 
     education, and the success of the individuals and students in 
     postsecondary education.
       ``(b) Grants.--The Secretary may award grants to 
     institutions of higher education or other private and public 
     institutions and organizations, that are carrying out a 
     program or project assisted under this subpart prior to the 
     date of enactment of the Higher Education Amendments of 1998, 
     to enable the institutions and organizations to expand and 
     leverage the success of such programs or projects by working 
     in partnership with other institutions, community-based 
     organizations, or combinations of such institutions and 
     organizations, that are not receiving assistance under this 
     subpart and are serving low-income students and first 
     generation college students, in order to--
       ``(1) disseminate and replicate best practices of programs 
     or projects assisted under this subpart; and
       ``(2) provide technical assistance regarding programs and 
     projects assisted under this subpart.
       ``(c) Results.--In order to improve overall program or 
     project effectiveness, the results of evaluations and grants 
     described in this section shall be disseminated by the 
     Secretary to similar programs or projects assisted under this 
     subpart, as well as other individuals concerned with 
     postsecondary access for and retention of low-income 
     individuals and first-generation college students.''.

     SEC. 414. NATIONAL EARLY INTERVENTION SCHOLARSHIP AND 
                   PARTNERSHIP PROGRAM.

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

     SEC. 415. FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY 
                   GRANTS.

       (a) Authorization of Appropriations.--Section 413A(b) (20 
     U.S.C. 1070b) is amended by striking ``$675,000,000 for 
     fiscal year 1993'' and inserting ``$700,000,000 for fiscal 
     year 1999''.
       (b) Use of Funds for Less-Than-Full-Time Students.--
     Subsection (d) of section 413C (20 U.S.C. 1070b-2) is amended 
     to read as follows:
       ``(d) Use of Funds for Less-Than-Full-Time Students.--If 
     the institution's allocation under this subpart is directly 
     or indirectly based in part on the financial need 
     demonstrated by students who are independent students or 
     attending the institution on less than a full-time basis, a 
     reasonable proportion of the allocation shall be made 
     available to such students.''.
       (c) Carryover, Carryback, and Reallocation.--Subpart 3 of 
     part A of title IV (20 U.S.C. 1070b et seq.) is amended by 
     adding at the end the following:

     ``SEC. 413E. CARRYOVER, CARRYBACK, AND REALLOCATION.

       ``(a) Carryover Authority.--Of the sums made available to 
     an eligible institution under this subpart for a fiscal year, 
     not more than 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) Carryback Authority.--Of the sums made available to 
     an eligible institution under this subpart for a fiscal year, 
     not more than 10 percent may, at the discretion of the 
     institution, be used by the institution for expenditure for 
     the fiscal year preceding the fiscal year for which the sums 
     were appropriated.
       ``(c) Reallocation.--Any of the sums made available to an 
     eligible institution under this subpart for a fiscal year 
     that are not needed by the institution to award supplemental 
     grants during that fiscal year, that the institution does not 
     wish to use during the succeeding fiscal year as authorized 
     in subsection (a), and that the institution does not wish to 
     use for the preceding fiscal year as authorized in subsection 
     (b), shall be made available to the Secretary for 
     reallocation under section 413D(e) until the end of the 
     second fiscal year after the fiscal year for which such sums 
     were appropriated.''.

     SEC. 416. LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP 
                   PROGRAM.

       (a) Amendment to Subpart Heading.--
       (1) In general.--The heading for subpart 4 of part A of 
     title IV (20 U.S.C. 1070c et seq.) is amended to read as 
     follows:

 ``Subpart 4--Leveraging Educational Assistance Partnership Program''.

       (2) Conforming amendments.--Subpart 4 of part A of title IV 
     (20 U.S.C. 1070c et seq.) is amended--
       (A) in section 415B(b) (20 U.S.C. 1070c-1(b)), by striking 
     ``State student grant incentive'' and inserting ``leveraging 
     educational assistance partnership''; and
       (B) in the heading for section 415C (20 U.S.C. 1070c-2), by 
     striking ``STATE STUDENT INCENTIVE GRANT'' and inserting 
     ``LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP''.
       (b) Authorization of Appropriations.--Section 415A(b) (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 $35,000,000, 
     the excess shall be available to carry out section 415E.''.
       (c) Special Leveraging Educational Assistance Partnership 
     Program.--Subpart 4 of part A of title IV (20 U.S.C. 1070c et 
     seq.) is amended--
       (1) by redesignating section 415E as 415F;
       (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) Applicability Rule.--The provisions of this subpart 
     which are not inconsistent with this section shall apply to 
     the program authorized by this section.
       ``(c) 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) making funds available for community service work-
     study activities for eligible students who demonstrate 
     financial need;
       ``(4) creating a postsecondary scholarship program for 
     eligible students who demonstrate financial need and wish to 
     enter teaching;
       ``(5) creating a scholarship program for eligible students 
     who demonstrate financial need and wish to enter a program of 
     study leading to a degree in mathematics, computer science, 
     or engineering;
       ``(6) carrying out early intervention programs, mentoring 
     programs, and career education programs for eligible students 
     who demonstrate financial need; and
       ``(7) awarding merit or academic scholarships to eligible 
     students who demonstrate financial need.
       ``(d) 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 (c) 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.
       ``(e) Federal Share.--The Federal share of the cost of the 
     authorized activities described in subsection (c) for any 
     fiscal year shall be 33\1/3\ percent.''; and
       (3) by adding at the end the following:

     ``SEC. 415G. FEDERAL-STATE RELATIONSHIPS; STATE AGREEMENTS.

       ``(a) In General.--Any State that desires to receive 
     assistance under this subpart shall enter into an agreement 
     with the Secretary pursuant to subsection (b) setting forth 
     the terms and conditions for the relationship between the 
     Federal Government and that State for the purposes set forth 
     under this subpart.
       ``(b) Contents.--
       ``(1) In general.--Such agreement shall consist of 
     assurances by the State, including a description of the means 
     to be used by the State to fulfill the assurances, that--
       ``(A) the State will provide for such methods of 
     administration as are necessary for the proper and efficient 
     administration of the program under this subpart in keeping 
     with the purposes set forth under this subpart;
       ``(B) the State will provide for such fiscal control and 
     fund accounting procedures as may be necessary to ensure 
     proper disbursement of, and accounting for, Federal funds 
     paid to the State under this subpart;
       ``(C) the State will follow policies and practices of 
     administration that will ensure that non-Federal funds will 
     not be supplanted by Federal funds, and that equitable and 
     appropriate criteria will be used in evaluation of 
     applications or proposals for grants under this subpart; and
       ``(D) the State has a comprehensive planning or policy 
     formulation process that--
       ``(i) considers the relation between State administration 
     of the program under this subpart, and administration of 
     similar State programs or processes;
       ``(ii) encourages State policies designed to consider 
     effects on declining enrollments on all sectors of 
     postsecondary education in the State;
       ``(iii) considers the postsecondary education needs of 
     unserved and underserved individuals within the State, 
     including individuals beyond the traditional college age;
       ``(iv) considers the resources of institutions, 
     organizations, or agencies (both public and private) within 
     the State capable of providing postsecondary educational 
     opportunities in the State; and
       ``(v) provides for direct, equitable, and active 
     participation in the comprehensive planning or policy 
     formulation process or processes of representatives of 
     institutions of higher education (including community 
     colleges, proprietary institutions, and independent colleges 
     and universities), students, other providers of postsecondary 
     education services, and the general public in the State.
       ``(2) Special rule.--Participation under paragraph 
     (1)(D)(v) shall, consistent with State

[[Page S7734]]

     law, be achieved through membership on State planning 
     commissions, State advisory councils, or other State entities 
     established by the State to conduct federally assisted 
     comprehensive planning or policy formulation.
       ``(c) Special Rule.--The information and assurances 
     provided by a State in accordance with subparagraphs (A), 
     (B), and (C) of subsection (b)(1), and regulations issued by 
     the Secretary related directly to such assurances, shall be 
     satisfactory for the purposes of, and shall be considered in 
     lieu of, any comparable requirements for information and 
     assurances in any program under this subpart.
       ``(d) Agreement Duration; Compliance.--
       ``(1) Agreement duration.--An agreement of a State shall 
     remain in effect subject to modification as changes in 
     information or circumstances require.
       ``(2) Compliance.--Whenever the Secretary, after reasonable 
     notice and opportunity for a hearing has been given to the 
     State, finds that there is a failure to comply substantially 
     with the assurances required in subparagraph (A), (B), or (C) 
     of subsection (b)(1), the Secretary shall notify the State 
     that the State is no longer eligible to participate in the 
     program under this subpart until the Secretary is satisfied 
     that there is no longer any such failure to comply.
       ``(e) Special Rules.--
       ``(1) Entities entering into agreements.--For the purpose 
     of this section, the selection of the State entity or 
     entities authorized to act on behalf of the State for the 
     purpose of entering into an agreement with the Secretary 
     shall be in accordance with the State law of each individual 
     State with respect to the authority to make legal agreements 
     between the State and the Federal Government.
       ``(2) Construction.--
       ``(A) State structure.--Nothing in this section shall be 
     construed to authorize the Secretary to require any State to 
     adopt, as a condition for entering into an agreement, or for 
     participation in a program under this subpart, a specific 
     State organizational structure for achieving participation in 
     the planning, or administration of programs, or for statewide 
     planning, coordination, governing, regulating, or 
     administering of postsecondary education agencies, 
     institutions, or programs in the State.
       ``(B) State authority.--Nothing in this section shall be 
     construed as a limitation on the authority of any State to 
     adopt a State organizational structure for postsecondary 
     education agencies, institutions, or programs that is 
     appropriate to the needs, traditions, and circumstances of 
     that State, or as a limitation on the authority of a State 
     entering into an agreement pursuant to this section to modify 
     the State organizational structure at any time subsequent to 
     entering into such an agreement.''.
       (d) Technical and Conforming Amendments.--
       (1) Purpose.--Subsection (a) of section 415A (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--
       ``(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) (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. 417. HEP AND CAMP.

       Section 418A(g) (20 U.S.C. 1070d-2(g)) is amended--
       (1) in paragraph (1), by striking ``$15,000,000 for fiscal 
     year 1993'' and inserting ``$25,000,000 for fiscal year 
     1999''; and
       (2) in paragraph (2), by striking ``$5,000,000 for fiscal 
     year 1993'' and inserting ``$10,000,000 for fiscal year 
     1999''.

     SEC. 418. ROBERT C. BYRD HONORS SCHOLARSHIP PROGRAM.

       Section 419K (20 U.S.C. 1070d-41) is amended by striking 
     ``$10,000,000 for fiscal year 1993'' and inserting 
     ``$45,000,000 for fiscal year 1999''.

     SEC. 419. CHILD CARE ACCESS MEANS PARENTS IN SCHOOL.

       Part A of title IV (20 U.S.C. 1070 et seq.) is amended by 
     inserting after subpart 6 (20 U.S.C. 1070d-31 et seq.) the 
     following:

         ``Subpart 7--Child Care Access Means Parents in School

     ``SEC. 419N. CHILD CARE ACCESS MEANS PARENTS IN SCHOOL.

       ``(a) Purpose.--The purpose of this section is to support 
     the participation of low-income parents in postsecondary 
     education through the provision of campus-based child care 
     services.
       ``(b) Program Authorized.--
       ``(1) Authority.--The Secretary may award grants to 
     institutions of higher education to assist the institutions 
     in providing campus-based child care services primarily 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; renewal; and payments.--
       ``(A) Duration.--The Secretary shall award a grant under 
     this section for a period of 3 years.
       ``(B) Renewal.--A grant under this section may be renewed 
     for a period of 3 years.
       ``(C) Payments.--Subject to subsection (e)(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 primarily serving 
     the needs of low-income students enrolled at the institution 
     of higher education.
       ``(6) Construction.--Nothing in this section shall be 
     construed to prohibit an institution of higher education that 
     receives grant funds under this section from serving the 
     child care needs of the community served by the institution.
       ``(7) 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.
       ``(c) 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 (b)(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--
       ``(A) information regarding student demographics;
       ``(B) an assessment of child care capacity on or near 
     campus;
       ``(C) information regarding the existence of waiting lists 
     for existing child care;
       ``(D) information regarding additional needs created by 
     concentrations of poverty or by geographic isolation; and
       ``(E) other relevant data;
       ``(4) contain a description of the activities to be 
     assisted, including whether the grant funds will support an 
     existing child care program or a new child care program;
       ``(5) identify the resources, including technical expertise 
     and financial support, 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, and 
     accessing foundation, corporate or other institutional 
     support, and demonstrate that the use of the resources will 
     not result in increases in student tuition;
       ``(6) 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;
       ``(7) describe the extent to which the child care program 
     will coordinate with the institution's early childhood 
     education curriculum, to the extent the curriculum is 
     available, to meet the needs of the students in the early 
     childhood education program at the institution, and the needs 
     of the parents and children participating in the child care 
     program assisted under this section;
       ``(8) in the case of an institution seeking assistance for 
     a new child care program--
       ``(A) 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;
       ``(B) 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; and
       ``(C) 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.
       ``(d) Priority.--The Secretary shall give priority in 
     awarding grants under this section to institutions of higher 
     education that submit applications describing programs that--
       ``(1) leverage significant local or institutional 
     resources, including in-kind contributions, to support the 
     activities assisted under this section; and
       ``(2) utilize a sliding fee scale for child care services 
     provided under this section in order to support a high number 
     of low-income parents pursuing postsecondary education at the 
     institution.
       ``(e) 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;

[[Page S7735]]

       ``(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.
       ``(f) Construction.--No funds provided under this section 
     shall be used for construction, except for minor renovation 
     or repair to meet applicable State or local health or safety 
     requirements.
       ``(g) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $60,000,000 for fiscal year 1999 and such sums as may be 
     necessary for each of the 4 succeeding fiscal years.''.

             PART B--FEDERAL FAMILY EDUCATION LOAN PROGRAM

     SEC. 421. ADVANCES FOR RESERVE FUNDS.

       Section 422 (20 U.S.C. 1072) is amended--
       (1) in subsection (c)--
       (A) in paragraph (6)(B)(i), by striking ``written'' and 
     inserting ``written, electronic''; and
       (B) in paragraph (7)(A), by striking ``during the 
     transition from the Federal Family Education Loan Program 
     under this part to the Federal Direct Student Loan Program 
     under part D of this title'';
       (2) in the matter preceding subparagraph (A) of subsection 
     (g)(1), by striking ``or the program authorized by part D of 
     this title'' each place the term appears; and
       (3) by adding at the end the following:
       ``(i) Additional Recall of Reserves.--
       ``(1) In general.--Notwithstanding any other provision of 
     law and subject to paragraph (4), the Secretary shall recall 
     $40,000,000 for each of the fiscal years 1999, 2000, 2001, 
     2002, and 2003 from reserve funds held in the Federal Student 
     Loan Reserve Funds established under section 422A 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 reserve funds under paragraph (1) 
     annually on the basis of \1/5\ of the agency's required 
     share. For purposes of this paragraph, a guaranty agency's 
     required share shall be determined as follows:
       ``(A) Equal percentage.--The Secretary shall require each 
     guaranty agency to return an equal percentage reduction in 
     the amount of reserve funds held by the agency on September 
     30, 1996.
       ``(B) Calculation.--The equal percentage reduction shall be 
     the percentage obtained by dividing--
       ``(i) $200,000,000, by
       ``(ii) the total amount of all guaranty agencies' reserve 
     funds held on September 30, 1996.
       ``(4) Offset of required shares.--If any guaranty agency 
     returns to the Secretary any reserve funds 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 excess reserve funds 
     returned.
       ``(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 buildings, equipment, or other 
     nonliquid assets.''.

     SEC. 422. FEDERAL STUDENT LOAN RESERVE FUND.

       Part B of title IV (20 U.S.C. 1071 et seq.) is amended by 
     inserting after section 422 (20 U.S.C. 1072) the following:

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

       ``(a) Establishment.--Each guaranty agency shall, not later 
     than 45 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 into a Federal Student Loan Reserve Fund (in this section 
     referred to as the `Federal Fund'), in an account of a type 
     selected by the agency, with the approval of the Secretary.
       ``(b) Investment of Funds.--Funds transferred to 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, with the approval of the Secretary. Earnings from the 
     Federal Fund shall be the sole property of the Federal 
     Government.
       ``(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 section 428(c)(6)(A)(i); and
       ``(3) the amount of the insurance premium collected from 
     borrowers pursuant to section 428(b)(1)(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 sections 
     428(b)(1)(G), 428(j), 437, and 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.--The Federal Fund 
     administered by the guaranty agency, regardless of who holds 
     or controls the reserve funds or assets, and any nonliquid 
     assets that were purchased with Federal reserve funds, 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). The Secretary may direct a 
     guaranty agency, or such agency's officers or directors, to 
     cease any activity involving expenditure, use, or transfer of 
     the Federal Fund administered by the guaranty agency that the 
     Secretary determines is a misapplication, misuse, or improper 
     expenditure of such funds or assets.
       ``(f) Transition.--
       ``(1) In general.--In order to establish the Agency 
     Operating Fund established by section 422B, each agency may 
     transfer not more than 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) for use in the performance of the 
     agency's duties under this part. Such transfers may occur 
     during the first 3 years following the establishment of the 
     Agency Operating Fund, except that no agency may transfer in 
     excess of 40 percent of the Federal Fund balance to the 
     agency's Agency Operating Fund during any fiscal year. In 
     determining the amount necessary for transfer, the agency 
     shall assure that sufficient funds remain in the Federal Fund 
     to pay lender claims within the required time periods and to 
     meet the reserve funds recall requirements of subsection (b).
       ``(2) Repayment provisions.--Each guaranty agency shall 
     begin repayment of sums transferred pursuant to this 
     subsection not later than 3 years after the establishment of 
     the Agency Operating Fund, and shall repay all sums 
     transferred not later than 5 years from the date of the 
     establishment of the Agency Operating Fund. The guaranty 
     agency shall provide to the Secretary a schedule for 
     repayment of the sums transferred and an annual financial 
     analysis demonstrating the agency's ability to comply with 
     the schedule and repay all outstanding sums transferred.
       ``(3) Prohibition.--If a guaranty agency transfers funds 
     from the Federal Fund in accordance with this section, and 
     fails to make scheduled repayments to the Federal Fund, the 
     agency may not receive any other funds under this part until 
     the Secretary determines that the agency has made such 
     repayments.
       ``(4) Waiver.--The Secretary may waive the requirements of 
     paragraph (3) for a guaranty agency described in such 
     paragraph if the Secretary determines there are extenuating 
     circumstances beyond the control of the agency that justify 
     such a waiver.
       ``(5) Investment of federal funds.--Funds transferred from 
     the Federal Fund to the Agency Operating Fund for operating 
     expenses 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, with the approval of the Secretary.
       ``(6) 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 guaranty agency 
     in the calculation.''.

     SEC. 423. AGENCY OPERATING FUND.

       Part B of title IV (20 U.S.C. 1071 et seq.) is amended 
     further by inserting after section 422A (as added by section 
     422) the following:

     ``SEC. 422B. AGENCY OPERATING FUND.

       ``(a) Establishment.--Each guaranty agency shall, not later 
     than 45 days after the date of enactment of this section, 
     establish a fund designated as the Agency Operating Fund (in 
     this section referred to as the `Operating Fund').
       ``(b) Investment of Funds.--Funds deposited into the 
     Operating Fund, with the exception of funds transferred from 
     the Federal Student Loan Reserve Fund pursuant to section 
     422A(f), shall be invested at the discretion of the guaranty 
     agency.
       ``(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 
     in accordance with section 458;
       ``(3) the default prevention fee paid in accordance with 
     section 428(l); and
       ``(4) amounts remaining pursuant to section 
     428(c)(6)(A)(ii) from collection on defaulted loans held by 
     the agency, after payment of the Secretary's equitable share, 
     excluding amounts deposited in the Federal Student Loan 
     Reserve Fund pursuant to section 422A(c)(2).
       ``(d) Uses of Funds.--
       ``(1) In general.--Funds in the Operating Fund shall be 
     used for application processing, loan disbursement, 
     enrollment and repayment status management, default 
     prevention activities (including those described in section 
     422(h)(8), default collection activities, school and lender 
     training, compliance monitoring, and other student financial 
     aid related activities as determined by the Secretary.
       ``(2) Special rule.--The guaranty agency may, in the 
     agency's discretion, transfer funds from the Operating Fund 
     to the Federal Student Loan Reserve Fund for use pursuant to 
     section 422A. Such transfer shall be irrevocable, and any 
     funds so transferred shall become the sole property of the 
     United States.
       ``(3) Definitions.--For purposes of this subsection:
       ``(A) Default collection activities.--The term `default 
     collection activities' means activities of a guaranty agency 
     that are directly related to the collection of the loan on 
     which a default claim has been paid to the participating

[[Page S7736]]

     lender, including the attributable compensation of collection 
     personnel (and in the case of personnel who perform several 
     functions for such an agency only the portion of the 
     compensation attributable to the collection activity), 
     attorney's fees, fees paid to collection agencies, postage, 
     equipment, supplies, telephone, and similar charges.
       ``(B) Default prevention activities.--The term `default 
     prevention activities' means activities of a guaranty agency, 
     including those described in section 422(h)(8), that are 
     directly related to providing collection assistance to the 
     lender on a delinquent loan, prior to the loan's being in a 
     default status, including the attributable compensation of 
     appropriate personnel (and in the case of personnel who 
     perform several functions for such an agency only the portion 
     of compensation attributable to the default prevention 
     activity), fees paid to locate a missing borrower, postage, 
     equipment, supplies, telephone, and similar charges.
       ``(C) Enrollment and repayment status management.--The term 
     `enrollment and repayment status management' means activities 
     of a guaranty agency that 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 title.
       ``(e) Ownership of Operating Fund.--The Operating Fund, 
     with the exception of funds transferred from the Federal 
     Student Loan Reserve Fund in accordance with section 422A(f), 
     shall be considered to be the property of the guaranty 
     agency. The Secretary may not regulate the uses or 
     expenditure of moneys in the Operating Fund, but the 
     Secretary may require such necessary reports and audits as 
     provided in section 428(b)(2). However, during any period in 
     which funds are owed to the Federal Student Loan Reserve Fund 
     as a result of 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.
       ``(f) Authority of Secretary To Dispose of Nonliquid 
     Assets.--The Secretary may allow a guaranty agency to 
     purchase nonliquid assets of the agency originally acquired 
     with student loan reserve funds, except that an agency may 
     not purchase any nonliquid assets during any period in which 
     funds are owed to the Federal Student Loan Reserve Fund as a 
     result of a transfer under section 422A(f). The purchase 
     amount shall be available for expenditure under section 
     458.''.

     SEC. 424. APPLICABLE INTEREST RATES.

       (a) Applicable Interest Rates.--
       (1) Amendment.--Section 427A (20 U.S.C. 1077a et seq.) 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 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 section 
     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. 425. FEDERAL PAYMENTS TO REDUCE STUDENT INTEREST COSTS.

       (a) Federal Interest Subsidies.--Section 428(a) (20 U.S.C. 
     1078(a)) is amended--
       (1) in paragraph (2)--
       (A) in subparagraph (A)--
       (i) in clause (i), by striking subclauses (I), (II), and 
     (III) and inserting the following:
       ``(I) sets forth the loan amount for which the student 
     shows financial need; and
       ``(II) sets forth a schedule for disbursement of the 
     proceeds of the loan in installments, consistent with the 
     requirements of section 428G; and''; and
       (ii) by amending clause (ii) to read as follows:
       ``(ii) meets the requirements of subparagraph (B); and'';
       (B) by amending subparagraph (B) to read as follows:
       ``(B) For the purpose of clause (ii) of subparagraph (A), a 
     student shall qualify for a portion of an interest payment 
     under paragraph (1) (and a loan amount pursuant to section 
     428H) if the eligible institution has determined and 
     documented the student's amount of need for a loan based on 
     the student's estimated cost of attendance, estimated 
     financial assistance, and, for the purpose of an interest 
     payment pursuant to this section, the expected family 
     contribution (as determined under part F), subject to the 
     provisions of subparagraph (D).'';
       (C) by amending subparagraph (C) to read as follows:
       ``(C) For the purpose of subparagraph (B) and this 
     paragraph--
       ``(i) a student's cost of attendance shall be determined 
     under section 472;
       ``(ii) a student's estimated financial assistance means, 
     for the period for which the loan is sought, the amount of 
     assistance such student will receive under subpart 1 of part 
     A (as determined in accordance with section 484(b)), subpart 
     3 of part A, parts C and E, and any veterans' education 
     benefits paid because of enrollment in a postsecondary 
     education institution, including veterans' education benefits 
     (as defined in section 480(c)), plus other scholarship, 
     grant, or loan assistance; and
       ``(iii) the determination of need and of the amount of a 
     loan by an eligible institution under subparagraph (B) with 
     respect to a student shall, with the exception of loans made 
     under section 428H, be calculated in accordance with part 
     F.''; and
       (D) by striking subparagraph (F); and
       (2) in paragraph (3)(A)(v)--
       (A) in subclause (I), by inserting ``by the institution'' 
     after ``disbursement''; and
       (B) in clause (II), by inserting ``by the institution'' 
     after ``disbursement''.
       (b) Insurance Program Agreements.--Section 428(b) (20 
     U.S.C. 1078(b)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A)--
       (i) in the matter preceding clause (i), by inserting ``, as 
     defined in section 481(d)(2),'' after ``academic year'';
       (ii) in clause (iv), by striking ``and'' after the 
     semicolon;
       (iii) in clause (v), by inserting ``and'' after the 
     semicolon; and
       (iv) by inserting before the matter following clause (v) 
     the following:
       ``(vi) in the case of a student enrolled in coursework 
     specified in sections 484(b)(3)(B) and 484(b)(4)(B)--

       ``(I) $2,625 for coursework necessary for enrollment in an 
     undergraduate degree or certificate program, and $5,500 for 
     coursework necessary for enrollment in a graduate or 
     professional degree or certification program; and
       ``(II) $5,500 for coursework necessary for a professional 
     credential or certification from a State required for 
     employment as a teacher in an elementary or secondary 
     school;'';

       (B) by amending subparagraph (E) to read as follows:
       ``(E) subject to subparagraphs (D) and (L), and except as 
     provided by subparagraph (M), provides that--

[[Page S7737]]

       ``(i) not more than 6 months prior to the date on which the 
     borrower's first payment is due, the lender shall offer the 
     borrower of a loan made, insured, or guaranteed under this 
     section or section 428H, the option of repaying the loan in 
     accordance with a graduated, income-sensitive, or extended 
     repayment schedule (as described in paragraph (9)) 
     established by the lender in accordance with regulations 
     provided by the Secretary; and
       ``(ii) repayment of loans shall be in installments in 
     accordance with the repayment plan selected under paragraph 
     (9) and commencing at the beginning of the repayment period 
     determined under paragraph (7)'';
       (C) in subparagraph (L)(i), by inserting ``except as 
     otherwise provided by a repayment plan selected by the 
     borrower under clause (ii) or (iii) of paragraph (9)(A),'' 
     before ``during any''; and
       (D) in subparagraph (U)(iii)(I), by inserting ``that 
     originates or holds more than $5,000,000 in loans made under 
     this title for any fiscal year (except that each lender 
     described in section 435(d)(1)(A)(ii)(III) shall annually 
     submit the results of an audit required by this clause),'' 
     before ``at least once a year''; and
       (2) by adding at the end the following:
       ``(9) Repayment plans.--
       ``(A) Design and selection.--In accordance with regulations 
     promulgated by the Secretary, the lender shall offer a 
     borrower of a loan made under this part the plans described 
     in this subparagraph for repayment of such loan, including 
     principal and interest thereon. Except as provided in 
     paragraph (1)(L)(i), no plan may require a borrower to repay 
     a loan in less than 5 years. The borrower may choose from--
       ``(i) a standard repayment plan, with a fixed annual 
     repayment amount paid over a fixed period of time, not to 
     exceed 10 years;
       ``(ii) a graduated repayment plan paid over a fixed period 
     of time, not to exceed 10 years;
       ``(iii) an income-sensitive repayment plan, with income-
     sensitive repayment amounts paid over a fixed period of time, 
     not to exceed 10 years, except that the borrower's scheduled 
     payments shall not be less than the amount of interest due; 
     and
       ``(iv) for first-time borrowers on or after the date of 
     enactment of the Higher Education Amendments of 1998 with 
     outstanding loans under this part totaling more than $30,000, 
     an extended repayment plan, with a fixed annual or graduated 
     repayment amount paid over an extended period of time, not to 
     exceed 25 years, except that the borrower shall repay 
     annually a minimum amount determined in accordance with 
     paragraph (2)(L).
       ``(B) Lender selection of option if borrower does not 
     select.--If a borrower of a loan made under this part does 
     not select a repayment plan described in subparagraph (A), 
     the lender shall provide the borrower with a repayment plan 
     described in subparagraph (A)(i).
       ``(C) Changes in selection.--The borrower of a loan made 
     under this part may change the borrower's selection of a 
     repayment plan under subparagraph (B), as the case may be, 
     under such conditions as may be prescribed by the Secretary 
     in regulation.
       ``(D) Acceleration permitted.--Under any of the plans 
     described in this paragraph, the borrower shall be entitled 
     to accelerate, without penalty, repayment on the borrower's 
     loans under this part.''.
       (c) Guaranty Agreements for Reimbursing Losses.--Section 
     428(c) (20 U.S.C. 1078(c)) is amended--
       (1) in paragraph (1)--
       (A) in the fourth sentence of subparagraph (A), by striking 
     ``as reimbursement under this subsection shall be equal to 98 
     percent'' and inserting ``as reimbursement for loans for 
     which the first disbursement is made on or after the date of 
     enactment of the Higher Education Amendments of 1998 shall be 
     equal to 95 percent'';
       (B) in subparagraph (B)--
       (i) in clause (i), by striking ``88 percent of the amount 
     of such excess'' and inserting ``85 percent of the amount of 
     such excess for loans for which the first disbursement is 
     made on or after the date of enactment of the Higher 
     Education Amendments of 1998''; and
       (ii) in clause (ii), by striking ``78 percent of the amount 
     of such excess'' and inserting ``75 percent of the amount of 
     such excess for loans for which the first disbursement is 
     made on or after the date of enactment of the Higher 
     Education Amendments of 1998'';
       (C) in subparagraph (E)--
       (i) in clause (i), by striking ``98 percent'' and inserting 
     ``95 percent'';
       (ii) in clause (ii), by striking ``88 percent'' and 
     inserting ``85 percent''; and
       (iii) in clause (iii), by striking ``78 percent'' and 
     inserting ``75 percent''; and
       (D) in subparagraph (F)--
       (i) in clause (i), by striking ``98 percent'' and inserting 
     ``95 percent''; and
       (ii) in clause (ii), by striking ``88 percent'' and 
     inserting ``85 percent'';
       (2) in paragraph (3)--
       (A) in subparagraph (A)(i), by inserting ``or electronic'' 
     after ``written'';
       (B) in subparagraph (B), by striking ``and'' after the 
     semicolon;
       (C) in subparagraph (C), by striking the period and 
     inserting ``; and''; and
       (D) by inserting before the matter following subparagraph 
     (C) the following:
       ``(D) shall contain provisions that specify that 
     forbearance for a period not to exceed 60 days may be granted 
     if the lender determines that such a suspension of collection 
     activity is warranted following a borrower's request for 
     forbearance in order to collect or process appropriate 
     supporting documentation related to the request, and that 
     during such period interest shall not be capitalized.'';
       (3) by amending paragraph (6) to read as follows:
       ``(6) Secretary's equitable share.--For the purpose of 
     paragraph (2)(D), the Secretary's equitable share of payments 
     made by the borrower shall be that portion of the payments 
     remaining after the guaranty agency with which the Secretary 
     has an agreement under this subsection has deducted from such 
     payments--
       ``(A) 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 loan; and
       ``(B) an amount equal to 24 percent of such payments for 
     use in accordance with section 422B.'';
       (4) in paragraph (8)--
       (A) by striking ``(A) If'' and inserting ``If''; and
       (B) by striking subparagraph (B); and
       (5) in paragraph (9)--
       (A) in subparagraph (A), by striking ``maintain a current 
     minimum reserve level of at least .5 percent'' and inserting 
     ``maintain in the agency's Federal Student Loan Reserve Fund 
     established under section 422A a current minimum reserve 
     level of at least 0.25 percent'';
       (B) in subparagraph (C)--
       (i) by striking ``80 percent'' and inserting ``78 
     percent'';
       (ii) by striking ``, as appropriate,''; and
       (iii) by striking ``30 working'' and inserting ``45 
     working'';
       (C) in subparagraph (E)--
       (i) in clause (iv), by inserting ``or'' after the 
     semicolon;
       (ii) in clause (v), by striking ``; or'' and inserting a 
     period; and
       (iii) by striking clause (vi);
       (D) in subparagraph (F), by amending clause (vii) to read 
     as follows:
       ``(vii) take any other action the Secretary determines 
     necessary to avoid disruption of the student loan program, to 
     ensure the continued availability of loans made under this 
     part to residents of each State in which the guaranty agency 
     did business, to ensure the full honoring of all guarantees 
     issued by the guaranty agency prior to the Secretary's 
     assumption of the functions of such agency, and to ensure the 
     proper servicing of loans guaranteed by the guaranty agency 
     prior to the Secretary's assumption of the functions of such 
     agency.''; and
       (E) in subparagraph (K), by striking ``and the progress of 
     the transition from the loan programs under this part to the 
     direct student loan programs under part D of this title''.
       (d) Payment for Lender Referral Services.--Subsection (e) 
     of section 428 (20 U.S.C. 1078) is repealed.
       (e) Payment of Certain Costs.--Subsection (f) of section 
     428 (20 U.S.C. 1078) is amended to read as follows:
       ``(f) Payments of Certain Costs.--
       ``(1) Payment for certain activities.--
       ``(A) In general.--The Secretary, for loans originated on 
     or after October 1, 1998, and in accordance with the 
     provisions of this paragraph, shall pay to each guaranty 
     agency, 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.
       ``(B) Payment.--The payment required by subparagraph (A) 
     shall be paid on a quarterly basis. The guaranty agency shall 
     be deemed to have a contractual right against the United 
     States to receive payments according to the provisions of 
     this subparagraph. Payments shall be made promptly and 
     without administrative delay to any guaranty agency 
     submitting an accurate and complete application therefore 
     under this subparagraph.''.
       (f) Lenders-of-Last-Resort.--Paragraph (3) of section 
     428(j) (20 U.S.C. 1078(j)) is amended--
       (1) in the paragraph heading, by striking ``during 
     transition to direct lending''; and
       (2) in subparagraph (A), by striking ``during the 
     transition from the Federal Family Education Loan Program 
     under this part to the Federal Direct Student Loan Program 
     under part D of this title'';
       (g) Default Aversion Assistance.--Subsection (l) of section 
     428 (20 U.S.C. 1078) is amended to read as follows:
       ``(l) Default Aversion Assistance.--
       ``(1) Assistance required.--Upon receipt of a proper 
     request from the lender not earlier than the 60th nor later 
     than the 90th day of delinquency, a guaranty agency having an 
     agreement with the Secretary under subsection (c) shall 
     engage in default aversion activities designed to prevent the 
     default by a borrower on a loan covered by such agreement.
       ``(2) Default prevention fee required.--
       ``(A) In general.--A guaranty agency, in accordance with 
     the provisions of this paragraph, may transfer from the 
     Federal Student Loan Reserve Fund to the Agency Operating 
     Fund a default prevention 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) Amount.--The default prevention fee shall be equal to 
     1 percent of the total unpaid principal and accrued interest 
     on the loan calculated 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 
     24 months prior to the subsequent delinquency. A guaranty 
     agency may transfer such fees earned under this subsection 
     not more frequently than monthly.
       ``(C) Definition of current repayment status.--For the 
     purpose of this paragraph, the term `current repayment 
     status' means that the borrower is not delinquent, in any 
     respect, in the payment of principal and interest on the loan 
     at the time the guaranty agency qualifies for the default 
     prevention fee.''.

[[Page S7738]]

       (h) State Share of Default Costs.--Subsection (n) of 
     section 428 (20 U.S.C. 1078) is repealed.

     SEC. 426. VOLUNTARY FLEXIBLE AGREEMENTS WITH GUARANTY 
                   AGENCIES.

       Part B of title IV (20 U.S.C. 1071 et seq.) is amended by 
     inserting after section 428 (20 U.S.C. 1078) the following:

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

       ``(a) Voluntary Agreements.--
       ``(1) Authority.--The Secretary may enter into a voluntary, 
     flexible agreement, subject to paragraph (2), with guaranty 
     agencies under this section, in lieu of agreements with a 
     guaranty agency under subsections (b) and (c) of section 428. 
     The Secretary may waive or modify any requirement under such 
     subsections, except that the Secretary may not waive any 
     statutory requirement pertaining to the terms and conditions 
     attached to student loans, default claim payments made to 
     lenders, or the prohibitions on inducements contained in 
     section 428(b)(3).
       ``(2) Eligibility.--During fiscal years 1999, 2000, and 
     2001, the Secretary may enter into a voluntary, flexible 
     agreement with not more than 6 guaranty agencies that had 1 
     or more agreements with the Secretary under subsections (b) 
     and (c) of section 428 as of the day before the date of 
     enactment of the Higher Education Amendments of 1998. 
     Beginning in fiscal year 2002, any guaranty agency or 
     consortium thereof may enter into a similar agreement with 
     the Secretary.
       ``(3) Report required.--Not later than September 30, 2001, 
     the Secretary shall report to the Committee on Labor and 
     Human Resources of the Senate and the Committee on Education 
     and the Workforce of the House of Representatives regarding 
     the impact that the voluntary flexible agreements have had 
     upon program integrity, program and cost efficiencies, and 
     the availability and delivery of student financial aid. Such 
     report shall include--
       ``(A) a description of each voluntary flexible agreement 
     and the performance goals established by the Secretary for 
     each agreement;
       ``(B) a list of participating guaranty agencies and the 
     specific statutory or regulatory waivers provided to each 
     guaranty agency;
       ``(C) a description of the standards by which each agency's 
     performance under the agency's voluntary flexible agreement 
     was assessed and the degree to which each agency achieved the 
     performance standards; and
       ``(D) an analysis of the fees paid by the Secretary, and 
     the costs and efficiencies achieved under each voluntary 
     agreement.
       ``(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, on a case-by case basis;
       ``(2) may be secured by 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 aversion 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 in a timely manner, and 
     on an 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;
       ``(x) the performance of other program functions by the 
     guaranty agency or the agency's affiliates; and
       ``(xi) informational outreach to schools and students in 
     support of access to higher education;
       ``(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 the agency's responsibilities under 
     the agreement will be assessed, and the consequences for a 
     guaranty agency's failure to achieve a specified level of 
     performance on one or more performance standards;
       ``(E) regarding the circumstances in which a guaranty 
     agency's agreement under this section may be ended in advance 
     of the agreement's 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, 
     and including the guaranty agency's compliance with reserve 
     requirements under sections 422 and 428.''.

     SEC. 427. FEDERAL PLUS LOANS.

       Section 428B (20 U.S.C. 1078-2) is amended--
       (1) by amending subsection (a) to read as follows:
       ``(a) Authority To Borrow.--
       ``(1) Authority and eligibility.--Parents of a dependent 
     student shall be eligible to borrow funds under this section 
     in amounts specified in subsection (b), if--
       ``(A) the parents do not have an adverse credit history as 
     determined pursuant to regulations promulgated by the 
     Secretary; and
       ``(B) the parents meet such other eligibility criteria as 
     the Secretary may establish by regulation, after consultation 
     with guaranty agencies, eligible lenders, and other 
     organizations involved in student financial assistance.
       ``(2) Terms, conditions, and benefits.--Except as provided 
     in subsections (c), (d), and (e), loans made under this 
     section shall have the same terms, conditions, and benefits 
     as all other loans made under this part.
       ``(3) Special rule.--Whenever necessary to carry out the 
     provisions of this section, the terms ``student'' and 
     ``borrower'' as used in this part shall include a parent 
     borrower under this section.''; and
       (2) by adding at the end the following:
       ``(f) Verification of Immigration Status and Social 
     Security Number.--A parent who wishes to borrow funds under 
     this section shall be subject to verification of the 
     parent's--
       ``(1) immigration status in the same manner as immigration 
     status is verified for students under section 484(g); and
       ``(2) social security number in the same manner as social 
     security numbers are verified for students under section 
     484(p).''.

     SEC. 428. FEDERAL CONSOLIDATION LOANS.

       Section 428C(a)(3) (20 U.S.C. 1078-3(a)(3)) is amended--
       (1) by amending subparagraph (A) to read as follows: ``(A) 
     For the purpose of this section, the term `eligible borrower' 
     means a borrower who--
       ``(i) is not subject to a judgment secured through 
     litigation or an order for wage garnishment under section 
     488A; or
       ``(ii) at the time of application for a consolidation 
     loan--
       ``(I) is in repayment status;
       ``(II) is in a grace period preceding repayment; or
       ``(III) is a defaulted borrower who has made arrangements 
     to repay the obligation on the defaulted loans satisfactory 
     to the holders of the defaulted loans.''; and
       (2) in subparagraph (B)(i)--
       (A) in subclause (I), by striking ``and'' after the 
     semicolon;
       (B) by redesignating subclause (II) as subclause (III);
       (C) by inserting after subclause (I) the following:
       ``(II) with respect to eligible student loans received 
     prior to the date of consolidation that the borrower may wish 
     to include with eligible loans specified in subclause (I) in 
     a later consolidation loan; and''; and
       (D) in subclause (III) (as redesignated by subparagraph 
     (B)--
       (i) by striking ``that loans'' and inserting ``with respect 
     to loans''; and
       (ii) by inserting ``that'' before ``may be added''.

     SEC. 429. REQUIREMENTS FOR DISBURSEMENTS OF STUDENT LOANS.

       Section 428G (20 U.S.C. 1078G) is amended--
       (1) in subsection (a)(1), by striking ``The proceeds'' and 
     inserting ``Except for a loan made for the final period of 
     enrollment, that is less than an academic year, in a 
     student's baccalaureate program of study, at an institution 
     with a cohort default rate (as calculated under section 
     435(m)) that is 5 percent or less, the proceeds''; and
       (2) in subsection (b)(1), by striking ``The first'' and 
     inserting ``Except for a loan made to a student borrower 
     entering an institution with a cohort default rate (as 
     calculated under section 435(m)) of less than 5 percent, the 
     first''.

     SEC. 430. DEFAULT REDUCTION PROGRAM.

       The heading for subsection (b) of section 428F (20 U.S.C. 
     1078-6) is amended by striking ``Special Rule'' and inserting 
     ``Satisfactory Repayment Arrangements To Renew Eligibility''.

     SEC. 431. UNSUBSIDIZED LOANS.

       Section 428H (20 U.S.C. 1078-8) is amended--
       (1) by amending subsection (b) to read as follows:
       ``(b) Eligible Borrowers.--Any student meeting the 
     requirements for student eligibility under section 484 
     (including graduate and professional students as defined in 
     regulations promulgated by the Secretary) shall be entitled 
     to borrow an unsubsidized Stafford loan if the eligible 
     institution at which the student has been accepted for 
     enrollment, or at which the student is in attendance, has--
       ``(1) determined and documented the student's need for the 
     loan based on the student's estimated cost of attendance (as 
     determined under section 472) and the student's estimated 
     financial assistance, including a loan which qualifies for 
     interest subsidy payments under section 428; and

[[Page S7739]]

       ``(2) provided the lender a statement--
       ``(A) certifying the eligibility of the student to receive 
     a loan under this section and the amount of the loan for 
     which such student is eligible, in accordance with subsection 
     (c); and
       ``(B) setting forth a schedule for disbursement of the 
     proceeds of the loan in installments, consistent with the 
     requirements of section 428G.'';
       (2) in subsection (d)--
       (A) in paragraph (2)--
       (i) in the matter preceding subparagraph (A)--

       (I) by inserting ``, as defined in section 481(d)(2),'' 
     after ``academic year''; and
       (II) by striking ``or in any period of 7 consecutive 
     months, whichever is longer,'';

       (ii) in subparagraph (C), by inserting ``and'' after the 
     semicolon; and
       (iii) by inserting before the matter following subparagraph 
     (C) the following:
       ``(D) in the case of a student enrolled in coursework 
     specified in sections 484(b)(3)(B) and 484(b)(4)(B)--
       ``(i) $4,000 for coursework necessary for enrollment in an 
     undergraduate degree or certificate program, and $5,000 for 
     coursework necessary for enrollment in a graduate or 
     professional program; and
       ``(ii) $5,000 for coursework necessary for a professional 
     credential or certification from a State required for 
     employment as a teacher in an elementary or secondary 
     school;''; and
       (B) in paragraph (3), by adding at the end the following: 
     ``The maximum aggregate amount shall not include interest 
     capitalized from an in-school period.''; and
       (3) in subsection (e)(6), by striking ``10 year repayment 
     period under section 428(b)(1)(D)'' and inserting ``repayment 
     period under section 428(b)(9)''.

     SEC. 432. LOAN FORGIVENESS FOR TEACHERS.

       Section 428J (20 U.S.C. 1078-10) is amended to read as 
     follows:

     ``SEC. 428J. LOAN FORGIVENESS FOR TEACHERS.

       ``(a) Statement of Purpose.--It is the purpose of this 
     section to encourage individuals to enter and continue in the 
     teaching profession.
       ``(b) Program Authorized.--The Secretary is authorized to 
     carry out a program, through the holder of the loan, of 
     assuming the obligation to repay a loan made under section 
     428 that is eligible for interest subsidy, for any new 
     borrower on or after the date of enactment of the Higher 
     Education Amendments of 1998, who--
       ``(1) has been employed as a full-time teacher for 3 
     consecutive complete school years--
       ``(A) in a school that qualifies under section 465(a)(2)(A) 
     for loan cancellation for Perkins loan recipients who teach 
     in such schools;
       ``(B) if employed as a secondary school teacher, is 
     teaching a subject area that is relevant to the borrower's 
     academic major as certified by the chief administrative 
     officer of the public or nonprofit private secondary school 
     in which the borrower is employed; and
       ``(C) if employed as an elementary school teacher, has 
     demonstrated, in accordance with State teacher certification 
     or licensing requirements and as certified by the chief 
     administrative officer of the public or nonprofit private 
     elementary school in which the borrower is employed, 
     knowledge and teaching skills in reading, writing, 
     mathematics and other areas of the elementary school 
     curriculum; and
       ``(2) is not in default on a loan for which the borrower 
     seeks forgiveness.
       ``(c) Regulations.--The Secretary is authorized to issue 
     such regulations as may be necessary to carry out the 
     provisions of this section.
       ``(d) Loan Repayment During Continuing Teaching Service.--
       ``(1) In general.--The Secretary shall assume the 
     obligation to repay through reimbursement to the holder--
       ``(A) 30 percent of the total outstanding amount and 
     applicable interest of subsidized Federal Stafford loans owed 
     by the student borrower after the completion of the fourth or 
     fifth complete school year of service described in subsection 
     (b);
       ``(B) 40 percent of such total amount after the completion 
     of the sixth complete school year of such service; and
       ``(C) a total amount for any borrower that shall not exceed 
     $10,000.
       ``(2) Construction.--Nothing in this section shall be 
     construed to authorize any refunding of any repayment of a 
     loan.
       ``(e) List.--If the list of schools in which a teacher may 
     perform service pursuant to subsection (b) 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.
       ``(f) Continued Eligibility.--Any teacher who performs 
     service in a school that--
       ``(1) meets the requirements of subsection (b)(1)(A) in any 
     year during such service; and
       ``(2) 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 forgiveness pursuant to subsection 
     (b).''.

     SEC. 433. 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) 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) 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.
       ``(5) Institution of higher education.--The term 
     `institution of higher education' has the meaning given the 
     term in section 101.
       ``(c) Demonstration Program.--
       ``(1) In general.--The Secretary may carry out a 
     demonstration program of assuming the obligation to repay, 
     pursuant to subsection (d), 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;
       ``(B) obtains employment in a child care facility; and
       ``(C) is working full-time and is earning an amount which 
     does not exceed the greater of an amount equal to 100 percent 
     of the poverty line for a family of 2 as determined in 
     accordance with section 673(2) of the Community Services 
     Block Grant Act.
       ``(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.
       ``(d) 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 (c)(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.).
       ``(e) 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.
       ``(f) 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.
       ``(g) 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 (b) shall be awarded on a competitive basis.
       ``(3) Contents.--The evaluation described in this 
     subsection shall--
       ``(A) determine the number of individuals who were 
     encouraged by the demonstration program assisted under this 
     section to pursue early childhood education;

[[Page S7740]]

       ``(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.
       ``(h) 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.''.

     SEC. 434. COMMON FORMS AND FORMATS.

       Section 432 (20 U.S.C. 1082) is amended--
       (1) in subsection (m)(1)--
       (A) in subparagraph (A), by striking ``a common application 
     form and promissory note'' and inserting ``common application 
     forms and promissory notes, or multiyear promissory notes,'';
       (B) by striking subparagraph (C);
       (C) by redesignating subparagraph (D) as subparagraph (C); 
     and
       (D) in subparagraph (C) (as redesignated by subparagraph 
     (C))--
       (i) by inserting ``, application and other'' after 
     ``electronic''; and
       (ii) by adding at the end the following: ``Guaranty 
     agencies, borrowers, and lenders may use electronically 
     printed versions of common forms approved for use by the 
     Secretary.''; and
       (2) in subsection (p), by striking ``State postsecondary 
     reviewing entities designated under subpart 1 of part H,''.

     SEC. 435. STUDENT LOAN INFORMATION BY ELIGIBLE LENDERS.

       Section 433 (20 U.S.C. 1083) is amended--
       (1) in subsection (a), by amending the matter preceding 
     paragraph (1) to read as follows:
       ``(a) Required Disclosure Before Disbursement.--Each 
     eligible lender shall, at or prior to the time such lender 
     disburses a loan that is insured or guaranteed under this 
     part (other than a loan made under section 428C), provide 
     thorough and accurate loan information on such loan to the 
     borrower. Any disclosure required by this subsection may be 
     made by an eligible lender by written or electronic means, 
     including as part of the application material provided to the 
     borrower, as part of the promissory note evidencing the loan, 
     or on a separate written form provided to the borrower. Each 
     lender shall provide a telephone number, and may provide an 
     electronic address, to each borrower through which additional 
     loan information can be obtained. The disclosure shall 
     include--''; and
       (2) in subsection (b), by amending the matter preceding 
     paragraph (1) to read as follows:
       ``(b) Required Disclosure Before Repayment.--Each eligible 
     lender shall, at or prior to the start of the repayment 
     period of the student borrower on loans made, insured, or 
     guaranteed under this part, disclose to the borrower by 
     written or electronic means the information required under 
     this subsection. Each eligible lender shall provide a 
     telephone number, and may provide an electronic address, to 
     each borrower through which additional loan information can 
     be obtained. For any loan made, insured, or guaranteed under 
     this part, other than a loan made under section 428B or 428C, 
     such disclosure required by this subsection shall be made not 
     less than 30 days nor more than 240 days before the first 
     payment on the loan is due from the borrower. The disclosure 
     shall include--''.

     SEC. 436. DEFINITIONS.

       (a) Eligible Institution.--Section 435(a) (20 U.S.C. 
     1085(a)) is amended--
       (1) in paragraph (2)--
       (A) by adding after the matter following subparagraph 
     (A)(ii) the following:

     ``If an institution continues to participate in a program 
     under this part, and the institution's appeal of the loss of 
     eligibility is unsuccessful, the institution shall be 
     required to pay to the Secretary an amount equal to the 
     amount of interest, special allowance, reinsurance, and any 
     related payments made by the Secretary (or which the 
     Secretary is obligated to make) with respect to loans made 
     under this part to students attending, or planning to attend, 
     that institution during the pendency of such appeal. In order 
     to continue to participate during an appeal under this 
     paragraph, the institution shall provide a letter of credit 
     in favor of the Secretary or other third-party financial 
     guarantees satisfactory to the Secretary in an amount 
     determined by the Secretary to be sufficient to satisfy the 
     institution's potential liability on such loans under the 
     preceding sentence.''; and
       (B) by amending subparagraph (C) to read as follows:
       ``(C)(i) This paragraph shall not apply to any institution 
     described in clause (ii), and any such institution that 
     exceeds the threshold percentage in subparagraph (A)(ii) for 
     2 consecutive years shall submit to the Secretary a default 
     management plan satisfactory to the Secretary and containing 
     criteria designed, in accordance with the regulations of the 
     Secretary, to demonstrate continuous improvement by the 
     institution in the institution's cohort default rate. If the 
     institution fails to submit the required plan, or to satisfy 
     the criteria in the plan, the institution shall be subject to 
     a loss of eligibility in accordance with this paragraph, 
     except as the Secretary may otherwise specify in regulations.
       ``(ii) An institution referred to in clause (i) is--
       ``(I) a part B institution within the meaning of section 
     322(2);
       ``(II) a Tribally Controlled College or University within 
     the meaning of section 2(a)(4) of the Tribally Controlled 
     College or University Assistance Act of 1978; or
       ``(III) a Navajo Community College under the Navajo 
     Community College Act.'';
       (2) in the matter following subparagraph (C)--
       (A) by inserting ``for a reasonable period of time, not to 
     exceed 30 days,'' after ``access''; and
       (B) by striking ``of the affected guaranty agencies and 
     loan servicers for a reasonable period of time, not to exceed 
     30 days'' and inserting ``used by a guaranty agency in 
     determining whether to pay a claim on a defaulted loan''; and
       (3) by adding at the end the following:
       ``(4) Participation rate index.--
       ``(A) In general.--An institution that demonstrates to the 
     Secretary that the institution's participation rate index is 
     equal to or less than 0.0375 for any of the 3 applicable 
     participation rate indices shall not be subject to paragraph 
     (2). The participation rate index shall be determined by 
     multiplying the institution's cohort default rate for loans 
     under part B or D, or weighted average cohort default rate 
     for loans under parts B and D, by the percentage of the 
     institution's regular students, enrolled on at least a half-
     time basis, who received a loan made under part B or D for a 
     12-month period ending during the 6 months immediately 
     preceding the fiscal year for which the cohort of borrowers 
     used to calculate the institution's cohort default rate is 
     determined.
       ``(B) Data.--An institution shall provide the Secretary 
     with sufficient data to determine the institution's 
     participation rate index within 30 days after receiving an 
     initial notification of the institution's draft cohort 
     default rate.
       ``(C) Notification.--Prior to publication of a final cohort 
     default rate for an institution that provides the data 
     described in subparagraph (B), the Secretary shall notify the 
     institution of the institution's compliance or noncompliance 
     with subparagraph (A).''.
       (b) Eligible Lender.--Section 435(d)(1)(A)(ii) (20 U.S.C. 
     1085(d)(1)(A)(ii) is amended--
       (1) by striking ``or'' after ``1992,''; and
       (2) by inserting before the semicolon the following: ``, or 
     (III) it is a bank (as defined in section 3(a)(1) of the 
     Federal Deposit Insurance Act (12 U.S.C. 1813(a)(1)) 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(1) of such Code, and the bank makes loans under this part 
     only to undergraduate students who are age 22 or younger and 
     has a portfolio of such loans that is not more than 
     $5,000,000''.
       (c) Cohort Default Rate.--Section 435(m)(1)(B) (20 U.S.C. 
     1085(m)(1)(B)) is amended by striking ``insurance, and, in 
     considering appeals with respect to cohort default rates 
     pursuant to subsection (a)(3), exclude'' and inserting 
     ``insurance. In considering appeals with respect to cohort 
     default rates pursuant to subsection (a)(3), the Secretary 
     shall exclude, from the calculation of the number of students 
     who entered repayment and from the calculation of the number 
     of students who default,''.

     SEC. 437. DELEGATION OF FUNCTIONS.

       Section 436 (20 U.S.C. 1086) is amended to read as follows:

     ``SEC. 436. DELEGATION OF FUNCTIONS.

       ``(a) In General.--An eligible lender or guaranty agency 
     that contracts with another entity to perform any of the 
     lender's or agency's functions under this title, or otherwise 
     delegates the performance of such functions to such other 
     entity--
       ``(1) shall not be relieved of the lender's or agency's 
     duty to comply with the requirements of this title; and
       ``(2) shall monitor the activities of such other entity for 
     compliance with such requirements.
       ``(b) Special Rule.--A lender that holds a loan made under 
     part B in the lender's capacity as a trustee is responsible 
     for complying with all statutory and regulatory requirements 
     imposed on any other holder of a loan made under this 
     part.''.

     SEC. 438. SPECIAL ALLOWANCES.

       (a) Amendments.--Section 438 (20 U.S.C. 1087-1) is 
     amended--
       (1) in subsection (c), by amending paragraph (1) to read as 
     follows:
       ``(1) Deduction from interest and special allowance 
     subsidies.--(A) Notwithstanding subsection (b), the Secretary 
     shall collect the amount the lender is authorized to charge 
     as an origination fee in accordance with paragraph (2) of 
     this subsection--
       ``(i) by reducing the total amount of interest and special 
     allowance payable under section 428(a)(3)(A) and subsection 
     (b) of this section, respectively, to any holder; or
       ``(ii) directly from the holder of the loan, if the lender 
     fails or is not required to bill the Secretary for interest 
     and special allowance or withdraws from the program with 
     unpaid loan origination fees.
       ``(B) If the Secretary collects the origination fee under 
     this subsection through the reduction of interest and special 
     allowance, and the total amount of interest and special 
     allowance payable under section 428(a)(3)(A) and subsection 
     (b) of this section, respectively, is less than the amount 
     the lender was authorized to charge borrowers for origination 
     fees in that quarter, the Secretary shall deduct the excess 
     amount

[[Page S7741]]

     from the subsequent quarters' payments until the total amount 
     has been deducted.'';
       (2) in subsection (d), by amending paragraph (1) to read as 
     follows:
       ``(1) Deduction from interest and special allowance 
     subsidies.--
       ``(A) In general.--Notwithstanding subsection (b), the 
     Secretary shall collect a loan fee in an amount determined in 
     accordance with paragraph (2)--
       ``(i) by reducing the total amount of interest and special 
     allowance payable under section 428(a)(3)(A) and subsection 
     (b), respectively, to any holder of a loan; or
       ``(ii) directly from the holder of the loan, if the 
     lender--

       ``(I) fails or is not required to bill the Secretary for 
     interest and special allowance payments; or
       ``(II) withdraws from the program with unpaid loan fees.

       ``(B) Special rule.--If the Secretary collects loan fees 
     under this subsection through the reduction of interest and 
     special allowance payments, and the total amount of interest 
     and special allowance payable under section 428(a)(3)(A) and 
     subsection (b), respectively, is less than the amount of such 
     loan fees, then the Secretary shall deduct the amount of the 
     loan fee balance from the amount of interest and special 
     allowance payments that would otherwise be payable, in 
     subsequent quarterly increments until the balance has been 
     deducted.''; and
       (3) in subsection (e)--
       (A) by striking paragraphs (1) and (2); and
       (B) by redesignating paragraphs (3) and (4) as paragraphs 
     (1) and (2), respectively.
       (b) Conforming Amendment.--Section 432(f)(1)(D) is amended 
     by striking ``required to file a plan for doing business 
     under section 438(d)'' and inserting ``that meets the 
     requirements of section 438(e)''.

     SEC. 439. STUDY OF MARKET-BASED MECHANISMS FOR DETERMINING 
                   STUDENT LOAN INTEREST RATES.

       (a) Study Required.--
       (1) In general.--The Secretary of the Treasury shall 
     conduct a study of the feasibility of employing market-based 
     mechanisms, including some form of auction, for determining 
     student loan interest rates under title IV of the Higher 
     Education Act of 1965 (20 U.S.C. 1070 et seq.). The study 
     shall include--
       (A) analysis of the potential impact of the mechanisms on 
     the delivery of student financial aid;
       (B) analysis of the implications of the mechanisms with 
     respect to student and institutional access to student loan 
     capital;
       (C) analysis of the potential impact of the mechanisms on 
     the costs of the programs under such title for students and 
     the Federal Government; and
       (D) a plan for structuring and implementing the mechanisms 
     in such a manner that ensures the cost-effective availability 
     of student loans for students and their families.
       (b) Consultation.--In conducting the study described in 
     paragraph (1), the Secretary shall consult with lenders, 
     secondary markets, guaranty agencies, institutions of higher 
     education, student loan borrowers, and other participants in 
     the student loan programs under title IV of the Higher 
     Education Act of 1965 (20 U.S.C. 1070 et seq.).
       (c) Report to Congress.--The Secretary of the Treasury 
     shall report to the Committee on Labor and Human Resources of 
     the Senate, and the Committee on Education and the Workforce 
     of the House of Representatives not later than September 30, 
     1999, regarding the results of the study described in 
     subsection (a).

                  PART C--FEDERAL WORK-STUDY PROGRAMS

     SEC. 441. AUTHORIZATION OF APPROPRIATIONS; COMMUNITY 
                   SERVICES.

       Section 441 (20 U.S.C. 2751) is amended--
       (1) in subsection (b), by striking ``$800,000,000 for 
     fiscal year 1993'' and inserting ``$900,000,000 for fiscal 
     year 1999''; and
       (2) in subsection (c)--
       (A) in paragraph (1), by inserting ``(including child care 
     services provided on campus)'' after ``child care''; and
       (B) in paragraph (3), by inserting ``, including students 
     with disabilities who are enrolled at the institution'' 
     before the semicolon.

     SEC. 442. GRANTS FOR FEDERAL WORK-STUDY PROGRAMS.

       Section 443(b) (20 U.S.C. 2753(b)) is amended--
       (1) in paragraph (1), by inserting ``, including 
     internships or research assistanceships as determined by the 
     Secretary,'' after ``part-time employment'';
       (2) by amending paragraph (3) 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 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 on less than a full-time basis, or (B) 
     independent students, a reasonable portion of the allocation 
     shall be made available to such students;'';
       (3) in paragraph (5)--
       (A) by striking ``provide that'' and inserting ``(A) 
     provide that'';
       (B) by striking ``1993-1994'' and inserting ``1999-2000'';
       (C) by inserting ``and'' after the semicolon; and
       (D) by adding at the end the following:
       ``(B) provide that the Federal share of the compensation of 
     students employed in community service shall not exceed 90 
     percent;''; and
       (4) in paragraph (6), by striking ``, and to make'' and all 
     that follows through ``such employment''.

     SEC. 443. WORK COLLEGES.

       Section 448 (20 U.S.C. 2756b) is amended--
       (1) in subsection (b)(2)--
       (A) in subparagraph (C), by striking ``and'' after the 
     semicolon;
       (B) in subparagraph (D)(ii), by striking the period and 
     inserting a semicolon; and
       (C) by adding at the end the following:
       ``(E) coordinate and carry out joint projects and 
     activities to promote work service learning; and
       ``(F) carry out a comprehensive, longitudinal study of 
     student academic progress and academic and career outcomes, 
     relative to student self-sufficiency in financing their 
     higher education, repayment of student loans, continued 
     community service, kind and quality of service performed, and 
     career choice and community service selected after 
     graduation.''; and
       (2) in subsection (f), by striking ``$5,000,000 for fiscal 
     year 1993'' and inserting ``$7,000,000 for fiscal year 
     1999''.

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

     SEC. 451. SELECTION OF INSTITUTIONS.

       Section 453(c) (20 U.S.C. 1087c(c)) is amended--
       (1) in paragraph (2)--
       (A) in the paragraph heading, by striking ``Transition'';
       (B) by striking subparagraph (E); and
       (C) by redesignating subparagraphs (F), (G), and (H) as 
     subparagraphs (E), (F), and (G), respectively; and
       (2) in paragraph (3)--
       (A) in the paragraph heading, by striking ``After 
     transition''; and
       (B) by striking ``For academic year 1995-1996 and 
     subsequent academic years, the'' and inserting ``The''.

     SEC. 452. TERMS AND CONDITIONS.

       (a) Interest Rates.--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/Ford Loans and Federal Direct Unsubsidized Stafford/
     Ford 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/Ford Loan or Federal Direct 
     Unsubsidized Stafford/Ford Loan 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 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) 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 the determination.
       ``(5) Repayment incentives.--
       ``(A) In general.--Notwithstanding any other provision of 
     this part, the Secretary is authorized to prescribe by 
     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 of the 
     loan. Such reductions may be offered only if the Secretary 
     determines the reductions are cost neutral and in the best 
     financial interest of the Federal Government. Any increase in 
     subsidy costs resulting from such reductions shall be 
     completely offset by corresponding savings in funds available 
     for the William D. Ford Federal Direct Loan Program in that 
     fiscal year from section 458 and other administrative 
     accounts.
       ``(B) Accountability.--The Secretary shall ensure the cost 
     neutrality of such reductions by obtaining an official report 
     from the Director of the Office of Management and Budget and 
     the Director of the Congressional Budget Office that any such 
     reductions will be completely cost neutral. The reports shall 
     be transmitted to the Committee on Labor and Human Resources 
     of the Senate and the Committee on Education and the 
     Workforce of the House of Representatives not less than 60 
     days prior to the publication of regulations proposing such 
     reductions.''.
       (b) 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.

     SEC. 453. CONTRACTS.

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

     SEC. 454. FUNDS FOR ADMINISTRATIVE EXPENSES.

       Section 458 (20 U.S.C. 1087h) is amended--

[[Page S7742]]

       (1) by amending subsection (a) to read as follows:
       ``(a) Administrative Expenses.--
       ``(1) In general.--Each fiscal year there shall be 
     available to the Secretary, from funds not otherwise 
     appropriated, funds to be obligated for--
       ``(A) administrative costs under this part and part B, 
     including the costs of the direct student loan programs under 
     this part; and
       ``(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, $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.
       ``(2) Account maintenance fees.--Account maintenance fees 
     under subparagraph (B) shall be paid quarterly and deposited 
     in the Agency Operating Fund established under section 422B.
       ``(3) Carryover.--The Secretary may carry over funds made 
     available under this section to a subsequent fiscal year.''; 
     and
       (2) by amending subsection (b) to read as follows:
       ``(b) Calculation Basis.--Account maintenance fees payable 
     to guaranty agencies under paragraph (1)(B) shall be 
     calculated--
       ``(1) for fiscal years 1999 and 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
       ``(2) for fiscal year 2001, 2002, and 2003, on the basis of 
     0.10 percent of the original principal amount of outstanding 
     loans on which insurance was issued under part B.''.

     SEC. 455. LOAN CANCELLATION FOR TEACHERS.

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

     ``SEC. 459. LOAN CANCELLATION FOR TEACHERS.

       ``(a) Statement of Purpose.--It is the purpose of this 
     section to encourage individuals to enter and continue in the 
     teaching profession.
       ``(b) Program Authorized.--The Secretary is authorized to 
     carry out a program of canceling the obligation to repay a 
     Federal Direct Stafford/Ford Loan made under this part that 
     is eligible for an interest subsidy, for any new borrower on 
     or after the date of enactment of the Higher Education 
     Amendments of 1998, who--
       ``(1) has been employed as a full-time teacher for 3 
     consecutive complete school years--
       ``(A) in a school that qualifies under section 465(a)(2)(A) 
     for loan cancellation for Perkins loan recipients who teach 
     in such schools;
       ``(B) if employed as a secondary school teacher, is 
     teaching a subject area that is relevant to the borrower's 
     academic major as certified by the chief administrative 
     officer of the public or non-profit private secondary school 
     in which the borrower is employed; and
       ``(C) if employed as an elementary school teacher, has 
     demonstrated, in accordance with State teacher certification 
     or licensing requirements and as certified by the chief 
     administrative officer of the public or nonprofit private 
     elementary school in which the borrower is employed, 
     knowledge and teaching skills in reading, writing, 
     mathematics and other areas of the elementary school 
     curriculum; and
       ``(2) is not in default on a loan for which the borrower 
     seeks forgiveness.
       ``(c) Regulations.--The Secretary is authorized to issue 
     such regulations as may be necessary to carry out the 
     provisions of this section.
       ``(d) Loan Cancellation During Continuing Teaching 
     Service.--
       ``(1) In general.--The Secretary shall cancel the 
     obligation to repay--
       ``(A) 30 percent of the total outstanding amount and 
     applicable interest of subsidized Federal Direct Stafford/
     Ford loans owed by the student borrower after the completion 
     of the fourth or fifth complete school year of service 
     described in subsection (b);
       ``(B) 40 percent of such total amount after the completion 
     of the sixth complete school year of such service; and
       ``(C) a total amount for any borrower that shall not exceed 
     $ 10,000.
       ``(2) Construction.--Nothing in this section shall be 
     construed to authorize any refunding of any canceled loan.
       ``(e) List.--If the list of schools in which a teacher may 
     perform service pursuant to subsection (b) 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.
       ``(f) Continued Eligibility.--Any teacher who performs 
     service in a school that--
       ``(1) meets the requirements of subsection (b)(1)(A) in any 
     year during such service; and
       ``(2) 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 (b).''.

                     PART E--FEDERAL PERKINS LOANS

     SEC. 461. AUTHORIZATION OF APPROPRIATIONS.

       Subsection (b) of section 461 (20 U.S.C. 1087aa) is 
     amended--
       (1) in paragraph (1), by striking ``1993'' and inserting 
     ``1999''; and
       (2) in paragraph (2), by striking ``1997'' each place the 
     term appears and inserting ``2003''.

     SEC. 462. ALLOCATION OF FUNDS.

       (a) Amendments.--Section 462 (20 U.S.C. 1087bb) is 
     amended--
       (1) in the matter preceding subparagraph (A) of subsection 
     (d)(3), by striking ``the Secretary, for'' and all that 
     follows through ``years,'';
       (2) by amending subsection (f) to read as follows:
       ``(f) Default Penalties.--
       ``(1) In general.--For fiscal year 1998 and any succeeding 
     fiscal year, any institution with a cohort default rate (as 
     defined under subsection (h)) that equals or exceeds 25 
     percent shall have a default penalty of zero.
       ``(2) Ineligibility.--
       ``(A) In general.--For fiscal year 1998 and any succeeding 
     fiscal year, any institution with a cohort default rate (as 
     defined in subsection (h)) that equals or exceeds 50 percent 
     for each of the 3 most recent years for which data are 
     available shall not be eligible to participate in a program 
     under this part for the fiscal year for which the 
     determination is made and the 2 succeeding fiscal years, 
     unless, within 30 days of receiving notification from the 
     Secretary of the loss of eligibility under this paragraph, 
     the institution appeals the loss of eligibility to the 
     Secretary. The Secretary shall issue a decision on any such 
     appeal within 45 days after the submission of the appeal. 
     Such decision may permit the institution to continue to 
     participate in a program under this part if--
       ``(i) the institution demonstrates to the satisfaction of 
     the Secretary that the calculation of the institution's 
     cohort default rate is not accurate, and that recalculation 
     would reduce the institution's cohort default rate for any of 
     the 3 fiscal years below 50 percent; or
       ``(ii) there are, in the judgment of the Secretary, 
     exceptional mitigating circumstances such as a small number 
     of borrowers entering repayment, that would make the 
     application of this subparagraph inequitable.
       ``(B) Continued participation.--During an appeal under 
     subparagraph (A), the Secretary may permit the institution to 
     continue to participate in a program under this part.
       ``(C) Definition.--For the purposes of subparagraph (A), 
     the term `loss of eligibility' shall be defined as the 
     mandatory liquidation of an institution's student loan fund, 
     and assignment of the institution's outstanding loan 
     portfolio to the Secretary.'';
       (3) by amending paragraph (1) of subsection (g) to read as 
     follows: ``(1) For award year 1998 and subsequent years, the 
     maximum cohort default rate is 25 percent.''; and
       (4) in subsection (h)--
       (A) in the subsection heading, by striking ``Definitions of 
     Default Rate and'' and inserting ``Definition of'';
       (B) by striking paragraphs (1) and (2);
       (C) by redesignating paragraphs (3) and (4) as paragraphs 
     (1) and (2), respectively;
       (D) in paragraph (1) (as redesignated by subparagraph 
     (C))--
       (i) by striking subparagraph (B); and
       (ii) by redesignating subparagraphs (C) through (G) as 
     subparagraphs (B) through (F), respectively; and
       (E) in the matter preceding subparagraph (A) of paragraph 
     (2) (as redesignated by subparagraph (C)), by striking ``A 
     loan'' and inserting ``For purposes of calculating the cohort 
     default rate under this subsection, a loan''.
       (b) Conforming Amendments.--Section 462 (20 U.S.C. 1087bb) 
     is amended--
       (1) in the matter following paragraphs (1)(B) and 
     (2)(D)(ii) of subsection (a), by inserting ``cohort'' before 
     ``default'' each place the term appears;
       (2) in the matter following paragraphs (2)(B) and (3)(C) of 
     subsection (c), by inserting ``cohort'' before ``default'' 
     each place the term appears;
       (3) in subsection (e)(2), by inserting ``cohort'' before 
     ``default''; and
       (4) in subsection (h)(1)(F) (as redesignated by 
     subparagraphs (C) and (D)(ii) of subsection (a)(4)), by 
     inserting ``cohort'' before ``default''.

     SEC. 463. AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION.

       Section 463 (20 U.S.C. 1087cc) is amended--
       (1) by amending subparagraph (B) of subsection (a)(2) to 
     read as follows:
       ``(B) a capital contribution by an institution in an amount 
     equal to one-third of the Federal capital contributions 
     described in subparagraph (A);'';
       (2) in subsection (c)--
       (A) in paragraph (2)--
       (i) in the matter preceding subparagraph (A), by striking 
     ``by the Secretary'' and all that follows through ``of--'' 
     and inserting ``by the Secretary or an institution, as the 
     case may be, to such organizations, with respect to any loan 
     held by the Secretary or the institution, respectively, 
     of--'';
       (ii) by amending subparagraph (A) to read as follows:
       ``(A) the date of disbursement and the amount of such loans 
     made to any borrower under this part at the time of 
     disbursement of the loan;'';
       (iii) in subparagraph (B)--

       (I) by inserting ``the repayment and'' after 
     ``concerning''; and
       (II) by striking ``any defaulted'' and inserting ``such''; 
     and

       (iv) in subparagraph (C), by inserting ``, or upon 
     cancellation or discharge of the borrower's obligation on the 
     loan for any reason'' before the period;
       (B) in paragraph (3)--
       (i) in the matter preceding subparagraph (A), by striking 
     ``until--'' and inserting ``until the loan is paid in 
     full.''; and
       (ii) by striking subparagraphs (A) and (B); and
       (C) by amending paragraph (4) to read as follows:
       ``(4)(A) Except as provided in subparagraph (B), an 
     institution of higher education, after consultation with the 
     Secretary and pursuant to the agreements entered into under 
     paragraph (1), shall disclose at least annually to any credit 
     bureau organization with which the Secretary has such an 
     agreement the information set forth in paragraph (2), and 
     shall disclose promptly to such credit bureau organization 
     any changes to the information previously disclosed.
       ``(B) The Secretary may promulgate regulations establishing 
     criteria under which an institution of higher education may 
     cease reporting the information described in paragraph (2) 
     before a loan is paid in full.''.

[[Page S7743]]

     SEC. 464. TERMS OF LOANS.

       Section 464 (20 U.S.C. 1087dd) is amended--
       (1) in subsection (a), by amending paragraph (2) to read as 
     follows:
       ``(2)(A) Except as provided in paragraph (4), the total of 
     loans made to a student in any academic year or its 
     equivalent by an institution of higher education from a loan 
     fund established pursuant to an agreement under this part 
     shall not exceed--
       ``(i) $4,000, in the case of a student who has not 
     successfully completed a program of undergraduate education; 
     or
       ``(ii) $6,000, in the case of a graduate or professional 
     student (as defined in regulations issued by the Secretary).
       ``(B) Except as provided in paragraph (4), the aggregate of 
     the loans for all years made to a student by institutions of 
     higher education from loan funds established pursuant to 
     agreements under this part may not exceed--
       ``(i) $40,000, in the case of any graduate or professional 
     student (as defined by regulations issued by the Secretary, 
     and including any loans from such funds made to such person 
     before such person became a graduate or professional 
     student);
       ``(ii) $20,000, in the case of a student who has 
     successfully completed 2 years of a program of education 
     leading to a bachelor's degree but who has not completed the 
     work necessary for such a degree (determined under 
     regulations issued by the Secretary, and including any loans 
     from such funds made to such person before such person became 
     such a student); and
       ``(iii) $8,000, in the case of any other student.
       ``(C)(i) The total of loans made to a student described in 
     clause (ii) in any academic year or its equivalent by an 
     institution of higher education from loan funds established 
     pursuant to agreements under this part may not exceed--
       ``(I) $8,000 for each of the third and fourth years of the 
     program of instruction leading to a bachelor's degree; or
       ``(II) $10,000 for the first year of graduate study (as 
     defined in regulations issued by the Secretary).
       ``(ii) A student referred to in clause (i) is any student--
       ``(I) who is a junior in a program of instruction leading 
     to a bachelor's degree;
       ``(II) who states in writing that the student will pursue a 
     course of study to become an elementary or secondary school 
     teacher; and
       ``(III) who states in writing that the student intends to 
     become a full-time teacher in a school which meets the 
     requirements of section 465(a)(2)(A).
       ``(iii) Each institution shall provide a report to the 
     Secretary annually containing the number of loans under this 
     subparagraph that are made, the amount of each loan, and 
     whether students benefiting from the higher loan limits met 
     the requirements for receiving those loans.
       ``(iv) If 3 years after the date of enactment of the Higher 
     Education Amendments of 1998, the Secretary determines that 
     an institution has engaged in a pattern of abuse of this 
     subparagraph, the Secretary may reduce or terminate the 
     institution's Federal capital contribution.'';
       (2) in subsection (b), by amending paragraph (2) to read as 
     follows:
       ``(2) If the institution's capital contribution under 
     section 462 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, a reasonable portion of the loans made from the 
     institution's student loan fund containing the contribution 
     shall be made available to such students.'';
       (3) in subsection (c)(1)--
       (A) in subparagraph (D), by striking ``(i) 3 percent'' and 
     all that follows through ``or (iii)'';
       (B) by redesignating subparagraphs (H) and (I) as 
     subparagraphs (I) and (J), respectively; and
       (C) by inserting after subparagraph (G) the following:
       ``(H) shall provide that, in the case of a loan made on or 
     after July 1, 1999, the loan shall be considered in default 
     (except as otherwise provided in section 462(h)) if the 
     borrower of a loan made under this part fails to make an 
     installment payment when due, or to meet any other term of 
     the promissory note or written repayment agreement, and such 
     failure persists for--
       ``(i) 180 days in the case of a loan that is repayable in 
     monthly installments; or
       ``(ii) 240 days in the case of a loan that is repayable in 
     less frequent installments;''; and
       (4) by adding at the end the following:
       ``(g) 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 the 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 
     the institution's affiliates and principals, or settle the 
     loan obligation pursuant to the financial responsibility 
     standards described in section 498(c).
       ``(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 
     in an amount that does not exceed the amount discharged 
     against the institution and the institution's affiliates and 
     principals.
       ``(3) Eligibility for additional assistance.--The period 
     during which a 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 not be considered income for 
     purposes of the Internal Revenue Code of 1986.
       ``(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.
       ``(h) Rehabilitation of Loans.--
       ``(1) Rehabilitation.--
       ``(A) In general.--If the borrower of a loan made under 
     this part who has defaulted on the loan makes 12 ontime, 
     consecutive, monthly payments of amounts owed on the loan, as 
     determined by the institution, the loan shall be considered 
     rehabilitated, and the institution that made that loan (or 
     the Secretary, in the case of a loan held by the Secretary) 
     shall instruct any credit bureau organization or credit 
     reporting agency to which the default was reported to remove 
     the default from the borrower's credit history.
       ``(B) Comparable conditions.--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) Additional assistance.--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 the borrower is otherwise eligible) on 
     the basis of defaulting on the loan prior to such 
     rehabilitation.
       ``(D) Limitations.--A borrower only once may obtain the 
     benefit of this paragraph with respect to rehabilitating a 
     loan under this part.
       ``(2) Restoration of eligibility.--If the borrower of a 
     loan made under this part who has defaulted on that loan 
     makes 6 ontime, 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 only once may obtain the benefit of this paragraph 
     with respect to restored eligibility.
       ``(i) Incentive Repayment Program.--
       ``(1) In general.--Each institution of higher education may 
     establish, with the approval of the Secretary, an incentive 
     repayment program designed to reduce default and to replenish 
     student loan funds established under this part. Each such 
     incentive repayment program may--
       ``(A) offer a reduction of the interest rate on a loan on 
     which the borrower has made 48 ontime, consecutive, monthly 
     repayments, but in no event may the rate be reduced by more 
     than 1 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 may the 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 will carry out the objectives of this 
     subsection.
       ``(2) Limitation.--No incentive repayment option under an 
     incentive repayment program authorized by this subsection may 
     be paid for with Federal funds, including any Federal funds 
     from the student loan fund, nor can an incentive repayment 
     option be paid for with institutional funds from the student 
     loan fund.''.

     SEC. 465. DISTRIBUTION OF ASSETS FROM STUDENT LOAN FUNDS.

       Section 466 (20 U.S.C. 1087ff) is amended--
       (1) in subsection (a)--
       (A) in the matter preceding paragraph (1)--
       (i) by striking ``1996'' and inserting ``2003''; and
       (ii) by striking ``1997'' and inserting ``2004''; and
       (B) in paragraph (1), by striking ``1996'' and inserting 
     ``2003'';
       (2) in subsection (b)--
       (A) by striking ``2005'' and inserting ``2012''; and
       (B) by striking ``1996'' and inserting ``2003''; and
       (3) in subsection (c), by striking ``1997'' and inserting 
     ``2004''.

     SEC. 466. PERKINS LOAN REVOLVING FUND.

       (a) Repeal.--Subsection (c) of section 467 (20 U.S.C. 
     1087gg(c)) is repealed.
       (b) Transfer of Balance.--Any funds in the Perkins Loan 
     Revolving Fund on the date of enactment of this Act shall be 
     transferred to and deposited in the Treasury.

                         PART F--NEED ANALYSIS

     SEC. 471. COST OF ATTENDANCE.

       Section 472 (20 U.S.C. 1087ll) is amended--
       (1) in paragraph (3)--
       (A) in subparagraph (A), by striking ``of not less than 
     $1,500'' and inserting ``determined by the institution''; and
       (B) in subparagraph (C), by striking ``, except that the 
     amount may not be less than $2,500''; and
       (2) in paragraph (11), by striking ``placed'' and inserting 
     ``engaged''.

     SEC. 472. FAMILY CONTRIBUTION FOR DEPENDENT STUDENTS.

       Section 475 (20 U.S.C. 1087oo) is amended--
       (1) in subsection (g)--
       (A) in paragraph (2)--
       (i) in subparagraph (D)--

       (I) by striking ``$1,750'' and inserting ``$2,200''; and
       (II) by striking ``and'' after the semicolon;

       (ii) in subparagraph (E), by striking the period and 
     inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(F) an allowance for parents' negative available income, 
     determined in accordance with paragraph (6).''; and

[[Page S7744]]

       (B) by adding at the end the following:
       ``(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 (1) exceeds 
     the parents' total income (as defined in section 480).''; and
       (2) by adding at the end the following:
       ``(j) Adjustments to Students Contribution for Enrollment 
     Periods of Less Than Nine Months.--For periods of enrollment 
     of less than 9 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 the amount determined under such subsection by 
     9, and multiplying the result by the number of months in the 
     period of enrollment.''.

     SEC. 473. FAMILY CONTRIBUTION FOR INDEPENDENT STUDENTS 
                   WITHOUT DEPENDENTS OTHER THAN A SPOUSE.

       Section 476(b)(1)(A)(iv) (20 U.S.C. 1087pp(b)(1)(A)(iv)) is 
     amended--
       (1) in subclause (I), by striking ``$3,000'' and inserting 
     ``$4,250'';
       (2) in subclause (II), by striking ``$3,000'' and inserting 
     ``$4,250''; and
       (3) in subclause (III), by striking ``$6,000'' and 
     inserting ``$7,250''.

     SEC. 474. 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 1999-2000, 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 
     1998 and the December next preceding the beginning of such 
     academic year, and rounding the result to the nearest $10.''.

     SEC. 475. REFUSAL OR ADJUSTMENT OF LOAN CERTIFICATIONS.

       Subsection (c) of section 479A (20 U.S.C. 1087tt) is 
     amended to read as follows:
       ``(c) Refusal or Adjustment of Loan Certifications.--An 
     eligible institution may refuse to certify a statement that 
     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. 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 
     disability status.''.

                       PART G--GENERAL PROVISIONS

     SEC. 481. MASTER CALENDAR.

       Section 482 (20 U.S.C. 1089) is amended--
       (1) in subsection (a), by adding at the end the following:
       ``(3) To the extent feasible, the Secretary shall notify 
     eligible institutions and vendors by December 1 prior to the 
     start of an award year of minimal hardware and software 
     requirements necessary to administer programs under this 
     title.''; and
       (2) by amending subsection (c) to read as follows:
       ``(c) Delay of Effective Date of Late Publications.--(1) 
     Except as provided in paragraph (2), any regulatory changes 
     initiated by the Secretary affecting the programs under this 
     title that have not been published in final form by November 
     1 prior to the start of the award year shall not become 
     effective until the beginning of the second award year after 
     such November 1 date.
       ``(2)(A) The Secretary may designate any regulatory 
     provision that affects the programs under this title and is 
     published in final form after November 1 as one that an 
     entity subject to the provision may, in the entity's 
     discretion, choose to implement prior to the effective date 
     described in paragraph (1). The Secretary may specify in the 
     designation when, and under what conditions, an entity may 
     implement the provision prior to that effective date. The 
     Secretary shall publish any designation under this 
     subparagraph in the Federal Register.
       ``(B) If an entity chooses to implement a regulatory 
     provision prior to the effective date described in paragraph 
     (1), as permitted by subparagraph (A), the provision shall be 
     effective with respect to that entity in accordance with the 
     terms of the Secretary's designation.''.

     SEC. 482. FORMS AND REGULATIONS.

       Section 483 (20 U.S.C. 1090) is amended--
       (1) in subsection (a)--
       (A) in the subsection heading, by striking ``Form'' and 
     inserting ``Form Development'';
       (B) by amending paragraph (1) to read as follows:
       ``(1) Single form requirements.--The Secretary, in 
     cooperation with representatives of agencies and 
     organizations involved in student financial assistance, shall 
     produce, distribute, and process free of charge a common 
     financial reporting form (which shall include electronic 
     versions of the form) to be used--
       ``(A) to determine the need (including the expected family 
     contribution and, if appropriate, cost of attendance) and 
     eligibility of a student for financial assistance under parts 
     A, C, D, and E; and
       ``(B) to determine the need (including the expected family 
     contribution and cost of attendance) of a student for the 
     purposes of part B.
       ``(2) State data items.--The Secretary shall include on the 
     form developed under this subsection such data items, 
     selected in consultation with the States to assist the States 
     in awarding State student financial assistance, as the 
     Secretary determines are appropriate for inclusion.
       ``(3) Parent's social security number.--The Secretary shall 
     include on the form developed under this paragraph space for 
     the social security number of parents of dependent students 
     seeking financial assistance under this title.
       ``(4) Use.--The Secretary shall require that the form 
     developed under this paragraph be used for the purpose of 
     collecting eligibility and other data for purposes of part B, 
     including the applicant's choice of lender.''; and
       (C) in paragraph (3)--
       (i) by striking ``Institutions of higher education and 
     States shall receive'' and inserting ``The Secretary shall 
     provide''; and
       (ii) by striking ``by the Secretary''; and
       (2) by adding at the end the following:
       ``(g) Payment for Data.--The Secretary may pay such charges 
     as the Secretary determines are necessary to obtain data that 
     the Secretary considers essential to the efficient 
     administration of the programs under this title.
       ``(h) Multiyear Promissory Note.--The Secretary shall 
     require, for loans made under this title for periods of 
     enrollment beginning on or after July 1, 2000, the use of a 
     promissory note applicable to more than 1 academic year, or 
     more than 1 type of loan made under this title. Prior to 
     implementing this subsection, the Secretary shall develop and 
     test such a promissory note on a limited or pilot basis.''.

     SEC. 483. STUDENT ELIGIBILITY.

       (a) Amendments.--Section 484 (20 U.S.C. 1091) is amended--
       (1) in subsection (d)--
       (A) in the matter preceding paragraph (1), by striking 
     ``either''; and
       (B) by adding at the end the following:
       ``(3) The student has completed a high school education in 
     a home school setting and has met any State requirements with 
     respect to such education in a home school setting.''; and
       (2) by adding at the end the following:
       ``(q) Verification of IRS Return Information.--The 
     Secretary shall verify the information reported by all 
     applicants for assistance on the form prescribed under 
     section 483 with the return information (as defined in 
     section 6103 of the Internal Revenue Code of 1986) available 
     to the Secretary of the Treasury. Notwithstanding section 
     6103 of such Code the Secretary of the Treasury shall provide 
     the return information to the Secretary. In the case of a 
     dependent student the return information shall include the 
     return information of the parent of the student. The form 
     prescribed by the Secretary under section 483 shall contain a 
     prominent notice of the verification of the information and a 
     warning to all the applicants of the penalties for 
     misrepresentation, with respect to the information, under the 
     United States Code.
       ``(r) Suspension of Eligibility for Drug-Related 
     Offenses.--
       ``(1) In general.--A 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:

  e possession of a
Ineligibility period is:
  1 year ffense........................................................
  2 years ffense.......................................................
  Indefinite.se........................................................

  e sale of a
Ineligibility period is:
  2 years fense........................................................
  Indefinite.nse.......................................................

       ``(2) Rehabilitation.--A student whose eligibility has been 
     suspended under paragraph (1) may resume eligibility before 
     the end of the ineligibility period determined under such 
     paragraph if the student satisfactorily completes a drug 
     rehabilitation program that complies with such criteria as 
     the Secretary shall prescribe in regulations for purposes of 
     this paragraph.
       ``(3) Definitions.--In this subsection, the term 
     `controlled substance' has the meaning given the term in 
     section 102(6) of the Controlled Substances Act (21 U.S.C. 
     802(6)).''.
       (b) Effective Date.--The amendment made by subsection 
     (a)(2) regarding suspension of eligibility for drug-related 
     offenses, 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. 484. INSTITUTIONAL REFUNDS.

       Section 484B (20 U.S.C. 1091b) is amended--
       (1) in subsection (b)--
       (A) in paragraph (1), by inserting ``or'' after the 
     semicolon;
       (B) by striking paragraph (2); and
       (C) by redesignating paragraph (3) as paragraph (2); and
       (2) in subsection (c)--
       (A) in paragraph (1), by striking ``last day of attendance 
     by the student'' and inserting ``day the student withdrew'';
       (B) in subparagraph (A) of paragraph (2), by striking 
     ``last recorded day of attendance by the student'' and 
     inserting ``day the student withdrew''; and
       (C) by adding at the end the following:
       ``(3) For the purpose of this section, the term `day a 
     student withdrew'--
       ``(A) is the date that was the last recorded day of 
     attendance by the student; or
       ``(B) in instances where attendance is not recorded, is the 
     date on which--
       ``(i) the student began the withdrawal process prescribed 
     by the institution; or

[[Page S7745]]

       ``(ii) the student otherwise provided notification to the 
     institution of the intent to withdraw.''.

     SEC. 485. INSTITUTIONAL AND FINANCIAL ASSISTANCE INFORMATION 
                   FOR STUDENTS.

       (a) Information Dissemination Activities.--Section 485(a) 
     (20 U.S.C. 1092(a)) is amended--
       (1) in paragraph (1)--
       (A) in the second sentence, by striking ``and mailings, to 
     all current'' and inserting ``, mailings, and electronic 
     media, to all enrolled'';
       (B) by inserting after the second sentence the following: 
     ``Each eligible institution annually shall provide to all 
     students enrolled at the institution, a list of the 
     information that is required by this section, together with a 
     statement of the procedures required to obtain the 
     information.'';
       (C) in subparagraph (M)(ii), by striking ``and'' after the 
     semicolon;
       (D) in subparagraph (N), by striking the period and 
     inserting ``; and''; and
       (E) by adding at the end the following:
       ``(O) the requirements and procedures for student 
     withdrawal prior to the end of a period of enrollment and the 
     consequences to the student, with respect to receipt of a 
     refund, of the student's failing to provide notification of 
     withdrawal.'';
       (2) in paragraph (2), by inserting ``an application for'' 
     after ``concerning''; and
       (3) in paragraph (3), by amending subparagraph (A) to read 
     as follows:
       ``(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''.
       (b) Exit Counseling for Borrowers.--Section 485(b) (20 
     U.S.C. 1092(b)) is amended--
       (1) in paragraph (1)(A), by striking ``(individually or in 
     groups)''; and
       (2) in paragraph (2), by adding at the end the following:
       ``(C) Nothing in this subsection shall be construed to 
     prohibit an institution of higher education from utilizing 
     electronic means to provide personalized exit counseling.''.
       (c) Disclosures Required With Respect to Athletically 
     Related Student Aid.--Section 485(e) (20 U.S.C. 1092(e)) is 
     amended--
       (1) by amending paragraph (2) to read as follows:
       ``(2) When an institution described in paragraph (1) offers 
     a potential student athlete athletically related student aid, 
     such institution shall provide to the student, the student's 
     parents, the student's guidance counselor, and the student's 
     coach the information contained in the report submitted by 
     such institution pursuant to paragraph (1). 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 the 
     previous sentence, the distribution of the compilation to all 
     secondary schools shall fulfill the responsibility of the 
     institution to provide the information to a prospective 
     student athlete's guidance counselor and coach.''; and
       (2) by amending paragraph (9) to read as follows:
       ``(9) The reports required by this subsection shall be due 
     each July 1 and shall cover the 1-year period ending August 
     31 of the preceding year.''.
       (d) Disclosure of Campus Security Policy and Campus Crime 
     Statistics.--Section 485(f) (20 U.S.C. 1092(f)) is amended--
       (1) by amending subparagraph (F) of paragraph (1) to read 
     as follows:
       ``(F) Statistics concerning the occurrence on campus, 
     during the most recent calendar year, and during the 2 
     preceding calendar years for which data are available--
       ``(i) of the following criminal offenses reported to campus 
     security authorities or local police agencies--

       ``(I) homicide, including murder or nonnegligent 
     manslaughter or negligent manslaughter;
       ``(II) sex offenses, forcible or nonforcible;
       ``(III) robbery;
       ``(IV) aggravated assault;
       ``(V) burglary;
       ``(VI) motor vehicle theft; and
       ``(VII) arson;

       ``(ii) of the crimes described in subclauses (I) through 
     (VII), and vandalism and simple assault, that manifest 
     evidence of prejudice based on actual or perceived race, 
     gender, religion, sexual orientation, ethnicity, or 
     disability that are reported to campus security authorities 
     or local police agencies, which data shall be collected and 
     reported according to category of prejudice.'';
       (2) by redesignating paragraphs (4) through (7) as 
     paragraphs (5) through (8), respectively;
       (3) by inserting after paragraph (3) the following:
       ``(4)(A) Each institution participating in any program 
     under this title which 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 all crimes reported to such police or security 
     department, including--
       ``(i) the nature, date, time, and general location of each 
     crime; and
       ``(ii) the disposition of the complaint, if known.
       ``(B)(i) All entries that are required pursuant to this 
     paragraph shall, except where disclosure of such information 
     is prohibited by law or such disclosure would jeopardize the 
     confidentiality of the victim, be open to public inspection 
     within 2 business days of the initial report being made to 
     the department or a campus security authority.
       ``(ii) If new information about an entry into a log becomes 
     available to a police or security department, then the new 
     information shall be recorded in the log not later than 2 
     business days after the information becomes available to the 
     police or security department.
       ``(iii) Where there is clear and convincing evidence that 
     the release of such information would 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, such information may be withheld 
     until that damage is no longer likely to occur from the 
     release of such information.
       ``(iv) Notwithstanding clause (iii), an institution of 
     higher education shall record all criminal incidents 
     occurring on campus and shall make the reports open to public 
     inspection not later than 2 business days after the 
     requirements of clause (iii) are met.'';
       (4) in paragraph (7) (as redesignated by subparagraph (B)), 
     by inserting at the end the following: ``Such statistics 
     shall not identify victims of crimes or persons accused of 
     crimes, except as permitted by State or local law.''; and
       (5) by adding at the end the following:
       ``(9) Study.--
       ``(A) In general.--The Secretary, in consultation with the 
     Attorney General, shall provide for a national study to 
     examine procedures undertaken after an institution of higher 
     education receives a report of sexual assault.
       ``(B) Report.--The study required by subparagraph (A) shall 
     include an analysis of--
       ``(i) the existence and publication of the institution of 
     higher education's and State's definition of sexual assault;
       ``(ii) the existence and publication of the institution's 
     policy for campus sexual assaults;
       ``(iii) the individuals to whom reports of sexual assault 
     are given most often and--

       ``(I) how the individuals are trained to respond to the 
     reports; and
       ``(II) the extent to which the individuals are trained;

       ``(iv) the reporting options that are articulated to the 
     victim or victims of the sexual assault regarding--

       ``(I) on-campus reporting and procedure options; and
       ``(II) off-campus reporting and procedure options;

       ``(v) the resources available for victims' safety, support, 
     medical health, and confidentiality, including--

       ``(I) how well the resources are articulated both 
     specifically to the victim of sexual assault and generally to 
     the campus at large; and
       ``(II) the security of the resources in terms of 
     confidentiality or reputation;

       ``(vi) policies and practices that may prevent or 
     discourage the reporting of campus sexual assaults to local 
     crime authorities, or that may otherwise obstruct justice or 
     interfere with the prosecution of perpetrators of campus 
     sexual assaults;
       ``(vii) policies and practices found successful in aiding 
     the report and any ensuing investigation or prosecution of a 
     campus sexual assault;
       ``(viii) the on-campus procedures for investigation and 
     disciplining the perpetrator of a sexual assault, including--

       ``(I) the format for collecting evidence; and
       ``(II) the format of the investigation and disciplinary 
     proceeding, including the faculty responsible for running the 
     disciplinary procedure and the persons allowed to attend the 
     disciplinary procedure; and

       ``(ix) types of punishment for offenders, including--

       ``(I) whether the case is directed outside for further 
     punishment; and
       ``(II) how the institution punishes perpetrators.

       ``(C) Submission of report.--The report required by 
     subparagraph (B) shall be submitted to Congress not later 
     than September 1, 1999.
       ``(D) Definition.--For purposes of this section, the term 
     `campus sexual assaults' means sexual assaults occurring at 
     institutions of higher education and sexual assaults 
     committed against or by students or employees of such 
     institutions.
       ``(E) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this section $1,000,000 for 
     fiscal year 1999.''.
       (e) Data Required.--Section 485(g) (20 U.S.C. 1092(g)) is 
     amended--
       (1) in paragraph (1), by adding at the end the following:
       ``(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 the institution's 
     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, except that 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 the institution's 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, except that 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 will, 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 for any such sport, and the 
     reasons for any such reduction, to the

[[Page S7746]]

     extent the reduction is known.'';
       (2) by striking paragraph (5);
       (3) by redesignating paragraph (4) as paragraph (5); and
       (4) by inserting after paragraph (3) the following:
       ``(4) Submission; report; information availability.--(A) 
     Each institution of higher education described in paragraph 
     (1) shall provide to the Secretary, within 15 days of the 
     date that the institution makes available the report under 
     paragraph (1), the information contained in the report.
       ``(B) The Secretary shall prepare a report regarding the 
     information received under subparagraph (A) for each year by 
     April 1 of the year. The report shall--
       ``(i) summarize the information and identify trends in the 
     information;
       ``(ii) aggregate the information by divisions of the 
     National Collegiate Athletic Association; and
       ``(iii) contain information on each individual institution 
     of higher education.
       ``(C) The Secretary shall ensure that the report described 
     in subparagraph (B) is made available on the Internet within 
     a reasonable period of time.
       ``(D) The Secretary shall notify, not later than 180 days 
     after the date of enactment of the Higher Education 
     Amendments of 1998, all secondary schools in all States 
     regarding the availability of the information reported under 
     subparagraph (B) and the information made available under 
     paragraph (1), and how such information may be accessed.''.
       (f) GEPA Amendment.--Section 444(a)(4)(B) of the General 
     Education Provisions Act (20 U.S.C. 1232g(a)(4)(B)) is 
     amended--
       (1) by redesignating clauses (iii) and (iv) as clauses (iv) 
     and (v), respectively; and
       (2) by inserting after clause (ii) the following:
       ``(iii) records that are maintained by local police or 
     campus security officers of an educational agency or 
     institution about--

       ``(I) individuals who have been found guilty of, or have 
     pled guilty to, committing or participating in any criminal 
     activity as defined in Federal, State, or local law that has 
     occurred while the individual was a student in attendance, 
     including audit or noncredit, at an educational institution; 
     and
       ``(II) findings of guilt of criminal misconduct and related 
     sanctions from any previously attended educational agencies 
     or institutions where such records were created on or after 
     September 1, 1999, and that are maintained by the institution 
     currently or most recently attended by the individual;''.

     SEC. 486. NATIONAL STUDENT LOAN DATA BANK SYSTEM.

       Section 485B (20 U.S.C. 1092b) is amended by adding at the 
     end the following:
       ``(h) Student Status Confirmation Report.--In order to 
     reduce unnecessary paperwork and to increase the efficient 
     administration, the Secretary shall assure that borrowers 
     under part E are included in the Student Status Confirmation 
     Report in the same manner as borrowers under parts B and 
     D.''.

     SEC. 487. TRAINING IN FINANCIAL AID SERVICES.

       Section 486 (20 U.S.C. 1093) is amended to read as follows:

     ``SEC. 486. INFORMATION ON THE COSTS OF HIGHER EDUCATION.

       ``(a) In General.--For the purpose of providing comparative 
     information to families about the costs of higher education--
       ``(1) the National Center for Education Statistics shall--
       ``(A) develop a standard definition for the following data 
     elements:
       ``(i) Tuition and fees.
       ``(ii) Total cost of attendance, including costs such as 
     housing, books, supplies, and transportation.
       ``(iii) Average amount of financial assistance received by 
     a student who attends an institution of higher education, in 
     terms of the following:

       ``(I) Grants and loans.
       ``(II) Institutional and other assistance.

       ``(iv) Percentage of students receiving student financial 
     assistance, in terms of the following:

       ``(I) Grants and loans.
       ``(II) Institutional and other assistance;

       ``(B) report the definitions to each institution of higher 
     education and the Committee on Labor and Human Resources of 
     the Senate and the Committee on Education and the Workforce 
     of the House of Representatives not later than 90 days after 
     the date of enactment of the Higher Education Amendments of 
     1998;
       ``(C) collect information regarding the data elements 
     described in subparagraph (A) with respect to all 
     institutions of higher education, and make available the 
     information each year in a timely fashion through the 
     integrated postsecondary education data system, beginning 
     with the information from the 1999-2000 academic year;
       ``(D) provide the public notice when the information 
     described in subparagraph (C) is available for public 
     inspection; and
       ``(E) publish in a timely fashion a report after the third 
     year of collection of the information described in 
     subparagraph (C) that compares the information described in 
     subparagraph (C) longitudinally by institution, which 
     information shall be presented in a form that is easily 
     understandable, including clear definitions of the data 
     elements described in subparagraph (A), to allow parents and 
     students to make informed decisions about attending college; 
     and
       ``(2) institutions of higher education shall provide 
     information regarding each data element described in 
     paragraph (1)(A) to the National Center for Education 
     Statistics by March 1 of each year, beginning in the year 
     2000.
       ``(b) Study.--
       ``(1) In general.--In consultation with the Bureau of Labor 
     Statistics, the National Center for Education Statistics 
     shall conduct a national study of expenditures at 
     institutions of higher education. Such study shall include 
     information about--
       ``(A) expenditures for--
       ``(i) faculty salaries and benefits;
       ``(ii) administrative salaries, benefits, and expenses;
       ``(iii) academic support services;
       ``(iv) research;
       ``(v) construction; and
       ``(vi) technology;
       ``(B) how such expenditures change over time; and
       ``(C) how such expenditures relate to college costs.
       ``(2) Final report.--The National Center for Education 
     Statistics shall submit a report regarding the findings of 
     the study required by paragraph (1) to the Committee on Labor 
     and Human Resources of the Senate and the Committee on 
     Education and the Workforce of the House of Representatives 
     not later than September 30, 2001.
       ``(c) Higher Education Market Basket.--In consultation with 
     the Bureau of Labor Statistics, the National Center for 
     Education Statistics shall develop a Higher Education Market 
     Basket that identifies the items that comprise the costs of 
     higher education. The National Center for Education 
     Statistics shall provide a report on the market basket to the 
     Committee on Labor and Human Resources of the Senate and the 
     Committee on Education and the Workforce of the House of 
     Representatives not later than September 30, 2002.
       ``(d) Fines.--In addition to the actions authorized in 
     section 487(c), the Secretary may impose a fine in an amount 
     not to exceed $25,000 on an institution of higher education 
     for failure to provide the information described in 
     subsection (a)(2) in a timely or accurate manner, or for 
     failure to otherwise cooperate with the National Center for 
     Education Statistics regarding efforts to obtain data on the 
     cost of higher education under such subsection.''.

     SEC. 488. PROGRAM PARTICIPATION AGREEMENTS.

       Section 487 (20 U.S.C. 1094) is amended--
       (1) in subsection (a)--
       (A) in paragraph (3)--
       (i) by striking subparagraph (B); and
       (ii) by redesignating subparagraphs (C) and (D) as 
     subparagraphs (B) and (C), respectively;
       (B) in paragraph (9), by striking ``part B'' and inserting 
     ``part B or D'';
       (C) in paragraph (14)--
       (i) in subparagraph (A), by striking ``part B'' and 
     inserting ``part B or D''; and
       (ii) in subparagraph (B)--

       (I) by inserting ``for-profit'' after ``Any'';
       (II) by striking ``and any eligible institution which'' and 
     inserting ``or''; and
       (III) by striking ``part B'' and inserting ``part B or D'';

       (D) in paragraph (15), by striking ``State review 
     entities'' and inserting ``the State agencies'';
       (E) by striking paragraph (18);
       (F) by redesignating paragraphs (19) through (22) as 
     paragraphs (18) through (21), respectively; and
       (G) by amending paragraph (20) (as redesignated by 
     subparagraph (F)) to read as follows:
       ``(20) The institution will meet the requirements 
     established by the Secretary and accrediting agencies or 
     associations, and will provide evidence to the Secretary that 
     the institution has the authority to operate within a 
     State.''; and
       (2) in subsection (c)--
       (A) in paragraph (1)(A)(i), by striking ``State review 
     entities referred to in'' and inserting ``appropriate State 
     agency notifying the Secretary under'';
       (B) in paragraph (4), by striking ``, after consultation 
     with each State review entity designated under subpart 1 of 
     part H,''; and
       (C) in paragraph (5), by striking ``State review entities 
     designated'' and inserting ``State agencies notifying the 
     Secretary''.

     SEC. 489. REGULATORY RELIEF AND IMPROVEMENT.

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

     ``SEC. 487A. REGULATORY RELIEF AND IMPROVEMENT.

       ``(a) Quality Assurance Program.--
       ``(1) In general.--The Secretary is authorized to select 
     institutions for voluntary participation in a Quality 
     Assurance Program that provides participating institutions 
     with an alternative management approach through which 
     individual schools develop and implement their own 
     comprehensive systems, including processing and disbursement 
     of student financial aid, verification of student financial 
     aid application data, and entrance and exit interviews, 
     thereby enhancing program integrity within the student aid 
     delivery system. The Quality Assurance Program authorized by 
     this section shall be based on criteria that include 
     demonstrated institutional performance, as determined by the 
     Secretary, and shall take into consideration current quality 
     assurance goals, as determined by the Secretary.
       ``(2) Waiver.--The Secretary is authorized to waive for any 
     institution participating in the Quality Assurance Program 
     any regulations dealing with reporting or verification 
     requirements in this title that are addressed by the 
     institution's alternative management system, and may 
     substitute such quality assurance reporting as the Secretary 
     determines necessary to ensure accountability and compliance 
     with the purposes of the programs under this title.
       ``(3) Determination.--The Secretary is authorized to 
     determine--
       ``(A) when an institution that is unable to administer the 
     Quality Assurance Program shall be removed from such program; 
     and
       ``(B) when institutions desiring to cease participation in 
     such program will be required to complete the current award 
     year under the requirements of the Quality Assurance Program.

[[Page S7747]]

       ``(4) Review and evaluation.--The Secretary shall review 
     and evaluate the Quality Assurance Program conducted by each 
     participating institution and, on the basis of that 
     evaluation, make recommendations regarding amendments to this 
     Act that will streamline the administration and enhance the 
     integrity of Federal student assistance programs. Such 
     recommendations shall be submitted to the Committee on Labor 
     and Human Resources of the Senate and the Committee on 
     Education and the Workforce of the House of Representatives.
       ``(b) Regulatory Improvement and Streamlining 
     Experiments.--
       ``(1) In general.--The Secretary shall review and evaluate 
     the experience of institutions participating as experimental 
     sites during the period of 1993 through 1998 under this 
     section (as such section was in effect on the day before the 
     date of enactment of the Higher Education Amendments of 
     1998), and shall submit a report based on this review and 
     evaluation to the Committee on Labor and Human Resources of 
     the Senate and the Committee on Education and the Workforce 
     of the House of Representatives not later than 6 months after 
     the enactment of the Higher Education Amendments of 1998. 
     Such report shall include--
       ``(A) a list of participating institutions and the specific 
     statutory or regulatory waivers granted to each institution;
       ``(B) the findings and conclusions reached regarding each 
     of the experiments conducted; and
       ``(C) recommendations for amendments to improve and 
     streamline this Act, based on the results of the experiment.
       ``(2) Selection.--
       ``(A) In general.--The Secretary is authorized to select a 
     limited number of institutions for voluntary participation as 
     experimental sites to provide recommendations to the 
     Secretary on the impact and effectiveness of proposed 
     regulations or new management initiatives, except that 
     additional institutions may not be selected by the Secretary 
     until the report required by subsection (b)(1) has been 
     submitted to Congress.
       ``(B) Consultation.--Prior to approving any additional 
     experimental sites, the Secretary shall consult with the 
     Committee on Labor and Human Resources of the Senate and the 
     Committee on Education and the Workforce of the House of 
     Representatives and shall provide--
       ``(i) a list of institutions proposed for participation in 
     the experiment and the specific statutory or regulatory 
     waivers proposed to be granted to each institution;
       ``(ii) the objectives to be achieved through the 
     experiment; and
       ``(iii) the period of time over which the experiment is to 
     be conducted.
       ``(C) Waivers.--The Secretary is authorized to waive, for 
     any institution participating as an experimental site under 
     subparagraph (A), any requirements in this title, or 
     regulations prescribed under this title, that will bias 
     experimental results.
       ``(c) Definitions.--For purposes of this section, the term 
     `current award year' is defined as the award year during 
     which the participating institution indicates the 
     institution's intention to cease participation.''.

     SEC. 489A. DISTANCE EDUCATION DEMONSTRATION PROGRAMS.

       Part G (20 U.S.C. 1088 et seq.) is amended by inserting 
     after section 487B (20 U.S.C. 1094a) the following:

     ``SEC. 487C. 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 to test the quality and viability 
     of expanded distance education programs currently restricted 
     under this Act;
       ``(2) to help determine the specific statutory and 
     regulatory requirements which should be altered to provide 
     greater access to high quality distance education programs; 
     and
       ``(3) 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, in accordance with the 
     provisions of subsection (d), is authorized to select 
     institutions of higher education or consortia of such 
     institutions for voluntary participation in a Distance 
     Education Demonstration Program that provides participating 
     institutions with the ability to offer distance education 
     programs that do not meet all or a portion of the sections or 
     regulations described in paragraph (2).
       ``(2) Waivers.--The Secretary is authorized to waive, for 
     any institution or consortia participating in a Distance 
     Education Demonstration Program, 1 or more of the 
     requirements of section 472(5) as the section relates to 
     computer costs, sections 472(10), 481(a)(3)(A), 481(a)(3)(B), 
     484(l)(1), or 1 or more of the regulations prescribed for 
     distance education under part F or G.
       ``(3) Special rule.--An institution of higher education, as 
     defined in section 481(a), is eligible to participate in the 
     demonstration program authorized under this section if such 
     institution awards a degree, except that--
       ``(A) such institutions that are described in section 
     481(a)(1)(C) shall not be eligible to participate; and
       ``(B) subject to subparagraph (A), such institutions that 
     meet the requirements of subsection (a) of section 481, other 
     than the requirements of paragraph (3)(A) or (3)(B) of such 
     subsection, shall be eligible to participate.
       ``(c) Application.--
       ``(1) In general.--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 and in such manner as the Secretary 
     may require.
       ``(2) Contents.--Each application shall include--
       ``(A) 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;
       ``(B) 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;
       ``(C) a description of the distance education programs to 
     be offered;
       ``(D) a description of the students to whom distance 
     education programs will be offered;
       ``(E) 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
       ``(F) such other information as the Secretary may require.
       ``(d) Selection.--The Secretary is authorized to select not 
     more than 5 institutions or consortia to participate in the 
     initial year of the demonstration program authorized under 
     this section. If expansion of the demonstration program can 
     be supported on the basis of the evaluations conducted 
     pursuant to subsections (f) and (g), the Secretary may select 
     not more than 10 additional institutions or consortia, taking 
     into account the number and quality of applications received 
     and the Department's capacity to oversee and monitor each 
     demonstration program. To the extent feasible, the Secretary 
     shall select a representative sample of institutions for 
     participation. 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.
       ``(e) Notification.--The Secretary shall make available to 
     the public and to the Committee on Labor and Human Resources 
     of the Senate and the Committee on Education and the 
     Workforce of the House of Representatives a list of 
     institutions or consortia selected to participate in the 
     demonstration program authorized by this section. Such notice 
     shall include a listing of the specific statutory and 
     regulatory requirements being waived for each institution or 
     consortia and a description of the distance education courses 
     to be offered.
       ``(f) Evaluations and Reports.--
       ``(1) Evaluation.--The Secretary, on an annual basis, shall 
     evaluate the demonstration programs authorized under this 
     section. Such evaluations shall specifically review--
       ``(A) the number and types of students participating in the 
     programs being offered, including the progress of 
     participating students toward recognized associate, 
     bachelor's, or graduate degrees, and the degree to which 
     participation in such programs increased;
       ``(B) issues related to student financial assistance for 
     distance education; and
       ``(C) the extent to which statutory or regulatory 
     requirements not waived under the demonstration program 
     present difficulties for students or institutions.
       ``(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 
     education and other nontraditional methods of expanding 
     access to education.
       ``(3) Reports.--
       ``(A) In general.--Within 18 months of the initiation of 
     the demonstration program, the Secretary shall report to the 
     Committee on Labor and Human Resources of the Senate and the 
     Committee on Education and the Workforce of the House of 
     Representatives with respect to--
       ``(i) the evaluations of the demonstration programs 
     authorized under this section; and
       ``(ii) any proposed statutory changes designed to enhance 
     the use of distance education.
       ``(B) Additional reports.--The Secretary shall provide 
     additional reports to the Committee on Labor and Human 
     Resources of the Senate and the Committee on Education and 
     the Workforce of the House of Representatives on an annual 
     basis regarding the demonstration programs authorized under 
     this section.
       ``(g) Independent Evaluation.--
       ``(1) In general.--The Secretary shall enter into a 
     contract with the National Academy of Sciences to study the 
     quality of and student learning outcomes in distance 
     education programs. Such study shall include--
       ``(A) identification of the elements by which quality in 
     distance education can be assessed, such as subject matter, 
     interactivity, and student outcomes; and
       ``(B) identification of the types of students which can 
     most benefit from distance education in areas such as access 
     to higher education, persistence, and graduation.
       ``(2) Scope.--Such study shall include distance education 
     programs offered by the institutions or consortia 
     participating in the demonstration program authorized by this 
     section, as well as the distance education programs offered 
     by other institutions.
       ``(3) Interim and final reports.--The Secretary shall 
     request that the National Academy of Sciences submit an 
     interim report to the Secretary, the Committee on Labor and 
     Human Resources of the Senate, and the Committee on Education 
     and the Workforce of the House of Representatives not later 
     than December 31, 2000, and a final report not later than 
     December 31, 2002, regarding the study.
       ``(4) Funding.--The Secretary shall make available not more 
     than $1,000,000 for the study required by this subsection.
       ``(h) Oversight.--In conducting the demonstration program 
     authorized under this section, the Secretary shall, on a 
     continuing basis--

[[Page S7748]]

       ``(1) assure compliance of institutions or consortia with 
     the requirements of this title (other than the sections and 
     regulations that are waived under subsection (b)(2));
       ``(2) provide technical assistance;
       ``(3) monitor fluctuations in the student population 
     enrolled in the participating institutions or consortia; and
       ``(4) consult with appropriate accrediting agencies or 
     associations and appropriate State regulatory authorities.
       ``(i) Definition.--For the purpose of this section, the 
     term `distance education' means an educational process that 
     is characterized by the separation, in time or place, between 
     instructor and student. Distance education 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. 489B. ADVISORY COMMITTEE ON STUDENT FINANCIAL 
                   ASSISTANCE.

       Section 491 (20 U.S.C. 1098) is amended--
       (1) in subsection (b)--
       (A) in the second sentence, by striking ``and 
     expenditures'' and inserting ``, expenditures and staffing 
     levels''; and
       (B) by inserting after the third sentence the following: 
     ``Reports, publications, and other documents, including such 
     reports, publications, and documents in electronic form, 
     shall not be subject to review by the Secretary.'';
       (2) in subsection (e)--
       (A) by redesignating paragraphs (3), (4), and (5), as 
     paragraphs (4), (5), and (6), respectively; and
       (B) by inserting after paragraph (2) the following:
       ``(3) No officers or full-time employees of the Federal 
     Government shall serve as members of the Advisory 
     Committee.'';
       (3) in subsection (g), by striking ``(1) Members'' and all 
     that follows through ``of the United States may'' and 
     inserting ``Members of the Advisory Committee may'';
       (4) in subsection (h)(1)--
       (A) by inserting ``determined'' after ``as may be''; and
       (B) by adding at the end the following: ``The Advisory 
     Committee may appoint not more than 1 full-time equivalent, 
     nonpermanent, consultant without regard to the provisions of 
     title 5, United States Code. The Advisory Committee shall not 
     be required by the Secretary to reduce personnel to meet 
     agency personnel reduction goals.'';
       (5) in subsection (i), by striking ``$750,000'' and 
     inserting ``$800,000'';
       (6) by amending subsection (j) to read as follows:
       ``(j) Special Analyses and Activities.--The Advisory 
     Committee shall--
       ``(1) monitor and evaluate the modernization of student 
     financial aid systems and delivery processes, including the 
     implementation of a performance-based organization within the 
     Department, and report to Congress regarding such 
     modernization on not less than an annual basis, including 
     recommendations for improvement;
       ``(2) 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 secondary school 
     students;
       ``(3) assess and make recommendations concerning the 
     feasibility and degree of use of appropriate technology in 
     the application for, and delivery and management of, 
     financial assistance under this title, as well as policies 
     that promote use of such technology to reduce cost and 
     enhance service and program integrity, including electronic 
     application and reapplication, just-in-time delivery of 
     funds, reporting of disbursements and reconciliation;
       ``(4) assess the implications of distance education on 
     student eligibility and other requirements for financial 
     assistance under this title, and make recommendations that 
     will enhance access to postsecondary education through 
     distance education while maintaining access, through on-
     campus instruction at eligible institutions, and program 
     integrity; and
       ``(5) make recommendations to the Secretary regarding 
     redundant or outdated provisions of and regulations under 
     this Act, consistent with the Secretary's requirements under 
     section 498A(b)(3).'';
       (7) in subsection (k), by striking ``1998'' and inserting 
     ``2004''; and
       (8) by repealing subsection (l).

     SEC. 489C. REGIONAL MEETINGS AND NEGOTIATED RULEMAKING.

       Section 492 (20 U.S.C. 1098a) is amended--
       (1) in subsection (a)--
       (A) in paragraph (1)--
       (i) by inserting ``, after the enactment of each Act to 
     reauthorize this Act that contains an amendment to this 
     title,'' after ``The Secretary''; and
       (ii) by inserting ``D,'' after ``B,''; and
       (B) in paragraph (2)--
       (i) by inserting ``D,'' after ``B,''; and
       (ii) by striking ``1992'' and inserting ``1998, and for the 
     implementation of this title as amended by each Act to 
     reauthorize this Act enacted after the date of enactment of 
     the Higher Education Amendments of 1998 that contains an 
     amendment to this title''; and
       (2) in subsection (b)--
       (A) by striking ``After'' and inserting the following:
       ``(1) In general.--After'';
       (B) in paragraph (1) (as redesignated by subparagraph 
     (A))--
       (i) by inserting ``D,'' after ``B,''; and
       (ii) by striking ``1992'' and inserting ``1998, and for the 
     implementation of this title as amended by each Act to 
     reauthorize this Act enacted after the date of enactment of 
     the Higher Education Amendments of 1998 that contains an 
     amendment to this title,''; and
       (C) by adding at the end the following:
       ``(2) Expansion of negotiated rulemaking in student loan 
     programs.--All regulations pertaining to the student 
     assistance programs in parts B, D, G, and H, that are 
     promulgated after the date of enactment of this paragraph, 
     shall be subject to the negotiated rulemaking process, unless 
     the Secretary determines that exceptional circumstances exist 
     making negotiated rulemaking impractical with respect to 
     given regulations and publishes the basis for such 
     determination in the Federal Register at the same time as the 
     proposed regulations in questions are first published. All 
     published proposed regulations shall conform, unless 
     impracticable, to agreements resulting from such negotiated 
     rulemaking. Such negotiated rulemaking shall be conducted in 
     accordance with the provisions of paragraph (1).''.

                    PART H--PROGRAM INTEGRITY TRIAD

     SEC. 491. STATE ROLE AND RESPONSIBILITIES.

       Subpart 1 of part H of title IV (20 U.S.C. 1099a et seq.) 
     is amended to read as follows:

                        ``Subpart 1--State Role

     ``SEC. 495. STATE RESPONSIBILITIES.

       ``(a) State Responsibilities.--As part of the integrity 
     program authorized by this part, each State, through 1 State 
     agency or several State agencies selected by the State, 
     shall--
       ``(1) furnish the Secretary, upon request, information with 
     respect to the process for licensing or other authorization 
     for institutions of higher education to operate within the 
     State;
       ``(2) notify the Secretary promptly whenever the State 
     revokes a license or other authority to operate an 
     institution of higher education; and
       ``(3) notify the Secretary promptly whenever the State has 
     credible evidence that an institution of higher education 
     within the State--
       ``(A) has committed fraud in the administration of the 
     student assistance programs authorized by this title; or
       ``(B) has substantially violated a provision of this title.
       ``(b) Institutional Responsibility.--Each institution of 
     higher education shall provide evidence to the Secretary that 
     the institution has authority to operate within a State at 
     the time the institution is certified under subpart 3.''.

     SEC. 492. ACCREDITING AGENCY RECOGNITION.

       (a) Amendments to Headings.--Subpart 2 of part H of title 
     IV (20 U.S.C. 1099b et seq.) is amended--
       (1) in the subpart heading, by striking ``Approval'' and 
     inserting ``Recognition''; and
       (2) in the heading for section 496, by striking 
     ``approval'' and inserting ``recognition''.
       (b) Recognition of Accrediting Agency or Association.--
     Section 496 (20 U.S.C. 1099b) is amended--
       (1) in the heading for subsection (a), by striking 
     ``Standards'' and inserting ``Criteria'';
       (2) in subsection (a)--
       (A) in the matter preceding paragraph (1), by striking 
     ``standards'' each place the term appears and inserting 
     ``criteria'';
       (B) in paragraph (4)--
       (i) by striking ``at the institution'' and inserting 
     ``offered by the institution''; and
       (ii) by inserting ``, including distance education courses 
     or programs,'' after ``higher education''; and
       (C) in paragraph (5)--
       (i) by striking subparagraph (I);
       (ii) by redesignating subparagraphs (A) through (H) as 
     subparagraphs (B) through (I), respectively;
       (iii) by inserting before subparagraph (B) the following:
       ``(A) success with respect to student achievement in 
     relation to the institution's mission, including, as 
     appropriate, consideration of course completion, State 
     licensing examination, and job placement rates;'';
       (iv) in subparagraph (I) (as redesignated by clause (ii)), 
     by striking ``in clock hours or credit hours''; and
       (v) in subparagraph (L)--

       (I) by inserting ``record of'' before ``compliance'';
       (II) by striking ``Act, including any'' and inserting ``Act 
     based on the'';
       (III) by inserting ``any'' after ``reviews, and''; and
       (IV) in the matter following subparagraph (L), by striking 
     ``(G),'';

       (3) by amending paragraph (1) of subsection (l) to read as 
     follows: ``(1)(A)(i) If the Secretary determines that an 
     accrediting agency or association has failed to apply 
     effectively the standards in this section, or is otherwise 
     not in compliance with the requirements of this section, the 
     Secretary shall--
       ``(I) after notice and opportunity for a hearing, limit, 
     suspend, or terminate the approval of the agency or 
     association; or
       ``(II) require the agency or association to take 
     appropriate action to bring the agency or association into 
     compliance with such requirements within a timeframe 
     specified by the Secretary, except that--
       ``(aa) such timeframe shall not exceed 12 months unless the 
     Secretary extends such period for good cause; and
       ``(bb) if the agency or association fails to bring the 
     agency or association into compliance within such timeframe, 
     the Secretary shall, after notice and opportunity for a 
     hearing, limit, suspend, or terminate the approval of the 
     agency or association.''; and
       (4) in subsection (n)(3), by adding at the end the 
     following: ``When the Secretary decides to recognize an 
     accrediting agency or association, the Secretary shall 
     determine the agency or association's scope of recognition. 
     If the agency or association reviews institutions offering 
     distance

[[Page S7749]]

     education courses or programs and the Secretary determines 
     that the agency or association meets the requirements of this 
     section, then the agency shall be recognized and the scope of 
     recognition shall include accreditation of institutions 
     offering distance education courses or programs.''.

     SEC. 493. ELIGIBILITY AND CERTIFICATION PROCEDURES.

       (a) Single Application Form.--Section 498(b) (20 U.S.C. 
     1099c(b)) is amended--
       (1) in paragraph (1), by striking ``and capability'' and 
     inserting ``financial responsibility, and administrative 
     capability'';
       (2) by amending paragraph (3) to read as follows:
       ``(3) requires--
       ``(A) a description of the third party servicers of an 
     institution of higher education; and
       ``(B) the institution to maintain a copy of any contract 
     with a financial aid service provider or loan servicer, and 
     provide a copy of any such contract to the Secretary upon 
     request;'';
       (3) in paragraph (4), by striking the period and inserting 
     ``; and''; and
       (4) by adding at the end the following:
       ``(5) provides, at the option of the institution, for 
     participation in 1 or more of the programs under part B or 
     D.''.
       (b) Financial Responsibility Standards.--Section 498(c) (20 
     U.S.C. 1099c(c)) is amended--
       (1) in paragraph (2), by striking ``with respect to 
     operating losses, net worth, asset to liabilities ratios, or 
     operating fund deficits'' and inserting ``regarding ratios 
     that demonstrate financial responsibility,'';
       (2) in paragraph (3)(A), by striking ``Secretary third 
     party'' and all that follows through ``payable to the 
     Secretary'' and inserting ``Secretary any third party 
     guarantees, which the Secretary determines are reasonable, 
     that''; and
       (3) in paragraph (4)--
       (A) in the matter preceding subparagraph (A), 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''.
       (c) Financial Guarantees From Owners.--Section 498(e) (20 
     U.S.C. 1099c(e)) is amended--
       (1) in the subsection heading, by inserting ``of For-Profit 
     Institutions'' after ``Owners'';
       (2) in paragraph (1)(A), by striking ``from an'' and 
     inserting ``from a for-profit'';
       (3) in paragraph (2)--
       (A) in the matter preceding clause (i) of subparagraph (A), 
     by inserting ``for-profit'' after ``or more'';
       (B) in subparagraph (B), by inserting ``for-profit'' after 
     ``or more''; and
       (4) in paragraph (3), by striking ``operation of, an 
     institution or'' and inserting ``operation of, a for-profit 
     institution or the''.
       (d) Applications and Site Visits.--Section 498(f) (20 
     U.S.C. 1099c(f)) is amended--
       (1) in the subsection heading by striking ``; Site Visits 
     and Fees'' and inserting ``and Site Visits'';
       (2) in the second sentence, by striking ``shall'' and 
     inserting ``may'';
       (3) in the third sentence, strike ``may'' and insert 
     ``shall''; and
       (4) by striking the fourth sentence.
       (e) Time Limitations on, and Renewal of, Eligibility.--
     Subsection (g) of section 498 (20 U.S.C. 1099c) is amended to 
     read as follows:
       ``(g) Time Limitations on, and Renewal of, Eligibility.--
       ``(1) General rule.--After the expiration of the 
     certification of any institution under the schedule 
     prescribed under this section (as in effect prior to the 
     enactment of the Higher Education Act Amendments of 1998), 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) Notification.--The Secretary shall notify each 
     institution of higher education not later than 6 months prior 
     to the date of the expiration of the institution's 
     certification.
       ``(3) Institutions outside the united states.--The 
     Secretary shall promulgate regulations regarding the 
     recertification requirements applicable to an institution of 
     higher education outside of the United States that meets the 
     requirements of section 481(a)(1)(C) and received less than 
     $500,000 in funds under part B for the most recent year for 
     which data are available.''.
       (f) Provisional Certification.--Section 498(h) (20 U.S.C. 
     1099c(h)) is amended--
       (1) in paragraph (1)(B)(ii), by striking ``an eligible'' 
     and inserting ``a for-profit eligible''; and
       (2) in paragraph (2), by striking ``the approval'' and 
     inserting ``the recognition''.
       (g) Treatment of Changes of Ownership.--Section 498(i) (20 
     U.S.C. 1099c(i)) is amended--
       (1) in the subsection heading, by inserting ``of For-Profit 
     Institutions'' after ``Ownership''; and
       (2) in paragraph (2)--
       (A) in subparagraph (A), by inserting ``for-profit'' before 
     ``institution'';
       (B) in subparagraph (C), by striking ``two'' and inserting 
     ``a for-profit institution with one'';
       (C) in subparagraph (D), by inserting ``for-profit'' before 
     ``institutions'';
       (D) in subparagraph (E), by inserting ``for-profit'' before 
     ``institutions''; and
       (E) in subparagraph (F), by inserting ``for-profit'' before 
     ``institution''.
       (h) Treatment of Branches.--The second sentence of section 
     498(j)(1) (20 U.S.C. 1099c(j)(1)) is amended by inserting 
     ``after the branch is certified by the Secretary as a branch 
     campus participating in a program under title IV,'' after ``2 
     years''.

     SEC. 494. PROGRAM REVIEW AND DATA.

       Section 498A (20 U.S.C. 1099c-1) is amended--
       (1) in subsection (a)--
       (A) in paragraph (2)--
       (i) in the matter preceding subparagraph (A), by striking 
     ``may'' and inserting ``shall'';
       (ii) by amending subparagraph (C) to read as follows:
       ``(C) institutions with a significant fluctuation in 
     Federal Stafford Loan volume, Federal Direct Stafford/Ford 
     Loan volume, or Federal Pell Grant award volume, or any 
     combination thereof, in the year for which the determination 
     is made, compared to the year prior to such year, that are 
     not accounted for by changes in the Federal Stafford Loan 
     program, the Federal Direct Stafford/Ford Loan program, or 
     the Pell Grant program, or any combination thereof;'';
       (iii) by amending subparagraph (D) to read as follows:
       ``(D) institutions reported to have deficiencies or 
     financial aid problems by the State licensing or authorizing 
     agency, or by the appropriate accrediting agency or 
     association;'';
       (iv) in subparagraph (E), by inserting ``and'' after the 
     semicolon; and
       (v) by striking subparagraphs (F) and (G), and inserting 
     the following:
       ``(F) such other institutions that the Secretary determines 
     may pose a significant risk of failure to comply with the 
     administrative capability or financial responsibility 
     provisions of this title; and''; and
       (B) in paragraph (3)(A), by inserting ``relevant'' after 
     ``all''; and
       (2) by amending subsection (b) to read as follows:
       ``(b) Special Administrative Rules.--
       ``(1) In general.--In carrying out paragraphs (1) and (2) 
     of subsection (a) and any other relevant provisions of this 
     title, the Secretary shall--
       ``(A) establish guidelines designed to ensure uniformity of 
     practice in the conduct of program reviews of institutions of 
     higher education;
       ``(B) make available to each institution participating in 
     programs authorized under this title complete copies of all 
     review guidelines and procedures used in program reviews;
       ``(C) permit the institution to correct or cure an 
     administrative, accounting, or recordkeeping error if the 
     error is not part of a pattern of error and there is no 
     evidence of fraud or misconduct related to the error;
       ``(D) base any civil penalty assessed against an 
     institution of higher education resulting from a program 
     review or audit on the gravity of the violation, failure, or 
     misrepresentation; and
       ``(E) inform the appropriate State and accrediting agency 
     or association whenever the Secretary takes action against an 
     institution of higher education under this section, section 
     498, or section 432.
       ``(2) Uniformity of application of regulations.--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.
       ``(3) Nonduplication and coordination.--The Secretary shall 
     establish a process for ensuring that eligibility and 
     compliance issues, such as institutional audit, program 
     review, and recertification, are considered simultaneously, 
     and shall establish a process for identifying unnecessary 
     duplication of reporting and related regulatory requirements. 
     In developing such processes, the Secretary shall consult 
     with relevant representatives of institutions participating 
     in the programs authorized by this title.''.

  PART I--ADMINISTRATIVE PROVISIONS FOR DELIVERY OF STUDENT FINANCIAL 
                               ASSISTANCE

     SEC. 495. PERFORMANCE-BASED ORGANIZATION FOR THE DELIVERY OF 
                   FEDERAL STUDENT FINANCIAL ASSISTANCE.

       Title IV (20 U.S.C. 1070 et seq.) is amended by adding at 
     the end the following:

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

     ``SEC. 499. PERFORMANCE-BASED ORGANIZATION FOR THE DELIVERY 
                   OF FEDERAL STUDENT FINANCIAL ASSISTANCE.

       ``(a) Establishment.--The Secretary shall establish in the 
     Department a performance-based organization (hereafter in 
     this part referred to as the `PBO') to administer various 
     functions relating to student financial assistance programs 
     authorized under this title.
       ``(b) Oversight and Authority.--
       ``(1) Policy oversight and direction.--The Secretary shall 
     maintain responsibility for the policy relating to functions 
     managed by the PBO, and the PBO shall remain subject to the 
     Secretary's oversight and direction.
       ``(2) Audits and review.--The PBO shall be subject to the 
     usual and customary Federal audit procedures and to review by 
     the Inspector General of the Department.
       ``(3) Changes.--
       ``(A) In general.--The Secretary and the Chief Operating 
     Officer shall consult concerning the effects of policy, 
     market, or other changes on the ability of the PBO to achieve 
     the goals and objectives established in the performance plan 
     described in subsection (e).
       ``(B) Revisions to agreement.--The Secretary and the Chief 
     Operating Officer may revise the annual performance agreement 
     described in subsection (f)(2) in light of policy, market, or 
     other changes that occur after the Secretary and the PBO 
     enter into the agreement.
       ``(c) Purposes of PBO.--The purposes of the PBO are--
       ``(1) to improve service to students and other participants 
     in the student financial assistance programs authorized under 
     this title, including making those programs more 
     understandable to students and their parents;
       ``(2) to reduce the costs of administering those programs;
       ``(3) to increase the accountability of the officials 
     responsible for administering those programs;

[[Page S7750]]

       ``(4) to provide greater flexibility in the administration 
     of those programs;
       ``(5) to improve and integrate the information and delivery 
     systems that support those programs; and
       ``(6) to develop and maintain a student financial 
     assistance system that contains complete, accurate, and 
     timely data to ensure program integrity.
       ``(d) Functions.--
       ``(1) In general.--Subject to subsection (b) of this 
     section, the PBO shall be responsible for administration of 
     the information and financial systems that support student 
     financial assistance programs authorized under this title, 
     including--
       ``(A) collecting, processing, and transmitting applicant 
     data to students, institutions, and authorized third parties, 
     as provided for in section 483;
       ``(B) contracting for the information and financial systems 
     supporting student financial assistance programs under this 
     title;
       ``(C) developing technical specifications for software and 
     systems that support those programs; and
       ``(D) providing all customer service, training, and user 
     support related to systems that support those programs.
       ``(2) Additional functions.--The Secretary may allocate to 
     the PBO such additional functions as the Secretary determines 
     necessary or appropriate to achieve the purposes of the PBO.
       ``(e) Performance Plan and Report.--
       ``(1) Performance plan.--
       ``(A) In general.--Each year, the Secretary and Chief 
     Operating Officer shall agree on, and make available to the 
     public, a performance plan for the PBO for the succeeding 5 
     years that establishes measurable goals and objectives for 
     the organization.
       ``(B) Consultation.--In developing the 5-year performance 
     plan, the Secretary and the Chief Operating Officer shall 
     consult with students, institutions of higher education, 
     Congress, lenders, and other interested parties not less than 
     30 days prior to the implementation of the performance plan.
       ``(C) Areas.--The plan shall address the PBO's 
     responsibilities in the following areas:
       ``(i) Improving service.--Improving service to students and 
     other participants in student financial aid programs 
     authorized under this title, including making those programs 
     more understandable to students and their parents.
       ``(ii) Reducing costs.--Reducing the costs of administering 
     those programs.
       ``(iii) Improvement and integration of support systems.--
     Improving and integrating the information and delivery 
     systems that support those programs.
       ``(iv) Delivery and information system.--Developing an 
     open, common, and integrated delivery and information system 
     for programs authorized under this title.
       ``(v) Other areas.--Any other areas identified by the 
     Secretary.
       ``(2) Annual report.--Each year, the Chief Operating 
     Officer shall prepare and submit to Congress, through the 
     Secretary, an annual report on the performance of the PBO, 
     including an evaluation of the extent to which the PBO met 
     the goals and objectives contained in the 5-year performance 
     plan described in paragraph (1) for the preceding year.
       ``(f) Chief Operating Officer.--
       ``(1) Appointment.--
       ``(A) In general.--The management of the PBO shall be 
     vested in a Chief Operating Officer who shall be appointed by 
     the Secretary to a term of not less than 3 and not more than 
     5 years and compensated without regard to chapters 33, 51, 
     and 53 of title 5, United States Code.
       ``(B) Basis.--The appointment shall be made on the basis of 
     demonstrated ability in management and experience in 
     information technology or financial services, without regard 
     to political affiliation or activity.
       ``(C) Reappointment.--The Secretary may reappoint the Chief 
     Operating Officer to subsequent terms of not less than 3 and 
     not more than 5 years, so long as the performance of the 
     Chief Operating Officer, as set forth in the performance 
     agreement described in paragraph (2), is satisfactory.
       ``(2) Performance agreement.--
       ``(A) In general.--Each year, the Secretary and the Chief 
     Operating Officer shall enter into an annual performance 
     agreement, that shall set forth measurable organization and 
     individual goals for the Chief Operating Officer.
       ``(B) Transmittal.--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.--
       ``(A) In general.--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)(C) of such 
     title.
       ``(B) Bonus.--In addition, the Chief Operating Officer may 
     receive a bonus in an amount that does not exceed 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 goals set forth in the performance agreement 
     described in paragraph (2).
       ``(C) Payment.--Payment of a bonus under this subparagraph 
     (B) 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.
       ``(4) Removal.--The Chief Operating Officer shall be 
     removable--
       ``(A) by the President; or
       ``(B) by the Secretary for misconduct or failure to meet 
     the goals set forth in the performance agreement described in 
     paragraph (2).
       ``(g) Senior Management.--
       ``(1) Appointment.--
       ``(A) In general.--The Chief Operating Officer may appoint 
     such senior managers as that officer determines necessary 
     without regard to the provisions of title 5, United States 
     Code, governing appointments in the competitive service.
       ``(B) Compensation.--The senior managers described in 
     subparagraph (A) 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.--Each year, the Chief 
     Operating Officer and each senior manager appointed under 
     this subsection shall enter into an annual performance 
     agreement that sets forth measurable organization and 
     individual goals.
       ``(3) Compensation.--
       ``(A) In general.--A senior manager appointed under this 
     subsection may be paid at an annual rate of basic pay of not 
     more than 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.
       ``(B) Bonus.--In addition, a senior manager may receive a 
     bonus in an amount such that the manager's total annual 
     compensation does not exceed 125 percent of the maximum rate 
     of basic pay for the Senior Executive Service, including any 
     applicable locality-based comparability payment, based upon 
     the Chief Operating Officer's evaluation of the manager's 
     performance in relation to the goals set forth in the 
     performance agreement described in paragraph (2).
       ``(4) Removal.--A senior manager shall be removable by the 
     Secretary or by the Chief Operating Officer.
       ``(h) Authorization of Appropriations.--The Secretary shall 
     allocate from funds made available under section 458 such 
     funds as are appropriate to the functions assumed by the PBO. 
     In addition, there are authorized to be appropriated such 
     sums as may be necessary to carry out the purposes of this 
     section, including transition costs.''.

        TITLE V--GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS

     SEC. 501. REPEALS, TRANSFERS, AND REDESIGNATIONS.

       (a) In General.--Title V (20 U.S.C. 1101 et seq.) is 
     amended--
       (1) by amending the title heading to read as follows:

     ``TITLE V--GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS'';

       (2) by repealing parts A, B, C, D, E, and F of title V (20 
     U.S.C. 1102 et seq., 1103 et seq., 1104 et seq., 1107 et 
     seq., 1111 et seq., and 1113 et seq.);
       (3) by transferring part C of title IX, part D of title IX, 
     part A of title XI, and part A of title X (20 U.S.C. 1134h et 
     seq., 1134l et seq., 1136 et seq., and 1135 et seq.) to title 
     V and redesignating such parts as parts A, B, C, and D, 
     respectively;
       (4) by redesignating sections 931 through 935 (20 U.S.C. 
     1134h et seq. and 1134k-1 et seq.) as sections 511 through 
     515, respectively;
       (5) by redesignating sections 941 through 947 (20 U.S.C. 
     1134l and 1134q-1) as section 521 through 527, respectively;
       (6) by redesignating sections 1101 through 1109 (20 U.S.C. 
     1136 through 1136h) as sections 531 through 539, 
     respectively; and
       (7) by redesignating sections 1001, 1002, 1003, 1004, and 
     1011 (20 U.S.C. 1135, 1135a-1, 1135a-2, 1135a-3, and 1135a-
     11) as sections 541, 542, 543, 544, and 551, respectively.
       (b) Cross Reference Conforming Amendments.--
       (1) Jacob k. javits fellowship program.--Section 514(a) (as 
     redesignated by subsection (a)(4)) (20 U.S.C. 1134k(a)) is 
     amended by striking ``933'' and inserting ``513''.
       (2) Graduate assistance in areas of national need.--Part B 
     of title V (as redesignated by paragraphs (3) and (5) of 
     subsection (a)) (20 U.S.C. 1134l et seq.) is amended--
       (A) in section 524(b)(7) (as redesignated by subsection 
     (a)(5)) (20 U.S.C. 1134o(b)(7)), by striking ``945'' and 
     inserting ``525''; and
       (B) in section 525(c) (as redesignated by subsection 
     (a)(5)) (20 U.S.C. 1134p(c))--
       (i) by striking ``946(a)'' and inserting ``526(a)''; and
       (ii) by striking ``944(b)(2)'' and inserting ``524(b)(2)''.
       (3) Urban and community service.--Part C of title V (as 
     redesignated by paragraphs (3) and (6) of subsection (a)) (20 
     U.S.C. 1136 et seq.) is amended--
       (A) in section 532(b) (20 U.S.C. 1136a(b)), by striking 
     ``1104'' and inserting ``534'';
       (B) in section 534(12) (20 U.S.C. 1136c(12)), by striking 
     ``1103(a)(2)(B)'' and inserting ``533(a)(2)(B)''; and
       (C) in section 538(1) (20 U.S.C. 1136g(1)), by striking 
     ``1103'' and inserting ``533''.
       (4) FIPSE.--Subsections (b) and (c) of section 544 (as 
     redesignated by subsection (a)(7)) (20 U.S.C. 1135a-3) each 
     are amended by striking ``1001(b)'' and inserting ``541(b)''.

     SEC. 502. PURPOSE.

       Section 500 (20 U.S.C. 1101) is amended to read as follows:

     ``SEC. 500. PURPOSE.

       ``It is the purpose of this title--
       ``(1) to authorize national graduate fellowship programs--

[[Page S7751]]

       ``(A) in order to attract students of superior ability and 
     achievement, exceptional promise, and demonstrated financial 
     need, into high-quality graduate programs and provide the 
     students with the financial support necessary to complete 
     advanced degrees; and
       ``(B) that are designed to--
       ``(i) sustain and enhance the capacity for graduate 
     education in areas of national need; and
       ``(ii) encourage talented students to pursue scholarly 
     careers in the humanities, social sciences, and the arts; and
       ``(2) to promote postsecondary programs.''.

               PART A--JACOB K. JAVITS FELLOWSHIP PROGRAM

     SEC. 511. AWARD OF FELLOWSHIPS.

       (a) Award of Jacob K. Javits Fellowships.--Section 511 (as 
     redesignated by section 501(4)) is amended--
       (1) in subsection (a)--
       (A) in the first sentence, by inserting ``, financial 
     need,'' after ``demonstrated achievement'';
       (B) in the second sentence--
       (i) by striking ``students intending'' and inserting 
     ``students who are eligible to receive any grant, loan, or 
     work assistance pursuant to section 484 and intend''; and
       (ii) by striking ``commonly accepted'' and all that follows 
     through ``degree-granting institution'' and inserting ``the 
     terminal highest degree awarded in the area of study''; and
       (C) in the third sentence, by inserting ``following the 
     fiscal year'' after ``July 1 of the fiscal year''; and
       (2) by adding at the end the following:
       ``(d) Process and Timing of Competition.--The Secretary 
     shall make applications for fellowships under this part 
     available not later than October 1 of the academic year 
     preceding the academic year for which fellowships will be 
     awarded, and shall announce the recipients of fellowships 
     under this section not later than March 1 of the academic 
     year preceding the academic year for which the fellowships 
     are awarded.
       ``(e) Authority To Contract.--The Secretary is authorized 
     to enter into a contract with a nongovernmental agency to 
     administer the program assisted under this part if the 
     Secretary determines that entering into the contract is an 
     efficient means of carrying out the program.''.
       (b) Allocation of Fellowships.--Section 512 (as 
     redesignated by section 501(4)) (20 U.S.C. 1134i) is 
     amended--
       (1) in subsection (a)--
       (A) in the third sentence of paragraph (1), by striking 
     ``knowledgeable about and have experience'' and inserting 
     ``representative of a range of disciplines''; and
       (B) in paragraph (2)--
       (i) by amending subparagraph (B) to read as follows:
       ``(B) establish general criteria for the award of 
     fellowships in academic fields identified by the Board, or, 
     in the event that the Secretary enters into a contract with a 
     nongovernmental entity to administer the program assisted 
     under this part, by such nongovernmental entity;''; and
       (ii) in subparagraph (C), by inserting ``except that, in 
     the event that the Secretary enters into a contract with a 
     nongovernmental entity to administer the program, such panels 
     may be appointed by such nongovernmental entity'' before the 
     semicolon; and
       (2) in the first sentence of subsection (b), by inserting 
     ``except that in the event that the Secretary enters into a 
     contract with a nongovernmental entity to administer the 
     program, such panels may be appointed by such nongovernmental 
     entity'' before the period.
       (c) Stipends.--Section 513 (as redesignated by section 
     501(4)) (20 U.S.C. 1134j) is amended--
       (1) in subsection (a)--
       (A) by striking ``1993-1994'' and inserting ``1999-2000''; 
     and
       (B) by striking ``according to measurements of need 
     approved by the Secretary'' and inserting ``determined in 
     accordance with part F of title IV''; and
       (2) in subsection (b)(1)(A)--
       (A) in clause (i)--
       (i) by striking ``$6,000'' and inserting ``$10,000''; and
       (ii) by striking ``1993-1994'' and inserting ``1999-2000''; 
     and
       (B) in clause (ii)--
       (i) in the matter preceding subclause (I), by striking 
     ``1993-1994'' and inserting ``1999-2000'';
       (ii) in subclause (I), by striking ``$9,000 for the 
     academic year 1993-1994'' and inserting ``$10,000 for the 
     academic year 1999-2000''; and
       (iii) in subclause (II), by striking ``$9,000'' and 
     inserting ``$10,000''.
       (d) Authorization of Appropriations.--Section 515 (as 
     redesignated by section 501(4)) (20 U.S.C. 1134k-1) is 
     amended by striking ``1993'' and inserting ``1999''.

         PART B--GRADUATE ASSISTANCE IN AREAS OF NATIONAL NEED

     SEC. 521. GRADUATE ASSISTANCE IN AREAS OF NATIONAL NEED.

       (a) Designation of Areas of National Need.--Subsection (b) 
     of section 523 (as redesignated by section 501(5)) (20 U.S.C. 
     1134n) is amended to read as follows:
       ``(b) Designation of Areas of National Need.--After 
     consultation with the National Science Foundation, the 
     National Academy of Sciences, and other appropriate Federal 
     and nonprofit agencies and organizations, the Secretary shall 
     designate areas of national need. In making such 
     designations, the Secretary shall take into consideration--
       ``(1) the extent to which the national interest in the area 
     is compelling;
       ``(2) the extent to which other Federal programs support 
     postbaccalaureate study in the area concerned; and
       ``(3) an assessment of how the program may achieve the most 
     significant impact with available resources.''.
       (b) Content of Applications.--Section 524(b) (as 
     redesignated by section 501(5)) (20 U.S.C. 1134o(b)) is 
     amended--
       (1) in paragraph (2)--
       (A) by striking ``funds'' and inserting ``sources''; and
       (B) by inserting ``, which contribution may be in cash or 
     in kind, fairly valued'' before the semicolon;
       (2) by redesignating paragraphs (4) through (9) as 
     paragraphs (5) through (10), respectively;
       (3) by inserting after paragraph (3) the following:
       ``(4) describe the number, types, and amounts of the 
     fellowships that the applicant intends to offer with grant 
     funds provided under this part;'' and
       (4) in paragraph (5)(A) (as redesignated by paragraph (2)), 
     by striking ``criteria developed by the institution'' and 
     inserting ``part F of title IV''.
       (c) Awards.--Section 525 (as redesignated by section 
     501(5)) (20 U.S.C. 1134p) is amended--
       (1) in the third sentence of subsection (b)--
       (A) by striking ``1993-1994'' and inserting ``1999-2000''; 
     and
       (B) by striking ``according to measurements of need 
     approved by the Secretary'' and inserting ``determined in 
     accordance with part F of title IV''; and
       (2) in subsection (c), by striking ``such payments'' and 
     inserting ``such excess''.
       (d) Institutional Payments.--Section 526(a)(1) (as 
     redesignated by section 501(5)) (20 U.S.C. 1134q(a)(1)) is 
     amended--
       (1) in subparagraph (A)--
       (A) by striking ``$6,000 annually'' and inserting ``$10,000 
     for each academic year,''; and
       (B) by striking ``1993-1994'' and inserting ``1999-2000''; 
     and
       (2) in subparagraph (B)--
       (A) in the matter preceding clause (i), by striking ``1993-
     1994'' and inserting ``1999-2000'';
       (B) in clause (i), by striking ``$9,000 for the academic 
     year 1993-1994'' and inserting ``$10,000 for the academic 
     year 1999-2000''; and
       (C) in clause (ii), by striking ``$9,000'' and inserting 
     ``$10,000''.
       (e) Authorization of Appropriations.--Section 527 (as 
     redesignated by section 501(5)) (20 U.S.C. 1134q-1) is 
     amended by striking ``$40,000,000 for fiscal year 1993'' and 
     inserting ``$30,000,000 for fiscal year 1999''.

                    PART C--URBAN COMMUNITY SERVICE

     SEC. 531. URBAN COMMUNITY SERVICE.

       (a) Priority.--Section 533(b) (as redesignated by section 
     501(a)(6)) (20 U.S.C. 1136b(b)) is amended by adding at the 
     end the following: ``In addition, the Secretary shall give 
     priority to eligible institutions submitting applications 
     that demonstrate the eligible institution's commitment to 
     urban community service.''.
       (b) Authorization of Appropriations.--Section 539 (as 
     redesignated by section 501(a)(6)) (20 U.S.C. 1136h) is 
     amended by striking ``1993'' and inserting ``1999''.

      PART D--FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION

     SEC. 541. FUND FOR THE IMPROVEMENT OF POSTSECONDARY 
                   EDUCATION.

       (a) Authority.--Section 541(a) (as redesignated by section 
     501(a)(7)) (20 U.S.C. 1135(a)) is amended--
       (1) in the matter preceding paragraph (1)--
       (A) by striking ``or combinations of such institutions'' 
     and inserting ``, combinations of such institutions,''; and
       (B) by striking ``institutions and combinations of such 
     institutions'' and inserting ``institutions, combinations, 
     and agencies''; and
       (2) in paragraph (2)--
       (A) by striking ``and programs involving new'' and 
     inserting ``, programs and joint efforts involving''; and
       (B) by striking ``new combinations'' and inserting 
     ``combinations''.
       (b) Technical Employees.--Section 543(a) (as redesignated 
     by section 501(a)(7)) (20 U.S.C. 1135a-2(a)) is amended by 
     striking ``5 technical'' and inserting ``7 technical''.
       (c) Authorization of Appropriations.--Section 544 (as 
     redesignated by section 501(a)(7)) (20 U.S.C. 1135a-3) is 
     amended--
       (1) in subsection (a), by striking ``$20,000,000 for fiscal 
     year 1993'' and inserting ``$26,000,000 for fiscal year 
     1999''; and
       (2) in subsection (b), by striking ``1993'' and inserting 
     ``1999''.
       (d) Areas of National Need.--
       (1) Areas.--Section 551(c) (as redesignated by section 
     501(a)(7)) (20 U.S.C. 1135a-11(c)) is amended--
       (A) in paragraph (2), by striking ``Campus climate and 
     culture'' and inserting ``Institutional restructuring to 
     improve learning and promote cost efficiencies'';
       (B) in paragraph (3), by inserting ``of model programs'' 
     after ``dissemination''; and
       (C) by adding at the end the following:
       ``(4) Articulation between 2-year and 4-year institutions 
     of higher education, including developing innovative methods 
     for ensuring the successful transfer of students from 2-year 
     to 4-year institutions of higher education.''.
       (2) Authorization of appropriations.--Section 551(d) (as 
     redesignated by section 501(a)(7)) (20 U.S.C. 1135a-11(d)) is 
     amended by striking ``1993'' and inserting ``1999''.

    PART E--HIGHER EDUCATION ACCESS FOR STUDENTS WITH DISABILITIES; 
           HISPANIC-SERVING INSTITUTIONS; GENERAL PROVISIONS

     SEC. 551. HIGHER EDUCATION ACCESS FOR STUDENTS WITH 
                   DISABILITIES; HISPANIC-SERVING INSTITUTIONS; 
                   GENERAL PROVISIONS.

       Title V (20 U.S.C. 1101 et seq.) is amended further by 
     adding at the end the following:

[[Page S7752]]

    ``PART E--HIGHER EDUCATION ACCESS FOR STUDENTS WITH DISABILITIES

     ``SEC. 571. HIGHER EDUCATION ACCESS FOR STUDENTS WITH 
                   DISABILITIES.

       ``(a) Purpose.--It is the purpose of this part--
       ``(1) to support the development of model programs to 
     provide technical assistance or training, and professional 
     development, for faculty and administrators in institutions 
     of higher education, as defined in section 481(a), to provide 
     the faculty and administrators with the skills and assistance 
     to teach effectively students with disabilities; and
       ``(2) to ensure effective evaluation and dissemination of 
     such model programs.
       ``(b) Grants Authorized.--
       ``(1) In general.--The Secretary is authorized to award 
     grants to institutions of higher education to carry out the 
     purposes of this part.
       ``(2) Model programs.--To the extent feasible, the model 
     programs developed under this part shall be developed for a 
     range of types and sizes of institutions of higher education.
       ``(3) Geographic distribution.--In awarding grants under 
     this part, the Secretary shall consider--
       ``(A) providing an equitable geographic distribution of 
     such grants; and
       ``(B) distributing such grants to urban and rural areas.
       ``(4) Approaches.--The Secretary shall award grants under 
     this part for a range of approaches to providing support to 
     faculty and administrators, such as in-service training, 
     professional development, customized and general technical 
     assistance, workshops, summer institutes, distance learning 
     and the use of educational technology.
       ``(c) Dissemination of Grants.--The Secretary may award 
     grants to institutions of higher education that have 
     demonstrated exceptional programs for students with 
     disabilities under this part in order to disseminate those 
     programs.
       ``(d) Applications.--Each institution of higher education 
     desiring a grant under this part shall submit an application 
     to the Secretary at such time, in such manner, and 
     accompanied by such information as the Secretary may require. 
     Each such application shall include--
       ``(1) a plan to assess the needs of the institution of 
     higher education in order to meet the purposes of this part, 
     in consultation with a broad range of persons within that 
     institution; and
       ``(2) a plan for coordinating with or collaborating with 
     the office within the institution that provides services to 
     students with disabilities, and the equal opportunity office 
     within the institution, if the offices exist.
       ``(e) Use of Funds.--Any institution of higher education 
     receiving a grant under this part--
       ``(1) shall use the grant funds to--
       ``(A) meet the purposes of this section; and
       ``(B) ensure that projects assisted under this part include 
     components for model development, demonstration, evaluation, 
     and dissemination to other institutions of higher education; 
     and
       ``(2) may include, to the extent practicable, graduate 
     teaching assistants in the services provided under the grant.
       ``(f) Grant Awards.--The Secretary shall award grants under 
     this part for a period of 3 years.
       ``(g) Construction.--Nothing in this section shall be 
     construed to impose any additional duty, obligation, or 
     responsibility on an institution of higher education, or on 
     the institution's administrators, faculty, or staff, in 
     addition to the requirements of section 504 of the 
     Rehabilitation Act of 1973 and the Americans with 
     Disabilities Act of 1990.
       ``(h) 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.

                ``PART F--HISPANIC-SERVING INSTITUTIONS

     ``SEC. 581. PURPOSE.

       ``The purpose of this part is to--
       ``(1) expand educational opportunities for, and improve the 
     academic attainment of, Hispanic students; and
       ``(2) expand and enhance the academic offerings, program 
     quality, and institutional stability of colleges and 
     universities that are educating the majority of Hispanic 
     college students and helping large numbers of Hispanic 
     students and other low-income individuals complete 
     postsecondary degrees.

     ``SEC. 582. PROGRAM AUTHORIZED.

       ``(a) In General.--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 students and other low-income individuals.
       ``(b) Authorized Activities.--
       ``(1) Types of activities authorized.--Grants awarded under 
     this section shall be used by Hispanic-serving institutions 
     of higher education to assist such institutions to plan, 
     develop, undertake, and carry out programs to improve and 
     expand such institutions' capacity to serve Hispanic students 
     and other low-income students.
       ``(2) Examples of authorized activities.--The programs 
     described in paragraph (1) may include--
       ``(A) purchase, rental, or lease of scientific or 
     laboratory equipment for educational purposes, including 
     instructional and research purposes;
       ``(B) renovation and improvement in classroom, library, 
     laboratory, and other instructional facilities;
       ``(C) support of faculty exchanges, and faculty development 
     and faculty fellowships to assist in attaining advanced 
     degrees in their field of instruction;
       ``(D) curriculum development and academic instruction;
       ``(E) purchase of library books, periodicals, microfilm, 
     and other educational materials;
       ``(F) funds and administrative management, and acquisition 
     of equipment for use in strengthening funds management;
       ``(G) joint use of facilities such as laboratories and 
     libraries;
       ``(H) academic tutoring and counseling programs and student 
     support services; and
       ``(I) expanding the number of Hispanic and other 
     underrepresented graduate and professional students that can 
     be served by the institution by expanding courses and 
     institutional resources.
       ``(3) Endowment fund.--
       ``(A) In general.--A Hispanic-serving institution may use 
     not more than 20 percent of the grant funds provided under 
     this part to establish or increase an endowment fund at the 
     institution.
       ``(B) Matching requirement.--In order to be eligible to use 
     grant funds in accordance with subparagraph (A), the 
     Hispanic-serving institution shall provide matching funds, in 
     an amount equal to the Federal funds used in accordance with 
     subparagraph (A), for the establishment or increase of the 
     endowment fund.
       ``(C) Comparability.--The provisions of part C of title III 
     regarding the establishment or increase of an endowment fund, 
     that the Secretary determines are not inconsistent with this 
     paragraph, shall apply to funds used under subparagraph (A).
       ``(c) Wait-Out-Period.--Each Hispanic-serving institution 
     that receives a grant under this part shall not be eligible 
     to receive an additional grant under this part until 2 years 
     after the date on which the preceding grant period 
     terminates.

     ``SEC. 583. 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 the institution is a Hispanic-
     serving institution as defined in section 585, along with 
     such other data and information 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 data and information submitted under subsection 
     (a)) may submit an application for assistance under this part 
     to the Secretary. Such application shall include--
       ``(1) a 5-year plan for improving the assistance provided 
     by the Hispanic-serving institution to Hispanic students and 
     other low-income individuals; and
       ``(2) such other information and assurance as the Secretary 
     may require.
       ``(c) Priority.--With respect to applications for 
     assistance under this section, the Secretary shall give 
     priority to an application that contains satisfactory 
     evidence that the Hispanic-serving institution has entered 
     into or will enter into a collaborative arrangement with at 
     least one local educational agency or community-based 
     organization to provide such agency or organization with 
     assistance (from funds other than funds provided under this 
     part) in reducing dropout rates for Hispanic students, 
     improving rates of academic achievement for Hispanic 
     students, and increasing the rates at which Hispanic 
     secondary school graduates enroll in higher education.

     ``SEC. 584. SPECIAL RULE.

       ``No Hispanic-serving institution that is eligible for and 
     receives funds under this part may receive funds under part A 
     or B of title III during the period for which funds under 
     this part are awarded.

     ``SEC. 585. DEFINITIONS.

       ``For purposes of this part:
       ``(1) Hispanic-serving institution.--The term `Hispanic-
     serving institution' means an institution of higher education 
     which--
       ``(A) is an eligible institution under section 312(b);
       ``(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) 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.

     ``SEC. 586. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     part $45,000,000 for fiscal year 1999 and such sums as may be 
     necessary for each of the 4 succeeding fiscal years.

                      ``PART G--GENERAL PROVISIONS

     ``SEC. 591. ADMINISTRATIVE PROVISIONS FOR PARTS A AND B.

       ``(a) Coordinated Administration.--In carrying out the 
     purpose described in section 500(1), the Secretary shall 
     provide for coordinated administration and regulation of 
     graduate programs assisted under parts A and B with other 
     Federal programs providing assistance for graduate education 
     in order to minimize duplication and improve efficiency to 
     ensure that the programs are carried out in a manner most 
     compatible with academic practices and with the standard 
     timetables for applications for, and notifications of 
     acceptance to, graduate programs.
       ``(b) Hiring Authority.--For purposes of carrying out parts 
     A and B, the Secretary shall appoint, without regard to the 
     provisions of title 5,

[[Page S7753]]

     United States Code, that govern appointments in the 
     competitive service, such administrative and technical 
     employees, with the appropriate educational background, as 
     shall be needed to assist in the administration of such 
     parts. The employees shall 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.
       ``(c) Use for Religious Purposes Prohibited.--No 
     institutional payment or allowance under section 513(b) or 
     526 shall be paid to a school or department of divinity as a 
     result of the award of a fellowship under part A or B, 
     respectively, to an individual who is studying for a 
     religious vocation.
       ``(d) Evaluation.--The Secretary shall evaluate the success 
     of assistance provided to individuals under part A or B with 
     respect to graduating from their degree programs, and 
     placement in faculty and professional positions.
       ``(e) Continuation Awards.--The Secretary, using funds 
     appropriated to carry out parts A and B, and before awarding 
     any assistance under such parts to a recipient that did not 
     receive assistance under part C or D of title IX (as such 
     parts were in effect prior to the date of enactment of the 
     Higher Education Amendments of 1998) shall continue to 
     provide funding to recipients of assistance under such part C 
     or D (as so in effect), as the case may be, pursuant to any 
     multiyear award of such assistance.''.

               TITLE VI--INTERNATIONAL EDUCATION PROGRAMS

     SEC. 601. INTERNATIONAL AND FOREIGN LANGUAGE STUDIES.

       Part A of title VI (20 U.S.C. 1121 et seq.) is amended to 
     read as follows:

          ``PART A--INTERNATIONAL AND FOREIGN LANGUAGE STUDIES

     ``SEC. 601. FINDINGS AND PURPOSES.

       ``(a) Findings.--The Congress finds that--
       ``(1) the well-being of the United States, its economy and 
     long-range security, is dependent on the education and 
     training of Americans in international and foreign language 
     studies and on a strong research base in these areas;
       ``(2) knowledge of other countries and the ability to 
     communicate in other languages is essential to the promotion 
     of mutual understanding and cooperation among nations; and
       ``(3) systematic efforts are necessary to enhance the 
     capacity of institutions of higher education in the United 
     States for--
       ``(A) producing graduates with international and foreign 
     language expertise and knowledge; and
       ``(B) research regarding such expertise and knowledge.
       ``(b) Purposes.--It is the purpose of this part--
       ``(1) to assist in the development of knowledge, 
     international study, resources and trained personnel;
       ``(2) to stimulate the attainment of foreign language 
     acquisition and fluency;
       ``(3) to develop a pool of international experts to meet 
     national needs; and
       ``(4) 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.

     ``SEC. 602. GRADUATE AND UNDERGRADUATE LANGUAGE AND AREA 
                   CENTERS AND PROGRAMS.

       ``(a) National Language and Area Centers and Programs 
     Authorized.--
       ``(1) Centers and programs.--
       ``(A) In general.--The Secretary is authorized--
       ``(i) to make grants to institutions of higher education, 
     or combinations thereof, for the purpose of establishing, 
     strengthening, and operating comprehensive language and area 
     centers and programs; and
       ``(ii) to make grants to such institutions or combinations 
     for the purpose of establishing, strengthening, and operating 
     a diverse network of undergraduate language and area centers 
     and programs.
       ``(B) National resources.--The centers and programs 
     referred to in paragraph (1) shall be national resources 
     for--
       ``(i) teaching of any modern foreign language;
       ``(ii) instruction in fields needed to provide full 
     understanding of areas, regions, or countries in which such 
     language is commonly used;
       ``(iii) research and training in international studies, and 
     the international and foreign language aspects of 
     professional and other fields of study; and
       ``(iv) instruction and research on issues in world affairs 
     which concern one or more countries.
       ``(2) Authorized activities.--Any such grant may be used to 
     pay all or part of the cost of establishing or operating a 
     center or program, including the cost of--
       ``(A) faculty, staff, and student travel in foreign areas, 
     regions, or countries;
       ``(B) teaching and research materials;
       ``(C) curriculum planning and development;
       ``(D) bringing visiting scholars and faculty to the center 
     to teach or to conduct research;
       ``(E) establishing and maintaining linkages with overseas 
     institutions of higher education and other organizations that 
     may contribute to the teaching and research of the center or 
     program; and
       ``(F) training and improvement of the staff, for the 
     purpose of, and subject to such conditions as the Secretary 
     finds necessary for, carrying out this section.
       ``(3) Grants to maintain library collections.--The 
     Secretary may make grants to centers described in paragraph 
     (1) having important library collections, as determined by 
     the Secretary, for the maintenance of such collections.
       ``(4) Outreach grants and summer institutes.--The Secretary 
     may make additional grants to centers described in paragraph 
     (1) for any one or more of the following purposes:
       ``(A) Programs of linkage or outreach between foreign 
     language, area studies, and other international fields and 
     professional schools and colleges.
       ``(B) Programs of linkage or outreach with 2-year and 4-
     year colleges and universities.
       ``(C) Programs of linkage or outreach with departments or 
     agencies of Federal and State Governments.
       ``(D) Programs of linkage or outreach with the news media, 
     business, professional, or trade associations.
       ``(E) Summer institutes in foreign area, foreign language, 
     and other international fields designed to carry out the 
     programs of linkage and outreach in subparagraphs (A), (B), 
     (C), and (D).
       ``(b) Stipends for Foreign Language and Area Studies.--
       ``(1) In general.--The Secretary is authorized to make 
     grants to institutions of higher education or combinations of 
     such institutions for the purpose of paying stipends to 
     individuals undergoing advanced training in any center or 
     program approved by the Secretary.
       ``(2) Requirements.--Students receiving stipends 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.
       ``(3) Allowances.--Stipends awarded to graduate level 
     recipients may include allowances for dependents and for 
     travel for research and study in the United States and 
     abroad.
       ``(c) Special Rule With Respect to 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.

     ``SEC. 603. LANGUAGE RESOURCE CENTERS.

       ``(a) Language Resource Centers Authorized.--The Secretary 
     is authorized to make grants to and enter into contracts with 
     institutions of higher education, or combinations of such 
     institutions, for the purpose of establishing, strengthening, 
     and operating a small number of national language resource 
     and training centers, which shall serve as resources to 
     improve the capacity to teach and learn foreign languages 
     effectively.
       ``(b) Authorized Activities.--The activities carried out by 
     the centers described in subsection (a)--
       ``(1) shall include effective dissemination efforts, 
     whenever appropriate; and
       ``(2) may include--
       ``(A) the conduct and dissemination of research on new and 
     improved teaching methods, including the use of advanced 
     educational technology;
       ``(B) the development and dissemination of new teaching 
     materials reflecting the use of such research in effective 
     teaching strategies;
       ``(C) the development, application, and dissemination of 
     performance testing appropriate to an educational setting for 
     use as a standard and comparable measurement of skill levels 
     in all languages;
       ``(D) the training of teachers in the administration and 
     interpretation of performance tests, the use of effective 
     teaching strategies, and the use of new technologies;
       ``(E) the publication and dissemination to individuals and 
     organizations in the foreign language field of instructional 
     materials in the less commonly taught languages;
       ``(F) the development and dissemination of materials 
     designed to serve as a resource for foreign language teachers 
     at the elementary and secondary school levels; and
       ``(G) 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.
       ``(c) Conditions for Grants.--Grants under this section 
     shall be made on such conditions as the Secretary determines 
     to be necessary to carry out the provisions of this section.

     ``SEC. 604. UNDERGRADUATE INTERNATIONAL STUDIES AND FOREIGN 
                   LANGUAGE PROGRAMS.

       ``(a) Incentives for the Creation of New Programs and the 
     Strengthening of Existing Programs in Undergraduate 
     International Studies and Foreign Languages.--
       ``(1) Authority.--The Secretary is authorized to make 
     grants to institutions of higher education, combinations of 
     such institutions, or partnerships between nonprofit 
     educational institutions and institutions of higher 
     education, to assist such institutions, combinations or 
     partnerships in planning, developing, and carrying out 
     programs to improve undergraduate instruction in 
     international studies and foreign languages. Such grants 
     shall be awarded to institutions, combinations or 
     partnerships seeking to create new programs or to strengthen 
     existing programs in area studies, foreign languages, and 
     other international fields.
       ``(2) Federal share and use of funds.--Grants made under 
     this section may be used to pay not more than 50 percent 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 
     undergraduate programs in international studies and foreign 
     languages;
       ``(B) teaching, research, curriculum development, faculty 
     training in the United States or abroad, and other related 
     activities, including the expansion of library and teaching 
     resources;

[[Page S7754]]

       ``(C) expansion of opportunities for learning foreign 
     languages, including less commonly taught languages;
       ``(D) programs under which foreign teachers and scholars 
     may visit institutions as visiting faculty;
       ``(E) programs designed to develop or enhance linkages 
     between 2-year and 4-year institutions of higher education, 
     or baccalaureate and post-baccalaureate programs or 
     institutions;
       ``(F) the development of undergraduate study abroad 
     programs in locations abroad in which such study 
     opportunities are not otherwise available and the integration 
     of these programs into specific on-campus degree programs;
       ``(G) the development of model programs to enhance the 
     effectiveness of study abroad, including predeparture and 
     post return programs;
       ``(H) the development of programs designed to integrate 
     professional and technical education with area studies, 
     foreign languages, and other international fields;
       ``(I) the conduct of summer institutes in foreign area, 
     foreign language, and other international fields for purposes 
     that are consistent with the projects and activities 
     described in this subsection; and
       ``(J) the development of partnerships between institutions 
     of higher education and the private sector, government, and 
     elementary and secondary education institutions to enhance 
     international knowledge.
       ``(3) Non-federal share.--The non-Federal share of the cost 
     of the programs assisted under this subsection may be 
     provided either in cash or in kind. Such assistance may be 
     composed of institutional and noninstitutional funds, 
     including State, private sector, corporation, or foundation 
     contributions.
       ``(4) Priority.--In awarding grants under this section, the 
     Secretary shall give priority to applications from 
     institutions of higher education, combinations or 
     partnerships that require entering students to have 
     successfully completed at least 2 years of secondary school 
     foreign language instruction or that require each graduating 
     student to earn 2 years of postsecondary credit in a foreign 
     language (or have demonstrated equivalent competence in the 
     foreign language) or, in the case of a 2-year degree granting 
     institution, offer 2 years of postsecondary credit in a 
     foreign language.
       ``(5) Grant conditions.--Grants under this subsection shall 
     be made on such conditions as the Secretary determines to be 
     necessary to carry out this subsection.
       ``(6) Application.--Each application for assistance under 
     this subsection shall include--
       ``(A) evidence that the applicant has conducted extensive 
     planning prior to submitting the application;
       ``(B) an assurance that the faculty and administrators of 
     all relevant departments and programs served by the applicant 
     are involved in ongoing collaboration with regard to 
     achieving the stated objectives of the application;
       ``(C) an assurance that students at the applicant 
     institutions, as appropriate, will have equal access to, and 
     derive benefits from, the program assisted under this 
     subsection; and
       ``(D) an assurance that each institution, combination or 
     partnership will use the Federal assistance provided under 
     this subsection to supplement and not supplant funds expended 
     by the institution, prior to the receipt of the Federal 
     assistance, for programs to improve undergraduate instruction 
     in international studies and foreign languages.
       ``(7) Evaluation.--The Secretary may establish requirements 
     for program evaluations and require grant recipients to 
     submit annual reports that evaluate the progress and 
     performance of students participating in programs assisted 
     under this subsection.
       ``(b) Programs of National Significance.--The Secretary may 
     also award grants to public and private nonprofit agencies 
     and organizations, including professional and scholarly 
     associations, whenever the Secretary determines such grants 
     will make an especially significant contribution to improving 
     undergraduate international studies and foreign language 
     programs.

     ``SEC. 605. RESEARCH; STUDIES; ANNUAL REPORT.

       ``(a) Authorized Activities.--The Secretary may, directly 
     or through grants or contracts, conduct research and studies 
     that contribute to achieving the purposes of this part. Such 
     research and studies may include--
       ``(1) studies and surveys to determine needs for increased 
     or improved instruction in foreign language, area studies, or 
     other international fields, including the demand for foreign 
     language, area, and other international specialists in 
     government, education, and the private sector;
       ``(2) studies and surveys to assess the utilization of 
     graduates of programs supported under this title by 
     governmental, educational, and private sector organizations 
     and other studies assessing the outcomes and effectiveness of 
     programs so supported;
       ``(3) evaluation of the extent to which programs assisted 
     under this title that address national needs would not 
     otherwise be offered;
       ``(4) comparative studies of the effectiveness of 
     strategies to provide international capabilities at 
     institutions of higher education;
       ``(5) research on more effective methods of providing 
     instruction and achieving competency in foreign languages;
       ``(6) the development and publication of specialized 
     materials for use in foreign language, area studies, and 
     other international fields, or for training foreign language, 
     area, and other international specialists;
       ``(7) studies and evaluations of effective practices in the 
     dissemination of international information, materials, 
     research, teaching strategies, and testing techniques 
     throughout the education community, including elementary and 
     secondary schools; and
       ``(8) the application of performance tests and standards 
     across all areas of foreign language instruction and 
     classroom use.
       ``(b) Annual Report.--The Secretary shall prepare, publish, 
     and announce an annual report listing the books and research 
     materials produced with assistance under this section.

     ``SEC. 606. SELECTION OF CERTAIN GRANT RECIPIENTS.

       ``(a) Competitive Grants.--The Secretary shall award grants 
     under section 602 competitively on the basis of criteria that 
     separately, but not less rigorously, evaluates the 
     applications for comprehensive and undergraduate language and 
     area centers and programs.
       ``(b) Selection Criteria.--The Secretary shall set criteria 
     for grants awarded under section 602 by which a determination 
     of excellence shall be made to meet the differing objectives 
     of graduate and undergraduate institutions.
       ``(c) Equitable Distribution of Grants.--The Secretary 
     shall, to the extent practicable, award grants under this 
     part (other than section 602) in such manner as to achieve an 
     equitable distribution of the grant funds throughout the 
     United States, based on the merit of a proposal as determined 
     pursuant to a peer review process involving broadly 
     representative professionals.

     ``SEC. 607. EQUITABLE DISTRIBUTION OF CERTAIN FUNDS.

       ``(a) Selection Criteria.--The Secretary shall make 
     excellence the criterion for selection of grants awarded 
     under section 602.
       ``(b) Equitable Distribution.--To the extent practicable 
     and consistent with the criterion of excellence, the 
     Secretary shall award grants under this part (other than 
     section 602) in such a manner as will achieve an equitable 
     distribution of funds throughout the United States.
       ``(c) Support for Undergraduate Education.--The Secretary 
     shall also award grants under this part in such manner as to 
     ensure that an appropriate portion of the funds appropriated 
     for this part (as determined by the Secretary) are used to 
     support undergraduate education.

     ``SEC. 608. AMERICAN OVERSEAS RESEARCH CENTERS.

       ``(a) Centers Authorized.--The Secretary is authorized to 
     make grants to and enter into contracts with any American 
     overseas research center that is a consortium of institutions 
     of higher education (hereafter in this section referred to as 
     a ``center'') to enable such center to promote postgraduate 
     research, exchanges and area studies.
       ``(b) Use of Grants.--Grants made and contracts entered 
     into pursuant to this section may be used to pay all or a 
     portion of the cost of establishing or operating a center or 
     program, including--
       ``(1) the cost of faculty and staff stipends and salaries;
       ``(2) the cost of faculty, staff, and student travel;
       ``(3) the cost of the operation and maintenance of overseas 
     facilities;
       ``(4) the cost of teaching and research materials;
       ``(5) the cost of acquisition, maintenance, and 
     preservation of library collections;
       ``(6) the cost of bringing visiting scholars and faculty to 
     a center to teach or to conduct research;
       ``(7) the cost of organizing and managing conferences; and
       ``(8) the cost of publication and dissemination of material 
     for the scholarly and general public.
       ``(c) Limitation.--The Secretary shall only award grants to 
     and enter into contracts with centers under this section 
     that--
       ``(1) receive more than 50 percent of their funding from 
     public or private United States sources;
       ``(2) have a permanent presence in the country in which the 
     center is located; and
       ``(3) are organizations described in section 501(c)(3) of 
     the Internal Revenue Code of 1986 which are exempt from 
     taxation under section 501(a) of such Code.
       ``(d) Development Grants.--The Secretary is authorized to 
     make grants for the establishment of new centers. The grants 
     may be used to fund activities that, within 1 year, will 
     result in the creation of a center described in subsection 
     (c).

     ``SEC. 609. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     part $80,000,000 for fiscal year 1999, and such sums as may 
     be necessary for each of the 4 succeeding fiscal years.''.

     SEC. 602. BUSINESS AND INTERNATIONAL EDUCATION PROGRAMS.

       Part B of title VI (20 U.S.C. 1130 et seq.) is amended--
       (1) in section 612 (20 U.S.C. 1130-1)--
       (A) in subsection (c)--
       (i) in paragraph (1)--

       (I) in subparagraph (B), by striking ``advanced''; and
       (II) in subparagraph (C), by striking ``evening or 
     summer''; and

       (ii) in paragraph (2)(C), by inserting ``foreign 
     language,'' after ``studies,''; and
       (B) in subsection (d)(2)(G), by inserting ``, such as a 
     representative of a community college in the region served by 
     the center'' before the period; and
       (2) in section 614 (20 U.S.C. 1130b)--
       (A) in subsection (a), by striking ``1993'' and inserting 
     ``1999''; and
       (B) in subsection (b), by striking ``1993'' and inserting 
     ``1999''.

     SEC. 603. INSTITUTE FOR INTERNATIONAL PUBLIC POLICY.

       Part C of title VI (20 U.S.C. 1131 et seq.) is amended--
       (1) in section 621(e) (20 U.S.C. 1131(e))--
       (A) by striking ``one-fourth'' and inserting ``one-half''; 
     and
       (B) by adding at the end the following: ``The non-Federal 
     contribution shall be made from private sector sources.'';

[[Page S7755]]

       (2) by redesignating sections 622 through 627 (20 U.S.C. 
     1131a and 1131f) as sections 623 through 628, respectively; 
     and
       (3) by inserting after section 621 (20 U.S.C. 1131) the 
     following:

     ``SEC. 622. INSTITUTIONAL DEVELOPMENT.

       ``(a) In General.--The Institute shall award grants, from 
     amounts available to the Institute for each fiscal year, to 
     historically Black colleges and universities, Hispanic-
     serving institutions, Tribally Controlled Colleges or 
     Universities, 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 
     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.--In this section--
       ``(1) the term `historically Black college and university' 
     has the meaning given the term in section 322;
       ``(2) the term `Hispanic-serving institution' has the 
     meaning given the term in section 585;
       ``(3) the term `Tribally Controlled College or University' 
     has the meaning given the term in section 2 of the Tribally 
     Controlled College or University Assistance Act of 1978 (25 
     U.S.C. 1801); and
       ``(4) the term `minority institution' has the meaning given 
     the term in section 365.'';
       (4) in section 623 (as redesignated by paragraph (2))--
       (A) in the section heading, by striking ``JUNIOR YEAR'' and 
     inserting ``STUDY'';
       (B) in subsection (b)(2)--
       (i) by inserting ``, or completing the third year of study 
     in the case of a summer abroad program,'' after ``study''; 
     and
       (ii) by striking ``junior year'' and inserting ``study'';
       (C) in subsection (c)--
       (i) in the matter preceding paragraph (1), by striking 
     ``junior year'' and inserting ``study'';
       (ii) in paragraph (1), by striking ``junior year'' and 
     inserting ``study''; and
       (iii) in paragraph (2)--

       (I) by striking ``one-half'' and inserting ``one-third''; 
     and
       (II) by striking ``junior year'' and inserting ``study'';

       (5) in section 627 (as redesignated by paragraph (2)) (20 
     U.S.C. 1131e), by striking ``625'' and inserting ``626''; and
       (6) in section 628 (as redesignated by paragraph (2)) (20 
     U.S.C. 1131f), by striking ``1993'' and inserting ``1999''.

     SEC. 604. GENERAL PROVISIONS.

       Section 632 (20 U.S.C. 1132-1) is repealed.

        TITLE VII--RELATED PROGRAMS AND AMENDMENTS TO OTHER ACTS

                   PART A--INDIAN EDUCATION PROGRAMS

     SEC. 711. TRIBALLY CONTROLLED COMMUNITY COLLEGE ASSISTANCE 
                   ACT OF 1978.

       (a) Reauthorization.--
       (1) Amount of grants.--Section 108(a)(2) of the Tribally 
     Controlled Community College Assistance Act of 1978 (25 
     U.S.C. 1808(a)(2)) is amended by striking ``$5,820'' and 
     inserting ``$6,000''.
       (2) Authorization of appropriations.--
       (A) Title i.--Section 110(a) of the Tribally Controlled 
     Community College Assistance Act of 1978 (25 U.S.C. 1810(a)) 
     is amended--
       (i) in paragraph (1), by striking ``1993'' and inserting 
     ``1999'';
       (ii) in paragraph (2), by striking ``$30,000,000 for fiscal 
     year 1993'' and inserting ``$40,000,000 for fiscal year 
     1999'';
       (iii) in paragraph (3), by striking ``1993'' and inserting 
     ``1999''; and
       (iv) in paragraph (4), by striking ``1993'' and inserting 
     ``1999''.
       (B) Title iii.--Section 306(a) of the Tribally Controlled 
     Community College Assistance Act of 1978 (25 U.S.C. 1836(a)) 
     is amended by striking ``1993'' and inserting ``1999''.
       (C) Title iv.--Section 403 of the Tribal Economic 
     Development and Technology Related Education Assistance Act 
     of 1990 (25 U.S.C. 1852) is amended by striking ``1993'' and 
     inserting ``1999''.
       (b) Name Change.--The Tribally Controlled Community College 
     Assistance Act of 1978 (25 U.S.C. 1801 et seq.) is amended--
       (1) by striking ``community college'' each place the term 
     appears and inserting ``college or university'';
       (2) by striking ``Community College'' each place the term 
     appears (other than when such term is preceded by the term 
     ``Navajo'') and inserting ``College or University'';
       (3) by striking ``community colleges'' each place the term 
     appears and inserting ``colleges or universities'';
       (4) by striking ``such college'' each place the term 
     appears and inserting ``such college or university''; and
       (5) by striking ``community college's'' and inserting 
     ``college or university's''.

     SEC. 712. AMERICAN INDIAN, ALASKA NATIVE, AND NATIVE HAWAIIAN 
                   CULTURE AND ART DEVELOPMENT.

       Section 1531 of the American Indian, Alaska Native, and 
     Native Hawaiian Culture and Art Development Act (20 U.S.C. 
     4451) is amended to read as follows:

     ``SEC. 1531. AUTHORIZATION OF APPROPRIATIONS.

       ``There is authorized to be appropriated to carry out part 
     A $5,000,000 for fiscal year 1999.''.

              PART B--ADVANCED PLACEMENT INCENTIVE PROGRAM

     SEC. 721. ADVANCED PLACEMENT INCENTIVE PROGRAM.

       (a) Program Established.--The Secretary of Education is 
     authorized to make grants to States having applications 
     approved under subsection (d), from allotments under 
     subsection (b), to enable the States to reimburse low-income 
     individuals to cover part or all of the cost of advanced 
     placement test fees, if the low-income individuals--
       (1) are enrolled in an advanced placement class; and
       (2) plan to take an advanced placement test.
       (b) Allotment.--From the sum appropriated under subsection 
     (j) for a fiscal year, the Secretary shall allot to each 
     State an amount that bears the same relation to the sum as 
     the number of low-income individuals in the State bears to 
     the number of low-income individuals in all States.
       (c) Information Dissemination.--The State educational 
     agency may use not more than 5 percent of grant funds 
     received for a fiscal year to disseminate information 
     regarding the availability of test fee payments under this 
     section to eligible individuals through secondary school 
     teachers and guidance counselors.
       (d) Requirements for Approval of Applications.--In 
     approving applications for grants the Secretary of Education 
     shall--
       (1) require that each such application contain a 
     description of the advance placement test fees the State will 
     pay on behalf of individual students;
       (2) require an assurance that any funds received under this 
     section, other than funds used in accordance with subsection 
     (c), shall be used only to pay advanced placement test fees; 
     and
       (3) contain such information as the Secretary may require 
     to demonstrate that the State will ensure that a student is 
     eligible for payments under this section, including the 
     documentation required by chapter 1 of subpart 2 of part A of 
     title IV of the Higher Education Act of 1965 (20 U.S.C. 
     1070a-11 et seq.).
       (e) Funding Rule.--Funds provided under this section shall 
     be used to supplement and not supplant other Federal, State, 
     local or private funds available to assist low-income 
     individuals in paying for advanced placement testing, except 
     that such funds may be used to supplant the funds so 
     available if the funds used to supplant are used to increase 
     the participation of low-income individuals in advanced 
     placement courses through teacher training and other 
     activities directly related to increasing the availability of 
     advanced placement courses.
       (f) Special Rule.--The Secretary of Education shall only 
     award grants under this section for a fiscal year if the 
     amount the College Board spends for the College Board's fee 
     assistance program for low-income students for the fiscal 
     year is not less than the amount the College Board spent for 
     such program for the preceding fiscal year.
       (g) Regulations.--The Secretary of Education shall 
     prescribe such regulations as are necessary to carry out this 
     section.
       (h) Report.--Each State annually shall report to the 
     Secretary of Education regarding--
       (1) the number of low-income individuals in the State who 
     receive assistance under this section; and
       (2) the teacher training and other activities described in 
     subsection (e).
       (i) Definition.--In this section:
       (1) Advanced placement test.--The term ``advanced placement 
     test'' includes only an advanced placement test approved by 
     the Secretary of Education for the purposes of this section.
       (2) Low-income individual.--The term ``low-income 
     individual'' has the meaning given the term in section 
     402A(g)(2) of the Higher Education Act of 1965 (20 U.S.C. 
     1070a-11(g)(2)).
       (j) Authorization of Appropriations.--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 to carry out this section.

                PART C--UNITED STATES INSTITUTE OF PEACE

     SEC. 731. AUTHORITIES OF THE UNITED STATES INSTITUTE OF 
                   PEACE.

       The United States Institute of Peace Act (22 U.S.C. 4601 et 
     seq.) is amended--
       (1) in section 1705 (22 U.S.C. 4604)--
       (A) in subsection (f), by inserting ``personal service and 
     other'' after ``may enter into''; and
       (B) in subsection (o), by inserting after ``Services'' the 
     following: ``and use all sources of supply and services of 
     the General Services Administration'';
       (2) in section 1710(a)(1) (22 U.S.C. 4609(a)(1))--
       (A) by striking ``1993'' and inserting ``1999''; and
       (B) by striking ``6'' and inserting ``4''; and
       (3) in the second and third sentences of section 1712 (22 
     U.S.C. 4611), by striking ``shall'' each place the term 
     appears and inserting ``may''.

               PART D--COMMUNITY SCHOLARSHIP MOBILIZATION

     SEC. 741. SHORT TITLE.

       This part may be cited as the ``Community Scholarship 
     Mobilization Act.''

     SEC. 742. FINDINGS.

       Congress finds that--
       (1) the local community, when properly organized and 
     challenged, is one of the best sources of academic support, 
     motivation toward achievement, and financial resources for 
     aspiring postsecondary students;
       (2) local communities, working to complement or augment 
     services currently offered by area schools and colleges, can 
     raise the educational expectations and increase the rate of 
     postsecondary attendance of their youth by forming locally-
     based organizations that provide both academic support 
     (including guidance, counseling, mentoring, tutoring, 
     encouragement, and recognition) and tangible, locally raised, 
     effectively targeted, publicly recognized, financial 
     assistance;

[[Page S7756]]

       (3) proven methods of stimulating these community efforts 
     can be promoted through Federal support for the establishment 
     of regional, State or community program centers to organize 
     and challenge community efforts to develop educational 
     incentives and support for local students; and
       (4) using Federal funds to leverage private contributions 
     to help students from low-income families attain educational 
     and career goals is an efficient and effective investment of 
     scarce taxpayer-provided resources.

     SEC. 743. DEFINITIONS.

       In this part:
       (1) Regional, state or community program center.--The term 
     ``regional, State or community program center'' means an 
     organization that--
       (A) is a division of, responsible to, and overseen by, the 
     national organization; and
       (B) is staffed by professionals trained to create, develop, 
     and sustain local entities in towns, cities, and 
     neighborhoods.
       (2) Local entity.--The term ``local entity'' means an 
     organization that--
       (A) is a nonprofit organization that is described in 
     section 501(c)(3) of the Internal Revenue Code of 1986, and 
     exempt from taxation under section 501(a) of such Code (or 
     shall meet this criteria through affiliation with the 
     national organization);
       (B) is formed for the purpose of providing educational 
     scholarships and academic support for residents of the local 
     community served by such organization;
       (C) solicits broad-based community support in its academic 
     support and fund-raising activities;
       (D) is broadly representative of the local community in the 
     structures of its volunteer-operated organization and has a 
     board of directors that includes leaders from local 
     neighborhood organizations and neighborhood residents, such 
     as school or college personnel, parents, students, community 
     agency representatives, retirees, and representatives of the 
     business community;
       (E) awards scholarships without regard to age, sex, marital 
     status, race, creed, color, religion, national origin or 
     disability; and
       (F) gives priority to awarding scholarships for 
     postsecondary education to deserving students from low-income 
     families in the local community.
       (3) National organization.--The term ``national 
     organization'' means an organization that--
       (A) has the capacity to create, develop and sustain local 
     entities and affiliated regional, State or community program 
     centers;
       (B) has the capacity to sustain newly created local 
     entities in towns, cities, and neighborhoods through ongoing 
     training support programs;
       (C) 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;
       (D) is a publicly supported organization within the meaning 
     of section 170(b)(1)(A)(iv) of such Code;
       (E) ensures that each of the organization's local entities 
     meet the criteria described in subparagraphs (C) and (D); and
       (F) has a program for or experience in cooperating with 
     secondary and postsecondary institutions in carrying out the 
     organization's scholarship and academic support activities.
       (4) High poverty area.--The term ``high poverty area'' 
     means a community with a higher percentage of children from 
     low-income families than the national average of such 
     percentage and a lower percentage of children pursuing 
     postsecondary education than the national average of such 
     percentage.
       (5) Students from low-income families.--The term ``students 
     from low-income families'' means students determined, 
     pursuant to part F of title IV of the Higher Education Act of 
     1965 (20 U.S.C. 1087kk et seq.), to be eligible for a Federal 
     Pell Grant under subpart 1 of part A of title IV of such Act 
     (20 U.S.C. 1070a).

     SEC. 744. PURPOSE, ENDOWMENT GRANT AUTHORITY.

       (a) Purpose.--It is the purpose of this part to establish 
     and support regional, State or community program centers to 
     enable such centers to foster the development of local 
     entities in high poverty areas that promote higher education 
     goals for students from low-income families by--
       (1) providing academic support, including guidance, 
     counseling, mentoring, tutoring, and recognition; and
       (2) providing scholarship assistance for the cost of 
     postsecondary education.
       (b) Endowment Grant Authority.--From the funds appropriated 
     pursuant to the authority of section 746, the Secretary shall 
     award an endowment grant, on a competitive basis, to a 
     national organization to enable such organization to support 
     the establishment or ongoing work of regional, State or 
     community program centers that foster the development of 
     local entities in high poverty areas to improve high school 
     graduation rates and postsecondary attendance through the 
     provision of academic support services and scholarship 
     assistance for the cost of postsecondary education.

     SEC. 745. GRANT AGREEMENT AND REQUIREMENTS.

       (a) In General.--The Secretary shall award one or more 
     endowment grants described in section 744(b) pursuant to an 
     agreement between the Secretary and a national organization. 
     Such agreement shall--
       (1) require the national organization to establish an 
     endowment fund in the amount of the grant, the corpus of 
     which shall remain intact and the interest income from which 
     shall be used to support the activities described in 
     paragraphs (2) and (3);
       (2) require the national organization to use 70 percent of 
     the interest income from the endowment fund in any fiscal 
     year to support the establishment or ongoing work of 
     regional, State or community program centers to enable such 
     centers to work with local communities to establish local 
     entities in high poverty areas and provide ongoing technical 
     assistance, training workshops, and other activities to help 
     ensure the ongoing success of the local entities;
       (3) require the national organization to use 30 percent of 
     the interest income from the endowment fund in any fiscal 
     year to provide scholarships for postsecondary education to 
     students from low-income families, which scholarships shall 
     be matched on a dollar-for-dollar basis from funds raised by 
     the local entities;
       (4) require that at least 50 percent of all the interest 
     income from the endowment be allocated to establish new local 
     entities or support regional, State or community program 
     centers in high poverty areas;
       (5) require the national organization to submit, for each 
     fiscal year in which such organization uses the interest from 
     the endowment fund, a report to the Secretary that contains--
       (A) a description of the programs and activities supported 
     by the interest on the endowment fund;
       (B) the audited financial statement of the national 
     organization for the preceding fiscal year;
       (C) a plan for the programs and activities to be supported 
     by the interest on the endowment fund as the Secretary may 
     require; and
       (D) an evaluation of the programs and activities supported 
     by the interest on the endowment fund as the Secretary may 
     require; and
       (E) data indicating the number of students from low-income 
     families who receive scholarships from local entities, and 
     the amounts of such scholarships;
       (6) contain such assurances as the Secretary may require 
     with respect to the management and operation of the endowment 
     fund; and
       (7) contain an assurance that if the Secretary determines 
     that such organization is not in substantial compliance with 
     the provisions of this part, then the national organization 
     shall pay to the Secretary an amount equal to the corpus of 
     the endowment fund plus any accrued interest on such fund 
     that is available to the national organization on the date of 
     such determination.
       (b) Returned Funds.--All funds returned to the Secretary 
     pursuant to subsection (a)(7) shall be available to the 
     Secretary to carry out any scholarship or grant program 
     assisted under title IV of the Higher Education Act of 1965 
     (20 U.S.C. 1070 et seq.).

     SEC. 746. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to carry out this 
     part $10,000,000 for fiscal year 2000.

    PART E--GRANTS TO STATES FOR WORKPLACE AND COMMUNITY TRANSITION 
               TRAINING FOR INCARCERATED YOUTH OFFENDERS

     SEC. 751. GRANTS TO STATES FOR WORKPLACE AND COMMUNITY 
                   TRANSITION TRAINING FOR INCARCERATED YOUTH 
                   OFFENDERS.

       (a) Findings.--Congress makes the following findings:
       (1) Over 150,000 youth offenders age 21 and younger are 
     incarcerated in the Nation's jails, juvenile facilities, and 
     prisons.
       (2) Most youth offenders who are incarcerated have been 
     sentenced as first-time adult felons.
       (3) Approximately 75 percent of youth offenders are high 
     school dropouts who lack basic literacy and life skills, have 
     little or no job experience, and lack marketable skills.
       (4) The average incarcerated youth has attended school only 
     through grade 10.
       (5) Most of these youths can be diverted from a life of 
     crime into productive citizenship with available educational, 
     vocational, work skills, and related service programs.
       (6) If not involved with educational programs while 
     incarcerated, almost all of these youths will return to a 
     life of crime upon release.
       (7) The average length of sentence for a youth offender is 
     about 3 years. Time spent in prison provides a unique 
     opportunity for education and training.
       (8) Even with quality education and training provided 
     during incarceration, a period of intense supervision, 
     support, and counseling is needed upon release to ensure 
     effective reintegration of youth offenders into society.
       (9) Research consistently shows that the vast majority of 
     incarcerated youths will not return to the public schools to 
     complete their education.
       (10) There is a need for alternative educational 
     opportunities during incarceration and after release.
       (b) Definition.--For purposes of this part, the term 
     ``youth offender'' means a male or female offender under the 
     age of 25, who is incarcerated in a State prison, including a 
     prerelease facility.
       (c) Grant Program.--The Secretary of Education (in this 
     section referred to as the ``Secretary'') shall establish a 
     program in accordance with this section to provide grants to 
     the State correctional education agencies in the States, from 
     allocations for the States under subsection (i), to assist 
     and encourage incarcerated youths to acquire functional 
     literacy, life, and job skills, through the pursuit of a 
     postsecondary education certificate, or an associate of arts 
     or bachelor's degree while in prison, and employment 
     counseling and other related services which start during 
     incarceration and continue through prerelease and while on 
     parole.
       (d) Application.--To be eligible for a grant under this 
     section, a State correctional education agency shall submit 
     to the Secretary a proposal for a youth offender program 
     that--
       (1) identifies the scope of the problem, including the 
     number of incarcerated youths in need of postsecondary 
     education and vocational training;

[[Page S7757]]

       (2) lists the accredited public or private educational 
     institution or institutions that will provide postsecondary 
     educational services;
       (3) lists the cooperating agencies, public and private, or 
     businesses that will provide related services, such as 
     counseling in the areas of career development, substance 
     abuse, health, and parenting skills;
       (4) describes the evaluation methods and performance 
     measures that the State correctional education agency will 
     employ, which methods and measures--
       (A) shall be appropriate to meet the goals and objectives 
     of the proposal; and
       (B) shall include measures of--
       (i) program completion;
       (ii) student academic and vocational skill attainment;
       (iii) success in job placement and retention; and
       (iv) recidivism;
       (5) describes how the proposed programs are to be 
     integrated with existing State correctional education 
     programs (such as adult education, graduate education degree 
     programs, and vocational training) and State industry 
     programs;
       (6) addresses the educational needs of youth offenders who 
     are in alternative programs (such as boot camps); and
       (7) describes how students will be selected so that only 
     youth offenders eligible under subsection (f) will be 
     enrolled in postsecondary programs.
       (e) Program Requirements.--Each State correctional 
     education agency receiving a grant under this section shall--
       (1) integrate activities carried out under the grant with 
     the objectives and activities of the school-to-work programs 
     of such State, including--
       (A) work experience or apprenticeship programs;
       (B) transitional worksite job training for vocational 
     education students that is related to the occupational goals 
     of such students and closely linked to classroom and 
     laboratory instruction;
       (C) placement services in occupations that the students are 
     preparing to enter;
       (D) employment-based learning programs; and
       (E) programs that address State and local labor shortages;
       (2) annually report to the Secretary and the Attorney 
     General on the results of the evaluations conducted using the 
     methods and performance measures contained in the proposal; 
     and
       (3) provide to each State for each student eligible under 
     subsection (f) not more than $1,500 annually for tuition, 
     books, and essential materials, and not more than $300 
     annually for related services such as career development, 
     substance abuse counseling, parenting skills training, and 
     health education, for each eligible incarcerated youth.
       (f) Student Eligibility.--A youth offender shall be 
     eligible for participation in a program receiving a grant 
     under this section if the youth offender--
       (1) is eligible to be released within 5 years (including a 
     youth offender who is eligible for parole within such time); 
     and
       (2) is 25 years of age or younger.
       (g) Length of Participation.--A State correctional 
     education agency receiving a grant under this section shall 
     provide educational and related services to each 
     participating youth offender for a period not to exceed 5 
     years, 1 year of which may be devoted to study in a graduate 
     education degree program or to remedial education services 
     for students who have obtained a secondary school diploma. 
     Educational and related services shall start during the 
     period of incarceration in prison or prerelease and may 
     continue during the period of parole.
       (h) Education Delivery Systems.--State correctional 
     education agencies and cooperating institutions shall, to the 
     extent practicable, use high-tech applications in developing 
     programs to meet the requirements and goals of this section.
       (i) Allocation of Funds.--From the amounts appropriated 
     pursuant to subsection (j), the Secretary shall allot to each 
     State an amount that bears the same relationship to such 
     funds as the total number of students eligible under 
     subsection (f) in such State bears to the total number of 
     such students in all States.
       (j) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section $14,000,000 for 
     fiscal year 1999 and such sums as may be necessary for each 
     of the 4 succeeding fiscal years.

                     PART F--EDUCATION OF THE DEAF

     SEC. 761. SHORT TITLE.

       This part may be cited as the ``Education of the Deaf 
     Amendments of 1998''.

     SEC. 762. ELEMENTARY AND SECONDARY EDUCATION PROGRAMS.

       Section 104(b) of the Education of the Deaf Act of 1986 (20 
     U.S.C. 4034(b)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A), by inserting ``and'' after the 
     semicolon;
       (B) in subparagraph (B), by striking ``; and'' and 
     inserting a period; and
       (C) by striking subparagraph (C);
       (2) in the matter preceding subparagraph (A) of paragraph 
     (2)--
       (A) by striking ``paragraph (1)'' and inserting ``paragraph 
     (1)(B)''; and
       (B) by striking ``section 618(b)'' and inserting ``section 
     618(a)(1)(A)'';
       (3) in paragraph (3), by striking ``intermediate 
     educational unit'' and inserting ``educational service 
     agency'';
       (4) in paragraph (4)--
       (A) in subparagraph (A), by striking ``intermediate 
     educational unit'' and inserting ``educational service 
     agency''; and
       (B) in subparagraph (B), by striking ``intermediate 
     educational units'' and inserting ``educational service 
     agencies''; and
       (5) by amending subparagraph (C) to read as follows:
       ``(C) provide the child a free appropriate public education 
     in accordance with part B of the Individuals with 
     Disabilities Education Act and procedural safeguards in 
     accordance with the following provisions of section 615 of 
     such Act:
       ``(i) paragraphs (1), and (3) through (6), of subsection 
     (b).
       ``(ii) Subsections (c) through (g).
       ``(iii) Subsection (h), except for the matter in paragraph 
     (4) pertaining to transmission of findings and decisions to a 
     State advisory panel.
       ``(iv) Paragraphs (1) and (2) of subsection (i).
       ``(v) Subsection (j)--

       ``(I) except that such subsection shall not be applicable 
     to a decision by the University to refuse to admit a child; 
     or
       ``(II) to dismiss a child, except that, before dismissing 
     any child, the University shall give at least 60 days written 
     notice to the child's parents and to the local educational 
     agency in which the child resides, unless the dismissal 
     involves a suspension, expulsion, or other change in 
     placement covered under section 615(k).

       ``(vi) Subsections (k) through (m).''.

     SEC. 763. AGREEMENT WITH GALLAUDET UNIVERSITY.

       Section 105(a) of the Education of the Deaf Act of 1986 (20 
     U.S.C. 4305(a)) is amended--
       (1) by striking ``within 1 year after enactment of the 
     Education of the Deaf Act Amendments of 1992, a new'' and 
     inserting ``and periodically update, an''; and
       (2) by amending the second sentence to read as follows: 
     ``The Secretary or the University shall determine the 
     necessity for the periodic update described in the preceding 
     sentence.''.

     SEC. 764. AGREEMENT FOR THE NATIONAL TECHNICAL INSTITUTE FOR 
                   THE DEAF.

       Paragraph (2) of section 112(a) of the Education of the 
     Deaf Act of 1986 (20 U.S.C. 4332(a)) is amended to read as 
     follows:
       ``(2) The Secretary and the institution of higher education 
     with which the Secretary has an agreement under this 
     section--
       ``(A) shall periodically assess the need for modification 
     of the agreement; and
       ``(B) shall periodically update the agreement as determined 
     necessary by the Secretary or the institution.''.

     SEC. 765. DEFINITIONS.

       Section 201 of the Education of the Deaf Act of 1986 (20 
     U.S.C. 4351) is amended--
       (1) in paragraph (1)(C), by striking ``Palau (but only 
     until the Compact of Free Association with Palau takes 
     effect),''; and
       (2) in paragraph (5)--
       (A) by inserting ``and'' after ``Virgin Islands,''; and
       (B) by striking ``, and Palau (but only until the Compact 
     of Free Association with Palau takes effect)''.

     SEC. 766. GIFTS.

       Subsection (b) of section 203 of the Education of the Deaf 
     Act of 1986 (20 U.S.C. 4353) is amended to read as follows:
       ``(b) Independent Financial and Compliance Audit.--
       ``(1) In general.--Gallaudet University shall have an 
     annual independent financial and compliance audit made of the 
     programs and activities of the University, including the 
     national mission and school operations of the elementary and 
     secondary education programs at Gallaudet. The institution of 
     higher education with which the Secretary has an agreement 
     under section 112 shall have an annual independent financial 
     and compliance audit made of the programs and activities of 
     such institution of higher education, including NTID, and 
     containing specific schedules and analyses for all NTID 
     funds, as determined by the Secretary.
       ``(2) Compliance.--As used in paragraph (1), compliance 
     means compliance with sections 102(b), 105(b)(4), 112(b)(5), 
     and 203(c), paragraphs (2) and (3) of section 207(b), 
     subsections (b)(2), (b)(3), and (c) through (f), of section 
     207, and subsections (b) and (c) of section 210.
       ``(3) Submission of audits.--A copy of each audit described 
     in paragraph (1) shall be provided to the Secretary within 15 
     days of acceptance of the audit by the University or the 
     institution authorized to establish and operate the NTID 
     under section 112(a), as the case may be, but not later than 
     January 10 of each year.''.

     SEC. 767. REPORTS.

       Section 204(3) of the Education of the Deaf Act of 1986 (20 
     U.S.C. 4354(3)) is amended--
       (1) in subparagraph (A), by striking ``The annual'' and 
     inserting ``A summary of the annual''; and
       (2) in subparagraph (B), by striking ``the annual'' and 
     inserting ``a summary of the annual''.

     SEC. 768. MONITORING, EVALUATION, AND REPORTING.

       Section 205(c) of the Education of the Deaf Act of 1986 (20 
     U.S.C. 4355(c)) is amended by striking ``1993, 1994, 1995, 
     1996, and 1997'' and inserting ``1998 through 2003''.

     SEC. 769. INVESTMENTS.

       Section 207 of the Education of the Deaf Act of 1986 (20 
     U.S.C. 4357) is amended--
       (1) in subsection (c)(1), by inserting ``the Federal 
     contribution of'' after ``shall invest'';
       (2) in subsection (d)(3)(A), by striking ``prior'' and 
     inserting ``current''; and
       (3) in subsection (h)--
       (A) in paragraph (1), by striking ``1993 through 1997'' and 
     inserting ``1998 through 2003''; and
       (B) in paragraph (2), by striking ``1993 through 1997'' and 
     inserting ``1998 through 2003''.

     SEC. 770. INTERNATIONAL STUDENTS.

       Section 210(a) of the Education of the Deaf Act of 1986 (20 
     U.S.C. 4359a(a)) is amended by inserting before the period 
     ``, except that in any

[[Page S7758]]

     school year no United States citizen who is qualified to be 
     admitted to the University or NTID and applies for admission 
     to the University or NTID shall be denied admission because 
     of the admission of an international student''.

     SEC. 771. RESEARCH PRIORITIES.

       Section 211 of the Education of the Deaf Act of 1986 (20 
     U.S.C. 4360) is amended to read as follows:

     ``SEC. 211. RESEARCH PRIORITIES.

       ``(a) Research Priorities.--Gallaudet University and the 
     National Technical Institute for the Deaf shall each 
     establish and disseminate priorities for their national 
     mission with respect to deafness related research, 
     development, and demonstration activities, that reflect 
     public input, through a process that includes consumers, 
     constituent groups, and the heads of other federally funded 
     programs. The priorities for the University shall include 
     activities conducted as part of the University's elementary 
     and secondary education programs under section 104.
       ``(b) Research Reports.--The University and NTID shall each 
     prepare and submit an annual research report, to the 
     Secretary, the Committee on Education and the Workforce of 
     the House of Representatives, and the Committee on Labor and 
     Human Resources of the Senate, not later than January 10 of 
     each year, that shall include--
       ``(1) a summary of the public input received as part of the 
     establishment and dissemination of priorities required by 
     subsection (a), and the University's and NTID's response to 
     the input; and
       ``(2) a summary description of the research undertaken by 
     the University and NTID, the start and projected end dates 
     for each research project, the projected cost and source or 
     sources of funding for each project, and any products 
     resulting from research completed in the prior fiscal 
     year.''.

     SEC. 772. AUTHORIZATION OF APPROPRIATIONS.

       Title II of the Education of the Deaf Act of 1986 (20 
     U.S.C. 4351 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 212. AUTHORIZATION OF APPROPRIATIONS.

       ``(a) Gallaudet University.--There are authorized to be 
     appropriated such sums as may be necessary for each of the 
     fiscal years 1998 through 2003 to carry out the provisions of 
     titles I and II, relating to--
       ``(1) Gallaudet University;
       ``(2) Kendall Demonstration Elementary School; and
       ``(3) the Model Secondary School for the Deaf.
       ``(b) National Technical Institute for the Deaf.--There are 
     authorized to be appropriated such sums as may be necessary 
     for each of the fiscal years 1998 through 2003 to carry out 
     the provisions of titles I and II relating to the National 
     Technical Institute for the Deaf.''.

     SEC. 773. COMMISSION ON EDUCATION OF THE DEAF.

       The Education of the Deaf Act of 1986 (20 U.S.C. 4301 et 
     seq.) is amended by adding at the end the following:

            ``TITLE III--COMMISSION ON EDUCATION OF THE DEAF

     ``SEC. 301. COMMISSION ESTABLISHED.

       ``(a) Establishment.--
       ``(1) In general.--The Secretary shall establish a 
     Commission on the Education of the Deaf to identify those 
     education-related factors in the lives of individuals who are 
     deaf that result in barriers to successful postsecondary 
     education experiences and employment, and those education-
     related factors in the lives of individuals who are deaf that 
     contribute to successful postsecondary education experiences 
     and employment.
       ``(2) Definition of individuals who are deaf.--In this 
     title, the term `individuals who are deaf' means all persons 
     with hearing impairments, including those who are hard-of-
     hearing, those deafened later in life, and those who are 
     profoundly deaf.
       ``(b) Composition.--
       ``(1) In general.--The Commission shall be composed of 13 
     members appointed by the Secretary from recommendations made 
     by the National Association of the Deaf, the American Society 
     for Deaf Children, the Alexander Graham Bell Association, the 
     President of Gallaudet, the Vice President of the National 
     Technical Institute for the Deaf, State Schools for the Deaf, 
     projects to train teachers of the deaf funded under section 
     673(b) of the Individuals with Disabilities Education Act, 
     parent training and information centers funded under section 
     682 of such Act, the Regional Centers on Postsecondary 
     Education for Individuals who are Deaf funded under section 
     672 of such Act, Self-Help for Hard of Hearing People, and 
     the Cothe Council on Education of the Deaf.
       ``(2) Qualifications.--
       ``(A) In general.--Members of the Commission shall be 
     appointed from among individuals who have broad experience 
     and expertise in deafness, program evaluation, education, 
     rehabilitation, and job training generally, which expertise 
     and experience shall be directly relevant to the issues to be 
     addressed by the Commission.
       ``(B) Deaf individuals.--At least \1/3\ of members of the 
     Commission shall be individuals who are deaf.
       ``(C) Chairperson.--The chairperson of the Commission shall 
     be elected by a simple majority of the Commission.
       ``(D) Assistant secretary.--One member of the Commission 
     shall be the Assistant Secretary for Special Education and 
     Rehabilitative Services.
       ``(3) Date.--Members of the Commission shall be appointed 
     not later than 90 days after the date of enactment of the 
     Education of the Deaf Amendments of 1998.

     ``SEC. 302. DUTIES, REPORT, AND DURATION OF THE COMMISSION.

       ``(a) Identification of Factors.--The Commission shall 
     identify, with respect to individuals who are deaf, factors 
     that pose barriers to or factors that facilitate--
       ``(1) educational performance and progress of students who 
     are deaf in high school;
       ``(2) educational performance and progress of students who 
     are deaf in postsecondary education;
       ``(3) career exploration and selection;
       ``(4) job performance and satisfaction in initial 
     postsecondary employment; and
       ``(5) career advancement and satisfaction.
       ``(b) Report.--The Commission shall report to the President 
     and Congress such interim reports that the Commission deems 
     appropriate, and not later than 18 months after the date of 
     enactment of the Education of the Deaf Amendments of 1998, a 
     final report containing the findings of the Commission with 
     respect to the factors identified under subsection (a). The 
     final report shall include recommendations, including 
     legislative proposals, that the Commission deems advisable.
       ``(c) Termination.--The Commission shall terminate 90 days 
     after the date on which the Commission submits the 
     Commission's final report described in subsection (b).

     ``SEC. 303. ADMINISTRATIVE PROVISIONS.

       ``(a) Personnel.--
       ``(1) In general.--The Commission may appoint such 
     personnel, including a staff director, as the Commission 
     deems necessary without regard to the provisions of title 5, 
     United States Code, except that the rate pay for any employee 
     of the Commission may not exceed the rate payable for level V 
     of the Executive Schedule under section 5316 of title 5, 
     United States Code.
       ``(2) Procurement of temporary and intermittent services.--
     The Chairperson of the Commission may procure temporary and 
     intermittent services under section 3109(b) of title 5, 
     United States Code, at rates for individuals which do not 
     exceed the daily equivalent of the annual rate of basic pay 
     prescribed for level V of the Executive Schedule under 
     section 5316 of such title.
       ``(b) Hearings; Quorum.--
       ``(1) Hearings.--The Commission or, with the authorization 
     of the Commission, any committee of the Commission, may, for 
     the purpose of carrying out the provisions of this title, 
     hold such hearings, sit, and act at such times and such 
     places in the United States as the Commission or such 
     committee may deem advisable.
       ``(2) Quorum.--Seven members of the Commission shall 
     constitute a quorum, but 2 or more members may conduct 
     hearings.
       ``(3) Hearings and public input.--In conducting hearings 
     and acquiring public input under this title, the Commission 
     may use various telecommunications media, including 
     teleconferencing, video-conferencing, the Internet, and other 
     media.
       ``(c) Consultation; Information and Statistics; Agency 
     Cooperation.--
       ``(1) In general.--In carrying out the Commission's duties 
     under this title and to the extent not prohibited by Federal 
     law, the Commission is authorized to secure consultation, 
     information, statistics, and cooperation from Federal 
     agencies, entities funded by the Federal Government, and 
     other entities the Commission deems advisable.
       ``(2) Special rule.--The Commission is authorized to use, 
     with their consent, the services, personnel, information, and 
     facilities of other Federal, State, local, and private 
     agencies with or without reimbursement.

     ``SEC. 304. COMPENSATION OF MEMBERS.

       ``(a) United States Officer and Employee Members.--Members 
     of the Commission who are officers or full-time employees of 
     the United States shall serve without compensation in 
     addition to that received for their services as officers or 
     employees of the United States; but may be allowed travel 
     expenses, including per diem in lieu of subsistence, at rates 
     authorized for employees of agencies under subchapter I of 
     chapter 57 of title 5, United States Code, while away from 
     their homes or regular places of business in the performance 
     of services for the Commission.
       ``(b) Public Members.--Members of the Commission who are 
     not officers or full-time employees of the United States 
     shall receive compensation at a rate that does not exceed the 
     daily rate payable for level V of the Executive Schedule 
     under section 5316 of title 5, United States Code, for each 
     day (including travel time) during which such members are 
     engaged in the actual performance of the duties of the 
     Commission. In addition, such members may be allowed travel 
     expenses, including per diem in lieu of subsistence, at rates 
     authorized for employees of agencies under subchapter I of 
     chapter 57 of title 5, United States Code, while away from 
     their homes or regular places of business in the performance 
     of services for the Commission.

     ``SEC. 305. AUTHORIZATIONS OF APPROPRIATIONS.

       ``There is authorized to be appropriated to carry out this 
     title such sums as may be necessary for each of the fiscal 
     years 1999 and 2000.''.

                            PART G--REPEALS

     SEC. 781. REPEALS.

       (a) Higher Education Act of 1965.--The following provisions 
     of the Act (20 U.S.C. 1001 et seq.) are repealed:
       (1) The heading for, sections 701 and 702 of, and parts A, 
     C, D, and E of, title VII (20 U.S.C. 1132a, 1132a-1, 1132b et 
     seq., 1132d et seq., 1132f et seq., and 1132i et seq.).
       (2) Title VIII (20 U.S.C. 1133 et seq.).
       (3) The heading for, section 901 of, and parts A, B, E, F, 
     and G of, title IX (20 U.S.C. 1134, 1134a et seq., 1134d et 
     seq., 1134r et seq., 20 U.S.C. 1134s et seq., and 1134u et 
     seq.).
       (4) The heading for, subpart 2 of part B of, and parts C, D 
     and E of, title X (20 U.S.C. 1135c et seq., 1135e et seq., 
     1135f, and 1135g et seq.).
       (5) The heading for, and part B of, title XI (20 U.S.C. 
     1137 et seq.).

[[Page S7759]]

       (b) Higher Education Amendments of 1992.--The following 
     provisions of the Higher Education Amendments of 1992 (Public 
     Law 102-325; 106 Stat 448) are repealed:
       (1) Parts E, F, and G of title XIII of the Higher Education 
     Amendments of 1992 (25 U.S.C. 3332 et seq., 3351 et seq., 
     3371) are repealed.
       (2) Title XIV.
       (3) Title XV.

                         PART H--MISCELLANEOUS

     SEC. 791. YEAR 2000 COMPUTER PROBLEM.

       (a) Sense of Congress.--With the year 2000 fast 
     approaching, it is the sense of Congress that the Department 
     of Education should--
       (1) assess immediately the extent of the risk to the 
     operations of the student financial aid system posed by the 
     year 2000 computer problem;
       (2) give the highest priority to correcting all 2-digit 
     date-related problems in the Department's computer systems to 
     ensure that those systems continue to operate effectively in 
     the year 2000 and beyond; and
       (3) develop contingency plans, with respect to the year 
     2000 computer problem, for those computer systems that the 
     Department is unable to correct in time.
       (b) Report Required.--Not later than March 1, 1999, the 
     Secretary of Education shall provide a report to the 
     Committee on Labor and Human Resources of the Senate and the 
     Committee on Education and the Workforce of the House of 
     Representatives describing the compliance status of all 
     mission critical systems at the Department, and contingency 
     plans for those computer systems in the Department that the 
     Department will be unable to correct in time, with respect to 
     the year 2000 computer problem.

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