[Congressional Record Volume 153, Number 117 (Friday, July 20, 2007)]
[Senate]
[Pages S9661-S9668]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   COLLEGE COST REDUCTION ACT OF 2007

  On Thursday, July 19, 2007, the Senate passed H.R. 2669.
  The bill, as amended, is as follows:

                               H.R. 2669

         Resolved, That the bill from the House of Representatives 
     (H.R. 2669) entitled ``An Act to provide for reconciliation 
     pursuant to section 601 of the concurrent resolution on the 
     budget for fiscal year 2008.'', do pass with the following 
     amendment:

       Strike out all after the enacting clause and insert:

     SECTION 1. SHORT TITLE; REFERENCES.

       (a) Short Title.--This Act may be cited as the ``Higher 
     Education Access Act of 2007''.
       (b) References.--Except as otherwise expressly provided, 
     whenever in this Act an amendment or repeal is expressed in 
     terms of an amendment to, or repeal of, a section or other 
     provision, the reference shall be considered to be made to a 
     section or other provision of the Higher Education Act of 
     1965 (20 U.S.C. 1001 et seq.).

  TITLE I--GRANTS TO STUDENTS IN ATTENDANCE AT INSTITUTIONS OF HIGHER 
                               EDUCATION

     SEC. 101. TUITION SENSITIVITY.

       (a) Amendment.--Section 401(b) (20 U.S.C. 1070a(b)) is 
     amended by striking paragraph (3).
       (b) Authorization and Appropriation of Funds.--There is 
     authorized to be appropriated, and there is appropriated, out 
     of any money in the Treasury not otherwise appropriated, for 
     the Department of Education to carry out the amendment made 
     by subsection (a), $5,000,000 for fiscal year 2008.

     SEC. 102. PROMISE GRANTS.

       (a) Amendment.--Subpart 1 of part A of title IV (20 U.S.C. 
     1070a et seq.) is amended by adding at the end the following:

     ``SEC. 401B. PROMISE GRANTS.

       ``(a) Grants.--
       ``(1) In general.--From amounts appropriated under 
     subsection (e) for a fiscal year and subject to subsection 
     (b), the Secretary shall award grants to students in the same 
     manner as the Secretary awards Federal Pell Grants to 
     students under section 401, except that--
       ``(A) at the beginning of each award year, the Secretary 
     shall establish a maximum and minimum award level based on 
     amounts made available under subsection (e);
       ``(B) the Secretary shall only award grants under this 
     section to students eligible for a Federal Pell Grant for the 
     award year; and
       ``(C) when determining eligibility for the awards under 
     this section, the Secretary shall consider only those 
     students who submitted a Free Application for Federal Student 
     Aid or other common reporting form under section 483 as of 
     July 1 of the award year for which the determination is made.
       ``(2) Students with the greatest need.--The Secretary shall 
     ensure grants are awarded under this section to students with 
     the greatest need as determined in accordance with section 
     471.
       ``(b) Cost of Attendance Limitation.--A grant awarded under 
     this section for an award year shall be awarded in an amount 
     that does not exceed--
       ``(1) the student's cost of attendance for the award year; 
     less
       ``(2) an amount equal to the sum of--
       ``(A) the expected family contribution for the student for 
     the award year; and
       ``(B) any Federal Pell Grant award received by the student 
     for the award year.
       ``(c) Supplement Not Supplant.--Grants awarded from funds 
     made available under subsection (e) shall be used to 
     supplement, and not supplant, other Federal, State, or 
     institutional grant funds.
       ``(d) Use of Excess Funds.--
       ``(1) Fifteen percent or less.--If, at the end of a fiscal 
     year, the funds available for making grant payments under 
     this section exceed the amount necessary to make the grant 
     payments required under this section to eligible students by 
     15 percent or less, then all of the excess funds shall remain 
     available for making grant payments under this section during 
     the next succeeding fiscal year.
       ``(2) More than fifteen percent.--If, at the end of a 
     fiscal year, the funds available for making grant payments 
     under this section exceed the amount necessary to make the 
     grant payments required under this section to eligible 
     students by more than 15 percent, then all of such funds 
     shall remain available for making such grant payments but 
     grant payments may be made under this paragraph only with 
     respect to awards for that fiscal year.
       ``(e) Authorization and Appropriation of Funds.--
       ``(1) In general.--There are authorized to be appropriated, 
     and there are appropriated, out of any money in the Treasury 
     not otherwise appropriated, for the Department of Education 
     to carry out this section--
       ``(A) $2,620,000,000 for fiscal year 2008;
       ``(B) $3,040,000,000 for fiscal year 2009;
       ``(C) $3,460,000,000 for fiscal year 2010;
       ``(D) $3,900,000,000 for fiscal year 2011;
       ``(E) $4,020,000,000 for fiscal year 2012;
       ``(F) $10,000,000 for fiscal year 2013;
       ``(G) $3,650,000,000 for fiscal year 2014;
       ``(H) $3,850,000,000 for fiscal year 2015;
       ``(I) $4,175,000,000 for fiscal year 2016; and
       ``(J) $4,180,000,000 for fiscal year 2017.
       ``(2) Availability of funds.--Funds appropriated under 
     paragraph (1) for a fiscal year shall remain available 
     through the last day of the fiscal year immediately 
     succeeding the fiscal year for which the funds are 
     appropriated.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on July 1, 2008.

         TITLE II--STUDENT LOAN BENEFITS, TERMS, AND CONDITIONS

     SEC. 201. DEFERMENTS.

       (a) FISL.--Section 427(a)(2)(C)(iii) (20 U.S.C. 
     1077(a)(2)(C)(iii)) is amended by striking ``3 years'' and 
     inserting ``6 years''.
       (b) Interest Subsidies.-- Section 428(b)(1)(M)(iv) (20 
     U.S.C. 1078(b)(1)(M)(iv)) is amended by striking ``3 years'' 
     and inserting ``6 years''.
       (c) Direct Loans.--Section 455(f)(2)(D) (20 U.S.C. 
     1087e(f)(2)(D)) is amended by striking ``3 years'' and 
     inserting ``6 years''.
       (d) Perkins.--Section 464(c)(2)(A)(iv) (20 U.S.C. 
     1087dd(c)(2)(A)(iv)) is amended by striking ``3 years'' and 
     inserting ``6 years''.
       (e) Effective Date and Applicability.--The amendments made 
     by this section shall take effect on July 1, 2008, and shall 
     only apply with respect to the loans made to a borrower of a 
     loan under title IV of the Higher Education Act of 1965 who 
     obtained the borrower's first loan under such title prior to 
     October 1, 2012.

     SEC. 202. STUDENT LOAN DEFERMENT FOR CERTAIN MEMBERS OF THE 
                   ARMED FORCES.

       (a) Federal Family Education Loans.-- Section 
     428(b)(1)(M)(iii) (20 U.S.C. 1078(b)(1)(M)(iii)) is amended--
       (1) in the matter preceding subclause (I), by striking 
     ``not in excess of 3 years'';
       (2) in subclause (II), by striking ``; or'' and inserting a 
     comma; and
       (3) by adding at the end the following:
     ``and for the 180-day period following the demobilization 
     date for the service described in subclause (I) or (II); 
     or''.
       (b) Direct Loans.--Section 455(f)(2)(C) (20 U.S.C. 
     1087e(f)(2)(C)) is amended--
       (1) in the matter preceding clause (i), by striking ``not 
     in excess of 3 years'';
       (2) in clause (ii), by striking ``; or'' and inserting a 
     comma; and
       (3) by adding at the end the following:
     ``and for the 180-day period following the demobilization 
     date for the service described in clause (i) or (ii); or''.
       (c) Perkins Loans.--Section 464(c)(2)(A)(iii) (20 U.S.C. 
     1087dd(c)(2)(A)(iii)) is amended--
       (1) in the matter preceding subclause (I), by striking 
     ``not in excess of 3 years'';
       (2) in subclause (II), by striking the semicolon and 
     inserting a comma; and
       (3) by adding at the end the following:
     ``and for the 180-day period following the demobilization 
     date for the service described in subclause (I) or (II);''.
       (d) Applicability.--Section 8007(f) of the Higher Education 
     Reconciliation Act of 2005 (20 U.S.C. 1078 note) is amended 
     by striking ``loans for which'' and all that follows through 
     the period at the end and inserting ``all loans under title 
     IV of the Higher Education Act of 1965.''.
       (e) Effective Date.--The amendments made by this section 
     shall take effect on July 1, 2008.

     SEC. 203. INCOME-BASED REPAYMENT PLANS.

       (a) FFEL.--Section 428 (as amended by sections 201(b) and 
     202(a)) (20 U.S.C. 1078) is further amended--
       (1) in subsection (b)--
       (A) in paragraph (1)--
       (i) in subparagraph (D), by striking ``income contingent'' 
     and inserting ``income-based''; and
       (ii) in subparagraph (E)(i), by striking ``income-
     sensitive'' and inserting ``income-based''; and

[[Page S9662]]

       (B) by striking clause (iii) of paragraph (9)(A) and 
     inserting the following:
       ``(iii) an income-based repayment plan, with parallel 
     terms, conditions, and benefits as the income-based repayment 
     plan described in subsections (e) and (d)(1)(D) of section 
     455, except that--

       ``(I) the plan described in this clause shall not be 
     available to a borrower of an excepted PLUS loan (as defined 
     in section 455(e)(10)) or of a loan made under 428C that 
     includes an excepted PLUS loan;
       ``(II) in lieu of the process of obtaining Federal income 
     tax returns and information from the Internal Revenue 
     Service, as described in section 455(e)(1), the borrower 
     shall provide the lender with a copy of the Federal income 
     tax return and return information for the borrower (and, if 
     applicable, the borrower's spouse) for the purposes described 
     in section 455(e)(1), and the lender shall determine the 
     repayment obligation on the loan, in accordance with the 
     procedures developed by the Secretary;
       ``(III) in lieu of the requirements of section 455(e)(3), 
     in the case of a borrower who chooses to repay a loan made, 
     insured, or guaranteed under this part pursuant to income-
     based repayment and for whom the adjusted gross income is 
     unavailable or does not reasonably reflect the borrower's 
     current income, the borrower shall provide the lender with 
     other documentation of income that the Secretary has 
     determined is satisfactory for similar borrowers of loans 
     made under part D;
       ``(IV) the Secretary shall pay any interest due and not 
     paid for under the repayment schedule described in section 
     455(e)(4) for a loan made, insured, or guaranteed under this 
     part in the same manner as the Secretary pays any such 
     interest under section 455(e)(6) for a Federal Direct 
     Stafford Loan;
       ``(V) the Secretary shall assume the obligation to repay an 
     outstanding balance of principal and interest due on all 
     loans made, insured, or guaranteed under this part (other 
     than an excepted PLUS Loan or a loan under section 428C that 
     includes an excepted PLUS loan), for a borrower who satisfies 
     the requirements of subparagraphs (A) and (B) of section 
     455(e)(7), in the same manner as the Secretary cancels such 
     outstanding balance under section 455(e)(7); and
       ``(VI) in lieu of the notification requirements under 
     section 455(e)(8), the lender shall notify a borrower of a 
     loan made, insured, or guaranteed under this part who chooses 
     to repay such loan pursuant to income-based repayment of the 
     terms and conditions of such plan, in accordance with the 
     procedures established by the Secretary, including 
     notification that--

       ``(aa) the borrower shall be responsible for providing the 
     lender with the information necessary for documentation of 
     the borrower's income, including income information for the 
     borrower's spouse (as applicable); and
       ``(bb) if the borrower considers that special circumstances 
     warrant an adjustment, as described in section 455(e)(8)(B), 
     the borrower may contact the lender, and the lender shall 
     determine whether such adjustment is appropriate, in 
     accordance with the criteria established by the Secretary; 
     and'';
       (2) in subsection (e)--
       (A) in the subsection heading, by striking ``Income-
     Sensitive'' and inserting ``Income-Based'';
       (B) in paragraph (1)--
       (i) by striking ``income-sensitive repayment'' and 
     inserting ``income-based repayment''; and
       (ii) by inserting ``and for the public service loan 
     forgiveness program under section 455(m), in accordance with 
     section 428C(b)(5)'' before the semicolon; and
       (C) in paragraphs (2) and (3), by striking ``income-
     sensitive'' each place the term occurs and inserting 
     ``income-based''; and
       (3) in subsection (m)--
       (A) in the subsection heading, by striking ``Income 
     Contingent'' and inserting ``Income-Based'';
       (B) in paragraph (1), by striking ``income contingent 
     repayment plan'' and all that follows through the period at 
     the end and inserting ``income-based repayment plan as 
     described in subsection (b)(9)(A)(iii) and section 
     455(d)(1)(D).''; and
       (C) in the paragraph heading of paragraph (2), by striking 
     ``income contingent'' and inserting ``income-based''.
       (b) Consolidation Loans.--Section 428C (20 U.S.C. 1078-3) 
     is amended--
       (1) in subsection (a)(3)(B)(i)(V), by striking ``for the 
     purposes of obtaining an income contingent repayment plan,'' 
     and inserting ``for the purpose of using the public service 
     loan forgiveness program under section 455(m),'';
       (2) in subsection (b)(5)--
       (A) in the first sentence, by striking ``, or is unable to 
     obtain a consolidation loan with income-sensitive repayment 
     terms acceptable to the borrower from such a lender,'' and 
     inserting ``, or chooses to obtain a consolidation loan for 
     the purposes of using the public service loan forgiveness 
     program offered under section 455(m),''; and
       (B) in the second sentence, by striking ``income contingent 
     repayment under part D of this title'' and inserting 
     ``income-based repayment''; and
       (3) in subsection (c)--
       (A) in paragraph (2)(A)--
       (i) in the first sentence, by striking ``of graduated or 
     income-sensitive repayment schedules, established by the 
     lender in accordance with the regulations of the Secretary.'' 
     and inserting ``of graduated repayment schedules, established 
     by the lender in accordance with the regulations of the 
     Secretary, and income-based repayment schedules, established 
     pursuant to regulations by the Secretary.''; and
       (ii) in the second sentence, by striking ``Except as 
     required'' and all that follows through ``subsection 
     (b)(5),'' and inserting ``Except as required by such income-
     based repayment schedules,''; and
       (B) in paragraph (3)(B), by striking ``income contingent 
     repayment offered by the Secretary under subsection (b)(5)'' 
     and inserting ``income-based repayment''.
       (c) Direct Loans.--Section 455 (as amended by sections 
     201(c) and 202(b)) (20 U.S.C. 1087e) is further amended--
       (1) in subsection (d)--
       (A) in paragraph (1)(D)--
       (i) by striking ``income contingent repayment plan'' and 
     inserting ``income-based repayment plan''; and
       (ii) by striking ``a Federal Direct PLUS loan'' and 
     inserting ``an excepted PLUS loan or any Federal Direct 
     Consolidation Loan that includes an excepted PLUS loan (as 
     defined in subsection (e)(10))''; and
       (B) in paragraph (5)(B), by striking ``income contingent'' 
     and inserting ``income-based''; and
       (2) in subsection (e)--
       (A) in the subsection heading, by striking ``Income 
     Contingent'' and inserting ``Income-Based'';
       (B) in paragraphs (1), (2), and (3), by striking ``income 
     contingent'' each place the term appears and inserting 
     ``income-based'';
       (C) in paragraph (4)--
       (i) by striking ``Income contingent'' and inserting 
     ``Income-based''; and
       (ii) by striking ``Secretary.'' and inserting ``Secretary, 
     except that the monthly required payment under such schedule 
     shall not exceed 15 percent of the result obtained by 
     calculating the amount by which--
       ``(A) the borrower's adjusted gross income; exceeds
       ``(B) 150 percent of the poverty line applicable to the 
     borrower's family size, as determined under section 673(2) of 
     the Community Service Block Grant Act, divided by 12.'';
       (D) in paragraph (5), by striking ``income contingent'' and 
     inserting ``income-based'';
       (E) by redesignating paragraph (6) as paragraph (8);
       (F) by inserting after paragraph (5) the following:
       ``(6) Treatment of interest.--In the case of a Federal 
     Direct Stafford Loan, any interest due and not paid for under 
     paragraph (2) shall be paid by the Secretary.
       ``(7) Loan forgiveness.--The Secretary shall cancel the 
     obligation to repay an outstanding balance of principal and 
     interest due on all loans made under this part, or assume the 
     obligation to repay an outstanding balance of principal and 
     interest due on all loans made, insured, or guaranteed under 
     part B, (other than an excepted PLUS Loan, or any Federal 
     Direct Consolidation Loan or loan under section 428C that 
     includes an excepted PLUS loan) to a borrower who--
       ``(A) makes the election under this subsection or under 
     section 428(b)(9)(A)(iii); and
       ``(B) for a period of time prescribed by the Secretary not 
     to exceed 25 years (including any period during which the 
     borrower is in deferment due to an economic hardship 
     described in section 435(o)), meets 1 of the following 
     requirements with respect to each payment made during such 
     period:
       ``(i) Has made the payment under this subsection or section 
     428(b)(9)(A)(iii).
       ``(ii) Has made the payment under a standard repayment plan 
     under section 428(b)(9)(A)(i) or 455(d)(1)(A).
       ``(iii) Has made a payment that counted toward the maximum 
     repayment period under income-sensitive repayment under 
     section 428(b)(9)(A)(iii) or income contingent repayment 
     under section 455(d)(1)(D), as each such section was in 
     effect on June 30, 2008.
       ``(iv) Has made a reduced payment of not less than the 
     amount required under subsection (e), pursuant to a 
     forbearance agreement under section 428(c)(3)(A)(i) for a 
     borrower described in 428(c)(3)(A)(i)(II).'';
       (G) in the matter preceding subparagraph (A) of paragraph 
     (8) (as redesignated by subparagraph (E)), by striking 
     ``income contingent'' and inserting ``income-based''; and
       (H) by adding at the end the following:
       ``(9) Return to standard repayment.--A borrower who is 
     repaying a loan made under this part pursuant to income-based 
     repayment may choose, at any time, to terminate repayment 
     pursuant to income-based repayment and repay such loan under 
     the standard repayment plan.
       ``(10) Definition of excepted plus loan.--In this 
     subsection, the term `excepted PLUS loan' means a Federal 
     Direct PLUS loan or a loan under section 428B that is made, 
     insured, or guaranteed on behalf of a dependent student.''.
       (d) Conforming Amendments and Technical Corrections.--The 
     Act (20 U.S.C. 1001 et seq.) is further amended--
       (1) in section 427(a)(2)(H) (20 U.S.C. 1077(a)(2)(H))--
       (A) by striking ``or income-sensitive''; and
       (B) by inserting ``or income-based repayment schedule 
     established pursuant to regulations by the Secretary'' before 
     the semicolon at the end; and
       (2) in section 455(d)(1)(C) (20 U.S.C. 1087e(d)(1)(C)), by 
     striking ``428(b)(9)(A)(v)'' and inserting 
     ``428(b)(9)(A)(iv)''.
       (e) Transition Provision.--A student who, as of June 30, 
     2008, elects to repay a loan under part B or part D of the 
     Higher Education Act of 1965 (20 U.S.C. 1071 et seq., 1087a 
     et seq.) through an income-sensitive repayment plan under 
     section 428(b)(9)(A)(iii) of such Act (20 U.S.C. 
     1078(b)(9)(A)(iii)) or an income contingent repayment plan 
     under section 455(d)(1)(D) of such Act (20 U.S.C. 
     1087e(d)(1)(D)) (as each such section was in effect on the 
     day before the date of enactment of this Act) shall have the 
     option to continue repayment under such section (as such 
     section was in effect on such day), or

[[Page S9663]]

     may elect, beginning on July 1, 2008, to use the income-based 
     repayment plan under section 428(b)(9)(A)(iii) or 
     455(d)(1)(D) (as applicable) of the Higher Education Act of 
     1965, as amended by this section.
       (f) Effective Date and Applicability.--The amendments made 
     by this section shall take effect on July 1, 2008, and shall 
     only apply with respect to a borrower of a loan under title 
     IV of the Higher Education Act of 1965 who obtained the 
     borrower's first loan under such title prior to October 1, 
     2012.

            TITLE III--FEDERAL FAMILY EDUCATION LOAN PROGRAM

     SEC. 301. REDUCTION OF LENDER INSURANCE PERCENTAGE.

       (a) Amendment.--Section 428(b)(1)(G) (20 U.S.C. 
     1078(b)(1)(G)) is amended--
       (1) in the matter preceding clause (i), by striking 
     ``insures 98 percent'' and inserting ``insures 97 percent'';
       (2) in clause (i), by inserting ``and'' after the 
     semicolon;
       (3) by striking clause (ii); and
       (4) by redesignating clause (iii) as clause (ii).
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect with respect to loans made on or after 
     October 1, 2007.

     SEC. 302. GUARANTY AGENCY COLLECTION RETENTION.

       Clause (ii) of section 428(c)(6)(A) (20 U.S.C. 
     1078(c)(6)(A)(ii)) is amended to read as follows:
       ``(ii) an amount equal to 24 percent of such payments for 
     use in accordance with section 422B, except that--
       ``(I) beginning October 1, 2003 and ending September 30, 
     2007, this subparagraph shall be applied by substituting `23 
     percent' for `24 percent'; and
       ``(II) beginning October 1, 2007, this subparagraph shall 
     be applied by substituting `16 percent' for `24 percent'.''.

     SEC. 303. ELIMINATION OF EXCEPTIONAL PERFORMER STATUS FOR 
                   LENDERS.

       (a) Elimination of Status.--Part B of title IV (20 U.S.C. 
     1071 et seq.) is amended by striking section 428I (20 U.S.C. 
     1078-9).
       (b) Conforming Amendments.--Part B of title IV is further 
     amended--
       (1) in section 428(c)(1) (20 U.S.C. 1078(c)(1))--
       (A) by striking subparagraph (D); and
       (B) by redesignating subparagraphs (E) through (H) as 
     subparagraphs (D) through (G), respectively; and
       (2) in section 438(b)(5) (20 U.S.C. 1087-1(b)(5)), by 
     striking the matter following subparagraph (B).
       (c) Effective Date.--The amendments made by subsections (a) 
     and (b) shall take effect on October 1, 2007, except that 
     section 428I of the Higher Education Act of 1965 (as in 
     effect on the day before the date of enactment of this Act) 
     shall apply to eligible lenders that received a designation 
     under subsection (a) of such section prior to October 1, 
     2007, for the remainder of the year for which the designation 
     was made.

     SEC. 304. DEFINITIONS.

       (a) Amendments.--Section 435 (20 U.S.C. 1085) is amended--
       (1) in subsection (o)(1)--
       (A) in subparagraph (A)(ii), by striking ``100 percent of 
     the poverty line for a family of 2'' and inserting ``150 
     percent of the poverty line applicable to the borrower's 
     family size''; and
       (B) in subparagraph (B)(ii), by striking ``to a family of 
     two'' and inserting ``to the borrower's family size''; and
       (2) by adding at the end the following:
       ``(p) Eligible Not-for-Profit Holder.--
       ``(1) Definition of eligible not-for-profit holder.--The 
     term `eligible not-for-profit holder' means an eligible 
     lender under subsection (d) (except for an eligible lender 
     described in subsection (d)(1)(E)) that requests a special 
     allowance payment under section 438(b)(2)(I)(vi)(II) and that 
     is--
       ``(A) a State of the United States, or a political 
     subdivision thereof, or an authority, agency, or other 
     instrumentality thereof (including such entities that are 
     eligible to issue bonds described in section 1.103-1 of title 
     26, Code of Federal Regulations, or section 144(b) of the 
     Internal Revenue Code of 1986);
       ``(B) an entity described in section 150(d)(2) of such Code 
     that has not made the election described in section 150(d)(3) 
     of such Code;
       ``(C) an entity described in section 501(c)(3) of such 
     Code; or
       ``(D) a trustee acting as an eligible lender on behalf of 
     an entity described in subparagraph (A), (B), or (C),
     except that no entity described in subparagraph (A), (B), or 
     (C) shall be owned or controlled in whole or in part by a 
     for-profit entity.
       ``(2) Prohibition.--In the case of a loan for which the 
     special allowance payment is calculated under section 
     438(b)(2)(I)(vi)(II) and that is sold by the eligible not-
     for-profit holder holding the loan to a for-profit entity or 
     to an entity that is not an eligible not-for-profit holder, 
     the special allowance payment for such loan shall, beginning 
     on the date of the sale, no longer be calculated under 
     section 438(b)(2)(I)(vi)(II) and shall be calculated under 
     section 438(b)(2)(I)(vi)(I) instead.
       ``(3) Regulations.--Not later than 1 year after the date of 
     enactment of the Higher Education Access Act of 2007, the 
     Secretary shall promulgate regulations in accordance with the 
     provisions of this subsection.''.
       (b) Applicability.--The amendment made by subsection (a)(1) 
     shall only apply with respect to any borrower of a loan under 
     title IV of the Higher Education Act of 1965 who obtained the 
     borrower's first loan under such title prior to October 1, 
     2012.

     SEC. 305. SPECIAL ALLOWANCES.

       (a) Reduction of Lender Special Allowance Payments.--
     Section 438(b)(2)(I) (20 U.S.C. 1087-1(b)(2)(I)) is amended--
       (1) in clause (i), by striking ``(iii), and (iv)'' and 
     inserting ``(iii), (iv), and (vi)''; and
       (2) by adding at the end the following:
       ``(vi) Reduction for loans disbursed on or after october 1, 
     2007.--With respect to a loan on which the applicable 
     interest rate is determined under section 427A(l) and for 
     which the first disbursement of principal is made on or after 
     October 1, 2007, the special allowance payment computed 
     pursuant to this subparagraph shall be computed--

       ``(I) for loans held by an eligible lender not described in 
     subclause (II)--

       ``(aa) by substituting `1.24 percent' for `1.74 percent' in 
     clause (ii);
       ``(bb) by substituting `1.84 percent' for `2.34 percent' 
     each place the term appears in this subparagraph;
       ``(cc) by substituting `1.84 percent' for `2.64 percent' in 
     clause (iii); and
       ``(dd) by substituting `2.14 percent' for `2.64 percent' in 
     clause (iv); and

       ``(II) for loans held by an eligible not-for-profit 
     holder--

       ``(aa) by substituting `1.99 percent' for `2.34 percent' 
     each place the term appears in this subparagraph;
       ``(bb) by substituting `1.39 percent' for `1.74 percent' in 
     clause (ii);
       ``(cc) by substituting `1.99 percent' for `2.64 percent' in 
     clause (iii); and
       ``(dd) by substituting `2.29 percent' for `2.64 percent' in 
     clause (iv).''.
       (b) Increased Loan Fees From Lenders.--Paragraph (2) of 
     section 438(d) (20 U.S.C. 1087-1(d)(2)) is amended to read as 
     follows:
       ``(2) Amount of loan fees.--The amount of the loan fee 
     which shall be deducted under paragraph (1), but which may 
     not be collected from the borrower, shall be equal to 1.0 
     percent of the principal amount of the loan with respect to 
     any loan under this part for which the first disbursement was 
     made on or after October 1, 2007.''.

         TITLE IV--WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM

     SEC. 401. LOAN FORGIVENESS FOR PUBLIC SERVICE EMPLOYEES.

       Section 455 (as amended by sections 201(c), 202(b), and 
     203(c)) (20 U.S.C. 1087e) is further amended by adding at the 
     end the following:
       ``(m) Repayment Plan for Public Service Employees.--
       ``(1) In general.--The Secretary shall cancel the balance 
     of interest and principal due, in accordance with paragraph 
     (2), on any eligible Federal Direct Loan not in default for 
     an eligible borrower who--
       ``(A) has made 120 monthly payments on the Federal Direct 
     Loan after October 1, 2007, pursuant to any combination of--
       ``(i) payments under an income-based repayment plan under 
     section 455(d)(1)(D);
       ``(ii) payments under a standard repayment plan under 
     section 455(d)(1)(A); or
       ``(iii) monthly payments under a repayment plan under 
     section 455(d)(1) of not less than the monthly amount 
     calculated under section 455(d)(1)(A); and
       ``(B)(i) is employed in a public service job at the time of 
     such forgiveness; and
       ``(ii) has been employed in a public service job during the 
     period in which the borrower makes each of the 120 payments 
     described in subparagraph (A).
       ``(2) Loan cancellation amount.--After the conclusion of 
     the employment period described in paragraph (1), the 
     Secretary shall cancel the obligation to repay, for each year 
     during such period described in paragraph (1)(B)(ii) for 
     which the eligible borrower submits documentation to the 
     Secretary that the borrower's annual adjusted gross income or 
     annual earnings were less than or equal to $65,000, \1/10\ of 
     the amount of the balance of principal and interest due as of 
     the time of such cancellation, on the eligible Federal Direct 
     Loans made to the borrower under this part.
       ``(3) Definitions.--In this subsection:
       ``(A) Eligible borrower.--The term `eligible borrower' 
     means a borrower who submits documentation to the Secretary 
     that the borrower's annual adjusted gross income or annual 
     earnings is less than or equal to $65,000.
       ``(B) Eligible federal direct loan.--The term `eligible 
     Federal Direct Loan' means a Federal Direct Stafford Loan, 
     Federal Direct PLUS Loan, Federal Direct Unsubsidized Loan, 
     or a Federal Direct Consolidation Loan if such consolidation 
     loan was obtained by the borrower under section 428C(b)(5) or 
     in accordance with section 428C(a)(3)(B)(i)(V).
       ``(C) Public service job.--In this paragraph, the term 
     `public service job' means--
       ``(i) a full-time job in public emergency management, 
     government, public safety, public law enforcement, public 
     health, public education, public early childhood education, 
     public child care, social work in a public child or family 
     service agency, public services for individuals with 
     disabilities, public services for the elderly, public 
     interest legal services (including prosecution or public 
     defense), public library sciences, public school library 
     sciences, or other public school-based services; or
       ``(ii) teaching as a full-time faculty member at a Tribal 
     College or University as defined in section 316(b).''.

     SEC. 402. UNIT COST CALCULATION FOR GUARANTY AGENCY ACCOUNT 
                   MAINTENANCE FEES.

       Section 458(b) (20 U.S.C. 1087h(b)) is amended--
       (1) by striking ``Account'' and inserting the following:
       ``(1) For fiscal years 2006 and 2007.--For each of the 
     fiscal years 2006 and 2007, account''; and
       (2) by adding at the end the following:
       ``(2) For fiscal year 2008 and succeeding fiscal years.--
       ``(A) In general.--For fiscal year 2008 and each succeeding 
     fiscal year, the Secretary shall

[[Page S9664]]

     calculate the account maintenance fees payable to guaranty 
     agencies under subsection (a)(3), on a per-loan cost basis in 
     accordance with subparagraph (B).
       ``(B) Amount determination.--To determine the amount that 
     shall be paid under subsection (a)(3) per outstanding loan 
     guaranteed by a guaranty agency for fiscal year 2008 and 
     succeeding fiscal years, the Secretary shall--
       ``(i) establish the per-loan cost basis amount by dividing 
     the total amount of account maintenance fees paid under 
     subsection (a)(3) for fiscal year 2006 by the number of loans 
     under part B that were outstanding for that fiscal year; and
       ``(ii) for subsequent fiscal years, adjust the amount 
     determined under clause (i) as the Secretary determines 
     necessary to account for inflation.''.

                     TITLE V--FEDERAL PERKINS LOANS

     SEC. 501. DISTRIBUTION OF LATE COLLECTIONS.

       Section 466(b) (20 U.S.C. 1087ff(b)) is amended by striking 
     ``March 31, 2012'' and inserting ``September 30, 2012''.

                        TITLE VI--NEED ANALYSIS

     SEC. 601. SUPPORT FOR WORKING STUDENTS.

       (a) Dependent Students.--Subparagraph (D) of section 
     475(g)(2) (20 U.S.C. 1087oo(g)(2)(D)) is amended to read as 
     follows:
       ``(D) an income protection allowance of the following 
     amount (or a successor amount prescribed by the Secretary 
     under section 478):
       ``(i) for academic year 2009-2010, $3,750;
       ``(ii) for academic year 2010-2011, $4,500;
       ``(iii) for academic year 2011-2012, $5,250; and
       ``(iv) for academic year 2012-2013, $6,000;''.
       (b) Independent Students Without Dependents Other Than a 
     Spouse.--Clause (iv) of section 476(b)(1)(A) (20 U.S.C. 
     1087pp(b)(1)(A)(iv)) is amended to read as follows:
       ``(iv) an income protection allowance of the following 
     amount (or a successor amount prescribed by the Secretary 
     under section 478):

       ``(I) for single or separated students, or married students 
     where both are enrolled pursuant to subsection (a)(2)--

       ``(aa) for academic year 2009-2010, $7,000;
       ``(bb) for academic year 2010-2011, $7,780;
       ``(cc) for academic year 2011-2012, $8,550; and
       ``(dd) for academic year 2012-2013, $9,330; and

       ``(II) for married students where 1 is enrolled pursuant to 
     subsection (a)(2)--

       ``(aa) for academic year 2009-2010, $11,220;
       ``(bb) for academic year 2010-2011, $12,460;
       ``(cc) for academic year 2011-2012, $13,710; and
       ``(dd) for academic year 2012-2013, $14,960;''.
       (c) Independent Students With Dependents Other Than a 
     Spouse.--Paragraph (4) of section 477(b) (20 U.S.C. 
     1087qq(b)(4)) is amended to read as follows:
       ``(4) Income protection allowance.--The income protection 
     allowance is determined by the tables described in 
     subparagraphs (A) through (D) (or a successor table 
     prescribed by the Secretary under section 478).
       ``(A) Academic year 2009-2010.--For academic year 2009-
     2010, the income protection allowance is determined by the 
     following table:

                      ``Income Protection Allowance
------------------------------------------------------------------------
                                   Number in College
 Family Size  ----------------------------------------------------------
                    1           2           3           4          5
------------------------------------------------------------------------
           2      $17,720     $14,690
           3       22,060      19,050     $16,020
           4       27,250      24,220      21,210     $18,170
           5       32,150      29,120      26,100      23,070    $20,060
           6       37,600      34,570      31,570      28,520     25,520
------------------------------------------------------------------------
NOTE: For each additional family member, add $4,240.
For each additional college student, subtract $3,020.

       ``(B) Academic year 2010-2011.--For academic year 2010-
     2011, the income protection allowance is determined by the 
     following table:


                      ``Income Protection Allowance
------------------------------------------------------------------------
                                   Number in College
 Family Size  ----------------------------------------------------------
                    1           2           3           4          5
------------------------------------------------------------------------
           2      $19,690     $16,330
           3       24,510      21,160     $17,800
           4       30,280      26,910      23,560     $20,190
           5       35,730      32,350      29,000      25,640    $22,290
           6       41,780      38,410      35,080      31,690     28,350
------------------------------------------------------------------------
NOTE: For each additional family member, add $4,710.
For each additional college student, subtract $3,350.

       ``(C) Academic year 2011-2012.--For academic year 2011-
     2012, the income protection allowance is determined by the 
     following table:


                      ``Income Protection Allowance
------------------------------------------------------------------------
                                   Number in College
 Family Size  ----------------------------------------------------------
                    1           2           3           4          5
------------------------------------------------------------------------
           2      $21,660     $17,960
           3       26,960      23,280     $19,580
           4       33,300      29,600      25,920     $22,210
           5       39,300      35,590      31,900      28,200    $24,520
           6       45,950      42,250      38,580      34,860     31,190
------------------------------------------------------------------------
NOTE: For each additional family member, add $5,180.
For each additional college student, subtract $3,690.

       ``(D) Academic year 2012-2013.--For academic year 2012-
     2013, the income protection allowance is determined by the 
     following table:


                      ``Income Protection Allowance
------------------------------------------------------------------------
                                   Number in College
 Family Size  ----------------------------------------------------------
                    1           2           3           4          5
------------------------------------------------------------------------
           2      $23,630     $19,590
           3       29,420      25,400     $21,360
           4       36,330      32,300      28,280     $24,230
           5       42,870      38,820      34,800      30,770    $26,750
           6       50,130      46,100      42,090      38,030     34,020
------------------------------------------------------------------------
NOTE: For each additional family member, add $5,660.
For each additional college student, subtract $4,020.''.

       (d) Updated Tables and Amounts.--Section 478(b) (20 U.S.C. 
     1087rr(b)) is amended--
       (1) by striking paragraph (1) and inserting the following:
       ``(1) Revised tables.--
       ``(A) In general.--For each academic year after academic 
     year 2008-2009, the Secretary shall publish in the Federal 
     Register a revised

[[Page S9665]]

     table of income protection allowances for the purpose of such 
     sections, subject to subparagraphs (B) and (C).
       ``(B) Table for independent students.--
       ``(i) Academic years 2009-2010 through 2012-2013.--For each 
     of the academic years 2009-2010 through 2012-2013, the 
     Secretary shall not develop a revised table of income 
     protection allowances under section 477(b)(4) and the table 
     specified for such academic year under subparagraphs (A) 
     through (D) of such section shall apply.
       ``(ii) Other academic years.--For each academic year after 
     academic year 2012-2013, the Secretary shall develop the 
     revised table of income protection allowances by increasing 
     each of the dollar amounts contained in the table of income 
     protection allowances under section 477(b)(4)(D) by a 
     percentage equal to the estimated percentage increase in the 
     Consumer Price Index (as determined by the Secretary) between 
     December 2011 and the December next preceding the beginning 
     of such academic year, and rounding the result to the nearest 
     $10.
       ``(C) Table for parents.--For each academic year after 
     academic year 2008-2009, the Secretary shall develop the 
     revised table of income protection allowances under section 
     475(c)(4) by increasing each of the dollar amounts contained 
     in the table by a percentage equal to the estimated 
     percentage increase in the Consumer Price Index (as 
     determined by the Secretary) between December 1992 and the 
     December next preceding the beginning of such academic year, 
     and rounding the result to the nearest $10.''; and
       (2) in paragraph (2), by striking ``shall be developed'' 
     and all that follows through the period at the end and 
     inserting ``shall be developed for each academic year after 
     academic year 2012-2013, by increasing each of the dollar 
     amounts contained in such section for academic year 2012-2013 
     by a percentage equal to the estimated percentage increase in 
     the Consumer Price Index (as determined by the Secretary) 
     between December 2011 and the December next preceding the 
     beginning of such academic year, and rounding the result to 
     the nearest $10.''.
       (e) Effective Date.--The amendments made by this section 
     shall take effect on July 1, 2009.

     SEC. 602. AUTOMATIC ZERO IMPROVEMENTS.

       (a) In General.--Section 479(c) (20 U.S.C. 1087ss(c)) is 
     amended--
       (1) in paragraph (1)(B), by striking ``20,000'' and 
     inserting ``$30,000''; and
       (2) in paragraph (2)(B), by striking ``$20,000'' and 
     inserting ``$30,000''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on July 1, 2009.

     SEC. 603. DISCRETION OF STUDENT FINANCIAL AID ADMINISTRATORS.

       The third sentence of section 479A(a) (20 U.S.C. 1087tt(a)) 
     is amended--
       (1) by inserting ``or an independent student'' after 
     ``family member''; and
       (2) by inserting ``a change in housing status that results 
     in homelessness (as defined in section 103 of the McKinney-
     Vento Homeless Assistance Act),'' after ``under section 
     487,''.

     SEC. 604. DEFINITIONS.

       (a) In General.--Section 480 (20 U.S.C. 1087vv) is 
     amended--
       (1) in subsection (a)(2)--
       (A) by striking ``and no portion'' and inserting ``no 
     portion''; and
       (B) by inserting ``and no distribution from any qualified 
     education benefit described in subsection (f)(3) that is not 
     subject to Federal income tax,'' after ``1986,'';
       (2) in subsection (d)--
       (A) by redesignating paragraphs (1), (2), (3) through (6), 
     and (7) as subparagraphs (A), (B), (D) through (G), and (I), 
     respectively, and indenting appropriately;
       (B) by striking ``Independent Student.--The term'' and 
     inserting ``Independent Student.--
       ``(1) Definition.--The term'';
       (C) by striking subparagraph (B) (as redesignated by 
     subparagraph (A)) and inserting the following:
       ``(B) is an orphan, in foster care, or a ward of the court, 
     or was in foster care when the individual was 13 years of age 
     or older or a ward of the court until the individual reached 
     the age of 18;
       ``(C) is an emancipated minor or is in legal guardianship 
     as determined by a court of competent jurisdiction in the 
     individual's State of legal residence;'';
       (D) in subparagraph (G) (as redesignated by subparagraph 
     (A)), by striking ``or'' after the semicolon;
       (E) by inserting after subparagraph (G) (as redesignated by 
     subparagraph (A)) the following:
       ``(H) has been verified as an unaccompanied youth who is a 
     homeless child or youth (as such terms are defined in section 
     725 of the McKinney-Vento Homeless Assistance Act) during the 
     school year in which the application is submitted, by--
       ``(i) a local educational agency homeless liaison, 
     designated pursuant to section 722(g)(1)(J)(ii) of the 
     McKinney-Vento Homeless Assistance Act;
       ``(ii) the director of a program funded under the Runaway 
     and Homeless Youth Act or a designee of the director; or
       ``(iii) the director of a program funded under subtitle B 
     of title IV of the McKinney-Vento Homeless Assistance Act 
     (relating to emergency shelter grants) or a designee of the 
     director; or''; and
       (F) by adding at the end the following:
       ``(2) Simplifying the dependency override process.--A 
     financial aid administrator may make a determination of 
     independence under paragraph (1)(I) based upon a documented 
     determination of independence that was previously made by 
     another financial aid administrator under such paragraph in 
     the same award year.'';
       (3) in subsection (e)--
       (A) in paragraph (3), by striking ``and'' after the 
     semicolon;
       (B) in paragraph (4), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(5) special combat pay.'';
       (4) in subsection (f), by striking paragraph (3) and 
     inserting the following:
       ``(3) A qualified education benefit shall be considered an 
     asset of--
       ``(A) the student if the student is an independent student; 
     or
       ``(B) the parent if the student is a dependent student, 
     regardless of whether the owner of the account is the student 
     or the parent.'';
       (5) in subsection (j)--
       (A) in paragraph (2), by inserting ``, or a distribution 
     that is not includable in gross income under section 529 of 
     such Code, under another prepaid tuition plan offered by a 
     State, or under a Coverdell education savings account under 
     section 530 of such Code,'' after ``1986''; and
       (B) by adding at the end the following:
       ``(4) Notwithstanding paragraph (1), special combat pay 
     shall not be treated as estimated financial assistance for 
     purposes of section 471(3).''; and
       (6) by adding at the end the following:
       ``(n) Special Combat Pay.--The term `special combat pay' 
     means pay received by a member of the Armed Forces because of 
     exposure to a hazardous situation.''.

     SEC. 605. AUTHORIZATION AND APPROPRIATIONS.

       There are authorized to be appropriated, and there are 
     appropriated, out of any money in the Treasury not otherwise 
     appropriated, $10,000,000 for fiscal year 2008 for the 
     Department of Education to pay the estimated increase in 
     costs in the Federal Pell Grant program under section 401 of 
     the Higher Education Act of 1965 (20 U.S.C. 1070a) resulting 
     from the amendments made by sections 603 and 604 for award 
     year 2007-2008.

                        TITLE VII--MISCELLANEOUS

     SEC. 701. COMPETITIVE LOAN AUCTION PILOT PROGRAM.

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

 ``PART I--COMPETITIVE LOAN AUCTION PILOT PROGRAM; STATE GRANT PROGRAM

     ``SEC. 499. COMPETITIVE LOAN AUCTION PILOT PROGRAM.

       ``(a) Definitions.--In this section:
       ``(1) Eligible federal plus loan.--The term `eligible 
     Federal PLUS Loan' means a loan described in section 428B 
     made to a parent of a dependent student.
       ``(2) Eligible lender.--The term `eligible lender' has the 
     meaning given the term in section 435.
       ``(b) Pilot Program.--The Secretary shall carry out a pilot 
     program under which the Secretary establishes a mechanism for 
     an auction of eligible Federal PLUS Loans in accordance with 
     this subsection. The pilot program shall meet the following 
     requirements:
       ``(1) Planning and implementation.--During the period 
     beginning on the date of enactment of this section and ending 
     on June 30, 2009, the Secretary shall plan and implement the 
     pilot program under this subsection.
       ``(2) Origination and disbursement; applicability of 
     section 428b.--Beginning on July 1, 2009, the Secretary shall 
     arrange for the origination and disbursement of all eligible 
     Federal PLUS Loans in accordance with the provisions of this 
     subsection and the provisions of section 428B that are not 
     inconsistent with this subsection.
       ``(3) Loan origination mechanism.--The Secretary shall 
     establish a loan origination auction mechanism that meets the 
     following requirements:
       ``(A) Auction.--The Secretary administers an auction under 
     this paragraph for each State under which eligible lenders 
     compete to originate eligible Federal PLUS Loans under this 
     paragraph at all institutions of higher education within the 
     State.
       ``(B) Prequalification process.--The Secretary establishes 
     a prequalification process for eligible lenders desiring to 
     participate in an auction under this paragraph that contains, 
     at a minimum--
       ``(i) a set of borrower benefits and servicing requirements 
     each eligible lender shall meet in order to participate in 
     such an auction; and
       ``(ii) an assessment of each such eligible lender's 
     capacity, including capital capacity, to participate 
     effectively.
       ``(C) Timing and origination.--Each State auction takes 
     place every 2 years, and the eligible lenders with the 
     winning bids for the State are the only eligible lenders 
     permitted to originate eligible Federal PLUS Loans made under 
     this paragraph for the cohort of students at the institutions 
     of higher education within the State until the students 
     graduate from or leave the institutions of higher education.
       ``(D) Bids.--Each eligible lender's bid consists of the 
     amount of the special allowance payment (including the 
     recapture of excess interest) the eligible lender proposes to 
     accept from the Secretary with respect to the eligible 
     Federal PLUS Loans made under this paragraph in lieu of the 
     amount determined under section 438(b)(2)(I).
       ``(E) Maximum bid.--The maximum bid allowable under this 
     paragraph shall not exceed the amount of the special 
     allowance payable on eligible Federal PLUS Loans made under 
     this paragraph computed under section 438(b)(2)(I) (other 
     than clauses (ii), (iii), (iv), and (vi) of such section), 
     except that for purposes of the computation under this 
     subparagraph, section 438(b)(2)(I)(i)(III) shall be applied 
     by substituting `1.74 percent' for `2.34 percent'.
       ``(F) Winning bids.--The winning bids for each State 
     auction shall be the 2 bids containing the lowest and the 
     second lowest proposed special allowance payments, subject to 
     subparagraph (E).

[[Page S9666]]

       ``(G) Agreement with secretary.--Each eligible lender 
     having a winning bid under subparagraph (F) enters into an 
     agreement with the Secretary under which the eligible 
     lender--
       ``(i) agrees to originate eligible Federal PLUS Loans under 
     this paragraph to each borrower who--

       ``(I) seeks an eligible Federal PLUS Loan under this 
     paragraph to enable a dependent student to attend an 
     institution of higher education within the State;
       ``(II) is eligible for an eligible Federal PLUS Loan; and
       ``(III) elects to borrow from the eligible lender; and

       ``(ii) agrees to accept a special allowance payment 
     (including the recapture of excess interest) from the 
     Secretary with respect to the eligible Federal PLUS Loans 
     originated under clause (i) in the amount proposed in the 
     second lowest winning bid described in subparagraph (F) for 
     the applicable State auction.
       ``(H) Sealed bids; confidentiality.--All bids are sealed 
     and the Secretary keeps the bids confidential, including 
     following the announcement of the winning bids.
       ``(I) Eligible lender of last resort.--
       ``(i) In general.--In the event that there is no winning 
     bid under subparagraph (F), the students at the institutions 
     of higher education within the State that was the subject of 
     the auction shall be served by an eligible lender of last 
     resort, as determined by the Secretary.
       ``(ii) Determination of eligible lender of last resort.--
     Prior to the start of any auction under this paragraph, 
     eligible lenders that desire to serve as an eligible lender 
     of last resort shall submit an application to the Secretary 
     at such time and in such manner as the Secretary may 
     determine. Such application shall include an assurance that 
     the eligible lender will meet the prequalification 
     requirements described in subparagraph (B).
       ``(iii) Geographic location.--The Secretary shall identify 
     an eligible lender of last resort for each State.
       ``(iv) Notification timing.--The Secretary shall not 
     identify any eligible lender of last resort until after the 
     announcement of all the winning bids for a State auction for 
     any year.
       ``(J) Guarantee against losses.--The Secretary guarantees 
     the eligible Federal PLUS Loans made under this paragraph 
     against losses resulting from the default of a parent 
     borrower in an amount equal to 99 percent of the unpaid 
     principal and interest due on the loan.
       ``(K) Loan fees.--The Secretary shall not collect a loan 
     fee under section 438(d) with respect to an eligible Federal 
     Plus Loan originated under this paragraph.
       ``(L) Consolidation.--
       ``(i) In general.--An eligible lender who is permitted to 
     originate eligible Federal PLUS Loans for a borrower under 
     this paragraph shall have the option to consolidate such 
     loans into 1 loan.
       ``(ii) Notification.--In the event a borrower with eligible 
     Federal PLUS Loans made under this paragraph wishes to 
     consolidate the loans, the borrower shall notify the eligible 
     lender who originated the loans under this paragraph.
       ``(iii) Limitation on eligible lender option to 
     consolidate.--The option described in clause (i) shall not 
     apply if--

       ``(I) the borrower includes in the notification in clause 
     (ii) verification of consolidation terms and conditions 
     offered by an eligible lender other than the eligible lender 
     described in clause (i); and
       ``(II) not later than 10 days after receiving such 
     notification from the borrower, the eligible lender described 
     in clause (i) does not agree to match such terms and 
     conditions, or provide more favorable terms and conditions to 
     such borrower than the offered terms and conditions described 
     in subclause (I).

       ``(iv) Consolidation of additional loans.--If a borrower 
     has a Federal Direct PLUS Loan or a loan made on behalf of a 
     dependent student under section 428B and seeks to consolidate 
     such loan with an eligible Federal PLUS Loan made under this 
     paragraph, then the eligible lender that originated the 
     borrower's loan under this paragraph may include in the 
     consolidation under this subparagraph a Federal Direct PLUS 
     Loan or a loan made on behalf of a dependent student under 
     section 428B, but only if--

       ``(I) in the case of a Federal Direct PLUS Loan, the 
     eligible lender agrees, not later than 10 days after the 
     borrower requests such consolidation from the lender, to 
     match the consolidation terms and conditions that would 
     otherwise be available to the borrower if the borrower 
     consolidated such loans in the loan program under part D; or
       ``(II) in the case of a loan made on behalf of a dependent 
     student under section 428B, the eligible lender agrees, not 
     later than 10 days after the borrower requests such 
     consolidation from the lender, to match the consolidation 
     terms and conditions offered by an eligible lender other than 
     the eligible lender that originated the borrower's loans 
     under this paragraph.

       ``(v) Special allowance on consolidation loans that include 
     loans made under this paragraph.--The applicable special 
     allowance payment for loans consolidated under this paragraph 
     shall be equal to the lesser of--

       ``(I) the weighted average of the special allowance payment 
     on such loans, except that such weighted average shall 
     exclude the special allowance payment for any Federal Direct 
     PLUS Loan included in the consolidation; or
       ``(II) the result of--

       ``(aa) the average of the bond equivalent rates of the 
     quotes of the 3-month commercial paper (financial) rates in 
     effect for each of the days in such quarter as reported by 
     the Federal Reserve in Publication H-15 (or its successor) 
     for such 3-month period; plus
       ``(bb) 1.59 percent.
       ``(vi) Interest payment rebate fee.--Any loan under section 
     428C consolidated under this paragraph shall not be subject 
     to the interest payment rebate fee under section 428C(f).
       ``(c) College Access Partnership Grant Program.--
       ``(1) Purpose.--It is the purpose of this subsection to 
     make payments to States to assist the States in carrying out 
     the activities and services described in paragraph (7) in 
     order to increase access to higher education for students in 
     the State.
       ``(2) Authorization and appropriations.--There are 
     authorized to be appropriated, and there are appropriated, 
     $113,000,000 for each of the fiscal years 2008 and 2009 to 
     carry out this subsection.
       ``(3) Program authorized.--
       ``(A) Grants authorized.--From amounts appropriated under 
     paragraph (2), the Secretary shall award grants, from 
     allotments under paragraph (4), to States having applications 
     approved under paragraph (5), to enable the State to pay the 
     Federal share of the costs of carrying out the activities and 
     services described in paragraph (7).
       ``(B) Federal share; non-federal share.--
       ``(i) Federal share.--The amount of the Federal share under 
     this subsection for a fiscal year shall be equal to \2/3\ of 
     the costs of the activities and services described in 
     paragraph (7).
       ``(ii) Non-federal share.--The amount of the non-Federal 
     share under this subsection shall be equal to \1/3\ of the 
     costs of the activities and services described in paragraph 
     (7). The non-Federal share may be in cash or in-kind, and may 
     be provided from a combination of State resources and 
     contributions from private organizations in the State.
       ``(C) Reduction for failure to pay non-federal share.--If a 
     State fails to provide the full non-Federal share required 
     under this paragraph, the Secretary shall reduce the amount 
     of the grant payment under this subsection proportionately.
       ``(D) Temporary ineligibility for subsequent payments.--
       ``(i) In general.--The Secretary shall determine a State to 
     be temporarily ineligible to receive a grant payment under 
     this subsection for a fiscal year if--

       ``(I) the State fails to submit an annual report pursuant 
     to paragraph (9) for the preceding fiscal year; or
       ``(II) the Secretary determines, based on information in 
     such annual report, that the State is not effectively meeting 
     the conditions described under paragraph (8) and the goals of 
     the application under paragraph (5).

       ``(ii) Reinstatement.--If the Secretary determines a State 
     is ineligible under clause (i), the Secretary may enter into 
     an agreement with the State setting forth the terms and 
     conditions under which the State may regain eligibility to 
     receive payments under this subsection.
       ``(4) Determination of allotment.--
       ``(A) Amount of allotment.--Subject to subparagraph (B), in 
     making grant payments to States under this subsection, the 
     allotment to each State for a fiscal year shall be equal to 
     the sum of--
       ``(i) the amount that bears the same relation to 50 percent 
     of the amount appropriated under paragraph (2) for such 
     fiscal year as the number of residents in the State aged 5 
     through 17 who are living below the poverty line applicable 
     to the resident's family size (as determined under section 
     673(2) of the Community Service Block Grant Act) bears to the 
     total number of such residents in all States; and
       ``(ii) the amount that bears the same relation to 50 
     percent of the amount appropriated under paragraph (2) for 
     such fiscal year as the number of residents in the State aged 
     15 through 44 who are living below the poverty line 
     applicable to the individual's family size (as determined 
     under section 673(2) of the Community Service Block Grant 
     Act) bears to the total number of such residents in all 
     States.
       ``(B) Minimum amount.--No State shall receive an allotment 
     under this subsection for a fiscal year in an amount that is 
     less than \1/2\ of 1 percent of the total amount appropriated 
     under paragraph (2) for such fiscal year.
       ``(5) Submission and contents of application.--
       ``(A) In general.--For each fiscal year for which a State 
     desires a grant payment under paragraph (3), the State agency 
     with jurisdiction over higher education, or another agency 
     designated by the Governor of the State to administer the 
     program under this subsection, shall submit an application to 
     the Secretary at such time, in such manner, and containing 
     the information described in subparagraph (B).
       ``(B) Application.--An application submitted under 
     subparagraph (A) shall include the following:
       ``(i) A description of the State's capacity to administer 
     the grant under this subsection and report annually to the 
     Secretary on the activities and services described in 
     paragraph (7).
       ``(ii) A description of the State's plan for using the 
     grant funds to meet the requirements of paragraphs (7) and 
     (8), including plans for how the State will make special 
     efforts to provide such benefits to students in the State 
     that are underrepresented in postsecondary education.
       ``(iii) A description of how the State will provide or 
     coordinate the non-Federal share from State and private 
     funds, if applicable.
       ``(iv) A description of the existing structure that the 
     State has in place to administer the activities and services 
     under paragraph (7) or the plan to develop such 
     administrative capacity.
       ``(6) Payment to eligible nonprofit organizations.--A State 
     receiving a payment under this subsection may elect to make a 
     payment to 1 or more eligible nonprofit organizations, 
     including an eligible not-for-profit holder (as defined in 
     section 438(p)), or a partnership of such organizations, in 
     the State in order to carry out

[[Page S9667]]

     activities or services described in paragraph (7), if the 
     eligible nonprofit organization or partnership--
       ``(A) was in existence on the day before the date of 
     enactment of the Higher Education Access Act of 2007; and
       ``(B) as of the day of such payment, is participating in 
     activities and services related to increasing access to 
     higher education, such as those activities and services 
     described in paragraph (7).
       ``(7) Allowable uses.--
       ``(A) In general.--Subject to subparagraph (C), a State may 
     use a grant payment under this subsection only for the 
     following activities and services, pursuant to the conditions 
     under paragraph (8):
       ``(i) Information for students and families regarding--

       ``(I) the benefits of a postsecondary education;
       ``(II) postsecondary education opportunities;
       ``(III) planning for postsecondary education; and
       ``(IV) career preparation.

       ``(ii) Information on financing options for postsecondary 
     education and activities that promote financial literacy and 
     debt management among students and families.
       ``(iii) Outreach activities for students who may be at risk 
     of not enrolling in or completing postsecondary education.
       ``(iv) Assistance in completion of the Free Application for 
     Federal Student Aid or other common financial reporting form 
     under section 483(a).
       ``(v) Need-based grant aid for students.
       ``(vi) Professional development for guidance counselors at 
     middle schools and secondary schools, and financial aid 
     administrators and college admissions counselors at 
     institutions of higher education, to improve such 
     individuals' capacity to assist students and parents with--

       ``(I) understanding--

       ``(aa) entrance requirements for admission to institutions 
     of higher education; and
       ``(bb) State eligibility requirements for Academic 
     Competitiveness Grants or National SMART Grants under section 
     401A, and other financial assistance that is dependent upon a 
     student's coursework;

       ``(II) applying to institutions of higher education;
       ``(III) applying for Federal student financial assistance 
     and other State, local, and private student financial 
     assistance and scholarships;
       ``(IV) activities that increase students' ability to 
     successfully complete the coursework required for a 
     postsecondary degree, including activities such as tutoring 
     or mentoring; and
       ``(V) activities to improve secondary school students' 
     preparedness for postsecondary entrance examinations.

       ``(vii) Student loan cancellation or repayment (as 
     applicable), or interest rate reductions, for borrowers who 
     are employed in a high-need geographical area or a high-need 
     profession in the State, as determined by the State.
       ``(B) Prohibited uses.--Funds made available under this 
     subsection shall not be used to promote any lender's loans.
       ``(C) Use of funds for administrative purposes.--A State 
     may use not more than 2 percent of the total amount of the 
     Federal share and non-Federal share provided under this 
     subsection for administrative purposes relating to the grant 
     under this subsection.
       ``(8) Special conditions.--
       ``(A) Availability to students and families.--A State 
     receiving a grant payment under this subsection shall--
       ``(i) make the activities and services described in clauses 
     (i) through (vi) of paragraph (7)(A) that are funded under 
     the payment available to all qualifying students and families 
     in the State;
       ``(ii) allow students and families to participate in the 
     activities and services without regard to--

       ``(I) the postsecondary institution in which the student 
     enrolls;
       ``(II) the type of student loan the student receives;
       ``(III) the servicer of such loan; or
       ``(IV) the student's academic performance;

       ``(iii) not charge any student or parent a fee or 
     additional charge to participate in the activities or 
     services; and
       ``(iv) in the case of an activity providing grant aid, not 
     require a student to meet any condition other than 
     eligibility for Federal financial assistance under this 
     title, except as provided for in the loan cancellation or 
     repayment or interest rate reductions described in paragraph 
     (7)(A)(vii).
       ``(B) Priority.--A State receiving a grant payment under 
     this subsection shall, in carrying out any activity or 
     service described in paragraph (7)(A) with the grant funds, 
     prioritize students and families who are living below the 
     poverty line applicable to the individual's family size (as 
     determined under section 673(2) of the Community Service 
     Block Grant Act).
       ``(C) Disclosures.--
       ``(i) Organizational disclosures.--In the case of a State 
     that has chosen to make a payment to an eligible not-for-
     profit holder in the State in accordance with paragraph (6), 
     the holder shall clearly and prominently indicate the name of 
     the holder and the nature of its work in connection with any 
     of the activities carried out, or any information or services 
     provided, with such funds.
       ``(ii) Informational disclosures.--Any information about 
     financing options for higher education provided through an 
     activity or service funded under this subsection shall--

       ``(I) include information to students and the students' 
     parents of the availability of Federal, State, local, 
     institutional, and other grants and loans for postsecondary 
     education; and
       ``(II) present information on financial assistance for 
     postsecondary education that is not provided under this title 
     in a manner that is clearly distinct from information on 
     student financial assistance under this title.

       ``(D) Coordination.--A State receiving a grant payment 
     under this subsection shall attempt to coordinate the 
     activities carried out with the payment with any existing 
     activities that are similar to such activities, and with any 
     other entities that support the existing activities in the 
     State.
       ``(9) Report.--A State receiving a payment under this 
     subsection shall prepare and submit an annual report to the 
     Secretary on the program under this subsection and on the 
     implementation of the activities and services described in 
     paragraph (7). The report shall include--
       ``(A) each activity or service that was provided to 
     students and families over the course of the year;
       ``(B) the cost of providing each activity or service;
       ``(C) the number, and percentage, if feasible and 
     applicable, of students who received each activity or 
     service; and
       ``(D) the total contributions from private organizations 
     included in the State's non-Federal share for the fiscal 
     year.
       ``(10) Sunset.--The authority provided to carry out this 
     subsection shall expire on September 30, 2009.
       ``(d) Financial Literacy Program Established.--
       ``(1) Definition of eligible entity.--In this subsection, 
     the term `eligible entity' means a nonprofit or for-profit 
     organization, or a consortium of such organizations, with a 
     demonstrated record of effectiveness in providing financial 
     literacy services to students at the secondary and 
     postsecondary level.
       ``(2) Program established.--From amounts appropriated under 
     paragraph (6), the Secretary shall award grants to eligible 
     entities to enable the eligible entities to increase the 
     financial literacy of students who are enrolled or will 
     enroll in an institution of higher education, including 
     providing instruction to students on topics such as the 
     understanding of loan terms and conditions, the calculation 
     of interest rates, refinancing of debt, debt management, and 
     future savings for education, health care and long-term care, 
     and retirement.
       ``(3) Grant period; renewability.--Each grant under this 
     subsection shall be awarded for one 5-year period, and may 
     not be renewed.
       ``(4) Matching requirements.--Each eligible entity that 
     receives a grant under this subsection shall provide, from 
     non-Federal sources, an amount (which may be provided in cash 
     or in kind) to carry out the activities supported by the 
     grant equal to 100 percent of the amount received under the 
     grant.
       ``(5) Applications.--An eligible entity desiring a grant 
     under this subsection shall submit an application to the 
     Secretary at such time, in such manner, and containing such 
     information as the Secretary may reasonably require. Such 
     application shall include the following:
       ``(A) A detailed description of the eligible entity's plans 
     for providing financial literacy activities and the students 
     and schools the grant will target.
       ``(B) The eligible entity's plan for using the matching 
     grant funds, including how the funds will be used to provide 
     financial literacy programs to students.
       ``(C) A plan to ensure the viability of the work of the 
     eligible entity beyond the grant period.
       ``(D) A detailed description of the activities that carry 
     out this subsection and that are conducted by the eligible 
     entity at the time of the application, and how the matching 
     grant funds will assist the eligible entity with expanding 
     and enhancing such activities.
       ``(E) A description of the strategies that will be used to 
     target activities under the grant to students in secondary 
     school and enrolled in institutions of higher education who 
     are historically underrepresented in institutions of higher 
     education and who may benefit from the activities of the 
     eligible entity.
       ``(6) Authorization and appropriations.--There are 
     authorized to be appropriated, and there are appropriated, 
     $10,000,000 for each of the fiscal years 2008 and 2009 to 
     carry out this subsection.
       ``(e) Secondary School Graduation and College Enrollment 
     Program.--
       ``(1) Definitions.--In this subsection:
       ``(A) Eligible local educational agency.--
       ``(i) In general.--The term `eligible local educational 
     agency' means a local educational agency with a secondary 
     school graduation rate of 70 percent or less--

       ``(I) in the aggregate; or
       ``(II) applicable to 2 or more subgroups of secondary 
     school students served by the local educational agency that 
     are described in clause (ii).

       ``(ii) Subgroups.--A subgroup referred to in clause (i)(II) 
     is--

       ``(I) a subgroup of economically disadvantaged students; or
       ``(II) a subgroup of students from a major racial or ethnic 
     group.

       ``(B) Eligible entity.--The term `eligible entity' means a 
     consortium of a nonprofit organization and an institution of 
     higher education with a demonstrated record of effectiveness 
     in raising secondary school graduation rates and 
     postsecondary enrollment rates.
       ``(2) Program established.--From amounts appropriated under 
     paragraph (7), the Secretary shall award grants to eligible 
     entities to enable the eligible entities to carry out 
     activities that--
       ``(A) create models of excellence for academically rigorous 
     secondary schools, including early college secondary schools;
       ``(B) increase secondary school graduation rates;
       ``(C) raise the rate of students who enroll in an 
     institution of higher education;
       ``(D) improve instruction and access to supports for 
     struggling secondary school students;
       ``(E) create, implement, and utilize early warning systems 
     to help identify students at risk of dropping out of 
     secondary school; and

[[Page S9668]]

       ``(F) improve communication between parents, students, and 
     schools concerning requirements for secondary school 
     graduation, postsecondary education enrollment, and financial 
     assistance available for attending postsecondary education.
       ``(3) Use of funds.--An eligible entity that receives a 
     grant under this subsection shall use the funds--
       ``(A) to implement a college-preparatory curriculum for all 
     students in a secondary school served by the eligible local 
     educational agency that is, at a minimum, aligned with a 
     rigorous secondary school program of study;
       ``(B) to implement accelerated academic catch-up programs, 
     for students who enter secondary school not meeting the 
     proficient levels of student academic achievement on the 
     State academic assessments for mathematics, reading or 
     language arts, or science under section 1111(b)(3) of the 
     Elementary and Secondary Education Act of 1965, that enable 
     such students to meet the proficient levels of achievement 
     and remain on track to graduate from secondary school on time 
     with a regular secondary school diploma;
       ``(C) to implement an early warning system to quickly 
     identify students at risk of dropping out of secondary 
     school, including systems that track student absenteeism; and
       ``(D) to implement a comprehensive postsecondary education 
     guidance program that--
       ``(i) will ensure that all students are regularly notified 
     throughout the students' time in secondary school of 
     secondary school graduation requirements and postsecondary 
     education entrance requirements; and
       ``(ii) provides guidance and assistance to students in 
     applying to an institution of higher education and in 
     applying for Federal financial assistance and other State, 
     local, and private financial assistance and scholarships.
       ``(4) Grant period; renewability.--Each grant under this 
     subsection shall be awarded for one 5-year period, and may 
     not be renewed.
       ``(5) Matching requirements.--Each eligible entity that 
     receives a grant under this subsection shall provide, from 
     non-Federal sources, an amount (which may be provided in cash 
     or in-kind) to carry out the activities supported by the 
     grant equal to 100 percent of the amount received under the 
     grant.
       ``(6) Applications.--An eligible entity desiring a grant 
     under this subsection shall submit an application to the 
     Secretary at such time, in such manner, and containing such 
     information as the Secretary may reasonably require.
       ``(7) Authorization and appropriations.--There are 
     authorized to be appropriated, and there are appropriated, 
     $25,000,000 for each of the fiscal years 2008 and 2009 to 
     carry out this subsection.''.

     SEC. 702. INNOCENT CHILD PROTECTION.

       (a) In General.--It shall be unlawful for any authority, 
     military or civil, of the United States, a State, or any 
     district, possession, commonwealth or other territory under 
     the authority of the United States, to carry out a sentence 
     of death on a woman while she carries a child in utero.
       (b) Definition.--In this section, the term ``child in 
     utero'' means a member of the species homo sapiens, at any 
     stage of development, who is carried in the womb.

                       TITLE VIII--OTHER MATTERS

     SEC. 801. SENSE OF SENATE ON THE DETAINEES AT GUANTANAMO BAY, 
                   CUBA.

       (a) Findings.--The Senate makes the following findings:
       (1) During the War on Terror, senior members of al Qaeda 
     have been captured by the United States military and 
     intelligence personnel and their allies.
       (2) Many such senior members of al Qaeda have since been 
     transferred to the detention facility at Guantanamo Bay, 
     Cuba.
       (3) These senior al Qaeda members detained at Guantanamo 
     Bay include Khalid Sheikh Mohammed, who was the mastermind 
     behind the terrorist attacks of September 11, 2001, which 
     killed approximately 3,000 innocent people.
       (4) These senior al Qaeda members detained at Guantanamo 
     Bay also include Majid Khan, who was tasked to develop plans 
     to poison water reservoirs inside the United States, was 
     responsible for conducting a study on the feasibility of a 
     potential gas station bombing campaign inside the United 
     States, and was integral in recommending Iyman Farris, who 
     plotted to destroy the Brooklyn Bridge, to be an operative 
     for al Qaeda inside the United States.
       (5) These senior al Qaeda members detained at Guantanamo 
     Bay also include Abd al-Rahim al-Nashiri, who was an al Qaeda 
     operations chief for the Arabian Peninsula and who, at the 
     request of Osama bin Laden, orchestrated the attack on the 
     U.S.S. Cole, which killed 17 United States sailors.
       (6) These senior al Qaeda members detained at Guantanamo 
     Bay also include Ahmed Khalfan Ghailani, who played a major 
     role in the East African Embassy Bombings, which killed more 
     than 250 people.
       (7) The Department of Defense has estimated that of the 
     approximately 415 detainees who have been released or 
     transferred from the detention facility at Guantanamo Bay, at 
     least 29 have subsequently taken up arms against the United 
     States and its allies.
       (8) Osama bin Laden, the leader of al Qaeda, said in his 
     1998 fatwa against the United States, that ``[t]he ruling to 
     kill the Americans and their allies--civilians and military--
     is an individual duty for every Muslim who can do it in any 
     country in which it is possible to do it''.
       (9) In the same fatwa, bin Laden said, ``[w]e--with God's 
     help--call on every Muslim who believes in God and wishes to 
     be rewarded to comply with God's order to kill the Americans 
     and plunder their money wherever and whenever they find it''.
       (10) It is safer for American citizens if captured members 
     of al Qaeda and other terrorist organizations are not housed 
     on American soil where they could more easily carry out their 
     mission to kill innocent civilians.
       (b) Sense of Senate.--It is the sense of the Senate that 
     detainees housed at Guantanamo Bay, Cuba, including senior 
     members of al Qaeda, should not be released into American 
     society, nor should they be transferred stateside into 
     facilities in American communities and neighborhoods.

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