[Congressional Record Volume 144, Number 131 (Saturday, September 26, 1998)]
[House]
[Pages H8978-H9083]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      CONFERENCE REPORT ON H.R. 6

  Mr. GOODLING submitted the following conference report and statement 
on the bill (H.R. 6), to extend the authorization of programs under the 
Higher Education Act of 1965, and for other purposes.

                  Conference Report (H. Rept. 105-750)

       The committee of conference on the disagreeing votes of the 
     two Houses on the amendment of the Senate to the bill (H.R. 
     6), to extend the authorization of programs under the Higher 
     Education Act of 1965, and for other purposes, having met, 
     after full and free conference, have agreed to recommend and 
     do recommend to their respective Houses as follows:
       That the Houses recede from its disagreement to the 
     amendment of the Senate and agree to the same with an 
     amendment as follows:
       In lieu of the matter proposed to be inserted by the Senate 
     amendment, insert the following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.
Sec. 2. References.
Sec. 3. General effective date.

                      TITLE I--GENERAL PROVISIONS

Sec. 101. Revision of title I.
Sec. 102. Conforming amendments.

                       TITLE II--TEACHER QUALITY

Sec. 201. Teacher quality enhancement grants.

                      TITLE III--INSTITUTIONAL AID

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

                      TITLE IV--STUDENT ASSISTANCE

                       Part A--Grants to Students

Sec. 401. Federal Pell Grants.
Sec. 402. Federal TRIO programs.
Sec. 403. Gear up program.
Sec. 404. Academic achievement incentive scholarships.
Sec. 405. Repeals.
Sec. 406. Federal supplemental educational opportunity grants.
Sec. 407. Leveraging educational assistance partnership program.
Sec. 408. Special programs for students whose families are engaged in 
              migrant and seasonal farmwork.
Sec. 409. Robert C. Byrd Honors Scholarship Program.
Sec. 410. Child care access means parents in school.
Sec. 410A. Learning anytime anywhere partnerships.

             Part B--Federal Family Education Loan Program

Sec. 411. Limitation repealed.
Sec. 412. Advances to reserve funds.
Sec. 413. Guaranty agency reforms.
Sec. 414. Scope and duration of Federal loan insurance program.
Sec. 415. Limitations on individual federally insured loans and Federal 
              loan insurance.
Sec. 416. Applicable interest rates.
Sec. 417. Federal payments to reduce student interest costs.
Sec. 418. Voluntary flexible agreements with guaranty agencies.
Sec. 419. Federal PLUS loans.
Sec. 420. Federal consolidation loans.
Sec. 421. Default reduction program.
Sec. 422. Requirements for disbursements of student loans.
Sec. 423. Unsubsidized loans.
Sec. 424. Loan forgiveness for teachers.
Sec. 425. Loan forgiveness for child care providers.
Sec. 426. Notice to Secretary and payment of loss.
Sec. 427. Legal powers and responsibilities.
Sec. 428. Student loan information by eligible lenders.
Sec. 429. Definitions.
Sec. 430. Delegation of functions.
Sec. 431. Discharge.
Sec. 432. Debt management options.
Sec. 433. Special allowances.
Sec. 434. Federal family education loan insurance fund.

                  Part C--Federal Work-study Programs

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

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Sec. 444. Flexible use of funds.
Sec. 445. Work colleges.

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

Sec. 451. Selection of institutions.
Sec. 452. Terms and conditions.
Sec. 453. Contracts.
Sec. 454. Funds for administrative expenses.
Sec. 455. Authority to sell loans.
Sec. 456. Loan cancellation for teachers.

                     Part E--Federal Perkins Loans

Sec. 461. Authorization of appropriations.
Sec. 462. Allocation of funds.
Sec. 463. Agreements with institutions of higher education.
Sec. 464. Terms of loans.
Sec. 465. Cancellation for public service.
Sec. 466. Distribution of assets from student loan funds.
Sec. 467. Perkins Loan Revolving Fund.

                         Part F--Need Analysis

Sec. 471. Cost of attendance.
Sec. 472. Data elements.
Sec. 473. Family contribution for dependent students.
Sec. 474. Family contribution for independent students without 
              dependents other than a spouse.
Sec. 475. Family contribution for independent students with dependents 
              other than a spouse.
Sec. 476. Regulations; updated tables and amounts.
Sec. 477. Simplified needs test; zero expected family contribution.
Sec. 478. Discretion of student financial aid administrators.
Sec. 479. Treatment of other financial assistance.
Sec. 480. Clerical amendments.
Sec. 480A. Effective dates.

                       Part G--General Provisions

Sec. 481. Master calendar.
Sec. 482. Forms and regulations.
Sec. 483. Student eligibility.
Sec. 484. State court judgments.
Sec. 485. Institutional refunds.
Sec. 486. Institutional and financial assistance information for 
              students.
Sec. 487. National student loan data system.
Sec. 488. Distance education demonstration programs.
Sec. 489. Program participation agreements.
Sec. 490. Regulatory relief and improvement.
Sec. 490A. Garnishment requirements.
Sec. 490B. Administrative subpoena authority.
Sec. 490C. Advisory Committee on Student Financial Assistance.
Sec. 490D. Meetings and negotiated rulemaking.
Sec. 490E. Year 2000 requirements at the Department of Education.
Sec. 490F. Procedures for cancellations and deferments for eligible 
              disabled veterans.

                       Part H--Program Integrity

Sec. 491. State role and responsibilities.
Sec. 492. Accrediting agency recognition.
Sec. 493. Eligibility and certification procedures.
Sec. 494. Program review and data.
Sec. 495. Review of regulations.

                    TITLE V--DEVELOPING INSTITUTIONS

Sec. 501. Establishment of new title V.

               TITLE VI--INTERNATIONAL EDUCATION PROGRAMS

Sec. 601. International and foreign language studies.
Sec. 602. Business and international education programs.
Sec. 603. Institute for International Public Policy.
Sec. 604. General provisions.

       TITLE VII--GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS

Sec. 701. Revision of title VII.
Sec. 702. Repeals.

           TITLE VIII--STUDIES, REPORTS, AND RELATED PROGRAMS

                            Part A--Studies

Sec. 801. Study of market mechanisms in Federal student loan programs.
Sec. 802. Study of the feasibility of alternative financial instruments 
              for determining lender yields.
Sec. 803. Student-related debt study required.
Sec. 804. Study of transfer of credits.
Sec. 805. Study of opportunities for participation in athletics 
              programs.
Sec. 806. Study of the effectiveness of cohort default rates for 
              institutions with few student loan borrowers.

              Part B--Advanced Placement Incentive Program

Sec. 810. Advanced placement incentive program.

               Part C--Community Scholarship Mobilization

Sec. 811. Short title.
Sec. 812. Findings.
Sec. 813. Definitions.
Sec. 814. Purpose; endowment grant authority.
Sec. 815. Grant agreement and requirements.
Sec. 816. Authorization of appropriations.

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

Sec. 821. Grants to States for workplace and community transition 
              training for incarcerated youth offenders.

   Part E--Grants to Combat Violent Crimes Against Women on Campuses

Sec. 826. Grants to combat violent crimes against women on campuses.
Sec. 827. Study of institutional procedures to report sexual assaults.

Part F--Improving United States Understanding of Science, Engineering, 
                      and Technology in East Asia

Sec. 831. Improving United States understanding of science, 
              engineering, and technology in East Asia.

                      Part G--Olympic Scholarships

Sec. 836. Extension of authorization.

                      Part H--Underground Railroad

Sec. 841. Underground Railroad educational and cultural program.

                Part I--Summer Travel and Work Programs

Sec. 846. Authority to administer summer travel and work programs.

                 Part J--Web-based Education Commission

Sec. 851. Short title; definitions.
Sec. 852. Establishment of Web-Based Education Commission.
Sec. 853. Duties of the Commission.
Sec. 854. Powers of the Commission.
Sec. 855. Commission personnel matters.
Sec. 856. Termination of the Commission.
Sec. 857. Authorization of appropriations.

                         Part K--Miscellaneous

Sec. 861. Education-welfare study.
Sec. 862. Release of conditions, covenants, and reversionary interests, 
              Guam Community College conveyance, Barrigada, Guam.
Sec. 863. Sense of Congress regarding good character.
Sec. 864. Educational merchandise licensing codes of conduct.

                   TITLE IX--AMENDMENTS TO OTHER LAWS

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

Sec. 901. Tribally controlled colleges and universities.
Sec. 902. Reauthorization of Navajo Community College Act.

                     Part B--Education of the Deaf

Sec. 911. Short title.
Sec. 912. Elementary and secondary education programs.
Sec. 913. Agreement with Gallaudet University.
Sec. 914. Agreement for the National Technical Institute for the Deaf.
Sec. 915. Definitions.
Sec. 916. Gifts.
Sec. 917. Reports.
Sec. 918. Monitoring, evaluation, and reporting.
Sec. 919. Federal endowment programs.
Sec. 920. Scholarship program.
Sec. 921. Oversight and effect of agreements.
Sec. 922. International students.
Sec. 923. Research priorities.
Sec. 924. National Study on the Education of the Deaf.
Sec. 925. Authorization of appropriations.

                Part C--United States Institute of Peace

Sec. 931. Authorities of the United States Institute of Peace.

              Part D--Voluntary Retirement Incentive Plans

Sec. 941. Voluntary retirement incentive plans.

           Part E--General Education Provisions Act Amendment

Sec. 951. Amendment to Family Educational Rights and Privacy Act of 
              1974.
Sec. 952. Alcohol or drug possession disclosure.

    Part F--Liaison for Proprietary Institutions of Higher Education

Sec. 961. Liaison for proprietary institutions of higher education.

                  Part G--Amendments to Other Statutes

Sec. 971. Nondischareability of certain claims for educational benefits 
              provided to obtain higher education.
Sec. 972. GNMA guarantee fee.

                            Part H--Repeals

Sec. 981. Repeals.
Sec. 982. Repeals of previous higher education amendments provisions.

     SEC. 2. REFERENCES.

       Except as otherwise expressly provided, whenever in this 
     Act an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Higher Education Act of 1965 (20 
     U.S.C. 1001 et seq.).

     SEC. 3. GENERAL EFFECTIVE DATE.

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

                      TITLE I--GENERAL PROVISIONS

     SEC. 101. REVISION OF TITLE I.

       (a) General Provisions.--Title I (20 U.S.C. 1001 et seq.) 
     is amended to read as follows:

                     ``TITLE I--GENERAL PROVISIONS

                         ``PART A--DEFINITIONS

     ``SEC. 101. GENERAL DEFINITION OF INSTITUTION OF HIGHER 
                   EDUCATION.

       ``(a) Institution of Higher Education.--For purposes of 
     this Act, other than title IV, the term `institution of 
     higher education' means an educational institution in any 
     State that--
       ``(1) admits as regular students only persons having a 
     certificate of graduation from a school providing secondary 
     education, or the recognized equivalent of such a 
     certificate;
       ``(2) is legally authorized within such State to provide a 
     program of education beyond secondary education;
       ``(3) provides an educational program for which the 
     institution awards a bachelor's degree or provides not less 
     than a 2-year program that is acceptable for full credit 
     toward such a degree;
       ``(4) is a public or other nonprofit institution; and
       ``(5) is accredited by a nationally recognized accrediting 
     agency or association, or if not so accredited, is an 
     institution that has been

[[Page H8980]]

     granted preaccreditation status by such an agency or 
     association that has been recognized by the Secretary for the 
     granting of preaccreditation status, and the Secretary has 
     determined that there is satisfactory assurance that the 
     institution will meet the accreditation standards of such an 
     agency or association within a reasonable time.
       ``(b) Additional Institutions Included.--For purposes of 
     this Act, other than title IV, the term `institution of 
     higher education' also includes--
       ``(1) any school that provides not less than a one-year 
     program of training to prepare students for gainful 
     employment in a recognized occupation and that meets the 
     provision of paragraphs (1), (2), (4), and (5) of subsection 
     (a); and
       ``(2) a public or nonprofit private educational institution 
     in any State that, in lieu of the requirement in subsection 
     (a)(1), admits as regular students persons who are beyond the 
     age of compulsory school attendance in the State in which the 
     institution is located.
       ``(c) List of Accrediting Agencies.--For purposes of this 
     section and section 102, the Secretary shall publish a list 
     of nationally recognized accrediting agencies or associations 
     that the Secretary determines, pursuant to subpart 2 of part 
     H of title IV, to be reliable authority as to the quality of 
     the education or training offered.

     ``SEC. 102. DEFINITION OF INSTITUTION OF HIGHER EDUCATION FOR 
                   PURPOSES OF TITLE IV PROGRAMS.

       ``(a) Definition of Institution of Higher Education for 
     Purposes of Title IV Programs.--
       ``(1) Inclusion of additional institutions.--Subject to 
     paragraphs (2) through (4) of this subsection, the term 
     `institution of higher education' for purposes of title IV 
     includes, in addition to the institutions covered by the 
     definition in section 101--
       ``(A) a proprietary institution of higher education (as 
     defined in subsection (b) of this section);
       ``(B) a postsecondary vocational institution (as defined in 
     subsection (c) of this section); and
       ``(C) only for the purposes of part B of title IV, an 
     institution outside the United States that is comparable to 
     an institution of higher education as defined in section 101 
     and that has been approved by the Secretary for the purpose 
     of part B of title IV.
       ``(2) Institutions outside the united states.--
       ``(A) In general.--For the purpose of qualifying as an 
     institution under paragraph (1)(C), the Secretary shall 
     establish criteria by regulation for the approval of 
     institutions outside the United States and for the 
     determination that such institutions are comparable to an 
     institution of higher education as defined in section 101. In 
     the case of a graduate medical or veterinary school outside 
     the United States, such criteria shall include a requirement 
     that a student attending such school outside the United 
     States is ineligible for loans made, insured, or guaranteed 
     under part B unless--
       ``(i)(I) at least 60 percent of those enrolled in, and at 
     least 60 percent of the graduates of, the graduate medical 
     school outside the United States were not persons described 
     in section 484(a)(5) in the year preceding the year for which 
     a student is seeking a loan under part B of title IV; and
       ``(II) at least 60 percent of the individuals who were 
     students or graduates of the graduate medical school outside 
     the United States (both nationals of the United States and 
     others) taking the examinations administered by the 
     Educational Commission for Foreign Medical Graduates received 
     a passing score in the year preceding the year for which a 
     student is seeking a loan under part B of title IV; or
       ``(ii) the institution has a clinical training program that 
     was approved by a State as of January 1, 1992, or the 
     institution's students complete their clinical training at an 
     approved veterinary school located in the United States.
       ``(B) Advisory panel.--
       ``(i) In general.--For the purpose of qualifying as an 
     institution under paragraph (1)(C) of this subsection, the 
     Secretary shall establish an advisory panel of medical 
     experts that shall--

       ``(I) evaluate the standards of accreditation applied to 
     applicant foreign medical schools; and
       ``(II) determine the comparability of those standards to 
     standards for accreditation applied to United States medical 
     schools.

       ``(ii) Special rule.--If the accreditation standards 
     described in clause (i) are determined not to be comparable, 
     the foreign medical school shall be required to meet the 
     requirements of section 101.
       ``(C) Failure to release information.--The failure of an 
     institution outside the United States to provide, release, or 
     authorize release to the Secretary of such information as may 
     be required by subparagraph (A) shall render such institution 
     ineligible for the purpose of part B of title IV.
       ``(D) Special rule.--If, pursuant to this paragraph, an 
     institution loses eligibility to participate in the programs 
     under title IV, then a student enrolled at such institution 
     may, notwithstanding such loss of eligibility, continue to be 
     eligible to receive a loan under part B while attending such 
     institution for the academic year succeeding the academic 
     year in which such loss of eligibility occurred.
       ``(3) Limitations based on course of study or enrollment.--
     An institution shall not be considered to meet the definition 
     of an institution of higher education in paragraph (1) if 
     such institution--
       ``(A) offers more than 50 percent of such institution's 
     courses by correspondence, unless the institution is an 
     institution that meets the definition in section 521(4)(C) of 
     the Carl D. Perkins Vocational and Applied Technology 
     Education Act;
       ``(B) enrolls 50 percent or more of the institution's 
     students in correspondence courses, unless the institution is 
     an institution that meets the definition in such section, 
     except that the Secretary, at the request of such 
     institution, may waive the applicability of this subparagraph 
     to such institution for good cause, as determined by the 
     Secretary in the case of an institution of higher education 
     that provides a 2-year or 4-year program of instruction (or 
     both) for which the institution awards an associate or 
     baccalaureate degree, respectively;
       ``(C) has a student enrollment in which more than 25 
     percent of the students are incarcerated, except that the 
     Secretary may waive the limitation contained in this 
     subparagraph for a nonprofit institution that provides a 4-
     year or a 2-year program of instruction (or both) for which 
     the institution awards a bachelor's degree, or an associate's 
     degree or a postsecondary diploma, respectively; or
       ``(D) has a student enrollment in which more than 50 
     percent of the students do not have a secondary school 
     diploma or its recognized equivalent, and does not provide a 
     4-year or a 2-year program of instruction (or both) for which 
     the institution awards a bachelor's degree or an associate's 
     degree, respectively, except that the Secretary may waive the 
     limitation contained in this subparagraph if a nonprofit 
     institution demonstrates to the satisfaction of the Secretary 
     that the institution exceeds such limitation because the 
     institution serves, through contracts with Federal, State, or 
     local government agencies, significant numbers of students 
     who do not have a secondary school diploma or its recognized 
     equivalent.
       ``(4) Limitations based on management.--An institution 
     shall not be considered to meet the definition of an 
     institution of higher education in paragraph (1) if--
       ``(A) the institution, or an affiliate of the institution 
     that has the power, by contract or ownership interest, to 
     direct or cause the direction of the management or policies 
     of the institution, has filed for bankruptcy, except that 
     this paragraph shall not apply to a nonprofit institution, 
     the primary function of which is to provide health care 
     educational services (or an affiliate of such an institution 
     that has the power, by contract or ownership interest, to 
     direct or cause the direction of the institution's management 
     or policies) that files for bankruptcy under chapter 11 of 
     title 11, United States Code, between July 1, 1998, and 
     December 1, 1998; or
       ``(B) the institution, the institution's owner, or the 
     institution's chief executive officer has been convicted of, 
     or has pled nolo contendere or guilty to, a crime involving 
     the acquisition, use, or expenditure of funds under title IV, 
     or has been judicially determined to have committed fraud 
     involving funds under title IV.
       ``(5) Certification.--The Secretary shall certify an 
     institution's qualification as an institution of higher 
     education in accordance with the requirements of subpart 3 of 
     part H of title IV.
       ``(6) Loss of eligibility.--An institution of higher 
     education shall not be considered to meet the definition of 
     an institution of higher education in paragraph (1) if such 
     institution is removed from eligibility for funds under title 
     IV as a result of an action pursuant to part H of title IV.
       ``(b) Proprietary Institution of Higher Education.--
       ``(1) Principal criteria.--For the purpose of this section, 
     the term `proprietary institution of higher education' means 
     a school that--
       ``(A) provides an eligible program of training to prepare 
     students for gainful employment in a recognized occupation;
       ``(B) meets the requirements of paragraphs (1) and (2) of 
     section 101(a);
       ``(C) does not meet the requirement of paragraph (4) of 
     section 101(a);
       ``(D) is accredited by a nationally recognized accrediting 
     agency or association recognized by the Secretary pursuant to 
     part H of title IV;
       ``(E) has been in existence for at least 2 years; and
       ``(F) has at least 10 percent of the school's revenues from 
     sources that are not derived from funds provided under title 
     IV, as determined in accordance with regulations prescribed 
     by the Secretary.
       ``(2) Additional institutions.--The term `proprietary 
     institution of higher education' also includes a proprietary 
     educational institution in any State that, in lieu of the 
     requirement in paragraph (1) of section 101(a), admits as 
     regular students persons who are beyond the age of compulsory 
     school attendance in the State in which the institution is 
     located.
       ``(c) Postsecondary Vocational Institution.--
       ``(1) Principal criteria.--For the purpose of this section, 
     the term `postsecondary vocational institution' means a 
     school that--
       ``(A) provides an eligible program of training to prepare 
     students for gainful employment in a recognized occupation;
       ``(B) meets the requirements of paragraphs (1), (2), (4), 
     and (5) of section 101(a); and
       ``(C) has been in existence for at least 2 years.
       ``(2) Additional institutions.--The term `postsecondary 
     vocational institution' also includes an educational 
     institution in any State that, in lieu of the requirement in 
     paragraph (1) of section 101(a), admits as regular students 
     persons who are beyond the age of compulsory school 
     attendance in the State in which the institution is located.

     ``SEC. 103. ADDITIONAL DEFINITIONS.

       ``In this Act:
       ``(1) Combination of institutions of higher education.--The 
     term `combination of institutions of higher education' means 
     a group of institutions of higher education that have entered 
     into a cooperative arrangement for the purpose of carrying 
     out a common objective, or a public

[[Page H8981]]

     or private nonprofit agency, organization, or institution 
     designated or created by a group of institutions of higher 
     education for the purpose of carrying out a common objective 
     on the group's behalf.
       ``(2) Department.--The term `Department' means the 
     Department of Education.
       ``(3) Disability.--The term `disability' has the same 
     meaning given that term under section 3(2) of the Americans 
     With Disabilities Act of 1990.
       ``(4) Elementary school.--The term `elementary school' has 
     the same meaning given that term under section 14101 of the 
     Elementary and Secondary Education Act of 1965.
       ``(5) Gifted and talented.--The term `gifted and talented' 
     has the same meaning given that term under section 14101 of 
     the Elementary and Secondary Education Act of 1965.
       ``(6) Local educational agency.--The term `local 
     educational agency' has the same meaning given that term 
     under section 14101 of the Elementary and Secondary Education 
     Act of 1965.
       ``(7) New borrower.--The term `new borrower' when used with 
     respect to any date means an individual who on that date has 
     no outstanding balance of principal or interest owing on any 
     loan made, insured, or guaranteed under title IV.
       ``(8) Nonprofit.--The term `nonprofit' as applied to a 
     school, agency, organization, or institution means a school, 
     agency, organization, or institution owned and operated by 
     one or more nonprofit corporations or associations, no part 
     of the net earnings of which inures, or may lawfully inure, 
     to the benefit of any private shareholder or individual.
       ``(9) School or department of divinity.--The term `school 
     or department of divinity' means an institution, or a 
     department or a branch of an institution, the program of 
     instruction of which is designed for the education of 
     students--
       ``(A) to prepare the students to become ministers of 
     religion or to enter upon some other religious vocation (or 
     to provide continuing training for any such vocation); or
       ``(B) to prepare the students to teach theological 
     subjects.
       ``(10) Secondary school.--The term `secondary school' has 
     the same meaning given that term under section 14101 of the 
     Elementary and Secondary Education Act of 1965.
       ``(11) Secretary.--The term `Secretary' means the Secretary 
     of Education.
       ``(12) Service-learning.--The term `service-learning' has 
     the same meaning given that term under section 101(23) of the 
     National and Community Service Act of 1990.
       ``(13) Special education teacher.--The term `special 
     education teacher' means teachers who teach children with 
     disabilities as defined in section 602 of the Individuals 
     with Disabilities Education Act.
       ``(14) State educational agency.--The term `State 
     educational agency' has the same meaning given that term 
     under section 14101 of the Elementary and Secondary Education 
     Act of 1965.
       ``(15) State higher education agency.--The term `State 
     higher education agency' means the officer or agency 
     primarily responsible for the State supervision of higher 
     education.
       ``(16) State; freely associated states.--
       ``(A) State.--The term `State' includes, in addition to the 
     several States of the United States, the Commonwealth of 
     Puerto Rico, the District of Columbia, Guam, American Samoa, 
     the United States Virgin Islands, the Commonwealth of the 
     Northern Mariana Islands, and the Freely Associated States.
       ``(B) Freely associated states.--The term `Freely 
     Associated States' means the Republic of the Marshall 
     Islands, the Federated States of Micronesia, and the Republic 
     of Palau.

                ``PART B--ADDITIONAL GENERAL PROVISIONS

     ``SEC. 111. ANTIDISCRIMINATION.

       ``(a) In General.--Institutions of higher education 
     receiving Federal financial assistance may not use such 
     financial assistance, directly or indirectly, to undertake 
     any study or project or fulfill the terms of any contract 
     containing an express or implied provision that any person or 
     persons of a particular race, religion, sex, or national 
     origin be barred from performing such study, project, or 
     contract, except that nothing in this subsection shall be 
     construed to prohibit an institution from conducting 
     objective studies or projects concerning the nature, effects, 
     or prevention of discrimination, or to have the institution's 
     curriculum restricted on the subject of discrimination.
       ``(b) Limitations on Statutory Construction.--Nothing in 
     this Act shall be construed to limit the rights or 
     responsibilities of any individual under the Americans With 
     Disabilities Act of 1990, the Rehabilitation Act of 1973, or 
     any other law.

     ``SEC. 112. 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 this Act, 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, to prevent hazing, 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. 113. TREATMENT OF TERRITORIES AND TERRITORIAL STUDENT 
                   ASSISTANCE.

       ``(a) Waiver Authority.--The Secretary is required to waive 
     the eligibility criteria of any postsecondary education 
     program administered by the Department where such criteria do 
     not take into account the unique circumstances in Guam, the 
     United States Virgin Islands, American Samoa, the 
     Commonwealth of the Northern Mariana Islands, and the Freely 
     Associated States.
       ``(b) Eligibility.--Notwithstanding any other provision of 
     law, an institution of higher education that is located in 
     any of the Freely Associated States, rather than in another 
     State, shall be eligible, if otherwise qualified, for 
     assistance under chapter 1 of subpart 2 of part A of title 
     IV. This subsection shall cease to be effective on September 
     30, 2004.

     ``SEC. 114. NATIONAL ADVISORY COMMITTEE ON INSTITUTIONAL 
                   QUALITY AND INTEGRITY.

       ``(a) Establishment.--There is established in the 
     Department a National Advisory Committee on Institutional 
     Quality and Integrity (hereafter in this section referred to 
     as the `Committee'), which shall be composed of 15 members 
     appointed by the Secretary from among individuals who are 
     representatives of, or knowledgeable concerning, education 
     and training beyond secondary education, including 
     representatives of all sectors and types of institutions of 
     higher education (as defined in section 102), to assess the 
     process of eligibility and certification of such institutions 
     under title IV and the provision of financial aid under title 
     IV.
       ``(b) Terms of Members.--Terms of office of each member of 
     the Committee shall be 3 years, except that any member 
     appointed to fill a vacancy occurring prior to the expiration 
     of the term for which the member's predecessor was appointed 
     shall be appointed for the remainder of such term.
       ``(c) Public Notice.--The Secretary shall--
       ``(1) annually publish in the Federal Register a list 
     containing the name of each member of the Committee and the 
     date of the expiration of the term of office of the member; 
     and
       ``(2) publicly solicit nominations for each vacant position 
     or expiring term of office on the Committee.
       ``(d) Functions.--The Committee shall--
       ``(1) advise the Secretary with respect to establishment 
     and enforcement of the standards of accrediting agencies or 
     associations under subpart 2 of part H of title IV;
       ``(2) advise the Secretary with respect to the recognition 
     of a specific accrediting agency or association;
       ``(3) advise the Secretary with respect to the preparation 
     and publication of the list of nationally recognized 
     accrediting agencies and associations;
       ``(4) develop and recommend to the Secretary standards and 
     criteria for specific categories of vocational training 
     institutions and institutions of higher education for which 
     there are no recognized accrediting agencies, associations, 
     or State agencies, in order to establish the eligibility of 
     such institutions on an interim basis for participation in 
     federally funded programs;
       ``(5) advise the Secretary with respect to the eligibility 
     and certification process for institutions of higher 
     education under title IV, together with recommendations for 
     improvements in such process;
       ``(6) advise the Secretary with respect to the relationship 
     between--
       ``(A) accreditation of institutions of higher education and 
     the certification and eligibility of such institutions; and
       ``(B) State licensing responsibilities with respect to such 
     institutions; and
       ``(7) carry out such other advisory functions relating to 
     accreditation and institutional eligibility as the Secretary 
     may prescribe.
       ``(e) Meeting Procedures.--The Committee shall meet not 
     less than twice each year at the call of the Chairperson. The 
     date of, and agenda for, each meeting of the Committee shall 
     be submitted in advance to the Secretary for approval. A 
     representative of the Secretary shall be present at all 
     meetings of the Committee.

[[Page H8982]]

       ``(f) Report.--Not later than November 30 of each year, the 
     Committee shall make an annual report through the Secretary 
     to Congress. The annual report shall contain--
       ``(1) a list of the members of the Committee and their 
     addresses;
       ``(2) a list of the functions of the Committee;
       ``(3) a list of dates and places of each meeting during the 
     preceding fiscal year; and
       ``(4) a summary of the activities, findings and 
     recommendations made by the Committee during the preceding 
     fiscal year.
       ``(g) Termination.--The Committee shall cease to exist on 
     September 30, 2004.

     ``SEC. 115. STUDENT REPRESENTATION.

       ``The Secretary shall, in appointing individuals to any 
     commission, committee, board, panel, or other body in 
     connection with the administration of this Act, include 
     individuals who are, at the time of appointment, attending an 
     institution of higher education.

     ``SEC. 116. FINANCIAL RESPONSIBILITY OF FOREIGN STUDENTS.

       ``Nothing in this Act or any other Federal law shall be 
     construed to prohibit any institution of higher education 
     from requiring a student who is a foreign national (and not 
     admitted to permanent residence in the United States) to 
     guarantee the future payment of tuition and fees to such 
     institution by--
       ``(1) making advance payment of such tuition and fees;
       ``(2) making deposits in an escrow account administered by 
     such institution for such payments; or
       ``(3) obtaining a bond or other insurance that such 
     payments will be made.

     ``SEC. 117. DISCLOSURES OF FOREIGN GIFTS.

       ``(a) Disclosure Report.--Whenever any institution is owned 
     or controlled by a foreign source or receives a gift from or 
     enters into a contract with a foreign source, the value of 
     which is $250,000 or more, considered alone or in combination 
     with all other gifts from or contracts with that foreign 
     source within a calendar year, the institution shall file a 
     disclosure report with the Secretary on January 31 or July 
     31, whichever is sooner.
       ``(b) Contents of Report.--Each report to the Secretary 
     required by this section shall contain the following:
       ``(1) For gifts received from or contracts entered into 
     with a foreign source other than a foreign government, the 
     aggregate dollar amount of such gifts and contracts 
     attributable to a particular country. The country to which a 
     gift is attributable is the country of citizenship, or if 
     unknown, the principal residence for a foreign source who is 
     a natural person, and the country of incorporation, or if 
     unknown, the principal place of business, for a foreign 
     source which is a legal entity.
       ``(2) For gifts received from or contracts entered into 
     with a foreign government, the aggregate amount of such gifts 
     and contracts received from each foreign government.
       ``(3) In the case of an institution which is owned or 
     controlled by a foreign source, the identity of the foreign 
     source, the date on which the foreign source assumed 
     ownership or control, and any changes in program or structure 
     resulting from the change in ownership or control.
       ``(c) Additional Disclosures for Restricted and Conditional 
     Gifts.--Notwithstanding the provisions of subsection (b), 
     whenever any institution receives a restricted or conditional 
     gift or contract from a foreign source, the institution shall 
     disclose the following:
       ``(1) For such gifts received from or contracts entered 
     into with a foreign source other than a foreign government, 
     the amount, the date, and a description of such conditions or 
     restrictions. The report shall also disclose the country of 
     citizenship, or if unknown, the principal residence for a 
     foreign source which is a natural person, and the country of 
     incorporation, or if unknown, the principal place of business 
     for a foreign source which is a legal entity.
       ``(2) For gifts received from or contracts entered into 
     with a foreign government, the amount, the date, a 
     description of such conditions or restrictions, and the name 
     of the foreign government.
       ``(d) Relation to Other Reporting Requirements.--
       ``(1) State requirements.--If an institution described 
     under subsection (a) is within a State which has enacted 
     requirements for public disclosure of gifts from or contracts 
     with a foreign source that are substantially similar to the 
     requirements of this section, a copy of the disclosure report 
     filed with the State may be filed with the Secretary in lieu 
     of a report required under subsection (a). The State in which 
     the institution is located shall provide to the Secretary 
     such assurances as the Secretary may require to establish 
     that the institution has met the requirements for public 
     disclosure under State law if the State report is filed.
       ``(2) Use of other federal reports.--If an institution 
     receives a gift from, or enters into a contract with, a 
     foreign source, where any other department, agency, or bureau 
     of the Executive Branch requires a report containing 
     requirements substantially similar to those required under 
     this section, a copy of the report may be filed with the 
     Secretary in lieu of a report required under subsection (a).
       ``(e) Public Inspection.--All disclosure reports required 
     by this section shall be public records open to inspection 
     and copying during business hours.
       ``(f) Enforcement.--
       ``(1) Court orders.--Whenever it appears that an 
     institution has failed to comply with the requirements of 
     this section, including any rule or regulation promulgated 
     under this section, a civil action may be brought by the 
     Attorney General, at the request of the Secretary, in an 
     appropriate district court of the United States, or the 
     appropriate United States court of any territory or other 
     place subject to the jurisdiction of the United States, to 
     request such court to compel compliance with the requirements 
     of this section.
       ``(2) Costs.--For knowing or willful failure to comply with 
     the requirements of this section, including any rule or 
     regulation promulgated thereunder, an institution shall pay 
     to the Treasury of the United States the full costs to the 
     United States of obtaining compliance, including all 
     associated costs of investigation and enforcement.
       ``(g) Regulations.--The Secretary may promulgate 
     regulations to carry out this section.
       ``(h) Definitions.--For the purpose of this section--
       ``(1) the term `contract' means any agreement for the 
     acquisition by purchase, lease, or barter of property or 
     services by the foreign source, for the direct benefit or use 
     of either of the parties;
       ``(2) the term `foreign source' means--
       ``(A) a foreign government, including an agency of a 
     foreign government;
       ``(B) a legal entity, governmental or otherwise, created 
     solely under the laws of a foreign state or states;
       ``(C) an individual who is not a citizen or a national of 
     the United States or a trust territory or protectorate 
     thereof; and
       ``(D) an agent, including a subsidiary or affiliate of a 
     foreign legal entity, acting on behalf of a foreign source;
       ``(3) the term `gift' means any gift of money or property;
       ``(4) the term `institution' means any institution, public 
     or private, or, if a multicampus institution, any single 
     campus of such institution, in any State, that--
       ``(A) is legally authorized within such State to provide a 
     program of education beyond secondary school;
       ``(B) provides a program for which the institution awards a 
     bachelor's degree (or provides not less than a 2-year program 
     which is acceptable for full credit toward such a degree) or 
     more advanced degrees; and
       ``(C) is accredited by a nationally recognized accrediting 
     agency or association and to which institution Federal 
     financial assistance is extended (directly or indirectly 
     through another entity or person), or which institution 
     receives support from the extension of Federal financial 
     assistance to any of the institution's subunits; and
       ``(5) the term `restricted or conditional gift or contract' 
     means any endowment, gift, grant, contract, award, present, 
     or property of any kind which includes provisions regarding--
       ``(A) the employment, assignment, or termination of 
     faculty;
       ``(B) the establishment of departments, centers, research 
     or lecture programs, or new faculty positions;
       ``(C) the selection or admission of students; or
       ``(D) the award of grants, loans, scholarships, 
     fellowships, or other forms of financial aid restricted to 
     students of a specified country, religion, sex, ethnic 
     origin, or political opinion.

     ``SEC. 118. APPLICATION OF PEER REVIEW PROCESS.

       ``All applications submitted under the provisions of this 
     Act which require peer review shall be read by a panel of 
     readers composed of individuals selected by the Secretary, 
     which shall include outside readers who are not employees of 
     the Federal Government. The Secretary shall ensure that no 
     individual assigned under this section to review any 
     application has any conflict of interest with regard to that 
     application which might impair the impartiality with which 
     that individual conducts the review under this section.

     ``SEC. 119. BINGE DRINKING ON COLLEGE CAMPUSES.

       ``(a) Short Title.--This section may be cited as the 
     `Collegiate Initiative To Reduce Binge Drinking and Illegal 
     Alcohol Consumption'.
       ``(b) 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 
     assistance, including to on-campus counseling programs if 
     appropriate.
       ``(5) The institution should adopt a policy to discourage 
     alcoholic beverage-related sponsorship of on-campus 
     activities. It should adopt policies limiting the 
     advertisement and promotion 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.

[[Page H8983]]

     ``SEC. 120. DRUG AND ALCOHOL ABUSE PREVENTION.

       ``(a) Restriction on Eligibility.--Notwithstanding any 
     other provision of law, no institution of higher education 
     shall be eligible to receive funds or any other form of 
     financial assistance under any Federal program, including 
     participation in any federally funded or guaranteed student 
     loan program, unless the institution certifies to the 
     Secretary that the institution has adopted and has 
     implemented a program to prevent the use of illicit drugs and 
     the abuse of alcohol by students and employees that, at a 
     minimum, includes--
       ``(1) the annual distribution to each student and employee 
     of--
       ``(A) standards of conduct that clearly prohibit, at a 
     minimum, the unlawful possession, use, or distribution of 
     illicit drugs and alcohol by students and employees on the 
     institution's property or as part of any of the institution's 
     activities;
       ``(B) a description of the applicable legal sanctions under 
     local, State, or Federal law for the unlawful possession or 
     distribution of illicit drugs and alcohol;
       ``(C) a description of the health-risks associated with the 
     use of illicit drugs and the abuse of alcohol;
       ``(D) a description of any drug or alcohol counseling, 
     treatment, or rehabilitation or re-entry programs that are 
     available to employees or students; and
       ``(E) a clear statement that the institution will impose 
     sanctions on students and employees (consistent with local, 
     State, and Federal law), and a description of those 
     sanctions, up to and including expulsion or termination of 
     employment and referral for prosecution, for violations of 
     the standards of conduct required by subparagraph (A); and
       ``(2) a biennial review by the institution of the 
     institution's program to--
       ``(A) determine the program's effectiveness and implement 
     changes to the program if the changes are needed; and
       ``(B) ensure that the sanctions required by paragraph 
     (1)(E) are consistently enforced.
       ``(b) Information Availability.--Each institution of higher 
     education that provides the certification required by 
     subsection (a) shall, upon request, make available to the 
     Secretary and to the public a copy of each item required by 
     subsection (a)(1) as well as the results of the biennial 
     review required by subsection (a)(2).
       ``(c) Regulations.--
       ``(1) In general.--The Secretary shall publish regulations 
     to implement and enforce the provisions of this section, 
     including regulations that provide for--
       ``(A) the periodic review of a representative sample of 
     programs required by subsection (a); and
       ``(B) a range of responses and sanctions for institutions 
     of higher education that fail to implement their programs or 
     to consistently enforce their sanctions, including 
     information and technical assistance, the development of a 
     compliance agreement, and the termination of any form of 
     Federal financial assistance.
       ``(2) Rehabilitation program.--The sanctions required by 
     subsection (a)(1)(E) may include the completion of an 
     appropriate rehabilitation program.
       ``(d) Appeals.--Upon determination by the Secretary to 
     terminate financial assistance to any institution of higher 
     education under this section, the institution may file an 
     appeal with an administrative law judge before the expiration 
     of the 30-day period beginning on the date such institution 
     is notified of the decision to terminate financial assistance 
     under this section. Such judge shall hold a hearing with 
     respect to such termination of assistance before the 
     expiration of the 45-day period beginning on the date that 
     such appeal is filed. Such judge may extend such 45-day 
     period upon a motion by the institution concerned. The 
     decision of the judge with respect to such termination shall 
     be considered to be a final agency action.
       ``(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 and contracts 
     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 and drug 
     abuse prevention programs in higher education and to focus 
     national attention on exemplary alcohol and drug abuse 
     prevention efforts.
       ``(2) Awards.--
       ``(A) In general.--The Secretary shall make 5 National 
     Recognition Awards for outstanding alcohol prevention 
     programs and 5 National Recognition Awards for outstanding 
     drug abuse prevention programs, on an annual basis, to 
     institutions of higher education that--
       ``(i) have developed and implemented innovative and 
     effective alcohol prevention programs or drug abuse 
     prevention programs; and
       ``(ii) with respect to an application for an alcohol 
     prevention program award, 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 review criteria described in 
     paragraph (3)(C)(iii).
       ``(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 and drug abuse 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 outstanding 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 prevention program of the institution;
       ``(ii) a description of program activities that focus on 
     alcohol or drug 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 such programs and the 
     means used to evaluate and improve the programs' efforts;
       ``(v) a description of special initiatives used to reduce 
     high-risk behavior or increase low risk behavior; and
       ``(vi) a description of coordination and networking efforts 
     that exist in the community in which the institution is 
     located for purposes of such programs.
       ``(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 and drug abuse 
     prevention and education efforts, directors or heads (or 
     their representatives) of professional associations that 
     focus on alcohol and drug 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. The review criteria shall include--
       ``(i) measures of the effectiveness of the program of the 
     institution, that includes changes in the campus alcohol or 
     other drug environment or the climate and changes in alcohol 
     or other drug use before and after the initiation of the 
     program;
       ``(ii) measures of program institutionalization, 
     including--

       ``(I) an assessment of needs of the institution;
       ``(II) the institution's alcohol and drug policies, staff 
     and faculty development activities, drug prevention criteria, 
     student, faculty, and campus community involvement; and
       ``(III) whether the program will be continued after the 
     cessation of Federal funding; and

       ``(iii) with respect to an application for an alcohol 
     prevention program award, criteria for determining whether 
     the institution 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;

[[Page H8984]]

       ``(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.--In order to be eligible to receive a 
     National Recognition Award an institution of higher education 
     shall--
       ``(A) offer an associate or baccalaureate degree;
       ``(B) have established an alcohol abuse prevention and 
     education program or a drug abuse prevention and education 
     program;
       ``(C) nominate itself or be nominated by others, such as 
     professional associations or student organizations, to 
     receive the award; and
       ``(D) not have received an award under this subsection 
     during the 5 academic years preceding the academic year for 
     which the determination is made.
       ``(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.

     ``SEC. 121. PRIOR RIGHTS AND OBLIGATIONS.

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

     shall be subject to the requirements of such part as such 
     part was in effect during such period.

     ``SEC. 122. RECOVERY OF PAYMENTS.

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

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

                   ``PART C--COST OF HIGHER EDUCATION

     ``SEC. 131. IMPROVEMENTS IN MARKET INFORMATION AND PUBLIC 
                   ACCOUNTABILITY IN HIGHER EDUCATION.

       ``(a) Improved Data Collection.--
       ``(1) Development of uniform methodology.--The Secretary 
     shall direct the Commissioner of Education Statistics to 
     convene a series of forums to develop nationally consistent 
     methodologies for reporting costs incurred by postsecondary 
     institutions in providing postsecondary education.
       ``(2) Redesign of data systems.--On the basis of the 
     methodologies developed pursuant to paragraph (1), the 
     Secretary shall redesign relevant parts of the postsecondary 
     education data systems to improve the usefulness and 
     timeliness of the data collected by such systems.
       ``(3) Information to institutions.--The Commissioner of 
     Education Statistics shall--
       ``(A) develop a standard definition for the following data 
     elements:
       ``(i) tuition and fees for a full-time undergraduate 
     student;
       ``(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; and

       ``(iv) number of students receiving financial assistance 
     described in each of subclauses (I), (II), and (III) of 
     clause (iii);
       ``(B) not later than 90 days after the date of enactment of 
     the Higher Education Amendments of 1998, report the 
     definitions to each institution of higher education and 
     within a reasonable period of time thereafter inform the 
     Committee on Labor and Human Resources of the Senate and the 
     Committee on Education and the Workforce of the House of 
     Representatives of those definitions; and
       ``(C) collect information regarding the data elements 
     described in subparagraph (A) with respect to at least all 
     institutions of higher education participating in programs 
     under title IV, beginning with the information from academic 
     year 2000-2001 and annually thereafter.
       ``(b) Data Dissemination.--The Secretary shall make 
     available the data collected pursuant to subsection (a). Such 
     data shall be available in a form that permits the review and 
     comparison of the data submissions of individual institutions 
     of higher education. Such data shall be presented in a form 
     that is easily understandable and allows parents and students 
     to make informed decisions based on the costs for typical 
     full-time undergraduate students.
       ``(c) Study.--
       ``(1) In general.--The Commissioner of Education Statistics 
     shall conduct a national study of expenditures at 
     institutions of higher education. Such study shall include 
     information with respect to--
       ``(A) the change in tuition and fees compared with the 
     consumer price index and other appropriate measures of 
     inflation;
       ``(B) faculty salaries and benefits;
       ``(C) administrative salaries, benefits and expenses;
       ``(D) academic support services;
       ``(E) research;
       ``(F) operations and maintenance; and
       ``(G) institutional expenditures for construction and 
     technology and the potential cost of replacing instructional 
     buildings and equipment.
       ``(2) Evaluation.--The study shall include an evaluation 
     of--
       ``(A) changes over time in the expenditures identified in 
     paragraph (1);
       ``(B) the relationship of the expenditures identified in 
     paragraph (1) to college costs; and
       ``(C) the extent to which increases in institutional 
     financial aid and tuition discounting practices affect 
     tuition increases, including the demographics of students 
     receiving such discounts, the extent to which financial aid 
     is provided to students with limited need in order to attract 
     a student to a particular institution, and the extent to 
     which Federal financial aid, including loan aid, has been 
     used to offset the costs of such practices.
       ``(3) Final report.--The Commissioner of Education 
     Statistics shall submit a report regarding the findings of 
     the study required by paragraph (1) to the appropriate 
     Committees of Congress not later than September 30, 2002.
       ``(4) Higher education market basket.--The Bureau of Labor 
     Statistics, in consultation with the Commissioner of 
     Education Statistics, shall develop a higher education market 
     basket that identifies the items that comprise the costs of 
     higher education. The Bureau of Labor Statistics shall 
     provide a report on the market basket to the Committee on 
     Labor and Human Resources of the Senate and the Committee on 
     Education and the Workforce of the House of Representatives 
     not later than September 30, 2002.
       ``(5) Fines.--In addition to actions authorized in section 
     487(c), the Secretary may impose a fine in an amount not to 
     exceed $25,000 on an institution of higher education for 
     failing to provide the information described in paragraph (1) 
     in a timely and accurate manner, or for failing to otherwise 
     cooperate with the National Center for Education Statistics 
     regarding efforts to obtain data on the cost of higher 
     education under this section and pursuant to the program 
     participation agreement entered into under section 487.
       ``(d) Student Aid Recipient Survey.--(1) The Secretary 
     shall survey student aid recipients on a regular cycle, but 
     not less than once every 3 years--
       ``(A) to identify the population of students receiving 
     Federal student aid;
       ``(B) to determine the income distribution and other 
     socioeconomic characteristics of federally aided students;

[[Page H8985]]

       ``(C) to describe the combinations of aid from State, 
     Federal, and private sources received by students from all 
     income groups;
       ``(D) to describe the debt burden of loan recipients and 
     their capacity to repay their education debts; and
       ``(E) to disseminate such information in both published and 
     machine readable form.
       ``(2) The survey shall be representative of full-time and 
     part-time, undergraduate, graduate, and professional and 
     current and former students in all types of institutions, and 
     should be designed and administered in consultation with the 
     Congress and the postsecondary education community.

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

     ``SEC. 141. PERFORMANCE-BASED ORGANIZATION FOR THE DELIVERY 
                   OF FEDERAL STUDENT FINANCIAL ASSISTANCE.

       ``(a) Establishment and Purpose.--
       ``(1) Establishment.--There is established in the 
     Department a Performance-Based Organization (hereafter 
     referred to as the `PBO') which shall be a discrete 
     management unit responsible for managing the operational 
     functions supporting the programs authorized under title IV 
     of this Act, as specified in subsection (b).
       ``(2) Purposes.--The purposes of the PBO are--
       ``(A) to improve service to students and other participants 
     in the student financial assistance programs authorized under 
     title IV, including making those programs more understandable 
     to students and their parents;
       ``(B) to reduce the costs of administering those programs;
       ``(C) to increase the accountability of the officials 
     responsible for administering the operational aspects of 
     these programs;
       ``(D) to provide greater flexibility in the management of 
     the operational functions of the Federal student financial 
     assistance programs;
       ``(E) to integrate the information systems supporting the 
     Federal student financial assistance programs;
       ``(F) to implement an open, common, integrated system for 
     the delivery of student financial assistance under title IV; 
     and
       ``(G) to develop and maintain a student financial 
     assistance system that contains complete, accurate, and 
     timely data to ensure program integrity.
       ``(b) General Authority.--
       ``(1) Authority of secretary.--Notwithstanding any other 
     provision of this part, the Secretary shall maintain 
     responsibility for the development and promulgation of policy 
     and regulations relating to the programs of student financial 
     assistance under title IV. In the exercise of its functions, 
     the PBO shall be subject to the direction of the Secretary. 
     The Secretary shall--
       ``(A) request the advice of, and work in cooperation with, 
     the Chief Operating Officer in developing regulations, 
     policies, administrative guidance, or procedures affecting 
     the information systems administered by the PBO, and other 
     functions performed by the PBO;
       ``(B) request cost estimates from the Chief Operating 
     Officer for system changes required by specific policies 
     proposed by the Secretary; and
       ``(C) assist the Chief Operating Officer in identifying 
     goals for the administration and modernization of the 
     delivery system for student financial assistance under title 
     IV.
       ``(2) PBO functions.--Subject to paragraph(1), the PBO 
     shall be responsible for administration of the information 
     and financial systems that support student financial 
     assistance programs authorized under this title, excluding 
     the development of policy relating to such programs but 
     including the following:
       ``(A) The administrative, accounting, and financial 
     management functions of the delivery system for Federal 
     student assistance, including--
       ``(i) the collection, processing and transmission of 
     applicant data to students, institutions and authorized third 
     parties, as provided for in section 483;
       ``(ii) design and technical specifications for software 
     development and systems supporting the delivery of student 
     financial assistance under title IV;
       ``(iii) all software and hardware acquisitions and all 
     information technology contracts related to the delivery and 
     management of student financial assistance under title IV;
       ``(iv) all aspects of contracting for the information and 
     financial systems supporting student financial assistance 
     programs under this title; and
       ``(v) providing all customer service, training, and user 
     support related to systems that support those programs.
       ``(B) Annual development of a budget for the operations and 
     services of the PBO, in consultation with the Secretary, and 
     for consideration and inclusion in the Department's annual 
     budget submission.
       ``(3) Additional functions.--The Secretary may allocate to 
     the PBO such additional functions as the Secretary and the 
     Chief Operating Officer determine are necessary or 
     appropriate to achieve the purposes of the PBO.
       ``(4) Independence.--Subject to paragraph (1), in carrying 
     out its functions, the PBO shall exercise independent control 
     of its budget allocations and expenditures, personnel 
     decisions and processes, procurements, and other 
     administrative and management functions.
       ``(5) Audits and review.--The PBO shall be subject to the 
     usual and customary Federal audit procedures and to review by 
     the Inspector General of the Department.
       ``(6) Changes.--
       ``(A) In general.--The Secretary and the Chief Operating 
     Officer shall consult concerning the effects of policy, 
     market, or other changes on the ability of the PBO to achieve 
     the goals and objectives established in the performance plan 
     described in subsection (c).
       ``(B) Revisions to agreement.--The Secretary and the Chief 
     Operating Officer may revise the annual performance agreement 
     described in subsection (d)(4) in light of policy, market, or 
     other changes that occur after the Secretary and the Chief 
     Operating Officer enter into the agreement.
       ``(c) Performance Plan and Report.--
       ``(1) Performance plan.--
       ``(A) In general.--Each year, the Secretary and Chief 
     Operating Officer shall agree on, and make available to the 
     public, a performance plan for the PBO for the succeeding 5 
     years that establishes measurable goals and objectives for 
     the organization.
       ``(B) Consultation.--In developing the 5-year performance 
     plan and any revision to the plan, the Secretary and the 
     Chief Operating Officer shall consult with students, 
     institutions of higher education, Congress, lenders, the 
     Advisory Committee on Student Financial Assistance, and other 
     interested parties not less than 30 days prior to the 
     implementation of the performance plan or revision.
       ``(C) Areas.--The plan shall include a concise statement of 
     the goals for a modernized system for the delivery of student 
     financial assistance under title IV and identify action steps 
     necessary to achieve such goals. The plan shall address the 
     PBO's responsibilities in the following areas:
       ``(i) Improving service.--Improving service to students and 
     other participants in student financial aid programs 
     authorized under this title, including making those programs 
     more understandable to students and their parents.
       ``(ii) Reducing costs.--Reducing the costs of administering 
     those programs.
       ``(iii) Improvement and integration of support systems.--
     Improving and integrating the information and delivery 
     systems that support those programs.
       ``(iv) Delivery and information system.--Developing an 
     open, common, and integrated delivery and information system 
     for programs authorized under this title.
       ``(v) Other areas.--Any other areas identified by the 
     Secretary.
       ``(2) Annual report.--Each year, the Chief Operating 
     Officer shall prepare and submit to Congress, through the 
     Secretary, an annual report on the performance of the PBO, 
     including an evaluation of the extent to which the PBO met 
     the goals and objectives contained in the 5-year performance 
     plan described in paragraph (1) for the preceding year. The 
     annual report shall include the following:
       ``(A) An independent financial audit of the expenditures of 
     both the PBO and programs administered by the PBO.
       ``(B) Financial and performance requirements applicable to 
     the PBO under the Chief Financial Officer Act of 1990 and the 
     Government Performance and Results Act of 1993.
       ``(C) The results achieved by the PBO during the year 
     relative to the goals established in the organization's 
     performance plan.
       ``(D) The evaluation rating of the performance of the Chief 
     Operating Officer and senior managers under subsections 
     (d)(4) and (e)(2), including the amounts of bonus 
     compensation awarded to these individuals;
       ``(E) recommendations for legislative and regulatory 
     changes to improve service to students and their families, 
     and to improve program efficiency and integrity; and
       ``(F) other such information as the Director of the Office 
     of Management and Budget shall prescribe for performance 
     based organizations.
       ``(3) Consultation with stakeholders.--The Chief Operating 
     Officer, in preparing the report described in paragraph (2), 
     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--
       ``(A) regarding the degree of satisfaction with the 
     delivery system; and
       ``(B) to seek suggestions on means to improve the delivery 
     system.
       ``(d) Chief Operating Officer.--
       ``(1) Appointment.--The management of the PBO shall be 
     vested in a Chief Operating Officer who shall be appointed by 
     the Secretary to a term of not less than 3 and not more than 
     5 years, and compensated without regard to chapters 33, 51, 
     and 53 of title 5, United States Code. The Secretary shall 
     appoint the Chief Operating Officer within 6 months after the 
     date of enactment of the Higher Education Amendments of 1998. 
     The appointment shall be made on the basis of demonstrated 
     management ability and expertise in information technology, 
     including experience with financial systems, and without 
     regard to political affiliation or activity.
       ``(2) Reappointment.--The Secretary may reappoint the Chief 
     Operating Officer to subsequent terms of not less than 3 and 
     not more than 5 years, so long as the performance of the 
     Chief Operating Officer, as set forth in the performance 
     agreement described in paragraph (4), is satisfactory.
       ``(3) Removal.--The Chief Operating Officer may be removed 
     by--
       ``(A) the President; or
       ``(B) the Secretary, for misconduct or failure to meet 
     performance goals set forth in the performance agreement in 
     paragraph (4).

     The President or Secretary shall communicate the reasons for 
     any such removal to the appropriate committees of Congress.
       ``(4) Performance agreement.--
       ``(A) In general.--Each year, the Secretary and the Chief 
     Operating Officer shall enter into an annual performance 
     agreement, that shall set forth measurable organization and 
     individual goals for the Chief Operating Officer.
       ``(B) Transmittal.--The final agreement, and any revision 
     to the final agreement, shall be

[[Page H8986]]

     transmitted to the Committee on Education and the Workforce 
     of the House of Representatives and the Committee on Labor 
     and Human Resources of the Senate, and made publicly 
     available.
       ``(5) Compensation.--
       ``(A) In general.--The Chief Operating Officer is 
     authorized to be paid at an annual rate of basic pay not to 
     exceed the maximum rate of basic pay for the Senior Executive 
     Service under section 5382 of title 5, United States Code, 
     including any applicable locality-based comparability payment 
     that may be authorized under section 5304(h)(2)(B) of such 
     title. The compensation of the Chief Operating Officer 
     shall be considered for purposes of section 207(c)(2)(A) 
     of title 18, United States Code, to be the equivalent of 
     that described under clause (ii) of section 207(c)(2)(A) 
     of such title.
       ``(B) Bonus.--In addition, the Chief Operating Officer may 
     receive a bonus in an amount that does not exceed 50 percent 
     of such annual rate of basic pay, based upon the Secretary's 
     evaluation of the Chief Operating Officer's performance in 
     relation to the goals set forth in the performance agreement 
     described in paragraph (2).
       ``(C) Payment.--Payment of a bonus under this subparagraph 
     (B) may be made to the Chief Operating Officer only to the 
     extent that such payment does not cause the Chief Operating 
     Officer's total aggregate compensation in a calendar year to 
     equal or exceed the amount of the President's salary under 
     section 102 of title 3, United States Code.
       ``(e) Senior Management.--
       ``(1) Appointment.--
       ``(A) In general.--The Chief Operating Officer may appoint 
     such senior managers as that officer determines necessary 
     without regard to the provisions of title 5, United States 
     Code, governing appointments in the competitive service.
       ``(B) Compensation.--The senior managers described in 
     subparagraph (A) may be paid without regard to the provisions 
     of chapter 51 and subchapter III of chapter 53 of such title 
     relating to classification and General Schedule pay rates.
       ``(2) Performance agreement.--Each year, the Chief 
     Operating Officer and each senior manager appointed under 
     this subsection shall enter into an annual performance 
     agreement that sets forth measurable organization and 
     individual goals. The agreement shall be subject to review 
     and renegotiation at the end of each term.
       ``(3) Compensation.--
       ``(A) In general.--A senior manager appointed under this 
     subsection may be paid at an annual rate of basic pay of not 
     more than the maximum rate of basic pay for the Senior 
     Executive Service under section 5382 of title 5, United 
     States Code, including any applicable locality-based 
     comparability payment that may be authorized under section 
     5304(h)(2)(C) of such title 5. The compensation of a senior 
     manager shall be considered for purposes of section 
     207(c)(2)(A) of title 18, United States Code, to be the 
     equivalent of that described under clause (ii) of section 
     207(c)(2)(A) of such title.
       ``(B) Bonus.--In addition, a senior manager may receive a 
     bonus in an amount such that the manager's total annual 
     compensation does not exceed 125 percent of the maximum rate 
     of basic pay for the Senior Executive Service, including any 
     applicable locality-based comparability payment, based upon 
     the Chief Operating Officer's evaluation of the manager's 
     performance in relation to the goals set forth in the 
     performance agreement described in paragraph (2).
       ``(4) Removal.--A senior manager shall be removable by the 
     Chief Operating Officer, or by the Secretary if the position 
     of Chief Operating Officer is vacant.
       ``(f) Student Loan Ombudsman.--
       ``(1) Appointment.--The Chief Operating Officer, in 
     consultation with the Secretary, shall appoint a Student Loan 
     Ombudsman to provide timely assistance to borrowers of loans 
     made, insured, or guaranteed under title IV by performing the 
     functions described in paragraph (3).
       ``(2) Public information.--The Chief Operating Officer 
     shall disseminate information about the availability and 
     functions of the Ombudsman to borrowers and potential 
     borrowers, as well as institutions of higher education, 
     lenders, guaranty agencies, loan servicers, and other 
     participants in those student loan programs.
       ``(3) Functions of ombudsman.--The Ombudsman shall--
       ``(A) in accordance with regulations of the Secretary, 
     receive, review, and attempt to resolve informally complaints 
     from borrowers of loans described in paragraph (1), 
     including, as appropriate, attempts to resolve such 
     complaints within the Department of Education and with 
     institutions of higher education, lenders, guaranty agencies, 
     loan servicers, and other participants in the loan programs 
     described in paragraph (1)(A); and
       ``(B) compile and analyze data on borrower complaints and 
     make appropriate recommendations.
       ``(4) Report.--Each year, the Ombudsman shall submit a 
     report to the Chief Operating Officer, for inclusion in the 
     annual report under subsection (c)(2), that describes the 
     activities, and evaluates the effectiveness, of the Ombudsman 
     during the preceding year.
       ``(g) Personnel Flexibility.--
       ``(1) Personnel ceilings.--The PBO shall not be subject to 
     any ceiling relating to the number or grade of employees.
       ``(2) Administrative flexibility.--The Chief Operating 
     Officer shall work with the Office of Personnel Management to 
     develop and implement personnel flexibilities in staffing, 
     classification, and pay that meet the needs of the PBO, 
     subject to compliance with title 5, United States Code.
       ``(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.
       ``(h) Establishment of a Fair and Equitable System for 
     Measuring Staff Performance.--The PBO shall establish an 
     annual performance management system, subject to compliance 
     with title 5, United States Code and consistent with 
     applicable provisions of law and regulations, which 
     strengthens the organizational effectiveness of the PBO by 
     providing for establishing goals or objectives for 
     individual, group, or organizational performance (or any 
     combination thereof), consistent with the performance plan of 
     the PBO and its performance planning procedures, including 
     those established under the Government Performance and 
     Results Act of 1993, and communicating such goals or 
     objectives to employees.
       ``(i) 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.
       ``(j) Authorization of Appropriations.--The Secretary shall 
     allocate from funds made available under section 458 such 
     funds as are appropriate to the functions assumed by the PBO. 
     In addition, there are authorized to be appropriated such 
     sums as may be necessary to carry out the purposes of this 
     part, including transition costs.

     ``SEC. 142. PROCUREMENT FLEXIBILITY.

       ``(a) Procurement Authority.--Subject to the authority 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) In General.--Except as provided in this section, the 
     PBO shall abide by all applicable Federal procurement laws 
     and regulations when procuring property and services. The PBO 
     shall--
       ``(1) enter into contracts for information systems 
     supporting the programs authorized under title IV to carry 
     out the functions set forth in section 141(b)(2); and
       ``(2) obtain the services of experts and consultants 
     without regard to section 3109 of title 5, United States Code 
     and set pay in accordance with such section.
       ``(c) Service Contracts.--
       ``(1) Performance-based servicing contracts.--The Chief 
     Operating Officer shall, to the extent practicable, maximize 
     the use of performance-based servicing contracts, consistent 
     with guidelines for such contracts published by the Office of 
     Federal Procurement Policy, to achieve cost savings and 
     improve service.
       ``(2) Fee for service arrangements.--The Chief Operating 
     Officer shall, when appropriate and consistent with the 
     purposes of the PBO, acquire services related to the title IV 
     delivery system from any entity that has the capability and 
     capacity to meet the requirements for the system. The Chief 
     Operating Officer is authorized to pay fees that are 
     equivalent to those paid by other entities to an organization 
     that provides an information system or service that meets the 
     requirements of the PBO, as determined by the Chief Operating 
     Officer.
       ``(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:
       ``(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

[[Page H8987]]

     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 of the 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 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) 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.
       ``(4) 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).
       ``(5) 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. 143. ADMINISTRATIVE SIMPLIFICATION OF STUDENT AID 
                   DELIVERY.

       ``(a) In General.--In order to improve the efficiency and 
     effectiveness of the student aid delivery system, the 
     Secretary and the Chief Operating Officer shall encourage and 
     participate in the establishment of voluntary consensus 
     standards and requirements for the electronic transmission of 
     information necessary for the administration of programs 
     under title IV.
       ``(b) Participation in Standard Setting Organizations.--

[[Page H8988]]

       ``(1) The Chief Operating Officer shall participate in the 
     activities of standard setting organizations in carrying out 
     the provisions of this section.
       ``(2) The Chief Operating Officer shall encourage higher 
     education groups seeking to develop common forms, standards, 
     and procedures in support of the delivery of Federal student 
     financial assistance to conduct these activities within a 
     standard setting organization.
       ``(3) The Chief Operating Officer may pay necessary dues 
     and fees associated with participating in standard setting 
     organizations pursuant to this subsection.
       ``(c) Adoption of Voluntary Consensus Standards.--Except 
     with respect to the common financial reporting form under 
     section 483(a), the Secretary shall consider adopting 
     voluntary consensus standards agreed to by the organization 
     described in subsection (b) for transactions required under 
     title IV, and common data elements for such transactions, to 
     enable information to be exchanged electronically between 
     systems administered by the Department and among participants 
     in the Federal student aid delivery system.
       ``(d) Use of Clearinghouses.--Nothing in this section shall 
     restrict the ability of participating institutions and 
     lenders from using a clearinghouse or servicer to comply with 
     the standards for the exchange of information established 
     under this section.
       ``(e) Data Security.--Any entity that maintains or 
     transmits information under a transaction covered by this 
     section shall maintain reasonable and appropriate 
     administrative, technical, and physical safeguards--
       ``(1) to ensure the integrity and confidentiality of the 
     information; and
       ``(2) to protect against any reasonably anticipated 
     security threats, or unauthorized uses or disclosures of the 
     information.
       ``(f) Definitions.--
       ``(1) Clearinghouse.--The term `clearinghouse' means a 
     public or private entity that processes or facilitates the 
     processing of nonstandard data elements into data elements 
     conforming to standards adopted under this section.
       ``(2) Standard setting organization.--The term `standard 
     setting organization' means an organization that--
       ``(A) is accredited by the American National Standards 
     Institute;
       ``(B) develops standards for information transactions, data 
     elements, or any other standard that is necessary to, or will 
     facilitate, the implementation of this section; and
       ``(C) is open to the participation of the various entities 
     engaged in the delivery of Federal student financial 
     assistance.
       ``(3) Voluntary consensus standard.--The term `voluntary 
     consensus standard' means a standard developed or used by a 
     standard setting organization described in paragraph (2).''.
       (b) Repeal of Old General Provisions.--Title XII (20 U.S.C. 
     1141 et seq.) is repealed.
       (c) Repeal of Title IV Definition.--Section 481 (20 U.S.C. 
     1088) is amended--
       (1) by striking subsections (a), (b), and (c); and
       (2) by redesignating subsections (d) through (f ) as 
     subsections (a) through (c), respectively.

     SEC. 102. CONFORMING AMENDMENTS.

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

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

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

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

       (B) Agricultural sciences education.--Section 1417(j)(1)(A) 
     of the National Agricultural Research, Extension, and 
     Teaching Policy Act of 1977 (7 U.S.C. 3152(j)(1)(A)) is 
     amended--
       (i) by striking ``1201(a)'' and inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (2) Armed forces.--
       (A) Science and mathematics education improvement 
     program.--Section 2193(c)(1) of title 10, United States Code, 
     is amended--
       (i) by striking ``1201(a)'' and inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (B) Support of science, mathematics, and engineering 
     education.--Section 2199(2) of title 10, United States Code, 
     is amended--
       (i) by striking ``1201(a)'' and inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (C) Allowable costs under defense contracts.--Section 
     841(c)(2) of the National Defense Authorization Act for 
     fiscal year 1994 (10 U.S.C. 2324 note) is amended--
       (i) by striking ``1201(a)'' and inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (D) Environmental restoration institutional grants for 
     training dislocated defense workers and young adults.--
     Section 1333(i)(3) of the National Defense Authorization Act 
     for fiscal year 1994 (10 U.S.C. 2701 note) is amended--
       (i) by striking ``1201(a)'' and inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (E) Environmental education opportunities program.--Section 
     1334(k)(3) of the National Defense Authorization Act for 
     fiscal year 1994 (10 U.S.C. 2701 note) is amended--
       (i) by striking ``1201(a)'' and inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (F) Environmental scholarship and fellowship programs.--
     Section 4451(b)(1) of the National Defense Authorization Act 
     for 1993 (10 U.S.C. 2701 note) is amended--
       (i) by striking ``1201(a)'' and inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (3) Application of antitrust laws to award of need-based 
     educational aid.--Section 568(c)(3) of the Improving 
     America's Schools Act of 1994 (15 U.S.C. 1 note) is amended--
       (A) by striking ``1201(a)'' and inserting ``101''; and
       (B) by striking ``(20 U.S.C. 1141(a))''.
       (4) Omnibus parks and public lands management act of 
     1996.--Section 1007(c)(5) of the Omnibus Parks and Public 
     Lands Management Act of 1996 (16 U.S.C. 698u-5) is amended by 
     striking ``1201(a) of the Higher Education Act of 1965 (20 
     U.S.C. 1141(a))'' and inserting ``101 of the Higher Education 
     Act of 1965''.
       (5) Restrictions on former officers, employees, and elected 
     officials of the executive and legislative branches.--Section 
     207(j)(2)(B) of title 18, United States Code, is amended by 
     striking ``1201(a)'' and inserting ``101''.
       (6) Education.--
       (A) Higher education amendments of 1992.--Section 1(c) of 
     the Higher Education Amendments of 1992 (20 U.S.C. 1001 note) 
     is amended by striking ``1201'' and inserting ``101''.
       (B) Treatment of branches.--Section 498(j)(2) of the Higher 
     Education Act of 1965 (20 U.S.C. 1099c(j)(2)) is amended by 
     striking ``1201(a)(2)'' and inserting ``101(a)(2)''.
       (C) Disclosure requirements.--Section 429(d)(2)(B)(ii) of 
     the General Education Provisions Act (20 U.S.C. 
     1228c(d)(2)(B)(ii)) is amended by striking ``1201(a)'' and 
     inserting ``101''.
       (D) Harry s. truman scholarships.--Section 3(4) of the 
     Harry S. Truman Memorial Scholarship Act (20 U.S.C. 2002(4)) 
     is amended by striking ``1201(a)'' and inserting ``101''.
       (E) Tech-prep education.--Section 347(2)(A) of the Carl D. 
     Perkins Vocational and Applied Technology Education Act (20 
     U.S.C. 2394e(2)(A)) is amended by striking ``1201(a)'' and 
     inserting ``101''.
       (F) Education for economic security.--Section 3(6) of the 
     Education for Economic Security Act (20 U.S.C. 3902(6)) is 
     amended by striking ``1201(a)'' and inserting ``101''.
       (G) James madison memorial fellowships.--Section 815 of the 
     James Madison Memorial Fellowship Act (20 U.S.C. 4514) is 
     amended--
       (i) in paragraph (3), by striking ``1201(a)'' and inserting 
     ``101''; and
       (ii) in paragraph (4), by striking ``1201(d) of the Higher 
     Education Act of 1965'' and inserting ``14101 of the 
     Elementary and Secondary Education Act of 1965''.
       (H) Barry goldwater scholarships.--Section 1403(4) of the 
     Barry Goldwater Scholarship and Excellence in Education Act 
     (20 U.S.C. 4702(4)) is amended--
       (i) by striking ``1201(a)'' and inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (I) Morris k. udall scholarships.--Section 4(6) of the 
     Morris K. Udall Scholarship and Excellence in National 
     Environmental and Native American Public Policy Act of 1992 
     (20 U.S.C. 5602(6)) is amended by striking ``1201(a)'' and 
     inserting ``101''.
       (J) Bilingual education, and language enhancement and 
     acquisition.--Section 7501(4) of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 7601(4)) is amended by 
     striking ``1201(a)'' and inserting ``101''.
       (K) General definitions.--Section 14101(17) of the 
     Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     8801(17)) is amended by striking ``1201(a)'' and inserting 
     ``101''.
       (L) National education statistics.--Section 402(c)(3) of 
     the National Education Statistics Act of 1994 (20 U.S.C. 
     9001(c)(3)) is amended by striking ``1201(a)'' and inserting 
     ``101''.
       (7) Foreign relations.--
       (A) Environment and sustainable development exchange 
     program.--Section 240(d) of the Foreign Relations 
     Authorization Act, Fiscal Years 1994 and 1995 (22 U.S.C. 2452 
     note) is amended by striking ``1201(a)'' and inserting 
     ``101''.
       (B) Samantha smith memorial exchange program.--Section 
     112(a)(8) of the Mutual Educational and Cultural Exchange Act 
     of 1961 (22 U.S.C. 2460(a)(8)) is amended--
       (i) by striking ``1201(a)'' and inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (C) Soviet-eastern european training.--Section 803(1) of 
     the Soviet-Eastern European Research and Training Act of 1983 
     (22 U.S.C. 4502(1)) is amended by striking ``1201(a)'' and 
     inserting ``101''.
       (D) Developing country scholarships.--Section 603(d) of the 
     Foreign Relations Authorization Act, Fiscal Years 1986 and 
     1987 (22 U.S.C. 4703(d)) is amended by striking ``1201(a)'' 
     and inserting ``101''.
       (8) Indians.--
       (A) Snyder act.--The last paragraph of section 410 of the 
     Act entitled ``An Act authorizing appropriations and 
     expenditures for the administration of Indian Affairs, and 
     for other purposes'', approved November 2, 1921 (25 U.S.C. 
     13) (commonly known as the Snyder Act) is amended by striking 
     ``1201'' and inserting ``101''.
       (B) Tribally controlled community college assistance.--
     Section 2(a)(5) of the Tribally Controlled Community College 
     Assistance Act (25 U.S.C. 1801(a)(5)) is amended by striking 
     ``1201(a)'' and inserting ``101''.
       (C) Construction of new facilities.--Section 113(b)(2) of 
     the Tribally Controlled Community College Assistance Act (25 
     U.S.C. 1813(b)(2)) is amended--
       (i) by striking ``1201(a)'' and inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.

[[Page H8989]]

       (D) American indian teacher training.--Section 
     1371(a)(1)(B) of the Higher Education Amendments of 1992 (25 
     U.S.C. 3371(a)(1)(B)) is amended by striking ``1201(a)'' and 
     inserting ``101''.
       (9) Labor.--
       (A) Rehabilitation definitions.--Section 6(23) of the 
     Rehabilitation Act of 1973 (29 U.S.C. 705(23)) is amended--
       (i) by striking ``1201(a)'' and inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (B) Technology related assistance for individuals with 
     disabilities act of 1988.--Section 3(8) of the Technology 
     Related Assistance for Individuals with Disabilities Act of 
     1988 (29 U.S.C. 2202(8)) is amended by striking ``1201(a) of 
     the Higher Education Act of 1965 (20 U.S.C. 1141(a))'' and 
     inserting ``101 of the Higher Education Act of 1965''.
       (10) Surface mining control.--Section 701(32) of the 
     Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 
     1291(32)) is amended by striking ``1201(a)'' and inserting 
     ``101''.
       (11) Pollution prevention.--Section 112(a)(1) of the 
     Federal Water Pollution Control Act (33 U.S.C. 1262(a)(1)) is 
     amended by striking ``1201'' and inserting ``101''.
       (12) Postal service.--Section 3626(b)(3) of title 39, 
     United States Code, is amended--
       (A) by striking ``1201(a)'' and inserting ``101''; and
       (B) by striking ``(20 U.S.C. 1141(a))''.
       (13) Public health and welfare.--
       (A) Public health service act.--Section 705(a)(2)(C) of the 
     Public Health Service Act (42 U.S.C. 292d(a)(2)(C)) is 
     amended by striking ``section 481(a)'' and inserting 
     ``section 102(a)''.
       (B) Scientific and technical education.--Section 3(g) of 
     the Scientific and Advanced-Technology Act of 1992 (42 U.S.C. 
     1862i(g)) is amended--
       (i) in paragraph (2)--

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

       (ii) in paragraph (3)--

       (I) by striking ``1201(a)'' and inserting ``101''; and

       (II) by striking ``(20 U.S.C. 1141(a))''.

       (C) Older americans.--Section 102(32) of the Older 
     Americans Act of 1965 (42 U.S.C. 3002(32)) is amended--
       (i) by striking ``1201(a)'' and inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (D) Justice system improvement.--Section 901(17) of the 
     Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 
     3791(17)) is amended--
       (i) by striking ``1201(a)'' and inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (E) Energy technology commercialization services program.--
     Section 362(f)(5)(A) of the Energy Policy and Conservation 
     Act (42 U.S.C. 6322(f)(5)(A)) is amended--
       (i) by striking ``1201(a)'' and inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (F) Environmental restoration and waste management.--
     Section 3132(b)(1) of the National Defense Authorization Act 
     for Fiscal Years 1992 and 1993 (42 U.S.C. 7274e(b)(1)) is 
     amended--
       (i) by striking ``1201(a)'' and inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (G) Head start.--Section 649(c)(3) of the Head Start Act 
     (42 U.S.C. 9844(c)(3)) is amended--
       (i) by striking ``1201(a)'' and inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (H) State dependent care development grants.--Section 
     670G(5) of the Child Care and Development Block Grant Act of 
     1990 (42 U.S.C. 9877(5)) is amended by striking ``1201(a)'' 
     and inserting ``101''.
       (I) Instructional activities for low-income youth.--The 
     matter preceding subparagraph (A) of section 682(b)(1) of the 
     Community Services Block Grant Act (42 U.S.C. 9910c(b)(1)) is 
     amended by striking ``1201(a)'' and inserting ``101''.
       (J) Drug abuse education.--Section 3601(7) of the Anti-Drug 
     Abuse Act of 1988 (42 U.S.C. 11851(7)) is amended--
       (i) by striking ``1201(a)'' and inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (K) National and community service.--Section 101(13) of the 
     National and Community Service Act of 1990 (42 U.S.C. 
     12511(13)) is amended--
       (i) by striking ``1201(a)'' and inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (L) Civilian community corps.--Section 166(6) of the 
     National and Community Service Act of 1990 (42 U.S.C. 
     12626(6)) is amended--
       (i) by striking ``1201(a)'' and inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (M) Cranston-gonzalez national affordable housing act.--
     Section 457(9) of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 12899f(9)) is amended by striking 
     ``1201(a)'' and inserting ``101''.
       (N) Community schools youth services and supervision grant 
     program.--The definition of public school in section 30401(b) 
     of the Community Schools Youth Services and Supervision Grant 
     Program Act of 1994 (42 U.S.C. 13791(b)) is amended--
       (i) by striking ``1201'' each place the term appears and 
     inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(i))''.
       (O) Police corps.--The definition of institution of higher 
     education in section 200103 of the Police Corps Act (42 
     U.S.C. 14092) is amended--
       (i) by striking ``1201(a)'' and inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (P) Law enforcement scholarship program.--The definition of 
     institution of higher education in section 200202 of the Law 
     Enforcement Scholarship and Recruitment Act (42 U.S.C. 14111) 
     is amended--
       (i) by striking ``1201(a)'' and inserting ``101''; and
       (ii) by striking ``(20 U.S.C. 1141(a))''.
       (14) Telecommunications.--Section 223(h)(4) of the 
     Telecommunications Act of 1934 (47 U.S.C. 223(h)(4)) is 
     amended--
       (A) by striking ``1201'' and inserting ``101''; and
       (B) by striking ``(20 U.S.C. 1141)''.
       (15) War and national defense.--Section 808(3) of the David 
     L. Boren National Security Education Act of 1991 (50 U.S.C. 
     1908(3)) is amended--
       (A) by striking ``1201(a)'' and inserting ``101''; and
       (B) by striking ``(20 U.S.C. 1141(a))''.
       (b) Internal Cross References.--The Act (20 U.S.C. 1001 et 
     seq.) is amended--
       (1) in section 402A(c)(2) (20 U.S.C. 1070a-11(c)(2)), by 
     striking ``1210'' and inserting ``118'';
       (2) in section 435(a) (20 U.S.C. 1085(a)), by striking 
     ``section 481'' and inserting ``section 102'';
       (3) in section 485(f)(1)(I) (20 U.S.C. 1092(f)(1)(I)), by 
     striking ``1213'' and inserting ``120'';
       (4) in section 487(d) (20 U.S.C. 1094(d)), by striking 
     ``section 481'' and inserting ``section 102'';
       (5) in subsections (j) and (k) of section 496 (20 U.S.C. 
     1099b), by striking ``section 481'' each place the term 
     appears and inserting ``section 102'';
       (6) in section 498(i) (20 U.S.C. 1099c) is amended by 
     striking ``section 481'' and inserting ``section 102'';
       (7) in section 498(j) (20 U.S.C. 1099c(j))--
       (A) in paragraph (1), by striking ``sections 481(b)(5) and 
     481(c)(3)'' and inserting ``sections 102(b)(1)(E) and 
     102(c)(1)(C)''; and
       (B) in paragraph (2), by striking ``1201(a)(2)'' and 
     inserting ``101(a)(2)''; and
       (8) in section 631(a)(8) (20 U.S.C. 1132(a)(8))--
       (A) by striking ``section 1201(a)'' each place the term 
     appears and inserting ``section 101''; and
       (B) by striking ``of 1201(a)'' and inserting ``of section 
     101''.
       (c) Additional Conforming Amendments Correcting References 
     to Section 481.--
       (1) School-to-work opportunities act of  1994.--Section 4 
     of the School-to-Work Opportunities Act of 1994 (20 U.S.C. 
     6103) is amended--
       (A) in paragraph (11)(B)(viii), by striking ``section 
     481(b)'' and inserting ``section 102(b)''; and
       (B) in paragraph (12), by striking ``section 481'' and 
     inserting ``section 102''.
       (2) National and community service act of 1990.--Section 
     148(g) of the National and Community Service Act of 1990 (42 
     U.S.C. 12604(g)) is amended by striking ``section 481(a) of 
     the Higher Education Act of 1965 (20 U.S.C. 1088(a))'' and 
     inserting ``section 102 of the Higher Education Act of 
     1965''.
       (d) Workforce Investment Act of 1998.--The Workforce 
     Investment Act of 1998 is amended--
       (1) in section 101(35) (29 U.S.C. 2801(35)), by striking 
     ``section 481 of the Higher Education Act of 1965 (20 U.S.C. 
     1088)'' and inserting ``section 102 of the Higher Education 
     Act of 1965''; and
       (2) in section 203(11) (20 U.S.C. 9202(11)), by striking 
     ``section 1201 of the Higher Education Act of 1965 (20 U.S.C. 
     1141)'' and inserting ``section 101 of the Higher Education 
     Act of 1965''.

                       TITLE II--TEACHER QUALITY

     SEC. 201. TEACHER QUALITY ENHANCEMENT GRANTS.

       The Act is amended by inserting after title I (20 U.S.C. 
     1001 et seq.) the following:

     ``TITLE II--TEACHER QUALITY ENHANCEMENT GRANTS FOR STATES AND 
                              PARTNERSHIPS

     ``SEC. 201. PURPOSES; DEFINITIONS.

       ``(a) Purposes.--The purposes of this title are to--
       ``(1) improve student achievement;
       ``(2) improve the quality of the current and future 
     teaching force by improving the preparation of prospective 
     teachers and enhancing professional development activities;
       ``(3) hold institutions of higher education accountable for 
     preparing teachers who have the necessary teaching skills and 
     are highly competent in the academic content areas in which 
     the teachers plan to teach, such as mathematics, science, 
     English, foreign languages, history, economics, art, civics, 
     Government, and geography, including training in the 
     effective uses of technology in the classroom; and
       ``(4) recruit highly qualified individuals, including 
     individuals from other occupations, into the teaching force.
       ``(b) Definitions.--In this title:
       ``(1) Arts and sciences.--The term `arts and sciences' 
     means--
       ``(A) when referring to an organizational unit of an 
     institution of higher education, any academic unit that 
     offers 1 or more academic majors in disciplines or content 
     areas corresponding to the academic subject matter areas in 
     which teachers provide instruction; and
       ``(B) when referring to a specific academic subject matter 
     area, the disciplines or content areas in which academic 
     majors are offered by the arts and science organizational 
     unit.
       ``(2) High need local educational agency.--The term `high 
     need local educational agency' means a local educational 
     agency that serves an elementary school or secondary school 
     located in an area in which there is--

[[Page H8990]]

       ``(A) a high percentage of individuals from families with 
     incomes below the poverty line;
       ``(B) a high percentage of secondary school teachers not 
     teaching in the content area in which the teachers were 
     trained to teach; or
       ``(C) a high teacher turnover rate.
       ``(3) Poverty line.--The term `poverty line' means the 
     poverty line (as defined by the Office of Management and 
     Budget, and revised annually in accordance with section 
     673(2) of the Community Services Block Grant Act (42 U.S.C. 
     9902(2))) applicable to a family of the size involved.

     ``SEC. 202. STATE GRANTS.

       ``(a) In General.--From amounts made available under 
     section 210(1) for a fiscal year, the Secretary is authorized 
     to award grants under this section, on a competitive basis, 
     to eligible States to enable the eligible States to carry out 
     the activities described in subsection (d).
       ``(b) Eligible State.--
       ``(1) Definition.--In this title, the term `eligible State' 
     means--
       ``(A) the Governor of a State; or
       ``(B) in the case of a State for which the constitution or 
     law of such State designates another individual, entity, or 
     agency in the State to be responsible for teacher 
     certification and preparation activity, such individual, 
     entity, or agency.
       ``(2) Consultation.--The Governor and the individual, 
     entity, or agency designated under paragraph (1) shall 
     consult with the Governor, State board of education, State 
     educational agency, or State agency for higher education, as 
     appropriate, with respect to the activities assisted under 
     this section.
       ``(3) Construction.--Nothing in this subsection shall be 
     construed to negate or supersede the legal authority under 
     State law of any State agency, State entity, or State public 
     official over programs that are under the jurisdiction of the 
     agency, entity, or official.
       ``(c) Application.--To be eligible to receive a grant under 
     this section, an eligible State shall, at the time of the 
     initial grant application, submit an application to the 
     Secretary that--
       ``(1) meets the requirement of this section;
       ``(2) includes a description of how the eligible State 
     intends to use funds provided under this section; and
       ``(3) contains such other information and assurances as the 
     Secretary may require.
       ``(d) Uses of Funds.--An eligible State that receives a 
     grant under this section shall use the grant funds to reform 
     teacher preparation requirements, and to ensure that current 
     and future teachers possess the necessary teaching skills and 
     academic content knowledge in the subject areas in which the 
     teachers are assigned to teach, by carrying out 1 or more of 
     the following activities:
       ``(1) Reforms.--Implementing reforms that hold institutions 
     of higher education with teacher preparation programs 
     accountable for preparing teachers who are highly competent 
     in the academic content areas in which the teachers plan to 
     teach, and possess strong teaching skills, which may include 
     the use of rigorous subject matter competency tests and the 
     requirement that a teacher have an academic major in the 
     subject area, or related discipline, in which the teacher 
     plans to teach.
       ``(2) Certification or licensure requirements.--Reforming 
     teacher certification or licensure requirements to ensure 
     that teachers have the necessary teaching skills and academic 
     content knowledge in the subject areas in which teachers are 
     assigned to teach.
       ``(3) Alternatives to traditional preparation for 
     teaching.--Providing prospective teachers with alternatives 
     to traditional preparation for teaching through programs at 
     colleges of arts and sciences or at nonprofit educational 
     organizations.
       ``(4) Alternative routes to state certification.--Carrying 
     out programs that--
       ``(A) include support during the initial teaching 
     experience; and
       ``(B) establish, expand, or improve alternative routes to 
     State certification of teachers for highly qualified 
     individuals, including mid-career professionals from other 
     occupations, paraprofessionals, former military personnel and 
     recent college graduates with records of academic 
     distinction.
       ``(5) Recruitment; pay; removal.--Developing and 
     implementing effective mechanisms to ensure that local 
     educational agencies and schools are able to effectively 
     recruit highly qualified teachers, to financially reward 
     those teachers and principals whose students have made 
     significant progress toward high academic performance, such 
     as through performance-based compensation systems and access 
     to ongoing professional development opportunities for 
     teachers and administrators, and to expeditiously remove 
     incompetent or unqualified teachers consistent with 
     procedures to ensure due process for the teachers.
       ``(6) Social promotion.--Development and implementation of 
     efforts to address the problem of social promotion and to 
     prepare teachers to effectively address the issues raised by 
     ending the practice of social promotion.
       ``(7) Recruitment.--Activities described in section 204(d).

     ``SEC. 203. PARTNERSHIP GRANTS.

       ``(a) Grants.--From amounts made available under section 
     210(2) for a fiscal year, the Secretary is authorized to 
     award grants under this section, on a competitive basis, to 
     eligible partnerships to enable the eligible partnerships to 
     carry out the activities described in subsections (d) and 
     (e).
       ``(b) Definitions.--
       ``(1) Eligible partnerships.--In this title, the term 
     `eligible partnerships' means an entity that--
       ``(A) shall include--
       ``(i) a partner institution;
       ``(ii) a school of arts and sciences; and
       ``(iii) a high need local educational agency; and
       ``(B) may include a Governor, State educational agency, the 
     State board of education, the State agency for higher 
     education, an institution of higher education not described 
     in subparagraph (A), a public charter school, a public or 
     private elementary school or secondary school, a public or 
     private nonprofit educational organization, a business, a 
     teacher organization, or a prekindergarten program.
       ``(2) Partner institution.--In this section, the term 
     `partner institution' means a private independent or State-
     supported public institution of higher education, the teacher 
     training program of which demonstrates that--
       ``(A) graduates from the teacher training program exhibit 
     strong performance on State-determined qualifying assessments 
     for new teachers through--
       ``(i) demonstrating that 80 percent or more of the 
     graduates of the program who intend to enter the field of 
     teaching have passed all of the applicable State 
     qualification assessments for new teachers, which shall 
     include an assessment of each prospective teacher's subject 
     matter knowledge in the content area or areas in which the 
     teacher intends to teach; or
       ``(ii) being ranked among the highest-performing teacher 
     preparation programs in the State as determined by the 
     State--

       ``(I) using criteria consistent with the requirements for 
     the State report card under section 207(b); and
       ``(II) using the State report card on teacher preparation 
     required under section 207(b), after the first publication of 
     such report card and for every year thereafter; or

       ``(B) the teacher training program requires all the 
     students of the program to participate in intensive clinical 
     experience, to meet high academic standards, and--
       ``(i) in the case of secondary school candidates, to 
     successfully complete an academic major in the subject area 
     in which the candidate intends to teach or to demonstrate 
     competence through a high level of performance in relevant 
     content areas; and
       ``(ii) in the case of elementary school candidates, to 
     successfully complete an academic major in the arts and 
     sciences or to demonstrate competence through a high level of 
     performance in core academic subject areas.
       ``(c) Application.--Each eligible partnership desiring a 
     grant under this section shall submit an application to the 
     Secretary at such time, in such manner, and accompanied by 
     such information as the Secretary may require. Each such 
     application shall--
       ``(1) contain a needs assessment of all the partners with 
     respect to teaching and learning and a description of how the 
     partnership will coordinate with other teacher training or 
     professional development programs, and how the activities of 
     the partnership will be consistent with State, local, and 
     other education reform activities that promote student 
     achievement;
       ``(2) contain a resource assessment that describes the 
     resources available to the partnership, the intended use of 
     the grant funds, including a description of how the grant 
     funds will be fairly distributed in accordance with 
     subsection (f), and the commitment of the resources of the 
     partnership to the activities assisted under this title, 
     including financial support, faculty participation, time 
     commitments, and continuation of the activities when the 
     grant ends; and
       ``(3) contain a description of--
       ``(A) how the partnership will meet the purposes of this 
     title;
       ``(B) how the partnership will carry out the activities 
     required under subsection (d) and any permissible activities 
     under subsection (e); and
       ``(C) the partnership's evaluation plan pursuant to section 
     206(b).
       ``(d) Required Uses of Funds.--An eligible partnership that 
     receives a grant under this section shall use the grant funds 
     to carry out the following activities:
       ``(1) Reforms.--Implementing reforms within teacher 
     preparation programs to hold the programs accountable for 
     preparing teachers who are highly competent in the academic 
     content areas in which the teachers plan to teach, and for 
     promoting strong teaching skills, including working with a 
     school of arts and sciences and integrating reliable 
     research-based teaching methods into the curriculum, which 
     curriculum shall include programs designed to successfully 
     integrate technology into teaching and learning.
       ``(2) Clinical experience and interaction.--Providing 
     sustained and high quality preservice clinical experience 
     including the mentoring of prospective teachers by veteran 
     teachers, and substantially increasing interaction between 
     faculty at institutions of higher education and new and 
     experienced teachers, principals, and other administrators at 
     elementary schools or secondary schools, and providing 
     support, including preparation time, for such interaction.
       ``(3) Professional development.--Creating opportunities for 
     enhanced and ongoing professional development that improves 
     the academic content knowledge of teachers in the subject 
     areas in which the teachers are certified to teach or in 
     which the teachers are working toward certification to teach, 
     and that promotes strong teaching skills.
       ``(e) Allowable Uses of Funds.--An eligible partnership 
     that receives a grant under this section may use such funds 
     to carry out the following activities:
       ``(1) Teacher preparation and parent involvement.--
     Preparing teachers to work with diverse student populations, 
     including individuals with disabilities and limited English 
     proficient individuals, and involving parents in the teacher 
     preparation program reform process.
       ``(2) Dissemination and coordination.--Broadly 
     disseminating information on effective

[[Page H8991]]

     practices used by the partnership, and coordinating with the 
     activities of the Governor, State board of education, State 
     higher education agency, and State educational agency, as 
     appropriate.
       ``(3) Managerial and leadership skills.--Developing and 
     implementing proven mechanisms to provide principals and 
     superintendents with effective managerial and leadership 
     skills that result in increased student achievement.
       ``(4) Teacher recruitment.--Activities described in section 
     204(d).
       ``(f) Special Rule.--No individual member of an eligible 
     partnership shall retain more than 50 percent of the funds 
     made available to the partnership under this section.
       ``(g) Construction.--Nothing in this section shall be 
     construed to prohibit an eligible partnership from using 
     grant funds to coordinate with the activities of more than 
     one Governor, State board of education, State educational 
     agency, local educational agency, or State agency for higher 
     education.

     ``SEC. 204. TEACHER RECRUITMENT GRANTS.

       ``(a) Program Authorized.--From amounts made available 
     under section 210(3) for a fiscal year, the Secretary is 
     authorized to award grants, on a competitive basis, to 
     eligible applicants to enable the eligible applicants to 
     carry out activities described in subsection (d).
       ``(b) Eligible Applicant Defined.--In this title, the term 
     `eligible applicant' means--
       ``(1) an eligible State described in section 202(b); or
       ``(2) an eligible partnership described in section 203(b).
       ``(c) Application.--Any eligible applicant desiring to 
     receive a grant under this section shall submit an 
     application to the Secretary at such time, in such form, and 
     containing such information as the Secretary may require, 
     including--
       ``(1) a description of the assessment that the eligible 
     applicant, and the other entities with whom the eligible 
     applicant will carry out the grant activities, have 
     undertaken to determine the most critical needs of the 
     participating high-need local educational agencies;
       ``(2) a description of the activities the eligible 
     applicant will carry out with the grant; and
       ``(3) a description of the eligible applicant's plan for 
     continuing the activities carried out with the grant, once 
     Federal funding ceases.
       ``(d) Uses of Funds.--Each eligible applicant receiving a 
     grant under this section shall use the grant funds--
       ``(1)(A) to award scholarships to help students pay the 
     costs of tuition, room, board, and other expenses of 
     completing a teacher preparation program;
       ``(B) to provide support services, if needed to enable 
     scholarship recipients to complete postsecondary education 
     programs; and
       ``(C) for followup services provided to former scholarship 
     recipients during the recipients first 3 years of teaching; 
     or
       ``(2) to develop and implement effective mechanisms to 
     ensure that high need local educational agencies and schools 
     are able to effectively recruit highly qualified teachers.
       ``(e) Service Requirements.--The Secretary shall establish 
     such requirements as the Secretary finds necessary to ensure 
     that recipients of scholarships under this section who 
     complete teacher education programs subsequently teach in a 
     high-need local educational agency, for a period of time 
     equivalent to the period for which the recipients receive 
     scholarship assistance, or repay the amount of the 
     scholarship. The Secretary shall use any such repayments 
     to carry out additional activities under this section.

     ``SEC. 205. ADMINISTRATIVE PROVISIONS.

       ``(a) Duration; One-time awards; Payments.--
       ``(1) Duration.--
       ``(A) Eligible states and eligible applicants.--Grants 
     awarded to eligible States and eligible applicants under this 
     title shall be awarded for a period not to exceed 3 years.
       ``(B) Eligible partnerships.--Grants awarded to eligible 
     partnerships under this title shall be awarded for a period 
     of 5 years.
       ``(2) One-time award.--An eligible State and an eligible 
     partnership may receive a grant under each of sections 202, 
     203, and 204 only once.
       ``(3) Payments.--The Secretary shall make annual payments 
     of grant funds awarded under this part.
       ``(b) Peer Review.--
       ``(1) Panel.--The Secretary shall provide the applications 
     submitted under this title to a peer review panel for 
     evaluation. With respect to each application, the peer review 
     panel shall initially recommend the application for funding 
     or for disapproval.
       ``(2) Priority.--In recommending applications to the 
     Secretary for funding under this title, the panel shall--
       ``(A) with respect to grants under section 202, give 
     priority to eligible States serving States that--
       ``(i) have initiatives to reform State teacher 
     certification requirements that are designed to ensure that 
     current and future teachers possess the necessary teaching 
     skills and academic content knowledge in the subject areas in 
     which the teachers are certified or licensed to teach;
       ``(ii) include innovative reforms to hold institutions of 
     higher education with teacher preparation programs 
     accountable for preparing teachers who are highly competent 
     in the academic content area in which the teachers plan to 
     teach and have strong teaching skills; or
       ``(iii) involve the development of innovative efforts aimed 
     at reducing the shortage of highly qualified teachers in high 
     poverty urban and rural areas;
       ``(B) with respect to grants under section 203--
       ``(i) give priority to applications from eligible 
     partnerships that involve businesses; and
       ``(ii) take into consideration--

       ``(I) providing an equitable geographic distribution of the 
     grants throughout the United States; and
       ``(II) the potential of the proposed activities for 
     creating improvement and positive change.

       ``(3) Secretarial selection.--The Secretary shall 
     determine, based on the peer review process, which 
     application shall receive funding and the amounts of the 
     grants. In determining grant amounts, the Secretary shall 
     take into account the total amount of funds available for all 
     grants under this title and the types of activities proposed 
     to be carried out.
       ``(c) Matching Requirements.--
       ``(1) State grants.--Each eligible State receiving a grant 
     under section 202 or 204 shall provide, from non-Federal 
     sources, an amount equal to 50 percent of the amount of the 
     grant (in cash or in kind) to carry out the activities 
     supported by the grant.
       ``(2) Partnership grants.--Each eligible partnership 
     receiving a grant under section 203 or 204 shall provide, 
     from non-Federal sources (in cash or in kind), an amount 
     equal to 25 percent of the grant for the first year of the 
     grant, 35 percent of the grant for the second year of the 
     grant, and 50 percent of the grant for each succeeding year 
     of the grant.
       ``(d) Limitation on Administrative Expenses.--An eligible 
     State or eligible partnership that receives a grant under 
     this title may not use more than 2 percent of the grant funds 
     for purposes of administering the grant.
       ``(e) Teacher Qualifications Provided to Parents Upon 
     Request.--Any local educational agency or school that 
     benefits from the activities assisted under this title shall 
     make available, upon request and in an understandable and 
     uniform format, to any parent of a student attending any 
     school served by the local educational agency, information 
     regarding the qualification of the student's classroom 
     teacher with regard to the subject matter in which the 
     teacher provides instruction. The local educational agency 
     shall inform parents that the parents are entitled to receive 
     the information upon request.

     ``SEC. 206. ACCOUNTABILITY AND EVALUATION.

       ``(a) State Grant Accountability report.--An eligible State 
     that receives a grant under section 202 shall submit an 
     annual accountability report to the Secretary, the Committee 
     on Labor and Human Resources of the Senate, and the Committee 
     on Education and the Workforce of the House of 
     Representatives. Such report shall include a description of 
     the degree to which the eligible State, in using funds 
     provided under such section, has made substantial progress in 
     meeting the following goals:
       ``(1) Student achievement.--Increasing student achievement 
     for all students as defined by the eligible State.
       ``(2) Raising standards.--Raising the State academic 
     standards required to enter the teaching profession, 
     including, where appropriate, through the use of incentives 
     to incorporate the requirement of an academic major in the 
     subject, or related discipline, in which the teacher plans to 
     teach.
       ``(3) Initial certification or licensure.--Increasing 
     success in the pass rate for initial State teacher 
     certification or licensure, or increasing the numbers of 
     highly qualified individuals being certified or licensed as 
     teachers through alternative programs.
       ``(4) Core academic subjects.--
       ``(A) Secondary school classes.--Increasing the percentage 
     of secondary school classes taught in core academic subject 
     areas by teachers--
       ``(i) with academic majors in those areas or in a related 
     field;
       ``(ii) who can demonstrate a high level of competence 
     through rigorous academic subject area tests; or
       ``(iii) who can demonstrate competence through a high level 
     of performance in relevant content areas.
       ``(B) Elementary school classes.--Increasing the percentage 
     of elementary school classes taught by teachers--
       ``(i) with academic majors in the arts and sciences; or
       ``(ii) who can demonstrate competence through a high level 
     of performance in core academic subjects.
       ``(5) Decreasing teacher shortages.--Decreasing shortages 
     of qualified teachers in poor urban and rural areas.
       ``(6) Increasing opportunities for professional 
     development.--Increasing opportunities for enhanced and 
     ongoing professional development that improves the academic 
     content knowledge of teachers in the subject areas in which 
     the teachers are certified or licensed to teach or in which 
     the teachers are working toward certification or licensure to 
     teach, and that promotes strong teaching skills.
       ``(7) Technology integration.--Increasing the number of 
     teachers prepared to integrate technology in the classroom.
       ``(b) Eligible Partnership Evaluation.--Each eligible 
     partnership receiving a grant under section 203 shall 
     establish and include in the application submitted under 
     section 203(c), an evaluation plan that includes strong 
     performance objectives. The plan shall include objectives and 
     measures for--
       ``(1) increased student achievement for all students as 
     measured by the partnership;
       ``(2) increased teacher retention in the first 3 years of a 
     teacher's career;
       ``(3) increased success in the pass rate for initial State 
     certification or licensure of teachers; and
       ``(4) increased percentage of secondary school classes 
     taught in core academic subject areas by teachers--
       ``(A) with academic majors in the areas or in a related 
     field; and

[[Page H8992]]

       ``(B) who can demonstrate a high level of competence 
     through rigorous academic subject area tests or who can 
     demonstrate competence through a high level of performance in 
     relevant content areas;
       ``(5) increasing the percentage of elementary school 
     classes taught by teachers with academic majors in the arts 
     and sciences or who demonstrate competence through a high 
     level of performance in core academic subject areas; and
       ``(6) increasing the number of teachers trained in 
     technology.
       ``(c) Revocation of Grant.--
       ``(1) Report.--Each eligible State or eligible partnership 
     receiving a grant under this title shall report annually on 
     the progress of the eligible State or eligible partnership 
     toward meeting the purposes of this title and the goals, 
     objectives, and measures described in subsections (a) and 
     (b).
       ``(2) Revocation.--
       ``(A) Eligible states and eligible applicants.--If the 
     Secretary determines that an eligible State or eligible 
     applicant is not making substantial progress in meeting the 
     purposes, goals, objectives, and measures, as appropriate, by 
     the end of the second year of a grant under this title, then 
     the grant payment shall not be made for the third year of the 
     grant.
       ``(B) Eligible partnerships.--If the Secretary determines 
     that an eligible partnership is not making substantial 
     progress in meeting the purposes, goals, objectives, and 
     measures, as appropriate, by the end of the third year of a 
     grant under this title, then the grant payments shall not be 
     made for any succeeding year of the grant.
       ``(d) Evaluation and Dissemination.--The Secretary shall 
     evaluate the activities funded under this title and report 
     the Secretary's findings regarding the activities to the 
     Committee on Labor and Human Resources of the Senate and the 
     Committee on Education and the Workforce of the House of 
     Representatives. The Secretary shall broadly disseminate 
     successful practices developed by eligible States and 
     eligible partnerships under this title, and shall broadly 
     disseminate information regarding such practices that were 
     found to be ineffective.

     ``SEC. 207. ACCOUNTABILITY FOR PROGRAMS THAT PREPARE 
                   TEACHERS.

       ``(a) Development of Definitions and Reporting Methods.--
     Within 9 months of the date of enactment of the Higher 
     Education Amendments of 1998, the Commissioner of the 
     National Center for Education Statistics, in consultation 
     with States and institutions of higher education, shall 
     develop key definitions for terms, and uniform reporting 
     methods (including the key definitions for the consistent 
     reporting of pass rates), related to the performance of 
     elementary school and secondary school teacher preparation 
     programs.
       ``(b) State Report Card on the Quality of Teacher 
     Preparation.--Each State that receives funds under this Act 
     shall provide to the Secretary, within 2 years of the date of 
     enactment of the Higher Education Amendments of 1998, and 
     annually thereafter, in a uniform and comprehensible manner 
     that conforms with the definitions and methods established in 
     subsection (a), a State report card on the quality of teacher 
     preparation in the State, which shall include at least the 
     following:
       ``(1) A description of the teacher certification and 
     licensure assessments, and any other certification and 
     licensure requirements, used by the State.
       ``(2) The standards and criteria that prospective teachers 
     must meet in order to attain initial teacher certification or 
     licensure and to be certified or licensed to teach particular 
     subjects or in particular grades within the State.
       ``(3) A description of the extent to which the assessments 
     and requirements described in paragraph (1) are aligned with 
     the State's standards and assessments for students.
       ``(4) The percentage of teaching candidates who passed each 
     of the assessments used by the State for teacher 
     certification and licensure, and the passing score on each 
     assessment that determines whether a candidate has passed 
     that assessment.
       ``(5) The percentage of teaching candidates who passed each 
     of the assessments used by the State for teacher 
     certification and licensure, disaggregated and ranked, by the 
     teacher preparation program in that State from which the 
     teacher candidate received the candidate's most recent 
     degree, which shall be made available widely and publicly.
       ``(6) Information on the extent to which teachers in the 
     State are given waivers of State certification or licensure 
     requirements, including the proportion of such teachers 
     distributed across high- and low-poverty school districts and 
     across subject areas.
       ``(7) A description of each State's alternative routes to 
     teacher certification, if any, and the percentage of teachers 
     certified through alternative certification routes who pass 
     State teacher certification or licensure assessments.
       ``(8) For each State, a description of proposed criteria 
     for assessing the performance of teacher preparation programs 
     within institutions of higher education in the State, 
     including indicators of teacher candidate knowledge and 
     skills.
       ``(9) Information on the extent to which teachers or 
     prospective teachers in each State are required to take 
     examinations or other assessments of their subject matter 
     knowledge in the area or areas in which the teachers provide 
     instruction, the standards established for passing any such 
     assessments, and the extent to which teachers or prospective 
     teachers are required to receive a passing score on such 
     assessments in order to teach in specific subject areas or 
     grade levels.
       ``(c) Initial Report.--
       ``(1) In general.--Each State that receives funds under 
     this Act, not later than 6 months of the date of enactment of 
     the Higher Education Amendments of 1998 and in a uniform and 
     comprehensible manner, shall submit to the Secretary the 
     information described in paragraphs (1), (5), and (6) of 
     subsection (b). Such information shall be compiled by the 
     Secretary and submitted to the Committee on Labor and Human 
     Resources of the Senate and the Committee on Education and 
     the Workforce of the House of Representatives not later than 
     9 months after the date of enactment of the Higher Education 
     Amendments of 1998.
       ``(2) Construction.--Nothing in this subsection shall be 
     construed to require a State to gather information that is 
     not in the possession of the State or the teacher preparation 
     programs in the State, or readily available to the State or 
     teacher preparation programs.
       ``(d) Report of the Secretary on the Quality of Teacher 
     Preparation.--
       ``(1) Report card.--The Secretary shall provide to 
     Congress, and publish and make widely available, a report 
     card on teacher qualifications and preparation in the United 
     States, including all the information reported in paragraphs 
     (1) through (9) of subsection (b). Such report shall identify 
     States for which eligible States and eligible partnerships 
     received a grant under this title. Such report shall be so 
     provided, published and made available not later than 2 years 
     6 months after the date of enactment of the Higher Education 
     Amendments of 1998 and annually thereafter.
       ``(2) Report to congress.--The Secretary shall report to 
     Congress--
       ``(A) a comparison of States' efforts to improve teaching 
     quality; and
       ``(B) regarding the national mean and median scores on any 
     standardized test that is used in more than 1 State for 
     teacher certification or licensure.
       ``(3) Special rule.--In the case of teacher preparation 
     programs with fewer than 10 graduates taking any single 
     initial teacher certification or licensure assessment during 
     an academic year, the Secretary shall collect and publish 
     information with respect to an average pass rate on State 
     certification or licensure assessments taken over a 3 year 
     period.
       ``(e) Coordination.--The Secretary, to the extent 
     practicable, shall coordinate the information collected and 
     published under this title among States for individuals who 
     took State teacher certification or licensure assessments in 
     a State other than the State in which the individual received 
     the individual's most recent degree.
       ``(f) Institutional Report Cards on the Quality of Teacher 
     Preparation.--
       ``(1) Report card.--Each institution of higher education 
     that conducts a teacher preparation program that enrolls 
     students receiving Federal assistance under this Act, not 
     later than 18 months after the date of enactment of the 
     Higher Education Amendments of 1998 and annually thereafter, 
     shall report to the State and the general public, in a 
     uniform and comprehensible manner that conforms with the 
     definitions and methods established under subsection (a), the 
     following information:
       ``(A) Pass rate.--(i) For the most recent year for which 
     the information is available, the pass rate of the 
     institution's graduates on the teacher certification or 
     licensure assessments of the State in which the institution 
     is located, but only for those students who took those 
     assessments within 3 years of completing the program.
       ``(ii) A comparison of the program's pass rate with the 
     average pass rate for programs in the State.
       ``(iii) In the case of teacher preparation programs with 
     fewer than 10 graduates taking any single initial teacher 
     certification or licensure assessment during an academic 
     year, the institution shall collect and publish information 
     with respect to an average pass rate on State certification 
     or licensure assessments taken over a 3 year period.
       ``(B) Program information.--The number of students in the 
     program, the average number of hours of supervised practice 
     teaching required for those in the program, and the faculty-
     student ratio in supervised practice teaching.
       ``(C) Statement.--In States that approve or accredit 
     teacher education programs, a statement of whether the 
     institution's program is so approved or accredited.
       ``(D) Designation as low-performing.--Whether the program 
     has been designated as low-performing by the State under 
     section 208(a).
       ``(2) Requirement.--The information described in paragraph 
     (1) shall be reported through publications such as school 
     catalogs and promotional materials sent to potential 
     applicants, secondary school guidance counselors, and 
     prospective employers of the institution's program graduates.
       ``(3) Fines.--In addition to the actions authorized in 
     section 487(c), the Secretary may impose a fine not to exceed 
     $25,000 on an institution of higher education for failure to 
     provide the information described in this subsection in a 
     timely or accurate manner.

     ``SEC. 208. STATE FUNCTIONS.

       ``(a) State Assessment.--In order to receive funds under 
     this Act, a State, not later than 2 years after the date of 
     enactment of the Higher Education Amendments of 1998, shall 
     have in place a procedure to identify, and assist, through 
     the provision of technical assistance, low-performing 
     programs of teacher preparation within institutions of higher 
     education. Such State shall provide the Secretary an annual 
     list of such low-performing institutions that includes an 
     identification of those institutions at-risk of being placed 
     on such list. Such levels of performance shall be determined 
     solely by the State and may include criteria based upon 
     information collected pursuant to this title. Such assessment 
     shall be described in the report under section 207(b).
       ``(b) Termination of Eligibility.--Any institution of 
     higher education that offers a program

[[Page H8993]]

     of teacher preparation in which the State has withdrawn the 
     State's approval or terminated the State's financial support 
     due to the low performance of the institution's teacher 
     preparation program based upon the State assessment described 
     in subsection (a)--
       ``(1) shall be ineligible for any funding for professional 
     development activities awarded by the Department of 
     Education; and
       ``(2) shall not be permitted to accept or enroll any 
     student that receives aid under title IV of this Act in the 
     institution's teacher preparation program.
       ``(c) Negotiated Rulemaking.--If the Secretary develops any 
     regulations implementing subsection (b)(2), the Secretary 
     shall submit such proposed regulations to a negotiated 
     rulemaking process, which shall include representatives of 
     States, institutions of higher education, and educational and 
     student organizations.

     ``SEC. 209. GENERAL PROVISIONS.

       ``(a) Methods.--In complying with sections 207 and 208, the 
     Secretary shall ensure that States and institutions of higher 
     education use fair and equitable methods in reporting and 
     that the reporting methods protect the privacy of 
     individuals.
       ``(b) Special Rule.--For each State in which there are no 
     State certification or licensure assessments, or for States 
     that do not set minimum performance levels on those 
     assessments--
       ``(1) the Secretary shall, to the extent practicable, 
     collect data comparable to the data required under this title 
     from States, local educational agencies, institutions of 
     higher education, or other entities that administer such 
     assessments to teachers or prospective teachers; and
       ``(2) notwithstanding any other provision of this title, 
     the Secretary shall use such data to carry out requirements 
     of this title related to assessments or pass rates.
       ``(c) Limitations.--
       ``(1) Federal control prohibited.--Nothing in this title 
     shall be construed to permit, allow, encourage, or authorize 
     any Federal control over any aspect of any private, 
     religious, or home school, whether or not a home school is 
     treated as a private school or home school under State law. 
     This section shall not be construed to prohibit private, 
     religious, or home schools from participation in programs or 
     services under this title.
       ``(2) No change in state control encouraged or required.--
     Nothing in this title shall be construed to encourage or 
     require any change in a State's treatment of any private, 
     religious, or home school, whether or not a home school is 
     treated as a private school or home school under State law.
       ``(3) National system of teacher certification 
     prohibited.--Nothing in this title shall be construed to 
     permit, allow, encourage, or authorize the Secretary to 
     establish or support any national system of teacher 
     certification.

     ``SEC. 210. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     title $300,000,000 for fiscal year 1999 and such sums as may 
     be necessary for each of the 4 succeeding fiscal years, of 
     which--
       ``(1) 45 percent shall be available for each fiscal year to 
     award grants under section 202;
       ``(2) 45 percent shall be available for each fiscal year to 
     award grants under section 203; and
       ``(3) 10 percent shall be available for each fiscal year to 
     award grants under section 204.''.

                      TITLE III--INSTITUTIONAL AID

     SEC. 301. TRANSFERS AND REDESIGNATIONS.

       (a) In General.--The Higher Education Act of 1965 is 
     amended--
       (1) by redesignating part D of title III (20 U.S.C. 1066 et 
     seq.) as part F of title III;
       (2) by redesignating sections 351, 352, 353, 354, 356, 357, 
     358, and 360 (20 U.S.C. 1066, 1067, 1068, 1069, 1069b, 1069c, 
     1069d, and 1069f) as sections 391, 392, 393, 394, 395, 396, 
     397, and 399, respectively;
       (3) by transferring part B of title VII (20 U.S.C. 1132c et 
     seq.) to title III to follow part C of title III (20 U.S.C. 
     1065 et seq.), and redesignating such part B as part D;
       (4) by redesignating sections 721 through 728 (20 U.S.C. 
     1132c and 1132c-7) as sections 341 through 348, respectively;
       (5) by transferring subparts 1 and 3 of part B of title X 
     (20 U.S.C. 1135b et seq. and 1135d et seq.) to title III to 
     follow part D of title III (as redesignated by paragraph 
     (3)), and redesignating such subpart 3 as subpart 2;
       (6) by inserting after part D of title III (as redesignated 
     by paragraph (3)) the following:

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

       (7) by redesignating sections 1021 through 1023 (20 U.S.C. 
     1135b and 1135b-2), and sections 1041, 1042, 1043, 1044, 
     1046, and 1047 (20 U.S.C. 1135d, 1135d-1, 1135d-2, 1135d-3, 
     1135d-5, and 1135d-6) as sections 351 through 353, and 
     sections 361, 362, 363, 364, 365, and 366, respectively; and
       (8) by repealing section 366 (as redesignated by paragraph 
     (7)) (20 U.S.C. 1135d-6).
       (b) Conforming Amendments.--Section 361 (as redesignated by 
     subsection (a)(7)) (20 U.S.C. 1135d) is amended--
       (1) in paragraph (1), by inserting ``and'' after the 
     semicolon;
       (2) in paragraph (2), by striking ``; and'' and inserting a 
     period; and
       (3) by striking paragraph (3).
       (c) Cross References.--Title III (20 U.S.C. 1051 et seq.) 
     is amended--
       (1) in section 311(b) (20 U.S.C. 1057(b)), by striking 
     ``360(a)(1)'' and inserting ``399(a)(1)'';
       (2) in section 312 (20 U.S.C. 1058)--
       (A) in subsection (b)(1)(B), by striking ``352(b)'' and 
     inserting ``392(b)''; and
       (B) in subsection (c)(2), by striking ``352(a)'' and 
     inserting ``392(a)'';
       (3) in section 313(b) (20 U.S.C. 1059(b)), by striking 
     ``354(a)(1)'' and inserting ``394(a)(1)'';
       (4) in section 342 (as redesignated by subsection (a)(4)) 
     (20 U.S.C. 1132c-1)--
       (A) in paragraph (3), by striking ``723(b)'' and inserting 
     ``343(b)'';
       (B) in paragraph (4), by striking ``723'' and inserting 
     ``343'';
       (C) in the matter preceding subparagraph (A) of paragraph 
     (5), by striking ``724(b)'' and inserting ``344(b)'';
       (D) in paragraph (8), by striking ``725(1)'' and inserting 
     ``345(1)''; and
       (E) in paragraph (9), by striking ``727'' and inserting 
     ``347'';
       (5) in section 343 (as redesignated by subsection (a)(4)) 
     (20 U.S.C. 1132c-2)--
       (A) in subsection (a), by striking ``724'' and inserting 
     ``344''; and
       (B) in subsection (b)--
       (i) in the matter preceding paragraph (1), by striking 
     ``725(1) and 726'' and inserting ``345(1) and 346'';
       (ii) in paragraph (10), by striking ``724'' and inserting 
     ``344''; and
       (iii) in subsection (d), by striking ``723(c)(1)'' and 
     inserting ``343(c)(1)'';
       (6) in section 345(2) (as redesignated by subsection 
     (a)(4)) (20 U.S.C. 1132c-4(2)), by striking ``723'' and 
     inserting ``343'';
       (7) in section 348 (as redesignated by subsection (a)(4)) 
     (20 U.S.C. 1132c-7), by striking ``725(1)'' and inserting 
     ``345(1)'';
       (8) in section 353(a) (as redesignated by subsection 
     (a)(7)) (20 U.S.C. 1135b-2(a))--
       (A) in paragraph (1), by striking ``1046(6)'' and inserting 
     ``365(6)'';
       (B) in paragraph (2), by striking ``1046(7)'' and inserting 
     ``365(7)'';
       (C) in paragraph (3), by striking ``1046(8)'' and inserting 
     ``365(8)''; and
       (D) in paragraph (4), by striking ``1046(9)'' and inserting 
     ``365(9)'';
       (9) in section 361(1) (as redesignated by subsection 
     (a)(7)) (20 U.S.C. 1135d(1)), by striking ``1046(3)'' and 
     inserting ``365(3)'';
       (10) in section 362(a) (as redesignated by subsection 
     (a)(7)) (20 U.S.C. 1135d-1(a))--
       (A) in the matter preceding paragraph (1), by striking 
     ``1041'' and inserting ``361''; and
       (B) in paragraph (1), by striking ``1021(b)'' and inserting 
     ``351(b)''; and
       (11) in section 391(b)(6) (as redesignated by subsection 
     (a)(2)), by striking ``357'' and inserting ``396''.

     SEC. 302. FINDINGS.

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

     SEC. 303. STRENGTHENING INSTITUTIONS.

       (a) Grants.--Section 311 (20 U.S.C. 1057) is amended by 
     adding at the end the following:
       ``(c) Authorized Activities.--Grants awarded under this 
     section shall be used for 1 or more of the following 
     activities:
       ``(1) Purchase, rental, or lease of scientific or 
     laboratory equipment for educational purposes, including 
     instructional and research purposes.
       ``(2) Construction, maintenance, renovation, and 
     improvement in classrooms, libraries, laboratories, and other 
     instructional facilities, including the integration of 
     computer technology into institutional facilities to create 
     smart buildings.
       ``(3) Support of faculty exchanges, faculty development, 
     and faculty fellowships to assist in attaining advanced 
     degrees in the field of instruction of the faculty.
       ``(4) Development and improvement of academic programs.
       ``(5) Purchase of library books, periodicals, and other 
     educational materials, including telecommunications program 
     material.
       ``(6) Tutoring, counseling, and student service programs 
     designed to improve academic success.
       ``(7) Funds management, administrative management, and 
     acquisition of equipment for use in strengthening funds 
     management.
       ``(8) Joint use of facilities, such as laboratories and 
     libraries.
       ``(9) Establishing or improving a development office to 
     strengthen or improve contributions from alumni and the 
     private sector.
       ``(10) Establishing or improving an endowment fund.
       ``(11) Creating or improving facilities for Internet or 
     other distance learning academic instruction capabilities, 
     including purchase or rental of telecommunications technology 
     equipment or services.
       ``(12) Other activities proposed in the application 
     submitted pursuant to subsection (c) that--
       ``(A) contribute to carrying out the purposes of the 
     program assisted under this part; and
       ``(B) are approved by the Secretary as part of the review 
     and acceptance of such application.
       ``(d) Endowment Fund.--
       ``(1) In general.--An eligible institution may use not more 
     than 20 percent of the grant funds provided under this part 
     to establish or increase an endowment fund at such 
     institution.
       ``(2) Matching requirement.--In order to be eligible to use 
     grant funds in accordance with paragraph (1), the eligible 
     institution shall provide matching funds from non-Federal 
     sources, in an amount equal to or greater than the Federal 
     funds used in accordance with paragraph (1), for the 
     establishment or increase of the endowment fund.
       ``(3) Comparability.--The provisions of part C, regarding 
     the establishment or increase of an endowment fund, that the 
     Secretary determines are not inconsistent with this 
     subsection, shall apply to funds used under paragraph (1).''.
       (b) Endowment Fund Definition.--Section 312 (as amended by 
     section 301(c)(2)) (20 U.S.C. 1058) is amended--

[[Page H8994]]

       (1) by redesignating subsections (c) through (f) as 
     subsections (d) through (g), respectively; and
       (2) by inserting after subsection (b) the following:
       ``(c) Endowment Fund.--For the purpose of this part, the 
     term `endowment fund' means a fund that--
       ``(1) is established by State law, by an institution of 
     higher education, or by a foundation that is exempt from 
     Federal income taxation;
       ``(2) is maintained for the purpose of generating income 
     for the support of the institution; and
       ``(3) does not include real estate.''.
       (c) Duration of Grant.--Section 313 (20 U.S.C. 1059) is 
     amended--
       (1) in subsection (b), by inserting ``subsection (c) and a 
     grant under'' before ``section 394(a)(1)''; and
       (2) by adding at the end the following:
       ``(d) Wait-Out-Period.--Each eligible institution that 
     received a grant under this part for a 5-year period shall 
     not be eligible to receive an additional grant under this 
     part until 2 years after the date on which the 5-year grant 
     period terminates.''.
       (d) Applications.--Title III is amended by striking section 
     314 (20 U.S.C. 1059a) and inserting the following:

     ``SEC. 314. APPLICATIONS.

       ``Each eligible institution desiring to receive assistance 
     under this part shall submit an application in accordance 
     with the requirements of section 391.''.
       (e) American Indian Tribally Controlled Colleges and 
     Universities.--Section 316 (20 U.S.C. 1059c) is amended to 
     read as follows:

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

       ``(a) Program Authorized.--The Secretary shall provide 
     grants and related assistance to Indian Tribal Colleges and 
     Universities to enable such institutions to improve and 
     expand their capacity to serve Indian students.
       ``(b) Definitions.--In this section:
       ``(1) Indian.--The term `Indian' has the meaning given the 
     term in section 2 of the Tribally Controlled College or 
     University Assistance Act of 1978.
       ``(2) Indian tribe.--The term `Indian tribe' has the 
     meaning given the term in section 2 of the Tribally 
     Controlled College or University Assistance Act of 1978.
       ``(3) Tribal college or university.--The term `Tribal 
     College or University' has the meaning give the term 
     `tribally controlled college or university' in section 2 of 
     the Tribally Controlled College or University Assistance Act 
     of 1978, and includes an institution listed in the Equity in 
     Educational Land Grant Status Act of 1994.
       ``(4) Institution of higher education.--The term 
     `institution of higher education' means an institution of 
     higher education as defined in section 101(a), except that 
     paragraph (2) of such section shall not apply.
       ``(c) Authorized Activities.--
       ``(1) In general.--Grants awarded under this section shall 
     be used by Tribal Colleges or Universities to assist such 
     institutions to plan, develop, undertake, and carry out 
     activities to improve and expand such institutions' capacity 
     to serve Indian students.
       ``(2) Examples of authorized activities.--The activities 
     described in paragraph (1) may include--
       ``(A) purchase, rental, or lease of scientific or 
     laboratory equipment for educational purposes, including 
     instructional and research purposes;
       ``(B) construction, maintenance, renovation, and 
     improvement in classrooms, libraries, laboratories, and other 
     instructional facilities, including purchase or rental of 
     telecommunications technology equipment or services;
       ``(C) support of faculty exchanges, faculty development, 
     and faculty fellowships to assist in attaining advanced 
     degrees in the faculty's field of instruction;
       ``(D) academic instruction in disciplines in which Indians 
     are underrepresented;
       ``(E) purchase of library books, periodicals, and other 
     educational materials, including telecommunications program 
     material;
       ``(F) tutoring, counseling, and student service programs 
     designed to improve academic success;
       ``(G) funds management, administrative management, and 
     acquisition of equipment for use in strengthening funds 
     management;
       ``(H) joint use of facilities, such as laboratories and 
     libraries;
       ``(I) establishing or improving a development office to 
     strengthen or improve contributions from alumni and the 
     private sector;
       ``(J) establishing or enhancing a program of teacher 
     education designed to qualify students to teach in elementary 
     schools or secondary schools, with a particular emphasis on 
     teaching Indian children and youth, that shall include, as 
     part of such program, preparation for teacher certification;
       ``(K) establishing community outreach programs that 
     encourage Indian elementary school and secondary school 
     students to develop the academic skills and the interest to 
     pursue postsecondary education; and
       ``(L) other activities proposed in the application 
     submitted pursuant to subsection (d) that--
       ``(i) contribute to carrying out the activities described 
     in subparagraphs (A) through (K); and
       ``(ii) are approved by the Secretary as part of the review 
     and acceptance of such application.
       ``(3) Endowment fund.--
       ``(A) In general.--A Tribal College or University may use 
     not more than 20 percent of the grant funds provided under 
     this section to establish or increase an endowment fund at 
     the institution.
       ``(B) Matching requirement.--In order to be eligible to use 
     grant funds in accordance with subparagraph (A), the Tribal 
     College or University shall provide matching funds, in an 
     amount equal to the Federal funds used in accordance with 
     subparagraph (A), for the establishment or increase of the 
     endowment fund.
       ``(C) Comparability.--The provisions of part C regarding 
     the establishment or increase of an endowment fund, that the 
     Secretary determines are not inconsistent with this 
     paragraph, shall apply to funds used under subparagraph (A).
       ``(d) Application Process.--
       ``(1) Institutional eligibility.--To be eligible to receive 
     assistance under this section, a Tribal College or University 
     shall be an eligible institution under section 312(b).
       ``(2) Application.--Any Tribal College or University 
     desiring to receive assistance under this section shall 
     submit an application to the Secretary at such time, and in 
     such manner, as the Secretary may by regulation reasonably 
     require. Each such application shall include--
       ``(A) a 5-year plan for improving the assistance provided 
     by the Tribal College or University to Indian students, 
     increasing the rates at which Indian secondary school 
     students enroll in higher education, and increasing overall 
     postsecondary retention rates for Indian students; and
       ``(B) such enrollment data and other information and 
     assurances as the Secretary may require to demonstrate 
     compliance with paragraph (1).
       ``(3) Special rule.--For the purposes of this part, no 
     Tribal College or University that is eligible for and 
     receives funds under this section may concurrently receive 
     other funds under this part or part B.''.
       (f) 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
       ``(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 activities to improve and expand such institutions' 
     capacity to serve Alaska Natives or Native Hawaiians.
       ``(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 the faculty's 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 the institution 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

[[Page H8995]]

     may concurrently receive other funds under this part or part 
     B.''.

     SEC. 304. STRENGTHENING HBCU'S.

       (a) Grants.--Section 323 (20 U.S.C. 1062) is amended--
       (1) by redesignating subsection (b) as subsection (c);
       (2) by inserting after subsection (a) the following:
       ``(b) Endowment Fund.--
       ``(1) In general.--An institution may use not more than 20 
     percent of the grant funds provided under this part to 
     establish or increase an endowment fund at the institution.
       ``(2) Matching requirement.--In order to be eligible to use 
     grant funds in accordance with paragraph (1), the eligible 
     institution shall provide matching funds from non-Federal 
     sources, in an amount equal to or greater than the Federal 
     funds used in accordance with paragraph (1), for the 
     establishment or increase of the endowment fund.
       ``(3) Comparability.--The provisions of part C regarding 
     the establishment or increase of an endowment fund, that the 
     Secretary determines are not inconsistent with this 
     subsection, shall apply to funds used under paragraph (1).''; 
     and
       (3) in subsection (c) (as redesignated by paragraph (1)), 
     by striking paragraph (3).
       (b) Professional or Graduate Institutions.--
       (1) General authorization.--Section 326(a) (20 U.S.C. 
     1063b(a)) is amended--
       (A) in subsection (a)--
       (i) in paragraph (1), by inserting ``in mathematics, 
     engineering, or the physical or natural sciences'' after 
     ``graduate education opportunities''; and
       (ii) in paragraph (2)--

       (I) by striking ``$500,000'' and inserting ``$1,000,000''; 
     and
       (II) by striking ``except that'' and all that follows and 
     inserting the following: ``, except that no institution shall 
     be required to match any portion of the first $1,000,000 of 
     the institution's award from the Secretary. After funds are 
     made available to each eligible institution under the funding 
     rules described in subsection (f ), the Secretary shall 
     distribute, on a pro rata basis, any amounts which were not 
     so made available (by reason of the failure of an institution 
     to comply with the matching requirements of this paragraph) 
     among the institutions that have complied with such matching 
     requirement.''; and

       (B) in subsection (d)(2), by striking ``$500,000'' and 
     inserting ``$1,000,000''.
       (2) Use of funds.--Section 326(c) (20 U.S.C. 1063b(c)) is 
     amended by striking paragraphs (1) through (3) and inserting 
     the following:
       ``(1) purchase, rental or lease of scientific or laboratory 
     equipment for educational purposes, including instructional 
     and research purposes;
       ``(2) construction, maintenance, renovation, and 
     improvement in classroom, library, laboratory, and other 
     instructional facilities, including purchase or rental of 
     telecommunications technology equipment or services;
       ``(3) purchase of library books, periodicals, technical and 
     other scientific journals, microfilm, microfiche, and other 
     educational materials, including telecommunications program 
     materials;
       ``(4) scholarships, fellowships, and other financial 
     assistance for needy graduate and professional students to 
     permit the enrollment of the students in and completion of 
     the doctoral degree in medicine, dentistry, pharmacy, 
     veterinary medicine, law, and the doctorate degree in the 
     physical or natural sciences, engineering, mathematics, or 
     other scientific disciplines in which African Americans are 
     underrepresented;
       ``(5) establish or improve a development office to 
     strengthen and increase contributions from alumni and the 
     private sector;
       ``(6) assist in the establishment or maintenance of an 
     institutional endowment to facilitate financial independence 
     pursuant to section 331; and
       ``(7) funds and administrative management, and the 
     acquisition of equipment, including software, for use in 
     strengthening funds management and management information 
     systems.''.
       (3) Eligibility.--Section 326(e) (20 U.S.C. 1063b(e)) is 
     amended--
       (A) in paragraph (1)--
       (i) by striking ``include--'' and inserting ``are the 
     following'';
       (ii) by inserting ``and other qualified graduate programs'' 
     before the semicolon at the end of subparagraphs (E) through 
     (J);
       (iii) by striking ``and'' at the end of subparagraph (O); 
     and
       (iv) in subparagraph (P)--

       (I) by inserting ``University'' after ``State''; and
       (II) by striking the period and inserting a semicolon; and
       (III) by adding at the end the following:

       ``(Q) Norfolk State University qualified graduate programs; 
     and
       ``(R) Tennessee State University qualified graduate 
     programs.'';
       (B) by striking paragraphs (2) and (3) and inserting the 
     following:
       ``(2) Qualified graduate program.--(A) For the purposes of 
     this section, the term `qualified graduate program' means a 
     graduate or professional program that provides a program of 
     instruction in the physical or natural sciences, engineering, 
     mathematics, or other scientific discipline in which African 
     Americans are underrepresented and has students enrolled in 
     such program at the time of application for a grant under 
     this section.
       ``(B) Notwithstanding the enrollment requirement contained 
     in subparagraph (A), an institution may use an amount equal 
     to not more than 10 percent of the institution's grant under 
     this section for the development of a new qualified graduate 
     program.
       ``(3) Special rule.--Institutions that were awarded grants 
     under this section prior to October 1, 1998, shall continue 
     to receive such grants, subject to the availability of 
     appropriated funds, regardless of the eligibility of the 
     institutions described in subparagraphs (Q) and (R) of 
     paragraph (1).''; and
       (C) by adding at the end the following:
       ``(5) Institutional choice.--The president or chancellor of 
     the institution may decide which graduate or professional 
     school or qualified graduate program will receive funds under 
     the grant in any 1 fiscal year, if the allocation of funds 
     among the schools or programs is delineated in the 
     application for funds submitted to the Secretary under this 
     section.''.
       (4) Funding rule.--Section 326(f ) (20 U.S.C. 1063b(f )) is 
     amended--
       (A) by striking ``Of the amount appropriated'' and 
     inserting ``Subject to subsection (g), of the amount 
     appropriated'';
       (B) in paragraph (1)--
       (i) by striking ``$12,000,000'' and inserting 
     ``$26,600,000''; and
       (ii) by striking ``(A) through (E)'' and inserting ``(A) 
     through (P)'';
       (C) by striking paragraph (2) and inserting the following:
       ``(2) any amount in excess of $26,600,000, but not in 
     excess of $28,600,000, shall be available for the purpose of 
     making grants to institutions or programs described in 
     subparagraphs (Q) and (R) of subsection (e)(1); and
       ``(3) any amount in excess of $28,600,000, shall be made 
     available to each of the institutions or programs identified 
     in subparagraphs (A) through (R) pursuant to a formula 
     developed by the Secretary that uses the following elements:
       ``(A) The ability of the institution to match Federal funds 
     with non-Federal funds.
       ``(B) The number of students enrolled in the programs for 
     which the eligible institution received funding under this 
     section in the previous year.
       ``(C) The average cost of education per student, for all 
     full-time graduate or professional students (or the 
     equivalent) enrolled in the eligible professional or graduate 
     school, or for doctoral students enrolled in the qualified 
     graduate programs.
       ``(D) The number of students in the previous year who 
     received their first professional or doctoral degree from the 
     programs for which the eligible institution received funding 
     under this section in the previous year.
       ``(E) The contribution, on a percent basis, of the programs 
     for which the institution is eligible to receive funds under 
     this section to the total number of African Americans 
     receiving graduate or professional degrees in the professions 
     or disciplines related to the programs for the previous 
     year.''.
       (5) Hold harmless rule.--Section 326 is further amended by 
     adding at the end the following new subsection:
       ``(g) Hold Harmless Rule.--Notwithstanding paragraphs (2) 
     and (3) of subsection (f ), no institution or qualified 
     program identified in subsection (e)(1) that received a grant 
     for fiscal year 1998 and that is eligible to receive a grant 
     in a subsequent fiscal year shall receive a grant amount in 
     any such subsequent fiscal year that is less than the grant 
     amount received for fiscal year 1998, unless the amount 
     appropriated is not sufficient to provide such grant amounts 
     to all such institutions and programs, or the institution 
     cannot provide sufficient matching funds to meet the 
     requirements of this section.''.

     SEC. 305. ENDOWMENT CHALLENGE GRANTS.

       Section 331(b) (20 U.S.C. 1065(b)) is amended--
       (1) in paragraph (1), by striking ``360'' and inserting 
     ``399''; and
       (2) in paragraph (2), by striking subparagraphs (B) and (C) 
     and inserting the following:
       ``(B) The Secretary may make a grant under this part to an 
     eligible institution in any fiscal year if the institution--
       ``(i) applies for a grant in an amount not exceeding 
     $500,000; and
       ``(ii) has deposited in the eligible institution's 
     endowment fund established under this section an amount which 
     is equal to \1/2\ of the amount of such grant.
       ``(C) An eligible institution of higher education that is 
     awarded a grant under subparagraph (B) shall not be eligible 
     to receive an additional grant under subparagraph (B) until 
     10 years after the date on which the grant period 
     terminates.''.

     SEC. 306. HBCU CAPITAL FINANCING.

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

[[Page H8996]]

       ``(F) physical infrastructure essential to support the 
     projects authorized under this paragraph, including roads, 
     sewer and drainage systems, and water, power, lighting, 
     telecommunications, and other utilities;''; and
       (5) in subparagraph (H) (as redesignated by paragraph (2)), 
     by striking ``(C)'' and inserting ``(G)''.
       (b) Responsibilities.--Section 343 (as redesignated by 
     section 301(a)(4)) (20 U.S.C. 1132c-2) is amended--
       (1) in subsection (b)(8) (as redesignated by section 
     301(a)(4)) (20 U.S.C. 1132c-2(b)(8)), by striking ``10 
     percent'' each place the term appears and inserting ``5 
     percent''; and
       (2) by adding at the end the following:
       ``(e) Notwithstanding any other provision of law, a 
     qualified bond guaranteed under this part may be sold to any 
     party that offers terms that the Secretary determines are in 
     the best interest of the eligible institution.''.
       (c) Technical Assistance.--Section 345 (as redesignated by 
     section 301(a)(4)) (20 U.S.C. 1132c-4) is amended--
       (1) in paragraph (5), by striking ``and'' after the 
     semicolon;
       (2) in paragraph (6), by striking the period and inserting 
     ``; and''; and
       (3) by adding at the end the following:
       ``(7) may, directly or by grant or contract, provide 
     technical assistance to eligible institutions to prepare the 
     institutions to qualify, apply for, and maintain a capital 
     improvement loan, including a loan under this part.''.
       (d) Prohibition.--Section 346 (as redesignated by section 
     301(a)(4)) (20 U.S.C. 1132c-5) is repealed.
       (e) Advisory Board.--Section 347 (as redesignated by 
     section 301(a)(4)) (20 U.S.C. 1132c-6) is amended--
       (1) in subsection (b)--
       (A) in subparagraph (D), by inserting ``, or the 
     president's designee.'' after the period; and
       (B) in subparagraph (E), by inserting ``, or the designee 
     of the Association'' before the period; and
       (2) by striking subsection (c).

     SEC. 307. MINORITY SCIENCE AND ENGINEERING IMPROVEMENT 
                   PROGRAM.

       (a) Minority Science and Engineering 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.''.
       (b) Eligibility for Grants.--Section 361 (as redesignated 
     by section 301(a)(7)) (20 U.S.C. 1135d) is amended to read as 
     follows:

     ``SEC. 361. ELIGIBILITY FOR GRANTS.

       ``Eligibility to receive grants under this part is limited 
     to--
       ``(1) public and private nonprofit institutions of higher 
     education that--
       ``(A) award baccalaureate degrees; and
       ``(B) are minority institutions;
       ``(2) public or private nonprofit institutions of higher 
     education that--
       ``(A) award associate degrees; and
       ``(B) are minority institutions that--
       ``(i) have a curriculum that includes science or 
     engineering subjects; and
       ``(ii) enter into a partnership with public or private 
     nonprofit institutions of higher education that award 
     baccalaureate degrees in science and engineering;
       ``(3) nonprofit science-oriented organizations, 
     professional scientific societies, and institutions of higher 
     education that award baccalaureate degrees, that--
       ``(A) provide a needed service to a group of minority 
     institutions; or
       ``(B) provide in-service training for project directors, 
     scientists, and engineers from minority institutions; or
       ``(4) consortia of organizations, that provide needed 
     services to 1 or more minority institutions, the membership 
     of which may include--
       ``(A) institutions of higher education which have a 
     curriculum in science or engineering;
       ``(B) institutions of higher education that have a graduate 
     or professional program in science or engineering;
       ``(C) research laboratories of, or under contract with, the 
     Department of Energy;
       ``(D) private organizations that have science or 
     engineering facilities; or
       ``(E) quasi-governmental entities that have a significant 
     scientific or engineering mission.''.
       (c) Definitions.--Section 365(4) (as redesignated by 
     section 301(a)(7)) (20 U.S.C. 1135d-5(4)) is amended by 
     inserting ``behavioral,'' after ``physical,''.
       (d) Conforming amendments.--The heading for subpart 1 of 
     part E of title III (as redesignated by paragraphs (6) and 
     (7) of section 301(a)) is amended by inserting ``and 
     Engineering'' before ``Improvement Program''.

     SEC. 308. GENERAL PROVISIONS.

       (a) Applications for Assistance.--Subsection (a) of section 
     391(a) (as redesignated by section 301(a)(2)) (20 U.S.C. 
     1066(a)) is amended to read as follows:
       ``(a) Applications.--
       ``(1) Applications required.--Any institution which is 
     eligible for assistance under this title shall submit to the 
     Secretary an application for assistance at such time, in such 
     form, and containing such information, as may be necessary to 
     enable the Secretary to evaluate the institutions's need for 
     the assistance. Subject to the availability of appropriations 
     to carry out this title, the Secretary may approve an 
     application for assistance under this title only if the 
     Secretary determines that--
       ``(A) the application meets the requirements of subsection 
     (b);
       ``(B) the applicant is eligible for assistance in 
     accordance with the part of this title under which the 
     assistance is sought; and
       ``(C) the applicant's performance goals are sufficiently 
     rigorous as to meet the purposes of this title and the 
     performance objectives and indicators for this title 
     established by the Secretary pursuant to the Government 
     Performance and Results Act of 1993 and the amendments made 
     by such Act.
       ``(2) Preliminary applications.--In carrying out paragraph 
     (1), the Secretary may develop a preliminary application for 
     use by eligible institutions applying under part A prior to 
     the submission of the principal application.''.
       (b) Applications.--Paragraph (1) of section 391(b) (as 
     redesignated by section 301(a)(2)) (20 U.S.C. 1066(b)) is 
     amended by inserting ``, D or E'' after ``part C''.
       (c) Contents of Applications.--Section 391(b)(6) (as 
     redesignated by section 301(a)(2)) is amended by inserting 
     before the semicolon the following: ``, except that for 
     purposes of section 316, paragraphs (2) and (3) of section 
     396 shall not apply''.
       (d) Waivers.--Section 392(a) (as redesignated by section 
     301(a)(2)) (20 U.S.C. 1067(a)) is amended--
       (1) by striking ``or'' at the end of paragraph (5);
       (2) by redesignating paragraph (6) as paragraph (7); and
       (3) by inserting after paragraph (5) the following new 
     paragraph:
       ``(6) that is a tribally controlled college or university 
     as defined in section 2 of the Tribally Controlled College or 
     University Assistance Act of 1978; or''.
       (e) Application Review Process.--Section 393(a) (as 
     redesignated by section 301(a)(2)) (20 U.S.C. 1068(a)) is 
     amended--
       (1) in paragraph (2), by striking ``Native American 
     colleges and universities'' and inserting ``Tribal Colleges 
     and Universities''; and
       (2) by adding at the end the following:
       ``(d) Exclusion.--The provisions of this section shall not 
     apply to applications submitted under part D.''.
       (f) Waivers.--Paragraph (2) of section 395(b) (as 
     redesignated by section 301(a)(2)) (20 U.S.C. 1069b(b)) is 
     amended by striking ``title IV, VII, or VIII'' and inserting 
     ``part D or title IV''.
       (g) Continuation Awards.--Part F of title III is amended by 
     inserting after section 397 (as redesignated by section 
     301(a)(2)) (20 U.S.C. 1069d) the following:

     ``SEC. 398. CONTINUATION AWARDS.

       ``The Secretary shall make continuation awards under this 
     title for the second and succeeding years of a grant only 
     after determining that the recipient is making satisfactory 
     progress in carrying out the grant.''.
       (h) Authorization of Appropriations.--Section 399(a) (as 
     redesignated by section 301(a)(2)) (20 U.S.C. 1069f) is 
     amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A), by striking ``1993'' and inserting 
     ``1999'';
       (B) in subparagraph (B)--
       (i) in clause (i), by striking ``$45,000,000 for fiscal 
     year 1993'' and inserting ``$10,000,000 for fiscal year 
     1999'';
       (ii) by striking clause (ii); and
       (iii) by striking ``(B)(i) There'' and inserting ``(B) 
     There''; and
       (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.'';
       (2) in paragraph (2)--
       (A) in subparagraph (A), by striking ``1993'' and inserting 
     ``1999''; and
       (B) in subparagraph (B), by striking ``$20,000,000 for 
     fiscal year 1993'' and inserting ``$35,000,000 for fiscal 
     year 1999'';
       (3) in paragraph (3), by striking ``$50,000,000 for fiscal 
     year 1993'' and inserting ``$10,000,000 for fiscal year 
     1999'';
       (4) by adding at the end the following:
       ``(4) Part d.--(A) There are authorized to be appropriated 
     to carry out part D (other than section 345(7), but including 
     section 347), $110,000 for fiscal year 1999, and such sums as 
     may be necessary for each of the 4 succeeding fiscal years.
       ``(B) There are authorized to be appropriated to carry out 
     section 345(7), such sums as may be necessary for fiscal year 
     1999 and each of the 4 succeeding fiscal years.
       ``(5) Part e.--There are authorized to be appropriated to 
     carry out part E, $10,000,000 for fiscal year 1999, and such 
     sums as may be necessary for each of the 4 succeeding fiscal 
     years.''; and
       (5) by striking subsections (c), (d), and (e).

[[Page H8997]]

                      TITLE IV--STUDENT ASSISTANCE

                       PART A--GRANTS TO STUDENTS

     SEC. 401. FEDERAL PELL GRANTS.

       (a) Extension of Authority.--Section 401(a)(1) (20 U.S.C. 
     1070a(a)(1)) is amended--
       (1) in the first sentence, by striking ``The Secretary 
     shall, during the period beginning July 1, 1972, and ending 
     September 30, 1998,'' and inserting ``For each fiscal year 
     through fiscal year 2004, the Secretary shall''; and
       (2) in the second sentence, by inserting ``until such time 
     as the Secretary determines and publishes in the Federal 
     Register with an opportunity for comment, an alternative 
     payment system that provides payments to institutions in an 
     accurate and timely manner,'' after ``pay eligible 
     students''.
       (b) Amount of Grant.--Paragraph (2)(A) of section 401(b) is 
     amended to read as follows:
       ``(2)(A) The amount of the Federal Pell Grant for a student 
     eligible under this part shall be--
       ``(i) $4,500 for academic year 1999-2000;
       ``(ii) $4,800 for academic year 2000-2001;
       ``(iii) $5,100 for academic year 2001-2002;
       ``(iv) $5,400 for academic year 2002-2003; and
       ``(v) $5,800 for academic year 2003-2004,
     less an amount equal to the amount determined to be the 
     expected family contribution with respect to that student for 
     that year.''.
       (c) Relation of Maximum Grant to Tuition and Expenses.--
     Paragraph (3) of section 401(b) is amended to read as 
     follows:
       ``(3)(A) For any academic year for which an appropriation 
     Act provides a maximum basic grant in an amount in excess of 
     $2,700, the amount of a student's basic grant shall equal 
     $2,700 plus--
       ``(i) one-half of the amount by which such maximum basic 
     grant exceeds $2,700; plus
       ``(ii) the lesser of--
       ``(I) the remaining one-half of such excess; or
       ``(II) the sum of the student's tuition and, if the student 
     has dependent care expenses (as described in section 472(8) 
     or disability-related expenses (as described in section 
     472(9)), an allowance determined by the institution for such 
     expenses.
       ``(B) An institution that charged only fees in lieu of 
     tuition as of October 1, 1998, may include in the 
     institution's determination of tuition charged, fees that 
     would normally constitute tuition.''.
       (d) Regulations for Multiple Awards.--Section 401(b)(6) is 
     amended--
       (1) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii), respectively;
       (2) by inserting ``(A)'' after the paragraph designation; 
     and
       (3) by adding at the end the following:
       ``(B) The Secretary shall promulgate regulations 
     implementing this paragraph.''.
       (e) Time Limit To Receive Grants.--Section 401(c) is 
     amended by adding at the end the following:
       ``(4) Notwithstanding paragraph (1), the Secretary may 
     allow, on a case-by-case basis, a student to receive a basic 
     grant if the student--
       ``(A) is carrying at least \1/2\ the normal full-time work 
     load for the course of study the student is pursuing, as 
     determined by the institution of higher education; and
       ``(B) is enrolled or accepted for enrollment in a 
     postbaccalaureate program that does not lead to a graduate 
     degree, and in courses required by a State in order for the 
     student to receive a professional certification or licensing 
     credential that is required for employment as a teacher in an 
     elementary school or secondary school in that State,

     except that this paragraph shall not apply to a student who 
     is enrolled in an institution of higher education that offers 
     a baccalaureate degree in education.''.
       (f) Institutional Ineligibility Based on Default Rates.--
     Section 401 is amended by adding at the end the following:
       ``(j) Institutional Ineligibility Based on Default Rates.--
       ``(1) In general.--No institution of higher education shall 
     be an eligible institution for purposes of this subpart if 
     such institution of higher education is ineligible to 
     participate in a loan program under part B or D as a result 
     of a final default rate determination made by the Secretary 
     under part B or D after the final publication of cohort 
     default rates for fiscal year 1996 or a succeeding fiscal 
     year.
       ``(2) Sanctions subject to appeal opportunity.--No 
     institution may be subject to the terms of this subsection 
     unless the institution has had the opportunity to appeal the 
     institution's default rate determination under regulations 
     issued by the Secretary for the loan program authorized under 
     part B or D, as applicable. This subsection shall not apply 
     to an institution that was not participating in the loan 
     program authorized under part B or D on the date of enactment 
     of the Higher Education Amendments of 1998, unless the 
     institution subsequently participates in the loan 
     programs.''.
       (g) Conforming Amendments.--
       (1) Section 400(a)(1) (20 U.S.C. 1070(a)(1)) is amended by 
     striking ``basic educational opportunity grants'' and 
     inserting ``Federal Pell Grants''.
       (2) The heading of subpart 1 of part A of title IV (20 
     U.S.C. 1070a et seq.) is amended to read as follows:

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

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

     SEC. 402. FEDERAL TRIO PROGRAMS.

       (a) Program Authority; Authorization of Appropriations.--
       (1) Duration of grants.--Section 402A(b)(2) (20 U.S.C. 
     1070a-11(b)(2)) is amended--
       (A) by striking ``and'' at the end of subparagraph (A);
       (B) by striking the period at the end of subparagraph (B) 
     and inserting ``; and''; and
       (C) by inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) grants under section 402H shall be awarded for a 
     period determined by the Secretary.''.
       (2) Minimum grants.--Section 402A(b)(3) is amended to read 
     as follows:
       ``(3) Minimum grants.--Unless the institution or agency 
     requests a smaller amount, individual grants under this 
     chapter shall be no less than--
       ``(A) $170,000 for programs authorized by sections 402D and 
     402G;
       ``(B) $180,000 for programs authorized by sections 402B and 
     402F; and
       ``(C) $190,000 for programs authorized by sections 402C and 
     402E.''.
       (3) Procedures for awarding grants and contracts.--
     Subsection (c) of section 402A is amended to read as follows:
       ``(c) Procedures for Awarding Grants and Contracts.--
       ``(1) Application requirements.--An eligible entity that 
     desires to receive a grant or contract under this chapter 
     shall submit an application to the Secretary in such manner 
     and form, and containing such information and assurances, as 
     the Secretary may reasonably require.
       ``(2) Prior experience.--In making grants under this 
     chapter, the Secretary shall consider each applicant's prior 
     experience of service delivery under the particular program 
     for which funds are sought. The level of consideration given 
     the factor of prior experience shall not vary from the level 
     of consideration given such factor during fiscal years 1994 
     through 1997, except that grants made under section 402H 
     shall not be given prior experience consideration.
       ``(3)  Order of awards; program fraud.--(A) Except with 
     respect to grants made under sections 402G and 402H and as 
     provided in subparagraph (B), the Secretary shall award 
     grants and contracts under this chapter in the order of the 
     scores received by the application for such grant or contract 
     in the peer review process required under paragraph (4) and 
     adjusted for prior experience in accordance with paragraph 
     (2) of this subsection.
       ``(B) The Secretary is not required to provide assistance 
     to a program otherwise eligible for assistance under this 
     chapter, if the Secretary has determined that such program 
     has involved the fraudulent use of funds under this chapter.
       ``(4) Peer review process.--(A) The Secretary shall ensure 
     that, to the extent practicable, members of groups 
     underrepresented in higher education, including African 
     Americans, Hispanics, Native Americans, Alaska Natives, Asian 
     Americans, and Native American Pacific Islanders (including 
     Native Hawaiians), are represented as readers of applications 
     submitted under this chapter. The Secretary shall also ensure 
     that persons from urban and rural backgrounds are represented 
     as readers.
       ``(B) The Secretary shall ensure that each application 
     submitted under this chapter is read by at least 3 readers 
     who are not employees of the Federal Government (other than 
     as readers of applications).
       ``(5) Number of applications for grants and contracts.--The 
     Secretary shall not limit the number of applications 
     submitted by an entity under any program authorized under 
     this chapter if the additional applications describe programs 
     serving different populations or campuses.
       ``(6) Coordination with other programs for disadvantaged 
     students.--The Secretary shall encourage coordination of 
     programs assisted under this chapter with other programs for 
     disadvantaged students operated by the sponsoring institution 
     or agency, regardless of the funding source of such programs. 
     The Secretary shall not limit an entity's eligibility to 
     receive funds under this chapter because such entity sponsors 
     a program similar to the program to be assisted under this 
     chapter, regardless of the funding source of such program. 
     The Secretary shall permit the Director of a program 
     receiving funds under this chapter to administer one or more 
     additional programs for disadvantaged students operated by 
     the sponsoring institution or agency, regardless of the 
     funding sources of such programs.
       ``(7)  Application status.--The Secretary shall inform each 
     entity operating programs under this chapter regarding the 
     status of their application for continued funding at least 8 
     months prior to the expiration of the grant or contract. The 
     Secretary, in the case of an entity that is continuing to 
     operate a successful program under this chapter, shall ensure 
     that the start-up date for a new grant or contract for such 
     program immediately follows the termination of the preceding 
     grant or contract so that no interruption of funding occurs 
     for such successful reapplicants. The Secretary shall inform 
     each entity requesting assistance under this chapter for a 
     new program regarding the status of their application at 
     least 8 months prior to the proposed startup date of such 
     program.''.
       (4) Authorization of appropriations.--Section 402A(f) is 
     amended by striking ``$650,000,000 for fiscal year 1993'' and 
     inserting ``$700,000,000 for fiscal year 1999''.
       (5) Waiver.--Section 402A(g) is amended by adding at the 
     end the following:

[[Page H8998]]

       ``(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.''.
       (b) Talent Search.--Section 402B(b) (20 U.S.C. 1070a-12(b)) 
     is amended--
       (1) by striking paragraph (4) and inserting the following:
       ``(4) guidance on and assistance in secondary school 
     reentry, entry to general educational development (GED) 
     programs, other alternative education programs for secondary 
     school dropouts, or postsecondary education;'';
       (2) in paragraph (5), by inserting ``, or activities 
     designed to acquaint individuals from disadvantaged 
     backgrounds with careers in which the individuals are 
     particularly underrepresented'' before the semicolon;
       (3) in paragraph (8), by striking ``parents'' and inserting 
     ``families''; and
       (4) in paragraph (9), by inserting ``or counselors'' after 
     ``teachers''.
       (c) Upward Bound.--Section 402C (20 U.S.C. 1070a-13) is 
     amended--
       (1) in subsection (b)--
       (A) in paragraph (2), by striking ``personal counseling'' 
     and inserting ``counseling and workshops'';
       (B) in paragraph (9)--
       (i) by inserting ``or counselors'' after ``teachers''; and
       (ii) by striking ``and'' after the semicolon;
       (C) by redesignating paragraph (10) as paragraph (12);
       (D) by inserting after paragraph (9) the following:
       ``(10) work-study positions where youth participating in 
     the project are exposed to careers requiring a postsecondary 
     degree;
       ``(11) special services to enable veterans to make the 
     transition to postsecondary education; and''; and
       (E) in paragraph (12) (as redesignated by subparagraph 
     (C)), by striking ``(9)'' and inserting ``(11)''; and
       (2) in subsection (e), by striking ``and not in excess of 
     $40 per month during the remaining period of the year.'' and 
     inserting ``except that youth participating in a work-study 
     position under subsection (b)(10) may be paid a stipend of 
     $300 per month during June, July, and August. Youths 
     participating in a project proposed to be carried out under 
     any application may be paid stipends not in excess of $40 per 
     month during the remaining period of the year.''.
       (d) Student Support Services.--Paragraph (6) of section 
     402D(c) (20 U.S.C. 1070a-14(c)(6)) is amended to read as 
     follows:
       ``(6) consider, in addition to such other criteria as the 
     Secretary may prescribe, the institution's effort, and where 
     applicable past history, in--
       ``(A) providing sufficient financial assistance to meet the 
     full financial need of each student in the project; and
       ``(B) maintaining the loan burden of each such student at a 
     manageable level.''.
       (e) Postbaccalaureate Achievement Program.--Section 
     402E(e)(1) (20 U.S.C. 1070a-15(e)(1)) is amended by striking 
     ``$2,400'' and inserting ``$2,800''.
       (f) Staff Development Activities.--Section 402G (20 U.S.C. 
     1070a-17) is amended--
       (1) in subsection (a), by inserting ``participating in,'' 
     after ``leadership personnel employed in,''; and
       (2) in subsection (b), by inserting after paragraph (3) the 
     following new paragraph:
       ``(4) The use of appropriate educational technology in the 
     operation of projects assisted under this chapter.''.
       (g) Evaluation and Dissemination.--Section 402H (20 U.S.C. 
     1070a-18) is amended to read as follows:

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

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

     SEC. 403. GEAR UP 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--GAINING EARLY AWARENESS AND READINESS FOR UNDERGRADUATE 
                                PROGRAMS

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

       ``(a) Program Authorized.--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 school, 
     middle school, 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 the 
     college financing options for the students and their parents.
       ``(b) Awards.--
       ``(1) In general.--From funds appropriated under section 
     404H for each fiscal year, the Secretary shall make awards to 
     eligible entities described in paragraphs (1) and (2) of 
     subsection (c) to enable the entities to carry out the 
     program authorized under subsection (a).
       ``(2) Priority.--In making awards to eligible entities 
     described in paragraph (c)(1), the Secretary shall--
       ``(A) give priority to eligible entities that--
       ``(i) on the day before the date of enactment of the Higher 
     Education Amendments of 1998, carried out successful 
     educational opportunity programs under this chapter (as this 
     chapter was in effect on such day); and
       ``(ii) have a prior, demonstrated commitment to early 
     intervention leading to college access through collaboration 
     and replication of successful strategies;
       ``(B) ensure that students served under this chapter on the 
     day before the date of enactment of the Higher Education 
     Amendments of 1998 continue to receive assistance through the 
     completion of secondary school.
       ``(c) Definition of Eligible Entity.--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 elementary schools or secondary schools; 
     and
       ``(ii) the 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.

     ``SEC. 404B. REQUIREMENTS.

       ``(a) Funding Rules.--
       ``(1) Continuation awards.--From the amount appropriated 
     under section 404H for a fiscal year, the Secretary shall 
     continue to award grants to States under this chapter (as 
     this chapter was in effect on the day before the date of 
     enactment of the Higher Education Amendments of 1998) in 
     accordance with the terms and conditions of such grants.
       ``(2) Distribution.--From the amount appropriated under 
     section 404H that remains after making continuation awards 
     under paragraph (1) for a fiscal year, the Secretary shall--
       ``(A) make available--
       ``(i) not less than 33 percent of the amount to eligible 
     entities described in section 404A(c)(1); and
       ``(ii) not less than 33 percent of the amount to eligible 
     entities described in section 404A(c)(2); and
       ``(B) award the remainder of the amount to eligible 
     entities described in paragraph (1) or (2) of section 
     404A(c).
       ``(3) Special rule.--The Secretary shall annually 
     reevaluate the distribution of funds described in paragraph 
     (2)(B) based on number, quality, and promise of the 
     applications and adjust the distribution accordingly.''.
       ``(b) Limitation.--Each eligible entity described in 
     section 404A(c)(1), and each eligible entity described in 
     section 404A(c)(2) that conducts a scholarship component 
     under section 404E, shall use not less than 25 percent and 
     not more than 50 percent of grant funds received under this 
     chapter for the early intervention component of an eligible 
     entity's program under this chapter, except that the 
     Secretary may waive the 50 percent limitation if the eligible 
     entity demonstrates that the eligible entity has another 
     means of providing the students with financial assistance 
     that is described in the plan submitted under section 404C.
       ``(c) Coordination.--Each eligible entity shall ensure that 
     the activities assisted under this chapter are, to the extent 
     practicable, coordinated with, and complement and enhance--

[[Page H8999]]

       ``(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.
       ``(d) Designation of Fiscal Agent.--An eligible entity 
     described in section 404A(c)(2) shall designate an 
     institution of higher education or a local educational agency 
     as the fiscal agent for the eligible entity.
       ``(e) Coordinators.--An eligible entity described in 
     section 404A(c)(2) shall have a full-time program coordinator 
     or a part-time program coordinator, whose primary 
     responsibility is a project under section 404C.
       ``(f) Displacement.--An eligible entity described in 
     404A(c)(2) shall ensure that the activities assisted under 
     this chapter will not displace an employee or eliminate a 
     position at a school assisted under this chapter, including a 
     partial displacement such as a reduction in hours, wages or 
     employment benefits.
       ``(g) Cohort Approach.--
       ``(1) In general.--The Secretary shall require that 
     eligible entities described in section 404A(c)(2)--
       ``(A) provide services under this chapter to at least 1 
     grade level of students, beginning not later than 7th grade, 
     in a participating 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 under the National School Lunch 
     Act (or, if an eligible entity determines that it would 
     promote the effectiveness of a program, 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. ELIGIBLE 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 a scholarship component if required or undertaken 
     pursuant to section 404E and an early intervention component 
     required pursuant to section 404D.
       ``(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 
     50 percent of the cost of the program, which matching funds 
     may be provided in cash or in kind;
       ``(B) specifies the methods by which matching funds 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.--Notwithstanding the matching 
     requirement described in paragraph (1)(A), the Secretary may 
     by regulation modify the percentage requirement described in 
     paragraph (1)(A) for eligible entities described in section 
     404A(c)(2).
       ``(c) Methods for Complying With Matching Requirement.--An 
     eligible entity may count toward the matching requirement 
     described in subsection (b)(1)(A)--
       ``(1) the amount of the financial assistance 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 financial assistance 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) Peer Review Panels.--The Secretary shall convene peer 
     review panels to assist in making determinations regarding 
     the awarding of grants under this chapter.

     ``SEC. 404D. EARLY INTERVENTION.

       ``(a) Services.--
       ``(1) In general.--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 404C, that the eligible entity will provide 
     comprehensive mentoring, counseling, outreach, and supportive 
     services to students participating in programs under this 
     chapter. Such counseling shall include--
       ``(A) financial aid counseling and information regarding 
     the opportunities for financial assistance under this title; 
     and
       ``(B) activities or information regarding--
       ``(i) fostering and improving parent involvement in 
     promoting the advantages of a college education, academic 
     admission requirements, and the need to take college 
     preparation courses;
       ``(ii) college admissions and achievement tests; and
       ``(iii) college 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 described in subsection (c), if applicable.
       ``(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) 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 progress described in section 
     484(c), in exchange for receiving tuition assistance for a 
     period of time to be established by each eligible entity.
       ``(C) Activities designed to ensure secondary school 
     completion and college enrollment of at-risk children, such 
     as 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 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 who are in their 
     sophomore or junior years of secondary school or are planning 
     to attend an institution of higher education in the 
     succeeding academic year that--
       ``(i) are carried out at an institution of higher education 
     that 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 financial assistance to the individuals to 
     cover the individuals' summer costs for books, supplies, 
     living costs, and personal expenses; and
       ``(iv) provide the individuals with financial assistance 
     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.--For eligible entities not using a 
     cohort approach, the eligible entity shall treat as priority 
     students any student in preschool through grade 12 who is 
     eligible--
       ``(1) to be counted under section 1124(c) of the Elementary 
     and Secondary Education Act of 1965;
       ``(2) for free or reduced price meals under the National 
     School Lunch Act; or
       ``(3) for assistance pursuant to part A of title IV of the 
     Social Security Act.
       ``(d) Allowable Providers.--In the case of eligible 
     entities described in section 404A(c)(1), the activities 
     required by this section 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, and 
     other organizations the State deems appropriate.

     ``SEC. 404E. 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 scholarships to students in accordance with the 
     requirements of this section. The Secretary shall encourage 
     the eligible entity to ensure that a scholarship 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 in accordance with the requirements of this section.
       ``(b) Grant Amounts.--The maximum amount of a scholarship 
     that an eligible student shall be eligible to receive under 
     this section shall be established by the eligible entity. The 
     minimum amount of the scholarship 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

[[Page H9000]]

     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.--Scholarships provided 
     under this section 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 
     scholarship 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 scholarship 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 404D.
       ``(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 to have met the requirements of 
     subsection (d)(4).

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

       ``(a) Authority.--The Secretary, using funds appropriated 
     under section 404H that do not exceed $200,000 for a fiscal 
     year--
       ``(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 under 
     the National School Lunch Act.
       ``(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. 404G. EVALUATION AND REPORT.

       ``(a) Evaluation.--Each eligible entity receiving a grant 
     under this chapter shall biennially evaluate the activities 
     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 activities 
     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 activities assisted under this chapter, the 
     Secretary shall, from not more than 0.75 percent of the funds 
     appropriated under section 404H for a fiscal year, award 1 or 
     more grants, contracts, or cooperative agreements to or with 
     public and private institutions and organizations, to enable 
     the 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 regarding the activities assisted under this chapter 
     and the evaluations conducted pursuant to this section.

     ``SEC. 404H. AUTHORIZATION OF 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.''.

     SEC. 404. ACADEMIC ACHIEVEMENT INCENTIVE SCHOLARSHIPS.

       Chapter 3 of subpart 2 of part A of title IV (20 U.S.C. 
     1070a-31 et seq.) is amended to read as follows:

        ``CHAPTER 3--ACADEMIC ACHIEVEMENT INCENTIVE SCHOLARSHIPS

     ``SEC. 406A. SCHOLARSHIPS AUTHORIZED.

       ``The Secretary is authorized to award scholarships to 
     students who graduate from secondary school after May 1, 
     2000, to enable the students to pay the cost of attendance at 
     an institution of higher education during the students first 
     2 academic years of undergraduate education, if the 
     students--
       ``(1) are eligible to receive Federal Pell Grants for the 
     year in which the scholarships are awarded; and
       ``(2) demonstrate academic achievement by graduating in the 
     top 10 percent of their secondary school graduating class.

     ``SEC. 406B. SCHOLARSHIP PROGRAM REQUIREMENTS.

       ``(a) Amount of Award.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     amount of a scholarship awarded under this chapter for any 
     academic year shall be equal to 100 percent of the amount of 
     the Federal Pell Grant for which the recipient is eligible 
     for the academic year.
       ``(2) Adjustment for insufficient appropriations.--If, 
     after the Secretary determines the total number of eligible 
     applicants for an academic year in accordance with section 
     406C, funds available to carry out this chapter for the 
     academic year are insufficient to fully fund all awards under 
     this chapter for the academic year, the amount of the 
     scholarship paid to each student under this chapter shall be 
     reduced proportionately.
       ``(b) Assistance Not To Exceed Cost of Attendance.--A 
     scholarship awarded under this chapter to any student, in 
     combination with the Federal Pell Grant assistance and other 
     student financial assistance available to such student, may 
     not exceed the student's cost of attendance.

     ``SEC. 406C. ELIGIBILITY OF SCHOLARS.

       ``(a) Procedures Established by Regulation.--The Secretary 
     shall establish by regulation procedures for the 
     determination of eligibility of students for the scholarships 
     awarded under this chapter. Such procedures shall include 
     measures to prevent any secondary school from certifying more 
     than 10 percent of the school's students for eligibility 
     under this section.
       ``(b) Coordination.--In prescribing procedures under 
     subsection (a), the Secretary shall ensure that the 
     determination of eligibility and the amount of the 
     scholarship is determined in a timely and accurate manner 
     consistent with the requirements of section 482 and the 
     submission of the financial aid form required by section 483. 
     For such purposes, the Secretary may provide that, for the 
     first academic year of a student's 2 academic years of 
     eligibility under this chapter, class rank may be determined 
     prior to graduation from secondary school, at such time and 
     in such manner as the Secretary may specify in regulations 
     prescribed under this chapter.

     ``SEC. 406D. STUDENT REQUIREMENTS.

       ``(a) In General.--Each eligible student desiring a 
     scholarship under this chapter shall submit an application to 
     the Secretary at such time, in such manner, and containing 
     such information as the Secretary may reasonably require.
       ``(b) Continuing Eligibility.--In order for a student to 
     continue to be eligible to receive a scholarship under this 
     chapter for the second year of undergraduate education, the 
     eligible student shall maintain eligibility to receive a 
     Federal Pell Grant for that year, including fulfilling the 
     requirements for satisfactory progress described in section 
     484(c).

     ``SEC. 407E. AUTHORIZATION OF 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.''.

     SEC. 405. REPEALS.

       Chapters 4 through 8 of subpart 2 of part A of title IV (20 
     U.S.C. 1070a-41 et seq. and 1070a-81 et seq.) are repealed.

     SEC. 406. FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY 
                   GRANTS.

       (a) Authorization of Appropriations.--Section 413A(b)(1) 
     (20 U.S.C. 1070b(b)(1)) is amended by striking ``1993'' and 
     inserting ``1999''.
       (b) Use of Funds for Less-Than-Full-Time Students.--
     Subsection (d) of section 413C (20 U.S.C. 1070b-2) is amended 
     to read as follows:
       ``(d) Use of Funds for Less-Than-Full-Time Students.--If 
     the institution's allocation under this subpart is directly 
     or indirectly based in part on the financial need 
     demonstrated by students who are independent students or 
     attending the institution on less than a full-time basis, 
     then a reasonable proportion of the allocation shall be made 
     available to such students.''.
       (c) Allocation of Funds.--
       (1) Updating the base period.--Section 413D(a) (20 U.S.C. 
     1070b-3(a)) is amended--
       (A) in paragraph (1), by striking ``received and used under 
     this part for fiscal year 1985'' and inserting ``received 
     under subsections (a) and (b) of this section for fiscal year 
     1999 (as such subsections were in effect with respect to 
     allocations for such fiscal year)'';
       (B) in paragraph (2)--
       (i) in subparagraphs (A) and (B), by striking ``1985'' each 
     place the term appears and inserting ``1999''; and
       (ii) in subparagraph (C)(i), by striking ``1986'' and 
     inserting ``2000''.
       (2) Elimination of pro rata share.--Section 413D is further 
     amended--
       (A) by striking subsection (b);
       (B) in subsection (c)(1), by striking ``three-quarters of 
     the remainder'' and inserting ``the remainder'';
       (C) in subsection (c)(2)(A)(i), by striking ``subsection 
     (d)'' and inserting ``subsection (c)''; and
       (D) by redesignating subsections (c), (d), (e), and (f) as 
     subsections (b), (c), (d), and (e), respectively.
       (3) Effective Date.--The amendments made by this subsection 
     shall apply with respect to allocations of amounts 
     appropriated pursuant to section 413A(b) of the Higher 
     Education Act of 1965 for fiscal year 2000 or any succeeding 
     fiscal year.
       (d) Carryover and Carryback Authority.--Subpart 3 of part A 
     of title IV (20 U.S.C. 1070b et seq.) is amended by adding at 
     the end the following:

     ``SEC. 413E. CARRYOVER AND CARRYBACK AUTHORITY.

       ``(a) Carryover Authority.--Of the sums made available to 
     an eligible institution under this subpart for a fiscal year, 
     not more than 10 percent may, at the discretion of the 
     institution, remain available for expenditure during the 
     succeeding fiscal year to carry out the program under this 
     subpart.
       ``(b) Carryback Authority.--
       ``(1) In general.--Of the sums made available to an 
     eligible institution under this subpart for a fiscal year, 
     not more than 10 percent may, at

[[Page H9001]]

     the discretion of the institution, be used by the institution 
     for expenditure for the fiscal year preceding the fiscal year 
     for which the sums were appropriated.
       ``(2) Use of carried-back funds.--An eligible institution 
     may make grants to students after the end of the academic 
     year, but prior to the beginning of the succeeding fiscal 
     year, from such succeeding fiscal year's appropriations.''.

     SEC. 407. LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP 
                   PROGRAM.

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

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

       (2) Conforming amendments.--Subpart 4 of part A of title IV 
     (20 U.S.C. 1070c et seq.) is amended--
       (A) in section 415B(b) (20 U.S.C. 1070c-1(b)), by striking 
     ``State student grant incentive'' and inserting ``leveraging 
     educational assistance partnership''; and
       (B) in the heading for section 415C (20 U.S.C. 1070c-2), by 
     striking ``STATE STUDENT INCENTIVE GRANT'' and inserting 
     ``LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP''.
       (b) Authorization of Appropriations.--Section 415A(b) (20 
     U.S.C. 1070c(b)) is amended--
       (1) in paragraph (1), by striking ``1993'' and inserting 
     ``1999'';
       (2) by redesignating paragraph (2) as paragraph (3); and
       (3) by inserting after paragraph (1) the following:
       ``(2) Reservation.--For any fiscal year for which the 
     amount appropriated under paragraph (1) exceeds $30,000,000, 
     the excess shall be available to carry out section 415E.''.
       (c) Special Leveraging Educational Assistance Partnership 
     Program.--Subpart 4 of part A of title IV (20 U.S.C. 1070c et 
     seq.) is amended--
       (1) by redesignating section 415E as 415F; and
       (2) by inserting after section 415D the following:

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

       ``(a) In General.--From amounts reserved under section 
     415A(b)(2) for each fiscal year, the Secretary shall--
       ``(1) make allotments among States in the same manner as 
     the Secretary makes allotments among States under section 
     415B; and
       ``(2) award grants to States, from allotments under 
     paragraph (1), to enable the States to pay the Federal share 
     of the cost of the authorized activities described in 
     subsection (c).
       ``(b) Applicability Rule.--The provisions of this subpart 
     which are not inconsistent with this section shall apply to 
     the program authorized by this section.
       ``(c) Authorized Activities.--Each State receiving a grant 
     under this section may use the grant funds for--
       ``(1) increasing the dollar amount of grants awarded under 
     section 415B to eligible students who demonstrate financial 
     need;
       ``(2) carrying out transition programs from secondary 
     school to postsecondary education for eligible students who 
     demonstrate financial need;
       ``(3) carrying out a financial aid program for eligible 
     students who demonstrate financial need and wish to enter 
     careers in information technology, or other fields of study 
     determined by the State to be critical to the State's 
     workforce needs;
       ``(4) making funds available for community service work-
     study activities for eligible students who demonstrate 
     financial need;
       ``(5) creating a postsecondary scholarship program for 
     eligible students who demonstrate financial need and wish to 
     enter teaching;
       ``(6) creating a scholarship program for eligible students 
     who demonstrate financial need and wish to enter a program of 
     study leading to a degree in mathematics, computer science, 
     or engineering;
       ``(7) carrying out early intervention programs, mentoring 
     programs, and career education programs for eligible students 
     who demonstrate financial need; and
       ``(8) awarding merit or academic scholarships to eligible 
     students who demonstrate financial need.
       ``(d) Maintenance of Effort Requirement.--Each State 
     receiving a grant under this section for a fiscal year shall 
     provide the Secretary an assurance that the aggregate amount 
     expended per student or the aggregate expenditures by the 
     State, from funds derived from non-Federal sources, for the 
     authorized activities described in subsection (c) for the 
     preceding fiscal year were not less than the amount expended 
     per student or the aggregate expenditures by the State for 
     the activities for the second preceding fiscal year.
       ``(e) Federal Share.--The Federal share of the cost of the 
     authorized activities described in subsection (c) for any 
     fiscal year shall be not more than 33\1/3\ percent.''.
       (c) Technical and Conforming Amendments.--
       (1) Purpose.--Subsection (a) of section 415A (20 U.S.C. 
     1070c(a)) is amended to read as follows:
       ``(a) Purpose of Subpart.--It is the purpose of this 
     subpart to make incentive grants available to States to 
     assist States in--
       ``(1) providing grants to--
       ``(A) eligible students attending institutions of higher 
     education or participating in programs of study abroad that 
     are approved for credit by institutions of higher education 
     at which such students are enrolled; and
       ``(B) eligible students for campus-based community service 
     work-study; and
       ``(2) carrying out the activities described in section 
     415F.''.
       (2) Allotment.--Section 415B(a)(1) (20 U.S.C. 1070c-
     1(a)(1)) is amended by inserting ``and not reserved under 
     section 415A(b)(2)'' after ``415A(b)(1)''.

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

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

     SEC. 409. ROBERT C. BYRD HONORS SCHOLARSHIP PROGRAM.

       (a) FAS Eligibility.--Section 419D (20 U.S.C. 1070d-34) is 
     amended by adding at the end thereof the following:
       ``(e) FAS Eligibility.--
       ``(1) Fiscal years 2000 through 2004.--Notwithstanding any 
     other provision of this subpart, in the case of students from 
     the Freely Associated States who may be selected to receive a 
     scholarship under this subpart for the first time for any of 
     the fiscal years 2000 through 2004--
       ``(A) there shall be 10 scholarships in the aggregate 
     awarded to such students for each of the fiscal years 2000 
     through 2004; and
       ``(B) the Pacific Regional Educational Laboratory shall 
     administer the program under this subpart in the case of 
     scholarships for students in the Freely Associated States.
       ``(2) Termination of eligibility.--A student from the 
     Freely Associated States shall not be eligible to a receive 
     scholarship under this subpart after September 30, 2004.''.
       (b) Authorization of Appropriations.--Section 419K (20 
     U.S.C. 1070d-41) is amended by striking ``$10,000,000 for 
     fiscal year 1993'' and inserting ``$45,000,000 for fiscal 
     year 1999''.

     SEC. 410. CHILD CARE ACCESS MEANS PARENTS IN SCHOOL.

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

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

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

       ``(a) Purpose.--The purpose of this section is to support 
     the participation of low-income parents in postsecondary 
     education through the provision of campus-based child care 
     services.
       ``(b) Program Authorized.--
       ``(1) Authority.--The Secretary may award grants to 
     institutions of higher education to assist the institutions 
     in providing campus-based child care services to low-income 
     students.
       ``(2) Amount of grants.--
       ``(A) In general.--The amount of a grant awarded to an 
     institution of higher education under this section for a 
     fiscal year shall not exceed 1 percent of the total amount of 
     all Federal Pell Grant funds awarded to students enrolled at 
     the institution of higher education for the preceding fiscal 
     year.
       ``(B) Minimum.--A grant under this section shall be awarded 
     in an amount that is not less than $10,000.
       ``(3) Duration; renewal; and payments.--
       ``(A) Duration.--The Secretary shall award a grant under 
     this section for a period of 4 years.
       ``(B) Payments.--Subject to subsection (e)(2), the 
     Secretary shall make annual grant payments under this 
     section.
       ``(4) Eligible institutions.--An institution of higher 
     education shall be eligible to receive a grant under this 
     section for a fiscal year if the total amount of all Federal 
     Pell Grant funds awarded to students enrolled at the 
     institution of higher education for the preceding fiscal year 
     equals or exceeds $350,000.
       ``(5) Use of funds.--Grant funds under this section shall 
     be used by an institution of higher education to support or 
     establish a campus-based child care program primarily serving 
     the needs of low-income students enrolled at the institution 
     of higher education. 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.
       ``(6) Construction.--Nothing in this section shall be 
     construed to prohibit an institution of higher education that 
     receives grant funds under this section from serving the 
     child care needs of the community served by the institution.
       ``(7) Definition of low-income student.--For the purpose of 
     this section, the term ``low-income student'' means a student 
     who is eligible to receive a Federal Pell Grant for the 
     fiscal year for which the determination is made.
       ``(c) Applications.--An institution of higher education 
     desiring a grant under this section shall submit an 
     application to the Secretary at such time, in such manner, 
     and accompanied by such information as the Secretary may 
     require. Each application shall--
       ``(1) demonstrate that the institution is an eligible 
     institution described in subsection (b)(4);

[[Page H9002]]

       ``(2) specify the amount of funds requested;
       ``(3) demonstrate the need of low-income students at the 
     institution for campus-based child care services by including 
     in the application--
       ``(A) information regarding student demographics;
       ``(B) an assessment of child care capacity on or near 
     campus;
       ``(C) information regarding the existence of waiting lists 
     for existing child care;
       ``(D) information regarding additional needs created by 
     concentrations of poverty or by geographic isolation; and
       ``(E) other relevant data;
       ``(4) contain a description of the activities to be 
     assisted, including whether the grant funds will support an 
     existing child care program or a new child care program;
       ``(5) identify the resources, including technical expertise 
     and financial support, the institution will draw upon to 
     support the child care program and the participation of low-
     income students in the program, such as accessing social 
     services funding, using student activity fees to help pay the 
     costs of child care, using resources obtained by meeting the 
     needs of parents who are not low-income students, and 
     accessing foundation, corporate or other institutional 
     support, and demonstrate that the use of the resources will 
     not result in increases in student tuition;
       ``(6) contain an assurance that the institution will meet 
     the child care needs of low-income students through the 
     provision of services, or through a contract for the 
     provision of services;
       ``(7) describe the extent to which the child care program 
     will coordinate with the institution's early childhood 
     education curriculum, to the extent the curriculum is 
     available, to meet the needs of the students in the early 
     childhood education program at the institution, and the needs 
     of the parents and children participating in the child care 
     program assisted under this section;
       ``(8) in the case of an institution seeking assistance for 
     a new child care program--
       ``(A) provide a timeline, covering the period from receipt 
     of the grant through the provision of the child care 
     services, delineating the specific steps the institution will 
     take to achieve the goal of providing low-income students 
     with child care services;
       ``(B) specify any measures the institution will take to 
     assist low-income students with child care during the period 
     before the institution provides child care services; and
       ``(C) include a plan for identifying resources needed for 
     the child care services, including space in which to provide 
     child care services, and technical assistance if necessary;
       ``(9) contain an assurance that any child care facility 
     assisted under this section will meet the applicable State or 
     local government licensing, certification, approval, or 
     registration requirements; and
       ``(10) contain a plan for any child care facility assisted 
     under this section to become accredited within 3 years of the 
     date the institution first receives assistance under this 
     section.
       ``(d) Priority.--The Secretary shall give priority in 
     awarding grants under this section to institutions of higher 
     education that submit applications describing programs that--
       ``(1) leverage significant local or institutional 
     resources, including in-kind contributions, to support the 
     activities assisted under this section; and
       ``(2) utilize a sliding fee scale for child care services 
     provided under this section in order to support a high number 
     of low-income parents pursuing postsecondary education at the 
     institution.
       ``(e) Reporting Requirements; Continuing Eligibility.--
       ``(1) Reporting requirements.--
       ``(A) Reports.--Each institution of higher education 
     receiving a grant under this section shall report to the 
     Secretary 18 months, and 36 months, after receiving the first 
     grant payment under this section.
       ``(B) Contents.--The report shall include--
       ``(i) data on the population served under this section;
       ``(ii) information on campus and community resources and 
     funding used to help low-income students access child care 
     services;
       ``(iii) information on progress made toward accreditation 
     of any child care facility; and
       ``(iv) information on the impact of the grant on the 
     quality, availability, and affordability of campus-based 
     child care services.
       ``(2) Continuing eligibility.--The Secretary shall make the 
     third annual grant payment under this section to an 
     institution of higher education only if the Secretary 
     determines, on the basis of the 18-month report submitted 
     under paragraph (1), that the institution is making a good 
     faith effort to ensure that low-income students at the 
     institution have access to affordable, quality child care 
     services.
       ``(f) Construction.--No funds provided under this section 
     shall be used for construction, except for minor renovation 
     or repair to meet applicable State or local health or safety 
     requirements.
       ``(g) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $45,000,000 for fiscal year 1999 and such sums as may be 
     necessary for each of the 4 succeeding fiscal years.''.

     SEC. 411. LEARNING ANYTIME ANYWHERE PARTNERSHIPS.

       Subpart 8 of part A of title IV (20 U.S.C. 1070 et seq.) is 
     amended to read as follows:

          ``Subpart 8--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.

     ``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 $10,000,000 for fiscal year 1999 and such sums as may 
     be necessary for each of the 4 succeeding fiscal years.''.

             PART B--FEDERAL FAMILY EDUCATION LOAN PROGRAM

     SEC. 411. LIMITATION REPEALED.

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

     SEC. 412. ADVANCES TO RESERVE FUNDS.

       Section 422 (20 U.S.C. 1072) is amended--
       (1) in subsection (a)(2), by striking ``428(c)(10)(E)'' and 
     inserting ``428(c)(9)(E)'';
       (2) in subsection (c)--
       (A) in paragraph (6)(B)(i), by striking ``written'' and 
     inserting ``written, electronic,'';
       (B) in paragraph (7)(A), by striking ``during the 
     transition from the Federal Family Education Loan Program 
     under this part to the

[[Page H9003]]

     Federal Direct Student Loan Program under part D of this 
     title''; and
       (C) in paragraph (7)(B), by striking ``428(c)(10)(F)(v)'' 
     and inserting ``428(c)(9)(F)(v)'';
       (3) in the first and second sentences of subsection (g)(1), 
     by striking ``or the program authorized by part D of this 
     title'' each place it appears; and
       (4) by adding at the end the following:
       ``(i) Additional Recall of Reserves.--
       ``(1) In general.--Notwithstanding any other provision of 
     law and subject to paragraph (4), the Secretary shall recall, 
     from reserve funds held in the Federal Student Loan Reserve 
     Funds established under section 422A by guaranty agencies--
       ``(A) $85,000,000 in fiscal year 2002;
       ``(B) $82,500,000 in fiscal year 2006; and
       ``(C) $82,500,000 in fiscal year 2007.
       ``(2) Deposit.--Funds recalled by the Secretary under this 
     subsection shall be deposited in the Treasury.
       ``(3) Required share.--The Secretary shall require each 
     guaranty agency to return reserve funds under paragraph (1) 
     on the basis of the agency's required share. For purposes of 
     this paragraph, a guaranty agency's required share shall be 
     determined as follows:
       ``(A) Equal percentage.--The Secretary shall require each 
     guaranty agency to return an amount representing an equal 
     percentage reduction in the amount of reserve funds held by 
     the agency on September 30, 1996.
       ``(B) Calculation.--The equal percentage reduction shall be 
     the percentage obtained by dividing--
       ``(i) $250,000,000, by
       ``(ii) the total amount of all guaranty agencies' reserve 
     funds held on September 30, 1996, less any amounts subject to 
     recall under subsection (h).
       ``(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 during the 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.
       ``(4) Offset of required shares.--If any guaranty agency 
     returns to the Secretary any reserve funds in excess of the 
     amount required under this subsection or subsection (h), the 
     total amount required to be returned under paragraph (1) 
     shall be reduced by the amount of such excess reserve funds 
     returned.
       ``(5) Definition of reserve funds.--The term `reserve 
     funds' when used with respect to a guaranty agency--
       ``(A) includes any reserve funds in cash or liquid assets 
     held by the guaranty agency, or held by, or under the control 
     of, any other entity; and
       ``(B) does not include buildings, equipment, or other 
     nonliquid assets.''.

     SEC. 413. GUARANTY AGENCY REFORMS.

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

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

       ``(a) Establishment.--Each guaranty agency shall, not later 
     than 60 days after the date of enactment of this section, 
     deposit all funds, securities, and other liquid assets 
     contained in the reserve fund established pursuant to section 
     422 into a Federal Student Loan Reserve Fund (in this section 
     and section 422B referred to as the `Federal Fund'), which 
     shall be an account of a type selected by the agency, with 
     the approval of the Secretary.
       ``(b) Investment of Funds.--Funds transferred to the 
     Federal Fund shall be invested in obligations issued or 
     guaranteed by the United States or a State, or in other 
     similarly low-risk securities selected by the guaranty 
     agency, with the approval of the Secretary. Earnings from the 
     Federal Fund shall be the sole property of the Federal 
     Government.
       ``(c) Additional Deposits.--After the establishment of the 
     Federal Fund, a guaranty agency shall deposit into the 
     Federal Fund--
       ``(1) all amounts received from the Secretary as payment of 
     reinsurance on loans pursuant to section 428(c)(1);
       ``(2) from amounts collected on behalf of the obligation of 
     a defaulted borrower, a percentage amount equal to the 
     complement of the reinsurance percentage in effect when 
     payment under the guaranty agreement was made--
       ``(A) with respect to the defaulted loan pursuant to 
     sections 428(c)(6)(A) and 428F(a)(1)(B); and
       ``(B) with respect to a loan that the Secretary has repaid 
     or discharged under section 437;
       ``(3) insurance premiums collected from borrowers pursuant 
     to sections 428(b)(1)(H) and 428H(h);
       ``(4) all amounts received from the Secretary as payment 
     for supplemental preclaims activity performed prior to the 
     date of enactment of this section;
       ``(5) 70 percent of amounts received after such date of 
     enactment from the Secretary as payment for administrative 
     cost allowances for loans upon which insurance was issued 
     prior to such date of enactment; and
       ``(6) other receipts as specified in regulations of the 
     Secretary.
       ``(d) Uses of Funds.--Subject to subsection (f), the 
     Federal Fund may only be used by a guaranty agency--
       ``(1) to pay lender claims pursuant to sections 
     428(b)(1)(G), 428(j), 437, and 439(q); and
       ``(2) to pay into the Agency Operating Fund established 
     pursuant to section 422B (in this section and section 422B 
     referred to as the ``Operating Fund'') a default aversion fee 
     in accordance with section 428(l).
       ``(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 this 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 
     expenditure of the Federal Fund or the Secretary's share of 
     such asset.
       ``(f) Transition.--
       ``(1) In general.--In order to establish the Operating 
     Fund, each guaranty agency may transfer not more than 180 
     days' cash expenses for normal operating expenses (not 
     including claim payments) as a working capital reserve as 
     defined in Office of Management and Budget Circular A-87 
     (Cost Accounting Standards) from the Federal Fund for deposit 
     into the Operating Fund for use in the performance of the 
     guaranty agency's duties under this part. Such transfers may 
     occur during the first 3 years following the establishment of 
     the Operating Fund. However, no agency may transfer in excess 
     of 45 percent of the balance, as of September 30, 1998, of 
     the agency's Federal Fund to the agency's Operating Fund 
     during such 3-year period. In determining the amount that may 
     be transferred, the agency shall ensure that sufficient funds 
     remain in the Federal Fund to pay lender claims within the 
     required time periods and to meet the reserve recall 
     requirements of this section and subsections (h) and (i) of 
     section 422.
       ``(2) Special rule.--A limited number of guaranty agencies 
     may transfer interest earned on the Federal Fund to the 
     Operating Fund during the first 3 years after the date of 
     enactment of this section if the guaranty agency demonstrates 
     to the Secretary that--
       ``(A) the cash flow in the Operating Fund will be negative 
     without the transfer of such interest; and
       ``(B) the transfer of such interest will substantially 
     improve the financial circumstances of the guaranty agency.
       ``(3) Repayment provisions.--Each guaranty agency shall 
     begin repayment of sums transferred pursuant to this 
     subsection not later than the start of the fourth year after 
     the establishment of the Operating Fund, and shall repay all 
     amounts transferred not later than 5 years from the date of 
     the establishment of the Operating Fund. With respect to 
     amounts transferred from the Federal Fund, the guaranty 
     agency shall not be required to repay any interest on the 
     funds transferred and subsequently repaid. The guaranty 
     agency shall provide to the Secretary a reasonable schedule 
     for repayment of the sums transferred and an annual financial 
     analysis demonstrating the agency's ability to comply with 
     the schedule and repay all outstanding sums transferred.
       ``(4) Prohibition.--If a guaranty agency transfers funds 
     from the Federal Fund in accordance with this section, and 
     fails to make scheduled repayments to the Federal Fund, the 
     agency may not receive any other funds under this part until 
     the Secretary determines that the agency has made such 
     repayments. 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.
       ``(5) Waiver.--The Secretary may--
       ``(A) waive the requirements of paragraph (3), but only 
     with respect to repayment of interest that was transferred in 
     accordance with paragraph (2); and
       ``(B) waive paragraph (4);

     for a guaranty agency, if the Secretary determines that there 
     are extenuating circumstances (such as State constitutional 
     prohibitions) beyond the control of the agency that justify 
     such a waiver.
       ``(6) Extension of repayment period for interest.--
       ``(A) Extension permitted.--The Secretary shall extend the 
     period for repayment of interest that was transferred in 
     accordance with paragraph (2) from 2 years to 5 years if the 
     Secretary determines that--
       ``(i) the cash flow of the Operating Fund will be negative 
     as a result of repayment as required by paragraph (3);
       ``(ii) the repayment of the interest transferred will 
     substantially diminish the financial circumstances of the 
     guaranty agency; and
       ``(iii) the guaranty agency has demonstrated--

       ``(I) that the agency is able to repay all transferred 
     funds by the end of the 8th year following the date of 
     establishment of the Operating Fund, and
       ``(II) that the agency will be financially sound on the 
     completion of repayment.

       ``(B) Repayment of income on transferred funds.--All 
     repayments made to the Federal

[[Page H9004]]

     Fund during the 6th, 7th, and 8th years following the 
     establishment of the Operating Fund of interest that was 
     transferred shall include the sums transferred plus any 
     income earned from the investment of the sums transferred 
     after the 5th year.
       ``(7) Investment of federal funds.--Funds transferred from 
     the Federal Fund to the Operating Fund for operating expenses 
     shall be invested in obligations issued or guaranteed by the 
     United States or a State, or in other similarly low-risk 
     securities selected by the guaranty agency, with the approval 
     of the Secretary.
       ``(8) Special rule.--In calculating the minimum reserve 
     level required by section 428(c)(9)(A), the Secretary shall 
     include all amounts owed to the Federal Fund by the guaranty 
     agency in the calculation.''.
       (b) Agency Operating Fund Established.--Part B of title IV 
     is further amended by inserting after section 422A (as added 
     by subsection (a)) the following new section:

     ``SEC. 422B. AGENCY OPERATING FUND.

       ``(a) Establishment.--Each guaranty agency shall, not later 
     than 60 days after the date of enactment of this section, 
     establish a fund designated as the Operating Fund.
       ``(b) Investment of Funds.--Funds deposited into the 
     Operating Fund shall be invested at the discretion of the 
     guaranty agency in accordance with prudent investor 
     standards.
       ``(c) Additional Deposits.--After the establishment of the 
     Operating Fund, the guaranty agency shall deposit into the 
     Operating Fund--
       ``(1) the loan processing and issuance fee paid by the 
     Secretary pursuant to section 428(f );
       ``(2) 30 percent of amounts received after the date of 
     enactment of this section from the Secretary as payment for 
     administrative cost allowances for loans upon which insurance 
     was issued prior to such date of enactment;
       ``(3) the account maintenance fee paid by the Secretary in 
     accordance with section 458;
       ``(4) the default aversion fee paid in accordance with 
     section 428(l);
       ``(5) amounts remaining pursuant to section 428(c)(6)(B) 
     from collection on defaulted loans held by the agency, after 
     payment of the Secretary's equitable share, excluding amounts 
     deposited in the Federal Fund pursuant to section 422A(c)(2); 
     and
       ``(6) other receipts as specified in regulations of the 
     Secretary.
       ``(d) Uses of Funds.--
       ``(1) In general.--Funds in the Operating Fund shall be 
     used for application processing, loan disbursement, 
     enrollment and repayment status management, default aversion 
     activities (including those described in section 
     422(h)(8)), default collection activities, school and 
     lender training, financial aid awareness and related 
     outreach activities, compliance monitoring, and other 
     student financial aid related activities, as selected by 
     the guaranty agency.
       ``(2) Special rule.--The guaranty agency may, in the 
     agency's discretion, transfer funds from the Operating Fund 
     to the Federal Fund for use pursuant to section 422A. Such 
     transfer shall be irrevocable, and any funds so transferred 
     shall become the sole property of the United States.
       ``(3) Definitions.--For purposes of this subsection:
       ``(A) Default collection activities.--The term `default 
     collection activities' means activities of a guaranty agency 
     that are directly related to the collection of the loan on 
     which a default claim has been paid to the participating 
     lender, including the due diligence activities required 
     pursuant to regulations of the Secretary.
       ``(B) Default aversion activities.--The term `default 
     aversion activities' means activities of a guaranty agency 
     that are directly related to providing collection assistance 
     to the lender on a delinquent loan, prior to the loan's being 
     legally in a default status, including due diligence 
     activities required pursuant to regulations of the Secretary.
       ``(C) Enrollment and repayment status management.--The term 
     `enrollment and repayment status management' means activities 
     of a guaranty agency that are directly related to 
     ascertaining the student's enrollment status, including 
     prompt notification to the lender of such status, an audit of 
     the note or written agreement to determine if the provisions 
     of that note or agreement are consistent with the records of 
     the guaranty agency as to the principal amount of the loan 
     guaranteed, and an examination of the note or agreement to 
     assure that the repayment provisions are consistent with the 
     provisions of this part.
       ``(e) Ownership and Regulation of Operating Fund.--
       ``(1) Ownership.--The Operating Fund, with the exception of 
     funds transferred from the Federal Fund in accordance with 
     section 422A(f), shall be considered to be the property of 
     the guaranty agency.
       ``(2) Regulation.--Except as provided in paragraph (3), the 
     Secretary may not regulate the uses or expenditure of moneys 
     in the Operating Fund, but the Secretary may require such 
     necessary reports and audits as provided in section 
     428(b)(2).
       ``(3) Exception.--Notwithstanding paragraphs (1) and (2), 
     during any period in which funds are owed to the Federal Fund 
     as a result of transfer under section 422A(f)--
       ``(A) moneys in the Operating Fund may only be used for 
     expenses related to the student loan programs authorized 
     under this part; and
       ``(B) the Secretary may regulate the uses or expenditure of 
     moneys in the Operating Fund.''.

     SEC. 414. 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''.

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

       Section 425(a)(1)(A) (20 U.S.C. 1075(a)(1)(A)) is amended--
       (1) in clause (i)--
       (A) by inserting ``and'' after the semicolon at the end of 
     subclause (I); and
       (B) by striking subclauses (II) and (III) and inserting the 
     following:
       ``(II) if such student is enrolled in a program of 
     undergraduate education which is less than one academic year, 
     the maximum annual loan amount that such student may receive 
     may not exceed the amount that bears the same ratio to the 
     amount specified in subclause (I) as the length of such 
     program measured in semester, trimester, quarter, or clock 
     hours bears to one academic year;''; and
       (2) by inserting ``and'' after the semicolon at the end of 
     clause (iii).

     SEC. 416. APPLICABLE INTEREST RATES.

       (a) Applicable Interest Rates.--
       (1) Amendment.--Section 427A (20 U.S.C. 1077a) is amended--
       (A) by redesignating subsections (k) and (l) as subsections 
     (l) and (m), respectively; and
       (B) by inserting after subsection (j) the following:
       ``(k) 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) of this subsection, 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 427(a)(2)(C) or 
     428(b)(1)(M),

     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) Consolidation loans.--With respect to any 
     consolidation loan under section 428C for which the 
     application is received by an eligible lender on or after 
     October 1, 1998, and before July 1, 2003, the applicable rate 
     of interest shall be at an annual rate on the unpaid 
     principal balance of the loan that is equal to the lesser 
     of--
       ``(A) the weighted average of the interest rates on the 
     loans consolidated, rounded to the nearest higher one-eighth 
     of 1 percent; or
       ``(B) 8.25 percent.
       ``(5) 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''.
       (b) Special Allowances.
       (1) Amendment.--Section 438(b)(2) (20 U.S.C. 1087-1(b)(2)) 
     is amended by adding at the end the following:
       ``(H) Loans disbursed on or after 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;
       ``(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(k)(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(k)(3), clause (i)(III) 
     of this subparagraph shall be applied by substituting `3.1 
     percent' for `2.8 percent', subject to clause (v) of this 
     subparagraph.

[[Page H9005]]

       ``(iv) Consolidation loans.--In the case of any 
     consolidation loan for which the application is received by 
     an eligible lender on or after October 1, 1998, and before 
     July 1, 2003, and for which the applicable interest rate is 
     determined under section 427A(k)(4), clause (i)(III) of this 
     subparagraph shall be applied by substituting `3.1 percent' 
     for `2.8 percent', subject to clause (vi) of this 
     subparagraph.
       ``(v) Limitation on special allowances for plus loans.--In 
     the case of PLUS loans made under section 428B and first 
     disbursed on or after October 1, 1998, and before July 1, 
     2003, for which the interest rate is determined under section 
     427A(k)(3), a special allowance shall not be paid for such 
     loan during any 12-month period beginning on July 1 and 
     ending on June 30 unless, on the June 1 preceding such July 
     1--

       ``(I) the bond equivalent rate of 91-day Treasury bills 
     auctioned at the final auction held prior to such June 1 (as 
     determined by the Secretary for purposes of such section); 
     plus
       ``(II) 3.1 percent,

     exceeds 9.0 percent.
       ``(vi) Limitation on special allowances for consolidation 
     loans.--In the case of consolidation loans made under section 
     428C and for which the application is received on or after 
     October 1, 1998, and before July 1, 2003, for which the 
     interest rate is determined under section 427A(k)(4), a 
     special allowance shall not be paid for such loan during any 
     3-month period ending March 31, June 30, September 30, or 
     December 31 unless--

       ``(I) the average of the bond equivalent rate of 91-day 
     Treasury bills auctioned for such 3-month period; plus
       ``(II) 3.1 percent,

     exceeds the rate determined under section 427A(k)(4).''.
       (2) Consolidation loans.--Section 428C(c)(1) (20 U.S.C. 
     1078-3(c)(1)) is amended by striking everything preceding 
     subparagraph (B) and inserting the following:
       ``(1) Interest rate.--(A) Notwithstanding subparagraphs (B) 
     and (C), with respect to any loan made under this section for 
     which the application is received by an eligible lender on or 
     after October 1, 1998, and before July 1, 2003, the 
     applicable interest rate shall be determined under section 
     427A(k)(4).''.
       (3) Conforming amendment.--Section 438(b)(2) (20 U.S.C. 
     1087-1(b)(2)(C)(ii)) is amended--
       (A) in subparagraph (A), by striking ``(F), and (G)'' and 
     inserting ``(F), (G), and (H)'';
       (B) in subparagraph (B)(iv), by striking ``(F), or (G)'' 
     and inserting ``(F), (G), or (H)''; and
       (C) in subparagraph (C)(ii), by striking ``subparagraph 
     (G)'' and inserting ``subparagraphs (G) and (H)''.
       (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, except that 
     such amendments shall apply with respect to any loan made 
     under section 428C of such Act for which the application is 
     received by an eligible lender on or after October 1, 1998, 
     and before July 1, 2003.

     SEC. 417. FEDERAL PAYMENTS TO REDUCE STUDENT INTEREST COSTS.

       (a) Federal Interest Subsidies.--
       (1) Requirements to receive subsidy.--Section 428(a)(2) (20 
     U.S.C. 1078(a)(2)) is amended--
       (A) in subparagraph (A)(i), by striking subclauses (I), 
     (II), and (III) and inserting the following:
       ``(I) sets forth the loan amount for which the student 
     shows financial need; and
       ``(II) sets forth a schedule for disbursement of the 
     proceeds of the loan in installments, consistent with the 
     requirements of section 428G; and''; and
       (B) by amending subparagraph (B) to read as follows:
       ``(B) For the purpose of clause (ii) of subparagraph (A), a 
     student shall qualify for a portion of an interest payment 
     under paragraph (1) if the eligible institution has 
     determined and documented the student's amount of need for a 
     loan based on the student's estimated cost of attendance, 
     estimated financial assistance, and, for the purpose of an 
     interest payment pursuant to this section, expected family 
     contribution (as determined under part F), subject to the 
     provisions of subparagraph (D).'';
       (C) by amending subparagraph (C) to read as follows:
       ``(C) For the purpose of subparagraph (B) and this 
     paragraph--
       ``(i) a student's cost of attendance shall be determined 
     under section 472;
       ``(ii) a student's estimated financial assistance means, 
     for the period for which the loan is sought--
       ``(I) the amount of assistance such student will receive 
     under subpart 1 of part A (as determined in accordance with 
     section 484(b)), subpart 3 of part A, and parts C and E;
       ``(II) any veterans' education benefits paid because of 
     enrollment in a postsecondary education institution, 
     including veterans' education benefits (as defined in section 
     480(c), but excluding benefits described in paragraph (2)(E) 
     of such section); plus
       ``(III) other scholarship, grant, or loan assistance, but 
     excluding any national service education award or post-
     service benefit under title I of the National and Community 
     Service Act of 1990; and
       ``(iii) the determination of need and of the amount of a 
     loan by an eligible institution under subparagraph (B) with 
     respect to a student shall be calculated in accordance with 
     part F.''; and
       (D) by striking subparagraph (F).
       (2) Duration of authority.--Section 428(a)(5) is amended--
       (A) by striking ``September 30, 2002'' and inserting 
     ``September 30, 2004''; and
       (B) by striking ``September 30, 2006'' and inserting 
     ``September 30, 2008''.
       (b) Insurance Program Agreements.--
       (1) Annual loan limits.--Section 428(b)(1)(A) is amended--
       (A) in the matter preceding clause (i), by inserting ``, as 
     defined in section 481(a)(2),'' after ``academic year'';
       (B) in clause (i)--
       (i) in subclause (I), by striking ``length (as determined 
     under section 481);'' and inserting ``length; and''; and
       (ii) by striking subclauses (II) and (III) and inserting 
     the following:

       ``(II) if such student is enrolled in a program of 
     undergraduate education which is less than 1 academic year, 
     the maximum annual loan amount that such student may receive 
     may not exceed the amount that bears the same ratio to the 
     amount specified in subclause (I) as the length of such 
     program measured in semester, trimester, quarter, or clock 
     hours bears to 1 academic year;'';

       (C) in clause (iv), by striking ``and'' after the 
     semicolon;
       (D) in clause (v), by inserting ``and'' after the 
     semicolon; and
       (E) by inserting before the matter following clause (v) the 
     following:
       ``(vi) in the case of a student enrolled in coursework 
     specified in sections 484(b)(3)(B) and 484(b)(4)(B)--

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

       (2) Selection of repayment plans.--Clause (ii) of section 
     428(b)(1)(D) is amended to read as follows: ``(ii) the 
     student borrower may annually change the selection of a 
     repayment plan under this part, and''.
       (3) Repayment plans.--Subparagraph (E) of section 428(b)(1) 
     is amended to read as follows:
       ``(E) subject to subparagraphs (D) and (L), and except as 
     provided by subparagraph (M), provides that--
       ``(i) not more than 6 months prior to the date on which the 
     borrower's first payment is due, the lender shall offer the 
     borrower of a loan made, insured, or guaranteed under this 
     section or section 428H, the option of repaying the loan in 
     accordance with a standard, graduated, income-sensitive, or 
     extended repayment schedule (as described in paragraph (9)) 
     established by the lender in accordance with regulations of 
     the Secretary; and
       ``(ii) repayment of loans shall be in installments in 
     accordance with the repayment plan selected under paragraph 
     (9) and commencing at the beginning of the repayment period 
     determined under paragraph (7);'';
       (4) Coinsurance.--Section 428(b)(1)(G) is amended by 
     striking ``not less than''.
       (5) Payment amounts.--Section 428(b)(1)(L)(i) is amended--
       (A) by inserting ``except as otherwise provided by a 
     repayment plan selected by the borrower under clause (ii) or 
     (iii) of paragraph (9)(A),'' before ``during any''; and
       (B) by inserting ``, notwithstanding any payment plan under 
     paragraph (9)(A)'' after ``due and payable'';
       (6) Deferments.--Section 428(b)(1)(M) is amended--
       (A) in clause (i)(I), by inserting before the semicolon the 
     following: ``, except that no borrower, notwithstanding the 
     provisions of the promissory note, shall be required to 
     borrow an additional loan under this title in order to be 
     eligible to receive a deferment under this clause''; and
       (B) in clause (ii), by inserting before the semicolon the 
     following: ``, except that no borrower who provides evidence 
     of eligibility for unemployment benefits shall be required to 
     provide additional paperwork for a deferment under this 
     clause''.
       (7) Limitation, suspension, and termination.--Section 
     428(b)(1)(U) is amended--
       (A) by striking ``emergency action,,'' each place the term 
     appears and inserting ``emergency action,''; and
       (B) in clause (iii)(I), by inserting ``that originates or 
     holds more than $5,000,000 in loans made under this title for 
     any lender fiscal year (except that each lender described in 
     section 435(d)(1)(A)(ii)(III) shall annually submit the 
     results of an audit required by this clause),'' before ``at 
     least once a year''.
       (8) Additional insurance program requirements.--Section 
     428(b)(1) is further amended--
       (A) by striking ``and'' at the end of subparagraph (W);
       (B) in subparagraph (X)--
       (i) by striking ``428(c)(10)'' and inserting ``428(c)(9)''; 
     and
       (ii) by striking the period at the end and inserting ``; 
     and'';
       (C) by adding at the end the following new subparagraph:
       ``(Y) provides that--
       ``(i) the lender shall determine the eligibility of a 
     borrower for a deferment described in subparagraph (M)(i) 
     based on receipt of--

       ``(I) a request for deferment from the borrower and 
     documentation of the borrower's eligibility for the 
     deferment;
       ``(II) a newly completed loan application that documents 
     the borrower's eligibility for a deferment; or
       ``(III) student status information received by the lender 
     that the borrower is enrolled on at least a half-time basis; 
     and

[[Page H9006]]

       ``(ii) the lender will notify the borrower of the granting 
     of any deferment under clause (i)(II) or (III) of this 
     subparagraph and of the option to continue paying on the 
     loan.''.
       (9) Restrictions on inducements.--Section 428(b)(3) is 
     amended--
       (A) by striking subparagraph (C) and inserting the 
     following:
       ``(C) conduct unsolicited mailings of student loan 
     application forms to students enrolled in secondary school or 
     a postsecondary institution, or to parents of such students, 
     except that applications may be mailed to borrowers who have 
     previously received loans guaranteed under this part by the 
     guaranty agency; or''; and
       (B) by adding at the end the following new sentence:

     ``It shall not be a violation of this paragraph for a 
     guaranty agency to provide assistance to institutions of 
     higher education comparable to the kinds of assistance 
     provided to institutions of higher education by the 
     Department of Education.''
       (10) Delay in commencement of repayment period.--Section 
     428(b)(7) is amended 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.''.
       (11) Repayment plans.--Section 428(b) is amended by adding 
     at the end the following:
       ``(9) Repayment plans.--
       ``(A) Design and selection.--In accordance with regulations 
     promulgated by the Secretary, the lender shall offer a 
     borrower of a loan made under this part the plans described 
     in this subparagraph for repayment of such loan, including 
     principal and interest thereon. No plan may require a 
     borrower to repay a loan in less than 5 years unless the 
     borrower, during the 6 months immediately preceding the start 
     of the repayment period, specifically requests that repayment 
     be made over of a shorter period. The borrower may choose 
     from--
       ``(i) a standard repayment plan, with a fixed annual 
     repayment amount paid over a fixed period of time, not to 
     exceed 10 years;
       ``(ii) a graduated repayment plan paid over a fixed period 
     of time, not to exceed 10 years;
       ``(iii) an income-sensitive repayment plan, with income-
     sensitive repayment amounts paid over a fixed period of time, 
     not to exceed 10 years, except that the borrower's scheduled 
     payments shall not be less than the amount of interest due; 
     and
       ``(iv) for new borrowers on or after the date of enactment 
     of the Higher Education Amendments of 1998 who accumulate 
     (after such date) outstanding loans under this part totaling 
     more than $30,000, an extended repayment plan, with a fixed 
     annual or graduated repayment amount paid over an extended 
     period of time, not to exceed 25 years, except that the 
     borrower shall repay annually a minimum amount determined in 
     accordance with paragraph (1)(L)(i).
       ``(B) Lender selection of option if borrower does not 
     select.--If a borrower of a loan made under this part does 
     not select a repayment plan described in subparagraph (A), 
     the lender shall provide the borrower with a repayment plan 
     described in subparagraph (A)(i).''.
       (c) Guarantee Agreements.--
       (1) Reinsurance payments.--
       (A) Amendments.--Section 428(c)(1) (20 U.S.C. 1078(c)(1)) 
     is amended--
       (i) in subparagraph (A), by striking ``98 percent'' and 
     inserting ``95 percent'';
       (ii) in subparagraph (B)(i), by striking ``88 percent'' and 
     inserting ``85 percent''; and
       (iii) in subparagraph (B)(ii), by striking ``78 percent'' 
     and inserting ``75 percent'';
       (iv) in subparagraph (E)--

       (I) in clause (i), by striking ``98 percent'' and inserting 
     ``95 percent'';
       (II) in clause (ii), by striking ``88 percent'' and 
     inserting ``85 percent''; and
       (III) in clause (iii), by striking ``78 percent'' and 
     inserting ``75 percent''; and

       (v) in subparagraph (F)--

       (I) in clause (i), by striking ``98 percent'' and inserting 
     ``95 percent'';
       (II) in clause (ii), by striking ``88 percent'' and 
     inserting ``85 percent''; and
       (III) in clause (iii), by striking ``78 percent'' and 
     inserting ``75 percent''.

       (B) Effective date.--The amendments made by subparagraph 
     (A) of this paragraph apply to loans for which the first 
     disbursement is made on or after October 1, 1998.
       (2) Notice to institutions of defaults.--Section 428(c)(2) 
     is amended--
       (A) in subparagraph (A), by striking ``proof that 
     reasonable attempts were made'' and inserting ``proof that 
     the institution was contacted and other reasonable attempts 
     were made''; and
       (B) in subparagraph (G), by striking ``certifies to the 
     Secretary that diligent attempts have been made'' and 
     inserting ``certifies to the Secretary that diligent 
     attempts, including contact with the institution, have been 
     made''.
       (3) Guaranty agency information to eligible institutions.--
     Section 428(c)(2)(H)(ii) is amended to read as follows:
       ``(ii) the guaranty agency shall not require the payment 
     from the institution of any fee for such information; and''.
       (4) Forbearance.--Section 428(c)(3) is amended--
       (A) in subparagraph (A)(i), by striking ``written'';
       (B) in subparagraph (B), by striking ``and'' after the 
     semicolon;
       (C) in subparagraph (C), by striking the period and 
     inserting ``; and''; and
       (D) by inserting before the matter following subparagraph 
     (C) the following:
       ``(D) shall contain provisions that specify that--
       ``(i) forbearance for a period not to exceed 60 days may be 
     granted if the lender reasonably determines that such a 
     suspension of collection activity is warranted following a 
     borrower's request for deferment, forbearance, a change in 
     repayment plan, or a request to consolidate loans, in order 
     to collect or process appropriate supporting documentation 
     related to the request, and
       ``(ii) during such period interest shall accrue but not be 
     capitalized.''.
       (5) Equitable share.--Paragraph (6) of Section 428(c) is 
     amended to read as follows:
       ``(6) Secretary's equitable share.--For the purpose of 
     paragraph (2)(D), the Secretary's equitable share of payments 
     made by the borrower shall be that portion of the payments 
     remaining after the guaranty agency with which the Secretary 
     has an agreement under this subsection has deducted from such 
     payments--
       ``(A) a percentage amount equal to the complement of the 
     reinsurance percentage in effect when payment under the 
     guaranty agreement was made with respect to the loan; and
       ``(B) an amount equal to 24 percent of such payments for 
     use in accordance with section 422B, except that, beginning 
     on October 1, 2003, this subparagraph shall be applied by 
     substituting `23 percent' for `24 percent'.''.
       (6) Assignment.--Section 428(c)(8) is amended--
       (A) by striking ``(A) If'' and inserting ``If''; and
       (B) by striking subparagraph (B).
       (7) Guaranty agency reserve level; agency termination.--
     Section 428(c)(9) is amended--
       (A) in subparagraph (A), by striking ``maintain a current 
     minimum reserve level of at least .5 percent'' and inserting 
     ``maintain in the agency's Federal Student Loan Reserve Fund 
     established under section 422A a current minimum reserve 
     level of at least 0.25 percent'';
       (B) in subparagraph (C)--
       (i) by striking ``80 percent pursuant to section 
     428(c)(1)(B)(ii)'' and inserting ``85 percent pursuant to 
     paragraph (1)(B)(i)'';
       (ii) by striking ``, as appropriate,''; and
       (iii) by striking ``30 working days'' and inserting ``45 
     working days'';
       (C) in subparagraph (E)--
       (i) by inserting ``or'' at the end of clause (iv);
       (ii) by striking ``; or'' at the end of clause (v) and 
     inserting a period; and
       (iii) by striking clause (vi);
       (D) in subparagraph (F)(vii), by striking ``to avoid 
     disruption'' and everything that follows and inserting ``and 
     to avoid disruption of the student loan program.'';
       (E) in subparagraph (I), by inserting ``that, if commenced 
     after September 24, 1998, shall be on the record'' after 
     ``for a hearing''; and
       (F) in subparagraph (K)--
       (i) by striking ``and Labor'' and inserting ``and the 
     Workforce''; and
       (ii) by striking everything after ``guaranty agency 
     system'' and inserting a period.
       (d) Payment for Lender Referral Services; Income-Sensitive 
     Repayment.--Subsection (e) of section 428 is amended to read 
     as follows:
       ``(e) Notice of Availability of Income-Sensitive Repayment 
     Option.--At the time of offering a borrower a loan under this 
     part, and at the time of offering the borrower the option of 
     repaying a loan in accordance with this section, the lender 
     shall provide the borrower with a notice that informs the 
     borrower, in a form prescribed by the Secretary by 
     regulation--
       ``(1) that all borrowers are eligible for income-sensitive 
     repayment, including through loan consolidation under section 
     428C;
       ``(2) the procedures by which the borrower may elect 
     income-sensitive repayment; and
       ``(3) where and how the borrower may obtain additional 
     information concerning income-sensitive repayment.''.
       (e) Payment of Certain Costs.--Subsection (f) of section 
     428 is amended to read as follows:
       ``(f) Payments of Certain Costs.--
       ``(1) Payment for certain activities.--
       ``(A) In general.--The Secretary--
       ``(i) for loans originated during fiscal years beginning on 
     or after October 1, 1998, and before October 1, 2003, and in 
     accordance with the provisions of this paragraph, shall, 
     except as provided in subparagraph (C), pay to each guaranty 
     agency, a loan processing and issuance fee equal to 0.65 
     percent of the total principal amount of the loans on which 
     insurance was issued under this part during such fiscal year 
     by such agency; and
       ``(ii) for loans originated during fiscal years beginning 
     on or after October 1, 2003, and in accordance with the 
     provisions of this paragraph, shall, except as provided in 
     subparagraph (C), 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.
       ``(B) Payment.--The payment required by subparagraph (A) 
     shall be paid on a quarterly basis. The guaranty agency shall 
     be deemed to have a contractual right against the United 
     States to receive payments according to the provisions of 
     this paragraph. Payments shall be made promptly and without 
     administrative delay to any guaranty agency submitting an 
     accurate and complete application under this subparagraph.
       ``(C) Requirement for payment.--No payment may be made 
     under this paragraph for

[[Page H9007]]

     loans for which the disbursement checks have not been cashed 
     or for which electronic funds transfers have not been 
     completed.''.
       (f) Action on Agreements.--Section 428(g) is amended by 
     striking ``and Labor'' and inserting ``and the Workforce''.
       (g) Lenders-of-Last-Resort.--Paragraph (3) of section 
     428(j) is amended--
       (1) in the paragraph heading, by striking ``during 
     transition to direct lending'';
       (2) in subparagraph (A)--
       (A) by striking ``during the transition from the Federal 
     Family Education Loan Program under this part to the Federal 
     Direct Student Loan Program under part D of this title,'' and 
     inserting a comma;
       (B) by inserting ``designated for a State'' after ``a 
     guaranty agency''; and
       (C) by inserting ``subparagraph (C) and'' before ``section 
     422(c)(7),''; and
       (3) by adding at the end thereof the following:
       ``(C) The Secretary shall exercise the authority described 
     in subparagraph (A) only if the Secretary determines that 
     eligible borrowers are seeking and are unable to obtain loans 
     under this part, and that the guaranty agency designated for 
     that State has the capability to provide lender-of-last-
     resort loans in a timely manner, in accordance with the 
     guaranty agency's obligations under paragraph (1), but cannot 
     do so without advances provided by the Secretary under this 
     paragraph. If the Secretary makes the determinations 
     described in the preceding sentence and determines that it 
     would be cost-effective to do so, the Secretary may provide 
     advances under this paragraph to such guaranty agency. If the 
     Secretary determines that such guaranty agency does not have 
     such capability, or will not provide such loans in a timely 
     fashion, the Secretary may provide such advances to enable 
     another guaranty agency, that the Secretary determines to 
     have such capability, to make lender-of-last-resort loans to 
     eligible borrowers in that State who are experiencing loan 
     access problems.''.
       (h) Default Aversion Assistance.--Subsection (l) of section 
     428 is amended to read as follows:
       ``(l) Default Aversion Assistance.--
       ``(1) Assistance required.--Upon receipt of a complete 
     request from a lender received not earlier than the 60th day 
     of delinquency, a guaranty agency having an agreement with 
     the Secretary under subsection (c) shall engage in default 
     aversion activities designed to prevent the default by a 
     borrower on a loan covered by such agreement.
       ``(2) Reimbursement.--
       ``(A) In general.--A guaranty agency, in accordance with 
     the provisions of this paragraph, may transfer from the 
     Federal Student Loan Reserve Fund under section 422A to the 
     Agency Operating Fund under section 422B a default aversion 
     fee. Such fee shall be paid for any loan on which a claim for 
     default has not been paid as a result of the loan being 
     brought into current repayment status by the guaranty agency 
     on or before the 300th day after the loan becomes 60 days 
     delinquent.
       ``(B) Amount.--The default aversion fee shall be equal to 1 
     percent of the total unpaid principal and accrued interest on 
     the loan at the time the request is submitted by the lender. 
     A guaranty agency may transfer such fees earned under this 
     subsection not more frequently than monthly. Such a fee shall 
     not be paid more than once on any loan for which the guaranty 
     agency averts the default unless--
       ``(i) at least 18 months has elapsed between the date the 
     borrower entered current repayment status and the date the 
     lender filed a subsequent default aversion assistance 
     request; and
       ``(ii) during the period between such dates, the borrower 
     was not more than 30 days past due on any payment of 
     principal and interest on the loan.
       ``(C) Definition.--For the purpose of earning the default 
     aversion fee, the term `current repayment status' means that 
     the borrower is not delinquent in the payment of any 
     principal or interest on the loan.''.
       (i) Income Contingent Repayment.--Section 428(m) is amended 
     by striking ``shall require at least 10 percent of the 
     borrowers'' and inserting ``may require borrowers''.
       (j) State Share of Default Costs.--Subsection (n) of 
     section 428 is repealed.
       (k) Blanket Certificate of Guaranty.--Section 428 is 
     amended by adding at the end the following:
       ``(n) Blanket Certificate of Loan Guaranty.--
       ``(1) In general.--Subject to paragraph (3), any guaranty 
     agency that has entered into or enters into any insurance 
     program agreement with the Secretary under this part may--
       ``(A) offer eligible lenders participating in the agency's 
     guaranty program a blanket certificate of loan guaranty that 
     permits the lender to make loans without receiving prior 
     approval from the guaranty agency of individual loans for 
     eligible borrowers enrolled in eligible programs at eligible 
     institutions; and
       ``(B) provide eligible lenders with the ability to transmit 
     electronically data to the agency concerning loans the lender 
     has elected to make under the agency's insurance program via 
     standard reporting formats, with such reporting to occur at 
     reasonable and standard intervals.
       ``(2) Limitations on blanket certificate of guaranty.--(A) 
     An eligible lender may not make a loan to a borrower under 
     this section after such lender receives a notification from 
     the guaranty agency that the borrower is not an eligible 
     borrower.
       ``(B) A guaranty agency may establish limitations or 
     restrictions on the number or volume of loans issued by a 
     lender under the blanket certificate of guaranty.
       ``(3) Participation level.--During fiscal years 1999 and 
     2000, the Secretary may permit, on a pilot basis, a limited 
     number of guaranty agencies to offer blanket certificates of 
     guaranty under this subsection. Beginning in fiscal year 
     2001, any guaranty agency that has an insurance program 
     agreement with the Secretary may offer blanket certificates 
     of guaranty under this subsection.
       ``(4) Report required.--The Secretary shall, at the 
     conclusion of the pilot program under paragraph (3), provide 
     a report to the Committee on Education and the Workforce of 
     the House of Representatives and the Committee on Labor and 
     Human Resources of the Senate on the impact of the blanket 
     certificates of guaranty on program efficiency and 
     integrity.''.

     SEC. 418. VOLUNTARY FLEXIBLE AGREEMENTS WITH GUARANTY 
                   AGENCIES.

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

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

       ``(a) Voluntary Agreements.--
       ``(1) Authority.--Subject to paragraph (2), the Secretary 
     may enter into a voluntary, flexible agreement with a 
     guaranty agency under this section, in lieu of agreements 
     with a guaranty agency under subsections (b) and (c) of 
     section 428. The Secretary may waive or modify any 
     requirement under such subsections, except that the Secretary 
     may not waive--
       ``(A) any statutory requirement pertaining to the terms and 
     conditions attached to student loans or default claim 
     payments made to lenders; or
       ``(B) the prohibitions on inducements contained in section 
     428(b)(3) unless the Secretary determines that such a waiver 
     is consistent with the purposes of this section and is 
     limited to activities of the guaranty agency within the State 
     or States for which the guaranty agency serves as the 
     designated guarantor.
       ``(2) Special rule.--If the Secretary grants a waiver 
     pursuant to paragraph (1)(B), any guaranty agency doing 
     business within the affected State or States may request, and 
     the Secretary shall grant, an identical waiver to such 
     guaranty agency under the same terms and conditions 
     (including service area limitations) as govern the original 
     waiver.
       ``(3) Eligibility.--During fiscal years 1999, 2000, and 
     2001, the Secretary may enter into a voluntary, flexible 
     agreement with not more than 6 guaranty agencies that had 1 
     or more agreements with the Secretary under subsections (b) 
     and (c) of section 428 as of the day before the date of 
     enactment of the Higher Education Amendments of 1998. 
     Beginning in fiscal year 2002, any guaranty agency or 
     consortium thereof may enter into a voluntary flexible 
     agreement with the Secretary.
       ``(4) Report required.--Not later than September 30, 2001, 
     the Secretary shall report to the Committee on Labor and 
     Human Resources of the Senate and the Committee on Education 
     and the Workforce of the House of Representatives regarding 
     the impact that the voluntary flexible agreements have had 
     upon program integrity, program and cost efficiencies, and 
     the availability and delivery of student financial aid. Such 
     report shall include--
       ``(A) a description of each voluntary flexible agreement 
     and the performance goals established by the Secretary for 
     each agreement;
       ``(B) a list of participating guaranty agencies and the 
     specific statutory or regulatory waivers provided to each 
     guaranty agency and any waivers provided to other guaranty 
     agencies under paragraph (2);
       ``(C) a description of the standards by which each agency's 
     performance under the agency's voluntary flexible agreement 
     was assessed and the degree to which each agency achieved the 
     performance standards; and
       ``(D) an analysis of the fees paid by the Secretary, and 
     the costs and efficiencies achieved under each voluntary 
     agreement.
       ``(b) Terms of Agreement.--An agreement between the 
     Secretary and a guaranty agency under this section--
       ``(1) shall be developed by the Secretary, in consultation 
     with the guaranty agency, on a case-by case basis;
       ``(2) may 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;
       ``(B) regarding the fees the Secretary shall pay, in lieu 
     of revenues that the guaranty agency may otherwise receive 
     under this part, to the guaranty agency under the agreement, 
     and other funds that the guaranty agency may receive or 
     retain under the agreement, except that in no case may the 
     cost to the Secretary of the agreement, as reasonably 
     projected by the Secretary, exceed the cost to the Secretary, 
     as similarly projected, in the absence of the agreement;
       ``(C) regarding the use of net revenues, as described in 
     the agreement under this section, for

[[Page H9008]]

     such other activities in support of postsecondary education 
     as may be agreed to by the Secretary and the guaranty agency;
       ``(D) regarding the standards by which the guaranty 
     agency's performance of the agency's responsibilities under 
     the agreement will be assessed, and the consequences for a 
     guaranty agency's failure to achieve a specified level of 
     performance on 1 or more performance standards;
       ``(E) regarding the circumstances in which a guaranty 
     agency's agreement under this section may be ended in advance 
     of the agreement's expiration date;
       ``(F) regarding such other businesses, previously purchased 
     or developed with reserve funds, that relate to the program 
     under this part and in which the Secretary permits the 
     guaranty agency to engage; and
       ``(G) such other provisions as the Secretary may determine 
     to be necessary to protect the United States from the risk of 
     unreasonable loss and to promote the purposes of this part;
       ``(3) shall provide for uniform lender participation with 
     the guaranty agency under the terms of the agreement; and
       ``(4) 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 Member of 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 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) Waiver 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 the Workforce of the House of 
     Representatives not later than 30 days prior to the granting 
     of a waiver pursuant to subsection (a)(2) to a guaranty 
     agency that is not a party to a voluntary flexible agreement.
       ``(4) Public availability.--The text of any voluntary 
     flexible agreement, and any subsequent revisions, and any 
     waivers related to section 428(b)(3) that are not part of 
     such an agreement, shall be readily available to the public.
       ``(5) Modification 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 the Workforce of the House of 
     Representatives 30 days prior to any modifications to an 
     agreement under this section.
       ``(d) Termination.--At the expiration or early termination 
     of an agreement under this section, the Secretary shall 
     reinstate the guaranty agency's prior agreements under 
     subsections (b) and (c) of section 428, subject only to such 
     additional requirements as the Secretary determines to be 
     necessary in order to ensure the efficient transfer of 
     responsibilities between the agreement under this section and 
     the agreements under subsections (b) and (c) of section 428, 
     and including the guaranty agency's compliance with reserve 
     requirements under sections 422 and 428.''.

     SEC. 419. FEDERAL PLUS LOANS.

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

     SEC. 420. FEDERAL CONSOLIDATION LOANS.

       (a) Definition of Eligible Borrower.--Section 428C(a)(3) 
     (20 U.S.C. 1078-3(a)(3)) is amended by striking everything 
     preceding subparagraph (C) and inserting the following:
       ``(3) Definition of eligible borrower.--(A) For the purpose 
     of this section, the term `eligible borrower' means a 
     borrower who--
       ``(i) is not subject to a judgment secured through 
     litigation with respect to a loan under this title or to an 
     order for wage garnishment under section 488A; and
       ``(ii) at the time of application for a consolidation 
     loan--
       ``(I) is in repayment status;
       ``(II) is in a grace period preceding repayment; or
       ``(III) is a defaulted borrower who has made arrangements 
     to repay the obligation on the defaulted loans satisfactory 
     to the holders of the defaulted loans.
       ``(B)(i) An individual's status as an eligible borrower 
     under this section terminates upon receipt of a consolidation 
     loan under this section, except that--
       ``(I) an individual who receives eligible student loans 
     after the date of receipt of the consolidation loan may 
     receive a subsequent consolidation loan;
       ``(II) loans received prior to the date of the 
     consolidation loan may be added during the 180-day period 
     following the making of the consolidation loan;
       ``(III) loans received following the making of the 
     consolidation loan may be added during the 180-day period 
     following the making of the consolidation loan; and
       ``(IV) loans received prior to the date of the first 
     consolidation loan may be added to a subsequent consolidation 
     loan.''.
       (b) Definition of Eligible Student Loan.--Section 
     428C(a)(4) is amended by striking subparagraph (C) and 
     inserting the following:
       ``(C) made under part D of this title;''.
       (c) Contents of Agreements.--Section 428C(b) is amended--
       (1) in paragraph (1)(A)(i), by inserting ``except that this 
     clause shall not apply in the case of a borrower with 
     multiple holders of loans under this part,'' after ``under 
     this section,'';
       (2) in paragraph (4)(C)(ii)--
       (A) in the matter preceding subclause (I), by inserting 
     ``during any such period'' after ``and be paid'';
       (B) in subclause (I), by striking ``, or on or after 
     October 1, 1998,''; and
       (C) in subclause (II), by striking ``and before October 1, 
     1998,'';
       (3) in paragraph (6)(A), by inserting before the semicolon 
     at the end the following: ``, except that a lender is not 
     required to consolidate loans described in subparagraph (D) 
     or (E) of subsection (a)(4) or subsection (d)(1)(C)(ii)''.
       (d) Extension of Authority.--Section 428C(e) is amended by 
     striking ``September 30, 2002'' and inserting ``September 30, 
     2004''.
       (e) Special Rule.--Section 428C(f) is amended--
       (1) by redesignating paragraph (2) as paragraph (3); and
       (2) by inserting after paragraph (1) the following:
       ``(2) Special rule.--For consolidation loans based on 
     applications received during the period from October 1, 1998 
     through January 31, 1999, inclusive, the rebate described in 
     paragraph (1) shall be equal to 0.62 percent of the principal 
     plus accrued unpaid interest on such loan.''.

     SEC. 421. DEFAULT REDUCTION PROGRAM.

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

     SEC. 422. REQUIREMENTS FOR DISBURSEMENTS OF STUDENT LOANS.

       (a) Special Rule.--Section 428G(a) (20 U.S.C. 1078-7(a)) is 
     amended by adding at the end the following:
       ``(3) Special rule.--An institution whose cohort default 
     rate (as determined under section 435(m)) for each of the 3 
     most recent fiscal years for which data are available is less 
     than 10 percent may disburse any loan made, insured, or 
     guaranteed under this part in a single installment for any 
     period of enrollment that is not more than 1 semester, 1 
     trimester, 1 quarter, or 4 months.''.
       (b) Disbursement.--Section 428G(b)(1) is amended by adding 
     at the end the following new sentence: ``An institution whose 
     cohort default rate (as determined under section 435(m)) for 
     each of the three most recent fiscal years for which data are 
     available is less than 10 percent shall be exempt from the 
     requirements of this paragraph.''.
       (c) Exclusions.--Section 428G(e) is amended--
       (1) by striking ``or made'' and inserting ``, made''; and
       (2) 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.
       (d) Effective Date.--The amendments made by subsections (a) 
     and (b) shall be effective during the period beginning on 
     October 1, 1998, and ending on September 30, 2002.

     SEC. 423. UNSUBSIDIZED LOANS.

       (a) Eligible Borrowers.--Subsection (b) of section 428H (20 
     U.S.C. 1078-8(b)) is amended to read as follows:
       ``(b) Eligible Borrowers.--Any student meeting the 
     requirements for student eligibility under section 484 
     (including graduate and professional students as defined in 
     regulations promulgated by the Secretary) shall be entitled 
     to borrow an unsubsidized Federal Stafford Loan

[[Page H9009]]

     if the eligible institution at which the student has been 
     accepted for enrollment, or at which the student is in 
     attendance, has--
       ``(1) determined and documented the student's need for the 
     loan based on the student's estimated cost of attendance (as 
     determined under section 472) and the student's estimated 
     financial assistance, including a loan which qualifies for 
     interest subsidy payments under section 428; and
       ``(2) provided the lender a statement--
       ``(A) certifying the eligibility of the student to receive 
     a loan under this section and the amount of the loan for 
     which such student is eligible, in accordance with subsection 
     (c); and
       ``(B) setting forth a schedule for disbursement of the 
     proceeds of the loan in installments, consistent with the 
     requirements of section 428G.''.
       (b) Loan Limits.--Section 428H(d) is amended--
       (1) in paragraph (2)--
       (A) in the matter preceding subparagraph (A)--
       (i) by inserting ``(as defined in section 481(a)(2))'' 
     after ``academic year''; and
       (ii) by striking ``or in any period of 7 consecutive 
     months, whichever is longer,'';
       (B) in subparagraph (A)--
       (i) in clause (i), by striking ``length (as determined 
     under section 481);'' and inserting ``length; and''; and
       (ii) by striking clauses (ii) and (iii) and inserting the 
     following:
       ``(ii) if such student is enrolled in a program of 
     undergraduate education which is less than one academic year, 
     the maximum annual loan amount that such student may receive 
     may not exceed the amount that bears the same ratio to the 
     amount specified in clause (i) as the length of such program 
     measured in semester, trimester, quarter, or clock hours 
     bears to one academic year;''.
       (C) in subparagraph (C), by inserting ``and'' after the 
     semicolon; and
       (D) by inserting before the matter following subparagraph 
     (C) the following:
       ``(D) in the case of a student enrolled in coursework 
     specified in sections 484(b)(3)(B) and 484(b)(4)(B)--
       ``(i) $4,000 for coursework necessary for enrollment in an 
     undergraduate degree or certificate program, and, in the case 
     of a student who has obtained a baccalaureate degree, $5,000 
     for coursework necessary for enrollment in a graduate or 
     professional program; and
       ``(ii) in the case of a student who has obtained a 
     baccalaureate degree, $5,000 for coursework necessary for a 
     professional credential or certification from a State 
     required for employment as a teacher in an elementary or 
     secondary school;''; and
       (2) in paragraph (3), by adding at the end the following: 
     ``Interest capitalized shall not be deemed to exceed such 
     maximum aggregate amount.''.
       (c) Capitalization of Interest.--Paragraph (2) of section 
     428H(e) is amended to read as follows:
       ``(2) Capitalization of interest.--(A) 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--
       ``(i) be paid monthly or quarterly; or
       ``(ii) 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 
     forbearance; or
       ``(IV) when the borrower defaults.
       ``(B) The capitalization of interest described in 
     subparagraph (A) shall not be deemed to exceed the annual 
     insurable limit on account of the student.''.
       (d) Extended Repayment Plan.--Section 428H(e)(6) is amended 
     by striking ``10 year repayment period under section 
     428(b)(1)(D)'' and inserting ``repayment period under section 
     428(b)(9)''.
       (e) Qualification.--Section 428H(e) is amended by adding at 
     the end the following:
       ``(7) Qualification for forbearance.--A lender may grant 
     the borrower of a loan under this section a forbearance for a 
     period not to exceed 60 days if the lender reasonably 
     determines that such a forbearance from collection activity 
     is warranted following a borrower's request for forbearance, 
     deferment, or a change in repayment plan, or a request to 
     consolidate loans in order to collect or process appropriate 
     supporting documentation related to the request. During any 
     such period, interest on the loan shall accrue but not be 
     capitalized.''.
       (f) Repeal.--Subsection (f) of section 428H is repealed.

     SEC. 424. LOAN FORGIVENESS FOR TEACHERS.

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

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

       ``(a) Statement of Purpose.--It is the purpose of this 
     section to encourage individuals to enter and continue in the 
     teaching profession.
       ``(b) Program Authorized.--The Secretary shall carry out a 
     program, through the holder of the loan, of assuming the 
     obligation to repay a qualified loan amount for a loan made 
     under section 428 or 428H, in accordance with subsection (c), 
     for any new borrower on or after October 1, 1998, who--
       ``(1) has been employed as a full-time teacher for 5 
     consecutive complete school years--
       ``(A) in a school that qualifies under section 465(a)(2)(A) 
     for loan cancellation for Perkins loan recipients who teach 
     in such schools;
       ``(B) if employed as a secondary school teacher, is 
     teaching a subject area that is relevant to the borrower's 
     academic major as certified by the chief administrative 
     officer of the public or nonprofit private secondary school 
     in which the borrower is employed; and
       ``(C) if employed as an elementary school teacher, has 
     demonstrated, as certified by the chief administrative 
     officer of the public or nonprofit private elementary school 
     in which the borrower is employed, knowledge and teaching 
     skills in reading, writing, mathematics, and other areas of 
     the elementary school curriculum; and
       ``(2) is not in default on a loan for which the borrower 
     seeks forgiveness.
       ``(c) Qualified Loans Amount.--
       ``(1) In general.--The Secretary shall repay not more than 
     $5,000 in the aggregate of the loan obligation on a loan made 
     under section 428 or 428H that is outstanding after the 
     completion of the fifth complete school year of teaching 
     described in subsection (b)(1). No borrower may receive a 
     reduction of loan obligations under both this section and 
     section 460.
       ``(2) Treatment of consolidation loans.--A loan amount for 
     a loan made under section 428C may be a qualified loan amount 
     for the purposes of this subsection only to the extent that 
     such loan amount was used to repay a Federal Direct Stafford 
     Loan, a Federal Direct Unsubsidized Stafford Loan, or a loan 
     made under section 428 or 428H for a borrower who meets the 
     requirements of subsection (b), as determined in accordance 
     with regulations prescribed by the Secretary.
       ``(d) Regulations.--The Secretary is authorized to issue 
     such regulations as may be necessary to carry out the 
     provisions of this section.
       ``(e) Construction.--Nothing in this section shall be 
     construed to authorize any refunding of any repayment of a 
     loan.
       ``(f) List.--If the list of schools in which a teacher may 
     perform service pursuant to subsection (b) is not available 
     before May 1 of any year, the Secretary may use the list for 
     the year preceding the year for which the determination is 
     made to make such service determination.
       ``(g) Additional Eligibility Provisions.--
       ``(1) Continued eligibility.--Any teacher who performs 
     service in a school that--
       ``(A) meets the requirements of subsection (b)(1)(A) in any 
     year during such service, and
       ``(B) in a subsequent year fails to meet the requirements 
     of such subsection,

     may continue to teach in such school and shall be eligible 
     for loan forgiveness pursuant to subsection (b).
       ``(2) Prevention of double benefits.--No borrower may, for 
     the same service, receive a benefit under both this 
     subsection and subtitle D of title I of the National and 
     Community Service Act of 1990 (42 U.S.C. 12571 et seq.).
       ``(h) Definition.--For purposes of this section, the term 
     `year', where applied to service as a teacher, means an 
     academic year as defined by the Secretary.''.

     SEC. 425. LOAN FORGIVENESS FOR CHILD CARE PROVIDERS.

       Part B (20 U.S.C. 1071 et seq.) is amended by inserting 
     after section 428J (20 U.S.C. 1078-10) the following:

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

       ``(a) Purpose.--It is the purpose of this section--
       ``(1) to bring more highly trained individuals into the 
     early child care profession; and
       ``(2) to keep more highly trained child care providers in 
     the early child care field for longer periods of time.
       ``(b) Definitions.--In this section:
       ``(1) Child care facility.--The term `child care facility' 
     means a facility, including a home, that--
       ``(A) provides child care services; and
       ``(B) meets applicable State or local government licensing, 
     certification, approval, or registration requirements, if 
     any.
       ``(2) Child care services.--The term `child care services' 
     means activities and services provided for the education and 
     care of children from birth through age 5 by an individual 
     who has a degree in early childhood education.
       ``(3) Degree.--The term `degree' means an associate's or 
     bachelor's degree awarded by an institution of higher 
     education.
       ``(4) Early childhood education.--The term `early childhood 
     education' means education in the areas of early child 
     education, child care, or any other educational area related 
     to child care that the Secretary determines appropriate.
       ``(5) Institution of higher education.--Notwithstanding 
     section 102, the term `institution of higher education' has 
     the meaning given the term in section 101.
       ``(c) Demonstration Program.--
       ``(1) In general.--The Secretary may carry out a 
     demonstration program of assuming the obligation to repay, 
     pursuant to subsection (d), a loan made, insured, or 
     guaranteed under this part or part D (excluding loans made 
     under sections 428B and 428C or comparable loans made under 
     part D) for any new borrower after the date of enactment of 
     the Higher Education Amendments of 1998, who--
       ``(A) completes a degree in early childhood education;
       ``(B) obtains employment in a child care facility; and
       ``(C) 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.
       ``(3) Award basis; priority.--
       ``(A) Award basis.--Subject to subparagraph (B), loan 
     repayment under this section shall be on a first-come, first-
     served basis and subject to the availability of 
     appropriations.

[[Page H9010]]

       ``(B) Priority.--The Secretary shall give priority in 
     providing loan repayment under this section for a fiscal year 
     to student borrowers who received loan repayment under this 
     section for the preceding fiscal year.
       ``(4) Regulations.--The Secretary is authorized to 
     prescribe such regulations as may be necessary to carry out 
     the provisions of this section.
       ``(d) Loan Repayment.--
       ``(1) In general.--The Secretary shall assume the 
     obligation to repay--
       ``(A) after the second consecutive year of employment 
     described in subparagraphs (B) and (C) of subsection (c)(1), 
     20 percent of the total amount of all loans made after date 
     of enactment of the Higher Education Amendments of 1998, to a 
     student under this part or part D;
       ``(B) after the third consecutive year of such employment, 
     20 percent of the total amount of all such loans; and
       ``(C) after each of the fourth and fifth consecutive years 
     of such employment, 30 percent of the total amount of all 
     such loans.
       ``(2) Construction.--Nothing in this section shall be 
     construed to authorize the refunding of any repayment of a 
     loan made under this part or part D.
       ``(3) Interest.--If a portion of a loan is repaid by the 
     Secretary under this section for any year, the proportionate 
     amount of interest on such loan which accrues for such year 
     shall be repaid by the Secretary.
       ``(4) Special rule.--In the case where a student borrower 
     who is not participating in loan repayment pursuant to this 
     section returns to an institution of higher education after 
     graduation from an institution of higher education for the 
     purpose of obtaining a degree in early childhood education, 
     the Secretary is authorized to assume the obligation to repay 
     the total amount of loans made under this part or part D 
     incurred for a maximum of two academic years in returning to 
     an institution of higher education for the purpose of 
     obtaining a degree in early childhood education. Such loans 
     shall only be repaid for borrowers who qualify for loan 
     repayment pursuant to the provisions of this section, and 
     shall be repaid in accordance with the provisions of 
     paragraph (1).
       ``(5) Ineligibility of national service award recipients.--
     No student borrower may, for the same volunteer service, 
     receive a benefit under both this section and subtitle D of 
     title I of the National and Community Service Act of 1990 (42 
     U.S.C. 12601 et seq.).
       ``(e) Repayment to Eligible Lenders.--The Secretary shall 
     pay to each eligible lender or holder for each fiscal year an 
     amount equal to the aggregate amount of loans which are 
     subject to repayment pursuant to this section for such year.
       ``(f) Application for Repayment.--
       ``(1) In general.--Each eligible individual desiring loan 
     repayment under this section shall submit a complete and 
     accurate application to the Secretary at such time, in such 
     manner, and containing such information as the Secretary may 
     require.
       ``(2) Conditions.--An eligible individual may apply for 
     loan repayment under this section after completing each year 
     of qualifying employment. The borrower shall receive 
     forbearance while engaged in qualifying employment unless the 
     borrower is in deferment while so engaged.
       ``(g) Evaluation.--
       ``(1) In general.--The Secretary shall conduct, by grant or 
     contract, an independent national evaluation of the impact of 
     the demonstration program assisted under this section on the 
     field of early childhood education.
       ``(2) Competitive basis.--The grant or contract described 
     in subsection (b) shall be awarded on a competitive basis.
       ``(3) Contents.--The evaluation described in this 
     subsection shall--
       ``(A) determine the number of individuals who were 
     encouraged by the demonstration program assisted under this 
     section to pursue early childhood education;
       ``(B) determine the number of individuals who remain 
     employed in a child care facility as a result of 
     participation in the program;
       ``(C) identify the barriers to the effectiveness of the 
     program;
       ``(D) assess the cost-effectiveness of the program in 
     improving the quality of--
       ``(i) early childhood education; and
       ``(ii) child care services;
       ``(E) identify the reasons why participants in the program 
     have chosen to take part in the program;
       ``(F) identify the number of individuals participating in 
     the program who received an associate's degree and the number 
     of such individuals who received a bachelor's degree; and
       ``(G) identify the number of years each individual 
     participates in the program.
       ``(4) Interim and final evaluation reports.--The Secretary 
     shall prepare and submit to the President and the Congress 
     such interim reports regarding the evaluation described in 
     this subsection as the Secretary deems appropriate, and shall 
     prepare and so submit a final report regarding the evaluation 
     by January 1, 2002.
       ``(h) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $10,000,000 for fiscal year 1999, and such sums as may be 
     necessary for each of the 4 succeeding fiscal years.''.

     SEC. 426. NOTICE TO SECRETARY AND PAYMENT OF LOSS.

       The third sentence of section 430(a) (20 U.S.C. 1080(a)) is 
     amended by inserting ``the institution was contacted and 
     other'' after ``submit proof that''.

     SEC. 427. LEGAL POWERS AND RESPONSIBILITIES.

       (a) Audit of Financial Transactions.--Section 432(f )(1) is 
     amended--
       (1) in subparagraph (B), by striking ``section 435(d)(1) 
     (D), (F), or (H);'' and inserting ``section 435(d)(1); and'';
       (2) in subparagraph (C)--
       (A) by striking ``and Labor'' and inserting ``and the 
     Workforce''; and
       (B) by striking ``; and'' inserting a period; and
       (3) by striking subparagraph (D).
       (b) Program of Assistance.--Section 432(k)(3) is amended by 
     striking ``Within 1 year'' and everything that follows 
     through ``1992, the'' and inserting ``The''.
       (c) Common Forms and Formats.--Section 432(m) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A), by striking ``a common application 
     form and promissory note'' and inserting ``common application 
     forms and promissory notes, or master promissory notes,'';
       (B) in subparagraph (B)--
       (i) by striking ``The form'' and inserting ``The forms'';
       (ii) by striking clause (iii); and
       (C) by amending subparagraph (C) to read as follows:
       ``(C) Free application form.--For academic year 1999-2000 
     and succeeding academic years, the Secretary shall prescribe 
     the form developed under section 483 as the application form 
     under this part, other than for loans under sections 428B and 
     428C.'';
       (D) by amending subparagraph (D) to read as follows:
       ``(D) Master promissory note.--
       ``(i) In general.--The Secretary shall develop and require 
     the use of master promissory note forms for loans made under 
     this part and part D. Such forms shall be available for 
     periods of enrollment beginning not later than July 1, 2000. 
     Each form shall allow eligible borrowers to receive, in 
     addition to initial loans, additional loans for the same or 
     subsequent periods of enrollment through a student 
     confirmation process approved by the Secretary. Such forms 
     shall be used for loans made under this part or part D as 
     directed by the Secretary.
       ``(ii) 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.
       ``(iii) 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.
       ``(iv) Perfection of security interests in student loans.--
     Notwithstanding the provisions of any State law to the 
     contrary, including the Uniform Commercial Code as in effect 
     in any State, a security interest in loans made under this 
     part created on behalf of any eligible lender as defined in 
     section 435(d) may be perfected either through the taking of 
     possession of such loans (which can be through taking 
     possession of an original or copy of the master promissory 
     note) or by the filing of notice of such security interest in 
     such loans in the manner provided by such State law for 
     perfection of security interests in accounts.''; and
       (2) by adding at the end the following:
       ``(4) Electronic forms.--Nothing in this section shall be 
     construed to limit the development and use of electronic 
     forms and procedures.''.
       (d) Default Reduction Management.--Section 432(n) is 
     amended--
       (1) in paragraph (1), by striking ``1993'' and inserting 
     ``1999''; and
       (2) in paragraph (3), by striking ``and Labor'' and 
     inserting ``and the Workforce''.
       (e) Reporting Requirement.--Section 432(p) is amended by 
     striking ``State postsecondary reviewing entities designated 
     under subpart 1 of part H,''.

     SEC. 428. STUDENT LOAN INFORMATION BY ELIGIBLE LENDERS.

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

[[Page H9011]]

     payment on the loan is due from the borrower. The disclosure 
     shall include--''.

     SEC. 429. DEFINITIONS.

       (a) Cohort Default Rate.--Section 435(a) (20 U.S.C. 
     1085(a)) is amended--
       (1) in paragraph (2)--
       (A) in subparagraph (A)--
       (i) by striking ``or'' at the end of clause (i);
       (ii) by striking clause (ii) and inserting the following:
       ``(ii) there are exceptional mitigating circumstances 
     within the meaning of paragraph (4); or
       ``(iii) there are, in the judgment of the Secretary, other 
     exceptional mitigating circumstances that would make the 
     application of this paragraph inequitable.''; and
       (iii) by adding after the matter following clause (iii) (as 
     added by clause (ii)) the following:

     ``If an institution continues to participate in a program 
     under this part, and the institution's appeal of the loss of 
     eligibility is unsuccessful, the institution shall be 
     required to pay to the Secretary an amount equal to the 
     amount of interest, special allowance, reinsurance, and any 
     related payments made by the Secretary (or which the 
     Secretary is obligated to make) with respect to loans made 
     under this part to students attending, or planning to attend, 
     that institution during the pendency of such appeal.''; and
       (B) in subparagraph (C), by striking ``July 1, 1998,'' and 
     inserting ``July 1, 1999,'';
       (2) in the matter following subparagraph (C) of paragraph 
     (3)--
       (A) by inserting ``for a reasonable period of time, not to 
     exceed 30 days,'' after ``access''; and
       (B) by striking ``of the affected guaranty agencies and 
     loan servicers for a reasonable period of time, not to exceed 
     30 days'' and inserting ``used by a guaranty agency in 
     determining whether to pay a claim on a defaulted loan or by 
     the Department in determining an institution's default rate 
     in the loan program under part D of this title''; and
       (3) by adding at the end the following new paragraphs:
       ``(4) Definition of mitigating circumstances.--(A) For 
     purposes of paragraph (2)(A)(ii), an institution of higher 
     education shall be treated as having exceptional mitigating 
     circumstances that make application of that paragraph 
     inequitable if such institution, in the opinion of an 
     independent auditor, meets the following criteria:
       ``(i) For a 12-month period that ended during the 6 months 
     immediately preceding the fiscal year for which the cohort of 
     borrowers used to calculate the institution's cohort default 
     rate is determined, at least two-thirds of the students 
     enrolled on at least a half-time basis at the institution--
       ``(I) are eligible to receive a Federal Pell Grant award 
     that is at least equal to one-half the maximum Federal Pell 
     Grant award for which a student would be eligible based on 
     the student's enrollment status; or
       ``(II) have an adjusted gross income that when added with 
     the adjusted gross income of the student's parents (unless 
     the student is an independent student), of less than the 
     poverty level, as determined by the Department of Health and 
     Human Services.
       ``(ii) In the case of an institution of higher education 
     that offers an associate, baccalaureate, graduate or 
     professional degree, 70 percent or more of the institution's 
     regular students who were initially enrolled on a full-time 
     basis and were scheduled to complete their programs during 
     the same 12-month period described in clause (i)--
       ``(I) completed the educational programs in which the 
     students were enrolled;
       ``(II) transferred from the institution to a higher level 
     educational program;
       ``(III) at the end of the 12-month period, remained 
     enrolled and making satisfactory progress toward completion 
     of the student's educational programs; or
       ``(IV) entered active duty in the Armed Forces of the 
     United States.
       ``(iii)(I) In the case of an institution of higher 
     education that does not award a degree described in clause 
     (ii), had a placement rate of 44 percent or more with respect 
     to the institution's former regular students who--
       ``(aa) remained in the program beyond the point the 
     students would have received a 100 percent tuition refund 
     from the institution;
       ``(bb) were initially enrolled on at least a half-time 
     basis; and
       ``(cc) were originally scheduled, at the time of 
     enrollment, to complete their educational programs during the 
     same 12-month period described in clause (i).
       ``(II) The placement rate shall not include students who 
     are still enrolled and making satisfactory progress in the 
     educational programs in which the students were originally 
     enrolled on the date following 12 months after the date of 
     the student's last date of attendance at the institution.
       ``(III) The placement rate is calculated by determining the 
     percentage of all those former regular students who--
       ``(aa) are employed, in an occupation for which the 
     institution provided training, on the date following 12 
     months after the date of their last day of attendance at the 
     institution;
       ``(bb) were employed, in an occupation for which the 
     institution provided training, for at least 13 weeks before 
     the date following 12 months after the date of their last day 
     of attendance at the institution; or
       ``(cc) entered active duty in the Armed Forces of the 
     United States.
       ``(IV) The placement rate shall not include as placements a 
     student or former student for whom the institution is the 
     employer.
       ``(B) For purposes of determining a rate of completion and 
     a placement rate under this paragraph, a student is 
     originally scheduled, at the time of enrollment, to complete 
     the educational program on the date when the student will 
     have been enrolled in the program for the amount of time 
     normally required to complete the program. The amount of time 
     normally required to complete the program for a student who 
     is initially enrolled full-time is the period of time 
     specified in the institution's enrollment contract, catalog, 
     or other materials, for completion of the program by a full-
     time student. For a student who is initially enrolled less 
     than full-time, the period is the amount of time it would 
     take the student to complete the program if the student 
     remained enrolled at that level of enrollment throughout the 
     program.
       ``(5) Reduction of default rates at certain minority 
     institutions.--
       ``(A) Beneficiaries of exception required to establish 
     management plan.--After July 1, 1999, any institution that 
     has a cohort default rate that equals or exceeds 25 percent 
     for each of the three most recent fiscal years for which data 
     are available and that relies on the exception in 
     subparagraph (B) to continue to be an eligible institution 
     shall--
       ``(i) submit to the Secretary a default management plan 
     which the Secretary, in the Secretary's discretion, after 
     consideration of the institution's history, resources, 
     dollars in default, and targets for default reduction, 
     determines is acceptable and provides reasonable assurance 
     that the institution will, by July 1, 2002, have a cohort 
     default rate that is less than 25 percent;
       ``(ii) engage an independent third party (which may be paid 
     with funds received under section 317 or part B of title III) 
     to provide technical assistance in implementing such default 
     management plan; and
       ``(iii) provide to the Secretary, on an annual basis or at 
     such other intervals as the Secretary may require, evidence 
     of cohort default rate improvement and successful 
     implementation of such default management plan.
       ``(B) Discretionary eligibility conditioned on 
     improvement.--Notwithstanding the expiration of the exception 
     in paragraph (2)(C), the Secretary may, in the Secretary's 
     discretion, continue to treat an institution described in 
     subparagraph (A) of this paragraph as an eligible institution 
     for each of the one-year periods beginning on July 1 of 1999, 
     2000, and 2001, only if the institution submits by the 
     beginning of such period evidence satisfactory to the 
     Secretary that--
       ``(i) such institution has complied and is continuing to 
     comply with the requirements of subparagraph (A); and
       ``(ii) such institution has made substantial improvement, 
     during each of the preceding one-year periods, in the 
     institution's cohort default rate.
       ``(6) Participation rate index.--
       ``(A) In general.--An institution that demonstrates to the 
     Secretary that the institution's participation rate index is 
     equal to or less than 0.0375 for any of the 3 most recent 
     fiscal years for which data is available shall not be subject 
     to paragraph (2). The participation rate index shall be 
     determined by multiplying the institution's cohort default 
     rate for loans under part B or D, or weighted average cohort 
     default rate for loans under parts B and D, by the percentage 
     of the institution's regular students, enrolled on at least a 
     half-time basis, who received a loan made under part B or D 
     for a 12-month period ending during the 6 months immediately 
     preceding the fiscal year for which the cohort of borrowers 
     used to calculate the institution's cohort default rate is 
     determined.
       ``(B) Data.--An institution shall provide the Secretary 
     with sufficient data to determine the institution's 
     participation rate index within 30 days after receiving an 
     initial notification of the institution's draft cohort 
     default rate.
       ``(C) Notification.--Prior to publication of a final cohort 
     default rate for an institution that provides the data 
     described in subparagraph (B), the Secretary shall notify the 
     institution of the institution's compliance or noncompliance 
     with subparagraph (A).''.
       (b) Eligible Lender.--Section 435(d) (20 U.S.C. 1085(d)) is 
     amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A)(ii)--
       (i) by striking ``or'' after ``1992,''; and
       (ii) by inserting before the semicolon the following: ``, 
     or (III) it is a bank (as defined in section 3(a)(1) of the 
     Federal Deposit Insurance Act (12 U.S.C. 1813(a)(1)) that is 
     a wholly owned subsidiary of a nonprofit foundation, the 
     foundation is described in section 501(c)(3) of the Internal 
     Revenue Code of 1986 and exempt from taxation under section 
     501(1) of such Code, and the bank makes loans under this part 
     only to undergraduate students who are age 22 or younger and 
     has a portfolio of such loans that is not more than 
     $5,000,000'';
       (B) by striking ``and'' at the end of subparagraph (I);
       (C) by striking the period at the end of subparagraph (J) 
     and inserting ``; and''; and
       (D) by adding at the end the following new subparagraph:
       ``(K) a consumer finance company subsidiary of a national 
     bank which, as of the date of enactment of this subparagraph, 
     through 1 or more subsidiaries (i) acts as a small business 
     lending company, as determined under regulations of the Small 
     Business Administration under section 120.470 of title 13, 
     Code of Federal Regulations (as such section is in effect on 
     the date of enactment of this subparagraph), and (ii) 
     participates in the program authorized by this part pursuant 
     to subparagraph (C), provided the national bank and all of 
     the bank's direct and indirect subsidiaries taken together as 
     a whole, do not have, as their primary consumer credit 
     function, the making or holding of loans made to students 
     under this part.''; and
       (2) in paragraph (5), by adding at the end the following 
     new sentence:


[[Page H9012]]


     ``It shall not be a violation of this paragraph for a lender 
     to provide assistance to institutions of higher education 
     comparable to the kinds of assistance provided to 
     institutions of higher education by the Department of 
     Education.''.
       (c) Definition of Default.--
       (1) Amendment.--Section 435(l) is amended--
       (A) by striking ``180 days'' and inserting ``270 days''; 
     and
       (B) by striking ``240 days'' and inserting ``330 days''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply with respect to loans for which the first day of 
     delinquency occurs on or after the date of enactment of this 
     Act.
       (d) Cohort Default Rate.--Section 435(m) is amended--
       (1) in paragraph (1)(B), by striking ``insurance, and, in 
     considering appeals with respect to cohort default rates 
     pursuant to subsection (a)(3), exclude'' and inserting 
     ``insurance. In considering appeals with respect to cohort 
     default rates pursuant to subsection (a)(3), the Secretary 
     shall exclude, from the calculation of the number of students 
     who entered repayment and from the calculation of the number 
     of students who default,''; and
       (2) in paragraph (2)(C), by adding at the end the 
     following: ``The Secretary may require guaranty agencies to 
     collect data with respect to defaulted loans in a manner that 
     will permit the identification of any defaulted loan for 
     which (i) the borrower is currently making payments and has 
     made not less than 6 consecutive on-time payments by the end 
     of such following fiscal year, and (ii) a guaranty agency has 
     renewed the borrower's title IV eligibility as provided in 
     section 428F(b).''; and
       (3) in paragraph (4), by adding at the end the following:
       ``(D) The Secretary shall publish the report described in 
     subparagraph (C) by September 30 of each year.''.

     SEC. 430. DELEGATION OF FUNCTIONS.

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

     ``SEC. 436. DELEGATION OF FUNCTIONS.

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

     SEC. 431. DISCHARGE.

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

     SEC. 432. DEBT MANAGEMENT OPTIONS.

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

     SEC. 433. SPECIAL ALLOWANCES.

       (a) Deduction From Interest and Special Allowance 
     Subsidies.--Paragraph (1) of section 438(c) (20 U.S.C. 1087-
     1) is amended to read as follows:
       ``(1) Deduction from interest and special allowance 
     subsidies.--(A) Notwithstanding subsection (b), the Secretary 
     shall collect the amount the lender is authorized to charge 
     as an origination fee in accordance with paragraph (2) of 
     this subsection--
       ``(i) by reducing the total amount of interest and special 
     allowance payable under section 428(a)(3)(A) and subsection 
     (b) of this section, respectively, to any holder; or
       ``(ii) directly from the holder of the loan, if the lender 
     fails or is not required to bill the Secretary for interest 
     and special allowance or withdraws from the program with 
     unpaid loan origination fees.
       ``(B) If the Secretary collects the origination fee under 
     this subsection through the reduction of interest and special 
     allowance, and the total amount of interest and special 
     allowance payable under section 428(a)(3)(A) and subsection 
     (b) of this section, respectively, is less than the amount 
     the lender was authorized to charge borrowers for origination 
     fees in that quarter, the Secretary shall deduct the excess 
     amount from the subsequent quarters' payments until the total 
     amount has been deducted.''.
       (b) Origination Fees.--Section 438(c) is amended--
       (1) in paragraph (2)--
       (A) by striking ``(other than'' and inserting ``(including 
     loans made under section 428H, but excluding''; and
       (B) by adding at the end the following new sentence: 
     ``Except as provided in paragraph (8), a lender that charges 
     an origination fee under this paragraph shall assess the same 
     fee to all student borrowers.''; and
       (2) by adding at the end the following new paragraph:
       ``(8) Exception.--Notwithstanding paragraph (2), a lender 
     may assess a lesser origination fee for a borrower 
     demonstrating greater financial need as determined by such 
     borrower's adjusted gross family income.''.
       (c) Collection of Fees.--Paragraph (1) of section 438(d) is 
     amended to read as follows:
       ``(1) Deduction from interest and special allowance 
     subsidies.--
       ``(A) In general.--Notwithstanding subsection (b), the 
     Secretary shall collect a loan fee in an amount determined in 
     accordance with paragraph (2)--
       ``(i) by reducing the total amount of interest and special 
     allowance payable under section 428(a)(3)(A) and subsection 
     (b), respectively, to any holder of a loan; or
       ``(ii) directly from the holder of the loan, if the 
     lender--

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

       ``(B) Special rule.--If the Secretary collects loan fees 
     under this subsection through the reduction of interest and 
     special allowance payments, and the total amount of interest 
     and special allowance payable under section 428(a)(3)(A) and 
     subsection (b), respectively, is less than the amount of such 
     loan fees, then the Secretary shall deduct the amount of the 
     loan fee balance from the amount of interest and special 
     allowance payments that would otherwise be payable, in 
     subsequent quarterly increments until the balance has been 
     deducted.''.
       (d) Lending From Proceeds of Tax-Exempt Obligations.--
       (1) Amendment.--Subsection (e) of section 438 is amended to 
     read as follows:
       ``(e) Nondiscrimination.--In order for the holders of loans 
     which were made or purchased with funds obtained by the 
     holder from an Authority issuing obligations, the income from 
     which is exempt from taxation under the Internal Revenue Code 
     of 1986, to be eligible to receive a special allowance under 
     subsection (b)(2) on any such loans, the Authority shall not 
     engage in any pattern or practice which results in a denial 
     of a borrower's access to loans under this part because of 
     the borrower's race, sex, color, religion, national origin, 
     age, disability status, income, attendance at a particular 
     eligible institution within the area served by the Authority, 
     length of the borrower's educational program, or the 
     borrower's academic year in school.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall be effective as of the date the plan required by 
     section 438(e)(1) (as such section was in effect prior to 
     such amendment) was approved by the Secretary or the Governor 
     (whichever was the case). No Authority shall have a right or 
     cause of action against the Secretary for any amounts paid to 
     or offset by the Secretary pursuant to a final settlement 
     agreement entered into prior to July 1, 1998, resolving any 
     audit or program review findings alleging violations of any 
     provision of section 438(e) (as in effect prior to such 
     amendment).

     SEC. 434. FEDERAL FAMILY EDUCATION LOAN INSURANCE FUND.

       Any funds in the insurance fund, as established under 
     section 431 of the Higher Education Act of 1965 (20 U.S.C. 
     1081), on the date of enactment of this Act shall be 
     transferred to and deposited in the Treasury. All funds 
     received by the Secretary of Education under subsection (a) 
     of such section after the date of enactment of this Act shall 
     be deposited into the fund in accordance with such 
     subsection.

                  PART C--FEDERAL WORK-STUDY PROGRAMS

     SEC. 441. AUTHORIZATION OF APPROPRIATIONS; COMMUNITY 
                   SERVICES.

       (a) Authorization of Appropriations.--Section 441(b) (42 
     U.S.C. 2751(b)) is amended by striking ``$800,000,000 for 
     fiscal year 1993'' and inserting ``$1,000,000,000 for fiscal 
     year 1999''.
       (b) Definition of Community Services.--Section 441(c) is 
     amended--
       (1) in paragraph (1), by inserting ``(including child care 
     services provided on campus that are open and accessible to 
     the community)'' after ``child care''; and
       (2) in paragraph (3), by inserting ``, including students 
     with disabilities who are enrolled at the institution'' 
     before the semicolon.

     SEC. 442. ALLOCATION OF FUNDS.

       (a) Updating the Base Period.--Section 442(a) (20 U.S.C. 
     2752(a)) is amended--
       (1) in paragraph (1), by striking ``received and used under 
     this part for fiscal year 1985'' and inserting ``received 
     under subsections (a) and (b) for fiscal year 1999 (as such 
     subsections were in effect with respect to allocations for 
     such fiscal year)'';
       (2) in paragraph (2)--
       (A) in subparagraphs (A) and (B), by striking ``1985'' each 
     place the term appears and inserting ``1999''; and
       (B) in subparagraph (C)(i), by striking ``1986'' and 
     inserting ``2000''.
       (b) Elimination of Pro Rata Share.--Section 442 is 
     amended--
       (1) by striking subsection (b);
       (2) by redesignating subsections (c) through (f) as 
     subsections (b) through (e), respectively;
       (3) in subsection (b)(1) (as redesignated by paragraph 
     (2)), by striking ``three-quarters of'';
       (4) in subsection (b)(2)(A)(i) (as so redesignated), by 
     striking ``subsection (d)'' and inserting ``subsection (c)'';
       (5) in subsection (c)(3) (as so redesignated), by striking 
     ``the Secretary, for academic year 1988-1989 shall use the 
     procedures employed for academic year 1986-1987, and, for any 
     subsequent academic years,''; and
       (6) in subsection (d)(1) (as so redesignated)--
       (A) by striking ``10 percent'' and inserting ``5 percent'';
       (B) by striking ``in community service'' and inserting ``in 
     tutoring in reading and family literacy activities''; and

[[Page H9013]]

       (C) by striking ``subsection (c)'' and inserting 
     ``subsection (b)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to allocations of amounts 
     appropriated pursuant to section 441(b) for fiscal year 2000 
     or any succeeding fiscal year.

     SEC. 443. GRANTS FOR FEDERAL WORK-STUDY PROGRAMS.

       (a) Eligible Employment.--Section 443(b)(1) (42 U.S.C. 
     2753(b)(1)) is amended by inserting ``, including 
     internships, practica, or research assistantships as 
     determined by the Secretary,'' after ``part-time 
     employment''.
       (b) Community Service.--Section 443(b)(2)(A) is amended--
       (1) by striking ``in fiscal year 1994 and succeeding fiscal 
     years,'' and inserting ``for fiscal year 1999,''; and
       (2) by inserting ``(including a reasonable amount of time 
     spent in travel or training directly related to such 
     community service)'' after ``community service''.
       (c) Tutoring and Literacy Activities.--Section 443 is 
     amended--
       (1) in subsection (b)(2)--
       (A) by striking ``and'' at the end of subparagraph (A);
       (B) by redesignating subparagraph (B) as subparagraph (C); 
     and
       (C) by inserting after subparagraph (A) the following:
       ``(B) for fiscal year 2000 and succeeding fiscal years, an 
     institution shall use at least 7 percent of the total amount 
     of funds granted to such institution under this section for 
     such fiscal year to compensate students employed in community 
     service, and shall ensure that not less than 1 tutoring or 
     family literacy project (as described in subsection (d)) is 
     included in meeting the requirement of this subparagraph, 
     except that the Secretary may waive this subparagraph if the 
     Secretary determines that enforcing this subparagraph would 
     cause hardship for students at the institution; and''; and
       (2) by adding at the end the following new subsection:
       ``(d) Tutoring and Literacy Activities.--
       ``(1) Use of funds.--In any academic year to which 
     subsection (b)(2)(B) applies, an institution shall ensure 
     that funds granted to such institution under this section are 
     used in accordance with such subsection to compensate 
     (including compensation for time spent in training and travel 
     directly related to tutoring in reading and family literacy 
     activities) students--
       ``(A) employed as reading tutors for children who are 
     preschool age or are in elementary school; or
       ``(B) employed in family literacy projects.
       ``(2) Priority for schools.--To the extent practicable, an 
     institution shall--
       ``(A) give priority to the employment of students in the 
     provision of tutoring in reading in schools that are 
     participating in a reading reform project that--
       ``(i) is designed to train teachers how to teach reading on 
     the basis of scientifically-based research on reading; and
       ``(ii) is funded under the Elementary and Secondary 
     Education Act of 1965; and
       ``(B) ensure that any student compensated with the funds 
     described in paragraph (1) who is employed in a school 
     participating in a reading reform project described in 
     subparagraph (A) receives training from the employing school 
     in the instructional practices used by the school.
       ``(3) Federal share.--The Federal share of the compensation 
     of work-study students compensated under this subsection may 
     exceed 75 percent.''.
       (d) Use of Funds for Independent and Less Than Full-Time 
     Students.--Paragraph (3) of section 443(b) is amended to read 
     as follows:
       ``(3) provide that in the selection of students for 
     employment under such work-study program, only students who 
     demonstrate financial need in accordance with part F and meet 
     the requirements of section 484 will be assisted, except that 
     if the institution's grant under this part is directly or 
     indirectly based in part on the financial need demonstrated 
     by students who are (A) attending the institution on less 
     than a full-time basis, or (B) independent students, a 
     reasonable portion of the grant shall be made available to 
     such students;''.
       (e) Federal Share.--Paragraph (5) of section 443(b) is 
     amended to read as follows:
       ``(5) provide that the Federal share of the compensation of 
     students employed in the work-study program in accordance 
     with the agreement shall not exceed 75 percent, except that--
       ``(A) the Federal share may exceed 75 percent, but not 
     exceed 90 percent, if, consistent with regulations of the 
     Secretary--
       ``(i) the student is employed at a nonprofit private 
     organization or a government agency that--

       ``(I) is not a part of, and is not owned, operated, or 
     controlled by, or under common ownership, operation, or 
     control with, the institution;
       ``(II) is selected by the institution on an individual 
     case-by-case basis for such student; and
       ``(III) would otherwise be unable to afford the costs of 
     such employment; and

       ``(ii) not more than 10 percent of the students compensated 
     through the institution's grant under this part during the 
     academic year are employed in positions for which the Federal 
     share exceeds 75 percent; and
       ``(B) the Federal share may exceed 75 percent if the 
     Secretary determines, pursuant to regulations promulgated by 
     the Secretary establishing objective criteria for such 
     determinations, that a Federal share in excess of such 
     amounts is required in furtherance of the purpose of this 
     part;''.
       (f) Availability of Employment.--Section 443(b)(6) is 
     amended by striking ``, and to make'' and all that follows 
     through ``such employment''.
       (g) Academic Relevance.--Section 443(c)(4) is amended by 
     inserting before the semicolon at the end the following: ``, 
     to the maximum extent practicable''.

     SEC. 444. FLEXIBLE USE OF FUNDS.

       Section 445 (42 U.S.C. 2755) is amended by adding at the 
     end the following:
       ``(c) Flexible Use of Funds.--An eligible institution may, 
     upon the request of a student, make payments to the student 
     under this part by crediting the student's account at the 
     institution or by making a direct deposit to the student's 
     account at a depository institution. An eligible institution 
     may only credit the student's account at the institution for 
     (1) tuition and fees, (2) in the case of institutionally 
     owned housing, room and board, and (3) other institutionally 
     provided goods and services.''.

     SEC. 445. WORK COLLEGES.

       Section 448 (42 U.S.C. 2756b) is amended--
       (1) in subsection (b)(2)--
       (A) in subparagraph (C), by striking ``and'' after the 
     semicolon;
       (B) in subparagraph (D)(ii), by striking the period and 
     inserting a semicolon; and
       (C) by adding at the end the following:
       ``(E) coordinate and carry out joint projects and 
     activities to promote work service learning; and
       ``(F) carry out a comprehensive, longitudinal study of 
     student academic progress and academic and career outcomes, 
     relative to student self-sufficiency in financing their 
     higher education, repayment of student loans, continued 
     community service, kind and quality of service performed, and 
     career choice and community service selected after 
     graduation.''; and
       (2) in subsection (f), by striking ``1993'' and inserting 
     ``1999''.

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

     SEC. 451. SELECTION OF INSTITUTIONS.

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

     SEC. 452. TERMS AND CONDITIONS.

       (a) Direct Loan Interest Rates.--
       (1) Amendment.--Section 455(b) (20 U.S.C. 1087e(b)) is 
     amended by adding at the end the following:
       ``(6) Interest rate provision for new loans on or after 
     October 1, 1998, and before July 1, 2003.--
       ``(A) Rates for fdsl and fdusl.--Notwithstanding the 
     preceding paragraphs of this subsection, for Federal Direct 
     Stafford Loans and Federal Direct Unsubsidized Stafford 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 Loan or Federal Direct 
     Unsubsidized Stafford 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'.
       ``(D) Consolidation loans.--Notwithstanding the preceding 
     paragraphs of this subsection, any Federal Direct 
     Consolidation loan for which the application is received on 
     or after February 1, 1999, and before July 1, 2003, shall 
     bear interest at an annual rate on the unpaid principal 
     balance of the loan that is equal to the lesser of--
       ``(i) the weighted average of the interest rates on the 
     loans consolidated, rounded to the nearest higher one-eighth 
     of one percent; or

[[Page H9014]]

       ``(ii) 8.25 percent.
       ``(E) Temporary rules for consolidation loans.--
     Notwithstanding the preceding paragraphs of this subsection, 
     any Federal Direct Consolidation loan for which the 
     application is received on or after October 1, 1998, and 
     before February 1, 1999, shall bear interest at an annual 
     rate on the unpaid principal balance of the loan that is 
     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.''.
       (2) Limitation on consolidation loans during temporary 
     interest rate.--Notwithstanding section 455(g) of the Higher 
     Education Act of 1965, a borrower who is enrolled or accepted 
     for enrollment in an institution of higher education may not 
     consolidate loans under such section during the period 
     beginning October 1, 1998, and ending February 1, 1999, 
     unless the borrower certifies that the borrower has no 
     outstanding loans made, insured, or guaranteed under title IV 
     of such Act other than loans made under part D of such title.
       (b) Repayment Incentives.--Section 455(b) (20 U.S.C. 
     1087e(b)) is further amended 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.--Prior to publishing regulations 
     proposing repayment incentives, the Secretary shall ensure 
     the cost neutrality of such reductions. The Secretary shall 
     not prescribe such regulations in final form unless an 
     official report from the Director of the Office of Management 
     and Budget to the Secretary and a comparable report from the 
     Director of the Congressional Budget Office to the Congress 
     each certify that any such reductions will be completely cost 
     neutral. Such 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.''.
       (c) Consolidation Loans.--The first sentence of section 
     455(g) is amended by striking everything after ``section 
     428C(a)(4)'' and inserting a period.
       (d) 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, except that such amendments shall apply 
     with respect to a Federal Direct Consolidation Loan for which 
     the application is received on or after October 1, 1998, and 
     before July 1, 2003.

     SEC. 453. CONTRACTS.

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

     SEC. 454. FUNDS FOR ADMINISTRATIVE EXPENSES.

       Section 458 (20 U.S.C. 1087h) is amended--
       (1) by amending subsection (a) to read as follows:
       ``(a) Administrative Expenses.--
       ``(1) In general.--Each fiscal year there shall be 
     available to the Secretary, from funds not otherwise 
     appropriated, funds to be obligated for--
       ``(A) administrative costs under this part and part B, 
     including the costs of the direct student loan programs under 
     this part; and
       ``(B) account maintenance fees payable to guaranty agencies 
     under part B and calculated in accordance with subsections 
     (b) and (c),

     not to exceed (from such funds not otherwise appropriated) 
     $617,000,000 in fiscal year 1999, $735,000,000 in fiscal year 
     2000, $770,000,000 in fiscal year 2001, $780,000,000 in 
     fiscal year 2002, and $795,000,000 in fiscal year 2003.
       ``(2) Account maintenance fees.--Account maintenance fees 
     under paragraph (1)(B) shall be paid quarterly and deposited 
     in the Agency Operating Fund established under section 422B.
       ``(3) Carryover.--The Secretary may carry over funds made 
     available under this section to a subsequent fiscal year.'';
       (2) by amending subsection (b) to read as follows:
       ``(b) Calculation Basis.--Except as provided in subsection 
     (c), account maintenance fees payable to guaranty agencies 
     under paragraph (1)(B) shall be calculated--
       ``(1) for fiscal years 1999 and 2000, on the basis of 0.12 
     percent of the original principal amount of outstanding loans 
     on which insurance was issued under part B; and
       ``(2) for fiscal year 2001, 2002, and 2003, on the basis of 
     0.10 percent of the original principal amount of outstanding 
     loans on which insurance was issued under part B.'';
       (3) by striking subsection (d);
       (4) by redesignating subsection (c) as subsection (d); and
       (5) by inserting after subsection (b) the following:
       ``(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.--If the amounts set forth in paragraph 
     (1) are insufficient to pay the account maintenance fees 
     payable to guaranty agencies pursuant to subsection (b) 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).''.

     SEC. 455. AUTHORITY TO SELL LOANS.

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

     ``SEC. 459. AUTHORITY TO SELL LOANS.

       ``The Secretary, in consultation with the Secretary of the 
     Treasury, is authorized to sell loans made under this part on 
     such terms as the Secretary determines are in the best 
     interest of the United States, except that any such sale 
     shall not result in any cost to the Federal Government. 
     Notwithstanding any other provision of law, the proceeds of 
     any such sale may be used by the Secretary to offer 
     reductions in the interest rate paid by a borrower of a loan 
     made under this part as the Secretary determines appropriate 
     to encourage on-time repayment in accordance with 455(b)(7). 
     Such reductions may be offered only if the Secretary 
     determines the reductions are in the best financial interests 
     of the Federal Government.''.

     SEC. 456. LOAN CANCELLATION FOR TEACHERS.

       Part D of title IV (20 U.S.C. 1087a et seq.) is further 
     amended by adding after section 459 (as added by section 455) 
     the following:

     ``SEC. 460. LOAN CANCELLATION FOR TEACHERS.

       ``(a) Statement of Purpose.--It is the purpose of this 
     section to encourage individuals to enter and continue in the 
     teaching profession.
       ``(b) Program Authorized.--
       ``(1) In general.--The Secretary shall carry out a program 
     of canceling the obligation to repay a qualified loan amount 
     in accordance with subsection (c) for Federal Direct Stafford 
     Loans and Federal Direct Unsubsidized Stafford Loans made 
     under this part for any new borrower on or after October 1, 
     1998, who--
       ``(A) has been employed as a full-time teacher for 5 
     consecutive complete school years--
       ``(i) in a school that qualifies under section 465(a)(2)(A) 
     for loan cancellation for Perkins loan recipients who teach 
     in such schools;
       ``(ii) if employed as a secondary school teacher, is 
     teaching a subject area that is relevant to the borrower's 
     academic major as certified by the chief administrative 
     officer of the public or non-profit private secondary school 
     in which the borrower is employed; and
       ``(iii) if employed as an elementary school teacher, has 
     demonstrated, as certified by the chief administrative 
     officer of the public or nonprofit private elementary school 
     in which the borrower is employed, knowledge and teaching 
     skills in reading, writing, mathematics and other areas of 
     the elementary school curriculum; and
       ``(B) is not in default on a loan for which the borrower 
     seeks forgiveness.
       ``(2) Special rule.--No borrower may obtain a reduction of 
     loan obligations under both this section and section 428J.
       ``(c) Qualified Loan Amounts.--
       ``(1) In general.--The Secretary shall cancel not more than 
     $5,000 in the aggregate of the loan obligation on a Federal 
     Direct Stafford Loan or a Federal Direct Unsubsidized 
     Stafford Loan that is outstanding after the completion of the 
     fifth complete school year of teaching described in 
     subsection (b)(1)(A).
       ``(2) Treatment of consolidation loans.--A loan amount for 
     a Federal Direct Consolidation Loan may be a qualified loan 
     amount for the purposes of this subsection only to the extent 
     that such loan amount was used to repay a Federal Direct 
     Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, 
     or a loan made under section 428 or 428H, for a borrower who 
     meets the requirements of subsection (b), as determined in 
     accordance with regulations prescribed by the Secretary.
       ``(d) Regulations.--The Secretary is authorized to issue 
     such regulations as may be necessary to carry out the 
     provisions of this section.
       ``(e) Construction.--Nothing in this section shall be 
     construed to authorize any refunding of any canceled loan.
       ``(f) List.--If the list of schools in which a teacher may 
     perform service pursuant to subsection (b) is not available 
     before May 1 of any year, the Secretary may use the list for 
     the year preceding the year for which the determination is 
     made to make such service determination.
       ``(g) Additional Eligibility Provisions.--
       ``(1) Continued eligibility.--Any teacher who performs 
     service in a school that--
       ``(A) meets the requirements of subsection (b)(1)(A) in any 
     year during such service; and
       ``(B) in a subsequent year fails to meet the requirements 
     of such subsection, may continue to teach in such school and 
     shall be eligible for loan cancellation pursuant to 
     subsection (b).
       ``(2) Prevention of double benefits.--No borrower may, for 
     the same volunteer service, receive a benefit under both this 
     section and

[[Page H9015]]

     subtitle D of title I of the National and Community Service 
     Act of 1990 (42 U.S.C. 12571 et seq.).
       ``(h) Definition.--For the purpose of this section, the 
     term `year' where applied to service as a teacher means an 
     academic year as defined by the Secretary.''.

                     PART E--FEDERAL PERKINS LOANS

     SEC. 461. AUTHORIZATION OF APPROPRIATIONS.

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

     SEC. 462. ALLOCATION OF FUNDS.

       (a) Changes in Allocation Formula.--
       (1) Updating the base period.--Section 462(a) (20 U.S.C. 
     1087bb(a)) is amended--
       (A) in paragraph (1)(A), by striking ``the amount of the 
     Federal capital contribution allocated to such institution 
     under this part for fiscal year 1985'' and inserting ``the 
     amount received under subsections (a) and (b) of this section 
     for fiscal year 1999 (as such subsections were in effect with 
     respect to allocations for such fiscal year)'';
       (B) in paragraph (2)--
       (i) in subparagraphs (A) and (B), by striking ``1985'' each 
     place the term appears and inserting ``1999''; and
       (ii) in subparagraph (C)(i), by striking ``1986'' and 
     inserting ``2000''.
       (2) Elimination of pro rata share.--Section 462 is further 
     amended--
       (A) in subsection (a)--
       (i) in paragraph (1)(B), by striking ``subsection (f)'' and 
     inserting ``subsection (e)'';
       (ii) in the matter following paragraph (1)(B), by striking 
     ``subsection (g)'' and inserting ``subsection (f)'';
       (iii) in paragraph (2)(D)(ii), by striking ``subsection 
     (f)'' and inserting ``subsection (e)''; and
       (iv) in the matter following paragraph (2)(D)(ii), by 
     striking ``subsection (g)'' and inserting ``subsection (f)'';
       (B) by striking subsection (b);
       (C) in subsection (c)(1), by striking ``three-quarters of 
     the remainder'' and inserting ``the remainder'';
       (D) in the matter following subsection (c)(2)(B), by 
     striking ``subsection (g)'' and inserting ``subsection (f 
     )'';
       (E) in subsection (c)(3)--
       (i) in subparagraph (A), by striking ``subsection (d)'' and 
     inserting ``subsection (c)'';
       (ii) in subparagraph (C), by striking ``subsection (f )'' 
     and inserting ``subsection (e)''; and
       (iii) in the matter following subparagraph (C), by striking 
     ``subsection (g)'' and inserting ``subsection (f )'';
       (F) in subsection (j)(1)(B)(i), by striking ``1985'' and 
     inserting ``1999'';
       (G) in subsection (j)(2)--
       (i) in subparagraph (A), by striking ``paragraph (3) of 
     subsection (c)'' and inserting ``subsection (b)(3)''; and
       (ii) in subparagraph (B), by striking ``subsection (c) of 
     section 462'' and inserting ``subsection (b)''; and
       (H) by redesignating subsections (c) through (j) as 
     subsections (b) through (i), respectively.
       (3) Effective date.--The amendments made by this subsection 
     shall apply with respect to allocations of amounts 
     appropriated pursuant to section 461(b) for fiscal year 2000 
     or any succeeding fiscal year.
       (b) Self-Help Need.--The matter preceding subparagraph (A) 
     of section 462(c)(3) (as redesignated by subsection 
     (a)(2)(G)) is amended by striking ``the Secretary, for'' and 
     all that follows through ``years,''.
       (c) Default Penalties.--Subsections (e) and (f) of section 
     462 (as redesignated by subsection (a)(2)(G)) are amended to 
     read as follows:
       ``(e) Default Penalties.--
       ``(1) Years preceding fiscal year 2000.--For any fiscal 
     year preceding fiscal year 2000, any institution with a 
     cohort default rate that--
       ``(A) equals or exceeds 15 percent, shall establish a 
     default reduction plan pursuant to regulations prescribed by 
     the Secretary, except that such plan shall not be required 
     with respect to an institution that has a default rate of 
     less than 20 percent and that has less than 100 students who 
     have loans under this part in such academic year;
       ``(B) equals or exceeds 20 percent, but is less than 25 
     percent, shall have a default penalty of 0.9;
       ``(C) equals or exceeds 25 percent, but is less than 30 
     percent, shall have a default penalty of 0.7; and
       ``(D) equals or exceeds 30 percent shall have a default 
     penalty of zero.
       ``(2) Years following fiscal year 2000.--For fiscal year 
     2000 and any succeeding fiscal year, any institution with a 
     cohort default rate (as defined under subsection (g)) that 
     equals or exceeds 25 percent shall have a default penalty of 
     zero.
       ``(3) Ineligibility.--
       ``(A) In general.--For fiscal year 2000 and any succeeding 
     fiscal year, any institution with a cohort default rate (as 
     defined in subsection (g)) that equals or exceeds 50 percent 
     for each of the 3 most recent years for which data are 
     available shall not be eligible to participate in a program 
     under this part for the fiscal year for which the 
     determination is made and the 2 succeeding fiscal years, 
     unless, within 30 days of receiving notification from the 
     Secretary of the loss of eligibility under this paragraph, 
     the institution appeals the loss of eligibility to the 
     Secretary. The Secretary shall issue a decision on any such 
     appeal within 45 days after the submission of the appeal. 
     Such decision may permit the institution to continue to 
     participate in a program under this part if--
       ``(i) the institution demonstrates to the satisfaction of 
     the Secretary that the calculation of the institution's 
     cohort default rate is not accurate, and that recalculation 
     would reduce the institution's cohort default rate for any of 
     the 3 fiscal years below 50 percent; or
       ``(ii) there are, in the judgment of the Secretary, such a 
     small number of borrowers entering repayment that the 
     application of this subparagraph would be inequitable.
       ``(B) Continued participation.--During an appeal under 
     subparagraph (A), the Secretary may permit the institution to 
     continue to participate in a program under this part.
       ``(C) Return of funds.--Within 90 days after the date of 
     any termination pursuant to subparagraph (A), or the 
     conclusion of any appeal pursuant to subparagraph (B), 
     whichever is later, the balance of the student loan fund 
     established under this part by the institution that is the 
     subject of the termination shall be distributed as 
     follows:
       ``(i) The Secretary shall first be paid an amount which 
     bears the same ratio to such balance (as of the date of such 
     distribution) as the total amount of Federal capital 
     contributions to such fund by the Secretary under this part 
     bears to the sum of such Federal capital contributions and 
     the capital contributions to such fund made by the 
     institution.
       ``(ii) The remainder of such student loan fund shall be 
     paid to the institution.
       ``(D) Use of returned funds.--Any funds returned to the 
     Secretary under this paragraph shall be reallocated to 
     institutions of higher education pursuant to subsection (i).
       ``(E) Definition.--For the purposes of subparagraph (A), 
     the term `loss of eligibility' shall be defined as the 
     mandatory liquidation of an institution's student loan fund, 
     and assignment of the institution's outstanding loan 
     portfolio to the Secretary.
       ``(f) Applicable Maximum Cohort Default Rate.--
       ``(1) Award years prior to 2000.--For award years prior to 
     award year 2000, the applicable maximum cohort default rate 
     is 30 percent.
       ``(2) Award year 2000 and succeeding award years.--For 
     award year 2000 and subsequent years, the applicable maximum 
     cohort default rate is 25 percent.''.
       (d) Cohort Default Rate Definition.--Section 462(g) (as 
     redesignated by subsection (a)(2)(G)) is amended--
       (1) by striking the subsection heading and paragraphs (1) 
     and (2) and inserting the following:
       ``(g) Definition of Cohort Default Rate.--'';
       (2) by striking ``(3)(A) For award year 1994 and any 
     succeeding award year, the term'' and inserting the 
     following:
       ``(1)(A) The term'';
       (3) in paragraph (1) (as redesignated by paragraph (2))--
       (A) by striking subparagraphs (B) and (E); and
       (B) by redesignating subparagraphs (C), (D), (F), and (G) 
     as subparagraphs (B), (C), (D), and (F), respectively;
       (C) by inserting after subparagraph (D) (as redesignated by 
     subparagraph (B)) the following:
       ``(E) In determining the number of students who default 
     before the end of such award year, the institution, in 
     calculating the cohort default rate, shall exclude--
       ``(i) any loan on which the borrower has, after the time 
     periods specified in paragraph (2)--
       ``(I) voluntarily made 6 consecutive payments;
       ``(II) voluntarily made all payments currently due;
       ``(III) repaid in full the amount due on the loan; or
       ``(IV) received a deferment or forbearance, based on a 
     condition that began prior to such time periods;
       ``(ii) any loan which has, after the time periods specified 
     in paragraph (2), been rehabilitated or canceled; and
       ``(iii) any other loan that the Secretary determines should 
     be excluded from such determination.''; and
       (4) by striking paragraph (4) and inserting the following:
       ``(2) For purposes of calculating the cohort default rate 
     under this subsection, a loan shall be considered to be in 
     default--
       ``(A) 240 days (in the case of a loan repayable monthly), 
     or
       ``(B) 270 days (in the case of a loan repayable quarterly),

     after the borrower fails to make an installment payment when 
     due or to comply with other terms of the promissory note.''.
       (e) Conforming Amendments.--Section 462 (20 U.S.C. 1087bb) 
     is amended--
       (1) in the matter following paragraphs (1)(B) and 
     (2)(D)(ii) of subsection (a), by inserting ``cohort'' before 
     ``default'' each place the term appears;
       (2) in the matter following paragraphs (2)(B) and (3)(C) of 
     subsection (b) (as redesignated by subsection (a)(2)(G)), by 
     inserting ``cohort'' before ``default'' each place the term 
     appears;
       (3) in subsection (d)(2) (as redesignated by subsection 
     (a)(2)(G)), by inserting ``cohort'' before ``default''; and
       (4) in subsection (g)(1)(F) (as redesignated by subsections 
     (a)(2)(G) and (d)(3)(B)), by inserting ``cohort'' before 
     ``default''.

     SEC. 463. AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION.

       (a) Contents of Agreements.--Section 463(a) (20 U.S.C. 
     1087cc(a)) is amended--
       (1) by amending subparagraph (B) of paragraph (2) to read 
     as follows:
       ``(B) a capital contribution by an institution in an amount 
     equal to one-third of the Federal capital contributions 
     described in subparagraph (A);'';
       (2) by striking paragraph (4); and
       (3) by redesignating paragraphs (5) through (10) as 
     paragraphs (4) through (9);
       (b) Agreements With Credit Bureaus.--Section 463(c) is 
     amended--

[[Page H9016]]

       (1) in paragraph (1)--
       (A) by striking ``the Secretary shall'' and inserting ``the 
     Secretary and each institution of higher education 
     participating in the program under this part shall''; and
       (B) by inserting ``and regarding loans held by the 
     Secretary or an institution'' after ``section 467'';
       (2) in paragraph (2)--
       (A) in the matter preceding subparagraph (A), by striking 
     ``by the Secretary'' and all that follows through ``of--'' 
     and inserting ``by the Secretary or an institution, as the 
     case may be, to such organizations, with respect to any loan 
     held by the Secretary or the institution, respectively, of--
     '';
       (B) by amending subparagraph (A) to read as follows:
       ``(A) the date of disbursement and the amount of such loans 
     made to any borrower under this part at the time of 
     disbursement of the loan;'';
       (C) in subparagraph (B)--
       (i) by inserting ``the repayment and'' after 
     ``concerning''; and
       (ii) by striking ``any defaulted'' and inserting ``such''; 
     and
       (D) in subparagraph (C), by inserting ``, or upon 
     cancellation or discharge of the borrower's obligation on the 
     loan for any reason'' before the period;
       (3) in paragraph (3)--
       (A) in the matter preceding subparagraph (A)--
       (i) by inserting ``or an institution'' after ``from the 
     Secretary''; and
       (ii) by striking ``until--'' and inserting ``until the loan 
     is paid in full.''; and
       (B) by striking subparagraphs (A) and (B);
       (4) by amending paragraph (4) to read as follows:
       ``(4)(A) Except as provided in subparagraph (B), an 
     institution of higher education, after consultation with the 
     Secretary and pursuant to the agreements entered into under 
     paragraph (1), shall disclose at least annually to any credit 
     bureau organization with which the Secretary has such an 
     agreement the information set forth in paragraph (2), and 
     shall disclose promptly to such credit bureau organization 
     any changes to the information previously disclosed.
       ``(B) The Secretary may promulgate regulations establishing 
     criteria under which an institution of higher education may 
     cease reporting the information described in paragraph (2) 
     before a loan is paid in full.''; and
       (4) by inserting after paragraph (4) the following:
       ``(5) Each institution of higher education shall notify the 
     appropriate credit bureau organizations whenever a borrower 
     of a loan that is made and held by the institution and that 
     is in default makes 6 consecutive monthly payments on such 
     loan, for the purpose of encouraging such organizations to 
     update the status of information maintained with respect to 
     that borrower.''.
       (c) Conforming Amendment.--Section 463(d) is amended by 
     striking ``subsection (a)(10)'' and inserting ``subsection 
     (a)(9)''.

     SEC. 464. TERMS OF LOANS.

       (a) Terms and Conditions; Annual Limits.--Paragraph (2) of 
     section 464(a) (20 U.S.C. 1087dd(a)) is amended to read as 
     follows:
       ``(2)(A) Except as provided in paragraph (4), the total of 
     loans made to a student in any academic year or its 
     equivalent by an institution of higher education from a loan 
     fund established pursuant to an agreement under this part 
     shall not exceed--
       ``(i) $4,000, in the case of a student who has not 
     successfully completed a program of undergraduate education; 
     or
       ``(ii) $6,000, in the case of a graduate or professional 
     student (as defined in regulations issued by the Secretary).
       ``(B) Except as provided in paragraph (4), the aggregate 
     unpaid principal amount for all loans made to a student by 
     institutions of higher education from loan funds established 
     pursuant to agreements under this part may not exceed--
       ``(i) $40,000, in the case of any graduate or professional 
     student (as defined by regulations issued by the Secretary, 
     and including any loans from such funds made to such person 
     before such person became a graduate or professional 
     student);
       ``(ii) $20,000, in the case of a student who has 
     successfully completed 2 years of a program of education 
     leading to a bachelor's degree but who has not completed the 
     work necessary for such a degree (determined under 
     regulations issued by the Secretary), and including any loans 
     from such funds made to such person before such person became 
     such a student; and
       ``(iii) $8,000, in the case of any other student.''.
       (b) Need and Eligibility.--Section 464(b) is amended--
       (1) in paragraph (1), by adding at the end the following: 
     ``A student who is in default on a loan under this part shall 
     not be eligible for an additional loan under this part unless 
     such loan meets one of the conditions for exclusion under 
     section 462(g)(1)(E).''; and
       (2) by amending paragraph (2) to read as follows:
       ``(2) If the institution's capital contribution under 
     section 462 is directly or indirectly based in part on the 
     financial need demonstrated by students who are (A) attending 
     the institution less than full time, or (B) independent 
     students, then a reasonable portion of the loans made from 
     the institution's student loan fund containing the 
     contribution shall be made available to such students.''.
       (c) Contents of Loan Agreement.--Section 464(c) is 
     amended--
       (1) in paragraph (1)(D)--
       (A) by striking ``(i) 3 percent'' and all that follows 
     through ``or (iii)''; and
       (B) by striking ``subparagraph (A)(i)'' and inserting 
     ``paragraph (2)(A)(i)'';
       (2) in the matter following clause (iv) of paragraph 
     (2)(A), by striking ``subparagraph (B)'' and inserting 
     ``subparagraph (A) of paragraph (1)'';
       (3) by adding at the end of paragraph (2) the following:
       ``(C) An individual with an outstanding loan balance who 
     meets the eligibility criteria for a deferment described in 
     subparagraph (A) as in effect on the date of enactment of 
     this subparagraph shall be eligible for deferment under this 
     paragraph notwithstanding any contrary provision of the 
     promissory note under which the loan or loans were made, and 
     notwithstanding any amendment (or effective date provision 
     relating to any amendment) to this section made prior to the 
     date of such deferment.''; and
       (4) 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.''.
       (d) Discharge; Rehabilitation; Incentive Repayment.--
     Section 464 is amended by adding at the end the following:
       ``(g) Discharge.--
       ``(1) In general.--If a student borrower who received a 
     loan made under this part on or after January 1, 1986, is 
     unable to complete the program in which such student is 
     enrolled due to the closure of the institution, then the 
     Secretary shall discharge the borrower's liability on the 
     loan (including the interest and collection fees) and shall 
     subsequently pursue any claim available to such borrower 
     against the institution and the institution's affiliates and 
     principals, or settle the loan obligation pursuant to the 
     financial responsibility standards described in section 
     498(c).
       ``(2) Assignment.--A borrower whose loan has been 
     discharged pursuant to this subsection shall be deemed to 
     have assigned to the United States the right to a loan refund 
     in an amount that does not exceed the amount discharged 
     against the institution and the institution's affiliates 
     and principals.
       ``(3) Eligibility for additional assistance.--The period 
     during which a student was unable to complete a course of 
     study due to the closing of the institution shall not be 
     considered for purposes of calculating the student's period 
     of eligibility for additional assistance under this title.
       ``(4) Special rule.--A borrower whose loan has been 
     discharged pursuant to this subsection shall not be 
     precluded, because of that discharge, from receiving 
     additional grant, loan, or work assistance under this title 
     for which the borrower would be otherwise eligible (but for 
     the default on the discharged loan). The amount discharged 
     under this subsection shall be treated as an amount canceled 
     under section 465(a).
       ``(5) Reporting.--The Secretary or institution, as the case 
     may be, shall report to credit bureaus with respect to loans 
     that have been discharged pursuant to this subsection.
       ``(h) Rehabilitation of Loans.--
       ``(1) Rehabilitation.--
       ``(A) In general.--If the borrower of a loan made under 
     this part who has defaulted on the loan makes 12 ontime, 
     consecutive, monthly payments of amounts owed on the loan, as 
     determined by the institution, or by the Secretary in the 
     case of a loan held by the Secretary, the loan shall be 
     considered rehabilitated, and the institution that made that 
     loan (or the Secretary, in the case of a loan held by the 
     Secretary) shall request that any credit bureau organization 
     or credit reporting agency to which the default was reported 
     remove the default from the borrower's credit history.
       ``(B) Comparable conditions.--As long as the borrower 
     continues to make scheduled repayments on a loan 
     rehabilitated under this paragraph, the rehabilitated loan 
     shall be subject to the same terms and conditions, and 
     qualify for the same benefits and privileges, as other loans 
     made under this part.
       ``(C) Additional assistance.--The borrower of a 
     rehabilitated loan shall not be precluded by section 484 from 
     receiving additional grant, loan, or work assistance under 
     this title (for which the borrower is otherwise eligible) on 
     the basis of defaulting on the loan prior to such 
     rehabilitation.
       ``(D) Limitations.--A borrower only once may obtain the 
     benefit of this paragraph with respect to rehabilitating a 
     loan under this part.
       ``(2) Restoration of eligibility.--If the borrower of a 
     loan made under this part who has defaulted on that loan 
     makes 6 ontime, consecutive, monthly payments of amounts owed 
     on such loan, the borrower's eligibility for grant, loan, or 
     work assistance under this title shall be restored to the 
     extent that the borrower is otherwise eligible. A borrower 
     only once may obtain the benefit of this paragraph with 
     respect to restored eligibility.
       ``(i) Incentive Repayment Program.--
       ``(1) In general.--Each institution of higher education may 
     establish, with the approval of the Secretary, an incentive 
     repayment program designed to reduce default and to replenish 
     student loan funds established under this part. Each such 
     incentive repayment program may--
       ``(A) offer a reduction of the interest rate on a loan on 
     which the borrower has made 48 consecutive, monthly 
     repayments, but in no event may the rate be reduced by more 
     than 1 percent;
       ``(B) provide for a discount on the balance owed on a loan 
     on which the borrower pays the

[[Page H9017]]

     principal and interest in full prior to the end of the 
     applicable repayment period, but in no event may the discount 
     exceed 5 percent of the unpaid principal balance due on the 
     loan at the time the early repayment is made; and
       ``(C) include such other incentive repayment options as the 
     institution determines will carry out the objectives of this 
     subsection.
       ``(2) Limitation.--No incentive repayment option under an 
     incentive repayment program authorized by this subsection may 
     be paid for with Federal funds, including any Federal funds 
     from the student loan fund, or with institutional funds from 
     the student loan fund.''.

     SEC. 465. CANCELLATION FOR PUBLIC SERVICE.

       Section 465 (20 U.S.C. 1087ee) is amended--
       (1) in subsection (a)--
       (A) in paragraph (2)(C), by striking ``section 676(b)(9)'' 
     and inserting ``section 635(a)(10)'';
       (B) in the last sentence of paragraph (2), by striking 
     ``section 602(a)(1)'' and inserting ``section 602''; and
       (C) by adding at the end the following new paragraph:
       ``(7) An individual with an outstanding loan obligation 
     under this part who performs service of any type that is 
     described in paragraph (2) as in effect on the date of 
     enactment of this paragraph shall be eligible for 
     cancellation under this section for such service 
     notwithstanding any contrary provision of the promissory note 
     under which the loan or loans were made, and notwithstanding 
     any amendment (or effective date provision relating to any 
     amendment) to this section made prior to the date of such 
     service.''; and
       (2) in subsection (b), by adding at the end the following 
     new sentence: ``To the extent feasible, the Secretary shall 
     pay the amounts for which any institution qualifies under 
     this subsection not later than 3 months after the institution 
     files an institutional application for campus-based funds.''.

     SEC. 466. DISTRIBUTION OF ASSETS FROM STUDENT LOAN FUNDS.

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

     SEC. 467. PERKINS LOAN REVOLVING FUND.

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

                         PART F--NEED ANALYSIS

     SEC. 471. COST OF ATTENDANCE.

       Section 472 (20 U.S.C. 1087ll) is amended--
       (1) in paragraph (2), by inserting after ``personal 
     expenses'' the following: ``, including a reasonable 
     allowance for the documented rental or purchase of a personal 
     computer,'';
       (2) in paragraph (3)--
       (A) in subparagraph (A), by striking ``of not less than 
     $1,500'' and inserting ``determined by the institution''; and
       (B) in subparagraph (C), by striking ``, except that the 
     amount may not be less than $2,500'';
       (3) in paragraph (10), by striking everything after 
     ``determining costs'' and inserting a semicolon; and
       (4) in paragraph (11), by striking ``placed'' and inserting 
     ``engaged''.

     SEC. 472. DATA ELEMENTS.

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

     SEC. 473. FAMILY CONTRIBUTION FOR DEPENDENT STUDENTS.

       (a) Parents' Contribution from Adjusted Available Income.--
     Section 475(b)(3) (20 U.S.C. 1087oo(b)(3)) is amended by 
     inserting ``, excluding the student's parents,'' after 
     ``number of family members''.
       (b) Student Contribution From Available Income.--Section 
     475(g) is amended--
       (1) in paragraph (2)--
       (A) in subparagraph (D), by striking ``$1,750; and'' and 
     inserting ``$2,200 (or a successor amount prescribed by the 
     Secretary under section 478);'';
       (B) by striking the period at the end of subparagraph (E) 
     and inserting ``; and''; and
       (C) by inserting after subparagraph (E) the following new 
     subparagraph:
       ``(F) an allowance for parents' negative available income, 
     determined in accordance with paragraph (6).''; and
       (2) by adding at the end the following new paragraph:
       ``(6) Allowance for parents' negative available income.--
     The allowance for parents' negative available income is the 
     amount, if any, by which the sum of the amounts deducted 
     under subparagraphs (A) through (F) of subsection (c)(1) 
     exceeds the sum of the parents' total income (as defined in 
     section 480) and the parents' contribution from assets (as 
     determined in accordance with subsection (d)).''.
       (c) Adjustments to Student's Contribution for Enrollment 
     Periods Other Than Nine Months.--Section 475 is amended by 
     adding at the end the following:
       ``(j) Adjustments to Student's Contribution for Enrollment 
     Periods of Less Than Nine Months.--For periods of enrollment 
     of less than 9 months, the student's contribution from 
     adjusted available income (as determined under subsection 
     (g)) is determined, for purposes other than subpart 2 of part 
     A, by dividing the amount determined under such subsection by 
     9, and multiplying the result by the number of months in the 
     period of enrollment.''.

     SEC. 474. FAMILY CONTRIBUTION FOR INDEPENDENT STUDENTS 
                   WITHOUT DEPENDENTS OTHER THAN A SPOUSE.

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

     SEC. 475. FAMILY CONTRIBUTION FOR INDEPENDENT STUDENTS WITH 
                   DEPENDENTS OTHER THAN A SPOUSE.

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

     SEC. 476. REGULATIONS; UPDATED TABLES AND AMOUNTS.

       Section 478(b) (20 U.S.C. 1087rr(b)) is amended--
       (1) by striking ``For each academic year'' and inserting 
     the following:
       ``(1) Revised tables.--For each academic year''; and
       (2) by adding at the end the following new paragraph:
       ``(2) Revised amounts.--For each academic year after 
     academic year 2000-2001, the Secretary shall publish in the 
     Federal Register revised income protection allowances for the 
     purpose of sections 475(g)(2)(D) and 476(b)(1)(A)(iv). Such 
     revised allowances shall be developed by increasing each of 
     the dollar amounts contained in such section by a percentage 
     equal to the estimated percentage increase in the Consumer 
     Price Index (as determined by the Secretary) between December 
     1999 and the December next preceding the beginning of such 
     academic year, and rounding the result to the nearest $10.''.

     SEC. 477. SIMPLIFIED NEEDS TEST; ZERO EXPECTED FAMILY 
                   CONTRIBUTION.

       Section 479 (20 U.S.C. 1087ss) is amended--
       (1) in subsection (b)(3)--
       (A) in the matter preceding subparagraph (A), by striking 
     ``this paragraph'' and inserting ``this subsection, or 
     subsection (c), as the case may be,'';
       (B) in subparagraph (A), by striking ``or'' at the end 
     thereof;
       (C) by redesignating subparagraph (B) as subparagraph (C); 
     and
       (D) by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) a form 1040 (including any prepared or electronic 
     version of such form) required pursuant to the Internal 
     Revenue Code of 1986, except that such form shall be 
     considered a qualifying form only if the student or family 
     files such form in order to take a tax credit under section 
     25A of the Internal Revenue Code of 1986, and would otherwise 
     be eligible to file a form described in subparagraph (A); 
     or'';
       (2) in subsection (c)--
       (A) by amending paragraph (1)(A) to read as follows:
       ``(A) the student's parents file, or are eligible to file, 
     a form described in subsection (b)(3), or certify that the 
     parents are not required to file an income tax return and the 
     student files, or is eligible to file, such a form, or 
     certifies that the student is not required to file an income 
     tax return; and''; and
       (B) by amending paragraph (2)(A) to read as follows:
       ``(A) the student (and the student's spouse, if any) files, 
     or is eligible to file, a form described in subsection 
     (b)(3), or certifies that the student (and the student's 
     spouse, if any) is not required to file an income tax return; 
     and''.

     SEC. 478. DISCRETION OF STUDENT FINANCIAL AID ADMINISTRATORS.

       Section 479A (20 U.S.C. 1087tt) is amended--
       (1) in subsection (a), by inserting after the second 
     sentence the following: ``Special circumstances may include 
     tuition expenses at an elementary or secondary school, 
     medical or dental expenses not covered by insurance, 
     unusually high child care costs, recent unemployment of a 
     family member, the number of parents enrolled at least half-
     time in a degree, certificate, or other program leading to a 
     recognized educational credential at an institution with a 
     program participation agreement under section 487, or other 
     changes in a family's income, a family's assets, or a 
     student's status.''; and

[[Page H9018]]

       (2) by amending subsection (c) to read as follows:
       ``(c) Refusal or Adjustment of Loan Certifications.--On a 
     case-by-case basis, an eligible institution may refuse to 
     certify a statement that permits a student to receive a loan 
     under part B or D, or may certify a loan amount or make a 
     loan that is less than the student's determination of need 
     (as determined under this part), if the reason for the action 
     is documented and provided in written form to the student. No 
     eligible institution shall discriminate against any borrower 
     or applicant in obtaining a loan on the basis of race, 
     national origin, religion, sex, marital status, age, or 
     disability status.''.

     SEC. 479. TREATMENT OF OTHER FINANCIAL ASSISTANCE.

       Section 480(j) (20 U.S.C. 1087vv(j)) is amended--
       (1) in paragraph (1), by inserting before the period at the 
     end the following: ``, and national service educational 
     awards or post-service benefits under title I of the National 
     and Community Service Act of 1990 (42 U.S.C. 12571 et 
     seq.)'';
       (2) by striking paragraph (3); and
       (3) by redesignating paragraph (4) as paragraph (3).

     SEC. 480. CLERICAL AMENDMENTS.

       (a) Amount of Need.--Section 471 (20 U.S.C. 1087kk) is 
     amended by striking ``or 4'' and inserting ``or 2''.
       (b) Family Contribution.--Section 473 (20 U.S.C. 1087mm) is 
     amended by striking ``subpart 4'' and inserting ``subpart 
     2''.

     SEC. 480A. EFFECTIVE DATES.

       (a) In General.--Except as provided in subsection (b), the 
     amendments made by this part are effective on the date of 
     enactment of this Act.
       (b) Provisions Effective for Academic Year 2000-2001, and 
     Thereafter.--The amendments made by sections 472, 473, 474, 
     and 475 shall apply with respect to determinations of need 
     under part F oif title IV of the Higher Education Act of 1965 
     for academic years beginning on or after July 1, 2000.

                       PART G--GENERAL PROVISIONS

     SEC. 481. MASTER CALENDAR.

       (a) Required Schedule.--Section 482(a) (20 U.S.C. 1089(a)) 
     is amended by adding at the end the following:
       ``(3) The Secretary shall, to the extent practicable, 
     notify eligible institutions, guaranty agencies, lenders, 
     interested software providers, and, upon request, other 
     interested parties, by December 1 prior to the start of an 
     award year of minimal hardware and software requirements 
     necessary to administer programs under this title.
       ``(4) The Secretary shall attempt to conduct training 
     activities for financial aid administrators and others in an 
     expeditious and timely manner prior to the start of an award 
     year in order to ensure that all participants are informed of 
     all administrative requirements.''.
       (b) Delay of Effective Date of Late Publications.--
     Subsection (c) of section 482 is amended to read as follows:
       ``(c) Delay of Effective Date of Late Publications.--(1) 
     Except as provided in paragraph (2), any regulatory changes 
     initiated by the Secretary affecting the programs under this 
     title that have not been published in final form by November 
     1 prior to the start of the award year shall not become 
     effective until the beginning of the second award year after 
     such November 1 date.
       ``(2)(A) The Secretary may designate any regulatory 
     provision that affects the programs under this title and is 
     published in final form after November 1 as one that an 
     entity subject to the provision may, in the entity's 
     discretion, choose to implement prior to the effective date 
     described in paragraph (1). The Secretary may specify in the 
     designation when, and under what conditions, an entity may 
     implement the provision prior to that effective date. The 
     Secretary shall publish any designation under this 
     subparagraph in the Federal Register.
       ``(B) If an entity chooses to implement a regulatory 
     provision prior to the effective date described in paragraph 
     (1), as permitted by subparagraph (A), the provision shall be 
     effective with respect to that entity in accordance with the 
     terms of the Secretary's designation.''.

     SEC. 482. FORMS AND REGULATIONS.

       (a) Common Financial Aid Form Development.--Section 483(a) 
     (20 U.S.C. 1090(a)) is amended--
       (1) in the subsection heading, by striking ``Form'' and 
     inserting ``Form Development'';
       (2) in paragraph (1)--
       (A) by striking ``A, C, D, and E'' and inserting ``A 
     through E'';
       (B) by striking ``and to determine the need of a student 
     for the purpose of part B of this title'';
       (C) by striking the second sentence and inserting the 
     following: ``The Secretary shall include on the form 
     developed under this subsection such data items as the 
     Secretary determines are appropriate for inclusion. Such 
     items shall be selected in consultation with States to assist 
     in the awarding of State financial assistance. In no case 
     shall the number of such data items be less than the number 
     included on the form on the date of enactment of the Higher 
     Education Amendments of 1998.''; and
       (D) by striking the last sentence;
       (3) in paragraph (2)--
       (A) by striking ``A, C, D, and E'' each place the term 
     appears and inserting ``A through E'';
       (B) by striking ``and the need of a student for the purpose 
     of part B of this title,''; and
       (C) by striking ``or have the student's need established 
     for the purpose of part B of this title'';
       (4) by amending paragraph (3) to read as follows:
       ``(3) Distribution of data.--Institutions of higher 
     education, guaranty agencies, and States shall receive, 
     without charge, the data collected by the Secretary using the 
     form developed pursuant to this section for the purposes of 
     processing loan applications and determining need and 
     eligibility for institutional and State financial aid awards. 
     Entities designated by institutions of higher education, 
     guaranty agencies, or States to receive such data shall be 
     subject to all the requirements of this section, unless such 
     requirements are waived by the Secretary.'';
       (5) by adding at the end the following:
       ``(5) Electronic forms.--(A) The Secretary, in cooperation 
     with representatives of agencies and organizations involved 
     in student financial assistance, including private computer 
     software providers, shall develop an electronic version of 
     the form described in paragraph (1). As permitted by the 
     Secretary, such an electronic version shall not require a 
     signature to be collected at the time such version is 
     submitted, if a signature is subsequently submitted by the 
     applicant. The Secretary shall prescribe such version not 
     later than 120 days after the date of enactment of the Higher 
     Education Amendments of 1998.
       ``(B) Nothing in this section shall be construed to 
     prohibit the use of the form developed by the Secretary 
     pursuant to subparagraph (A) by an eligible institution, 
     eligible lender, guaranty agency, State grant agency, private 
     computer software providers, a consortium thereof, or such 
     other entities as the Secretary may designate.
       ``(C) No fee shall be charged to students in connection 
     with the use of the electronic version of the form, or of any 
     other electronic forms used in conjunction with such form in 
     applying for Federal or State student financial assistance.
       ``(D) The Secretary shall ensure that data collection 
     complies with section 552a of title 5, United States Code, 
     and that any entity using the electronic version of the form 
     developed by the Secretary pursuant to subparagraph (A) shall 
     maintain reasonable and appropriate administrative, 
     technical, and physical safeguards to ensure the integrity 
     and confidentiality of the information, and to protect 
     against security threats, or unauthorized uses or disclosures 
     of the information provided on the electronic version of the 
     form. Data collected by such version of the form shall be 
     used only for the application, award, and administration of 
     aid awarded under this title, State aid, or aid awarded by 
     eligible institutions or such entities as the Secretary may 
     designate. No data collected by such version of the form 
     shall be used for making final aid awards under this title 
     until such data have been processed by the Secretary or a 
     contractor or designee of the Secretary.
       ``(6) Third party servicers and private software 
     providers.--To the extent practicable and in a timely manner, 
     the Secretary shall provide, to private organizations and 
     consortia that develop software used by eligible institutions 
     for the administration of funds under this title, all the 
     necessary specifications that the organizations and consortia 
     must meet for the software the organizations and consortia 
     develop, produce, and distribute (including any diskette, 
     modem, or network communications) which are so used. The 
     specifications shall contain record layouts for required 
     data. The Secretary shall develop in advance of each 
     processing cycle an annual schedule for providing such 
     specifications. The Secretary, to the extent practicable, 
     shall use means of providing such specifications, including 
     conferences and other meetings, outreach, and technical 
     support mechanisms (such as training and printed reference 
     materials). The Secretary shall, from time to time, solicit 
     from such organizations and consortia means of improving the 
     support provided by the Secretary.
       ``(7) Parent's social security number and birth date.--The 
     Secretary is authorized to include on the form developed 
     under this subsection space for the social security number 
     and birth date of parents of dependent students seeking 
     financial assistance under this title.''.
       (b) Streamlined Reapplication Process.--Section 483(b)(1) 
     is amended by striking ``, within 240 days'' and all that 
     follows through ``of 1992,''.
       (c) Information to Committees.--Section 483(c) is amended 
     by striking ``and Labor'' and inserting ``and the 
     Workforce''.
       (d) Toll-Free Information.--Section 483(d) is amended by 
     striking ``section 633(c)'' and inserting ``section 
     685(d)(2)(C)''.
       (e) Repeal.--Subsection (f ) of section 483 is repealed.

     SEC. 483. STUDENT ELIGIBILITY.

       (a) In General.--Section 484(a) (20 U.S.C. 1091(a)) is 
     amended--
       (1) in paragraph (4), by striking ``the institution'' and 
     everything that follows through ``lender), a document'' and 
     inserting ``the Secretary, as part of the original financial 
     aid application process, a certification,''; and
       (2) in paragraph (5), by striking ``or a permanent resident 
     of the Trust Territory of the Pacific Islands, Guam, or the 
     Northern Mariana Islands'' and inserting ``a citizen of any 
     one of the Freely Associated States''.
       (b) Home-Schooled Students.--Section 484(d) is amended--
       (1) in the matter preceding paragraph (1), by striking 
     ``either''; and
       (2) by adding at the end the following:
       ``(3) The student has completed a secondary school 
     education in a home school setting that is treated as a home 
     school or private school under State law.''.
       (c) Termination of Eligibility.--Section 484(j) is amended 
     to read as follows:
       ``(j) Assistance Under Subparts 1 and 3 of Part A, and Part 
     C.--Notwithstanding any other provision of law, a student 
     shall be eligible until September 30, 2004, for assistance 
     under subparts 1 and 3 of part A, and part C, if the student 
     is otherwise qualified and--

[[Page H9019]]

       ``(1) is a citizen of any one of the Freely Associated 
     States and attends an institution of higher education in a 
     State or a public or nonprofit private institution of higher 
     education in the Freely Associated States; or
       ``(2) meets the requirements of subsection (a)(5) and 
     attends a public or nonprofit private institution of higher 
     education in any one of the Freely Associated States.''.
       (d) Correspondence Courses.--Paragraph (1) of section 
     484(l) is amended 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.''.
       (e) Verification of Income Data.--Section 484 is amended by 
     adding at the end the following:
       ``(q) Verification of Income Data.--
       ``(1) Confirmation with irs.--The Secretary of Education, 
     in cooperation with the Secretary of the Treasury, is 
     authorized to confirm with the Internal Revenue Service the 
     adjusted gross income, Federal income taxes paid, filing 
     status, and exemptions reported by applicants (including 
     parents) under this title on their Federal income tax returns 
     for the purpose of verifying the information reported by 
     applicants on student financial aid applications.
       ``(2) Notification.--The Secretary shall establish 
     procedures under which an applicant is notified that the 
     Internal Revenue Service will disclose to the Secretary tax 
     return information as authorized under section 6103(l)(13) of 
     the Internal Revenue Code of 1986.''.
       (f) Suspension of Eligibility for Drug-Related Offenses.--
       (1) Amendment.--Section 484 is amended by adding at the end 
     thereof the following:
       ``(r) Suspension of Eligibility for Drug-Related 
     Offenses.--
       ``(1) In general.--A student who has been convicted of any 
     offense under any Federal or State law involving the 
     possession or sale of a controlled substance shall not be 
     eligible to receive any grant, loan, or work assistance under 
     this title during the period beginning on the date of such 
     conviction and ending after the interval specified in the 
     following table:

``If convicted of an offense involving:

Ineligibility period is:rolled substance:
  1 year ffense........................................................
  2 years ffense.......................................................
  Indefinite.se........................................................

Ineligibility period is: substance:
  2 years fense........................................................
  Indefinite.nse.......................................................

       ``(2) Rehabilitation.--A student whose eligibility has been 
     suspended under paragraph (1) may resume eligibility before 
     the end of the ineligibility period determined under such 
     paragraph if--
       ``(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 reversed, set aside, or otherwise 
     rendered nugatory.
       ``(3) Definitions.--In this subsection, the term 
     `controlled substance' has the meaning given the term in 
     section 102(6) of the Controlled Substances Act (21 U.S.C. 
     802(6)).''.
       (2) Effective date.--The amendment made by paragraph (1), 
     regarding suspension of eligibility for drug-related 
     offenses, shall apply with respect to financial assistance to 
     cover the costs of attendance for periods of enrollment 
     beginning after the date of enactment of this Act.

     SEC. 484. STATE COURT JUDGMENTS.

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

     SEC. 485. INSTITUTIONAL REFUNDS.

       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 an institution during a payment period 
     or period of enrollment in which the recipient began 
     attendance, the amount of grant or loan assistance (other 
     than assistance received under part C) to be returned to the 
     title IV programs is calculated according to paragraph (3) 
     and returned in accordance with subsection (b).
       ``(2) Leave of absence.--
       ``(A) Leave not treated as withdrawal.--In the case of a 
     student who takes a leave of absence from an institution for 
     not more than a total of 180 days in any 12-month period, the 
     institution may consider the student as not having withdrawn 
     from the institution during the leave of absence, and not 
     calculate the amount of grant and loan assistance provided 
     under this title that is to be returned in accordance with 
     this section if--
       ``(i) the institution has a formal policy regarding leaves 
     of absence;
       ``(ii) the student followed the institution's policy in 
     requesting a leave of absence; and
       ``(iii) the institution approved the student's request in 
     accordance with the institution's policy.
       ``(B) Consequences of failure to return.--If a student does 
     not return to the institution at the expiration of an 
     approved leave of absence that meets the requirements of 
     subparagraph (A), the institution shall calculate the amount 
     of grant and loan assistance provided under this title that 
     is to be returned in accordance with this section based on 
     the day the student withdrew (as determined under subsection 
     (c)).
       ``(3) 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 or period of enrollment for 
     which the assistance was awarded, 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--
       ``(i) equal to the percentage of the payment period or 
     period of enrollment for which assistance was awarded that 
     was 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 period of enrollment; or
       ``(ii) 100 percent, if the day the student withdrew occurs 
     after the student has completed 60 percent of the payment 
     period or period of enrollment.
       ``(C) Percentage and amount 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 that 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 
     or period of enrollment, as of the day the student withdrew.
       ``(4) 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 
     subparagraph (A) of paragraph (3), 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 (3)(A), 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)(3)(C); or
       ``(B) an amount equal to--
       ``(i) the total institutional charges incurred by the 
     student for the payment period or period of enrollment for 
     which such assistance was awarded; 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)(3)(C)(i).
       ``(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)(3)(C)(ii) in the order specified in paragraph (3) minus 
     the amount the institution is required to return under 
     paragraph (1).
       ``(B) Special rule.--The student (or parent in the case of 
     funds due to a loan borrowed by a parent under part B or D) 
     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--

[[Page H9020]]

       ``(I) repayment arrangements satisfactory to the 
     institution; or
       ``(II) overpayment collection procedures prescribed by the 
     Secretary.

       ``(C) Requirement.--Notwithstanding subparagraphs (A) and 
     (B), a student shall not be required to return 50 percent of 
     the grant assistance received by the student under this 
     title, for a payment period or period of enrollment, that is 
     the responsibility of the student to repay under this 
     section.
       ``(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 or period of 
     enrollment 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 or period of enrollment for which 
     a return of funds is required.
       ``(ii) To outstanding balances on loans made under section 
     428 for the payment period or period of enrollment 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 or period of enrollment for which a return of funds is 
     required.
       ``(iv) To outstanding balances on subsidized loans made 
     under part D for the payment period or period of enrollment 
     for which a return of funds is required.
       ``(v) To outstanding balances on loans made under part E 
     for the payment period or period of enrollment for which a 
     return of funds is required.
       ``(vi) To outstanding balances on loans made under section 
     428B for the payment period or period of enrollment for which 
     a return of funds is required.
       ``(vii) To outstanding balances on parent loans made under 
     part D for the payment period or period of enrollment 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 or period of enrollment for which a return of funds is 
     required.
       ``(ii) To awards under subpart 3 of part A for the payment 
     period or period of enrollment 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 is the mid-point of the 
     payment period for which assistance under this title was 
     disbursed or a later date documented by the institution; or
       ``(B) for institutions 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 did not 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 or Period of 
     Enrollment Completed.--For purposes of subsection 
     (a)(3)(B)(i), the percentage of the payment period or period 
     of enrollment for which assistance was awarded that was 
     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 or period of enrollment for 
     which assistance is awarded 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 or period of enrollment for which 
     assistance is awarded into the number of clock hours--
       ``(A) completed by the student in that period as of the day 
     the student withdrew; or
       ``(B) scheduled to be completed as of the day the student 
     withdrew, if the clock hours completed in the period are not 
     less than a percentage, to be determined by the Secretary in 
     regulations, of the hours that were scheduled to be completed 
     by the student in the period.
       ``(e) Effective Date.--The provisions of this section shall 
     take effect 2 years after the date of enactment of the Higher 
     Education Amendments of 1998. An institution of higher 
     education may choose to implement such provisions prior to 
     that date.''.

     SEC. 486. INSTITUTIONAL AND FINANCIAL ASSISTANCE INFORMATION 
                   FOR STUDENTS.

       (a) Information Dissemination Activities.--Section 485(a) 
     (20 U.S.C. 1092(a)) is amended--
       (1) in paragraph (1)--
       (A) in the second sentence, by striking ``, 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'';
       (B) by inserting after the second sentence the following: 
     ``Each eligible institution shall, on an annual basis, 
     provide to all enrolled students a list of the information 
     that is required to be provided by institutions to students 
     by this section and section 444 of the General Education 
     Provisions Act (also referred to as the Family Educational 
     Rights and Privacy Act of 1974), together with a statement of 
     the procedures required to obtain such information.'';
       (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;''; and
       (D) by striking ``and'' at the end of subparagraph (M);
       (E) by striking the period at the end of subparagraph (N) 
     and inserting ``; and''; and
       (F) by adding at the end the following:
       ``(O) the campus crime report prepared by the institution 
     pursuant to subsection (f), including all required reporting 
     categories.'';
       (2) in paragraph (3), by amending subparagraph (A) to read 
     as follows:
       ``(A) shall be made available by July 1 each year to 
     enrolled students and prospective students prior to the 
     students enrolling or entering into any financial obligation; 
     and''; and
       (3) by adding at the end the following:
       ``(6) Each institution may provide supplemental information 
     to enrolled and prospective students showing the completion 
     or graduation rate for students described in paragraph (4) or 
     for students transferring into the institution or information 
     showing the rate at which students transfer out of the 
     institution.''.
       (b) Exit Counseling for Borrowers.--Section 485(b) (20 
     U.S.C. 1092(b)) is amended--
       (1) in paragraph (1)(A), by striking ``(individually or in 
     groups)''; and
       (2) in paragraph (2), by adding at the end the following:
       ``(C) Nothing in this subsection shall be construed to 
     prohibit an institution of higher education from utilizing 
     electronic means to provide personalized exit counseling.''.
       (c) Departmental Publications.--Section 485(d) is amended--
       (1) by striking ``(1) assist'' and inserting ``(A) 
     assist'';
       (2) by striking ``(2) assist'' and inserting ``(B) 
     assist'';
       (3) by inserting ``(1)'' before ``The Secretary'' the first 
     place the term appears; and
       (4) by adding at the end the following:
       ``(2) The Secretary, to the extent the information is 
     available, shall compile information describing State and 
     other prepaid tuition programs and savings programs and 
     disseminate such information to States, eligible 
     institutions, students, and parents in departmental 
     publications.
       ``(3) The Secretary, to the extent practicable, shall 
     update the Department's Internet site to include direct links 
     to databases that contain information on public and private 
     financial assistance programs. The Secretary shall only 
     provide direct links to databases that can be accessed 
     without charge and shall make reasonable efforts to verify 
     that the databases included in a direct link are not 
     providing fraudulent information. The Secretary shall 
     prominently display adjacent to any such direct link a 
     disclaimer indicating that a direct link to a database does 
     not constitute an endorsement or recommendation of the 
     database, the provider of the database, or any services or 
     products of such provider. The Secretary shall provide 
     additional direct links to information resources from which 
     students may obtain information about fraudulent and 
     deceptive practices in the provision of services related to 
     student financial aid.''.
       (d) Disclosures.--Section 485(e) is amended--
       (1) in paragraph (2)--
       (A) by striking ``his parents, his guidance'' and inserting 
     ``the student's parents, guidance''; and
       (B) by adding at the end the following: ``If the 
     institution is a member of a national collegiate athletic 
     association that compiles graduation rate data on behalf of 
     the association's member institutions that the Secretary 
     determines is substantially comparable to the information 
     described in paragraph (1), the distribution of the 
     compilation of such data to all secondary schools in the 
     United States shall fulfill the responsibility of the 
     institution to provide information to a prospective student 
     athlete's guidance counselor and coach.''; and
       (2) by amending paragraph (9) to read as follows:
       ``(9) The reports required by this subsection shall be due 
     each July 1 and shall cover the 1-year period ending August 
     31 of the preceding year.''.
       (e) Disclosure of Campus Security Policy and Campus Crime 
     Statistics.--Section 485(f) (20 U.S.C. 1092(f)) is amended--
       (1) in paragraph (1)--
       (A) by amending subparagraph (F) to read as follows:
       ``(F) Statistics concerning the occurrence on campus, in or 
     on noncampus buildings or property, and on public property 
     during the most recent calendar year, and during the 2 
     preceding calendar years for which data are available--
       ``(i) of the following criminal offenses reported to campus 
     security authorities or local police agencies:
       ``(I) murder;
       ``(II) sex offenses, forcible or nonforcible;

[[Page H9021]]

       ``(III) robbery;
       ``(IV) aggravated assault;
       ``(V) burglary;
       ``(VI) motor vehicle theft;
       ``(VII) manslaughter;
       ``(VIII) arson; and
       ``(IX) arrests or persons referred for campus disciplinary 
     action for liquor law violations, drug-related violations, 
     and weapons possession; and
       ``(ii) of the crimes described in subclauses (I) through 
     (VIII) of clause (i), and other crimes involving bodily 
     injury to any person in which the victim is intentionally 
     selected because of the actual or perceived race, gender, 
     religion, sexual orientation, ethnicity, or disability of the 
     victim that are reported to campus security authorities or 
     local police agencies, which data shall be collected and 
     reported according to category of prejudice.'';
       (B) by striking subparagraph (H); and
       (C) by redesignating subparagraph (I) as subparagraph (H);
       (2) in paragraph (4)--
       (A) by striking ``Upon request of the Secretary, each'' and 
     inserting ``On an annual basis, each'';
       (B) by striking ``paragraphs (1)(F) and (1)(H)'' and 
     inserting ``paragraph (1)(F)'';
       (C) by striking ``and Labor'' and inserting ``and the 
     Workforce'';
       (D) by striking ``1995'' and inserting ``2000'';
       (E) by striking ``and'' at the end of subparagraph (A);
       (F) by redesignating subparagraph (B) as subparagraph (C); 
     and
       (G) by inserting after subparagraph (A) the following:
       ``(B) make copies of the statistics submitted to the 
     Secretary available to the public; and'';
       (3) by amending paragraph (5)(A) to read as follows:
       ``(5)(A) In this subsection:
       ``(i) 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 and used by the 
     institution in direct support of, or in a manner related to, 
     the institution's educational purposes, including residence 
     halls; and
       ``(II) property within the same reasonably contiguous 
     geographic area of the institution that is owned by the 
     institution but controlled by another person, is used by 
     students, and supports institutional purposes (such as a food 
     or other retail vendor).
       ``(ii) The term `noncampus building or property' means--
       ``(I) any building or property owned or controlled by a 
     student organization recognized by the institution; and
       ``(II) 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.
       ``(iii) The term `public property' means 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, and is 
     adjacent to a facility owned or controlled by the institution 
     if the facility is used by the institution in direct support 
     of, or in a manner related to the institution's educational 
     purposes.'';
       (4) in paragraph (6)--
       (A) by striking ``paragraphs (1)(F) and (1)(H)'' and 
     inserting ``paragraph (1)(F)''; and
       (B) by adding at the end the following: ``Such statistics 
     shall not identify victims of crimes or persons accused of 
     crimes.'';
       (5) by redesignating paragraphs (4) through (7) as 
     paragraphs (5) through (8), respectively;
       (6) by inserting after paragraph (3) the following:
       ``(4)(A) Each institution participating in any program 
     under this title that maintains a police or security 
     department of any kind shall make, keep, and maintain a daily 
     log, written in a form that can be easily understood, 
     recording all crimes reported to such police or security 
     department, including--
       ``(i) the nature, date, time, and general location of each 
     crime; and
       ``(ii) the disposition of the complaint, if known.
       ``(B)(i) All entries that are required pursuant to this 
     paragraph shall, except where disclosure of such information 
     is prohibited by law or such disclosure would jeopardize the 
     confidentiality of the victim, be open to public inspection 
     within 2 business days of the initial report being made to 
     the department or a campus security authority.
       ``(ii) If new information about an entry into a log becomes 
     available to a police or security department, then the new 
     information shall be recorded in the log not later than 2 
     business days after the information becomes available to the 
     police or security department.
       ``(iii) If there is clear and convincing evidence that the 
     release of such information would jeopardize an ongoing 
     criminal investigation or the safety of an individual, cause 
     a suspect to flee or evade detection, or result in the 
     destruction of evidence, such information may be withheld 
     until that damage is no longer likely to occur from the 
     release of such information.''; and
       (7) by adding at the end the following:
       ``(9) The Secretary shall provide technical assistance in 
     complying with the provisions of this section to an 
     institution of higher education who requests such assistance.
       ``(10) Nothing in this section shall be construed to 
     require the reporting or disclosure of privileged 
     information.
       ``(11) 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.
       ``(12) For purposes of reporting the statistics with 
     respect to crimes described in paragraph (1)(F), an 
     institution of higher education shall distinguish, by means 
     of separate categories, any criminal offenses that occur--
       ``(A) on campus;
       ``(B) in or on a noncampus building or property;
       ``(C) on public property; and
       ``(D) in dormitories or other residential facilities for 
     students on campus.
       ``(13) Upon a determination pursuant to section 
     487(c)(3)(B) that an institution of higher education 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 in the same amount and pursuant to the same 
     procedures as a civil penalty is imposed under section 
     487(c)(3)(B).
       ``(14)(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.
       ``(15) This subsection may be cited as the `Jeanne Clery 
     Disclosure of Campus Security Policy and Campus Crime 
     Statistics Act'.''.
       (f) Data Required.--Section 485(g) is amended--
       (1) in paragraph (1), by adding at the end the following:
       ``(I)(i) The total revenues, and the revenues from 
     football, men's basketball, women's basketball, all other 
     men's sports combined and all other women's sports combined, 
     derived by the institution from the institution's 
     intercollegiate athletics activities.
       ``(ii) For the purpose of clause (i), revenues from 
     intercollegiate athletics activities allocable to a sport 
     shall include (without limitation) gate receipts, broadcast 
     revenues, appearance guarantees and options, concessions, and 
     advertising, but revenues such as student activities fees or 
     alumni contributions not so allocable shall be included in 
     the calculation of total revenues only.
       ``(J)(i) The total expenses, and the expenses attributable 
     to football, men's basketball, women's basketball, all other 
     men's sports combined, and all other women's sports combined, 
     made by the institution for the institution's intercollegiate 
     athletics activities.
       ``(ii) For the purpose of clause (i), expenses for 
     intercollegiate athletics activities allocable to a sport 
     shall include (without limitation) grants-in-aid, salaries, 
     travel, equipment, and supplies, but expenses such as general 
     and administrative overhead not so allocable shall be 
     included in the calculation of total expenses only.''; and
       (2) by striking paragraph (5);
       (3) by redesignating paragraph (4) as paragraph (5); and
       (4) by inserting after paragraph (3) the following:
       ``(4) Submission; report; information availability.--(A) On 
     an annual basis, each institution of higher education 
     described in paragraph (1) shall provide to the Secretary, 
     within 15 days of the date that the institution makes 
     available the report under paragraph (1), the information 
     contained in the report.
       ``(B) The Secretary shall prepare a report regarding the 
     information received under subparagraph (A) and submit such 
     report to the Committee on Education and the Workforce of the 
     House of Representatives and the Committee on Labor and Human 
     Resources of the Senate by April 1, 2000. The report shall--
       ``(i) summarize the information and identify trends in the 
     information;
       ``(ii) aggregate the information by divisions of the 
     National Collegiate Athletic Association; and
       ``(iii) contain information on each individual institution 
     of higher education.
       ``(C) The Secretary shall ensure that the reports described 
     in subparagraph (A) and the report to Congress described in 
     subparagraph (B) are made available to the public within a 
     reasonable period of time.
       ``(D) Not later than 180 days after the date of enactment 
     of the Higher Education Amendments of 1998, the Secretary 
     shall notify all secondary schools in all States regarding 
     the availability of the information reported under 
     subparagraph (B) and the information made available under 
     paragraph (1), and how such information may be accessed.''.

     SEC. 487. NATIONAL STUDENT LOAN DATA SYSTEM.

       Section 485B(a) (20 U.S.C. 1092b(a)) is amended by 
     inserting before the period at the end of the third sentence 
     the following: ``not later than one year after the date of 
     enactment of the Higher Education Amendments of 1998''.

     SEC. 488. DISTANCE EDUCATION DEMONSTRATION PROGRAMS.

       Section 486 (20 U.S.C. 1083) is amended to read as follows:

     ``SEC. 486. DISTANCE EDUCATION DEMONSTRATION PROGRAMS.

       ``(a) Purpose.--It is the purpose of this section--
       ``(1) to allow demonstration programs that are strictly 
     monitored by the Department of Education to test the quality 
     and viability of expanded distance education programs 
     currently restricted under this Act;
       ``(2) to provide for increased student access to higher 
     education through distance education programs; and

[[Page H9022]]

       ``(3) to help determine--
       ``(A) the most effective means of delivering quality 
     education via distance education course offerings;
       ``(B) the specific statutory and regulatory requirements 
     which should be altered to provide greater access to high 
     quality distance education programs; and
       ``(C) the appropriate level of Federal assistance for 
     students enrolled in distance education programs.
       ``(b) Demonstration Programs Authorized.--
       ``(1) In general.--In accordance with the provisions of 
     subsection (d), the Secretary is authorized to select 
     institutions of higher education, systems of such 
     institutions, or consortia of such institutions for voluntary 
     participation in a Distance Education Demonstration Program 
     that provides participating institutions with the ability to 
     offer distance education programs that do not meet all or a 
     portion of the sections or regulations described in paragraph 
     (2).
       ``(2) Waivers.--The Secretary is authorized to waive for 
     any institution 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(a) and 481(b) as such sections relate to 
     requirements for a minimum number of weeks of instruction, 
     sections 102(a)(3)(A), 102(a)(3)(B), and 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) Eligible applicants.--
       ``(A) Eligible institutions.--Except as provided in 
     subparagraphs (B), (C), and (D), only an institution of 
     higher education that is eligible to participate in programs 
     under this title shall be eligible to participate in the 
     demonstration program authorized under this section.
       ``(B) Prohibition.--An institution of higher education 
     described in section 102(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 102, other than the requirement 
     of paragraph (3)(A) or (3)(B) of such subsection, and that 
     provides a 2-year or 4-year program of instruction for which 
     the institution awards an associate or baccalaureate degree, 
     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. In addition to the 
     waivers described in paragraph (2), the Secretary may waive 
     the provisions of title I and parts G and H of this title for 
     such university that 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.
       ``(c) Application.--
       ``(1) In general.--Each institution, system, or consortium 
     of institutions desiring to participate in a demonstration 
     program under this section shall submit an application to the 
     Secretary at such time and in such manner as the Secretary 
     may require.
       ``(2) Contents.--Each application shall include--
       ``(A) a description of the institution, system, or 
     consortium's consultation with a recognized accrediting 
     agency or association with respect to quality assurances for 
     the distance education programs to be offered;
       ``(B) a description of the statutory and regulatory 
     requirements described in subsection (b)(2) or, if 
     applicable, subsection (b)(3)(D) for which a waiver is sought 
     and the reasons for which the waiver is sought;
       ``(C) a description of the distance education programs to 
     be offered;
       ``(D) a description of the students to whom distance 
     education programs will be offered;
       ``(E) an assurance that the institution, system, or 
     consortium will offer full cooperation with the ongoing 
     evaluations of the demonstration program provided for in this 
     section; and
       ``(F) such other information as the Secretary may require.
       ``(d) Selection.--
       ``(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 section, 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;
       ``(C) an institution's--
       ``(i) financial responsibility;
       ``(ii) administrative capability; and
       ``(iii) program or programs being offered via distance 
     education; and
       ``(D) ensuring the participation of a diverse group of 
     institutions with respect to size, mission, and geographic 
     distribution.
       ``(e) Notification.--The Secretary shall make available to 
     the public and to the Committee on Labor and Human Resources 
     of the Senate and the Committee on Education and the 
     Workforce of the House of Representatives a list of 
     institutions, systems or consortia selected to participate in 
     the demonstration program authorized by this section. Such 
     notice shall include a listing of the specific statutory and 
     regulatory requirements being waived for each institution, 
     system or consortium and a description of the distance 
     education courses to be offered.
       ``(f) Evaluations and Reports.--
       ``(1) Evaluation.--The Secretary shall evaluate the 
     demonstration programs authorized under this section on an 
     annual basis. Such evaluations specifically shall review--
       ``(A) the extent to which the institution, system or 
     consortium has met the goals set forth in its application to 
     the Secretary, including the measures of program quality 
     assurance;
       ``(B) the number and types of students participating in the 
     programs offered, including the progress of participating 
     students toward recognized certificates or degrees and the 
     extent to which participation in such programs increased;
       ``(C) issues related to student financial assistance for 
     distance education;
       ``(D) effective technologies for delivering distance 
     education course offerings; and
       ``(E) the extent to which statutory or regulatory 
     requirements not waived under the demonstration program 
     present difficulties for students or institutions.
       ``(2) Policy analysis.--The Secretary shall review current 
     policies and identify those policies that present impediments 
     to the development and use of distance education and other 
     nontraditional methods of expanding access to education.
       ``(3) Reports.--
       ``(A) In general.--Within 18 months of the initiation of 
     the demonstration program, the Secretary shall report to the 
     Committee on Labor and Human Resources of the Senate and the 
     Committee on Education and the Workforce of the House of 
     Representatives with respect to--
       ``(i) the evaluations of the demonstration programs 
     authorized under this section; and
       ``(ii) any proposed statutory changes designed to enhance 
     the use of distance education.
       ``(B) Additional reports.--The Secretary shall provide 
     additional reports to the Committee on Labor and Human 
     Resources of the Senate and the Committee on Education and 
     the Workforce of the House of Representatives on an annual 
     basis regarding--
       ``(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.
       ``(g) Oversight.--In conducting the demonstration program 
     authorized under this section, the Secretary shall, on a 
     continuing basis--
       ``(1) assure compliance of institutions, systems or 
     consortia with the requirements of this title (other than the 
     sections and regulations that are waived under subsections 
     (b)(2) and (b)(3)(D));
       ``(2) provide technical assistance;
       ``(3) monitor fluctuations in the student population 
     enrolled in the participating institutions, systems or 
     consortia; and
       ``(4) consult with appropriate accrediting agencies or 
     associations and appropriate State regulatory authorities.
       ``(h) Definition.--For the purpose of this section, the 
     term `distance education' means an educational process that 
     is characterized by the separation, in time or place, between 
     instructor and student. Such term may include courses offered 
     principally through the use of--
       ``(1) television, audio, or computer transmission, such as 
     open broadcast, closed circuit, cable, microwave, or 
     satellite transmission;
       ``(2) audio or computer conferencing;
       ``(3) video cassettes or discs; or
       ``(4) correspondence.''.

     SEC. 489. PROGRAM PARTICIPATION AGREEMENTS.

       (a) Required Content.--Section 487(a) (20 U.S.C. 1094(a)) 
     is amended--
       (1) in paragraph (3)--
       (A) by striking subparagraph (B); and
       (B) by redesignating subparagraphs (C) and (D) as 
     subparagraphs (B) and (C), respectively;
       (2) in paragraph (4), by striking ``subsection (b)'' and 
     inserting ``subsection (c)'';
       (3) in paragraph (9), by striking ``part B'' and inserting 
     ``part B or D'';
       (4) in paragraph (14)--
       (A) in subparagraph (A), by striking ``part B'' and 
     inserting ``part B or D''; and
       (B) in subparagraph (B), by striking ``part B'' and 
     inserting ``part B or D''; and
       (C) by adding at the end the following:
       ``(C) This paragraph shall not apply in the case of an 
     institution in which (i) neither the parent nor the 
     subordinate institution has a cohort default rate in excess 
     of 10 percent, and (ii) the new owner of such parent or 
     subordinate institution does not, and has not, owned any 
     other institution with a cohort default rate in excess of 10 
     percent.'';
       (5) in paragraph (15), by striking ``State review 
     entities'' and inserting ``the State agencies'';
       (6) by amending paragraph (18) to read as follows:
       ``(18) The institution will meet the requirements 
     established pursuant to section 485(g).''; and

[[Page H9023]]

       (7) by amending paragraph (21) to read as follows:
       ``(21) The institution will meet the requirements 
     established by the Secretary and accrediting agencies or 
     associations, and will provide evidence to the Secretary that 
     the institution has the authority to operate within a 
     State.''.
       (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)(A) The institution, if located in a State to which 
     section 4(b) of the National Voter Registration Act (42 
     U.S.C. 1973gg-2(b)) does not apply, will make a good faith 
     effort to distribute a mail voter registration form, 
     requested and received from the State, to each student 
     enrolled in a degree or certificate program and physically in 
     attendance at the institution, and to make such forms widely 
     available to students at the institution.
       ``(B) The institution shall request the forms from the 
     State 120 days prior to the deadline for registering to vote 
     within the State. If an institution has not received a 
     sufficient quantity of forms to fulfill this section from the 
     State within 60 days prior to the deadline for registering to 
     vote in the State, the institution shall not be held liable 
     for not meeting the requirements of this section during that 
     election year.
       ``(C) This paragraph shall apply to elections as defined in 
     section 301(1) of the Federal Election Campaign Act of 1971 
     (2 U.S.C. 431(1)), and includes the election for Governor or 
     other chief executive within such State).''.
       (2) Regulation prohibited.--No officer of the executive 
     branch is authorized to instruct the institution in the 
     manner in which the amendment made by this subsection is 
     carried out.
       (c) Audits; Financial Responsibility.--Section 487(c) is 
     amended--
       (1) in paragraph (1)(A)--
       (A) 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;
       (B) in clause (ii), by inserting ``or'' after the 
     semicolon; and
       (C) by adding at the end the following:
       ``(iii) at the discretion of the Secretary, with regard to 
     an eligible institution (other than an eligible institution 
     described in section 102(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);'';
       (2) in paragraph (4), by striking ``, after consultation 
     with each State review entity designated under subpart 1 of 
     part H,''; and
       (3) in paragraph (5), by striking ``State review entities 
     designated'' and inserting ``State agencies notifying the 
     Secretary''.

     SEC. 490. REGULATORY RELIEF AND IMPROVEMENT.

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

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

       ``(a) Quality Assurance Program.--
       ``(1) In general.--The Secretary is authorized to select 
     institutions for voluntary participation in a Quality 
     Assurance Program that provides participating institutions 
     with an alternative management approach through which 
     individual schools develop and implement their own 
     comprehensive systems, related to processing and disbursement 
     of student financial aid, verification of student financial 
     aid application data, and entrance and exit interviews, 
     thereby enhancing program integrity within the student aid 
     delivery system.
       ``(2) Criteria and consideration.--The Quality Assurance 
     Program authorized by this section shall be based on criteria 
     that include demonstrated institutional performance, as 
     determined by the Secretary, and shall take into 
     consideration current quality assurance goals, as determined 
     by the Secretary. The selection criteria shall ensure the 
     participation of a diverse group of institutions of higher 
     education with respect to size, mission, and geographical 
     distribution.
       ``(3) Waiver.--The Secretary is authorized to waive for any 
     institution participating in the Quality Assurance Program 
     any regulations dealing with reporting or verification 
     requirements in this title that are addressed by the 
     institution's alternative management system, and may 
     substitute such quality assurance reporting as the Secretary 
     determines necessary to ensure accountability and compliance 
     with the purposes of the programs under this title. The 
     Secretary shall not modify or waive any statutory 
     requirements pursuant to this paragraph.
       ``(4) Determination.--The Secretary is authorized to 
     determine--
       ``(A) when an institution that is unable to administer the 
     Quality Assurance Program shall be removed from such program; 
     and
       ``(B) when institutions desiring to cease participation in 
     such program will be required to complete the current award 
     year under the requirements of the Quality Assurance Program.
       ``(5) Review and evaluation.--The Secretary shall review 
     and evaluate the Quality Assurance Program conducted by each 
     participating institution and, on the basis of that 
     evaluation, make recommendations regarding amendments to this 
     Act that will streamline the administration and enhance the 
     integrity of Federal student assistance programs. Such 
     recommendations shall be submitted to the Committee on Labor 
     and Human Resources of the Senate and the Committee on 
     Education and the Workforce of the House of Representatives.
       ``(b) Regulatory Improvement and Streamlining 
     Experiments.--
       ``(1) In general.--The Secretary may continue any 
     experimental sites in existence on the date of enactment of 
     the Higher Education Amendments of 1998. Any activities 
     approved by the Secretary prior to such date that are 
     inconsistent with this section shall be discontinued not 
     later than June 30, 1999.
       ``(2) Report.--The Secretary shall review and evaluate the 
     experience of institutions participating as experimental 
     sites during the period of 1993 through 1998 under this 
     section (as such section was in effect on the day before the 
     date of enactment of the Higher Education Amendments of 
     1998), and shall submit a report based on this review and 
     evaluation to the Committee on Labor and Human Resources of 
     the Senate and the Committee on Education and the Workforce 
     of the House of Representatives not later than 6 months after 
     the enactment of the Higher Education Amendments of 1998. 
     Such report shall include--
       ``(A) a list of participating institutions and the specific 
     statutory or regulatory waivers granted to each institution;
       ``(B) the findings and conclusions reached regarding each 
     of the experiments conducted; and
       ``(C) recommendations for amendments to improve and 
     streamline this Act, based on the results of the experiment.
       ``(3) Selection.--
       ``(A) In general.--Upon the submission of the report 
     required by paragraph (2), the Secretary is authorized to 
     select a limited number of additional institutions for 
     voluntary participation as experimental sites to provide 
     recommendations to the Secretary on the impact and 
     effectiveness of proposed regulations or new management 
     initiatives.
       ``(B) Consultation.--Prior to approving any additional 
     experimental sites, the Secretary shall consult with the 
     Committee on Labor and Human Resources of the Senate and the 
     Committee on Education and the Workforce of the House of 
     Representatives and shall provide to such Committees--
       ``(i) a list of institutions proposed for participation in 
     the experiment and the specific statutory or regulatory 
     waivers proposed to be granted to each institution;
       ``(ii) a statement of the objectives to be achieved through 
     the experiment; and
       ``(iii) an identification of the period of time over which 
     the experiment is to be conducted.
       ``(C) Waivers.--The Secretary is authorized to waive, for 
     any institution participating as an experimental site under 
     subparagraph (A), any requirements in this title, or 
     regulations prescribed under this title, that will bias the 
     results of the experiment, except that the Secretary shall 
     not waive any provisions with respect to award rules, grant 
     and loan maximum award amounts, and need analysis 
     requirements.
       ``(c) Definitions.--For purposes of this section, the term 
     `current award year' means the award year during which the 
     participating institution indicates the institution's 
     intention to cease participation.''.

     SEC. 490A. GARNISHMENT REQUIREMENTS.

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

     SEC. 490B. ADMINISTRATIVE SUBPOENA AUTHORITY.

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

     ``SEC. 490A. ADMINISTRATIVE SUBPOENAS.

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

     SEC. 490C. ADVISORY COMMITTEE ON STUDENT FINANCIAL 
                   ASSISTANCE.

       Section 491 (20 U.S.C. 1098) is amended--
       (1) in subsection (b)--
       (A) in the second sentence, by striking ``and 
     expenditures'' and inserting ``, expenditures and staffing 
     levels''; and
       (B) by inserting after the third sentence the following: 
     ``Reports, publications, and other documents of the Advisory 
     Committee, including such reports, publications, and 
     documents in electronic form, shall not be subject to review 
     by the Secretary.'';
       (2) in subsection (e)--
       (A) by redesignating paragraphs (3), (4), and (5), as 
     paragraphs (4), (5), and (6), respectively; and

[[Page H9024]]

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

     SEC. 490D. MEETINGS AND NEGOTIATED RULEMAKING.

       (a) Meetings.--Section 492(a) (20 U.S.C. 1098a) is 
     amended--
       (1) in paragraph (1)--
       (A) by striking ``convene regional meetings to'';
       (B) by striking ``parts B, G, and H of this title,'' and 
     inserting ``this title;''; and
       (C) by striking ``Such meetings shall include'' and 
     inserting ``The Secretary shall obtain the advice of and 
     recommendations from''; and
       (2) in paragraph (2)--
       (A) by striking ``During such meetings the'' and inserting 
     ``The'';
       (B) by striking ``parts B, G, and H'' and inserting ``this 
     title'';
       (C) by striking ``1992'' and inserting ``1998 through such 
     mechanisms as regional meetings and electronic exchanges of 
     information''; and
       (D) by striking ``at such meetings'' and inserting 
     ``through such mechanisms''.
       (b) Draft Regulations.--Section 492(b) is amended--
       (1) by striking ``After'' and inserting the following:
       ``(1) In general.--After'';
       (2) in paragraph (1) (as redesignated by paragraph (1))--
       (A) by striking ``holding regional meetings'' and inserting 
     ``obtaining the advice and recommendations described in 
     subsection (a)(1);
       (B) by striking ``parts B, G, and H of this title'' and 
     inserting ``this title'';
       (C) by striking ``1992'' and inserting ``1998'';
       (D) 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.'';
       (E) by striking ``participating in the regional meetings'';
       (F) by striking ``240-day'' and inserting ``360-day''; and
       (G) by striking ``section 431(g)'' and inserting ``section 
     437(e)''; and
       (3) by adding at the end the following:
       ``(2) Expansion of negotiated rulemaking.--All regulations 
     pertaining to this title that are promulgated after the date 
     of enactment of this paragraph shall be subject to a 
     negotiated rulemaking (including the selection of the issues 
     to be negotiated), unless the Secretary determines that 
     applying such a requirement with respect to given regulations 
     is impracticable, unnecessary, or contrary to the public 
     interest (within the meaning of section 553(b)(3)(B) of title 
     5, United States Code), and publishes the basis for such 
     determination in the Federal Register at the same time as the 
     proposed regulations in question are first published. All 
     published proposed regulations shall conform to agreements 
     resulting from such negotiated rulemaking unless the 
     Secretary reopens the negotiated rulemaking process or 
     provides a written explanation to the participants in that 
     process why the Secretary has decided to depart from such 
     agreements. Such negotiated rulemaking shall be conducted in 
     accordance with the provisions of paragraph (1), and the 
     Secretary shall ensure that a clear and reliable record of 
     agreements reached during the negotiations process is 
     maintained.''.

     SEC. 490E. YEAR 2000 REQUIREMENTS AT THE DEPARTMENT OF 
                   EDUCATION.

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

     ``SEC. 493A. YEAR 2000 REQUIREMENTS AT THE DEPARTMENT.

       ``(a) Preparations for Year 2000.--In order to ensure that 
     the processing, delivery, and administration of grant, loan, 
     and work assistance provided under this title is not 
     interrupted due to operational problems related to the 
     inability of computer systems to indicate accurately dates 
     after December 31, 1999, the Secretary of Education 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 that are 
     necessary for the processing, delivery, and administration of 
     the grant, loan, and work assistance are Year 2000 compliant 
     by March 31, 1999, 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 equally provide 
     for successful resolution of, the Year 2000 computer problem 
     in both programs by December 31, 1999;
       ``(3) work with the Department's various data exchange 
     partners under this title to fully test all data exchange 
     routes for Year 2000 compliance via end-to-end testing, and 
     submit a report describing the parameters and results of such 
     tests to the Comptroller General not later than March 31, 
     1999;
       ``(4) ensure that the Inspector General of the Department 
     (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 of 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 this title will continue to run uninterrupted in the 
     event of widespread disruptions in the flow of accurate 
     computerized data, which contingency plan shall include a 
     prioritization of mission critical systems and strategies to 
     allow data partners to transfer data through alternate means; 
     and
       ``(7) alert Congress at the earliest possible time if 
     mission critical deadlines will not be met.
       ``(b) Postponement Authority for the Year 2000.--
       ``(1) Purpose.--It is the purpose of this subsection to 
     provide the Secretary with the flexibility necessary to--
       ``(A) ensure that the resources and capabilities of 
     institutions, lenders, and guaranty agencies are not 
     overburdened by the combination of student aid processing and 
     delivery requirements added or modified by the amendments 
     made by the Higher Education Amendments of 1998 and by the 
     changes required to ensure that the systems of the 
     institutions, lenders and guaranty agencies are Year 2000 
     compliant; and
       ``(B) avoid the disruption of grant, loan, or work 
     assistance funds awarded to students because of Year 2000 
     compliance problems at a substantial number of institutions, 
     lenders, and guaranty agencies.
       ``(2) Authority to postpone.--The Secretary may postpone, 
     for a period of time described in paragraph (3), the 
     implementation of any requirements under part B, D, E, or G 
     that are added or modified by the amendments made by the 
     Higher Education Amendments of 1998 related to the processing 
     or delivery of grant, loan, and work assistance (which shall 
     not include the determination of need for such assistance) 
     provided under this title, if the Secretary--
       ``(A) determines that--
       ``(i) implementation of such requirements would require 
     extensive changes to the existing systems of institutions, 
     lenders, or guaranty agencies; and
       ``(ii) postponement is necessary to avoid jeopardizing the 
     ability of a substantial number of institutions, lenders, or 
     guaranty agencies to ensure that all of the systems of the 
     institutions, lenders, or guaranty agencies related to the 
     processing or delivery of such assistance function 
     successfully after December 31, 1999; and
       ``(B) promptly publishes in the Federal Register a list of, 
     and notifies Congress of, any provisions, the implementation 
     of which the Secretary intends to postpone, with the reasons 
     for such postponement.
       ``(3) Exceptions to authority.--The Secretary may not 
     postpone the implementation of one or more provisions 
     described in this subsection longer than the earlier of--
       ``(A) the period of time that the Secretary determines 
     necessary to ensure that the processing and delivery systems 
     of the institutions, lenders, and guaranty agencies referred 
     to in paragraph (1)(A)(ii) are capable of functioning 
     successfully after December 31, 1999; or

[[Page H9025]]

       ``(B) one award year after the effective date applicable to 
     such provision under the Higher Education Amendments of 
     1998.''.

     SEC. 490F. 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 after section 493A (as added by section 490E) the 
     following:

     ``SEC. 493B. 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.''.

                       PART H--PROGRAM INTEGRITY

     SEC. 491. STATE ROLE AND RESPONSIBILITIES.

       Part H of title IV (20 U.S.C. 1099a et seq.) is amended 
     by--
       (1) striking the heading of such part and inserting the 
     following:

                     ``PART H--PROGRAM INTEGRITY'';

       and
       (2) by amending subpart 1 (20 U.S.C. 1099a et seq.) to read 
     as follows:

                        ``Subpart 1--State Role

     ``SEC. 495. STATE RESPONSIBILITIES.

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

     SEC. 492. ACCREDITING AGENCY RECOGNITION.

       (a) Recognition.--
       (1) Subpart heading.--The heading of subpart 2 of part H is 
     amended by striking ``Approval'' and inserting 
     ``Recognition''.
       (2) Section 496 heading.--The heading of section 496 is 
     amended by striking ``approval'' and inserting 
     ``recognition''.
       (b) Standards.--Section 496(a) (20 U.S.C. 1099b(a)) is 
     amended--
       (1) in the subsection heading, by striking ``Standards'' 
     and inserting ``Criteria'';
       (2) in the matter preceding paragraph (1), by striking 
     ``standards'' each place the term appears and inserting 
     ``criteria'';
       (3) in paragraph (4)--
       (A) by striking ``at the institution'' and inserting 
     ``offered by the institution''; and
       (B) by inserting ``, including distance education courses 
     or programs,'' after ``higher education''; and
       (4) in paragraph (5)--
       (A) by striking ``of accreditation'' and inserting ``for 
     accreditation'';
       (B) by striking subparagraphs (H), (I), and (J);
       (C) by redesignating subparagraphs (A) through (G) as 
     subparagraphs (B) through (H), respectively;
       (D) by redesignating subparagraphs (K) and (L) as 
     subparagraphs (I) and (J), respectively;
       (E) by inserting before subparagraph (B) the following:
       ``(A) success with respect to student achievement in 
     relation to the institution's mission, including, as 
     appropriate, consideration of course completion, State 
     licensing examinations, and job placement rates;'';
       (F) in subparagraph (H) (as redesignated by subparagraph 
     (C)), by striking ``program length and tuition and fees in 
     relation to the subject matters taught'' and inserting 
     ``measures of program length'';
       (G) in subparagraph (J) (as redesignated by subparagraph 
     (D))--
       (i) by inserting ``record of'' before ``compliance'';
       (ii) by striking ``Act, including any'' and inserting ``Act 
     based on the most recent student loan default rate data 
     provided by the Secretary, the''; and
       (iii) by inserting ``any'' after ``reviews, and''; and
       (H) in the matter following subparagraph (J) (as 
     redesignated by subparagraph (D)), by striking ``(G), (H), 
     (I), (J), and (L)'' and inserting ``(A), (H), and (J)'';
       (5) in paragraph (7), by striking ``State postsecondary 
     review entity'' and inserting ``State licensing or 
     authorizing agency''; and
       (6) in paragraph (8), by striking ``State postsecondary'' 
     and everything that follows through ``is located'' and 
     inserting ``State licensing or authorizing agency''.
       (c) Operating Procedures.--Section 496(c) is amended--
       (1) by striking ``approved by the Secretary'' and inserting 
     ``recognized by the Secretary''; and
       (2) in paragraph (1), by striking ``(at least'' and 
     everything that follows through ``unannounced),'' and 
     inserting ``(which may include unannounced site visits)''.
       (d) Conforming Amendments.--Section 496 is further 
     amended--
       (1) in subsection (d)--
       (A) by striking ``Approval'' in the heading of such 
     subsection and inserting ``Recognition''; and
       (B) by striking ``approved'' and inserting ``recognized'';
       (2) in subsection (f ), by striking ``approved'' and 
     inserting ``recognized'';
       (3) in subsection (g)--
       (A) in the heading of such subsection, by striking 
     ``Standards'' and inserting ``Criteria''; and
       (B) by striking ``standards'' the first place such term 
     appears and inserting ``criteria'';
       (4) in subsection (k)--
       (A) in the matter preceding paragraph (1), by striking 
     ``section 481'' and inserting ``section 102''; and
       (B) in paragraph (2), by striking ``standards'' and 
     inserting ``criteria'';
       (5) in subsection (l), by striking everything preceding 
     paragraph (2) and inserting the following:
       ``(l) Limitation, Suspension, or Termination of 
     Recognition.--(1) If the Secretary determines that an 
     accrediting agency or association has failed to apply 
     effectively the criteria in this section, or is otherwise not 
     in compliance with the requirements of this section, the 
     Secretary shall--
       ``(A) after notice and opportunity for a hearing, limit, 
     suspend, or terminate the recognition of the agency or 
     association; or
       ``(B) require the agency or association to take appropriate 
     action to bring the agency or association into compliance 
     with such requirements within a timeframe specified by the 
     Secretary, except that--
       ``(i) such timeframe shall not exceed 12 months unless the 
     Secretary extends such period for good cause; and
       ``(ii) if the agency or association fails to bring the 
     agency or association into compliance within such timeframe, 
     the Secretary shall, after notice and opportunity for a 
     hearing, limit, suspend, or terminate the recognition of the 
     agency or association.''; and
       (6) in subsection (n)--
       (A) by striking ``standards'' each place the term appears 
     and inserting ``criteria'';
       (B) in paragraph (3)--
       (i) by striking ``approval process'' and inserting 
     ``recognition process'';
       (ii) by striking ``approval or disapproval'' and inserting 
     ``recognition or denial of recognition''; and
       (iii) by adding at the end the following: ``When the 
     Secretary decides to recognize an accrediting agency or 
     association, the Secretary shall determine the agency or 
     association's scope of recognition. If the agency or 
     association reviews institutions offering distance education 
     courses or programs and the Secretary determines that the 
     agency or association meets the requirements of this section, 
     then the agency shall be recognized and the scope of 
     recognition shall include accreditation of institutions 
     offering distance education courses or programs.''; and
       (C) by striking paragraph (4) and inserting the following:
       ``(4) The Secretary shall maintain sufficient documentation 
     to support the conclusions reached in the recognition 
     process, and, if the Secretary does not recognize any 
     accreditation agency or association, shall make publicly 
     available the reason for denying recognition, including 
     reference to the specific criteria under this section which 
     have not been fulfilled.''.

     SEC. 493. ELIGIBILITY AND CERTIFICATION PROCEDURES.

       (a) Single Application Form.--Section 498(b) (20 U.S.C. 
     1099c(b)) is amended--
       (1) in paragraph (1), by striking ``and capability'' and 
     inserting ``financial responsibility, and administrative 
     capability'';
       (2) by amending paragraph (3) to read as follows:
       ``(3) requires--
       ``(A) a description of the third party servicers of an 
     institution of higher education; and
       ``(B) the institution to maintain a copy of any contract 
     with a financial aid service provider or loan servicer, and 
     provide a copy of any such contract to the Secretary upon 
     request;'';
       (3) in paragraph (4), by striking the period and inserting 
     ``; and''; and
       (4) by adding at the end the following:
       ``(5) provides, at the option of the institution, for 
     participation in 1 or more of the programs under part B or 
     D.''.
       (b) Financial Responsibility Standards.--Section 498(c) is 
     amended--
       (1) in paragraph (2)--
       (A) in the first sentence, by striking ``with respect to 
     operating losses, net worth, asset to liabilities ratios, or 
     operating fund deficits'' and inserting ``regarding ratios 
     that demonstrate financial responsibility,''; and
       (B) in the second sentence, by inserting ``, public,'' 
     after ``for profit'';
       (2) in paragraph (3)(A), by inserting ``that the Secretary 
     determines are reasonable'' after ``guarantees''; and
       (3) in paragraph (4)--
       (A) in the matter preceding subparagraph (A), by striking 
     ``ratio of current assets to current liabilities'' and 
     inserting ``criteria''; and
       (B) in subparagraph (C), by striking ``current operating 
     ratio requirement'' and inserting ``criteria''.
       (c) Financial Guarantees From Owners.--
       (1) Amendment.--Section 498(e) is amended by adding at the 
     end the following:
       ``(6) Notwithstanding any other provision of law, any 
     individual who--

[[Page H9026]]

       ``(A) 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,
       ``(B) is required to pay, on behalf of a student or 
     borrower, a refund of unearned institutional charges to a 
     lender, or to the Secretary, and
       ``(C) 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.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall be effective with respect to any unpaid refunds that 
     were first required to be paid to a lender or to the 
     Secretary on or after 90 days after the date of enactment of 
     this Act.
       (d) Applications and Site Visits.--Section 498(f) is 
     amended--
       (1) in the subsection heading, by striking ``; Site Visits 
     and Fees'' and inserting ``and Site Visits'';
       (2) in the second sentence, by striking ``shall'' and 
     inserting ``may'';
       (3) in the third sentence--
       (A) by striking ``may establish'' and insert ``shall 
     establish''; and
       (B) by striking ``may coordinate'' and inserting ``shall, 
     to the extent practicable, coordinate''; and
       (4) by striking the fourth sentence.
       (e) Time Limitations on, and Renewal of, Eligibility.--
     Subsection (g) of section 498 is amended to read as follows:
       ``(g) Time Limitations on, and Renewal of, Eligibility.--
       ``(1) General rule.--After the expiration of the 
     certification of any institution under the schedule 
     prescribed under this section (as this section was in effect 
     prior to the enactment of the Higher Education Act Amendments 
     of 1998), or upon request for initial certification from an 
     institution not previously certified, the Secretary may 
     certify the eligibility for the purposes of any program 
     authorized under this title of each such institution for a 
     period not to exceed 6 years.
       ``(2) Notification.--The Secretary shall notify each 
     institution of higher education not later than 6 months prior 
     to the date of the expiration of the institution's 
     certification.
       ``(3) Institutions outside the united states.--The 
     Secretary shall promulgate regulations regarding the 
     recertification requirements applicable to an institution of 
     higher education outside of the United States that meets the 
     requirements of section 102(a)(1)(C) and received less than 
     $500,000 in funds under part B for the most recent year for 
     which data are available.''.
       (f) Provisional Certification.--Section 498(h)(2) is 
     amended--
       (1) by striking ``the approval'' and inserting ``the 
     recognition''; and
       (2) by striking ``of approval'' and inserting ``of 
     recognition''.
       (g) Change in Ownership.--Section 498(i) is amended by 
     adding at the end the following:
       ``(4)(A) The Secretary may provisionally certify an 
     institution seeking approval of a change in ownership based 
     on the preliminary review by the Secretary of a materially 
     complete application that is received by the Secretary within 
     10 business days of the transaction for which the approval is 
     sought.
       ``(B) A provisional certification under this paragraph 
     shall expire not later than the end of the month following 
     the month in which the transaction occurred, except that if 
     the Secretary has not issued a decision on the application 
     for the change of ownership within that period, the Secretary 
     may continue such provisional certification on a month-to-
     month basis until such decision has been issued.''.
       (h) Treatment of Branches.--The second sentence of section 
     498(j)(1) is amended by inserting ``after the branch is 
     certified by the Secretary as a branch campus participating 
     in a program under this title,'' after ``2 years''.

     SEC. 494. PROGRAM REVIEW AND DATA.

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

     SEC. 495. REVIEW OF REGULATIONS.

       Part H of title IV is further amended by adding at the end 
     the following:

     ``SEC. 498B. REVIEW OF REGULATIONS.

       ``(a) Review Required.--The Secretary shall review each 
     regulation issued under this title that is in effect at the 
     time of the review and applies to the operations or 
     activities of any participant in the programs assisted under 
     this title. The review shall include a determination of 
     whether the regulation is duplicative, or is no longer 
     necessary. The review may involve one or more of the 
     following:
       ``(1) An assurance of the uniformity of interpretation and 
     application of such regulations.
       ``(2) The establishment of a process for ensuring that 
     eligibility and compliance issues, such as institutional 
     audit, program review, and recertification, are considered 
     simultaneously.
       ``(3) A determination of the extent to which unnecessary 
     costs are imposed on institutions of higher education as a 
     consequence of the applicability to the facilities and 
     equipment of such institutions of regulations prescribed for 
     purposes of regulating industrial and commercial enterprises.
       ``(b) Regulatory and Statutory Relief for Small Volume 
     Institutions.--The Secretary shall review and evaluate ways 
     in which regulations under and provisions of this Act 
     affecting institution of higher education (other than 
     institutions described in section 102(a)(1)(C)), that have 
     received in each of the 2 most recent award years prior to 
     the date of the enactment of the Higher Education Amendments 
     of 1998 less than $200,000 in funds through this title, may 
     be improved, streamlined, or eliminated.
       ``(c) Consultation.--In carrying out subsections (a) and 
     (b), the Secretary shall consult with relevant 
     representatives of institutions participating in the programs 
     authorized by this title.
       ``(d) Reports to Congress.--
       ``(1) In general.--The Secretary shall submit, not later 
     than 1 year after the date of 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 based 
     on the reviews conducted under subsections (a) and (b), 
     including a timetable for implementation of any recommended 
     changes in regulations and a description of any 
     recommendations for legislative changes.
       ``(2) Additional reports.--Not later than January 1, 2003, 
     the Secretary 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 
     detailing the Secretary's findings and recommendations based 
     on the review conducted under subsection (a), including a 
     timetable for implementation of any recommended changes in 
     regulations and a description of any recommendations for 
     legislative changes.''.

                    TITLE V--DEVELOPING INSTITUTIONS

     SEC. 501. ESTABLISHMENT OF NEW TITLE V.

       Title V (20 U.S.C. 1101 et seq.) is amended to read as 
     follows:

                   ``TITLE V--DEVELOPING INSTITUTIONS

                ``PART A--HISPANIC-SERVING INSTITUTIONS

     ``SEC. 501. FINDINGS; PURPOSE; AND PROGRAM AUTHORITY.

       ``(a) 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--

[[Page H9027]]

       ``(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.
       ``(b) Purpose.--The purpose of this title is to--
       ``(1) expand educational opportunities for, and improve the 
     academic attainment of, Hispanic students; and
       ``(2) expand and enhance the academic offerings, program 
     quality, and institutional stability of colleges and 
     universities that are educating the majority of Hispanic 
     college students and helping large numbers of Hispanic 
     students and other low-income individuals complete 
     postsecondary degrees.
       ``(c) Program Authority.--The Secretary shall provide 
     grants and related assistance to Hispanic-serving 
     institutions to enable such institutions to improve and 
     expand their capacity to serve Hispanic students and other 
     low-income individuals.

     ``SEC. 502. DEFINITIONS; ELIGIBILITY;

       ``(a) Definitions.--For the purpose of this title:
       ``(1) Educational and general expenditures.--The term 
     `educational and general expenditures' means the total amount 
     expended by an institution for instruction, research, public 
     service, academic support (including library expenditures), 
     student services, institutional support, scholarships and 
     fellowships, operation and maintenance expenditures for the 
     physical plant, and any mandatory transfers that the 
     institution is required to pay by law.
       ``(2) Eligible institution.--The term `eligible 
     institution' means--
       ``(A) an institution of higher education--
       ``(i) that has an enrollment of needy students as required 
     by subsection (b);
       ``(ii) except as provided in section 512(b), the average 
     educational and general expenditures of which are low, per 
     full-time equivalent undergraduate student, in comparison 
     with the average educational and general expenditures per 
     full-time equivalent undergraduate student of institutions 
     that offer similar instruction;
       ``(iii) that is--

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

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

     For purposes of the determination of whether an institution 
     is an eligible institution under this paragraph, the factor 
     described under subparagraph (A)(i) shall be given twice the 
     weight of the factor described under subparagraph (A)(ii).
       ``(3) Endowment fund.--The term `endowment fund' means a 
     fund that--
       ``(A) is established by State law, by a Hispanic-serving 
     institution, or by a foundation that is exempt from Federal 
     income taxation;
       ``(B) is maintained for the purpose of generating income 
     for the support of the institution; and
       ``(C) does not include real estate.
       ``(4) Full-time equivalent students.--The term `full-time 
     equivalent students' means the sum of the number of students 
     enrolled full time at an institution, plus the full-time 
     equivalent of the number of students enrolled part time 
     (determined on the basis of the quotient of the sum of the 
     credit hours of all part-time students divided by 12) at such 
     institution.
       ``(5) Hispanic-serving institution.--The term `Hispanic-
     serving institution' means an institution of higher education 
     that--
       ``(A) is an eligible institution;
       ``(B) at the time of application, has an enrollment of 
     undergraduate full-time equivalent students that is at least 
     25 percent Hispanic students; and
       ``(C) provides assurances that not less than 50 percent of 
     the institution's Hispanic students are low-income 
     individuals.
       ``(6) Junior or community college.--The term `junior or 
     community college' means an institution of higher education--
       ``(A) that admits as regular students persons who are 
     beyond the age of compulsory school attendance in the State 
     in which the institution is located and who have the ability 
     to benefit from the training offered by the institution;
       ``(B) that does not provide an educational program for 
     which the institution awards a bachelor's degree (or an 
     equivalent degree); and
       ``(C) that--
       ``(i) provides an educational program of not less than 2 
     years in duration that is acceptable for full credit toward 
     such a degree; or
       ``(ii) offers a 2-year program in engineering, mathematics, 
     or the physical or biological sciences, designed to prepare a 
     student to work as a technician or at the semiprofessional 
     level in engineering, scientific, or other technological 
     fields requiring the understanding and application of basic 
     engineering, scientific, or mathematical principles of 
     knowledge.
       ``(7) Low-income individual.--The term `low-income 
     individual' means an individual from a family whose taxable 
     income for the preceding year did not exceed 150 percent of 
     an amount equal to the poverty level determined by using 
     criteria of poverty established by the Bureau of the Census.
       ``(b) Enrollment of Needy Students.--For the purpose of 
     this title, the term `enrollment of needy students' means an 
     enrollment at an institution with respect to which--
       ``(1) at least 50 percent of the degree students so 
     enrolled are receiving need-based assistance under title IV 
     in the second fiscal year preceding the fiscal year for which 
     the determination is made (other than loans for which an 
     interest subsidy is paid pursuant to section 428); or
       ``(2) a substantial percentage of the students so enrolled 
     are receiving Federal Pell Grants in the second fiscal year 
     preceding the fiscal year for which determination is made, 
     compared to the percentage of students receiving Federal Pell 
     Grants at all such institutions in the second fiscal year 
     preceding the fiscal year for which the determination is 
     made, unless the requirement of this paragraph is waived 
     under section 512(a).

     ``SEC. 503. AUTHORIZED ACTIVITIES.

       ``(a) Types of Activities Authorized.--Grants awarded under 
     this title shall be used by Hispanic-serving institutions of 
     higher education to assist the institutions to plan, develop, 
     undertake, and carry out programs to improve and expand the 
     institutions' capacity to serve Hispanic students and other 
     low-income students.
       ``(b) Authorized Activities.--Grants awarded under this 
     section shall be used for one or more of the following 
     activities:
       ``(1) Purchase, rental, or lease of scientific or 
     laboratory equipment for educational purposes, including 
     instructional and research purposes.
       ``(2) Construction, maintenance, renovation, and 
     improvement in classrooms, libraries, laboratories, and other 
     instructional facilities.
       ``(3) Support of faculty exchanges, faculty development, 
     curriculum development, academic instruction, and faculty 
     fellowships to assist in attaining advanced degrees in the 
     fellow's field of instruction.
       ``(4) Purchase of library books, periodicals, and other 
     educational materials, including telecommunications program 
     material.
       ``(5) Tutoring, counseling, and student service programs 
     designed to improve academic success.
       ``(6) Funds management, administrative management, and 
     acquisition of equipment for use in strengthening funds 
     management.
       ``(7) Joint use of facilities, such as laboratories and 
     libraries.
       ``(8) Establishing or improving a development office to 
     strengthen or improve contributions from alumni and the 
     private sector.
       ``(9) Establishing or improving an endowment fund.
       ``(10) Creating or improving facilities for Internet or 
     other distance learning academic instruction capabilities, 
     including purchase or rental of telecommunications technology 
     equipment or services.
       ``(11) Establishing or enhancing a program of teacher 
     education designed to qualify students to teach in public 
     elementary schools and secondary schools.
       ``(12) Establishing community outreach programs that will 
     encourage elementary school and secondary school students to 
     develop the academic skills and the interest to pursue 
     postsecondary education.
       ``(13) Expanding the number of Hispanic and other 
     underrepresented graduate and professional students that can 
     be served by the institution by expanding courses and 
     institutional resources.
       ``(14) Other activities proposed in the application 
     submitted pursuant to section 504 that--
       ``(A) contribute to carrying out the purposes of this 
     title; and
       ``(B) are approved by the Secretary as part of the review 
     and acceptance of such application.
       ``(c) Endowment Fund Limitations.--
       ``(1) Portion of grant.--A Hispanic-serving institution may 
     not use more than 20 percent of the grant funds provided 
     under this title for any fiscal year for establishing or 
     improving an endowment fund.
       ``(2) Matching required.--A Hispanic-serving institution 
     that uses any portion of the grant funds provided under this 
     title for any fiscal year for establishing or improving an 
     endowment fund shall provide from non-Federal funds an amount 
     equal to or greater than the portion.
       ``(3) Comparability.--The provisions of part C of title III 
     regarding the establishment or increase of an endowment fund, 
     that the Secretary determines are not inconsistent with this 
     subsection, shall apply to funds used under paragraph (1).

     ``SEC. 504. DURATION OF GRANT.

       ``(a) Award Period.--
       ``(1) In general.--The Secretary may award a grant to a 
     Hispanic-serving institution under this title for 5 years.
       ``(2) Waitout period.--A Hispanic-serving institution shall 
     not be eligible to secure a subsequent 5-year grant award 
     under this title until 2 years have elapsed since the 
     expiration of the institution's most recent 5-year grant 
     award under this title, except that for the purpose of this 
     subsection a grant under section 514(a) shall not be 
     considered a grant under this title.
       ``(b) Planning Grants.--Notwithstanding subsection (a), the 
     Secretary may award a grant to a Hispanic-serving institution 
     under this title for a period of 1 year for the purpose of 
     preparation of plans and applications for a grant under this 
     title.

     ``SEC. 505. SPECIAL RULE.

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

[[Page H9028]]

                      ``PART B--GENERAL PROVISIONS

     ``SEC. 511. ELIGIBILITY; APPLICATIONS.

       ``(a) Institutional Eligibility.--Each Hispanic-serving 
     institution desiring to receive assistance under this title 
     shall submit to the Secretary such enrollment data as may be 
     necessary to demonstrate that the institution is a Hispanic-
     serving institution as defined in section 502, along with 
     such other data and information as the Secretary may by 
     regulation require.
       ``(b) Applications.--
       ``(1) Applications required.--Any institution which is 
     eligible for assistance under this title shall submit to the 
     Secretary an application for assistance at such time, in such 
     form, and containing such information, as may be necessary to 
     enable the Secretary to evaluate the institution's need for 
     assistance. Subject to the availability of appropriations to 
     carry out this title, the Secretary may approve an 
     application for a grant under this title only if the 
     Secretary determines that--
       ``(A) the application meets the requirements of subsection 
     (b); and
       ``(B) the institution is eligible for assistance in 
     accordance with the provisions of this title under which the 
     assistance is sought.
       ``(2) Preliminary applications.--In carrying out paragraph 
     (1), the Secretary may develop a preliminary application for 
     use by Hispanic-serving institutions applying under this 
     title prior to the submission of the principal application.
       ``(c) Contents.--A Hispanic-serving institution, in the 
     institution's application for a grant, shall--
       ``(1) set forth, or describe how the institution will 
     develop, a comprehensive development plan to strengthen the 
     institution's academic quality and institutional management, 
     and otherwise provide for institutional self-sufficiency and 
     growth (including measurable objectives for the institution 
     and the Secretary to use in monitoring the effectiveness of 
     activities under this title);
       ``(2) include a 5-year plan for improving the assistance 
     provided by the Hispanic-serving institution to Hispanic 
     students and other low-income individuals;
       ``(3) set forth policies and procedures to ensure that 
     Federal funds made available under this title for any fiscal 
     year will be used to supplement and, to the extent practical, 
     increase the funds that would otherwise be made available for 
     the purposes of section 501(b), and in no case supplant those 
     funds;
       ``(4) set forth policies and procedures for evaluating the 
     effectiveness in accomplishing the purpose of the activities 
     for which a grant is sought under this title;
       ``(5) provide for such fiscal control and fund accounting 
     procedures as may be necessary to ensure proper disbursement 
     of and accounting for funds made available to the institution 
     under this title;
       ``(6) provide that the institution will comply with the 
     limitations set forth in section 516;
       ``(7) describe in a comprehensive manner any proposed 
     project for which funds are sought under the application and 
     include--
       ``(A) a description of the various components of the 
     proposed project, including the estimated time required to 
     complete each such component;
       ``(B) in the case of any development project that consists 
     of several components (as described by the institution 
     pursuant to subparagraph (A)), a statement identifying those 
     components which, if separately funded, would be sound 
     investments of Federal funds and those components which would 
     be sound investments of Federal funds only if funded under 
     this title in conjunction with other parts of the development 
     project (as specified by the institution);
       ``(C) an evaluation by the institution of the priority 
     given any proposed project for which funds are sought in 
     relation to any other projects for which funds are sought by 
     the institution under this title, and a similar evaluation 
     regarding priorities among the components of any single 
     proposed project (as described by the institution pursuant to 
     subparagraph (A));
       ``(D) a detailed budget showing the manner in which funds 
     for any proposed project would be spent by the institution; 
     and
       ``(E) a detailed description of any activity which involves 
     the expenditure of more than $25,000, as identified in the 
     budget referred to in subparagraph (D);
       ``(8) provide for making reports, in such form and 
     containing such information, as the Secretary may require to 
     carry out the Secretary's functions under this title, 
     including not less than 1 report annually setting forth the 
     institution's progress toward achieving the objectives for 
     which the funds were awarded and for keeping such records and 
     affording such access to such records, as the Secretary may 
     find necessary to assure the correctness and verification of 
     such reports; and
       ``(9) include such other information as the Secretary may 
     prescribe.
       ``(d) Priority.--With respect to applications for 
     assistance under this section, the Secretary shall give 
     priority to an application that contains satisfactory 
     evidence that the Hispanic-serving institution has entered 
     into or will enter into a collaborative arrangement with at 
     least one local educational agency or community-based 
     organization to provide such agency or organization with 
     assistance (from funds other than funds provided under this 
     title) in reducing dropout rates for Hispanic students, 
     improving rates of academic achievement for Hispanic 
     students, and increasing the rates at which Hispanic 
     secondary school graduates enroll in higher education.
       ``(e) Eligibility Data.--The Secretary shall use the most 
     recent and relevant data concerning the number and percentage 
     of students receiving need-based assistance under title IV in 
     making eligibility determinations and shall advance the base-
     year for the determinations forward following each annual 
     grant cycle.

     ``SEC. 512. WAIVER AUTHORITY AND REPORTING REQUIREMENT.

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

     ``SEC. 513. APPLICATION REVIEW PROCESS.

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

     ``SEC. 514. COOPERATIVE ARRANGEMENTS.

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

     ``SEC. 515. ASSISTANCE TO INSTITUTIONS UNDER OTHER PROGRAMS.

       ``(a) Assistance Eligibility.--Each Hispanic-serving 
     institution that the Secretary determines to be an 
     institution eligible under this title may be eligible for 
     waivers in accordance with subsection (b).

[[Page H9029]]

       ``(b) Waiver Applicability.--
       ``(1) In general.--Subject to, and in accordance with, 
     regulations promulgated for the purpose of this section, in 
     the case of any application by a Hispanic-serving institution 
     referred to in subsection (a) for assistance under any 
     programs specified in paragraph (2), the Secretary is 
     authorized, if such application is otherwise approvable, to 
     waive any requirement for a non-Federal share of the cost of 
     the program or project, or, to the extent not inconsistent 
     with other law, to give, or require to be given, priority 
     consideration of the application in relation to applications 
     from other institutions.
       ``(2) Programs.--The provisions of this section shall apply 
     to any program authorized by title IV or section 604.
       ``(c) Limitation.--The Secretary shall not waive, under 
     subsection (b), the non-Federal share requirement for any 
     program for applications which, if approved, would require 
     the expenditure of more than 10 percent of the appropriations 
     for the program for any fiscal year.

     ``SEC. 516. LIMITATIONS.

       ``The funds appropriated under section 518 may not be 
     used--
       ``(1) for a school or department of divinity or any 
     religious worship or sectarian activity;
       ``(2) for an activity that is inconsistent with a State 
     plan for desegregation of higher education applicable to a 
     Hispanic-serving institution;
       ``(3) for an activity that is inconsistent with a State 
     plan of higher education applicable to a Hispanic-serving 
     institution; or
       ``(4) for purposes other than the purposes set forth in the 
     approved application under which the funds were made 
     available to a Hispanic-serving institution.

     ``SEC. 517. PENALTIES.

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

     ``SEC. 518. AUTHORIZATIONS OF APPROPRIATIONS.

       ``(a) Authorizations.--There are authorized to be 
     appropriated to carry out this title $62,500,000 for fiscal 
     year 1999 and such sums as may be necessary for each of the 4 
     succeeding fiscal years.
       ``(b) Use of Multiple Year Awards.--In the event of a 
     multiple year award to any Hispanic-serving institution under 
     this title, the Secretary shall make funds available for such 
     award from funds appropriated for this title for the fiscal 
     year in which such funds are to be used by the 
     institution.''.

               TITLE VI--INTERNATIONAL EDUCATION PROGRAMS

     SEC. 601. INTERNATIONAL AND FOREIGN LANGUAGE STUDIES.

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

          ``PART A--INTERNATIONAL AND FOREIGN LANGUAGE STUDIES

     ``SEC. 601. FINDINGS AND PURPOSES.

       ``(a) Findings.--Congress finds as follows:
       ``(1) The security, stability, and economic vitality of the 
     United States in a complex global era depend upon American 
     experts in and citizens knowledgeable about world regions, 
     foreign languages and international affairs, as well as upon 
     a strong research base in these areas.
       ``(2) Advances in communications technology and the growth 
     of regional and global problems make knowledge of other 
     countries and the ability to communicate in other languages 
     more essential to the promotion of mutual understanding and 
     cooperation among nations and their peoples.
       ``(3) Dramatic post-Cold War changes in the world's 
     geopolitical and economic landscapes are creating needs for 
     American expertise and knowledge about a greater diversity of 
     less commonly taught foreign languages and nations of the 
     world.
       ``(4) Systematic efforts are necessary to enhance the 
     capacity of institutions of higher education in the United 
     States for--
       ``(A) producing graduates with international and foreign 
     language expertise and knowledge; and
       ``(B) research regarding such expertise and knowledge.
       ``(5) Cooperative efforts among the Federal Government, 
     institutions of higher education, and the private sector are 
     necessary to promote the generation and dissemination of 
     information about world regions, foreign languages, and 
     international affairs throughout education, government, 
     business, civic, and nonprofit sectors in the United States.
       ``(b) Purposes.--The purposes of this part are--
       ``(1)(A) to support centers, programs and fellowships in 
     institutions of higher education in the United States for 
     producing increased numbers of trained personnel and research 
     in foreign languages, area and other international studies;
       ``(B) to develop a pool of international experts to meet 
     national needs;
       ``(C) to develop and validate specialized materials and 
     techniques for foreign language acquisition and fluency, 
     emphasizing (but not limited to) the less commonly taught 
     languages;
       ``(D) to promote access to research and training overseas; 
     and
       ``(E) to advance the internationalization of a variety of 
     disciplines throughout undergraduate and graduate education;
       ``(2) to support cooperative efforts promoting access to 
     and the dissemination of international and foreign language 
     knowledge, teaching materials, and research, throughout 
     education, government, business, civic and nonprofit sectors 
     in the United States, through the use of advanced 
     technologies; and
       ``(3) to coordinate the programs of the Federal Government 
     in the areas of foreign language, area and other 
     international studies, including professional international 
     affairs education and research.

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

       ``(a) National Language and Area Centers and Programs 
     Authorized.--
       ``(1) Centers and programs.--
       ``(A) In general.--The Secretary is authorized--
       ``(i) to make grants to institutions of higher education, 
     or combinations thereof, for the purpose of establishing, 
     strengthening, and operating comprehensive foreign language 
     and area or international studies centers and programs; and
       ``(ii) to make grants to such institutions or combinations 
     for the purpose of establishing, strengthening, and operating 
     a diverse network of undergraduate foreign language and area 
     or international studies centers and programs.
       ``(B) National resources.--The centers and programs 
     referred to in paragraph (1) shall be national resources 
     for--
       ``(i) teaching of any modern foreign language;
       ``(ii) instruction in fields needed to provide full 
     understanding of areas, regions, or countries in which such 
     language is commonly used;
       ``(iii) research and training in international studies, and 
     the international and foreign language aspects of 
     professional and other fields of study; and
       ``(iv) instruction and research on issues in world affairs 
     that concern 1 or more countries.
       ``(2) Authorized activities.--Any such grant may be used to 
     pay all or part of the cost of establishing or operating a 
     center or program, including the cost of--
       ``(A) teaching and research materials;
       ``(B) curriculum planning and development;
       ``(C) establishing and maintaining linkages with overseas 
     institutions of higher education and other organizations that 
     may contribute to the teaching and research of the center or 
     program;
       ``(D) bringing visiting scholars and faculty to the center 
     to teach or to conduct research;
       ``(E) professional development of the center's faculty and 
     staff;
       ``(F) projects conducted in cooperation with other centers 
     addressing themes of world regional, cross-regional, 
     international, or global importance;
       ``(G) summer institutes in the United States or abroad 
     designed to provide language and area training in the 
     center's field or topic; and
       ``(H) support for faculty, staff, and student travel in 
     foreign areas, regions, or countries, and for the development 
     and support of educational programs abroad for students.
       ``(3) Grants to maintain library collections.--The 
     Secretary may make grants to centers described in paragraph 
     (1) having important library collections, as determined by 
     the Secretary, for the maintenance of such collections.
       ``(4) Outreach grants and summer institutes.--The Secretary 
     may make additional grants to centers described in paragraph 
     (1) for any 1 or more of the following purposes:
       ``(A) Programs of linkage or outreach between foreign 
     language, area studies, or other international fields, and 
     professional schools and colleges.
       ``(B) Programs of linkage or outreach with 2-year and 4-
     year colleges and universities.
       ``(C) Programs of linkage or outreach with departments or 
     agencies of Federal and State governments.
       ``(D) Programs of linkage or outreach with the news media, 
     business, professional, or trade associations.
       ``(E) Summer institutes in foreign area, foreign language, 
     and other international fields designed to carry out the 
     programs of linkage and outreach described in subparagraphs 
     (A), (B), (C), and (D).
       ``(b) Graduate Fellowships for Foreign Language and Area or 
     International Studies.--
       ``(1) In general.--The Secretary is authorized to make 
     grants to institutions of higher education or combinations of 
     such institutions for the purpose of paying stipends to 
     individuals undergoing advanced training in any center or 
     program approved by the Secretary.
       ``(2) Eligible students.--Students receiving stipends 
     described in paragraph (1) shall be individuals who are 
     engaged in an instructional program with stated performance 
     goals for functional foreign language use or in a program 
     developing such performance goals, in combination with area 
     studies, international studies, or the international aspects 
     of a professional studies program, including predissertation 
     level studies, preparation for dissertation research, 
     dissertation research abroad, and dissertation writing.
       ``(c) Special Rule With Respect to Travel.--No funds may be 
     expended under this part for undergraduate travel except in 
     accordance with rules prescribed by the Secretary setting 
     forth policies and procedures to assure that Federal funds 
     made available for such travel are expended as part of a 
     formal program of supervised study.
       ``(d) Allowances.--Stipends awarded to graduate level 
     recipients may include allowances for dependents and for 
     travel for research and study in the United States and 
     abroad.

     ``SEC. 603. LANGUAGE RESOURCE CENTERS.

       ``(a) Language Resource Centers Authorized.--The Secretary 
     is authorized to make grants to and enter into contracts with 
     institutions of higher education, or combinations of such 
     institutions, for the purpose of establishing, strengthening, 
     and operating a small number of national language resource 
     and training

[[Page H9030]]

     centers, which shall serve as resources to improve the 
     capacity to teach and learn foreign languages effectively.
       ``(b) Authorized Activities.--The activities carried out by 
     the centers described in subsection (a)--
       ``(1) shall include effective dissemination efforts, 
     whenever appropriate; and
       ``(2) may include--
       ``(A) the conduct and dissemination of research on new and 
     improved teaching methods, including the use of advanced 
     educational technology;
       ``(B) the development and dissemination of new teaching 
     materials reflecting the use of such research in effective 
     teaching strategies;
       ``(C) the development, application, and dissemination of 
     performance testing appropriate to an educational setting for 
     use as a standard and comparable measurement of skill levels 
     in all languages;
       ``(D) the training of teachers in the administration and 
     interpretation of performance tests, the use of effective 
     teaching strategies, and the use of new technologies;
       ``(E) a significant focus on the teaching and learning 
     needs of the less commonly taught languages, including an 
     assessment of the strategic needs of the United States, the 
     determination of ways to meet those needs nationally, and the 
     publication and dissemination of instructional materials in 
     the less commonly taught languages;
       ``(F) the development and dissemination of materials 
     designed to serve as a resource for foreign language teachers 
     at the elementary school and secondary school levels; and
       ``(G) the operation of intensive summer language institutes 
     to train advanced foreign language students, to provide 
     professional development, and to improve language instruction 
     through preservice and inservice language training for 
     teachers.
       ``(c) Conditions for Grants.--Grants under this section 
     shall be made on such conditions as the Secretary determines 
     to be necessary to carry out the provisions of this 
     section.''.

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

       ``(a) Incentives for the Creation of New Programs and the 
     Strengthening of Existing Programs in Undergraduate 
     International Studies and Foreign Language Programs.--
       ``(1) Authority.--The Secretary is authorized to make 
     grants to institutions of higher education, combinations of 
     such institutions, or partnerships between nonprofit 
     educational organizations and institutions of higher 
     education, to assist such institutions, combinations or 
     partnerships in planning, developing, and carrying out 
     programs to improve undergraduate instruction in 
     international studies and foreign languages. Such grants 
     shall be awarded to institutions, combinations or 
     partnerships seeking to create new programs or to strengthen 
     existing programs in foreign languages, area studies, and 
     other international fields.
       ``(2) Use of funds.--Grants made under this section may be 
     used for Federal share of the cost of projects and activities 
     which are an integral part of such a program, such as--
       ``(A) planning for the development and expansion of 
     undergraduate programs in international studies and foreign 
     languages;
       ``(B) teaching, research, curriculum development, faculty 
     training in the United States or abroad, and other related 
     activities, including--
       ``(i) the expansion of library and teaching resources; and
       ``(ii) preservice and inservice teacher training;
       ``(C) expansion of opportunities for learning foreign 
     languages, including less commonly taught languages;
       ``(D) programs under which foreign teachers and scholars 
     may visit institutions as visiting faculty;
       ``(E) programs designed to develop or enhance linkages 
     between 2-year and 4-year institutions of higher education, 
     or baccalaureate and post-baccalaureate programs or 
     institutions;
       ``(F) the development of undergraduate educational 
     programs--
       ``(i) in locations abroad where such opportunities are not 
     otherwise available or that serve students for whom such 
     opportunities are not otherwise available; and
       ``(ii) that provide courses that are closely related to on-
     campus foreign language and international curricula;
       ``(G) the integration of new and continuing education 
     abroad opportunities for undergraduate students into 
     curricula of specific degree programs;
       ``(H) the development of model programs to enrich or 
     enhance the effectiveness of educational programs abroad, 
     including predeparture and postreturn programs, and the 
     integration of educational programs abroad into the 
     curriculum of the home institution;
       ``(I) the development of programs designed to integrate 
     professional and technical education with foreign languages, 
     area studies, and other international fields;
       ``(J) the establishment of linkages overseas with 
     institutions of higher education and organizations that 
     contribute to the educational programs assisted under this 
     subsection;
       ``(K) the conduct of summer institutes in foreign area, 
     foreign language, and other international fields to provide 
     faculty and curriculum development, including the integration 
     of professional and technical education with foreign area and 
     other international studies, and to provide foreign area and 
     other international knowledge or skills to government 
     personnel or private sector professionals in international 
     activities;
       ``(L) the development of partnerships between--
       ``(i) institutions of higher education, and
       ``(ii) the private sector, government, or elementary and 
     secondary education institutions,
     in order to enhance international knowledge and skills; and
       ``(M) the use of innovative technology to increase access 
     to international education programs.
       ``(3) Non-federal share.--The non-Federal share of the cost 
     of the programs assisted under this subsection--
       ``(A) may be provided in cash from the private sector 
     corporations or foundations in an amount equal to one-third 
     of the total cost of the programs assisted under this 
     section; or
       ``(B) may be provided as an in-cash or in-kind contribution 
     from institutional and noninstitutional funds, including 
     State and private sector corporation or foundation 
     contributions, equal to one-half of the total cost of the 
     programs assisted under this section.
       ``(4) Special rule.--The Secretary may waive or reduce the 
     required non-Federal share for institutions that--
       ``(A) are eligible to receive assistance under part A or B 
     of title III or under title V; and
       ``(B) have submitted a grant application under this 
     section.
       ``(5) Priority.--In awarding grants under this section, the 
     Secretary shall give priority to applications from 
     institutions of higher education, combinations or 
     partnerships that require entering students to have 
     successfully completed at least 2 years of secondary school 
     foreign language instruction or that require each graduating 
     student to earn 2 years of postsecondary credit in a foreign 
     language (or have demonstrated equivalent competence in the 
     foreign language) or, in the case of a 2-year degree granting 
     institution, offer 2 years of postsecondary credit in a 
     foreign language.
       ``(6) Grant conditions.--Grants under this subsection shall 
     be made on such conditions as the Secretary determines to be 
     necessary to carry out this subsection.
       ``(7) Application.--Each application for assistance under 
     this subsection shall include--
       ``(A) evidence that the applicant has conducted extensive 
     planning prior to submitting the application;
       ``(B) an assurance that the faculty and administrators of 
     all relevant departments and programs served by the applicant 
     are involved in ongoing collaboration with regard to 
     achieving the stated objectives of the application;
       ``(C) an assurance that students at the applicant 
     institutions, as appropriate, will have equal access to, and 
     derive benefits from, the program assisted under this 
     subsection; and
       ``(D) an assurance that each institution, combination or 
     partnership will use the Federal assistance provided under 
     this subsection to supplement and not supplant non-Federal 
     funds the institution expends for programs to improve 
     undergraduate instruction in international studies and 
     foreign languages.
       ``(8) Evaluation.--The Secretary may establish requirements 
     for program evaluations and require grant recipients to 
     submit annual reports that evaluate the progress and 
     performance of students participating in programs assisted 
     under this subsection.
       ``(b) Programs of National Significance.--The Secretary may 
     also award grants to public and private nonprofit agencies 
     and organizations, including professional and scholarly 
     associations, whenever the Secretary determines such grants 
     will make an especially significant contribution to improving 
     undergraduate international studies and foreign language 
     programs.
       ``(c) Funding Support.--The Secretary may use not more than 
     10 percent of the total amount appropriated for this part for 
     carrying out the purposes of this section.

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

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

[[Page H9031]]

     ``SEC. 606. TECHNOLOGICAL INNOVATION AND COOPERATION FOR 
                   FOREIGN INFORMATION ACCESS.

       ``(a) Authority.--The Secretary is authorized to make 
     grants to institutions of higher education, public or 
     nonprofit private libraries, or consortia of such 
     institutions or libraries, to develop innovative techniques 
     or programs using new electronic technologies to collect, 
     organize, preserve and widely disseminate information on 
     world regions and countries other than the United States that 
     address our Nation's teaching and research needs in 
     international education and foreign languages.
       ``(b) Authorized Activities.--Grants under this section may 
     be used--
       ``(1) to facilitate access to or preserve foreign 
     information resources in print or electronic forms;
       ``(2) to develop new means of immediate, full-text document 
     delivery for information and scholarship from abroad;
       ``(3) to develop new means of shared electronic access to 
     international data;
       ``(4) to support collaborative projects of indexing, 
     cataloging, and other means of bibliographic access for 
     scholars to important research materials published or 
     distributed outside the United States;
       ``(5) to develop methods for the wide dissemination of 
     resources written in non-Roman language alphabets;
       ``(6) to assist teachers of less commonly taught languages 
     in acquiring, via electronic and other means, materials 
     suitable for classroom use; and
       ``(7) to promote collaborative technology based projects in 
     foreign languages, area studies, and international studies 
     among grant recipients under this title.
       ``(c) Application.--Each institution or consortium desiring 
     a grant under this section shall submit an application to the 
     Secretary at such time, in such manner, and accompanied by 
     such information and assurances as the Secretary may 
     reasonably require.
       ``(d) Match Required.--The Federal share of the total cost 
     of carrying out a program supported by a grant under this 
     section shall not be more than 66\2/3\ percent. The non-
     Federal share of such cost may be provided either in-kind or 
     in cash, and may include contributions from private sector 
     corporations or foundations.''.

     ``SEC. 607. SELECTION OF CERTAIN GRANT RECIPIENTS.

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

     ``SEC. 608. EQUITABLE DISTRIBUTION OF CERTAIN FUNDS.

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

     ``SEC. 609. AMERICAN OVERSEAS RESEARCH CENTERS.

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

     ``SEC. 610. AUTHORIZATION OF APPROPRIATIONS.

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

     SEC. 602. BUSINESS AND INTERNATIONAL EDUCATION PROGRAMS.

       (a) Amendment to Heading.--The heading for section 611 (20 
     U.S.C. 1130) is amended to read as follows:

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

       (b) Centers.--Section 612 (20 U.S.C. 1130-1) is amended--
       (1) in subsection (c)--
       (A) in paragraph (1)--
       (i) in subparagraph (B), by striking ``advanced''; and
       (ii) in subparagraph (C), by striking ``evening or 
     summer''; and
       (B) in paragraph (2)(C), by inserting ``foreign language 
     studies,'' after ``area studies,''; and
       (2) in subsection (d)(2)(G), by inserting ``, such as a 
     representative of a community college in the region served by 
     the center'' before the period.
       (c) Authorization of Appropriations.--Section 614 (20 
     U.S.C. 1130b) is amended--
       (1) in subsection (a), by striking ``1993'' and inserting 
     ``1999''; and
       (2) in subsection (b), by striking ``1993'' and inserting 
     ``1999''.

     SEC. 603. INSTITUTE FOR INTERNATIONAL PUBLIC POLICY.

       (a) Minority Foreign Service Professional Development 
     Program.--Section 621(e) (20 U.S.C. 1131(e)) is amended by 
     striking ``one-fourth'' and inserting ``one-half''.
       (b) Institutional Development.--Part C of title VI (20 
     U.S.C. 1131 et seq.) is amended--
       (1) by redesignating sections 622 through 627 (20 U.S.C. 
     1131a through 1131f) as sections 623 through 628, 
     respectively; and
       (2) by inserting after section 621 (20 U.S.C. 1131) the 
     following:

     ``SEC. 622. INSTITUTIONAL DEVELOPMENT.

       ``(a) In General.--The Institute shall award grants, from 
     amounts available to the Institute for each fiscal year, to 
     historically Black colleges and universities, Hispanic-
     serving institutions, Tribally Controlled Colleges or 
     Universities, and minority institutions, to enable such 
     colleges, universities, and institutions to strengthen 
     international affairs programs.
       ``(b) Application.--No grant may be made by the Institute 
     unless an application is made by the college, university, or 
     institution at such time, in such manner, and accompanied by 
     such information as the Institute may require.
       ``(c) Definitions.--In this section--
       ``(1) the term `historically Black college and university' 
     has the meaning given the term in section 322;
       ``(2) the term `Hispanic-serving institution' has the 
     meaning given the term in section 502;
       ``(3) the term `Tribally Controlled College or University' 
     has the meaning given the term in section 2 of the Tribally 
     Controlled College or University Assistance Act of 1978 (25 
     U.S.C. 1801); and
       ``(4) the term `minority institution' has the meaning given 
     the term in section 365.''.
       (c) Study Abroad Program.--Section 623 (as redesignated by 
     subsection(b)(1)) (20 U.S.C. 1131a)--
       (1) in the section heading, by striking ``JUNIOR YEAR'' and 
     inserting ``STUDY'';
       (2) in subsection (b)(2)--
       (A) by inserting ``, or completing the third year of study 
     in the case of a summer abroad program,'' after ``study''; 
     and
       (B) by striking ``junior year'' and inserting ``study''; 
     and
       (3) in subsection (c)--
       (A) in the matter preceding paragraph (1), by striking 
     ``junior year'' and inserting ``study'';
       (B) in paragraph (1), by striking ``junior year'' and 
     inserting ``study''; and
       (C) in paragraph (2)--
       (i) by striking ``one-half'' and inserting ``one-third''; 
     and
       (ii) by striking ``junior year'' and inserting ``study''.
       (d) Internships.--Section 625 (as redesignated by 
     subsection (b)(1)) (20 U.S.C. 1132c)--
       (1) by striking ``The Institute'' and inserting ``(a) In 
     General.--The Institute''; and
       (2) by adding at the end the following:
       ``(b) Postbaccalaureate Internships.--The Institute shall 
     enter into agreements with institutions of higher education 
     described in the first sentence of subsection (a) to conduct 
     internships for students who have completed study for a 
     baccalaureate degree. The internship program authorized by 
     this subsection shall--
       ``(1) assist the students to prepare for a master's degree 
     program;
       ``(2) be carried out with the assistance of the Woodrow 
     Wilson International Center for Scholars;
       ``(3) contain work experience for the students designed to 
     contribute to the students' preparation for a master's degree 
     program; and
       ``(4) be assisted by the Interagency Committee on Minority 
     Careers in International Affairs established under subsection 
     (c).
       ``(c) Interagency Committee on Minority Careers in 
     International Affairs.--
       ``(1) Establishment.--There is established in the executive 
     branch of the Federal Government an Interagency Committee on 
     Minority Careers in International Affairs composed of not 
     less than 7 members, including--

[[Page H9032]]

       ``(A) the Under Secretary for Farm and Foreign Agricultural 
     Services of the Department of Agriculture, or the Under 
     Secretary's designee;
       ``(B) the Assistant Secretary and Director General, of the 
     United States and Foreign Commercial Service of the 
     Department of Commerce, or the Assistant Secretary and 
     Director General's designee;
       ``(C) the Under Secretary of Defense for Personnel and 
     Readiness of the Department of Defense, or the Under 
     Secretary's designee;
       ``(D) the Assistant Secretary for Postsecondary Education 
     in the Department of Education, or the Assistant Secretary's 
     designee;
       ``(E) the Director General of the Foreign Service of the 
     Department of State, or the Director General's designee;
       ``(F) the General Counsel of the Agency for International 
     Development, or the General Counsel's designee; and
       ``(G) the Associate Director for Educational and Cultural 
     Affairs of the United States Information Agency, or the 
     Associate Director's designee.
       ``(2) Functions.--The Interagency Committee established by 
     this section shall--
       ``(A) on an annual basis inform the Secretary and the 
     Institute regarding ways to advise students participating in 
     the internship program assisted under this section with 
     respect to goals for careers in international affairs;
       ``(B) locate for students potential internship 
     opportunities in the Federal Government related to 
     international affairs; and
       ``(C) promote policies in each department and agency 
     participating in the Committee that are designed to carry out 
     the objectives of this part.''.
       (f) Conforming Amendment.--Section 627 (as redesignated by 
     subsection (b)(1)) (20 U.S.C. 1131e) is amended by striking 
     ``625'' and inserting ``626''.
       (g) Authorization of Appropriations.--Section 628 (as 
     redesignated by subsection (b)(1)) (20 U.S.C. 1131f), by 
     striking ``1993'' and inserting ``1999''.

     SEC. 604. GENERAL PROVISIONS.

       (a) Definitions.--Section 631(a) (20 U.S.C. 1132(a)) is 
     amended--
       (1) by striking ``and'' at the end of paragraph (7);
       (2) by striking the period at the end of paragraph (8) and 
     inserting ``; and''; and
       (3) by inserting after paragraph (8) the following:
       ``(9) the term `educational programs abroad' means programs 
     of study, internships, or service learning outside the United 
     States which are part of a foreign language or other 
     international curriculum at the undergraduate or graduate 
     education levels.''.
       (b) Repeal.--Section 632 (20 U.S.C. 1132-1) is repealed.

       TITLE VII--GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS

     SEC. 701. REVISION OF TITLE VII.

       Title VII (20 U.S.C. 1132a et seq.) is amended to read as 
     follows:

      ``TITLE VII--GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS

     ``SEC. 700. PURPOSE.

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

                 ``PART A--GRADUATE EDUCATION PROGRAMS

            ``Subpart 1--Jacob K. Javits Fellowship Program

     ``SEC. 701. AWARD OF JACOB K. JAVITS FELLOWSHIPS.

       ``(a) Authority and Timing of Awards.--The Secretary is 
     authorized to award fellowships in accordance with the 
     provisions of this subpart for graduate study in the arts, 
     humanities, and social sciences by students of superior 
     ability selected on the basis of demonstrated achievement, 
     financial need, and exceptional promise. The fellowships 
     shall be awarded to students who are eligible to receive any 
     grant, loan, or work assistance pursuant to section 484 and 
     intend to pursue a doctoral degree, except that fellowships 
     may be granted to students pursuing a master's degree in 
     those fields in which the master's degree is the terminal 
     highest degree awarded in the area of study. All funds 
     appropriated in a fiscal year shall be obligated and expended 
     to the students for fellowships for use in the academic year 
     beginning after July 1 of the fiscal year following the 
     fiscal year for which the funds were appropriated. The 
     fellowships shall be awarded for only 1 academic year of 
     study and shall be renewable for a period not to exceed 4 
     years of study.
       ``(b) Designation of Fellows.--Students receiving awards 
     under this subpart shall be known as `Jacob K. Javits 
     Fellows'.
       ``(c) Interruptions of Study.--The institution of higher 
     education may allow a fellowship recipient to interrupt 
     periods of study for a period not to exceed 12 months for the 
     purpose of work, travel, or independent study away from the 
     campus, if such independent study is supportive of the 
     fellowship recipient's academic program and shall continue 
     payments for those 12-month periods during which the student 
     is pursuing travel or independent study supportive of the 
     recipient's academic program.
       ``(d) Process and Timing of Competition.--The Secretary 
     shall make applications for fellowships under this part 
     available not later than October 1 of the academic year 
     preceding the academic year for which fellowships will be 
     awarded, and shall announce the recipients of fellowships 
     under this section not later than March 1 of the academic 
     year preceding the academic year for which the fellowships 
     are awarded.
       ``(e) Authority To Contract.--The Secretary is authorized 
     to enter into a contract with a nongovernmental agency to 
     administer the program assisted under this part if the 
     Secretary determines that entering into the contract is an 
     efficient means of carrying out the program.

     ``SEC. 702. ALLOCATION OF FELLOWSHIPS.

       ``(a) Fellowship Board.--
       ``(1) Appointment.--The Secretary shall appoint a Jacob K. 
     Javits Fellows Program Fellowship Board (hereinafter in this 
     subpart referred to as the `Board') consisting of 9 
     individuals representative of both public and private 
     institutions of higher education who are especially qualified 
     to serve on the Board. In making appointments, the Secretary 
     shall give due consideration to the appointment of 
     individuals who are highly respected in the academic 
     community. The Secretary shall assure that individuals 
     appointed to the Board are broadly representative of a range 
     of disciplines in graduate education in arts, humanities, and 
     social sciences.
       ``(2) Duties.--The Board shall--
       ``(A) establish general policies for the program 
     established by this subpart and oversee the program's 
     operation;
       ``(B) establish general criteria for the award of 
     fellowships in academic fields identified by the Board, or, 
     in the event that the Secretary enters into a contract with a 
     nongovernmental entity to administer the program assisted 
     under this subpart, by such nongovernmental entity;
       ``(C) appoint panels of academic scholars with 
     distinguished backgrounds in the arts, humanities, and social 
     sciences for the purpose of selecting fellows, except that, 
     in the event that the Secretary enters into a contract with a 
     nongovernmental entity to administer the program, such panels 
     may be appointed by such nongovernmental entity; and
       ``(D) prepare and submit to the Congress at least once in 
     every 3-year period a report on any modifications in the 
     program that the Board determines are appropriate.
       ``(3) Consultations.--In carrying out its responsibilities, 
     the Board shall consult on a regular basis with 
     representatives of the National Science Foundation, the 
     National Endowment for the Humanities, the National Endowment 
     for the Arts, and representatives of institutions of higher 
     education and associations of such institutions, learned 
     societies, and professional organizations.
       ``(4) Term.--The term of office of each member of the Board 
     shall be 4 years, except that any member appointed to fill a 
     vacancy shall serve for the remainder of the term for which 
     the predecessor of the member was appointed. No member may 
     serve for a period in excess of 6 years.
       ``(5) Initial meeting; vacancy.--The Secretary shall call 
     the first meeting of the Board, at which the first order of 
     business shall be the election of a Chairperson and a Vice 
     Chairperson, who shall serve until 1 year after the date of 
     the appointment of the Chairperson and Vice Chairperson. 
     Thereafter each officer shall be elected for a term of 2 
     years. In case a vacancy occurs in either office, the Board 
     shall elect an individual from among the members of the Board 
     to fill such vacancy.
       ``(6) Quorum; additional meetings.--(A) A majority of the 
     members of the Board shall constitute a quorum.
       ``(B) The Board shall meet at least once a year or more 
     frequently, as may be necessary, to carry out the Board's 
     responsibilities.
       ``(7) Compensation.--Members of the Board, while serving on 
     the business of the Board, shall be entitled to receive 
     compensation at rates fixed by the Secretary, but not 
     exceeding the rate of basic pay payable for level IV of the 
     Executive Schedule, including travel time, and while so 
     serving away from their homes or regular places of business, 
     the members may be allowed travel expenses, including per 
     diem in lieu of subsistence, as authorized by section 5703 of 
     title 5, United States Code, for persons in Government 
     service employed intermittently.
       ``(b) Use of Selection Panels.--The recipients of 
     fellowships shall be selected in each designated field from 
     among all applicants nationwide in each field by 
     distinguished panels appointed by the Board to make such 
     selections under criteria established by the Board, except 
     that, in the event that the Secretary enters into a contract 
     with a nongovernmental entity to administer the program, such 
     panels may be appointed by such nongovernmental entity. The 
     number of recipients in each field in each year shall not 
     exceed the number of fellows allocated to that field for that 
     year by the Board.
       ``(c) Fellowship Portability.--Each recipient shall be 
     entitled to use the fellowship in a graduate program at any 
     accredited institution of higher education in which the 
     recipient may decide to enroll.

     ``SEC. 703. STIPENDS.

       ``(a) Award by Secretary.--The Secretary shall pay to 
     individuals awarded fellowships under this subpart such 
     stipends as the Secretary may establish, reflecting the 
     purpose of this program to encourage highly talented students 
     to undertake graduate study as described in this subpart. In 
     the case of an individual who receives such individual's 
     first stipend under this subpart in academic year 1999-2000 
     or any succeeding academic year, such stipend shall be set at 
     a level of support equal to that provided

[[Page H9033]]

     by the National Science Foundation graduate fellowships, 
     except such amount shall be adjusted as necessary so as not 
     to exceed the fellow's demonstrated level of need determined 
     in accordance with part F of title IV.
       ``(b) Institutional Payments.--
       ``(1) In general.--(A) The Secretary shall (in addition to 
     stipends paid to individuals under this subpart) pay to the 
     institution of higher education, for each individual awarded 
     a fellowship under this subpart at such institution, an 
     institutional allowance. Except as provided in subparagraph 
     (B), such allowance shall be, for 1999-2000 and succeeding 
     academic years, the same amount as the institutional payment 
     made for 1998-1999 under section 933(b) (as such section was 
     in effect on the day before the date of enactment of the 
     Higher Education Amendments of 1998) adjusted for 1999-2000 
     and annually thereafter in accordance with inflation as 
     determined by the Department of Labor's Consumer Price Index 
     for the previous calendar year.
       ``(B) The institutional allowance paid under subparagraph 
     (A) shall be reduced by the amount the institution charges 
     and collects from a fellowship recipient for tuition and 
     other expenses as part of the recipient's instructional 
     program.
       ``(2) Special rules.--(A) Beginning March 1, 1992, any 
     applicant for a fellowship under this subpart who has been 
     notified in writing by the Secretary that such applicant has 
     been selected to receive such a fellowship and is 
     subsequently notified that the fellowship award has been 
     withdrawn, shall receive such fellowship unless the Secretary 
     subsequently makes a determination that such applicant 
     submitted fraudulent information on the application.
       ``(B) Subject to the availability of appropriations, 
     amounts payable to an institution by the Secretary pursuant 
     to this subsection shall not be reduced for any purpose other 
     than the purposes specified under paragraph (1).

     ``SEC. 704. FELLOWSHIP CONDITIONS.

       ``(a) Requirements for Receipt.--An individual awarded a 
     fellowship under the provisions of this subpart shall 
     continue to receive payments provided in section 703 only 
     during such periods as the Secretary finds that such 
     individual is maintaining satisfactory proficiency in, and 
     devoting essentially full time to, study or research in the 
     field in which such fellowship was awarded, in an institution 
     of higher education, and is not engaging in gainful 
     employment other than part-time employment by such 
     institution in teaching, research, or similar activities, 
     approved by the Secretary.
       ``(b) Reports From Recipients.--The Secretary is authorized 
     to require reports containing such information in such form 
     and filed at such times as the Secretary determines necessary 
     from any person awarded a fellowship under the provisions of 
     this subpart. The reports shall be accompanied by a 
     certificate from an appropriate official at the institution 
     of higher education, library, archive, or other research 
     center approved by the Secretary, stating that such 
     individual is making satisfactory progress in, and is 
     devoting essentially full time to the program for which the 
     fellowship was awarded.

     ``SEC. 705. AUTHORIZATION OF APPROPRIATIONS.

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

       ``Subpart 2--Graduate Assistance in Areas of National Need

     ``SEC. 711. GRANTS TO ACADEMIC DEPARTMENTS AND PROGRAMS OF 
                   INSTITUTIONS.

       ``(a) Grant Authority.--
       ``(1) In general.--The Secretary shall make grants to 
     academic departments, programs and other academic units of 
     institutions of higher education that provide courses of 
     study leading to a graduate degree in order to enable such 
     institutions to provide assistance to graduate students in 
     accordance with this subpart.
       ``(2) Additional grants.--The Secretary may also make 
     grants to such departments, programs and other academic units 
     of institutions of higher education granting graduate degrees 
     which submit joint proposals involving nondegree granting 
     institutions which have formal arrangements for the support 
     of doctoral dissertation research with degree-granting 
     institutions. Nondegree granting institutions eligible for 
     awards as part of such joint proposals include any 
     organization which--
       ``(A) is described in section 501(c)(3) of the Internal 
     Revenue Code of 1986, and is exempt from tax under section 
     501(a) of such Code;
       ``(B) is organized and operated substantially to conduct 
     scientific and cultural research and graduate training 
     programs;
       ``(C) is not a private foundation;
       ``(D) has academic personnel for instruction and counseling 
     who meet the standards of the institution of higher education 
     in which the students are enrolled; and
       ``(E) has necessary research resources not otherwise 
     readily available in such institutions to such students.
       ``(b) Award and Duration of Grants.--
       ``(1) Awards.--The principal criterion for the award of 
     grants shall be the relative quality of the graduate programs 
     presented in competing applications. Consistent with an 
     allocation of awards based on quality of competing 
     applications, the Secretary shall, in awarding such grants, 
     promote an equitable geographic distribution among eligible 
     public and private institutions of higher education.
       ``(2) Duration and Amount.--
       ``(A) Duration.--The Secretary shall award a grant under 
     this subpart for a period of 3 years.
       ``(B) Amount.--The Secretary shall award a grant to an 
     academic department, program or unit of an institution of 
     higher education under this subpart for a fiscal year in an 
     amount that is not less than $100,000 and not greater than 
     $750,000.
       ``(3) Reallotment.--Whenever the Secretary determines that 
     an academic department, program or unit of an institution of 
     higher education is unable to use all of the amounts 
     available to the department, program or unit under this 
     subpart, the Secretary shall, on such dates during each 
     fiscal year as the Secretary may fix, reallot the amounts not 
     needed to academic departments, programs and units of 
     institutions which can use the grants authorized by this 
     subpart.
       ``(c) Preference To Continuing Grant Recipients.--
       ``(1) In general.--The Secretary shall make new grant 
     awards under this subpart only to the extent that each 
     previous grant recipient under this subpart has received 
     continued funding in accordance with subsection (b)(2)(A).
       ``(2) Ratable reduction.--To the extent that appropriations 
     under this subpart are insufficient to comply with paragraph 
     (1), available funds shall be distributed by ratably reducing 
     the amounts required to be awarded under subsection 
     (b)(2)(A).

     ``SEC. 712. INSTITUTIONAL ELIGIBILITY.

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

     ``SEC. 713. CRITERIA FOR APPLICATIONS.

       ``(a) Selection of Applications.--The Secretary shall make 
     grants to academic departments, programs and units of 
     institutions of higher education on the basis of applications 
     submitted in accordance with subsection (b). Applications 
     shall be ranked on program quality by review panels of 
     nationally recognized scholars and evaluated on the quality 
     and effectiveness of the academic program and the achievement 
     and promise of the students to be served. To the extent 
     possible (consistent with other provisions of this section), 
     the Secretary shall make awards that are consistent with 
     recommendations of the review panels.
       ``(b) Contents of Applications.--An academic department, 
     program or unit of an institution of higher education, in the 
     department, program or unit's application for a grant, 
     shall--
       ``(1) describe the current academic program of the 
     applicant for which the grant is sought;
       ``(2) provide assurances that the applicant will provide, 
     from other non-Federal sources, for the purposes of the 
     fellowship program under this subpart an amount equal to at 
     least 25 percent of the amount of the grant received under 
     this subpart, which contribution may be in cash or in kind, 
     fairly valued;
       ``(3) set forth policies and procedures to assure that, in 
     making fellowship awards under this subpart, the institution 
     will seek talented students from traditionally 
     underrepresented backgrounds, as determined by the Secretary;
       ``(4) describe the number, types, and amounts of the 
     fellowships that the applicant intends to offer with grant 
     funds provided under this part;
       ``(5) set forth policies and procedures to assure that, in 
     making fellowship awards under this subpart, the institution 
     will make awards to individuals who--
       ``(A) have financial need, as determined under part F of 
     title IV;
       ``(B) have excellent academic records in their previous 
     programs of study; and
       ``(C) plan to pursue the highest possible degree available 
     in their course of study;
       ``(6) set forth policies and procedures to ensure that 
     Federal funds made available under this subpart for any 
     fiscal year will be used to supplement and, to the extent 
     practical, increase the funds that would otherwise be made 
     available for the purpose of this subpart and in no case 
     to supplant those funds;
       ``(7) provide assurances that, in the event that funds made 
     available to the academic department, program or unit under 
     this subpart are insufficient to provide the assistance due a 
     student under the commitment entered into between the 
     academic department, program or unit and the student, the 
     academic department, program or unit will, from any funds 
     available to the department, program or unit, fulfill the 
     commitment to the student;
       ``(8) provide that the applicant will comply with the 
     limitations set forth in section 715;
       ``(9) provide assurances that the academic department will 
     provide at least 1 year of supervised training in instruction 
     for students; and
       ``(10) include such other information as the Secretary may 
     prescribe.

     ``SEC. 714. AWARDS TO GRADUATE STUDENTS.

       ``(a) Commitments to Graduate Students.--
       ``(1) In general.--An academic department, program or unit 
     of an institution of higher education shall make commitments 
     to graduate students who are eligible students under section 
     484 (including students pursuing a doctoral degree after 
     having completed a master's degree program at an institution 
     of higher education) at any point in their graduate study to 
     provide stipends for the length of time necessary for a 
     student to complete the course of graduate study, but in no 
     case longer than 5 years.

[[Page H9034]]

       ``(2) Special rule.--No such commitments shall be made to 
     students under this subpart unless the academic department, 
     program or unit has determined adequate funds are available 
     to fulfill the commitment from funds received or anticipated 
     under this subpart, or from institutional funds.
       ``(b) Amount of Stipends.--The Secretary shall make 
     payments to institutions of higher education for the purpose 
     of paying stipends to individuals who are awarded fellowships 
     under this subpart. The stipends the Secretary establishes 
     shall reflect the purpose of the program under this subpart 
     to encourage highly talented students to undertake graduate 
     study as described in this subpart. In the case of an 
     individual who receives such individual's first stipend under 
     this subpart in academic year 1999-2000 or any succeeding 
     academic year, such stipend shall be set at a level of 
     support equal to that provided by the National Science 
     Foundation graduate fellowships, except such amount shall be 
     adjusted as necessary so as not to exceed the fellow's 
     demonstrated level of need as determined under part F of 
     title IV.
       ``(c) Treatment of Institutional Payments.--An institution 
     of higher education that makes institutional payments for 
     tuition and fees on behalf of individuals supported by 
     fellowships under this subpart in amounts that exceed the 
     institutional payments made by the Secretary pursuant to 
     section 716(a) may count such excess toward the amounts the 
     institution is required to provide pursuant to section 
     714(b)(2).
       ``(d) Academic Progress Required.--Notwithstanding the 
     provisions of subsection (a), no student shall receive an 
     award--
       ``(1) except during periods in which such student is 
     maintaining satisfactory progress in, and devoting 
     essentially full time to, study or research in the field in 
     which such fellowship was awarded; or
       ``(2) if the student is engaging in gainful employment 
     other than part-time employment involved in teaching, 
     research, or similar activities determined by the institution 
     to be in support of the student's progress towards a degree.

     ``SEC. 715. ADDITIONAL ASSISTANCE FOR COST OF EDUCATION.

       ``(a) Institutional Payments.--
       ``(1) In general.--The Secretary shall (in addition to 
     stipends paid to individuals under this subpart) pay to the 
     institution of higher education, for each individual awarded 
     a fellowship under this subpart at such institution, an 
     institutional allowance. Except as provided in paragraph (2), 
     such allowance shall be, for 1999-2000 and succeeding 
     academic years, the same amount as the institutional payment 
     made for 1998-1999 adjusted annually thereafter in accordance 
     with inflation as determined by the Department of Labor's 
     Consumer Price Index for the previous calendar year.
       ``(2) Reduction.--The institutional allowance paid under 
     paragraph (1) shall be reduced by the amount the institution 
     charges and collects from a fellowship recipient for tuition 
     and other expenses as part of the recipient's instructional 
     program.
       ``(b) Use for Overhead Prohibited.--Funds made available 
     pursuant to this subpart may not be used for the general 
     operational overhead of the academic department or program.

     ``SEC. 716. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated $35,000,000 for 
     fiscal year 1999 and such sums as may be necessary for each 
     of the 4 succeeding fiscal years to carry out this subpart.

  ``Subpart 3--Thurgood Marshall Legal Educational Opportunity Program

     ``SEC. 721. 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 
     Thurgood Marshall 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.

                    ``Subpart 4--General Provisions

     ``SEC. 731. ADMINISTRATIVE PROVISIONS FOR SUBPARTS 1, 2, AND 
                   3.

       ``(a) Coordinated Administration.--In carrying out the 
     purpose described in section 700(1), the Secretary shall 
     provide for coordinated administration and regulation of 
     graduate programs assisted under subparts 1, 2, and 3 with 
     other Federal programs providing assistance for graduate 
     education in order to minimize duplication and improve 
     efficiency to ensure that the programs are carried out in a 
     manner most compatible with academic practices and with the 
     standard timetables for applications for, and notifications 
     of acceptance to, graduate programs.
       ``(b) Hiring Authority.--For purposes of carrying out 
     subparts 1, 2, and 3, the Secretary shall appoint, without 
     regard to the provisions of title 5, United States Code, that 
     govern appointments in the competitive service, such 
     administrative and technical employees, with the appropriate 
     educational background, as shall be needed to assist in the 
     administration of such parts. The employees shall be paid 
     without regard to the provisions of chapter 51 and subchapter 
     III of chapter 53 of such title relating to classification 
     and General Schedule pay rates.
       ``(c) Use for Religious Purposes Prohibited.--No 
     institutional payment or allowance under section 703(b) or 
     715(a) shall be paid to a school or department of divinity as 
     a result of the award of a fellowship under subpart 1 or 2, 
     respectively, to an individual who is studying for a 
     religious vocation.
       ``(d) Evaluation.--The Secretary shall evaluate the success 
     of assistance provided to individuals under subpart 1, 2, or 
     3 with respect to graduating from their degree programs, and 
     placement in faculty and professional positions.
       ``(e) Continuation Awards.--The Secretary, using funds 
     appropriated to carry out subparts 1 and 2, and before 
     awarding any assistance under such parts to a recipient that 
     did not receive assistance under part C or D of title IX (as 
     such parts were in effect prior to the date of enactment of 
     the Higher Education Amendments of 1998) shall continue to 
     provide funding to recipients of assistance under such part C 
     or D (as so in effect), as the case may be, pursuant to any 
     multiyear award of such assistance.

     ``PART B--FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION

     ``SEC. 741. FUND FOR THE IMPROVEMENT OF POSTSECONDARY 
                   EDUCATION.

       ``(a) Authority.--The Secretary is authorized to make 
     grants to, or enter into contracts with, institutions of 
     higher education, combinations of such institutions, and 
     other public and private nonprofit institutions and agencies, 
     to enable such institutions, combinations, and agencies to 
     improve postsecondary education opportunities by--
       ``(1) encouraging the reform, innovation, and improvement 
     of postsecondary education, and providing equal educational 
     opportunity for all;
       ``(2) the creation of institutions, programs, and joint 
     efforts involving paths to career and professional training, 
     and combinations of academic and experiential learning;
       ``(3) the establishment of institutions and programs based 
     on the technology of communications;

[[Page H9035]]

       ``(4) the carrying out, in postsecondary educational 
     institutions, of changes in internal structure and operations 
     designed to clarify institutional priorities and purposes;
       ``(5) the design and introduction of cost-effective methods 
     of instruction and operation;
       ``(6) the introduction of institutional reforms designed to 
     expand individual opportunities for entering and reentering 
     institutions and pursuing programs of study tailored to 
     individual needs;
       ``(7) the introduction of reforms in graduate education, in 
     the structure of academic professions, and in the recruitment 
     and retention of faculties; and
       ``(8) the creation of new institutions and programs for 
     examining and awarding credentials to individuals, and the 
     introduction of reforms in current institutional practices 
     related thereto.
       ``(b) Planning Grants.--The Secretary is authorized to make 
     planning grants to institutions of higher education for the 
     development and testing of innovative techniques in 
     postsecondary education. Such grants shall not exceed 
     $20,000.

     ``SEC. 742. BOARD OF THE FUND FOR THE IMPROVEMENT OF 
                   POSTSECONDARY EDUCATION.

       ``(a) Establishment.--There is established a National Board 
     of the Fund for the Improvement of Postsecondary Education 
     (in this part referred to as the `Board'). The Board shall 
     consist of 15 members appointed by the Secretary for 
     overlapping 3-year terms. A majority of the Board shall 
     constitute a quorum. Any member of the Board who has served 
     for 6 consecutive years shall thereafter be ineligible for 
     appointment to the Board during a 2-year period following the 
     expiration of such sixth year.
       ``(b) Membership.--
       ``(1) In general.--The Secretary shall designate one of the 
     members of the Board as Chairperson of the Board. A majority 
     of the members of the Board shall be public interest 
     representatives, including students, and a minority shall be 
     educational representatives. All members selected shall be 
     individuals able to contribute an important perspective on 
     priorities for improvement in postsecondary education and 
     strategies of educational and institutional change.
       ``(2) Appointment of director.--The Secretary shall appoint 
     the Director of the Fund for the Improvement of Postsecondary 
     Education (hereafter in this part referred to as the 
     `Director').
       ``(c) Duties.--The Board shall--
       ``(1) advise the Secretary and the Director on priorities 
     for the improvement of postsecondary education and make such 
     recommendations as the Board may deem appropriate for the 
     improvement of postsecondary education and for the 
     evaluation, dissemination, and adaptation of demonstrated 
     improvements in postsecondary educational practice;
       ``(2) advise the Secretary and the Director on the 
     operation of the Fund for the Improvement of Postsecondary 
     Education, including advice on planning documents, 
     guidelines, and procedures for grant competitions prepared by 
     the Fund; and
       ``(3) meet at the call of the Chairperson, except that the 
     Board shall meet whenever one-third or more of the members 
     request in writing that a meeting be held.
       ``(d) Information and Assistance.--The Director shall make 
     available to the Board such information and assistance as may 
     be necessary to enable the Board to carry out its functions.

     ``SEC. 743. ADMINISTRATIVE PROVISIONS.

       ``(a) Technical Employees.--The Secretary may appoint, for 
     terms not to exceed 3 years, without regard to the provisions 
     of title 5 of the United States Code governing appointments 
     in the competitive service, not more than 7 technical 
     employees to administer this part who may be paid without 
     regard to the provisions of chapter 51 and subchapter III of 
     chapter 53 of such title relating to classification and 
     General Schedule pay rates.
       ``(b) Procedures.--The Director shall establish procedures 
     for reviewing and evaluating grants and contracts made or 
     entered into under this part. Procedures for reviewing grant 
     applications or contracts for financial assistance under this 
     section may not be subject to any review outside of officials 
     responsible for the administration of the Fund for the 
     Improvement of Postsecondary Education.

     ``SEC. 744. SPECIAL PROJECTS.

       ``(a) Grant Authority.--The Director is authorized to make 
     grants to institutions of higher education, or consortia 
     thereof, and such other public agencies and nonprofit 
     organizations as the Director deems necessary for innovative 
     projects concerning one or more areas of particular national 
     need identified by the Director.
       ``(b) Application.--No grant shall be made under this part 
     unless an application is made at such time, in such manner, 
     and contains or is accompanied by such information as the 
     Secretary may require.
       ``(c) Areas of National Need.--Areas of national need shall 
     initially include, but shall not be limited to, the 
     following:
       ``(1) Institutional restructuring to improve learning and 
     promote productivity, efficiency, quality improvement, and 
     cost and price control.
       ``(2) Articulation between 2-year and 4-year institutions 
     of higher education, including developing innovative methods 
     for ensuring the successful transfer of students from 2-year 
     to 4-year institutions of higher education.
       ``(3) Evaluation and dissemination of model programs.
       ``(4) International cooperation and student exchange among 
     postsecondary educational institutions.

     ``SEC. 745. 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.

                   ``PART C--URBAN COMMUNITY SERVICE

     ``SEC. 751. FINDINGS.

       ``The Congress finds that--
       ``(1) the Nation's urban centers are facing increasingly 
     pressing problems and needs in the areas of economic 
     development, community infrastructure and service, social 
     policy, public health, housing, crime, education, 
     environmental concerns, planning and work force preparation;
       ``(2) there are, in the Nation's urban institutions, people 
     with underutilized skills, knowledge, and experience who are 
     capable of providing a vast range of services toward the 
     amelioration of the problems described in paragraph (1);
       ``(3) the skills, knowledge and experience in these urban 
     institutions, if applied in a systematic and sustained 
     manner, can make a significant contribution to the solution 
     of such problems; and
       ``(4) the application of such skills, knowledge and 
     experience is hindered by the limited funds available to 
     redirect attention to solutions to such urban problems.

     ``SEC. 752. PURPOSE; PROGRAM AUTHORIZED.

       ``(a) Purpose.--It is the purpose of this part to provide 
     incentives to urban academic institutions to enable such 
     institutions to work with private and civic organizations to 
     devise and implement solutions to pressing and severe 
     problems in their communities.
       ``(b) Program Authorized.--The Secretary is authorized to 
     carry out a program of providing assistance to eligible 
     institutions to enable such institutions to carry out the 
     activities described in section 754 in accordance with the 
     provisions of this part.

     ``SEC. 753. APPLICATION FOR URBAN COMMUNITY SERVICE GRANTS.

       ``(a) Application.--
       ``(1) In general.--An eligible institution seeking 
     assistance under this part shall submit to the Secretary an 
     application at such time, in such form, and containing or 
     accompanied by such information and assurances as the 
     Secretary may require by regulation.
       ``(2) Contents.--Each application submitted pursuant to 
     paragraph (1) shall--
       ``(A) describe the activities and services for which 
     assistance is sought; and
       ``(B) include a plan that is agreed to by the members of a 
     consortium that includes, in addition to the eligible 
     institution, one or more of the following entities:
       ``(i) A community college.
       ``(ii) An urban school system.
       ``(iii) A local government.
       ``(iv) A business or other employer.
       ``(v) A nonprofit institution.
       ``(3) Waiver.--The Secretary may waive the consortium 
     requirements described in paragraph (2) for any applicant who 
     can demonstrate to the satisfaction of the Secretary that the 
     applicant has devised an integrated and coordinated plan 
     which meets the purpose of this part.
       ``(b) Priority in Selection of Applications.--The Secretary 
     shall give priority to applications that propose to conduct 
     joint projects supported by other local, State, and Federal 
     programs. In addition, the Secretary shall give priority to 
     eligible institutions submitting applications that 
     demonstrate the eligible institution's commitment to urban 
     community service.
       ``(c) Selection Procedures.--The Secretary shall, by 
     regulation, develop a formal procedure for the submission of 
     applications under this part and shall publish in the Federal 
     Register an announcement of that procedure and the 
     availability of funds under this part.

     ``SEC. 754. ALLOWABLE ACTIVITIES.

       ``Funds made available under this part shall be used to 
     support planning, applied research, training, resource 
     exchanges or technology transfers, the delivery of services, 
     or other activities the purpose of which is to design and 
     implement programs to assist urban communities to meet and 
     address their pressing and severe problems, such as the 
     following:
       ``(1) Work force preparation.
       ``(2) Urban poverty and the allviation of such poverty.
       ``(3) Health care, including delivery and access.
       ``(4) Underperforming school systems and students.
       ``(5) Problems faced by the elderly and individuals with 
     disabilities in urban settings.
       ``(6) Problems faced by families and children.
       ``(7) Campus and community crime prevention, including 
     enhanced security and safety awareness measures as well as 
     coordinated programs addressing the root causes of crime.
       ``(8) Urban housing.
       ``(9) Urban infrastructure.
       ``(10) Economic development.
       ``(11) Urban environmental concerns.
       ``(12) Other problem areas which participants in the 
     consortium described in section 753(a)(2)(B) concur are of 
     high priority in the urban area.
       ``(13)(A) Problems faced by individuals with disabilities 
     regarding accessibility to institutions of higher education 
     and other public and private community facilities.
       ``(B) Amelioration of existing attitudinal barriers that 
     prevent full inclusion by individuals with disabilities in 
     their community.
       ``(14) Improving access to technology in local communities.

     ``SEC. 755. PEER REVIEW.

       ``The Secretary shall designate a peer review panel to 
     review applications submitted under this part and make 
     recommendations for funding to the Secretary. In selecting 
     the peer review panel, the Secretary may consult with other 
     appropriate Cabinet-level officials and with non-Federal 
     organizations, to ensure that the panel

[[Page H9036]]

     will be geographically balanced and be composed of 
     representatives from public and private institutions of 
     higher education, labor, business, and State and local 
     government, who have expertise in urban community service or 
     in education.

     ``SEC. 756. DISBURSEMENT OF FUNDS.

       ``(a) Multiyear Availability.--Subject to the availability 
     of appropriations, grants under this part may be made on a 
     multiyear basis, except that no institution, individually or 
     as a participant in a consortium of such institutions, may 
     receive such a grant for more than 5 years.
       ``(b) Equitable Geographic Distribution.--The Secretary 
     shall award grants under this part in a manner that achieves 
     an equitable geographic distribution of such grants.
       ``(c) Matching Requirement.--An applicant under this part 
     and the local governments associated with the application 
     shall contribute to the conduct of the program supported by 
     the grant an amount from non-Federal funds equal to at least 
     one-fourth of the amount of the grant, which contribution may 
     be in cash or in kind.

     ``SEC. 757. DESIGNATION OF URBAN GRANT INSTITUTIONS.

       ``The Secretary shall publish a list of eligible 
     institutions under this part and shall designate these 
     institutions of higher education as `Urban Grant 
     Institutions'. The Secretary shall establish a national 
     network of Urban Grant Institutions so that the results of 
     individual projects achieved in one metropolitan area can 
     then be generalized, disseminated, replicated and applied 
     throughout the Nation. The information developed as a result 
     of this section shall be made available to Urban Grant 
     Institutions and to any other interested institution of 
     higher education by any appropriate means.

     ``SEC. 758. DEFINITIONS.

       ``As used in this part:
       ``(1) Urban area.--The term `urban area' means a 
     metropolitan statistical area having a population of not less 
     than 350,000, or two contiguous metropolitan statistical 
     areas having a population of not less than 350,000, or, in 
     any State which does not have a metropolitan statistical area 
     which has such a population, the eligible entity in the State 
     submitting an application under section 753, or, if no such 
     entity submits an application, the Secretary, shall designate 
     one urban area for the purposes of this part.
       ``(2) Eligible institution.--The term `eligible 
     institution' means--
       ``(A) a nonprofit municipal university, established by the 
     governing body of the city in which it is located, and 
     operating as of the date of enactment of the Higher Education 
     Amendments of 1992 under that authority; or
       ``(B) an institution of higher education, or a consortium 
     of such institutions any one of which meets all of the 
     requirements of this paragraph, which--
       ``(i) is located in an urban area;
       ``(ii) draws a substantial portion of its undergraduate 
     students from the urban area in which such institution is 
     located, or from contiguous areas;
       ``(iii) carries out programs to make postsecondary 
     educational opportunities more accessible to residents of 
     such urban area, or contiguous areas;
       ``(iv) has the present capacity to provide resources 
     responsive to the needs and priorities of such urban area and 
     contiguous areas;
       ``(v) offers a range of professional, technical, or 
     graduate programs sufficient to sustain the capacity of such 
     institution to provide such resources; and
       ``(vi) has demonstrated and sustained a sense of 
     responsibility to such urban area and contiguous areas and 
     the people of such areas.

     ``SEC. 759. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated $20,000,000 for 
     fiscal year 1999 and such sums as may be necessary for each 
     of the 4 succeeding fiscal years to carry out this part.

 ``PART D--DEMONSTRATION PROJECTS TO ENSURE STUDENTS WITH DISABILITIES 
                   RECEIVE A QUALITY HIGHER EDUCATION

     ``SEC. 761. PURPOSES.

       ``It is the purpose of this part to support model 
     demonstration projects to provide technical assistance or 
     professional development for faculty and administrators in 
     institutions of higher education in order to provide students 
     with disabilities a quality postsecondary education.

     ``SEC. 762. GRANTS AUTHORIZED.

       ``(a) Competitive Grants Authorized.--The Secretary may 
     award grants, contracts, and cooperative agreements, on a 
     competitive basis, to institutions of higher education, of 
     which at least two such grants shall be awarded to 
     institutions that provide professional development and 
     technical assistance in order for students with learning 
     disabilities to receive a quality postsecondary education.
       ``(b) Duration; Activities.--
       ``(1) Duration.--Grants under this part shall be awarded 
     for a period of 3 years.
       ``(2) Authorized activities.--Grants under this part shall 
     be used to carry out 1 or more of the following activities:
       ``(A) Teaching methods and strategies.--The development of 
     innovative, effective and efficient teaching methods and 
     strategies to provide faculty and administrators with the 
     skills and supports necessary to teach students with 
     disabilities. Such methods and strategies may include 
     inservice training, professional development, customized and 
     general technical assistance, workshops, summer institutes, 
     distance learning, and training in the use of assistive and 
     educational technology.
       ``(B) Synthesizing research and information.--Synthesizing 
     research and other information related to the provision of 
     postsecondary educational services to students with 
     disabilities.
       ``(C) Professional development and training sessions.--
     Conducting professional development and training sessions for 
     faculty and administrators from other institutions of higher 
     education to enable the faculty and administrators to meet 
     the postsecondary educational needs of students with 
     disabilities.
       ``(3) Mandatory evaluation and dissemination.--Grants under 
     this part shall be used for evaluation, and dissemination to 
     other institutions of higher education, of the information 
     obtained through the activities described in subparagraphs 
     (A) through (C).
       ``(c) Considerations in Making Awards.--In awarding grants, 
     contracts, or cooperative agreements under this section, the 
     Secretary shall consider the following:
       ``(1) Geographic distribution.--Providing an equitable 
     geographic distribution of such grants.
       ``(2) Rural and urban areas.--Distributing such grants to 
     urban and rural areas.
       ``(3) Range and type of institution.--Ensuring that the 
     activities to be assisted are developed for a range of types 
     and sizes of institutions of higher education.
       ``(4) Prior experience or exceptional programs.--
     Institutions of higher education with demonstrated prior 
     experience in, or exceptional programs for, meeting the 
     postsecondary educational needs of students with 
     disabilities.

     ``SEC. 763. APPLICATIONS.

       ``Each institution of higher education desiring to receive 
     a grant, contract, or cooperative agreement under this part 
     shall submit an application to the Secretary at such time, in 
     such manner, and accompanied by such information as the 
     Secretary may require. Each application shall include--
       ``(1) a description of how such institution plans to 
     address each of the activities required under this part;
       ``(2) a description of how the institution consulted with a 
     broad range of people within the institution to develop 
     activities for which assistance is sought; and
       ``(3) a description of how the institution will coordinate 
     and collaborate with the office that provides services to 
     students with disabilities within the institution.

     ``SEC. 764. RULE OF CONSTRUCTION.

       ``Nothing in this part shall be construed to impose any 
     additional duty, obligation or responsibility on an 
     institution of higher education or on the institution's 
     faculty, administrators, or staff than are required by 
     section 504 of the Rehabilitation Act of 1973 and the 
     Americans with Disabilities Act of 1990.

     ``SEC. 765. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated for this part 
     $10,000,000 for fiscal year 1999 and such sums as may be 
     necessary for each of the 4 succeeding fiscal years.''.

     SEC. 702. REPEALS.

       Except as otherwise provided in section 301(a), titles VIII 
     (20 U.S.C. 1133 et seq.), IX (20 U.S.C. 1134 et seq.), X (20 
     U.S.C. 1135 et seq.), XI (20 U.S.C. 1136), and XII (20 U.S.C. 
     1141) are repealed.

           TITLE VIII--STUDIES, REPORTS, AND RELATED PROGRAMS

                            PART A--STUDIES

     SEC. 801. STUDY OF MARKET MECHANISMS IN FEDERAL STUDENT LOAN 
                   PROGRAMS.

       (a) Study Required.--The Comptroller General and the 
     Secretary of Education shall convene a study group including 
     the Secretary of the Treasury, the Director of the Office of 
     Management and Budget, the Director of the Congressional 
     Budget Office, representatives of entities making loans under 
     part B of title IV of the Higher Education Act of 1965, 
     representatives of other entities in the financial services 
     community, representatives of other participants in the 
     student loan programs, and such other individuals as the 
     Comptroller General and the Secretary may designate. The 
     Comptroller General and Secretary, in consultation with the 
     study group, shall design and conduct a study to identify and 
     evaluate means of establishing a market mechanism for the 
     delivery of loans made pursuant to such title IV.
       (b) Design of Study.--The study required under this section 
     shall identify not fewer than 3 different market mechanisms 
     for use in determining lender return on student loans while 
     continuing to meet the other objectives of the programs under 
     parts B and D of such title IV, including the provision of 
     loans to all eligible students. Consideration may be given to 
     the use of auctions and to the feasibility of incorporating 
     income-contingent repayment options into the student loan 
     system and requiring borrowers to repay through income tax 
     withholding.
       (c) Evaluation of Market Mechanisms.--The mechanisms 
     identified under subsection (b) shall be evaluated in terms 
     of the following areas:
       (1) The cost or savings of loans to or for borrowers, 
     including parent borrowers.
       (2) The cost or savings of the mechanism to the Federal 
     Government.
       (3) The cost, effect, and distribution of Federal subsidies 
     to or for participants in the program.
       (4) The ability of the mechanism to accommodate the 
     potential distribution of subsidies to students through an 
     income contingent repayment option.
       (5) The effect on the simplicity of the program, including 
     the effect of the plan on the regulatory burden on students, 
     institutions, lenders, and other program participants.
       (6) The effect on investment in human capital and 
     resources, loan servicing capability, and the quality of 
     service to the borrower.
       (7) The effect on the diversity of lenders, including 
     community-based lenders, originating and secondary market 
     lenders.

[[Page H9037]]

       (8) The effect on program integrity.
       (9) The degree to which the mechanism will provide market 
     incentives to encourage continuous improvement in the 
     delivery and servicing of loans.
       (10) The availability of loans to students by region, 
     income level, and by categories of institutions.
       (11) The proposed Federal and State role in the operation 
     of the mechanism.
       (12) A description of how the mechanism will be 
     administered and operated.
       (13) Transition procedures, including the effect on loan 
     availability during a transition period.
       (14) Any other areas the study group may include.
       (d) Preliminary Findings and Publication of Study.--Not 
     later than November 15, 2000, the study group shall make the 
     group's preliminary findings, including any additional or 
     dissenting views, available to the public with a 60-day 
     request for public comment. The study group shall review 
     these comments and the Comptroller General and the Secretary 
     shall transmit a final report, including any additional or 
     dissenting views, to the Committee on Education and the 
     Workforce of the House of Representatives, the Committee on 
     Labor and Human Resources of the Senate, and the Committees 
     on the Budget of the House of Representatives and the Senate 
     not later than May 15, 2001.

     SEC. 802. STUDY OF THE FEASIBILITY OF ALTERNATIVE FINANCIAL 
                   INSTRUMENTS FOR DETERMINING LENDER YIELDS.

       (a) Study Required.--The Comptroller General and the 
     Secretary of Education shall convene a study group including 
     the Secretary of the Treasury, the Director of the Office of 
     Management and Budget, the Director of the Congressional 
     Budget Office, representatives of entities making loans under 
     part B of title IV of the Higher Education Act of 1965, 
     representatives of other entities in the financial services 
     community, representatives of other participants in the 
     student loan programs, and such other individuals as the 
     Comptroller General and the Secretary of Education may 
     designate. The Comptroller General and the Secretary of 
     Education, in consultation with the study group, shall 
     evaluate the 91-day Treasury bill, 30-day and 90-day 
     commercial paper, and the 90-day London Interbank Offered 
     Rate (in this section referred to as ``LIBOR'') in terms of 
     the following:
       (1) The historical liquidity of the market for each, and a 
     historical comparison of the spread between (A) the 30-day 
     and 90-day commercial paper rate, respectively, and the 91-
     day Treasury bill rate, and (B) the spread between the LIBOR 
     and the 91-day Treasury bill rate.
       (2) The historical volatility of the rates and projections 
     of future volatility.
       (3) Recent changes in the liquidity of the market for each 
     such instrument in a balanced Federal budget environment and 
     a low-interest rate environment, and projections of future 
     liquidity assuming the Federal budget remains in balance.
       (4) The cost or savings to lenders with small, medium, and 
     large student loan portfolios of basing lender yield on 
     either the 30-day or 90-day commercial paper rate or the 
     LIBOR while continuing to base the borrower rate on the 91-
     day Treasury bill, and the effect of such change on the 
     diversity of lenders participating in the program.
       (5) The cost or savings to the Federal Government of basing 
     lender yield on either the 30-day or 90-day commercial paper 
     rate or the LIBOR while continuing to base the borrower rate 
     on the 91-day Treasury bill.
       (6) Any possible risks or benefits to the student loan 
     programs under the Higher Education Act of 1965 and to 
     student borrowers.
       (7) Any other areas the Comptroller General and the 
     Secretary of Education agree to include.
       (b) Report Required.--Not later than 6 months after the 
     date of enactment of this Act, the Comptroller General and 
     the Secretary shall submit a final report regarding the 
     findings of the study group to the Committee on Education and 
     the Workforce of the House of Representatives and the 
     Committee on Labor and Human Resources of the Senate.

     SEC. 803. STUDENT-RELATED DEBT STUDY REQUIRED.

       (a) In General.--The Secretary of Education 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 of Education 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 of Education 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 part C of title I.

     SEC. 804. STUDY OF TRANSFER OF CREDITS.

       (a) Study Required.--The Secretary of Education shall 
     conduct a study to evaluate policies or practices instituted 
     by recognized accrediting agencies or associations regarding 
     the treatment of the transfer of credits from one institution 
     of higher education to another, giving particular attention 
     to--
       (1) adopted policies regarding the transfer of credits 
     between institutions of higher education which are accredited 
     by different agencies or associations and the reasons for 
     such policies;
       (2) adopted policies regarding the transfer of credits 
     between institutions of higher education which are accredited 
     by national agencies or associations and institutions of 
     higher education which are accredited by regional agencies 
     and associations and the reasons for such policies;
       (3) the effect of the adoption of such policies on students 
     transferring between such institutions of higher education, 
     including time required to matriculate, increases to the 
     student of tuition and fees paid, and increases to the 
     student with regard to student loan burden;
       (4) the extent to which Federal financial aid is awarded to 
     such students for the duplication of coursework already 
     completed at another institution; and
       (5) the aggregate cost to the Federal Government of the 
     adoption of such policies.
       (b) Report.--Not later than one year after the date of 
     enactment of this Act, the Secretary of Education shall 
     submit a report to the Chairman and Ranking Minority Member 
     of the Committee on Education and the Workforce of the House 
     of Representatives and the Committee on Labor and Human 
     Resources of the Senate detailing the Secretary's findings 
     regarding the study conducted under subsection (a). The 
     Secretary's report shall include such recommendation with 
     respect to the recognition of accrediting agencies or 
     associations as the Secretary deems advisable.

     SEC. 805. 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.

[[Page H9038]]

     SEC. 806. STUDY OF THE EFFECTIVENESS OF COHORT DEFAULT RATES 
                   FOR INSTITUTIONS WITH FEW STUDENT LOAN 
                   BORROWERS.

       (a) Study Required.--The Secretary of Education 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 title IV of the 
     Higher Education Act of 1965 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 such 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 such title; and
       (5) analysis of the costs incurred by the Department of 
     Education 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 of Education shall consult with 
     institutions of higher education.
       (c) Report to Congress.--The Secretary of Education shall 
     report to the Committee on Labor and Human Resources of the 
     Senate and the Committee on Education and the Workforce of 
     the House of Representatives not later than September 30, 
     1999, regarding the results of the study described in 
     subsection (a).

              PART B--ADVANCED PLACEMENT INCENTIVE PROGRAM

     SEC. 810. ADVANCED PLACEMENT INCENTIVE PROGRAM.

       (a) Program Established.--The Secretary of Education is 
     authorized to make grants to States having applications 
     approved under subsection (c) to enable the States to 
     reimburse low-income individuals to cover part or all of the 
     cost of advanced placement test fees, if the low-income 
     individuals--
       (1) are enrolled in an advanced placement class; and
       (2) plan to take an advanced placement test.
       (b) Information Dissemination.--The State educational 
     agency shall disseminate information regarding the 
     availability of test fee payments under this section to 
     eligible individuals through secondary school teachers and 
     guidance counselors.
       (c) Requirements for Approval of Applications.--In 
     approving applications for grants the Secretary of Education 
     shall--
       (1) require that each such application contain a 
     description of the advanced placement test fees the State 
     will pay on behalf of individual students;
       (2) require an assurance that any funds received under this 
     section, other than funds used in accordance with subsection 
     (d), shall be used only to pay advanced placement test fees;
       (3) contain such information as the Secretary may require 
     to demonstrate that the State will ensure that a student is 
     eligible for payments under this section, including the 
     documentation required by chapter 1 of subpart 2 of part A of 
     title IV of the Higher Education Act of 1965 (20 U.S.C. 
     1070a-11 et seq.); and
       (4) consider the number of children eligible to be counted 
     under section 1124(c) of the Elementary and Secondary 
     Education Act of 1965 in the State in relation to the number 
     of such children in all the States in determining grant award 
     amounts.
       (d) Funding Rules.--
       (1) Use of funds.--A State educational agency in a State in 
     which no eligible low-income individual is required to pay 
     more than a nominal fee to take advanced placement tests in 
     core subjects may use any grant funds provided to that State 
     educational agency, that remain after fees have been paid on 
     behalf of all eligible low-income individuals, for activities 
     directly related to increasing--
       (A) the enrollment of low-income individuals in advanced 
     placement courses;
       (B) the participation of low-income individuals in advanced 
     placement tests; and
       (C) the availability of advanced placement courses in 
     schools serving high poverty areas.
       (2) Supplement, not supplant, rule.--Funds provided under 
     this section shall supplement and not supplant other non-
     Federal funds that are available to assist low-income 
     individuals in paying advanced placement test fees.
       (e) Regulations.--The Secretary of Education shall 
     prescribe such regulations as are necessary to carry out this 
     section.
       (f) Report.--Each State annually shall report to the 
     Secretary of Education regarding--
       (1) the number of low-income individuals in the State who 
     receive assistance under this section; and
       (2) the activities described in subsection (d)(1), if 
     applicable.
       (g) Definition.--In this section:
       (1) Advanced placement test.--The term ``advanced placement 
     test'' includes only an advanced placement test approved by 
     the Secretary of Education for the purposes of this section.
       (2) Low-income individual.--The term ``low-income 
     individual'' has the meaning given the term in section 
     402A(g)(2) of the Higher Education Act of 1965 (20 U.S.C. 
     1070a-11(g)(2)).
       (h) Authorization of Appropriations.--There are authorized 
     to be appropriated $6,800,000 for fiscal year 1999 and such 
     sums as may be necessary for each of the 4 succeeding fiscal 
     years to carry out this section.

               PART C--COMMUNITY SCHOLARSHIP MOBILIZATION

     SEC. 811. SHORT TITLE.

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

     SEC. 812. FINDINGS.

       Congress finds that--
       (1) the local community, when properly organized and 
     challenged, is one of the best sources of academic support, 
     motivation toward achievement, and financial resources for 
     aspiring postsecondary students;
       (2) local communities, working to complement or augment 
     services currently offered by area schools and colleges, can 
     raise the educational expectations and increase the rate of 
     postsecondary attendance of their youth by forming locally-
     based organizations that provide both academic support 
     (including guidance, counseling, mentoring, tutoring, 
     encouragement, and recognition) and tangible, locally raised, 
     effectively targeted, publicly recognized, financial 
     assistance;
       (3) proven methods of stimulating these community efforts 
     can be promoted through Federal support for the establishment 
     of regional, State or community program centers to organize 
     and challenge community efforts to develop educational 
     incentives and support for local students; and
       (4) using Federal funds to leverage private contributions 
     to help students from low-income families attain educational 
     and career goals is an efficient and effective investment of 
     scarce taxpayer-provided resources.

     SEC. 813. DEFINITIONS.

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

     SEC. 814. PURPOSE; ENDOWMENT GRANT AUTHORITY.

       (a) Purpose.--It is the purpose of this part to establish 
     and support regional, State or community program centers to 
     enable such centers to foster the development of local 
     entities in high poverty areas that promote higher education 
     goals for students from low-income families by--
       (1) providing academic support, including guidance, 
     counseling, mentoring, tutoring, and recognition; and
       (2) providing scholarship assistance for the cost of 
     postsecondary education.
       (b) Endowment Grant Authority.--From the funds appropriated 
     pursuant to the authority of section 816, the Secretary shall 
     award an

[[Page H9039]]

     endowment grant, on a competitive basis, to a national 
     organization to enable such organization to support the 
     establishment or ongoing work of regional, State or community 
     program centers that foster the development of local entities 
     in high poverty areas to improve secondary school graduation 
     rates and postsecondary attendance through the provision of 
     academic support services and scholarship assistance for the 
     cost of postsecondary education.

     SEC. 815. GRANT AGREEMENT AND REQUIREMENTS.

       (a) In General.--The Secretary shall award one or more 
     endowment grants described in section 814(b) pursuant to an 
     agreement between the Secretary and a national organization. 
     Such agreement shall--
       (1) require a national organization to establish an 
     endowment fund in the amount of the grant, the corpus of 
     which shall remain intact and the interest income from which 
     shall be used to support the activities described in 
     paragraphs (2) and (3);
       (2) require a national organization to use 70 percent of 
     the interest income from the endowment fund in any fiscal 
     year to support the establishment or ongoing work of 
     regional, State or community program centers to enable such 
     centers to work with local communities to establish local 
     entities in high poverty areas and provide ongoing technical 
     assistance, training workshops, and other activities to help 
     ensure the ongoing success of the local entities;
       (3) require a national organization to use 30 percent of 
     the interest income from the endowment fund in any fiscal 
     year to provide scholarships for postsecondary education to 
     students from low-income families, which scholarships shall 
     be matched on a dollar-for-dollar basis from funds raised by 
     the local entities;
       (4) require that at least 50 percent of all the interest 
     income from the endowment be allocated to establish new local 
     entities or support regional, State or community program 
     centers in high poverty areas;
       (5) require a national organization to submit, for each 
     fiscal year in which such organization uses the interest from 
     the endowment fund, a report to the Secretary that contains--
       (A) a description of the programs and activities supported 
     by the interest on the endowment fund;
       (B) the audited financial statement of the national 
     organization for the preceding fiscal year;
       (C) a plan for the programs and activities to be supported 
     by the interest on the endowment fund as the Secretary may 
     require; and
       (D) an evaluation of the programs and activities supported 
     by the interest on the endowment fund as the Secretary may 
     require; and
       (E) data indicating the number of students from low-income 
     families who receive scholarships from local entities, and 
     the amounts of such scholarships;
       (6) contain such assurances as the Secretary may require 
     with respect to the management and operation of the endowment 
     fund; and
       (7) contain an assurance that if the Secretary determines 
     that such organization is not in substantial compliance with 
     the provisions of this part, then the national organization 
     shall pay to the Secretary an amount equal to the corpus of 
     the endowment fund plus any accrued interest on such fund 
     that is available to the national organization on the date of 
     such determination.
       (b) Returned Funds.--All funds returned to the Secretary 
     pursuant to subsection (a)(7) shall be available to the 
     Secretary to carry out any scholarship or grant program 
     assisted under title IV of the Higher Education Act of 1965 
     (20 U.S.C. 1070 et seq.).

     SEC. 816. AUTHORIZATION OF APPROPRIATIONS.

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

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

     SEC. 821. GRANTS TO STATES FOR WORKPLACE AND COMMUNITY 
                   TRANSITION TRAINING FOR INCARCERATED YOUTH 
                   OFFENDERS.

       (a) Findings.--Congress makes the following findings:
       (1) Over 150,000 youth offenders age 21 and younger are 
     incarcerated in the Nation's jails, juvenile facilities, and 
     prisons.
       (2) Most youth offenders who are incarcerated have been 
     sentenced as first-time adult felons.
       (3) Approximately 75 percent of youth offenders are high 
     school dropouts who lack basic literacy and life skills, have 
     little or no job experience, and lack marketable skills.
       (4) The average incarcerated youth has attended school only 
     through grade 10.
       (5) Most of these youths can be diverted from a life of 
     crime into productive citizenship with available educational, 
     vocational, work skills, and related service programs.
       (6) If not involved with educational programs while 
     incarcerated, almost all of these youths will return to a 
     life of crime upon release.
       (7) The average length of sentence for a youth offender is 
     about 3 years. Time spent in prison provides a unique 
     opportunity for education and training.
       (8) Even with quality education and training provided 
     during incarceration, a period of intense supervision, 
     support, and counseling is needed upon release to ensure 
     effective reintegration of youth offenders into society.
       (9) Research consistently shows that the vast majority of 
     incarcerated youths will not return to the public schools to 
     complete their education.
       (10) There is a need for alternative educational 
     opportunities during incarceration and after release.
       (b) Definition.--For purposes of this part, the term 
     ``youth offender'' means a male or female offender under the 
     age of 25, who is incarcerated in a State prison, including a 
     prerelease facility.
       (c) Grant Program.--The Secretary of Education (in this 
     section referred to as the ``Secretary'') shall establish a 
     program in accordance with this section to provide grants to 
     the State correctional education agencies in the States, from 
     allocations for the States under subsection (i), to assist 
     and encourage incarcerated youths to acquire functional 
     literacy, life, and job skills, through the pursuit of a 
     postsecondary education certificate, or an associate of arts 
     or bachelor's degree while in prison, and employment 
     counseling and other related services which start during 
     incarceration and continue through prerelease and while on 
     parole.
       (d) Application.--To be eligible for a grant under this 
     section, a State correctional education agency shall submit 
     to the Secretary a proposal for a youth offender program 
     that--
       (1) identifies the scope of the problem, including the 
     number of incarcerated youths in need of postsecondary 
     education and vocational training;
       (2) lists the accredited public or private educational 
     institution or institutions that will provide postsecondary 
     educational services;
       (3) lists the cooperating agencies, public and private, or 
     businesses that will provide related services, such as 
     counseling in the areas of career development, substance 
     abuse, health, and parenting skills;
       (4) describes the evaluation methods and performance 
     measures that the State correctional education agency will 
     employ, which methods and measures--
       (A) shall be appropriate to meet the goals and objectives 
     of the proposal; and
       (B) shall include measures of--
       (i) program completion;
       (ii) student academic and vocational skill attainment;
       (iii) success in job placement and retention; and
       (iv) recidivism;
       (5) describes how the proposed programs are to be 
     integrated with existing State correctional education 
     programs (such as adult education, graduate education degree 
     programs, and vocational training) and State industry 
     programs;
       (6) addresses the educational needs of youth offenders who 
     are in alternative programs (such as boot camps); and
       (7) describes how students will be selected so that only 
     youth offenders eligible under subsection (f) will be 
     enrolled in postsecondary programs.
       (e) Program Requirements.--Each State correctional 
     education agency receiving a grant under this section shall--
       (1) integrate activities carried out under the grant with 
     the objectives and activities of the school-to-work programs 
     of such State, including--
       (A) work experience or apprenticeship programs;
       (B) transitional worksite job training for vocational 
     education students that is related to the occupational goals 
     of such students and closely linked to classroom and 
     laboratory instruction;
       (C) placement services in occupations that the students are 
     preparing to enter;
       (D) employment-based learning programs; and
       (E) programs that address State and local labor shortages;
       (2) annually report to the Secretary and the Attorney 
     General on the results of the evaluations conducted using the 
     methods and performance measures contained in the proposal; 
     and
       (3) provide to each State for each student eligible under 
     subsection (f) not more than $1,500 annually for tuition, 
     books, and essential materials, and not more than $300 
     annually for related services such as career development, 
     substance abuse counseling, parenting skills training, and 
     health education, for each eligible incarcerated youth.
       (f) Student Eligibility.--A youth offender shall be 
     eligible for participation in a program receiving a grant 
     under this section if the youth offender--
       (1) is eligible to be released within 5 years (including a 
     youth offender who is eligible for parole within such time); 
     and
       (2) is 25 years of age or younger.
       (g) Length of Participation.--A State correctional 
     education agency receiving a grant under this section shall 
     provide educational and related services to each 
     participating youth offender for a period not to exceed 5 
     years, 1 year of which may be devoted to study in a graduate 
     education degree program or to remedial education services 
     for students who have obtained a secondary school diploma or 
     its recognized equivalent. Educational and related services 
     shall start during the period of incarceration in prison or 
     prerelease and may continue during the period of parole.
       (h) Education Delivery Systems.--State correctional 
     education agencies and cooperating institutions shall, to the 
     extent practicable, use high-tech applications in developing 
     programs to meet the requirements and goals of this section.
       (i) Allocation of Funds.--From the funds appropriated 
     pursuant to subsection (j) for each fiscal year, the 
     Secretary shall allot to each State an amount that bears the 
     same relationship to such funds as the total number of 
     students eligible under subsection (f) in such State bears to 
     the total number of such students in all States.
       (j) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section $17,000,000 for 
     fiscal year 1999 and such sums as may be necessary for each 
     of the 4 succeeding fiscal years.

[[Page H9040]]

   PART E--GRANTS TO COMBAT VIOLENT CRIMES AGAINST WOMEN ON CAMPUSES

     SEC. 826. 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 such 
     institutions or consortia consisting of campus personnel, 
     student organizations, campus administrators, security 
     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, campus security 
     personnel, and personnel serving on campus disciplinary or 
     judicial boards 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 implement and operate education programs for the 
     prevention of violent crimes against women.
       (4) To develop, enlarge, or strengthen support services 
     programs, including medical or psychological counseling, for 
     victims of sexual offense crimes.
       (5) To create, disseminate, or otherwise provide assistance 
     and information about victims' options on and off campus to 
     bring disciplinary or other legal action.
       (6) To develop and implement more effective campus 
     policies, protocols, orders, and services specifically 
     devoted to prevent, identify, and respond to violent crimes 
     against women on campus, including the crimes of sexual 
     assault, stalking, and domestic violence.
       (7) To develop, 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.
       (8) To develop, enlarge, or strengthen victim services 
     programs for the campus and to improve delivery of victim 
     services on campus.
       (9) To provide capital improvements (including improved 
     lighting and communications facilities but not including the 
     construction of buildings) on campuses to address violent 
     crimes against women on campus, including the crimes of 
     sexual assault, stalking, and domestic violence.
       (10) 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 and other 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.
       (3) Compliance with campus crime reporting required.--No 
     institution of higher education shall be eligible for a grant 
     under this section unless such institution is in compliance 
     with the requirements of section 485(f ) of the Higher 
     Education Act of 1965.
       (d) 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) Grantee reporting.--
       (A) Annual report.--Each institution of higher education 
     receiving a grant under this section shall submit an annual 
     performance report to the Attorney General. The Attorney 
     General shall suspend funding under this section for an 
     institution of higher education if the institution fails to 
     submit an annual performance report.
       (B) Final report.--Upon completion of the grant period 
     under this section, the institution shall file a performance 
     report with the Attorney General and the Secretary of 
     Education explaining the activities carried out under this 
     section together with an assessment of the effectiveness of 
     those activities in achieving the purposes described in 
     subsection (b).
       (3) Report to congress.--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 part, including information obtained from reports 
     submitted pursuant to section 485(f) of the Higher Education 
     Act of 1965.
       (4) Regulations or guidelines.--Not later than 120 days 
     after the date of enactment of this section, the Attorney 
     General, in consultation with the Secretary of Education, 
     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.
       (f) 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.
       (g) Authorization of Appropriations.--For the purpose of 
     carrying out this part, there are authorized to be 
     appropriated $10,000,000 for fiscal year 1999 and such sums 
     as may be necessary for each of the 4 succeeding fiscal 
     years.

     SEC. 827. STUDY OF INSTITUTIONAL PROCEDURES TO REPORT SEXUAL 
                   ASSAULTS.

       (a) In General.--The Attorney General, in consultation with 
     the Secretary of Education, shall provide for a national 
     study to examine procedures undertaken after an institution 
     of higher education receives a report of sexual assault.
       (b) Report.--The study required by subsection (a) shall 
     include an analysis of--
       (1) the existence and publication of the institution of 
     higher education's and State's definition of sexual assault;
       (2) the existence and publication of the institution's 
     policy for campus sexual assaults;
       (3) the individuals to whom reports of sexual assault are 
     given most often and--
       (A) how the individuals are trained to respond to the 
     reports; and
       (B) the extent to which the individuals are trained;
       (4) the reporting options that are articulated to the 
     victim or victims of the sexual assault regarding--
       (A) on-campus reporting and procedure options; and
       (B) off-campus reporting and procedure options;
       (5) the resources available for victims' safety, support, 
     medical health, and confidentiality, including--
       (A) how well the resources are articulated both 
     specifically to the victim of sexual assault and generally to 
     the campus at large; and
       (B) the security of the resources in terms of 
     confidentiality or reputation;
       (6) policies and practices that may prevent or discourage 
     the reporting of campus sexual assaults to local crime 
     authorities, or that may otherwise obstruct justice or 
     interfere with the prosecution of perpetrators of campus 
     sexual assaults;

[[Page H9041]]

       (7) policies and practices found successful in aiding the 
     report and any ensuing investigation or prosecution of a 
     campus sexual assault;
       (8) the on-campus procedures for investigation and 
     disciplining the perpetrator of a sexual assault, including--
       (A) the format for collecting evidence; and
       (B) the format of the investigation and disciplinary 
     proceeding, including the faculty responsible for running the 
     disciplinary procedure and the persons allowed to attend the 
     disciplinary procedure; and
       (9) types of punishment for offenders, including--
       (A) whether the case is directed outside the institution 
     for further punishment; and
       (B) how the institution punishes perpetrators.
       (c) Submission of Report.--The report required by 
     subsection (b) shall be submitted to Congress not later than 
     September 1, 2000.
       (d) Definition.--For purposes of this section, the term 
     ``campus sexual assaults'' means sexual assaults occurring at 
     institutions of higher education and sexual assaults 
     committed against or by students or employees of such 
     institutions.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $1,000,000 for 
     fiscal year 2000.

PART F--IMPROVING UNITED STATES UNDERSTANDING OF SCIENCE, ENGINEERING, 
                      AND TECHNOLOGY IN EAST ASIA

     SEC. 831. 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.

                      PART G--OLYMPIC SCHOLARSHIPS

     SEC. 836. EXTENSION OF AUTHORIZATION.

       Section 1543(d) of the Higher Education Amendments of 1992 
     is amended by striking ``1993'' and inserting ``1999''.

                      PART H--UNDERGROUND RAILROAD

     SEC. 841. 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.

                PART I--SUMMER TRAVEL AND WORK PROGRAMS

     SEC. 846. 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.

                 PART J--WEB-BASED EDUCATION COMMISSION

     SEC. 851. 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 852.
       (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. 852. ESTABLISHMENT OF WEB-BASED EDUCATION COMMISSION.

       (a) Establishment.--There is established a commission to be 
     known as the Web-Based Education Commission.
       (b) Membership.--
       (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.--Not later than 30 days after the date 
     on which all members of the Commission have been appointed, 
     the Commission shall hold the Commission's 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 the 
     members of the Commission.

     SEC. 853. 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 the 
     Commission's 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--

[[Page H9042]]

       (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. 854. 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 duties of the Commission.
       (b) Information From Federal Agencies.--The Commission may 
     request from the head of any Federal agency or 
     instrumentality such information as the Commission considers 
     necessary to carry out the provisions of this part. Each such 
     agency or instrumentality shall, to the extent permitted by 
     law and subject to the exceptions set forth in section 552 of 
     title 5, United States Code (commonly referred to as the 
     Freedom of Information Act), furnish such information to the 
     Commission upon request.
       (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. 855. 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 the Commission's 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. 856. TERMINATION OF THE COMMISSION.

       The Commission shall terminate on the date that is 90 days 
     after the date on which the Commission submits the 
     Commission's report under section 853(b).

     SEC. 857. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There are authorized to be appropriated 
     $450,000 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.

                         PART K--MISCELLANEOUS

     SEC. 861. EDUCATION-WELFARE STUDY.

       (a) Study.--The Comptroller General of the United States 
     shall conduct a study of the effectiveness of educational 
     approaches (including vocational and post-secondary education 
     approaches) and rapid employment approaches to helping 
     welfare recipients and other low-income adults become 
     employed and economically self-sufficient. Such study shall 
     include--
       (1) a survey of the available scientific evidence and 
     research data on the subject, including a comparison of the 
     effects of programs emphasizing a vocational or postsecondary 
     educational approach to programs emphasizing a rapid 
     employment approach, along with research on the impacts of 
     programs which emphasize a combination of such approaches;
       (2) an examination of the research regarding the impact of 
     postsecondary education on the educational attainment of the 
     children of recipients who have completed a postsecondary 
     education program; and
       (3) information regarding short and long-term employment, 
     wages, duration of employment, poverty rates, sustainable 
     economic self-sufficiency, prospects for career advancement 
     or wage increases, access to quality child care, placement in 
     employment with benefits including health care, life 
     insurance and retirement, and related program outcomes.
       (b) Report.--Not later than August 1, 1999, the Comptroller 
     General of the United States shall prepare and submit to the 
     Committees on Ways and Means and on Education and the 
     Workforce of the House of Representatives and the Committees 
     on Finance and on Labor and Human Resources of the Senate, a 
     report that contains the finding of the study required by 
     subsection (a).

     SEC. 862. RELEASE OF CONDITIONS, COVENANTS, AND REVERSIONARY 
                   INTERESTS, GUAM COMMUNITY COLLEGE CONVEYANCE, 
                   BARRIGADA, GUAM.

       (a) Release.--The Secretary of Education shall release all 
     conditions and covenants that were imposed by the United 
     States, and the reversionary interests that were retained by 
     the United States, as part of the conveyance of a parcel of 
     Federal surplus property located in Barrigada, Guam, 
     consisting of approximately 314.28 acres and known as Naval 
     Communications Area Master Station, WESTPAC, parcel IN, which 
     was conveyed to the Guam Community College pursuant to--
       (1) the quitclaim deed dated June 8, 1990, conveying 61.45 
     acres, between the Secretary, acting through the 
     Administrator for Management Services, and the Guam Community 
     College, acting through its Board of Trustees; and
       (2) the quitclaim deed dated June 8, 1990, conveying 252.83 
     acres, between the Secretary, acting through the 
     Administrator for Management Services, and the Guam Community 
     College, acting through its Board of Trustees, and the 
     Governor of Guam.
       (b) Consideration.--The Secretary shall execute the release 
     of the conditions, covenants, and reversionary interests 
     under subsection (a) without consideration.
       (c) Instrument of Release.--The Secretary shall execute and 
     file in the appropriate office or offices a deed of release, 
     amended deed, or other appropriate instrument effectuating 
     the release of the conditions, covenants, and reversionary 
     interests under subsection (a).

     SEC. 863. SENSE OF CONGRESS REGARDING GOOD CHARACTER.

       (a) Findings.--Congress finds that--
       (1) the future of our Nation and world will be determined 
     by the young people of today;
       (2) record levels of youth crime, violence, teenage 
     pregnancy, and substance abuse indicate a growing moral 
     crisis in our society;
       (3) character development is the long-term process of 
     helping young people to know, care about, and act upon such 
     basic values as trustworthiness, respect for self and others, 
     responsibility, fairness, compassion, and citizenship;
       (4) these values are universal, reaching across cultural 
     and religious differences;
       (5) a recent poll found that 90 percent of Americans 
     support the teaching of core moral and civic values;
       (6) parents will always be children's primary character 
     educators;
       (7) good moral character is developed best in the context 
     of the family;
       (8) parents, community leaders, and school officials are 
     establishing successful partnerships across the Nation to 
     implement character education programs;
       (9) character education programs also ask parents, faculty, 
     and staff to serve as role models of core values, to provide 
     opportunities for young people to apply these values, and to 
     establish high academic standards that challenge students to 
     set high goals, work to achieve the goals, and persevere in 
     spite of difficulty;
       (10) the development of virtue and moral character, those 
     habits of mind, heart, and spirit that help young people to 
     know, desire, and do what is right, has historically been a 
     primary mission of colleges and universities; and
       (11) the Congress encourages parents, faculty, and staff 
     across the Nation to emphasize character development in the 
     home, in the community, in our schools, and in our colleges 
     and universities.
       (b) Sense of Congress.--It is the sense of Congress that 
     Congress should support and encourage character building 
     initiatives in schools across America and urge colleges and 
     universities to affirm that the development of character is 
     one of the primary goals of higher education.

     SEC. 864. EDUCATIONAL MERCHANDISE LICENSING CODES OF CONDUCT.

       It is the sense of the Congress that all American colleges 
     and universities should adopt rigorous educational 
     merchandise licensing codes of conduct to assure that 
     university and college licensed merchandise is not made by 
     sweatshop and exploited adult or child labor either 
     domestically or abroad, and that such codes should include at 
     least the following:
       (1) Public reporting of the code and the companies adhering 
     to the code.
       (2) Independent monitoring of the companies adhering to the 
     code by entities not limited to major international 
     accounting firms.
       (3) An explicit prohibition on the use of child labor.
       (4) An explicit requirement that companies pay workers at 
     least the governing minimum wage and applicable overtime.
       (5) An explicit requirement that companies allow workers 
     the right to organize without retribution.
       (6) An explicit requirement that companies maintain a safe 
     and healthy workplace.

                   TITLE IX--AMENDMENTS TO OTHER LAWS

   PART A--EXTENSION AND REVISION OF INDIAN HIGHER EDUCATION PROGRAMS

     SEC. 901. TRIBALLY CONTROLLED COLLEGES AND UNIVERSITIES.

       (a) Reauthorization.--
       (1) Amount of grants.--Section 108(a)(2) of the Tribally 
     Controlled Community College Assistance Act of 1978 (25 
     U.S.C. 1808(a)(2)) is amended by striking ``$5,820'' and 
     inserting ``$6,000''.
       (2) Authorization of appropriations.--
       (A) Title i.--Section 110(a) of the Tribally Controlled 
     Community College Assistance Act of 1978 (25 U.S.C. 1810(a)) 
     is amended--

[[Page H9043]]

       (i) in paragraph (1), by striking ``1993'' and inserting 
     ``1999'';
       (ii) in paragraph (2), by striking ``$30,000,000 for fiscal 
     year 1993'' and inserting ``$40,000,000 for fiscal year 
     1999'';
       (iii) in paragraph (3), by striking ``1993'' and inserting 
     ``1999''; and
       (iv) in paragraph (4), by striking ``1993'' and inserting 
     ``1999''.
       (B) Title iii.--Section 306(a) of the Tribally Controlled 
     Community College Assistance Act of 1978 (25 U.S.C. 1836(a)) 
     is amended by striking ``1993'' and inserting ``1999''.
       (C) Title iv.--Section 403 of the Tribal Economic 
     Development and Technology Related Education Assistance Act 
     of 1990 (25 U.S.C. 1852) is amended by striking ``1993'' and 
     inserting ``1999''.
       (b) Extension to Colleges and Universities.--The Tribally 
     Controlled Community College Assistance Act of 1978 (25 
     U.S.C. 1801 et seq.) is amended--
       (1) in the first section (25 U.S.C. 1801 note), by striking 
     ``Community College'' and inserting ``College or 
     University'';
       (2) in the heading for title I (25 U.S.C. 1802 et seq.), by 
     striking ``COMMUNITY COLLEGES'' and inserting ``COLLEGES OR 
     UNIVERSITIES'';
       (3) in the heading for title III (25 U.S.C. 1831 et seq.), 
     by striking ``COMMUNITY COLLEGE'' and inserting ``COLLEGE OR 
     UNIVERSITY'';
       (4) in the heading for section 107, by striking ``community 
     colleges'' and inserting ``colleges or universities'';
       (5) in sections 2(a)(4), 2(a)(7), 2(b)(4), 102(b), 103, 
     105, 106(b), 107(a), 107(b), 108(a), 108(b)(3)(A), 
     108(b)(3)(B), 108(b)(4), 109(b)(2), 109(b)(3), 109(d), 
     113(a), 113(b), 113(c)(1), 113(c)(2), 302(b), 303, 304, 
     305(a), and 305(b) (25 U.S.C. 1801(a)(4), 1801(a)(7), 
     1801(b)(4), 1803(b), 1804, 1805, 1806(b), 1807(a), 1807(b), 
     1808(a), 1808(b)(3)(A), 1808(b)(3)(B), 1808(b)(4), 
     1809(b)(2), 1809(b)(3), 1809(d), 1813(a), 1813(b), 
     1813(c)(1), 1813(c)(2), 1832(b), 1833, 1834, 1835(a), and 
     1835(b)), by striking ``community college'' each place the 
     term appears and inserting ``college or university'';
       (6) in sections 101, 102(a), 104(a)(1), 107(a), 108(c)(2), 
     109(b)(1), 111(a)(2), 112(a), 112(a)(2), 112(c)(2)(B), 301, 
     302(a), and 402(a) (25 U.S.C. 1802, 1803(a), 1804a(a)(1), 
     1807(a), 1808(c)(2), 1809(b)(1), 1811(a)(2), 1812(a), 
     1812(a)(2), 1812(c)(2)(B), 1831, 1832(a), and 1851(a)), by 
     striking ``community colleges'' each place the term appears 
     and inserting ``colleges or universities'';
       (7) in sections 108(a)(1), 108(a), 113(b)(2), 113(c)(2), 
     302(a), 302(b), 302(b)(2)(B), 302(b)(4), 303, 304, 305(a), 
     and 305(b) (25 U.S.C. 1808(a)(1), 1808(a), 1813(b)(2), 
     1813(c)(2), 1832(a), 1832(b), 1832(b)(2)(B), 1832(b)(4), 
     1833, 1834, 1835(a), and 1835(b)), by striking ``such 
     college'' each place the term appears and inserting ``such 
     college or university'';
       (8) in sections 104(a)(2), 109(b)(1), and 111(a)(2) (25 
     U.S.C. 1804a(a)(2), 1809(b)(1), and 1811(a)(2), by striking 
     ``such colleges'' and inserting ``such colleges or 
     universities'';
       (9) in section 2(b)(5) (25 U.S.C. 1801(b)(5)), by striking 
     ``community college's'' and inserting ``college or 
     university's'';
       (10) in section 109(a) (25 U.S.C. 1809(a)), by inserting 
     ``or university'' after ``tribally controlled college'';
       (11) in section 110(a)(4) (25 U.S.C. 1810(a)(4)), by 
     striking ``Tribally Controlled Community Colleges'' and 
     inserting ``tribally controlled colleges or universities'';
       (12) in sections 102(b), 109(d), 113(c)(2)(E), 302(b)(6), 
     and 305(a) (25 U.S.C. 1803(b), 1809(d), 1813(c)(2)(E), 
     1832(b)(6), and 1835(a)), by striking ``the college'' and 
     inserting ``the college or university'';
       (13) in section 112(c)(1) (25 U.S.C. 1812(c)(1)), by 
     striking ``colleges'' and inserting ``colleges or 
     universities'';
       (14) in sections 302(b)(4) and 305(a) (25 U.S.C. 1832(b)(4) 
     and 1835(a)), by striking ``that college'' and inserting 
     ``that college or university''; and
       (15) in section 302(b)(4) (25 U.S.C. 1832(b)(4)), by 
     striking ``other colleges'' and inserting ``other colleges or 
     universities''.
       (c) Additional Conforming Amendments.--
       (1) Recommended legislation.--The Secretary of Education 
     shall prepare and submit to Congress recommended legislation 
     containing technical and conforming amendments to reflect the 
     changes made by subsection (b).
       (2) Submission to congress.--Not later than 6 months after 
     the effective date of this title, the Secretary of Education 
     shall submit the recommended legislation referred to under 
     paragraph (1).
       (d) References.--Any reference to a section or other 
     provision of the Tribally Controlled Community College 
     Assistance Act of 1978 shall be deemed to be a reference to 
     the Tribally Controlled College or University Assistance Act 
     of 1978.
       (e) Clerical Amendment.--Section 109 of the Tribally 
     Controlled Colleges or University Act of 1978 (as renamed by 
     subsection (b)(1)) (25 U.S.C. 1809) is amended by 
     redesignating subsection (d) as subsection (c).

     SEC. 902. REAUTHORIZATION OF NAVAJO COMMUNITY COLLEGE ACT.

       Section 5(a)(1) of the Navajo Community College Act (25 
     U.S.C. 640c-1) is amended by striking ``1993'' and inserting 
     ``1999''.

                     PART B--EDUCATION OF THE DEAF

     SEC. 911. SHORT TITLE.

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

     SEC. 912. ELEMENTARY AND SECONDARY EDUCATION PROGRAMS.

       Section 104(b) of the Education of the Deaf Act of 1986 (20 
     U.S.C. 4304(b)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A), by inserting ``and'' after the 
     semicolon;
       (B) in subparagraph (B), by striking ``; and'' and 
     inserting a period; and
       (C) by striking subparagraph (C);
       (2) in the matter preceding subparagraph (A) of paragraph 
     (2)--
       (A) by striking ``paragraph (1)'' and inserting ``paragraph 
     (1)(B)''; and
       (B) by striking ``section 618(b)'' and inserting ``section 
     618(a)(1)(A)'';
       (3) in paragraph (3), by striking ``intermediate 
     educational unit'' and inserting ``educational service 
     agency'';
       (4) in paragraph (4)--
       (A) in subparagraph (A), by striking ``intermediate 
     educational unit'' and inserting ``educational service 
     agency''; and
       (B) in subparagraph (B), by striking ``intermediate 
     educational units'' and inserting ``educational service 
     agencies''; and
       (5) by amending subparagraph (C) to read as follows:
       ``(C) provide the child a free appropriate public education 
     in accordance with part B of the Individuals with 
     Disabilities Education Act and procedural safeguards in 
     accordance with the following provisions of section 615 of 
     such Act:
       ``(i) Paragraphs (1), and (3) through (6), of subsection 
     (b).
       ``(ii) Subsections (c) through (g).
       ``(iii) Subsection (h), except for the matter in paragraph 
     (4) pertaining to transmission of findings and decisions to a 
     State advisory panel.
       ``(iv) Paragraphs (1) and (2) of subsection (i).
       ``(v) Subsection (j)--

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

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

     SEC. 913. AGREEMENT WITH GALLAUDET UNIVERSITY.

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

     SEC. 914. AGREEMENT FOR THE NATIONAL TECHNICAL INSTITUTE FOR 
                   THE DEAF.

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

     SEC. 915. DEFINITIONS.

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

     SEC. 916. GIFTS.

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

     SEC. 917. REPORTS.

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

     SEC. 918. MONITORING, EVALUATION, AND REPORTING.

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

     SEC. 919. FEDERAL ENDOWMENT PROGRAMS.

       Section 207 of the Education of the Deaf Act of 1986 (20 
     U.S.C. 4357) is amended--

[[Page H9044]]

       (1) in subsection (b)--
       (A) by amending paragraph (2) to read as follows:
       ``(2) Subject to the availability of appropriations, the 
     Secretary shall make payments to each Federal endowment fund 
     in amounts equal to sums contributed to the fund from non-
     Federal sources during the fiscal year in which the 
     appropriations are made available (excluding transfers from 
     other endowment funds of the institution involved).''; and
       (B) by striking paragraph (3);
       (2) in subsection (c)(1), by inserting ``the Federal 
     contribution of'' after ``shall invest'';
       (3) in subsection (d)--
       (A) in paragraph (2)(C), by striking ``Beginning on October 
     1, 1992, the'' and inserting ``The''; and
       (B) in paragraph (3)(A), by striking ``prior'' and 
     inserting ``current''; and
       (4) in subsection (h)--
       (A) in paragraph (1), by striking ``1993 through 1997'' and 
     inserting ``1998 through 2003''; and
       (B) in paragraph (2), by striking ``1993 through 1997'' and 
     inserting ``1998 through 2003''.

     SEC. 920. SCHOLARSHIP PROGRAM.

       Section 208 of the Education of the Deaf Act of 1986 (20 
     U.S.C. 4358) is repealed.

     SEC. 921. OVERSIGHT AND EFFECT OF AGREEMENTS.

       Section 209 of the Education of the Deaf Act of 1986 (20 
     U.S.C. 4359) is amended--
       (1) in subsection (a), by striking ``Committee on Education 
     and Labor'' and inserting ``Committee on Education and the 
     Workforce''; and
       (2) by redesignating such section as section 208.

     SEC. 922. INTERNATIONAL STUDENTS.

       (a) Amendment.--Section 210 of the Education of the Deaf 
     Act of 1986 (20 U.S.C. 4359a) is amended--
       (1) in subsection (a)--
       (A) by striking ``10 percent'' and inserting ``15 
     percent''; and
       (B) by inserting before the period the following: ``, 
     except that in any school year no United States citizen who 
     is qualified to be admitted to the University or NTID and 
     applies for admission to the University or NTID shall be 
     denied admission because of the admission of an international 
     student''; and
       (2) in subsection (b), by striking ``surcharge of 75 
     percent for the academic year 1993-1994 and 90 percent 
     beginning with the academic year 1994-1995'' and inserting 
     ``surcharge of 100 percent for the academic year 1999-2000 
     and any succeeding academic year''.
       (b) Conforming Amendment.--Section 210 of such Act (20 
     U.S.C. 4359a) is amended by redesignating such section as 
     section 209.

     SEC. 923. RESEARCH PRIORITIES.

       Title II of the Education of the Deaf Act of 1986 is 
     amended by striking section 211 (20 U.S.C. 4360) and 
     inserting the following:

     ``SEC. 210. RESEARCH PRIORITIES.

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

     SEC. 924. NATIONAL STUDY ON THE EDUCATION OF THE DEAF.

       The Education of the Deaf Act of 1986 (20 U.S.C. 4301 et 
     seq.) is amended by adding after section 210 (as inserted by 
     section 923) the following:

     ``SEC. 211. NATIONAL STUDY ON THE EDUCATION OF THE DEAF.

       ``(a) Conduct of Study.--
       ``(1) In general.--The Secretary shall conduct a national 
     study on the education of the deaf, to identify education-
     related barriers to successful postsecondary education 
     experiences and employment for individuals who are deaf, and 
     those education-related factors that contribute to successful 
     postsecondary education experiences and employment for 
     individuals who are deaf.
       ``(2) Definition.--In this section the term `deaf', when 
     used with respect to an individual, means an individual with 
     a hearing impairment, including an individual who is hard of 
     hearing, an individual deafened later in life, and an 
     individual who is profoundly deaf.
       ``(b) Public Input and Consultation.--
       ``(1) In general.--In conducting such study, the Secretary 
     shall obtain input from the public. To obtain such input, the 
     Secretary shall--
       ``(A) publish a notice with an opportunity for comment in 
     the Federal Register;
       ``(B) consult with individuals and organizations 
     representing a wide range of perspectives on deafness-related 
     issues, including organizations representing individuals who 
     are deaf, parents of children who are deaf, educators, and 
     researchers; and
       ``(C) take such other action as the Secretary deems 
     appropriate, which may include holding public meetings.
       ``(2) Structured opportunities.--The Secretary shall 
     provide structured opportunities to receive and respond to 
     the viewpoints of the individuals and organizations described 
     in paragraph (1)(B).
       ``(c) Report.--The Secretary shall report to Congress not 
     later than 18 months after the date of enactment of the 
     Education of the Deaf Amendments of 1998 regarding the 
     results of the study. The report shall contain--
       ``(1) recommendations, including recommendations for 
     legislation, that the Secretary deems appropriate; and
       ``(2) a detailed summary of the input received under 
     subsection (b) and the ways in which the report addresses 
     such input.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated $1,000,000 for each of the 
     fiscal years 1999 and 2000 to carry out the provisions of 
     this section.''.

     SEC. 925. AUTHORIZATION OF APPROPRIATIONS.

       Title II of the Education of the Deaf Act of 1986 (20 
     U.S.C. 4351 et seq.) is amended by adding after section 211 
     (as inserted by section 924) the following:

     ``SEC. 212. AUTHORIZATION OF APPROPRIATIONS.

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

                PART C--UNITED STATES INSTITUTE OF PEACE

     SEC. 931. AUTHORITIES OF THE UNITED STATES INSTITUTE OF 
                   PEACE.

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

              PART D--VOLUNTARY RETIREMENT INCENTIVE PLANS

     SEC. 941. VOLUNTARY RETIREMENT INCENTIVE PLANS.

       (a) In General.--Section 4 of the Age Discrimination in 
     Employment Act of 1967 (29 U.S.C. 623) is amended by adding 
     at the end the following:
       ``(m) Notwithstanding subsection (f )(2)(B), it shall not 
     be a violation of subsection (a), (b), (c), or (e) solely 
     because a plan of an institution of higher education (as 
     defined in section 101 of the Higher Education Act of 1965) 
     offers employees who are serving under a contract of 
     unlimited tenure (or similar arrangement providing for 
     unlimited tenure) supplemental benefits upon voluntary 
     retirement that are reduced or eliminated on the basis of 
     age, if--
       ``(1) such institution does not implement with respect to 
     such employees any age-based reduction or cessation of 
     benefits that are not such supplemental benefits, except as 
     permitted by other provisions of this Act;
       ``(2) such supplemental benefits are in addition to any 
     retirement or severance benefits which have been offered 
     generally to employees serving under a contract of unlimited 
     tenure (or similar arrangement providing for unlimited 
     tenure), independent of any early retirement or exit-
     incentive plan, within the preceding 365 days; and
       ``(3) any employee who attains the minimum age and 
     satisfies all non-age-based conditions for receiving a 
     benefit under the plan has an opportunity lasting not less 
     than 180 days to elect to retire and to receive the maximum 
     benefit that could then be elected by a younger but otherwise 
     similarly situated employee, and the plan does not require 
     retirement to occur sooner than 180 days after such 
     election.''.
       (b) Plans Permitted.--Section 4(i)(6) of the Age 
     Discrimination in Employment Act of 1967 (29 U.S.C. 
     623(i)(6)) is amended by adding after the word ``accruals'' 
     the following: ``or it is a plan permitted by subsection 
     (m).''
       (c) Construction.--Nothing in the amendment made by 
     subsection (a) shall affect the application of section 4 of 
     the Age Discrimination in Employment Act of 1967 (29 U.S.C. 
     623) with respect to--
       (1) any plan described in subsection (m) of section 4 of 
     such Act (as added by subsection (a)), for any period prior 
     to enactment of such Act;
       (2) any plan not described in subsection (m) of section 4 
     of such Act (as added by subsection (a)); or
       (3) any employer other than an institution of higher 
     education (as defined in section 101 of the Higher Education 
     Act of 1965).
       (d) Effective Date.--

[[Page H9045]]

       (1) In general.--This section shall take effect on the date 
     of enactment of this Act.
       (2) Effect on causes of action existing before date of 
     enactment.--The amendment made by subsection (a) shall not 
     apply with respect to any cause of action arising under the 
     Age Discrimination in Employment Act of 1967 prior to the 
     date of enactment of this Act.

           PART E--GENERAL EDUCATION PROVISIONS ACT AMENDMENT

     SEC. 951. AMENDMENT TO FAMILY EDUCATIONAL RIGHTS AND PRIVACY 
                   ACT OF 1974

       Section 444(b) of the General Education Provisions Act (20 
     U.S.C. 1232g(b)), also know as the Family Educational Rights 
     and Privacy Act of 1974, is amended--
       (1) in paragraph (1), by amending subparagraph (C) to read 
     as follows:
       ``(C)(i) authorized representatives of (I) the Comptroller 
     General of the United States, (II) the Secretary, or (III) 
     State educational authorities, under the conditions set forth 
     in paragraph (3), or (ii) authorized representatives of the 
     Attorney General for law enforcement purposes under the same 
     conditions as apply to the Secretary under paragraph (3);''; 
     and
       (2) in paragraph (6)--
       (A) by inserting ``(A)'' after ``(6)'';
       (B) in subparagraph (A), as designated by subparagraph (A) 
     of this paragraph--
       (i) by striking ``the results'' and inserting ``or a 
     nonforcible sex offense, the final results''; and
       (ii) by striking ``such crime'' each place the term appears 
     and inserting ``such crime or offense''; and
       (C) adding at the end thereof the following:
       ``(B) Nothing in this section shall be construed to 
     prohibit an institution of postsecondary education from 
     disclosing the final results of any disciplinary proceeding 
     conducted by such institution against a student who is an 
     alleged perpetrator of any crime of violence (as that term is 
     defined in section 16 of title 18, United States Code), or a 
     nonforcible sex offense, if the institution determines as a 
     result of that disciplinary proceeding that the student 
     committed a violation of the institution's rules or policies 
     with respect to such crime or offense.
       ``(C) For the purpose of this paragraph, the final results 
     of any disciplinary proceeding--
       ``(i) shall include only the name of the student, the 
     violation committed, and any sanction imposed by the 
     institution on that student; and
       ``(ii) may include the name of any other student, such as a 
     victim or witness, only with the written consent of that 
     other student.''.

     SEC. 952. ALCOHOL OR DRUG POSSESSION DISCLOSURE.

       Section 444 of the General Education Provisions Act (20 
     U.S.C. 1232g) is amended by adding at the end the following:
       ``(i) Drug and Alcohol Violation Disclosures.--
       ``(1) In general.--Nothing in this Act or the Higher 
     Education Act of 1965 shall be construed to prohibit an 
     institution of higher education from disclosing, to a parent 
     or legal guardian of a student, information regarding any 
     violation of any Federal, State, or local law, or of any rule 
     or policy of the institution, governing the use or possession 
     of alcohol or a controlled substance, regardless of 
     whether that information is contained in the student's 
     education records, if--
       ``(A) the student is under the age of 21; and
       ``(B) the institution determines that the student has 
     committed a disciplinary violation with respect to such use 
     or possession.
       ``(2) State law regarding disclosure.--Nothing in paragraph 
     (1) shall be construed to supersede any provision of State 
     law that prohibits an institution of higher education from 
     making the disclosure described in subsection (a).''.

    PART F--LIAISON FOR PROPRIETARY INSTITUTIONS OF HIGHER EDUCATION

     SEC. 961. LIAISON FOR PROPRIETARY INSTITUTIONS OF HIGHER 
                   EDUCATION.

       Title II of the Department of Education Organization Act 
     (20 U.S.C. 3411 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 219. LIAISON FOR PROPRIETARY INSTITUTIONS OF HIGHER 
                   EDUCATION.

       ``(a) Establishment.--There shall be in the Department a 
     Liaison for Proprietary Institutions of Higher Education, who 
     shall be an officer of the Department appointed by the 
     Secretary.
       ``(b) Appointment.--The Secretary shall appoint, not later 
     than 6 months after the date of enactment of the Higher 
     Education Amendments of 1998 a Liaison for Proprietary 
     Institutions of Higher Education who shall be a person who--
       ``(1) has attained a certificate or degree from a 
     proprietary institution of higher education; or
       ``(2) has been employed in a proprietary institution 
     setting for not less than 5 years.
       ``(c) Duties.--The Liaison for Proprietary Institutions of 
     Higher Education shall--
       ``(1) serve as the principal advisor to the Secretary on 
     matters affecting proprietary institutions of higher 
     education;
       ``(2) provide guidance to programs within the Department 
     that involve functions affecting proprietary institutions of 
     higher education; and
       ``(3) work with the Federal Interagency Committee on 
     Education to improve the coordination of--
       ``(A) the outreach programs in the numerous Federal 
     departments and agencies that administer education and job 
     training programs;
       ``(B) collaborative business and education partnerships; 
     and
       ``(C) education programs located in, and involving, rural 
     areas.''.

                  PART G--AMENDMENTS TO OTHER STATUTES

     SEC. 971. NONDISCHAREABILITY OF CERTAIN CLAIMS FOR 
                   EDUCATIONAL BENEFITS PROVIDED TO OBTAIN HIGHER 
                   EDUCATION.

       (a) Amendment.--Section 523(a)(8) of title 11, United 
     States Code, is amended by striking ``unless--'' and all that 
     follows through ``(B) excepting such debt'' and inserting 
     ``unless excepting such debt''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply only with respect to cases commenced under title 
     11, United States Code, after the date of enactment of this 
     Act.

     SEC. 972. 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, 2004.

                            PART H--REPEALS

     SEC. 981. REPEALS.

       Section 4122 of the Elementary and Secondary Education Act 
     of 1965 (20 U.S.C. 7132) is repealed.
       And the Senate agree to the same.
     For consideration of the House bill (except sec. 464), and 
     the Senate amendment (except secs. 484 and 799C), and 
     modifications committed to conference:
     Bill Goodling,
     Howard ``Buck'' McKeon,
     Tom Petri,
     Lindsey Graham,
     Mark Souder,
     John E. Peterson,
     W.L. Clay,
     Dale E. Kildee,
     M.G. Martinez,
     Robert E. Andrews,
     For consideration of sec. 464 of the House bill, and secs. 
     484 and 799C of the Senate amendment, and modifications 
     committed to conference:
     Bill Goodling,
     James Talent,
     E. Clay Shaw, Jr.,
     Dave Camp,
     W.L. Clay,
     Sander Levin,
                                Managers on the Part of the House.

     Jim Jeffords,
     Dan Coats,
     Judd Gregg,
     Bill Frist,
     Mike DeWine,
     Mike Enzi,
     Tim Hutchinson,
     Susan Collins,
     John Warner,
     Mitch McConnell,
     Ted Kennedy,
     Chris Dodd,
     Tom Harkin,
     Barbara A. Mikulski,
     Jeff Bingaman,
     Patty Murray,
     Jack Reed,
                               Managers on the Part of the Senate.

       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

       The managers on the part of the House and the Senate at the 
     conference on the disagreeing votes of the two Houses on the 
     amendment of the Senate to the bill (H.R. 6), to extend the 
     authorization of programs under the Higher Education Act of 
     1965, and for other purposes, submit the following joint 
     statement to the House and the Senate in explanation of the 
     effect of the action agreed upon by the managers and 
     recommended in the accompanying conference report:
       The Senate amendment struck all of the House bill after the 
     enacting clause and inserted a substitute text.
       The House recedes from its disagreement to the amendment of 
     the Senate with an amendment that is a substitute for the 
     House bill and the Senate amendment. The differences between 
     the House bill, the Senate amendment, and the substitute 
     agreed to in conference are noted below, except for clerical 
     corrections, conforming changes made necessary by agreements 
     reached by the conferees, and minor drafting and clerical 
     changes.
       Both bills provide that this Act may be cited as the 
     ``Higher Education Amendments of 1998'', and both bills 
     provide that all references to ``the Act'' are references to 
     the Higher Education Act of 1965.
       The House bill, but not the Senate bill, contains a 
     provision that, except as otherwise provided, the amendments 
     made by the Higher Education Amendments of 1998 shall take 
     effect on October 1, 1998.
       The Senate recedes.

                      TITLE I--GENERAL PROVISIONS


                         transfer of provisions

       Both bills repeal title I of current law and transfer 
     provisions of the current title XII to title I.

                          Part A--Definitions


                    institution of higher education

       The House bill transfers all definitions from the current 
     section 1201 and section 481(a), (b), and (c) to title I. The 
     general definition of ``institution of higher education'' 
     currently contained in section 1201(a) is rewritten without 
     substantive changes. Section 481 (a), (b), and (c) are also 
     rewritten with only minor changes.
       The Senate bill simply redesignates section 1201 as section 
     101, makes minor

[[Page H9046]]

     changes to section 481(a), and no changes to section 481 (b) 
     and (c).
       The Senate recedes with respect to the placement of both 
     definitions of ``institution of higher education'' in title 
     I. The conference substitute provides that the general 
     definition of ``institution of higher education'' currently 
     included in section 1201(a) is transferred to section 101 and 
     the definition of ``institution of higher education'' for 
     purposes of title IV and related institutional definitions 
     currently included in section 481 are transferred to section 
     102. The purpose of transferring both definitions to the same 
     title of the bill is for ease of reference. The transfer of 
     the definitions does not, nor is it intended to, change the 
     meaning of the current definitions.


                        foreign medical schools

       Both bills include specific references to veterinary 
     schools in provisions dealing with standards to be met by 
     institutions outside the United States in order to qualify 
     for Federal Family Education Loans include veterinary 
     schools. The House bill places the provision in title I while 
     the Senate bill includes it in title IV.
       The Senate recedes.


               institutions serving incarcerated students

       The House bill, but not the Senate bill, allows the 
     Secretary to waive the provision limiting the percentage of 
     incarcerated students enrolled in the institution in the case 
     of nonprofit schools providing 4-year or 2-year programs of 
     instruction that award diplomas in addition to bachelor and 
     associate degrees.
       The Senate recedes with an amendment to insert 
     ``postsecondary'' before diploma.


                               85/15 rule

       The House bill, but not the Senate bill, modifies the 85/15 
     rule (which specifies the proportion of its revenue that a 
     proprietary institution may receive from Title IV programs in 
     order to remain an eligible institution) to allow monies 
     earned from non-title IV-eligible programs provided on a 
     contractual basis to be included in calculating the 15 
     percent.
       The Senate recedes with an amendment to change the current 
     85/15 rule to a 90/10 rule, so that such institutions must 
     earn at least 10 percent of their revenues from sources not 
     derived from funds provided under title IV, and to strike 
     provisions dealing with the calculation of non-federal 
     revenues. The conferees further agree that non-title IV 
     revenues will continue to be defined as they are under the 
     Secretary's regulations as in effect upon the date of 
     enactment.

                       Part B--General Provisions


                         transfer of provisions

       Both bills transfer general provisions from the current 
     title XII to title 1, after eliminating obsolete or unfunded 
     sections, including: Federal-State Relationship; State 
     Agreements (Section 1203), Commission to Study 
     Postsecondary Institutional and Programmatic Recognition 
     Process (Section 1206), Aggregate Limit of Authorization 
     of Appropriations (Section 1211), and Technology Transfer 
     Centers (Section 1212).


          Protection of Student Speech and Association Rights

       Both bills include Sense-of-Congress provisions relating to 
     the protection of student speech and association rights, but 
     there are minor differences in wording. The House bill 
     includes these provisions in Title XIII, while the Senate 
     bill includes them in Section 797 of Title VII.
       The House recedes/the Senate recedes to place the 
     provisions in Title I.
       The Senate bill, but not the House bill, clarifies that 
     institutions are not prohibited from taking appropriate 
     action in certain situations.
       The House recedes, with an amendment adding hazing.


                        Freely Associated States

       The House bill, but not the Senate bill, terminates the 
     eligibility of the Freely Associated States for TRIO.
       The Senate recedes with an amendment to sunset the 
     eligibility of the Freely Associated States (the Republic of 
     the Marshall Islands, the Federated States of Micronesia and 
     the Republic of Palau) on September 30, 2004. The conferees 
     intend that the Freely Associated States will continue to be 
     eligible for TRIO, Byrd Scholarships, Pell Grants, SEOG, and 
     College Work Study until the expiration of the Higher 
     Education Act Amendments of 1998 on September 30, 2004. 
     However, the conferees recognize that the terms of the 
     Compacts of Free Association will be renegotiated prior to 
     that date and anticipate that these issues will be discussed 
     and equitably resolved within the context of these 
     negotiations. The conferees fully expect that those 
     negotiations will result in these higher education service 
     being paid for by the legislation implementing the 
     renegotiated Compacts, not the Higher Education Act. Further, 
     the conferees expect that any changes affecting these 
     programs made by the Compacts through this renegotiating 
     process will be considered by the Congress.


              Advisory Committee on Institutional Quality

       The Senate bill, but not the House bill, adopts a new 
     notice and public solicitation of members for the National 
     Advisory Committee on Institutional Quality and Integrity, 
     deletes outdated references, and extends the duration of the 
     committee until 2004.
       The House recedes.


                   Binge Drinking on College Campuses

       The House bill includes Sense-of-the-House language on 
     alcohol consumption in Title XII. The Senate bill includes 
     similar provisions in Section 798 of Title VII.
       The House recedes/the Senate recedes to place the 
     provisions in Part B of title I.
       The Senate bill includes a title for this section, 
     Collegiate Initiative to Reduce Binge Drinking, while the 
     House bill has no title.
       The House recedes with an amendment to name the title, 
     ``Collegiate Initiative to Reduce Binge Drinking and Illegal 
     Alcohol Consumption''.
       The Senate bill includes findings and the House bill does 
     not.
       The Senate recedes.
       The House recommends that all college and university 
     administrators adopt a code of principles, while the Senate 
     bill recommends that all institutions carry out the following 
     list. Throughout the list of principles/activities, the House 
     bill uses ``shall'' while the Senate bill uses ``should''.
       The House recedes.
       Both bills call for a ``zero tolerance'' policy enforced on 
     illegal consumption of alcohol. The House bill also applies 
     it to binge drinking and wants institutions to take steps to 
     reduce opportunities for legal alcohol consumption on campus.
       The House recedes.
       The House bill requires that students be referred to on 
     campus counseling programs, while the Senate bill references 
     appropriate assistance.
       The House recedes with an amendment adding ``including on-
     campus counseling programs, if appropriate'' at the end of 
     the last sentence, and striking ``appropriate'' where it 
     appears in the second sentence of the Senate bill.
       The House bill requires the institution to adopt a policy 
     to discourage alcohol-related sponsorship of campus 
     activities, while the Senate bill encourages a policy of 
     eliminating alcohol-related sponsorship.
       The Senate recedes with amendment to change ``shall'' to 
     ``should'' in both sentences.
       Both bills encourage Town/Gown alliances. The alliance is 
     to encourage responsible policies toward alcohol consumption 
     and address illegal use in the Senate bill, while in the 
     House bill they are to curtail illegal access to alcohol and 
     adopt responsible alcohol marketing and service practices.
       The House recedes.


                   Drug and Alcohol Abuse Prevention

       Both bills include a new grant and recognition awards 
     program as subsections (e) and (f) of the ``Drug and Alcohol 
     Abuse Prevention'' included in Title I of each bill. The 
     grant program is similar in both bills, with minor wording 
     differences. Both bills authorize $5 million in FY 1999 
     and ``such sums'' in the 4 succeeding fiscal years for the 
     program.
     National recognition awards
       Both bills have similar provisions, except the House bill 
     includes alcohol and drug abuse prevention, while the Senate 
     bill only includes alcohol abuse prevention.
       The House recedes with an amendment to insert ``and drug 
     abuse'' after ``alcohol'' in both places it appears in the 
     purpose section and to provide that 5 of the 10 National 
     Recognition Awards be made to institutions with outstanding 
     alcohol prevention programs and the other 5 be made to 
     institutions with outstanding drug prevention programs.
       The Senate bill, but not the House bill, requires 
     applicants to demonstrate efforts to change climate on campus 
     related to alcohol.
       The House recedes with amendment to change the cross-
     reference from ``objectives'' to review criteria.
       The Senate bill, but not the House bill, directs the 
     Secretary to disseminate information about the programs to 
     secondary schools in the country, while the House bill simply 
     requires information to be disseminated.
       The House recedes with an amendment to insert ``and drug 
     abuse'' after ``alcohol''.
       The Senate bill, but not the House bill, sets the award 
     amounts and $50,000.
       The House recedes with an amendment to add ``or drug 
     abuse'' after ``alcohol''.
     Applications
       Both bills establish application procedures, but they are 
     worded differently.
       The House recedes.
       The House bill, but not the Senate bill, includes a 
     description of special initiatives used to reduce high risk 
     behavior and/or increase low risk behavior.
       The Senate recedes.
       The Senate bill, but not House bill, includes a description 
     of the activities to be assisted that meet the requirements 
     of the review criteria.
       The Senate recedes.
       The House bill, but not the Senate bill, includes a 
     description of coordination and networking with the 
     community.
       The Senate recedes.
     Eligibility criteria
       Both bills extend eligibility to the same institutions, but 
     the House bill includes drug prevention programs.
       The House recedes with an amendment to include drug 
     prevention programs.
       The Senate bill, but not the House bill, limits awards to 1 
     in 5 academic years.
       The House recedes.
     Objectives
       The Senate bill, but not the House bill, includes 
     objectives that must be accomplished.

[[Page H9047]]

       The Senate recedes
     Application review
       Similar provision, except the House bill includes drug 
     abuse prevention.
       The House recedes with an amendment to insert ``and drug 
     abuse'' after ``alcohol abuse''.
     Review criteria
       The House bill requires the Secretary to develop review 
     criteria, while the Senate bill requires the committee to 
     develop criteria.
       The House recedes.
       The House bill, but not the Senate bill, requires the 
     committee to consider measures of effectiveness.
       The Senate recedes.
       The House bill, but not the Senate bill, requires the 
     committee to consider measures of program 
     institutionalization, including the assessment of policies, 
     activities, and community involvement.
       The Senate recedes.
       The Senate bill, but not the House bill, requires the 
     criteria to include whether the institution has policies with 
     respect to certain prohibitions on alcohol marketing and 
     sponsorship of athletic events; alcohol free living; and 
     community partnerships.
       The House recedes.
     Authorization
       The House bill authorizes $25,000 for fiscal 1998, $66,000 
     each for fiscal 1999 and 2000, $72,000 each for fiscal 2001, 
     2002, 2003, and 2004. The Senate bill authorizes $750,000 for 
     1999 which remain available until expended.
       The House recedes.


           prior rights and obligations/recovery of payments

       The House bill, but not the Senate bill, retains provisions 
     relating to renovation and construction of facilities within 
     Title VII. The Senate bill transfers provisions relating to 
     prior rights and obligations to Title I. The House bill 
     extends the authorization of appropriations for obligations 
     incurred prior to 1987 for parts C and D as in effect prior 
     to the 1992 amendments. The Senate does the same thing in 
     title I.
       The House recedes.
       The Senate bill, but not the House bill, extends the 
     authorization of appropriations for obligations incurred 
     after 1992 and before 1998 for part C as in effect after the 
     1992 amendments and before the Higher Education Act 
     Amendments of 1998.
       The House recedes.
       The House bill, but not the Senate bill, extends Part C. 
     The Senate bill in Title I provides for authorization of 
     appropriations for obligations incurred between 1992 and 
     1998, and retains legal obligations of such part as such part 
     was in effect during the period.
       The House recedes.
       The House bill, but not the Senate bill, retains part E 
     with minor conforming changes. The Senate bill repeals Part E 
     and transfers only section 781 (``Recovery of Payments'') to 
     title I. (Definition and loan forgiveness sections of Part E 
     are repealed in the Senate bill.)
       The House recedes.

                    Part C--Cost of Higher Education

       Both bills address expanded information on the costs of 
     higher education. The House provisions are in Title VIII, 
     while the Senate provisions are in Section 486 of Title IV, 
     replacing the current Section 486.
       The Senate recedes with an amendment to place the 
     provisions in Part C of Title I.
       The House bill requires the National Center for Education 
     Statistics (NCES) to convene forums to develop consistent 
     methodologies for reporting cost data. The Senate bill 
     requires NCES to develop common definitions for specific data 
     elements.
       The Senate recedes.


             separation of undergraduate and graduate costs

       The House bill, but not the Senate bill, requires that the 
     data be in such a form that allows the Secretary of Education 
     to disseminate separate data for undergraduate and graduate 
     postsecondary education.
       The House recedes. Although not requiring the 
     disaggregation of undergraduate and graduate education data, 
     the conferees believe it is important to focus on graduate 
     education and encourage the development of data on that 
     subject.


                                  data

       The House bill, but not the Senate bill, requires the 
     Secretary of Education to redesign relevant parts of the 
     postsecondary education data system based on consistent 
     methodologies.
       The Senate recedes.


                                 report

       The Senate bill, but not the House bill, requires the 
     National Center for Education Statistics to report such 
     definitions to each institution of higher education and to 
     the respective House and Senate committees within 90 days of 
     enactment.
       The House recedes with an amendment to apply the 90-day 
     requirement only to the reporting of definitions to 
     institutions of higher education and to report to the 
     appropriate congressional committees at a later date.


                       collection of information

       The Senate bill, but not the House bill, requires the 
     Secretary to collect information based on the standard 
     definitions and make the information available each year 
     through the integrated postsecondary education data system 
     (IPEDS) beginning with the 1999-2000 academic year.
       The House recedes with an amendment to strike the reference 
     to (IPEDS).
       The Senate bill, but not the House bill, requires the 
     National Center for Education Statistics to provide public 
     notice that such information is available.
       The Senate recedes.


                           data dissemination

       Both bills require the publication of such information in a 
     form that is easily understandable to parents and students, 
     with slightly different wording.
       The Senate recedes with an amendment striking ``publish'' 
     and inserting ``make available''.
       The House bill, but not the Senate bill, requires such 
     information be published in both printed and electronic form.
       The House recedes.
       The Senate bill, but not the House bill, requires that the 
     National Center for Education Statistics publish a report 
     after the third year such information is collected comparing 
     such information longitudinally by institution.
       The Senate recedes. The conferees expect that the data 
     published by NCES will be presented in a manner which allows 
     for easy comparison of a single institution's cost over time 
     and that the data also be presented by sector. The reporting 
     of this data is not intended to replace other important 
     sources of information, and--specifically--it is the intent 
     of the conferees that NCES will continue NPSAS.


                        data to be disseminated

       Both bills require the data to be provided to parents and 
     students.
       Both bills require that data be collected on tuition. The 
     Senate bill also requires that data be collected on fees.
       The House recedes.
       The House bill, but not the Senate bill, specifies that 
     data will be provided on an institution's cost of educating 
     students on a full-time equivalent basis.
       The House recedes.
       The House bill, but not the Senate bill, specifies that 
     data will be provided on the general subsidy on a full-time 
     equivalent basis.
       The House recedes.
       The House bill, but not the Senate bill, specifies that 
     data will be provided on the instructional cost by level of 
     instruction.
       The House recedes.
       The House bill specifies that data will be provided on the 
     total price of attendance, while the Senate bill refers to 
     the cost of attendance for a full-time undergraduate--
     consistent with the provisions of section 472.
       The House recedes.
       Both bills require that data be collected on the average 
     amount of per student financial aid received, but the Senate 
     bill specifies undergraduate students.
       The House recedes.
       The Senate bill, but not the House bill, requires that 
     information be collected on the percentage of students 
     receiving student financial aid assistance in terms of grants 
     and loans and institutional and other assistance.
       The House recedes with an amendment to strike 
     ``percentage'' and insert ``number''.


                                 report

       The Senate bill, but not the House bill, requires 
     institutions of higher education to provide required data to 
     the National Center for Education Statistics by March 1 of 
     each year beginning in the year 2000.
       The House recedes with an amendment striking ``March 1 of 
     each year, beginning in the year 2000'' and inserting in its 
     place ``beginning with the academic year 2000-2001 and 
     annually thereafter.''


       annual report to congress on the cost of higher education

       The House bill requires an on-going analysis by the General 
     Accounting Office with respect to college costs, while the 
     Senate bill requires NCES in consultation with the Bureau of 
     Labor Statistics to study expenditures at colleges.
       The House recedes with an amendment striking ``In 
     consultation with the Bureau of Labor Statistics.'' Although 
     not specified in the conference substitute, the conferees 
     expect NCES to consult with the Bureau of Labor Statistics in 
     studying college expenditures.
       The House bill, but not the Senate bill, includes a 
     comparison of increases in tuition with other commodities and 
     services.
       The Senate recedes with an amendment striking ``increase in 
     tuition'' and inserting ``change in tuition and fees'' and 
     striking ``other commodities and services'' and inserting 
     ``the Consumer Price Index and other appropriate measures of 
     inflation''.
       Both bills look at faculty salaries, administrative 
     salaries, but the House also includes staffing ratios.
       The House recedes.
       The Senate bill, but not the House bill, includes academic 
     support services and research.
       The House recedes.
       The House bill, but not the Senate bill, includes faculty 
     to student ratios; tenure practices, and related information.
       The House recedes.
       Both bills include construction and technology, with 
     drafting differences. The Senate bill, but not the House 
     bill, includes the replacement cost of instructional 
     buildings and equipment.
       The House recedes with an amendment to remove separate 
     references to technology and construction and to incorporate 
     these items into provisions of the Senate bill dealing with 
     the potential cost of replacing instructional buildings and 
     equipment.

[[Page H9048]]

       The Senate bill, but not the House bill, looks as changes 
     over time and their relation to college costs.
       The House recedes with an amendment adding potential 
     replacement costs to the list of items for which trend data 
     is to be collected.
       The House bill, but not the Senate bill, includes studying 
     tuition discounting practices.
       The Senate recedes. The conferees intend that this 
     provision will apply only to institutions doing tuition 
     discounting.
       The House bill, but not the Senate bill, calls for the 
     establishment of timely mechanism for distributing 
     information.
       The House recedes.
       The House bill, but not the Senate bill, looks at the 
     impact of financial aid on tuition changes.
       The House recedes.
       The House bill, but not the Senate bill, looks at state 
     fiscal policies.
       The House recedes.
       The House bill, but not the Senate bill, allows the 
     inclusion of other appropriate topics.
       The House recedes.


                                 report

       The House bill requires an annual report from the 
     Comptroller General. The Senate bill requires NCES to submit 
     a report by September 30, 2001.
       The House recedes with an amendment striking ``2001'' and 
     inserting ``2002''.


                     higher education market basket

       The Senate bill, but not the House bill, requires the 
     National Center for Education Statistics, in consultation 
     with the Bureau of Labor Statistics (BLS) to develop a 
     ``Higher Education Market Basket'' to be used to determine 
     the composition of the costs of higher education to guide 
     future decision making in this area. The report is to be 
     submitted to the respective House and Senate committees by 
     September 30, 20002.
       The House recedes with an amendment placing the BLS in the 
     lead, in consultation with NCES.


                                 fines

       The Senate bill, but not the House bill, authorizes the 
     Secretary to impose fines of up to $25,000 on institutions 
     which fail to provide cost information.
       The House recedes.


                      student aid recipient survey

       The House bill, but not the Senate bill, repeals Title 13 
     of the Higher Education Amendments of 1986 on Education 
     Administration.
       The Senate recedes with an amendment to maintain section 
     1303(c) of the 1986 Amendments to the HEA and move it to the 
     section of the bill dealing with cost studies. Section 
     1303(c) authorizes the Secretary to survey student aid 
     recipients on a regular cycle.

                 Part D--Performance-Based Organization


                         pbo creation/placement

       The House bill creates the PBO in Part B of title I; the 
     Senate bill creates the PBO at the end of title IV.
       The Senate recedes with an amendment to place PBO 
     provisions in Part D of Title I.


                           pbo establishment

       The House bill, but not the Senate bill, establishes the 
     PBO in the Department. The Senate bill requires the Secretary 
     to establish the PBO in the Department of Education.
       The Senate recedes.
       The House bill specifically states that the PBO is 
     responsible for managing information systems. The Senate bill 
     authorizes the PBO to administer various functions relating 
     to student financial assistance.
       The Senate recedes with an amendment to clarify that the 
     PBO is responsible for administering the operational 
     functions of student financial assistance.


                                purposes

       The House and Senate bills state that it is a purpose of 
     the PBO to improve service. The Senate bill states that it is 
     a purpose of the PBO to make programs more understandable to 
     students and their parents.
       The House recedes.
       The House and Senate bills state that it is a purpose of 
     the PBO to increase the accountability of the programs. The 
     House bill emphasizes the operational aspects of the 
     programs.
       The Senate recedes.
       The House and Senate bills state that it is a purpose of 
     the PBO to provide greater flexibility. The House bill 
     emphasizes operational functions while the Senate bill refers 
     to administration of the programs.
       The Senate recedes.
       The House bill states that it is a purpose to integrate the 
     information systems, while the Senate bill states that it is 
     a purpose of the PBO to improve and integrate information and 
     delivery systems.
       The Senate recedes.
       The House bill, but not the Senate bill, states that it is 
     a purpose of the PBO to develop an open, common, integrated 
     delivery system.
       The Senate recedes.
       The Senate bill, but not the House bill, states that it is 
     a purpose of the PBO to develop and maintain complete, 
     accurate and timely data.
       The House recedes.


                               authority

       The House bill assigns the Secretary with responsibility 
     for the development and promulgation of policy related to 
     student aid. The Senate bill assigns the Secretary 
     responsibility for policy relating to the functions managed 
     by the PBO.
       The Senate recedes with an amendment to insert ``and 
     regulations as relate'' after ``policy''.
       The House bill, but not the Senate bill, requires the 
     Secretary to work in cooperation with the Chief Operating 
     Officer (COO) in developing policies affecting the functions 
     assigned to the PBO.
       The Senate recedes.
       The House bill, but not the Senate bill, requires the 
     Secretary to request cost estimates from the COO for system 
     changes.
       The Senate recedes.
       The House bill, but not the Senate bill, requires the 
     Secretary to consider the COO's comments and estimates before 
     finalizing regulations.
       The House recedes.
       The House bill, but not the Senate bill, requires the 
     Secretary to assist the COO in identifying goals.
       The Senate recedes.
       The House bill, but not the Senate bill, requires the 
     Secretary to arrange for additional funding for the PBO.
       The House recedes.


                               functions

       The House bill assigns the PBO with responsibility for all 
     contracting for data and information systems. The Senate bill 
     assigns the PBO with responsibility for the administration of 
     the information and financial systems.
       The House recedes with an amendment to add ``but not 
     including the development of policy relating to such 
     programs'' after ``under this title''.
       The House bill, but not the Senate bill, makes the PBO 
     responsible for the administrative, accounting and financial 
     management functions of the delivery system.
       The Senate recedes.
       The House bill references information technology and system 
     infrastructure. The Senate bill references contracting for 
     information and financial systems.
       The Senate recedes with an amendment to clarify that the 
     PBO is responsible for design and acquisition.
       The House bill, but not the Senate bill, includes acquiring 
     all software and hardware, and all information technology 
     contracts. The Senate bill provides the PBO with authority to 
     contract for information and financial systems.
       The House recedes with an amendment to add ``All aspects 
     of'' before ``contracting for the information''.
       The House bill, but not the Senate bill, includes 
     development of a budget as PBO function.
       The Senate recedes.
       The House bill, but not the Senate bill, includes 
     development of goals as PBO function.
       The House recedes.


                          additional functions

       The House bill requires agreement of COO in handling 
     additional functions. The Senate bill provides the Secretary 
     with the authority to allocate additional functions to the 
     PBO.
       The House recedes with an amendment to insert ``and the 
     COO'' after the second ``Secretary''.


                              independence

       The House bill, but not the Senate bill, gives the PBO 
     explicit control of its budget and personnel decisions.
       The Senate recedes. Under the conference substitute, the 
     Secretary retains ultimate control over policy development 
     for student financial assistance programs, including 
     development of regulatory policy and standards for 
     institutional eligibility. The bill vests the PBO with 
     operational responsibility for administration of the 
     information and financial systems that support those programs 
     and other functions that may be allocated to it, subject 
     to the Secretary's policy direction and oversight. The 
     conferees explicitly clarify that the PBO, while a part of 
     the Department of Education, shall exercise independent 
     control from the principal offices of the Department in 
     carrying out its day-to-day activities, including its 
     budget allocations and expenditures, its personnel 
     decisions, its procurements, and its other administrative 
     and management functions. This level of independence is 
     critical to providing the PBO with greater flexibility in 
     the management of the operational functions assigned to 
     it.


                                changes

       The Senate bill, but not the House bill, gives the 
     Secretary and the chief operating officer authority to 
     consult about changes affecting the PBO's goals.
       The House recedes.


                               agreements

       The Senate fill, but not the House bill, gives the 
     Secretary and the chief operating officer the authority to 
     revise the performance agreement in light of policy or market 
     changes.
       The House recedes.


                                funding

       Both bills, using similar language, authorize the use of 
     funds from section 458. The Senate bill, but not the House 
     bill, provides for the appropriation of such additional sums 
     as may be necessary.
       The House recedes.


                                 plans

       The Senate bill, but not the House bill, requires a 5-year 
     performance plan.

[[Page H9049]]

       The House recedes.
       The House bill, but not the Senate bill, requires 
     consultation with Congress and the Advisory Committee on 
     Student Financial Assistance in developing the plan, while 
     the Senate bill requires consultation with Congress and 
     others 30 days prior to implementation of the plan.
       The House recedes with an amendment to include the advisory 
     committee.
       The House bill, but not the Senate bill, requires the plan 
     to include goals for a modernized delivery system. The Senate 
     bill requires that the plan include specific goals with 
     regard to service, cost, improvement and integration of 
     support systems, delivery and information systems and other 
     areas designated by the Secretary.
       The House recedes with an amendment to strike Senate 
     language in paragraph (C) and replace with ``The performance 
     plan shall include a concise statement of goals for a 
     modernized system for the delivery of student financial 
     assistance under title IV and identify action steps necessary 
     to achieve such goals.''
       The Senate bill, but not the House bill, requires that the 
     plan describe how the PBO will improve service, reduce costs, 
     improve and integrate information and delivery systems, 
     develop an open, common, integrated delivery system, and 
     attain other objectives identified by the Secretary.
       The House recedes.


                                 report

       The House and Senate bills require an annual report on the 
     performance of the PBO, using different language.
       The House recedes.
       The House bill requires the report to be provided to 
     Congress and the Secretary, while the Senate bill requires 
     the report to be provided to Congress through the Secretary.
       The House recedes.
       The Senate bill requires that the chief operating officer, 
     in preparing the report, consult with stakeholders involved 
     in the delivery of student financial aid.
       The House recedes.
       The House bill, but not the Senate bill, requires that the 
     report include an independent financial audit.
       The Senate recedes.
       The House bill, but not the Senate bill, requires that the 
     report include CFOA and GPRA compliance information.
       The Senate recedes.
       The House bill, but not the Senate bill, specifically 
     requires as a separate element in the report the results of 
     the PBO's efforts to meet its goals.
       The Senate recedes.
       The House bill, but not the Senate bill, requires that the 
     report include reports of the evaluations of the chief 
     operating officer and senior management team.
       The Senate recedes with an amendment to clarify which 
     information will be made public.
       The House bill, but not the Senate bill, requires the 
     report to discuss the effectiveness of the coordination 
     between the PBO and the Secretary.
       The House recedes.
       The House bill, but not the Senate bill, requires the 
     report to include legislative and regulatory recommendations.
       The Senate recedes.
       The House bill, but not the Senate bill, requires the 
     report to include any other information required by OMB.
       The Senate recedes.


                        chief operating officer

       Both bills vest management of the PBO in a chief operating 
     officer.
       The House bill appoints the chief operating officer for a 
     5-year term, while the Senate bill provides for a term of 3 
     to 5 years.
       The House recedes.
       The House bill, but not the Senate bill, requires the 
     appointment of the chief operating officer within 6 months of 
     enactment of the Higher Education Act Amendments of 1998.
       The Senate recedes.
       The House bill, but not the Senate bill, requires the 
     Secretary to consult with Congress prior to the appointment.
       The House recedes. The conferees strongly encourage the 
     Secretary to consult with Congress prior to the selection of 
     the COO.


                                 basis

       Both bills, using comparable language, describe the 
     experience a candidate must have to be selected COO.
       The Senate recedes with an amendment to strike ``extensive 
     experience in the financial services industry'' and replace 
     with ``experience with financial systems''.
       The House bill allows reappointment for subsequent terms, 
     while the Senate bill allows reappointment for 3 to 5 terms.
       The House recedes.


                                removal

       The House bill, but not the Senate bill, requires the 
     President or Secretary to notify Congress of reasons for 
     removal.
       The Senate recedes.


                         performance agreement

       The House and Senate bills require an annual performance 
     agreement; the Senate bill requires measurable individual and 
     organizational goals while the House bill requires 
     measurable individual and organizational goals in key 
     operational areas.
       The House recedes.
       The House bill, but not the Senate bill, specifically calls 
     for review and renegotiation of a new plan each year. The 
     Senate bill requires an annual performance agreement.
       The House recedes.


                              compensation

       Both bills contain similar compensation and bonus 
     provisions.
       The House recedes with an amendment to add ``The 
     compensation of the Chief Operating Officer shall be 
     considered to be the equivalent of that described by section 
     207(c)(2)(A) of title 18 United States Code.''


                            senior managers

       The House bill, but not the Senate bill, restricts to give 
     the number of senior managers that the chief operating 
     officer may appoint.
       The House recedes.


                         performance agreement

       Both bills have similar provisions regarding the 
     performance agreement.
       The House recedes with an amendment to add ``the agreement 
     shall be subject to review and renegotiation at the end of 
     each term'' to the end of the Senate language.


                              compensation

       The House bill, but not the Senate bill, limits senior 
     manager's pay to 75% of maximum rate of basis pay allowable 
     for members of the Senior Executive Service.
       The House recedes.
       The House bill limits bonus compensation to 50% of the 
     annual rate of basic pay. The Senate bill permits bonus 
     compensation to the extent total annual compensation does not 
     exceed 125% of the maximum rate of basis pay for SES.
       The House recedes with an amendment to add ``The 
     compensation of a senior manager shall be considered to be 
     the equivalent of that described by section 207(c)(A)(ii) of 
     title 18 United States Code.''


                                removal

       The Senate bill, but not the House bill, allows for the 
     removal of senior managers by the Secretary or the COO.
       The House recedes with an amendment to strike ``Secretary 
     or by the Chief Operating Officer'' and replace it with 
     ``Chief Operating Officer, or if there is no COO, by the 
     Secretary.''
       The Senate bill, but not the House bill, requires the 
     Secretary and COO to report to Congress on the proposed 
     budget and sources of funding for the operation of the PBO.
       The House recedes.


                         personnel flexibility

       Both bills contain similar provisions regarding personnel 
     flexibility.


                       administrative flexibility

       The House bill, but not the Senate bill, requires the chief 
     operating officer to work with the Office of Personnel 
     Management (OPM) to establish personnel flexibilities. The 
     Senate bill authorizes specific personnel flexibilities and 
     require the PBO to work with OPM on these and other 
     flexibilities available under current law.
       The Senate recedes with an amendment to provide buyout 
     authority to the COO.
       The Senate applies a modified version of language currently 
     contained with Section 4703(F), the statute authorizing 
     personnel flexibility demonstration projects, to the specific 
     flexibilities authorized under the HEA. This provision does 
     not apply to flexibilities available under current law.
       The Senate recedes.


                             flexibilities

       The Senate bill, but not the House bill, authorizes the PBO 
     to exercise authorities provided with regard to performance 
     management, broad banding, and staff flexibilities without 
     prior approval of OPM.
       The Senate recedes.
       The Senate bill, but not the House bill, requires the PBO 
     to implement the flexibilities provided with regard to 
     alternate job evaluation systems only after a plan is 
     submitted to, and approved by, OPM.
       The Senate recedes.
       The Senate bill, but not the House bill, provides that 
     exercise of these flexibilities will not prevent the PBO from 
     being eligible to implement demonstration projects.
       The Senate recedes.
       The Senate bill, but not the House bill, provides that the 
     PBO will not be required to submit its demonstration plan for 
     a public hearing prior to implementation.
       The Senate recedes.
       The Senate bill provides that the PBO will be required to 
     provide 30 day rather than 180 day notification of the 
     implementation of a demonstration project.
       The Senate recedes.
       The Senate bill, for the purposes of the PBO, modifies the 
     provision requiring 90 day notification in order to expedite 
     implementation of the PBO.
       The Senate recedes.
       The Senate bill, for the purposes of the PBO, retains the 
     ability of employees to transfer leave from one employee to 
     another in case of medical emergencies.
       The Senate bill exempts the PBO from the requirement that a 
     demonstration project involve fewer than 5,000 individuals 
     and be limited to five years. The Senate bill also exempts 
     the PBO from the limit on the number of active demonstration 
     projects that may be in effect at any given time.
       The Senate recedes.
       The Senate bill exempts the PBO from the restriction placed 
     on the participation of employees within a unit with respect 
     to which a labor organization is accorded exclusive 
     recognition.
       The Senate recedes.


                           Staff Performance

       The House bill and the Senate bill require the PBO to 
     establish an annual performance

[[Page H9050]]

     management system with goals or objectives consistent with 
     the performance plan. The Senate bill provides for specific 
     elements of a performance management system, including: 
     retention standards, development of individual goals, and an 
     award system.
       The Senate recedes.
       The Senate bill, but not the House bill, authorizes the 
     chief operating officer to establish an awards program. 
     Awards made under this authority may not exceed $25,000.
       The Senate recedes.


                  classification and pay flexibilities

       The Senate bill, but not the House bill, provides that the 
     PBO, subject to criteria provided by OPM, establish one or 
     more broadbanded systems for the pay and evaluation of its 
     employees.
       The Senate recedes.
       The Senate bill, but not the House bill, exempts the 
     broadbanding authority from the requirements of Chapter 52 
     and subchapter II of Chapter 53 regarding pay schedules.
       The Senate recedes.
       Provides the COO, with the approval of OPM, the authority 
     to establish alternate job evaluation systems for jobs which 
     should not be classified under statutory pay and job 
     classifications.
       The Senate recedes.
       Provides the COO, with the approval of OPM, the authority 
     to establish alternate job evaluation and payment systems for 
     jobs which are above a GS-15.
       The Senate recedes.
       The Senate bill provides the chief operating officer with 
     authority to develop category rating systems for evaluating 
     job applicants for the competitive service.
       The Senate recedes.
       The Senate bill provides the COO with the authority to hire 
     25 technical and professional employees to support the PBO.
       The House recedes.
       The Senate bill, but not the House bill, authorizes the 
     Chief Operating Officer to use the authority of the Secretary 
     to procure property and services.
       The House recedes with an amendment to delete ``, 
     direction, and control''.
       The House and Senate bills both require that, with the 
     exception of the specific flexibilities contained within the 
     HEA, the PBO must comply with all generally applicable 
     procurement laws and regulations.
       The Senate recedes.
       The House bill authorizes the PBO to hire experts and 
     consultants without regard to section 3109 of title V. The 
     Senate bill authorizes the PBO to hire no more than 25 
     technical or professional staff.
       The Senate recedes.
       The House bill requires that to the extent practicable the 
     PBO use performance based contracts and services in 
     accordance with the guidelines published by OFPP.
       The Senate recedes.
       The House bill requires the COO, to the extent practicable, 
     to utilize services of organizations outside the government 
     and to enter into fee for service arrangements for 
     information services if the COO determines that these 
     services will meet the requirement of the PBO. The Senate 
     bill permits the COO to enter into an arrangement with a 
     mutual benefit corporation.
       The Senate recedes with an amendment to strike ``to the 
     extent practicable'' and replace it with ``where 
     appropriate'' and to strike ``utilize services available 
     outside the Federal Government in the delivery of Federal 
     student financial assistance to achieve this purpose'' and 
     replace it with ``acquire services related to the title IV 
     delivery system from any entity that has the capability and 
     capacity to meet requirements for the system.'' In blending 
     the provisions from the House and Senate bills, the conferees 
     require the COO to utilize services available from entities 
     outside of the Department of Education whenever appropriate. 
     In using the term ``entity'' in section 142, the conferees 
     have sought to encompass a wide variety of organizations that 
     could provide services to the PBO, including the National 
     Student Loan Clearinghouse and mutual benefit corporations. A 
     mutual benefit corporation is considered to be a corporation 
     organized and chartered as a mutual benefit corporation under 
     the laws of any state governing the incorporation of 
     nonprofit corporations.
       The House bill, but not the Senate bill, authorizes the PBO 
     to create focus groups to provide advice on matters 
     pertaining to student financial aid.
       The House recedes.
       The Senate bill, but not the House bill, permits the PBO to 
     utilize two-phase selection procedures.
       The House recedes.
       The Senate bill, but not the House bill, permits the PBO to 
     utilize flexible wait-periods and deadlines for the 
     procurement of noncommercial items.
       The House recedes.
       The Senate bill, but not the House bill, permits the PBO to 
     utilize modular contracting.
       The House recedes.
       The Senate bill, but not the House bill, permits the PBO to 
     utilize simplified procedures for Small Business Set-Asides 
     for services other than commercial items.
       The House recedes.
       The Senate bill, but not the House bill, requires the COO, 
     in consultation with the Administrator of OFPP, to issue 
     guidance for the use of the flexibilities contained within 
     this Act.
       The House recedes.
       The Senate bill, but not the House bill, requires OFPP to 
     provide the PBO with guidance regarding the use of the 
     flexibilities contained within this Act and to ensure that 
     these flexibilities are utilized in a manner consistent with 
     the flexibilities authorized for any other PBO.
       The House recedes.
       The Senate bill, but not the House bill, requires OFPP to 
     ensure that the procurements made by the PBO are consistent 
     with the guidance provided by OFPP.
       The House recedes.
       The Senate bill, but not the House bill, prohibits any 
     department or agency from using the procurement authority of 
     the PRO unless the purchase is approved in advance by the 
     appropriate contracting officer of that agency.
       The House recedes.
       The Senate bill, but not the House bill, contains 
     definitions relevant to the procurement flexibilities 
     provided to the PBO.
       The House recedes with an amendment to strike the 
     definition of ``mutual benefit corporation''.


                             simplification

       The House bill, but not the Senate bill, authorizes the 
     Secretary to participate in setting consensus standards for 
     electronic transmission of data.
       The Senate recedes with an amendment.
       The House bill, but not the Senate bill, except for the 
     FAFSA, requires that the Secretary adopt consensus standards 
     and common data elements for transactions in order to enable 
     program participants to electronically exchange information.
       The Senate recedes with an amendment to encourage the 
     Secretary to adopt voluntary consensus standards.
       The House bill, but not the Senate bill, requires that the 
     adopted consensus standards be those developed by a standard 
     setting organization open to entities engaged in student aid 
     delivery and that the standards be consistent with the goal 
     of reducing costs.
       The Senate recedes with an amendment.
       The House bill, but not the Senate bill, requires the chief 
     operating officer (i) to participate in the activities of a 
     standard setting organization; (ii) to encourage higher ed 
     groups to participate in these activities for the purpose of 
     development common forms and procedures; and (iii) pay fees 
     associated with this participation.
       The Senate recedes with an amendment striking reference to 
     subsection (j).
       The House bill, but not the Senate bill, requires the 
     Secretary to follow negotiated rulemaking procedures for the 
     adoption of new standards.
       The House recedes.
       The House bill, but not the Senate bill, identifies 3 areas 
     which should be addressed by the voluntary consensus 
     standards process: (i) single electronic personal identifier; 
     (ii) procedures for using electronic signatures; and (iii) 
     single institution identifiers.
       The House recedes.
       The House bill, but not the Senate bill, specifically 
     allows the use of clearinghouses for complying with standards 
     for data exchange.
       The Senate recedes with an amendment.
       The House bill, but not the Senate bill, requires the 
     Department of Education to comply with these standard setting 
     requirements within 12 months of the date of enactment. NSLDS 
     must be compliant within 18 months after the date of 
     enactment and no compliance deadline is provided with respect 
     to IPEDS.
       The House recedes.
       The House bill, but not the Senate bill, requires anyone 
     having or transmitting data to maintain safeguards protecting 
     the integrity and confidentiality of the information and 
     protecting the information from any unauthorized use.
       The Senate recedes.
       The House bill, but not the Senate bill, provides for the 
     authorization of appropriations to carry out these data 
     standardization activities and requires the Secretary to fund 
     such efforts from the Department's administrative accounts if 
     no separate funds are appropriated.
       The House recedes.
       The House bill, but not the Senate bill, defines voluntary 
     consensus standard; standard setting organization and 
     clearinghouse.
       The Senate recedes with an amendment.
       The Senate bill, but not the House bill, establishes a 
     Student Loan Ombudsman within the Department of Education.
       The House recedes with an amendment to fold into the PBO 
     and appropriate conforming changes.

                       Title II--Teacher Quality


                    overview of conference agreement

       Title II of the Higher Education Amendments of 1998 
     provides a single authorization for three separate grant 
     programs focusing on improving student achievement, improving 
     teacher quality, holding institutions of higher education 
     accountable for preparing well qualified teachers and 
     recruiting highly qualified teachers. Specifically, 45% of 
     the total amount will be for State Grants; 45% will be for 
     Partnership Grants; and 10% will be for Recruitment Grants.
       Under the State Grants, Governors or appropriate 
     educational entities, agencies or individuals--whoever is 
     determined by the State constitution or law to have authority 
     for teacher certification and preparation activities--will 
     have the ability to use funds to improve the accountability 
     of teacher preparation programs; reform teacher certification 
     requirements; expand alternative

[[Page H9051]]

     routes to teacher certification; promote performance based-
     compensation for teachers; streamline the process for 
     removing incompetent or unqualified teachers; recruit highly 
     qualified teachers; and implement efforts to end their 
     practice of social promotion.
       In addition, grants will be provided to Partnerships of 
     institutions of higher education; schools of arts and 
     sciences; high need local education agencies; and others. 
     Funds provided to these Partnerships are to be used for 
     activities such as improving accountability of teacher 
     preparation programs; providing clinical experience and 
     professional development; and for the recruitment of highly 
     qualified teachers.
       A separate grant provides both States and Partnerships the 
     ability to compete for funds specifically targeted toward 
     teacher recruitment.
       This title also includes strong accountability for States 
     and Partnerships receiving grants to ensure funds are being 
     effectively used to improve student achievement and raise the 
     level of teacher quality. In addition, each institution of 
     higher education receiving federal assistance will be held 
     accountable for disseminating information on the quality of 
     their program based upon criteria such as the pass rates of 
     their graduates on teacher assessment, where appropriate.
       States will also be required to identify poor performing 
     teacher preparation programs. Those programs loosing State 
     support will be prohibited from accepting or enrolling any 
     student, who receives aid under title IV of the Higher 
     Education Act, in the institution's teacher preparation 
     program.
       With regard to reporting requirements contained in this 
     Title, the conferees reiterate the importance of maintaining 
     and protecting the privacy of individual students whose 
     assessment scores are being reported.
       The conferees recognize in the Special Rule in Section 209 
     that some states do not currently have state certification, 
     licensure or assessments, while other states do not require 
     passage of such assessments for teacher certification. The 
     conferees agree that nothing in this Title should be 
     construed to force States to implement certification, 
     licensure or assessments in order to receive funds under this 
     Title. In determining eligibility for grants, measuring 
     improvement or reporting data for such States or partnerships 
     in those States, the Secretary shall develop comparable 
     measures. The conferees reaffirm that partnerships located in 
     these states are eligible for funding if the partner 
     institution meets one of the provisions found in Sec. 
     203(b)(2), other than Sec. 203(b)(2)(A)(i).
       The conferees agree that while nothing in this Title shall 
     be construed to permit, allow, encourage or authorize the 
     Secretary to establish or support any national system of 
     teacher certification, States and institutions shall be free 
     to receive assistance from or work in cooperation with 
     national organization concerned with teacher 
     certification.


                            Conference Notes

       The House bill contains two parts, Teacher Quality 
     Enhancement Grants (Part E) and Accountability for 
     institutions of higher education that prepare teachers (Part 
     F) while the Senate provisions relating to Teacher Quality 
     are divided into 3 subparts in part A: Teacher Quality 
     Enhancement Grants, Teacher Training Partnership Grants and 
     General Provisions.
       The Senate recedes with an amendment establishing Teacher 
     Quality Enhancement Grants which are comprised of three 
     competitive grant programs: State Grants, Partnership Grants, 
     and Teacher Recruitment Grants.
       The House bill contains purposes for this part while the 
     Senate bill contains purposes for the title. Otherwise, 
     provisions are similar.
       The House recedes with an amendment to include the list of 
     subject areas from (1) of the House bill in (3) of the Senate 
     bill between ``teach'' and ``including'' and to add (3) from 
     the House bill to the list of purposes after striking ``high 
     quality'' and inserting ``highly qualified''.
       The House bill, but not the Senate bill, defines an 
     ``eligible grant recipient'' for purposes of Sec. 273(b) and 
     for purposes other than Sec. 273(b). The Senate bill, in 
     Subpart 1--Teacher Quality Enhancement Grants--authorizes the 
     Secretary to award grants to States and further provides for 
     a procedure for State designation.
       The Senate recedes with an amendment to have the language 
     read as follows:
       (b)(1) In this title, the term ``eligible State'' means (A) 
     the Governor of a State; or (B) in the case of a State for 
     which the constitution or law of such State designates 
     another individual, entity, or agency in the State to be 
     responsible for teacher certification and preparation 
     activities, such individual, entity or agency.
       (2) Consultation.--The Governor and the individual, entity, 
     or agency designated under paragraph (1)(B) shall consult 
     with the Governor, State board of education, State 
     educational agency, or state agency for higher education, as 
     appropriate, with respect to the activities assisted under 
     this section.
       (3) Construction.--Nothing in this subsection shall be 
     construed to negate or supersede the legal authority under 
     State law of any State agency, State entity, or State public 
     official over programs that are under the jurisdiction of the 
     agency, entity, or official.
       The House bill and the Senate bill have similar provisions 
     relating to the application process though the Senate bill 
     has a more extensive applications process for the ``Teacher 
     Training Partnerships.''
       The Senate recedes with respect to the contents of the 
     application for state grants.
       Use of Funds: The House bill and the Senate bill outline 
     uses of funds for grants to States. Some provisions are 
     similar.
       The House bill and the Senate bill have similar provisions. 
     The House bill refers to current and future teachers while 
     the Senate bill refers to new teachers. The Senate bill 
     references teaching skills.
       The House recedes with an amendment adding teaching skills 
     throughout this Title.
       Similar provisions. Minor differences in language.
       The House recedes with an amendment to add a definition for 
     ``Arts and Sciences''.
       Similar provisions. Minor language differences.
       The House recedes with an amendment to insert ``including 
     mid-career profesionals from other occupations, 
     paraprofessionals, former military personnel and recent 
     college graduates with records of academic distinction.''
       Similar provision. Language differences.
       The House recedes with an amendment to strike ``and to 
     remove teachers who are not qualified.'' and substitute ``and 
     to expeditiously remove incompetent or unqualified teachers 
     consistent with procedures to ensure due process for the 
     teachers.''
       Similar provisions. Language differences.
       The Senate recedes with structural changes to reflect the 
     agreement reached on recruitment.
       The House bill but not the Senate bill includes as an 
     allowable use of funds managerial skills for principals and 
     superintendents.
       The Senate recedes with an amendment to move this language 
     to section 203(e) Allowable Uses of Funds (for the 
     partnership) as a permissive activity and modifies the 
     language to read: ``(7) Developing and implementing proven 
     mechanisms to provide principals and superintendents with 
     effective managerial and leadership skills resulting in 
     increased student achievement.''
       The Senate bill but not the House bill includes social 
     promotion as a use of funds under the State grants.
       The House recedes.
       The House bill and the Senate bill contain similar language 
     on Peer Review panels though the Senate provisions relate 
     only to the grants in Subpart 1 (Teacher Quality Enhancement 
     Grants to States).
       The Senate recedes with an amendment to have the Peer 
     Review panels review both State and partnership grants and 
     moves this provision to the ``General Provision'' section.
       The House bill and the Senate bill have similar language 
     relating to Priority consideration for grants, though the 
     Senate provisions relate only to the grants in Subpart 1 
     (Teacher Quality Enhancement Grants to States).
       The Senate recedes with an amendment to add ``teaching 
     skills'' to the priority concerning reforms of state teacher 
     certification requirements and also adding the Senate 
     provision dealing with efforts at reducing the shortage of 
     highly qualified teachers in high poverty areas to the list 
     of priority applicants for the State grants.
       The House bill includes language on Priority consideration 
     for ``eligible partnerships.'' The Senate bill contains 
     language on priority consideration for ``teacher training 
     partnerships'' that involve businesses.
       The House recedes with an amendment which awards priority 
     to applications from eligible partnerships which involve 
     businesses and take into consideration providing an equitable 
     geographic distribution of the grants throughout the United 
     States and the potential of the proposed activities for 
     creating improvement and positive change.
       The House bill, but not the Senate bill, requires that the 
     panel assign applications rank.
       The House recedes.
       The House bill, but not the Senate bill, requires the 
     panels to make recommendations to the Secretary with respect 
     to the amount of the grant. The House bill requires that \1/
     3\ of the funds be spent on ``eligible partnerships.''
       The House recedes.
       The House bill, but not the Senate bill, includes 
     provisions on Secretarial selection.
       The Senate recedes with an amendment to strike ``panel's 
     recommendation'' and replace with ``process'', and to strike 
     subparagraph (B) which required the Secretary to select 
     grants based upon the ranking of the peer review panel.
       The House bill, but not the Senate bill, contains 
     provisions for distributing funds by formula if funds 
     appropriated for the part exceed $250,000,000.
       The House recedes.
       The House bill, but not the Senate bill, distributes funds 
     to States that submit applications in an amount that bears 
     the same ratio to the amount appropriated as the school age 
     population ages 5-17 of all States, except that no State 
     shall receive less than \1/4\ of 1 percent of the total when 
     funds for this part exceed $250,000,000.
       The House recedes.
       Both the House and Senate bills contain similar language on 
     matching requirements for States.
       The conferees established that the matching requirement for 
     the State grants and the teacher recruitment grants would be 
     50 percent of the grant amount to be matched with

[[Page H9052]]

     non-Federal sources (in cash or kind) while a partnership 
     receiving a grant must match, from non-Federal sources (in 
     cash or kind), an amount equal to 25 percent of the grant in 
     the first year, 35 percent for the second year, and 50 
     percent for each succeeding year.
       The House bill, but not the Senate bill, includes a 
     limitation on administrative expenses at no more than two 
     percent of grant funds.
       The Senate recedes with an amendment to strike 
     ``administrative costs'' and to add ``for purposes of 
     administering the grant''.
       The House bill and the Senate bill include requirements for 
     accountability reports that must be provided by grant 
     recipients. The Senate provisions related to only the 
     ``Teacher Quality Enhancement Grants'' (grants to States) 
     while the House bill applies to both State grants and 
     partnerships. (Some of the provisions are similar.)
       The House recedes. The conferees agreed to an 
     Accountability and Evaluation section which requires an 
     annual accountability report by the eligible State and an 
     evaluation plan by the eligible partnership, which is also to 
     be reported on annually.
       The Senate bill but not the House bill, includes increased 
     student achievement as a goal for a State to describe 
     progress toward in their accountability report.
       The House recedes with an amendment striking ``as measured 
     by increased graduation rates, decreased dropout rates, or 
     higher scores on local, State, or other assessments'' and 
     replace with ``as defined by the eligible State''.
       The Senate bill, but not the House bill, includes 
     increasing initial certification or licensure as a goal for a 
     State to describe progress toward in their accountability 
     report.
       The House recedes.
       The House and Senate bills contain similar provisions 
     regarding increasing the percentages of secondary school 
     classes in core academic subject areas taught by teachers 
     with an academic major or who have demonstrated competence 
     through a high level of performance in their subject area and 
     elementary school classes taught by teachers with an academic 
     major in the arts and sciences or have demonstrated 
     competence through a high level of performance in core 
     academic subjects.
       The House recedes.
       The Senate bill, but not the House bill, includes 
     technology as a goal for a State to describe progress toward 
     in their accountability report.
       The House recedes.
       The House bill, but not the Senate bill, includes 
     requirements that lead institutions have an 80 percent 
     minimum pass rate on applicable State qualifications for new 
     teachers in order to be eligible to compete for funds under 
     this part and that in succeeding years, all institutions 
     within a State shall meet a minimum pass rate of 70 percent.
       The Senate recedes with an amendment which clarifies what a 
     partner institution must do in order to participate in a 
     partnership by defining ``Partner Institution'' in Section 
     203.
       The House bill and the Senate bill have the same provisions 
     relating to information on teacher qualifications being 
     provided to parents, though the Senate bill requires that 
     LEAs inform parents that they are able to receive this 
     information upon request.
       The House recedes.
       The House bill but not the Senate bill includes 
     ``limitations'' provisions relating to prohibitions on 
     federal control of education.
       The Senate recedes with an amendment to modify Sect. 
     209(c)(3) so that it reads:
       ``National System of Teacher Certification Prohibited.--
     Nothing in this title shall be construed to permit, allow, 
     encourage, or authorize the Secretary to establish or support 
     any national system of teacher certification.''
       The House bill defines ``eligible partnerships'' in part E 
     while the Senate bill defines ``Teacher Training 
     Partnerships'' for the purposes of Subpart 2 of Part A, 
     Teacher Training Partnership Grants.
       The Senate recedes with an amendment to clarify that 
     teacher training partnerships shall include: an institution 
     of higher education which has either: an 80% pass rate on 
     applicable State qualification assessments for new teachers, 
     including an assessment of each prospective teacher's subject 
     matter knowledge in their content area; or is ranked among 
     the highest performing teacher preparation programs in the 
     State as determined by the State; or currently requires 
     students enrolled in the teacher preparation program to 
     participated in intensive clinical experiences, to meet high 
     academic standards, and for secondary school candidates to 
     complete an academic major in their subject area or 
     demonstrate competence through a high level of performance in 
     their subject area and for elementary school candidates, to 
     have an academic major in the arts and sciences or 
     demonstrate competence through high levels of performance in 
     their core academic subject areas.
       The Senate bill, but not the House bill, defines ``high 
     need'' for the purposes of teacher training partnerships.
       The House recedes.
       The Senate bill, but not the House bill, limits 
     partnerships to receive only one grant.
       The House recedes with amendment clarifying that States, 
     partnerships and entities receiving a recruitment grant 
     receive only one grant.
       The Senate bill includes ``Use of Funds'' provisions for 
     ``Teacher Training Partnership'' grants while the House bill 
     contains ``Partnership Activities'' language in sec. 273(b).
       The Senate recedes with an amendment defining required uses 
     of funds and allowable uses of funds by combining several of 
     the Senate provisions with the House provisions.
       The Senate bill but not the House bill specifies that no 
     one member of the partnership may retain more than 50% of 
     funds made available to the partnership.
       The House recedes with an amendment to modify Sec. 203(f) 
     so that it reads: ``Special Rule.--No individual member of an 
     eligible partnership shall retain more than 50 percent of the 
     funds made available to the partnership under this section.
       The Senate bill but not the House bill allows for 
     coordination among more than one Governor, State Board of 
     Education, State educational agency, or State agency for 
     higher education.
       The House recedes with an amendment to add local 
     educational agency.
       The Senate bill, but not the House bill, has a separate 
     application process for ``teacher training partnership'' 
     grants. The House bill includes a more limited application 
     process.
       The Senate recedes with an amendment which sets forth, in 
     Sect. 203(c), the requirements of the application process for 
     the partnership grants while retaining several of the Senate 
     provisions.
       The Senate bill, but not the House bill, contains separate 
     accountability and evaluation provisions for ``teacher 
     training partnership'' grants.
       The Senate recedes with an amendment which sets forth the 
     accountability requirements for the partnership grants in 
     Sect. 206(b) which require an evaluation plan with strong 
     performance objectives to be included in an eligible 
     partnership's application. The plan shall include objectives 
     and measures for increased student achievement; increased 
     teacher retention; increased success in the pass rate for 
     initial State certification or licensure of teachers; an 
     increased percentage of secondary school classes taught in 
     core academic subject areas by teachers with academic majors 
     in their subject areas or who can demonstrate a high level of 
     competence through performance in their subject area, and for 
     an increasing percentage of elementary school classes taught 
     by teachers with academic majors in the arts and sciences or 
     who can demonstrate a high level of competence through 
     performance in core academic subject areas; and for 
     increasing the number of teachers trained in technology.
       The Senate bill but not the House bill includes provisions 
     relating to the revocation of grants.
       The House recedes with an amendment striking ``, after 
     consultation with the peer review panel described in section 
     213(b),''.
       The Senate bill but not the House bill includes provisions 
     on evaluation and dissemination of information.
       The House recedes.
       The Senate bill, but not the House bill, calls on the 
     Secretary to conduct a comparative study on teacher training 
     through the National Center for Education Statistics.
       The Senate recedes.
       The Senate bill, but not the House bill, requires National 
     Center for Education Statistics to develop key definitions 
     and uniform methods of calculation for terms related to 
     teacher preparation.
       The House recedes with an amendment to replace ``six 
     months'' with ``nine months''; and to move ``for terms'' 
     after ``key definitions''.
       The conferees agreed to the following:
     Development of common definitions and uniform reporting 
         methods
       Within 9 months of the date of enactment, the Commissioner 
     of the National Center for Education Statistics, in 
     consultation with States and institutions of higher 
     education, shall develop key definitions for terms, and 
     uniform reporting methods including the key definitions for 
     the consistent reporting of pass rates related to the 
     performance of elementary and secondary school teacher 
     preparation programs.
       The House bill and the Senate bill require that States 
     receiving funds under this Act provide the Secretary with 
     information relating to teacher preparation. While the 
     language is similar, the House bill requires information to 
     be submitted within one year of the date of enactment and the 
     Senate bill within 2 years of the date of enactment.
       The House recedes.
       The House bill, but not the Senate bill, includes 
     provisions regarding teacher subject matter knowledge in the 
     data that the Secretary must collect from a State.
       The Senate recedes.
       Similar provision. Language differences.
       The House recedes with an amendment to insert ``and 
     ranked'' after ``desegregated''.
       The Senate bill, but not the House bill, includes 
     percentage of teaching candidates with passing scores.
       The House recedes with an amendment to strike ``cut score'' 
     and insert ``passing score''.
       The Senate bill, but not the House bill, requires that 
     assessment and standards be aligned.
       The House recedes.
       The Senate bill, but not the House bill, requires reporting 
     on alternative routes to certification.
       The House recedes.
       The Senate bill, but not the House bill, requires criteria 
     for assessing performance of teacher preparation programs.

[[Page H9053]]

       The House recedes.
       The Conferees agreed to the following:
     State report card on the quality of teacher preparation
       The conferees agreed to the following general language: 
     Each State receiving funds under this Act shall provide to 
     the Secretary, within two years of the date of enactment, and 
     annually thereafter, in a uniform and comprehensible manner, 
     a State report card on the quality of teacher preparation in 
     the State, including: a description of certification and 
     licensure assessments used by the State; standards and 
     criteria that prospective teachers must meet in order to 
     attain initial certification or licensure; a description of 
     the extent to which the State's teacher assessments and 
     requirements are aligned with the State's standards and 
     assessment for students; the percentage of teaching 
     candidates who passed the State's assessments disaggregated 
     and ranked by the teacher preparation program in the State, 
     and the State's passing score for each such assessment; the 
     percentage of teaching candidates who passed the State's 
     assessments, disaggregated and ranked; information on the 
     extent to which teachers in the State are given waivers of 
     State certification or licensure requirements; a description 
     of each State's alternative routes to teacher certification 
     and the percentage of teachers certified through alternative 
     routes who pass State certification and licensure 
     assessments; a description of the proposed criteria for 
     assessing the performance of teacher preparation programs; 
     information on the extent to which teachers or prospective 
     teachers in each State are required to take examinations or 
     other assessments of their subject matter knowledge in the 
     subject they teach.
     Initial report on specific data
       The conferees agreed to the following general language: 
     Each State that receives funds under this Act, not later than 
     six months after the date of enactment, shall submit to the 
     Secretary information concerning a description of teacher 
     certification and licensure assessments used by the State; 
     the percentage of teaching candidates who passed the State's 
     assessments, disaggregated and ranked; and information on the 
     extent to which teachers in the State are given waivers of 
     State certification or licensure requirements. Such 
     information shall be compiled by the Secretary and submitted 
     to the Committee on Labor and Human Resources of the Senate 
     and the Committee on Education and the Workforce of the House 
     Representatives not later than 9 months after the date of 
     enactment. However, no State is required to gather 
     information that is not in the possession of the State or the 
     teacher preparation programs in the State, or readily 
     available.
       The House bill and the Senate bill both require that 
     information regarding pass rates be provided to the public.
       The House recedes.
       The Senate bill but not the House bill requires 
     institutions of higher education that conduct teacher 
     preparation programs that enroll students receiving federal 
     assistance report information to the State and general public 
     regarding its teacher preparation program.
       The House recedes.
       The Senate bill but not the House bill allows the Secretary 
     to impose a fine not to exceed $25,000 on a program that 
     fails to provide information in a timely or accurate manner.
       The House recedes.
       The Conferees agreed to the following:
     Institutional report cards on the quality of teacher 
         preparation
       The conferees agreed to the following general language: 
     Each institution of higher education that conducts a teacher 
     preparation program which enrolls students receiving Federal 
     assistance under this Act, not later than 18 months after the 
     date of enactment, and annually thereafter, shall report to 
     the public on their pass rates; program information; 
     accreditation; and whether they have been designated as low-
     performing by the State. This information shall be made 
     widely available. The Secretary may impose a fine not to 
     exceed $25,000 for failing to provide this information in a 
     timely or accurate manner.
       The House bill, but not the Senate bill, requires the 
     Secretary to coordinate all the information collected among 
     States for individuals who took State teacher licensing 
     assessment in a State other than the one in which the 
     individual received his or her most recent degree.
       The Senate recedes.
       The Conferees agreed to the following:
     Report of the Secretary on the quality of teacher preparation
       Report card: The conferees agreed to the following general 
     language: The Secretary shall provide to Congress and make 
     widely available a report card on teacher qualifications and 
     preparation in the United States, including all the 
     information included in the State Report Card. Such report 
     will identify States which received grants as eligible States 
     or eligible partnerships under this title. This report shall 
     be published and made available not later than two years and 
     six months after the date of enactment.
       Report to Congress: The Secretary shall report to Congress 
     a comparison of State's efforts to improve teaching quality 
     and the national mean and median scores on any standardized 
     test that is used in more than one state for teacher 
     certification or licensure.
       Special rule: When fewer than 10 graduates take a 
     particular licensure or certification assessment in a given 
     year, the Secretary shall collect and publish this 
     information with respect to average pass rates taken over a 
     three-year period.
       The House bill and the Senate bill require that States 
     establish accountability measures for identifying low-
     performing institutions. The Senate bill includes additional 
     language not included in the House bill and requires action 
     no later than 3 years after the date of enactment while the 
     House bill requires action no later than one year after date 
     of enactment. In addition, the House bill requires 
     identification of schools where less than 70% of graduates 
     passed the state test while the Senate bill has no numerical 
     cut off.
       The House recedes with an amendment regarding 
     identification of low-performing institutions, as described 
     below.
       The House bill and the Senate bill include similar 
     provisions relating to identifying low performing 
     institutions as well as provisions that specify circumstances 
     where a school or program of education would lose eligibility 
     for professional development activities awarded by the 
     Department and the Title IV programs under this Act.
       The Senate recedes with an amendment to insert ``and 
     assist, through the provision of technical assistance'' after 
     ``identify''; to allow 2 years ``to publish and disseminate 
     the measures and the list of low-performing teacher 
     preparation programs publicly and widely''; and to provide 
     that the termination of eligibility provisions will take 
     effect not later than three years after enactment of the 
     Higher Education Amendments of 1998.
       The Conferees agreed to the following:
     State accountability procedures
       State assessment: The conferees agreed to the following 
     general language: In order to receive funds under this Act, a 
     State, not later than two years after the date of enactment, 
     shall have in place a procedure to identify, and assist, low 
     performing programs of teacher preparation within 
     institutions of higher education. Such State shall provide 
     the Secretary an annual list of low performing institutions 
     that includes an identification of those institutions at-risk 
     of being placed on the list. Such performance levels shall be 
     determined solely by the State.
       Termination of eligibility: Any institution of higher 
     education that offers a program of teacher preparation in 
     which the State has withdrawn the State's approval or 
     terminated the State's financial support due to low 
     performance, shall be ineligible for any funding for 
     professional development activities awarded by the Department 
     of Education and shall not be permitted to enroll or accept 
     any student receiving Title IV aid.
       The House bill, but not the Senate bill, contains specific 
     provisions to address situations where a State has no State 
     licensing or credentialing assessment.
       The Senate recedes with an amendment creating a Special 
     Rule in section 209(b) to address this situation.
       The House bill, but not the Senate bill, specifies that the 
     Secretary submit such proposed regulations to a negotiated 
     rulemaking process.
       The Senate recedes.
       The House bill authorizes such sums as necessary for Part E 
     of Title II (teacher quality initiative), while the Senate 
     bill authorizes $300 million for Part A of Title II (teacher 
     quality initiative).
       The House recedes.
       The Senate bill, but not the House bill, designates that 50 
     percent of appropriated funds be spent on State grants and 50 
     percent be spent on partnership grant activities. The House 
     bill requires that \1/3\ of funds be spend on partnerships.
       The House recedes with an amendment to provide that 45% of 
     the funds will be provided for state grants, 45% for 
     partnership grants, and 10% for recruitment.
       The Senate bill, but not the House bill, authorizes a 
     separate program in Part B, entitled ``Recruiting New 
     Teachers for Underserved Areas.'' It is authorized at $37 
     million.
       The Senate recedes with an amendment establishing Teacher 
     Recruitment Grants in section 204 which provide competitive 
     grants to eligible States described in section 202(b) or 
     eligible partnerships described in section 203(b).

                      TITLE III--INSTITUTIONAL AID

       The House and Senate bills transfer the Minority Science 
     and Engineering Improvement Program from Title X to Title 
     III. The Senate bill, but not the House bill, also transfers 
     the HBCU Capital Financing Program from Title VII to Title 
     III.
       The House recedes.
       The Senate bill strikes paragraph (3) which contains 
     administrative provisions applying to the Science Engineering 
     Access Program which is repealed in the Senate bill.
       The House recedes.
       The Senate bill, but not the House bill, adds a new finding 
     related to use of effective technology.
       The House recedes.
       The House bill, but not the Senate bill, provides that 
     special consideration is to be given to institutions with low 
     endowments and low expenditures on library material. The 
     Senate bill maintains current law.
       The House recedes.
       The House bill, but not Senate bill, replaces that special 
     consideration list in current law with a new special 
     consideration for projects creating smart buildings.

[[Page H9054]]

       The House recedes.
       The Senate bill, but not the House bill, adds high 
     technology equipment to the special consideration related to 
     equipment.
       The Senate recedes.
       The House bill, but not the Senate bill, includes a new 
     section on authorized activities, which are similar to 
     Hispanic-serving, tribal and HBCU.
       The Senate recedes with an amendment to authorize the use 
     of funds to create smart buildings and to develop and improve 
     academic programs.
       The House and Senate bills authorize the use of funds to 
     establish or improve an endowment fund.
       The House bill, but not the Senate bill requires the 
     matching funds to be from non-federal sources.
       The Senate recedes.
       The Senate bill, but not the House bill, applies the 
     endowment provisions in existing part C to the new endowment 
     provision. The House bill requires the Secretary to publish 
     regulations.
       The House recedes.
       The House bill, but not the Senate bill, defines 
     ``endowment fund'' in Section 312. The Senate bill cross 
     references the same definition as contained in Part C.
       The Senate recedes.
       The House and Senate bills, using comparable language, 
     require a two-year waiting period before a new grant can be 
     applied for.
       The House recedes.
       The House bill, but not the Senate bill, excludes planning 
     grants and cooperative arrangement grants, from the wait-out 
     period and priority limitations.
       The Senate recedes.
       The House bill, but not the Senate bill, strikes the 
     application process section and moves it to general 
     provisions and inserts a general application requirement.
       The Senate recedes


                  Section 316: American Indian Program

       The House and Senate bills establish a separate title for 
     support of Hispanic serving institutions and insert a new 
     program for American Indian Tribally Controlled Colleges and 
     Universities.
       The House bill lists endowment as an authorized use.
       The House recedes.
       The Senate bill permits an American Indian Tribally 
     Controlled College or University to use not more than 20% of 
     its grant under this section for the purpose of establishing 
     and improving an endowment.
       The House recedes.
       The Senate bill, but not the House, bill, includes a new 
     section for Alaska Native and Native Hawaiian-serving 
     institutions.
       The House recedes.
       The House bill inserts ``establishment and improvement of 
     endowment funds'' as an authorized use of funds, while the 
     Senate bill includes a new subsection for the same purpose.
       The House recedes.
       The Senate bill creates a new subsection for endowment 
     fund. Both bills limit use to 20% of grant money, but House 
     bill limit is defined in terms of fiscal year. The House and 
     Senate bills require an institution to provide matching 
     funds, but the House bill requires that these funds come from 
     non-federal funds.
       The Senate recedes.
       The House bill authorizes the Secretary to publish 
     regulations, while the Senate bill applies the provisions of 
     Part C.
       The House recedes.
       The House bill eliminates the prohibition against using 
     Title III funds for telecommunications equipment if funds are 
     available under 396(K) of the Communications Act of 1934.
       The Senate recedes.
       The House bill, but not the Senate bill, limits other 
     graduate programs to those in mathematics or physical or 
     natural sciences.
       The Senate recedes with an amendment to add 
     ``engineering''.
       The House bill requires matching funds for any amount over 
     $500,000, while the Senate bill requires that only that part 
     of a grant in excess of $1 million be matched.
       The House recedes.
       The House bill rewrites paragraph (2) while the Senate bill 
     adds a new sentence clarifying the match requirement. The 
     House bill strikes the reference to Morehouse and includes a 
     reallocation plan if funds remain after the initial 
     distribution.
       The Senate recedes with an amendment to strike ``$500,000'' 
     and insert ``$1,000,000''.
       The House bill, but not the Senate bill, revises the list 
     of authorized uses of funds--adding one activity dealing with 
     financial assistance and eliminating 6 activities authorized 
     under current law.
       The Senate recedes.
       The House bill, but not the Senate bill, substitutes ``are 
     the following'' for ``include__'' in order to clarify that 
     the list is not subject to change.
       The Senate recedes.
       Both bills add ``qualified graduate program'' to schools 
     listed in (F) through (J), but the Senate bill also adds it 
     to the school listed in (E).
       The Senate recedes with an amendment to strike ``(F)'' and 
     insert ``(E)''.
       The House bill, but not the Senate bill, strikes paragraphs 
     2 and 3 and rewrites each. Paragraph 2 modifies ``qualified 
     graduate program'' by requiring schools to have students 
     enrolled in the program at the time of application and that 
     the program be accredited.
       The Senate recedes with an amendment to strike the 
     reference to ``accredited'' and to permit institutions to use 
     not more than 10% of their grant for the development of new 
     eligible programs.
       The House bill, but not the Senate bill, provides that 
     institutions receiving funds prior to October 1, 1998, shall 
     continue to receive grants (subject to appropriations) 
     regardless of eligibility of new institutions.
       The Senate recedes.
       The House bill, but not the Senate bill, allows for 
     institution Presidents to decide which graduate or 
     professional school will receive the funds.
       The Senate recedes with an amendment to clarify that the 
     decision regarding the school or program to receive funds 
     must be specified in the application.
       The House bill, but not the Senate bill, makes the first 
     $26 million available for (A) through (P) institutions and 
     changes the current $12,000,000 to $26,000,000. The Senate 
     bill changes $12 million to $15 million.
       The Senate recedes with an amendment to increase $26 
     million to $26.6 million.
       The House bill, but not the Senate bill, includes 
     subparagraphs (A) through (P) in funding, while the Senate 
     keeps current law which covers these institutions.
       The Senate recedes.
       The House bill, but not the Senate bill, allocates the 1st 
     million over $26 million to (Q) and (R) institutions. The 
     Senate bill provides that funds in excess of $15 million but 
     less than $28 million is for grants to institutions in (F)-
     (P) and secondly for (Q) and (R).
       The Senate recedes with an amendment to strike ``$1 
     million'' and insert ``$2 million'', and to strike ``$26 
     million'' and insert ``$26.6 million''.
       The House bill requires the Secretary to develop a formula 
     for distributing funds in excess of $27 million and to 
     consider 3 factors. The Senate bill requires the Secretary to 
     distribute funds in excess of $28 million on a competitive 
     basis that takes into account 5 criteria.
       The Senate recedes with an amendment to strike ``$27 
     million'' and insert ``$28.6 million''; and to require the 
     formula to include the ability of the institution to match 
     funds, the number of students enrolled in the programs for 
     which the institution is eligible to receive financing, the 
     average cost of education per student in these programs, the 
     number of students who received their first professional or 
     doctoral degree, and the percent contribution of the 
     institution to the nationwide number of African Americans 
     receiving graduate or professional degrees in the professions 
     or disciplines related to the programs for which the 
     institution is eligible to receive funds.
       The House and Senate bills contain provisions designed to 
     ensure that current participants maintain current funding 
     levels after the addition of the two new institutions.
       The Senate recedes with an amendment to insert at the end 
     of the subsection ``, or the institution or program cannot 
     provide sufficient matching funds to meet the requirements of 
     this section.''
       The Senate bill, but not the House bill, modifies the 
     formula for establishing maximum grant size to reflect 
     reduced authorization levels.
       The House recedes.
       The Senate bill but not the House bill, moves HBCU capital 
     financing to title III.
       The House recedes on placement in Part D of Title III.
       The Senate bill but not the House bill, adds an additional 
     subparagraph expanding what is defined as a ``capital 
     project''.
       The House recedes with an amendment to include 4 provisions 
     recommended by the Department of Education and the HBCU 
     Capital Financing Advisory Board, including a change in the 
     definition of capital project, reduction of escrow from 10% 
     to 5%; authority to offer technical assistance; and an 
     amendment to the definition of board membership.
       The Senate bill, but not the House bill, adds 2 
     subparagraphs concerned with capital projects, one covers 
     maintenance and storage areas, the other outpatient health 
     care.
       The House recedes.
       The Senate bill, but not the House bill, adds subpoint (e) 
     to the end of section 343, which allows the Secretary of 
     Education to sell qualified bonds when it is in the best 
     interest of the institution.
       The House recedes.
       The House bill, but not the Senate bill, redesignates Part 
     D as Part E and creates 1 science and engineering improvement 
     program taken from title X, part B. The Senate bill moves 
     existing Title X, part B. subparts 1 and 3 to title III and 
     designates it as part E--keeping just the minority science 
     improvement program.
       The House recedes with an amendment to insert ``and 
     Engineering'' after ``Science'' in subsection (a).
  The Senate bill, but not the House bill, creates a findings section.
       The House recedes.
       The House bill creates a new program, while the Senate bill 
     retains current law. The new program created by the House 
     authorizes funds to:
       The House recedes.
       The House bill, but not the Senate bill, allows the 
     Secretary to make grants to minority institutions, 
     organizations, and entities to do programs and activities as 
     authorized. The Senate bill retains current law.
       The House recedes with an amendment to require that one 
     category of applicant be a four-year public or private 
     nonprofit minority institution; to provide that any community 
     college applicant must enter into a

[[Page H9055]]

     partnership with a four-year institution and must offer math 
     and engineering courses; and to include the consortia 
     provisions of the House bill.
       The House bill, but not the Senate bill, states that the 
     Secretary will appoint not less than 1 technical employee to 
     administer the program. The Senate bill retains current law 
     and requires not less than 2 technical employees.
       The House recedes.
       The House bill consolidates the provisions related to 
     application procedures.
       The Senate recedes.
       The House bill, but not the Senate bill, requires the 
     Secretary to develop a preliminary application.
       The Senate recedes with an amendment to change ``shall'' to 
     ``may.''
       The Senate bill, but not the House bill, excludes 
     institutions participating in part D (HBCU capital financing) 
     and part E (minority science improvement) from the 
     requirement of preparing a comprehensive development plan.
       The House recedes.
       The House bill, but not the Senate bill, requires 
     information related to GPRA.
       The House recedes.
       The House bill, but not the Senate bill, exempts Tribal 
     Colleges from being in compliance with certain state plans.
       The Senate recedes.
       The House bill, but not the Senate bill, amends section 
     352(a) to allow the Secretary to waive requirements for a 
     grant for tribal colleges.
       The Senate recedes.
       The House bill, but not the Senate bill, changes Native 
     American colleges and universities to Tribal Colleges and 
     Universities and eliminates subparagraph (a) dealing with 
     examples of special consideration.
       The Senate recedes on the redesignation of Native American 
     colleges and universities.
       The House recedes on the elimination of subparagraph (A).
       The Senate bill, but not the House bill, excludes the peer 
     review provisions from applying to applications submitted 
     under Part D (HBCU capital financing).
       The House recedes.
       The Senate bill, but not the House bill, strikes waiver 
     applicability to programs under titles IV, VII or VIII and 
     inserts part D, title IV, reflecting the transfer of the HBCU 
     Capital Financing Program from title VII to part D, title 
     III.
       The House recedes.
       The House bill, but not the Senate bill, adds a new section 
     355 for continuation awards.
       The Senate recedes.
       The Senate bill authorizes Tribal Colleges at $5 million in 
     fiscal year 1999 and ``such sums'', while the House bill sets 
     the authorization at $10 million in FY 1999 and ``such 
     sums''.
       The Senate recedes.
       The Senate bill, but not the House bill, authorizes $5 
     million in FY 1999 and ``such sums'' in the 4 succeeding 
     fiscal years for new Native Alaska and Native Hawaiian 
     program.
       The House recedes.
       Both bills change the Part B funding authorization date to 
     1999.
       Both bills change the Section 326 authorization date to 
     1000. The Hose bill changes the dollar amount to $35,000,000 
     and the Senate bill changes the dollar amount to $30,000,00 
     for graduate programs.
       The Senate recedes.
       Both bills change the Part C authorization date to 1999 and 
     the dollar amount to $10,000,000 for the endowment program.
       The Senate authorizes funding for HBCU capital financing.
       The House recedes.
       The House bill authorizes for Part D, its modified minority 
     science improvement, $10 million for 1999 and such sums. The 
     Senate bill authorizes for part E, minority science 
     improvement, $10,000,000 for fiscal year 1999 and such sums.
       The House recedes.
       The House bill, but not the Senate bill, strikes 
     subsections c,d, and e authorizing reservation of funds, 
     ratable reductions and additional reservations.
       The Senate recedes

                      TITLE IV--STUDENT ASSISTANCE

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

                         Subpart 1--Pell Grants


                            advance funding

       The House bill strikes the 85-percent advance funding 
     provisions. The Senate bill leaves the provision is place 
     until the Secretary implements a new payment process.
       The House recedes.


                            amount of grant

       The House bill establishes the authorized Pell maximum at 
     $4,500 for academic year 1999-2000 and increases it by $200 
     in each subsequent year until academic year 2003-2004. The 
     Senate bill establishes the authorized Pell maximum at $5,000 
     for academic year 1999-2000 and increases it by $200 in each 
     subsequent year until academic year 2003-2004.
       The Senate recedes with an amendment setting the following 
     Pell maximums:
       $4,500 for academic year 1999-2000
       $4,800 for academic year 2000-2001
       $5,100 for academic year 2001-2002
       $5,400 for academic year 2002-2003
       $5,800 for academic year 2002-2004


                          Tuition Sensitivity

       The House bill, but not the Senate bill, raises the tuition 
     sensitivity level to $3,000. The Senate bill modifies the 
     formula by including in (ii) fees and allowing an institution 
     to determine allowances for dependent care and disability-
     related expenses as is the practice allowed under need 
     analysis.
       The House recedes with amendment to raise the tuition 
     sensitivity level to $2700 and strike ``fees.''


                        fees in lieu of tuition

       The House bill, but not the Senate bill, clarifies that 
     fees that normally constitute tuition should be included as 
     tuition. The provision applies to fees charged as of January 
     31, 1998.


      Allowance for Dependent Care and Disability related Expenses

       The House bill increases the allowance for dependent care 
     and disability related expenses to $1,500. The Senate bill 
     strikes the $750 minimum allowance and allows the institution 
     to determine the amount.
       The House recedes.


                              minimum pell

       The Senate bill, but not the House bill, establishes a 
     minimum Pell at $200 deleting the current bump provisions 
     which gives students a grant of $400 even though their need 
     is calculated to be between $200 and $399.
       The Senate recedes.


                         two pell grants a year

       The Senate bill, but not the House bill, includes new 
     language requiring the Secretary to promulgate regulations 
     implementing a provision that gives the Secretary the 
     authority to allow a student to receive two Pell Grants 
     during a single award year.


                       time limit to receive pell

       The Senate bill, but not the House bill, places a time 
     limit on the period which students may receive a Pell Grant 
     to 150 percent of the period normally required by a full-time 
     student to complete a degree at the institution at which the 
     student is in attendance, as determined by the institution. 
     The Senate bill, but not the House bill, allows students to 
     receive Pell Grants that exceed this period if the student is 
     disabled.
       The Senate recedes.


                            fifth-year pell

       The Senate bill, but not the House bill, allows the 
     Secretary to extend, on a case-by-case basis, Federal Pell 
     aid to teaching students enrolled in postbaccalaureate 
     teacher certificate courses required by state law.
       The House recedes.


                          english instruction

       The Senate bill, but not the House bill, allows a student 
     to receive a Pell Grant to attend English language 
     instruction only if not less than a minimum percentage of the 
     students enrolled in the course complete the course, students 
     enrolled are required to take a proficiency test upon 
     completion, and not less than a minimum percent of students 
     achieve a passing score on the test. The Senate bill, but not 
     the House bill, requires the Secretary to develop regulations 
     that specify the minimum percentage of students who complete 
     the course of instruction, one or more proficiency tests, the 
     minimum percent of student who must achieve a passing score 
     on the tests, and any other requirements as necessary.
       The Senate recedes


           institutional ineligibility based on default rates

       The House bill, but not the Senate bill, eliminates schools 
     from participation in the Pell Grant program if their 
     participation is eliminated in the loan programs due to high 
     default rates. This provision only applies to institutions 
     participating in the loan programs on the date of enactment. 
     An institution is allowed to appeal its default rate before 
     its participation in the Pell Grant program is eliminated.
       The Senate recedes.

     Subpart 2--Federal Early Outreach and Student Service Programs

     Chapter 1--Federal TRIO Programs


                           duration of grants

       The House bill, but not the Senate bill, sets all grants at 
     four years instead of the current process of some awards 
     lasting for four years and others five years.
       The House recedes.
       The House bill, but not the Senate bill, requires grants 
     under 402H (Evaluation for Project Improvement) to be awarded 
     for a period determined by the Secretary.
       The Senate recedes.


                             minimum grants

       The Senate bill, but not the House bill, increases the 
     minimum grant amount. The House maintains the existing 
     levels, whereas, the Senate increases the minimum level by 
     $20,000 for each fiscal year.
       The Senate recedes.


              procedures for awarding grants and contracts

       The House bill, but not the Senate bill, requires an 
     applicant to submit an application which contains information 
     specified by the Secretary.
       The Senate recedes.


                            prior experience

       The House bill, but not the Senate bill, requires the 
     Secretary, in considering prior experience in awarding 
     grants, to not vary from the level of consideration given 
     such factor during FY1994-1997. The Senate bill maintains 
     current law, using the level applied in FY1985. The House 
     bill, but not the Senate bill, provides that TRIO Evaluation 
     authority is not to be given prior experience consideration.

[[Page H9056]]

       The Senate recedes. This provision updates, but does not 
     change, current law.


                     order of awards; program fraud

       The House bill restates current law with a change that 
     excepts grants for evaluations for project improvements from 
     the provision.
       The Senate recedes.


                    authorization of appropriations

       The House bill and the Senate bill increase FY 1999 
     authorization of appropriations to $800,000,000 and 
     $700,000,000, respectively.
       The House recedes.
       The House bill but not the Senate bill strikes the 
     provision that allows the use of up to one-half of one 
     percent of funds to obtain additional qualified readers and 
     staff to review TRIO applications.
       The House recedes.


                                 waiver

       The Senate bill, but not the House bill, allows the 
     Secretary to waive the serve requirements for veterans if the 
     Secretary determines the application of the service 
     requirement to the veteran will defeat the purpose of the 
     program.
       The House recedes.


                             talent search

     Permissible services
       The House bill, but not the Senate bill, expands 
     permissible services offered through Talent Search programs 
     to include assistance in reentering school or receiving a GED 
     or other alternative education programs for secondary school 
     dropouts or postsecondary education.
       The Senate recedes.
       The House bill, but not the Senate bill, further expands 
     Talent Search workshops and counseling to serve all family 
     members.
       The Senate recedes.
       The Senate bill, but not the House bill, expands 
     permissible service activities designed to acquaint youth 
     from disadvantaged backgrounds with careers in which they are 
     underrepresented.
       The House recedes.
     Counselors
       The Senate bill, but not the House bill, includes 
     counselors in the list of individuals who may be involved in 
     Talent Search.
       The House recedes.


                              upward bound

     Permissible services
       The House bill, but not the Senate bill, expands 
     permissible services to include counseling and workshops, in 
     place of personal counseling.
       The Senate recedes.
     Work study
       The House bill amends an existing Upward Bound service that 
     involves activities designed to acquaint participants with 
     the range of career options available to them by adding work-
     study as one of the permitted activities. The Senate bill 
     adds a separate activity that permits funding work study 
     positions in order to expose participants to careers 
     requiring postsecondary degrees.
       The House recedes.
     Counselors
       The Senate bill, but not the House bill, includes 
     counselors in the list of individuals who may be involved in 
     Upward Bound.
       The House recedes.
     Veterans
       The House bill but not the Senate bill allows Upward Bound 
     programs to offer special services to enable veterans to 
     participate in postsecondary education.
       The Senate recedes.
       The House bill but not the Senate bill eliminates--for 
     projects in which a majority of participants are veterans--
     the requirement that the project include instruction in math 
     through precalculus, laboratory science, foreign language, 
     composition and literature as part of the core curriculum.
       The House recedes.
     Maximum stipend
       The Senate bill but not the House bill expands activities 
     in Upward Bound to include summer work-study and permits 
     higher stipends for Upward Bound students participating in 
     summer work-study positions in the amount of $300/month 
     during June, July and August.
       The House recedes.


                        student support services

     Requirements for approval of applications
       The Senate bill provides that, in approving an application, 
     the Secretary is to consider the institution's current and 
     past efforts to provide sufficient financial assistance to 
     meet a student's full financial need and keep students' loan 
     burden manageable. The House bill expands the current law by 
     adding minimizing loan burden to the institution's assurance.
       The House recedes with an amendment striking ``at the 
     institution'' in subparagraph (A) and replacing it with ``in 
     the project.''


                     postbaccalaureate achievement

       The House bill, but not the Senate bill, allows 
     institutions to service students who have been accepted into, 
     but are not yet enrolled in, a qualified graduate program.
       The House recedes.
       The House bill but not the Senate bill increases the 
     maximum stipend to $3,200.
       The Senate recedes with an amendment to increase the 
     maximum stipend to $2,800.


                      staff development activities

     Contents of training programs
       The House bill but not the Senate bill expands training 
     topics for staff development activities to include training 
     in the use of educational technology.
       The Senate recedes.
       The Senate bill, but not the House bill, allows for 
     leadership personnel to participate in authorized staff 
     development activities.
       The House recedes.


                      evaluation and dissemination

     Evaluations
       In addition to minor wording changes, the Senate bill makes 
     the purpose of the TRIO evaluation authority that of 
     improving effectiveness of the program, rather than improving 
     the operation of the program as in current law. The House 
     bill continues current law, with the additional requirement 
     that the evaluations are to investigate the effectiveness of 
     alternative and innovative methods of increasing access.
       The House recedes with an amendment to add ``Such 
     evaluations shall also investigate the effectiveness of 
     alternative and innovative methods within Federal TRIO 
     programs of increasing access to, and retention of, students 
     in postsecondary education'' at the end of (a)(2).
     Replication and information dissemination
       The Senate bill, but not the House bill, adds a new 
     authority intended to disseminate and replicate best 
     practices and provide technical assistance by authorizing 
     grants to institutions carrying out TRIO and NEISP projects 
     to expand their success by working with institutions that are 
     not aided by these programs but that are serving low income, 
     first-generation students.
       The House recedes.
     Chapter 2--National Early Intervention and Partnership 
         Program
       The House bill reauthorizes the NEISP.
       The House recedes, as NEISP functions are incorporated into 
     the new Gaining Early Awareness and Readiness for 
     Undergraduate Programs (GEAR UP).


gaining early awareness and readiness for undergraduate programs (gear 
                                  up)

       The GEAR UP program contained in the conference substitute 
     combines elements of the existing National Early Intervention 
     Scholarship Partnership Program, the CONNECTIONS Program 
     included in the Senate bill, and the High Hopes program 
     included in the House bill. Authorized at $200 million for 
     fiscal year 1999 and such sums as may be necessary for the 4 
     succeeding fiscal years, the program encourages States and 
     university partnerships to provide support services to 
     students or cohorts of students who are at-risk of dropping 
     out of school and providing information, encouragement and 
     means to pursue postsecondary study. Under the GEAR UP 
     program funds can be used for a variety of activities, such 
     as providing eligible students or cohorts of students with 
     comprehensive mentoring, support services, outreach services, 
     tutoring, and academic assistance.
       The State-based component of the program remains virtually 
     unchanged from the current NEISP program. State programs must 
     have a scholarship component. In making State grants, the 
     Secretary is required to give priority to programs with a 
     demonstrated commitment to early intervention and which 
     carried out successful educational opportunities programs 
     under this chapter prior to the 1998 Higher Education Act 
     Amendments.
       The partnership component of the GEAR UP program must focus 
     on a cohort of students beginning not later than the 7th 
     grade, in which at least 50 percent of the students are 
     enrolled or eligible for free or reduced price lunch. 
     Provision of scholarships is not required of the 
     partnerships, but the conferees would encourage the Secretary 
     to look favorably on those partnership applications that do 
     have a scholarship component.
       All grants made under the GEAR UP program must be 
     coordinated both within the program as well as with other 
     related services under Federal and non-Federal programs.
       The Secretary is required to use \1/3\ of the funds 
     appropriated for grants to States and \1/3\ of the funds 
     appropriated to grants to Partnerships. The Secretary has 
     flexibility in determining the distribution of the remaining 
     \1/3\ of funds. It is the intent of the conferees that those 
     remaining funds will be distributed in a fair and equitable 
     manner. The Secretary is required to annually reevaluate the 
     distribution of the remaining \1/3\ of funds based on the 
     number, quality and promise of applications received from 
     States and Partnerships and adjust the distribution 
     accordingly.
       Up to $200,000 each year shall be used for the provision of 
     21st Century Scholarship certificates. These certificates 
     shall be provided by the Secretary to all students 
     participating in the program under this chapter and must 
     indicate the amount of Federal financial assistance for 
     college such student may be eligible to receive.
     Chapter 3--Academic Achievement Incentive Scholarships
       The House bill but not the Senate bill, establishes a 
     program to increase the size of the maximum Pell Grant award 
     for freshmen and sophomores who graduate in the top 10 
     percent of their high school class. Funding is authorized at 
     $240,000,000 for fiscal year 1999 and such sums as necessary 
     for the four succeeding years.
       The Senate recedes with an amendment to rename the program 
     the ``Academic Achievement Incentives Scholarship Program'', 
     to

[[Page H9057]]

     place it in Title IV, Part A, Subpart 2 as a new Chapter 3, 
     and to provide an authorization level of $200,000,000 for 
     fiscal year 1999.
     Repeals
       Both bills repeal the current chapters 4 through 8 of 
     subpart 2 of part A of title IV.


                        Frank Tejeda Scholarship

       The House bill, but not the Senate bill, creates the new 
     Frank Tejeda Scholarship Program as chapter 4 of subpart 2 of 
     part A. The purpose of this new program is to recruit and 
     train teachers who are proficient in both Spanish and English 
     and who show academic promise. Funding is authorized at 
     $5,000,000 for fiscal year 1999 and such sums for the four 
     succeeding fiscal years.
       The House recedes.


              public safety officer memorial scholarships

       The House bill, but not the Senate bill, authorizes 
     scholarships to any applicant enrolled or has been accepted 
     for enrollment at an institution. The Public Safety Officer 
     Memorial Scholarship program is placed in chapter 5 of 
     subpart 2 of part A. The applicant must submit an application 
     accompanied by a certification stating the officer died in 
     the line-of-duty from the head of the agency that employed 
     the public safety officer to whom the applicant was married, 
     living, or receiving support.
       The House recedes. The conferees note that a related 
     program is administered through the Department of Justice and 
     that changes similar to those proposed in the House bill were 
     approved by the Senate earlier this year. The conferees 
     believe it would be more appropriate to build upon an 
     existing program and encourage the House Committee on the 
     Judiciary to approve this initiative.

     Subpart 3--Federal Supplemental Educational Opportunity Grants


                         extension of authority

       The Senate bill, but not the House bill, increases fiscal 
     year 1999 authorization of appropriations to $700,000,000.
       The Senate recedes.


             use of funds for less-than-full-time students

       The House bill requires grant funds to be made available to 
     independent and less than full-time students. The Senate bill 
     requires that a reasonable proportion of the allocated funds 
     be made available to such students.
       The House recedes.


                             pro rata share

       The House bill, but not the Senate bill, strikes the pro 
     rata share of FSEOG allocations and allocates all excess 
     funds on a fair share basis.
       The Senate recedes with an amendment to maintain current 
     law for fiscal year 1999 (base year) and to provide that, for 
     fiscal year 2000 and thereafter, institutions will receive 
     their base guarantee plus pro rata share amount received for 
     FY 1999--with any funds appropriated in excess of the amount 
     necessary to meet the base payment being distributed under 
     the fair share calculation using the latest available data.


                         reallocation of excess

       The House bill requires that excess funds not needed for 
     the next fiscal year shall be returned to the Secretary in 
     order to make grants. The House bill allows the Secretary to 
     make grants to other institutions within the same state. The 
     Senate bill requires that excess funds not needed for the 
     next fiscal year or for the previous fiscal year be returned 
     to the Secretary in order to make grants. The Senate bill 
     permits the Secretary to reallocate funds according to 
     regulations.
       The House recedes.


               use of carried over and carried-back funds

       The House bill and the Senate bill contain similar language 
     on allowing institutions to carry over and carry back funds 
     made available to such institutions.

    Subpart 4--Leveraging Educational Assistance Partnership Program

       The Senate bill, but not the House bill, renames the Grants 
     to States for State Student Incentives (SSIG) program as the 
     Leveraging Educational Assistance Partnership (LEAP) Program.
       The House recedes.


                    authorization of appropriations

       Both bills authorize appropriations of $105,000,000 for 
     fiscal year 1999 and such sums in the four succeeding fiscal 
     years.


                              reservation

       Both bills require that in any fiscal year for which the 
     amount appropriated exceeds a certain amount--$25,000,000 for 
     the House and $35,000,000 for the Senate--the excess be 
     available for the Special Leveraging Educational Assistance 
     Partnership Program.
       The House recedes with an amendment to set the trigger at 
     $30 million.


     special leveraging educational assistance partnership program

     Authorized activities
       The House bill, but not the Senate bill, authorizes states 
     to use grant funds for carrying out financial aid programs 
     for students who demonstrate financial need and wish to enter 
     careers in information technology or other critical areas of 
     the state's workforce.
       The State recedes with an amendment to strike ``teaching 
     or''.
       The Senate bill authorizes states to use the funds for 
     community service work-study activities for students who 
     demonstrate financial need.
       The House recedes.
       Both bills include teaching, but placement differs.
       The House recedes.
       The Senate bill authorizes states to use the funds for a 
     scholarship program for mathematics, computer science or 
     engineering degrees for students who demonstrate financial 
     need.
       The House recedes.
     Maintenance of effort requirement
       The House bill but not the Senate bill allows the Secretary 
     to waive this requirement for good cause, as determined by 
     the Secretary.
       The House recedes.
     Federal share of authorized activities
       The House bill requires that the federal share of the cost 
     of the authorized activities be 25 percent, whereas the 
     Senate bill requires 33\1/3\ percent.
       The House recedes.
     Federal-State relationships
       The Senate bill relocates Section 1203 with minor wording 
     changes in this section.
       The Senate recedes, thereby eliminating the provision.

Subpart 5--Special Programs for Students Whose Families are Engaged in 
                     Migrant and Seasonal Farmwork


                            management plan

       The House bill, but not the Senate bill, requires that the 
     grant recipient coordinate its project to the extent feasible 
     with other local, state, and federal programs to maximize the 
     resources available for migrant students.
       The Senate recedes.


                         extension of authority

       The Senate bill, but not the House bill, increases the 
     authorized level for HEP to $25,000,000 and $10,000,000 for 
     CAMP for fiscal year 1999.
       The Senate recedes.


                            data collection

       The House bill, but not the Senate bill, requires the 
     National Center for Education Statistics to collect 
     postsecondary data on migrant students.
       The Senate recedes.

          Subpart 6--Robert C. Byrd Honors Scholarship Program


                       termination of eligibility

       The House bill, but not the Senate bill, terminates the 
     eligibility of students from the Federated States of 
     Micronesia, the Republic of the Marshall Islands, and the 
     Palau on the earlier of the date of enactment of the Higher 
     Education Amendments of 1998 or October 1, 1998.
       The Senate recedes with an amendment providing that 
     students from the Freely Associated States who first become 
     eligible to receive a scholarship after fiscal year 1999 may 
     compete in the Byrd program through the Pacific Regional 
     Education Laboratory--with the total number of scholarships 
     limited to 10 in each fiscal year and that FAS eligibility 
     for Byrd sunsets September 30, 2004.


                    authorization of appropriations

       The House bill increases authorized appropriation level to 
     $40,000,000 in fiscal year 1999, whereas, the Senate bill 
     increases the authorized level to $45,000,000.
       The House recedes.

          Subpart 7--Child Care Access Means Parents in School

       Both bills include provisions for campus-based child care. 
     The House bill includes these provisions in chapter 5 of 
     subpart 2 of part A, while the Senate includes it in subpart 
     7 of part A.
       The House recedes.


                                purpose

       The Senate bill, but not the House bill, states that the 
     purpose of the program is to support the participation of 
     low-income parents in postsecondary education through the 
     provision of campus-based child care services.
       The House recedes.


                           program authorized

       The House bill requires services be provided to low-income 
     students; the Senate bill requires services be provided 
     primarily to low-income students.
       The House recedes.


                                renewal

       The Senate bill, but not the House bill, allows a grant to 
     be renewed for a period of three years.
       The Senate recedes with an amendment to change the initial 
     grant period to 4 years.


                              use of funds

       The House bill allows an institution to support or 
     establish a child care program serving the needs of low-
     income students enrolled at the institution. The Senate bill 
     requires the program to support or establish child care 
     services primarily to low-income students. The Senate bill 
     clarifies that campus-child care grants awarded to 
     institutions can 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 higher education.
       The House recedes.


                              construction

       The Senate bill, but not the House bill, requires that 
     nothing prohibit an institution from serving the child care 
     needs of the community served by the institution.

[[Page H9058]]

       The House recedes.


                              applications

       The Senate bill, but not the House bill, requires the 
     application to contain a description of the activities to be 
     assisted, including whether the grant funds will support an 
     existing child care program or a new child care program.
       The House recedes.
       The Senate bill, but not the House bill, also requires 
     information on child care capacity in the area and waiting 
     lists.
       The House recedes.
       The Senate bill, but not the House bill, requires the 
     provision of information on whether funds will support a new 
     or existing program.
       The House recedes.
       The Senate bill, but not the House bill, requires provision 
     of information with respect to coordination between the 
     program and the institution's early childhood curriculum.
       The House recedes.
       The Senate bill, but not the House bill, distinguishes 
     between new and existing programs and, if new, require a 
     timeline, measures to assist low-income students prior to 
     provision of child care by the institution, and a plan for 
     identifying resources needed. The House bill makes these 
     requirements for all applicants.
       The House recedes.


                                priority

       The Senate bill, but not the House bill, requires the 
     Secretary to give priority to institutions that submit 
     applications describing programs that leverage significant 
     local or institutional resources to support the activities; 
     and utilize a sliding fee scale for child care services to 
     support a high number of low-income parents at their 
     institution.
       The House recedes.


                              construction

       The Senate bill, but not the House bill, provides that no 
     funds be used for construction, except for minor renovations 
     or repair.
       The House recedes.


                    authorization of appropriations

       The House bill authorizes the program at $30,000,000 for 
     fiscal year 1999 and ``such sums'' for the four succeeding 
     fiscal years, while the Senate bill authorizes $60,000,000 
     for fiscal year 1999 and ``such sums'' for the four 
     succeeding fiscal years.
       The Senate recedes with an amendment to authorize 
     $45,000,000 for FY 1999.

           Subpart 8--Learning Anytime Anywhere Partnerships

       The Senate bill, but not the House bill, establishes the 
     ``Learning Anytime Anywhere Partnerships'' program. The 
     purpose of the program to enhance the delivery, quality, and 
     accountability of postsecondary education and career-oriented 
     lifelong learning through technology and related innovations. 
     Grants and authorized to be awarded for period not to exceed 
     five years to partnerships consisting of two or more 
     independent agencies, organizations, or institutions. Funds 
     are to be used to: develop and assess model distance learning 
     programs or innovative software; develop methodologies for 
     the identification and measurement of skill competencies; 
     develop and assess innovative student support services; or 
     support other activities that are consistent with the purpose 
     of this subpart. Funding is authorized at $30,000,000 for 
     fiscal year 1999 and ``such sums'' for each of the four 
     succeeding fiscal years.
       The House recedes with an amendment establishing an 
     authorization level of $10 million for fiscal year 1999.

             Part B--Federal Family Education Loan Program

       The House bill, but not the Senate bill, eliminates the 
     limitation of Secretarial authority to guaranty new loans if 
     the Secretary does not complete regulations for the 1992 
     amendments.
       The Senate recedes.
       The House bill, but not the Senate bill, corrects an 
     incorrect section reference.
       The Senate recedes.
       The House bill and the Senate bills use comparable language 
     to specify that private nonprofit institutions or 
     organizations that contract with the Secretary to provide 
     loan insurance must have the capability to handle electronic 
     inquiries from students, eligible lenders and others.
       The House recedes.
       The House bill eliminates Secretarial authority to make 
     emergency advances of funds for the purpose of guaranty 
     agencies acting as lenders-of-last-resort. The Senate bill 
     eliminates Secretarial authority to make emergency advances 
     of funds for the purpose of guaranty agencies acting as 
     lenders-of-last-resort during the transition to the direct 
     lending program.
       The House recedes.
       The House bill, but not the Senate bill, corrects an 
     incorrect section reference.
       The Senate recedes.
       The House bill, but not the Senate bill, contains 
     conforming language to strike Secretarial authority to use 
     emergency advances for the purpose of guaranty agencies 
     acting as lenders-of-last resort.
       The House recedes.
       The House bill, but not the Senate bill, requires the 
     Secretary to conduct a study on the impact of guaranty agency 
     loan servicing and collection activity on student loan 
     default rates.
       The House recedes.
       The House bill requires the Secretary to recall to the 
     Treasury $215 million from Federal Student Loan Reserve 
     Funds. The Senate bill requires the Secretary to recall $250 
     million from Federal Student Loan Reserve Funds.
       The House recedes.
       The House bill calculates the percentage reduction for 
     total funds recalled of $215 million. The Senate bill 
     calculates the percentage reduction for total funds recalled 
     of $250 million.
       The House recedes with an amendment to strike ``September 
     30, 1996'' and insert ``September 30, 1996, less amounts 
     subject to recall under section 422(h)''.
       The Senate bill, but not the House bill, does not allow the 
     percentage reduction to deplete the reserve funds of any 
     agency that charged the 1% insurance premium below an amount 
     equal to the amount of lender claim payments made 90 days 
     prior to the date of return. The additional amount will be 
     imposed on the guaranty agencies that this restriction does 
     not apply to on an equal percentage basis.
       The House recedes.
       The House bill establishes a Federal Student Loan Reserve 
     Fund within 60 days of enactment, whereas, the Senate bill 
     establishes a Federal Student Loan Reserve Fund within 45 
     days of enactment.
       The Senate recedes.
       The Senate bill requires investments in non-government 
     securities to be approved by the Secretary, and specifies 
     that the Federal Fund earnings are the property of the 
     Federal government.
       The House recedes.
       The House bill, but not the Senate bill, includes in the 
     Federal Fund amounts collected on rehabilitated defaulted 
     loans that are sold to an eligible lender as part of a 
     default reduction program.
       The Senate recedes.
       The House bill, but not the Senate bill, specifies that 
     insurance premiums from unsubsidized loans shall be deposited 
     in the fund.
       The Senate recedes with an amendment that specifies that 
     all supplemental preclaims payments paid after the date of 
     enactment shall be deposited in the Federal fund and that 70% 
     of all administrative cost allowance payments that were due 
     prior to enactment but paid after the date of enactment shall 
     be deposited in the Federal fund as well as such other 
     receipts as specified in regulations of the Secretary.
       The House bill and the Senate bill clarify that the Federal 
     fund and assets purchased by the Federal fund are the 
     property of the federal government. The Senate bill includes 
     nonliquid assets purchased with reserve funds in the Federal 
     Fund prorated on the percentage of the asset developed or 
     purchased with federal reserve funds.
       The House recedes with a technical amendment to change 
     ``authorized by the part'' to ``authorized by this part'' and 
     ``improper expenditures'' to ``improper expenditure.''
       The Senate allows the Secretary to restrict the use of the 
     nonliquid asset only to the extent necessary to protect the 
     Secretary's prorated share of the value of the asset.
       The House recedes.
       The Senate bill authorizes the Secretary to direct the 
     guaranty agencies to discontinue any activity related to the 
     expenditure or transfer of the Federal fund or the 
     Secretary's share of a nonliquid asset that is improper.
       The House recedes.
       The House bill, but not the Senate bill, states that 
     nonliquid reserve fund assets and other reserve fund assets 
     as of the date of enactment are the property of the United 
     States, to be used as determined by the Secretary and subject 
     to restrictions on their sale as determined by the Secretary.
       The House recedes.
       The Senate bill limits the transfer of Federal funds to the 
     Agency Operating Fund by a guaranty agency to 50 percent of 
     the Federal fund balance during any fiscal year, whereas the 
     Senate bill limits the transfer of funds to 40 percent of the 
     Federal Fund balance.
       The Senate recedes with an amendment to limit the transfer 
     to an aggregate of 45%. The transfer of Federal funds to the 
     Agency Operating Fund is intended to help guaranty agencies 
     to meet short term operating expenses during the transition 
     period. Guaranty agencies will only be able to borrow what 
     they need to ensure that they can meet normal operating 
     expenses. In addition, a guaranty agency shall, at the time 
     it transfers funds, provide the Secretary with notice of the 
     transfer and a plan, including a schedule of payments, for 
     repayment of all funds transferred into the Agency Operating 
     Fund.
       The House bill requires sufficient funds to remain in the 
     Federal Fund to meet the reserve fund recall requirements of 
     the Balanced Budget Act of 1997; the Senate bill requires 
     sufficient funds to remain in the Federal Fund to meet the 
     recalls required in the Balanced Budget Act of 1997 and the 
     Higher Education Act Amendments of 1998.
       The Senate recedes with an amendment to require that the 
     Federal Fund have sufficient funds to pay lender claims and 
     meet the recall provisions of both the Balanced Budget Act 
     and the Higher Education Amendments of 1998.
       The House bill, but not the Senate bill, includes interest 
     earned on the Federal Fund as an allowable deposit in the 
     Operating Fund for up to ten guaranty agencies that can 
     demonstrate negative cash flow during the transition years as 
     a result of restructuring.
       The Senate recedes with an amendment to strike ``(not to 
     exceed 10)''; to strike ``the potential for'' and insert 
     ``that there will be''

[[Page H9059]]

     in its place; and to add ``and that the use of the interest 
     by the guaranty agency will result in a substantial 
     improvement in their financial circumstances'' at the end of 
     (5). In addition, the Senate made further amendments on 
     extended repayment of the interest. The interest which is 
     transferred from the Federal Fund to the Agency Operating 
     Fund must be returned to the Federal Fund no later than five 
     years after the establishment of the Agency Operating Fund. 
     The Secretary is, however, authorized to extend the repayment 
     period or waive the requirement to return the transferred 
     interest if the Secretary determines that there are 
     extenuating circumstances beyond the control of the agency, 
     including state constitutional prohibitions on guaranty 
     agency borrowing, that justify such a waiver. The Conferees 
     expect that this relief will be afforded only to guaranty 
     agencies which can demonstrate need for this relief through 
     an independent, standard accounting method.
       The House bill requires repayment of Federal funds to begin 
     no later than the start of the fourth year after the 
     establishment of the Agency Operating Fund. The Senate bill 
     requires repayment no later than three years after the 
     establishment of the Agency Operating Fund.
       The Senate recedes with an amendment to clarify that 
     guaranty agencies are not required to pay interest on the 
     funds transferred from the Federal fund during the transition 
     period.
       The Senate bill, but not the House bill, requires the 
     guaranty agency to provide a schedule for repayment of 
     Federal funds transferred to the Agency Operating Fund.
       The House recedes with an amendment to insert 
     ``reasonable'' prior to the first ``schedule'' in the last 
     sentence.
       If the guaranty agency fails to make scheduled repayments, 
     the Senate bill, but not the House bill, prohibits the 
     guaranty agency from receiving any other funds under Part B 
     until such repayments are made. The Secretary is directed to 
     pay withheld funds immediately to the guaranty agency after 
     the repayments have been made.
       The House recedes.
       The Senate bill, but not the House bill, gives the 
     Secretary the authority to waive the prohibition to receive 
     additional funds for circumstances beyond the control of the 
     agency.
       The House recedes with an amendment.
       The Senate bill, but not the House bill, requires funds 
     transferred from the federal fund to be invested in 
     government or other low-risk securities to be approved by the 
     Secretary.
       The House recedes.
       The House bill requires the establishment of an Agency 
     Operating Fund within 60 days of enactment. The Senate bill 
     requires the establishment of an Agency Operating Fund within 
     45 days of enactment.
       The Senate recedes.
       The House and Senate bills allow funds to be invested as 
     determined by the guaranty agency. The House bill, but not 
     the Senate bill, requires funds to be invested in 
     accordance with prudent investor standards. The Senate 
     bill provides separate treatment for transferred funds.
       The Senate recedes. In drafting this provision, the 
     conferees intend to allow guarantee agencies flexibility with 
     respect to the investment of funds from the Agency Operating 
     Fund. However, in order to ensure the integrity of the 
     program, it is the intent of the conferees that these 
     investments be made in accordance with prudent investor 
     standards as recognized under applicable state or Federal 
     law.
       The Senate bill, but not the House bill provides for the 
     deposit in the Agency Operating Fund of any outstanding 
     administrative cost allowance payments that are made to the 
     agency after the date of enactment.
       The House recedes with an amendment to provide for the 
     deposit in the Agency Operating Fund of 30% of any 
     outstanding administrative cost allowance payments that are 
     made to the agency after the date of enactment and such other 
     receipts as the Secretary may determine by regulation. The 
     conferees expect that these payments will be made in a timely 
     fashion.
       The House bill, but not the Senate bill, includes financial 
     awareness and outreach activities and other student aid 
     activities as allowable uses of funds in the Operating Fund. 
     The Senate bill, but not the House bill, clarifies that 
     allowable default prevention activities include those in 
     Section 442(h)(8).
       The House recedes with an amendment to insert ``financial 
     aid awareness and related outreach activities'' prior to 
     ``compliance monitoring''.
       The House bill provides that the guaranty agency determines 
     the financial aid related activities that are allowable uses 
     of funds in the Operating Fund. The Senate bill provides that 
     the Secretary determine which additional activities are 
     allowable uses of funds in the Operating Fund.
       The House recedes with an amendment to replace ``as 
     determined by'' with ``selected by'' and to strike 
     ``Secretary'' and insert ``guaranty agency''.
       The House and Senate bills provide comparable descriptions 
     of default collection activities. The house bill specifically 
     includes activities required by regulations of the Secretary. 
     The Senate bill reflects the collection costs for which 
     agencies are currently reimbursed under 428(c)(6)(B)(i).
       The Senate recedes.
       The House and Senate bills provide comparable descriptions 
     of default prevention activities. The House bill specifically 
     includes activities required by regulations of the Secretary. 
     The Senate bill reflects the costs for which agencies are 
     currently reimbursed under 428(c)(6) (B)(ii) and (C)(i).
       The Senate recedes.
       The House bill authorizes the Secretary to regulate the use 
     and expenditure of money in the Operating Fund related to 
     guaranty agency functions in the loan programs as long as the 
     Operating Fund owes money to the Federal Fund. The Senate 
     bill does not allow the Secretary to regulate the use or 
     expenditures of any money in the Operating Fund, but funds 
     can only be used for student loan program expenses while 
     funds are owed to the Federal fund.
       The House recedes with an amendment providing that the 
     Secretary may regulate the uses or expenditures of funds in 
     the Operating Fund so long as funds are owed to the Federal 
     fund.
       The House bill, but not the Senate bill, reduces guaranty 
     agency reinsurance from 78% to 75% on loans transferred to a 
     guaranty agency from an insolvent guaranty agency.
       The Senate recedes.
       The House bill, but not the Senate bill, strikes the 
     exemption from additional review on reimbursement of losses 
     for an eligible lender, servicer or guaranty agency that has 
     been designated for exceptional performance.
       The House recedes.
       The House bill applies the percentage changes for 
     reimbursing losses to loans first disbursed after October 1, 
     1998. The Senate bill applies the percentage changes for 
     reimbursing losses on insured loans to loans first disbursed 
     after the date of enactment.
       The Senate recedes.
       The Senate bill, but not the House bill, changes the 
     equitable share percentage that guaranty agencies may retain 
     on collections from 24 percent to 23 percent after September 
     30, 2003.
       The House recedes.
       The Senate bill clarifies that the current minimum reserve 
     level is to be maintained in the Federal Fund established 
     under Section 422A.
       The House recedes.
       The House bill requires a management plan if an agency is 
     at 85% reinsurance, while the Senate bill requires it at 78%.
       The Senate recedes.
       The Senate bill, but not the House bill, strengthens the 
     requirement that the Secretary must obtain a management plan 
     from guaranty agencies that fall below the current minimum 
     reserve level by dropping ``as appropriate.''
       The House recedes.
       The Senate bill specifies that the loan processing and 
     issuance fee will apply to loans originated on or after 
     October 1, 1998 and prior to October 1, 2003.
       The House recedes.
       The Senate bill, but not the House bill sets a loan 
     processing and issuance fee equal to 0.40 percent of the 
     total principal amount of loans for loans originated on or 
     after October 1, 2003.
       The House recedes.
       The Senate bill inadvertently strikes subparagraph C and 
     paragraph (2) which prohibits payment on undisbursed checks 
     or incomplete EFT, and establishes the information required 
     on the application for payments.
       The Senate recedes.
       The Senate bill, but not the House bill, requires the 
     request for default aversion assistance to be received 
     between the 60th and 90th day of delinquency. The House bill 
     requires the request to be received not earlier than the 60th 
     day.
       The Senate recedes.
       Comparable provision. The House bill authorizes a default 
     aversion fee, whereas the Senate bill authorizes a default 
     prevention fee.
       The Senate recedes with an amendment to insert ``by the 
     guaranty agency'' after ``repayment status''.
       The House bill authorizes the fee to be transferred for 
     defaults that have been brought into current repayment on or 
     before the 210th day after the loan is 60 days delinquent. 
     The Senate bill authorizes the fee to be paid for defaults 
     that have not been presented that the guaranty agency brings 
     into current repayment within 300 days after the loans are 60 
     days delinquent. The Senate time line reflects a conforming 
     change coinciding with the change in the definition of 
     default.
       The House recedes.
       The House bill specifies that the fee shall not be paid on 
     any loan for which a default claim has been paid. The Senate 
     bill specifies that a fee shall not be paid on any loan for 
     which a claim has been presented.
       The Senate recedes.
       The House bill prohibits the default aversion fee from 
     being paid on a single loan until 12 months have lapsed 
     between the date the loan became current and when the lender 
     filed a subsequent default aversion request. The Senate bill 
     requires the borrower to remain current for at least 24 
     months before the next delinquency.
       The Senate recedes with an amendment to change paragraph 
     (B) so that it reads:
       (B) The default aversion fee shall be equal to 1 percent of 
     the total unpaid principal and accrued interest on the loan 
     at the time the request is submitted by the lender. A 
     guaranty agency may transfer such fees earned under this 
     subsection no more frequently than monthly.

[[Page H9060]]

       (C) Such fee shall not be paid more than once on any loan 
     for which the guaranty agency averts the default unless at 
     least 18 months has elapsed between the date the borrower 
     entered current repayment status and the date the lender 
     filed a subsequent default aversion assistance request, and, 
     during this period the borrower is not more than 30 days past 
     due in payment on principal and interest on the loan.
       The Senate bill, but not the House bill, clarifies that 
     current repayment status is determined at the time the 
     guaranty agency qualifies for the default aversion fee.
       The Senate recedes.
       The House bill, but not the Senate bill, adjusts the annual 
     limits for loans to students enrolled in programs that are 
     less than one academic year to a ratio based on the length of 
     the program.
       The Senate recedes.
       The House and Senate bills establish the interest rate for 
     students at the bond equivalent rate of 91-day Treasury bills 
     plus 2.3% capped at 8.25%. The Senate bill sunsets this 
     interest rate provision on July 1, 2003.
       The House recedes.
       The House and Senate bills established the in-school 
     interest rate for students at the bond equivalent of 91-day 
     Treasury bills plus 1.7%. Senate bill sunsets this provision 
     on July 1, 2003.
       The House recedes.
       The House and Senate bills establish the interest rate for 
     parent loans at the bond equivalent rate of 91-day Treasury 
     bills plus 3.1% capped at 9%. The Senate bill sunsets this 
     provision on July 1, 2003.
       The House recedes.
       The House bill, but not the Senate bill, sets the interest 
     rate on consolidation loans at the weighted average of loans 
     being consolidated rounded to the nearest \1/8\ capped at 
     8.25%. The Senate bill retains current law establishing the 
     rate at the weighted average of loans being consolidated 
     rounded to the nearest whole percent and capped at 9%.
       The Senate recedes with an amendment to sunset the 
     consolidation loan rate on July 1, 2003.
       The House bill, but not the Senate bill, restates current 
     law that a lender may charge a lower interest for 
     consolidation loans.
       The House recedes.
       The Senate bill establishes special allowance for loans 
     disbursed between October 1, 1998 and July 1, 2003. The House 
     bill establishes special allowance for loans disbursed on or 
     after July 1, 1998.
       The House recedes.
       The House and Senate, using comparable language, simplify 
     the records that must be sent from an institution to the 
     lender with respect to loan amount.
       The House recedes.
       The Senate bill requires a student to provide a statement 
     from the institution of higher education to the lender in 
     order to establish eligibility. The House bill establishes 
     eligibility if the institution has provided a statement to 
     the lender.
       The House recedes.
       The House bill deletes the description that the amount of 
     need is based on the student's estimated cost of attendance, 
     estimated financial assistance, and the expected family 
     contribution and just references Part F. The Senate bill 
     retains the description and authorizes the school to retain 
     supporting documentation rather than send it to the lender.
       The House recedes with an amendment to strike ``Pursuant to 
     section 428H.''
       The Senate bill, but not the House bill, clarifies that the 
     cost of attendance is determined under provisions in section 
     472.
       The House recedes.
       The House bill, but not the Senate bill, strikes the 
     current law defining estimated financial assistance for the 
     purpose of receiving student loans.
       The House recedes with an amendment to make a conforming 
     change to section 480(j)(3) to exclude benefits under chapter 
     30 of Title 38.
       The Senate bill, but not the House bill, clarifies that 
     unsubsidized loans are excluded from the determination of 
     need and amount of loan for federal interest subsidies.
       The House recedes with an amendment to strike ``with the 
     exception of loans made under section 428H.''
       The Senate bill, but not the House bill, makes a conforming 
     amendment that strikes institutional authority to refuse to 
     certify a loan from section 428 and moves this authority to 
     part F.
       The House recedes.
       The Senate bill, but not the House bill, starts the clock 
     for accruing interest when the school disburses funds to the 
     student rather than when the lender disburses funds to the 
     school.
       The Senate recedes.
       The Senate bill, but not the House bill, specifies the 
     statutory authority that defines academic year is in section 
     481(d)(2).
       The House recedes.
       The House bill, but not the Senate bill, simplifies the 
     current loan proration formula used for students enrolled in 
     an undergraduate program less than one academic year.
       The Senate recedes.
       The Senate bill, but not the House bill, specifies the loan 
     limits for enrollment in non-degree course work necessary for 
     admission to a program leading to a degree or certificate, 
     and for post-baccalaureate non-degree course work required 
     for professional credential or certification for teaching in 
     a state.
       The House recedes.
       The Senate bill, but not the House bill, changes an 
     incorrect section reference from the repealed Supplemental 
     Loans Program contained in 428H.
       The House recedes.
       The House bill allows the borrower to change repayment 
     plans annually. The Senate bill allows the Secretary to 
     prescribe regulations on how the borrower can change 
     selection of a repayment plan.
       The Senate recedes.
       The Senate bill, but not the House bill, adds an extended 
     repayment schedule as an option the lender is required to 
     offer to borrowers in the Federal Stafford loan programs.
       The House recedes with an amendment.
       The Senate bill adjusts the loan installment periods to 
     accommodate extended repayment schedules.
       The House recedes.
       The Senate bill, but not the House bill, allows flexibility 
     to accommodate extended repayment plans in the minimum 
     repayment allowed on aggregate loans each year.
       The House recedes.
       The House bill, but not the Senate bill, clarifies an 
     exception to the prohibition of unsolicited mailings of loan 
     applications for mailings to parents of a student who has 
     previously received a loan.
       The Senate recedes.
       The House bill, but not the Senate bill, allows a guaranty 
     agency to provide the same kind of assistance to institutions 
     of higher education that is provided by the Department of 
     Education.
       The Senate recedes.
       The House bill, but not the Senate bill, clarifies that 
     pre-July 1, 1993, borrowers enrolled half time do not have to 
     borrow an additional loan to qualify for an in-school 
     deferment regardless of the terms and conditions attached to 
     the original loan.
       The Senate recedes.
       The House and Senate bill exclude active military service 
     from the grace period, thus preserving the grace period and 
     delaying the onset of repayment. The Senate bill limits the 
     exclusion for active duty to a period up to three years and 
     only for active duty periods more than 30 days. The Senate 
     bill provides that the exclusion period includes periods 
     necessary to resume enrollment.
       The House recedes.
       The Senate bill, but not the House bill, requires the 
     lender to offer and allows the borrower to select among the 
     following repayment plans: a standard repayment plan with 
     fixed payments not to exceed 10 years; a graduated repayment 
     plan not to exceed ten years; an income-sensitive repayment 
     plan with income-sensitive payments that are not less than 
     the amount of interest due and not to exceed ten years; and, 
     an extended repayment plan with a fixed or graduated 
     repayment not to exceed 25 years. The extended repayment plan 
     is only available to first-time borrowers after the date of 
     enactment for loan amounts in excess of $30,000.
       The House recedes.
       The Senate bill, but not the House bill, specifies that a 
     borrower will enter standard repayment in the case that the 
     borrower does not select a repayment plan.
       The House recedes.
       The Senate bill, but not the House bill, allows the 
     borrower to accelerate payment on loans under any repayment 
     plan.
       The Senate recedes.
       The House bill, but not the Senate bill, fixes the rate of 
     insurance at 98% of unpaid principal.
       The Senate recedes.
       The House bill, but not the Senate bill, provides that a 
     borrower qualifying for unemployment benefits does not have 
     to file additional supporting documentation to receive loan 
     deferment benefits.
       The Senate recedes with an amendment.
       The House and Senate bills eliminate the annual audit 
     requirement for small lenders. The House bill sets a $5 
     million loan threshold based on the annual audit period, 
     while the Senate bill uses fiscal year. The Senate bill 
     requires a lender that is a wholly-owned subsidiary of a 
     nonprofit tax-exempt foundation that lends only to 
     undergraduates and has less than $5 million in loans to 
     submit an annual report.
       The House recedes with an amendment to insert ``lender'' 
     between ``any'' and ``fiscal year''.
       The House bill, but not the Senate bill, corrects an 
     incorrect section reference.
       The Senate recedes.
       The House bill, but not the Senate bill, allows lenders to 
     determine deferment eligibility without a request from the 
     borrower with the receipt of a new loan application 
     documenting deferment eligibility or if it is documented that 
     the borrower is enrolled at least half-time.
       The Senate recedes with an amendment that the lender will 
     notify the borrower regarding his or her current status and 
     options to repay.
       The House bill, but not the Senate bill, prohibits 
     guarantee agencies from charging institutions for information 
     about borrowers related to preclaims assistance.
       The Senate recedes.
       The House bill eliminates the requirement that forbearance 
     requests must be written. the Senate bill allows forbearance 
     requests to be electronic.
       The Senate recedes.
       The House bill, but not the Senate bill, allows total debt 
     burden to be taken into consideration when determining 
     eligibility for forbearance.
       The House recedes.

[[Page H9061]]

       The House bill and the Senate bill allow lenders to grant 
     forbearance immediately upon request for sixty days to 
     research or process any related documentation.
       The House recedes with an amendment to insert 
     ``reasonably'' between ``lender'' and ``determines'' and to 
     strike ``for forbearance'' and insert ``for deferment, 
     forbearance, a change in a repayment plan, or request to 
     consolidate loans'' in its place.
       The House bill, but not the Senate bill, clarifies that the 
     Secretary must give the guaranty agency an opportunity for a 
     hearing on the record.
       The Senate recedes with an amendment.
       The House bill, but not the Senate bill, corrects the House 
     Committee name.
       The Senate recedes.
       The Senate bill eliminates payment for lender referral 
     services. The House bill eliminates references to the 
     transition to direct lending for providing lender referral 
     services.
       The House recedes.
       The House bill, but not the Senate bill, corrects the name 
     of the House committee.
       The Senate recedes.
       The House bill, but not the Senate bill, clarifies the 
     guaranty agency as designated by the state.
       The Senate recedes.
       The House bill, but not the Senate bill, inserts reference 
     to new subparagraph (c) which sets forth requirements for 
     providing advance funds.
       The Senate recedes.
       The House bill, but not the Senate bill, revises the 
     Secretary's authority to provide advances to lender-of-last-
     resort guaranty agencies if there are loan access problems.
       The Senate recedes.
       The House bill allows the Secretary to designate another 
     guaranty agency for a state if the Secretary determines that 
     the designated guaranty agency does not have capability to 
     provide lender-of-last-resort loans to eligible borrowers.
       The Senate recedes.
       The House bill, but not the Senate bill, eliminates the 
     requirement that 10 percent of defaulted loans are to be 
     placed in income contingent repayment.
       The Senate recedes.
       The House bill, but not the Senate bill, allows the 
     guaranty agency to offer blanket certificate of loan guaranty 
     so lenders can make new loans without receiving prior 
     approval for individual loans.
       The Senate recedes with an amendment to authorize pilot 
     programs prior to implementation program wide.
       The House bill, but not the Senate bill, allows guaranty 
     agencies and lenders the ability to transmit data 
     electronically under the insurance program agreement and 
     blanket guaranty.
       The Senate recedes.
       The House bill, but not the Senate bill, does not extend 
     the blanket certificate of guaranty to loans in which the 
     guaranty agency has notified the lender that the borrower is 
     not eligible.
       The Senate recedes.
       Furthermore, the House bill allows the guaranty agency and 
     lender to establish limitations and restrictions under the 
     blanket certificate of guaranty.
       The Senate recedes with an amendment.
       The House bill, but not the Senate bill, requires lenders 
     to provide the borrower information on the availability of 
     income-sensitive repayment options. Specifically, it provides 
     that all borrowers are eligible to select income-sensitive 
     repayment through loan consolidation, the procedures to make 
     the selection, and how to obtain additional information about 
     this repayment option.
       The Senate recedes.
       The House bill, but not the Senate bill, specifies that the 
     lender shall also offer income-sensitive repayment option 
     through consolidation loans.
       The House recedes.
       The House bill, but not the Senate bill, clarifies that 
     information about income-sensitive repayment options through 
     loan consolidation must be provided in exit counseling to 
     borrowers.
       The House recedes.
       The Senate bill, but not the House bill, prohibits the 
     Secretary from waiving or modifying statutory requirements 
     pertaining to terms and conditions of loans, default claims 
     payments to lenders, or the prohibition of inducements when 
     developing the responsibilities between the lender and the 
     guaranty agency for participation in a voluntary flexible 
     agreement.
       The House recedes with an amendment permitting the 
     Secretary to waive the prohibition on inducements if the 
     Secretary determines that a waiver is consistent with the 
     purposes of this section and is limited to the activities of 
     the guaranty agency within the State or States for which the 
     guaranty agency serves as the designated guarantor. If the 
     Secretary grants a waiver, any guaranty agency doing business 
     within the affected State or States may request, and the 
     Secretary shall grant, an identical waiver to such guaranty 
     agency under the same terms and service area limitations as 
     govern the original waiver.
       The Senate bill, but not the House bill, lifts any 
     restrictions on the number of consortia or guaranty agencies 
     that may enter into a voluntary flexible agreement with the 
     Secretary after FY 2002.
       The House recedes.
       The Senate bill, but not the House bill, requires the 
     Secretary to report to Congress on the impact of the 
     voluntary flexible agreement. The report is to include a 
     description of the agreement and performance goals, a list of 
     participating guaranty agencies and the specific statutory or 
     regulatory waivers granted, an assessment of the agency's 
     success in achieving the goals set, and an evaluation of the 
     costs and efficiencies gained under each of the agreements.
       The House recedes with an amendment.
       The House bill limits the agreement to five years with the 
     option to renew.
       The House recedes.
       The Senate bill allows agreements to be secured by the 
     guaranty agency and the Secretary.
       The Senate recedes.
       The House bill gives an illustrative list of areas that may 
     be addressed by the agreement, while the Senate bill gives an 
     exhaustive list.
       The House recedes.
       The House bill, but not the Senate bill, includes 
     performance of other program functions by the guaranty agency 
     as functions specified in voluntary flexible agreements.
       The House recedes.
       The Senate bill, but not the House bill, includes 
     informational outreach to schools and students in support of 
     access as responsibilities that can be specified under 
     voluntary flexible agreements.
       The House recedes.
       The Senate bill, but not the House bill, does not allow 
     agreements to prohibit or restrict borrowers from selecting a 
     lender of the borrower's choice.
       The House recedes.
       The Senate bill, but not the House bill, requires the 
     Secretary to publish in the Federal Register an invitation 
     for guaranty agencies to enter into voluntary agreements and 
     the criteria for selection.
       The House recedes.
       The Senate bill, but not the House bill, requires the 
     Secretary to notify Congress and to publish in the Federal 
     Register the following information about the voluntary 
     flexible agreements: a description of the agreement and 
     performance goals; a list of participating agencies and 
     statutory and regulatory waivers granted; the standards of 
     performance; and the fees to be paid.
       The House recedes with an amendment to strike ``and shall 
     publish a notice in the Federal Register, with a request for 
     public comment''.
       The Senate bill, but not the House bill, requires the 
     Secretary to make the text of the agreements and any 
     modifications readily available to the public.
       The House recedes.
       The Senate bill, but not the House bill, requires the 
     Secretary to notify Congress within 30 days of any 
     modifications to the agreements.
       The House recedes.
       The Senate bill, but not the House bill, allows the 
     Secretary to establish additional eligibility criteria for 
     PLUS loans in addition to adverse credit history after 
     consultation with the financial aid community.
       The House recedes.
       The Senate bill, but not the House bill, makes technical 
     amendments to the section and separates terms, conditions and 
     benefits and the special rule defining borrower into separate 
     subparagraphs.
       The House recedes.
       The Senate bill, but not the House bill, requires parents 
     borrowing PLUS loans to verify immigration status and social 
     security numbers.
       The House recedes.
       The Senate bill, but not the House bill, adds a requirement 
     that an eligible borrower for a consolidation loan must not 
     be subject to a judgement secured through litigation or an 
     order of wage garnishment.
       The House recedes with an amendment to clarify that the 
     judgement relates to Title IV student loan debt, and to 
     replace ``or'' at the end of (i) with ``and.''
       The Senate bill, but not the House bill, makes technical 
     amendments to the subparagraph to add subclauses for each of 
     the eligibility criteria.
       The House recedes.
       The Senate bill, but not the House bill, adds an additional 
     subclause that provides an exception to terminating an 
     individual's status as an eligible borrower for loans 
     received prior to the date of consolidation that the borrower 
     may wish to include in a later consolidation loan.
       The House recedes with an amendment.
       The House bill, but not the Senate bill, allows direct 
     loans to be included in FFEL consolidation loans after 
     expiration of the Emergency Student Loan Consolidation Act of 
     1997.
       The Senate recedes.
       The House bill, but not the Senate bill, allows a borrower 
     to select the lender of his/her choice for consolidation even 
     if the lender does not hold one of his/her loans.
       The Senate recedes with an amendment. The conferees support 
     the changes made to section 428C(b)(1)(A). However, we want 
     to ensure the protection of borrowers from mass marketing or 
     selective marketing of consolidation loans. Those borrowers 
     with loans held by more than one lender may seek a 
     consolidation loan from any eligible loan consolidator.
       The House bill, but not the Senate bill, extends the 
     authority for the borrower to retain interest subsidies that 
     the borrower was entitled to on the underlying loans prior to 
     consolidation.
       The Senate recedes.
       The House bill, but not the Senate bill, makes a technical 
     amendment to the subclauses to add this provision.
       The Senate recedes.

[[Page H9062]]

       The House bill, but not the Senate bill, does not require a 
     lender to consolidate loans of Title VII, Part A, Subpart II 
     and Title VIII, Part B, Subpart II of the Public Health 
     Service Act.
       The Senate recedes.
       The House bill, but not the Senate bill, allows lenders to 
     set a minimum loan balance to consolidate loans for 
     borrowers.
       The House recedes. In discussing this provision, the 
     conferees note that current law does not prohibit lenders 
     from establishing, as a matter of lending policy, a minimum 
     loan balance for which they will process a consolidation loan 
     application. It is the intent of the conferees that lenders 
     continue to be allowed to establish their own policies with 
     respect to minimum balance requirements. However, the 
     conferees strongly believe that all students should have 
     access to consolidation loans.
       The House bill eliminates multiple disbursement of student 
     loans within a single period of enrollment such as a 
     semester, quarter, or trimester. The Senate bill eliminates 
     multiple disbursements of student loans for students in their 
     final period of enrollment that is less than one academic 
     year, only if the institution has a cohort default rate less 
     than five percent.
       The Senate recedes with an amendment.
       The House bill eliminates the 30-day delay rule for 
     institutions disbursing student loans to first-time borrowers 
     student loans for institutions with a cohort default rate 
     less than ten percent for the 3 most recent fiscal years. The 
     Senate bill eliminates the same requirement for institutions 
     with a cohort default rate of less than five percent.
       The Senate recedes with an amendment.
       The Senate bill, but not the House bill, excludes loans for 
     study abroad students from the requirements of 428G, 
     particularly the multiple disbursement and delayed 
     disbursement requirements, if the home institution has a 
     cohort default rate less than five percent.
       The House recedes.
       The Senate bill, but not the House bill, sets the effective 
     dates for the exemption from the 30-day delay disbursement 
     provisions from October 1, 1998 to September 30, 2002.
       The House recedes.
       The House bill, but not the Senate bill, allows up to $300 
     in over-awards of student aid before withholding and 
     returning to the lender any disbursements of loan funds.
       The House recedes.
       The Senate bill, but not the House bill, changes the 
     heading of subsection b of 428 to ``Satisfactory Repayment 
     Arrangements to Renew Eligibility.''
       The House recedes.
       Both the House and Senate bills require the institution to 
     provide the lender certification of the students eligibility 
     for a loan, the loan amount, and a disbursement schedule. The 
     Senate bill authorizes the institution to determine and 
     maintain documentation supporting the student's eligibility, 
     which was previously required to be sent to the lender.
       The House recedes.
       The Senate bill retains the requirement that the school 
     determine and document need for a loan, but deletes the 
     requirement that COA, EFA, and EFC be sent to the lender.
       The House recedes.
       The House and Senate bills require a statement to the 
     lender certifying student eligibility, loan amount, and 
     disbursement schedule. The Senate bill requires the school to 
     provide the statement, while the House bill requires the 
     student to provide it from the school.
       The House recedes.
       The Senate bill deletes the obsolete 7-month standard for 
     annual loan limits and specifies the statutory authority that 
     defines academic year is in section 481(d)(2).
       The House recedes.
       The House bill, but not the Senate bill, deletes the 
     current proration and reduced loan limits calculation for 
     loans for an undergraduate program that is less than one 
     academic year for an independent student who has not 
     completed the first 2 years of undergraduate education and 
     bases the maximum loan amount on the ratio of the student's 
     program length to the academic year.
       The Senate recedes.
       The Senate bill, but not the House bill, sets loan limits 
     for unsubsidized loans for independent students in a course 
     of study necessary for enrollment in non-degree coursework 
     necessary for admission to a program leading to a degree or 
     certificate, and for post-baccalaureate non-degree coursework 
     required for professional credential or certification for 
     teaching in a state.
       The House recedes.
       The Senate bill, but not the House bill, clarifies that the 
     maximum aggregate amount for independent, unsubsidized loans 
     does not include capitalized interest.
       The House recedes.
       The House bill, but not the Senate bill, specifies that the 
     capitalization of interest is not deemed to exceed the annual 
     insurable limit.
       The Senate recedes.
       The Senate bill, but not the House bill, allows for 
     extended repayment plans as detailed in 428(b)(9).
       The House recedes with an amendment.
       The House bill, but not the Senate bill, allows 
     forbearance, deferment, or income-sensitive repayments to 
     begin upon request by the borrower of loans made under this 
     section subject to the servicer receiving all necessary 
     documentation within 30 days.
       The Senate recedes with an amendment.
       The House bill, but not the Senate bill, repeals the three 
     percent loan origination fee and consolidates it with other 
     origination fees in section 438.
       The Senate recedes.
       The Senate bill, but not the House bill, includes sense-of-
     the-Senate language that Congress should consider adding 
     borrower flexibility in regards to unsubsidized Stafford 
     aggregate loan limits based on findings that private sector 
     student loan programs are growing rapidly, but federal loan 
     are less expensive and provide a greater range of debt 
     management options.
       The Senate recedes.
       The House bill repeals 428J. The Senate bill amends 428J 
     with provisions for loan forgiveness for teachers.
       The House recedes.
       The House bill, but not the Senate bill, specifies that the 
     Secretary's authority to sue and be sued in any court of 
     record shall not be construed to limit court review under 
     Title 5, Chapter 7.
       The House recedes.
       The House bill, but not the Senate bill, extends the 
     authority for the Comptroller General and Inspector General 
     by allowing the audit of all eligible lenders.
       The Senate recedes.
       The House bill, but not the Senate bill, includes a 
     technical amendment correcting the name of the House 
     committee.
       The Senate recedes.
       The House bill strikes all reference to authorities 
     required to file a plan for doing business as a separate 
     category. The Senate bill retains the authority of the IG and 
     GAO to conduct audits of organizations using tax exempt 
     financing which are not guaranty agencies or eligible 
     lenders.
       The Senate recedes.
       The House bill, but not the Senate bill, eliminates 
     reference to making recommendations on programs of assistance 
     to borrowers in relation to the 1992 amendments.
       The Senate recedes.
       The House bill clarifies that the Secretary must prescribe 
     the common form using the FAFSA as the loan application for 
     both FDLP and FFELP. The Senate bill clarifies that the 
     common forms may include master promissory notes.
       The House recedes with an amendment.
       The House bill clarifies that any electronic forms 
     developed must use the FAFSA as the loan application for both 
     FDLP and FFELP.
       The House recedes.
       The House bill, but not the Senate bill, requires the FAFSA 
     to be used for all FFELP loan applications with the exception 
     of PLUS and Consolidation loans beginning in academic year 
     1999-2000. The Senate bill modifies section 483 to require 
     the FAFSA to be utilized as the FFELP loan application.
       The Senate recedes with an amendment.
       The Senate bill, but not the House bill, allows guaranty 
     agencies, borrowers, and lenders to use electronic versions 
     of the common application forms and promissory note approved 
     by the Secretary.
       The House recedes with an amendment.
       The House bill requires a master promissory note with a 
     multi-year line-of-credit to be developed within 180 days of 
     enactment that addresses the needs of participants in part B 
     and part D. The Senate bill requires a master promissory note 
     for enrollment periods after July 1, 2000, applicable to more 
     than 1 academic year or loan type; a pilot program is 
     permitted before the implementation of the entire system.
       The House recedes with an amendment. The conferees believe 
     that the master promissory note offers the possibility of 
     important program simplification for borrowers, institutions 
     of higher education, and lenders. The conferees continue to 
     remain concerned that the master promissory note may, if not 
     implemented thoughtfully, contribute to additional 
     unnecessary student indebtedness. The conferees have included 
     language which requires a student confirmation process.
       The House and Senate bills require consultation with 
     institutions, guaranty agencies, eligible lenders, students, 
     and others in developing the master promissory note.
       The House recedes.
       The House and Senate bills have comparable provisions 
     regarding the sale and assignment of loans using a master 
     promissory note. The house bill specifies that the note 
     provide for a line-of-credit.
       The House recedes with an amendment.
       The House bill, but not the Senate bill, extends the 
     default reduction management program to the year 2003.
       The Senate recedes.
       The House bill, but not the Senate bill, corrects the House 
     Committee name.
       The Senate recedes.
       The House bill, but not the Senate bill, requires 
     disclosure information for the borrower be in simple and 
     understandable terms.
       The Senate recedes.
       The Senate bill, but not the House bill, allows disclosure 
     information to borrowers to be made by electronic as well as 
     written means.
       The House recedes.
       The Senate bill, but not the House bill, requires each 
     lender to provide a telephone number that provides additional 
     loan information to each borrower. The lender is allowed to 
     provide an electronic address as well.
       The House recedes.
       The House bill, but not the Senate bill, requires 
     disclosure information for the borrower to be in simple and 
     understandable terms.

[[Page H9063]]

       The Senate recedes.
       The Senate bill, but not the House bill, allows disclosure 
     information to borrowers to be made by electronic means.
       The House recedes.
       The Senate bill, but not the House bill, requires each 
     lender to provide a telephone number that provides additional 
     loan information to each borrower. The lender is allowed to 
     provide an electronic address as well.
       The House recedes.
       The House bill, but not the Senate bill, establishes 
     exceptional mitigating circumstances that, if met, allow high 
     default schools to remain in the program.
       The Senate recedes with an amendment.
       The Senate bill, but not the House bill, requires a high 
     default institution with an unsuccessful appeal of loss of 
     eligibility to pay all interest, special allowance, 
     reinsurance and any other payments made or required to be 
     made by the Secretary on loans made during the appeal.
       The House recedes.
       The Senate bill, but not the House bill, requires the high 
     default rate institution to provide a letter of credit or 
     other third-party guarantee to satisfy the potential 
     liability for these payments.
       The Senate recedes.
       The House bill extends the exemption for loss of 
     eligibility due to high cohort default rates for Historically 
     Black Colleges and Universities, Tribally-Controlled 
     Community Colleges and Navajo Community Colleges until July 
     1, 1999. The Senate bill continues the exemption until 
     September 30, 2002, but requires institutions exceeding the 
     threshold for 2 years to file default management plans. 
     Failure to submit the plan or meet its criteria results in 
     termination from the program.
       The Senate recedes with an amendment.
       The House bill requires loan servicers to provide complete 
     copies of all records for all loans at the request of the 
     institution if the institution is appealing a loss of 
     eligibility due to improper loan servicing. The Senate bill 
     limits the institution to access to records used by a 
     guaranty agency in determining whether to pay a claim on a 
     defaulted loan that contributes to the institution's cohort 
     default rate.
       The House recedes with an amendment to include Direct Loan 
     Servicers.
       The House bill but not the Senate bill, adds a definition 
     of mitigating circumstances.
       The Senate recedes.
       The House bill, requires that the circumstances that 
     represent exceptional mitigating circumstances for an 
     institution must be certified by a certified public 
     accountant.
       The Senate recedes with an amendment specifying that, in 
     the opinion of an independent auditor, the institution meets 
     the mitigating circumstances criteria.
       The House bill, but not the Senate bill, requires that at 
     least two-thirds of the students enrolled at least half-time 
     must be eligible for at least half of the maximum Pell Grant 
     award or at least two-thirds of the students enrolled at 
     least half-time must have a family income below the HHS 
     poverty level.
       The Senate recedes.
       The House bill provides that at least two-thirds of the 
     students enrolled on a full-time basis, within a one-year 
     period prior to the appeal, must complete the program within 
     normal time frames, be enrolled and making satisfactory 
     academic progress toward completion, or have entered active 
     military service.
       The Senate recedes with an amendment to incorporate current 
     federal regulatory criteria which requires institutions that 
     offer degree programs to document that 70 percent of the 
     institution's regular students completed their programs, 
     transferred from the institution to a higher level 
     educational program, or entered active duty in the Armed 
     Forces.
       The House bill provides that at least two-thirds of the 
     students enrolled on a full-time basis, within a one year 
     period prior to the appeal, are placed for at least 13 weeks 
     in an employment position for which they have been trained, a 
     higher level education program, or active duty in the armed 
     forces.
       The Senate recedes with an amendment to incorporate, with a 
     reduced placement rate requirement of 44 percent, the current 
     regulatory criteria that requires non-degree granting 
     institutions to document the placement rate of their former 
     regular students.
       The House bill requires default management plans for 
     institutions over the default threshold for 3 years that rely 
     on the exemption to continue to participate. The Senate bill 
     requires the default management plan in paragraph (2)(C).
       The Senate recedes with an amendment to change ``July 1, 
     1998'' to ``July 1, 1999''.
       The House bill requires a default management plan to be 
     filed if the institution has exceeded the cohort default rate 
     for the last three fiscal years, whereas, the Senate bill's 
     plan is triggered after two consecutive years.
       The Senate recedes.
       The House bill requires the default plan to provide 
     reasonable assurance that the default rate will fall below 25 
     percent by July 1, 2001, and evidence of improvement and 
     successful implementation is to be filed annually. The Senate 
     bill authorizes the Secretary to determine the criteria for 
     the plan.
       The Senate recedes with an amendment to change ``July 1, 
     2001'' to ``July 1, 2002''.
       The House bill, but not the Senate bill, requires the 
     institution to engage an independent third party to provide 
     technical assistance.
       The Senate recedes.
       The House bill allows the Secretary to grant further 
     exemptions only for July 1, 1999, and July 1, 2000, for 
     institutions over the default threshold and requires the 
     institution to demonstrate substantial improvement in 
     reducing the cohort default rate in order to maintain 
     eligibility. The Senate bill subjects the institution to a 
     loss of eligibility for failure to file a plan to meet the 
     performance criteria contained within the plan.
       The Senate recedes with an amendment to change ``beginning 
     on July 1, 1999 and July 1, 2000,'' to ``beginning on July 1, 
     1999, July 1, 2000, and July 1, 2001,''.
       The House bill follows the participation rate index for 
     exemption from cohort default rate penalties that is defined 
     in regulations on July 1, 1996. The Senate bill restates the 
     regulation. Both bills allow institutions to remain in the 
     program if they comply with the regulation without going 
     through the appeals process.
       The House recedes with a technical amendment to assure the 
     language reflects the current regulation.
       The Senate bill, but not the House bill, sets an effective 
     date for the exemption provided to minority institutions as 
     the date of enactment until September 30, 2002.
       The Senate recedes.
       The House bill, but not the Senate bill, authorizes the 
     Secretary--through a third-party consultant--to provide 
     administrative, fiscal, management, strategic planning, and 
     technical assistance to Historically Black Colleges and 
     Universities, Tribally Controlled Community Colleges, and 
     Navajo Community Colleges that have submitted a default 
     management plan.
       The House recedes.
       The House bill, but not the Senate bill, requires the 
     wholly-owned subsidiary of a non-profit foundation to have 
     participated in the FFELP for three years prior to the date 
     of enactment.
       The Senate recedes.
       The House bill sets the loan portfolio limit at $10 
     million, the Senate bill sets the loan portfolio limit at $5 
     million.
       The House recedes.
       The House bill, but not the Senate bill, requires all loans 
     made or held as trustee, including consumer loans, to be 
     considered when determining the primary consumer credit 
     function.
       The House recedes. The conferees urge the Department, when 
     interpreting the rule related to a lending institution's 
     primary function, to consider the role of trust department's 
     in today's banking environment. In particular, the Department 
     is encouraged to consider the distinction between loans made 
     and held by a lender that are clearly part of the 
     institution's primary consumer function, and loans that are 
     merely held in trust on behalf of another originating lender 
     and that are clearly not part of the institution's primary 
     consumer function.
       The House bill, but not the Senate bill, expands the 
     definition of eligible lender to include a wholly owned 
     subsidiary of a publicly held holding company if the holding 
     company has acted as a finance company and has participated 
     in the loan programs for three years prior to enactment.
       The Senate recedes with an amendment providing for the 
     eligibility of a consumer finance company subsidiary of a 
     national bank which, as of the dae of enactment, through one 
     or more subsidiaries: (1) acts as a small business lending 
     company, as defined by the Small Business Administration; and 
     (2) participates in the part B programs as of the date of 
     enactment, provided the national bank and all of the bank's 
     subsidiaries together do not have the making or holding of 
     student loans as their primary consumer credit function.
       The House bill, but not the Senate bill, allows eligible 
     lenders, as defined in statute, to provide assistance to 
     institutions similar to the assistance provided by the 
     Department.
       The Senate recedes.
       The House bill, but not the Senate bill, defines multi-year 
     line-of-credit as an agreement between the borrower and the 
     lender under a master promissory note.
       The Senate recedes.
       The Senate bill, but not the House bill, clarifies that the 
     default rate calculation excludes improperly serviced loans 
     identified through appeal from both the numerator and 
     denominator.
       The House recedes.
       The House bill, but not the Senate bill, requires guaranty 
     agencies to collect and report additional information on 
     defaulted loans to identify which borrowers have made not 
     less than six consecutive payments and for whom the guaranty 
     agency has renewed Title IV eligibility.
       The Senate recedes with an amendment to strike ``within 2 
     years after the date of enactment of the Higher Education 
     Amendments of 1998,''; to replace ``shall, by regulation'' 
     with ``may''; and to strike the last sentence.
       The House bill gives the Secretary authority, after 
     reviewing the data, to regulate how these loans should be 
     treated in the default rate calculation.
       The House recedes.
       The Senate bill, but not the House bill, requires the 
     default rates to be published annually by September 30.
       The House recedes.
       The Senate bill, but not the House bill, eliminates the 
     District of Columbia Student Loan Insurance Program.

[[Page H9064]]

       The House recedes.
       The Senate bill, but not the House bill, holds lenders or 
     agencies that delegate student loan functions responsible for 
     compliance of the delegated functions. The agency or lender 
     must monitor the entity to ensure compliance, and the entity 
     is responsible for compliance with applicable rules and 
     regulations as well.
       The House recedes. By including the provision with respect 
     to delegation of functions, the conferees intend to codify 
     current regulation. It is not the intent of the conferees to 
     create new or additional responsibilities for trustees.
       The House bill, but not the Senate bill, expands loans that 
     qualify for discharge to include loans from institutions that 
     failed to make a refund of loan proceeds owed to the lender.
       The Senate recedes.
       The House bill, but not the Senate bill, requires the 
     Secretary to annually report to Congress on the amount of 
     loans discharged for this reason.
       The Senate recedes.
       The House bill provides loan forgiveness for teachers in 
     Section 437. The Senate bill provides loan forgiveness for 
     teachers by amending Section 428J.
       The House recedes on placement.
       The House bill, but not the Senate bill, amends the 
     subsection title to read ``Discharge Related to School 
     Closure or False Certification.''
       The Senate recedes.
       The Senate bill, but not the House bill, states the purpose 
     of the loan forgiveness provisions is to encourage 
     individuals to enter the teaching profession.
       The House recedes.
       The Senate bill, but not the House bill, authorizes 
     cancellation only on subsidized loans made to new borrowers 
     on or after October 1, 1998. The House bill authorizes 
     cancellation of new loans made to borrowers with no 
     outstanding principal or interest.
       The House recedes.
       The House and Senate bills provide that loans received 
     after the first and second year of undergraduate education 
     are eligible for subsequent loan forgiveness.
       The conference agreement provides that all subsidized and 
     unsubsidized loans up to a maximum of $5,000 are eligible for 
     forgiveness.
       The House bill, but not the Senate bill, extends loan 
     forgiveness to the portion of consolidation loans that 
     otherwise meet the requirements to qualify.
       The Senate recedes.
       The House bill requires three years of academic service as 
     a full-time teacher to qualify for the loan forgiveness 
     benefits at the end of the 3rd year of teaching. The Senate 
     bill requires three consecutive, complete years employed as a 
     full-time teacher to be eligible after the 4th year for 
     cancellation.
       The conference agreement requires five full years of 
     academic service as a full-time teacher to qualify for loan 
     forgiveness benefits at the end of the fifth year of 
     teaching.
       The House bill details the requirements for qualifying 
     schools and has the State determine which schools qualify. 
     The Senate bill refers to the same requirements for teacher 
     cancellations in the Perkins Loan program, which has the 
     Secretary determine which schools qualify.
       The House recedes.
       The Senate bill, but not the House bill, does not extend 
     loan forgiveness to defaulted loans.
       The House recedes.
       The House bill forgives 30 percent of the qualified loan 
     amount for the first and second year of academic service 
     after completion of the qualifying service (3rd and 4th years 
     of teaching). The Senate bill forgives 30 percent of the loan 
     and applicable interest after completions of the fourth and 
     fifth year of qualifying service.
       The conference agreement forgives up to $5,000 in 
     qualifying loans after completion of the fifth year of 
     qualifying service.
       The House bill sets the total amount that may be forgiven 
     at $17,750. The Senate bill sets the total amount that may be 
     forgiven at $8,000.
       The conference agreement sets the total amount at $5,000.
       The House bill requires the borrower to have majored in the 
     subject area in which the borrower is teaching, while the 
     Senate bill requires that the teaching subject area be 
     relevant to the borrower's academic major. The Senate bill, 
     but not the House bill, requires the chief administrative 
     officer of the secondary school to certify that the teaching 
     subject area is relevant to the borrower's academic major.
       The House recedes.
       The Senate bill, but not the House bill, requires the chief 
     administrative officer of the elementary school to certify 
     the borrower's knowledge and teaching skills in reading, 
     writing and mathematics.
       The House recedes.
       The House bill, but not the Senate bill, prohibits a 
     borrower from receiving benefits from both loan forgiveness 
     for teaching and National Service for the same employment.
       The Senate recedes.
       The House bill grants the Secretary authority to regulate 
     the reimbursement of loans. The Senate bill grants the 
     Secretary authority to regulate all provisions of the loan 
     forgiveness program.
       The House recedes.
       The House bill, but not the Senate bill, repeals debt 
     management options authorizing the Secretary to acquire loans 
     that are at a high risk of default from eligible lenders.
       The Senate recedes.
       The Senate bill, but not the House bill, allows the 
     Secretary to collect origination fees directly from the 
     holder of the loan if the lender fails or is not required to 
     bill the Secretary for interest and special allowances or, 
     withdraws from the program with unpaid origination fees.
       The House recedes.
       The House bill, but not the Senate bill, includes 
     origination fees for unsubsidized loans with fees for 
     subsidized Stafford loans.
       The Senate recedes.
       The House bill, but not the Senate bill, mandates that the 
     lender must charge the same origination fee to all student 
     borrowers.
       The Senate recedes.
       The House bill adds an exception that the origination fee 
     can be reduced for a borrower that demonstrates greater 
     financial need.
       The Senate recedes.
       The Senate bill, but not the House bill, allows the 
     Secretary to collect loan fees directly from the holder of 
     the loan if the lender fails or is not required to bill the 
     Secretary for interest and special allowances, or withdraws 
     from the program with unpaid origination fees.
       The House recedes.
       The Senate bill, but not the House bill, clarifies that the 
     Secretary may collect excess loan fees from subsequent 
     quarterly payments of special allowance payments.
       The House recedes.
       Both the Senate and the House bills repeal the Plan for 
     Doing Business.
       The conferees support the repeal of the Plan for Doing 
     Business retroactively. The Plan for Doing Business 
     requirements included in the Act have changed many times 
     since it was first enacted in 1980. The provisions enacted in 
     the 1986 amendments transferred sole and exclusive 
     responsibility for approving and monitoring compliance of the 
     Plan from the Secretary to the nation's Governors. Due to 
     changes in the tax code and other changes in law, the need 
     for the Plan has become obsolete and thus is being repealed 
     retroactively pursuant to these amendments.
       The House bill, but not the Senate bill, eliminates 
     nondiscrimination requirements for tax-exempt authorities.
       The House recedes. In repealing the plan for doing business 
     retroactively, the conferees retain the nondiscrimination 
     provisions of current law that are applicable to nonprofit 
     secondary markets. Although the conferees do not have 
     evidence of discriminatory practices in these secondary 
     markets, they recognize the benefits of tax exemption carry 
     responsibilities for serving all students without regard to 
     factors such as income and school attended.
       The House bill, but not the Senate bill, eliminates the 
     annual report by the Secretary to Congress assessing student 
     loan credit provided through tax-exempt obligations.
       The Senate recedes.
       The Senate bill, but not the House bill, makes a conforming 
     change to reflect the elimination of the plan for doing 
     business.
       The Senate recedes.
       The House bill, but not the Senate bill, requires the GAO 
     to conduct a study to determine if lender policies indicate 
     institutional, programmatic, or socioeconomic discrimination 
     in assessing or waiving fees.
       The House recedes.
       The Senate bill, but not the House bill, defines an 
     institution of higher education for the purposes of 
     determining eligibility for loan forgiveness for child care 
     providers.
       The House recedes.
       The Senate bill, but not the House bill, requires the 
     borrower to have worked two consecutive years as a child care 
     provider in a low-income community.
       The House recedes.
       The Senate bill defines a low-income community as a 
     community where 70 percent of households earn less than 85 
     percent of the state median income.
       The House recedes.
       The House and Senate bills use comparable language but the 
     Senate bill clarifies that years of service must be 
     consecutive.
       The House recedes.
       The House and Senate bills retain the authority of the 
     Secretary to maintain the Federal Family Education Loan 
     Insurance Fund.
       The conference agreement directs the Secretary to deposit 
     the $47 million currently contained within the Fund directly 
     in the Treasury.

                   Part C--Federal Work-Study Program


                   purpose; appropriations authority

       The House bill clarifies current law by specifically 
     referencing the eligibility of professional students engaged 
     in an internship, practicum or as a research assistant, as 
     determined by the Secretary, for purposes of work study. The 
     Senate bill clarifies that part-time employment under work-
     study may include internships and research assistanceships.
       The House recedes with an amendment to insert ``practica'' 
     after ``internships.''
       The House bill authorizes appropriations of $1 billion for 
     fiscal year 1999, whereas the Senate bill authorizes 
     appropriations of $900 million for FY 1999. Both bills 
     authorize ``such sums'' in the 4 succeeding fiscal years.
       The Senate recedes.
       The House bill includes on-campus services as qualifying 
     under the definition of community service. The Senate bill 
     includes on-

[[Page H9065]]

     campus services in child care and services to students with 
     disabilities as qualifying under the definition of community 
     service.
       The House recedes.


                          allocation of funds

       The House bill, but not the Senate bill, strikes the pro 
     rata share of CWS allocations and allocates all excess funds 
     on a fair share basis.
       The Senate recedes with an amendment to maintain current 
     law for fiscal year 1999 (base year) and to provide that, for 
     fiscal year 2000 and thereafter, institutions will receive 
     their base guarantee plus pro rata share amount received for 
     FY 1999--with any funds appropriated in excess of the amount 
     necessary to meet the base payment being distributed under 
     the fair share calculation using the latest available data.
       The House bill, but not the Senate bill, creates a tutoring 
     and literacy program and funds such program with at least 2 
     percent of CWS funds.
       The House bill, but not the Senate bill, requires that 
     funds be used to compensate, including travel and training 
     expenses, students employed as reading tutors and in family 
     literacy projects.
       The House bill, but not the Senate bill, requires 
     institutions to give priority to students teaching in schools 
     identified for improvement under sec. 1116 of ESEA and 
     identified by a local education organization under sec. 15104 
     of ESEA.
       The House bill, but not the Senate bill, requires that 
     students compensated with funds under the program be trained 
     in practices used by school pursuant to sec. 15104 of ESEA.
       The House bill, but not the Senate bill, permits the 
     federal share of compensation under the program to exceed 75 
     percent.
       The House bill, but not the Senate bill, authorizes the 
     Secretary to waive requirements of the subsection if 
     enforcement would cause a hardship to students.
       The House bill, but not the Senate bill, requires that the 
     institution return unused funds for reallocation if the 
     institution did not request a waiver from the Secretary.
       The House bill, but not the Senate bill, requires the 
     Secretary to reallocate returned amounts among institutions 
     using at least 4 percent of total institutional grants for 
     purposes of the subsection on the same basis as excess 
     eligible amounts are allocated pursuant to sec. 442(c).
       The Senate recedes with an amendment to increase the 
     community service requirement from 5 percent to 7 percent 
     beginning in FY 2000, to require all institutions to fund at 
     least 1 reading tutor or family literacy project, and to make 
     other administrative changes relating to this new initiative.
       The House bill, but not the Senate bill, strikes a 
     reference to fiscal year 1994 and includes travel and 
     training as activities for which students can be compensated 
     for purposes of community service.
       The Senate recedes with an amendment to clarify that travel 
     and training compensation will be for ``reasonable periods of 
     time.'' In permitting institutions to cover activities 
     involving training and travel for reasonable periods of time, 
     the conferees address concerns that some students cannot 
     afford to take community service jobs that involve unusually 
     long commutes or time for training. In such cases, the 
     institutions may reimburse for these training or travel 
     activities for reasonable periods of time. The conferees 
     expect that this exception will be used on a case-by-case 
     basis only where needed.
       The House bill requires that funds for community service 
     employment be made available to less-than-full-time students 
     and independent students if the institution's grant is 
     directly or indirectly based on their need. The Senate bill 
     requires that a reasonable portion of the allocated funds be 
     made available to such students.
       The House recedes.
       The Senate bill, but not the House bill, updates the 
     academic year reference.
       The House recedes.
       The Senate bill, but not the House bill, requires that the 
     federal share for Community Service jobs not exceed 90 
     percent for academic years 1999-2000 and succeeding academic 
     years.
       The House recedes with an amendment to allow institutions 
     to permit a maximum 90 percent federal contribution for 
     placements at non-profit organizations or government agencies 
     under these terms: (1) the organization or agency would be 
     selected by colleges on a case-by-case basis; (2) in 
     accordance with regulations of the Department of Education, 
     that would specify that these agencies are unable to afford 
     the personnel costs for the student employees; (3) that no 
     more than 10 percent of the institution's placements would 
     receive this 90 percent funding level; and (4) that no 
     placements at the institution itself would be eligible under 
     this provision for the 90 percent match, nor at any agency 
     owned, operated or controlled by the college.
       The House bill, but not the Senate bill, requires that 
     private sector employment be academically relevant to the 
     maximum degree possible.
       The Senate recedes. The conferees agree that academic 
     relevancy remains a key consideration in private sector 
     employment placements under the Federal Work Study program. 
     However, many students have also expressed an interest in 
     pursuing other employment opportunities that provide other 
     valuable experience outside their field.


                         flexible use of funds

       The House bill, but not the Senate bill, authorizes the 
     institutions to make payments directly to the student's 
     account for tuition, room and board and institutionally 
     provided services, with the permission of the student.
       The Senate recedes with an amendment to strike ``with the 
     permission of'' and replace it with ``upon the request of'' 
     in section 445(b)(3).


                 job location and development programs

       The House bill, but not the Senate bill, increases the 
     amount of funds institutions may use for job location and 
     development to $60,000 and includes community service, 
     cooperative education jobs, and work study in the definition 
     of permissible use of funds.
       The House recedes.
       The House bill, but not the Senate bill, requires the 
     institution to notify the Secretary if funds will be used to 
     develop cooperative education jobs, provide assurances: that 
     the funds will not supplant current cooperative education 
     funds at the institution; at 2-year institutions, that funds 
     will expand jobs for associate or certificate degree 
     students; that work will be relevant to the student's 
     academic program; and that the institution will report on the 
     use of funds, the employers, and employers' role.
       The House recedes.


                             work colleges

       The Senate bill, but not the House bill, authorizes work 
     colleges to coordinate and carry out joint projects and to 
     conduct a comprehensive longitudinal study of academic 
     progress and academic and career outcomes.
       The House recedes.
       The Senate bill, but not the House bill, increases the 
     authorization from $5 million to $7 million for fiscal year 
     1999.
       The Senate recedes.

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

       The House bill, but not the Senate bill, strikes the 
     reference to ``phase in'' of the Direct Loan program.
       The Senate recedes.
       The House bill, but not the Senate bill, strikes the 
     transition provision placing annual limits on the William D. 
     Ford Federal Direct Loan Program volume.
       The Senate recedes.
       The House bill, but not the Senate bill, strikes the 
     requirement that the Secretary select institutions that are 
     reasonably representative and select additional institutions 
     if necessary to achieve reasonable representation.
       The Senate recedes.
       The House bill, but not the Senate bill, strikes a 
     reference to 1994-95.
       The Senate recedes.
       The House bill, but not the Senate bill, strikes the 
     requirement that an institution have participated in the 
     Perkins program and not have exceeded the maximum default 
     rate established under section 462.
       The Senate recedes.
       The House bill strikes the reference to SPRE, whereas the 
     Senate bill strikes the paragraph.
       The House recedes.
       The Senate bill, but not the House bill, establishes the 
     interest rate for subsidized and unsubsidized loans for which 
     the first disbursement is made on or after October 1, 1998, 
     and before July 1, 2003. The House bill applies these 
     provisions to loans for which the first disbursement is made 
     on or after July 1, 1998.
       The House recedes.
       The Senate bill, but not the House bill, applies in-school 
     and grace period interest rate provisions to loans for which 
     the first disbursement is made on or after October 1, 1998, 
     and before July 1, 2003. The House bill applies these 
     provisions to loans disbursed on or after July 1, 1998.
       The House recedes.
       The Senate bill, but not the House bill, establishes the 
     interest rate for PLUS loans for which the first disbursement 
     is made on or after October 1, 1998, and before July 1, 2003. 
     The House bill applies these same provisions to loans for 
     which the first disbursement occurs on or after July 1, 1998.
       The House recedes.
       The House bill, but not the Senate bill, establishes the 
     interest rate on consolidation loans as the weighted average 
     of the interest rates rounded to the nearest one-eighth 
     percent, capped at 8.25%. The Senate bill retains current 
     law.
       The Senate recedes with an amendment which would retain 
     current law for the four months commencing October 1, 1998, 
     allowing the Secretary to continue to offer students 
     consolidation loans at T-bill plus 2.3% for this limited 
     period. For applications received on or after February 1, the 
     interest rate on consolidation loans will be the weighted 
     average of the interest rates rounded up to the nearest one-
     eighth percent, capped at 8.25%, the same rate as in the FFEL 
     program.
       The House and Senate bills provide the Secretary with the 
     authority to provide interest rate reductions to encourage 
     timely repayment if the Secretary determines that these 
     reductions will encourage on-time repayment. These reductions 
     may only be offered if they are cost neutral and in the best 
     interest of the Federal government. Any subsequent increases 
     in the subsidy costs must be offset by corresponding 
     reductions in the funds available for the administration of 
     the William D. Ford Federal Direct Loan Program.

[[Page H9066]]

       The Senate bill, but not the House bill, requires the 
     Secretary to obtain official reports from OMB and CBO that 
     assure the cost neutrality of providing repayment incentives. 
     The reports will also be sent to Congress 60 days prior to 
     publication of regulations announcing the Secretary's intent 
     to provide repayment incentives.
       The House recedes with an amendment to clarify that the OMB 
     will file a report with the Secretary and the CBO will file a 
     report with Congress.
       The House bill requires the Secretary, after consulting 
     with the Secretary of the Treasury, to publish the applicable 
     rates of interest in the Federal Register. The Senate bill 
     retains a similar provision as redesignated in ISTEA.
       The House recedes.
       The Senate bill, but not the House bill, limits the 
     authorization for the direct loan interest rates to loans for 
     which the first disbursements are made on or after October 1, 
     1998, and before July 1, 2003. The House bill establishes 
     rates for loans disbursed on or after July 1, 1998.
       The House recedes.
       The House bill, but not the Senate bill, makes a conforming 
     change by eliminating the Secretary's authority to establish 
     terms and conditions for consolidation loans.
       The Senate recedes.
       The House and Senate bills establish different levels of 
     mandatory spending for administration of the student loan 
     programs as provided for in section 458. The House sets the 
     funding levels at $626,000,000 in fiscal year 1999, 
     $726,000,000 in fiscal year 2000, $770,000,000 in fiscal year 
     2001, $780,000,000 in fiscal year 2002, and $795,000,000 in 
     fiscal year 2003. The Senate bill, in order to offset an 
     amendment to exclude veterans benefits from financial need 
     analysis calculations, set the funding levels at $612,000,000 
     in fiscal year 1999, $730,000,000 in fiscal year 2000, 
     $770,000,000 in fiscal year 2001, $780,000,000 in fiscal year 
     2002, and $795,000,000 in fiscal year 2003.
       The conferees were able to identify an alternate offset and 
     funding for the administration of the loan programs by the 
     Department of Education was restored to the levels 
     established in the Balanced Budget Act of 1997.
       The House bill establishes the calculation basis for 
     account maintenance fees at .12 percent for fiscal years 
     1999-2000 and .10 percent for fiscal years 2001 and 
     succeeding years. The Senate bill sets the calculation basis 
     for account maintenance fees at .12 percent for fiscal years 
     1999-2000 and .10 percent for fiscal years 2001 through 2003.
       The House recedes. The conferees expect that the Department 
     will make all payments to guaranty agencies for portfolio 
     maintenance fees in a prompt and timely fashion.
       The Senate bill, but not the House bill, caps the annual 
     amount of money that is available from the section 458 
     account which may be paid to guaranty agencies for account 
     maintenance fees at $177 million in fiscal year 1999, $180 
     million in fiscal year 2000, $170 million in fiscal year 
     2001, $180 million in fiscal year 2002, and $195 million in 
     fiscal year 2003.
       The House recedes.
       If in any single year, the amount to which a guaranty 
     agency is entitled exceeds the annual caps for use of funds 
     within section 458, the Senate bill, but not the House bill, 
     authorizes the guaranty agency to transfer the insufficiency 
     from the Federal Student Loan Reserve Fund which it 
     administers to its Agency Operating Fund.
       The House recedes.
       The Senate bill, but not the House bill, states that 
     guaranty agencies have a contractual right to receive 
     portfolio maintenance fees transferred from the reserve fund.
       The House recedes.
       The House bill, but not the Senate bill, eliminates the 
     Secretary's authority to draw funds from future fiscal years 
     after notifying Congress.
       The Senate recedes.
       The House bill, but not the Senate bill, authorizes the 
     Secretary to sell loans and use the proceeds to offer 
     incentives for on-time repayment by borrowers if the 
     Secretary determines it is in the financial interest of the 
     Federal Government.
       The Senate recedes.
       The House bill, but not the Senate bill, entitles the 
     program ``Loan Cancellation for Certain Public Service''. The 
     Senate bill entitles the program ``Loan Cancellation for 
     Teachers''.
       The House recedes.
       The Senate bill, but not the House bill, states the purpose 
     of the loan forgiveness provisions is to encourage 
     individuals to enter the teaching profession.
       The House recedes.
       The House bill authorizes the cancellation of student 
     loans. The Senate bill authorizes the Secretary to carry out 
     a program of cancellation.
       The House recedes.
       The Senate bill, but not the House bill, authorizes 
     cancellation only on subsidized loans made to new borrowers 
     on or after October 1, 1998. The House bill authorizes 
     cancellation of new loans made to borrowers with no 
     outstanding principal or interest.
       The conference agreement authorizes the cancellation of 
     subsidized and unsubsidized loans made to new borrowers on or 
     after October 1, 1998.
       The House and Senate bills provide that loans received 
     after the first and second year of undergraduate education 
     are eligible for subsequent loan forgiveness.
       The conference agreement provides that all subsidized and 
     unsubsidized loans up to a maximum of $5,000 are eligible for 
     forgiveness.
       The House bill requires three years of academic service as 
     a full-time teacher to qualify for the loan forgiveness 
     benefits at the end of the 3rd year of teaching. The Senate 
     bill requires three consecutive, complete years employed as a 
     full-time teacher to be eligible after the 4th year for 
     cancellation.
       The conference agreement requires five full years of 
     academic service as a full-time teacher to qualify for loan 
     forgiveness benefits at the end of the fifth year of 
     teaching.
       The House bill, but not the Senate bill, extends loan 
     forgiveness to the portion of consolidation loans that 
     otherwise meet the requirements to qualify.
       The Senate recedes.
       The House bill details the requirements for qualifying 
     schools and has the State determine which schools qualify. 
     The Senate bill refers to the same requirements for teacher 
     cancellations that apply to the Perkins Loan program and in 
     which the Secretary determines which schools qualify.
       The House recedes.
       The Senate bill, but not the House bill, does not extend 
     loan forgiveness to defaulted loans.
       The House recedes.
       The House bill requires the borrower to have majored in the 
     subject area in which the borrower is teaching, while the 
     Senate bill requires that the teaching subject area be 
     relevant to the borrower's academic major. The Senate bill, 
     but not the House bill, requires the chief administrative 
     officer of the secondary school to certify that the teaching 
     subject area is relevant to the borrower's academic major.
       The House recedes.
       The Senate bill, but not the House bill, requires the chief 
     administrative officer of the elementary school to certify 
     the borrower's knowledge and teaching skills in reading, 
     writing, and mathematics.
       The House recedes.
       The House bill, but not the Senate bill, defines the school 
     year as an academic year as defined by the Secretary.
       The Senate recedes with an amendment to include the same 
     provision in Part B (section 428J).
       The House bill, but not the Senate bill, prohibits a 
     borrower from receiving benefits under this section and the 
     National and Community Service Act of 1990 for the same 
     employment.
       The Senate recedes.
       The Senate bill, but not the House bill, authorizes the 
     Secretary to issue regulations to carry out the provisions of 
     the section.
       The House recedes.

                     Part E--Federal Perkins Loans


                       appropriations authorized

       Extension of Authority for the Federal Perkins Loan Program 
     through 2003.


                          allocation of funds

       The House bill, but not the Senate bill, strikes pro rate 
     share and allocates excess funds on a fair share basis.
       The Senate recedes with an amendment to maintain current 
     law for fiscal year 1999 (base year) and to provide that, for 
     fiscal year 2000 and thereafter, institutions will receive 
     their base guarantee plus pro rata share amount received for 
     FY 1999--with any funds appropriated in excess of the amount 
     necessary to meet the base payment being distributed under 
     the fair share calculation using the latest available data.
       The Senate bill, not House bill, deletes outdated 
     references to prior academic years.
       The House recedes.
       The Senate bill, but not the House bill, sets a default 
     penalty of zero for any institution with a cohort default 
     rate equal to or above 15 percent.
       The House recedes with an amendment to change fiscal year 
     1998 to fiscal year 2000, and to provide transition language 
     for the period preceding FY 2000.
       The Senate bill, but not the House bill, does not allow 
     institutions with cohort default rates in excess of 50 
     percent for each of the three most recent years for which 
     data are available to be eligible to participate in the 
     Perkins Loan program. The loss of eligibility may be appealed 
     to the Secretary.
       The House recedes with an amendment to change fiscal year 
     ``1998'' to fiscal year ``2000''.
       The Senate bill, but not the House bill, allows the 
     Secretary to waive the loss of eligibility if the institution 
     can demonstrate an error in the default rate calculation, or 
     there are exceptional mitigating circumstances, such as a 
     small number of borrowers.
       The House recedes with an amendment to strike ``exceptional 
     mitigating circumstances such as''.
       The House bill does not require a default management plan 
     for institutions with a default rate less than 20 percent and 
     less than 100 borrowers. The Senate bill eliminates the 
     requirement that institutions file default management plans.
       The Senate recedes for the transition period preceding the 
     default penalties in effect beginning in fiscal year 2000. 
     After fiscal year 2000, the requirement that institutions 
     file default management plans is eliminated.
       The Senate bill, but not the House bill, permits the 
     institution to continue to participate in the program when 
     appealing loss of eligibility with the permission of the 
     Secretary.
       The House recedes.
       The Senate bill, but not the House bill, defines loss of 
     eligibility as mandatory liquidation of the institution's 
     Federal Perkins loan

[[Page H9067]]

     revolving fund and assignment of the loan portfolio to the 
     Department of Education.
       The House recedes with an amendment to add language to 
     ensure that liquidated funds go back into the Perkins program 
     and are allocated consistent with provisions of Section 
     466(c).
       The Senate bill, but not the House bill, sets the maximum 
     cohort default rate at 25 percent.
       The House recedes with an amendment to replace ``1998'' 
     with ``2000'' and to provide transition language for the 
     period preceding FY 2000.
       The Senate bill, but not the House bill, changes the 
     heading to read, ``Definition of Cohort Default Rate.''
       The House recedes.
       The Senate bill, but not the House bill, removes any 
     definitions or references to any default rate other than 
     cohort default rate.
       The House recedes with an amendment striking paragraph (E) 
     and adding the following new (E):
       (E) In determining the number of students who default 
     before the end of such award year, the institution shall, in 
     calculating the cohort default rate, exclude:
       (i) any loan on which the borrower has voluntarily made 6 
     consecutive payments after the time periods specified in 
     paragraph (4);
       (ii) any loans on which the borrower has made voluntary 
     payments sufficient to bring the loan current after the time 
     periods specified in paragraph (4);
       (iii) any loan on which the borrower has paid in full the 
     amount due on the loan after the time periods specified in 
     paragraph (4);
       (iv) any loan which has been rehabilitated or canceled 
     after the time period specified in paragraph (4);
       (v) any loan on which the borrower received a deferment or 
     forbearance after the time periods specified in paragraph 
     (4), but based on a condition that began prior to such time 
     periods;
       (vi) any other loan which the Secretary determines should 
     be excluded from the calculation.
       The House bill, but not the Senate bill, defines 
     satisfactory arrangements to resume payment as either: the 
     receipt of three voluntary payments; sufficient payments to 
     bring the loan current; obtaining a deferment, cancellation, 
     or forbearance; full payment of the loan; or any other 
     arrangement approved by the Secretary.
       The House recedes.


            agreements with institutions of higher education

       The Senate bill, but not the House bill, eliminates capital 
     contributions for fiscal years that have expired as well as 
     deletes references to the expanded lending option program.
       The House recedes with an amendment to strike paragraph (4) 
     and redesignate (5) through (10) as (4) through (9).
       The Senate bill, not House bill, allows agreements with 
     credit bureau organizations to be with either the Secretary 
     or an institution.
       The House recedes
       The Senate bill, but not the House bill, clarifies the 
     reporting requirements in the cooperative agreements with 
     credit bureaus.
       The House recedes.
       The Senate bill, but not the House bill, allows credit 
     bureaus to report information on the status of Perkins loans 
     until the loan is paid-in-full.
       The House recedes.
       The Senate bill, but not the House bill, requires 
     institutions to report annually to credit bureaus the date 
     and amount of Perkins loan disbursed, collection and default 
     status, and the date of cancellation or any other discharge 
     of the loan.
       The House recedes.
       The Senate bill, but not the House bill, authorizes the 
     Secretary to establish criteria to cease reporting any 
     Perkins loan information prior to loan being paid-in-full.
       The House recedes.
       The House bill, but not the Senate bill, requires 
     institutions to report to credit bureaus if there are 12 
     consecutive monthly payments on a defaulted loan to encourage 
     institutions to keep credit bureau reporting current.
       The Senate recedes with amendment to replace ``12'' with 
     ``6''.
       Both bills authorize institutions of higher education to 
     implement incentive repayment programs to reduce default and 
     replenish the institution's loan funds.
       The Senate bill, but not the House bill, clarifies that 
     borrower loan payments made under an incentive repayment 
     program must be on-time.
       The Senate recedes.
       Both bills provide for an interest rate reduction, discount 
     on the loan balance, and other options approved by the 
     Secretary as part of an incentive repayment program.
       The Senate bill, but not the House bill, prohibits 
     incentive repayment options being paid for with institutional 
     funds or from Federal funds, including the Federal Perkins 
     student loan fund.
       The House recedes


                             term of loans

       The Senate bill, but not the House bill, raises the annual 
     loan limits to $4,000 for undergraduates and to $6,000 for 
     graduate or professional students, as currently allowed under 
     the expanded lending option, and eliminates the expanded 
     lending option.
       The House recedes.
       The House bill, but not the Senate bill, changes the 
     definition of aggregate loan limits to include only unpaid 
     principal.
       The Senate recedes.
       The Senate bill, but not the House bill, raises the 
     aggregate loans limits to $40,000 for graduate or 
     professional students, $20,000 for undergraduates who have 
     completed two years of school, and $8,000 for all other 
     students, as currently allowed for institutions under the 
     expanded lending option, and eliminates the expanded lending 
     option.
       The House recedes.
       The Senate bill, but not the House bill, sets annual loan 
     limits for students who are studying to be teachers at $8,000 
     for third and fourth year undergraduates in a bachelors 
     degree program, and $10,000 for the first year of graduate 
     study.
       The Senate recedes.
       The Senate bill, but not the House bill, requires 
     institutions giving loans with higher limits to borrowers 
     studying to be teachers to report on the benefits and amounts 
     of these loans.
       The Senate recedes.
       The Senate bill, but not the House bill, authorizes the 
     Secretary to reduce or eliminate an institution's Perkins 
     Loan Federal capital contribution if the institution abuses 
     use of the higher loan limits.
       The Senate recedes.
       The House bill and the Senate bill eliminate the 
     requirement that five percent of loans be awarded to less 
     than full-time and independent students. The House bill 
     strikes references to less-than-full-time, while the Senate 
     bill requires the use of a reasonable portion of loans be 
     made available to these students.
       The House recedes with an amendment to add a sentence at 
     the end of paragraph (1), to read as follows: A student who 
     is in default on a Perkins Loan shall not be considered an 
     eligible student unless the student meets one of the 
     conditions in section 462(h)(3)(E).
       The Senate bill, but not the House bill, strikes outdated 
     interest rates.
       The House recedes.
       The Senate bill, but not the House bill, considers a loan 
     to be in default if the borrower fails to make a payment for 
     180 days for monthly installment payments, or 240 days for 
     installment payments made less frequently.
       The Senate recedes.
       The House bill, but not the Senate bill, extends deferment 
     eligibility to all Perkins loan borrowers regardless of when 
     the loan was made and the deferment eligibility listed on the 
     promissory note.
       The Senate recedes.
       The House bill, but not the Senate bill, corrects a 
     subparagraph reference error.
       The Senate recedes.
       The Senate bill, but not the House bill, excludes active 
     duty in the reserves for up to three years as counting 
     towards the nine-month grace period prior to commencement of 
     repayment after the student ceases enrollment.
       The House recedes.
       With minor differences, both bills authorize a program to 
     rehabilitate defaulted loans allowing a borrower to regain 
     lost program benefits and Title IV eligibility. Both bills 
     limit rehabilitation to a one-time opportunity.
       The House recedes/the Senate recedes with an amendment to 
     strike ``shall instruct'' and insert ``shall request'' with 
     regard to reporting to credit reporting organizations.
       The House bill authorizes the Secretary to settle the loan 
     obligation for loans discharged due to an institution's 
     closure. The Senate clarifies that the Secretary is 
     authorized to settle the loan obligation pursuant to the 
     financial responsibility standards of section 498(c) of the 
     Act.
       The House recedes.
       With minor differences, both bills provide that borrowers 
     receiving a closed school discharge assign their right to any 
     refund to the United States.
       With minor differences, both bills exclude the period 
     during which a student was unable to complete his or her 
     course of study due to school closure for purposes of 
     calculating a student's period of eligibility.
       The House bill and the Senate bill do not preclude 
     borrowers with discharged loans from receiving additional 
     assistance. The House bill, but not the Senate bill, excludes 
     from income taxes income from loans discharged due to school 
     closure.
       The Senate recedes.
       Both bills require an institution or the Secretary to 
     report to credit bureaus regarding any closed school 
     discharge.


            cancellation of loans for certain public service

       The House bill, but not the Senate bill, updates two 
     section references in the Individuals with Disabilities 
     Education Act.
       The Senate recedes.
       The House bill, but not the Senate bill, extends loan 
     cancellation for public service to members of the 
     Commissioned Corps of the Public Health Service, and to non-
     physician mental health professionals providing health care 
     services in a health professional shortage area.
       The House recedes.
       The House bill, but not the Senate bill, adds the new 
     categories of individuals eligible for cancellation to the 
     section of the law specifying the percentage of the loan 
     canceled each year: 15 percent for 1st two years of service, 
     20 percent for 3rd and 4th years and 30 percent for fifth 
     year.
       The House recedes.
       The House bill, but not the Senate bill, extends loan 
     cancellation for public service to

[[Page H9068]]

     all Perkins loan borrowers who perform qualifying service 
     regardless of when the loan was made or the cancellation 
     provisions listed on the promissory note.
       The Senate recedes.
       The House bill, but not the Senate bill, encourages the 
     Secretary to reimburse institutions for loan cancellations 
     within three months of the institution's application for 
     funds.
       The Senate recedes.


             distribution of assets from student loan funds

       Both bills extend the dates related to capital distribution 
     to 2003 and 2004, respectively.
       The Senate bill, but not the House bill, begins the capital 
     distribution of late collection fees from the institution to 
     the Secretary after March 31, 2012.
       The House recedes.


       collection of defaulted loans: perkins loan revolving fund

       Both bills repeal the Perkins Loan revolving fund.
       Both bills specify that any funds remaining in the Perkins 
     Loan revolving fund on date of enactment be transferred to 
     and deposited in the Treasury.

                         Part F--Need Analysis


                           cost of attendance

       The House bill, but not the Senate bill, includes 
     reasonable allowances for computers in the cost of 
     attendance. The House bill, but not the Senate bill, also 
     strikes the exclusion of equipment in the cost of attendance 
     for students receiving instruction through 
     telecommunications.
       The Senate recedes. The conference substitute provides 
     authority to schools to include the cost of computers in 
     students' costs of attendance. The conferees also believe 
     that financial aid administrators will use this authority to 
     ensure that students are not given an unwarranted allowance. 
     The conferees believe that each school will handle this 
     matter in a way that is appropriate for its student and 
     operations.
       The Senate bill, but not the House bill, strikes the $1,500 
     minimum living allowance for dependent students living at 
     home and allows the amount of the allowance to be determined 
     by the institution.
       The House recedes.
       The Senate bill, but not the House bill, strikes the 
     minimum living allowances of $2,500 and allows for an 
     allowance for reasonable costs for all students other than 
     dependent students living at home and dependent students 
     living in institutionally owned or operated housing.
       The House recedes.
       The Senate bill, but not the House bill, clarifies that a 
     student is ``engaged'' in cooperative education in order for 
     the institution to include reasonable employment costs.
       The House recedes.


             determination of expected family contribution

       The House bill, but not the Senate bill, excludes parents 
     from the number of family members in college in the general 
     rule for determination of family contribution and makes a 
     conforming change to section 475.
       The Senate recedes with an amendment to make it clear in 
     FAO discretion that parents can be counted, if appropriate.


                                 assets

       The House bill, but not the Senate bill, combines parent 
     and student assets into family assets and makes conforming 
     changes to the nomenclature in the remainder of the section.
       The House recedes.


                      income protection allowance

       The House bill increases the dependent student income 
     protection allowance to $3,000, requires the Secretary to 
     adjust the allowance for inflation under section 478 and 
     makes conforming changes to section 478. The Senate bill 
     increases the allowance to $2,200 and makes identical changes 
     to 478.
       The House recedes.


                   negative adjusted available income

       The House bill permits a negative parental income 
     contribution from income when the sum of deductions for 
     federal, state and social security taxes and allowances for 
     income protection and employment and certain federal tax 
     credits are greater than the sum of parental income and 
     contribution from family assets. The Senate bill permits a 
     negative parental contribution from income when the sum of 
     deductions identical to the House bill are greater than 
     parental income. (Note: The House cite to paragraph (2) 
     should be (c)(1) and the cite to subsection (c) should be 
     (d).)
       The Senate recedes with an amendment to cite correct 
     paragraph.


 family contribution for independent students without dependents other 
                             than a spouse

       The House bill, but not the Senate bill, provides for 
     adjustments for periods of enrollment other than nine months 
     for independent students without dependents other than a 
     spouse.
       The Senate recedes with an amendment to change ``other than 
     9 months'' to ``less than nine months''.


                      income protection allowance

       The House bill increases the income protection allowance 
     for single independent students and married independent 
     students with both enrolled to $5,500 and requires the 
     Secretary to adjust the allowance for inflation under section 
     478. The Senate bill increases the income allowance to $4,250 
     and makes identical changes in section 478.
       The House recedes with an amendment to change ``$4,250'' to 
     ``5,000''.
       The House bill increases the income protection allowance 
     for married independent students with one enrolled to $8,500 
     and requires the Secretary to adjust the allowance for 
     inflation under section 478. The Senate bill increases the 
     allowance to $7,250 and makes identical changes in section 
     478.
       The House recedes with an amendment to change ``$7,250'' to 
     ``$8,000''.


family contribution for independent students with dependents other than 
                               a spouses

       The House bill, but not the Senate bill, makes conforming 
     changes for periods of enrollment other than nine months.
       The Senate recedes with an amendment to change ``other than 
     nine months'' to ``less than nine months''.


        simplified needs test; zero expected family contribution

       The House bill and the Senate bill, using different 
     language, clarify the IRS forms required for eligibility for 
     the simple needs tests.


                         special circumstances

       The House bill and the Senate bill list examples of special 
     circumstances which may result in adjustments. Examples 
     include elementary or secondary tuition, child care costs, 
     recent unemployment or other changes in family income, assets 
     or student status. The House bill, but not the Senate bill, 
     requires the Secretary to define extraordinary circumstances 
     by regulation. The Senate recedes with an amendment to add 
     the number of parents enrolled at least half-time in a degree 
     or certificate program to the examples of special 
     circumstances using the text language from section 475(b)(3), 
     and to strike ``Extraordinary circumstances shall be defined 
     by the Secretary by regulation.''


              refusal or adjustment of loan certifications

       The House bill and the Senate bill permit an eligible 
     institution to refuse to certify a loan. The House bill, but 
     not the Senate bill, requires that such actions be made on a 
     case-by-case basis and that students be afforded the 
     opportunity to appeal such action. The Senate bill, in a 
     conforming amendment, strikes the current law Section 
     428(a)(2)(F)--where the authority to refuse or adjust loan 
     certifications is now located.
       The House recedes with an amendment to add that refusals to 
     certify loans be made on a case-by-case basis.


              definitions--military post-service benefits

       Both bills, using different language, require that military 
     post-service benefits under chapter 30 of title 38 not be 
     treated as financial assistance for purposes of determining 
     need.
       The Senate bill, but not the House bill, provides that 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. It prohibits the reduction of the Pell 
     grant as a result of application of this section.
       The House recedes with an amendment to redraft the language 
     so that certain veteran's benefits are not included as 
     estimated financial assistance for the purpose of determining 
     subsidized loan eligibility.

   Part G--General Provisions Relating to Student Assistance Programs


                              definitions

       The House bill, but not the Senate bill, moves the 
     definition of ``institution of higher education'' and related 
     institutional definitions from section 481 to title I.
       The Senate recedes. The purpose of moving these definitions 
     was to keep definitions of ``institutions of higher 
     education'' in the same place. The definitions currently 
     found in section 481 will continue to be applicable for title 
     IV purposes only.
       Both bills define distance learning/education, but the 
     House bill refers to it as ``distance learning'' while the 
     Senate bill refers to it as ``distance education''. The House 
     bill places the definition in Section 481 applying to ``any 
     program under this title'' while the Senate bill places it in 
     a new Section 487C, applying the definition to ``this 
     section,'' which is the new Distance Education Demonstration 
     Program.
       The House recedes.


                            master calendar

       Using different language, both bills require notification 
     by December 1 prior to the start of an award year of minimal 
     hardware and software requirements. The House bill requires 
     notification to institutions, guaranty agencies, lenders, 
     interested software providers, and other parties upon 
     request. The Senate bill requires notification to 
     institutions and vendors.
       The Senate recedes.
       The House bill, but not the Senate bill, requires the 
     Secretary to attempt to provide training activities in an 
     expeditious and timely manner prior to the start of each 
     award year.
       The Senate recedes.
       The Senate bill, but not the House bill, moves the date to 
     November 1 prior to the start of the award year for the 
     publication of final regulations to be effective during the 
     award year.
       The House recedes.
       The House bill, but not the Senate bill, requires the 
     Secretary to provide a 60-day period for public comment on 
     any proposed rulemaking.

[[Page H9069]]

       The House recedes.
       The Senate bill, but not the House bill, permits the 
     Secretary to allow entities to choose to implement 
     regulations prior to the effective date for regulations 
     published after November 1.
       The House recedes.


                         forms and regulations

       The Senate bill, but not the House bill, changes the 
     Section 483(a) subheading to ``Common Financial Aid Form 
     Development and Processing.''
       The House recedes.
       The House bill requires that the common form (FAFSA) be 
     used to determine need and eligibility for all programs under 
     parts A thru E, except for SSIG. The Senate bill keeps 
     separate references to Parts A, C, D, E, and does not exempt 
     SSIG. The Senate bill includes using the form to determine 
     cost of attendance and provides that the form is to be used 
     to determine need, but not eligibility, for loans under Part 
     B. The Senate bill also includes an electronic version of the 
     form.
       The Senate recedes.
       Both bills require the Secretary to include data on the 
     form to assist states in awarding State financial aid, but 
     the House bill requires that the number of data elements be 
     no less than the number contained on the form as of the date 
     of enactment.
       The Senate recedes.
       The House bill, but not the Senate bill, requires a notice 
     on the common form to students, advising them to check with 
     the college financial aid office if they have unusual 
     circumstances affecting their eligibility.
       The House recedes. The conferees recognize that students 
     and their families may face unusual financial circumstances 
     that may affect their eligibility for student financial aid. 
     In some cases, the financial aid administrator can adjust the 
     aid award to reflect these circumstances. The conferees 
     intend that the Secretary will provide notice to students and 
     parents advising them to check with the college financial aid 
     office in the event they have such unusual circumstances. 
     This notice should be prominently displayed on the first page 
     of the FAFSA.
       The Senate bill, but not the House bill, requires the form 
     to be used for collecting eligibility and other data for part 
     B, including the applicant's choice of lender.
       The Senate recedes.
       The House bill, but not the Senate bill, makes a conforming 
     change to reference parts A through E and requires the use of 
     the common form to determine need and for loan processing for 
     part B.
       The Senate recedes.
       The Senate bill, but not the House bill, makes an editorial 
     change to clarify that the Secretary shall provide data 
     collected on the form free of charge.
       The Senate recedes with an amendment to add (in the first 
     sentence) guaranty agencies to the entities receiving the 
     data collected by the Secretary and to modify the second 
     sentence to incorporate guaranty agencies.
       Both bills, in different paragraphs, require the Secretary 
     to develop electronic versions of the common financial 
     reporting form. The House bill, but not the Senate bill, 
     provides that the electronic version of the common 
     application not require a signature at the time it is 
     submitted.
       The Senate recedes with an amendment to clarify that a 
     signature is ultimately needed.
       The House bill, but not the Senate bill, authorizes 
     institutions lenders, agencies, private software providers 
     and other entities designated by the Secretary to use the 
     electronic version of the form.
       The Senate recedes with an amendment to strike ``the 
     version of.''
       The House bill requires that students not be charged a fee 
     in connection with the use of the electronic form or any 
     other electronic forms used with the FAFSA to apply for 
     federal or state student assistance.
       The Senate recedes.
       The House bill, but not the Senate bill, requires users of 
     the form to maintain reasonable and appropriate 
     administrative, technical, and physical safeguards to protect 
     the data and limits the use of the data to purposes of 
     awarding aid under this title, by states, institutions, or 
     others designated by the Secretary.
       The Senate recedes.
       The House bill, but not the Senate bill, requires the 
     Secretary to provide support to third-party servicers and 
     private software providers by providing timely 
     specifications, record layouts, and test cases establishing 
     schedules for providing such information, and providing other 
     technical support.
       The Senate recedes with an amendment to require the 
     Secretary to provide such support to the extent practicable 
     and deletes reference to test cases.
       The Senate bill, but not the House bill, authorizes the 
     Secretary to pay charges to obtain data needed for the 
     administration of the Title IV programs.
       The Senate recedes.
       The House bill, but not the Senate bill, repeals the 
     reference to an expired provision from the Higher Education 
     amendments of 1992 related to anti-trust and need-based aid.
       The Senate recedes.
       The House bill, but not the Senate bill, requires that 
     students submit as part of the original application process, 
     a certification to the federal government (instead of to the 
     institution) with respect to educational purpose.
       The Senate recedes.
       The House bill requires the Social Security number of 
     parents of dependent students to be included on the common 
     form. The Senate bill requires the Secretary to include a 
     space for the parent Social Security number on the form.
       The House recedes with an amendment to change ``shall'' to 
     ``is authorized to'' and to insert ``birth date'' after 
     ``number''.


                          student eligibility

       The House bill, but not the Senate bill, updates the 
     reference to ``Trust Territory of the Pacific Islands'' to 
     reflect its correct name.
       The Senate recedes.
       The Senate bill, but not the House bill, clarifies the 
     eligibility of home-school graduates for Title IV assistance.
       The House recedes with a further clarifying amendment to 
     the provision.
       The House bill, but not the Senate bill, continues 
     eligibility for citizens of Palau, the Marshall Islands, and 
     Micronesia until September 30, 2001 for Pell, SEOG, and 
     work study if they are attending school in those places or 
     in Guam, or if they are U.S. citizens attending school in 
     Micronesia, the Marshall Island, or Palau.
       The Senate recedes with an amendment to continue 
     eligibility through September 30, 2004, and to also provide 
     for attendance at an institution of higher education in a 
     state, as well as in the freely associated states.
       The Senate bill, but not the House bill, expands current 
     law provisions dealing with the definition of correspondence 
     courses. Current law specifies that a student enrolled in a 
     course offered via telecommunications leading to a recognized 
     associate, baccalaureate, or graduate degree is not 
     considered to be enrolled in a correspondence courses unless 
     the total of telecommunications and correspondence courses at 
     the institution equals or exceeds 50 percent of all courses 
     at the institution. The Senate bill includes certificate 
     programs of 1 year or longer in the list of courses covered 
     by this provision.
       The House recedes.
       The Senate bill, but not the House bill, adds an additional 
     requirement that institutions covered under the under the 
     provisions of Section 484(l)(1) are those at which at least 
     50 percent of the programs offered lead to a recognized 
     associate, baccalaureate, or graduate degree.
       The House recedes.
       Using different language, both bills require the Secretary 
     of Education and the Secretary of the Treasury to verify with 
     Federal income tax returns information reported by student 
     financial aid applicants and to provide notification to 
     applicants that such verification will occur.
       The Senate recedes.
       Using the same definition of ``controlled substance,'' both 
     bills limit the eligibility for Title IV assistance of 
     students who are convicted of drug-related offenses and allow 
     for early resumption of eligibility upon completion of a drug 
     rehabilitation program that includes two unannounced drug 
     tests. The Senate bill, but not the House bill, also provides 
     for rehabilitation if the conviction is reversed, set-aside, 
     or otherwise rendered nugatory.
       The House recedes.


                         State Court Judgments

       The House bill, but not the Senate bill, allows a judgment 
     of a State court for recovery of Title IV money that has been 
     assigned to the Secretary to be registered in any district 
     court and provides it shall have the same force and effect as 
     a judgment of the district court of the district in which the 
     judgment is registered.
       The Senate recedes.


                         Institutional Refunds

       The Senate bill, but not the House bill, rewrites Section 
     48-4B-dealing with institutional refunds. The House bill 
     maintains current law.
       The House recedes.
       The Senate bill, but not the House bill, specifies a 
     formula for calculating the refund amount of Title IV 
     assistance based on the amount of any grant or loan earned by 
     the student as of the student's date of withdrawal.
       The House recedes with an amendment authorizing formal 
     leave of absence as a period during which no refund 
     calculation would be necessary.
       The Senate bill, but not the House bill, defines the earned 
     amount of grant or loan assistance as equal to the proportion 
     of the payment period completed by the students as of the 
     date of the student's withdrawal up to 60 percent of the 
     payment period, at which point the amount earned equals 100 
     percent. The Senate bill defines the unearned percentage as 
     the difference between the amount earned and the amount 
     disbursed.
       The House recedes with an amendment to provide that the 
     earned amount may be the proportion of the ``period of 
     enrollment'' at non-term based institutions.
       The Senate bill, but not the House bill, requires the 
     institution to disburse to the student any amounts earned by 
     the student that had not yet been disbursed on the date of 
     withdrawal.
       The House recedes.
       The Senate bill, but not the House bill, requires the 
     student to return to the institution any unearned amounts 
     disbursed as of the date of withdrawal.
       The House recedes.
       The Senate bill, but not the House bill, defines the 
     institution's responsibility for returning unearned funds as 
     the lesser of the

[[Page H9070]]

     amount unearned or the total institutional charges multiplied 
     by the percentage of funds unearned. The Senate bill also 
     defines the student's responsibility to return to the 
     institution unearned funds.
       The House recedes with an amendment reducing by half the 
     amount of unearned grant assistance the student is 
     responsible for returning to recognize incurred up-front 
     costs related to the student's attendance.
       The Senate bill, but not the House bill, defines withdrawal 
     date as the date upon which the institution determines that 
     the student begins the withdrawal process, otherwise provides 
     official notification, or, in the case of lack of 
     notification, the end of the payment period, except that in 
     the case of illness, accident, etc., the institution may 
     determine an appropriate date of withdrawal.
       The House recedes with an amendment to modify the 
     definition of withdrawal date in the case of a student who 
     does not begin the withdrawal process or otherwise notify the 
     institution of his or her intent to withdraw to be the date 
     that is the mid-point of the payment period unless the 
     institution can document a later date.
       The Senate bill, but not the House bill, defines the 
     percentage of the payment period completed for a credit-hour 
     institution as the number of days completed divided by the 
     number of days in the payment period. In the case of clock-
     hour institutions, the percentage completed equals the number 
     of clock-hours completed divided by the total number of 
     clock-hours in the payment period.
       The House recedes with an amendment to provide for the use 
     of ``period of enrollment'' and scheduled clock-hours, within 
     an acceptable range of completed clock-hours identified 
     through regulations of the Secretary, to calculate the 
     percentage completed.


    Institutional and Financial Assistance Information for Students

       Both bills include the use of electronic media to provide 
     required information and clarify that the information must be 
     made available upon request by July 1 of each year to both 
     current and prospective students. The Senate bill requires 
     information be made available to all ``enrolled'' and 
     prospective students, while the House bill refers to 
     ``current'' and prospective students.
       The House recedes.
       Using different language, both bills require institutions 
     to provide to current students a list of the information 
     required to be disseminated and the procedures for obtaining 
     it.
       The Senate recedes.
       The House bill, but not the Senate bill, includes 
     information required under Section 444 of GEPA to be included 
     in the list that must be provided.
       The Senate recedes.
       The Senate bill, but not the House bill, makes conforming 
     changes to the information requirements regarding refund, 
     return of funds, and withdrawal.
       The House recedes.
       The Senate bill, but not the House bill, defines a 
     prospective student as one who has requested information 
     concerning an application for admission.
       The Senate recedes.
       The House bill, but not the Senate bill, modifies the 
     calculation of graduation rate by eliminating students 
     enrolled in programs for which the prior program provided 
     substantial preparation.
       The House recedes.
       The House bill, but not the Senate bill, clarifies that 
     institutions may, but are not required to, provide 
     information on completion and graduation rates of students 
     who transfer into, and rates at which students transfer out 
     of, the institution.
       The Senate recedes with an amendment to include the list in 
     section 485(a)(4) in the optional information that may be 
     provided.
       The Senate bill, but not the House bill, strikes the 
     requirement that borrower exit counseling be conducted 
     ``(individually or in groups).''
       The House recedes.
       The Senate bill, but not the House bill, clarifies that 
     institutions may use electronic means to provide borrower 
     exit counseling.
       The House recedes. This provision allows institutions to 
     utilize electronic means to provide exit counseling. The 
     conferees are aware of a number of initiatives on the part of 
     participants in the FFEL program to make use of internet-
     based services and other emerging technologies to improve 
     service to institutions and borrowers. We support this goal, 
     and believe that the Secretary should encourage similar 
     efforts with respect to debt counseling, applications 
     processing, data exchange, and other areas where the use of 
     such technologies has the potential to simplify the student 
     financial aid process, while keeping in mind the privacy 
     interests of students and other borrowers.
       The House bill, but not the Senate bill, requires the 
     Secretary to provide information on State prepaid tuition 
     programs and direct links on the Department Internet site to 
     databases containing information on public and private 
     financial assistance programs.
       The Senate recedes with an amendment to broaden the 
     language in paragraph 2 to read ``* * * State and other 
     prepaid tuition programs or savings programs''; and to change 
     the second sentence in paragraph 3 to read ``The Secretary 
     shall only provide direct links to databases which can be 
     accessed without charge and shall make reasonable efforts to 
     verify that the databases included in the direct link are not 
     providing fraudulent information.'' The Secretary, however, 
     does not bear responsibility for either the inclusion or 
     exclusion of any information.
       Both bills make minor changes to the information 
     dissemination requirements for student athletes, parents, 
     guidance counselors, and coaches and allow the NCAA to 
     distribute graduation rate information to all secondary 
     schools to satisfy the distribution requirement. The House 
     bill, but not the Senate bill, clarifies that the 
     distribution is only to U.S. schools.
       The Senate recedes.
       The House bill, but not the Senate bill, rewrites the 
     allowance for institutions to provide supplemental 
     information for students transferring in or out of the 
     institution.
       The House recedes.


    disclosure of campus security policy and campus crime statistics

       Both bills require institutions of higher education to 
     report annually on campus crime statistics. The House bill, 
     but not the Senate bill, expands the parties responsible for 
     reporting statistics to include campus officials with direct 
     responsibility for student or campus activities, disciplinary 
     officers, and athletic department officials, and specifically 
     requires inclusion of matters handled through disciplinary 
     proceedings.
       The House recedes.
       The House bill, but not the Senate bill, expands the crimes 
     that must be included in campus crime statistics to include 
     larceny and moves to subparagraph (f) a revised version of 
     current subparagraph (H) dealing with arrests or referrals to 
     the campus disciplinary system for alcohol, drug and weapons 
     offenses. Using different wording, both bills add 
     manslaughter. Both bills also add arson to the current law 
     list.
       The Senate recedes with an amendment to strike larceny. It 
     is the intent of the conferees that references to alcohol, 
     drug, and weapons offenses refer to violations of law, not to 
     violations of campus codes of conduct.
       The Senate bill, but not the House bill, requires 
     statistics by category of prejudice on crimes that manifest 
     evidence of prejudice and adds vandalism and simple assault.
       The House recedes with an amendment to eliminate references 
     to vandalism and simple assault and to provide that other 
     crimes involving bodily injury must be included in the 
     statistics of hate crimes.
       The House bill, but not the Senate bill, requires 
     institutions to submit annual statistics reports to the 
     Secretary for the Secretary to make them available to the 
     public.
       The Senate recedes.
       The House bill, but not the Senate bill, requires the 
     Secretary to submit to Congress a comprehensive report on 
     crime statistics by September 1, 2000.
       The Senate recedes.
       The House bill, but not the Senate bill, requires the 
     Secretary to make copies of the annual statistics available 
     to the public.
       The Senate recedes.
       The House bill, but not the Senate bill, prohibits the 
     identification of victims or persons accused in the 
     statistics.
       The Senate recedes.
       Both bills require institutions to make, keep, and maintain 
     daily logs of crime reported to police or security 
     departments and to make these logs public, except where 
     prohibited by law. The Senate bill, but not the House bill, 
     also provides an exception to disclosure in cases where it 
     would jeopardize the confidentiality of the victim.
       The House recedes.
       The Senate bill, but not the House bill, requires the logs 
     to be updated with new information when available, but not 
     later than two business days after the information becomes 
     available to the police or security department.
       The House recedes.
       Both bills permit institutions to withhold crime 
     information under certain circumstances and release the 
     information when such reason no longer exists. The Senate 
     bill, but not the House bill, requires that reports be open 
     to public inspection within two days of the time at which 
     information previously withheld is released.
       The Senate recedes.
       Using different language, both bills require the Secretary 
     to provide technical assistance to institutions in complying 
     with the provisions of this section. The House bill provides 
     that such assistance is provided at the request of the 
     institution, while the Senate bill provides that the 
     Secretary will determine if an institution requires such 
     assistance.
       The Senate recedes.
       The House bill, but not the Senate bill, specifies that 
     nothing in the section will require the reporting or 
     disclosure of privileged information.
       The Senate recedes.
       The Senate bill, but not the House bill, defines ``campus'' 
     for purposes of reporting crime statistics.
       The House recedes with an amendment eliminating a specific 
     definition of ``campus'' and replacing it with descriptions 
     of the three reporting categories for crime reporting: on 
     campus, in or on a non-campus building or property, and on 
     public property that is reasonably contiguous to the campus. 
     The conferees are aware of concerns from some institutions 
     that own property remote from the main campus which is used 
     only occasionally by students. By including the qualifier 
     ``used in direct support of, or in relation to, the 
     institution's educational purposes'' in defining the 
     noncontiguous property, the conferees intend to exclude 
     property where

[[Page H9071]]

     student use is only occasional but to include such 
     noncontinguous property if student use is frequent or if the 
     property is primarily used for institutional purposes.
       The Senate bill, but not the House bill, requires the 
     Secretary to report to Congress institutions determined not 
     to be in compliance with reporting requirements.
       The House recedes.
       The Senate, bill but not the House bill, requires that 
     institutions report crimes by means of separate categories 
     for publicly owned thoroughfares and for on-campus 
     residential facilities.
       The House recedes with an amendment to require separately 
     reported statistics on crimes committed on campus, in or on a 
     non-campus building or property, and on public property with 
     accompanying descriptions of what these reporting categories 
     include and to assure that these statistics in all categories 
     are among the material to be provided to students and 
     prospective students under the provisions of section 485(a).
       The Senate bill, but not the House bill, requires the 
     Secretary to report to Congress each institution not in 
     compliance with reporting requirements, provides technical 
     assistance to such institutions, and provides for fines of up 
     to $25,000 for each violation, failure, or misrepresentation.
       The House recedes with an amendment specifying that any 
     fine for non-compliance will be assessed pursuant to that 
     provisions governing civil penalties in section 487(c)(3)(B) 
     based on substantial misrepresentations of the number, 
     location, or nature of the crimes required to be reported. 
     The conferees would like to point out that many concerns have 
     been raised with respect to noncompliance with the reporting 
     requirements. We have been disappointed over the past few 
     years at the growing number of reports about schools 
     circumventing current law or failing to provide accurate 
     information with respect to crimes occurring on campus. The 
     conferees strongly encourage the Department of Education to 
     enforce the provisions of the law and to penalize those 
     schools that do not comply with the reporting requirements.
       The Senate bill, but not the House bill, clarifies that the 
     provision do not cause liability or standard of care, nor is 
     noncompliance admissible as evidence in any proceeding except 
     for enforcement of the subsection.
       The House recedes. It is the intent of the conferees to 
     hold harmless colleges and universities from liability for 
     information supplied by third-party, non-campus, security and 
     police authorities.
       The Senate bill, but not the House bill, permits the 
     citation of the subsection as the ``Jeanne Clery Disclosure 
     of Campus Security Policy and Campus Crime Statistics Act.''
       The House recedes.


                           athletic reporting

       Both bills consolidate athletic reporting requirements by 
     moving requirements currently in Section 487(a)(18) to 
     Section 485(g).
       The House bill, but not the Senate bill, requires 
     institutions to report reductions that may occur during the 
     ensuing four years in participating in or financial resources 
     provided for collegiate sports, and the reasons for any such 
     reduction. The House bill also strikes this provision as of 
     October 1, 1998.
       The House recedes.
       Both bills strike the outdated reference to the publication 
     of regulations.
       The Senate bill, but not the House bill, requires the 
     Secretary to compile athletic reporting data submitted by 
     institutions and report on such data by April 1 of each 
     year.
       The House recedes with an amendment to make the 
     responsibilities of the Secretary consistent with those for 
     the campus crime report--providing that he issue only one 
     report, which will be submitted to the Congress by April 1, 
     2000.


                   National Student Loan Data System

       The House bill, but not the Senate bill, requires the 
     Secretary to provide by one year after the enactment of the 
     HEA amendments, the use of the NSLDS by borrowers to identify 
     the current loan holders and servicers of their loans.
       The Senate recedes with an amendment to change ``1997'' to 
     ``1998.''


                   Training in Financial Aid Services

       The House bill retains current law Section 486, ``Training 
     in Financial Aid Services,'' while the Senate bill repeals 
     the current Section 486 provisions.
       The House recedes.


                    Program Participation Agreements

       The House bill, but not the Senate bill, adds the SSIG 
     program to the PPA requirements. The House recedes.
       Using different language, both bills strike the requirement 
     that institutions submit information relating to 
     administrative capability and financial responsibility to 
     State postsecondary review entities. The House bill requires 
     the information to be provided to the appropriate state 
     agency, while the Senate bill simply deletes the reference.
       The House recedes.
       The Senate bill, but not the House bill, requires Part D 
     Schools to disclose to borrowers information about State 
     grant assistance and requires schools to submit default 
     management plans with their initial applications to 
     participate in Part D loan programs.
       The House recedes.
       The Senate bill, but not the House bill, clarifies that the 
     requirement of a default management plan for an institution 
     that undergoes a change of ownership applies only to for-
     profit institutions.
       The House recedes with an amendment providing that 
     development of a default management plan is not required for 
     ownership changes involving institutions with default rates 
     of 10 percent or below.
       The Senate bill substitutes ``the State agencies under 
     subpart 1 of Part H'' for ``State review entities under 
     subpart 1 of Part H'' as the authority to receive information 
     related to an institution's administrative capability and 
     financial responsibility. The House substitutes ``appropriate 
     State agencies'' for ``State review entities under subpart 1 
     of Part H.''
       The House recedes.
       Both bills move requirements for athletic reporting from 
     Sec. 487(a)(18) to Sec. 485(g). The Senate bill strikes 
     487(a)(18), while the House bill replaces the language in 
     487(a)(18) with language requiring institutions to meet the 
     requirements of Sec. 485(g).
       The Senate recedes.
       Both bills make substitutions for the requirement that 
     institutions meet the requirements established by State 
     postsecondary review entities. The House bill substitutes 
     ``appropriate State agencies,'' while the Senate bill 
     requires institutions to provide evidence to the Secretary 
     that the institution has the authority to operate within a 
     State.
       The House recedes.
       Using different language, both bills require institutions 
     to distribute voter registration forms. The House bill, 
     referencing section 9 of the National Voter Registration Act, 
     requires institutions to distribute these forms to each 
     student during registration unless the student, in writing, 
     declines to receive such forms. The Senate bill requires 
     institutions, located in a state to which section 113 
     applies, to make a good faith effort to makes forms available 
     to students currently enrolled and in attendance in a degree 
     or certificate program.
       The House recedes with an amendment to strike ``to which 
     section 113 applies'' and insert ``to which section 4(b) of 
     the National Voter Registration Act (42 U.S.C. 1973gg-2(b)) 
     does not apply'' and to insert ``requested and'' before 
     ``received.'' In order to meet the expectations of the 
     conferees, the institution shall establish a process to 
     request the necessary forms not less than 120 days prior to 
     deadline for registering for each election (as defined in 
     section 301(1) of the Federal Election Campaign Act of 1971 
     (2 U.S.C. 431(1)), and including the election for Governor or 
     other chief executive within such state) and to have received 
     the forms from the state 60 days prior to the deadline for 
     registering to vote in the state. The process for 
     distributing forms should be designed to ensure that each 
     student, enrolled in a degree or certificate program and 
     physically in attendance at the institution, is offered the 
     form or the opportunity to receive a form from the 
     institution. This may include, but is not limited to, 
     providing a phone prompt when the student registers via 
     telephone or a similar prompt during registration that is 
     carried out via the internet or by facsimile. It is the 
     conferees' expectation that publication of the availability 
     of voter registration forms in one or more campus locations 
     is not sufficient to meet the requirements of this provision. 
     The conferees wish to provide institutions with broad 
     flexibility regarding the good faith effort in order to meet 
     the needs of different campuses. Additionally, the conferees 
     recognize that implementation of this provision depends on 
     the transmittal of registration forms by the states to the 
     institution, and do not intend to place a risk the 
     institution's participation in title IV programs in the event 
     that a state fails to meet its obligation in this regard. 
     Finally, in establishing the target dates for request and 
     receipt of the registration forms, the conferees assumes that 
     a degree of leeway would be afforded the states and the 
     institutions in meeting these dates so long as the 
     institutions are given ample time to implement their process 
     for distributing the forms in accordance with the amendment 
     and students are given ample time to complete the 
     registration process.
       The Senate bill, but not the House bill, prohibits any 
     officer of the executive branch from regulating the manner in 
     which institutions carry out the voter registration form 
     distribution requirement.
       The House recedes.
       The Senate bill, but not the House bill, referencing 
     section 6 of the National Voter Registration Act, includes in 
     title I a requirement that a State provide to institutions 
     mail registration forms not later than 60 days prior to the 
     last day to register for a regularly scheduled federal 
     election or election for chief executive of the State.
       The Senate recedes.
       The Senate bill, but not the House bill, exempts states 
     described in section 4(b) of the National Voter Registration 
     Act. Such States are those where there is no voter 
     registration requirement for any voter in Federal elections 
     or where all voters may register at the polling place at the 
     time of voting in a Federal general election.
       The Senate recedes.
       The House bill, but not the Senate bill, replaces ``State 
     postsecondary review entities referred to in subpart 1 of 
     Part H'' with ``appropriate state agencies'' in the list of 
     agencies to which institutions are required to make financial 
     and compliance audits available. The Senate bill substitutes 
     ``appropriate State agencies notifying the Secretary under 
     subpart 1 of Part H.'' The House

[[Page H9072]]

     bill deletes subpart 1 of Part H and redesignates subparts 1 
     and 2.
       The House recedes.
       The Senate bill, but not the House bill, permits U.S. 
     institutions that receive less than $200,000 in funds under 
     Title IV, and provide a letter of credit for not less than 
     half of the potential liability as determined by the 
     Secretary, to satisfy the annual audit requirements by 
     submitting an audit every three years.
       The House recedes with an amendment to give the Secretary 
     discretion in implementing this provision.


                       Quality Assurance Program

       The House bill changes the heading to ``Quality Assurance 
     and Regulatory Simplification Program,'' while the Senate 
     bill changes the heading to ``Regulatory Relief and 
     Improvement.''
       The House recedes.
       The House bill allows the Secretary to select institutions 
     to develop alternative management programs for complying with 
     regulations under parts A thru E and part G. The Senate bill 
     allows the Secretary to select institutions for QA, expanding 
     the current law provision relating to data verification to 
     include the development of systems for processing and 
     disbursing student aid, and entrance and exit interviews.
       The House recedes with an amendment to replace 
     ``including'' with ``related to'' in paragraph 1.
       The House bill prohibits the Secretary from waiving 
     requirements of the Act. The Senate bill authorizes the 
     Secretary to waive regulatory requirements dealing with 
     reporting or verification and to substitute other reporting 
     to ensure accountability.
       The House recedes with an amendment to add ``The Secretary 
     shall not modify or waive the application of any requirement 
     or other provision of this Act'' at the end of paragraph 2.
       The House bill allows for the continued Quality Assurance 
     Program for institutions to develop systems for verifying 
     application data.
       The House recedes.
       Both bills base participation in the Quality Assurance 
     Program on demonstrated institutional performance and both 
     consider goals determined by the Secretary, although the 
     House bill refers to ``regulatory simplification goals'', 
     while the Senate bill refers to ``quality assurance goals''. 
     The House bill, but not the Senate bill, requires the 
     Secretary to ensure representation by institutions according 
     to size, mission, and geographical distribution.
       The House recedes with an amendment to add at the end of 
     section 487AS(a)(1). ``The selection criteria shall ensure 
     the participation of representatives of institutions of 
     higher education according to size, mission, and geographical 
     distribution.''
       Using different language, both bills revise the Secretary's 
     authority to remove institutions from participation.
       The House recedes.
       The Senate bill, but not the House bill, requires the 
     Secretary to submit recommendations to Congress regarding 
     amendments to this Act that will streamline and enhance the 
     integrity of Federal student assistance programs. Such 
     recommendations are to be based on an evaluation of the 
     Quality Assurance Program.
       The House recedes.
       The House bill designates institutions selected for 
     participation in the Regulatory Simplification Program as 
     Experimental Sites, while the Senate bill includes separate 
     provisions dealing with Experimental Sites.
       The House recedes.
       The Senate bill, but not the House bill, requires the 
     Secretary to submit to Congress a report on the experience of 
     institutions participating as experimental sites between 1993 
     and 1998, and recommendations for amendments to improve and 
     streamline this Act, based on the results of the experiments.
       The House recedes.
       The Senate bill, but not the House bill, allows the 
     Secretary to select new institutions to participate as 
     experimental sites, but not until the report required in 
     (b)(1) has been provided to Congress.
       The House recedes with an amendment to authorize the 
     Secretary to continue the current experimental sites as in 
     existence upon the date of enactment to the extent they are 
     not inconsistent with the provisions of this section. Any 
     activities currently approved by the Secretary prior to the 
     enactment of this Act that are inconsistent with this section 
     shall be discontinued no later than June 30, 1999.
       The Senate bill, but not the House bill, requires the 
     Secretary to consult with Congress prior to approving any 
     experimental sites. The Secretary must provide a list of 
     institutions, specific statutory waivers, objectives of the 
     experiment, and the time period for conducting the 
     experiment.
       The House recedes.
       The Senate bill, but not the House bill, authorizes the 
     Secretary to waive statutory provisions, if such would bias 
     experiment results.
       The House recedes with an amendment excluding award rules, 
     award maximums, and need analysis.
       The Senate bill, but not the House bill, requires the 
     Secretary to recommend ways that regulations and provisions 
     of the Act affecting U.S. institutions that receive less than 
     $200,000 in funds under Title IV can be streamlined and to 
     issue, within one year of enactment, a report including 
     fundings and recommendations and a timetable for implementing 
     recommended changes.
       The House recedes with an amendment to move the provisions 
     to the new section 498B dealing with review of regulations.
       Both bills establish Distance Education Demonstration 
     Programs. The House bill includes the programs in Section 
     487B, redesignating the current Section 487B as 487C. The 
     Senate bill includes the programs in Section 487C.
       The Senate recedes with an amendment to move the distance 
     education demonstration program provisions to section 486.
       Both bills identify purposes for allowing a distance 
     education program. Both bills note a purpose is to test the 
     quality and viability of distance education programs 
     currently restricted under the Act, and both bills identify 
     helping to determine appropriate level of Federal assistance 
     for students as a purpose of this section.
       The House bill, but not the Senate bill, identifies 
     increased access to higher education as a purpose of this 
     section.
       The Senate recedes.
       The House bill, but not the Senate bill, identifies 
     determining effective means of delivering quality education 
     via distance education as a purpose of this section.
       The Senate recedes.
       The Senate bill, but not the House bill, identifies as a 
     purpose of this section the identification and regulatory 
     requirements which need altering to lead to greater access to 
     higher education.
       The House recedes.
       Both bills authorize the Secretary to waive statutory or 
     regulatory requirements, but differ in the specific waiver 
     authority granted. The House bill refers to ``exemptions,'' 
     while the Senate bill refers to ``waivers.'' The Senate bill 
     allows only waivers related to distance education; the Houe 
     bill allows waivers in general.
       The House recedes.
       The House bill allows exemptions from the statutory 
     requirments of Part F, Part G, and Part A of title I. The 
     Senate bill allows waiver of specific provisions of Parts F 
     and G related to computer costs, weeks of instruction, 
     percentage of courses offered via telecommunications, 
     percentage of students enrolled in such courses, and 
     eligibility requirements.
       The House recedes.
       The House bill allows exemption from the regulations 
     prescribed under Part F, Part G, and Part A of title I. The 
     Senate bill allows the waiver of any regulations under F or 
     G.
       The House recedes.
       The Senate bill, but not the House bill, limits 
     participation to institutions to offer 2-year or 4-year 
     associate, baccalaureate, or graduate programs.
       The House recedes with an amendment limiting participation 
     by institutions to those that are title IV eligible.
       The Senate bill, but not the House bill, prohibits foreign 
     schools from participation.
       The House recedes.
       The Senate bill, but not the House bill, permits 
     institutions that meet all the eligibility requirements of 
     Section 481(a), except (3)(A) or (3)(B) (now found in Title 
     I), to participate in the demonstration program.
       The House recedes with an amendment to limit the special 
     rule to institutions that offer 2- or 4-year associate, 
     baccalaureate, or graduate programs.
       The Senate bill, but not the House bill, authorizes the 
     participation of Western Governors University in the 
     demonstration and permits the Secretary to grant more 
     extensive waivers for WGU.
       The House recedes with an amendment to permit waivers for 
     Western Governors University of everything in the Act except 
     Title IV, Parts A, B, C, E, and F. Title IV, Part F, waivers 
     will be limited to the two provisions that may be waived for 
     other participants in the demonstration program.
       Using different language, both bills require comparable 
     application requirements.
       The House recedes with amendments to include reference to 
     systems of institutions and waivers sought under (b)(3)(D).
       The House bill authorizes the Secretary to select a 
     representative sample of institutions for participation and 
     provides the Secretary with the discretion to determine the 
     number of demonstration programs allowed. The Senate bill 
     limits participation to 15 projects for the first year. An 
     additional 35 projects can be selected in the third year, 
     based on evaluations of the original projects.
       The House recedes.
       The Senate bill provides that ``systems of institutions'' 
     may participate.
       The House recedes with an amendment to ensure that 
     ``systems of institutions'' are included in all appropriate 
     places.
       The Senate bill, but not the House bill, requires the 
     Secretary, in selecting participating institutions, to take 
     into account factors including the number and quality of 
     applications received, the ability of the Department of 
     Education to oversee participants, the financial 
     responsibility and administrative capability, and the 
     distance educations programs offered.
       The House recedes with an amendment to add a consideration 
     to assure the participation of institutions of higher 
     education according to size, mission, and geographical 
     distribution.
       The Senate bill, but not the House bill, requires 
     notification to the public and Congress of the institutions 
     or consortia participating and the statutory and regulatory 
     requirements being waived.

[[Page H9073]]

       The House recedes.
       Both bills include provisions for annual evaluations of the 
     demonstration programs by the Secretary. The House bill, but 
     not the Senate bill, requires evaluations to review the 
     extent to which goals of participating institutions have been 
     met.
       The Senate recedes.
       The Senate bill, but not the House bill, requires the 
     review to look at numbers and types of students and their 
     progress toward degrees.
       The House recedes with an amendment to strike ``associate, 
     bachelor's, or graduate degrees'' and insert in its place 
     ``degrees or certificates'' and to change ``degree to which 
     participation in such programs increased'' to ``extent to 
     which participation in such programs increased''.
       Both bills include the review by the Secretary of issues 
     related to student financial assistance for distance 
     education. The House bill, but not the Senate bill, includes 
     the review of effective technologies.
       The Senate recedes.
       The Senate bill, but not the House bill, includes the 
     review of statutory and regulatory requirements not waived 
     that hinder distance education programs.
       The House recedes.
       Both bills require the Secretary to identify policies which 
     impede the development and use of distance education, and 
     both bills require reports to Congress. The Senate bill 
     requires an initial report with 18 months, with annual 
     reports thereafter, while the House bill does not specify the 
     time frame in which reports are to be submitted.
       The House recedes.
       The Senate bill, but not the House bill, requires the 
     Secretary to issue an annual report on the number and types 
     of students pursuing a certificate through distance education 
     programs, the progress of such students, and the extent to 
     which participation in such programs has increased.
       The House recedes.
       The Senate bill, but not the House bill, authorizes 
     $1,000,000 for a study by the National Academy of Sciences on 
     distance education programs.
       The Senate recedes.
       The Senate bill, but not the House bill, requires the 
     Secretary to assure compliance by institutions participating 
     in the distance education demonstration programs with the 
     statutory requirements not authorized to be waived, to 
     provide technical assistance, to monitor fluctuations in 
     student enrollment, and to consult with appropriate State 
     authorities and accrediting agencies or associations.
       The House recedes.


                      wage garnishment requirement

       The House bill, but not the Senate bill, increases to 15 
     percent the amount of a borrower's wages that can be 
     garnished and provides that Title IV assistance shall not be 
     subject to garnishment or attachment except for a debt owed 
     to the Secretary.
       The House recedes with regard to the 15 percent. The Senate 
     recedes with regard to attachment.


                        administrative subpoenas

       The House bill, but not the Senate bill, gives the 
     Secretary the authority to issue administrative subpoenas.
       The Senate recedes.


           advisory committee on student financial assistance

       Both bills specify that the Advisory Committee has 
     independent control over staffing levels.
       Using slightly different language, both bills clarify that 
     documents of the Committee shall not be subject to 
     Secretarial review. The Senate bill includes reports and 
     publications in electronic form, while the House bill refers 
     only to documents.
       The House recedes.
       The House bill, but not the Senate bill, increases 
     Committee membership to 15 members and makes conforming 
     changes to reflect the increase.
       The House recedes.
       The House bill, but not the Senate bill, includes the 
     process for appointing the additional members.
       The House recedes.
       Using slightly different language, both bills prohibit 
     federal employees from serving as members of the Advisory 
     Committee.
       The House recedes.
       Using slightly different language, both bills strike the 
     reference to federal employees with regard to compensation 
     and expenses incident to attending meetings.
       The House recedes.
       The House bill allows personnel to be hired as deemed 
     necessary by the Chairman without regard to personnel 
     ceilings. The Senate bill allows for the appointment of 1 
     full-time equivalent, nonpermanent consultant without regard 
     to title 5, United States Code, and prohibits the Secretary 
     from requiring the committee to reduce personnel to meet the 
     Department's personnel goals.
       The House recedes.
       Both bills funds to be made available for the Committee, 
     but set different amounts. The House bill requires $850,000, 
     whereas the Senate bill requires $800,000.
       The House recedes.
       Using different language, both bills require that the 
     Committee monitor and evaluate the modernization of student 
     financial aid systems and delivery processes and the 
     implementation of a performance-based organization within the 
     Department, and assess dissemination methods.
       The House recedes.
       The Senate bill, but not the House bill, requires the 
     Committee to make recommendations regarding the use of 
     technology in the delivery and management of financial 
     assistance.
       The House recedes.
       The Senate bill, but not the House bill, requires the 
     Committee to assess the implications of distance learning on 
     student eligibility and other requirements for financial 
     assistance under the Act.
       The House recedes.
       The Senate bill, but not the House bill, requires the 
     Committee to make recommendations regarding redundant or 
     outdated regulations and provisions of the Act.
       The House recedes.
       Both bills extend the Committee through 2004 and repeal a 
     loan study.
       Same provisions.


              regional meetings and negotiated rulemaking

       The House bill, but not the Senate bill, extends the 
     requirements of this Section to all regulations developed 
     under this title. The Senate bill, but not the House bill, 
     continues current law applying to Parts B, G, and H and 
     extends the requirements of this section to include Part D.
       The House recedes with an amendment striking ``regional'' 
     and the Senate recedes by extending the requirements to all 
     regulations.
       Both bills require the Secretary to obtain advice and 
     recommendations from others involved in student financial 
     assistance programs and allow for meetings and electronic 
     exchanges as means for the Secretary to obtain such advice 
     and recommendations. The House bill refers to national 
     meetings, while the Senate bill refers to regional meetings. 
     The House bill, but not the Senate bill, drops current law 
     identifying specific parts,the requirements that the 
     Secretary take into account information received through the 
     process, and the summary publication requirement.
       The Senate recedes.
       The House bill, but not the Senate bill, extends the 
     requirements of this section to revisions of regulations 
     developed under this Title. The Senate bill extends the 
     requirements to regulations promulgated after the date of 
     enactment of this Act pertaining to Parts B, D, G, and H.
       The Senate recedes with an amendment to conform to other 
     decisions.
       The House bill, but not the Senate bill, requires the 
     Secretary to follow certain procedures in establishing the 
     negotiated rulemaking process, including preparing a 
     transcript.
       The House recedes. The conferees expect that any written 
     explanation to the participants in the negotiated rulemaking 
     process of why the Secretary is departing from an agreement 
     reached through that process would: (1) contain a detailed 
     statement of the reasons for the Secretary's decision, and 
     (2) be provided to the participants sufficiently in advance 
     of the publication of the proposed regulation so as to allow 
     them a real opportunity to express their concerns to the 
     Secretary.
       The House bill instructs the Secretary to select 
     participants from program participants and representatives of 
     groups involved in student financial assistance. The Senate 
     continues the nomination process based on the groups who 
     participated in the regional meetings.
       The Senate recedes with an amendment to change the first 
     ``industry'' to ``program'' and to strike ``reflecting the 
     diversity in the industry'' in paragraph two.
       The House bill expands the current requirement to encourage 
     the Secretary to publish revisions to regulations in 
     accordance with the master calendar requirements. The Senate 
     bill retains current law.
       The Senate recedes.
       The House bill, but not the Senate bill, requires a 
     transcript of the negotiated rulemaking process to be made 
     available to the public.
       The Senate recedes.
       The Senate bill requires negotiated rulemaking for all 
     regulations implementing parts B, D, G and H after the date 
     of enactment. The House bill requires all title IV 
     regulations and revisions to regulations to be subject to 
     negotiated rulemaking. The Senate bill, but not the House 
     bill, provides the Secretary with the ability to decline to 
     use the negotiated rulemaking process under exceptional 
     circumstances.
       The House recedes.
       The Senate bill, but not the House bill, maintains the 
     current law provision authorizing the appropriation of funds 
     to carry out negotiated rulemaking and providing that, if 
     funds are not appropriated, that the Secretary will use 
     Department operating funds for this purpose.
       The House recedes.


                               year 2000

       The conferees strongly encourage the Department of 
     Education to greatly improve its Year 2000 computer 
     readiness. It is important to implement changes necessary for 
     Year 2000 compliance in all of the Department's fourteen 
     mission critical systems immediately. Further, the conferees 
     expect the Department to prepare and make available detailed 
     contingency plans ensuring the continuous access to funds for 
     students and families in the event of a problem with the 
     implementation of Year 2000 compliant systems. The House 
     receded with an amendment

[[Page H9074]]

     to the Senate provisions requiring the Department to take 
     certain actions with respect to Year 2000 computer issues and 
     to the Senate's timeline regarding reporting to Congress 
     regarding their Year 2000 compliance.
       The conferees understand that a limited number of 
     institutions of higher education, lenders and guaranty 
     agencies may face difficulties implementing changes or 
     modifications to student aid processing or delivery 
     requirements required by this Act at the same time they are 
     making changes required to ensure that their systems are Year 
     2000 compliant. To ensure that institutions, lenders and 
     guaranty agencies are not overburdened, the conferees provide 
     the Secretary flexibility to posptone, for up to one year, 
     the implementation of any requirements under part B, D, E, or 
     G if the Secretary determines that such requirements would 
     require extensive changes to their existing systems and 
     postponement is necessary to avoiding jeopardizing the 
     ability of a substantial number of institutions, lenders or 
     guaranty agencies to fulfill their processing or delivery 
     functions successfully after December 31, 1999. The Secretary 
     must publish in the Federal Register, and notify Congress, 
     regarding the provisions the Secretary intends to postpone 
     and the reasons for such postponement. The conferees expect 
     that this postponement authority will only be used in 
     situations where it is absolutely necessary.


   procedures for cancellations and deferments for eligible disabled 
                                veterans

       Both bills require the Secretary of Education in 
     consultation with the Secretary of Veterans Affairs to 
     develop and implement procedures to allow for certification 
     and affidavits needed to enable eligible disabled veterans to 
     document their eligibility for deferments and cancellations 
     of student loans. The Secretaries of Education and Veterans 
     Affairs must report to Congress within 6 months of enactment 
     on their progress of such procedures. The House bill includes 
     this provision in title VIII, while the Senate bill includes 
     it as section 493A of title IV.
       The House recedes on placement in title IV.

                       Part H--Program Integrity

       The House bill changes the title of Part H to ``Program 
     Integrity,'' while the Senate bill maintains the current 
     title of the Part (``Program Integrity Triad'').
       The Senate recedes.

                         Subpart 1--State Role

       The House bill, repeals subpart 1 of part H, while the 
     Senate bill renames subpart 1 as ``State Role'' and sets 
     forth state responsibilities related to institutions of 
     higher education.
       The House recedes.
       The Senate bill, but not the House bill, requires each 
     institution to provide evidence that it has the authority to 
     operate in a state at the time of certification.
       The House recedes.

                        Subpart 2--Accreditation

       Both bills change the subpart heading from ``Accrediting 
     Agency Approval'' to ``Accrediting Agency Recognition'' and 
     make conforming changes throughout the subpart to reflect the 
     change in terminology. In addition, bith bills strike 
     ``standards'' and replace it with ``criteria'' throughout the 
     subpart.


                           distance education

       Both bills address the assessment of distance education, 
     but do so in different portions of Section 496. The Senate 
     bill amends Section 496(a)(4) to require accreditors to 
     include distance education programs when assessing quality. 
     The House bill amends Section 496(a)(5) to require 
     accreditors to apply standards for assessing the quality of 
     an institution's distance education programs.
       The House recedes.
       The Senate bill, but not the House bill, requires the 
     Secretary to determine the scope of recognition for an 
     accrediting agency. If distance education is included, the 
     scope shall include accreditation of institutions offering 
     distance education courses or programs.
       The House recedes.


                          accreditor standards

       Both bills modify provisions relating to accreditor 
     standards;
       The House bill, but not the Senate bill, strikes the 
     requirement for accreditors to have a standard to assess 
     tuition and fees in relation to subject matter.
       The Senate recedes.
       The Senate bill, but not the House bill, deletes the 
     reference to clock hours or credit hours as part of the 
     assessment of program length.
       The House recedes with an amendment to strike the entire 
     subparagraph, as program length is addressed in another 
     subparagraph.
       The House bill, but not the Senate bill, strikes the 
     separate subparagraph (J) requiring assessment of default 
     rates and includes default rates in general compliance 
     subparagraph (L).
       The Senate recedes.
       The Senate bill, but not the House bill, requires the 
     subparagraph (L) assessment to be based on the institution's 
     record of compliance as evidenced by audits and program 
     reviews. The House recedes with an amendment to insert the 
     default rate language.


                              site visits

       The House bill, but not the Senate bill, strikes the 
     requirement for unannounced site visits and makes it an 
     option.
       The Senate recedes.
       The House bill, but not the Senate bill, exempts new sites 
     where programs are offered through telecommunciations from 
     on-site visits if the program was included in a previously 
     approved accreditation review.
       The House recedes. The conferees understand that on-site 
     visits are triggered only if new sites are considered branch 
     campuses. The term ``branch campus'' is not defined in this 
     Act, but it is defined in regulation (34 CFR 600.2) as:
       A location of an institution that is geographically apart 
     and independent of the main campus of the institution. The 
     Secretary considers a location of an institution to be 
     independent of the main campus if the location--
       (1) Is permanent in nature;
       (2) Offers courses in education programs leading to a 
     degree, certificate, or other recognized education 
     credential;
       (3) Has its own faculty and administrative or supervisory 
     organization; and
       (4) Has its own budgetary and hiring authority.
     Under this definition, a site visit does not appear to be 
     required for the most common situations that might arise when 
     an institution initiates distance education activities. The 
     conferees are aware of concerns that site visits are being 
     required, both with respect to telecommunications programs 
     and to other off-site programs and believe that the 
     definition of branch campus should not be so broadly 
     interpreted as to require expensive site visits in instances 
     where they are not needed.
       The Senate bill, but not the House bill, provides the 
     Secretary with the option of allowing an accrediting agency 
     to take appropriate steps to correct problems within a 12-
     month time frame in lieu of termination.
       The House recedes.

                Subpart 3--Eligibility and Certification

       The Senate bill requires that an institution maintain a 
     copy of any contract between the institution and a financial 
     aid service provider or loan servicer, and provide a copy of 
     any such contract to the Secretary upon request, instead of 
     requiring that the institution supply the copy with its 
     application to participate in the student aid programs under 
     Title IV, as is currently the case. The House bill maintains 
     current law.
       The House recedes.
       The Senate bill, but not the House bill, allows an 
     institution to decide which loan programs it wishes to 
     participate in under part B or D.
       The House recedes.


                        financial responsibility

       The House bill, but not the Senate bill, requires the 
     Secretary to determine if an institution has financial 
     resources sufficient to prevent precipitous closure.
       The House recedes.
       Both bills revise the criteria used to determine the 
     financial responsibility of an institution to be based on 
     whether it meets certain ratios.
       The House bill, but not the Senate bill, includes public 
     institutions with for-profit and non-profit with respect to 
     taking into consideration differences in generally accepted 
     accounting principles.
       The Senate recedes.
       The House bill, but not the Senate bill, requires the 
     Secretary to avoid duplication of reporting requirements for 
     assessing and reviewing financial responsibility.
       The House recedes.
       The Senate bill, but not the House bill, eliminates 
     references to letter of credit and performance bonds and 
     allows the Secretary to determine what financial guarantees 
     are reasonable when an institution has failed to meet 
     financial responsibility standards.
       The Senate recedes with an amendment to insert ``which the 
     Secretary determines are reasonable'' after ``third party 
     guarantees.''
       Both bills eliminate reference to ``ratio of current assets 
     to current liabilities'' for institutions providing 2- or 4-
     year programs and replaces it with a general reference to 
     criteria imposed by the Secretary. There are drafting 
     differences in the two bills.


                        administrative capacity

       The House bill, but not the Senate bill, specifies that 
     student aid refers to assistance provided under Title IV and 
     authorizes the Secretary to establish written procedures 
     related to approval, disbursement and delivery of student aid 
     and for the division of functions at an institution related 
     to authorizing and disbursing funds with adequate checks and 
     balances.
       The House recedes.


                         failure to pay refunds

       Both bills add a new provision assessing an additional 
     penalty commensurate with the penalty applicable to 
     nonpayment of taxes in instances where a person willfully 
     fails to pay a refund amount owed to a student or borrower, 
     but there are wording differences.
       The House recedes.
       The House bill, but not the Senate bill, provides an 
     effective date for the new refund penalty provision, applying 
     it to unpaid refunds which were first required to be paid on 
     or after 90 days after enactment.
       The Senate recedes.


                              site visits

       Both bills make site visits for certification or 
     recertification permissive, rather than mandatory, and both 
     bills require the Secretary to establish priorities by which 
     institutions are to receive site visits.

[[Page H9075]]

       The House bill, but not the Senate bill, requires the 
     Secretary--to the extent practicable--to coordinate with site 
     visits by other entities.
       The Senate recedes.
       The Senate bill, but not the House bill, eliminates the 
     Secretary's authority to charge fees to cover expenses for 
     site visits.
       The House recedes.
       The House bill, but not the Senate bill, allows the 
     Secretary to exempt institutions in the Quality Assurance 
     program from the site visit requirement.
       The House recedes.


                     certification/re-certification

       The Senate bill, but not the House bill, keeps references 
     to prescribed certification schedule as in effect prior to 
     the 1998 amendments. (Both bills extend the certification 
     period to 6 years, rather than the 4 years in current law.) 
     Both bills require that institutions be notified 6 months in 
     advance of the expiration of its certification.
       The House recedes.
       The Senate bill, but not the House bill, directs the 
     Secretary to publish regulations for recertification for 
     institutions outside the US that have received less than 
     $500,000 in Part B loan funds in the most recent fiscal year.
       The House recedes.


                               ownership

       The Senate bill, but not the House bill, applies financial 
     guarantees, provisional certification as a result of change 
     of ownership, and other change of ownership provisions only 
     to for-profit institutions.
       The Senate recedes.
       The House bill, but not the Senate bill, allows the 
     Secretary to grant provisional certification to an 
     institution seeking approval for a change of ownership based 
     on the preliminary review of a materially complete 
     application and to extend that status on a month-by-month 
     basis as necessary.
       The Senate recedes.
       The Senate bill, but not the House bill, clarifies that a 
     branch campus must be in existence for 2 years after 
     Secretarial certification as a branch before the branch can 
     seek certification as a main or free-standing campus.
       The House recedes.


                        program Review and data

       Both bills require, rather than authorize, the Secretary to 
     give priority in program reviews to institutions that meet 
     certain criteria. Both bills clarify that significant 
     fluctuations are those that do not relate to programmatic 
     changes.
       The Senate bill, but not the House bill, includes Direct 
     Loans.
       The House recedes.
       The Senate bill, but not the House bill, rewrites current 
     paragraph (G) as (F) to define other institutions as those 
     that pose a significant risk of failure.
       The House recedes.
       Both bills clarify that ``relevant'' information available 
     to the Department should be included in a central data base.
       The Senate bill, but not the House bill, includes ``other 
     relevant provisions of this title'' in describing the 
     Secretary's responsibility.
       The House recedes.
       Both bills maintain current law requiring the establishment 
     of guidelines designed to ensure uniformity of practice in 
     the conduct of program reviews.
       The Senate bill, but not the House bill, includes a new 
     provision requiring the Secretary to make copies of all 
     review guidelines and procedures available to all 
     participating institutions.
       The House recedes.
       The Senate bill, but not the House bill, requires the 
     Secretary to permit institutions to correct administrative, 
     accounting, or recordkeeping errors which are not part of a 
     pattern, and not fraudulent.
       The House recedes.
       The Senate bill, but not the House bill, requires the 
     Secretary to base any civil penalty stemming from audit or 
     program review on the gravity of the violation.
       The House recedes.
       Both bills require the Secretary to inform the appropriate 
     state and accrediting agency or association whenever the 
     Secretary takes action against an institution.


                         review of regulations

       Both bills contain a number of regulatory studies. Both 
     bills maintain the current law requirement that the Secretary 
     is to review regulations and their application to ensure 
     uniformity. The House bill, but not the Senate bill, requires 
     consultation with representatives of institutions. The House 
     bill, but not the Senate bill, adds a new section requiring 
     the Secretary to conduct a biennial review of all regulations 
     in effect with respect to HEA and to determine which are no 
     longer necessary. The House bill, but not the Senate bill, 
     also requires the Comptroller General to conduct a study on 
     the extent to which unnecessary costs are imposed on colleges 
     and universities as a consequence of requiring them to abide 
     by the same regulations as industrial or commercial entities.
       The Senate bill, but not the House bill, requires the 
     Secretary to establish a process for ensuring that 
     eligibility and compliance issues are considered 
     simultaneously, and for identifying unnecessary duplicative 
     reporting and related regulations. The Secretary is required 
     to consult with representatives of institutions in developing 
     the processes. The Senate bill, but not the House bill, also 
     requires the Secretary to recommend ways that regulations and 
     provisions of the Act affecting U.S. institutions that 
     receive less than $200,000 in funds under Title IV can be 
     streamlined and to issue, within one year of enactment, a 
     report including findings and recommendations and a timetable 
     for implementing recommended changes.
       The conference substitute combines these regulatory reviews 
     into a new section 498B. Under this section, the Secretary 
     would be required to review regulations to determine if they 
     are duplicative or no longer necessary. Such review may also 
     include assurance of the uniformity of interpretation and 
     application of such regulations, a process for ensuring 
     that eligibility and compliance issues are considered 
     simultaneously, and the extent to which unnecessary costs 
     are imposed on institutions as a result of applying 
     regulations designed for industrial and commercial 
     enterprises. The Secretary is to submit a report within 
     one year of the date of enactment and to submit a second 
     report by January 1, 2003. It is the intention of the 
     conferees that submission of the second regulatory study 
     will coincide with the next reauthorization of the Higher 
     Education Act, permitting Congress to consider legislative 
     changes designed to reduce unnecessary regulation in the 
     context of the reauthorization.
       The conference substitute further provides for a review of 
     ways in which regulations and statutory provisions can be 
     improved, streamlined, or eliminated for small-volume 
     institutions, with a report to be issued within one year of 
     enactment. In both this review and in the broader review 
     described above, the Secretary is to consult with relevant 
     representatives of institutions participating in title IV 
     programs.
       The House bill, but not the Senate bill, directs the 
     Comptroller General look at laws, regulations, and mandates 
     that contribute to costs and ways to reduce those mandates. 
     The conference substitute does not include this provision, 
     but conferees intend to make this request of the General 
     Accounting Office by letter.

                    TITLE V--DEVELOPING INSTITUTIONS

       The Senate bill, but not the House bill, includes 
     Congressional findings.
       The House recedes.
       The Senate bill, but not the House bill, includes a purpose 
     section.
       The House recedes.
       The House bill but not the Senate bill expands eligibility 
     to include for profit institutions that award 4-year 
     baccalaureate degrees, are regionally accredited, and serve 
     at least 1,500 Hispanic students.
       The House recedes.
       The House bill restates the current definition of eligible 
     institution found in section 312 of title III, but deletes 
     reference to College of Marshall Islands and Micronesia, and 
     Palau community college. The Senate bill adopts same (except 
     for deletion of Palau, etc.) by cross reference to title III.
       The Senate recedes.
       The House bill restates the current definition contained 
     within section 312 of Title III. The Senate bill retains 
     identical definitions by cross reference to section 312 of 
     title III.
       The Senate recedes.
       The House bill restates the current definition of junior or 
     community college that is contained within section 312 of 
     Title III. The Senate bill retains identical definitions by 
     cross reference to section 312 of Title III.
       The Senate recedes.
       The House bill restates the definition of expenditures 
     contained within Title III. The Senate bill retains the same 
     definition by cross reference to Title III.
       The Senate recedes.
       The House bill provides a definition of endowment fund that 
     is consistent with that used in title III. The Senate retains 
     a similar definition by cross reference to section 331(b) of 
     the Act.
       The Senate recedes.
       The House bill provides a definition of enrollment of needy 
     students that is consistent with that currently contained 
     within title III. The Senate bill retains the same definition 
     by cross reference to title III.
       The Senate recedes.
       The House requires that grants be utilized to support one 
     or more of the authorized activities. The Senate language 
     provides examples of authorized activities.
       The Senate recedes with amendment adding ``to improve and 
     expand such institutions' capacity to serve Hispanic students 
     and other low-income students''.
       The House bill, but not the Senate bill, modifies current 
     law to include construction and maintenance.
       The Senate recedes.
       The House bill deletes microfilm and includes 
     telecommunication program materials in the list of authorized 
     activities. The Senate bill restates current law.
       The Senate recedes.
       The House bill, but not the Senate, specifically authorizes 
     the support of development offices.
       The Senate recedes.
       The House bill, but not the Senate bill, includes 
     establishing or improving an endowment fund as an authorized 
     activity.
       The Senate recedes.
       The House bill, but not the Senate bill, specifically 
     authorizes support for distance learning activities.
       The Senate recedes.
       The House bill, but not the Senate bill, specifically 
     authorizes support for teacher education.
       The Senate recedes.

[[Page H9076]]

       The House bill, but not the Senate bill, specifically 
     authorizes support for community outreach programs.
       The Senate recedes.
       The House bill authorizes support for general activities to 
     improve and expand graduate and professional opportunities. 
     The Senate bill authorizes support for activities that expand 
     the number of students that the institution can serve.
       The House recedes.
       The House bill authorizes additional activities proposed in 
     the application that are approved by the Secretary and 
     contribute to carrying out the purposes of this section.
       The Senate recedes.
       The House and Senate bills, using comparable language, 
     authorize the use of funds to establish an endowment fund.
       The House recedes.
       The House and Senate bills require that endowment funds be 
     matched. The House bill requires that non-federal funds be 
     used for meeting the match.
       The Senate recedes.
       The House bill requires the Secretary to publish 
     regulations pertaining to the use of a grant for the purposes 
     of building an endowment, while the Senate bill extends the 
     endowment provisions of part C of title III to the use of 
     these funds.
       The House recedes.
       The House and Senate bills give priority to applications 
     which provide evidence that the Hispanic-Serving Institution 
     has entered into a collaborative relationship with a 
     community-based organization but the House bill requests the 
     community-based organization have demonstrated effectiveness.
       The House recedes.
       The House bill excludes recipients of aid under this title 
     from concurrently receiving funds from Title III. The Senate 
     bill excludes recipients from receiving funds from part A and 
     part B of title III.
       The House recedes.
       The House bill, but not the Senate bill, retains current 
     law with regard to the authority to provide 5 years grants, 
     priorities, and planning grants.
       The Senate recedes.
       The House and Senate bills both provide that a grant 
     recipient must wait at least two-years before receiving a 
     subsequent grant under this title except that the House bill 
     exempts planning grants from this limitation.
       The Senate recedes.
       The House bill, but not the Senate bill, applies the 
     general provisions with regard to applications for assistance 
     contained within part D of title III of the Act to the new 
     program for Hispanic-Serving Institutions.
       The Senate recedes with an amendment.
       The House bill, but not the Senate bill, requires that the 
     applicants' performance goals be compatible with the overall 
     program goals established in conformity with the Government 
     Performance Review Act.
       The House recedes.
       The House bill, but not the Senate bill, authorizes the 
     Secretary to develop a preliminary application.
       The Senate recedes with amendment striking ``shall'' and 
     replacing it with ``may.''
       The House bill, but not the Senate bill, includes the 
     requirement that the applicant agree to make any reports 
     deemed necessary by the Secretary to comply with the 
     Government Performance Review Act.
       The House recedes.
       The House bill, but not the Senate bill, permits the 
     Secretary to waive eligibility requirements based on 
     persuasive evidence submitted by the institution that this 
     waiver would be consistent with the purposes of this title.
       The Senate recedes.
       The House bill, but not the Senate bill, applies the 
     provisions regarding the review of applications contained 
     within part D of title III of the Act to the new program for 
     Hispanic-Serving Institutions except that the House bill does 
     not require that the readers includes representatives of 
     Historically Black Colleges and Universities, Native American 
     Colleges and Universities or other under represented groups.
       The Senate recedes with an amendment.
       The House bill, but not the Senate bill, authorizes the 
     Secretary to make grants from funds available under part A of 
     this program to encourage cooperative arrangements between 
     grant recipients and institutions not receiving funds under 
     this program.
       The Senate recedes.
       The House bill, but not the Senate bill, restates with 
     reference to the Hispanic Serving Institution program the 
     provision contained within part D of title III of the Act 
     which authorizes the Secretary to provide waivers of non-
     Federal cost-share requirements for any institution which is 
     eligible for funds under part A of title III.
       The Senate recedes.
       The House bill limits the waiver of non-Federal cost-share 
     requirements to program funded through title IV and VII.
       The Senate recedes with amendment to restrict waiver 
     authority to title IV and section 604 of title VI.
       The House bill, but not the Senate bill, applies 
     limitations contained within section 357 of the current Act 
     to the new Hispanic-Serving Institution program.
       The Senate recedes.
       The House bill, but not the Senate bill, applies provisions 
     relating to penalties contained within section 358 of the 
     current Act to the new Hispanic-Serving Institution program.
       The Senate recedes.
       The House bill authorizes $80 million for FY 1999 and such 
     sums as may be necessary for each of the four succeeding 
     years. The Senate authorizes $45 million for FY 1999 and such 
     sums as may be necessary for each of the four succeeding 
     years.
       The Senate recedes with an amendment to provide an 
     authorization level of $62.5 million in FY 1999.
       The House bill, but not the Senate bill, prohibits the use 
     of funding for a school or department of divinity, an 
     activity that is inconsistent with a State plan for 
     desegregation, or purposes other than the purposes set forth 
     in the application.
       The Senate recedes.

                   Title VI--International Education

       The House bill but not the Senate bill establishes 
     International Education as Part A and the programs are given 
     subpart headings. The House bill includes international and 
     graduate education programs in title VI, while the Senate 
     bill includes only international programs in title VI.
       The House recedes.

           Part A--International and Foreign Language Studies


                         findings and purposes

       The House bill rewrites the findings and includes 2 new 
     ones. The Senate bill keeps the current findings, rewriting 
     one of them.
       The Senate recedes with amendment to include the rewritten 
     finding in the Senate bill in lieu of a similar House 
     provision.
       House bill rewrites and increases the list of purposes. The 
     Senate bill maintains current law.
       The Senate recedes.


          graduate and undergraduate language and area centers

       The House bill changes the heading to ``National Resource 
     Centers for Foreign Language and Area of International 
     Studies Authorized.'' The Senate bill adds ``and Programs'' 
     to the heading.
       The House recedes.
     Authority
       The House bill replaces ``language and area centers'' with 
     ``foreign language and area or international studies 
     centers'' in paragraphs (1)(A) and (1)(B), while the Senate 
     bill restates current law.
       The Senate recedes.
     Authorized activities
       Both bills allow the use of funds for creating and 
     operating a center, but the House bill creates 2 categories 
     of activities, mandatory and permissive, while the Senate 
     bill continues current law.
       The House recedes.
     Mandatory activities
       The House bill, but not the Senate bill, requires the 
     center to support instruction in foreign language and courses 
     in non-language disciplines that cover the center's subject 
     area; support teaching and research materials; programs of 
     outreach; and program coordination.
       The House recedes.
     Permissible activities
       The House bill lists permissible activities while the 
     Senate restates current law (which is all permissive).
       The House recedes.
       New activity--The House bill adds support for faculty 
     positions is underrepresented disciplines at the center.
       The House recedes.
       Both bills include the current law provisions regarding 
     linkages to overseas institutions, with slight wording 
     differences.
       The House recedes.
       Both bills include the current law provisions dealing with 
     visiting scholars/faculty.
       The House recedes.
       New activity--The House bill, but not the Senate bill, adds 
     projects with other centers.
       The Senate recedes with amendment striking ``National 
     Resource Centers`` and inserting ``centers.''
       New activity--The House bill, but not the Senate bill, adds 
     summer institutes.
       The Senate recedes.
       The Senate bill is current law, while the House bill adds 
     development of programs abroad to current law.
       The Senate recedes.
     Libraries
       The Senate bill, but not the House bill, modifies current 
     law to clarify that the Secretary determines what centers 
     have important library collections.
       The House recedes.
     Outreach
       The House bill maintains current law, while the Senate bill 
     restates current law and modifies (E) to include foreign 
     language summer institutes.
       The House recedes.
     Stipends
       The House bill, but not the Senate bill, changes the 
     Section 602(b) heading to ``Graduate Fellowships for Foreign 
     Language and Area or International Studies.''
       The Senate recedes.
     Eligibility
       Both bills restate current law, but the bills give 
     different headings to the provision, and the House bill 
     includes specific reference to pre-dissertation and 
     dissertation activities at the end of the paragraph.
       The Senate recedes.


                       Language Resource Centers

       The Senate bill, but not the House bill, restates current 
     law with minor changes.

[[Page H9077]]

       The House recedes.
       The Senate bill modifies current law by requiring effective 
     dissemination efforts and by including dissemination in the 
     list of permissive activities.
       The House recedes.
       The House bill rewrites current law in order to focus on 
     less commonly taught languages and includes assessment of 
     ways to meet the needs of teaching those languages, in 
     addition to publication and dissemination of instructional 
     materials. The Senate bill modifies current law by including 
     dissemination to individuals and organizations.
       The Senate recedes.
       The House bill, but not the Senate bill, maintains current 
     law relating to the widespread dissemination of information 
     to the postsecondary education community. The Senate bill 
     replaces this provision with language regarding the 
     development and dissemination of materials to elementary and 
     secondary schools.
       The House recedes.


   Undergraduate International Studies and Foreign Language Programs

       The House bill, but not the Senate bill, shortens the 
     heading of Section 604(a) to read ``Program Incentives and 
     the Strengthening of Existing Programs in Undergraduate 
     International Studies and Foreign Languages''.
       The House recedes.
       Both bills have similar provisions regarding the use of 
     funds. The Senate bill combines provisions dealing with 
     faculty training in the U.S. and expansion of library 
     resources which are listed separately in the House bill.
       The House recedes with amendment to add ``and pre-services 
     and in service teacher training'' at the end of the sentence.
       The House bill, but not the Senate bill, includes 
     development of international dimension in teacher training.
       The House recedes.
       Both bills have similar study abroad provision, except the 
     House bill includes language dealing with serving students 
     for whom such opportunities are not otherwise available.
       The Senate recedes.
       Both bills address integration of study abroad into 
     specific degree program curricula, but differ in placement.
       The Senate recedes.
       Both bills include the same provision, except the House 
     bill adds integration of program into home institution 
     curricula.
       The Senate recedes.
       The House bill, but not the Senate bill, include linkages 
     overseas with schools and organizations that contribute to 
     international education.
       The Senate recedes.
       Both bills include provisions dealing with summer 
     institutes, but House bill includes a broader scope to 
     include government personnel and private persons involved in 
     international activities.
       The Senate recedes.
       The House bill, but not the Senate bill, includes use of 
     innovative technology.
       The Senate recedes.
     Non-Federal share
       The Senate bill keeps current law and expands the 
     noninstitutional providers to include private sector, 
     corporation or foundation. The House bill allows the non-
     federal share to be equal to \1/3\ the grant amount if 
     provided in cash by private sector corporation or foundation 
     or, \1/2\ the grant amount if provided in-cash or in-kind 
     from institutional and noninstitutional funds from the same 
     list of providers in the Senate bill.
       The Senate recedes.
     Priority
       The Senate bill restates current law and includes 
     partnerships.
       The House recedes.
     Special rule
       The House bill, but not the Senate bill, allows the 
     Secretary to waive or reduce the non-federal share for title 
     III and Title V-eligible institutions.
       The Senate recedes.
     Grant conditions
       The Senate bill, but not the House bill, includes new 
     sections establishing grant conditions and application 
     requirements.
       The House recedes.
       Both bills repeal existing Sections 604(b) and 605.
     National significance
       Both bills redesignate this subsection as (b), and the 
     Senate bill modifies the language by adding ``to improving 
     undergraduate international studies and foreign language 
     programs.''
       The House recedes.
     Funding support
       The House bill, but not the Senate bill, includes a new 
     provision limiting the Secretary to using no more than 10% of 
     the funds appropriated for international education for this 
     section.
       The Senate recedes.


                    research; studies; annual report

       The Senate bill, but not the House bill, includes a new 
     provision dealing with the evaluation of Title VI programs.
       The House recedes.
       The House bill, but not the Senate bill, adds ``area 
     studies or other international fields'' to the end of the 
     provision.
       The Senate recedes.
       The House bill, but not the Senate bill, adds a new 
     provision addressing the use of technology.
       The Senate recedes.
       The Senate bill, but not the House bill, adds a new 
     provision dealing with studies of effective dissemination 
     practices and testing techniques.
       The House recedes.
     Technological innovation and cooperation for foreign 
         information access
       The House bill, but not the Senate bill, creates a new 
     section called ``Technological Innovation and Cooperation for 
     Foreign Information Access.''
       The new section in the House bill replaces the language of 
     the current Section 607 (``Periodicals and Other Research 
     Materials Published Outside the United States''). The purpose 
     of this section is to authorize grants for improving the 
     collection, organization, dissemination of information on 
     world regions that address teaching and research needs. The 
     Senate bill repeals the current Section 607.
       The Senate recedes.
     American overseas research centers
       The House bill allows the Secretary to use at least 10% of 
     the funds available for this section for establishing new 
     centers. The Senate bill allows the Secretary to make grants 
     to fund activities that within one year will result in the 
     creation of a center.
       The House recedes.
     Authorization of appropriations for Part A programs
       Both bills authorize $80 million for fiscal year 1999 and 
     ``such sums'' in the 4 succeeding fiscal years.

         Part B--Business and International Education Programs

       Both bills strike ``advanced'' in describing degree 
     candidates, and both bills remove the requirement that 
     programs be offered in the evening or in summer.
       The Senate bill, but not the House bill, inserts ``foreign 
     language'' in the summer institutes.
       The House recedes.


                         permissible activities

       The House bill, but not the Senate bill includes, as a new 
     permissible activity for business education centers the 
     offering of professional graduate degrees in translation and 
     interpretation.
       The House recedes.
       Both bills make specific reference to a representative of a 
     community college as one who may serve on the advisory 
     council of a business education center.


               authorization of appropriations for part b

       Both bills authorize $11 million in fiscal year 1999 and 
     ``such sums'' in the 4 succeeding fiscal years for Centers 
     for International Business Education and $7 million in fiscal 
     year 1999 and ``such sums'' in the 4 succeeding fiscal years 
     for Education and Training Programs.

           Part C--Institute for International Public Policy

       Both bills change the matching requirement from one-fourth 
     to one-half.


                                sources

       The Senate bill, but not the House bill, specifies that the 
     non-Federal contribution must be made from private sector 
     sources.
       The Senate recedes.


                                heading

       The House bill changes the heading to ``Junior Year and 
     Summer Abroad Program'' while the Senate bill makes it 
     ``Study Abroad Program''. The House bill makes conforming 
     changes by inserting ``and summer'' after junior year 
     everywhere it appears, while the Senate bill substitutes 
     ``study'' for ``junior year'' in each place it appears.
       The House recedes.
       The House bill inserts ``or summer'' after junior year, 
     while the Senate bill adds ``or completing the third year of 
     study in a summer abroad program'' in defining students 
     eligible to participate in the program.
       The House recedes.
       The Senate bill, but not the House bill, requires the 
     institution to pay 1/3 of cost for students nominated to 
     study abroad program--rather than \1/2\ as in current law.
       The House recedes.


                       institutional development

       Both bills create a new section on institutional 
     development.


                              internships

       The House bill, but not the Senate bill, adds a new 
     paragraph to allow the institute to enter into agreements 
     with institutions to conduct internships.
       The Senate recedes with an amendment to incorporate federal 
     agency involvement in an advisory capacity.


                         interagency committee

       The House bill, but not the Senate bill, creates an 
     interagency committee on minority careers in international 
     affairs.
       The House recedes with an amendment to incorporate federal 
     agency involvement in an advisory role in the internship 
     program.


                        authorization for part c

       Both bills authorize $10 million for fiscal year 1999 and 
     ``such sums'' in the 4 succeeding fiscal years for Part C.

                       Part D--General Provisions


                              definitions

       The House bill, but not the Senate bill, adds definitions 
     for ``internationalization of undergraduate education'' and 
     for ``educational programs abroad.''
       The Senate recedes with an amendment to strike the 
     definition of ``internationalization of undergraduate 
     education.''

[[Page H9078]]

                                 repeal

       Both bills repeal preservation of pre-1992 programs.

       TITLE VII--GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS

                       Part A--Graduate Education

       The House bill creates a Part B in Title VI for GAANN. The 
     Senate moves graduate programs (Jacob J. Javits and GAANN) to 
     Title V.
       The House recedes with an amendment to move graduate 
     programs into Part A of Title VII.
       The Senate bill, but not the House bill, rewrites the 
     purpose section.
       The House recedes with an amendment to strike subclause 
     (iii).

                       Subpart 1--Javits Program

       The House bill repeals the Javits program. The Senate keeps 
     the program with the following changes:
       Includes financial need in the selection of students for a 
     fellowship; allows grants to be awarded to master's degree 
     students for whom such a degree is considered terminal in 
     their fields; allows for the forward-funding of 
     appropriations for this program to enable new recipients to 
     learn about their awards before making decisions about 
     attending graduate school; adds a new paragraph establishing 
     the timing of applications and announcement of recipients; 
     adds a new paragraph authorizing the Secretary to enter into 
     a contract for administering the program; requires that board 
     representatives are representative of a range of disciplines 
     instead of requiring board members to have knowledge and 
     experience in arts and related areas; modifies the criteria 
     for appointments to the fellowship board to include people 
     who represent a range of disciplines; allows the panels to be 
     appointed by the contractor if there is one; updates the date 
     reference; uses Part F to determine a student's need; updates 
     the institutional allowance; and reauthorizes the program at 
     $30 million in fiscal year 1999 and ``such sums'' in the 4 
     succeeding fiscal years.
       The House recedes.

                            Subpart 2--GAANN

       Both bills continue the GAANN program with changes.
       The House bill revises the purpose to focus on graduate 
     education generally and not just teaching and research. The 
     Senate bill includes a purpose section for all graduate 
     programs.
       The House recedes.
       The House bill directs the Secretary in the new second 
     sentence to coordinate with other federal programs to 
     minimize duplication and improve efficiency.
       The Senate recedes with an amendment to strike the last 
     sentence, which reads ``The Secretary shall coordinate the 
     administration and regulation of programs under this part 
     with other Federal programs providing graduate assistance to 
     minimize duplication and improve efficiency.''
       Both bills continue current law, except the House bill 
     increases the minimum grant from $100,000 to $125,000.
       The House recedes.
       The House bill deletes the paragraph that provides 
     preferences to continuing grant recipients.
       The House recedes.
       The House bill requires the Secretary to consult with 
     appropriate agencies, while the Senate bill specifically 
     mentions NSF and NAS.
       The Senate recedes.
       The House bill, but not the Senate bill, requires 
     applications to be evaluated on quality and effectiveness of 
     academic program and achievement promise of students.
       The Senate recedes.
       Both bills have the same provision but the Senate bill uses 
     the word ``sources'' instead of ``funds''.
       The House recedes.
       The House bill, but not the Senate bill, deletes the 
     current law requirement that the institution set forth 
     policies and procedures to seek talented students from 
     traditionally underrepresented backgrounds for these grants.
       The House recedes.
       The House bill, but not the Senate bill, deletes the 
     requirement that individuals must be planning teaching or 
     research careers.
       The Senate recedes.
       The House bill, but not the Senate bill, drops the word 
     `endeavor' with respect to fulfilling the commitment to the 
     student and instead, requires the institution to fulfill the 
     commitment from any available funds.
       The Senate recedes.
       The House bill, but not the Senate bill, inserts ``eligible 
     graduate student as defined in section 484'' to clarify that 
     students must meet the eligibility requirements of section 
     484 and limits eligibility to 3 years of study instead of 5 
     years.
       The Senate recedes with regard to reference to section 484. 
     The House recedes with regard to 5 years.
       Both bills make the same changes to dates and amounts and 
     updates institutional payments.
       The House bill requires funding continuation awards under 
     Harris, Javits and GAANN before new awards can be made.
       The House recedes.
       The House bill authorizes $40 million in fiscal year 1999 
     and ``such sums'' in the 4 succeeding fiscal years for GAANN. 
     The Senate bill authorizes $30 million in fiscal year 1999 
     and ``such sums'' in the 4 succeeding fiscal years for GAANN.
       The Senate recedes with an amendment to set the fiscal year 
     1999 authorization level at $35 million.

         Subpart 3--Thurgood Marshall Legal Opportunity Program

       The Senate bill, but not the House bill, authorizes the 
     Thurgood Marshall Legal Opportunity Program. Funding is 
     authorized at $5 million in fiscal year 1999 and in each of 
     the 4 succeeding fiscal years.
       The House recedes.

                     Subpart 4--General Provisions

       The Senate bill requires coordination similar to the House 
     bill. The Senate bill adds ensuring programs are carried out 
     in a manner compatible with academic practices and standard 
     timetables.
       The House recedes.
       The Senate bill modifies current law which says ``no 
     fellowship shall be awarded for study at a school or 
     department of divinity.'' The Senate bill now says ``no 
     institutional payment or allowance shall be paid to such 
     schools as the result of the award of a fellowship to a 
     student studying for a religious vocation.'' The House bill 
     deletes this prohibition.
       The House recedes.
       The Senate bill, but not the House bill, requires an 
     evaluation.
       The House recedes.
       The Senate bill requires continuation awards to Javits and 
     GAANN recipients before making new awards.
       The House recedes.


                      faculty development program

       The Senate bill, but not the House bill, authorizes a 
     faculty development program. Funding is authorized at $30 
     million in fiscal year 1999 and ``such sums'' in the 4 
     succeeding fiscal years.
       The Senate recedes.

                             Part B--FIPSE

       Both bills continue FIPSE, but transfer it to other parts 
     of the Act.
       Placement of FIPSE in Part B of Title VII.
       The Senate bill, but not the House bill, makes a clarifying 
     change in the provision identifying entities which can 
     receive grants or enter into contracts.
       The House recedes.
       The Senate bill, but not the House bill, revises language 
     dealing with institutions and programs involving combination 
     of academic and experiential learning.
       The House recedes.
       The House bill, but not the Senate bill, expands the 
     Secretary's grant authority by allowing the Secretary to 
     award an endowment grant on a competitive basis to a national 
     organization to support program centers in high poverty 
     areas.
       The House recedes.
       The Senate bill, but not the House bill, increases the 
     number of technical employees who may be appointed by the 
     Secretary to not more than 7, rather than the current 5.
       The House recedes. This provision does not increase the 
     number of FIPSE employees, but rather enhances the agency's 
     ability to obtain personnel on a temporary basis for specific 
     projects.
       The Senate bill, but not the House bill, keeps separate 
     subparts and separate authorizations. The authorization for 
     supbart 1 is increased to $26 million in fiscal year 1999 and 
     ``such sums'' in the 4 succeeding fiscal years. The 
     authorization for Planning Grants is $1 million in fiscal 
     year 1999 and ``such sums'' in the 4 succeeding fiscal years. 
     The House bill creates a single authorization for all FIPSE 
     activities at $30 million in fiscal year 1999 and ``such 
     sums'' in the 4 succeeding fiscal year.
       The Senate recedes.
       The House bill, but not the Senate bill, strikes the 
     current list of areas of national need and inserts 5 new 
     areas--building on the current list. The Senate bill revises 
     the current list.
       The House bill makes reference to promoting ``productivity, 
     quality improvement and cost and price control'' while the 
     Senate bill refers to promoting ``cost efficiencies.''
       The Senate recedes.
       Both bills add articulation agreements, but the Senate bill 
     also includes developing methods to ensure successful 
     transfers.
       The House recedes.
       The House bill, but not the Senate bill, adds a new 
     provision aimed to cooperation among institutions to 
     encourage savings.
       The House recedes.
       The House bill expands current law to include 
     ``international cooperation and student exchange'' while the 
     Senate bill keeps the current law--``International 
     exchanges.''
       The Senate recedes.
       The House bill, but not the Senate bill, eliminates the 
     separate authorization of appropriation for FIPSE Special 
     Projects. The Senate bill authorizes $5 million in fiscal 
     year 1999 and ``such sums'' in the 4 succeeding fiscal years 
     for Special Projects.
       The Senate recedes.
       The House bill, but not the Senate bill, eliminates 
     subparts in FIPSE.
       The Senate recedes.
       The House bill, but not the Senate bill, creates 1 
     authorization of appropriations for all FIPSE activities at 
     $30 million in fiscal year 1999 and ``such sums'' for the 4 
     succeeding fiscal years.
       The Senate recedes.

                    Part C--Urban Community Service

       Both bills continue Urban Community Service, but move the 
     provisions to different titles. The House bill includes it as 
     Part A of Title II. The Senate bill includes it as Part D of 
     Title V.

[[Page H9079]]

       Placement in Part C of Title VII.
       The Senate bill, but not the House bill, modifies priority 
     selection to include giving priority to institutions that 
     have demonstrated a commitment to urban community service.
       The House recedes.
       The House bill, but not the Senate bill, expands the list 
     of allowable activities to include improving access to 
     technology in the community.
       The Senate recedes.
       The House bill, but not the Senate bill, directs that 
     information developed shall be made available to other 
     institutions by all appropriate means.
       The Senate recedes.
       Both bills reauthorize the program at $20 million in fiscal 
     year 1999 and ``such sums'' in the 4 succeeding fiscal years.

  Part D--Demonstration Projects To Ensure Students With Disabilities 
                   Receive a Quality Higher Education

       Both bills include provisions to ensure students with 
     disabilities receive a quality higher education. The House 
     bill focuses on individuals with learning disabilities, while 
     the Senate bill focuses more generally on students with 
     disabilities.
       The conference substitute provides for competitive grants 
     to be awarded to institutions for a period of three years. 
     These grants will be used to develop innovative and effective 
     teaching methods and strategies, synthesize research and 
     information related to the provision of postsecondary 
     educational services, or conduct professional development and 
     training sessions for faculty and administrators. In each 
     case, grants must be used to evaluate and disseminate the 
     information obtained from the activities. At least two of 
     these grants shall be awarded to institutions that provide 
     technical assistance and professional development for 
     students with learning disabilities. The conference 
     substitute authorizes appropriations at $10,000,000 for 
     fiscal year 1999 and such sums for each of the four 
     succeeding years.

           TITLE VIII--STUDIES, REPORTS, AND RELATED PROGRAMS

                      Part A--Studies and Reports


                       study of market mechanisms

       Both bills provide for a study of market-based mechanisms 
     is student loan programs. The House provisions are included 
     in title VII, while the Senate provisions are included in 
     title IV. The House bill requires the Comptroller General, in 
     consultation with interested parties, to conduct a study of 
     the potential use of auctions or other market mechanisms. The 
     Senate bill requires the Secretary of Treasury to conduct a 
     study of market-based mechanisms.
       The conference substitute merges concepts contained in both 
     bills, requiring the Comptroller General and the Secretary of 
     Education to convene a study group to design and conduct a 
     study to identify and evaluate means of establishing a market 
     mechanism for the delivery of title IV loans. Not fewer than 
     three different mechanisms are to be identified and 
     evaluated. The study group is to issue its preliminary 
     findings no later than November 15, 2000, and submit a final 
     report no later than May 15, 2001.


   study of the feasibility of alternative financial instruments for 
                       determining lender yields

       The conference substitute also requires the Comptroller 
     General and the Secretary of Education to convene a study 
     group with the same composition as the market mechanisms 
     study group to evaluate alternative financial instruments for 
     determining lender yields. This study will evaluate the 91-
     day Treasury bill (which is used in current law to determine 
     student loan interest rates), 30-day and 90-day Commercial 
     Paper, and the 90-day London Interbank Offered Rate (LIBOR). 
     Some lenders have urged that a different instrument be 
     adopted for the student loan programs in order to achieve 
     greater efficiencies. This study will examine alternative 
     financial instruments in terms of the following: costs or 
     savings to various lenders; costs or savings to the federal 
     government; and benefits and risks to students and to the 
     student loan program. In addition, the conferees intend that 
     data gathered and conclusions reached in this study be 
     considered in the comprehensive market-mechanisms study.


                          student-related debt

       The Senate bill, but not the House bill, requires the 
     Secretary to conduct a study that analyzes the distribution 
     and increase in student-related debt, to submit the report to 
     the relevant congressional committees 18 months after 
     enactment, and to collect and provide relevant information to 
     families through the Integrated Postsecondary Student Aid 
     Study.
       The House recedes.


                          transfer of credits

       The House bill, but not the Senate bill, requires the 
     Secretary of Education to conduct a study evaluating the 
     policies and/or practices instituted by recognized 
     accrediting agencies or associations regarding the transfer 
     of academic credits from one institution to another. The 
     House bill requires the Secretary to submit a report, which 
     includes recommendations on recognizing accrediting agencies 
     or associations to the Chairman and Ranking Minority Member 
     of the respective House and Senate Committees.
       The Senate recedes. The conferees do not intend to regulate 
     the policies or practices used by institutions of higher 
     education.


                         athletic participation

       The Senate bill, but not the House bill, directs the 
     Comptroller General to study the opportunities for 
     participation in intercollegiate athletics. A report 
     containing the results of the study is to be submitted to the 
     appropriate congressional committees.
       The House recedes with an amendment to place the study in 
     Title VIII.


                          cohort default study

       The Senate bill, but not the House bill, requires the 
     Secretary to conduct a study on the effectiveness of the 
     cohort default rate as an indicator of administrative 
     capability and program quality. The study required by the 
     Senate bill shall include: identification of the institutions 
     and student populations used; analysis of cohort default 
     rates as indicators of administrative capability and program 
     quality; the effectiveness at preventing fraud and abuse; 
     analysis of institutions that no longer participate due to 
     high default rates; and the costs incurred by the Department 
     related to monitoring and enforcing cohort default rates. The 
     Secretary is required to consult with institutions in 
     preparing the report, and to have the report sent to Congress 
     by September 30, 1999.
       The House recedes.


                             other studies

       The House bill, but not the Senate bill, requires the 
     Secretary of Education to submit a report to Congress on the 
     desirability and feasibility of new Federal efforts to assist 
     individuals with substantial alternative student loans (loans 
     which are not direct student loans or federally guaranteed 
     student loans) to repay their loans. The report must be 
     submitted to Congress within 2 years of enactment.
       The House recedes.
       The Senate bill, but not the House bill, directs the 
     Comptroller General, in consultation with the Inspector 
     General of the Department of Education, to submit a report to 
     the relevant congressional committees not later than 90 days 
     after enactment, describing legislative and regulatory 
     changes that can be made to strengthen laws governing the 
     transfer of foreclosed property or assets by the Department 
     to individuals 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.
       The Senate recedes.

              Part B--Advanced Placement Incentive Program

       Both bills reauthorize this program. The Senate bill, but 
     not the House bill, makes substantial changes to the program. 
     The House bill transfers it to Part D of Title II, while the 
     Senate bill transfers it to Part B of Title VII.
       Placement in Title VIII.
       The Senate bill, but not the House bill, renames the 
     program ``Advanced Placement Incentive Program.'' The House 
     bill retains the current name, ``Advanced Placement Fee 
     Payment Program.''
       The House recedes.
       The Senate bill, but not the House bill, creates a new 
     formula for distributing funds based on low-income people in 
     a state.
       The Senate recedes with an amendment to add at the end of 
     subpart (d)--Requirements for Approval of Applications, the 
     following:
       (4) consider the number children eligible to be counted for 
     Title I (1124E of the ESEA) in the State in relation to the 
     number of children eligible to be counted for Title I (1124E 
     of the ESEA) in all States.
       The Senate bill maintains current law, but includes a new 
     limit of 5% of funds for use of funds for dissemination 
     purposes.
       The Senate recedes.
       The Senate bill, but not the House bill, changes the 
     supplement-not-supplant rule by allowing federal funds to 
     supplant other funds if the other funds are used to increase 
     participation.
       The Senate recedes with an amendment to rewrite the funding 
     rule to permit a State education agency in a state in which 
     no eligible low-income individual is required to pay more 
     than a nominal fee to take advanced placement tests in core 
     subjects to use any remaining grant funds provided to that 
     state education agency under this section for activities 
     directly related to increasing participation.
       The Senate bill, but not the House bill, includes a new 
     rule that ties a awarding of federal funds to the College 
     Board level of spending for its fee assistance program.
       The Senate recedes. The conferees encourage appropriators 
     to consider the record of continued funding from private 
     entities in determining federal funding levels for the 
     program.
       The Senate bill, but not the House bill, creates a new 
     reporting section.
       The House recedes.
       The House bill maintains the current authorization level of 
     $3.6 million for fiscal year 1999 and ``such sums'' for the 4 
     succeeding fiscal years, while the Senate bill increases the 
     authorization to $10 million in fiscal year 1999 and ``such 
     sums'' in the 4 succeeding fiscal years.
       The House recedes with an amendment setting the fiscal year 
     1999 authorization level at $6.8 million.

             Part C--Community Scholarship Mobilization Act

       The Senate bill, but not the House bill, authorizes the 
     Community Scholarship Mobilization Act--a competitive grant 
     program

[[Page H9080]]

     which will allow grant recipients to establish and support 
     program centers to foster the development of local chapters 
     in high poverty areas that promote higher education goals for 
     students from low-income families. It is authorized at $10 
     million for FY 2000.
       The House recedes.

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

       The House bill transfers this program to Part C of Title 
     II; the Senate transfers it to Part E of Title VII.
       Placement in title VIII.
       The Senate bill, but not the House bill, restates the 
     program with only minor wording changes.
       The House recedes.
       The House bill authorizes funding of $5 million in fiscal 
     year 1999 and ``such sums'' for the 4 succeeding fiscal 
     years, while the Senate bill authorizes $17 million in fiscal 
     year 1999 and ``such sums'' for the 4 succeeding fiscal 
     years.
       The House recedes.

   Part E--Grants to Combat Violent Crimes Against Women on Campuses

       Both the House bill and the Senate bill authorize grants to 
     combat violent crimes against women on campuses. The House 
     bill includes the program in Part F of Title II. The Senate 
     bill includes it as Section 792 of Title VII.
       The conference substitute places the program in Part E of 
     Title VIII.


                          grant authorization

       The House bill provides that the Secretary of Education 
     will make the grants, while the Senate bill provides that the 
     Attorney General will make the grants.
       The House recedes.
       Both bills make grants available to institutions of higher 
     education, but the Senate bill specifies that grant funds 
     will be for the use of a consortia.
       The House recedes with an amendment inserting ``such 
     institutions or by a'' after ``for use by.''
       The House bill provides that grant funds will be used to 
     provide training of personnel in order to develop and 
     strengthen security/investigation strategies, while the 
     Senate bill includes more general authority to develop and 
     strengthen such strategies.
       The House recedes.
       The House bill, but not the Senate bill, gives priority to 
     applicants that show the greatest need for the sums 
     requested.
       The House recedes.


                              use of funds

       Both bills specify use of grant funds.
       The Senate bill, but not the House bill, permits funds to 
     be used to increase apprehension, investigation, and 
     adjudication of those committing violent crimes.
       The House recedes.
       Both bills provide for training, with differences in 
     wording.
       The House recedes with an amendment to include personnel 
     serving, on-campus disciplinary or judicial boards among 
     those receiving training.
       The House bill, but not the Senate bill, permits use of 
     funds for prevention education.
       The Senate recedes.
       The House bill, but not the Senate bill, permits use of 
     funds for support services for victims.
       The Senate recedes.
       The House bill, but not the Senate bill, permits use of 
     funds to inform victims of disciplinary or other legal 
     options.
       The Senate recedes.
       Both bills authorize funds for training. The House bill 
     refers to identifying and responding to violent crimes, while 
     the Senate bill refers to targeting violent crimes.
       The Senate recedes.
       The Senate bill, but not the House bill, permits use of 
     funds for data collections and communications systems.
       The Senate recedes.
       Both bills provide for capital improvements, but the House 
     bill specifies that funds may not include construction of 
     buildings.
       The Senate recedes.


                              applications

       Both bills include application requirements. The House bill 
     provides for applications to the Secretary while the Senate 
     bill provides for applications to the Attorney General.
       The House recedes.
       Both bills refer to consultation with victim services 
     programs, but the House bill refers to ``other'' such 
     programs while the Senate bill refers to ``nongovernmental'' 
     programs.
       The Senate recedes.
       The Senate bill, but not the House bill, requires 
     applications to include information about the population 
     being served.
       The House recedes.


                        reports and Evaluations

       The House bill, but not the Senate bill, makes ineligible 
     for a grant any institution which is not in compliance with 
     the campus crime reporting requirements of Section 485(f).
       The Senate recedes.
       Both bills include reporting requirements, with minor 
     differences in wording. The House bill, but not the Senate 
     bill, provides for evaluation based on the reduction in 
     crimes reported under Section 485(f).
       The House recedes with an amendment to add ``including 
     reports submitted pursuant to section 485(f).''
       Both bills have grantee reporting requirements which differ 
     only in wording. The House bill, but not the Senate bill, 
     also provides that grant funding will be suspended if the 
     applicant fails to submit an annual report.
       The Senate recedes with an amendment to add the Attorney 
     General to the first sentence and replace ``Secretary'' with 
     ``Attorney General'' in the last sentence.
       The Senate bill, but not the House bill, provides that the 
     Attorney General may request assistance from other Federal 
     agencies in support of campus security.
       The House recedes.
       The Senate bill, but not the House bill, requires the 
     Secretary and the Attorney General to publish regulations 
     implementing this section.
       The House recedes with an amendment striking ``Secretary'' 
     in the first sentence and replacing it with ``Attorney 
     General, in consultation with the Secretary,'' and amending 
     the second sentence to include ``in consultation with the 
     Secretary'' after ``Attorney General.''


                          authorization levels

       Both bills authorize funding of $10 million in FY 1999. The 
     House bill authorizes ``such sums'' for the 4 succeeding 
     fiscal years, while the Senate bill authorizes $10 million in 
     each of the 3 succeeding fiscal years.
       The Senate recedes.


                                 report

       The Senate bill, but not the House bill, authorizes 
     $1,000,000 in fiscal year 1999 for the Secretary to provide 
     for a national study to examine procedures undertaken after 
     an institution receives a report of sexual assault and other 
     policies and procedures. The Secretary is required to submit 
     a report to Congress by September 1, 1999.
       The House recedes with an amendment to replace ``The 
     Secretary, in consultation with the Attorney General'' with 
     ``The Attorney General, in consultation with the Secretary.''

Part F--Improving United States Understanding of Science, Engineering, 
                      and Technology in East Asia

       The Senate bill, but not the House bill, authorizes the 
     Director of the National Science Foundation, in consultation 
     with the Secretary of Education, to administer an 
     interdisciplinary program of education and research on East 
     Asian science, engineering, and technology.
       The House recedes.

                      Part G--Olympic Scholarships

       The House bill reinstate section of title XV of the Higher 
     Education Amendments of 1992 dealing with Olympic 
     Scholarships--changing the date from 1993 to 1999. The Senate 
     bill repeals this program.
       The Senate recedes.

                      Part H--Underground Railroad

       The Senate bill, but not the House bill, authorizes the 
     Underground Railroad Educational and Cultural Program which 
     allows the Secretary of Education, in consultation with the 
     Secretary of the Interior, to make grants to nonprofit 
     educational organizations to research, display, interpret, 
     and collect artifacts relating to the history of the 
     Underground Railroad, and to make the interpretive efforts 
     available to institutions of higher education. It is 
     authorized at $6 million for FY 1999-FY2001 and $3 million 
     for FY 2002 and FY 2003.
       The House recedes.

                Part I--Summer Travel and Work Programs

       The Senate bill, but not the House bill, authorizes the 
     Director of USIA to administer summer travel and work 
     cultural exchange programs without regard to pre-placement 
     requirements.
       The House recedes.

                 Part J--Web-Based Education Commission

       The Senate bill, but not the House bill, authorizes the 
     establishment of a Web-Based Education Commission. The 
     commission is to assess the educational software available in 
     retail markets for secondary and postsecondary students and 
     submit a report to the President and Congress that contains 
     its findings and its recommendations for legislative and 
     administrative actions. Funding level of $650,000 is 
     authorized for fiscal year 1999.
       The House recedes with an amendment to change the 
     authorization level to $450,000 million.

                    Part K--Miscellaneous Provisions


 study of approaches to help welfare recipients achieve economic self-
                              sufficiency

       The Senate bill, but not the House bill, amends the welfare 
     provisions of the Social Security Act. It permits States to 
     count 24 months of postsecondary and vocational education as 
     a work activity for TANF recipients and removes teen parents 
     from being calculated in the 30% caps of those involved with 
     work/education activities.
       The House recedes with an amendment to require the 
     Comptroller General to conduct a study of the long-term 
     effectiveness of education and rapid employment approaches to 
     helping welfare recipients become employed, sustain 
     employment, and achieve economic self-sufficiency. The report 
     is to be submitted to the appropriate committees of Congress 
     no later than August 1, 1999.


                         guam community college

       The Senate bill, but not the House bill, provides that the 
     Secretary of Education will release all conditions and 
     covenants and

[[Page H9081]]

     any reversionary interests imposed or retained by the United 
     States federal government regarding the conveyance of Federal 
     surplus property in Guam for the construction of a new Guam 
     Community College campus.
       The House recedes.


                sense of the congress on good character

       The Senate bill, but not the House bill, includes sense-of-
     the-Congress language stating that Congress should support 
     and encourage character building initiatives in schools 
     across America and urges colleges and universities to affirm 
     that the development of character is one of the primary goals 
     of higher education.
       The House recedes.


            Sense of the Senate on cost of higher education

       The Senate bill, but not the House bill, includes sense-of-
     the-Senate language that the cost of tuition at institutions 
     of education continues to increase at a rate above inflation, 
     that efforts should be made to address the disproportionate 
     share of Federal student aid in the form of loans compared to 
     grants, and that providing incentives to institutions of 
     higher education may be an effective way to limit tuition 
     growth.
       The Senate recedes.


               Sense of the congress on teacher education

       The Senate bill, but not the House bill, includes a ``Sense 
     of the Congress'' regarding teacher education that encourages 
     collaboration, partnership and alternative routes to teaching 
     in teacher preparation as well as encouraging students 
     participating in federal programs to become involved in 
     supervised tutoring and mentoring activities.
       The Senate recedes.


                     sense of the house on dyslexia

       The House bill, but not the Senate bill, includes a sense 
     of the House of Representatives that colleges and 
     universities receiving assistance under the Higher Education 
     Act of 1965 shall establish policies for identifying students 
     with learning disabilities, specifically students with 
     dyslexia, early during their postsecondary educational 
     training so they may have the ability to receive higher 
     education opportunities.
       The House recedes.

                   TITLE IX--AMENDMENTS TO OTHER ACTS

                   Part A--Indian Education Programs


      tribally controlled community college assistance act of 1978

       Both bills reauthorize the Tribally Controlled Community 
     College Assistance Act of 1978 and rename it the Tribally 
     Controlled Community College or University Assistance Act of 
     1978. Both bills increase the per-Indian-pupil authorization 
     to $6,000. Both bills reauthorize the programs in this Act 
     and increase the authorization for grants to colleges and 
     universities to $40,000,000 in fiscal year 1999.
       The House bill, but not the Senate bill, requires an 
     institution to be accredited or in the process of 
     accreditation by an accrediting agency or organization 
     recognized by the Secretary of Education rather than the 
     Secretary of the Interior.
       The House recedes.


                      Navajo Community College Act

       Both bills reauthorize the Navajo Community College Act.


                             Other programs

       The House bill, but not the Senate bill, reauthorizes the 
     Tribal Development Student Assistance Revolving Loan Program, 
     the American Indian Postsecondary Economic Development 
     Scholarship and American Indian Teacher Training.
       The House recedes.
       The Senate bill, but not the House bill, authorizes $5 
     million in FY 1999 for the Institute of American Indian and 
     Alaska Native Culture and Arts Development.
       The Senate recedes.

                     Part B--Education of the Deaf

       Given the enormous importance of education to the future 
     success of all Americans, the conferees reaffirm the long-
     standing commitment to programs targeted to people who are 
     deaf or hearing impaired through extending the authorization 
     for the Education of the Deaf Act of 1986. The conference 
     agreement amends the Education of the Deaf Act by extending 
     the authorization for Gallaudet University and the National 
     Technical Institute for the Deaf. The conference agreement 
     also makes the legislation consistent with certain provisions 
     of the Individuals with Disabilities Education Act Amendments 
     of 1997, strengthens and clarifies audit provisions, 
     increases flexibility and clarifies provisions with regard to 
     the endowment programs, and authorizes a National Study on 
     the Education of the Deaf.
       The conference agreement increases the ability of Gallaudet 
     University and the National Technical Institute for the Deaf 
     to utilize excess enrollment capacity at the institutions by 
     raising the current 10 percent enrollment cap on 
     international students to 15 percent, while establishing the 
     requirement that no qualified United States citizen will be 
     denied admission to the institutions. The conference 
     agreement also makes a modest increase in the amount of the 
     tuition surcharge paid by international students from 90 
     percent of the tuition charged to U.S. students to 100 
     percent of that amount.
       The conferees view the National Study on the Education of 
     the Deaf as an appropriate and timely method for identifying 
     education-related factors that facilitate or result in 
     barriers to successful postsecondary education and employment 
     of individuals who are deaf. In addition to any other factors 
     the Secretary deems appropriate, the study shall identify 
     education-related factors that pose barriers to or that 
     facilitate:
       (1) educational performance and progress of students who 
     are deaf in high school;
       (2) educational performance and progress of students who 
     are deaf in postsecondary education;
       (3) career exploration and selection;
       (4) job performance and satisfaction in initial 
     postsecondary employment; and
       (5) career advancement and satisfaction.

                Part C--United States Institute of Peace

       The Senate bill, but not the House bill, reauthorizes the 
     Institute for Peace and authorizes the Institute to enter 
     into personal service contracts and to utilize the services 
     of GSA. The Senate bill also permits rather than requires 
     Congress to hold hearings on reports submitted by the 
     President.
       The House recedes.

              Part D--Voluntary Retirement Incentive Plans


                              present law

       Section 4(f)(2)(B)(ii) of the Age Discrimination in 
     Employment Act of 1967 (ADEA) provides that voluntary early 
     retirement incentive plans do not violate the ADEA's 
     prohibition, in Section 4(a)(1), against age discrimination 
     in compensation, terms, conditions, or privileges of 
     employment, provided such plans are otherwise consistent with 
     the relevant purpose or purposes of the Act. The relevant 
     purposes of the Act are set forth in Section 2(b): to promote 
     employment of older persons based upon their ability rather 
     than age; to prohibit arbitrary age discrimination in 
     employment; and to help employers and workers find ways of 
     meeting problems arising from the impact of age on 
     employment.
       Under section 4(l)(1)(B) of ADEA, certain age-based early 
     retirement subsidies and social security supplements are 
     permitted in defined benefit pension plans.


                               house bill

     In general
       The House bill adds to the ADEA a ``safe harbor'' under 
     which institutions of higher education may offer to tenured 
     faculty members, upon their voluntary retirement, 
     supplemental benefits that are reduced or eliminated based 
     upon age, subject to three conditions. First, the institution 
     must not implement any age-based reduction or cessation of 
     benefits other than these supplemental benefits. Second, 
     these supplemental, age-based benefits must be in addition to 
     any retirement or severance benefits that have been available 
     to tenured faculty members generally, independent of any 
     early retirement or exit-incentive plan, within the preceding 
     365 days. Third, any tenured faculty member who attains the 
     minimum age and satisfies all non-age-based conditions for 
     receiving such a supplemental benefit has an opportunity for 
     at least 180 days to elect to retire and receive the maximum 
     supplemental benefit that could then be elected by a younger 
     but otherwise similarly situated employee, and must have the 
     ability to delay retirement for at least 180 days after 
     making that election.
       Benefits described in the safe harbor will not be in 
     violation of subsection (a), (b), (c), or (e) of Section 4 of 
     the ADEA. In addition, the bill amends Section 4(i)(6) of the 
     ADEA to exempt such benefits from Section 4(i)(1), which 
     precludes reduction or cessation of retirement plan 
     contributions or benefit accruals based upon age. This relief 
     from Section 4(i)(1) is limited to the supplemental benefits 
     described in the safe harbor, and would not change the 
     prohibition in existing law against age-based reduction or 
     cessation of contributions or benefit accruals under other 
     retirement plans.


                    institutions of higher education

       The safe harbor in the House bill is limited to plans 
     offered by institutions of higher education as defined in 
     Section 1201(a) of the Higher Education Act of 1965 (20 
     U.S.C. 1141(a)). The term ``institution of higher 
     education'' had the same meaning under Section 12(d) of 
     the ADEA, as in effect prior to January 1, 1994.


                           tenured employees

       A plan covered by the safe harbor may offer benefits only 
     to employees who are serving under a contract of unlimited 
     tenure (or similar arrangement providing for unlimited 
     tenure). This language is intended to have the same meaning 
     as it did in Section 12(d) of the ADEA, as in effect prior to 
     January 1, 1994. Assuming an employee was tenured at the time 
     the retirement incentive was offered, the safe harbor will 
     not fail to apply merely because a tenured employee is no 
     longer tenured at the time benefits are actually provided.


                         supplemental benefits

       The safe harbor encompasses only supplemental retirement 
     benefits--i.e., benefits that are in addition to those 
     already available to tenured faculty members under other 
     plans. Thus, the safe harbor would not apply to a plan under 
     which tenured faculty members, because they did not retire 
     before a given age, ceased to receive benefits (other than 
     the supplemental retirement benefits themselves) that were 
     available to other tenured faculty members. However, the bill 
     provides that any reduction or cessation of benefits that is 
     permitted by other provisions of the ADEA would not prevent 
     the

[[Page H9082]]

     safe harbor from applying. This would include, for example, 
     any general change in post-retirement benefits, such as a 
     change in or elimination of retiree health benefits, that 
     applies without regard to age, or any change or cessation of 
     coverage resulting from Medicare eligibility.
       In addition, an institution may not cease offering a 
     retirement or severance benefit that has been generally 
     available to tenured faculty members and, within 365 days 
     thereafter, begin offering that benefit solely to faculty 
     members who retire under the supplemental, age-based 
     retirement plan permitted by the safe harbor. The House bill 
     would not, however, preclude an institution from 
     discontinuing benefits under an existing early retirement or 
     exit-incentive plan and substituting, within 365 days 
     thereafter, a supplemental age-based retirement plan 
     described in the safe harbor. Similarly, the bill would not 
     preclude an institution from offering benefits under such a 
     plan that had been offered within the preceding 365 days 
     under individually negotiated retirement or exit-incentive 
     arrangements with selected faculty members. In addition, a 
     plan does not fall outside the safe harbor merely because it 
     restates or incorporates benefits that are also available on 
     the same terms under other plans or policies to tenured 
     faculty generally.


                 one hundred and eighty day opportunity

       To satisfy the safe harbor, a plan must not preclude an 
     eligible employee who has attained too high an age for the 
     maximum benefit otherwise available under the applicable 
     formula from having an opportunity of at least 180 days' 
     duration to elect to retire and receive that maximum benefit. 
     In determining that maximum benefit, the employee will be 
     assumed to retire at the age which, under the applicable 
     formula, results in the largest benefit. If more than one 
     benefit is offered, or non-cash benefits are provided, or 
     benefits are provided over a period of time, the employee 
     will be assumed to retire at the age which, under the 
     applicable formula or formulas, results in benefits with the 
     largest combined present value. In determining the benefits 
     actually payable to the employee, all relevant factors other 
     than age, such as salary or years of service, will be 
     determined as of the employee's actual retirement.
       This 180-day opportunity must be offered not only to 
     faculty members who have attained the minimum age, are in an 
     eligible classification, and satisfy the other eligibility 
     requirements at the time the plan is established, but also to 
     faculty members who satisfy all of these conditions at some 
     later time while the plan remains in effect. The maximum 
     benefit available to such a faculty member will be determined 
     in the manner described above as of the time of the faculty 
     member's retirement, based on benefits available at that time 
     under the plan.
       The House bill also provides that a plan within the safe 
     harbor may not require retirement to occur sooner than 180 
     days after the election to retire. As a practical matter, 
     this means that the plan must begin the 180-day election 
     period at least 360 days before the intended retirement date, 
     so that a faculty member who makes the election at the end of 
     that 180-day period will still have 180 days to plan for 
     retirement. The bill is not, however, intended to preclude a 
     faculty member from choosing to retire sooner, if the plan 
     allows the faculty member to do so.


                                examples

       Under the bill, a college or university plan would not 
     violate the ADEA, for example, by offering to tenured faculty 
     members who voluntarily retire between ages 65 and 70 a 
     monthly bridge benefit, payable until age 70, equal to 50 
     percent of their final monthly salary, with the expectation 
     that the faculty members would wait until age 70 to commence 
     their regular retirement benefits. The bridge benefit could 
     be made available between other ages, such as 60 and 65, or 
     62 and 69, could involve a different or varying percentage of 
     pay, and could be subject to other conditions, such as a 
     minimum service requirement for eligibility, or limitation of 
     the plan to one or more schools, departments, or other 
     classifications of tenured faculty. Similarly, under the 
     bill, a plan could, consistent with the ADEA, provide lump 
     sum retirement incentives that are reduced based upon age at 
     retirement and eliminated at a specified upper age (e.g., 65 
     or 70). The ADEA would also not be violated by a voluntary 
     phased, planned or similar retirement program for eligible 
     tenured faculty members under which the retirement incentive 
     takes the form of subsidized pay or benefits for part-time 
     work or decreased duties, and the amount of the subsidy or 
     duration of the part-time work or decreased duties, or both, 
     is reduced or eliminated based upon age.
       In each case, the age-based benefits provided would be in 
     addition to, and not in lieu of, any retirement or severance 
     benefits available within the preceding 365 days to tenured 
     faculty members generally (other than benefits under a prior 
     early retirement or exit-incentive plan).
       Also, in each of the above examples, a faculty member who 
     would otherwise be prevented by attainment of too high an age 
     from receiving the maximum benefit under the applicable 
     formula would be given an opportunity of at least 180 days' 
     duration to elect to retire and receive that maximum benefit, 
     determined as described above, and would have the right to 
     take at least 180 days after the election to plan for 
     retirement. For example, if the plan offered decreasing lump 
     sum benefits to all tenured faculty members retiring between 
     ages 65 and 70, inclusive, with 15 or more years of service, 
     all tenured faculty members with 15 or more years of service 
     who were older than age 65 when the plan was first 
     implemented would have a 180-day period in which they could 
     elect to retire and receive the highest lump sum benefit (the 
     benefit that would otherwise be available only to 65-year-old 
     retirees). A similar 180-day opportunity would be offered to 
     tenured faculty members who completed 15 years of service at 
     an age higher than 65; they could elect the highest benefit 
     then available to a younger (but otherwise similarly 
     situated) faculty member.


                    Effect On Procedural Obligations

       Enactment of the safe harbor is not intended to diminish 
     any other rights or obligations, such as collective 
     bargaining obligations under federal or state law, that 
     tenured faculty members or institutions of higher education 
     may have regarding the processes to be followed in 
     establishing a plan described in the safe harbor.


     Effect on application of the ADEA to other plans or employers

       The House bill provides that the enactment of this safe 
     harbor does not affect the application of the ADEA to plans 
     or employers outside the safe harbor. Also, enactment of the 
     safe harbor does not affect the application of the ADEA to 
     any plan at any time prior to the bill's enactment, whether 
     or not the plan is described in the safe harbor.


                             Effective Date

       Title X of the House bill is effective on the date of 
     enactment of this Act, and shall not apply with respect to 
     any cause of action arising under the ADEA prior to that 
     date.
       The Senate bill did not contain a similar provision.


                          Conference Agreement

       The conference agreement follows the House bill.

                              Part E--GEPA


     Amendment to Family Educational Rights and Privacy Act of 1974

       The House bill, but not the Senate bill, amends the General 
     Education Provisions Act by allowing institutions of higher 
     education to disclose disciplinary records of students who 
     have admitted or been found guilty of a crime of violence 
     where the records directly relate to such misconduct.
       The Senate recedes with an amendment to provide for public 
     disclosure of the results of campus disciplinary proceedings 
     against students who are alleged perpetrators of crimes of 
     violence or a nonforcible sex offense, without the student's 
     consent, if the student is determined, as a result of that 
     proceeding, to have committed a disciplinary violation in 
     connection with the crime. The information that could be 
     disclosed to the public would include only the name of the 
     student determined to have committed the violation, the 
     violation committed, and any sanction imposed by the 
     institution. The information disclosed could include the name 
     of any other student (such as a victim or witness) only with 
     the written consent of that other student. A parallel 
     reference to a nonforcible sex offense would be added to 
     section 444(b)(6), regarding the release of disciplinary 
     proceeding results to the alleged victim. In addition, 
     authorized representatives of the Attorney General would be 
     exempted from the general prohibition against the release of 
     education records. Such exemption would be provided only for 
     law enforcement purposes.


                 Alcohol or Drug Possession Disclosure

       The Senate bill, but not the House bill, provides an 
     assurance that the Higher Education Act shall not be 
     construed to prohibit an institution of higher education from 
     disclosing information regarding violations of law regarding 
     alcohol and drugs to the parents of under-age students.
       The House recedes with an amendment to add ``or legal 
     guardian'' after ``parent'', to include violations of any 
     rule or policy of the institution if the institution has 
     determined the student has committed a disciplinary 
     violation, and to include language regarding State law 
     regarding disclosure.

    Part F--Liaison for Proprietary Institutions of Higher Education

       The Senate bill, but not the House bill, amends the 
     Department of Education Organization Act to establish a 
     Liaison for Proprietary Institutions of Higher Education.
       The House recedes.

                            Part G--Offsets


              Discharge of Student Loan Debt in Bankruptcy

       The conferees, in the effort to ensure the budget 
     neutrality of this bill, adopted a provision eliminating the 
     current bankruptcy discharge for student borrowers after they 
     have been in repayment for seven years. The conferees note 
     that this change does not affect the current provisions 
     allowing any student borrower to discharge a student loan 
     during bankruptcy if they can prove undue economic hardship. 
     The conferees also note the availability of various options 
     to increase the affordability of student loan debt, including 
     deferment, forbearance, cancellation and extended, graduated, 
     income-contingent and income-sensitive repayment options.


              Government National Mortgage Association Fee

       The conferees, in the effort to ensure the budget 
     neutrality of this bill, adopted a provision increasing the 
     Government National Mortgage Association's (Ginnie Mae) 
     guarantee fee from six basis points to nine basis

[[Page H9083]]

     points in fiscal years 2005, 2006, and 2007. Although this 
     fee increase is outside of our committees' jurisdiction, it 
     is the understanding of the conferees that it can be 
     implemented in a way which does not adversely affect low-
     income homebuyers.

                            Part H--Repeals

       The House bill, but not the Senate bill, repeals Section 
     4122 of the Elementary and Secondary Education Act of 1965 
     (20 USC 7132) which provides grants for drug and violence 
     prevention programs-model programs on safety and illegal use 
     of drugs and alcohol.
       The Senate recedes. A new program which is similar to the 
     ESEA program is established in Title 1 of this Act.

     For consideration of the House bill (except sec. 464), and 
     the Senate amendment (except secs. 484 and 799C), and 
     modifications committed to conference:
     Bill Goodling,
     Howard ``Buck'' McKeon,
     Tom Petri,
     Lindsey Graham,
     Mark Souder,
     John E. Peterson,
     W.L. Clay,
     Dale E. Kildee,
     M.G. Martinez,
     Robert E. Andrews,
     For consideration of sec. 464 of the House bill, and secs. 
     484 and 799C of the Senate amendment, and modifications 
     committed to conference:
     Bill Goodling,
     James Talent,
     E. Clay Shaw, Jr.,
     Dave Camp,
     W.L. Clay,
     Sander Levin,
                                Managers on the Part of the House.

     Jim Jeffords,
     Dan Coats,
     Judd Gregg,
     Bill Frist,
     Mike DeWine,
     Mike Enzi,
     Tim Hutchinson
     Susan Collins,
     John Warner,
     Mitch McConnell,
     Ted Kennedy,
     Chris Dodd,
     Tom Harkin,
     Barbara A. Mikulski,
     Jeff Bingaman,
     Patty Murray,
     Jack Reed,
     Managers on the Part of the Senate.

                          ____________________