[Congressional Record Volume 144, Number 90 (Thursday, July 9, 1998)]
[Senate]
[Pages S7759-S7782]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  MODIFICATION TO COMMITTEE SUBSTITUTE

  The PRESIDING OFFICER. Under the previous order, the manager is 
recognized to modify the bill.
  Mr. JEFFORDS. Mr. President, under the order, I send a modification 
of the committee-reported substitute to the desk.
  The PRESIDING OFFICER. The amendment is so modified.
  The modification is as follows:

       On page 339, after line 24, insert the following:

     SEC. 104. GRANTS AND RECOGNITION AWARDS.

       Section 110 (as redesignated by section 101(a)(6)) (20 
     U.S.C. 1145g) is amended by adding at the end the following:
       ``(e) Alcohol and Drug Abuse Prevention Grants.--
       ``(1) Program authority.--The Secretary may make grants to 
     institutions of higher education or consortia of such 
     institutions, and enter into contracts with such 
     institutions, consortia, and other organizations, to develop, 
     implement, operate, improve, and disseminate programs of 
     prevention, and education (including treatment-referral) to 
     reduce and eliminate the illegal use of drugs and alcohol and 
     the violence associated with such use. Such grants or 
     contracts may also be used for the support of a higher 
     education center for alcohol and drug abuse prevention that 
     will provide training, technical assistance, evaluation, 
     dissemination, and associated services and assistance to the 
     higher education community as determined by the Secretary and 
     institutions of higher education.
       ``(2) Awards.--Grants and contracts shall be awarded under 
     paragraph (1) on a competitive basis.
       ``(3) Applications.--An institution of higher education, a 
     consortium of such institutions, or another organization that 
     desires to receive a grant or contract under paragraph (1) 
     shall submit an application to the Secretary at such time, in 
     such manner, and containing or accompanied by such 
     information as the Secretary may reasonably require by 
     regulation.
       ``(4) Additional requirements.--
       ``(A) Participation.--In awarding grants under this 
     subsection the Secretary shall make every effort to ensure--
       ``(i) the equitable participation of private and public 
     institutions of higher education (including community and 
     junior colleges); and
       ``(ii) the equitable geographic participation of such 
     institutions.
       ``(B) Consideration.--In awarding grants and contracts 
     under this subsection the Secretary shall give appropriate 
     consideration to institutions of higher education with 
     limited enrollment.
       ``(5) Authorization of appropriations.--There are 
     authorized to be appropriated to carry out this subsection 
     $5,000,000 for fiscal year 1999 and such sums as may be 
     necessary for each of the 4 succeeding fiscal years.
       ``(f) National Recognition Awards.--
       ``(1) Purpose.--It is the purpose of this subsection to 
     provide models of innovative and effective alcohol prevention 
     programs in higher education and to focus national attention 
     on exemplary alcohol prevention efforts.
       ``(2) Awards.--
       ``(A) In general.--The Secretary shall make 10 National 
     Recognition Awards, on an annual basis, to institutions of 
     higher education that--
       ``(i) have developed and implemented innovative and 
     effective alcohol prevention programs; and
       ``(ii) demonstrate in the application submitted under 
     paragraph (3) that the institution has undertaken efforts 
     designed to change the culture of college drinking consistent 
     with the objectives described in paragraph (4)(B).
       ``(B) Ceremony.--The awards shall be made at a ceremony in 
     Washington, D.C.
       ``(C) Document.--The Secretary shall publish a document 
     describing the alcohol prevention programs of institutions of 
     higher education that receive the awards under this 
     subsection and disseminate the document nationally to all 
     public and private secondary school guidance counselors for 
     use by secondary school juniors and seniors preparing to 
     enter an institution of higher education. The document shall 
     be disseminated not later than January 1 of each academic 
     year.
       ``(D) Amount and use.--Each institution of higher education 
     selected to receive an award under this subsection shall 
     receive an award in the amount of $50,000. Such award shall 
     be used for the maintenance and improvement of the 
     institution's alcohol prevention program for the academic 
     year following the academic year for which the award is made.
       ``(3) Application.--
       ``(A) In general.--Each institution of higher education 
     desiring an award under this subsection 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 contain--
       ``(i) a clear description of the goals and objectives of 
     the alcohol program of the institution;
       ``(ii) a description of program activities that focus on 
     alcohol policy issues, policy development, modification, or 
     refinement, policy dissemination and implementation, and 
     policy enforcement;
       ``(iii) a description of activities that encourage student 
     and employee participation and involvement in activity 
     development and implementation;
       ``(iv) the objective criteria used to determine the 
     effectiveness of the methods used in the program and the 
     means used to evaluate and improve the program efforts; and
       ``(v) a description of the activities to be assisted that 
     meet the criteria described in subparagraph (C).
       ``(B) Application review.--The Secretary shall appoint a 
     committee to review applications submitted under this 
     paragraph. The committee may include representatives of 
     Federal departments or agencies the programs of which include 
     alcohol abuse prevention and education efforts, directors or 
     heads (or their representatives) of professional associations 
     that focus on alcohol abuse prevention efforts, and non-
     Federal scientists who have backgrounds in social science 
     evaluation and research methodology and in education. 
     Decisions of the committee shall be made directly to the 
     Secretary without review by any other entity in the 
     Department.
       ``(C) Review criteria.--The committee described in 
     subparagraph (B) shall develop specific review criteria for 
     reviewing and evaluating applications submitted under this 
     paragraph. Such criteria shall include whether the 
     institution of higher education has policies in effect that--
       ``(i) prohibit alcoholic beverage sponsorship of athletic 
     events, and prohibit alcoholic beverage advertising inside 
     athletic facilities;
       ``(ii) prohibit alcoholic beverage marketing on campus, 
     which may include efforts to ban alcohol advertising in 
     institutional publications or efforts to prohibit alcohol-
     related advertisements at campus events;
       ``(iii) establish or expand upon alcohol-free living 
     arrangements for all college students;
       ``(iv) establish partnerships with community members and 
     organizations to further alcohol prevention efforts on campus 
     and the areas surrounding campus; and
       ``(v) establish innovative communications programs 
     involving students and faculty in an effort to educate 
     students about alcohol-related risks.
       ``(4) Eligibility.--
       ``(A) In general.--In order to be eligible to receive a 
     National Recognition Award an institution of higher education 
     shall--
       ``(i) offer an associate or baccalaureate degree;
       ``(ii) have established an alcohol abuse prevention and 
     education program;
       ``(iii) nominate itself or be nominated by others, such as 
     professional associations or student organizations, to 
     receive the award; and
       ``(iv) not have received an award under this subsection 
     during the 5 academic years preceding the academic year for 
     which the determination is made.
       ``(B) Objectives.--In order to receive a National 
     Recognition Award an institution shall demonstrate in the 
     application submitted under paragraph (3) that the 
     institution has accomplished all of the following objectives:
       ``(i) The elimination of alcoholic beverage sponsorship of 
     athletic events, and the elimination of alcoholic beverage 
     advertising inside athletic facilities.
       ``(ii) The elimination of alcoholic beverage marketing on 
     campus that may include efforts to ban alcohol advertising in 
     institutional publications or prohibit alcohol-related 
     advertisements at campus events.
       ``(iii) The establishment or expansion of alcohol-free 
     living arrangements for all college students.
       ``(iv) The establishment of partnerships with community 
     members and organizations to further alcohol prevention 
     efforts on campus and the surrounding areas.

[[Page S7760]]

       ``(v) The establishment of innovative communications 
     programs involving students and faculty in an effort to 
     educate students about alcohol-related risks.
       ``(5) Authorization of appropriations.--
       ``(A) In general.--There is authorized to be appropriated 
     to carry out this subsection $750,000 for fiscal year 1999.
       ``(B) Availability.--Funds appropriated under subparagraph 
     (A) shall remain available until expended.''.
       On page 343, line 16, strike the end quotation marks and 
     the second period.
       On page 343, between lines 16 and 17, insert the following:

     ``SEC. 113. STUDENT-RELATED DEBT STUDY REQUIRED.

       ``(a) In General.--The Secretary shall conduct a study that 
     analyzes the distribution and increase in student-related 
     debt in terms of--
       ``(1) demographic characteristics, such as race or 
     ethnicity, and family income;
       ``(2) type of institution and whether the institution is a 
     public or private institution;
       ``(3) loan source, such as Federal, State, institutional or 
     other, and, if the loan source is Federal, whether the loan 
     is or is not subsidized;
       ``(4) academic field of study;
       ``(5) parent loans, and whether the parent loans are 
     federally guaranteed, private, or property-secured such as 
     home equity loans; and
       ``(6) relation of student debt or anticipated debt to--
       ``(A) students' decisions about whether and where to enroll 
     in college and whether or how much to borrow in order to 
     attend college;
       ``(B) the length of time it takes students to earn 
     baccalaureate degrees;
       ``(C) students' decisions about whether and where to attend 
     graduate school;
       ``(D) graduates' employment decisions;
       ``(E) graduates' burden of repayment as reflected by the 
     graduates' ability to save for retirement or invest in a 
     home; and
       ``(F) students' future earnings.
       ``(b) Report.--After conclusion of the study required by 
     subsection (a), the Secretary shall submit a final report 
     regarding the findings of the study 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 18 months after the date of enactment of the 
     Higher Education Amendments of 1998.
       ``(c) Information.--After the study and report under this 
     section are concluded, the Secretary shall determine which 
     information described in subsection (a) would be useful for 
     families to know and shall include such information as part 
     of the comparative information provided to families about the 
     costs of higher education under the provisions of section 
     486(a)(1).

     ``SEC. 114. STUDY OF FORECLOSED PROPERTY OR ASSETS.

       ``Not later than 90 days after the date of enactment of the 
     Higher Education Amendments of 1998, the Comptroller General, 
     in consultation with the Inspector General of the Department, 
     shall submit 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 that provides 
     the following:
       ``(1) Descriptions of legislative changes that can be made 
     to strengthen laws governing the transfer of foreclosed 
     property or assets by the Department to individuals or their 
     agents that have had prior dealings with the Department. Such 
     descriptions shall address the transfer of property to 
     individuals or their agents who have been in positions of 
     management or oversight at postsecondary educational 
     institutions that have failed, or are failing, to make 
     payments to the Department on property loans, or defaulted on 
     any property or asset loan from a Federal agency.
       ``(2) Changes that can be implemented at the Department to 
     strengthen all rules and regulations governing the transfer 
     of foreclosed property or assets by the Department to 
     individuals or their agents as described in paragraph (1).

     ``SEC. 115. STATE REQUIREMENT.

       ``(a) In General.--Except as provided in subsection (b), 
     each State, that has individuals who reside in the State and 
     who receive financial assistance under this Act, shall 
     provide an appropriate number of mail voter registration 
     forms (as described in section 6(a) of the National Voter 
     Registration Act (42 U.S.C. 1973gg-4(a))) to each eligible 
     institution under section 487 in the State, not later than 60 
     days before each date that is the last day to register to 
     vote for a regularly scheduled--
       ``(1) election (as defined in section 301(1) of the Federal 
     Election Campaign Act of 1971 (2 U.S.C. 431(1)); or
       ``(2) election for Governor or other chief executive within 
     such State.
       ``(b) Nonapplicability to Certain States.--The requirement 
     of subsection (a) shall not apply to a State which is 
     described in section 4(b) of the National Voter Registration 
     Act (42 U.S.C. 1973gg-2(b)).

     ``SEC. 116. STUDY OF OPPORTUNITIES FOR PARTICIPATION IN 
                   ATHLETICS PROGRAMS.

       ``(a) Study.--The Comptroller General shall conduct a study 
     of the opportunities for participation in intercollegiate 
     athletics. The study shall address issues including--
       ``(1) the extent to which the number of--
       ``(A) secondary school athletic teams has increased or 
     decreased in the 20 years preceding 1998 (in aggregate 
     terms); and
       ``(B) intercollegiate athletic teams has increased or 
     decreased in the 20 years preceding 1998 (in aggregate terms) 
     at 2-year and 4-year institutions of higher education;
       ``(2) the extent to which participation by student-athletes 
     in secondary school and intercollegiate athletics has 
     increased or decreased in the 20 years preceding 1998 (in 
     aggregate terms);
       ``(3) over the 20-year period preceding 1998, a list of the 
     men's and women's secondary school and intercollegiate 
     sports, ranked in order of the sports most affected by 
     increases or decreases in levels of participation and numbers 
     of teams (in the aggregate);
       ``(4) all factors that have influenced campus officials to 
     add or discontinue sports teams at secondary schools and 
     institutions of higher education, including--
       ``(A) institutional mission and priorities;
       ``(B) budgetary pressures;
       ``(C) institutional reforms and restructuring;
       ``(D) escalating liability insurance premiums;
       ``(E) changing student and community interest in a sport;
       ``(F) advancement of diversity among students;
       ``(G) lack of necessary level of competitiveness of the 
     sports program;
       ``(H) club level sport achieving a level of competitiveness 
     to make the sport a viable varsity level sport;
       ``(I) injuries or deaths; and
       ``(J) conference realignment;
       ``(5) the actions that institutions of higher education 
     have taken when decreasing the level of participation in 
     intercollegiate sports, or the number of teams, in terms of 
     providing information, advice, scholarship maintenance, 
     counseling, advance warning, and an opportunity for student-
     athletes to be involved in the decisionmaking process;
       ``(6) the administrative processes and procedures used by 
     institutions of higher education when determining whether to 
     increase or decrease intercollegiate athletic teams or 
     participation by student-athletes;
       ``(7) the budgetary or fiscal impact, if any, of a decision 
     by an institution of higher education--
       ``(A) to increase or decrease the number of intercollegiate 
     athletic teams or the participation of student-athletes; or
       ``(B) to be involved in a conference realignment; and
       ``(8) the alternatives, if any, institutions of higher 
     education have pursued in lieu of eliminating, or severely 
     reducing the funding for, an intercollegiate sport, and the 
     success of such alternatives.
       ``(b) Report.--The Comptroller General shall submit a 
     report regarding the results of the study to the Committee on 
     Labor and Human Resources of the Senate and the Committee on 
     Education and the Workforce of the House of Representatives.

     ``SEC. 117. SPECIAL RULE.

       ``Notwithstanding any other provision of law, the sum of 
     financial assistance received under this Act and other 
     Federal financial assistance for postsecondary education 
     received by an individual shall not exceed the individual's 
     cost of attendance as defined in section 472, except that no 
     individual shall have the amount of a Federal Pell Grant for 
     which the individual is eligible reduced as a result of the 
     application of this section.''.
       On page 365, line 8, insert ``and in school districts with 
     disproportionately high numbers of limited English proficient 
     students,'' after ``areas,''.
       On page 370, between lines 19 and 20, insert the following:
       ``(c) Construction.--Nothing in this part shall be 
     construed to prohibit a teacher training partnership from 
     using grant funds to coordinate with the activities of more 
     than 1 Governor, State board of education, or State 
     educational agency.
       On page 390, line 20, strike ``and''.
       On page 390, line 25, strike the period and insert ``; 
     or''.
       On page 390, after line 25, insert the following:
       ``(C) applications from partnerships that propose to carry 
     out programs that use innovative means, including technology, 
     to recruit for participation in the activities assisted under 
     the programs students who are Native Hawaiian, Alaska Native, 
     or Native American Pacific Islander.
       On page 407, between lines 8 and 9, insert the following:
       (d) Alaska Native and Native Hawaiian-Serving 
     Institutions.--Part A of title III (20 U.S.C. 1057 et seq.) 
     is amended by adding at the end the following:

     ``SEC. 317. ALASKA NATIVE AND NATIVE HAWAIIAN-SERVING 
                   INSTITUTIONS.

       ``(a) Program Authorized.--The Secretary shall provide 
     grants and related assistance to Alaska Native-serving 
     institutions and Native Hawaiian-serving institutions to 
     enable such institutions to improve and expand their capacity 
     to serve Alaska Natives and Native Hawaiians.
       ``(b) Definitions.--For the purpose of this section--
       ``(1) the term `Alaska Native' has the meaning given the 
     term in section 9308 of the Elementary and Secondary 
     Education Act of 1965;
       ``(2) the term `Alaska Native-serving institution' means an 
     institution of higher education that--
       ``(A) is an eligible institution under section 312(b); and

[[Page S7761]]

       ``(B) at the time of application, has an enrollment of 
     undergraduate students that is at least 20 percent Alaska 
     Native students;
       ``(3) the term `Native Hawaiian' has the meaning given the 
     term in section 9212 of the Elementary and Secondary 
     Education Act of 1965; and
       ``(4) the term `Native Hawaiian-serving institution' means 
     an institution of higher education which--
       ``(A) is an eligible institution under section 312(b); and
       ``(B) at the time of application, has an enrollment of 
     undergraduate students that is at least 10 percent Native 
     Hawaiian students.
       ``(c) Authorized Activities.--
       ``(1) Types of activities authorized.--Grants awarded under 
     this section shall be used by Alaska Native-serving 
     institutions and Native Hawaiian-serving institutions to 
     assist such institutions to plan, develop, undertake, and 
     carry out programs.
       ``(2) Examples of authorized activities.--Such programs 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; and
       ``(H) academic tutoring and counseling programs and student 
     support services.
       ``(d) Application Process.--
       ``(1) Institutional eligibility.--Each Alaska Native-
     serving institution and Native Hawaiian-serving institution 
     desiring to receive assistance under this section shall 
     submit to the Secretary such enrollment data as may be 
     necessary to demonstrate that it is an Alaska Native-serving 
     institution or a Native Hawaiian-serving institution as 
     defined in subsection (b), along with such other information 
     and data as the Secretary may by regulation require.
       ``(2) Applications.--Any institution which is determined by 
     the Secretary to be an Alaska Native-serving institution or a 
     Native Hawaiian-serving institution may submit an application 
     for assistance under this section to the Secretary. Such 
     application shall include--
       ``(A) a 5-year plan for improving the assistance provided 
     by the Alaska Native-serving institution or the Native 
     Hawaiian-serving institution to Alaska Native or Native 
     Hawaiian students; and
       ``(B) such other information and assurance as the Secretary 
     may require.
       ``(e) Special Rule.--For the purposes of this section, no 
     Alaska Native-serving institution or Native Hawaiian-serving 
     institution which is eligible for and receives funds under 
     this section may concurrently receive other funds under this 
     part or part B.''.
       On page 408, strike line 10, and insert the following:
       (1) in subsection (a)--
       (A) in paragraph (2), by striking ``$500,000'' and 
     inserting ``$1,000,000''; and
       (B) by adding at the end of
       On page 408, line 12, strike ``$500,000'' and insert 
     ``$1,000,000''.
       On page 408, line 14, strike ``$500,000'' and insert 
     ``$1,000,000''.
       On page 408, line 17, strike ``$500,000'' and insert 
     ``$1,000,000''.
       On page 408, between lines 17 and 18, insert the following:
       (2) in subsection (d)(2), by striking ``$500,000'' and 
     inserting ``$1,000,000''.
       On page 409, line 9, strike ``and'' after the semicolon.
       On page 409, line 13, strike the period and insert a 
     semicolon.
       On page 409, between lines 13 and 14, insert the following:
       (G) in subparagraph (O), by striking ``and'' after the 
     semicolon.
       (H) in subparagraph (P)--
       (i) by inserting ``University'' after ``State''; and
       (ii) by striking the period and inserting a semicolon;
       (I) by adding at the end the following:
       ``(Q) Norfolk State University qualified graduate program; 
     and
       ``(R) Tennessee State University qualified graduate 
     program.'';
       (4) in subsection (f)--
       (A) in paragraph (1), by striking ``$12,000,000'' and 
     inserting ``$15,000,000'';
       (B) in paragraph (2)--
       (i) in the matter preceding subparagraph (A), by striking 
     ``$12,000,000'' and inserting ``$15,000,000 but not in excess 
     of $28,000,000'';
       (ii) in subparagraph (A), by striking ``$500,000'' and 
     inserting ``$1,000,000''; and
       (iii) in subparagraph (B)--

       (I) by striking ``(A) through (P)'' and inserting ``(Q) and 
     (R)''; and
       (II) by striking the period and inserting ``; and

       (C) by adding at the end the following:
       ``(3) any amount appropriated in excess of $28,000,000 
     shall be available for the purpose of making grants to 
     institutions or programs described in subparagraphs (A) 
     through (R), on a competitive basis and through a peer review 
     process that takes into consideration--
       ``(A) the ability of the institution to match Federal funds 
     with non-Federal funds;
       ``(B) the number of students enrolled in the institution or 
     program for which funds are sought;
       ``(C) the percentage of students enrolled in the 
     institution or program for which funds are sought who are 
     eligible for need-based student aid;
       ``(D) the percentage of students enrolled in the 
     institution or program for which funds are sought who 
     complete their degrees within a reasonable period of time as 
     determined by the Secretary; and
       ``(E) the quality of the proposal.''; and
       (5) by adding at the end the following:
       ``(g) Special Rule.--No institution or program described in 
     subsection (e)(1) that received a grant under this section 
     for fiscal year 1998 and that is eligible to receive a grant 
     under this section in a subsequent fiscal year shall receive 
     a grant under this section in any subsequent fiscal year in 
     an amount that is less than the grant amount received for 
     fiscal year 1996 or 1997, whichever is greater, unless--
       ``(1) the amount appropriated for the subsequent fiscal 
     year is not sufficient to provide grants under this section 
     to all such institutions or programs; or
       ``(2) the institution or program cannot provide sufficient 
     matching funds to meet the requirements of this section.''.
       On page 411, between lines 20 and 21, insert the following:
       (a) Minority Science Improvement Program Findings.--Subpart 
     1 of part E of title III (as redesignated by paragraphs (6) 
     and (7) of section 301) (20 U.S.C. 1135b et seq.) is amended 
     by inserting after the subpart heading the following:

     ``SEC. 350. FINDINGS.

       ``Congress makes the following findings:
       ``(1) It is incumbent on the Federal Government to support 
     the technological and economic competitiveness of the United 
     States by improving and expanding the scientific and 
     technological capacity of the United States. More and better 
     prepared scientists, engineers, and technical experts are 
     needed to improve and expand such capacity.
       ``(2) As the Nation's population becomes more diverse, it 
     is important that the educational and training needs of all 
     Americans are met. Underrepresentation of minorities in 
     science and technological fields diminishes our Nation's 
     competitiveness by impairing the quantity of well prepared 
     scientists, engineers, and technical experts in these fields.
       ``(3) Despite significant limitations in resources, 
     minority institutions provide an important educational 
     opportunity for minority students, particularly in science 
     and engineering fields. Aid to minority institutions is a 
     good way to address the underrepresentation of minorities in 
     science and technological fields.
       ``(4) There is a strong Federal interest in improving 
     science and engineering programs at minority institutions as 
     such programs lag behind in program offerings and in student 
     enrollment compared to such programs at other institutions of 
     higher education.''.
       On page 411, line 21, insert ``(b) Definitions.--'' before 
     ``Section 365(4)''.
       On page 412, line 19, strike ``and'' after the semicolon.
       On page 412, line 26, insert ``and'' after the semicolon.
       On page 412, after line 26, insert the following:
       (C) by adding at the end the following:
       ``(C) There are authorized to be appropriated to carry out 
     section 317, $5,000,000 for fiscal year 1999 and such sums as 
     may be necessary for each of the 4 succeeding fiscal 
     years.'';
       On page 413, line 23, strike ``Title'' and insert ``Part A 
     of title''.
       On page 413, strike line 24.
       On page 414, line 1, strike ``(A)'' and insert ``(1)''.
       On page 414, line 4, strike ``(B)'' and insert ``(2)''.
       On page 414, line 5, strike ``; and'' and insert a period.
       On page 414, strike lines 6 through 11.
       On page 418, between lines 10 and 11, insert the following:
       ``(I) not less than a minimum percentage of the students 
     enrolled in the course complete the course;
       On page 418, line 11, strike ``such a'' and insert ``the''.
       On page 418, line 17, strike ``such students'' and insert 
     ``the students enrolled in the course''.
       On page 418, line 20, insert ``the minimum percentage of 
     students who complete the course of instruction,'' after 
     ``specify''.
       On page 419, line 20, strike ``and''.
       On page 419, line 23, strike the period and insert ``; 
     and''.
       On page 419, between lines 23 and 24, insert the following:
       (4) in subsection (g), by adding at the end the following:
       ``(4) Waiver.--The Secretary may waive the service 
     requirements in subparagraph (A) or (B) of paragraph (3) if 
     the Secretary determines the application of the service 
     requirements to a veteran will defeat the purpose of a 
     program under this chapter.''.
       On page 419, line 24, strike ``Section'' and insert the 
     following:
       ``(1) Amendment to section 402b(b)(5).--Section''.
       On page 420, between lines 2 and 3, insert the following:
       (2) Amendment to section 402b(b)(9).--Section 402B(b)(9) 
     (20 U.S.C. 1070a-12(b)(9)) is

[[Page S7762]]

     amended by inserting ``or counselors'' after ``teachers''.
       On page 420, strike lines 6 and 7, and insert the 
     following:
       (A) in paragraph (9)--
       (i) by inserting ``or counselors'' after ``teachers''; and
       (ii) by striking ``and'' after the semicolon.
       On page 421, between lines 13 and 14, insert the following:
       (e) Staff Development Activities.--Section 402G(a) (20 
     U.S.C. 1070a-17(a)) is amended by inserting ``participating 
     in,'' after ``leadership personnel employed in,''.
       On page 423, strike lines 10 through 13, and insert the 
     following:

     SEC. 414. CONNECTIONS PROGRAM.

       Chapter 2 of subpart 2 of part A of title IV (20 U.S.C. 
     1070a-21 et seq.) is amended to read as follows:

                    ``CHAPTER 2--CONNECTIONS PROGRAM

     ``SEC. 404A. EARLY INTERVENTION AND COLLEGE AWARENESS PROGRAM 
                   AUTHORIZED.

       ``(a) In General.--The Secretary is authorized, in 
     accordance with the requirements of this chapter, to 
     establish a program that--
       ``(1) encourages eligible entities to provide or maintain a 
     guarantee to eligible low-income students who obtain a 
     secondary school diploma (or its recognized equivalent), of 
     the financial assistance necessary to permit the students to 
     attend an institution of higher education; and
       ``(2) supports eligible entities in providing--
       ``(A) additional counseling, mentoring, academic support, 
     outreach, and supportive services to elementary, middle, and 
     secondary school students who are at risk of dropping out of 
     school; and
       ``(B) information to students and their parents about the 
     advantages of obtaining a postsecondary education and their 
     college financing options.
       ``(b) Awards.--
       ``(1) In general.--The Secretary may award grants to 
     eligible entities to carry out the program authorized under 
     subsection (a).
       ``(2) Priority.--In making the awards described in 
     paragraph (1), the Secretary shall--
       ``(A) give priority to eligible entities that--
       ``(i) carried out, prior to the date of enactment of the 
     Higher Education Amendments of 1998, successful educational 
     opportunity programs; and
       ``(ii) have a prior, demonstrated commitment to early 
     intervention leading to college access through collaboration 
     and replication of successful strategies; and
       ``(B) ensure that students served under this chapter prior 
     to the date of enactment of the Higher Education Amendments 
     of 1998 continue to receive service through the completion of 
     secondary school.
       ``(c) Definitions.--For the purposes of this chapter, the 
     term `eligible entity' means--
       ``(1) a State; or
       ``(2) a partnership consisting of--
       ``(A) 1 or more local educational agencies acting on behalf 
     of--
       ``(i) 1 or more public schools; and
       ``(ii) the public secondary schools that students from the 
     schools described in clause (i) would normally attend;
       ``(B) 1 or more degree granting institutions of higher 
     education; and
       ``(C) at least 2 community organizations or entities, such 
     as businesses, professional associations, community-based 
     organizations, philanthropic organizations, State agencies, 
     institutions or agencies sponsoring programs authorized under 
     subpart 4, or other public or private agencies or 
     organizations.
       ``(d) Coordination.--Each eligible entity shall ensure that 
     the activities assisted under this chapter are, to the extent 
     practicable, coordinated with, and complement and enhance--
       ``(1) services under this chapter provided by other 
     eligible entities serving the same school district or State; 
     and
       ``(2) related services under other Federal or non-Federal 
     programs.

     ``SEC. 404B. ELIGIBILITY ENTITY PLANS.

       ``(a) Plan Required for Eligibility.--
       ``(1) In general.--In order for an eligible entity to 
     qualify for a grant under this chapter, the eligible entity 
     shall submit to the Secretary a plan for carrying out the 
     program under this chapter. Such plan shall provide for the 
     conduct of both a scholarship component in accordance with 
     section 404D and an early intervention component in 
     accordance with section 404C.
       ``(2) Contents.--Each plan submitted pursuant to paragraph 
     (1) shall be in such form, contain or be accompanied by such 
     information or assurances, and be submitted at such time as 
     the Secretary may require by regulation. Each such plan 
     shall--
       ``(A) describe the activities for which assistance under 
     this chapter is sought; and
       ``(B) provide such additional assurances as the Secretary 
     determines necessary to ensure compliance with the 
     requirements of this chapter.
       ``(b) Matching Requirement.--
       ``(1) In general.--The Secretary shall not approve a plan 
     submitted under subsection (a) unless such plan--
       ``(A) provides that the eligible entity will provide, from 
     State, local, institutional, or private funds, not less than 
     \1/2\ the cost of the program, which matching funds may be 
     provided in cash or in kind;
       ``(B) specifies the methods by which such share of the 
     costs will be paid; and
       ``(C) includes provisions designed to ensure that funds 
     provided under this chapter shall supplement and not supplant 
     funds expended for existing programs.
       ``(2) Special rule.--The Secretary may change the share of 
     the costs required to be provided under paragraph (1)(A) for 
     eligible entities defined in section 402A(c)(2).
       ``(c) Methods for Complying With Matching Requirement.--An 
     eligible entity may count toward the share of the costs 
     required by subsection (b)(1)(A)--
       ``(1) the amount of the grants paid to students from State, 
     local, institutional, or private funds under this chapter;
       ``(2) the amount of tuition, fees, room or board waived or 
     reduced for recipients of grants under this chapter; and
       ``(3) the amount expended on documented, targeted, long-
     term mentoring and counseling provided by volunteers or paid 
     staff of nonschool organizations, including businesses, 
     religious organizations, community groups, postsecondary 
     educational institutions, nonprofit and philanthropic 
     organizations, and other organizations.
       ``(d) Cohort Approach.--
       ``(1) In general.--The Secretary may require that eligible 
     entities--
       ``(A) provide services under this chapter to at least 1 
     grade level of students, beginning not later than 7th grade, 
     in a participating public school that has a 7th grade and in 
     which at least 50 percent of the students enrolled are 
     eligible for free or reduced-price lunch (or, if an eligible 
     entity determines that it would promote the effectiveness of 
     a project, an entire grade level of students, beginning not 
     later than the 7th grade, who reside in public housing as 
     defined in section 3(b)(1) of the United States Housing Act 
     of 1937); and
       ``(B) ensure that the services are provided through the 
     12th grade to students in the participating grade level.
       ``(2) Coordination requirement.--In order for the Secretary 
     to require the cohort approach described in paragraph (1), 
     the Secretary shall, where applicable, ensure that the cohort 
     approach is done in coordination and collaboration with 
     existing early intervention programs and does not duplicate 
     the services already provided to a school or community.

     ``SEC. 404C. EARLY INTERVENTION.

       ``(a) Services.--
       ``(1) In order to receive a grant under this chapter, an 
     eligible entity shall demonstrate to the satisfaction of the 
     Secretary, in the plan submitted under section 404B, that the 
     eligible entity will provide comprehensive mentoring, 
     counseling, outreach, and supportive services to students 
     participating in programs under this chapter who are enrolled 
     in any of the grades preschool through grade 12. Such 
     counseling shall include financial aid counseling that 
     provides--
       ``(A) information regarding the opportunities for financial 
     assistance under this title; and
       ``(B) activities or information regarding--
       ``(i) fostering and improving parent involvement in 
     promoting postsecondary information regarding the advantages 
     of a college education, academic admission requirements, and 
     the need to take college preparation courses;
       ``(ii) admissions and achievement tests; and
       ``(iii) application procedures.
       ``(2) Methods.--The eligible entity shall demonstrate in 
     such plan, pursuant to regulations of the Secretary, the 
     methods by which the eligible entity will target services on 
     priority students.
       ``(b) Uses of Funds.--
       ``(1) In general.--The Secretary shall, by regulation, 
     establish criteria for determining whether comprehensive 
     mentoring, counseling, outreach, and supportive services 
     programs may be used to meet the requirements of subsection 
     (a).
       ``(2) Allowable providers.--For those eligible entities 
     defined in section 404A(c)(1), the activities required by 
     subsection (a) may be provided by service providers such as 
     community-based organizations, schools, institutions of 
     higher education, public and private agencies, nonprofit and 
     philanthropic organizations, businesses, institutions and 
     agencies sponsoring programs authorized under subpart 4 of 
     this part, and other organizations the State deems 
     appropriate.
       ``(3) Permissible activities.--Examples of activities that 
     meet the requirements of subsection (a) include the 
     following:
       ``(A) Providing eligible students in preschool through 
     grade 12 with a continuing system of mentoring and advising 
     that--
       ``(i) is coordinated with the Federal and State community 
     service initiatives; and
       ``(ii) may include such support services as after school 
     and summer tutoring, assistance in obtaining summer jobs, 
     career mentoring, and academic counseling.
       ``(B) Requiring each student to enter into an agreement 
     under which the student agrees to achieve certain academic 
     milestones, such as completing a prescribed set of courses 
     and maintaining satisfactory academic progress described in 
     section 484(c), in exchange for receiving tuition assistance 
     for a period of time to be established by each State.
       ``(C) Activities designed to ensure secondary school 
     completion and college enrollment of at-risk children, 
     including identification of at-risk children, after school 
     and summer tutoring, assistance in obtaining summer jobs, 
     academic counseling, volunteer and parent involvement, 
     providing former or current scholarship recipients as

[[Page S7763]]

     mentor or peer counselors, skills assessment, providing 
     access to rigorous core courses that reflect challenging 
     academic standards, personal counseling, family counseling 
     and home visits, staff development, and programs and 
     activities described in this subparagraph that are specially 
     designed for students of limited English proficiency.
       ``(D) Summer programs for individuals planning to attend an 
     institution of higher education in the next academic year 
     that--
       ``(i) are carried out at an institution of higher education 
     that also has programs of academic year supportive services 
     for disadvantaged students through projects authorized under 
     section 402D or through comparable projects funded by the 
     State or other sources;
       ``(ii) provide for the participation of the individuals who 
     are eligible for assistance under section 402D or who are 
     eligible for comparable programs funded by the State;
       ``(iii)(I) provide summer instruction in remedial, 
     developmental or supportive courses;
       ``(II) provide such summer services as counseling, 
     tutoring, or orientation; and
       ``(III) provide grant aid to the individuals to cover the 
     individuals' summer costs for books, supplies, living costs, 
     and personal expenses; and
       ``(iv) provide the individuals with financial aid during 
     each academic year the individuals are enrolled at the 
     participating institution after the summer program.
       ``(E) Requiring eligible students to meet other standards 
     or requirements as the State determines necessary to meet the 
     purposes of this section.
       ``(c) Priority Students.--In administering the early 
     intervention component, the eligible entity shall treat as 
     priority students any student in preschool through grade 12 
     who is eligible--
       ``(1) to be counted under section 1005(c) of the Elementary 
     and Secondary Education Act of 1965;
       ``(2) for free or reduced price meals pursuant to the 
     National School Lunch Act; or
       ``(3) for assistance pursuant to part A of title IV of the 
     Social Security Act.

     ``SEC. 404D. SCHOLARSHIP COMPONENT.

       ``(a) In General.--
       ``(1) States.--In order to receive a grant under this 
     chapter, an eligible entity described in section 404A(c)(1) 
     shall establish or maintain a financial assistance program 
     that awards grants to students in accordance with the 
     requirements of this section. The Secretary shall encourage 
     the eligible entity to ensure that the tuition assistance 
     provided pursuant to this section is available to an eligible 
     student for use at any institution of higher education.
       ``(2) Partnerships.--An eligible entity described in 
     section 404A(c)(2) may award scholarships to eligible 
     students.
       ``(b) Grant Amounts.--The maximum amount of the grant that 
     an eligible student shall be eligible to receive under this 
     section shall be established by the State. The minimum amount 
     of the grant for each fiscal year shall not be less than the 
     lesser of--
       ``(1) 75 percent of the average cost of attendance for an 
     in-State student, in a 4-year program of instruction, at 
     public institutions of higher education in such State, as 
     determined in accordance with regulations prescribed by the 
     Secretary; or
       ``(2) the maximum Federal Pell Grant funded under section 
     401 for such fiscal year.
       ``(c) Relation to Other Assistance.--Tuition assistance 
     provided under this chapter shall not be considered for the 
     purpose of awarding Federal grant assistance under this 
     title, except that in no case shall the total amount of 
     student financial assistance awarded to a student under this 
     title exceed such student's total cost of attendance.
       ``(d) Eligible Students.--A student eligible for assistance 
     under this section is a student who--
       ``(1) is less than 22 years old at time of first grant 
     award under this section;
       ``(2) receives a secondary school diploma or its recognized 
     equivalent on or after January 1, 1993;
       ``(3) is enrolled or accepted for enrollment in a program 
     of undergraduate instruction at an institution of higher 
     education that is located within the State's boundaries, 
     except that, at the State's option, an eligible entity may 
     offer grant program portability for recipients who attend 
     institutions of higher education outside such State; and
       ``(4) who participated in the early intervention component 
     required under section 404C.
       ``(e) Priority.--The Secretary shall ensure that each 
     eligible entity places a priority on awarding scholarships to 
     students who will receive a Federal Pell Grant for the 
     academic year for which the scholarship is awarded under this 
     section.
       ``(f) Special Rule.--An eligible entity may consider 
     students who have successfully participated in programs 
     funded under chapter 1 of this subpart to have met the 
     requirements of subsection (d)(4).

     ``SEC. 404E. 21ST CENTURY SCHOLAR CERTIFICATES.

       ``(a) Authority.--The Secretary, using funds appropriated 
     under section 404G, not to exceed $200,000 annually--
       ``(1) shall ensure that certificates, to be known as 21st 
     Century Scholar Certificates, are provided to all students 
     participating in programs under this chapter; and
       ``(2) may, as practicable, ensure that such certificates 
     are provided to all students in grades 6 through 12 who 
     attend schools at which at least 50 percent of the students 
     enrolled are eligible for a free or reduced price lunch.
       ``(b) Information Required.--A 21st Century Scholar 
     Certificate shall be personalized for each student and 
     indicate the amount of Federal financial aid for college 
     which a student may be eligible to receive.

     ``SEC. 404F. EVALUATION AND REPORT.

       ``(a) Evaluation.--Each eligible entity receiving a grant 
     under this chapter shall biennially evaluate the early 
     intervention program assisted under this chapter in 
     accordance with the standards described in subsection (b) and 
     shall submit to the Secretary a copy of such evaluation. The 
     evaluation shall permit service providers to track eligible 
     student progress during the period such students are 
     participating in the program assisted under this section and 
     shall be consistent with the standards developed by the 
     Secretary pursuant to subsection (b).
       ``(b) Evaluation Standards.--The Secretary shall prescribe 
     standards for the evaluation described in subsection (a). 
     Such standards shall--
       ``(1) provide for input from eligible entities and service 
     providers; and
       ``(2) ensure that data protocols and procedures are 
     consistent and uniform.
       ``(c) Federal Evaluation.--In order to evaluate and improve 
     the impact of the program assisted under this chapter, the 
     Secretary shall, with funds appropriated under section 404G, 
     make grants to, and enter into contracts and cooperative 
     agreements with public and private institutions and 
     organizations, to evaluate the effectiveness of the program 
     and, as appropriate, disseminate the results of the 
     evaluation.
       ``(d) Report.--The Secretary shall biennially report to 
     Congress on the activities assisted under this chapter and 
     the evaluations conducted pursuant to this section.

     ``SEC. 404G. APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     chapter $200,000,000 for fiscal year 1999 and such sums as 
     may be necessary for each of the 4 succeeding fiscal 
     years.''.
       On page 436, line 24, insert ``Grant funds under this 
     section may be used to provide before and after school 
     services to the extent necessary to enable low-income 
     students enrolled at the institution of higher education to 
     pursue postsecondary education.'' after the period.
       On page 442, between lines 8 and 9, insert the following:

     SEC. 419A. LEARNING ANYTIME ANYWHERE PARTNERSHIPS.

       Part A of title IV (20 U.S.C. 1070 et seq.) is amended 
     further by adding at the end the following:

          ``Subpart 9--Learning Anytime Anywhere Partnerships

     ``SEC. 420D. FINDINGS.

       ``Congress makes the following findings:
       ``(1) The nature of postsecondary education delivery is 
     changing, and new technology and other related innovations 
     can provide promising education opportunities for individuals 
     who are currently not being served, particularly for 
     individuals without easy access to traditional campus-based 
     postsecondary education or for whom traditional courses are a 
     poor match with education or training needs.
       ``(2) Individuals, including individuals seeking basic or 
     technical skills or their first postsecondary experience, 
     individuals with disabilities, dislocated workers, 
     individuals making the transition from welfare-to-work, and 
     individuals who are limited by time and place constraints can 
     benefit from nontraditional, noncampus-based postsecondary 
     education opportunities and appropriate support services.
       ``(3) The need for high-quality, nontraditional, 
     technology-based education opportunities is great, as is the 
     need for skill competency credentials and other measures of 
     educational progress and attainment that are valid and widely 
     accepted, but neither need is likely to be adequately 
     addressed by the uncoordinated efforts of agencies and 
     institutions acting independently and without assistance.
       ``(4) Partnerships, consisting of institutions of higher 
     education, community organizations, or other public or 
     private agencies or organizations, can coordinate and combine 
     institutional resources--
       ``(A) to provide the needed variety of education options to 
     students; and
       ``(B) to develop new means of ensuring accountability and 
     quality for innovative education methods.

     ``SEC. 420E. PURPOSE; PROGRAM AUTHORIZED.

       ``(a) Purpose.--It is the purpose of this subpart to 
     enhance the delivery, quality, and accountability of 
     postsecondary education and career-oriented lifelong learning 
     through technology and related innovations.
       ``(b) Program Authorized.--
       ``(1) Grants.--
       ``(A) In general.--The Secretary may, from funds 
     appropriated under section 420J make grants to, or enter into 
     contracts or cooperative agreements with, eligible 
     partnerships to carry out the authorized activities described 
     in section 420G.
       ``(B) Duration.--Grants under this subpart shall be awarded 
     for periods that do not exceed 5 years.
       ``(2) Definition of eligible partnership.--For purposes of 
     this subpart, the term `eligible partnership' means a 
     partnership consisting of 2 or more independent agencies, 
     organizations, or institutions. The agencies, organizations, 
     or institutions may include institutions of higher education, 
     community organizations, and other public and private 
     institutions, agencies, and organizations.

[[Page S7764]]

     ``SEC. 420F. APPLICATION.

       ``(a) Requirement.--An eligible partnership desiring to 
     receive a grant under this subpart shall submit an 
     application to the Secretary, in such form and containing 
     such information, as the Secretary may require.
       ``(b) Contents.--Each application shall include--
       ``(1) the name of each partner and a description of the 
     responsibilities of the partner, including the designation of 
     a nonprofit organization as the fiscal agent for the 
     partnership;
       ``(2) a description of the need for the project, including 
     a description of how the project will build on any existing 
     services and activities;
       ``(3) a listing of human, financial (other than funds 
     provided under this subpart), and other resources that each 
     member of the partnership will contribute to the partnership, 
     and a description of the efforts each member of the 
     partnership will make in seeking additional resources; and
       ``(4) a description of how the project will operate, 
     including how funds awarded under this subpart will be used 
     to meet the purpose of this subpart.

     ``SEC. 420G. AUTHORIZED ACTIVITIES.

       ``Funds awarded to an eligible partnership under this 
     subpart shall be used to--
       ``(1) develop and assess model distance learning programs 
     or innovative educational software;
       ``(2) develop methodologies for the identification and 
     measurement of skill competencies;
       ``(3) develop and assess innovative student support 
     services; or
       ``(4) support other activities that are consistent with the 
     purpose of this subpart.

     ``SEC. 420H. MATCHING REQUIREMENT.

       ``Federal funds shall provide not more than 50 percent of 
     the cost of a project under this subpart. The non-Federal 
     share of project costs may be in cash or in kind, fairly 
     evaluated, including services, supplies, or equipment.

     ``SEC. 420I. PEER REVIEW.

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

     ``SEC. 420J. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     subpart $30,000,000 for fiscal year 1999 and such sums as may 
     be necessary for each of the 4 succeeding fiscal years.''.
       On page 443, line 2, insert ``for Fiscal Years 1999, 2000, 
     2001, and 2002'' after ``Reserves''.
       On page 443, line 5, strike ``$40,000,000'' and insert 
     ``$21,250,000''.
       On page 443, line 6, strike ``2002, and 2003'' and insert 
     ``and 2002''.
       On page 443, line 15, strike ``\1/5\'' and insert ``\1/
     4\''.
       On page 444, line 4, strike ``$200,000,000'' and insert 
     ``$85,000,000''.
       On page 444, between lines 7 and 8, insert the following:
       ``(C) Special rule.--Notwithstanding subparagraphs (A) and 
     (B), the percentage reduction under subparagraph (B) shall 
     not result in the depletion of the reserve funds of any 
     agency which charges the 1.0 percent insurance premium 
     pursuant to section 428(b)(1)(H) below an amount equal to the 
     amount of lender claim payments paid 90 days prior to the 
     date of the return under this subsection. If any additional 
     amount is required to be returned after deducting the total 
     of the required shares under subparagraph (B) and as a result 
     of the preceding sentence, such additional amount shall be 
     obtained by imposing on each guaranty agency to which the 
     preceding sentence does not apply, an equal percentage 
     reduction in the amount of the agency's remaining reserve 
     funds.
       On page 444, line 22, strike the end quotation marks and 
     the second period.
       On page 444, after line 22, insert the following:
       ``(j) Additional Recall of Reserves on September 1, 2007.--
       ``(1) In general.--Notwithstanding any other provision of 
     law and subject to paragraph (4), the Secretary shall recall, 
     on September 1, 2007, $165,000,000 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) Equal percentage reduction.--The Secretary shall 
     require each guaranty agency to return reserve funds under 
     paragraph (1) by requiring an equal percentage reduction in 
     the amount of reserve funds held by the agency 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, subsection (h), or 
     subsection (i), 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.''.
       On page 446, beginning with line 17, strike all through 
     page 447, line 4, and insert the following:
       ``(e) Ownership of Federal Fund.--The Federal Fund, and any 
     nonliquid asset (such as a building or equipment) developed 
     or purchased by the guaranty agency in whole or in part with 
     Federal reserve funds, regardless of who holds or controls 
     the Federal reserve funds or such asset, shall be considered 
     to be the property of the United States, prorated based on 
     the percentage of such asset developed or purchased with 
     Federal reserve funds, which property shall be used in the 
     operation of the program authorized by the part, as provided 
     in subsection (d). The Secretary may restrict or regulate the 
     use of such asset only to the extent necessary to reasonably 
     protect the Secretary's prorated share of the value of such 
     asset. The Secretary may direct a guaranty agency, or such 
     agency's officers or directors, to cease any activity 
     involving expenditures, use, or transfer of the Federal Fund 
     administered by the guaranty agency that the Secretary 
     determines is a misapplication, misuse, or improper 
     expenditures of the Federal fund or the Secretary's share of 
     such asset.''.
       On page 448, line 15, insert ``The Secretary shall pay to 
     the guaranty agency any funds withheld in accordance with 
     this paragraph immediately upon making the determination that 
     the guaranty agency has made all such repayments.'' after the 
     period.
       On page 450, line 1, insert ``administrative cost 
     allowances paid under section 458, as such section was in 
     effect on the day preceding the date of enactment of the 
     Higher Education Amendments of 1998, and'' after ``(2)''.
       On page 453, strike lines 9 through 17.
       On page 453, between lines 17 and 18, insert the following:

     SEC. 424. SCOPE AND DURATION OF FEDERAL LOAN INSURANCE 
                   PROGRAM.

       Section 424(a) (20 U.S.C. 1074(a)) is amended--
       (1) by striking ``October 1, 2002'' and inserting ``October 
     1, 2004''; and
       (2) by striking ``September 30, 2006'' and inserting 
     ``September 30, 2008''.
       On page 453, beginning with line 18, strike all through 
     page 458, line 2, and insert the following:

     SEC. 425. APPLICABLE INTEREST RATES.

       (a) Applicable Interest Rates.--
       (1) Amendment.--Section 427A (20 U.S.C. 1077a et seq.) is 
     amended by amending subsection (j) to read as follows:
       ``(j) Interest Rates for New Loans On or After October 1, 
     1998, and Before July 1, 2003.--
       ``(1) In general.--Notwithstanding subsection (h) and 
     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 October 1, 1998, and before 
     July 1, 2003, 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.--Notwithstanding 
     subsection (h), 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 October 1, 
     1998, and before July 1, 2003, 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.--Notwithstanding subsection (h), with 
     respect to any loan under section 428B for which the first 
     disbursement is made on or after October 1, 1998, and before 
     July 1, 2003, 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) Consultation.--The Secretary shall determine the 
     applicable rate of interest under this subsection after 
     consultation with the Secretary of the Treasury and shall 
     publish such rate in the Federal Register as soon as 
     practicable after the date of determination.''.
       (2) 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(j)(3)''.
       (b) Special Allowances.
       (1) Amendment.--Section 438(b)(2)(G) (20 U.S.C. 1087-
     1(b)(2)(G)) is amended to read as follows:
       ``(G) Loans disbursed between october 1, 1998, and before 
     july 1, 2003.--
       ``(i) In general.--Subject to paragraph (4) and clauses 
     (ii), (iii), and (iv) of this subparagraph, and except as 
     provided in subparagraph (B), the special allowance paid 
     pursuant to this subsection on loans for which the first 
     disbursement is made on or after October 1, 1998, and before 
     July 1, 2003, shall be computed--
       ``(I) by determining the average of the bond equivalent 
     rates of 91-day Treasury bills auctioned for such 3-month 
     period;

[[Page S7765]]

       ``(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 October 
     1, 1998, and before July 1, 2003, and for which the 
     applicable rate of interest is described in section 
     427A(j)(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 October 1, 1998, and 
     before July 1, 2003, and for which the applicable rate of 
     interest is described in section 427A(j)(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 October 1, 1998, and 
     before July 1, 2003, for which the interest rate is 
     determined under section 427A(j)(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(j)(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 (G), 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 October 1, 1998, and before July 1, 2003.
       On page 460, line 9, strike ``and'' after the semicolon.
       On page 460, line 14, strike the period and insert ``; 
     and''.
       On page 460, between lines 14 and 15, insert the following:
       (3) in paragraph (5)--
       (A) by striking ``September 30, 2002'' and inserting 
     ``September 30, 2004''; and
       (B) by striking ``September 30, 2006'' and inserting 
     ``September 30, 2008''.
       On page 463, line 2, strike ``and'' after the semicolon.
       On page 463, between lines 2 and 3, insert the following:
       (2) in paragraph (7), by adding at the end the following:
       ``(D) There shall be excluded from the 6-month period that 
     begins on the date on which a student ceases to carry at 
     least one-half the normal full-time academic workload as 
     described in subparagraph (A)(i) any period not to exceed 3 
     years during which a borrower who is a member of a reserve 
     component of the Armed Forces named in section 10101 of title 
     10, United States Code, is called or ordered to active duty 
     for a period of more than 30 days (as defined in section 
     101(d)(2) of such title). Such period of exclusion shall 
     include the period necessary to resume enrollment at the 
     borrower's next available regular enrollment period.''; and
       On page 468, line 5, insert ``, except that, beginning on 
     September 30, 2003, this subparagraph shall be applied by 
     substituting `23 percent' for `24 percent' '' before the 
     period.
       On page 470, line 5, strike ``The Secretary, for'' and 
     insert the following: ``The Secretary--
       ``(i) for
       On page 470, line 6, insert ``and before October 1, 2003,'' 
     after ``1998,''.
       On page 470, line 12, strike the period and insert ``; 
     and''.
       On page 470, between lines 12 and 13, insert the following:
       ``(ii) for loans originated on or after October 1, 2003, 
     and in accordance with the provisions of this paragraph, 
     shall pay to each guaranty agency, a loan processing and 
     issuance fee equal to 0.40 percent of the total principal 
     amount of the loans on which insurance was issued under this 
     part during such fiscal year by such agency.
       On page 472, line 2, strike ``210th'' and insert ``300th''.
       On page 475, strike line 10 and all that follows through 
     page 476, line 15, and insert the following:
       ``(3) may only include provisions--
       ``(A) specifying the responsibilities of the guaranty 
     agency under the agreement, with respect to--
       ``(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; and
       ``(x) informational outreach to schools and students in 
     support of access to higher education;
       On page 477, line 25, strike ``and'' after the semicolon.
       On page 478, line 3, strike the period and insert ``; 
     and''.
       On page 478, between lines 3 and 4, insert the following:
       ``(5) shall not prohibit or restrict borrowers from 
     selecting a lender of the borrower's choosing, subject to the 
     prohibitions and restrictions applicable to the selection 
     under this Act.
       ``(c) Public Notice.--
       ``(1) In general.--The Secretary shall publish in the 
     Federal Register a notice to all guaranty agencies that sets 
     forth--
       ``(A) an invitation for the guaranty agencies to enter into 
     agreements under this section; and
       ``(B) the criteria that the Secretary will use for 
     selecting the guaranty agencies with which the Secretary will 
     enter into agreements under this section.
       ``(2) Agreement notice.--The Secretary shall notify the 
     Chairperson and the Ranking Minority Members of the Committee 
     on Labor and Human Resources of the Senate, and the Committee 
     on Education and Workforce of the House of Representatives, 
     and shall publish a notice in the Federal Register, with a 
     request for public comment, at least 30 days prior to 
     concluding an agreement under this section. The notice shall 
     contain--
       ``(A) a description of the voluntary flexible agreement and 
     the performance goals established by the Secretary for the 
     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 guaranty 
     agency's performance under the agreement will be assessed; 
     and
       ``(D) a description of the fees that will be paid to each 
     participating guaranty agency.
       ``(3) Public availability.--The text of any voluntary 
     flexible agreement, and any subsequent revisions, shall be 
     readily available to the public.
       ``(4) Modification notice.--The Secretary shall notify the 
     Chairperson and the Ranking Minority Member of the Committee 
     on Labor and Human Resources of the Senate, and the Committee 
     on Education and Workforce of the House of Representatives 30 
     days prior to any modifications to an agreement under this 
     section.
       On page 481, between lines 11 and 12, insert the following:

     SEC. 429. FEDERAL CONSOLIDATION LOANS.

       Section 428C(e) (20 U.S.C. 1078-3(e)) is amended by 
     striking ``September 30, 2002'' and inserting ``September 30, 
     2004''.
       On page 481, line 14, insert ``(a) In General.--'' before 
     ``Section''.
       On page 481, line 21, strike ``and'' after the semicolon.
       On page 482, line 2, strike the period and insert ``; 
     and''.
       On page 482, between lines 2 and 3, insert the following:
       (3) in subsection (e)--
       (A) by striking ``or made'' and inserting ``, made''; and
       (B) by inserting ``, or made to a student to cover the cost 
     of attendance in a program of study abroad approved by the 
     home eligible institution if the home eligible institution 
     has a cohort default rate (as calculated under section 
     435(m)) of less than 5 percent'' before the period.
       (b) Effective Date.--The amendment made by subsection 
     (a)(2) shall be effective during the period beginning on 
     October 1, 1998, and ending on September 30, 2002.
       On page 482, line 9, insert ``(a) In General.--'' before 
     ``Section''.
       On page 484, line 14, strike ``and'' after the semicolon.
       On page 484, between lines 14 and 15, insert the following:
       (3) in subsection (e)--
       (A) by amending paragraph (2) to read as follows:
       ``(2) Capitalization of interest.--Interest on loans made 
     under this section for which payments of principal are not 
     required during the in-school and grace periods or for which 
     payments are deferred under sections 427(a)(2)(C) and 
     428(b)(1)(M) shall, if agreed upon by the borrower and the 
     lender--
       ``(A) be paid monthly or quarterly; or
       ``(B) be added to the principal amount of the loan by the 
     lender only--
       ``(i) when the loan enters repayment;
       ``(ii) at the expiration of a grace period, in the case of 
     a loan that qualifies for a grace period;
       ``(iii) at the expiration of a period of deferment; or
       ``(iv) when the borrower defaults.''; and
       On page 484, line 15, strike ``(3) in subsection (e)(6)'' 
     and insert ``(B) in paragraph (6)''.
       On page 484, between lines 17 and 18, insert the following:
       (b) Sense of the Senate on Loan Limit Flexibility.--
       (1) Findings.--The Senate finds that--
       (A) due to the annual borrowing ceilings on the Federal 
     student loan programs, increasing numbers of needy students 
     are borrowing from more expensive private sector loan 
     programs than from the Federal loan programs;
       (B) according to the College Board, in academic year 1996-
     1997, students borrowed approximately $1,200,000,000 from 
     private sector loan programs;
       (C) the alternative private sector loan programs are not 
     only more expensive, but the interest rates are not capped, 
     leaving students vulnerable to higher monthly payments when 
     interest rates increase; and

[[Page S7766]]

       (D) with more flexible Federal annual loan ceilings, 
     students could be kept in Federal student loan programs, 
     thereby making available to the students the debt management 
     advantages of loan consolidation and alternative repayment 
     options that are available under Federal student loan 
     programs, and lowering the costs of monthly payments.
       (2) Sense of the senate.--It is the sense of the Senate 
     that Congress should consider the growing problem described 
     in paragraph (1) by continuing to examine the potential for 
     adding borrowing flexibility to the annual, but not the 
     aggregate, amounts that both undergraduate and graduate 
     students are allowed to borrow under section 428H of the 
     Higher Education Act of 1965.
       On page 485, line 3, insert ``qualifying'' before ``loan 
     made''.
       On page 485, lines 5 and 6, strike ``the date of enactment 
     of the Higher Education Amendments of 1998'' and insert 
     ``October 1, 1998''.
       On page 486, between lines 4 and 5, insert the following:
       ``(c) Qualifying Loans.--For purposes of this section, a 
     loan is a qualifying loan if--
       ``(1) the loan was obtained to cover the cost of 
     instruction for an academic year after the first and second 
     years of undergraduate education; and
       ``(2) the loan did not cover the costs of instruction for 
     more than 2 academic years, or 3 academic years in the case 
     of a program of instruction normally requiring 5 years to 
     complete.
       On page 486, line 15, insert ``that are qualifying loans 
     and are'' after ``loans''.
       On page 486, line 23, strike ``$10,000'' and insert 
     ``$8,000''.
       On page 489, strike lines 18 through 23 and insert:
       ``(C) has worked full time for the 2 consecutive years 
     preceding the year for which the determination is made as a 
     child care provider in a low-income community.
       ``(2) Low-income community.--For the purposes of this 
     subsection, the term `low-income community' means a community 
     in which 70 percent of households within the community earn 
     less than 85 percent of the State median household income.
       On page 490, line 16, insert ``consecutive'' after 
     ``second''.
       On page 490, line 22, insert ``consecutive'' after 
     ``third''.
       On page 491, line 1, insert ``consecutive'' after 
     ``fifth''.
       On page 495, line 2, strike ``multiyear'' and insert 
     ``master''.
       On page 500, between lines 16 and 17, insert the following:
       (b) Effective Date.--The amendment made by subsection 
     (a)(1)(B) shall be effective during the period beginning on 
     the date of enactment of this Act and ending on September 30, 
     2002.
       On page 501, between lines 5 and 6, insert the following:
       (d) Definition of Default.--
       (1) Amendment.--Section 435(l) (20 U.S.C. 1085l) is 
     amended--
       (A) by striking ``180 days'' and inserting ``270 days''; 
     and
       (B) by striking ``240 days'' and inserting ``330 days''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply with respect to loans for which the first day of 
     delinquency occurs on or after the date of enactment of this 
     Act.
       On page 501, between lines 14 and 15, insert the following:

     SEC. 436A. STUDY OF THE EFFECTIVENESS OF COHORT DEFAULT RATES 
                   FOR INSTITUTIONS WITH FEW STUDENT LOAN 
                   BORROWERS.

       Part A of title IV (20 U.S.C. 1071 et seq.) is amended by 
     adding after section 435 the following:

     ``SEC. 435A. STUDY OF THE EFFECTIVENESS OF COHORT DEFAULT 
                   RATES FOR INSTITUTIONS WITH FEW STUDENT LOAN 
                   BORROWERS.

       ``(a) Study Required.--The Secretary shall conduct a study 
     of the effectiveness of cohort default rates as an indicator 
     of administrative capability and program quality for 
     institutions of higher education at which less than 15 
     percent of students eligible to borrow participate in the 
     Federal student loan programs under this title and fewer than 
     30 borrowers enter repayment in any fiscal year. At a 
     minimum, the study shall include--
       ``(1) identification of the institutions included in the 
     study and of the student populations the institutions serve;
       ``(2) analysis of cohort default rates as indicators of 
     administrative shortcomings and program quality at the 
     institutions;
       ``(3) analysis of the effectiveness of cohort default rates 
     as a means to prevent fraud and abuse in the programs 
     assisted under this title;
       ``(4) analysis of the extent to which the institutions with 
     high cohort default rates are no longer participants in the 
     Federal student loan programs under this title; and
       ``(5) analysis of the costs incurred by the Department for 
     the calculation, publication, correction, and appeal of 
     cohort default rates for the institutions in relation to any 
     benefits to taxpayers.
       ``(b) Consultation.--In conducting the study described in 
     subsection (a), the Secretary shall consult with institutions 
     of higher education.
       ``(c) Report to Congress.--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 not later than September 30, 1999, regarding 
     the results of the study described in subsection (a).''.
       On page 508, line 4, insert ``and'' after the semicolon.
       On page 508, strike lines 5 through 10, and insert the 
     following:
       (C) by inserting ``and (B) provide that the Federal share 
     of the compensation of students employed in community service 
     shall not exceed 90 percent for academic years 1999-2000 and 
     succeeding academic years,'' after ``academic years,''; and
       On page 510, beginning with line 4, strike all through page 
     513, line 8, and insert the following:
       (a) Direct Loan Interest Rates.--Section 455(b) (20 U.S.C. 
     1087e(b)) is amended by amending paragraph (5) to read as 
     follows:
       ``(5) Interest rate provision.--
       ``(A) Rates for fdsl and fdusl.--Notwithstanding the 
     preceding paragraphs of this subsection, for Federal Direct 
     Unsubsidized Stafford/Ford Loans for which the first 
     disbursement is made on or after October 1, 1998, and before 
     July 1, 2003, 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--
       ``(i) the bond equivalent rate of 91-day Treasury bills 
     auctioned at the final auction held prior to such June 1; 
     plus
       ``(ii) 2.3 percent,
     except that such rate shall not exceed 8.25 percent.
       ``(B) In school and grace period rules.--Notwithstanding 
     the preceding paragraphs of this subsection, 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 October 1, 1998, and before 
     July 1, 2003, the applicable rate of interest for interest 
     which accrues--
       ``(i) prior to the beginning of the repayment period of the 
     loan; or
       ``(ii) 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 subparagraph (A) by substituting 
     `1.7 percent' for `2.3 percent'.
       ``(C) PLUS loans.--Notwithstanding the preceding paragraphs 
     of this subsection, with respect to Federal Direct PLUS Loan 
     for which the first disbursement is made on or after October 
     1, 1998, and before July 1, 2003, the applicable rate of 
     interest shall be determined under subparagraph (A)--
       ``(i) by substituting `3.1 percent' for `2.3 percent'; and
       ``(ii) by substituting `9.0 percent' for `8.25 percent'.''.
       (b) Effective date.--The amendments made by subsection (a) 
     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 October 1, 1998, and 
     before July 1, 2003.
       (c) Repayment Incentives.--Section 455(b) (20 U.S.C. 
     1087e(b)) is amended further by adding at the end the 
     following:
       ``(7) 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.''.
       On page 514, strike line 6, and insert the following:
       in accordance with subsections (b) and (c),
       not to exceed
       On page 514, strike line 8, and insert the following:

     $617,000,000 in fiscal year 1999, $735,000,000
       On page 514, line 13, strike ``subparagraph (B)'' and 
     insert ``paragraph (1)(B)''.
       On page 514, line 18, strike ``and''.
       On page 514, line 21, strike ``Account'' and insert 
     ``Except as provided in subsection (c), account''.
       On page 515, line 6, strike the second period and insert a 
     semicolon.
       On page 515, between lines 6 and 7, insert the following:
       (3) by redesignating subsections (c) and (d) as subsections 
     (d) and (e), respectively; and
       (4) by inserting after subsection (b) the following:

[[Page S7767]]

       ``(c) Special Rules.--
       ``(1) Fee cap.--The total amount of account maintenance 
     fees payable under this section--
       ``(A) for fiscal year 1999, shall not exceed $177,000,000;
       ``(B) for fiscal year 2000, shall not exceed $180,000,000;
       ``(C) for fiscal year 2001, shall not exceed $170,000,000;
       ``(D) for fiscal year 2002, shall not exceed $180,000,000; 
     and
       ``(E) for fiscal year 2003, shall not exceed $195,000,000.
       ``(2) Insufficient funding.--
       ``(A) In general.--Notwithstanding section 422A(d), if the 
     amount made available under subsection (a) is insufficient to 
     pay the account maintenance fees payable to guaranty agencies 
     under paragraph (1) for a fiscal year, the Secretary shall 
     pay the insufficiency by requiring guaranty agencies to 
     transfer funds from the Federal Student Loan Reserve Funds 
     under section 422A to the Agency Operating Funds under 
     section 422B.
       ``(B) Entitlement.--A guaranty agency shall be deemed to 
     have a contractual right against the United States to receive 
     payments according to the provisions of subparagraph (A).''.
       On page 515, line 17, insert ``and is a qualifying loan'' 
     after ``subsidy''.
       On page 515, lines 18 and 19, strike ``the date of 
     enactment of the Higher Education Amendments of 1998'' and 
     insert ``October 1, 1998''.
       On page 516, between lines 17 and 18, insert the following:
       ``(c) Qualifying Loans.--For purposes of this section, a 
     loan is a qualifying loan if--
       ``(1) the loan was obtained to cover the cost of 
     instruction for an academic year after the first and second 
     years of undergraduate education; and
       ``(2) the loan did not cover the costs of instruction for 
     more than 2 academic years, or 3 academic years in the case 
     of a program of instruction normally requiring 5 years to 
     complete.
       On page 517, line 3, insert ``that are qualifying loans and 
     are'' after ``loans''.
       On page 517, line 11, strike ``$10,000'' and insert 
     ``$8,000''.
       On page 528, line 16, strike ``and'' after the semicolon.
       On page 528, between lines 16 and 17, insert the following:
       (4) in subsection (c), by adding at the end the following:
       ``(7) There shall be excluded from the 9-month period that 
     begins on the date on which a student ceases to carry at 
     least one-half the normal full-time academic workload as 
     described in paragraph (1)(A) any period not to exceed 3 
     years during which a borrower who is a member of a reserve 
     component of the Armed Forces named in section 10101 of title 
     10, United States Code, is called or ordered to active duty 
     for a period of more than 30 days (as defined in section 
     101(d)(2) of such title). Such period of exclusion shall 
     include the period necessary to resume enrollment at the 
     borrower's next available regular enrollment period.''; and
       On page 529, line 23, strike ``The'' and all that follows 
     through page 530, line 2.
       On page 537, between lines 5 and 6, insert the following:

     SEC. 475. SIMPLIFIED NEEDS TEST; ZERO EXPECTED FAMILY 
                   CONTRIBUTION.

       Section 479 (20 U.S.C. 1087ss) is amended--
       (1) in subsection (b)(3)--
       (A) in subparagraph (A), by striking ``or'' after the 
     semicolon;
       (B) by redesignating subparagraph (B) as subparagraph (C); 
     and
       (C) by inserting after subparagraph (A) the following:
       ``(B) a form 1040 (including any prepared or electronic 
     version of such form) required pursuant to the Internal 
     Revenue Code of 1986, except that such form shall be 
     considered a form described in this paragraph only if the 
     student or family files such form in order to take a tax 
     credit under section 25A of the Internal Revenue Code of 
     1986, and would otherwise be eligible to file a form 
     described in subparagraph (A); or''; and
       (2) in subsection (c)--
       (A) in paragraph (1), by amending subparagraph (A) to read 
     as follows:
       ``(A)(i) the student's parents file, or are eligible to 
     file, a form described in subsection (b)(3), or the parents 
     certify to the Secretary that the parents are not required to 
     file an income tax return; and
       ``(ii) the student files, or is eligible to file, a form 
     described in subsection (b)(3), or the student certifies to 
     the Secretary that the student is not required to file an 
     income tax return; and''; and
       (B) in paragraph (2), by amending subparagraph (A) to read 
     as follows:
       ``(A) the student (and the student's spouse, if any) files, 
     or is eligible to file, a form described in subsection 
     (b)(3), or the student certifies to the Secretary that the 
     student (and the student's spouse, if any) is not required to 
     file an income tax return; and''.
       On page 537, strike lines 8 and 9, and insert the 
     following:
       Section 479A (20 U.S.C. 1087tt) is amended--
       (1) in subsection (a), by inserting ``Special circumstances 
     may include tuition expenses at an elementary school or 
     secondary school, medical or dental expenses not covered by 
     insurance, other changes in a family's income or assets, or 
     changes in a student's status.'' after ``absence of special 
     circumstances.''; and
       (2) by amending subsection (c) to read as follows:
       On page 537, between lines 21 and 22, insert the following:

     SEC. 481. DEFINITION OF INSTITUTION OF HIGHER EDUCATION.

       Subparagraph (A) of section 481(a)(2) (20 U.S.C. 
     1088(a)(2)) is amended--
       (1) in the second sentence, by inserting ``or veterinary'' 
     after ``case of a graduate medical'';
       (2) by striking ``attending a graduate medical school'' and 
     inserting ``attending such school''; and
       (3) by amending clause (ii) to read as follows:
       ``(ii) the institution has a clinical training program that 
     was approved by a State as of January 1, 1992, or students 
     enrolled in the institution complete their clinical training 
     at an approved veterinary school located in the United 
     States.''.
       On page 541, strike lines 6 through 13, and insert the 
     following:
       ``(h) Master Promissory Note.--
       ``(1) In general.--The Secretary shall develop and require 
     the use of a master promissory note, for loans made under 
     this title for periods of enrollment beginning on or after 
     July 1, 2000, that may be applicable to more than 1 academic 
     year, or more than 1 type of loan made under this title. 
     Prior to implementing the master promissory note for all 
     loans made under this title, the Secretary may develop, test, 
     and require the use of such a master promissory note on a 
     limited or pilot basis.
       ``(2) Consultation.--In developing the master promissory 
     note under this subsection, the Secretary shall consult with 
     representatives of guaranty agencies, eligible lenders, 
     institutions of higher education, students, and organizations 
     involved in student financial assistance.
       ``(3) Sale; assignment; enforceability.--Notwithstanding 
     any other provision of law, each loan made under a master 
     promissory note under this subsection may be sold or assigned 
     independently of any other loan made under the same 
     promissory note and each such loan shall be separately 
     enforceable in all Federal and State courts on the basis of 
     an original or copy of the master promissory note in 
     accordance with the terms of the master promissory note.''.
       On page 541, between lines 24 and 25, insert the following:
       (2) in subsection (l), by amending paragraph (1) to read as 
     follows:
       ``(1) Relation to correspondence courses.--
       ``(A) In general.--A student enrolled in a course of 
     instruction at an institution of higher education that is 
     offered in whole or in part through telecommunications and 
     leads to a recognized certificate for a program of study of 1 
     year or longer, or a recognized associate, baccalaureate, or 
     graduate degree, conferred by such institution, shall not be 
     considered to be enrolled in correspondence courses unless 
     the total amount of telecommunications and correspondence 
     courses at such institution equals or exceeds 50 percent of 
     the total amount of all courses at the institution.
       ``(B) Requirement.--An institution of higher education 
     referred to in subparagraph (A) is an institution of higher 
     education--
       ``(i) that is not an institute or school described in 
     section 521(4)(C) of the Carl D. Perkins Vocational and 
     Applied Technology Education Act; and
       ``(ii) for which at least 50 percent of the programs of 
     study offered by the institution lead to the award of a 
     recognized associate, baccalaureate, or graduate degree.''; 
     and
       On page 543, strike lines 4 through 8, and insert the 
     following:

     riod determined under such paragraph if--
       ``(A) the student satisfactorily completes a drug 
     rehabilitation program that--
       ``(i) complies with such criteria as the Secretary shall 
     prescribe in regulations for purposes of this paragraph; and
       ``(ii) includes 2 unannounced drug tests; or
       ``(B) the conviction is expunged by pardon, reversed, set 
     aside, or otherwise rendered nugatory.
       On page 543, strike line 19 and all that follows through 
     page 544, line 25, and insert the following:
       Section 484B (20 U.S.C. 1091b) is amended to read as 
     follows:

     ``SEC. 484B. INSTITUTIONAL REFUNDS.

       ``(a) Return of Title IV Funds.--
       ``(1) In general.--If a recipient of assistance under this 
     title withdraws from a payment period in which the recipient 
     began attendance, the amount of grant (other than assistance 
     received under part C of this title) or loan assistance to be 
     returned to the title IV programs is calculated according to 
     paragraph (2) and returned in accordance with subsection (b).
       ``(2) Calculation of amount of title iv assistance 
     earned.--
       ``(A) In general.--The amount of grant or loan assistance 
     under this title that is earned by the recipient for purposes 
     of this section is calculated by--
       ``(i) determining the percentage of grant and loan 
     assistance under this title that has been earned by the 
     student, as described in subparagraph (B); and
       ``(ii) applying such percentage to the total amount of such 
     grant and loan assistance that was disbursed (and that could 
     have been disbursed) to the student, or on the student's 
     behalf, for the payment period, as of the day the student 
     withdrew.
       ``(B) Percentage earned.--For purposes of subparagraph 
     (A)(i), the percentage of grant or loan assistance under this 
     title that has been earned by the student is--

[[Page S7768]]

       ``(i) equal to the percentage of the payment period 
     completed (as determined in accordance with subsection (d)) 
     as of the day the student withdrew, provided that such date 
     occurs on or before the completion of 60 percent of the 
     payment period; or
       ``(ii) 100 percent, if the day the student withdrew occurs 
     after the student has completed 60 percent of the payment 
     period.
       ``(C) Percentage not earned.--For purposes of subsection 
     (b), the amount of grant and loan assistance awarded under 
     this title that has not been earned by the student shall be 
     calculated by--
       ``(i) determining the complement of the percentage of grant 
     or loan assistance under this title has been earned by the 
     student described in subparagraph (B); and
       ``(ii) applying the percentage determined under clause (i) 
     to the total amount of such grant and loan assistance that 
     was disbursed (and that could have been disbursed) to the 
     student, or on the student's behalf, for the payment period, 
     as of the day the student withdrew.
       ``(3) Differences between amounts earned and amounts 
     received.--
       ``(A) In general.--If the student has received less grant 
     or loan assistance than the amount earned, as calculated 
     under paragraph (2)(B), the institution of higher education 
     shall comply with the procedures for late disbursement 
     specified by the Secretary in regulations.
       ``(B) Return.--If the student has received more grant or 
     loan assistance than the amount earned, as calculated under 
     paragraph (2)(B), the unearned funds shall be returned by the 
     institution or the student, or both, as may be required under 
     paragraphs (1) and (2) of subsection (b), to the programs 
     under this title in the order specified in subsection (b)(3).
       ``(b) Return of Title IV Program Funds.--
       ``(1) Responsibility of the institution.--The institution 
     shall return, in the order specified in paragraph (3), the 
     lesser of--
       ``(A) the amount of grant and loan assistance awarded under 
     this title that has not been earned by the student, as 
     calculated under subsection (a)(2)(C); or
       ``(B) an amount equal to--
       ``(i) the total institutional charges for the payment 
     period; multiplied by
       ``(ii) the percentage of grant and loan assistance awarded 
     under this title that has not been earned by the student, as 
     described in subsection (a)(2)(C).
       ``(2) Responsibility of the student.--
       ``(A) In general.--The student shall return assistance that 
     has not been earned by the student as described in subsection 
     (a)(2)(C) in the order specified in paragraph (3) minus the 
     amount the institution is required to return under paragraph 
     (1).
       ``(B) Special rule.--The student shall return or repay, as 
     appropriate, the amount determined under subparagraph (A) 
     to--
       ``(i) a loan program under this title in accordance with 
     the terms of the loan; and
       ``(ii) a grant program under this title, as an overpayment 
     of such grant and shall be subject to overpayment collection 
     procedures prescribed by the Secretary.
       ``(3) Order of return of title iv funds.--
       ``(A) In general.--Excess funds returned by the institution 
     or the student, as appropriate, in accordance with paragraph 
     (1) or (2), respectively, shall be credited to outstanding 
     balances on loans made under this title to the student or on 
     behalf of the student for the payment period for which a 
     return of funds is required. Such excess funds shall be 
     credited in the following order:
       ``(i) To outstanding balances on loans made under section 
     428H for the payment period for which a return of funds is 
     required.
       ``(ii) To outstanding balances on loans made under section 
     428 for the payment period for which a return of funds is 
     required.
       ``(iii) To outstanding balances on unsubsidized loans 
     (other than parent loans) made under part D for the payment 
     period for which a return of funds is required.
       ``(iv) To outstanding balances on subsidized loans made 
     under part D for the payment period for which a return of 
     funds is required.
       ``(v) To outstanding balances on loans made under part E 
     for the payment period for which a return of funds is 
     required.
       ``(vi) To outstanding balances on loans made under section 
     428B for the payment period for which a return of funds is 
     required.
       ``(vii) To outstanding balances on parent loans made under 
     part D for the payment period for which a return of funds is 
     required.
       ``(B) Remaining excesses.--If excess funds remain after 
     repaying all outstanding loan amounts, the remaining excess 
     shall be credited in the following order:
       ``(i) To awards under subpart 1 of part A for the payment 
     period for which a return of funds is required.
       ``(ii) To awards under subpart 3 of part A for the payment 
     period for which a return of funds is required.
       ``(iii) To other assistance awarded under this title for 
     which a return of funds is required.
       ``(c) Withdrawal Date.--
       ``(1) In general.--In this section, the term `day the 
     student withdrew'--
       ``(A) is the date that the institution determines--
       ``(i) the student began the withdrawal process prescribed 
     by the institution;
       ``(ii) the student otherwise provided official notification 
     to the institution of the intent to withdraw; or
       ``(iii) in the case of a student who does not begin the 
     withdrawal process or otherwise notify the institution of the 
     intent to withdraw, the date that the payment period ends for 
     which aid under this title was disbursed; or
       ``(B) for schools required to take attendance, is 
     determined by the institution from such attendance records.
       ``(2) Special rule.--Notwithstanding paragraph (1), if the 
     institution determines that a student was not able to begin 
     the withdrawal process, or otherwise notify the institution 
     of the intent to withdraw, due to illness, accident, grievous 
     personal loss, or other such circumstances beyond the 
     student's control, the institution may determine the 
     appropriate withdrawal date.
       ``(d) Percentage of the Payment Period Completed.--For 
     purposes of subsection (a)(2)(B)(i), the percentage of the 
     payment period completed is determined--
       ``(1) in the case of a program that is measured in credit 
     hours, by dividing the total number of calendar days 
     comprising the payment period into the number of calendar 
     days completed in that period as of the day the student 
     withdrew; and
       ``(2) in the case of a program that is measured in clock 
     hours, by dividing the total number of clock hours comprising 
     the payment period into the number of clock hours completed 
     by the student in that payment period as of the day the 
     student withdrew.''.
       On page 545, strike lines 6 through 9, and insert the 
     following:
       (A) in the second sentence, by striking ``, through 
     appropriate publications and mailings, to all current 
     students, and to any prospective student upon request.'' and 
     inserting ``upon request, through appropriate publications, 
     mailings, and electronic media to an enrolled student, and to 
     any prospective student.'';
       On page 545, between lines 14 and 15, insert the following:
       (C) by amending subparagraph (F) to read as follows:
       ``(F) a statement of--
       ``(i) the requirements of any refund policy with which the 
     institution is required to comply;
       ``(ii) the requirements under section 484B for the return 
     of grant or loan assistance provided under this title; and
       ``(iii) the requirements for officially withdrawing from 
     the institution;'';
       On page 545, line 16, insert ``and'' after the semicolon.
       On page 545, line 18, strike ``and'' after the second 
     semicolon.
       On page 545, strike lines 19 through 25.
       On page 550, between lines 16 and 17, insert the following:
       (4) in paragraph (6) (as redesignated by paragraph (2)), by 
     amending subparagraph (A) to read as follows: ``(A) For 
     purposes of this section the term `campus' means--
       ``(i) any building or property owned or controlled by an 
     institution of higher education within the same reasonably 
     contiguous geographic area of the institution, including a 
     building or property owned by the institution, but controlled 
     by another person, such as a food or other retail vendor;
       ``(ii) any building or property owned or controlled by a 
     student organization recognized by the institution;
       ``(iii) all public property that is within the same 
     reasonably contiguous geographic area of the institution, 
     such as a sidewalk, a street, other thoroughfare, or parking 
     facility, that is adjacent to a facility owned or controlled 
     by the institution;
       ``(iv) any building or property (other than a branch 
     campus) owned or controlled by an institution of higher 
     education that is used in direct support of, or in relation 
     to, the institution's educational purposes, is used by 
     students, and is not within the same reasonably contiguous 
     geographic area of the institution; and
       ``(v) all dormitories or other student residential 
     facilities owned or controlled by the institution.'';
       On page 550, line 20, strike ``permitted'' and insert 
     ``required''.
       On page 553, line 25, strike the end quotation marks and 
     the second period.
       On page 553, after line 25, insert the following:
       ``(10)(A) The Secretary shall report to the appropriate 
     committees of Congress each institution of higher education 
     that the Secretary determines is not in compliance with the 
     reporting requirements of this subsection.
       ``(B) The Secretary shall provide to an institution of 
     higher education that the Secretary determines is having 
     difficulty, or is not in compliance, with the reporting 
     requirements of this subsection--
       ``(i) data and analysis regarding successful practices 
     employed by institutions of higher education to reduce campus 
     crime; and
       ``(ii) technical assistance.
       ``(11) For purposes of reporting the statistics described 
     in paragraphs (1)(F) and (1)(H), an institution of higher 
     education shall distinguish, by means of separate categories, 
     any criminal offenses that occur--
       ``(A) on publicly owned sidewalks, streets, or other 
     thoroughfares, or in parking facilities, that are adjacent to 
     facilities owned by the institution; and
       ``(B) in dormitories or other residential facilities for 
     students on campus.
       ``(12)(A) Upon determination, after reasonable notice and 
     opportunity for a hearing on the record, that an institution 
     of higher education--

[[Page S7769]]

       ``(i) has violated or failed to carry out any provision of 
     this subsection or any regulation prescribed under this 
     subsection; or
       ``(ii) has substantially misrepresented the number, 
     location, or nature of the crimes required to be reported 
     under this subsection,
     the Secretary shall impose a civil penalty upon the 
     institution of not to exceed $25,000 for each violation, 
     failure, or misrepresentation.
       ``(B) Any civil penalty may be compromised by the 
     Secretary. In determining the amount of such penalty, or the 
     amount agreed upon in compromise, the appropriateness of the 
     penalty to the size of the institution of higher education 
     subject to the determination, and the gravity of the 
     violation, failure, or misrepresentation shall be considered. 
     The amount of such penalty, when finally determined, or the 
     amount agreed upon in compromise, may be deducted from any 
     sums owing by the United States to the institution charged.
       ``(13)(A) Nothing in this subsection may be construed to--
       ``(i) create a cause of action against any institution of 
     higher education or any employee of such an institution for 
     any civil liability; or
       ``(ii) establish any standard of care.
       ``(B) Notwithstanding any other provision of law, evidence 
     regarding compliance or noncompliance with this subsection 
     shall not be admissible as evidence in any proceeding of any 
     court, agency, board, or other entity, except with respect to 
     an action to enforce this subsection
       ``(14) This subsection may be cited as the `Jeanne Clery 
     Disclosure of Campus Security Policy and Campus Crime 
     Statistics Act'.''.
       On page 555, line 7, insert end quotation marks and a 
     period after the period.
       On page 555, strike lines 8 through 15.
       On page 557, line 24, strike ``, and that'' and all that 
     follows through page 558, line 2, and insert a semicolon, end 
     quotation marks, and a period.
       On page 558, line 24, strike ``Tuition and fees'' and 
     insert ``Tuition and fees for a full-time undergraduate 
     student''.
       On page 559, strike lines 1 through 16, and insert the 
     following:
       ``(ii) Cost of attendance for a full-time undergraduate 
     student, consistent with the provisions of section 472.
       ``(iii) Average amount of financial assistance received by 
     an undergraduate student who attends an institution of higher 
     education, including--

       ``(I) each type of assistance or benefit described in 
     section 428(a)(2)(C)(i);
       ``(II) fellowships; and
       ``(III) institutional and other assistance.

       ``(iv) Percentage of students receiving financial 
     assistance described in each of subclauses (I), (II), and 
     (III) of clause (iii);
       On page 560, line 1, insert ``at least'' after ``all''.
       On page 560, line 1, insert ``participating in the program 
     under this title'' after ``education''.
       On page 561, between lines 11 and 12, insert the following:
       ``(v) operations and maintenance;
       On page 561, between lines 13 and 14, insert the following:
       ``(B) the replacement cost of instructional buildings and 
     equipment;
       On page 561, line 14, strike ``such expenditures'' and 
     insert ``the expenditures described in subparagraph (A)''.
       On page 561, line 16, strike ``such expenditures'' and 
     insert ``the expenditures described in subparagraph (A) and 
     the replacement cost described in subparagraph (B)''.
       On page 562, line 20, strike ``Section'' and insert ``(a) 
     In General.--Section''.
       On page 564, strike lines 7 through 10, and insert the 
     following:
       (A) in paragraph (1)(A)--
       (i) in clause (i)--

       (I) by striking ``clause (ii)'' and inserting ``clauses 
     (ii) and (iii)'';
       (II) by striking ``State review entities referred to in'' 
     and inserting ``appropriate State agency notifying the 
     Secretary under''; and
       (III) by striking ``or'' after the semicolon;

       (ii) in clause (ii), by inserting ``or'' after the 
     semicolon; and
       (iii) by adding at the end the following:
       ``(iii) with regard to an eligible institution (other than 
     an eligible institution described in section 481(a)(1)(C)) 
     that has obtained less than $200,000 in funds under this 
     title during each of the 2 award years that precede the audit 
     period and submits a letter of credit payable to the 
     Secretary equal to not less than \1/2\ of the annual 
     potential liabilities of such institution as determined by 
     the Secretary, deeming an audit conducted every 3 years to 
     satisfy the requirements of clause (i), except for the award 
     year immediately preceding renewal of the institution's 
     eligibility under section 498(g);'';
       On page 564, between lines 16 and 17, insert the following:
       (b) Provision of Voter Registration Forms.--
       (1) Program participation requirement.--Section 487(a) (20 
     U.S.C. 1094(a)) is amended by adding at the end the 
     following:
       ``(23) The institution, if located in a State to which 
     section 113 applies, will make a good faith effort to provide 
     a mail voter registration form, received from such State, to 
     each student enrolled in a degree or certificate program and 
     in attendance at the institution and to make such forms 
     widely available to students at the institution.''.
       (2) Regulation prohibited.--No officer of the executive 
     branch is authorized to instruct the State in the manner in 
     which the amendment made by this subsection is carried out.
       On page 568, between lines 22 and 23, insert the following:
       ``(c) Regulatory and Statutory Relief for Small Volume 
     Institutions.--The Secretary, following discussions with 
     representatives of eligible institutions (other than eligible 
     institutions described in section 481(a)(1)(C)) that have 
     obtained in each of the 2 most recent award years prior to 
     the date of enactment of the Higher Education Amendments of 
     1998 less than $200,000 in funds through this title, shall 
     review and evaluate ways in which regulations under and 
     provisions of this Act affecting the institutions may be 
     improved, streamlined, or eliminated, and shall submit, not 
     later than 1 year after the enactment of the Higher Education 
     Amendments of 1998, 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 detailing 
     the Secretary's findings and recommendations, including a 
     timetable for implementation of any recommended changes.
       On page 570, strike line 6 and all that follows through 
     page 571, line 2, and insert the following:
       ``(2) Waivers.--The Secretary is authorized to waive for 
     any institution of higher education, system of institutions 
     of higher education, or consortium participating in a 
     Distance Education Demonstration Program, the requirements of 
     section 472(5) as the section relates to computer costs, 
     sections 481(d) and 481(e) as such sections relate to 
     requirements for a minimum number of weeks of instruction, 
     sections 472(10), 481(a)(3)(A), 481(a)(3)(B), 484(l)(1), or 1 
     or more of the regulations prescribed under this part or part 
     F which inhibit the operation of quality distance education 
     programs.
       ``(3) Special rules.--
       ``(A) Eligible institutions.--Only an institution of higher 
     education that provides at least a 2-year, or 4-year program 
     of instruction for which the institution awards an associate 
     or a baccalaureate degree, or provides a graduate degree, 
     shall be eligible to participate in the demonstration program 
     authorized under this section.
       ``(B) Prohibition.--An institution of higher education 
     described in section 481(a)(1)(C) shall not be eligible to 
     participate in the demonstration program authorized under 
     this section.
       ``(C) Special rule.--Subject to subparagraph (B), an 
     institution of higher education that meets the requirements 
     of subsection (a) of section 481, other than the requirement 
     of paragraph (3)(A) or (3)(B) of such subsection, shall be 
     eligible to participate in the demonstration program 
     authorized under this section.
       ``(D) Requirement.--Notwithstanding any other provision of 
     this paragraph, Western Governors University shall be 
     considered eligible to participate in the demonstration 
     program authorized under this section, and the Secretary may, 
     in addition to the waivers described in paragraph (2), waive 
     for such university such other requirements of this title as 
     the Secretary determines to be appropriate because of the 
     unique characteristics of such university. In carrying out 
     the preceding sentence, the Secretary shall ensure that 
     adequate program integrity and accountability measures apply 
     to such university's participation in the demonstration 
     program authorized under this section.
       On page 572, strike lines 5 through 20, and insert the 
     following:
       ``(d) Selection.--
       ``(1) In general.--For the first year of the demonstration 
     program authorized under this section, the Secretary is 
     authorized to select for participation in the program not 
     more than 15 institutions, systems of institutions, or 
     consortia of institutions. For the third year of the 
     demonstration program authorized under this title, the 
     Secretary may select not more than 35 institutions, systems, 
     or consortia, in addition to the institutions, systems, or 
     consortia selected pursuant to the preceding sentence, to 
     participate in the demonstration program if the Secretary 
     determines that such expansion is warranted based on the 
     evaluations conducted in accordance with subsections (f) and 
     (g).
       ``(2) Considerations.--In selecting institutions to 
     participate in the demonstration program in the first or 
     succeeding years of the program, the Secretary shall take 
     into account--
       ``(A) the number and quality of applications received;
       ``(B) the Department's capacity to oversee and monitor each 
     institution's participation; and
       ``(C) an institution's--
       ``(i) financial responsibility;
       ``(ii) administrative capability; and
       ``(iii) program or programs being offered via distance 
     education.
       On page 574, strike lines 21 and 22, and insert the 
     following:
     nual basis regarding--
       ``(i) the demonstration programs authorized under this 
     section; and
       ``(ii) the number and types of students receiving 
     assistance under this title for instruction leading to a 
     recognized certificate, as provided for in section 484(l)(1), 
     including the progress of such students toward recognized 
     certificates and the degree to which participation in such 
     programs leading to such certificates increased.
       On page 580, strike lines 11 through 24, and insert the 
     following:

[[Page S7770]]

       (i) by inserting ``D,'' after ``B,''; and
       (ii) by striking ``Such meetings shall include'' and 
     inserting ``The Secretary shall obtain the advice of and 
     recommendations from''; and
       (B) in paragraph (2)--
       (i) by striking ``During such meetings the'' and inserting 
     ``The'';
       (ii) by inserting ``D,'' after ``B,''; and
       (iii) by striking ``1992'' and inserting ``1998 through 
     such mechanisms as regional meetings and electronic exchanges 
     of information''; and
       On page 581, strike lines 6 through 13, and insert the 
     following:
       (i) by striking ``holding regional meetings'' and inserting 
     ``obtaining the advice and recommendations described in 
     subsection (a)(1)'';
       (ii) by inserting ``D,'' after ``B,'';
       (iii) by striking ``1992'' and inserting ``1998''; and
       (iv) by striking ``The Secretary shall follow the guidance 
     provided in sections 305.82-4 and 305.85-5 of chapter 1, Code 
     of Federal Regulations, and any successor recommendation, 
     regulation, or law.''; and
       On page 581, line 22, strike ``impractical'' and insert 
     ``unnecessary or inadvisable''.
       On page 582, between lines 5 and 6, insert the following:

     SEC. 489D. PROCEDURES FOR CANCELLATIONS AND DEFERMENTS FOR 
                   ELIGIBLE DISABLED VETERANS.

       Part G of title IV (20 U.S.C. 1088 et seq.) is amended by 
     adding at the end the following:

     ``SEC. 493A. PROCEDURES FOR CANCELLATIONS AND DEFERMENTS FOR 
                   ELIGIBLE DISABLED VETERANS.

       ``The Secretary, in consultation with the Secretary of 
     Veterans Affairs, shall develop and implement a procedure to 
     permit Department of Veterans Affairs physicians to provide 
     the certifications and affidavits needed to enable disabled 
     veterans enrolled in the Department of Veterans Affairs 
     health care system to document such veterans' eligibility for 
     deferments or cancellations of student loans made, insured, 
     or guaranteed under this title. Not later than 6 months after 
     the date of enactment of the Higher Education Amendments of 
     1998, the Secretary and the Secretary of Veterans Affairs 
     jointly shall report to Congress on the progress made in 
     developing and implementing the procedure.''.
       On page 588, line 19, strike ``and'' after the semicolon.
       On page 588, line 22, strike the period and insert ``; 
     and''.
       On page 588, between lines 22 and 23, insert the following:
       (5) by adding at the end the following:
       ``(6) Notwithstanding any other provision of law, any 
     individual, whom the Secretary determines, in accordance with 
     paragraph (2), exercises substantial control over an 
     institution participating in, or seeking to participate in, a 
     program under this title, required to pay, on behalf of a 
     student or borrower, a refund of unearned institutional 
     charges to a lender, or to the Secretary, who willfully fails 
     to pay such refund or willfully attempts in any manner to 
     evade payment of such refund, shall, in addition to other 
     penalties provided by law, be liable to the Secretary for the 
     amount of the refund not paid, to the same extent with 
     respect to such refund that such an individual would be 
     liable as a responsible person for a penalty under section 
     6672(a) of Internal Revenue Code of 1986 with respect to the 
     nonpayment of taxes.''.
       On page 596, line 8, strike ``PBO'' and insert ``Chief 
     Operating Officer''.
       On page 598, line 12, insert ``and any revision to the 
     plan'' after ``plan''.
       On page 598, line 17, insert ``or revision'' after 
     ``plan''.
       On page 599, line 14, strike ``Each year'' and insert the 
     following:
       ``(A) In general.--Each year''.
       On page 599, between lines 20 and 21, insert the following:
       ``(B) Consultation with stakeholders.--The Chief Operating 
     Officer, in preparing the report described in subparagraph 
     (A), shall establish appropriate means to consult with 
     borrowers, institutions, lenders, guaranty agencies, 
     secondary markets, and others involved in the delivery system 
     of student aid under this title--
       ``(i) regarding the degree of satisfaction with the 
     delivery system; and
       ``(ii) to seek suggestions on means to improve the delivery 
     system.
       On page 600, lines 7 and 8, strike ``, without regard to 
     political affiliation or activity''.
       On page 600, line 22, insert ``, and any revision to the 
     final agreement,'' after ``agreement''.
       On page 604, between lines 3 and 4, insert the following:
       ``(h) Report.--The Secretary and the Chief Operating 
     Officer, not later than 180 days after the date of enactment 
     of the Higher Education Amendments of 1998, shall report to 
     Congress on the proposed budget and sources of funding for 
     the operation of the PBO.
       On page 604, line 9, strike ``section'' and insert 
     ``part''.
       On page 604, line 9, strike the end quotation marks and the 
     second period.
       On page 604, between lines 9 and 10, insert the following:

     ``SEC. 499A. PERSONNEL FLEXIBILITIES.

       ``(a) General Provisions.--
       ``(1) Certain limitations not applicable.--The PBO shall 
     not be subject to any limitation related to the number or 
     grade of its employees.
       ``(2) Applicable provisions of title 5.--
       ``(A) Provisions.--Any flexibilities provided under this 
     section shall be exercised in a manner consistent with the 
     following provisions of title 5, United States Code:
       ``(i) Chapter 23, relating to merit system principles and 
     prohibited personnel practices.
       ``(ii) Provisions relating to preference eligibles.
       ``(iii) Section 5307, relating to the aggregate limitation 
     on pay.
       ``(iv) Chapter 71, relating to labor-management relations, 
     except to the extent provided by paragraph (3).
       ``(B) Exercise of authority.--The exercise of any 
     authorities provided under this section shall be subject to 
     subsections (b) and (c) of section 1104 of title 5, United 
     States Code, as though such authorities were delegated to the 
     PBO under subsection (a)(2) of such section. The PBO shall 
     provide the Office of Personnel Management with any 
     information the Office requires in carrying out its 
     responsibilities under this subsection.
       ``(3) Labor organization agreements.--Employees within a 
     unit to which a labor organization is accorded exclusive 
     recognition under chapter 71 of title 5, United States Code, 
     shall not be subject to any flexibility provided under this 
     section unless the exclusive representative and PBO have 
     entered into a written agreement which specifically provides 
     for the exercise of that flexibility. A written agreement may 
     not be imposed by the Federal Services Impasses Panel under 
     section 7119 of title 5, United States Code.
       ``(4) Flexibilities.--
       ``(A) Prior approval.--The PBO may exercise any of the 
     flexibilities provided under subsections (b), (c)(1), and (d) 
     without prior approval of the Office of Personnel Management.
       ``(B) Plan and approval.--The PBO may exercise the 
     flexibilities described in subsection (c)(2) only after a 
     specific plan for implementation of those flexibilities is 
     submitted to and approved by the Director of the Office of 
     Personnel Management.
       ``(5) Demonstration projects.--
       ``(A) In general.--The exercise of any flexibilities under 
     this section shall not affect the authority of the PBO to 
     implement a demonstration project subject to chapter 47 of 
     title 5, United States Code, and as provided in subparagraph 
     (B).
       ``(B) Application of title 5.--In applying section 4703 of 
     title 5, United States Code, to a project described in 
     subparagraph (A)--
       ``(i) section 4703(b)(1) shall be deemed to read as 
     follows:
       `` `(1) develop a plan for such project which describes its 
     purpose, the employees to be covered, the project itself, its 
     anticipated outcomes, and the method of evaluating the 
     project;';
       ``(ii) section 4703(b)(3) shall not apply;
       ``(iii) the 180-day notification period in section 
     4703(b)(4) shall be deemed to be a 30-day notification 
     period;
       ``(iv) section 4703(b)(6) shall be deemed to read as 
     follows:
       `` `(6) provide each House of Congress with the final 
     version of the plan.';
       ``(v) section 4703(c)(1) shall be deemed to read as 
     follows:
       `` `(1) subchapter V of chapter 63 or subpart G of part III 
     of this title;';
       ``(vi) section 4703(d) shall not apply; and
       ``(vii) section 4703(f) shall not apply, and, in lieu 
     thereof, paragraph (3) of this subsection shall apply as 
     though the demonstration project were a flexibility authority 
     provided under this subsection.
       ``(b) Performance Management.--
       ``(1) In general.--The PBO shall establish a performance 
     management system that--
       ``(A) maintains individual accountability by--
       ``(i) establishing 1 or more retention standards for each 
     employee related to the work of the employee and expressed in 
     terms of individual performance, and communicating such 
     retention standards to employees;
       ``(ii) making periodic determinations of whether each 
     employee meets or does not meet the employee's established 
     retention standards; and
       ``(iii) taking actions, in accordance with applicable laws 
     and regulations, with respect to any employee whose 
     performance does not meet established retention standards, 
     including denying any increase in basic pay, promotions, and 
     credit for performance under section 3502 of title 5, United 
     States Code, and taking 1 or more of the following actions:

       ``(I) Reassignment;
       ``(II) An action under chapter 43 or 75 of title 5, United 
     States Code; or
       ``(III) Any other appropriate action to resolve the 
     performance problem; and

       ``(B) strengthens its effectiveness by providing for--
       ``(i) establishing goals or objectives for individual, 
     group, or organizational performance (or any combination 
     thereof), consistent with the annual performance agreement 
     described in section 499(f)(2) and PBO performance planning 
     procedures, including those established under the Government 
     Performance and Results Act of 1993, and communicating such 
     goals or objectives to employees;
       ``(ii) using such goals and objectives to make performance 
     distinctions among employees or groups of employees; and
       ``(iii) using performance assessments as a basis for 
     granting employee awards, adjusting an employee's rate of 
     basic pay, and other appropriate personnel actions, in 
     accordance with applicable provisions or law and regulation.

[[Page S7771]]

       ``(2) Performance.--
       ``(A) Assessment.--For purposes of paragraph (1)(B), the 
     term `performance assessment' means a determination of 
     whether or not retention standards established under 
     paragraph (1)(A)(i) are met, and any additional performance 
     determination made on the basis of performance goals and 
     objectives established under paragraph (1)(B)(i).
       ``(B) Unacceptable performance.--For purposes of title 5, 
     United States Code, the term `unacceptable performance' with 
     respect to an employee of the PBO means performance of the 
     employee which fails to meet a retention standard established 
     under paragraph (1)(A)(i).
       ``(3) Awards program.--
       ``(A) In general.--The PBO may establish an awards program 
     designed to provide incentives for and recognition of 
     organizational, group, and individual achievements by 
     providing for granting awards to employees who, as 
     individuals or members of a group, contribute to meeting the 
     performance goals and objectives established under this part 
     by such means as a superior individual or group 
     accomplishment, a documented productivity gain, or sustained 
     superior performance.
       ``(B) Limitation.--Notwithstanding section 4502(b) of title 
     5, United States Code, the PBO may grant a cash award in an 
     amount not exceeding $25,000, with the approval of the Chief 
     Operating Officer.
       ``(c) Classification and Pay Flexibilities.--
       ``(1) In general.--
       ``(A) Definition.--For purposes of this section, the term 
     `broad-banded system' means a system for grouping positions 
     for pay, job evaluation, and other purposes that is different 
     from the system established under chapter 51 and subchapter 
     III of chapter 53 of title 5, United States Code, as a result 
     of combining grades and related ranges of rates of pay in 1 
     or more occupational series.
       ``(B) Establishment.--The PBO may, subject to criteria to 
     be prescribed by the Office of Personnel Management, 
     establish 1 or more broad-banded systems covering all or any 
     portion of its workforce. The Office may require the PBO to 
     submit to the Office such information relating to its broad-
     banded systems as the Office may require. Laws and 
     regulations pertaining to General Schedule employees (other 
     than chapter 52 and subchapter II of chapter 53 of title 5, 
     United States Code) shall continue to be applicable to 
     employees under a broad-banded system.
       ``(C) Criteria.--The criteria to be prescribed by the 
     Office of Personnel Management shall, at a minimum--
       ``(i) ensure that the structure of any broad-banded system 
     maintains, through linkage to the General Schedule, the 
     principle of equal pay for substantially equal work;
       ``(ii) establish the minimum and maximum number of grades 
     that may be combined into pay bands;
       ``(iii) establish requirements for adjusting the pay of an 
     employee within a pay band;
       ``(iv) establish requirements for setting the pay of a 
     supervisory employee whose position is in a pay band or who 
     supervises employees whose positions are in pay bands; and
       ``(v) establish requirements and methodologies for setting 
     the pay of an employee upon conversion to a broad-banded 
     system, initial appointment, change of position or type of 
     appointment (including promotion, demotion, transfer, 
     reassignment, reinstatement, placement in another pay band, 
     or movement to a different geographic location), and movement 
     between a broad-banded system and another pay system.
       ``(2) Alternative job evaluation systems flexibilities.--
       ``(A) In general.--With the approval of the Office of 
     Personnel Management in accordance with subsection (a)(4)(B), 
     the PBO may establish 1 or more alternative job evaluation 
     systems that include any positions or groups of positions 
     that the PBO determines, for reasons of effective 
     administration--
       ``(i) should not be classified under chapter 51 of title 5, 
     United States Code, or paid under the General Schedule;
       ``(ii) should not be classified or paid under subchapter IV 
     of chapter 53 of such title; or
       ``(iii) should not be paid under section 5376 of such 
     title.
       ``(B) Pay.--
       ``(i) General limitation.--An alternative job evaluation 
     system established under this section that includes positions 
     described in clause (i) or (ii), or both, of subparagraph (A) 
     may not provide a rate of basic pay for any employee in 
     excess of the maximum rate of pay under the General Schedule.
       ``(ii) Specific limitation.--An alternative job evaluation 
     system established under this section that includes positions 
     described in clause (iii) of subparagraph (A) may not provide 
     a rate of basic pay for any employee in excess of the annual 
     rate of basic pay of the Chief Operating Officer under the 
     first sentence of section 499(f)(3).
       ``(C) Implementation.--An alternative job evaluation system 
     established under this section shall be implemented in such a 
     way as to ensure the maintenance of the principle of equal 
     pay for substantially equal work.
       ``(D) Applicability of laws.--Except as otherwise provided 
     under this part, employees under an alternative job 
     evaluation system shall continue to be subject to the laws 
     and regulations covering employees under the pay system that 
     would otherwise apply to them. If the alternative job 
     evaluation system combines employees from different pay 
     systems into a single system, the plan submitted under 
     subsection (a)(4)(B) shall address the applicability of the 
     laws and regulations for the different pay systems.
       ``(d) Staffing Flexibilities.--
       ``(1) Appointment.--
       ``(A) Conditions.--Except as otherwise provided under this 
     subsection, an employee of the PBO may be selected for a 
     permanent appointment in the competitive service in the PBO 
     through internal competitive promotion procedures if--
       ``(i) the employee has completed, in the competitive 
     service, 2 years of current continuous service under a term 
     appointment or any combination of term appointments;
       ``(ii) such term appointment or appointments were made 
     under competitive procedures prescribed for permanent 
     appointments;
       ``(iii) the employee's performance under such term 
     appointment or appointments met established retention 
     standards; and
       ``(iv) the vacancy announcement for the term appointment 
     from which the conversion is made stated that there was a 
     potential for subsequent conversion to a permanent 
     appointment.
       ``(B) Similar appointment.--An appointment under this 
     section may be made only to a position in the same line of 
     work as a position to which the employee received a term 
     appointment under competitive procedures.
       ``(2) Category rating systems.--
       ``(A) In general.--Notwithstanding subchapter I of chapter 
     33 of title 5, United States Code, the PBO may establish 
     category rating systems for evaluating job applicants for 
     positions in the competitive service. Qualified candidates 
     under such rating systems shall be divided into 2 or more 
     quality categories on the basis of relative degrees of merit, 
     rather than assigned individual numerical ratings. Each 
     applicant who meets the minimum qualification requirements 
     for the position to be filled shall be assigned to an 
     appropriate category based on an evaluation of the 
     applicant's knowledge, skills, and abilities relative to 
     those needed for successful performance in the position to be 
     filled.
       ``(B) Preference eligibles.--Within each quality category 
     established under subparagraph (A), preference eligibles 
     shall be listed ahead of individuals who are not preference 
     eligibles. For other than scientific and professional 
     positions at or higher than level GS-9 (or equivalent), 
     preference eligibles who have a compensable service-connected 
     disability of 10 percent or more, and who meet the minimum 
     qualification standards, shall be listed in the highest 
     quality category.
       ``(C) Selection.--An appointing authority may select any 
     applicant from the highest quality category or, if fewer than 
     3 candidates have been assigned to the highest quality 
     category, from a merged category consisting of the highest 
     and second highest quality categories. Notwithstanding the 
     preceding sentence, the appointing authority may not pass 
     over a preference eligible in the same or higher category 
     from which selection is made, unless the requirements of 
     section 3317(b) or 3318(b) of title 5, United States Code, as 
     applicable, are satisfied.
       ``(3) Excepted service.--The Chief Operating Officer may 
     appoint, without regard to the provisions of title 5, United 
     States Code, governing appointments in the competitive 
     service, not more than 25 technical and professional 
     employees to administer the functions of the PBO. These 
     employees 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.
       ``(4) Rule of construction.--Notwithstanding paragraphs (1) 
     through (3), no provision of this subsection exempts the PBO 
     from--
       ``(A) any employment priorities established under direction 
     of the President for the placement of surplus or displaced 
     employees; or
       ``(B) its obligations under any court order or decree 
     relating to the employment practices of the PBO or the 
     Department of Education.

     ``SEC. 499B. PROCUREMENT FLEXIBILITY.

       ``(a) Procurement Authority.--Subject to the authority, 
     direction, and control of the Secretary, the Chief Operating 
     Officer of a PBO may exercise the authority of the Secretary 
     to procure property and services in the performance of 
     functions managed by the PBO. For the purposes of this 
     section, the term `PBO' includes the Chief Operating Officer 
     of the PBO and any employee of the PBO exercising procurement 
     authority under the preceding sentence.
       ``(b) Applicability of Procurement Laws.--Except to the 
     extent otherwise authorized in this section, a PBO shall 
     comply with all laws and regulations that are generally 
     applicable to procurements of property and services by the 
     head of an executive agency of the Federal Government.
       ``(c) Use of Mutual Benefit Corporation.--The PBO may 
     acquire services related to the title IV delivery system from 
     any mutual benefit corporation that has the capability and 
     capacity to meet the requirements for the system, as 
     determined by the Chief Operating Officer of the PBO.
       ``(d) Two-Phase Source-Selection Procedures.--
       ``(1) In general.--The PBO may use a two-phase process for 
     selecting a source for a procurement of property or services.
       ``(2) First phase.--The procedures for the first phase of 
     the process for a procurement are as follows:

[[Page S7772]]

       ``(A) Publication of notice.--The contracting officer for 
     the procurement shall publish a notice of the procurement in 
     accordance with section 18 of the Office of Federal 
     Procurement Policy Act (41 U.S.C. 416) and subsections (e), 
     (f), and (g) of section 8 of the Small Business Act (15 
     U.S.C. 637), except that the notice shall include only the 
     following:
       ``(i) A general description of the scope or purpose of the 
     procurement that provides sufficient information on the scope 
     or purpose for sources to make informed business decisions 
     regarding whether to participate in the procurement.
       ``(ii) A description of the basis on which potential 
     sources are to be selected to submit offers in the second 
     phase.
       ``(iii) A description of the information that is to be 
     required under subparagraph (B).
       ``(iv) Any additional information that the contracting 
     officer determines appropriate.
       ``(B) Information submitted by offerors.--Each offeror for 
     the procurement shall submit basic information, such as 
     information on the offeror's qualifications, the proposed 
     conceptual approach, costs likely to be associated with the 
     proposed conceptual approach, and past performance of the 
     offeror on Federal Government contracts, together with any 
     additional information that is requested by the contracting 
     officer.
       ``(C) Selection for second phase.--The contracting officer 
     shall select the offerors that are to be eligible to 
     participate in the second phase of the process. The 
     contracting officer shall limit the number of the selected 
     offerors to the number of sources that the contracting 
     officer determines is appropriate and in the best interests 
     of the Federal Government.
       ``(3) Second phase.--
       ``(A) In general.--The contracting officer shall conduct 
     the second phase of the source selection process in 
     accordance with sections 303A and 303B of the Federal 
     Property and Administrative Services Act of 1949 (41 U.S.C. 
     253a and 253b).
       ``(B) Eligible participants.--Only the sources selected in 
     the first phase of the process shall be eligible to 
     participate in the second phase.
       ``(C) Single or multiple procurements.--The second phase 
     may include a single procurement or multiple procurements 
     within the scope, or for the purpose, described in the notice 
     pursuant to paragraph (2)(A).
       ``(4) Procedures considered competitive.--The procedures 
     used for selecting a source for a procurement under this 
     subsection shall be considered competitive procedures for all 
     purposes.
       ``(e) Use of Simplified Procedures for Commercial Items.--
     Whenever the PBO anticipates that commercial items will be 
     offered for a procurement, the PBO may use (consistent with 
     the special rules for commercial items) the special 
     simplified procedures for the procurement without regard to--
       ``(1) any dollar limitation otherwise applicable to the use 
     of those procedures; and
       ``(2) the expiration of the authority to use special 
     simplified procedures under section 4202(e) of the Clinger-
     Cohen Act of 1996 (110 Stat. 654; 10 U.S.C. 2304 note).
       ``(f) Flexible Wait Periods and Deadlines for Submission of 
     Offers of Noncommercial Items.--
       ``(1) Authority.--In carrying out a procurement, the PBO 
     may--
       ``(A) apply a shorter waiting period for the issuance of a 
     solicitation after the publication of a notice under section 
     18 Office of Federal Procurement Policy Act (41 U.S.C. 416) 
     than is required under subsection (a)(3)(A) of such section; 
     and
       ``(B) notwithstanding subsection (a)(3) of such section, 
     establish any deadline for the submission of bids or 
     proposals that affords potential offerors a reasonable 
     opportunity to respond to the solicitation.
       ``(2) Inapplicability to commercial items.--Paragraph (1) 
     does not apply to a procurement of a commercial item.
       ``(3) Consistency with applicable international 
     agreements.--If an international agreement is applicable to 
     the procurement, any exercise of authority under paragraph 
     (1) shall be consistent with the international agreement.
       ``(g) Modular Contracting.--
       ``(1) In general.--The PBO may satisfy the requirements of 
     the PBO for a system incrementally by carrying out successive 
     procurements of modules of the system. In doing so, the PBO 
     may use procedures authorized under this subsection to 
     procure any such module after the first module.
       ``(2) Utility requirement.--A module may not be procured 
     for a system under this subsection unless the module is 
     useful independently of the other modules or useful in 
     combination with another module previously procured for the 
     system.
       ``(3) Conditions for use of authority.--The PBO may use 
     procedures authorized under paragraph (4) for the procurement 
     of an additional module for a system if--
       ``(A) competitive procedures were used for awarding the 
     contract for the procurement of the first module for the 
     system; and
       ``(B) the solicitation for the first module included--
       ``(i) a general description of the entire system that was 
     sufficient to provide potential offerors with reasonable 
     notice of the general scope of future modules;
       ``(ii) other information sufficient for potential offerors 
     to make informed business judgments regarding whether to 
     submit offers for the contract for the first module; and
       ``(iii) a statement that procedures authorized under this 
     subsection could be used for awarding subsequent contracts 
     for the procurement of additional modules for the system.
       ``(4) Procedures.--If the procurement of the first module 
     for a system meets the requirements set forth in paragraph 
     (3), the PBO may award a contract for the procurement of an 
     additional module for the system using any of the following 
     procedures:
       ``(A) Sole source.--Award of the contract on a sole-source 
     basis to a contractor who was awarded a contract for a module 
     previously procured for the system under competitive 
     procedures or procedures authorized under subparagraph (B).
       ``(B) Adequate competition.--Award of the contract on the 
     basis of offers made by--
       ``(i) a contractor who was awarded a contract for a module 
     previously procured for the system after having been selected 
     for award of the contract under this subparagraph or other 
     competitive procedures; and
       ``(ii) at least one other offeror that submitted an offer 
     for a module previously procured for the system and is 
     expected, on the basis of the offer for the previously 
     procured module, to submit a competitive offer for the 
     additional module.
       ``(C) Other.--Award of the contract under any other 
     procedure authorized by law.
       ``(5) Notice requirement.--
       ``(A) Publication.--Not less than 30 days before issuing a 
     solicitation for offers for a contract for a module for a 
     system under procedures authorized under subparagraph (A) or 
     (B) of paragraph (4), the PBO shall publish in the Commerce 
     Business Daily a notice of the intent to use such procedures 
     to enter into the contract.
       ``(B) Exception.--Publication of a notice is not required 
     under this paragraph with respect to a use of procedures 
     authorized under paragraph (4) if the contractor referred to 
     in that subparagraph (who is to be solicited to submit an 
     offer) has previously provided a module for the system under 
     a contract that contained cost, schedule, and performance 
     goals and the contractor met those goals.
       ``(C) Content of notice.--A notice published under 
     subparagraph (A) with respect to a use of procedures 
     described in paragraph (4) shall contain the information 
     required under section 18(b) of the Office of Federal 
     Procurement Policy Act (41 U.S.C. 416(b)), other than 
     paragraph (4) of such section, and shall invite the 
     submission of any assertion that the use of the procedures 
     for the procurement involved is not in the best interest of 
     the Federal Government together with information supporting 
     the assertion.
       ``(6) Documentation.--The basis for an award of a contract 
     under this subsection shall be documented. However, a 
     justification pursuant to section 303(f) of the Federal 
     Property and Administrative Services Act of 1949 (41 U.S.C. 
     253(f)) or section 8(h) of the Small Business Act (15 U.S.C. 
     637(h)) is not required.
       ``(7) Simplified source-selection procedures.--The PBO may 
     award a contract under any other simplified procedures 
     prescribed by the PBO for the selection of sources for the 
     procurement of modules for a system, after the first module, 
     that are not to be procured under a contract awarded on a 
     sole-source basis.
       ``(h) Use of Simplified Procedures for Small Business Set-
     Asides for Services Other Than Commercial Items.--
       ``(1) Authority.--The PBO may use special simplified 
     procedures for a procurement of services that are not 
     commercial items if--
       ``(A) the procurement is in an amount not greater than 
     $1,000,000;
       ``(B) the procurement is conducted as a small business set-
     aside pursuant to section 15(a) of the Small Business Act (15 
     U.S.C. 644(a)); and
       ``(C) the price charged for supplies associated with the 
     services procured are items of supply expected to be less 
     than 20 percent of the total contract price.
       ``(2) Inapplicability to certain procurements.--The 
     authority set forth in paragraph (1) may not be used for--
       ``(A) an award of a contract on a sole-source basis; or
       ``(B) a contract for construction.
       ``(i) Guidance for Use of Authority.--
       ``(1) Issuance by pbo.--The Chief Operating Officer of the 
     PBO, in consultation with the Administrator for Federal 
     Procurement Policy, shall issue guidance for the use by PBO 
     personnel of the authority provided in this section.
       ``(2) Guidance from ofpp.--As part of the consultation 
     required under paragraph (1), the Administrator for Federal 
     Procurement Policy shall provide the PBO with guidance that 
     is designed to ensure, to the maximum extent practicable, 
     that the authority under this section is exercised by the PBO 
     in a manner that is consistent with the exercise of the 
     authority by the heads of the other performance-based 
     organizations.
       ``(3) Compliance with ofpp guidance.--The head of the PBO 
     shall ensure that the procurements of the PBO under this 
     section are carried out in a manner that is consistent with 
     the guidance provided for the PBO under paragraph (2).
       ``(j) Limitation on Multiagency Contracting.--No department 
     or agency of the Federal Government may purchase property or 
     services under contracts entered into or administered by a 
     PBO under this section unless the purchase is approved in 
     advance

[[Page S7773]]

     by the senior procurement official of that department or 
     agency who is responsible for purchasing by the department or 
     agency.
       ``(k) Laws Not Affected.--Nothing in this section shall be 
     construed to waive laws for the enforcement of civil rights 
     or for the establishment and enforcement of labor standards 
     that are applicable to contracts of the Federal Government.
       ``(l) Definitions.--In this section:
       ``(1) Commercial item.--The term `commercial item' has the 
     meaning given the term in section 4(12) of the Office of 
     Federal Procurement Policy Act (41 U.S.C. 403(12)).
       ``(2) Competitive procedures.--The term `competitive 
     procedures' has the meaning given the term in section 309(b) 
     of the Federal Property and Administrative Services Act of 
     1949 (41 U.S.C. 259(b)).
       ``(3) Mutual benefit corporation.--The term `mutual benefit 
     corporation' means a corporation organized and chartered as a 
     mutual benefit corporation under the laws of any State 
     governing the incorporation of nonprofit corporations.
       ``(4) Sole-source basis.--The term `sole-source basis', 
     with respect to an award of a contract, means that the 
     contract is awarded to a source after soliciting an offer or 
     offers from, and negotiating with, only that source.
       ``(5) Special rules for commercial items.--The term 
     `special rules for commercial items' means the regulations 
     set forth in the Federal Acquisition Regulation pursuant to 
     section 303(g)(1) of the Federal Property and Administrative 
     Services Act of 1949 (41 U.S.C. 253(g)(1)) and section 31 of 
     the Office of Federal Procurement Policy Act (41 U.S.C. 427).
       ``(6) Special simplified procedures.--The term `special 
     simplified procedures' means the procedures applicable to 
     purchases of property and services for amounts not greater 
     than the simplified acquisition threshold that are set forth 
     in the Federal Acquisition Regulation pursuant to section 
     303(g)(1)(B) of the Federal Property and Administrative 
     Services Act of 1949 (41 U.S.C. 253(g)(1)(A)) and section 
     31(a)(1) of the Office of Federal Procurement Policy Act (41 
     U.S.C. 427(a)(1)).''.

     SEC. 496. STUDENT LOAN OMBUDSMAN OFFICE.

       Title IV (20 U.S.C. 1070 et seq.) is amended by adding 
     after part I (as added by section 495) the following:

                ``PART J--STUDENT LOAN OMBUDSMAN OFFICE

     ``SEC. 499F. STUDENT LOAN OMBUDSMAN OFFICE.

       ``(a) Office Established.--The Secretary shall establish, 
     within the Department, a Student Loan Ombudsman Office.
       ``(b) Independence of Student Loan Ombudsman Office.--In 
     the exercise of its functions, powers, and duties, the 
     Student Loan Ombudsman Office shall be independent of the 
     Secretary and the other offices and officers of the 
     Department.
       ``(c) Student Loan Ombudsman.--The Student Loan Ombudsman 
     Office shall be managed by the Student Loan Ombudsman, who 
     shall be appointed by the Secretary to a 5-year term. The 
     Secretary shall appoint the Student Loan Ombudsman not later 
     than 6 months after the date of enactment of the Higher 
     Education Amendments of 1998. The appointment shall be made 
     without regard to political affiliation or activity. The 
     Secretary may reappoint the Student Loan Ombudsman to 
     subsequent terms.
       ``(d) Duties and Responsibilities.--The Student Loan 
     Ombudsman Office shall--
       ``(1) directly assist student loan borrowers with loans 
     made, insured, or guaranteed under this title;
       ``(2) ensure that student loan borrower complaints and 
     requests for assistance are promptly resolved and responded 
     to by the Secretary, contractors or servicers, guaranty 
     agencies, lenders, and other loan holders, or the agents of 
     such individuals or entities;
       ``(3) investigate and resolve complaints of student loan 
     borrowers;
       ``(4) provide information on the experience of borrowers 
     with respect to existing and proposed statutes, regulations, 
     and Department directives and actions;
       ``(5) track and analyze complaint data by loan program, 
     institution, lender, guaranty agency, and servicer, as 
     applicable; and
       ``(6) report annually to the appropriate committees of 
     Congress, which report shall be made available to the public, 
     regarding the responsibilities and performance of the Student 
     Loan Ombudsman Office, including an analysis of complaint 
     data described in paragraph (5).
       ``(e) Student Loan Ombudsman Office Access to Records.--The 
     Student Loan Ombudsman Office shall, upon presentation of a 
     signed release form from a student loan borrower, have full 
     and complete access to all records regarding the borrower's 
     loan and education program that are necessary to carry out 
     the Student Loan Ombudsman's duties. The Student Loan 
     Ombudsman shall maintain personal identifying information in 
     the strictest confidence and use such information only for 
     the purpose of assisting the borrower in pursuing resolution 
     of the individual's complaint, unless written authorization 
     is obtained to use such information for other specified 
     purposes.
       ``(f) Accessibility for Borrowers.--The Student Loan 
     Ombudsman Office shall maintain a toll-free telephone number 
     and Internet web site for receiving borrower complaints.
       ``(g) Notification to Borrowers.--The Student Loan 
     Ombudsman Office shall encourage maximum outreach to 
     borrowers by all appropriate parties, including the 
     Department, Congress, lenders, institutions of higher 
     education, loan servicers, and guaranty agencies, to provide 
     ongoing notice, to student loan borrowers, of the Student 
     Loan Ombudsman Office. Such notice, including the toll-free 
     telephone number, at a minimum, shall be given to borrowers 
     in publications and on Internet web sites.
       ``(h) Conflict of Interest.--Employees of the Student Loan 
     Ombudsman Office shall not be employees or officers of any 
     participant in the student loan programs under this Act 
     (other than the Department), including any lender, guaranty 
     agency, proprietary institution of higher education, 
     postsecondary vocational institution, institution of higher 
     education, loan servicer, collections agency, or trade 
     association or education advocacy group representing any such 
     entity. The Student Loan Ombudsman Office shall avoid all 
     conflicts of interest and appearances of impropriety.
       ``(i) Supplement and Not Supplant.--The remedies and 
     procedures of the Student Loan Ombudsman Office shall 
     supplement and not supplant any other consumer remedies and 
     procedures available to borrowers.
       ``(j) Funding.--In each fiscal year, not less than 
     $2,000,000 of the amount appropriated for the fiscal year for 
     salaries and expenses at the Department shall be available to 
     carry out this section.''.
       On page 605, line 3, strike ``C, and D'' and insert ``D, 
     and E''.
       On page 605, line 6, strike ``511 through 515'' and insert 
     ``501 through 505''.
       On page 605, lines 8 and 9, strike ``521 through 527'' and 
     insert ``511 through 517''.
       On page 605, line 19, strike ``514(a)'' and insert 
     ``504(a)''.
       On page 605, line 21, strike ``513'' and insert ``503''.
       On page 606, line 1, strike ``524(b)(7)'' and insert 
     ``514(b)(7)''.
       On page 606, line 3, strike ``525'' and insert ``515''.
       On page 606, line 4, strike ``525(c)'' and insert 
     ``515(c)''.
       On page 606, line 7, strike ``526(a)'' and insert 
     ``516(a)''.
       On page 606, line 9, strike ``524(b)(2)'' and insert 
     ``514(b)(2)''.
       On page 607, line 17, strike ``and''.
       On page 607, between lines 20 and 21, insert the following:
       ``(iii) encourage talented individuals from 
     underrepresented groups to pursue faculty careers in higher 
     education; and
       On page 607, line 26, strike ``511'' and insert ``501''.
       On page 609, line 8, strike ``512'' and insert ``502''.
       On page 610, line 14, strike ``513'' and insert ``503''.
       On page 611, line 16, strike ``515'' and insert ``505''.
       On page 611, line 23, strike ``523'' and insert ``513''.
       On page 612, line 16, strike ``524(b)'' and insert 
     ``514(b)''.
       On page 613, line 11, strike ``525'' and insert ``515''.
       On page 613, line 22, strike ``526(a)(1)'' and insert 
     ``516(a)(1)''.
       On page 614, line 15, strike ``527'' and insert ``517''.
       On page 614, between lines 17 and 18, insert the following:

                  PART C--FACULTY DEVELOPMENT PROGRAM

     SEC. 531. FACULTY DEVELOPMENT PROGRAM REAUTHORIZED.

       Title V (20 U.S.C. 1101 et seq.) is amended further by 
     inserting after part B (as redesignated by section 501(a)(3)) 
     the following:

               ``PART C--FACULTY DEVELOPMENT FELLOWSHIPS

     ``SEC. 521. FACULTY DEVELOPMENT FELLOWSHIPS AUTHORIZED.

       ``(a) In General.--The Secretary shall make grants to 
     institutions of higher education, or consortia of such 
     institutions, to enable such institutions to award 
     fellowships to talented graduate students in order to 
     increase the access of individuals from underrepresented 
     groups to pursue graduate study, and to teach in institutions 
     of higher education.
       ``(b) Underrepresented Groups Defined.--For the purpose of 
     this part, the term `underrepresented groups' means African 
     Americans, Hispanic Americans, Asian Americans, Native 
     Americans, Pacific Islanders, Native Hawaiians, and 
     individuals who are pursuing graduate study in academic 
     disciplines in which the individuals are underrepresented for 
     the individuals' gender.
       ``(c) Preference.--In making awards under this part, the 
     Secretary shall give preference to applicants with a 
     demonstrated record of--
       ``(1) admitting students from the Ronald E. McNair 
     Postbaccalaureate Achievement Program or a program with a 
     similar purpose;
       ``(2) graduating individuals from groups underrepresented 
     in graduate education; and
       ``(3) placing the graduates of the institution or 
     consortium in faculty positions in institutions of higher 
     education.
       ``(d) Reporting.--Each institution of higher education or 
     consortium receiving a grant under this section shall, on an 
     annual basis, provide to the Secretary evidence regarding--
       ``(1) the success of the institution in attracting 
     underrepresented students into graduate programs;
       ``(2) graduating the students; and
       ``(3) the success of each graduate in obtaining a faculty 
     position in an institution of higher education.

[[Page S7774]]

       ``(e) Application Required.--
       ``(1) In general.--Each academic department or program of 
     an institution of higher education desiring a grant under 
     this part shall submit an application to the Secretary at 
     such time, in such manner, and containing such information as 
     the Secretary may reasonably require.
       ``(2) Additional assurances.--Each application submitted 
     pursuant to paragraph (1) shall--
       ``(A) provide an assurance that, in the event that funds 
     made available to the academic department or program under 
     this part are insufficient to provide assistance due a 
     student under a commitment entered into between the academic 
     department and the student, the academic department or 
     program will endeavor, from funds available to the department 
     or program, to fulfill the commitment made to the student; 
     and
       ``(B) contain such other assurances as the Secretary may 
     reasonably require.
       ``(3) Approval of applications.--The Secretary shall 
     prescribe criteria for the approval of applications submitted 
     under paragraph (1).
       ``(f) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this part 
     $30,000,000 for fiscal year 1999 and such sums as may be 
     necessary for each of the 4 succeeding fiscal years.''.
       On page 614, line 18, strike ``PART C'' and insert ``PART 
     D''.
       On page 614, line 19, strike ``531'' and insert ``541''.
       On page 615, line 5, strike ``PART D'' and insert ``PART 
     E''.
       On page 615, line 7, strike ``541'' and insert ``551''.
       On page 617, line 7, strike ``PART E'' and insert ``PART 
     F''.
       On page 617, line 10, strike ``551'' and insert ``561''.
       On page 617, line 15, strike ``PART E'' and insert ``PART 
     F''.
       On page 620, line 19, strike ``PART F'' and insert ``PART 
     G''.
       On page 620, between lines 19 and 20, insert the following:

     SEC. 580. FINDINGS.

       Congress makes the following findings:
       (1) Hispanic Americans are at high risk of not enrolling or 
     graduating from institutions of higher education.
       (2) Disparities between the enrollment of non-Hispanic 
     white students and Hispanic students in postsecondary 
     education are increasing. Between 1973 and 1994, enrollment 
     of white secondary school graduates in 4-year institutions of 
     higher education increased at a rate 2 times higher than that 
     of Hispanic secondary school graduates.
       (3) Despite significant limitations in resources, Hispanic-
     serving institutions provide a significant proportion of 
     postsecondary opportunities for Hispanic students.
       (4) Relative to other institutions of higher education, 
     Hispanic-serving institutions are underfunded. Such 
     institutions receive significantly less in State and local 
     funding, per full-time equivalent student, than other 
     institutions of higher education.
       (5) Hispanic-serving institutions are succeeding in 
     educating Hispanic students despite significant resource 
     problems that--
       (A) limit the ability of such institutions to expand and 
     improve the academic programs of such institutions; and
       (B) could imperil the financial and administrative 
     stability of such institutions.
       (6) There is a national interest in remedying the 
     disparities described in paragraphs (2) and (4) and ensuring 
     that Hispanic students have an equal opportunity to pursue 
     postsecondary opportunities.
       On page 626, line 11, strike ``PART G'' and insert ``PART 
     H''.
       On page 626, lines 12 and 13, strike ``PARTS A AND B'' and 
     insert ``PARTS A, B, AND C''.
       On page 626, line 17, strike ``parts A and B'' and insert 
     ``parts A, B, and C''.
       On page 626, line 25, strike ``parts A and B'' and insert 
     ``parts A, B, and C''.
       On page 627, line 10, strike ``513(b)'' and insert 
     ``503(b)''.
       On page 627, line 11, strike ``526'' and insert ``516''.
       On page 627, lines 16 and 17, strike ``part A or B'' and 
     insert ``part A, B, or C''.
       On page 626, strike line 11, and insert the following:

   ``PART G--THURGOOD MARSHALL LEGAL EDUCATIONAL OPPORTUNITY PROGRAM

     ``SEC. 588. LEGAL EDUCATIONAL OPPORTUNITY PROGRAM.

       ``(a) Program Authority.--The Secretary shall carry out a 
     program to be known as the `Thurgood Marshall Legal 
     Educational Opportunity Program' designed to provide low-
     income, minority, or disadvantaged college students with the 
     information, preparation, and financial assistance to gain 
     access to and complete law school study.
       ``(b) Eligibility.--A college student is eligible for 
     assistance under this section if the student is--
       ``(1) from a low-income family;
       ``(2) a minority; or
       ``(3) from an economically or otherwise disadvantaged 
     background.
       ``(c) Contract or Grant Authorized.--The Secretary is 
     authorized to enter into a contract with, or make a grant to, 
     the Council on Legal Education Opportunity, for a period of 
     not less than 5 years--
       ``(1) to identify college students who are from low-income 
     families, are minorities, or are from disadvantaged 
     backgrounds described in subsection (b)(3);
       ``(2) to prepare such students for study at accredited law 
     schools;
       ``(3) to assist such students to select the appropriate law 
     school, make application for entry into law school, and 
     receive financial assistance for such study;
       ``(4) to provide support services to such students who are 
     first-year law students to improve retention and success in 
     law school studies; and
       ``(5) to motivate and prepare such students with respect to 
     law school studies and practice in low-income communities.
       ``(d) Services Provided.--In carrying out the purposes 
     described in subsection (c), the contract or grant shall 
     provide for the delivery of services through prelaw 
     information resource centers, summer institutes, midyear 
     seminars, and other educational activities, conducted under 
     this section. Such services may include--
       ``(1) information and counseling regarding--
       ``(A) accredited law school academic programs, especially 
     tuition, fees, and admission requirements;
       ``(B) course work offered and required for graduation;
       ``(C) faculty specialties and areas of legal emphasis; and
       ``(D) undergraduate preparatory courses and curriculum 
     selection;
       ``(2) tutoring and academic counseling, including 
     assistance in preparing for bar examinations;
       ``(3) prelaw mentoring programs, involving law school 
     faculty, members of State and local bar associations, and 
     retired and sitting judges, justices, and magistrates;
       ``(4) assistance in identifying preparatory courses and 
     material for the law school aptitude or admissions tests;
       ``(5) summer institutes for Thurgood Marshall Fellows that 
     expose the Fellows to a rigorous curriculum that emphasizes 
     abstract thinking, legal analysis, research, writing, and 
     examination techniques; and
       ``(6) midyear seminars and other educational activities 
     that are designed to reinforce reading, writing, and studying 
     skills of Thurgood Marshall Fellows.
       ``(e) Duration of the Provision of Services.--The services 
     described in subsection (d) may be provided--
       ``(1) prior to the period of law school study;
       ``(2) during the period of law school study; and
       ``(3) during the period following law school study and 
     prior to taking a bar examination.
       ``(f) Subcontracts and Subgrants.--For the purposes of 
     planning, developing, or delivering one or more of the 
     services described in subsection (d), the Council on Legal 
     Education Opportunity shall enter into subcontracts with, and 
     make subgrants to, institutions of higher education, law 
     schools, public and private agencies and organizations, and 
     combinations of such institutions, schools, agencies, and 
     organizations.
       ``(g) Stipends.--The Secretary shall annually establish the 
     maximum stipend to be paid (including allowances for 
     participant travel and for the travel of the dependents of 
     the participant) to Thurgood Marshall Fellows for the period 
     of participation in summer institutes and midyear seminars. A 
     Fellow may be eligible for such a stipend only if the Fellow 
     maintains satisfactory academic progress toward the Juris 
     Doctor or Bachelor of Laws degree, as determined by the 
     respective institutions.
       ``(h) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $5,000,000 for fiscal year 1999 and each of the 4 succeeding 
     fiscal years.

                      ``PART H--GENERAL PROVISIONS

       On page 651, between lines 17 and 18, insert the following:

     SEC. 713. NAVAJO COMMUNITY COLLEGE ACT.

       Section 5(a)(1) of the Navajo Community College Act (25 
     U.S.C. 640c-1(a)(1)) is amended by striking ``1993'' and 
     inserting ``1999''.
       On page 657, line 8, insert ``or member'' after 
     ``division''.
       On page 657, line 9, strike ``the'' and insert ``a''.
       On page 661, line 6, strike ``the'' and insert ``a''.
       On page 661, line 11, strike ``the'' and insert ``a''.
       On page 661, line 20, strike ``the'' and insert ``a''.
       On page 662, line 5, strike ``the'' and insert ``a''.
       On page 670, between lines 7 and 8, insert the following:

                 PART F--WEB-BASED EDUCATION COMMISSION

     SEC. 753. SHORT TITLE; DEFINITIONS.

       (a) In General.--This part may be cited as the ``Web-Based 
     Education Commission Act''.
       (b) Definitions.--In this part:
       (1) Commission.--The term ``Commission'' means the Web-
     Based Education Commission established under section 754.
       (2) Information technology.--The term ``information 
     technology'' has the meaning given that term in section 5002 
     of the Information Technology Management Reform Act of 1996 
     (110 Stat. 679).
       (3) State.--The term ``State'' means each of the several 
     States of the United States and the District of Columbia.

     SEC. 754. ESTABLISHMENT OF WEB-BASED EDUCATION COMMISSION.

       (a) Establishment.--There is established a commission to be 
     known as the Web-Based Education Commission.
       (b) Membership.--

[[Page S7775]]

       (1) Composition.--The Commission shall be composed of 14 
     members, of which--
       (A) 3 members shall be appointed by the President, from 
     among individuals representing the Internet technology 
     industry;
       (B) 3 members shall be appointed by the Secretary, from 
     among individuals with expertise in accreditation, 
     establishing statewide curricula, and establishing 
     information technology networks pertaining to education 
     curricula;
       (C) 2 members shall be appointed by the Majority Leader of 
     the Senate;
       (D) 2 members shall be appointed by the Minority Leader of 
     the Senate;
       (E) 2 members shall be appointed by the Speaker of the 
     House of Representatives; and
       (F) 2 members shall be appointed by the Minority Leader of 
     the House of Representatives.
       (2) Date.--The appointments of the members of the 
     Commission shall be made not later than 45 days after the 
     date of enactment of this Act.
       (c) Period of Appointment; Vacancies.--Members shall be 
     appointed for the life of the Commission. Any vacancy in the 
     Commission shall not affect its powers, but shall be filled 
     in the same manner as the original appointment.
       (d) Initial Meeting.--No later than 30 days after the date 
     on which all members of the Commission have been appointed, 
     the Commission shall hold its first meeting.
       (e) Meetings.--The Commission shall meet at the call of the 
     Chairperson.
       (f) Quorum.--A majority of the members of the Commission 
     shall constitute a quorum, but a lesser number of members may 
     hold hearings.
       (g) Chairperson and Vice Chairperson.--The Commission shall 
     select a chairperson and vice chairperson from among its 
     members.

     SEC. 755. DUTIES OF THE COMMISSION.

       (a) Study.--
       (1) In general.--The Commission shall conduct a thorough 
     study to assess the educational software available in retail 
     markets for secondary and postsecondary students who choose 
     to use such software.
       (2) Public hearings.--As part of the study conducted under 
     this subsection, the Commission shall hold public hearings in 
     each region of the United States concerning the assessment 
     referred to in paragraph (1).
       (3) Existing information.--To the extent practicable, in 
     carrying out the study under this subsection, the Commission 
     shall identify and use existing information related to the 
     assessment referred to in paragraph (1).
       (b) Report.--Not later than 6 months after the first 
     meeting of the Commission, the Commission shall submit a 
     report to the President and Congress that shall contain a 
     detailed statement of the findings and conclusions of the 
     Commission resulting from the study, together with its 
     recommendations--
       (1) for such legislation and administrative actions as the 
     Commission considers to be appropriate; and
       (2) regarding the appropriate Federal role in determining 
     quality educational software products.
       (c) Facilitation of Exchange of Information.--In carrying 
     out the study under subsection (a), the Commission shall, to 
     the extent practicable, facilitate the exchange of 
     information concerning the issues that are the subject of the 
     study among--
       (1) officials of the Federal Government, and State 
     governments and political subdivisions of States; and
       (2) educators from Federal, State, and local institutions 
     of higher education and secondary schools.

     SEC. 756. POWERS OF THE COMMISSION.

       (a) Hearings.--The Commission may hold such hearings, sit 
     and act at such times and places, take such testimony, and 
     receive such evidence as the Commission considers advisable 
     to carry out the purposes of this part.
       (b) Information From Federal Agencies.--The Commission may 
     secure directly from any Federal department or agency such 
     information as the Commission considers necessary to carry 
     out the provisions of this part. Upon request of the 
     Chairperson of the Commission, the head of such department or 
     agency shall furnish such information to the Commission.
       (c) Postal Services.--The Commission may use the United 
     States mails in the same manner and under the same conditions 
     as other departments and agencies of the Federal Government.
       (d) Gifts.--The Commission may accept, use, and dispose of 
     gifts or donations of services or property.

     SEC. 757. COMMISSION PERSONNEL MATTERS.

       (a) Compensation of Members.--Except as provided in 
     subsection (b), each member of the Commission who is not an 
     officer or employee of the Federal Government shall serve 
     without compensation. All members of the Commission who are 
     officers or 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.
       (b) Travel Expenses.--The members of the Commission shall 
     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.
       (c) Staff.--
       (1) In general.--The Chairperson of the Commission may, 
     without regard to the civil service laws and regulations, 
     appoint and terminate an executive director and such other 
     additional personnel as may be necessary to enable the 
     Commission to perform its duties. The employment of an 
     executive director shall be subject to confirmation by the 
     Commission.
       (2) Compensation.--The Chairperson of the Commission may 
     fix the compensation of the executive director and other 
     personnel without regard to the provisions of chapter 51 and 
     subchapter III of chapter 53 of title 5, United States Code, 
     relating to classification of positions and General Schedule 
     pay rates, except that the rate of pay for the executive 
     director and other personnel may not exceed the rate payable 
     for level V of the Executive Schedule under section 5316 of 
     such title.
       (d) Detail of Government Employees.--Any Federal Government 
     employee may be detailed to the Commission without 
     reimbursement, and such detail shall be without interruption 
     or loss of civil service status or privilege.
       (e) 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 that 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.

     SEC. 758. TERMINATION OF THE COMMISSION.

       The Commission shall terminate on the date that is 90 days 
     after the date on which the Commission submits its report 
     under section 755(b).

     SEC. 759. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There are authorized to be appropriated 
     $650,000 for fiscal year 1999 to the Commission to carry out 
     this part.
       (b) Availability.--Any sums appropriated under the 
     authorization contained in this section shall remain 
     available, without fiscal year limitation, until expended.
       On page 686, beginning with line 15, strike all through 
     page 687, line 12, and insert the following:

     SEC. 791. YEAR 2000 REQUIREMENTS AT THE DEPARTMENT OF 
                   EDUCATION.

       In order to ensure that the processing, delivery, and 
     administration of grant, loan, and work assistance provided 
     under title IV of the Higher Education Act of 1965 is not 
     interrupted due to operational problems related to the 
     inability of computer systems to indicate accurately dates 
     after December 31, 1999, the Secretary shall--
       (1) take such actions as are necessary to ensure that all 
     internal and external systems, hardware and data exchange 
     infrastructure administered by the Department of Education 
     that are necessary for the processing, delivery, and 
     administration of the grant, loan, and work assistance are 
     year 2000 compliant, such that there will be no business 
     interruption after December 31, 1999;
       (2) ensure that the Robert T. Stafford Federal Student Loan 
     Program and the William D. Ford Federal Direct Loan Program 
     are equal in level of priority with respect to addressing, 
     and that resources are managed to provide for successful 
     resolution of, the year 2000 computer problem in both 
     programs by December 31, 1999;
       (3) work with institutions of higher education, guaranty 
     agencies, third party servicers, and other persons to ensure 
     successful data exchanges necessary for the processing, 
     delivery, and administration of the grant, loan, and work 
     assistance;
       (4) ensure that the Inspector General of the Department of 
     Education (or an external, independent entity selected by the 
     Inspector General) performs and publishes a risk assessment 
     of the systems and hardware under the Department's 
     management, that has been reviewed by an independent entity, 
     and make such assessment publicly available not later than 60 
     days after the date of enactment of the Higher Education 
     Amendments of 1998;
       (5) not later than June 30, 1999, ensure that the Inspector 
     General (or an external, independent entity selected by the 
     Inspector General) conducts a review of the Department's Year 
     2000 compliance for the processing, delivery, and 
     administration systems and data exchange systems for the 
     grant, loan, and work assistance, and submits a report 
     reflecting the results of that review to the Chairperson of 
     the Committee on Labor and Human Resources of the Senate and 
     the Chairperson of the Committee on Education and the 
     Workforce of the House of Representatives;
       (6) develop a contingency plan to ensure the programs under 
     title IV of the Higher Education Act of 1965 will continue to 
     run uninterrupted in the event of a computer failure after 
     December 31, 1999, which the contingency plan shall include a 
     prioritization of mission critical systems and strategies to 
     allow data partners to transfer data; and
       (7) alert Congress at the earliest possible time if mission 
     critical deadlines will not be met.
       On page 687, after line 12, add the following:

     SEC. 792. GRANTS TO COMBAT VIOLENT CRIMES AGAINST WOMEN ON 
                   CAMPUSES.

       (a) Grants Authorized.--
       (1) In general.--The Attorney General is authorized to make 
     grants to institutions of higher education, for use by 
     consortia consisting of campus personnel, student 
     organizations, campus administrators, security

[[Page S7776]]

     personnel, and regional crisis centers affiliated with the 
     institution, to develop and strengthen effective security and 
     investigation strategies to combat violent crimes against 
     women on campuses, and to develop and strengthen victim 
     services in cases involving violent crimes against women on 
     campuses, which may include partnerships with local criminal 
     justice authorities and community-based victim services 
     agencies.
       (2) Award basis.--The Attorney General shall award grants 
     and contracts under this section on a competitive basis.
       (3) Equitable participation.--The Attorney General shall 
     make every effort to ensure--
       (A) the equitable participation of private and public 
     institutions of higher education in the activities assisted 
     under this section; and
       (B) the equitable geographic distribution of grants under 
     this section among the various regions of the United States.
       (b) Use of Grant Funds.--Grants funds awarded under this 
     section may be used for the following purposes:
       (1) To provide personnel, training, technical assistance, 
     data collection, and other equipment with respect to the 
     increased apprehension, investigation, and adjudication of 
     persons committing violent crimes against women on campus.
       (2) To train campus administrators and campus security 
     personnel to more effectively identify and respond to violent 
     crimes against women on campus, including the crimes of 
     sexual assault, stalking, and domestic violence.
       (3) To develop, train, or expand campus security personnel 
     and campus administrators with respect to specifically 
     targeting violent crimes against women on campus, including 
     the crimes of sexual assault, stalking, and domestic 
     violence.
       (4) To develop and implement more effective campus 
     policies, protocols, orders, and services specifically 
     devoted to prevent, identify, and respond to violent crimes 
     against women on campus, including the crimes of sexual 
     assault, stalking, and domestic violence.
       (5) To develop, install, or expand data collection and 
     communication systems, including computerized systems, 
     linking campus security to the local law enforcement for the 
     purpose of identifying and tracking arrests, protection 
     orders, violations of protection orders, prosecutions, and 
     convictions with respect to violent crimes against women on 
     campus, including the crimes of sexual assault, stalking, and 
     domestic violence.
       (6) To develop, enlarge, or strengthen victim services 
     programs for the campus and to improve delivery of victim 
     services on campus.
       (7) To provide capital improvements on campus to address 
     violent crimes against women on campus, including the crimes 
     of sexual assault, stalking, and domestic violence.
       (8) To support improved coordination among campus 
     administrators, campus security personnel, and local law 
     enforcement to reduce violent crimes against women on campus.
       (c) Applications.--
       (1) In general.--In order to be eligible to be awarded a 
     grant under this section for any fiscal year, an institution 
     of higher education shall submit an application to the 
     Attorney General at such time and in such manner as the 
     Attorney General shall prescribe.
       (2) Contents.--Each application submitted under paragraph 
     (1) shall--
       (A) describe the need for grant funds and the plan for 
     implementation for any of the purposes described in 
     subsection (b);
       (B) describe how the campus authorities shall consult and 
     coordinate with nonprofit, nongovernmental victim services 
     programs, including sexual assault and domestic violence 
     victim services programs;
       (C) describe the characteristics of the population being 
     served, including type of campus, demographics of the 
     population, and number of students;
       (D) provide measurable goals and expected results from the 
     use of the grants funds;
       (E) provide assurances that the Federal funds made 
     available under this section shall be used to supplement and, 
     to the extent practical, increase the level of funds that 
     would, in the absence of Federal funds, be made available by 
     the institution for the purposes described in subsection (b); 
     and
       (F) include such other information and assurances as the 
     Attorney General reasonably determines to be necessary.
       (d) Grantee Reporting.--Each institution of higher 
     education receiving a grant under this section, upon 
     completion of the grant period under this section, shall file 
     a performance report with the Attorney General explaining the 
     activities carried out under the grant, together with an 
     assessment of the effectiveness of the activities in 
     achieving the purposes described in subsection (b).
       (e) Definitions.--In this section--
       (1) the term ``domestic violence'' includes acts or threats 
     of violence, not including acts of self defense, committed by 
     a current or former spouse of the victim, by a person with 
     whom the victim shares a child in common, by a person who is 
     cohabitating with or has cohabitated with the victim, by a 
     person similarly situated to a spouse of the victim under the 
     domestic or family violence laws of the jurisdiction, or by 
     any other person against a victim who is protected from that 
     person's acts under the domestic or family violence laws of 
     the jurisdiction;
       (2) the term ``sexual assault'' means any conduct 
     proscribed by chapter 109A of title 18, United States Code, 
     whether or not the conduct occurs in the special maritime and 
     territorial jurisdiction of the United States or in a Federal 
     prison, including both assaults committed by offenders who 
     are strangers to the victim and assaults committed by 
     offenders who are known or related by blood or marriage to 
     the victim; and
       (3) the term ``victim services'' means a nonprofit, 
     nongovernmental organization that assists domestic violence 
     or sexual assault victims, including campus women's centers, 
     rape crisis centers, battered women's shelters, and other 
     sexual assault or domestic violence programs, including 
     campus counseling support and victim advocate organizations 
     with domestic violence, stalking, and sexual assault 
     programs, whether or not organized and staffed by students.
       (f) General Terms and Conditions.--
       (1) Nonmonetary assistance.--In addition to the assistance 
     provided under this section, the Attorney General may request 
     any Federal agency to use the agency's authorities and the 
     resources granted to the agency under Federal law (including 
     personnel, equipment, supplies, facilities, and managerial, 
     technical, and advisory services) in support of campus 
     security, and investigation and victim service efforts.
       (2) Reporting.--Not later than 180 days after the end of 
     the fiscal year for which grants are awarded under this 
     section, the Attorney General shall submit to the committees 
     of the House of Representatives and the Senate responsible 
     for issues relating to higher education and crime, a report 
     that includes--
       (A) the number of grants, and the amount of funds, 
     distributed under this section;
       (B) a summary of the purposes for which the grants were 
     provided and an evaluation of the progress made under the 
     grant;
       (C) a statistical summary of the persons served, detailing 
     the nature of victimization, and providing data on age, sex, 
     race, ethnicity, language, disability, relationship to 
     offender, geographic distribution, and type of campus; and
       (D) an evaluation of the effectiveness of programs funded 
     under this section.
       (3) Regulations or guidelines.--Not later than 120 days 
     after the date of enactment of this section, the Secretary 
     shall publish proposed regulations or guidelines implementing 
     this section. Not later than 180 days after the date of 
     enactment of this section, the Attorney General shall publish 
     final regulations or guidelines implementing this section.
       (g) Authorization of Appropriations.--For the purpose of 
     carrying out this section, there are authorized to be 
     appropriated $10,000,000 for each of the fiscal years 1999 
     through 2002.

     SEC. 793. AUTHORITY TO ADMINISTER SUMMER TRAVEL AND WORK 
                   PROGRAMS.

       The Director of the United States Information Agency is 
     authorized to administer summer travel and work programs 
     without regard to preplacement requirements.

     SEC. 794. IMPROVING UNITED STATES UNDERSTANDING OF SCIENCE, 
                   ENGINEERING, AND TECHNOLOGY IN EAST ASIA.

       (a) Establishment.--The Director of the National Science 
     Foundation is authorized, beginning in fiscal year 2000, to 
     carry out an interdisciplinary program of education and 
     research on East Asian science, engineering, and technology. 
     The Director shall carry out the interdisciplinary program in 
     consultation with the Secretary of Education.
       (b) Purposes.--The purposes of the program established 
     under this section shall be to--
       (1) increase understanding of East Asian research, and 
     innovation for the creative application of science and 
     technology to the problems of society;
       (2) provide scientists, engineers, technology managers, and 
     students with training in East Asian languages, and with an 
     understanding of research, technology, and management of 
     innovation, in East Asian countries;
       (3) provide program participants with opportunities to be 
     directly involved in scientific and engineering research, and 
     activities related to the management of scientific and 
     technological innovation, in East Asia; and
       (4) create mechanisms for cooperation and partnerships 
     among United States industry, universities, colleges, not-
     for-profit institutions, Federal laboratories (within the 
     meaning of section 4(6) of the Stevenson-Wydler Technology 
     Innovation Act of 1980 (15 U.S.C. 3703(6))), and government, 
     to disseminate the results of the program assisted under this 
     section for the benefit of United States research and 
     innovation.
       (c) Participation by Federal Scientists, Engineers, and 
     Managers.--Scientists, engineers, and managers of science and 
     engineering programs in Federal agencies and the Federal 
     laboratories shall be eligible to participate in the program 
     assisted under this section on a reimbursable basis.
       (d) Requirement for Merit Review.--Awards made under the 
     program established under this section shall only be made 
     using a competitive, merit-based review process.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $10,000,000 for 
     fiscal year 2000.

[[Page S7777]]

     SEC. 795. UNDERGROUND RAILROAD EDUCATIONAL AND CULTURAL 
                   PROGRAM.

       (a) Program Established.--The Secretary of Education, in 
     consultation and cooperation with the Secretary of the 
     Interior, is authorized to make grants to 1 or more nonprofit 
     educational organizations that are established to research, 
     display, interpret, and collect artifacts relating to the 
     history of the Underground Railroad.
       (b) Grant Agreement.--Each nonprofit educational 
     organization awarded a grant under this section shall enter 
     into an agreement with the Secretary of Education. Each such 
     agreement shall require the organization--
       (1) to establish a facility to house, display, and 
     interpret the artifacts related to the history of the 
     Underground Railroad, and to make the interpretive efforts 
     available to institutions of higher education that award a 
     baccalaureate or graduate degree;
       (2) to demonstrate substantial private support for the 
     facility through the implementation of a public-private 
     partnership between a State or local public entity and a 
     private entity for the support of the facility, which private 
     entity shall provide matching funds for the support of the 
     facility in an amount equal to 4 times the amount of the 
     contribution of the State or local public entity, except that 
     not more than 20 percent of the matching funds may be 
     provided by the Federal Government;
       (3) to create an endowment to fund any and all shortfalls 
     in the costs of the on-going operations of the facility;
       (4) to establish a network of satellite centers throughout 
     the United States to help disseminate information regarding 
     the Underground Railroad throughout the United States, if 
     such satellite centers raise 80 percent of the funds required 
     to establish the satellite centers from non-Federal public 
     and private sources;
       (5) to establish the capability to electronically link the 
     facility with other local and regional facilities that have 
     collections and programs which interpret the history of the 
     Underground Railroad; and
       (6) to submit, for each fiscal year for which the 
     organization receives funding under this section, a report to 
     the Secretary of Education that contains--
       (A) a description of the programs and activities supported 
     by the funding;
       (B) the audited financial statement of the organization for 
     the preceding fiscal year;
       (C) a plan for the programs and activities to be supported 
     by the funding as the Secretary may require; and
       (D) an evaluation of the programs and activities supported 
     by the funding as the Secretary may require.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section $6,000,000 for 
     fiscal year 1999, $6,000,000 for fiscal year 2000, $6,000,000 
     for fiscal year 2001, $3,000,000 for fiscal year 2002, and 
     $3,000,000 for fiscal year 2003.

     SEC. 796. GNMA GUARANTEE FEE.

       (a) In General.--Section 306(g)(3)(A) of the National 
     Housing Act (12 U.S.C. 1721(g)(3)(A)) is amended by striking 
     ``No fee or charge'' and all that follows through ``States)'' 
     and inserting ``The Association shall assess and collect a 
     fee in an amount equal to 9 basis points''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on October 1, 2002.

     SEC. 797. PROTECTION OF STUDENT SPEECH AND ASSOCIATION 
                   RIGHTS.

       (a) Protection of Rights.--It is the sense of Congress that 
     no student attending an institution of higher education on a 
     full- or part-time basis should, on the basis of 
     participation in protected speech or protected association, 
     be excluded from participation in, be denied the benefits of, 
     or be subjected to discrimination or official sanction under 
     any education program, activity, or division of the 
     institution directly or indirectly receiving financial 
     assistance under the Higher Education Act of 1965, whether or 
     not such program, activity, or division is sponsored or 
     officially sanctioned by the institution.
       (b) Construction.--Nothing in this section shall be 
     construed--
       (1) to discourage the imposition of an official sanction on 
     a student that has willfully participated in the disruption 
     or attempted disruption of a lecture, class, speech, 
     presentation, or performance made or scheduled to be made 
     under the auspices of the institution of higher education; or
       (2) to prevent an institution of higher education from 
     taking appropriate and effective action to prevent violations 
     of State liquor laws, to discourage binge drinking and other 
     alcohol abuse, to protect students from sexual harassment 
     including assault and date rape, or to regulate unsanitary or 
     unsafe conditions in any student residence.
       (c) Definitions.--For the purposes of this section:
       (1) Official sanction.--The term ``official sanction''--
       (A) means expulsion, suspension, probation, censure, 
     condemnation, reprimand, or any other disciplinary, coercive, 
     or adverse action taken by an institution of higher education 
     or administrative unit of the institution; and
       (B) includes an oral or written warning made by an official 
     of an institution of higher education acting in the official 
     capacity of the official.
       (2) Protected association.--The term ``protected 
     association'' means the joining, assembling, and residing 
     with others that is protected under the first and 14th 
     amendments to the Constitution, or would be protected if the 
     institution of higher education involved were subject to 
     those amendments.
       (3) Protected speech.--The term ``protected speech'' means 
     speech that is protected under the first and 14th amendments 
     to the Constitution, or would be protected if the institution 
     of higher education involved were subject to those 
     amendments.

     SEC. 798. BINGE DRINKING ON COLLEGE CAMPUSES.

       (a) Short Title.--This section may be cited as the 
     ``Collegiate Initiative To Reduce Binge Drinking''.
       (b) Findings.--Congress makes the following findings:
       (1) Many college president rank alcohol abuse as the number 
     one problem on campus.
       (2) Alcohol is a factor in the 3 leading causes of death 
     (accidents, homicides, and suicides) for individuals aged 15 
     through 24.
       (3) More than any other group, college students tend to 
     consume large numbers of drinks in rapid succession with the 
     intention of becoming drunk.
       (4) 84 percent of college students report drinking alcohol 
     during the school year, with 44 percent of all college 
     students qualifying as binge drinkers and 19 percent of all 
     college students qualifying as frequent binge drinkers.
       (5) Alcohol is involved in a large percentage of all campus 
     rapes, violent crimes, student suicides, and fraternity 
     hazing accidents.
       (6) Heavy alcohol consumption on college campuses can 
     result in drunk driving crashes, hospitalization for alcohol 
     overdoses, trouble with police, injury, missed classes, and 
     academic failure.
       (7) The secondhand effects of student alcohol consumption 
     range from assault, property damage, and unwanted sexual 
     advances, to interruptions in study or sleep, or having to 
     ``babysit'' another student who drank too much.
       (8) Campus binge drinking can also lead to the death of our 
     Nation's young and promising students.
       (c) Sense of Congress.--It is the sense of Congress that, 
     in an effort to change the culture of alcohol consumption on 
     college campuses, all institutions of higher education should 
     carry out the following:
       (1) The president of the institution should appoint a task 
     force consisting of school administrators, faculty, students, 
     Greek system representatives, and others to conduct a full 
     examination of student and academic life at the institution. 
     The task force should make recommendations for a broad range 
     of policy and program changes that would serve to reduce 
     alcohol and other drug-related problems. The institution 
     should provide resources to assist the task force in 
     promoting the campus policies and proposed environmental 
     changes that have been identified.
       (2) The institution should provide maximum opportunities 
     for students to live in an alcohol-free environment and to 
     engage in stimulating, alcohol-free recreational and leisure 
     activities.
       (3) The institution should enforce a ``zero tolerance'' 
     policy on the illegal consumption of alcohol by students at 
     the institution.
       (4) The institution should vigorously enforce the 
     institution's code of disciplinary sanctions for those who 
     violate campus alcohol policies. Students with alcohol or 
     other drug-related problems should be referred for 
     appropriate assistance.
       (5) The institution should adopt a policy of eliminating 
     alcoholic beverage-related sponsorship of on-campus 
     activities. The institution should adopt policies limiting 
     the advertisement and production of alcoholic beverages on 
     campus.
       (6) The institution should work with the local community, 
     including local businesses, in a ``Town/Gown'' alliance to 
     encourage responsible policies toward alcohol consumption and 
     to address illegal alcohol use by students.

     SEC. 799. SENSE OF THE SENATE REGARDING HIGHER EDUCATION.

       (a) Findings.--The Senate makes the following findings:
       (1) Higher education must be kept affordable for all 
     families as the number of students attending institutions of 
     higher education in the 1995-1996 academic year reached 
     19,400,000 students at all levels.
       (2) According to the College Board's Annual Survey of 
     Colleges, 1997-1998 undergraduate students at United States 
     colleges will pay on average, approximately 5 percent more 
     for the 1997-1998 academic year in tuition and fees at 4-year 
     institutions of higher education than the students paid for 
     the 1996-1997 academic year, and from 2 to 4 percent more for 
     the 1997-1998 academic year in tuition and fees at 2-year 
     institutions of higher education than the students paid for 
     the 1996-1997 academic year.
       (3) From academic years 1980-1981 to academic years 1994-
     1995, tuition at 4-year public colleges and universities 
     increased 234 percent, while median household income rose 
     only 82 percent, and as a result, families now spend nearly 
     twice as much of their income on college tuition as families 
     did in 1980.
       (4) A college education has become less affordable as 
     undergraduate public school tuition has increased 
     substantially in the years preceding 1998.
       (5) In the 1997-1998 school year, average undergraduate 
     tuition and fees--

[[Page S7778]]

       (A) for public 4-year institutions of higher education were 
     $3,111, representing a 97 percent increase from the 1988-1989 
     school year; and
       (B) for private 4-year institutions of higher education 
     were $13,664, representing an increase of 71 percent from the 
     1988-1989 school year.
       (6) In the 1996-1997 academic year--
       (A) over $580,000,000 in Federal Supplemental Educational 
     Opportunity Grants were disbursed to more than 990,000 
     students;
       (B) $760,000,000 in Federal funds supported more than 
     700,000 students in the Federal Work-Study Program; and
       (C) more than 700,000 students borrowed approximately 
     $940,000,000 in Federal Perkins Loans.
       (7) In the 1996-1997 academic year, Federal loan programs 
     provided over $30,000,000,000 in financial aid to students.
       (8) Student financial aid in the form of loans is 
     disproportionate to the amount of financial aid received 
     through grants. In 1980, approximately 40 percent of Federal 
     student financial aid was distributed through loans. In the 
     1996-1997 academic year, 60 percent of Federal, State, and 
     institutional student financial aid was distributed through 
     loans.
       (9) As the proportion of Federal grants continues to 
     decline, students and families will have to consider 
     alternative ways to finance a college education.
       (10) In the 1970s, Federal Pell Grants financed \3/4\ of 
     the costs at a public 4-year institution of higher education 
     and \1/3\ of the costs at a private 4-year institution of 
     higher education. In contrast, in the 1996-1997 academic 
     year, Federal Pell Grants financed \1/3\ of the costs at a 4-
     year public institution of higher education and \1/7\ of the 
     costs at a private 4-year institution of higher education.
       (11) While student dependence on Federal loans programs has 
     increased, the default rate on those loans has decreased. 
     According to the Department of Education, in fiscal year 
     1990, the national default rate on federally insured student 
     loans was 22.4 percent. In fiscal year 1994, the national 
     default rate declined to 10.4 percent.
       (12) The National Commission on the Cost of Higher 
     Education concluded in the report of the National Commission 
     that Federal student aid grants have not contributed to 
     increases in tuition while the evidence is inconclusive 
     regarding the impact of Federal student loans on increases in 
     tuition.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that--
       (1) the cost of tuition at institutions of higher education 
     continues to increase at a rate above the Consumer Price 
     Index, affecting the nearly 20,000,000 students at all 
     levels, resulting in an increase in the number of students 
     seeking Federal loans and Federal grants;
       (2) efforts should be made to address the disproportionate 
     share of Federal student aid in the form of Federal student 
     loans compared to Federal student grants available for 
     students at institutions of higher education; and
       (3) Federal incentives provided to public and private 
     institutions of higher education may be an effective way to 
     limit tuition growth.

     SEC. 799A. SENSE OF CONGRESS REGARDING TEACHER EDUCATION.

       (a) Findings.--Congress finds that--
       (1) the education of teachers is a university-wide 
     responsibility requiring the integration of subject matter 
     and teacher education course work across faculties with 
     multiple site-based clinical learning experiences;
       (2) teachers well prepared in both subject matter and good 
     professional practice are essential to raising the 
     achievement levels of our Nation's students, especially in 
     mathematics and the sciences;
       (3) teacher educators, substantive experts, and 
     kindergarten through grade 12 teachers need to interact with 
     one another through shared experiences that incorporate 
     school-site-based knowledge into the teacher preparation 
     curriculum;
       (4) partnerships between practitioners and academics 
     working together in all phases of teacher education improve 
     the quality of such education and create incentives for 
     teachers to pursue excellence in their teaching;
       (5) individuals may be more likely to choose teaching as a 
     career if more flexible teacher preparation programs, 
     tailored to the needs and experiences of the individuals, 
     with multiple entry points and pathways into the teaching 
     profession, are made available;
       (6) strong leadership skills of school principals are 
     essential to improving the quality of teaching and academic 
     achievement of all students;
       (7) collaboration among teacher educators, other university 
     faculty, elementary and secondary schools, and community 
     colleges facilitate, strengthen, and renew all the 
     individuals and entities participating in the collaboration.
       (b) Sense of Congress.--It is the sense of Congress that--
       (1) Federal programs, including the Federal Work-Study 
     Programs, should encourage students, particularly prospective 
     teachers, to become involved in supervised tutoring and 
     mentoring activities in kindergarten through grade 12 
     schools;
       (2) institutions of higher education, kindergarten through 
     grade 12 schools, local educational agencies, States, and the 
     Department of Education should enter into partnerships to 
     identify and prepare promising candidates as future education 
     leaders and to provide continuing professional development 
     opportunities to current principals and other education 
     leaders;
       (3) options for access to teacher preparation programs and 
     new avenues to careers in teaching should be expanded to 
     reach professionals seeking second careers and individuals 
     whose prior experiences encompass critical subject areas such 
     as mathematics and the sciences;
       (4) partnerships between institutions of higher education 
     and kindergarten through grade 12 schools should emphasize 
     contacts between faculty and the business community to align 
     expectations for academic achievement to create a more 
     seamless transition for students from secondary to 
     postsecondary schools and to the workplace; and
       (5) Congress should focus on identifying, replicating, and 
     facilitating the expansion of exemplary partnerships between 
     institutions of higher education and kindergarten through 
     grade 12 schools, with particular emphasis on partnerships 
     targeted toward fostering excellence in kindergarten through 
     grade 12 school leadership, attracting and preparing 
     qualified professionals for new careers in teaching, helping 
     teachers incorporate technology into curricula, and aligning 
     the curricula and expectations for student achievement in 
     secondary schools and institutions of higher education, and 
     for the workplace.

  The PRESIDING OFFICER. The Senator from Vermont.


                         Privilege of the floor

  Mr. JEFFORDS. Mr. President, I ask unanimous consent that Pam Moran, 
a fellow with the Committee on Labor and Human Resources, be allowed 
the privileges of the floor during consideration of S. 1882, the Higher 
Education Amendments of 1998.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. JEFFORDS. Mr. President, I am extremely pleased that the Senate 
is considering S. 1882, the Higher Education Amendments of 1998. This 
legislation extends for 5 years the authorization of programs under the 
Higher Education Act and makes significant improvements in student 
benefits and in the operation of these programs.
  The Higher Education Act is among the most significant statutes under 
the jurisdiction of the Committee on Labor and Human Resources. Since 
its inception in 1965, the Act has been focused on enhancing the 
opportunities of students to pursue postsecondary education. This 
legislation will make college more accessible for more Americans by 
increasing the amount of Pell grants and lowering interest rates for 
student loans. By increasing the access and quality of higher 
education, this bill will help ensure that our nation remains a leader 
in educational excellence for all of our citizens. By giving more 
students the ability to attend college, we are giving them the 
opportunity to pursue their dreams.
  136 years ago this week, Senator Justin Smith Morrill from Vermont 
led the effort in the United States Senate to pass the Land Grant 
College Act of 1862, which opened the doors of higher education to all 
Americans. Today, I am proud to follow in Justin Smith Morrill's 
footsteps and urge the Senate to pass this important bipartisan 
legislation which will make the dream of getting a college education 
become a reality for millions of students across this nation.
  Over the years, the federal effort in this area has been substantial 
and will continue to be so. The Higher Education Act currently provides 
$48.5 billion in student financial assistance for 8.5 million students 
and $216 million for institutional development. In 1995-96, 55 percent 
of undergraduate students received financial aid under this Act. Over 
the next ten years, the Federal Government will guarantee over 88 
million student loans--totaling over $383.5 billion. Over the next five 
years, the Federal Government will provide more than 25.4 million Pell 
Grants.
  The reauthorization bill we are considering today preserves the focus 
on students--who are the primary reason we have a Higher Education Act 
in the first place. Students now in school will be assured of receiving 
the lowest interest rate in nearly two decades on their loans. Students 
now in high school who aspire to a college education will benefit from 
an expanded early intervention program known as CONNECTIONS, as well as 
continuing to receive services from the time-tested and highly regarded 
TRIO programs.
  Students who have graduated and are faced with exceptionally high 
loan burdens will be able to take advantage of extended repayment 
options under the

[[Page S7779]]

guaranteed loan program. Recognizing the toll which ever increasing 
college costs are placing on students, the bill builds on 
recommendations of the National Commission on the Cost of Higher 
Education so that students and their families can obtain useful cost 
information.
  This bill reflects a strong commitment to the maintenance of two 
viable loan programs--the guaranteed or Federal Family Education Loan 
Program (FFELP) and the Direct Loan Program. Among the most challenging 
tasks facing the committee was developing a student loan interest rate 
which could offer the lowest viable interest to students while assuring 
sufficient lender participation to preserve full access to loans. After 
nearly a year of consultation with students, lenders, representatives 
of the higher education community, the administration and financial 
services experts, the committee developed a compromise interest rate 
package. Lender yield is reduced by 30 basis points while students 
receive the significant interest rate reduction they have anticipated. 
This solution is by no means perfect, but it promises to preserve the 
stability of the FFEL program for the nearly 4 million students and 
their families who depend upon these loans each year.
  The legislation also includes a new guaranty agency financing model--
the goal of which is to achieve cost savings and efficiencies in the 
delivery and administration of student aid while ensuring that 
students, lenders, the Federal Government, and institutions of higher 
education receive high quality service. Additional efforts to improve 
the delivery of student aid programs include the development of a 
Performance Based Organization (PBO) to strengthen the management of 
key systems within the Department of Education. A number of provisions 
in the legislation also pave the way toward taking advantage of the 
efficiencies made possible through electronic processing and other 
technological advances.
  Looking toward the future, the bill contains several provisions 
dealing with the Year 2000 computer problem. The Office of Management 
and Budget has raised serious questions about the Department of 
Education's ability to meet the timetable outlined by the General 
Accounting Office for the testing of software renovation work. Failure 
to renovate all mission critical systems could result in disruptions in 
the management and delivery of student financial aid to more than 8 
million students. This is an area in which the committee will be 
following closely in the months ahead.
  Perhaps the most exciting and far-reaching innovation in this 
legislation is its provisions dealing with teacher preparation. The 
bill before us eliminates some 15 small, categorical teacher training 
programs--only one of which receives funding--and replaces them with a 
comprehensive model for change and improvement. The teacher quality 
provisions included in Title II of S. 1882 are an important first step 
towards really improving teacher training. I think it will be viewed as 
one of the lasting achievements of this reauthorization.
  It represents a collaboration of good ideas from many members of the 
Labor and Human Resources Committee, each who spent a great deal of 
time on this matter. The result is a proposal that breaks away from 
``business-as-usual'' practices, and encourages States and education 
partnerships to reform their efforts to meet the needs of students in 
today's classroom.
  At its foundation, Title II embraces the notion that investing in the 
preparation of our nation's teachers is a good one. Well prepared 
teachers play a key role in making it possible for our students to 
achieve the standards required to assure both their own well being and 
the ability of our country to compete internationally. In fact, the 
continued health and strength of our nation depends on our country's 
ability to improve the education of our young people. Integral to that 
is the strength and ability of our nation's teaching force. Without a 
strong, competent, well prepared teaching force, other investments in 
education will be of little value.
  The bill takes a two-pronged approach to helping assure that our 
nation's elementary and secondary school teachers will be thoroughly 
prepared to offer the quality of instruction needed to assure that 
students achieve the standards we need and expect. Working at both the 
state level to promote system-wide reforms and at the local level to 
develop partnerships to enhance the quality of teacher training, the 
bill offers a comprehensive and systematic approach to this pressing 
national need.
  Title II demands excellence from our teacher preparation programs; 
encourages coordination; focuses on the need for academic content 
knowledge and strong teaching skills; and fosters state innovations in 
establishing more rigorous standards and exploring alternative 
certification. These efforts recognize the fundamental connection that 
exists among states, institutions of higher education, and efforts to 
improve education for our nation's elementary and secondary school 
teachers.
  The teacher training provisions included in this bill are unique in 
other ways as well. In particular, the committee included very strong 
accountability measures as part of this title. In order to maintain a 
grant, a State or a partnership will have to show improvement--
measurable results--that go to the heart of learning.
  It is important to consider the Title II provisions in the context of 
education reform because, as I have said before, good teachers are at 
the core of educational improvement.
  It has been 15 years since the national crisis in education was 
raised by the ``A Nation At Risk'' report. The admonition was given in 
these terse words: If a foreign government had imposed on us our 
educational system we would have declared it an act of war.
  Yet little has changed. There is some improvement in science but 
little in math. Children are coming to school slightly more prepared to 
learn, but this is primarily in the area of health.
  It is obvious that nothing is going to change unless it changes in 
the classroom. And nothing will change in the classroom until the 
teachers change. And the teachers can't be expected to change until 
they have help in knowing what is expected of them.
  In the most recent Goals 2000 Report issued last November, we learned 
that in more than 40 States there was no change in the percentage of 
teachers who reported that they held a degree or held a teaching 
certificate in their main teaching assignment. In 33 States no change 
was reported in the proportion of beginning public school teachers who 
participated in a formal teacher induction process.
  Dindo Rivera, who travels about the county for IBM raising this 
issue, likes to explain it this way: If you were an office worker and 
had fallen asleep as Rip Van Winkle did for twenty years and walked 
into a modern office you would go into catatonic shock at trying to do 
anything from answering the phone to typing a letter. However, if you 
were a school teacher when you walked back into the classroom after 
your slumber, you'd feel right at home in your subjects.
  Some changes are occurring. The concept of ``social promotion'' 
initiated in the 60's is being challenged but creating serious problems 
for schools requiring remedial help. Literacy programs are being 
initiated to stop or reduce the inflow of non readers. But as to the 
crisis of math and science and other critical subjects, we have seen 
little in the way of results.
  Pointing a finger at the colleges of education is not inappropriate. 
They need to change. They must ensure that graduates are capable of 
facing today's challenge--not yesteryears. But they are unlikely to 
change unless the universities that host them pay attention to them. 
Often times, the schools of education are treated as step children. In 
most cases the degrees issued are not enough to increase their capacity 
to teach updated courses--and these updated courses are sorely needed.
  We must focus attention on this issue. We should fully fund the new 
Title II Teacher Quality Program that is included in this bill. We 
should also call together the presidents of the universities to 
challenge them to take immediate action to remedy the crisis. We must 
enlist the teachers and the teachers unions and insist that they too 
help out.
  The Higher Education bill before us does make strides in the 
direction of reform and improvement. Still, we must do even more to 
raise awareness

[[Page S7780]]

of the problem and the need to change. The number of teachers is not as 
important as the quality of teachers. On the Federal level we must 
focus on promoting and ensuring quality. We don't necessarily need 
millions of new teachers--what we really need are millions of good 
teachers.
  The need for good teachers has been recognized. The Hunt Commission 
Report, ``What Matters Most: Teaching for America's Future'' has a goal 
of providing 100,000 nationally accredited teachers. But their goal is 
too far off into the next century. Their goal would provide one teacher 
for every school. We need one for every classroom and, most certainly 
every new teacher graduating must be trained to be a good teacher. 
Every teacher's college must meet that challenge and every present 
teacher must be given the training to be a good teacher. The present 
bill takes a giant step in that direction.
  In closing, I would like to acknowledge the long hours and hard work 
of members of the Labor and Human Resources Committee and their staffs 
over the past 18 months as we have worked to develop this legislation. 
Even with the substantial streamlining we have done in the Act, a 
thorough review of all its provisions is a large and challenging task. 
At this time, I would like to offer particular thanks to the ranking 
minority member, Senator Kennedy, to Senator Coats, and to Senator 
Dodd. These three members have gone well beyond the extra mile in 
helping to forge a bipartisan approach to improving the lives of 
American students. Throughout committee deliberations, there have been 
legitimate differences of opinion. The spirit of cooperation and the 
commitment to working through these differences has allowed us to 
present to the Senate a solid piece of legislation which I believe 
every member of this body can proudly support.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, I yield for a consent request.


                        Privileges of the Floor

  Mr. WELLSTONE. Mr. President, I ask unanimous consent that Erin 
Shanahan, Sarah West and Micky Holmes, interns and fellows, be allowed 
on the floor during the debate and votes on the education bill.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                        Privileges of the Floor

  Mr. KENNEDY. Mr. President, I ask unanimous consent congressional 
fellow Jennifer Krone and Jim Butler be granted floor privileges.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KENNEDY. Mr. President, at the outset, as we begin this debate on 
the Higher Education Act, I thank my good friend, the chairman of our 
committee, Senator Jeffords, and all of the members of the committee 
for their broad support for this legislation and for the workmanship 
which was reflected in this product over a considerable period of time.
  This legislation was reported unanimously out of our committee, and I 
think it reflects the best judgment of the members of the committee. I 
am particularly impressed by the work of our friends and colleagues on 
the Republican side--Senator Coats, Senator Collins, and many of the 
others, members who were very, very much involved; and on our side, 
Senator Dodd, Senator Murray, and many, many others whom I will refer 
to in my opening comments as well. This has been really a very strong 
bipartisan effort.
  Those of us who have had the honor to serve on the Education 
Committee for a number of years have always felt that education is 
something which should have a special position in the thinking of not 
only the families of America but elected officials in trying to find a 
common ground in these areas that are so important to families across 
this country. This bill reflects that continued effort by the 
membership of the committee.
  We have strong differences on some policy issues, which we have seen 
in recent hours and recent days, which we will see coming through these 
next several weeks, the next 35 days that we are in the Senate. 
Thankfully, we have been able to keep that kind of view out of the 
consideration of this legislation.
  There will be several amendments from our side and from the 
Republican side. Those are based upon rather thoughtful consideration 
and thoughtful differences on education policy, but they are certainly 
serious amendments and thoughtful ones, and we look forward to 
addressing these issues as we move ahead.
  We are very hopeful that we can move this legislation, because of its 
importance, to an early conclusion with due opportunity for the 
membership to express their views.
  I want to pay particular tribute, as I mentioned, to the chairman of 
our committee, Senator Jeffords. He has had a longstanding, continuing 
commitment to a number of different issues in our Human Resources 
Committee, but I believe personally the commitment in terms of 
education generally has been a very special interest. He has been 
absolutely tireless in working with all the members of the committee to 
bring this product forward. All of us are grateful to him and to his 
staff for all of the efforts they have made and for the strong and good 
leadership that he has provided in fashioning this legislation.
  Our goal in this bill is to strengthen the Federal support for higher 
education. A recent study from the Institute of Higher Education Policy 
summarizes the public and private benefits of higher education, both 
economic and social. As you can see on this chart, higher education 
provides major economic benefits, such as increased tax revenues, 
greater productivity, increased flexibility in the workforce.
  We are all mindful that when we had the GI bill after World War II, 
for every dollar that was invested in the GI bill, more than $8 was 
actually returned by those who participated in those scholarship 
programs. The Nation benefits, the individuals benefit, our communities 
benefit, America benefits, and our position in the world and our values 
in the world benefit from the strong investment that we make in 
education and by the extraordinary talent that we have in the young 
people of our country.
  This legislation provides vital social benefits as well. College 
graduates have greater involvement in their communities, give more to 
charities. They also show an appreciation of diversity that is vital in 
our increasingly complex society. This legislation expands access to 
college for all qualified students. It increases the maximum 
authorization for Pell grants for the neediest students and expands the 
formula for need analysis to protect more of the income of working 
parents and students.
  The bill also continues the critical investments in graduate 
education through the program of Graduate Assistance in Areas of 
National Need and the portable Javits fellowships for talented students 
in the arts, humanities, and social sciences.
  The bill also will enable colleges to work with faculty and 
administrators to improve teaching for students with disabilities. Many 
more students with disabilities are benefiting from higher education, 
and faculty members often have little experience in teaching these 
students. This bill reaches out to all colleges and universities and 
includes training in this area for graduate teaching assistants--the 
faculty of the future.

  The bill takes a major step in improving training of teachers. 
Senator Jeffords has spoken to that issue in very considerable detail, 
but let me underline some points on that subject.
  Fifty percent of the funding in this category goes to local 
partnerships that include elementary and secondary schools, colleges, 
and even teachers unions, businesses, and community organizations. The 
other 50 percent goes to competitive grants to State education 
agencies.
  The bill also includes greater loan forgiveness for teachers. It 
forgives up to $8,000 of loans for teachers who teach at least 3 years 
in high-need schools. Many college graduates with heavy debtloads 
cannot afford to go into teaching in schools that need help the most. 
This program will make it easier for idealistic young men and women to 
work with the needy children.
  The bill also includes early intervention initiatives to encourage 
students to plan for college as part of their future. One of the 
greatest tragedies of education today is that so many young students in 
elementary school, middle school, and high school regard college as out 
of reach.

[[Page S7781]]

  I know many of our colleagues have had the opportunity that I have 
had in going out and talking to middle-school students around our 
States. You ask those young people, those young students, ``How many of 
you would want to go to college?'' and almost before the words come out 
of your mouth, every hand goes up in that classroom. There is a great 
desire, a great interest, on the part of these young students to 
continue their education.
  Then something happens as they go through eighth and ninth grades and 
begin to become more disillusioned about the possibilities of going on 
to college and continuing their education, perhaps somewhat more 
realistic about some of the financial obligations that they have. It is 
not completely separate from the fact that the increased use of drugs 
in the eighth and ninth grades increases about 300 percent to 350 
percent. The time when kids are beginning to cool off in terms of their 
realization of the possibilities for their continuing on to higher 
education corresponds to the period of dramatic increase among young 
people in terms of substance abuse.
  Mr. President, the hope and the desire of young students in our 
society to go on to higher education is there in the middle schools, 
and so many of them are discouraged from doing so. This happens at a 
time when there has been a corresponding record of increased use of 
illegal substances. Many people believe it is the increased use of the 
substances that have discouraged students.
  On the other hand, there are many others who believe that these young 
students, when they find out they will not have the opportunity to go 
on to higher education or continue their education, become discouraged, 
in many instances despondent, lose interest and subject themselves to 
the adverse behavior that some young people involve themselves in.
  The whole question in terms of trying to reach out to these students 
in elementary school, middle school, and high school is very, very 
important. We need to do what we can to change that distressing 
mindset. This bill is a major step in that direction.
  The bill also expands the Federal aid for student learning through 
distance education. The managers' package broadens the demonstration 
programs, and allows the use of Federal aid for certain distance 
education certificate programs.
  Distance learning can open the doors of higher education to many who 
cannot attend classes because they live in remote areas or because of 
their job or family responsibilities. Some have some special needs, as 
well. But we must also ensure that the promise of these programs do not 
lead to abuses. The bill calls for the Department of Education to 
monitor these changes in distance education, and to report to Congress 
on the result.
  Another important provision in the bill calls for the creation of a 
Performance Based Organization in the Department of Education. Its goal 
is to streamline and improve the financial aid functions of the 
Department, and give it more flexibility to deal with the many aspects 
of Federal aid.
  The bill also enables guaranty agencies to enter into voluntary 
flexible agreements with the Secretary of Education. It will be more 
businesslike and will focus more heavily on preventing defaults. The 
guaranty agency in Massachusetts has been in the forefront of this 
reform.
  Under these arrangements, guaranty agencies can concentrate on 
preventing defaults instead of simply collecting from students after 
they have defaulted on their loans. Under current law, these agencies 
are paid too much when the students go into default and they are not 
paid enough to prevent the defaults in the first place.
  In a pilot project, the Great Lakes Guaranty Agency reduced its 
default rate by 96 percent, 96 percent over 18 months by emphasizing 
the prevention of defaults. This is a win-win-win idea. The student 
borrowers win because they avoid default and ruining their credit. 
Government wins because it saves millions in reinsurance payments. The 
lenders win because the loan continues to earn interest in their 
portfolios.
  This bill accommodates the concerns of many individuals. Senator 
Torricelli in his bill, S. 1534, says students who are called to active 
duty in the Reserves of our Armed Forces will not have to worry about 
repaying their student loans before they return. Senator Moseley-Braun 
sponsored a program to encourage more individuals from 
underrepresentative groups to become college professors. Senators 
Sarbanes and Mikulski spearheaded efforts to include the Thurgood 
Marshall Legal Education Opportunity Program.

  The major issue in this bill is the interest rate on student loans. 
The bill reduces the interest rate that students will pay on loans by 
almost 1 percent, a substantial benefit for students. The average 
borrower with a loan of $12,000 will save $650 in interest payments 
over the 10-year life of the loan. The average master's degree student 
with a debt of $20,000 will save more than $1,000. For borrowers with 
larger loans, the savings will be even greater.
  Unfortunately and unwisely, the bill trims the rates paid to banks 
only slightly. As in the House bill, students will pay the same lower 
interest rate to the banks that they pay to the Government in the 
Direct Loan Program. But the bill offers a sweetheart deal to the banks 
by giving the banks a half of a percent interest rate subsidy. This 
subsidy means that bank receipts will go down only slightly from the 
excessive receipts they receive under the high interest rates now in 
effect. It is estimated that the average bank return on student loans 
will be 16 percent--far higher than the average bank return of 12 
percent on its overall assets since 1970.
  This interest rate subsidy will be paid by the taxpayers. The 
Congressional Budget Office calculates that the costs will be at least 
$1 billion over 5 years and maybe as much as $3.6 billion. The Office 
of Management and Budget calculates that this subsidy will cost $2.7 
billion over that period, a cost that is not paid for under the bill.
  This failure could trigger a sequester of mandatory inventory 
programs in October, including Medicare, and we need to deal with this 
problem more effectively. The best solution is to change the current 
system under which Congress sets the interest rates the banks can 
charge. Instead, we should adopt, I believe, a market-based system for 
interest rates, not one based on price fixing by Congress.
  We are considering offering an amendment that allows the Secretary of 
Education and the Secretary of the Treasury to conduct pilot programs 
using auctions as an alternative for setting these interest rates. 
Competition should determine how much of a premium lenders need in 
order to offer and service these loans. The results of the pilot 
programs would be reported to Congress and full-scale implementation 
would follow only after a subsequent vote of approval by Congress. 
These pilot programs will give Congress the information to make a 
sensible decision providing adequate incentives to the banks without 
gouging students or taxpayers.
  I look forward to final Senate action on this bill. I commend the 
constructive bipartisan spirit that has brought us to this point. Our 
colleges and universities deserve no less.
  Mr. GRAHAM. Mr. President, I ask unanimous consent for a period of 
morning business for the purposes of making a statement for 10 minutes.
  Mr. McCONNELL. Mr. President, reserving the right to object, we have 
a Senate agreement we want to propound momentarily regarding an 
emergency piece of legislation that has now been cleared on both sides. 
I don't want to interrupt the Senator from Florida, but we are anxious.
  Mr. GRAHAM. I modify my unanimous consent request to first provide 
for the Senator from Kentucky to proceed as indicated.
  Mr. JEFFORDS. Reserving the right to object, I know we are trying to 
get the opening statements out with respect to this bill. Senator 
Coats, I know, has been waiting. Senator Dodd is also waiting. So at 
this point I object until at least those two Members are taken care of.
  The PRESIDING OFFICER. The Senator from Florida has the floor.
  Mr. GRAHAM. Mr. President, it had been my understanding that 
unanimous consent requests could be made after Senator Kennedy's 
statement, but if the Senator from Vermont would like to have other 
opening statements, I modify my unanimous consent request that I have 
10 minutes of morning business immediately upon the

[[Page S7782]]

completion of the statements by the Senators from Indiana, Connecticut, 
Minnesota, and any other members of the committee wishing to do so--
that at that point, I have 10 minutes.

  The PRESIDING OFFICER. Is there objection?
  Mr. McCONNELL. Mr. President, I have been told it is only going to 
take a minute to run a hotline on the Democratic side, after which I 
would like to propound, on behalf of myself and Senator Biden, a 
unanimous consent agreement. This whole matter will take just a minute 
or so. I would like to, with the consent of my colleagues, get that out 
of the way here before the debate continues, if the Senator from 
Vermont finds that acceptable.
  The PRESIDING OFFICER. Is there objection?
  Mr. KENNEDY. Mr. President, the Senator has this consent request. I 
hope he will offer it and we can consider it, if the leadership so 
desires. I would certainly support it. Can't we wait until we get the 
agreement?
  The PRESIDING OFFICER. The Senator from Florida has the floor.
  Mr. KENNEDY. I object then.
  The PRESIDING OFFICER. The Senator from Florida.
  Mr. GRAHAM. Mr. President, let me restate my unanimous consent, which 
is that upon the completion of the opening statements of the members of 
the committee, I be allowed 10 minutes as in morning business for a 
statement on the wildfires in Florida.
  The PRESIDING OFFICER. Is there objection?
  Mr. WELLSTONE. Mr. President, I will not object. I just say to my 
colleague, I am pleased to speak right after him. I just ask that other 
colleagues will speak, and I would like to speak after the Senator from 
Florida.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Connecticut is recognized.
  Mr. DODD. Mr. President, let me thank my colleague from Florida for 
his graciousness. For the purposes of getting the opening statements 
out, it is worthwhile to hear those who have worked over the past year 
or more to put this piece of legislation together.
  Let me begin by commending the distinguished chairman of the 
committee, Senator Jeffords of Vermont, and the distinguished ranking 
Democrat, Senator Kennedy, and my colleague from Indiana, Senator 
Coats, for their tremendous efforts here to put this higher education 
bill together.
  Mr. President, there are very few pieces of legislation that we will 
consider in this Congress that are as important to American families as 
the one we take up today.
  I see my colleague from Kentucky. Does he wish me to yield?
  Mr. McCONNELL. If the Senator will yield for a moment, the unanimous 
consent agreement has now been cleared.
  Mr. DODD. Without interrupting the flow of the debate and without 
yielding my right to the floor, for the purposes of propounding the 
unanimous consent agreement, I will yield to the Senator from Kentucky.

                          ____________________