[House Report 104-153]
[From the U.S. Government Publishing Office]
104th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 104-153
_______________________________________________________________________
PRIVATIZATION ACT OF 1995
_______________________________________________________________________
June 22, 1995.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Goodling, from the Committee on Economic and Educational
Opportunities, submitted the following
R E P O R T
together with
MINORITY AND ADDITIONAL VIEWS
[To accompany H.R. 1720]
[Including cost estimate of the Congressional Budget Office]
The Committee on Economic and Educational Opportunities, to
whom was referred the bill (H.R. 1720) to amend the Higher
Education Act of 1965 to provide for the cessation of Federal
sponsorship of two Government sponsored enterprises, and for
other purposes, having considered the same, report favorably
thereon with an amendment and recommend that the bill as
amended do pass.
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE; REFERENCES.
(a) Short Title.--This Act may be cited as the ``Privatization Act of
1995''.
(b) References.--References in this Act to ``the Act'' are references
to the Higher Education Act of 1965.
SEC. 2. PURPOSE.
The purpose of this Act is to provide for the cessation of Federal
sponsorship of two Government sponsored enterprises, the Student Loan
Marketing Association and the College Construction Loan Insurance
Association now that both corporations are economically viable and have
successfully fulfilled the purposes for which they were created.
TITLE I--STUDENT LOAN MARKETING ASSOCIATION
SEC. 101. REORGANIZATION OF THE STUDENT LOAN MARKETING ASSOCIATION
THROUGH THE FORMATION OF A HOLDING COMPANY.
(a) Amendment.--Part B of title IV of the Act (20 U.S.C. 1071 et
seq.) is amended by inserting after section 439 (20 U.S.C. 1087-2) the
following new section:
``SEC. 440. REORGANIZATION OF THE STUDENT LOAN MARKETING ASSOCIATION
THROUGH THE FORMATION OF A HOLDING COMPANY.
``(a) Actions by the Association's Board of Directors.--The Board of
Directors of the Association shall take or cause to be taken all such
action as it deems necessary or appropriate to effect, upon the
shareholder approval described in subsection (b), a restructuring of
the common stock ownership of the Association, as set forth in a plan
of reorganization adopted by the Board of Directors (the terms of which
shall be consistent with this Act) so that all of the outstanding
common shares shall be directly owned by an ordinary business
corporation chartered under State or District of Columbia law (the
`Holding Company'), as the Board of Directors may determine. Such
actions may include, in the Board's discretion, a merger of a wholly
owned subsidiary of the Holding Company with and into the Association,
which would have the effect provided in the plan of reorganization and
the law of the jurisdiction in which such subsidiary is incorporated.
As part of the restructuring, the Board of Directors may cause (1) the
common shares of the Association to be converted, at the reorganization
effective date, to common shares of the Holding Company on a one for
one basis, consistent with applicable State or District of Columbia
law, and (2) Holding Company common shares to be registered with the
Securities and Exchange Commission.
``(b) Shareholder Approval.--The plan of reorganization adopted by
the Board of Directors pursuant to subsection (a) shall be submitted to
common stockholders of the Association for their approval. The
reorganization shall occur at the reorganization effective date,
provided that the plan of reorganization has been approved by the
affirmative votes, cast in person or by proxy, of the holders of a
majority of the issued and outstanding shares of the Association common
stock.
``(c) Transition.--
``(1) In general.--Except as specifically provided in this
section, until the dissolution date the Association shall
continue to have all of the rights, privileges and obligations
set forth in, and shall be subject to all of the limitations
and restrictions of, section 439 of this Act as in effect on
the effective date of this section, and the Association shall
continue to carry out the purposes of such section. The Holding
Company and its affiliates other than the Association shall not
be entitled to any of the rights, privileges and obligations,
and shall not be subject to the limitations and restrictions,
applicable to the Association under section 439 of this Act as
in effect on the effective date of this section, except as
specifically provided in this section. The Holding Company and
its subsidiaries (other than the Association) shall not
purchase loans insured under this Act until such time as the
Association ceases acquiring such loans, except that the
Association shall continue to acquire loans as a lender of last
resort pursuant to section 439(q) of this Act or under an
agreement with the Secretary described in section 440(c)(6).
``(2) Transfer of certain property.--Except as specifically
provided in this section, at the reorganization effective date
or as soon as practicable thereafter, the Association shall use
its best efforts to transfer to the Holding Company or its
subsidiaries (or both), in each case, as directed by the
Holding Company, all real and personal property of the
Association (both tangible and intangible) other than the
remaining property. Without limiting the preceding sentence,
such transferred property shall include all right, title and
interest in (A) direct or indirect subsidiaries of the
Association (excluding any interest in any government sponsored
enterprise), (B) contracts, leases, and other agreements, (C)
licenses and other intellectual property, and (D) any other
property of the Association. Notwithstanding the preceding
provisions of this paragraph, nothing in this paragraph shall
be construed to prohibit the Association from transferring
remaining property from time to time to the Holding Company or
its subsidiaries, subject to the provisions of paragraph (4).
``(3) Transfer of personnel.--At the reorganization effective
date, employees of the Association shall become employees of
the Holding Company (or of the subsidiaries), and the Holding
Company (or the subsidiaries or both) shall provide all
necessary and appropriate management and operational support
(including loan servicing) to the Association, as requested by
the Association. The Association may, however, obtain such
management and operational support from other persons or
entities.
``(4) Dividends.--The Association may pay dividends in the
form of cash or noncash distributions so long as at the time of
the declaration of such dividends, after giving effect to the
payment of such dividends as of the date of such declaration by
the Board of Directors of the Association, the Association's
capital would be in compliance with the capital standards set
forth in section 439(r) of this Act. If, at any time after the
reorganization effective date, the Association fails to comply
with such capital standards, the Holding Company shall be
obligated to transfer to the Association additional capital in
such amounts as are necessary to ensure that the Association
again complies with the capital standards.
``(5) Valuation of noncash distributions.--After the
reorganization effective date, any distribution of noncash
assets by the Association to the Holding Company shall be
valued at book value on the date the Association's Board of
Directors approved such distribution for purposes of
calculating compliance with section 439(r) of this Act.
``(6) Restrictions on new business activity or acquisition of
assets by association.--After the reorganization effective
date, the Association shall not engage in any new business
activities or acquire any additional assets other than--
``(A) in connection with (i) student loan purchases
through September 30, 2003, and (ii) contractual
commitments for future warehousing advances or pursuant
to letters of credit or standby bond purchase
agreements which are outstanding as of the
reorganization effective date;
``(B) in connection with its serving as a lender-of-
last-resort pursuant to section 439 of this Act; and
``(C) in connection with its purchase of loans
insured under this part, if the Secretary, with the
approval of the Secretary of the Treasury, enters into
an agreement with the Association for the continuation
or resumption of its secondary market purchase program
because the Secretary determines there is inadequate
liquidity for loans made under this part.
The Secretary is authorized to enter into an agreement
described in subparagraph (C) with the Association covering
such secondary market activities.
Any agreement entered into under subparagraph (C) shall cover a
period of 12 months, but may be renewed if the Secretary
determines that liquidity remains inadequate. The fee provided
under section 439(h)(7) shall not apply to loans acquired under
any such agreement with the Secretary.
``(7) Issuance of debt obligations during the transition
period; attributes of debt obligations.--After the
reorganization effective date, the Association shall not issue
debt obligations which mature later than September 30, 2004,
except in connection with serving as a lender-of-last-resort
pursuant to section 439 of this Act or with purchasing loans
under an agreement with the Secretary as described in paragraph
(6) of this subsection. Nothing in this subsection shall modify
the attributes accorded the debt obligations of the Association
by section 439, regardless of whether such debt obligations are
incurred prior to, or at any time following, the reorganization
effective date or are transferred to a trust in accordance with
subsection (d).
``(8) Monitoring of safety and soundness.--
``(A) Obligation to obtain, maintain, and report
information.--The Association shall obtain such
information and make and keep such records as the
Secretary of the Treasury may from time to time
prescribe concerning (i) the financial risk to the
Association resulting from the activities of any of its
associated persons, to the extent such activities are
reasonably likely to have a material impact on the
financial condition of the Association, including its
capital ratio, its liquidity, or its ability to conduct
and finance its operations, and (ii) the Association's
policies, procedures, and systems for monitoring and
controlling any such financial risk. The Association's
obligations under this subsection with respect to any
associated person which is a third party servicer (as
defined in 34 C.F.R. 682.200(b)) shall be limited to
providing to the Secretary of the Treasury copies of
any reports or other information provided to the
Secretary of Education pursuant to 34 C.F.R. 682.200 et
seq. The Secretary of the Treasury may require summary
reports of such information to be filed no more
frequently than quarterly. For purposes of this
paragraph, the term `associated person' shall mean any
person, other than a natural person, directly or
indirectly controlling, controlled by, or under common
control with the Association.
``(B) Separate operation of corporations.--
``(i) The funds and assets of the Association
shall at all times be maintained separately
from the funds and assets of the Holding
Company or any of its other subsidiaries and
may be used solely by the Association to carry
out its purposes and to fulfill its
obligations.
``(ii) The Association shall maintain books
and records that clearly reflect the assets and
liabilities of the Association, separate from
the assets and liabilities of the Holding
Company or any of its other subsidiaries.
``(iii) The Association shall maintain a
corporate office that is physically separate
from any office of the Holding Company or any
of its subsidiaries.
``(iv) No director of the Association that is
appointed by the President pursuant to section
439(c)(1)(A) may serve as a director of the
Holding Company.
``(v) At least one officer of the Association
shall remain an officer solely of the
Association.
``(vi) Transactions between the Association
and the Holding Company or its other
subsidiaries, including any loan servicing
arrangements, shall be on terms no less
favorable to the Association than the
Association could obtain from an unrelated
third party.
``(vii) The Association shall not extend
credit to the Holding Company or any of its
affiliates, nor guarantee or provide any credit
enhancement to any debt obligations of the
Holding Company or any of its affiliates.
``(viii) Any amounts collected on behalf of
the Association by the Holding Company or any
of its other subsidiaries with respect to the
assets of the Association, pursuant to a
servicing contract or other arrangement between
the Association and the Holding Company or any
of its other direct or indirect subsidiaries,
shall be collected solely for the benefit of
the Association and shall be immediately
deposited by the Holding Company or such other
subsidiary to an account under the sole control
of the Association.
``(C) Encumbrance of assets.--Notwithstanding any
otherwise applicable Federal or State law, rule, or
regulation, or legal or equitable principle, doctrine,
or theory to the contrary, under no circumstances shall
the assets of the Association be available or used to
pay claims or debts of or incurred by the Holding
Company. Nothing in this subparagraph shall limit the
right of the Association to pay dividends not otherwise
prohibited hereunder or limit any liability of the
Holding Company explicitly provided for in this part.
``(D) Holding company activities.--After the
reorganization effective date and prior to the
dissolution of the Association in accordance with
section 440(d), Holding Company activities shall be
limited to ownership of the Association and any other
subsidiaries. All business activities shall be
conducted through subsidiaries.
``(9) Association board of directors.--Notwithstanding any
other provision of part B of this title, after the
reorganization effective date, the 14 directors of the
Association elected by the Association's stockholders (which
immediately after the reorganization effective date shall be
the Holding Company) shall no longer be required to meet the
eligibility requirements set forth in section 439(c).
``(10) Issuance of stock warrants.--At the reorganization
effective date, the Holding Company shall issue to the
Secretary of the Treasury 200,000 stock warrants, each
entitling the holder of the stock warrant to purchase from the
Holding Company one share of the registered common stock of the
Holding Company at any time on or before September 30, 2007.
The exercise price for such warrants shall be an amount equal
to the average closing price of the common stock of the
Association for the 20 business days prior to and including the
date of enactment of this section on the exchange or market
which is then the primary exchange or market for the common
stock of the Association, subject to any adjustments necessary
to reflect the conversion of Association common stock into
Holding Company common stock as part of the plan of
reorganization approved by the Association's shareholders.
``(11) Restrictions on transfer of association shares and
bankruptcy of association.--After the reorganization effective
date, the Holding Company shall not sell, pledge, or otherwise
transfer the outstanding shares of the Association, or agree to
or cause the liquidation of the Association to file a petition
of bankruptcy under title 11, United States Code, without prior
approval of the Secretary of the Treasury and the Secretary of
Education.
``(d) Termination of the Association.--The Association shall
dissolve, and its separate existence shall terminate on September 30,
2007, after discharge of all outstanding debt obligations and
liquidation pursuant to this subsection. The Association may dissolve
pursuant to this subsection prior to such date by notifying the
Secretary of Education and the Secretary of the Treasury of its
intention to dissolve, unless within 60 days of receipt of such notice
the Secretary of Education notifies the Association that it continues
to be needed to serve as a lender of last resort pursuant to section
439(q) of this Act or continues to be needed to purchase loans under an
agreement with the Secretary described in subsection (c)(6) of this
section. On the dissolution date, the Association shall take the
following actions:
``(1) Establishment of a trust.--The Association shall, under
the terms of an irrevocable trust agreement in form and
substance satisfactory to the Secretary of the Treasury, the
Association and the appointed trustee, irrevocably transfer all
remaining obligations of the Association to the trust and
irrevocably deposit or cause to be deposited into such trust,
to be held as trust funds solely for the benefit of holders of
the remaining obligations, money or direct noncallable
obligations of the United States of America or any agency
thereof for which payment the full faith and credit of the
United States is pledged, maturing as to principal and interest
in such amounts and at such times as are determined by the
Secretary of the Treasury to be sufficient, without
consideration of any significant reinvestment of such interest,
to pay the principal of, and interest on, the remaining
obligations in accordance with their terms. To the extent the
Association cannot provide money or qualifying obligations in
the amount required, the Holding Company shall be required to
transfer money or qualifying obligations to the trust in the
amount necessary to prevent any deficiency.
``(2) Use of trust assets.--All money, obligations, or
financial assets deposited into the trust pursuant to this
subsection shall be applied by the trustee to the payment of
the remaining obligations assumed by the trust. Upon the
fulfillment of the trustee's duties under the trust, any
remaining assets of the trust shall be transferred to the
Holding Company or its subsidiaries, or both, as directed by
the Holding Company.
``(3) Obligations not transferred to the trust.--The
Association shall make proper provision for all other
obligations of the Association, including the repurchase or
redemption, or the making of proper provision for the
repurchase or redemption, of any preferred stock of the
Association then outstanding. Any obligations of the
Association which cannot be fully satisfied shall become
liabilities of the Holding Company as of the date of
dissolution.
``(4) Transfer of remaining assets.--After compliance with
paragraphs (1), (2), and (3), the Association shall transfer to
the Holding Company any remaining assets of the Association.
``(e) Operation of the Holding Company.--
``(1) Holding company board of directors.--The number and
composition of the Board of Directors of the Holding Company
shall be determined as set forth in the Holding Company's
charter or like instrument (as amended from time to time) or
bylaws (as amended from time to time) and as permissible under
the laws of the jurisdiction of its incorporation.
``(2) Holding company name.--The names of the Holding Company
and any direct or indirect subsidiary of the Holding Company
other than the Association may not contain the name `Student
Loan Marketing Association' or `Sallie Mae'.
``(3) Use of sallie mae name.--Subject to paragraph (2), the
Association may assign to the Holding Company, or any direct or
indirect subsidiary of the Holding Company other than the
Association, the `Sallie Mae' name as a trademark and service
mark, except that neither the Holding Company nor any direct or
indirect subsidiary of the Holding Company may use the `Sallie
Mae' name on, or to identify the issuer of, any debt obligation
or other security offered or sold by the Holding Company or any
direct or indirect subsidiary. The Association shall remit to
the Secretary of Treasury $5,000,000 during fiscal year 1996 as
compensation for the right to assign such trademark or service
mark.
``(4) Disclosure required.--Until 3 years after the
dissolution date, the Holding Company, and any direct or
indirect subsidiary of the Holding Company other than the
Association, shall prominently display in any document offering
its securities, and in any advertisement or promotional
materials which use the `Sallie Mae' name or mark, a statement
that--
``(A) neither the Holding Company nor any such
subsidiary is a Government-sponsored enterprise or
instrumentality of the United States; and
``(B) the obligations of the Holding Company and any
such subsidiary are not guaranteed by the full faith
and credit of the United States.
``(f) Strict Construction.--Except as specifically set forth in this
section, nothing contained in this section shall be construed to limit
the authority of the Association as a federally chartered corporation,
or of the Holding Company as a State or District of Columbia chartered
corporation.
``(g) Right To Enforce.--The Secretary of Education or the Secretary
of the Treasury, as appropriate, may request the Attorney General of
the United States to bring an action in the United States District
Court for the District of Columbia for the enforcement of any
provisions of this section, or may, under the direction or control of
the Attorney General, bring such an action. Such court shall have
jurisdiction and power to order and require compliance with this
section.
``(h) Deadline for Reorganization Effective Date.--This section shall
be of no further force and effect in the event that the reorganization
effective date does not occur on or before 18 months after the date of
enactment of this section.
``(i) Definitions.--For purposes of this section:
``(1) The term `Association' means the Student Loan Marketing
Association.
``(2) The term `dissolution date' shall mean September 30,
2007, or such earlier date as the Secretary of Education
permits the transfer of remaining obligations in accordance
with subsection (d) of this section.
``(3) The term `reorganization effective date' means the
effective date of the reorganization as determined by the Board
of Directors of the Association, which shall not be earlier
than the date that stockholder approval is obtained pursuant to
subsection (b) of this section and shall not be later than the
date that is 18 months after the date of enactment of this
section.
``(4) The term `Holding Company' means the new business
corporation formed pursuant to this section by the Association
under the laws of any State of the United States or the
District of Columbia.
``(5) The term `remaining obligations' shall mean the debt
obligations of the Association outstanding as of the
dissolution date.
``(6) The term `remaining property' shall mean the following
assets and liabilities of the Association which are outstanding
as of the reorganization effective date: (A) debt obligations
issued by the Association, (B) contracts relating to interest
rate, currency, or commodity positions or protections, (C)
investment securities owned by the Association, (D) any
instruments, assets, or agreements described in section 439(d)
of this Act (including without limitation all student loans,
forward purchase and lending commitments, warehousing advances,
academic facilities obligations, letters of credit, standby
bond purchase agreements, liquidity agreements, and student
loan revenue bonds or other loans), and (E) except as
specifically prohibited by this Act, any other nonmaterial
assets or liabilities of the Association which the
Association's Board of Directors determines to be necessary or
appropriate to its operations.
``(7) The term `reorganization' means the restructuring event
or events (including any merger event) giving effect to the
holding company structure described in subsection (a) of this
section.
``(8) The term `subsidiaries' shall mean one or more direct
or indirect subsidiaries of the Holding Company.''.
(b) Technical Amendments.--
(1) Amendments to the higher education act.--Effective on the
reorganization effective date (as defined in section 440(h)(3)
of the Act, as added by subsection (a))--
(A) section 435(d)(1)(F) of the Act (20 U.S.C.
1085(d)(1)(F)) is amended by inserting after ``Student
Loan Marketing Association'' the following: ``or the
Holding Company of the Student Loan Marketing
Association, including all subsidiaries of such Holding
Company, created pursuant to section 440 of this
Act,''; and
(B) sections 435(d)(1)(G) and 428C(a)(1)(A) of such
Act (20 U.S.C. 1085(d)(1)(G); 1078-3(a)(1)(A)) are each
amended by inserting after ``Student Loan Marketing
Association'' the following: ``or the Holding Company
of the Student Loan Marketing Association, including
all subsidiaries of such Holding Company, created
pursuant to section 440 of this Act''.
(2) Enforcement of safety and soundness requirements.--
Section 439(r) of the Act (20 U.S.C. 1087-2(r)) is amended--
(A) by redesignating paragraph (13) as paragraph
(15); and
(B) by inserting after paragraph (12) the following
new paragraph:
``(13) Enforcement of safety and soundness requirements.--The
Secretary of Education or the Secretary of the Treasury, as
appropriate, may request the Attorney General of the United
States to bring an action in the United States District Court
for the District of Columbia for the enforcement of any
provisions of this subsection, or may, under the direction or
control of the Attorney General, bring such an action. Such
court shall have jurisdiction and power to order and require
compliance with this subsection.''.
(3) Capital ratio amendments.--Section 439(r) of the Act is
further amended--
(A) in paragraph (1)--
(i) by striking ``and'' at the end of
subparagraph (A);
(ii) by striking the period at the end of
subparagraph (B) and inserting ``; and''; and
(iii) by adding at the end the following new
subparagraph:
``(C) within 45 days of the end of each calendar
quarter, (i) financial statements of the Association,
and (ii) a report setting forth the calculation of the
capital ratio of the Association.'';
(B) in paragraph (11), by striking ``paragraphs (4)
and (6)(A)'' and inserting ``paragraphs (4), (6)(A),
and (14)''; and
(C) by inserting after paragraph (13) (as added by
paragraph (2) of this subsection) the following new
paragraph:
``(14) Actions by secretary.--If the shareholders of the
Association shall have approved a reorganization plan in
accordance with section 440(b) and, for any quarter after
January 1, 2000, the Association shall have a capital ratio of
less than 2.25 percent, the Secretary of the Treasury may,
until such capital ratio is met, take any one or more of the
actions described in paragraph (7), except that--
``(A) the capital ratio to be restored pursuant to
paragraph (7)(D) shall be 2.25 percent; and
``(B) if the relevant capital ratio is in excess of
or equal to 2 percent for such quarter, the Secretary
of the Treasury shall defer taking any of the actions
set forth in paragraph (7) until the next succeeding
quarter and may then proceed with any such action only
if the capital ratio of the Association remains below
2.25 percent.
Upon approval by the shareholders of the Association of a
reorganization plan in accordance with section 440(b) for any
period after January 1, 2000, the provisions of paragraphs (4),
(5), (6), (8), (9), and (10) shall be of no further application
to the Association.''.
(4) Repeal of the association's charter.--Effective on the
dissolution date (as defined in section 440(h)(2) of the Act,
as added by subsection (a)), section 439 of the Act (20 U.S.C.
1087-2) is repealed.
TITLE II--COLLEGE CONSTRUCTION LOAN INSURANCE ASSOCIATION
SEC. 201. PRIVATIZATION OF COLLEGE CONSTRUCTION LOAN INSURANCE
ASSOCIATION.
(a) Repeal of Statutory Restrictions.--Part D of title VII of the Act
(20 U.S.C. 1132f et seq.) is repealed.
(b) Status of the Corporation.--
(1) Status of the corporation.--The Corporation shall not be
an agency, instrumentality, or establishment of the United
States Government and shall not be a ``Government corporation''
nor a ``Government controlled corporation'' as defined in
section 103 of title 5, United States Code. No action under
section 1491 of title 28, United States Code (commonly known as
the Tucker Act) shall be allowable against the United States
based on the actions of the Corporation.
(2) Corporate powers.--The Corporation shall have the power
to engage in any business or other activities for which
corporations may be organized under the laws of any State of
the United States or the District of Columbia. The Corporation
shall have the power to enter into contracts, to execute
instruments, to incur liabilities, to provide products and
services, and to do all things as are necessary or incidental
to the proper management of its affairs and the efficient
operation of a private, for-profit business.
(c) Related Privatization Requirements.--
(1) Notice requirements.--During the 5-year period following
the date of the enactment of this Act, the Corporation shall
include in any document offering the Corporation's securities,
or in any contracts for insurance, guarantee, or reinsurance of
obligations, a statement that--
(A) the Corporation is not a Government-sponsored
enterprise or instrumentality of the United States; and
(B) the Corporation's obligations are not guaranteed
by the full faith and credit of the United States.
(2) Corporate charter.--The Corporation's charter shall be
amended as necessary and without delay to conform the
requirements of this Act.
(3) Corporate name.--The name of the Corporation, or of any
direct or indirect subsidiary thereof, may not contain the term
``College Construction Loan Insurance Association''.
(4) Articles of incorporation.--The Corporation shall amend
its articles of incorporation without delay to reflect that one
of the purposes of the Corporation shall be to guarantee,
insure and reinsure bonds, leases, and other evidences of debt
of educational institutions, including Historically Black
Colleges and Universities and other academic institutions which
are ranked in the lower investment grade category using a
nationally recognized credit rating system.
(5) Transition requirements.--
(A) Requirements until stock sale.--Notwithstanding
subsection (a), the requirements of section 754 of the
Act (20 U.S.C. 1132f-3), as in existence as of the day
before enactment of this Act, shall continue to be
effective until the day immediately following the date
of closing of the purchase of the Secretary's stock (or
the date of closing of the final purchase, in the case
of multiple transactions) pursuant to subsection (d) of
this section.
(B) Reports after stock sale.--The Corporation shall,
not later than March 30 of the first full calendar year
immediately following the sale pursuant to subsection
(d), and each of the 2 succeeding years, submit to the
Secretary of Education a report describing the
Corporation's efforts to assist in the financing of
education facilities projects, including projects for
elementary, secondary, and postsecondary educational
institution infrastructure, and detailing, on a
project-by-project basis, the Corporation's business
dealings with educational institutions that are rated
by a nationally recognized statistical rating
organization at or below the organization's third
highest ratings.
(d) Sale of Federally Owned Stock.--
(1) Sale of stock required.--The Secretary of the Treasury
shall, upon the request of the Secretary of Education make
every effort to sell, pursuant to section 324 of title 31,
United States Code, the voting common stock of the Corporation
owned by the Secretary of Education not later than one year
after the date of the enactment of this Act.
(2) Purchase by the corporation.--In the event that the
Secretary of the Treasury is unable to sell the voting common
stock, or any portion thereof, at a price acceptable to the
Secretary of Education and the Secretary of the Treasury within
the period specified in paragraph (1), the Corporation shall
purchase such stock at a price determined by the Secretary of
the Treasury and acceptable to the Corporation based on
independent appraisal by one or more nationally recognized
financial firms. Such firms shall be selected by the Secretary
of the Treasury in consultation with the Secretary of Education
and the Corporation.
(e) Assistance by the Corporation.--The Corporation shall provide
such assistance as the Secretary of the Treasury and the Secretary of
Education may require to facilitate the sale of the stock under this
section.
(f) Definition.--As used in this section, the term ``Corporation''
means the Corporation established pursuant to the provision of law
repealed by subsection (a).
TITLE III--REPEALERS AND OTHER AMENDMENTS
SEC. 301. HIGHER EDUCATION PROVISIONS.
(a) Higher Education Act of 1965 Provisions.--The following
provisions of the Higher Education Act of 1965 are repealed:
(1) Part B of title I (20 U.S.C. 1011 et seq.), relating to
articulation agreements.
(2) Part C of title I (20 U.S.C. 1015 et seq.), relating to
access and equity to education for all Americans through
telecommunications.
(3) Title II (20 U.S.C. 1021 et seq.), relating to academic
libraries and information services.
(4) Chapter 2 of subpart 2 of part A of title IV (20 U.S.C.
1070a-21 et seq.), relating to national early intervention
scholarships.
(5) Chapter 3 of subpart 2 of part A of title IV (20 U.S.C.
1070a-31 et seq.), relating to presidential access
scholarships.
(6) Chapter 4 of subpart 2 of part A of title IV (20 U.S.C.
1070a-41 et seq.), relating to model program community
partnerships and counseling grants.
(7) Chapter 5 of subpart 2 of part A of title IV (20 U.S.C.
1070a-52 et seq.), relating to an early awareness information
program.
(8) Chapter 8 of subpart 2 of part A of title IV (20 U.S.C.
1070a-81), relating to technical assistance for teachers and
counselors.
(9) Subpart 5 of part A of title IV (20 U.S.C. 1070d-2),
relating to special programs for students whose families are
engaged in migrant and seasonal farmwork.
(10) Subpart 8 of part A of title IV (20 U.S.C. 1070f),
relating to special child care services for disadvantaged
college students.
(11) Section 428J (20 U.S.C. 1078-10), relating to loan
forgiveness for teachers, individuals performing national
community service and nurses.
(12) Section 486 (20 U.S.C. 1093), relating to training in
financial aid services.
(13) Subpart 1 of part H of title IV (20 U.S.C. 1099a et
seq.) relating to State postsecondary review entity programs.
(14) Part A of title V (20 U.S.C. 1102 et seq.), relating to
State and local programs for teacher excellence.
(15) Part B of title V (20 U.S.C. 1103 et seq.), relating to
national teacher academies.
(16) Subpart 1 of part C of title V (20 U.S.C. 1104 et seq.),
relating to Douglas teacher scholarships.
(17) Subpart 3 of part C of title V (20 U.S.C. 1106 et seq.),
relating to the teacher corps.
(18) Subpart 3 of part D of title V (20 U.S.C. 1109 et seq.),
relating to class size demonstration grants.
(19) Subpart 4 of part D of title V (20 U.S.C. 1110 et seq.),
relating to middle school teaching demonstration programs.
(20) Subpart 1 of part E of title V (20 U.S.C. 1111 et seq.),
relating to new teaching careers.
(21) Subpart 1 of part F of title V (20 U.S.C. 1113 et seq.),
relating to the national mini corps programs.
(22) Section 586 (20 U.S.C. 1114), relating to demonstration
grants for critical language and area studies.
(23) Section 587 (20 U.S.C. 1114a), relating to development
of foreign languages and cultures instructional materials.
(24) Subpart 3 of part F of title V (20 U.S.C. 1115),
relating to small State teaching initiatives.
(25) Subpart 4 of part F of title V (20 U.S.C. 1116),
relating to faculty development grants.
(26) Subpart 5 of part F of title V (20 U.S.C. 1117),
relating to early childhood staff training and professional
enhancement.
(27) Section 605 (20 U.S.C. 1124a), relating to intensive
summer language institutes.
(28) Section 607 (20 U.S.C. 1125a), relating to foreign
language periodicals.
(29) Part A of title VII (20 U.S.C. 11326 et seq.), relating
to academic and library facilities.
(30) Title VIII (20 U.S.C. 1133 et seq.), relating to
cooperative education programs.
(31) Part A of title IX (20 U.S.C. 1134a et seq.), relating
to women and minority participation in graduate education.
(32) Part B of title IX (20 U.S.C. 1134d et seq.), relating
to Harris fellowships.
(33) Part C of title IX (20 U.S.C. 1134h et seq.), relating
to Javits fellowships.
(34) Part E of title IX (20 U.S.C. 1134r et seq.), relating
to the faculty development fellowship program.
(35) Part F of title IX (20 U.S.C. 1134s et seq.), relating
to legal training for the disadvantaged.
(36) Part G of title IX (20 U.S.C. 1134u et seq.), relating
to law school clinical programs.
(37) Section 1011 (20 U.S.C. 1135a-11), relating to special
projects in areas of national need.
(38) Subpart 2 of part B of title X (20 U.S.C. 1135c et
seq.), relating to science and engineering access programs.
(39) Part C of title X (20 U.S.C. 1135e et seq.), relating to
women and minorities science and engineering outreach
demonstration programs.
(40) Part D of title X (20 U.S.C. 1135f), relating to
Eisenhower leadership programs.
(41) Title XI (20 U.S.C. 1136 et seq.), relating to community
service programs.
(b) Education Amendments of 1986 Provisions.--The following
provisions of the Higher Education Amendments of 1986 are repealed:
(1) Part E of title XIII (20 U.S.C. 1221-1 note), relating to
a National Academy of Science study.
(2) Part B of title XV (20 U.S.C. 4441 et seq.), relating to
Native Hawaiian culture and art development.
(c) Education Amendments of 1992 Provisions.--The following
provisions of the Higher Education Amendments of 1992 are repealed:
(1) Part F of title XIII (25 U.S.C. 3351 et seq.), relating
to American Indian postsecondary economic development
scholarships.
(2) Part G of title XIII (25 U.S.C. 3371), relating to
American Indian teacher training.
(3) Section 1406 (20 U.S.C. 1221e-1 note), relating to a
national survey of factors associated with participation.
(4) Section 1409 (20 U.S.C. 1132a note), relating to a study
of environmental hazards in institutions of higher education.
(5) Section 1412 (20 U.S.C. 1101 note), relating to a
national job bank for teacher recruitment.
(6) Part B of title XV (20 U.S.C. 1452 note), relating to a
national clearinghouse for postsecondary education materials.
(7) Part C of title XV (20 U.S.C. 1101 note), relating to
school-based decisionmakers.
(8) Part D of title XV (20 U.S.C. 1145h note), relating to
grants for sexual offenses education.
(9) Part E of title XV (20 U.S.C. 1070 note), relating to
Olympic scholarships.
(10) Part G of title XV (20 U.S.C. 1070a-11 note), relating
to advanced placement fee payment programs.
(d) Conforming Amendments.--The Act is amended--
(1) in section 453(c)(2)--
(A) by striking subparagraph (E); and
(B) by redesignating subparagraphs (F) through (H) as
subparagraphs (E) through (G), respectively;
(2) in section 487(a)(3), by striking subparagraph (B) and
redesignating subparagraphs (C) and (D) as subparagraphs (B)
and (C), respectively;
(3) in section 487(a)(15), by striking ``the Secretary of
Veterans Affairs, and State review entities under subpart 1 of
part H'' and inserting ``and the Secretary of Veterans
Affairs'';
(4) in section 487(a)(21), by striking ``, State
postsecondary review entities,'';
(5) in section 487(c)(1)(A)(i), by striking ``State agencies,
and the State review entities referred to in subpart 1 of part
H'' and inserting ``and State agencies'';
(6) in section 487(c)(4), by striking ``, after consultation
with each State review entity designated under subpart 1 of
part H,'';
(7) in section 487(c)(5), by striking ``State review entities
designated under subpart 1 of part H,'';
(8) in section 496(a)(7), by striking ``and the appropriate
State postsecondary review entity'';
(9) in section 496(a)(8), by striking ``and the State
postsecondary review entity of the State in which the
institution of higher education is located'';
(10) in section 498(g)(2), by striking everything after the
first sentence;
(11) in section 498A(a)(2)(D), by striking ``by the
appropriate State postsecondary review entity designated under
subpart 1 of this part or'';
(12) in section 498A(a)(2)--
(A) by inserting ``and'' after the semicolon at the
end of subparagraph (E);
(B) by striking subparagraph (F); and
(C) by redesignating subparagraph (G) as subparagraph
(F); and
(13) in section 498A(a)(3)--
(A) by inserting ``and'' after the semicolon at the
end of subparagraph (C);
(B) by striking ``; and'' at the end of subparagraph
(D) and inserting a period; and
(C) by striking subparagraph (E).
SEC. 302. EFFECTIVE DATE.
The repeals and amendments made by this title shall take effect on
October 1, 1996.
TITLE IV--GENERAL PROVISIONS RELATING TO STUDENT ASSISTANCE PROGRAMS
SEC. 401. AMENDMENT TO HIGHER EDUCATION ACT.
(a) Amendment.--Section 481(b) of the Act (20 U.S.C. 1088(b)) is
amended by inserting after the first sentence the following: ``For the
purposes of determining whether an institution meets the requirements
of clause (6), the Secretary shall not consider the financial
information of any institution for a fiscal year that began on or
before April 30, 1994.''.
(b) Effective Date.--The amendment made by subsection (a) shall apply
to any determination made on or after July 1, 1994, by the Secretary of
Education pursuant to section 481(b)(6) of the Act.
The provisions of the substitute are explained in this
report.
Purpose
The purpose of this Act is to provide for the cessation of
Federal sponsorship of two government sponsored enterprises,
the Student Loan Marketing Association and the College
Construction Loan Insurance Association now that both
corporations are economically viable and have successfully
fulfilled the purposes for which they were created.
Committee Action
On May 3, 1995 the Committee on Economic and Educational
Opportunities, Subcommittee on Postsecondary Education,
Training and Life-Long Learning, and Subcommittee on National
Economic Growth, Natural Resources and Regulatory Affairs held
a joint hearing on privatizing Government Sponsored Entities
(GSEs). Witnesses were: Ms. Darcy Bradbury, Deputy Assistant
Secretary for Federal Finance, Department of the Treasury,
Washington, D.C.; Mr. Leo Kornfeld, Senior Advisor to the
Secretary, Department of Education, Washington, D.C.; Mr.
Lawrence Hough, President and Chief Executive Officer, The
Student Loan Marketing Association, Washington, D.C.; Mr.
Oliver Sockwell, President and Chief Executive Officer, The
College Construction Loan Insurance Association, Washington,
D.C.; Mr. Fred Khedouri, Senior Managing Director at Bear,
Stearns, and Company, Inc., New York, NY and; Mr. Robert
Torray, President of Robert Torray and Company, Bethesda, MD.
Introduction of the Privatization Act of 1995
On, May 25, 1995, Representative McKeon introduced H.R.
1720, the Privatization Act of 1995. H.R. 1720 was designed to
amend the Higher Education Act of 1965, to provide for the
cessation of Federal sponsorship of two government sponsored
enterprises.
Legislative Action
On June 8, 1995, the Committee on Economic and Educational
Opportunities assembled to consider H.R. 1720, the
Privatization Act of 1995. Chairman Goodling offered an
amendment in the nature of a substitute to H.R. 1720. Further
amendments to the amendment in the nature of a substitute were
adopted, and the Committee adopted the amendment in the nature
of a substitute, as amended. H.R. 1720, as amended, was
approved by the Committee on Economic and Educational
Opportunities on June 8, 1995, by a voice vote.
Background and Need for Legislation
TITLE I--Student Loan Marketing Association
The Student Loan Marketing Association (``Sallie Mae'' or
``the Association'') was established in 1972 pursuant to a
charter authorized by Part B of Title IV of the Higher
Education Act of 1965. Sallie Mae was established as a
shareholder-owned financial intermediary to provide financing
and liquidity to the student loan market. The Association
facilitates student lending primarily by making a secondary
market in such loans and providing related financial and
operational support to lending and education institutions. In
the intervening two decades during which investors have
continued to provide private sector equity capital to support
its activities, Sallie Mae has successfully fulfilled its
mission set out for it by Congress. Tens of millions of
students have financed a portion of their postsecondary
education costs through guaranteed student loans facilitated
through Sallie Mae's efforts. Sallie Mae has become a
recognized industry leader in developing and implementing
advances in providing financial services to enable banks and
other lenders to meet the demand for student loans.
The appropriate future course for Sallie Mae is, however,
affected by several important developments. Sallie Mae's very
success has spawned the evolution of an active and competitive
market in the provision of secondary market services to
originators of student loans. Moreover, the application of
securitization to the student loan market is providing lenders
with an ever-increasing source of funding for student loan
originations. Additionally, since 1993, the Department of
Education has been replacing a portion of the guaranteed
student loan program with direct government lending. These
trends reduce the need for the Federal government to sponsor a
Government Sponsored Enterprise (GSE) like Sallie Mae in order
to create a secondary market for guaranteed student loans.
As stated by Darcy Bradbury, Deputy Assistant Secretary of
the Treasury for Federal Finance, in testimony before the
Subcommittee on Postsecondary Education, Training and Life-Long
Learning and the Subcommittee on National Economic Growth,
Natural Resources and Regulatory Affairs: ``The Treasury has
for a number of years, in Democratic and Republican
Administrations, believed that it is appropriate to wean a GSE
from Federal sponsorship once the GSE becomes economically
viable and successfully fulfills the purpose for which it was
created with Federal sponsorship, or when the purpose for which
it was created ceases to exist.'' Ms. Bradbury went on to
conclude that Congress should favorably consider legislation to
authorize Sallie Mae's management to form a fully private
company and to wind down the GSE during a transition.
Title I of H.R. 1720 is designed to facilitate an orderly,
gradual transition of Sallie Mae from a federally chartered,
limited purpose GSE to a fully private, State-chartered
corporation. This transition furthers a number of important
public policy goals:
It maintains the stability of the student loan market
by allowing Sallie Mae to continue its services to that
market as a fully private corporation;
It preserves the attributes of Sallie Mae's
outstanding bonds for the benefit of current bond
holders;
It encourages continued private sector participation
in other GSEs by demonstrating that investors'
interests in the going concern value of such entities
will be preserved when the entity has matured and its
original federally chartered mission has been
accomplished;
It provides for safety and soundness regulation
throughout the transition to ensure the continued
viability of all activities undertaken pursuant to the
Federal charter; and
It allows the continued operation of a corporate
organization whose unique skills and facilities can
continue to contribute to meeting the needs and goals
of America's higher education community.
Sallie Mae has been working closely with Congress and the
Department of Treasury, which is its safety and soundness
regulator, for over one year on a mutually acceptable
reorganization plan. As a result of discussions with
representatives of the Department of Treasury and the
Department of Education, the Committee bill incorporates a
number of changes from the Subcommittee on Postsecondary
Education, Training and Life-Long Learning's bill, H.R. 1720,
reflecting the Committee's response to certain concerns
expressed by the Administration.
To ensure the continued financial soundness of the
Association during its wind-down period, the Committee has
incorporated the following provisions to strengthen the
Association's existing safety and soundness requirements:
The Association's required capital ratio has been
raised to 2.25 percent after 1999. In addition, after
1999, the Treasury Department may act immediately and
unilaterally to enforce the new capital requirement, in
contrast to existing law which allows the Association
to first propose remedial steps and provides for a
consultative process;
A number of requirements have been added to ensure
that the management, structure, operations, funds and
assets of the Association are maintained separate from
those of the Holding Company and its other
subsidiaries. Other provisions ensure that transactions
between the Association and these affiliated entities
are undertaken on an arms-length basis and that the
Association's funds and other assets are not available
to pay the debts of any of its affiliated entities. The
Holding Company is prohibited from being an operating
entity during the wind down period;
The reporting requirements of the Association to the
Department of Treasury have been expanded and the
Treasury Department has been granted authority to
oversee any material financial risk to the Association
which may result from the activities of the Holding
Company and its other subsidiaries. The Secretary of
Treasury and the Secretary of Education have been
specifically authorized, in conjunction with the United
States Attorney General, to bring an action in Federal
district court to enforce the Association's safety and
soundness requirements, as well as any provisions of
this legislation. Finally, the Holding Company is
specifically prohibited from transferring shares of the
Association or placing the Association in bankruptcy
without the approval of these Departments.
The Committee has restricted the Association's ability to
issue new GSE debt after the reorganization. In addition, the
defeasance trust into which any remaining debt will be
deposited has been structured to ensure that the Secretary of
Treasury approves the form and substance of such trust and to
minimize any repayment risk to the holders of the outstanding
obligations.
To prevent confusion in the marketplace, the Holding
Company and its non-GSE subsidiaries are prohibited from using
the names ``Student Loan Marketing Association or Sallie Mae''
as part of their names. The Association is permitted to assign
the name ``Sallie Mae'' to these entities as a trade name or
service name, although restrictions on the use of this name in
connection with securities offerings, advertisements and
promotional materials have been incorporated into H.R. 1720.
The Federal government will share in an economic benefit
flowing from privatization as a result of a provision which
mandates that the Association issue stock warrants for Holding
Company stock to the Treasury Department at the time of
reorganization. The terms of these warrants have been
structured to provide maximum flexibility to the Department in
their exercise or transfer.
Finally, this Committee has incorporated amendments to
address concerns raised by certain Members that the Association
continue to support the Federal Family Education Loan (FFEL)
Program after it is privatized. H.R. 1720 makes it clear that,
after the reorganization, the Association shall continue to
serve the purposes for which it was formed and specifically
shall continue to serve as a lender of last resort. In
addition, an exception to the restriction on new business
activities of the Association has been added to ensure that it
continues to purchase insured student loans if the Secretary of
Education determines that there is inadequate liquidity in the
secondary market.
Title II--College Construction Loan Insurance Association
The College Construction Loan Insurance Association
(``Connie Lee'' or ``the Corporation''), was authorized by
Congress under Title VII of the Higher Education Amendments of
1986 to help finance the demand for new and renovated higher
education facilities. At that time, Congress determined that
the deterioration of its physical infrastructure was one of the
most serious problems facing higher education.
Although various financing options were available to
institutions of higher education, most only provided short-term
financing and only met the needs of institutions considered to
be of the highest credit caliber. To correct this problem,
Congress created Connie Lee in order to provide access to long-
term capital to non-investment grade but fundamentally sound
universities and colleges. Of all the potential solutions,
creating Connie Lee entailed the least liability to the Federal
government and the greatest potential for using Federal funds
to leverage a significant level of private capital investment.
Connie Lee was created as a private for-profit corporation,
not an agency or a Federal government corporation. The key
goals were to:
Create a well capitalized financial guaranty company
to be managed in a manner which would be conducive to
its long term viability and would limit Federal
liability in insuring academic facilities and equipment
loans;
Provide a combination of construction and equipment
underwriting and financing expertise, credit expertise,
legal analysis and financial modeling which specialized
in the unique needs of institutions engaged in
postsecondary education and training;
Provide open access of long-term capital to a larger
number of higher education institutions than was the
case; and
Provide lower issuing and interest costs to
educational institutions by virtue of the financial
guaranty.
Although created as a private, for-profit corporation,
Connie Lee commenced its operations as a joint venture with the
Secretary of Education and the Student Loan Marketing
Association. As major supporters of the Corporation, the
Secretary of Education and the Secretary of Treasury were each
given two appointments to the Corporation's board of directors,
while the Student Loan Marketing Association was given three.
The Federal government is currently a minority shareholder in
Connie Lee owning less than 15% of Connie Lee stock.
From inception through today, Connie Lee has insured or
reinsured approximately $10 billion of principal and interest
for academic facilities financings for colleges, universities
and teaching hospitals. Connie Lee's insurance has increased
investor demand for the institutions' bonds which lowers the
interest cost, saving institutions millions of dollars. Connie
Lee's success in assisting institutions in facilities financing
has also caused large investors and insurers to direct more
long term capital into academic facilities.
Connie Lee's success in fulfilling its original mission has
resulted in both the need and desire for privatization. As the
demand for Connie Lee's services begins to decline as fewer
eligible institutions engage in facilities construction, Connie
Lee is unable to expand its services to assist other higher
education institutions, elementary and secondary schools, local
governments, etc., because of the restrictive language of its
authorizing legislation. Yet, these other institutions and
local governments could greatly benefit from the insurance
offered by Connie Lee.
From the viewpoint of Oliver Sockwell, President and Chief
Executive Officer of Connie Lee, in testimony before the
Subcommittee on Postsecondary Education, Training and Life-Long
Learning, privatization provides the flexibility to expand its
markets and stabilize its revenue stream assuring its continued
health and financial strength. In the case of Connie Lee, it is
clear that the Federal restrictions placed on Connie Lee
greatly outweigh the benefits of its status as a Government
Sponsored Enterprise (GSE). This is particularly true since
unlike other GSEs, Connie Lee does not rely on a line of credit
to the US Treasury and Connie Lee does not use federally backed
debt to fund its operations. And unlike other GSEs, Connie Lee
already pays State and local income tax on its corporate
earnings and is subject to Securities and Exchange Commission
registration.
From the Federal government's viewpoint, privatizing Connie
Lee denotes a clear shift in the way the Federal government
does business. Privatization eliminates a Federal presence
where the operation of market forces would be more suitable. It
also reduces the scope of government. Most importantly, the
Federal government would be free of any perception of implied
risk that it would be called upon to provide assistance in the
event Connie Lee would have financial difficulties.
H.R. 1720 provides for the privatization of Connie Lee
immediately upon enactment. The Treasury Department will have
one year to sell the stock currently owned by the Department of
Education and until such sale occurs, the Federal directors on
the Connie Lee board shall remain members of the board.
In order to address concerns raised by Committee Members
that Connie Lee continue to serve the needs of educational
institutions in the lower investment grade categories, Connie
Lee agreed to amend its articles of incorporation to reflect
that assistance to these institutions shall be a purpose of the
Corporation. In addition, Connie Lee has agreed to provide
reports to the Secretary of Education describing its efforts to
assist in the financing of education facilities projects,
including elementary, secondary and postsecondary, for a period
of two years following the divestiture of the federally owned
stock.
title III--repealers and other amendments
Title III of H.R. 1720 repeals a number of programs found
in the Higher Education Act. Some of these programs have not
been funded since their creation. Other programs are currently
funded but recommended for termination in the Administration's
1996 budget proposal. In addition, two programs repealed in
Title III have been proposed for rescission by the House and
Senate Appropriations Committees in the 104th Congress.
Recognizing that this is a time of scarce taxpayer dollars,
the Committee believes eliminating and consolidating small
categorical programs will result in a more prudent and focused
use of those scarce dollars. Funding should be directed to
those programs which serve large numbers of students across the
entire country. The Administration's budget for 1996 recognized
the importance of reducing the number of small categorical
programs which are often costly to administer while only
benefiting a few students. The vast majority of currently
funded programs which are included for repeal are taken
directly from the Administration's 1996 budget.
H.R. 1720 eliminates the State Postsecondary Review Program
created under Part H of Title IV of the Higher Education Act.
Funding for this program was recommended for rescission by the
House and Senate Appropriations Committees last month. The
program was created under the 1992 Amendments to the Higher
Education Act, at a time when Congress was particularly
concerned with fraud and abuse in the student aid programs.
Although this continues to be a concern, many of the program
improvements contained in the 1992 Amendments and prior
measures have helped to reduce the incidences of fraud and
abuse in the student aid programs. This fact, coupled with the
burdensome requirements placed on all institutions, not just
those suspected of fraudulent behavior, caused this Committee
to reevaluate the need for this program. Upon review, this
Committee determined that creating additional bureaucracy with
taxpayer dollars was not the best means for accomplishing the
goal of eliminating fraud and abuse.
title IV--general provisions relating to studentassistance programs
The Higher Education Amendments of 1992 included a new
eligibility requirement for proprietary institutions. The
provision, known as the ``85/15 rule'' requires a proprietary
institution to have at least 15 percent of its revenue
generated by sources that are not derived from funds provided
under Title IV of the Higher Education Act.
The final regulations implementing this rule were published
on April 29, 1994 to be enforced as of July 1, 1994 on the
basis of the preceding fiscal year. During the last Congress,
many Members of this Committee were troubled with the
Department of Education's intent to enforce the rule in such a
manner. As a result, the 1995 Labor, HHS and Education
Appropriations Bill included a one year delay of the
regulations published by the Department of Education
implementing the 85/15 rule.
The provision contained in this legislation clarifies the
intent of Congress that the Department of Education, when
implementing the 85/15 rule, shall only consider an
institution's financial information for a fiscal year which
began on or after April 30, 1994. This date coincides with the
publication date of the final regulations implementing the 85/
15 rule and prevents any retroactive application of those
regulations for purposes of determining an institution's
eligibility for Title IV programs.
Summary
The following is a summary of the legislation as approved
by this Committee:
title I--student loan marketing association
In reporting H.R. 1720, the Committee on Economic and
Educational Opportunities takes the unprecedented step of
eliminating a successful public-private partnership that has
out-lived the need for taxpayer support and turns it into a
completely private venture. The Student Loan Marketing
Association (Sallie Mae) and the College Construction Loan
Insurance Association (Connie Lee), are examples of for-profit,
stockholder owned Government Sponsored Enterprises (GSEs) which
have successfully fulfilled their intended purposes. These two
successful organizations present an excellent opportunity that
will help pave the way for the privatization of other GSEs in
the future.
Title I of the bill sets forth provisions for the
privatization of Sallie Mae. It allows the Board of Directors
to take the necessary actions to create an ordinary business
corporation in the form of a Holding Company and requires the
stockholders of the Association to approve the reorganization
plan. Such approval must occur within eighteen months of the
date of enactment of this bill. The rights, obligations,
restrictions, and purposes applicable to the Association under
Section 439 of the Higher Education Act will continue until
dissolution of the Association. The new Holding Company has
none of the rights set forth in Section 439, except as
specifically provided in the bill.
Title I requires the Association to provide information
regarding the Association's finances, policies, and systems to
the Department of the Treasury for purposes of monitoring
safety and soundness. In addition, specific requirements for
the maintenance of separate identities and operations with
respect to the Association and the Holding Company are clearly
described.
The dissolution of the Association is scheduled to occur on
September 30, 2007. Dissolution may occur prior to that date
only with the approval of the Secretary of Education. Title I
also calls for the establishment of an irrevocable trust which
will hold any remaining Association obligations for the benefit
of the holders of the obligations. If the assets of the trust
are insufficient to pay the obligations, the Holding Company
shall transfer funds to the trust in the amount necessary to
prevent any deficiency.
Title I establishes requirements for the operation of the
Holding Company. It calls for the number and composition of the
Board of Directors of the Holding Company to be determined in
the Holding Company's charter. It also prohibits the Holding
Company from using the name ``Student Loan Marketing
Association'' or ``Sallie Mae''. It further requires the
Holding Company or any subsidiary other than the Association,
when offering securities or using the ``Sallie Mae'' name or
mark, to state that the Holding Company or subsidiary is not a
GSE and that its obligations are not guaranteed by the full
faith and credit of the United States.
title II--college construction loan insurance association
Title II sets forth specific requirements related to the
privatization of Connie Lee. Upon enactment, Part D of Title
VII of the Higher Education Act is repealed and Connie Lee is
free to operate its affairs like any other private, for-profit
business. Upon privatization, Connie Lee will be required to
disclose that it is not a Government Sponsored Enterprise (GSE)
and that its obligations are not guaranteed by the full faith
and credit of the United States in all securities offerings and
contracts for insurance, guarantee, or reinsurance of
obligations for five years after date of enactment. Connie Lee
is also required to amend its articles of incorporation. They
must reflect as one of Connie Lee's purposes, to guarantee,
insure and reinsure bonds, leases and other evidences of debt
of educational institutions, including Historically Black
Colleges and Universities, which are ranked in the lower
investment grade categories.
Title II retains section 754 of the Higher Education Act
until all the stock of the Secretary of Education has been
sold, continuing the right of the Secretary of Education and
the Secretary of the Treasury to appoint directors to the
Corporation's board. It requires the Corporation to report to
the Secretary of Education for two years after the sale of the
stock with respect to financing activities of the Corporation
in financing education facilities projects. Title II
establishes requirements with respect to the sale of the
Department of Education owned stock and requires the
Corporation to purchase the stock if the Treasury is unable to
sell.
title III--repealers and other amendments
Title III identifies programs to be repealed by this Act.
The list includes programs which are unfunded, programs which
have been recommended for termination by President Clinton in
the 1996 budget and two additional programs recommended for
termination by the House and Senate Appropriations Committees
this Congress.
Section 301(a) repeals the following provisions of the
Higher Education Act of 1965:
(1) Articulation Agreements--Part B of title I (20
U.S.C. 1011 et seq.)
(2) Access & Equity to Education for all Americans
through Telecommunications--Part C of title I (20
U.S.C. 1015 et seq.)
(3) Academic Libraries and Information Services--
Title II (20 U.S.C. 1021 et seq.)
(4) National Early Intervention Scholarships--Chapter
2 of subpart 2 of part A of title IV (20 U.S.C. 1070a-
21 et seq.)
(5) Presidential Access Scholarships--Chapter 3 of
subpart 2 of part A of title IV (20 U.S.C. 1070a-31 et
seq.)
(6) Model Program Community Partnership & Counseling
Grants--Chapter 4 of subpart 2 of part A of title IV
(20 U.S.C. 1070a-41 et seq.)
(7) Early Awareness Information Program--Chapter 5 of
subpart A of title IV (20 U.S.C. 1070a-52 et seq.)
(8) Technical Assistance for Teachers & Counselors--
Chapter 8 of subpart 2 of part A of title IV (20 U.S.C.
1070a-81)
(9) Special Programs for Students whose Parents are
Engaged in Migrant Seasonal Farm Work--Subpart 5 of
part A of title IV (20 U.S.C. 1070d-2)
(10) Special Child Care Services for Disadvantaged
College Students--Subpart 8 of part A of title IV (20
U.S.C. 1070f)
(11) Loan Forgiveness for teachers, individuals
performing community service and nurses--Section 428J
(20 U.S.C. 1078-10)
(12) Training in Financial Aid Services--Section 486
(20 U.S.C. 1093)
(13) State Postsecondary Review Entities--Subpart 1
of part H of title IV (20 U.S.C. 1099a et seq.)
(14) State & Local Programs for Teacher Excellence--
Part A of title V (20 U.S.C. 1102 et seq.)
(15) National Teacher Academies--Part B of title V
(20 U.S.C. 1103 et seq.)
(16) Douglas Teacher Scholarships--Subpart 1 of Part
C of title V (20 U.S.C. 1104 et seq.)
(17) Teacher Corps--Subpart 3 of part C of title V
(20 U.S.C. 1106 et seq.)
(18) Class Size Demonstration Grant--Subpart 3 of
part D of title V (20 U.S.C. 1109 et seq.)
(19) Middle School Teaching Demonstration Programs--
Subpart 4 of part D of title V (20 U.S.C. 1110 et seq.)
(20) New Teaching Careers--Subpart 1 of part E of
title V (20 U.S.C. 1111 et seq.)
(21) National Mini Corps Programs--Subpart 1 of part
F of title V (20 U.S.C. 1113 et seq.)
(22) Demonstration Grants for Critical Language/Area
Studies--Section 586 (20 U.S.C. 1114)
(23) Development of Foreign Languages & Culture
Instructions Materials--Section 587 (20 U.S.C. 1114a)
(24) Small State Teaching Initiative--Subpart 3 of
part F of title V (20 U.S.C. 1115)
(25) Faculty Development Grants--Subpart 4 of part F
of title V (20 U.S.C. 1116)
(26) Early Childhood Staff Training & Professional
Enhancement--Subpart 5 of part F of title V (20 U.S.C.
1117)
(27) Intensive Summer Language Institutes--Section
605 (20 U.S.C. 1124a)
(28) Foreign Language Periodicals--Section 607 (20
U.S.C. 1125a)
(29) Improvement of Academic & Library Facilities--
Part A of title VII (20 U.S.C. 11326 et seq.)
(30) Cooperative Education--Title VIII (20 U.S.C.
1133 et seq.)
(31) Women & Minority Participation in Graduate
Education--Part A of title IX (20 U.S.C. 1134a et seq.)
(32) Harris Fellowships--Part B of title IX (20
U.S.C. 1134d et seq.)
(33) Javits Fellowships--Part C of title IX (20
U.S.C. 1134h et seq.)
(34) Faculty Development Fellowship Program--Part E
of title IX (20 U.S.C. 1134r et seq.)
(35) Legal Training for the Disadvantaged--Part F of
title IX (20 U.S.C. 1134s et seq.)
(36) Law School Clinical Programs--Part G of title IX
(20 U.S.C. 1134u et seq.)
(37) FIPSE--Special Projects in Areas of National
Need--Section 1011 (20 U.S.C. 1135a-11)
(38) Science & Engineering Access Programs--Subpart 2
of part B of title X (20 U.S.C. 1135c et seq.)
(39) Women & Minorities Science & Engineering
Outreach Demonstration Programs--Part C of title X (20
U.S.C. 1135e et seq.)
(40) Eisenhower Leadership Program--Part D of title X
(20 U.S.C. 1135f)
(41) Student Literacy & Mentoring Corps; Innovative
Projects for Community Service; and Urban Community
Service--Title XI (20 U.S.C. 1136 et seq.)
Section 301(b) repeals the following provisions of the
Education Amendments of 1986:
(1) National Academy of Science Study--Part E of
title XIII (20 U.S.C. 1221-1 note)
(2) Native Hawaiian Culture and Arts Development--
Part B of title XV (20 U.S.C. 4441 et seq.)
Section 301(c) repeals the following provisions of the
Education Amendments of 1992:
(1) American Indian Postsecondary Economic
Development Scholarship--Part F of title XIII (20
U.S.C. 3351 et seq.)
(2) American Indian Teacher Training--Part G of title
XIII (20 U.S.C. 3371)
(3) National Survey of Factors Associated with
Participation--Section 1406 (20 U.S.C. 1221e-1 note)
(4) Study of Environmental Hazards in Institutions of
Higher Education--Section 1409 (20 U.S.C. 1132a note)
(5) National Job Bank for Teacher Recruitment--
Section 1412 (20 U.S.C. 1101 note)
(6) National Clearinghouse for Postsecondary
Education Materials--Part B of title XV (20 U.S.C. 1452
note)
(7) School-Based Decisionmakers--Part C of title XV
(20 U.S.C. 1101 note)
(8) Grants for Sexual Offenses Education--Part D of
title XV (20 U.S.C. 1145h note)
(9) Olympic Scholarships--Part E of title XV (20
U.S.C. 1070 note)
(10) Advanced Placement Fee Payment Program--Part G
of title XV (20 U.S.C. 1070a-11 note)
Section 301(d) makes the following technical and conforming
amendments to the Higher Education Act of 1965:
(1) strikes subparagraph (E) of section 453(c)(2) and
redesignates the remaining subparagraphs
(2) strikes subparagraph (B) of section 487(a)(3) and
redesignates the remaining subparagraphs
(3) in section 487(a)(15) strikes the words ``the
Secretary of Veterans Affairs, and State review
entities under Subpart 1 of part H'' and inserts ``and
the Secretary of Veterans Affairs''
(4) in section 487(a)(21) strikes the words ``, State
Postsecondary review entities,''
(5) in section 487(c)(1)(A)(i) strikes the words
``State Agencies, and the State review entities
referred to in Subpart 1 of part H'' and inserts the
words ``and State agencies''
(6) in section 487(c)(4) strikes the words ``, after
consultation with each State review entity designated
under Subpart 1 of part H,''
(7) in section 487(c)(5) strikes the words ``State
review entities designated under Subpart 1 of part H,''
(8) in section 496(a)(7) strikes the words ``and the
appropriate State Postsecondary review entity''
(9) in section 496(a)(8) strikes the words ``and the
State Postsecondary review entity of the State in which
the institution of higher education is located''
(10) in section 498(g)(2) strikes everything after
the first sentence
(11) in section 498A(a)(2)(D) strikes the words ``by
the appropriate State Postsecondary review entity
designated under Subpart 1 of this part or''
(12) in section 498A(a)(2) inserts ``and'' after the
semicolon at the end of subparagraph (E); strikes
subparagraph (F); and redesignates the remaining
subparagraphs
(13) in section 498A(a)(3) inserts ``and'' after the
semicolon at the end of subparagraph (C); by striking
``; and'' at the end of subparagraph (D) and inserting
a period; and strikes subparagraph (E)
The effective date for this title is October 1, 1996.
Title iv--general provisions relating to student Assistance Programs
Title IV amends the Higher Education Act by requiring that,
for the purposes of determining whether an institution meets
the requirements of clause (6) of Section 481(b) (commonly
referred to as the 85/15 rule), the Secretary of Education
shall not consider the financial information of any institution
for a fiscal year which began on or before April 30, 1994. The
provision is effective beginning July 1, 1994.
Committee Views
Title I--Student Loan Marketing Association
Background
The Student Loan Marketing Association (Sallie Mae or the
Association) was established in 1972 under a Federal charter
authorized by Part B of Title IV of the Higher Education Act of
1965. At that time, there existed a tremendous need for a
secondary market that would purchase student loans from primary
lenders, thereby making the student loan program attractive to
such lenders. By providing a secondary market such as Sallie
Mae, Congress hoped to expand lender participation in the
program. This approach has succeeded. Today there is ample
funding for student loans and virtually every eligible student
has access to student loans.
Under its Federal charter, Sallie Mae gained certain
advantages, the most important one being the ability to raise
large amounts of capital in a cost effective way. Investors
were attracted to Sallie Mae as a result of its Government
Sponsored Enterprise (GSE) status and Sallie Mae has enjoyed
ready access to financing sources while operating at relatively
low capital levels. People across this nation invested in this
public-private partnership, knowing that their capital was
being put to a publicly beneficial purpose--enhancing access to
postsecondary education.
The Committee commends Sallie Mae for having served its
purpose well. Since its creation, tens of millions of students
have financed a postsecondary education using funds provided to
the guaranteed loan program through Sallie Mae. In addition,
Sallie Mae has eased the administrative burden associated with
student loans by creating an efficient student loan servicing
operation.
However, times have changed. The secondary market for
student loans has become extremely competitive over the last
twenty years. New financing alternatives such as student loan
securitization have made it much easier for lenders to
replenish student loan capital without the use of a secondary
market. The combined effect of these changes leaves Sallie Mae
with significantly limited opportunities for the financing
activities for which its GSE attributes were designed. With the
diminished need for a federally chartered secondary market and
the lack of long-term business options available to Sallie Mae
under its restrictive charter, the Committee believes that it
is the right time to open the door to privatization.
Advantages of privatization
Allowing Sallie Mae to privatize has certain advantages for
the Association. It frees it from a burdensome Federal charter
which constrains its ability to react to a changing market
place and it allows the Association to put its resources to use
in other private ventures.
Allowing the privatization of Sallie Mae also shows an
ability on the part of the government to recognize when its
help is no longer needed in fulfilling a certain purpose. In
the process, the amount of GSE debt that is viewed as having
government support is reduced and an implicit liability is
removed from the taxpayer.
In reporting H.R. 1720, the Committee is pleased to have
played a role in truly reinventing government and relieving the
marketplace of unneeded Federal intervention.
Provisions of privatization
By allowing Sallie Mae to privatize, the Committee
recognizes the importance of ensuring the financial soundness
of the Association, protecting student loan access by
maintaining a lender of last resort role for the Association
should it be necessary, and above all protecting the taxpayer
from loss due to the transition. The Committee is pleased to
note that this bipartisan initiative was undertaken with the
assistance of the Department of the Treasury and the Department
of Education to ensure these outcomes.
H.R. 1720 requires that the shareholders approve any plan
to privatize within eighteen months of enactment of this
legislation. This is essential because Sallie Mae is a
stockholder-owned corporation. Those who have invested in this
enterprise did so in good faith under a certain set of terms
and conditions. It would be unwise and unfair to unilaterally
change those terms and conditions without their consent.
With agreement from its shareholders, Sallie Mae will be
allowed to reorganize as a State-chartered, separately
capitalized company. The GSE will become a wholly owned
subsidiary of the new Holding Company, albeit in a wind-down
mode, for a number of years. Some assets, as well as personnel
will be transferred from the GSE to the fully private new
company. At the end of the wind-down period, the remaining debt
obligations and assets sufficient to prevent any deficiency
will be transferred to an irrevocable trust. Only after the
retirement of the debt obligations are remaining assets
transferred to the Holding Company.
The Committee notes that a number of provisions have been
incorporated into H.R. 1720 to ensure the safety and soundness
of the Association as well as the stability of the guaranteed
loan program. For instance, it is required to keep separate all
funds and assets of the Association and maintain physically
separate corporate offices from the newly formed Holding
Company or any of its subsidiaries. The Association's ability
to issue new GSE debt is strictly limited, and the
Association's reporting requirements to the Secretary of the
Treasury have been strengthened. In addition, after the
reorganization date the Association will be limited in any new
business activities, and will dissolve on September 30, 2007,
unless needed as a lender of last resort.
Budget neutrality
The Committee is strongly committed to ensuring that no
cost befall the taxpayer as a result of allowing Sallie Mae to
become a private corporation. H.R. 1720 has been drafted to
ensure that it is budget neutral. In addition, the Committee
notes that H.R. 1720 provides for the exercise of 200,000 stock
warrants by the Secretary of the Treasury should this prove
advantageous in the future. The purpose of this provision is to
ensure that the taxpayer will share in the success of a newly
private Sallie Mae.
title II--college construction loan insurance association
Background
As with the Student Loan Marketing Association, the College
Construction Loan Insurance Association (Connie Lee or the
Corporation) is an example of a very successful public-private
partnership which has served its purpose. Connie Lee was
authorized by Congress under Title VII of the Higher Education
Amendments of 1986. At that time, the deterioration of physical
infrastructure was a pressing problem for institutions of
higher education, and low cost financing of improvements to
facilities was an option only for institutions considered to be
of the highest credit caliber. Connie Lee was chartered to
underwrite the financing of facilities construction and
improvement for the more mainstream institutions. For the
government, the creation of Connie Lee provided the best
solution to the problem; leveraging a significant amount of
private capital while exposing the government to little
liability.
Since that time, Connie Lee has insured or reinsured nearly
$10 billion in principal and interest for academic facilities.
However, as with Sallie Mae, Connie Lee's success in fulfilling
its mission has created a situation where severing its
relationship with the government is desirable for both parties.
Advantages of privatization
Connie Lee has never enjoyed the advantages accorded to
most Government Sponsored Enterprises (GSEs). Connie Lee has no
Federal line of credit. Connie Lee does not use federally
backed debt to fund its operations, and it must pay State and
local income taxes and Federal Exchange Commission filing fees.
In fact, the Higher Education Act (Section 751 (b))
specifically prohibits Connie Lee from being ``a Government
Corporation'' or ``Government Controlled Corporation.''
Clearly, Connie Lee was meant to be a fully private company.
However, the Committee recognizes that the Department of
Education's minority ownership of stock (14%) coupled with a
government charter restricting Connie Lee's business activities
does create the perception of implicit government protection
for the Corporation. Therefore, the complete privatization of
Connie Lee would benefit both the Corporation and the
government.
For Connie Lee, privatization means the ability to
determine its own destiny. Currently, its business activities
are narrowly limited. Privatization would allow Connie Lee to
use its expertise in facilities underwriting to help secure
funding for elementary and secondary schools, higher education
facilities which do not currently fall within its charter
guidelines, and local municipal projects.
In return, the taxpayer is relieved of the perception of
any implicit risk of loss should Connie Lee have financial
difficulties. This shift in philosophy represents a clear
departure from ``business as usual'' in Washington. It
represents a willingness on the part of the government to
recognize when a Federal presence is no longer needed, and it
reduces the government's presence in the market place.
H.R. 1720 privatizes Connie Lee upon enactment and allows
up to one year for the sale of stock owned by the Department of
Education. Prior to the sale of the federally held stock, the
Federal directors on Connie Lee's board would retain their
positions. In this way, the taxpayer is assured the maximum
return for the initial investment in Connie Lee, and the
Corporation is not unnecessarily prevented from putting its
resources to more productive uses.
In addition, the Corporation has agreed to amend its
articles of incorporation to reflect that serving the needs of
lower investment grade educational institutions shall be a
purpose of the Corporation. The Corporation will furnish
reports to the Secretary of Education on its efforts to assist
in the financing of educational facilities including
elementary, secondary, and postsecondary, for a period of two
years after the Federal divestiture of stock.
title III--repealers and other amendments
Title III of H.R. 1720 repeals 53 programs found in the
Higher Education Act. Some of these programs have been
consolidated within H.R. 1617, the CAREERS Act. Some programs
are unfunded. Others have been recommended for elimination by
President Clinton in the 1996 budget or by both the House and
Senate Appropriations Committees in this Congress.
In repealing these programs, the Committee is setting
priorities. Each and every one of these programs was enacted
with the best of intentions. However, Federal resources are
scarce. To bring the budget into balance, there must be a focus
of Federal resources where they will do the most good to help
the most people. Maintaining small categorical programs, many
of which are unfunded, is not cost effective nor is it wise.
Clearly, if Congress is serious about reducing the size of
government, reducing duplication and waste and making efficient
use of scarce taxpayer dollars, then we must eliminate or
consolidate those programs that can be identified by both
political parties as low priorities.
It should be noted that this legislation repeals the State
Postsecondary Review Program authorized under the Higher
Education Act of 1965 (Title IV, Part H, Subpart 1). The State
Postsecondary Review Program was established to ensure a
``gatekeeping'' role at the State level for Title IV program
integrity. Unfortunately, the State Postsecondary Review
Entities (SPREs) that were established under this program
proved to be tremendously burdensome to institutions of higher
education. This was clearly an unintended consequence.
In addition, the Committee notes that default costs have
been declining due to previously enacted integrity provisions,
the most important one being the elimination of high default
rate schools. According to Department of Education data,
default costs have declined by approximately one billion
dollars since the 1990 fiscal year when default costs reached
$2.6 billion. In addition, more than 600 schools have lost
eligibility as a result of this one provision, and another 270
may lose eligibility if they fail in their appeal to the
Department of Education. This is particularly significant in
light of the conclusion reached by the Senate Permanent
Subcommittee on Investigations which in 1990 found that high
default rates were both a warning sign of potential abuse and a
common thread of actual abuse in problem schools. The Committee
therefore finds it difficult to justify imposing the burdensome
requirements of this program on every institution of higher
education regardless of existing problems or the potential for
problems.
The Committee is willing to recognize when actions it took
with the best of intentions go awry, and correct its mistakes.
The State Postsecondary Review Program is an example of this
situation. Designed as a way to ensure integrity within Title
IV without burdensome regulation at the Federal level, the SPRE
program became a model of burdensome regulation at the State
level as directed from the Federal level. H.R. 1720 corrects
that mistake.
title iv--general provisions relating to student assistance programs
Title IV clarifies that the Secretary of Education shall
not implement the 85/15 rule with respect to eligibility for
proprietary institutions under Title IV of the Higher Education
Act of 1965 (Section 481(b)(6)) on a retroactive basis.
The 85/15 rule was enacted as a floor amendment to the
Higher Education Amendments of 1992. This rule limits the
eligibility of proprietary schools from participation in Title
IV programs to those schools receiving at least 15 percent of
their revenues from non-Title IV sources. The intent of this
provision is simple and straight-forward. For-profit,
proprietary institutions of higher education must not be solely
reliant on Federal Student Financial Assistance for income. The
Committee remains concerned over the Department of Education's
implementation of this regulation. While the rule itself is
simple, the Department's interpretation of it is baffling. For
instance, the Department's regulations fail to count revenues
from sources such as contract training, provided to businesses
willing to pay for it, toward the institution's non-Federal
revenues. The intent of the 85/15 rule was to ensure that
schools were providing training which was of great enough value
that it would be sought after regardless of the availability of
Federal funds. Clearly, this training is of value. In addition,
the Department seems intent on implementing this regulation
retroactively, at least for some proprietary schools.
The Committee views this as a simple fairness issue.
Clearly, the Secretary must enforce the law. However, the
Secretary should not hold institutions to standards which were
not final prior to the beginning of the fiscal year in
question. Nor should the Secretary discount contract training
funds from industry as a source of non-Federal revenue.
H.R. 1720 will prevent the retroactive application of these
regulations. Unfortunately, the Committee was unable to include
a correction of the Secretary's interpretation of non-Federal
revenues. The Committee notes that the Secretary may begin
enforcement of the 85/15 rule on July 1, 1995. However, the
Committee is committed to correcting the interpretations noted
above, and would urge a delay in implementation until either
the Secretary or this Congress has an opportunity to make
further necessary corrections.
Section-by-Section
Section 1 contains the short title and notes that
references to ``the Act'' are references to the Higher
Education Act.
Section 2 contains the purpose of the bill.
Title I--Student Loan Marketing Association
Section 101(a) sets forth the provisions for the
privatization of the Student Loan Marketing Association by
amending Section 439 of the Higher Education Act by adding a
new section 440.
Section 440(a) provides for the first step in effecting the
transition of Sallie Mae to a fully private, State-chartered
institution. It requires Sallie Mae's current Board of
Directors to develop a reorganization plan for the
restructuring of the Association's ownership. Effectively,
current shares in Sallie Mae would be converted into shares in
a newly formed Holding Company chartered in a State or the
District of Columbia.
Section 440(b) requires that the reorganization plan be
approved by the holders of a majority of Sallie Mae's
outstanding stock.
Section 440(c)(1) clarifies that, except as specifically
modified by the provisions of section 440, the provisions of
section 439 of the Higher Education Act continue to apply in
full force and effect to the Association during its wind-down
period following the reorganization of its ownership. The
provision also clarifies that the Holding Company and its other
subsidiaries shall not be entitled or subject to any of the
rights, privileges, obligations or limitations applicable to
the Association under section 439, except as specifically
provided in section 440. Finally, this section clarifies that
the Holding Company and its non-GSE subsidiaries shall not
purchase federally-insured student loans until the Association
ceases to purchase such loans, except for the Association's
purchase of such loans as a lender-of-last-resort or under
agreement with the Secretary of Education pursuant to section
440(c)(6).
Section 440(c)(2) specifies that, as soon as practicable
after the reorganization, the Association would be required to
use its best efforts to transfer to the Holding Company or its
non-GSE subsidiaries all real and personal property, including
intangibles held by the Association, except for property
defined as ``remaining property.'' Remaining property would
include the financial, program-related assets and obligations
of the Association, such as debt obligations, student loans,
portfolio investments, letters of credit, outstanding swap
agreements and forward purchase commitments. This remaining
property would initially remain in the GSE at the beginning of
the wind-down. Such property could be transferred out of the
GSE subsequently, so long as the GSE continued to maintain
adequate capital to meet the requirements of section 439(r).
Section 440(c)(3) specifies that at the time of the
reorganization, the employees of the Association will become
employees of the Holding Company or the other subsidiaries.
This provision requires the Holding Company and the
subsidiaries to provide management and operational support for
the Association during the wind-down as requested by the
Association. The Association is also specifically empowered to
obtain management and operational support from persons other
than the Holding Company and the subsidiaries.
Section 440(c)(4) clarifies that the Association may pay
dividends in the form of cash or noncash distributions to the
Holding Company, just as it may pay dividends to shareholders
under current law. The payment of dividends would continue to
be subject to the requirements of section 439(r) that the
Association maintain a capital ratio greater than or equal to
two percent or two and one quarter percent beginning January 1,
2001 or that it meet the capital ratio safe harbor requirements
set forth in section 439(r)(11).
Section 440(c)(5) provides that for purposes of calculating
compliance with the Association's capital requirements, any
distribution of noncash assets by the Association to the
Holding Company is to be valued at net book value as of the
date the distribution was approved by the Association's Board
of Directors.
Section 440(c)(6) limits the Association's ability to
engage in new business activities or acquire new assets
following the reorganization. Activities may be undertaken in
connection with student loan purchases through September 30,
2003; in connection with contractual commitments for future
warehousing advances, where such commitments are outstanding as
of the date of the reorganization; or pursuant to a letter of
credit or standby bond purchase agreement that is outstanding
as of such date. Activities may also be undertaken in
connection with the GSE's role as lender of last resort
pursuant to section 439. Finally, activities may be undertaken
pursuant to agreements entered into with the Secretary of
Education if the Secretary requests the Association to continue
or resume its secondary market purchase program after September
30, 2003. The Secretary may make such a request only after
determining that there is inadequate liquidity for loans made
under Part B of Title IV of the Higher Education Act. Any such
agreement shall cover a period of 12 months, but may be renewed
if the Secretary determines that liquidity remains inadequate.
The provision provides that the offset fee provided under
section 439(h)(7) shall not apply to loans acquired pursuant to
any such agreement.
Section 440(c)(7) prohibits the Association from issuing
new debt obligations that mature later than September 30, 2004,
except in connection with fulfilling the Association's lender
of last resort role or with purchasing loans under an agreement
with the Secretary of Education described in the previous
paragraph.
Section 440(c)(8) establishes new requirements to the
safety and soundness requirements currently applicable to the
Association under the Higher Education Act. The GSE is required
to obtain such information and keep such records as the
Secretary of the Treasury may prescribe concerning any material
financial risk to the Association which could reasonably result
from the activities of the Holding Company or its non-GSE
subsidiaries. The GSE must also keep records relating to the
policies, procedures and systems used by the GSE to monitor and
control such risk. In addition, requirements are imposed to
ensure that a substantial degree of separation is maintained
between the Association and its affiliates. In particular the
following restrictions are provided for:
(i) the assets of the Association shall be maintained
separately from those of the Holding Company and its
other subsidiaries and may be used only in connection
with the Association's purposes and obligations;
(ii) the Association's books and records shall
clearly reflect the assets and liabilities of the
Association, separate from the assets and liabilities
of the Holding Company and its other subsidiaries;
(iii) the Association's corporate office shall be
physically separate from all offices of the Holding
Company and its other subsidiaries;
(iv) no director of the Association who is appointed
by the President may serve as a director of the Holding
Company;
(v) at least one of the Association's officers shall
be an officer solely of the Association;
(vi) transactions between the Association and the
Holding Company and its subsidiaries shall be on terms
no less favorable than the Association would receive
from a third party;
(vii) the Association shall not extend credit to the
Holding Company or its subsidiaries or guarantee or
provide credit enhancement for any debt of the Holding
Company or the subsidiaries;
(viii) any amounts collected on behalf of the
Association by the Holding Company or its other
subsidiaries with respect to the assets of the
Association are required to be immediately deposited to
an account controlled solely by the Association.
Moreover, it is provided that under no circumstances shall
the assets of the Association be available to pay claims or
debts incurred by the Holding Company. It is further provided,
however, that the above requirement shall not limit the right
of the Association to pay dividends that are otherwise
permissible and shall not limit any liability of the Holding
Company that is explicitly provided for in Part B. Finally, it
is provided that the Holding Company's activities shall be
limited to the ownership of the Association and its other
subsidiaries during the wind-down period, and that all business
activities shall be conducted at the subsidiary level.
Section 440(c)(9) gives the Holding Company, as sole
shareholder of Sallie Mae, the authority to choose the
shareholder-elected members of the Association's Board of
Directors.
Section 440(c)(10) requires the Holding Company to issue to
the Secretary of the Treasury 200,000 stock warrants, each
warrant entitling the holder to purchase a share of stock of
the Holding Company at any time on or before September 30,
2007.
Section 440(c)(11) provides that after the reorganization,
the Holding Company shall not sell, pledge, or otherwise
transfer any outstanding shares of the Association, or cause
the Association to liquidate or file bankruptcy, without the
approval of the Secretary of the Treasury and the Secretary of
Education.
Section 440(d) limits the period for winding down the GSE
activities of the Association to September 30, 2007. The
Association may determine to cease its activities and dissolve
prior to September 30, 2007, unless the Secretary of Education
determines that the Association continues to be needed as a
lender of last resort or continues to be needed to purchase
loans in furtherance of an agreement under section 440(a)(6).
At the end of the period all of the Association's outstanding
debt obligations must be transferred to a trust that will
satisfy all payment obligations on the remaining debt issues
which will retain the attributes accorded them by the
Association's statutory charter. The Association must deposit
certain qualifying assets into the trust. The assets are to be
transferred irrevocably, solely for the benefit of the holders
of the Association's debt obligations, and in such amount as is
determined by the Secretary of the Treasury to be sufficient to
pay the principal and interest on the outstanding debt
obligations according to their terms. To the extent that the
Association cannot provide qualifying assets in the amount
required, the Holding Company shall be required to transfer
such assets in an amount necessary to prevent any deficiency.
After the obligations are finally discharged, the trust will
transfer any remaining assets to either the Holding Company or
its subsidiaries as directed by the Holding Company. After
funding the trust and prior to dissolution, the Association is
also required to take whatever actions are necessary to
discharge all other obligations of the Association, including
the repurchase or redemption of the Association's preferred
stock. Any such obligations that cannot be fully satisfied
shall become liabilities of the Holding Company as of the date
of dissolution. To the extent that any assets remain in the
Association following the foregoing procedures, such assets
shall be transferred to the Holding Company.
Section 440(e)(1) specifies that the number and composition
of the Board of Directors of the Holding Company shall be as
set forth in the Holding Company's charter or bylaws and as
permissible under the laws of the jurisdiction of its
incorporation.
Section 440(e)(2) specifically prohibits the use of the
names ``Student Loan Marketing Association'' or ``Sallie Mae''
or variations thereof in the names of the Holding Company or
any of its direct or indirect subsidiaries other than the
Association.
Section 440(e)(3) specifically permits the Association to
assign to the Holding Company or any of its other subsidiaries
the name ``Sallie Mae,'' to be used as a trademark or service
mark.
Section 440(e)(4) requires certain disclosures to be made
during the period commencing after the reorganization and
ending three years after the dissolution of the Association, in
connection with any use of the ``Sallie Mae'' name by the
Holding Company or its subsidiaries other than the Association.
The disclosures must be prominently displayed on all offering
documents relating to securities offerings of the Holding
Company and its subsidiaries other than the Association, and
promotional and advertising materials.
Section 440(f) makes clear that, except as explicitly
provided, the section is not intended to limit the authority of
the Association to act as a federally chartered GSE or the
authority of the Holding Company to take any actions that are
lawful for a State-chartered corporation.
Section 440(g) grants authority to the Attorney General,
upon request of the Secretary of Education or the Secretary of
the Treasury, to enforce the provisions of new Section 440, by
action brought in the United States District Court for the
District of Columbia.
Section 440(h) sets a deadline of 18 months after the
effective date of the section for the occurrence of the
reorganization pursuant to which Sallie Mae's outstanding
common stock will be converted to common stock of the Holding
Company. If the reorganization has not taken place by 18 months
after the effective date of section 440, this subsection
provides that the section shall be of no further force and
effect.
Section 440(i) sets forth the defined terms used throughout
section 440.
Section 101(b) sets forth technical amendments.
Section 101(b)(1) permits the Holding Company and any of
its subsidiaries to be eligible lenders under the Higher
Education Act for secondary market purposes.
Section 101(b)(2) supplements existing safety and soundness
requirements applicable to the Association by amending Section
439(r) of the Higher Education Act to authorize the Attorney
General, upon request of the Secretary of Education or the
Secretary of the Treasury to enforce such requirements in an
action before the United States District Court for the District
of Columbia.
Section 101(b)(3) amends the safety and soundness
requirements set forth in Section 439(r). First, the subsection
supplements the reports provided by the Association in support
of its safety and soundness requirements by requiring the
Association to provide to the Secretary of the Treasury, within
45 days of the end of each calendar quarter, financial
statements and quarterly reports setting forth the calculation
of the Association's capital ratio. The subsection also amends
the safety and soundness provisions relating to the
Association's capital ratio by providing new capital
requirements applicable to the Association after January 1,
2000, if the Association's shareholders have approved the
reorganization. At such time, the Association will be required
to maintain a capital ratio of 2.25 percent for any quarter. If
the Association fails to maintain such ratio, the Secretary of
the Treasury may take certain specified actions to limit
increases in the Association's liabilities, restrict growth in
the Association's assets (other than student loan purchases and
warehousing advances), restrict capital distributions by the
Association, require that the Association issue new capital
sufficient to restore the capital ratio to the required 2.25
percent, and limit certain increases in the executive
compensation paid by the Association. However, if the
Association's capital ratio for any quarter falls below 2.25
percent, but is equal to or in excess of 2 percent, the
Secretary must defer taking such actions until the next quarter
and then may proceed with such actions only if the capital
ratio remains below 2.25 percent. Further, the Association is
deemed to be in compliance with its capital ratio requirements
if it is rated by two nationally recognized statistical rating
organizations, without regard to its status as a federally
chartered corporation, in one of the two highest full rating
categories.
Section 101(b)(4) provides that upon the dissolution of the
Association and the creation of the trust pursuant to new
section 440(d), both the Association's Federal charter and
section 439, shall be repealed.
Title II--College Construction Loan Insurance Association
Section 201(a) provides for the repeal of the existing Part
D of Title VII of the Higher Education Act which originally
created the College Construction Loan Insurance Association.
Section 201(b)(1) provides that the Corporation is not an
agency, instrumentality or establishment of the US Government,
nor a government corporation or government controlled
corporation. In addition, no action shall be allowable against
the United States based on actions of the Corporation.
Section 201(b)(2) states that the Corporation may engage in
any business or activities for which corporations may be
organized under the laws of any State or the District of
Columbia.
Section 201(c)(1) requires the Corporation to disclose that
it is not a government sponsored enterprise and that its
obligations are not guaranteed by the full faith and credit of
the United States in all securities offerings and contracts for
insurance, guarantee, or reinsurance of obligations for 5 years
after date of enactment.
Section 201(c)(2) requires the Corporation to amend its
charter to conform to this Act.
Section 201(c)(3) prohibits the Corporation from using the
term ``College Construction Loan Insurance Association'' in its
name.
Section 201(c)(4) requires the Corporation to amend its
articles of incorporation to reflect as one of its purposes, to
guarantee, insure and reinsure bonds, leases and other
evidences of debt of educational institutions, including
Historically Black Colleges and Universities which are ranked
in the lower investment grade category.
Section 201(c)(5)(A) retains section 754 of the Higher
Education Act to remain in effect until all the stock of the
Secretary of Education has been sold. This continues the right
of the Secretary of Education and the Secretary of Treasury to
appoint directors to the Corporation's board.
Section 201(c)(5)(B) requires the Corporation to report to
the Secretary of Education for two years after the sale of the
stock with respect to financing activities of the Corporation
in financing education facilities projects.
Section 201(d)(1) requires the Treasury upon the request of
the Department of Education to make every effort to sell its
stock not later than one year after enactment.
Section 201(d)(2) requires the Corporation to purchase the
stock if the Treasury is unable to sell. The price is to be
determined by the Secretary of the Treasury and acceptable to
the Corporation based on independent appraisal by a nationally
recognized financial firm.
Section 201(e) requires the Corporation to assist the
Secretary of the Treasury and the Secretary of Education to
facilitate the sale of the stock.
Section 201(f) defines the term ``Corporation'' to mean the
Corporation established under the provision of law repealed by
subsection (a).
Title III--Repealers and Other Amendments
Section 301(a) repeals the following provisions of the
Higher Education Act of 1965:
(1) Articulation Agreements--Part B of title I (20
U.S.C. 1011 et seq.)
(2) Access & Equity to Education for all Americans
through Telecommunications--Part C of title I (20
U.S.C. 1015 et seq.)
(3) Academic Libraries and Information Services--
Title II (20 U.S.C. 1021 et seq.)
(4) National Early Intervention Scholarships--Chapter
2 of subpart 2 of part A of title IV (20 U.S.C. 1070a-
21 et seq.)
(5) Presidential Access Scholarships--Chapter 3 of
subpart 2 of part A of title IV (20 U.S.C. 1070a-31 et
seq.)
(6) Model Program Community Partnership & Counseling
Grants--Chapter 4 of subpart 2 of part A of title IV
(20 U.S.C. 1070a-41 et seq.)
(7) Early Awareness Information Program--Chapter 5 of
subpart A of title IV (20 U.S.C. 1070a-52 et seq.)
(8) Technical Assistance for Teachers & Counselors--
Chapter 8 of subpart 2 of part A of title IV (20 U.S.C.
1070a-81)
(9) Special Programs for Students whose Parents are
Engaged in Migrant Seasonal Farm Work--Subpart 5 of
part A of title IV (20 U.S.C. 1070d-2)
(10) Special Child Care Services for Disadvantaged
College Students--Subpart 8 of part A of title IV (20
U.S.C. 1070f)
(11) Loan Forgiveness for teachers, individuals
performing community service and nurses--Section 428J
(20 U.S.C. 1078-10)
(12) Training in Financial Aid Services--Section 486
(20 U.S.C. 1093)
(13) State Postsecondary Review Entities--Subpart 1
of part H of title IV (20 U.S.C. 1099a et seq.)
(14) State & Local Programs for Teacher Excellence--
Part A of title V (20 U.S.C. 1102 et seq.)
(15) National Teacher Academies--Part B of title V
(20 U.S.C. 1103 et seq.)
(16) Douglas Teacher Scholarships--Subpart 1 of Part
C of title V (20 U.S.C. 1104 et seq.)
(17) Teacher Corps--Subpart 3 of part C of title V
(20 U.S.C. 1106 et seq.)
(18) Class Size Demonstration Grant--Subpart 3 of
part D of title V (20 U.S.C. 1109 et seq.)
(19) Middle School Teaching Demonstration Programs--
Subpart 4 of part D of title V (20 U.S.C. 1110 et seq.)
(20) New Teaching Careers--Subpart 1 of part E of
title V (20 U.S.C. 1111 et seq.)
(21) National Mini Corps Programs--Subpart 1 of part
F of title V (20 U.S.C. 1113 et seq.)
(22) Demonstration Grants for Critical Language/Area
Studies--Section 586 (20 U.S.C. 1114)
(23) Development of Foreign Languages & Culture
Instructions Materials--Section 587 (20 U.S.C. 1114a)
(24) Small State Teaching Initiative--Subpart 3 of
part F of title V (20 U.S.C. 1115)
(25) Faculty Development Grants--Subpart 4 of part F
of title V (20 U.S.C. 1116)
(26) Early Childhood Staff Training & Professional
Enhancement--Subpart 5 of part F of title V (20 U.S.C.
1117)
(27) Intensive Summer Language Institutes--Section
605 (20 U.S.C. 1124a)
(28) Foreign Language Periodicals--Section 607 (20
U.S.C. 1125a)
(29) Improvement of Academic & Library Facilities--
Part A of title VII (20 U.S.C. 11326 et seq.)
(30) Cooperative Education--Title VIII (20 U.S.C.
1133 et seq.)
(31) Women & Minority Participation in Graduate
Education--Part A of title IX (20 U.S.C. 1134a et seq.)
(32) Harris Fellowships--Part B of title IX (20
U.S.C. 1134d et seq.)
(33) Javits Fellowships--Part C of title IX (20
U.S.C. 1134h et seq.)
(34) Faculty Development Fellowship Program--Part E
of title IX (20 U.S.C. 1134r et seq.)
(35) Legal Training for the Disadvantaged--Part F of
title IX (20 U.S.C. 1134s et seq.)
(36) Law School Clinical Programs--Part G of title IX
(20 U.S.C. 1134u et seq.)
(37) FIPSE--Special Projects in Areas of National
Need--Section 1011 (20 U.S.C. 1135a-11)
(38) Science & Engineering Access Programs--Subpart 2
of part B of title X (20 U.S.C. 1135c et seq.)
(39) Women & Minorities Science & Engineering
Outreach Demonstration Programs--Part C of title X (20
U.S.C. 1135e et seq.)
(40) Eisenhower Leadership Program--Part D of title X
(20 U.S.C. 1135f)
(41) Student Literacy & Mentoring Corps; Innovative
Projects for Community Service; and Urban Community
Service--Title XI (20 U.S.C. 1136 et seq.)
Section 301(b) repeals the following provisions of
the Education Amendments of 1986:
(1) a National Academy of Science Study--Part E of
title XIII (20 U.S.C. 1221-1 note)
(2) Native Hawaiian Culture and Arts Development--
Part B of title XV (20 U.S.C. 4441 et seq.)
Section 301(c) repeals the following provisions of the
Education Amendments of 1992:
(1) American Indian Postsecondary Economic
Development Scholarship--Part F of title XIII (25
U.S.C. 3351 et seq.)
(2) American Indian Teacher Training--Part G of title
XIII (25 U.S.C. 3371)
(3) National Survey of Factors Associated with
Participation--Section 1406 (20 U.S.C. 1221e-1 note)
(4) Study of Environmental Hazards in Institutions of
Higher Education--Section 1409 (20 U.S.C. 1132a note)
(5) National Job Bank for Teacher Recruitment--
Section 1412 (20 U.S.C. 1101 note)
(6) National Clearinghouse for Postsecondary
Education Materials--Part B of title XV (20 U.S.C. 1452
note)
(7) School-Based Decisionmakers--Part C of title XV
(20 U.S.C. 1101 note)
(8) Grants for Sexual Offenses Education--Part D of
title XV (20 U.S.C. 1145h note)
(9) Olympic Scholarships--Part E of title XV (20
U.S.C. 1070 note)
(10) Advanced Placement Fee Payment Program--Part G
of title XV (20 U.S.C. 1070a-11 note)
Section 301(d) Makes the following technical and conforming
amendments to the Higher Education Act of 1965:
(1) strikes subparagraph (E) of section 453(c)(2) and
redesignates the remaining subparagraphs
(2) strikes subparagraph (B) of section 487(a)(3) and
redesignates the remaining subparagraphs
(3) in section 487(a)(15) strikes the words ``the
Secretary of Veteran Affairs, and State review entities
under Subpart 1 of part H'' and inserts ``and the
Secretary of Veterans Affairs''
(4) in section 487 (a)(21) strikes the words ``,
State Postsecondary review entities,''
(5) in section 487 (c)(1)(A)(i) strikes the words
``State Agencies, and the State review entities
referred to in Subpart 1 of part H'' and inserts the
words ``and State agencies''
(6) in section 487(c)(4) strikes the words ``, after
consultation with each State review entity designated
under Subpart 1 of part H''
(7) in section 487(c)(5) strikes the words ``State
review entities designated under Subpart 1 of part H,''
(8) in section 496(a)(7) strikes the words ``and the
appropriate State Postsecondary review entity
(9) in section 496(a)(8) strikes the words ``and the
State Postsecondary review entity of the State in which
the institution of higher education is located''
(10) in section 498(g)(2) strikes everything after
the first sentence
(11) in section 498A(a)(2)(D) strikes the words ``by
the appropriate State Postsecondary review entity
designated under Subpart 1 of this part or''
(12) in section 498A(a)(2) inserts ``and'' after the
semicolon at the end of subparagraph (E); strikes
subparagraph (F); and redesignates the remaining
subparagraphs
(13) in section 498A(a)(3) inserts ``and'' after the
semicolon at the end of subparagraph (C); by striking
``; and'' at the end of subparagraph (D) and inserting
a period; and strikes subparagraph (E)
Section 302 sets an effective date of October 1, 1996, for
this title.
title iv--general provisions relating to student assistance programs
Section 401(a) amends the Higher Education Act by requiring
that, for the purposes of determining whether an institution
meets the requirements of clause (6) (commonly referred to as
the 85/15 rule), the Secretary of Education shall not consider
the financial information of any institution for a fiscal year
which began on or before April 30, 1994.
Section 401(b) makes this provision effective beginning
July 1, 1994.
Oversight Findings of the Committee
In compliance with clause 2(l)(3)(A) of rule XI of the
Rules of the House of Representatives and clause 2(b)(1) of
rule X of the Rules of the House of Representatives, the
Committee's oversight findings and recommendations are
reflected in the body of this report.
Inflationary Impact Statement
In compliance with clause 2(l)(4) of rule XI of the Rules
of the House of Representatives, the Committee estimates that
the enactment into law of H.R. 1720 will have no significant
inflationary impact on prices and costs in the operation of the
national economy. It is the judgment of the Committee that the
inflationary impact of this legislation as a component of the
Federal budget is negligible.
Government Reform and Oversight
With respect to the requirement of clause 2(l)(3)(D) of
rule XI of the Rules of the House of Representatives, the
Committee has received no report of oversight findings and
recommendations from the Committee on Government Reform and
Oversight on the subject of H.R. 1720.
Committee Estimate
Clause 7 of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison by the
Committee of the costs which would be incurred in carrying out
H.R. 1720. However, clause 7(d) of that rule provides that this
requirement does not apply when the Committee has included in
its report a timely submitted cost estimate of the bill
prepared by the Director of the Congressional Budget Office
under section 403 of the Congressional Budget Act of 1974.
Application of Law to Legislative Branch
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch. The bill does not prohibit legislative branch employees
from otherwise being eligible for services and activities
authorized.
Unfunded Mandate Statement
Section 423 of the Congressional Budget and Impoundment
Control Act requires a statement of whether the provisions of
the reported bill include unfunded mandates; the bill provides
funds for administration of the programs authorized under this
bill and as such does not contain any unfunded mandates.
Budget Authority and Congressional Budget Office Cost Estimate
With respect to the requirement of clause 2(l)(3)(B) of
rule XI of the House of Representatives and section 308(a) of
the Congressional Budget Act of 1974 and with respect to
requirements of clause 2(l)(3)(C) of rule XI of the House of
Representatives and section 403 of the Congressional Budget Act
of 1974, the Committee has received the following cost estimate
for H.R. 1720 from the Director of the Congressional Budget
Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 20, 1995.
Hon. William F. Goodling,
Chairman, Committee on Economic and Educational Opportunities,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
estimated the budgetary effect of H.R. 1720, the Privatization
Act of 1995, as ordered reported by the Committee on Economic
and Educational Opportunities on June 8, 1995.
Enactment of H.R. 1720 would affect direct spending.
Therefore, pay-as-you-go procedures would apply to this bill.
If you wish further details on this estimate, we will be
pleased to provide them.
Sincerely,
James L. Blum
(For June E. O'Neill, Director).
congressional budget office cost estimate
1. Bill number: H.R. 1720.
2. Bill title: The Privatization Act of 1995.
3. Bill status: As ordered reported by the House Committee
on Economic and Educational Opportunities on June 8, 1995.
4. Bill purpose: H.R. 1720 would: (1) allow the
stockholders of the Student Loan Marketing Association (Sallie
Mae) to reorganize the company through the formation of a
holding company while retaining through 2007 the current
government-sponsored enterprise (GSE) as a subsidiary: (2)
fully privatize the College Construction Loan Insurance
Association (Connie Lee) by removing its GSE status and
requiring the sale of the government's stock in the
corporation; (3) change the timing for implementing the
regulation governing the eligibility for participation in
student aid programs of proprietary institutions of higher
education; and (4) repeal the authorization for appropriations
for many higher education programs.
5. Estimated cost to the Federal Government: Enactment of
H.R. 1720 would affect direct spending, produce income from an
asset sale, and reduce authorizations for spending subject to
appropriations action. The following table summarizes the
estimated budgetary impact of this bill. Authorization savings
are shown on two different bases--one assuming that ``such
sums'' authorizations reflect adjustments for inflation, the
other without such adjustments.
------------------------------------------------------------------------
1996 1997 1998 1999 2000
------------------------------------------------------------------------
Direct spending and
offsetting receipts:
Estimated outlays...... 0 ....... ....... ....... .......
Assset sale receipts:
Estimated outlays...... -7 ....... ....... ....... .......
Spending subject to
appropriations action:
Estimated outlays--
assuming ``such sums''
adjusted for inflation ....... -23 -123 -127 -27
Estimated outlays--
assuming ``such sums''
not adjusted for
inflation............. ....... -21 -115 -115 -25
------------------------------------------------------------------------
Direct spending: The changes to the government's student
aid programs in H.R. 1720 would increase direct spending by $5
million in 1996. The following table summarizes the estimated
budget authority and outlays for the programs under current
law, the changes that would stem from the bill, and the
projected budget authority and outlays if the bill were
enacted.
PROJECTED DIRECT SPENDING UNDER H.R. 1720
------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000
------------------------------------------------------------------------
Projected direct
spending under
current law:
Estimated
budget
authority.... 5,778 3,847 3,014 2,866 3,150 3,438
Estimated
outlays...... 5,237 3,733 3,029 2,589 2,752 3,050
Proposed Changes--
Student aid
program changes:
Estimated
budget
authority.... -- 5 -- -- -- --
Estimated
outlays...... -- 5 -- -- -- --
Direct Spending
Under H.R. 1720:
Estimated
budget
authority.... 5,778 3,852 3,014 2,866 3,150 3,438
Estimated
outlays...... 5,237 3,738 3,029 2,589 2,752 3,050
------------------------------------------------------------------------
Offsetting receipts: The changes to reorganize Sallie Mae
and fully privatize Connie Lee would affect offsetting
receipts, increasing them by $12 million in 1996. Of this
amount, $7 million would be the proceeds of an assets sale and
would not count for pay-as-you-go purposes. The following table
summarizes the estimated impact of H.R. 172- on offsetting
receipts
PROJECTED OFFSETTING RECEIPTS UNDER H.R. 1720
------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000
------------------------------------------------------------------------
Asset sale
receipts--Connie
Lee
Privatization:
Estimated
budget
authority.... -- -7 -- -- -- --
Estimated
outlays...... -- -7 -- -- -- --
Other offsetting
receipts--Sallie
Mae
reorganization:
Estimated
budget
authority.... -- -5 -- -- -- --
Estimated
outlays...... -- -5 -- -- -- --
------------------------------------------------------------------------
Authorizations of appropriations: The repeal of
authorizations would affect discretionary spending. The
following table summarizes the estimated budgetary impact of
the bill with the discretionary authorizations adjusted for
inflation where such sums as necessary are authorized. The
total authorization of appropriations for higher education
programs would be reduced by $303 million over the 1996-2000
period.
PROJECTED AUTHORIZATIONS OF APPROPRIATIONS UNDER H.R. 1720--INCLUDING
INFLATION ADJUSTMENT FOR UNSPECIFIED AUTHORIZATIONS
------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000
------------------------------------------------------------------------
Authorizations of
appropriations
under current
law:
Estimated
authorization
\1\......... 139 143 148 153 1 1
Estimated
outlays...... 136 139 143 148 130 27
Proposed changes--
Higher education
programs:
Estimated
authorization -- -- -148 -153 -1 -1
Estimated
outlays...... -- -- -23 -123 -127 -27
Authorizations of
appropriations
under H.R. 1720:
Estimated
authorization
\1\......... 139 143 0 0 0 0
Estimated
outlays...... 136 139 120 25 2 0
------------------------------------------------------------------------
\1\ The 1995 figure is the amount already appropriated.
Components may not sum to totals due to rounding.
Note: Authorizations of education programs assume a one-year extension
as provided under the General Education Provisions Act (GEPA).
The following table shows authorizations of appropriations
under H.R. 1720 without adjustments for inflation where such
sums as necessary are authorized. When inflation is not
considered, the total authorization programs would be reduced
by $280 million over the 1996-2000 period.
PROJECTED AUTHORIZATIONS OF APPROPRIATIONS UNDER H.R. 1720--WITH NO
INFLATION ADJUSTMENT FOR UNSPECIFIED AUTHORIZATIONS
------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000
------------------------------------------------------------------------
Authorizations of
appropriations
under current
law:
Estimated
authorization
\1\......... 139 139 139 139 1 1
Estimated
outlays...... 136 138 139 139 117 25
Proposed changes--
higher education
programs:
Estimated
authorization -- -- -139 -139 -1 -1
Authorizations of
appropriations
under H.R. 1720:
Estimated
authorization
\1\......... 139 139 0 0 0 0
Estimated
outlays...... 136 138 117 24 2 0
------------------------------------------------------------------------
\1\ The 1995 figure is the amount already appropriated.
Components may not sum to totals due to rounding.
Note: Authorizations of education programs assume a one-year extension
as provided under the General Education Provisions Act (GEPA).
The budgetary impact of this bill falls within budget
function 500.
6. Basis of estimate: This estimate is based upon an
assumed enactment date of October 1, 1995.
Direct spending
Sallie Mae
The Student Loan Marketing Association (Sallie Mae) is
currently a government-sponsored enterprise (GSE) established
by the Congress to develop a secondary market for federally
guaranteed student loans. Although its stock is publicly
traded, it operates under a rather narrowly drawn federal
charter that requires it to focus on ensuring a secondary
market in student loans.
H.R. 1720 would allow Sallie Mae to reorganize itself
through the formation of a holding company that would retain
the current GSE as a subsidiary. The GSE subsidiary is referred
to in the legislation as the ``Association''. Under this
proposal, the residual GSE would cease to exist after 2007.
Stockholders would have eighteen months after enactment of this
legislation to approve the reorganization plan. This cost
estimate reflects the assumption that Sallie Mae's stockholders
would vote in favor of reorganizing the company, based on the
fact that the current management of Sallie Mae favors the
action.
The legislation would require the Association (the residual
GSE) to remain subject to all the existing terms and conditions
of the present organization. The Association would be given the
authority to enter into purchase agreements for student loans
through 2003 and to exist as a separate entity until 2007. As
long as the Association remains a secondary market for student
loans, the bill would prohibit the new private entity or
entities from competing in that secondary market.
When the Association ceases to hold student loans, the
costs of the federal government's student loan program would
increase. Under current federal law governing Sallie Mae, the
organization is required to pay the Secretary of Education an
annual offset fee equal to 0.3 percent of the volume of
(nonconsolidated) guaranteed student loans that Sallie Mae has
purchased on or after August 10, 1993. This fee, calculated on
a net present value basis over the life of each loan portfolio,
has the effect of reducing the subsidy costs incurred by the
government on guaranteed student loans. Over the 1996-2000
period, collection of this fee is expected to offset the
program's costs by $290 million. These projections are based on
the assumption that, under current law, Sallie Mae would
continue to operate and maintain its current market share of
guaranteed student loans, and that the volume of new guaranteed
student loans would decline over the next several years as the
direct loan program expands to the required 60 percent of total
loan volume.
Under H.R. 1720, new guaranteed student loans made after
2000 are not expected to be purchased by the residual GSE.
Therefore, over the 1995-2000 period, there would be no costs
from the loss of the offset fee. However, beginning in 2001 or
2002, the government could expect to incur increased subsidy
costs of between $65 million and $75 million annually because
it would no longer be collecting this fee on new loans.
Student Aid Programs
H.R. 1720 would mandate that implementation of the ``85
percent rule'', which is to take effect July 1, 1995, be
delayed for proprietary institutions of higher education whose
fiscal year begins between January 1 and April 29. CBO
estimates that this change would cost $5 million in 1996.
The ``85 percent rule'' requires that in order to be
eligible to participate in Title IV federal student aid
programs, a proprietary institution of higher education must
obtain at least 15 percent of its instruction-based revenues
from sources that are not derived from the federal student aid
programs. These programs consist primarily of student loans and
Pell grants. The rule, as currently written, requires the most
recently completed fiscal year to be used in determining
eligibility. For schools whose fiscal year is the calendar
year, enforcement of the current regulation would be based on
the fiscal year beginning January 1994. For these schools, H.R.
1720 would delay implementation so that eligibility could be
based on the fiscal year beginning January 1995. While the bill
makes the change retroactive to the effective date of the
current rule, the enactment date of H.R. 1720 is assumed to be
October 1, 1995. Thus, it would not affect federal spending in
fiscal year 1995.
Those schools that would, under current law, lose their
eligibility to participate in Title IV programs on July 1,
1995, would, if they remain in business, be given a reprieve
until their December 1995 financial statements are audited and
reviewed. There is little information on how many schools, Pell
grant recipients, or student loan borrowers would be affected
by the original rule or the proposed delay, although about half
of the schools are believed to have the calendar year as their
fiscal year. This rule, and the proposed change to it, are most
likely to affect small schools with relatively few students.
CBO estimates that 10,000 students would be attending schools
given a reprieve and would be eligible for student aid during
this period, but would not be eligible under current law. Of
course, many student would enroll in other proprietary schools
if implementation of the regulation occurred as scheduled. The
$5 million cost is the estimated federal subsidy cost
associated with student loans and Pell grant awards for the
academic year 1995-1996.
Offsetting receipts
Sallie Mae
Under provisions of H.R. 1720, Sallie Mae would be mandated
to pay a $5 million fee in 1996 for the right to assign the
name, Sallie Mae. This would increase offsetting receipts to
the Treasury in 1996. In addition, the new holding company
would be required to issue 200,000 stock warrants to the
Secretary of Treasury. Each warrant would allow the holder to
purchase one share of registered common stock at any time
before September 30, 2007. This legislation does not require
that the Secretary acquire or sell the stock. Therefore, no
proceeds from a sale of these stock warrants is anticipated. In
today's market, these stock warrants would be valued at about
$2 million (about $10 per share).
Connie Lee
H.R. 1720 would repeal the law establishing the College
Construction Loan Insurance Association (Connie Lee) and would
mandate the Secretary of the Treasury to make every effort to
sell the government's stock--which currently is not being
publicly traded--within one year of enactment. Connie Lee is a
GSE established in 1987 to provide loan guarantees for college
construction projects. There are currently no on-budget federal
costs for the GSE.
The government owns 1,914,800 shares of Connie Lee stock
from its initial investment of $19.1 million in 1987. CBO
estimates that the proceeds from the sale of the Connie Lee
stock would be approximately $7 million. This estimate is based
on an analysis that examined Connie Lee's return on equity and
potential price-earnings ratio compared to those of other
financial guarantee companies that are publicly traded, making
adjustments for Connie Lee's lower credit quality and the fact
that its stock is not a liquid asset. The proceeds from this
asset sale are not counted under pay-as-you-go scoring rules.
Authorizations of appropriations
H.R. 1720 would repeal over 50 higher education programs
authorized under the Higher Education Act of 1965 as well as a
few small programs authorized under other Acts. The attached
Table 1 details the program repeals by title of the Higher
Education Act. All but one of the programs repealed are
authorized at such sums as may be necessary through 1998, which
assumes a one-year extension as provided under the General
Education Provisions Act (GEPA). The American Indian, Alaska
Native, and Native Hawaiian Cultural Art Development program is
permanently authorized. Many of the programs that are repealed
are authorized but have not received an appropriation. The
estimated authorization levels reflect the 1995 appropriation
levels both with and without inflation adjustments. The
estimated outlays reflect the current spending patterns of the
programs.
The Department of the Treasury would incur costs of
$150,000 to $200,000 in 1996 to cover the cost of the sale of
the Connie Lee stock.
7. Pay-as-you-go considerations: Section 252 of the
Balanced Budget and Emergency Deficit Control Act of 1985 sets
up pay-as-you-go procedures for legislation affecting direct
spending or receipts through 1998. Additional outlays are
estimated to be zero because the increase in direct spending in
the student aid programs is offset by fees paid to the Treasury
for the right to use the name Sallie Mae. CBO estimates the
pay-as-you-go effects of the bill as follows:
------------------------------------------------------------------------
1995 1996 1997 1998
------------------------------------------------------------------------
Change in outlays................... 0 0 0 0
Change in receipts.................. (\1\) (\1\) (\1\) (\1\)
------------------------------------------------------------------------
\1\ Not applicable.
8. Estimated cost to State and local governments: None.
9. Estimate comparison: None.
10. Previous CBO estimate: None.
11. Estimate prepared by: Deborah Kalcevic
12. Estimate approved by: Robert A. Sunshine for Paul N.
Van de Water, Assistant Director for Budget Analysis.
TABLE 1.--PROJECTED SPENDING UNDER H.R. 1720--WITH NO INFLATION ADJUSTMENT FOR UNSPECIFIED AUTHORIZATIONS
[By fiscal year, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000
----------------------------------------------------------------------------------------------------------------
AUTHORIZATIONS OF APPROPRIATIONS
Current Law
Estimated authorization................... 139 139 139 139 1 1
Estimated outlays......................... 136 138 139 139 117 25
Proposed Changes
Higher Education Act Programs: Title I:
Partnerships for Education Excellence:
Estimated authorization................... ......... ......... 0 0 0 0
Estimated outlays......................... ......... ......... 0 0 0 0
Title II Academic Libraries and information
Services:
Estimated authorization................... ......... ......... -11 -11 0 0
Estimated outlays......................... ......... ......... -5 -9 -7 -3
Title IV: Student Assistance:
Estimated authorization................... ......... ......... -34 -34 0 0
Estimated outlays......................... ......... ......... -6 -31 -28 -3
Title V: Educator Recruitment, Retention, and
Development:
Estimated authorization................... ......... ......... -16 -16 0 0
Estimated outlays......................... ......... ......... -2 -13 -14 -3
Title VI: International Education Programs:
Estimated authorization................... ......... ......... 0 0 0 0
Estimated outlays......................... ......... ......... 0 0 0 0
Title VII: Construction, Reconstruction, and
Renovation of Academic Facilities:
Estimated authorization................... ......... ......... 0 0 0 0
Estimated outlays......................... ......... ......... 0 0 0 0
Title VIII: Cooperative Education:
Estimated authorization................... ......... ......... -7 -7 0 0
Estimated outlays......................... ......... ......... -1 -6 -6 -1
Title IX: Graduate Programs:
Estimated authorization................... ......... ......... -50 -50 0 0
Estimated outlays......................... ......... ......... -6 -40 -43 -10
Title X: Postsecondary Improvement Programs:
Estimated authorization................... ......... ......... -4 -4 0 0
Estimated outlays......................... ......... ......... -0 -3 -3 -1
Title XI: Community Services Programs:
Estimated authorization................... ......... ......... -14 -14 0 0
Estimated outlays......................... ......... ......... -2 -12 -12 -3
Subtotal:
Estimated authorization............... ......... ......... -137 -137 0 0
Estimated outlays..................... ......... ......... -21 -113 -113 -24
Changes to Other Laws:
Estimated authorization................... ......... ......... -2 -2 -1 -1
Estimated outlays......................... ......... ......... -0 -2 -2 -1
Tatal, H.R. 1720:
Estimated authorization............... ......... ......... -139 -139 -1 -1
Estimated outlays..................... ......... ......... -21 -115 -115 -25
Projected Under H.R. 1720:
Estimated authroization................... 139 139 0 0 0 0
Estimated outlays......................... 136 138 117 24 2 0
----------------------------------------------------------------------------------------------------------------
Components may not sum to totals due to rounding.
Note: Authorizations of education programs assume a one--year extension as provided for under the general
Education Provisions Act.
Votes on Amendments
The Committee defeated an amendment (15 ayes to 19 noes)
offered by Mr. Owens to strike paragraph (35), relating to
faculty development fellowship program, and redesignate the
succeeding paragraphs accordingly.
The roll call vote is as follows:
AYES NOES
Mr. Clay Chairman Goodling
Mr. Miller Mr. Petri
Mr. Kildee Mrs. Roukema
Mr. Williams Mr. Gunderson
Mr. Martinez Mr. Ballenger
Mr. Owens Mr. Barrett
Mr. Sawyer Mr. Cunningham
Mrs. Mink Mr. Hoekstra
Mr. Andrews Mr. McKeon
Mr. Reed Mr. Castle
Mr. Becerra Mrs. Meyers
Mr. Scott Mr. Talent
Ms. Woolsey Mr. Greenwood
Mr. Romero-Barcelo Mr. Hutchinson
Mr. Reynolds Mr. Knollenberg
Mr. Weldon
Mr. Funderburk
Mr. Souder
Mr. McIntosh
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3 of rule XIII of the Rules of the
House of Representatives, changes in existing law made by the
bill, as reported, are shown as follows (existing law proposed
to be omitted is enclosed in black brackets, new matter is
printed in italic, existing law in which no change is proposed
is shown in roman):
HIGHER EDUCATION ACT OF 1965
* * * * * * *
TITLE I--PARTNERSHIPS FOR EDUCATIONAL EXCELLENCE
* * * * * * *
[PART B--ARTICULATION AGREEMENTS
[SEC. 121. FINDINGS AND PURPOSE.
[(a) Findings.--The Congress finds that--
[(1) because more than one-half of all first-time
first-year students attending postsecondary
institutions attend community or junior colleges, and
because almost one-half of minority students enrolled
in higher education attend 2-year institutions,
community and junior colleges represent a substantial
and an important educational resource;
[(2) declining participation rates for low-income
students and minorities at institutions of higher
education is of growing concern to the higher education
community and Congress; and
[(3) there is growing awareness of the need to assist
low-income, minority and other nontraditional students
in bridging the gap between 2-year to 4-year
institutions, enabling such students to reach their
individual potential, as well as contribute to the
larger society.
[(b) Purpose.--The purpose of this part is to improve the
educational opportunities of this Nation's postsecondary
students by creating comprehensive articulation agreements and
planning between partnerships of 2-year and 4-year institutions
of higher education.
[SEC. 122. AUTHORIZATION OF GRANTS.
[(a) Assistance for Articulation Partnerships.--From amounts
appropriated for this part, the Secretary shall make grants to
States to enable States to make awards, either on a competitive
basis or on the basis of a formula determined by the State, to
articulation partnerships between--
[(1) a qualified 2-year institution; and
[(2) a qualified 4-year institution.
[(b) Qualified Institutions.--For purposes of this part--
[(1) a qualified 2-year institution is an institution
of higher education (as determined under section
481(a)) that is an eligible institution under section
435(a) and that--
[(A) is a nonprofit institution that offers a
2-year associate degree or a 2-year certificate
program; or
[(B) is a proprietary institution that offers
a 2-year associate degree program; and
[(2) a qualified 4-year institution is an institution
of higher education (as determined under section
481(a)) that is an eligible institution under section
435(a) and that offers a baccalaureate degree program.
[(c) Allocation and State Grants.--
[(1) Formula allocation.--In any fiscal year for
which the amount made available under section 129 to
carry out the provisions of this part equals or exceeds
$50,000,000, the Secretary shall allot an amount that
bears the same ratio to the amount appropriated under
section 129 for such fiscal year as the total amount
received under title IV by students attending
institutions of higher education in that State for such
fiscal year bears to the total amount received under
title IV by all students for such fiscal year, based on
the most recent year for which such data are available.
[(2) Competitive grants.--In any fiscal year for
which the amount made available under section 129 to
carry out the provisions of this part do not equal or
exceed $50,000,000, the Secretary is authorized, in
accordance with the provisions of this part, to make
grants to States to carry out articulation agreements
under sections 124 and 125.
[SEC. 123. STATE APPLICATION.
[Each State that desires to receive a grant under this part
shall submit an application to the Secretary in such form and
containing or accompanied by such information as the Secretary
may require. Such application shall--
[(1) after consultation with the State agencies
responsible for supervision of community colleges,
technical institutes, or other 2-year postsecondary
institutions, designate a sole State agency as the
State agency responsible for the administration and
supervision of activities carried out with assistance
under this part;
[(2) describe how funds will be allocated in a manner
consistent with section 124;
[(3) contain assurances that the State will comply
with the requirements of this part;
[(4) provide for an annual submission of data
concerning the use of funds and students served with
assistance under this part; and
[(5) provide that the State will keep such records
and provide such information to the Secretary as may be
required for purposes of financial audits and program
evaluation.
[SEC. 124. LOCAL APPLICATIONS.
[Any articulation partnership comprised of qualified
institutions that desires to receive a grant from a State under
this part shall submit an application to the State in such form
and containing or accompanied by such information as the State
may require and shall--
[(1) include in the articulation agreement--
[(A) assurances that academic credit earned
at the qualified institution described in
section 122(b)(1) will be transferable to the
qualified institution or institutions as
described in section 122(b)(2);
[(B) development of articulation agreement
programs and services appropriate to the needs
of the partnership participants;
[(C) activities that facilitate the
development of programs and services
appropriate to the needs of the students
attending courses covered by the articulation
agreement;
[(D) inservice training for faculty designed
to implement effective articulation agreements;
[(E) counseling services; and
[(F) information concerning programs
contained in the articulation agreement;
[(2) include assurances that the articulation
partnership has the qualified personnel required--
[(A) to develop, administer, and implement
the program required by this part; and
[(B) to provide special training necessary to
prepare staff for the program; and
[(3) include a plan of operation for the program
which includes a description of--
[(A) the program goals;
[(B) the uses of funds as required by
paragraph (2);
[(C) the activities and services which will
be provided under the program (including
training and preparation of staff); and
[(D) the subject areas to be included in the
articulation agreement.
[SEC. 125. ARTICULATION AGREEMENT.
[(a) Length of Grant.--Each recipient of a grant from a State
shall use the amounts provided under the grant to develop and
operate articulation agreements for 6 years.
[(b) Use of Funds.--Funds provided to an articulation
partnership under this part may be used--
[(1) to perform any activity or program required by
section 124;
[(2) as part of the program's planning activities, to
acquire technical assistance from Federal, State, or
local entities that have successfully designed,
established, and operated articulation programs;
[(3) to provide workshops with students and teachers,
counseling for students to continue their education to
a bachelors degree, orientation visits at institutions
participating in the partnerships;
[(4) to develop agreements with local educational
agencies for vocational course equivalency approval
procedures for purposes of satisfying entrance
requirements to qualified institutions; and
[(5) to provide outreach to potential students.
[SEC. 126. STATE ADMINISTRATION.
[A State may reserve not more than 3 percent of the amounts
available under this part for any fiscal year for State
administrative costs including monitoring and technical
assistance.
[SEC. 127. PRIORITY.
[The State shall give priority to grant applications for
programs which--
[(1) encourage teacher education;
[(2) have, as one of the partners participating in an
articulation agreement, an entity participating in an
articulation agreement described in section 344(b)(1)
of the Carl D. Perkins Vocational and Applied
Technology Education Act;
[(3) contribute their own institutional resources;
[(4) are not subject to a default reduction agreement
under section 428F;
[(5) encourage technology education; or
[(6) encourage articulation in subject areas of
national importance as determined by the Secretary.
[SEC. 128. REPORTS.
[(a) State Reports.--Each State shall submit to the Secretary
an annual report on the operation of the program under this
part in such State during the preceding year. Such report shall
include such information as the Secretary may require by
regulation.
[(b) Evaluation and Dissemination.--
[(1) Evaluation.--The Secretary shall, on the basis
of the reports submitted under subsection (a), evaluate
all or a sample of the programs conducted under this
part for the purposes of--
[(A) determining the success or failure of
such programs in increasing access and entry of
students from 2-year institutions to 4-year
institutions; and
[(B) identifying the most successful programs
under this part and the causes for such
success.
[(2) Dissemination.--The Secretary shall, not later
than January 31, 1996, submit a report to the Congress
on the results of the evaluation described in paragraph
(1). The Secretary shall disseminate the findings made
pursuant to subparagraph (B) through appropriate
agencies and organizations.
[(3) Reservation.--The Secretary may reserve up to 3
percent of the amount appropriated under section 129 to
carry out this subsection.
[SEC. 129. AUTHORIZATION OF APPROPRIATIONS.
[There are authorized to be appropriated to carry out this
part, $25,000,000 for fiscal year 1993, and such sums as may be
necessary for each of the 4 succeeding fiscal years.
[PART C--ACCESS AND EQUITY TO EDUCATION FOR ALL AMERICANS THROUGH
TELECOMMUNICATIONS
[SEC. 131. PROGRAM ESTABLISHED; AUTHORIZATION OF APPROPRIATIONS;
ELIGIBILITY.
[(a) General Authority.--The Secretary is authorized to make
grants to eligible partnerships to enable such partnerships to
pay the Federal share of the cost of the activities described
in the application submitted pursuant to section 132.
[(b) Authorizations of Appropriations.--
[(1) In general.--There are authorized to be
appropriated to carry out this part $10,000,000 for
fiscal year 1993 and such sums as may be necessary for
each of the 4 succeeding fiscal years.
[(2) Availability.--Funds appropriated pursuant to
the authority of paragraph (1) shall remain available
until expended.
[(c) Eligible Partnership.--For the purpose of this part the
term ``eligible partnership' means a partnership which--
[(1) shall consist of--
[(A) a public broadcasting entity or a
consortium thereof; and
[(B) an institution of higher education or a
consortium thereof; and
[(2) may also include a State, a unit of local
government, or a public or private nonprofit
organization.
[(d) Federal Share.--The Federal share shall be 50 percent.
[SEC. 132. APPLICATION.
[(a) In General.--Each eligible partnership desiring to
receive a grant under this part 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.
[(b) Contents.--Each application submitted pursuant to
paragraph (1) shall--
[(1) describe the education telecommunications
activities or services to be assisted;
[(2) describe the administrative and management
structure supporting such activities or services;
[(3) provide assurances that the financial interests
of the United States in the telecommunications
equipment, software and other facilities shall be
protected for the useful life of such equipment,
software or facilities;
[(4) describe the manner in which nontraditional
postsecondary education students will benefit from the
activities and services supported;
[(5) describe the manner in which special services,
including captioned films, television, descriptive
video and education media for individuals with
disabilities, shall be supported; and
[(6) provide assurances that the eligible partnership
will provide the non-Federal share of assistance under
this part.
[(c) Approval of Applications.--
[(1) In general.--The Secretary shall, in approving
applications under this part, give priority to
applications which describe programs that--
[(A) include support for services to make
captioned films, descriptive video and
educational media available to individuals with
disabilities who otherwise lack access to such
educational materials;
[(B) will provide, directly or indirectly,
activities or services to a significant number
of postsecondary institutions;
[(C) improve access to accredited
telecommunications coursework for individuals
with disabilities otherwise denied such access;
[(D) will be available in a multistate area;
[(E) include evidence of significant support
for the program from the business community; or
[(F) provide matching funds, in an amount
which exceeds the required non-Federal share.
[(2) Equitable geographic distribution of
assistance.--In approving applications under this part
the Secretary shall ensure the equitable geographic
distribution of grants awarded under this part.
[SEC. 133. AUTHORIZED ACTIVITIES.
[Grants awarded under this part shall be used for one or more
of the following activities:
[(1) The acquisition of site equipment to provide the
technical ability to receive diverse education services
at schools, campuses, and work site locations.
[(2) Satellite, fiber optic and other distribution
systems, and for local broadcast or other local
distribution capability.
[(3) Pre-service or in-service education and training
for kindergarten through 12th grade teachers through
interactive television conferencing.
[(4) Preparation of telecommunications programs and
software that support national, regional or statewide
efforts to provide teaching and learning materials not
otherwise available for local use.
[(5) A loan service of captioned films, descriptive
video and educational media in order to make such
materials available, in accordance with regulations
issued by the Secretary, in the United States for
nonprofit purposes to individuals with disabilities,
parents of individuals with disabilities, and other
individuals directly involved in activities for the
advancement of individuals with disabilities, including
addressing problems of illiteracy among individuals
with disabilities.
[SEC. 134. DEFINITION.
[For the purpose of this part, the term ``public broadcasting
entity'' has the same meaning given to such term by section
397(11) of the Communications Act of 1934.
[SEC. 135. REPORT.
[(a) In General.--Each recipient of a grant under this part
shall submit a report to the Secretary not later than 30 days
after the conclusion of the grant period.
[(b) Contents.--Each report described in subsection (a) shall
include--
[(1) a description of activities and services
assisted under this part;
[(2) a description of the population served by the
program; and
[(3) an assessment of the ability of private sector
entities participating in the eligible partnership to
continue the support of the activities and services in
the absence of Federal funding.
[(c) Dissemination.--The Secretary shall select reports
received under this subsection that are appropriate for
dissemination to the education community and shall make such
reports available through the National Diffusion Network.
[TITLE II--ACADEMIC LIBRARIES AND INFORMATION SERVICES
[SEC. 201. PURPOSE; AUTHORIZATION.
[(a) Purpose.--The Secretary shall carry out a program to
assist--
[(1) college and university libraries in acquiring
technological equipment and in conducting research in
information technology in accordance with part A;
[(2) in the education and training of persons in
library and information science and to encourage
research and development relating to improvement of
libraries (including the promotion of economical and
effective information delivery, cooperative efforts,
and developmental projects) in accordance with part B;
[(3) the Nation's major research libraries, in
maintaining and strengthening their collections, and in
making information resources available to other
libraries whose users have need for research materials
in accordance with part C; and
[(4) historically black colleges and universities and
other minority-serving institutions with programs in
library and information sciences to train and educate
African-Americans and other underrepresented racial,
national origin, and ethnic minorities in such programs
in accordance with part D.
[(b) Authorization of Appropriations.--
[(1) Part a.--There are authorized to be appropriated
to carry out part A $20,000,000 for fiscal year 1993
and such sums as may be necessary for each of the 4
succeeding fiscal years.
[(2) Part b.--There are authorized to be appropriated
to carry out part B $10,000,000 for fiscal year 1993
and such sums as may be necessary for each of the 4
succeeding fiscal years.
[(3) Part c.--There are authorized to be appropriated
to carry out part C $20,000,000 for fiscal year 1993
and such sums as may be necessary for each of the 4
succeeding fiscal years.
[(4) Part d.--There are authorized to be appropriated
to carry out part D $15,000,000 for fiscal year 1993
and such sums as may be necessary for each of the 4
succeeding fiscal years.
[SEC. 202. NOTIFICATION OF STATE AGENCY.
[Each institution of higher education which receives a grant
under this title shall annually inform the State agency
designated pursuant to section 1203 of its activities under
this title.
[SEC. 203. LIBRARY EXPERTS.
[The Secretary shall make every effort to ensure that
programs under this title are administered by appropriate
library experts.
[PART A--COLLEGE LIBRARY TECHNOLOGY AND COOPERATION GRANTS
[SEC. 211. COLLEGE LIBRARY TECHNOLOGY AND COOPERATION GRANTS.
[(a) Grants Authorized.--The Secretary is authorized to make
grants for technological equipment, networking, and other
special purposes to--
[(1) institutions of higher education which
demonstrate a need for special assistance for the
planning, development, acquisition, maintenance, or
upgrading of technological equipment necessary to
organize, access or utilize material in electronic
formats and to participate in networks for the
accessing and sharing of library and information
resources;
[(2) combinations of institutions of higher education
which demonstrate a need for special assistance in
establishing and strengthening joint-use library
facilities, resources, or equipment for the accessing
and sharing of library and information resources;
[(3) other public and private nonprofit organizations
which provide library and information services to
institutions of higher education on a formal,
cooperative basis for the purpose of establishing,
developing, or expanding programs or projects that
improve the services provided by such organizations to
institutions of higher education; and
[(4) institutions of higher education conducting
research or demonstration projects that improve
information services to meet special national or
regional needs by utilizing technology to enhance
library or information services such as through the
National Research and Education Network.
[(b) Awards Requirements.--From funds appropriated for this
part, the Secretary shall make competitive awards to
institutions, combinations of institutions, or organizations in
each of the categories described in paragraphs (1) through (4)
of subsection (a).
[(c) Amount.--
[(1) In general.--The Secretary shall award grants
under this section in an amount which is not less than
$25,000.
[(2) Special rule.--The Secretary shall award grants
pursuant to paragraph (1) of subsection (a) in an
amount which is not more than $50,000 for each
institution of higher education.
[(d) Priority.--In awarding grants pursuant to paragraph (1)
of subsection (a), the Secretary shall give priority to
institutions of higher education seeking assistance for
projects which assist developing institutions of higher
education in linking one or more institutions of higher
education to resource sharing networks.
[(e) Duration.--The Secretary shall award grants under this
section for a period not to exceed 3 years.
[(f) Application.--
[(1) In general.--Each institution of higher
education or combination thereof 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 reasonably
require.
[(2) Content.--Each application submitted pursuant to
paragraph (1) shall--
[(A) describe the activities and services for
which assistance is sought; and
[(B) contain assurances that the applicant
will expend during the period for which the
grant is sought (from funds other than funds
received under this title), for the same
purpose as such grant, an amount from such
other sources equal to not less than one-third
of such grant.
[(3) Criteria.--The Secretary shall prescribe by
regulation criteria for the approval of applications
submitted under this section.
[PART B--LIBRARY EDUCATION, RESEARCH, AND DEVELOPMENT
[SEC. 221. GRANTS AUTHORIZED.
[(a) Grants.--From the amounts appropriated for this part for
any fiscal year, the Secretary shall make grants in accordance
with sections 222 and 223.
[(b) Reservation.--Of the amount appropriated for this part
for any fiscal year, the Secretary shall make available two-
thirds of such amount for the purpose of section 222 and one-
third of such amount for the purpose of section 223.
[SEC. 222. LIBRARY EDUCATION AND HUMAN RESOURCE DEVELOPMENT.
[(a) Purpose and Grant Criteria.--The Secretary is authorized
to make grants to, and enter into contracts with, institutions
of higher education and library organizations or agencies to
assist such institutions, library organizations, or agencies in
educating and training persons in library and information
science, particularly in areas of critical needs, such as
recruitment and retention of minorities. Such grants or
contracts may be used by such institutions, library
organizations, or agencies to--
[(1) assist in covering the cost of courses of study
or staff development (including short term or regular
session institutes),
[(2) establish and maintain fellowships or
traineeships with stipends (including allowances for
travel, subsistence, and other expenses) for fellows
who demonstrate need and who are working toward a
graduate degree (and their dependents), not in excess
of such maximum amounts as may be determined by the
Secretary, and
[(3) establish, develop, or expand programs of
library and information science, including new
techniques of information transfer and communication
technology.
[(b) Additional Requirements.--Not less than 50 percent of
the grants made under this section shall be for the purpose of
establishing and maintaining fellowships or traineeships under
subsection (a)(2).
[SEC. 223. RESEARCH AND DEMONSTRATION.
[The Secretary is authorized to make grants to, and enter
into contracts with, institutions of higher education and other
public and private agencies, institutions, and organizations
for research and development projects related to the
improvement of libraries, education in library and information
science, the enhancement of library services through effective
and efficient use of new technologies, and for the
dissemination of information derived from such projects.
[SEC. 224. CONSULTATION REQUIREMENTS.
[The Secretary shall consult with the appropriate library and
information science professional bodies in the determination of
critical needs under section 222 and in the determination of
priorities under section 223.
[PART C--IMPROVING ACCESS TO RESEARCH LIBRARY RESOURCES
[SEC. 231. RESEARCH LIBRARY RESOURCES.
[(a) Grants.--
[(1) General authority.--From the amount appropriated
for this part, the Secretary shall make grants to
institutions with major research libraries.
[(2) Major research library.--For the purposes of
this part, the term ``major research library'' means a
public or private nonprofit institution (including the
library resources of an institution of higher
education), an independent research library, or a State
or other public library, having a library collection
which is available to qualified users and which--
[(A) makes a significant contribution to
higher education and research;
[(B) is broadly based and is recognized as
having national or international significance
for scholarly research;
[(C) is of a unique nature, and contains
material not widely available; and
[(D) is in substantial demand by researchers
and scholars not connected with that
institution.
[(b) Eligibility.--In determining eligibility for assistance
under this part, the Secretary shall permit institutions that
do not otherwise qualify to provide additional information or
documents to demonstrate the national or international
significance for scholarly research of the particular
collection described in the grant proposal.
[SEC. 232. GEOGRAPHICAL DISTRIBUTION OF GRANTS.
[In making grants under this part, the Secretary shall
endeavor to achieve broad and equitable geographical
distribution throughout the Nation.
[PART D--STRENGTHENING LIBRARY AND INFORMATION SCIENCE PROGRAMS AND
LIBRARIES IN HISTORICALLY BLACK COLLEGES AND UNIVERSITIES AND OTHER
MINORITY-SERVING INSTITUTIONS
[SEC. 241. STRENGTHENING LIBRARY AND INFORMATION SCIENCE PROGRAMS AND
LIBRARIES IN HISTORICALLY BLACK COLLEGES AND
UNIVERSITIES AND OTHER MINORITY-SERVING
INSTITUTIONS.
[(a) Eligible Institutions.--For the purposes of this
section, the term ``eligible institution'' means--
[(1) an historically black college or university; or
[(2) an institution of higher education which--
[(A) serves a large number or high percentage
of minority students; and
[(B) enrolls and graduates minority students
in library and information science programs.
[(b) General Authority.--
[(1) Authority of secretary.--The Secretary is
authorized to make grants to, and enter into contracts
with--
[(A) eligible institutions to assist such
institutions in strengthening their library and
information science programs and library
resources; and
[(B) eligible institutions, and library
organizations or agencies which have nationally
approved programs in library and information
science, to assist such institutions and
organizations in the education and training of
African Americans and other underrepresented
racial, national origin, and ethnic minorities,
particularly in areas of critical needs of
library and information science.
[(2) Use of funds.--Such grants or contracts may be
used by such institutions, library organizations, or
agencies to--
[(A) establish, develop, or strengthen
libraries and library and information science
programs, including new techniques of
information transfer and communication
technology;
[(B) assist in covering the cost of courses
of study or staff development (including short-
term or regular session institutes); and
[(C) establish and maintain fellowships or
traineeships with stipends (including
allowances for travel, subsistence, and other
expenses) for fellows who demonstrate need and
who are working toward a graduate degree (and
their dependents), not in excess of such
maximum amounts as may be determined by the
Secretary.
[(c) Traineeships.--Not less than 50 percent of the grants
made under this section shall be for the purpose of
establishing and maintaining fellowships or traineeships under
subsection (a)(2).
[(d) Funding Prohibition.--Notwithstanding any other
provision of law, no funds are authorized to be appropriated to
carry out this part for any fiscal year unless the amount
appropriated to carry out each of parts A, B, and C for such
fiscal year equals or exceeds the amount appropriated for such
parts, respectively, for fiscal year 1992.]
* * * * * * *
TITLE IV--STUDENT ASSISTANCE
Part A--Grants to Students in Attendance at Institutions of Higher
Education
* * * * * * *
Subpart 2--Federal Early Outreach and Student Services Programs
* * * * * * *
[CHAPTER 2--NATIONAL EARLY INTERVENTION SCHOLARSHIP AND PARTNERSHIP
PROGRAM
[SEC. 404A. EARLY INTERVENTION PROGRAM AUTHORIZED.
[The Secretary is authorized, in accordance with the
requirements of this chapter, to establish a program that--
[(1) encourages States to provide or maintain a
guarantee to eligible low-income students who obtain a
high school diploma (or its equivalent), of the
financial assistance necessary to permit them to attend
an institution of higher education; and
[(2) provides incentives to States, in cooperation
with local educational agencies, institutions of higher
education, community organizations and business, to
provide--
[(A) additional counseling, mentoring,
academic support, outreach, and supportive
services to elementary, middle, and secondary
school students who are at risk of dropping out
of school; and
[(B) information to students and their
parents about the advantages of obtaining a
postsecondary education and their college
financing options.
[SEC. 404B. STATE ELIGIBILITY AND STATE PLAN.
[(a) Plan Required for Eligibility.--(1) In order for a State
to qualify for a grant under this chapter, the State shall
submit to the Secretary a plan for carrying out the program
under this chapter. Such plan shall provide for the conduct,
under the State program, of both a scholarship component in
accordance with section 404D and an early intervention
component in accordance with section 404C.
[(2) Each State 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 and shall--
[(A) describe the activities for which assistance
under this section is sought; and
[(B) provide such additional assurances as the
Secretary determines necessary to ensure compliance
with the requirements of this section.
[(b) Matching Requirement.--The Secretary shall not approve a
plan submitted under subsection (a) unless such plan--
[(1) provides that the State will provide, from
State, local, or private funds, not less than one-half
the cost of the program;
[(2) specifies the methods by which such share of the
costs will be paid; and
[(3) includes provisions designed to assure that
funds provided under this chapter shall supplement and
not supplant funds expended for existing State and
local programs.
[(c) Methods for Complying With Matching Requirement.--A
State may count toward the contribution required by subsection
(b)(1)--
[(1) the amount of the grants paid to students from
State, local, or private funds under this chapter;
[(2) the amount of tuition, fees, room or board
waived or reduced for recipients of grants under this
chapter; and
[(3) the amount expended on documented, targeted,
long-term mentoring and counseling provided by
volunteers or paid staff of nonschool organizations,
including businesses, religious organizations,
community groups, postsecondary educational
institutions, nonprofit and philanthropic
organizations, and other organizations.
[(d) Payment Requirements.--Upon submission by a State of
such documents as the Secretary may, by regulation, require for
demonstrating the total amount expended by the State in
accordance with this chapter for a fiscal year, the Secretary
shall, from such State's allotment under section 404E for such
fiscal year, pay to such State an amount equal to not more than
one-half of the total amount so expended.
[SEC. 404C. EARLY INTERVENTION.
[(a) In General.--In order to receive payments under section
404B(d), a State shall demonstrate to the satisfaction of the
Secretary that the State will provide comprehensive mentoring,
counseling, outreach, and supportive services to students
participating in programs under this chapter who are enrolled
in preschool through grade 12. Such counseling shall include
financial aid counseling that provides information on the
opportunities for financial assistance under this title. The
State shall demonstrate, pursuant to regulations of the
Secretary, the methods by which the State will target services
on priority students.
[(b) Uses of Funds.--
[(1) In general.--The Secretary shall, by regulation,
establish criteria for determining whether
comprehensive mentoring, counseling, outreach, and
supportive services programs may be used to meet the
requirements of subsection (a).
[(2) Allowable providers.--The activities required by
subsection (a) may be provided by service providers
such as community-based organizations, schools,
institutions of higher education, public and private
agencies, nonprofit and philanthropic organizations,
businesses, institutions and agencies sponsoring
programs authorized under subpart 4 of this part, and
other organizations the Secretary deems appropriate.
[(3) Permissible activities.--Examples of acceptable
activities to meet the requirements of subsection (a)
include the following:
[(A) Providing eligible students in preschool
through grade 12 with a continuing system of
mentoring and advising that--
[(i) is coordinated with the Federal
and State community service
initiatives; and
[(ii) may include such support
services as after school and summer
tutoring, assistance in obtaining
summer jobs, career mentoring and
academic counseling.
[(B) Requiring each student to enter into an
agreement under which the student agrees to
achieve certain academic milestones, such as
completing a prescribed set of courses and
maintaining satisfactory academic progress as
described in section 484(c), in exchange for
receiving tuition assistance for a period of
time to be established by each State.
[(C) Activities designed to ensure high
school completion and college enrollment of at-
risk children, including identification of at-
risk children, after school and summer
tutoring, assistance in obtaining summer jobs,
academic counseling, volunteer and parent
involvement and former or current scholarship
recipients as mentor or peer counselors, skills
assessment, personal counseling, family
counseling and home visits, and staff
development, and programs and activities as
described in this subparagraph which are
specially designed for students of limited
English proficiency.
[(D) Prefreshman summer programs that--
[(i) are at institutions of higher
education that also have 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) assure the participation of
students who qualify as disadvantaged
under the provisions of section 402D or
who are eligible for comparable
programs funded by the State;
[(iii)(I) provide summer instruction
in remedial, developmental or
supportive courses; (II) provide such
summer services as counseling,
tutoring, or orientation; and (III)
provide grant aid to students to cover
prefreshman summer costs for books,
supplies, living costs and personal
expenses; and
[(iv) assure that participating
students will receive financial aid
during each academic year they are
enrolled at the participating
institution after the prefreshman
summer.
[(E) Requiring eligible students to meet
other standards or requirements as the State
determines necessary to meet the purposes of
this section.
[(c) Priority Students.--In administering the early
intervention component, the State shall treat as priority
students any student in preschool through grade 12 who is
eligible--
[(1) to be counted under section 1005(c) of the
Elementary and Secondary Education Act of 1965;
[(2) for free or reduced price meals pursuant to the
National School Lunch Act; or
[(3) for assistance pursuant to part A of title IV of
the Social Security Act (Aid to Families with Dependent
Children).
[SEC. 404D. SCHOLARSHIP COMPONENT.
[(a) In General.--In order to receive payments under section
404B(d), a State shall establish or maintain a financial
assistance program that awards grants to students in accordance
with the requirements of this section. The Secretary shall
encourage the State to ensure that the tuition assistance
provided pursuant to this section is available to an eligible
student for use at any eligible institution.
[(b) Grant Amounts.--The maximum amount of the grant that an
eligible student in any participating State shall be eligible
to receive under this section shall be established by the
State. The minimum amount of the grant for each fiscal year
shall not be less than the lesser of--
[(1) 75 percent of the average cost of attendance for
an in-State student, in a 4-year program of
instruction, at public institutions of higher education
in such State, as determined in accordance with
regulations prescribed by the Secretary; or
[(2) the maximum grant funded under section 401 for
such fiscal year.
[(c) Relation to Other Assistance.--Tuition assistance
provided under this chapter shall not be considered for the
purpose of awarding Federal grant assistance under this title,
except that in no case shall the total amount of student
financial assistance awarded to a student under this title
exceed such student's total cost of attendance.
[(d) Eligible Students.--A student eligible for assistance
under this chapter is a student who--
[(1) is less than 22 years old at time of first grant
award;
[(2) receives a high school diploma or a certificate
of high school equivalence 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, as a State option, a State may
offer grant program portability for recipients who
attend institutions of higher education outside such
State; and
[(4) who participated in the State early intervention
component required under section 404C.
[(e) Priority; Waiver.--(1) The Secretary shall ensure that
each State place a priority on awarding scholarships to
students who will receive a Pell Grant for the academic year
for which the award is being made under this chapter.
[(2) A State may consider students who have successfully
participated in programs funded under chapter 1 of this subpart
to have met the requirements of subsection (d)(4).
[SEC. 404E. DISTRIBUTION OF FUNDS.
[(a) Competitive Awards.--If the amount appropriated to carry
out this chapter for a fiscal year is less than $50,000,000,
then the Secretary shall award grants under this chapter on a
competitive basis to States to carry out a program described in
section 404A.
[(b) Allotment Based on Title I ESEA Allocations.--If the
amount appropriated to carry out this chapter for a fiscal year
is $50,000,000 or more, then the Secretary shall allot to each
State an amount which bears the same ratio to such sums as--
[(1) the amount allocated under section 1005 of the
Elementary and Secondary Education Act of 1965 to the
local education agencies in the State,
bears to--
[(2) the total amount allocated under such section to
all such agencies in all States.
[(c) Limit on Use.--No State may use less than 25 percent or
more than 50 percent of its allotment for the early
intervention component of the State program, except that the
Secretary may waive the 50 percent limitation if the State
demonstrates that the State has another means of providing the
student's financial assistance that is described in the State
plan.
[(d) Reallotment.--The amount of any State's allotment under
subsection (b) for any fiscal year which the Secretary
determines will not be required for such fiscal year for the
program of that State shall be available for reallotment from
time to time, on such dates during such year as the Secretary
may fix, to other States in proportion to the original
allotments to such States for such year, but with such
proportionate amount for any of such States being reduced to
the extent it exceeds the sum the Secretary estimates such
State needs and will be able to use for such year for carrying
out such programs. The total of such reductions shall be
similarly reallotted among the States whose proportionate
amounts were not so reduced. A State shall match, in accordance
with section 404B(b) any reallocated funds it receives under
this subsection.
[(e) Allotment Subject to Continuing Compliance.--The
Secretary shall make payments for programs only to States which
continue to meet the requirements of the State plan pursuant to
section 404B.
[SEC. 404F. EVALUATION AND REPORT.
[(a) Evaluation.--Each State receiving an allotment under
this chapter shall biennially evaluate the early intervention
program assisted under this chapter in accordance with the
standards described in subsection (b) and shall submit to the
Secretary a copy of such evaluation. The evaluation component
shall permit service providers to track eligible student
progress during the period such students are participating in
the program assisted under this section and must 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 States and service
providers; and
[(2) ensure that data protocols and procedures are
consistent and uniform.
[(c) Report.--The Secretary shall biennially report to the
Congress on the activities assisted under this chapter and the
evaluations conducted pursuant to subsection (a).
[SEC. 404G. APPROPRIATIONS.
[There is authorized to be appropriated to make grants under
this chapter $200,000,000 for fiscal year 1993 and such sums as
may be necessary for each of the four succeeding fiscal years.
[CHAPTER 3--PRESIDENTIAL ACCESS SCHOLARSHIPS
[SEC. 406A. SCHOLARSHIPS AUTHORIZED.
[The Secretary is authorized in accordance with this chapter
to award Presidential Access Scholarships to students who--
[(1) are eligible to receive a Pell Grant for the
year in which the scholarship is awarded;
[(2) have participated in a preparatory program for
postsecondary education; and
[(3) demonstrate academic achievement.
[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 25
percent of the Pell Grant that the recipient is awarded
for that year or $400, whichever is greater.
[(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 in a fiscal year are
insufficient to fully fund all awards for that academic
year under this chapter, the amount paid to each
student shall be reduced proportionately.
[(b) Period of Award.--Scholarships under this chapter shall
be awarded for a period of not more than four academic years,
or in the case of a student who is enrolled in an undergraduate
course of study that requires attendance for the full-time
equivalent of five academic years, five academic years.
[(c) Use at Any Institution Permitted.--An eligible student
awarded a scholarship under this chapter may use such
scholarship stipend to attend any institution of higher
education.
[(d) Assistance Not To Exceed Cost of Attendance.--A
scholarship awarded under this chapter to any student, in
combination with the Pell Grant and other student financial
assistance available to such student, may not exceed the
student's cost of attendance (as defined in section 472).
[(e) Presidential Access Scholars.--Students awarded
scholarships under this chapter shall be known as
``Presidential Access Scholars''.
[SEC. 406C. ELIGIBILITY OF SCHOLARS.
[(a) Requirements for Students in First Year of Postsecondary
Education.--In order for a student who will be attending the
student's first year of postsecondary education to be eligible
to receive a scholarship under this chapter for that academic
year, the student shall--
[(1) be enrolled or accepted for enrollment in a
degree or certificate program of at least 2 years in
length;
[(2) have demonstrated academic achievement and
preparation for postsecondary education by taking
college preparatory level coursework in the following
areas while in secondary school or the equivalent:
[(A) 4 years of English;
[(B) 3 years of science;
[(C) 3 years of mathematics;
[(D) either--
[(i) 3 years of history; or
[(ii) 2 years of history and 1 year
of social studies; and
[(E) either--
[(i) 2 years of a foreign language;
or
[(ii) 1 year of computer science and
1 year of a foreign language.
[(3) earn a grade point average of 2.5 or higher, on
a scale of 4.0, in the final 2 years of high school;
and
[(4) either--
[(A) have participated, for a minimum period
of 36 months, in an early intervention program
that meets the requirements of section 406D; or
[(B) rank, or have ranked, in the top 10
percent, by grade point average, of the
student's secondary school graduating class.
[(b) Requirements for All Students.--
[(1) 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.
[(2) In order for a student who will be attending a
year of postsecondary education, other than the
student's first year, to continue to be eligible to
receive a scholarship under this chapter for that
academic year the eligible student shall maintain
eligibility to receive a Pell Grant, including
fulfilling the requirements for satisfactory academic
progress as described in section 484(c).
[SEC. 406D. ELIGIBLE EARLY INTERVENTION PROGRAMS.
[(a) Participation in Trio Programs and National Early
Intervention Scholarship and Partnership Programs.--
Participation in a program authorized under section 402B, 402C,
or 402F, or chapter 2 of subpart 2 of this part for a 36-month
period shall meet the requirement of section 406C(a)(4)(A).
[(b) Other Eligible Early Intervention Program.--
Participation in another early intervention program, regardless
of sponsorship, for a 36-month period, shall meet the
requirements of section 406C(a)(4)(A) if the program--
[(1) meets the requirements established by the
Secretary; and
[(2) is certified by the Governor as an honors
scholars program.
[SEC. 406E. STUDENT ELIGIBILITY.
[(a) Student Eligibility.--For the purpose of this chapter,
the term ``eligible student'' means an individual who--
[(1) is a graduate of a public or private secondary
school or has the equivalent certificate of graduation
as recognized by the State in which the eligible
student resides;
[(2) not later than 3 years after such individual
graduates or obtains an equivalent certificate, has
been admitted for enrollment or is enrolled at an
institution of higher education; and
[(3) is eligible to receive a Pell Grant for the year
in which the scholarship is awarded.
[(b) Limitation.--For the purpose of this chapter, the term
``eligible student'' does not include an individual who has
been awarded a baccalaureate degree.
[(c) Waivers.--
[(1) Early intervention program participation.--The
Secretary may waive the requirement described in
section 406C(a)(4) for any student who was unable to
participate in an early intervention program assisted
under this part because such program was not available
in the area in which such student resides or the
student was unable to participate in an early
intervention program where the student resides.
[(2) Limited-english proficient students.--The
Secretary may waive the requirement described in
section 406C(a)(2)(E) for any limited-English
proficient student who is fluent in a language other
than English and is participating in a program to teach
such student the English language or for any English
speaking student fluent in a second language.
[SEC. 406F. EARLY INTERVENTION SCHOLARSHIP AGREEMENT.
[(a) In General.--In order for a student to receive a
scholarship under this chapter, the State educational agency
serving the State in which such child resides shall have
entered into an agreement with the Secretary.
[(b) Contents.--Each agreement described in subsection (a)
shall include provisions designed to ensure that--
[(1) all secondary school students in the State have
equal and easy access to the coursework described in
section 406C(a)(2);
[(2) the State educational agency has procedures in
place to verify to the Secretary that students
receiving scholarships under this chapter have taken
such coursework and that such coursework has been of a
college preparatory level, including a requirement that
all secondary schools in the State issue a certificate
to each eligible student certifying that such student
has completed the necessary coursework to qualify for a
scholarship under this chapter;
[(3) the State educational agency has procedures in
place to notify institutions of higher education of the
availability of scholarships under this chapter, so
that such institutions may award additional
scholarships in concert with the scholarships received
under this chapter; and
[(4) the State educational agency has procedures in
place to inform junior high school students and their
families about the value of postsecondary education,
the availability of student aid to meet college
expenses, and the availability of scholarships under
this chapter for students who take demanding courses,
with particular emphasis on activities designed to
ensure that students from low- and moderate-income
families have access to such information.
[(c) Special Rule.--The Secretary may allow a State to
receive assistance under this chapter for students whose
secondary schools do not offer the necessary coursework if such
students take the required courses at another local secondary
school or community college.
[SEC. 406G. AUTHORIZATION OF APPROPRIATIONS.
[There are authorized to be appropriated $200,000,000 for
fiscal year 1993 and such sums as may be necessary for each of
the 4 succeeding fiscal years to carry out the provisions of
this chapter. No amount may be expended to carry out the
provisions of this chapter in any fiscal year unless the amount
appropriated for such fiscal year to carry out subpart 1 of
part A of this title exceeds the amount appropriated to carry
out such subpart in the preceding fiscal year.
[CHAPTER 4--MODEL PROGRAM COMMUNITY PARTNERSHIP AND COUNSELING GRANTS
[SEC. 408A. MODEL PROGRAM GRANTS.
[(a) Program Authority.--From the amounts appropriated under
section 408C, the Secretary shall award grants to develop model
programs--
[(1) to counsel students, at an early age, about
college opportunities, precollege requirements, the
college admissions procedure, financial aid
opportunities, and student support services that are
specially designed or customized for use in specific
geographic, social, and cultural environments; or
[(2) which stimulate community partnerships with
schools by providing tutoring, mentoring, work
experiences, and other services which support making
postsecondary education a realistic goal for all
students.
[(b) Priorities in Selection.--The Secretary shall give
priority to those model programs which are directed at areas
which have a high proportion of minority, limited English
proficiency, economically disadvantaged, disabled,
nontraditional, or at-risk students and those model programs
which serve these students from rural or urban environments.
[(c) Proposal Requirements.--
[(1) Tailoring.--To receive a grant under subsection
(a)(1), the proposal submitted to the Secretary shall
demonstrate that the counseling on college
opportunities, precollege requirements, the college
admissions procedure, and financial aid opportunities
(including early intervention counseling), is tailored
to a specific geographic, social or cultural
environment.
[(2) Community partnerships.--To receive a grant
under subsection (a)(2), the proposal submitted to the
Secretary shall demonstrate the active involvement of a
local educational agency and at least one of the
following:
[(A) Local businesses.
[(B) Labor organizations.
[(C) Community groups.
[(3) Goals and outcomes.--To receive a grant under
this section, each proposal shall contain a statement
of specific, measurable goals and methods for obtaining
statistics on the number of participants who continue
on to postsecondary education.
[SEC. 408B. DIFFUSION ACTIVITIES.
[(a) Collection of Information.--The Secretary shall collect
information concerning--
[(1) programs supported under section 408A and
programs of demonstrated effectiveness which counsel
students about college opportunities, precollege
requirements, the college admissions procedure, and
financial aid opportunities;
[(2) early intervention programs of demonstrated
effectiveness which set students on the path toward
staying in school and pursuing a postsecondary
education;
[(3) model programs which counsel students in
specific environments, such as urban, rural, and
suburban; and
[(4) model programs which develop school/community
partnerships to provide mentoring, tutoring, work
experiences and other services which support making
postsecondary education a realistic goal for all
students.
[(b) Dissemination.--The Secretary shall ensure that the
information collected under subsection (a) is disseminated.
[SEC. 408C. AUTHORIZATION OF APPROPRIATIONS.
[There are authorized to be appropriated $35,000,000 for
fiscal year 1993 and such sums as may be necessary for each of
the 4 succeeding fiscal years to carry out this chapter.
[CHAPTER 5--PUBLIC INFORMATION
[SEC. 409A. DATABASE AND INFORMATION LINE.
[From the funds available under section 409C, the Secretary
shall award a contract to establish and maintain--
[(1) a computerized database of all public and
private student financial assistance programs, to be
accessible to schools and libraries through either
modems or toll-free telephone lines; and
[(2) a toll-free information line, including access
by telecommunications devices for the deaf (``TDD's''),
to provide individualized financial assistance
information to parents, students, and other
individuals, including individuals with disabilities,
and to refer students with disabilities and their
families to the postsecondary clearinghouse that is
authorized under section 633(c) of the Individuals with
Disabilities Education Act.
[SEC. 409B. EARLY AWARENESS INFORMATION PROGRAM.
[(a) Program Authority.--The Secretary is authorized to enter
into contracts with appropriate public agencies, nonprofit
private organizations, and institutions of higher education to
conduct an information program designed--
[(1) to broaden the early awareness of postsecondary
educational opportunities by secondary school students
and their parents; and
[(2) to encourage economically disadvantaged,
minority, or at-risk individuals to seek higher
education, and to seek higher education and financial
assistance counseling at public schools and libraries.
[(b) Contents of Messages.--Announcements and messages
supported under this section--
[(1) may be specially designed for students of
limited English proficiency,
[(2) shall publicize--
[(A) the availability of Federal student
assistance under this Act;
[(B) the importance of postsecondary
education in long-term career planning; and
[(C) the need and necessity to complete a
secondary education program successfully in
order to meet the requirements for college.
[(c) Informing Congress.--The Secretary shall keep the
appropriate committees of the Congress informed with respect to
the efforts made pursuant to this section and shall recommend
any additional legislative authority that will serve the
purposes of this section.
[SEC. 409C. DATABASE AND INFORMATION LINE.
[There are authorized to be appropriated $20,000,000 for
fiscal year 1993 and such sums as may be necessary for each of
the 4 succeeding fiscal years to carry out this chapter.]
* * * * * * *
[CHAPTER 8--TECHNICAL ASSISTANCE FOR TEACHERS AND COUNSELORS
[SEC. 410C. TECHNICAL ASSISTANCE GRANTS.
[(a) Program Authority.--From the amounts appropriated under
subsection (f), the Secretary shall award grants to local
educational agencies to use for the purpose of obtaining
specialized training for guidance counselors, teachers, and
principals to counsel students about college opportunities,
precollege requirements, the college admissions procedure, and
financial aid opportunities.
[(b) Selection of Grant Recipients.--
[(1) Priority.--In making grants under this section,
the Secretary shall give priority to those local
educational agencies serving school districts (A) from
which the proportion of students who continue on to
higher education is significantly below the national
average, and (B) in which the proportion of students
who are educationally disadvantaged is significantly
above the national average.
[(2) Selection procedures.--The Secretary shall
develop a formal procedure for the submission of
proposals and publish in the Federal Register an
announcement with respect to that procedure and the
availability of funds.
[(c) Local Plan.--To receive a grant under this section, a
local educational agency shall submit to the Secretary a plan
that--
[(1) specifies the methods to be used for outreach,
implementation, and follow-up with those students most
in need and at-risk for dropping out or failing to
pursue postsecondary education;
[(2) demonstrates the methods by which the agency
will target funds to those schools within the district
that have the lowest rate of students who continue on
to higher education;
[(3) utilizes early intervention programs for
counseling minority, economically disadvantaged,
disabled, and at-risk students about postsecondary
education;
[(4) includes a strategy for keeping the guidance
counselors, teachers (including elementary, secondary,
vocational, and special education teachers), and
principals who have been trained up-to-date on
financial aid information;
[(5) contains a statement of specific goals and
methods for obtaining statistics on the number of
participants who continue on to postsecondary
education; and
[(6) contains a description of the costs of the
training and other activities to be undertaken.
[(d) Duration of Grants.--Grants under this section shall be
available for 2 years.
[(e) Evaluation.--
[(1) Conduct of evaluations.--The Secretary shall
reserve not more than 2 percent of any amount
appropriated under subsection (f) for the purpose of
carrying out an independent evaluation of the
effectiveness of the training programs assisted under
this section in--
[(A) increasing the number of personnel in a
school who regularly counsel students regarding
college opportunities, precollege requirements,
the college admission procedure, and financial
aid opportunities; and
[(B) increasing the number of students who
continue on to postsecondary education from a
school which has had personnel trained using
monies from this section.
[(2) Report.--The Secretary shall submit to the
appropriate committees of the Congress a report which
contains the findings of the evaluation required by
paragraph (1).
[(f) Technical Assistance Grants.--There are authorized to be
appropriated $40,000,000 for fiscal year 1993 and such sums as
may be necessary for each of the 4 succeeding fiscal years to
carry out this section.]
* * * * * * *
[Subpart 5--Special Programs for Students Whose Families Are Engaged in
Migrant and Seasonal Farmwork
[SEC. 418A. MAINTENANCE AND EXPANSION OF EXISTING PROGRAMS.
[(a) Program Authority.--The Secretary shall maintain and
expand existing secondary and postsecondary high school
equivalency program and college assistance migrant program
projects located at institutions of higher education or at
private nonprofit organizations working in cooperation with
institutions of higher education.
[(b) Services Provided by High School Equivalency Program.--
The services authorized by this subpart for the high school
equivalency program include--
[(1) recruitment services to reach persons--
[(A)(i) who are 16 years of age and over; or
[(ii) who are beyond the age of compulsory
school attendance in the State in which such
persons reside and are not enrolled in school;
[(B)(i) who themselves, or whose parents,
have spent a minimum of 75 days during the past
24 months in migrant and seasonal farmwork; or
[(ii) who are eligible to participate, or
have participated within the preceding 2 years,
in programs under part C of title I of the
Elementary and Secondary Education Act of 1965
or section 402 of the Job Training Partnership
Act; and
[(C) who lack a high school diploma or its
equivalent;
[(2) educational services which provide instruction
designed to help students obtain a general education
diploma which meets the guidelines established by the
State in which the project is located for high school
equivalency;
[(3) supportive services which include the following:
[(A) personal, vocational, and academic
counseling;
[(B) placement services designed to place
students in a university, college, or junior
college program, or in military service or
career positions; and
[(C) health services;
[(4) information concerning, and assistance in
obtaining, available student financial aid;
[(5) weekly stipends for high school equivalency
program participants;
[(6) housing for those enrolled in residential
programs;
[(7) exposure to cultural events, academic programs,
and other educational and cultural activities usually
not available to migrant youth; and
[(8) other essential supportive services, as needed
to ensure the success of eligible students.
[(c) Services Provided by College Assistance Migrant
Program.--(1) Services authorized by this subpart for the
college assistance migrant program include--
[(A) outreach and recruitment services to reach
persons who themselves or whose parents have spent a
minimum of 75 days during the past 24 months in migrant
and seasonal farmwork or who have participated or are
eligible to participate, in programs under part C of
title I of the Elementary and Secondary Education Act
of 1965 (or such part's predecessor authority) or
section 402 of the Job Training Partnership Act, and
who meet the minimum qualifications for attendance at a
college or university;
[(B) supportive and instructional services which
include:
[(i) personal, academic, and career
counseling as an ongoing part of the program;
[(ii) tutoring and academic skill building
instruction and assistance;
[(iii) assistance with special admissions;
[(iv) health services; and
[(v) other services as necessary to assist
students in completing program requirements;
[(C) assistance in obtaining student financial aid
which includes, but is not limited to:
[(i) stipends;
[(ii) scholarships;
[(iii) student travel;
[(iv) career oriented work study;
[(v) books and supplies;
[(vi) tuition and fees;
[(vii) room and board; and
[(viii) other assistance necessary to assist
students in completing their first year of
college;
[(D) housing support for students living in
institutional facilities and commuting students;
[(E) exposure to cultural events, academic programs,
and other activities not usually available to migrant
youth; and
[(F) other support services as necessary to ensure
the success of eligible students.
[(2) A recipient of a grant to operate a college assistance
migrant program under this subpart shall provide followup
services for migrant students after such students have
completed their first year of college, and shall not use more
than 10 percent of such grant for such followup services. Such
followup services may include--
[(A) monitoring and reporting the academic progress
of students who participated in the project during such
student's first year of college and during such
student's subsequent years in college; and
[(B) referring such students to on- or off-campus
providers of counseling services, academic assistance,
or financial aid.
[(d) Management Plan Required.--Each project application
shall include a management plan which contains assurances that
staff shall have a demonstrated knowledge and be sensitive to
the unique characteristics and needs of the migrant and
seasonal farmworker population, and provisions for:
[(1) staff in-service training;
[(2) training and technical assistance;
[(3) staff travel;
[(4) student travel;
[(5) interagency coordination; and
[(6) an evaluation plan.
[(e) Five-year Grant Period; Consideration of Prior
Experience.--Except under extraordinary circumstances, the
Secretary shall award grants for a 5-year period. For the
purpose of making grants under this subpart, the Secretary
shall consider the prior experience of service delivery under
the particular project for which funds are sought by each
applicant. Such prior experience shall be awarded the same
level of consideration given this factor for applicants for
programs authorized by subpart 4 of this part in accordance
with section 417A(b)(2).
[(f) Minimum Allocations.--The Secretary shall not allocate
an amount less than--
[(1) $150,000 for each project under the high school
equivalency program, and
[(2) $150,000 for each project under the college
assistance migrant program.
[(g) Authorization of Appropriations.--(1) There are
authorized to be appropriated for the high school equivalency
program $15,000,000 for fiscal year 1993 and such sums as may
be necessary for each of the 4 succeeding fiscal years.
[(2) There are authorized to be appropriated for the college
assistance migrant program $5,000,000 for fiscal year 1993 and
such sums as may be necessary for each of the 4 succeeding
fiscal years.]
* * * * * * *
[Subpart 8--Special Child Care Services for Disadvantaged College
Students
[SEC. 420B. SPECIAL CHILD CARE SERVICES FOR DISADVANTAGED COLLEGE
STUDENTS.
[(a) Program Authority.--Funds appropriated pursuant to
subsection (c) shall be used by the Secretary to make grants to
institutions of higher education to provide special child care
services to disadvantaged students.
[(b) Applications.--Any institution wishing to receive a
grant under this section shall submit an application to the
Secretary. Such application shall include--
[(1) a description of the program to be established;
[(2) assurances by the applicant to the Secretary
that--
[(A) not less than two-thirds of the
participants in the program are low-income
individuals;
[(B) the participants require the services to
pursue successfully a program of education
beyond high school;
[(C) the participants are enrolled at the
institution which is the recipient of the
grant;
[(D) all participants will receive sufficient
assistance (under this subpart, other
provisions of this title, or otherwise) to meet
that student's full financial need for child
care services related to such enrollment; and
[(E) the institution will meet such need of
participants by providing child care through
vouchers, contracted services, or direct
provision of services; and
[(3) such information (and meet such conditions) as
may be required by the Secretary.
[(c) Authorization of Appropriations.--There are authorized
to be appropriated to carry out the purpose of this section,
$20,000,000 for fiscal year 1993, and such sums as may be
necessary for the 4 succeeding fiscal years.
[(d) Definition.--For purposes of this subpart, 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 the criteria of poverty established by the Bureau of the
Census.]
Part B--Federal Family Education Loan Program
* * * * * * *
SEC. 428C. FEDERAL CONSOLIDATION LOANS.
(a) Agreements With Eligible Lenders.--
(1) Agreement required for insurance coverage.--For
the purpose of providing loans to eligible borrowers
for consolidation of their obligations with respect to
eligible student loans, the Secretary or a guaranty
agency shall enter into agreements in accordance with
subsection (b) with the following eligible lenders:
(A) the Student Loan Marketing Association or
the Holding Company of the Student Loan
Marketing Association, including all
subsidiaries of such Holding Company, created
pursuant to section 440 of this Act;
* * * * * * *
[SEC. 428J. LOAN FORGIVENESS FOR TEACHERS, INDIVIDUALS PERFORMING
NATIONAL COMMUNITY SERVICE AND NURSES.
[(a) Statement of Purpose.--It is the purpose of this section
to encourage individuals to--
[(1) enter the teaching and nursing profession; and
[(2) perform national and community service.
[(b) Demonstration Program.--
[(1) In general.--The Secretary, in consultation with
the Secretary of Health and Human Services, is
authorized to carry out a demonstration program of
assuming the obligation to repay a loan made, insured
or guaranteed under this part (excluding loans made
under section 428A, 428B, or 428C) for any new borrower
after October 1, 1989, who--
[(A) is employed as a full-time teacher--
[(i) in a school which qualifies
under section 465(a)(2)(A) for loan
cancellation for Perkins loan
recipients who teach in such schools;
and
[(ii) of mathematics, science,
foreign languages, special education,
bilingual education, or any other field
of expertise where the State
educational agency determines there is
a shortage of qualified teachers;
[(B) serves as a full-time volunteer under
the Peace Corps Act or under the Domestic
Volunteer Service Act of 1973, or to perform
comparable service as a full-time employee of
an organization which is exempt from taxation
under section 501(c)(3) of the Internal Revenue
Code of 1986, if the borrower does not receive
compensation which exceeds the greater of--
[(i) the minimum wage rate described
in section 6 of the Fair Labor
Standards Act of 1938; or
[(ii) an amount equal to 100 percent
of the poverty line for a family of two
(as defined in section 673(2) of the
Community Services Block Grant Act); or
[(C) is employed full-time as a nurse in a
public hospital, a rural health clinic, a
migrant health center, an Indian Health
Service, an Indian health center, a Native
Hawaiian health center or in an acute care or
long-term care facility.
[(2) Regulations.--The Secretary is authorized to
issue such regulations as may be necessary to carry out
the provisions of this section.
[(c) Loan Repayment.--
[(1) In general.--The Secretary shall assume the
obligation to repay--
[(A) 15 percent of the total amount of
Stafford loans incurred by the student borrower
during such borrower's last 2 years of
undergraduate education for the first or second
year of service in which such borrower meets
the requirements described in subsection (a);
[(B) 20 percent of such total amount for such
third or fourth year of service; and
[(C) 30 percent of such total amount for such
fifth year of service.
[(2) Construction.--Nothing in this subsection shall
be construed to authorize the refunding of any
repayment of a Stafford loan.
[(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
teaching certificate, the Secretary is authorized to
assume the obligation to repay the total amount of
Stafford loans incurred for a maximum of 2 academic
years in returning to an institution of higher
education for the purpose of obtaining a teaching
certificate or additional certification. Such Stafford
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 educational
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. 12571 et
seq.).
[(d) Repayment to Eligible Lenders.--The Secretary shall pay
to each eligible lender or holder for each fiscal year an
amount equal to the aggregate amount of Stafford loans which
are subject to repayment pursuant to this section for such
year.
[(e) Application for Repayment.--
[(1) In general.--Each eligible individual desiring
loan repayment under this section shall submit a
complete and accurate application to the Secretary at
such time, in such manner, and containing such
information as the Secretary may reasonably require.
Loan repayment under this section shall be on a first-
come, first-served basis and subject to the
availability of appropriations.
[(2) Conditions.--An eligible individual may apply
for repayment after completing each year of qualifying
service. The borrower shall receive forbearance while
engaged in qualifying service unless the borrower is in
deferment while so engaged.
[(f) Definitions.--For the purpose of this section the term
``eligible lender'' has the same meaning given such term in
section 435(d).
[(g) Evaluation.--
[(1) In general.--The Secretary shall conduct, by
grant or contract, an independent national evaluation
of the impact of the program assisted under this part
on the fields of teaching, nursing, and community
service.
[(2) Competitive basis.--The grant or contract
described in paragraph (1) shall be awarded on a
competitive basis.
[(3) Contents.--The evaluation described in this
section shall--
[(A) assess whether the program assisted
under this section has brought into teaching,
nursing, and community service a significant
number of highly capable individuals who
otherwise would not have entered such fields;
[(B) assess whether a significant number of
students perform the service described in
subsection (b) or opt to repay the loans
instead of remaining in the career for which
such student received loan repayment under this
section;
[(C) identify the barriers to the
effectiveness of the program assisted under
this section;
[(D) assess the cost-effectiveness of such
program in improving teacher, nursing, and
community service worker quality and quantity
and the ways to improve the cost-effectiveness
of such program;
[(E) identify the reasons for which
participants in the program have chosen to take
part in such program; and
[(F) identify other areas of community
service or employment which may serve as
appropriate methods of loan repayment.
[(4) Interim evaluation reports.--The Secretary shall
prepare and submit to the President and the Congress
such interim reports on the evaluation described in
this section as the Secretary deems appropriate, and
shall submit such a final report by January 1, 1997.
[(5) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section
$10,000,000 for fiscal year 1993 and such sums as may
be necessary for each of the 4 succeeding fiscal
years.]
* * * * * * *
SEC. 435. DEFINITIONS FOR STUDENT LOAN INSURANCE PROGRAM.
As used in this part:
(a) * * *
* * * * * * *
(d) Eligible Lender.--
(1) In general.--Except as provided in paragraphs (2)
through (6), the term ``eligible lender'' means--
(A) * * *
* * * * * * *
(F) for purposes only of purchasing and
holding loans made by other lenders under this
part, the Student Loan Marketing Association or
the Holding Company of the Student Loan
Marketing Association, including all
subsidiaries of such Holding Company, created
pursuant to section 440 of this Act, or an
agency of any State functioning as a secondary
market;
(G) for purposes of making loans under
sections 428A(d), 428B(d), 428C, and 439(q),
the Student Loan Marketing Association or the
Holding Company of the Student Loan Marketing
Association, including all subsidiaries of such
Holding Company, created pursuant to section
440 of this Act;
* * * * * * *
SEC. 439. STUDENT LOAN MARKETING ASSOCIATION.
(a) * * *
* * * * * * *
(r) Safety and Soundness of Association.--
(1) Reports by the association.--The Association
shall promptly furnish to the Secretary of Education
and Secretary of the Treasury copies of all--
(A) periodic financial reports publicly
distributed by the Association; [and]
(B) reports concerning the Association that
are received by the Association and prepared by
nationally recognized statistical rating
organizations[.]; and
(C) within 45 days of the end of each
calendar quarter, (i) financial statements of
the Association, and (ii) a report setting
forth the calculation of the capital ratio of
the Association.
* * * * * * *
(11) Safe harbor.--The Association shall be deemed in
compliance with the capital ratios described in
[paragraphs (4) and (6)(A)] paragraphs (4), (6)(A), and
(14) if the Association is rated in 1 of the 2 highest
full rating categories (such categories to be
determined without regard to designations within
categories) by 2 nationally recognized statistical
rating organizations, determined without regard to the
Association's status as a federally chartered
corporation.
* * * * * * *
(13) Enforcement of safety and soundness
requirements.--The Secretary of Education or the
Secretary of the Treasury, as appropriate, may request
the Attorney General of the United States to bring an
action in the United States District Court for the
District of Columbia for the enforcement of any
provisions of this subsection, or may, under the
direction or control of the Attorney General, bring
such an action. Such court shall have jurisdiction and
power to order and require compliance with this
subsection.
(14) Actions by secretary.--If the shareholders of
the Association shall have approved a reorganization
plan in accordance with section 440(b) and, for any
quarter after January 1, 2000, the Association shall
have a capital ratio of less than 2.25 percent, the
Secretary of the Treasury may, until such capital ratio
is met, take any one or more of the actions described
in paragraph (7), except that--
(A) the capital ratio to be restored pursuant
to paragraph (7)(D) shall be 2.25 percent; and
(B) if the relevant capital ratio is in
excess of or equal to 2 percent for such
quarter, the Secretary of the Treasury shall
defer taking any of the actions set forth in
paragraph (7) until the next succeeding quarter
and may then proceed with any such action only
if the capital ratio of the Association remains
below 2.25 percent.
Upon approval by the shareholders of the Association of
a reorganization plan in accordance with section 440(b)
for any period after January 1, 2000, the provisions of
paragraphs (4), (5), (6), (8), (9), and (10) shall be
of no further application to the Association.
[(13)] (15) Definitions.--As used in this subsection:
(A) The term ``nationally recognized
statistical rating organization'' means any
entity recognized as such by the Securities and
Exchange Commission.
* * * * * * *
SEC. 440. REORGANIZATION OF THE STUDENT LOAN MARKETING ASSOCIATION
THROUGH THE FORMATION OF A HOLDING COMPANY.
(a) Actions by the Association's Board of Directors.--The
Board of Directors of the Association shall take or cause to be
taken all such action as it deems necessary or appropriate to
effect, upon the shareholder approval described in subsection
(b), a restructuring of the common stock ownership of the
Association, as set forth in a plan of reorganization adopted
by the Board of Directors (the terms of which shall be
consistent with this Act) so that all of the outstanding common
shares shall be directly owned by an ordinary business
corporation chartered under State or District of Columbia law
(the ``Holding Company''), as the Board of Directors may
determine. Such actions may include, in the Board's discretion,
a merger of a wholly owned subsidiary of the Holding Company
with and into the Association, which would have the effect
provided in the plan of reorganization and the law of the
jurisdiction in which such subsidiary is incorporated. As part
of the restructuring, the Board of Directors may cause (1) the
common shares of the Association to be converted, at the
reorganization effective date, to common shares of the Holding
Company on a one for one basis, consistent with applicable
State or District of Columbia law, and (2) Holding Company
common shares to be registered with the Securities and Exchange
Commission.
(b) Shareholder Approval.--The plan of reorganization adopted
by the Board of Directors pursuant to subsection (a) shall be
submitted to common stockholders of the Association for their
approval. The reorganization shall occur at the reorganization
effective date, provided that the plan of reorganization has
been approved by the affirmative votes, cast in person or by
proxy, of the holders of a majority of the issued and
outstanding shares of the Association common stock.
(c) Transition.--
(1) In general.--Except as specifically provided in
this section, until the dissolution date the
Association shall continue to have all of the rights,
privileges and obligations set forth in, and shall be
subject to all of the limitations and restrictions of,
section 439 of this Act as in effect on the effective
date of this section, and the Association shall
continue to carry out the purposes of such section. The
Holding Company and its affiliates other than the
Association shall not be entitled to any of the rights,
privileges and obligations, and shall not be subject to
the limitations and restrictions, applicable to the
Association under section 439 of this Act as in effect
on the effective date of this section, except as
specifically provided in this section. The Holding
Company and its subsidiaries (other than the
Association) shall not purchase loans insured under
this Act until such time as the Association ceases
acquiring such loans, except that the Association shall
continue to acquire loans as a lender of last resort
pursuant to section 439(q) of this Act or under an
agreement with the Secretary described in section
440(c)(6).
(2) Transfer of certain property.--Except as
specifically provided in this section, at the
reorganization effective date or as soon as practicable
thereafter, the Association shall use its best efforts
to transfer to the Holding Company or its subsidiaries
(or both), in each case, as directed by the Holding
Company, all real and personal property of the
Association (both tangible and intangible) other than
the remaining property. Without limiting the preceding
sentence, such transferred property shall include all
right, title and interest in (A) direct or indirect
subsidiaries of the Association (excluding any interest
in any government sponsored enterprise), (B) contracts,
leases, and other agreements, (C) licenses and other
intellectual property, and (D) any other property of
the Association. Notwithstanding the preceding
provisions of this paragraph, nothing in this paragraph
shall be construed to prohibit the Association from
transferring remaining property from time to time to
the Holding Company or its subsidiaries, subject to the
provisions of paragraph (4).
(3) Transfer of personnel.--At the reorganization
effective date, employees of the Association shall
become employees of the Holding Company (or of the
subsidiaries), and the Holding Company (or the
subsidiaries or both) shall provide all necessary and
appropriate management and operational support
(including loan servicing) to the Association, as
requested by the Association. The Association may,
however, obtain such management and operational support
from other persons or entities.
(4) Dividends.--The Association may pay dividends in
the form of cash or noncash distributions so long as at
the time of the declaration of such dividends, after
giving effect to the payment of such dividends as of
the date of such declaration by the Board of Directors
of the Association, the Association's capital would be
in compliance with the capital standards set forth in
section 439(r) of this Act. If, at any time after the
reorganization effective date, the Association fails to
comply with such capital standards, the Holding Company
shall be obligated to transfer to the Association
additional capital in such amounts as are necessary to
ensure that the Association again complies with the
capital standards.
(5) Valuation of noncash distributions.--After the
reorganization effective date, any distribution of
noncash assets by the Association to the Holding
Company shall be valued at book value on the date the
Association's Board of Directors approved such
distribution for purposes of calculating compliance
with section 439(r) of this Act.
(6) Restrictions on new business activity or
acquisition of assets by association.--After the
reorganization effective date, the Association shall
not engage in any new business activities or acquire
any additional assets other than--
(A) in connection with (i) student loan
purchases through September 30, 2003, and (ii)
contractual commitments for future warehousing
advances or pursuant to letters of credit or
standby bond purchase agreements which are
outstanding as of the reorganization effective
date;
(B) in connection with its serving as a
lender-of-last-resort pursuant to section 439
of this Act; and
(C) in connection with its purchase of loans
insured under this part, if the Secretary, with
the approval of the Secretary of the Treasury,
enters into an agreement with the Association
for the continuation or resumption of its
secondary market purchase program because the
Secretary determines there is inadequate
liquidity for loans made under this part.
The Secretary is authorized to enter into an agreement
described in subparagraph (C) with the Association
covering such secondary market activities.
Any agreement entered into under subparagraph (C) shall
cover a period of 12 months, but may be renewed if the
Secretary determines that liquidity remains inadequate.
The fee provided under section 439(h)(7) shall not
apply to loans acquired under any such agreement with
the Secretary.
(7) Issuance of debt obligations during the
transition period; attributes of debt obligations.--
After the reorganization effective date, the
Association shall not issue debt obligations which
mature later than September 30, 2004, except in
connection with serving as a lender-of-last-resort
pursuant to section 439 of this Act or with purchasing
loans under an agreement with the Secretary as
described in paragraph (6) of this subsection. Nothing
in this subsection shall modify the attributes accorded
the debt obligations of the Association by section 439,
regardless of whether such debt obligations are
incurred prior to, or at any time following, the
reorganization effective date or are transferred to a
trust in accordance with subsection (d).
(8) Monitoring of safety and soundness.--
(A) Obligation to obtain, maintain, and
report information.--The Association shall
obtain such information and make and keep such
records as the Secretary of the Treasury may
from time to time prescribe concerning (i) the
financial risk to the Association resulting
from the activities of any of its associated
persons, to the extent such activities are
reasonably likely to have a material impact on
the financial condition of the Association,
including its capital ratio, its liquidity, or
its ability to conduct and finance its
operations, and (ii) the Association's
policies, procedures, and systems for
monitoring and controlling any such financial
risk. The Association's obligations under this
subsection with respect to any associated
person which is a third party servicer (as
defined in 34 C.F.R. 682.200(b)) shall be
limited to providing to the Secretary of the
Treasury copies of any reports or other
information provided to the Secretary of
Education pursuant to 34 C.F.R. 682.200 et seq.
The Secretary of the Treasury may require
summary reports of such information to be filed
no more frequently than quarterly. For purposes
of this paragraph, the term ``associated
person'' shall mean any person, other than a
natural person, directly or indirectly
controlling, controlled by, or under common
control with the Association.
(B) Separate operation of corporations.--
(i) The funds and assets of the
Association shall at all times be
maintained separately from the funds
and assets of the Holding Company or
any of its other subsidiaries and may
be used solely by the Association to
carry out its purposes and to fulfill
its obligations.
(ii) The Association shall maintain
books and records that clearly reflect
the assets and liabilities of the
Association, separate from the assets
and liabilities of the Holding Company
or any of its other subsidiaries.
(iii) The Association shall maintain
a corporate office that is physically
separate from any office of the Holding
Company or any of its subsidiaries.
(iv) No director of the Association
that is appointed by the President
pursuant to section 439(c)(1)(A) may
serve as a director of the Holding
Company.
(v) At least one officer of the
Association shall remain an officer
solely of the Association.
(vi) Transactions between the
Association and the Holding Company or
its other subsidiaries, including any
loan servicing arrangements, shall be
on terms no less favorable to the
Association than the Association could
obtain from an unrelated third party.
(vii) The Association shall not
extend credit to the Holding Company or
any of its affiliates, nor guarantee or
provide any credit enhancement to any
debt obligations of the Holding Company
or any of its affiliates.
(viii) Any amounts collected on
behalf of the Association by the
Holding Company or any of its other
subsidiaries with respect to the assets
of the Association, pursuant to a
servicing contract or other arrangement
between the Association and the Holding
Company or any of its other direct or
indirect subsidiaries, shall be
collected solely for the benefit of the
Association and shall be immediately
deposited by the Holding Company or
such other subsidiary to an account
under the sole control of the
Association.
(C) Encumbrance of assets.--Notwithstanding
any otherwise applicable Federal or State law,
rule, or regulation, or legal or equitable
principle, doctrine, or theory to the contrary,
under no circumstances shall the assets of the
Association be available or used to pay claims
or debts of or incurred by the Holding Company.
Nothing in this subparagraph shall limit the
right of the Association to pay dividends not
otherwise prohibited hereunder or limit any
liability of the Holding Company explicitly
provided for in this part.
(D) Holding company activities.--After the
reorganization effective date and prior to the
dissolution of the Association in accordance
with section 440(d), Holding Company activities
shall be limited to ownership of the
Association and any other subsidiaries. All
business activities shall be conducted through
subsidiaries.
(9) Association board of directors.--Notwithstanding
any other provision of part B of this title, after the
reorganization effective date, the 14 directors of the
Association elected by the Association's stockholders
(which immediately after the reorganization effective
date shall be the Holding Company) shall no longer be
required to meet the eligibility requirements set forth
in section 439(c).
(10) Issuance of stock warrants.--At the
reorganization effective date, the Holding Company
shall issue to the Secretary of the Treasury 200,000
stock warrants, each entitling the holder of the stock
warrant to purchase from the Holding Company one share
of the registered common stock of the Holding Company
at any time on or before September 30, 2007. The
exercise price for such warrants shall be an amount
equal to the average closing price of the common stock
of the Association for the 20 business days prior to
and including the date of enactment of this section on
the exchange or market which is then the primary
exchange or market for the common stock of the
Association, subject to any adjustments necessary to
reflect the conversion of Association common stock into
Holding Company common stock as part of the plan of
reorganization approved by the Association's
shareholders.
(11) Restrictions on transfer of association shares
and bankruptcy of association.--After the
reorganization effective date, the Holding Company
shall not sell, pledge, or otherwise transfer the
outstanding shares of the Association, or agree to or
cause the liquidation of the Association to file a
petition of bankruptcy under title 11, United States
Code, without prior approval of the Secretary of the
Treasury and the Secretary of Education.
(d) Termination of the Association.--The Association shall
dissolve, and its separate existence shall terminate on
September 30, 2007, after discharge of all outstanding debt
obligations and liquidation pursuant to this subsection. The
Association may dissolve pursuant to this subsection prior to
such date by notifying the Secretary of Education and the
Secretary of the Treasury of its intention to dissolve, unless
within 60 days of receipt of such notice the Secretary of
Education notifies the Association that it continues to be
needed to serve as a lender of last resort pursuant to section
439(q) of this Act or continues to be needed to purchase loans
under an agreement with the Secretary described in subsection
(c)(6) of this section. On the dissolution date, the
Association shall take the following actions:
(1) Establishment of a trust.--The Association shall,
under the terms of an irrevocable trust agreement in
form and substance satisfactory to the Secretary of the
Treasury, the Association and the appointed trustee,
irrevocably transfer all remaining obligations of the
Association to the trust and irrevocably deposit or
cause to be deposited into such trust, to be held as
trust funds solely for the benefit of holders of the
remaining obligations, money or direct noncallable
obligations of the United States of America or any
agency thereof for which payment the full faith and
credit of the United States is pledged, maturing as to
principal and interest in such amounts and at such
times as are determined by the Secretary of the
Treasury to be sufficient, without consideration of any
significant reinvestment of such interest, to pay the
principal of, and interest on, the remaining
obligations in accordance with their terms. To the
extent the Association cannot provide money or
qualifying obligations in the amount required, the
Holding Company shall be required to transfer money or
qualifying obligations to the trust in the amount
necessary to prevent any deficiency.
(2) Use of trust assets.--All money, obligations, or
financial assets deposited into the trust pursuant to
this subsection shall be applied by the trustee to the
payment of the remaining obligations assumed by the
trust. Upon the fulfillment of the trustee's duties
under the trust, any remaining assets of the trust
shall be transferred to the Holding Company or its
subsidiaries, or both, as directed by the Holding
Company.
(3) Obligations not transferred to the trust.--The
Association shall make proper provision for all other
obligations of the Association, including the
repurchase or redemption, or the making of proper
provision for the repurchase or redemption, of any
preferred stock of the Association then outstanding.
Any obligations of the Association which cannot be
fully satisfied shall become liabilities of the Holding
Company as of the date of dissolution.
(4) Transfer of remaining assets.--After compliance
with paragraphs (1), (2), and (3), the Association
shall transfer to the Holding Company any remaining
assets of the Association.
(e) Operation of the Holding Company.--
(1) Holding company board of directors.--The number
and composition of the Board of Directors of the
Holding Company shall be determined as set forth in the
Holding Company's charter or like instrument (as
amended from time to time) or bylaws (as amended from
time to time) and as permissible under the laws of the
jurisdiction of its incorporation.
(2) Holding company name.--The names of the Holding
Company and any direct or indirect subsidiary of the
Holding Company other than the Association may not
contain the name ``Student Loan Marketing Association''
or ``Sallie Mae''.
(3) Use of sallie mae name.--Subject to paragraph
(2), the Association may assign to the Holding Company,
or any direct or indirect subsidiary of the Holding
Company other than the Association, the ``Sallie Mae''
name as a trademark and service mark, except that
neither the Holding Company nor any direct or indirect
subsidiary of the Holding Company may use the ``Sallie
Mae'' name on, or to identify the issuer of, any debt
obligation or other security offered or sold by the
Holding Company or any direct or indirect subsidiary.
The Association shall remit to the Secretary of
Treasury $5,000,000 during fiscal year 1996 as
compensation for the right to assign such trademark or
service mark.
(4) Disclosure required.--Until 3 years after the
dissolution date, the Holding Company, and any direct
or indirect subsidiary of the Holding Company other
than the Association, shall prominently display in any
document offering its securities, and in any
advertisement or promotional materials which use the
``Sallie Mae'' name or mark, a statement that--
(A) neither the Holding Company nor any such
subsidiary is a Government-sponsored enterprise
or instrumentality of the United States; and
(B) the obligations of the Holding Company
and any such subsidiary are not guaranteed by
the full faith and credit of the United States.
(f) Strict Construction.--Except as specifically set forth in
this section, nothing contained in this section shall be
construed to limit the authority of the Association as a
federally chartered corporation, or of the Holding Company as a
State or District of Columbia chartered corporation.
(g) Right To Enforce.--The Secretary of Education or the
Secretary of the Treasury, as appropriate, may request the
Attorney General of the United States to bring an action in the
United States District Court for the District of Columbia for
the enforcement of any provisions of this section, or may,
under the direction or control of the Attorney General, bring
such an action. Such court shall have jurisdiction and power to
order and require compliance with this section.
(h) Deadline for Reorganization Effective Date.--This section
shall be of no further force and effect in the event that the
reorganization effective date does not occur on or before 18
months after the date of enactment of this section.
(i) Definitions.--For purposes of this section--
(1) The term ``Association'' means the Student Loan
Marketing Association.
(2) The term ``dissolution date'' shall mean
September 30, 2007, or such earlier date as the
Secretary of Education permits the transfer of
remaining obligations in accordance with subsection (d)
of this section.
(3) The term ``reorganization effective date'' means
the effective date of the reorganization as determined
by the Board of Directors of the Association, which
shall not be earlier than the date that stockholder
approval is obtained pursuant to subsection (b) of this
section and shall not be later than the date that is 18
months after the date of enactment of this section.
(4) The term ``Holding Company'' means the new
business corporation formed pursuant to this section by
the Association under the laws of any State of the
United States or the District of Columbia.
(5) The term ``remaining obligations'' shall mean the
debt obligations of the Association outstanding as of
the dissolution date.
(6) The term ``remaining property'' shall mean the
following assets and liabilities of the Association
which are outstanding as of the reorganization
effective date: (A) debt obligations issued by the
Association, (B) contracts relating to interest rate,
currency, or commodity positions or protections, (C)
investment securities owned by the Association, (D) any
instruments, assets, or agreements described in section
439(d) of this Act (including without limitation all
student loans, forward purchase and lending
commitments, warehousing advances, academic facilities
obligations, letters of credit, standby bond purchase
agreements, liquidity agreements, and student loan
revenue bonds or other loans), and (E) except as
specifically prohibited by this Act, any other
nonmaterial assets or liabilities of the Association
which the Association's Board of Directors determines
to be necessary or appropriate to its operations.
(7) The term ``reorganization'' means the
restructuring event or events (including any merger
event) giving effect to the holding company structure
described in subsection (a) of this section.
(8) The term ``subsidiaries'' shall mean one or more
direct or indirect subsidiaries of the Holding Company.
* * * * * * *
PART D--WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM
* * * * * * *
SEC. 453. SELECTION OF INSTITUTIONS FOR PARTICIPATION AND ORIGINATION.
(a) * * *
* * * * * * *
(c) Selection Criteria for Origination.--
(1) * * *
(2) Transition selection criteria.--For academic year
1994-1995, the Secretary may approve an institution to
originate loans only if such institution--
(A) * * *
* * * * * * *
[(E) in the opinion of the Secretary, has not
had significant deficiencies identified by a
State postsecondary review entity under subpart
1 of part H of this title;
[(F)] (E) in the opinion of the Secretary,
has not had severe performance deficiencies for
any of the programs under this title, including
such deficiencies demonstrated by audits or
program reviews submitted or conducted during
the 5 calendar years immediately preceding the
date of application;
[(G)] (F) provides an assurance that such
institution has no delinquent outstanding debts
to the Federal Government, unless such debts
are being repaid under or in accordance with a
repayment arrangement satisfactory to the
Federal Government, or the Secretary in the
Secretary's discretion determines that the
existence or amount of such debts has not been
finally determined by the cognizant Federal
agency; and
[(H)] (G) meets such other criteria as the
Secretary may establish to protect the
financial interest of the United States and to
promote the purposes of this part.
* * * * * * *
Part G--General Provisions Relating to Student Assistance Programs
SEC. 481. DEFINITIONS.
(a) * * *
(b) Proprietary Institution of Higher Education.--For the
purpose of this section, the term ``proprietary institution of
higher education'' means a school (1) which provides an
eligible program of training to prepare students for gainful
employment in a recognized occupation, (2) which meets the
requirements of clauses (1) and (2) of section 1201(a), (3)
which does not meet the requirement of clause (4) of section
1201(a), (4) which is accredited by a nationally recognized
accrediting agency or association approved by the Secretary
pursuant to part H of this title, (5) which has been in
existence for at least 2 years, and (6) which has at least 15
percent of its revenues from sources that are not derived from
funds provided under this title, as determined in accordance
with regulations prescribed by the Secretary. For the purposes
of determining whether an institution meets the requirements of
clause (6), the Secretary shall not consider the financial
information of any institution for a fiscal year that began on
or before April 30, 1994. Such term also includes a proprietary
educational institution in any State which, in lieu of the
requirement in clause (1) of section 1201(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. 486. TRAINING IN FINANCIAL AID SERVICES.
[(a) Program Authority.--The Secretary is authorized to
provide grants to appropriate nonprofit private organizations
or combinations of such organizations to provide training for
student financial aid administrators and TRIO personnel, at all
levels of experience, who provide or are involved in student
financial aid services.
[(b) Use of Funds.--Financial assistance under this section
may be used for--
[(1) the operation of short-term training institutes
and special training programs for student financial aid
administrators or TRIO personnel designed to--
[(A) improve the professional management
skills of participants in such institutes and
programs;
[(B) improve the delivery of student
services;
[(C) improve students' or prospective
students' information on the availability and
operation of student financial assistance
programs; and
[(D) improve the understanding and knowledge
of the participants concerning the legislative
and regulatory requirements of the student
financial assistance programs and changes in
such requirements; and
[(2) the development of appropriate training
materials.
[(c) Limitations.--Grants authorized under this section--
[(1) shall be limited to not less than $1,000,000 in
the case of single-year grants;
[(2) shall be limited to not less than $1,000,000 per
year in the case of multiple-year grants;
[(3) shall be limited to a maximum of 3 years in the
case of multiple-year grants; and
[(4) may be renewed at the discretion of the
Secretary.
[(d) Authorization of Appropriations and Use of Funds.--There
are authorized to be appropriated $5,000,000 for fiscal year
1993 and such sums as may be necessary for each of the 4
succeeding fiscal years to carry out the provisions of this
section.]
SEC. 487. PROGRAM PARTICIPATION AGREEMENTS.
(a) Required for Programs of Assistance; Contents.--In order
to be an eligible institution for the purposes of any program
authorized under this title, an institution must be an
institution of higher education or an eligible institution (as
that term is defined for the purpose of that program) and
shall, except with respect to a program under subpart 4 of part
A, enter into a program participation agreement with the
Secretary. The agreement shall condition the initial and
continuing eligibility of an institution to participate in a
program upon compliance with the following requirements:
(1) * * *
* * * * * * *
(3) The institution will establish and maintain such
administrative and fiscal procedures and records as may
be necessary to ensure proper and efficient
administration of funds received from the Secretary or
from students under this title, together with
assurances that the institution will provide, upon
request and in a timely fashion, information relating
to the administrative capability and financial
responsibility of the institution to--
(A) the Secretary;
[(B) the appropriate State review entity
designated under subpart 1 of part H;
[(C)] (B) the appropriate guaranty agency;
and
[(D)] (C) the appropriate accrediting agency
or association.
* * * * * * *
(15) The institution acknowledges the authority of
the Secretary, guaranty agencies, lenders, accrediting
agencies, [the Secretary of Veterans Affairs, and State
review entities under subpart 1 of part H] and the
Secretary of Veterans Affairs to share with each other
any information pertaining to the institution's
eligibility to participate in programs under this title
or any information on fraud and abuse.
* * * * * * *
(21) The institution will meet the requirements
established by the Secretary[, State postsecondary
review entities,] and accrediting agencies pursuant to
part H of this title.
* * * * * * *
(c) Audits; Financial Responsibility; Enforcement of
Standards.--(1) Notwithstanding any other provisions of this
title, the Secretary shall prescribe such regulations as may be
necessary to provide for--
(A)(i) except as provided in clause (ii), a financial
audit of an eligible institution with regard to the
financial condition of the institution in its entirety,
and a compliance audit of such institution with regard
to any funds obtained by it under this title or
obtained from a student or a parent who has a loan
insured or guaranteed by the Secretary under this
title, on at least an annual basis and covering the
period since the most recent audit, conducted by a
qualified, independent organization or person in
accordance with standards established by the
Comptroller General for the audit of governmental
organizations, programs, and functions, and as
prescribed in regulations of the Secretary, the results
of which shall be submitted to the Secretary and shall
be available to cognizant guaranty agencies, eligible
lenders, [State agencies, and the State review entities
referred to in subpart 1 of part H] and State agencies;
or
* * * * * * *
(4) The Secretary shall publish[, after consultation with
each State review entity designated under subpart 1 of part H,]
a list of State agencies which the Secretary determines to be
reliable authority as to the quality of public postsecondary
vocational education in their respective States for the purpose
of determining eligibility for all Federal student assistance
programs.
(5) The Secretary shall make readily available to appropriate
guaranty agencies, eligible lenders, [State review entities
designated under subpart 1 of part H,] and accrediting agencies
or associations the results of the audits of eligible
institutions conducted pursuant to paragraph (1)(A).
* * * * * * *
PART H--PROGRAM INTEGRITY TRIAD
[Subpart 1--State Postsecondary Review Program
[SEC. 494. STATE POSTSECONDARY REVIEW PROGRAM.
[(a) Purpose.--It is the purpose of this section to authorize
the Secretary to enter into agreements that--
[(1) designate one State postsecondary review entity
in each State to be responsible for the conduct or
coordination of the review under section 494C(d) of
institutions of higher education, reported to the State
by the Secretary pursuant to section 494C(a), for the
purposes of determining eligibility under this title;
and
[(2) provide Federal funds to each State
postsecondary review entity for performing the
functions required by such agreements with the
Secretary.
[(b) Program Authority.--The Secretary shall, in accordance
with the provisions of this subpart, enter into agreements with
each of the States to carry out the purposes of this subpart.
If any State declines to enter into an agreement with the
Secretary for the purposes of this subpart, the provisions of
this subpart which refer to the State, with respect to such
State, shall refer to the Secretary, who may make appropriate
arrangements with agencies or organizations of demonstrated
competence in reviewing institutions of higher education.
[(c) Failure To Comply With Agreement.--If a State fails to
enter into an agreement under this section or fails to meet the
requirements of its agreement with the Secretary under this
subpart--
[(1) the Secretary--
[(A) may not designate as eligible for
participation in any program under this title
any new institution (including new branch
campuses) or any institution that has changed
ownership, pursuant to section 481 and subpart
3 of this part; and
[(B) may grant only provisional certification
for all institutions in the State pursuant to
subpart 3 of this part; and
[(2) the State shall be ineligible to receive funds
under section 494B of this subpart, subpart 4 of part A
of this title, and chapter 2 of subpart 2 of part A of
this title
[SEC. 494A. STATE POSTSECONDARY REVIEW ENTITY AGREEMENTS.
[(a) State Organization Structures.--(1) Each agreement under
this subpart shall describe a State organizational structure
responsible for carrying out the review under section 494C(d)
of institutions reported to the State by the Secretary pursuant
to section 494C(a). Each such entity's action in reviewing such
institutions shall, for purposes of this subpart, be considered
to be the action of the State.
[(2) For the purposes of this subpart, the designation of a
State postsecondary review entity for the purpose of entering
into an agreement with the Secretary shall be in accordance
with the State law of each individual State with respect to the
authority to make legal agreements between the State and the
Federal Government.
[(3) Except as provided in paragraph (6), nothing in this
subpart shall be construed to authorize the Secretary to
require any State to adopt, as a condition for entering into an
agreement, a specific State organizational structure.
[(4) Except as provided in paragraph (6), nothing in this
subpart shall be construed--
[(A) as a limitation on the authority of any State to
adopt a State organization structure for postsecondary
education agencies, or programs, or institutions of
higher education as appropriate to the needs,
traditions, and circumstances of that State;
[(B) as a limitation on the authority of a State
entering into an agreement pursuant to this subpart to
modify the State organizational structure at any time
subsequent to entering into such agreement;
[(C) as a limitation on the authority of any State to
enter into an agreement for purposes of this subpart as
a member of a consortium of States;
[(D) as an authorization for the Secretary to
withhold funds from any State or postsecondary
institution on the basis of compliance with a State's
constitution or laws;
[(E) as an authorization for any State postsecondary
review entity to exercise planning, policy,
coordinating, supervisory, budgeting, or administrative
powers over any postsecondary institution; or
[(F) as a limitation on the use of State audits for
the purpose of compliance with applicable standards
under section 494C(d).
[(5) Nothing in this subpart shall be construed to limit the
authority or activities of any State loan insurance program
established under section 428(b) of this title or of any
relevant State licensing authority which grants approval for
institutions of higher education to operate within a State or
their authority to contact the Secretary directly.
[(6) Notwithstanding the provisions of paragraphs (2), (3),
and (4) of this subsection, the Secretary may require each
State to designate an entity responsible for the conduct or
coordination of the review of institutions under this title.
[(b) Contents of Agreements.--Agreements between each State
and the Secretary shall contain the following elements:
[(1) A designation of a single State postsecondary
review entity, which represents all entities of that
State which are responsible for--
[(A) granting State authorization to each
institution of higher education in that State
for the purposes of this title, and
[(B) ensuring that each institution of higher
education in that State remains in compliance
with the standards developed pursuant to
section 494C.
[(2) Assurances that the State will review
institutions of higher education for the purpose of
determining eligibility under this title on a schedule
to coincide with the dates set by the Secretary to
certify or recertify such institutions of higher
education as provided in section 481 and subpart 3 of
this part.
[(3) Assurances that the appropriate State
postsecondary review entity will perform the functions
authorized by this subpart and will keep such records
and provide such information to the Secretary as may be
requested for financial and compliance audits and
program evaluation, consistent with the
responsibilities of the Secretary.
[(4) A description of the relationship between the
State postsecondary review entity designated for the
purposes of this subpart and (A) the agency or agencies
designated for the purposes of chapter 36 of title 38
of the United States Code, (B) the loan insurance
program established under section 428(b) of this title
for that State, and (C) the grant agency established
under section 415C of this title.
[(5) A plan for performing the functions described in
section 494C of this subpart.
[(c) Federal Responsibility.--Notwithstanding any other
provision of law, no State shall be required to enter into an
agreement with the Secretary under this subpart for performing
the review functions required by such agreement unless the
Congress appropriates funds for this subpart
[SEC. 494B. FEDERAL REIMBURSEMENT OF STATE POSTSECONDARY REVIEW COSTS.
[(a) Payments.--Subject to subsection (b), the Secretary
shall reimburse the States for the costs of performing the
functions required by agreements with the Secretary authorized
under this subpart. Such costs shall include expenses for
providing initial and continuing training to State personnel
and other personnel in the State, including personnel at
institutions of higher education subject to review, to serve
the purposes of this subpart. Reimbursement shall be provided
for necessary activities which supplement, but do not supplant,
existing licensing or review functions conducted by the State.
The Secretary shall also reimburse such entities for work
performed by their subcontractors and consultants where such
work has a direct relationship to the requirements of
agreements with the Secretary under this subpart.
[(b) Authorization of Appropriations.--For the purpose of
enabling the Secretary to make payments to States which have
made agreements with the Secretary under this subpart, there is
authorized to be appropriated $75,000,000 for fiscal year 1993,
and such sums as may be necessary for each of the 4 succeeding
fiscal years.
[SEC. 494C. FUNCTIONS OF STATE REVIEW ENTITIES.
[(a) Initial Review.--The Secretary shall review all eligible
institutions of higher education in a State to determine if any
such institution meets any of the criteria in subsection (b).
If any such institution meets one or more of such criteria, the
Secretary shall inform the State in which such institution is
located that the institution has met such criteria, and the
State shall review the institution pursuant to the standards in
subsection (d). The Secretary may determine that a State need
not review an institution if such institution meets the
criterion in subsection (b)(10) only, such institution was
previously reviewed by the State under subsection (d), and the
State determined in such previous review that the institution
did not violate any of the standards in subsection (d). The
Secretary shall supply the State with a copy of the
institutional audits, required pursuant to section 487(c), for
the institutions which shall be reviewed by the State. In
addition to those institutions identified by the Secretary, the
State may, subject to approval by the Secretary, review
additional institutions which meet one or more of the criteria
provided in subsection (b), based on more recent data available
to the State, or which the State has reason to believe are
engaged in fraudulent practices. If the Secretary fails to
approve or disapprove a State request to review additional
institutions within 21 days, the State may proceed to review
such additional institutions as if approved by the Secretary.
[(b) Review Criteria.--The criteria for the initial review of
institutions of higher education are as follows:
[(1) A cohort default rate (as defined in section
435(m)) equal to or greater than 25 percent.
[(2) A cohort default rate (as defined in such
section) equal to or greater than 20 percent and
either--
[(A) more than two-thirds of the
institution's total undergraduates who are
enrolled on at least a half-time basis receive
assistance under this title (except subparts 4
and 6 of part A); or
[(B) two-thirds or more of the institution's
education and general expenditures are derived
from funds provided to students enrolled at the
institution from the programs established under
this title (except subparts 4 and 6 of part A
and section 428B).
[(3) Two-thirds or more of the institution's
education and general expenditures are derived from
funds provided to students enrolled at the institution
pursuant to subpart 1 of part A of this title.
[(4) A limitation, suspension, or termination action
by the Secretary against the institution pursuant to
section 487 during the preceding 5 years.
[(5) An audit finding during the 2 most recent audits
of an institution of higher education's conduct of the
programs established by this title that resulted in the
repayment by the institution of amounts greater than 5
percent of the funds such institution received from the
programs assisted under this title for any one year.
[(6) A citation of an institution by the Secretary
for failure to submit audits required by this title in
a timely fashion.
[(7) A year-to-year fluctuation of more than 25
percent in the amounts received by students enrolled at
the institution from either Federal Pell Grant, Federal
Stafford Loan, or Federal Supplemental Loans to
Students programs, which are not accounted for by
changes in these programs.
[(8) Failure to meet financial responsibility
standards pursuant to subpart 3 of this part.
[(9) A change of ownership of the institution that
results in a change of control which includes (but is
not limited to)--
[(A) the sale of the institution or the
majority of its assets;
[(B) the division of 1 or more institutions
into 2 or more institutions;
[(C) the transfer of the controlling interest
in stock of the institution or its parent
corporation;
[(D) the transfer of the controlling interest
of stock of the institution to its parent
corporation; or
[(E) the transfer of the liabilities of the
institution to its parent corporation.
[(10) Except with regard to any public institution
that is affiliated with a State system of higher
education, participation in any of the programs
established pursuant to subparts 1 and 3 of part A,
part B, part C, and part E of this title for less than
5 years.
[(11) A pattern of student complaints pursuant to
subsection (j) related to the management or conduct of
the programs established by this title or relating to
misleading or inappropriate advertising and promotion
of the institution's program, which in the judgment of
the Secretary are sufficient to justify review of the
institution.
[(c) Use of Recent Data.--The criteria provided for in
subsection (b) shall be measured on the basis of the most
recent data available to the Secretary. Institutions may
request verification of the data used by the Secretary.
[(d) Review Standards.--Institutions which meet 1 or more of
the criteria in subsection (b) shall be reviewed by the
appropriate State entity in accordance with published State
standards that are consistent with the constitution and laws of
the State, developed in consultation with the institutions in
the State, and subject to disapproval by the Secretary. Such
review shall determine the following:
[(1) The availability to students and prospective
students of catalogs, admissions requirements, course
outlines, schedules of tuition and fees, policies
regarding course cancellations, and the rules and
regulations of the institution relating to students and
the accuracy of such catalogs and course outlines in
reflecting the courses and programs offered by the
institution.
[(2) Assurance that the institution has a method to
assess a student's ability to successfully complete the
course of study for which he or she has applied.
[(3) Assurance that the institution maintains and
enforces standards relating to academic progress and
maintains adequate student and other records.
[(4) Compliance by the institution with relevant
safety and health standards, such as fire, building,
and sanitation codes.
[(5) The financial and administrative capacity of the
institution as appropriate to a specified scale of
operations and the maintenance of adequate financial
and other information necessary to determine the
financial and administrative capacity of the
institution.
[(6) For institutions financially at risk, the
adequacy of provisions to provide for the instruction
of students and to provide for the retention and
accessibility of academic and financial aid records of
students in the event the institution closes.
[(7) If the stated objectives of the courses or
programs of the institution are to prepare students for
employment, the relationship of the tuition and fees to
the remuneration that can be reasonably expected by
students who complete the course or program and the
relationship of the courses or programs (including the
appropriateness of the length of such courses) to
providing the student with quality training and useful
employment in recognized occupations in the State.
[(8) Availability to students of relevant information
by institutions of higher education, including--
[(A) information relating to market and job
availability for students in occupational,
professional, and vocational programs; and
[(B) information regarding the relationship
of courses to specific standards necessary for
State licensure in specific occupations.
[(9) The appropriateness of the number of credit or
clock hours required for the completion of programs or
of the length of 600-hour courses.
[(10) Assessing the actions of any owner,
shareholder, or person exercising control over the
educational institution which may adversely affect
eligibility for programs under this title.
[(11) The adequacy of procedures for investigation
and resolution of student complaints.
[(12) The appropriateness of advertising and
promotion and student recruitment practices.
[(13) That the institution has a fair and equitable
refund policy to protect students.
[(14) The success of the program at the institution,
including--
[(A) the rates of the institution's students'
program completion and graduation, taking into
account the length of the program at the
institution and the selectivity of the
institution's admissions policies;
[(B) the withdrawal rates of the
institution's students;
[(C) with respect to vocational and
professional programs, the rates of placement
of the institution's graduates in occupations
related to their course of study;
[(D) where appropriate, the rate at which the
institution's graduates pass licensure
examinations; and
[(E) the variety of student completion goals,
including transfer to another institution of
higher education, full-time employment in the
field of study, and military service.
[(15) With respect to an institution which meets 1 or
more of the criteria in subsection (b), the State shall
contract with the appropriate approved accrediting
agency or association (described in subpart 2 of this
part) or another peer review system with demonstrated
competence in assessing programs (pursuant to the
authority contained in subsection (f)) to carry out a
review or provide information regarding such agency's
or association's assessment of the following: The
quality and content of the institution's courses or
programs of instruction, training, or study in relation
to achieving the stated objectives for which the
courses or programs are offered, including the adequacy
of the space, equipment, instructional materials,
staff, and student support services (including student
orientation, counseling, and advisement) for providing
education and training that meets such stated
objectives.
[(e) Substitutions Prohibited.--The appropriate State
postsecondary review entity may not substitute either (1)
accreditation by a private accrediting agency or body, or (2)
compliance audits performed by a State guaranty agency
established under section 428(b) of this title, for State
review of compliance with the standards in subsection (d).
[(f) State Contracts.--If the appropriate State postsecondary
review entity contracts with a private agency or body or an
accreditation body or peer review system for assistance in
performing State postsecondary review entity functions, such
contract shall be provided for in the agreement with the
Secretary required by section 494A.
[(g) Prohibition on Unrelated Requirements.--Notwithstanding
any of the provisions of this subpart, the Secretary shall not
require a State to establish standards that are unrelated to
ensuring institutional or program integrity or that violate the
provisions of a State's constitution or laws.
[(h) Institutional Eligibility.--A State postsecondary review
entity may determine that an institution of higher education
shall not be eligible to participate in programs under this
title based on its own findings or the findings of a Federal
entity in accordance with the following procedures:
[(1) State findings.--If the appropriate State
postsecondary review entity finds that an institution
of higher education does not meet one or more of the
standards in subsection (d) of this section, such State
postsecondary review entity shall notify the Secretary
of its findings and the actions that such entity is
taking, or has taken, in response to such findings
within a time period prescribed by the Secretary by
regulation. If a State postsecondary review entity
determines an institution of higher education shall not
be eligible for participation in programs under this
title, such State postsecondary review entity shall so
notify the Secretary. Upon receipt of such notification
of ineligibility, the Secretary shall immediately
terminate the participation of such institutions in the
programs authorized by this title.
[(2) Secretary's findings.--If the Secretary or any
other Federal entity takes, or plans to take, any
action against any institution of higher education
(including any actions taken under section 487), the
Secretary shall notify the appropriate State
postsecondary review entity (or entities, in the case
of multi-State institutions) of such action within a
time period prescribed in the Secretary's regulations.
[(3) Procedural protections for disapproval.--The
Secretary shall, by regulation, prescribe minimum
procedural standards for the disapproval of
institutions of higher education by the appropriate
State postsecondary review entity or entities for
purposes of this title.
[(i) Limit on State Postsecondary Review Agency Functions.--
The functions of State postsecondary review entity shall not
include performing financial and compliance audits as may be
required under section 428 or 487 of this Act.
[(j) Consumer Complaints.--A State, in consultation with the
institutions of higher education in the State, shall establish
and publicize the availability of procedures for receiving and
responding to complaints from students, faculty, and others
about institutions of higher education and shall keep records
of such complaints in order to determine their frequency and
nature for specific institutions of higher education.
[(k) Enforcement Mechanisms.--Nothing in this subpart shall
restrict the authority of the States to establish mechanisms to
enforce the standards established under subsection (d) or
require the States to establish specific mechanisms recommended
by the Secretary.]
Subpart 2--Accrediting Agency Approval
SEC. 496. APPROVAL OF ACCREDITING AGENCY OR ASSOCIATION.
(a) Standards Required.--No accrediting agency or association
may be determined by the Secretary to be a reliable authority
as to the quality of education or training offered for the
purposes of this Act or for other Federal purposes, unless the
agency or association meets standards established by the
Secretary pursuant to this section. The Secretary shall, after
notice and opportunity for a hearing, establish standards for
such determinations. Such standards shall include an
appropriate measure or measures of student achievement. Such
standards shall require that--
(1) * * *
* * * * * * *
(7) such agency or association shall notify the
Secretary [and the appropriate State postsecondary
review entity] within 30 days of the accreditation of
an institution or any final denial, withdrawal,
suspension, or termination of accreditation or
placement on probation of an institution, together with
any other adverse action taken with respect to an
institution; and
(8) such agency or association shall make available
to the public, upon request, and to the Secretary, [and
the State postsecondary review entity of the State in
which the institution of higher education is located] a
summary of any review resulting in a final accrediting
decision involving denial, termination, or suspension
of accreditation, together with the comments of the
affected institution.
* * * * * * *
Subpart 3--Eligibility and Certification Procedures
SEC. 498. ELIGIBILITY AND CERTIFICATION PROCEDURES.
(a) * * *
* * * * * * *
(g) Time Limitations on, and Renewal of, Eligibility.--(1) *
* *
(2) The Secretary shall establish a schedule for the
expiration of the eligibility for purposes of any such program
of all institutions of higher education within the 5-year
period specified in paragraph (1). [Such schedule shall place a
priority for the expiration of the certification of
institutions on those that meet the following criteria:
[(A) institutions subject to review by a State
postsecondary review entity pursuant to subpart 1 of
part H; or
[(B) other categories of institutions which the
Secretary deems necessary.]
* * * * * * *
SEC. 498A. PROGRAM REVIEW AND DATA.
(a) General Authority.--In order to strengthen the
administrative capability and financial responsibility
provisions of this title, the Secretary--
(1) shall provide for the conduct of program reviews
on a systematic basis designed to include all
institutions of higher education participating in
programs authorized by this title;
(2) may give priority for program review to
institutions of higher education that are--
(A) * * *
* * * * * * *
(D) institutions reported to have
deficiencies or financial aid problems [by the
appropriate State postsecondary review entity
designated under subpart 1 of this part or] by
the appropriate accrediting agency or
association;
(E) institutions with high annual dropout
rates; and
[(F) any institution which is required to be
reviewed by a State postsecondary review entity
pursuant to subpart 1 of part H under section
494C(b); and
[(G)] (F) such other institutions as the
Secretary deems necessary; and
(3) shall establish and operate a central data base
of information on institutional accreditation,
eligibility, and certification that includes--
(A) * * *
* * * * * * *
(C) all relevant information from accrediting
agencies or associations; and
(D) all relevant information available from a
guaranty agency[; and
[(E) all relevant information available from
States under subpart 1.].
* * * * * * *
TITLE V--EDUCATOR RECRUITMENT, RETENTION, AND DEVELOPMENT
* * * * * * *
[PART A--STATE AND LOCAL PROGRAMS FOR TEACHER EXCELLENCE
[SEC. 501. AUTHORITY AND ALLOCATION OF FUNDS; DEFINITIONS.
[(a) Purpose and Authority.--
[(1) Purpose.--It is the purpose of this part to
provide funds to State educational agencies, local
educational agencies and institutions of higher
education in order to update and improve the skills of
classroom teachers, including preschool and early
childhood education specialists and school
administrators, to establish State academies for
teachers and school leaders, and to provide for a
comprehensive examination of State requirements for
teacher preservice and certification.
[(2) Program authorized.--The Secretary is authorized
to make allotments to State educational agencies for
the purposes of enhancing and improving the quality of
teaching, including early childhood education, in each
of the several States.
[(b) Allotment of Funds.--
[(1) In general.--From the funds appropriated in each
fiscal year pursuant to section 510A, the Secretary
shall allot to each State--
[(A) 50 percent of such funds on the basis of
the number of individuals in the State aged 5
through 17 compared to the number of all such
individuals in all States; and
[(B) 50 percent of such funds on the basis of
the amount the State receives under sections
1005 and 1006 of chapter 1 of title I of the
Elementary and Secondary Education Act of 1965
compared to the total amount that all States
receive under such sections.
[(2) Allocations from state allotments.--
[(A)(i) Except as provided in subsection (c),
from the amount allotted to each State in each
fiscal year pursuant to paragraph (1) and not
reserved pursuant to subparagraph (B)(i), the
State education agency shall allocate 50
percent of such amount in accordance with
clause (ii) to local eduational agencies to
carry out the activities described in section
503.
[(ii) The State educational agency shall
allocate 50 percent of the amount allotted to
the State in each fiscal year under paragraph
(1) so that--
[(I) one-half of such amount is
allocated to local educational agencies
within such State based on the local
educational agency's relative share of
the enrollments in public schools
within the State; and
[(II) one-half of such amount is
allocated to local educational agencies
within such State based on the local
educational agency's relative share of
the State's allocation of funds under
sections 1005 and 1006 of the
Elementary and Secondary Education Act
of 1965,
except that any local educational agency that
would receive an allocation of less than
$10,000 shall be required to form a consortium
with at least one other local educational
agency in order to receive an allocation under
this part. In making allocations under this
part, the State educational agency shall use
the most recent data available.
[(B)(i) From the amount allotted to each
State in each fiscal year pursuant to paragraph
(1) the State educational agency shall reserve
not more than 3 percent of such funds for the
purposes of administering the program under
this title, including evaluation and
dissemination activities.
[(ii) From the amount allotted to each State
in each fiscal year under paragraph (1) and not
reserved pursuant to clause (i), the State
educational agency--
[(I) shall reserve not more than 25
percent of such funds to carry out
sections 504, 505, and 506; and
[(II) shall reserve not more than 25
percent of such funds to award grants
to institutions of higher education in
accordance with sections 507 and 508.
[(c) Special Rule.--Notwithstanding the provisions of
subsection (b)(2)(A), if the amount appropriated to carry out
this part for any fiscal year is less than $250,000,000, then
each State educational agency shall use 50 percent of the
amount allotted to such State under paragraph (1) and not
reserved pursuant to subsection (b)(2)(B)(i) to award grants to
local educational agencies on a competitive basis.
[(d) Reallotment.--If a State or local educational agency
elects not to receive assistance under this part in any fiscal
year or the Secretary determines in any fiscal year that a
State or local educational agency will not be able to use all
or any portion of the funds available to such State or local
educational agency under this part, then the Secretary shall
reallot such funds. The Secretary shall reallot such funds in
such fiscal year in accordance with the provisions of this part
among the States or local educational agencies who are eligible
for assistance under this part and are not described in the
preceding sentence.
[(e) Definitions.--For purposes of this part--
[(1) the term ``State'' means each of the 50 States,
the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Guam, the Commonwealth of the
Northern Mariana Islands, American Samoa, and the
Republic of Palau (until the Compact of Free
Association takes effect pursuant to section 101(a) of
Public Law 99-658); and
[(2) the term ``key academic subjects'' means
English, mathematics, science, history, geography,
foreign languages, civics and government, and
economics.
[SEC. 502. STATE APPLICATION.
[(a) In General.--Any State which desires to receive an
allotment under this part shall submit to the Secretary an
application which--
[(1) designates the State educational agency as the
State agency responsible for the administration and
supervision of programs assisted under this part;
[(2) provides for a process of active discussion and
consultation with a committee, convened by the chief
State school officer, which is broadly representative
of the following educational interests within the
State, including--
[(A) a representative nominated by each of
the following:
[(i) the State teacher organizations;
[(ii) the organizations representing
preschool and early childhood education
specialists;
[(iii) the State school
administrators organization;
[(iv) the State parents
organizations;
[(v) the State business
organizations; and
[(vi) the State student
organizations;
[(B) a representative from the State board of
education;
[(C) a representative of faculty from
departments, schools or colleges of educations;
[(D) other representatives of institutions of
higher education, including community colleges;
[(E) the State director of vocational
education; and
[(F) the State director of special education;
[(3) describes the competitive process that the State
will use to distribute funds among local educational
agencies pursuant to section 501(c);
[(4) describes the process the State will use to
conduct the assessment required by section 504(c);
[(5) describes how the State will allocate funds
among activities required under section 504;
[(6) with respect to the State academies to be
established under sections 505 and 506--
[(A) describes the academies to be
established under this part and the goals and
objectives for each such academy;
[(B) describes how the academies assisted
under this part shall relate to the overall
plan for the attainment of the national
education goals by the State;
[(C) describes the competitive process that
shall be used to select applicants to operate
the academies assisted under this part;
[(D) assures that the Academies for Teachers
shall provide instruction in the key academic
subjects;
[(E) assures that the State shall continue to
operate the academies assisted under this part
when Federal funds provided pursuant to this
title are no longer available;
[(F) assures that Federal funds provided
under this part shall not be used for
construction of new facilities or substantial
remodeling;
[(G) assures that the Academies for Teachers
shall provide activities designed to enhance
the ability of teachers to work with special
educational populations, including--
[(i) limited-English proficient
children;
[(ii) children with disabilities;
[(iii) economically and educationally
disadvantaged children; and
[(iv) gifted and talented children;
and
[(H) contains such other assurances and
information as the Secretary may reasonably
require;
[(7) describes the competitive process that the State
will use to distribute funds among institutions of
higher education pursuant to section 507;
[(8) describes a plan to promote learning among the
State educational agency staff in order to support and
facilitate systemic improvement of the State
educational agency, schools or colleges of education at
institutions of higher education, and local educational
agencies; and
[(9) includes such other information and assurances
as the Secretary may require.
[(b) Functions of Committee.--The application required by
subsection (a) shall identify the procedures by which the
committee required by paragraph (2) of such subsection will be
engaged in--
[(1) ensuring that activities assisted under this
part are effective, coordinated with other State,
local, and Federal activities and programs, and meet
the needs of the State for improving the quality of
teaching and teacher education programs, including
those programs concerned with preschool education and
the training of early childhood education specialists,
and school leadership programs;
[(2) advising the State on criteria for awarding
funds under sections 501(c), 505, 506, and 507; and
[(3) advising the State on criteria for approving
local educational agency applications under section
503(a).
[(c) Evaluation and Report.--
[(1) Report to secretary.--Each State educational
agency receiving an allotment under this part shall
evaluate the work of each academy that is located in
the State and assisted under this part every 2 years,
including the impact of each academy's programs on
participants, and report the findings of such
evaluation to the Secretary. The initial report shall
be submitted 3 years after funds are first allotted to
such State educational agency under section 501 and
subsequent reports shall be submitted every 2 years
thereafter. Such report shall also describe the
characteristics of the participants and activities
provided at each academy assisted under this part.
[(2) Report to congress.--The Secretary shall submit
to the Congress a summary of the reports required under
subsection (a). The initial summary shall be submitted
60 days after the due date of the first report
described in subsection (a) and subsequent summaries
shall be submitted every 2 years thereafter.
[SEC. 503. LOCAL APPLICATION AND USE OF FUNDS.
[(a) Local Application.--Any local educational agency which
desires to receive assistance under section 501(b)(2)(A) or
501(c) shall submit to the State educational agency an
application which--
[(1) describes the needs of such local educational
agency with respect to inservice training programs for
teachers and preschool and early childhood education
specialists pursuant to the assessment conducted under
subsection (b)(2)(A), and, if appropriate, describes
the need of such local educational agency for teacher
recruitment, business partnerships, outreach to
military veterans, and the provision of other
opportunities for teachers to improve their skills;
[(2) describes the process used to determine such
needs, including consultation with teachers, preschool
and early childhood specialists, principals, parents,
representatives from departments, schools or colleges
of education, and others in the community;
[(3) describes the activities such agency intends to
conduct with the funds provided under section
501(b)(2)(A) or 501(c) consistent with the provisions
of this section in order to improve the quality of
teaching within such agency;
[(4) describes the processes and methods used to
promote systematic improvement through continual
learning in order to achieve agreed upon local, State
and National standards; and
[(5) any other information that the State educational
agency may reasonably require.
[(b) Local Uses of Funds.--
[(1) In general.--Local educational agencies
receiving assistance under section 501(b)(2)(A) or
501(c) shall use such funds for the inservice training
of teachers and, if appropriate, for preschool and
early childhood education specialists, and may use
funds for--
[(A) development of programs to recruit
individuals into the teaching profession and
the field of early childhood education;
[(B) business partnerships;
[(C) outreach to military veterans; and
[(D) other purposes consistent with improving
the quality of teaching in the local
educational agency, as approved by the State
educational agency.
[(2) Inservice training.--
[(A) In order to receive assistance under
section 501(b)(2)(A) or 501(c), a local
educational agency or a consortium of local
educational agencies shall first assess the
needs of such agency or agencies for inservice
training.
[(B) Funds expended for inservice training
shall be used, in accordance with the
assessment conducted under subparagraph (A),
for the cost of--
[(i) the expansion and improvement of
inservice training and retraining of
teachers and other appropriate school
personnel, including vocational
teachers, special education teachers,
and preschool teachers, consistent with
the assessment conducted under
subparagraph (A);
[(ii) providing funds for grants for
individual teachers within the local
educational agency to undertake
projects to improve their teaching
ability or to improve the instructional
materials used in their classrooms;
[(iii) activities designed to address
the effects of chronic community
violence on children, such as violence
counseling training for teachers and
early childhood specialists, and
activities and training aimed at
resolving conflicts;
[(iv) activities designed to enhance
the ability of teachers to work with
culturally diverse students;
[(v) activities designed to integrate
academic and vocational education;
[(vi) as appropriate, activities
designed to assist teacher
participation in a Tech-Prep program
under section 344 of the Carl D.
Perkins Vocational and Applied
Technology Act, in order to develop the
skills of such teachers in activities
such as organizational development
leadership and interdisciplinary
curricula development; and
[(vii) other activities consistent
with the goals of this part as approved
by the State educational agency.
[(C) Such activities may be carried out
through agreements with institutions of higher
education, nonprofit organizations, public
agencies, and museums.
[(D) Activities related to inservice training
shall be coordinated with such activities
carried out under part A of title II of the
Elementary and Secondary Education Act of 1965.
[(3) Recruitment of teachers.--
[(A) Local educational agencies receiving
assistance under section 501(b)(2)(A) or 501(c)
may use such assistance--
[(i) to establish, operate, or expand
programs to encourage and recruit
interested individuals to pursue a
course of study that will lead to a
career in education; and
[(ii) to establish, operate, or
expand a program where such agency
recruits students currently enrolled in
a school in the local educational
agency to be teachers or early
childhood education specialists.
[(B) Activities under this paragraph may
include--
[(i) academic and career counseling
of and support services for students;
[(ii) programs in which students act
as tutors while they are enrolled in
schools in the local educational
agency;
[(iii) programs in which students
enrolled in institutions of higher
education and other individuals tutor
students within schools in the local
educational agency;
[(iv) information and recruitment
efforts to attract individuals into the
teaching profession; and
[(v) programs to support early
childhood education efforts at the
preschool and school level.
[(C) In conducting programs under this
paragraph, local educational agencies shall
place a priority on recruiting students and
individuals from minority groups.
[(D) Local educational agencies may conduct
programs under this paragraph in consortia with
institutions of higher education.
[(4) Business partnerships.--Local educational
agencies receiving assistance under section
501(b)(2)(A) or 501(c) may use such assistance to
establish partnerships with representatives of the
business community to sponsor--
[(A) programs which allow representatives of
local business or firms to go into the
classroom and work with the classroom teacher
to provide instruction in subject areas where
the expertise of the teacher could be
supplemented, especially in the subject areas
of mathematics, science, and vocational and
technology education training;
[(B) internship programs which provide an
opportunity for classroom teachers to work in
local businesses or firms to gain practical
experience or to develop new skills or
expertise;
[(C) programs which bring students and
teachers into business settings to see
applications of course work and in specialized
areas, and to learn to use advanced technical
equipment;
[(D) programs which allow representatives of
local businesses and firms to work with school
administrators to develop instructional
material; and
[(E) other activities appropriate to forming
a working relationship between business leaders
and classroom leaders.
[(5) Outreach to military veterans.--Local
educational agencies receiving assistance under section
501(b)(2)(A) or 501(c) may use such assistance to
establish programs to inform United States military
veterans of teaching opportunities and to provide
assistance in the establishment of teaching
opportunities for such veterans by--
[(A) planning and implementing informational
and outreach programs leading to the
development of programs specifically designed
to inform United States military veterans about
teaching opportunities and the qualifications
necessary for such opportunities;
[(B) planning and implementing programs
leading to the creation of teaching
opportunities for such veterans;
[(C) supporting programs to assist such
veterans to meet the qualifications to become
teachers;
[(D) disseminating information on the program
described in this paragraph and on sources of
student financial assistance available under
title IV of this Act and under programs
administered by the Department of Veterans
Affairs and other Federal agencies; and
[(E) making scholarships available to such
military veterans under the same terms and
conditions specified in subpart 1 of part C of
this title.
[SEC. 504. STATE USES OF FUNDS.
[(a) In General.--Each State educational agency receiving
funds reserved pursuant to section 501(b)(2)(B)(ii)(I) shall
use such funds--
[(1) first, to conduct a study of teacher education
programs within such State, as required under
subsection (c); and
[(2) secondly, for--
[(A) the establishment of State Academies for
Teachers under section 505;
[(B) the establishment of State Academies for
School Leaders under section 506; and
[(C) activities directly related to the
implementation of the teacher education study
required under subsection (c).
[(b) Special Rule.--If a State educational agency can
demonstrate that the amount of funds reserved pursuant to
section 501(b)(2)(B)(ii)(I) is insufficient to establish one
State academy, then the State educational agency shall
distribute such funds to local educational agencies in
accordance with section 501(b)(2)(A) or 501(c) to carry out the
activities described in section 503(b).
[(c) Teacher Education Study.--
[(1) Study required.--Each State educational agency
receiving funds under this part shall, in consultation
with institutions of higher education, local
educational agencies, teachers, parents, the State
legislature, the State board of education, and
business, undertake a study of--
[(A) teacher education programs and State
teacher professional development requirements,
including programs and requirements intended to
train preschool and early childhood education
specialists; and
[(B) the State laws and regulations relating
to such programs and requirements, including
any standards or requirements for certification
and licensure,
in order to determine if such programs and requirements
are adequately preparing teachers to effectively
educate students.
[(2) Considerations.--Such study shall consider
whether such programs or requirements--
[(A) would be improved if teacher education
programs were required to coordinate courses
with other departments on campus in order to
provide prospective teachers with a strong
background in their subject matter;
[(B) integrate academic and vocational
education instruction;
[(C) give enough flexibility in order to
allow experimentation and innovation;
[(D) would be improved if such programs
provided preparation for students desiring to
become teachers, but who are pursuing a
bachelor's degree in an area of study other
than education;
[(E) would be improved if teacher
certification required a bachelor's degree in a
subject area and a master's degree in
education; and
[(F) would be improved if institutions of
higher education that have developed innovative
materials and curricula for inservice training
were required to incorporate these improvements
into their preservice programs.
[(3) Deadlines.--
[(A) Such study shall be completed by two
years from the end of the first fiscal year in
which funding was made available for this part.
The results of such study shall be reported to
the Secretary. In submitting the report to the
Secretary, the State educational agency shall
include in the report the most successful
practices used to enhance the profession of
teaching. The Secretary may disseminate such
successful practices in order to assist other
States in their efforts to enhance the
profession of teaching.
[(B) Except as provided in paragraph (4),
beginning in the third fiscal year for which
funding under this part is available, State
educational agencies shall use all funds
provided under section 501(b)(2)(B)(ii)(I)
which are not allotted for State Academies for
Teachers and State Academies for School
Leaders--
[(i) to implement the program and
policy changes resulting from the
findings of such study; and
[(ii) to assist schools and programs
of education throughout the State in
meeting any new requirements that
result from such study.
[(C) The State educational agency shall award
grants pursuant to section 507(b)(9) to
institutions of higher education to implement
the programs and policy changes resulting from
the findings of such study.
[(4) Waiver.--If a State demonstrates to the
Secretary that it has completed a study comparable to
the study required by this subsection within the
previous 5 years prior to the fiscal year for which
funds are first made available under this part, then
the Secretary may waive the requirements of this
subsection. States receiving a waiver shall use funds
provided under section 501(b)(2)(B)(ii)(I) to implement
the program and policy changes resulting from the
findings of such study. If the State can demonstrate to
the Secretary that such program and policy changes have
been implemented, then the State shall use funds
provided under section 501(b)(2)(B)(ii)(I) to carry out
the activities authorized under sections 505 and 506.
[SEC. 505. STATE ACADEMIES FOR TEACHERS.
[(a) Purpose; Definitions.--
[(1) Purpose.--It is the purpose of this section to
improve elementary and secondary school teacher subject
matter knowledge and teaching skills in each of the key
academic subjects by establishing one or more Academies
in the key academic subjects in every State.
[(2) Definitions.--For purposes of this section--
[(A) the term ``Academy'' means a course of
instruction and related activities to increase
a teacher's knowledge of a specific subject
area, a teacher's ability to impart such
knowledge to students, and a teacher's ability
to address any other issue described in this
section, except that such term--
[(i) does not mean a physical
facility; and
[(ii) does not require a separate
location from another Academy or other
training program; and
[(B) the term ``eligible entity'' means a
local educational agency, an institution of
higher education, a museum, a private nonprofit
educational organization of demonstrated
effectiveness, or a consortium of any 2 or more
of such entities.
[(b) Application Required.--
[(1) In general.--Each eligible entity desiring to
operate an Academy under this section shall submit an
application to the State educational agency at such
time, in such manner, and accompanied by such
information as the State may reasonably require.
[(2) Contents.--Each application submitted pursuant
to paragraph (1) shall describe--
[(A) the goals of the Academy and the steps
that shall be taken to evaluate the extent to
which the Academy reaches its goals;
[(B) the curriculum to be used or developed
by the Academy;
[(C) steps to be taken to recruit teachers
for the Academy's program, including outreach
efforts to identify and attract--
[(i) minority group members;
[(ii) individuals with disabilities;
[(iii) individuals from areas with
large numbers or concentrations of
disadvantaged students; and
[(iv) other teachers with the
potential to serve as mentor teachers;
[(D) steps to be taken to ensure that faculty
members teaching at the Academy shall be of
exceptional ability and experience, including
outreach efforts to identify and attract as
faculty members--
[(i) minority group members;
[(ii) individuals with disabilities;
and
[(iii) individuals from areas with
large numbers or concentrations of
disadvantaged students;
[(E) efforts to be undertaken to disseminate
information about the Academy;
[(F) selection criteria to be used in
identifying teachers to participate in the
Academy;
[(G) steps to be taken to assure that the
programs offered by the Academy shall be of
sufficient length and comprehensiveness to
significantly improve participants' knowledge;
and
[(H) efforts to be undertaken to evaluate the
impact of the Academy on participants.
[(c) Use of Allotted Funds.--
[(1) Grants.--Each State educational agency receiving
an allotment under this part shall use the funds
reserved pursuant to section 501(b)(2)(B)(ii)(I) to
award one or more competitive grants to eligible
entities to enable such eligible entities to operate an
Academy in accordance with the provisions of this
section.
[(2) Coordination of activities.--To the extent
practicable, such academies shall coordinate efforts
with teacher inservice activities of local educational
agencies.
[(3) Combination of resources.--Each State
educational agency receiving an allotment under this
part may combine the funds reserved pursuant to section
501(b)(2)(B)(ii)(I) with such funds reserved by another
State educational agency to operate academies assisted
under this part on a multistate or regional basis.
[(4) Costs.--Each eligible entity receiving a grant
under this section shall use such funds to meet the
operating costs of carrying out the activities
described in subsection (d), which may include
reasonable startup and initial operating costs, and
costs associated with release time, stipends, travel,
and living expenses for teachers who participate in the
Academy's program if no other funds are available to
pay such costs.
[(d) Authorized Activities.--Each eligible entity receiving a
grant to operate an Academy under this section may use such
grant funds for--
[(1) renewal and enhancement of participants'
knowledge in key academic subjects;
[(2) skills and strategies to improve academic
achievement of students, especially students who are
educationally disadvantaged, are limited-English
proficient, are drug- or alcohol-exposed, or have
disabilities;
[(3) improved teaching and classroom management
skills;
[(4) techniques for the integration of academic and
vocational subject matter, including the application of
such techniques in tech/prep education programs;
[(5) the use of educational technologies in teaching
the key academic subjects;
[(6) training needed to participate in curriculum
development in a key academic subject;
[(7) training in the development and use of
assessment tools;
[(8) review of existing teacher enhancement programs
to identify the most promising approaches;
[(9) development of a curriculum for use by the
Academy;
[(10) follow-up activities for previous participants;
[(11) dissemination of information about the Academy,
including the training curricula developed; and
[(12) any other activities proposed by the applicant
and approved by the State educational agency.
[(e) Cost Sharing.--Funds received for this section may be
used to pay not more than 75 percent of the cost of operating
an Academy in the first year an eligible entity receives a
grant under this section, 65 percent of such cost in such
second year, 55 percent of such cost in such third year, 45
percent of such cost in such fourth year, and 35 percent of
such cost in such fifth year. The remaining share shall be
provided from non-Federal sources, and may be in cash or in-
kind contributions, fairly valued.
[(f) Special Rules.--
[(1) Uses of funds.--
[(A) Key academic subjects.--At least 70
percent of funds received for this section
shall be used for enhancement of participant
knowledge in key academic subjects.
[(B) Other subjects.--At least 20 percent of
the funds received for this section shall be
used for enhancement of participant knowledge
in areas not related to academic subjects.
[(2) Special rule.--In awarding grants under this
section the State educational agency may provide for
training in 2 or more key academic subjects at a single
site.
[(3) Additional academies or awards.--If a State can
demonstrate that the State's need for academies in key
academic subjects has been met, and if the State can
demonstrate that it is implementing the findings of the
teacher education study described in section 504(c),
then the State may use a portion of the amount reserved
pursuant to section 501(b)(2)(B)(ii)(I) to establish
one or more of the following academies or awards:
[(A) Early childhood academies.--A State
educational agency may establish an academy
aimed at early childhood education training.
Such an academy shall give a priority to
recruiting candidates from underrepresented
groups in the early childhood education
profession and shall provide intensive
childhood training in violence counseling.
[(B) Tech-prep academies.--A State
educational agency may establish an academy
for--
[(i) assisting educators in secondary
schools and community colleges to more
effectively understand organizational
structures and organizational change
strategies;
[(ii) assisting educators to learn
effective peer leadership strategies;
[(iii) assisting secondary school
teachers and community college faculty
to identify the knowledge and skills
required in highly technical industries
and workplaces;
[(iv) assisting secondary school
teachers and community college faculty
to apply creative strategies to the
development of interdisciplinary
curricula; and
[(v) assisting educators in
integrating academic and vocational
education.
[(C) Teacher awards.--(i) A State educational
agency may make awards to State Academies for
Teachers to provide for a program of cash
awards and recognition to outstanding teachers
in the key academic subject or subjects covered
by the program of the Academy.
[(ii) Any full-time public or private
elementary or secondary school teacher of a key
academic subject or vocational and technology
education subject, including an elementary
school teacher of the general curriculum, shall
be eligible to receive an award under this
subparagraph.
[(iii) The amount of a teacher's award under
this subparagraph shall not exceed $5,000 and
shall be available for any purpose the
recipient chooses.
[(iv) Each Academy receiving an award under
clause (i) of this subparagraph shall select
teachers to receive awards from nominations
received from local educational agencies,
public and private elementary and secondary
schools, teachers, associations of teachers,
parents, associations of parents and teachers,
businesses, business groups, and student
groups.
[(v) The Academy shall select award
recipients under this subparagraph in
accordance with criteria developed by the
Academy and approved by the State educational
agency. The selection criteria may take into
account teacher's success in--
[(I) educating disadvantaged children
and children with disabilities;
[(II) educating gifted and talented
children;
[(III) encouraging students to
enroll, and succeed, in advanced
classes in a key academic subject or
vocational and technology education
subject;
[(IV) teaching a key academic subject
or vocational and technology education
subject successfully in schools
educating large numbers of
educationally disadvantaged students,
including schools in low-income inner-
city or rural areas;
[(V) introducing a new curriculum in
a key academic subject into a school or
strengthening an established
curriculum;
[(VI) acting as a master teacher; and
[(VII) other criteria as developed by
the Academies and approved by the State
educational agency.
[SEC. 506. STATE ACADEMIES FOR SCHOOL LEADERS.
[(a) Purpose; Definitions.--
[(1) Purpose.--It is the purpose of this section to
improve the training and performance of school
principals and other school leaders and to increase the
number of persons who are highly trained to be
principals and school leaders by establishing an
Academy for current and prospective school leaders in
every State.
[(2) Definitions.--For the purpose of this section--
[(A) the term ``Academy'' means a course of
instruction and related activities to increase
a school leader's knowledge of the tools and
techniques of school management and leadership,
and such leader's ability to exercise such
tools and techniques in the school setting, and
may include a course of instruction for school
district level system leaders separately or in
combination with school leaders and teachers,
except that such term--
[(i) does not mean a physical
facility; and
[(ii) does not require a separate
location from another Academy or other
training program; and
[(B) the term ``eligible entity'' means a
technical assistance center assisted under
subpart 2 of part C of title V of this Act as
such Act was in effect on the day before the
date of enactment of the Higher Education
Amendments of 1992, a local educational agency,
an institution of higher education, a museum, a
private nonprofit educational organization of
demonstrated effectiveness, or a consortium of
any 2 or more such entities.
[(b) Application Required.--
[(1) In general.--(A) Each eligible entity desiring
to operate an Academy under this section shall submit
an application to the State educational agency at such
time, in such manner and accompanied by such
information as the State may reasonably require. Such
Academy may be operated in cooperation or consortium
with an Academy of another State.
[(B) A priority for awards shall be given to entities
who received funds under subpart 2 of part C of title V
of the Higher Education Act as in effect on September
30, 1991.
[(2) Contents.--Each application submitted pursuant
to paragraph (1) shall describe--
[(A) the goals of the Academy and the steps
that shall be taken to evaluate the extent to
which the Academy reaches its goals;
[(B) the curriculum to be used or developed
by the Academy;
[(C) the steps to be taken to recruit school
leaders for the Academy's program, including
outreach efforts to identify and attract--
[(i) minority group members;
[(ii) individuals with disabilities;
[(iii) individuals from areas with
large numbers or concentrations of
disadvantaged students; and
[(iv) other individuals with
potential to become school leaders;
[(D) efforts to be taken to disseminate
information about the Academy;
[(E) selection criteria to be used in
identifying school leaders to participate in
the Academy;
[(F) steps to be taken to assure that the
programs offered by the Academy shall be of
sufficient length and comprehensiveness to
significantly improve participants' knowledge;
[(G) steps to be taken to assure the
involvement of private sector managers and
executives from businesses in the conduct of
the Academy's programs; and
[(H) efforts to be undertaken to evaluate the
impact of the Academy on participants.
[(c) Use of Allotted Funds.--
[(1) Grants.--Each State educational agency receiving
an allotment under this part shall use the funds
reserved pursuant to section 501(b)(2)(B)(ii)(I) to
award a competitive grant to an eligible entity to
enable such eligible entity to operate an Academy in
accordance with the provisions of this subpart.
[(2) Costs.--Each eligible entity receiving a grant
under this section shall use such funds to meet the
costs of carrying out the activities described in
subsection (d), which may include reasonable startup
and initial operating costs, and stipends, travel, and
living expenses for participants in the Academy if no
other funds are available to pay such costs.
[(3) Limitations.--
[(A) Participants.--At least 70 percent of
the participants in an Academy shall be from
the school building level.
[(B) Special rule.--In awarding grants under
this section, the State educational agency may
provide for the location at the same site of
Academies assisted under this section and
Academies assisted under section 505.
[(d) Authorized Activities.--Each eligible entity receiving a
grant to operate an Academy under this section may use such
grant funds for--
[(1) developing and enhancing of participants'
knowledge in instructional leadership, school-based
management, shared decisionmaking, school improvement
strategies and school-level accountability mechanisms;
[(2) identifying candidates, including members of
minority groups, individuals with disabilities, and
individuals from schools with high numbers or
concentrations of educationally disadvantaged students
and individuals who are bilingual, to be trained as new
school leaders;
[(3) conducting programs which provide for the
involvement of private sector managers and executives
from businesses;
[(4) identifying models and methods of leadership
training and development that are promising or have
proven to be successful;
[(5) providing intensive training and development
programs for current school leaders seeking enhanced
and up-to-date knowledge needed to perform their jobs
effectively;
[(6) identifying local educational agencies and
schools with principal and other school leader
vacancies and working with such agencies and schools to
match Academy participants with such vacancies;
[(7) facilitating internships for graduates of the
program for new school leaders, under the guidance and
supervision of experienced administrators;
[(8) providing periodic follow-up development
activities for school leaders trained through the
Academy's programs;
[(9) disseminating information about the Academy,
including the training curricula developed;
[(10) coordinating activities with those of any State
Academies for Teachers established in the State; and
[(11) any other activity proposed by the applicant in
the application submitted pursuant to subsection (b)
and approved by the State educational agency.
[(e) Cost-Sharing.--Funds received under this section may be
used to pay not more than 75 percent of the cost of operating
an Academy in the first year an eligible entity receives a
grant under this subpart, 65 percent of such cost in such
second year, 55 percent of such cost in such third year, 45
percent of such cost in such fourth year, and 35 percent of
such cost in such fifth year. The remaining share shall be
provided from non-Federal sources, and be in cash or in kind,
fairly valued.
[SEC. 507. INSTITUTIONS OF HIGHER EDUCATION USES OF FUNDS.
[(a) Applications.--Institutions of higher education desiring
to receive a grant under section 501(b)(2)(B)(ii)(II) shall
submit to the State educational agency an application which--
[(1) describes the types of activities that the
institution plans to undertake with funds provided;
[(2) describes the process used by the institution to
determine the State's needs for improving teacher
education and training for preschool and early
childhood education specialists, including consulting
with current students, teachers, representatives from
local educational agencies, parents, and
representatives from preschool and early childhood
specialists;
[(3) if such institution is applying for a grant to
assist local educational agencies in providing
inservice training for teachers, describes the training
and services that such institution plans to provide for
teachers within the local educational agency and
demonstrates that such training and services are
consistent with the needs of the local educational
agencies to be served;
[(4) if such institution is applying for a grant to
establish a professional development academy, contains
the information required pursuant to section 508;
[(5) describes how the institution plans to integrate
academic and vocational teacher education programs; and
[(6) contains any other information that may be
required by the State educational agency.
[(b) Awards.--The State educational agency shall award grants
on a competitive basis to institutions of higher education that
have departments, schools, or colleges of education. In
awarding grants, the State educational agency shall award funds
for the following purposes:
[(1) For the establishment of professional
development academies pursuant to section 508.
[(2) For the establishment and maintenance of
programs that provide teacher training to individuals
who are moving to a career in education from another
occupation.
[(3) For institutions of higher education in
consultation and cooperation with a local educational
agency or a consortium of local educational agencies,
to develop and provide technical assistance to local
education agencies in providing inservice training for
teachers.
[(4) For improving teacher education programs in
order to further innovation in teacher education
programs within an institution of higher education and
to better meet the needs of the local educational
agencies for well-prepared teachers.
[(5) For improving training for preschool and early
childhood education specialists, including preschool
and early intervention services for infants and
toddlers with disabilities, in order to further
innovation in such programs with institutions of higher
education and to better meet the needs of preschool and
early childhood education programs for well-prepared
personnel.
[(6) To integrate the instruction of academic and
vocational teacher education programs.
[(7) For activities to encourage individuals,
especially individuals from minority groups, to pursue
a career in education.
[(8) For expanding cooperative educational programs
between State educational agencies and offices,
schools, and school systems, institutions of higher
education, appropriate educational entities, and
private sector establishments involved in education
between the United States and the Republic of Mexico
for the purpose of providing bilateral teaching
initiatives and programs that provide teacher training
experiences between the educational communities of the
United States and those of the Republic of Mexico and
to enhance mutually beneficial educational activities
involving researchers, scholars, faculty members,
teachers, educational administrators, and other
specialists to lecture, teach, conduct research, and
develop cooperative programs.
[(9) When the study of teacher education programs is
completed in accordance with section 504(c), to
implement the program and policy changes for teacher
education programs resulting from the findings of such
study.
[SEC. 508. PROFESSIONAL DEVELOPMENT ACADEMIES.
[(a) Authority; Definitions.--
[(1) Authority.--From amounts reserved pursuant to
section 501(b)(2)(B)(ii)(II), the State educational
agency is authorized to make grants to, and enter into
contracts and cooperative agreements with, eligible
entities to plan, establish, and operate professional
development academies.
[(2) Definitions.--For purposes of this section--
[(A) the term ``Academy'' means school-based
teacher training operated as a partnership
between one or more elementary or secondary
schools and one or more institutions of higher
education that provides prospective and novice
teachers an opportunity to work under the
guidance of master teachers and college faculty
members. Such Academy shall be established for
the purpose of--
[(i) the training of prospective and
novice teachers (including preschool
and early childhood education
specialists, where appropriate) under
the guidance of master teachers and
teacher educators;
[(ii) the continuing development of
experienced teachers;
[(iii) research and development to
improve teaching and learning and the
organization of schools;
[(iv) public demonstration of
exemplary learning programs for diverse
students; and
[(v) dissemination of knowledge
produced in the research and
development process;
except that such term--
[(i) does not mean a physical
facility; and
[(ii) does not require a separate
location from another Academy or other
training program; and
[(B) the term ``eligible entity'' means a
partnership that includes one or more local
educational agencies and one or more
institutions of higher education and may
include teachers and the business community.
[(b) Awards and Renewals.--An award made under this section
may be in the form of a one-year planning grant. Such award may
be renewed for implementation purposes without further
competition annually for 4 additional years, upon submission of
an evaluation of the project to the State educational agency
and assurances that the recipient--
[(1) has achieved the goals set out in its
application for the original term;
[(2) shows promise of continuing its progress;
[(3) will meet its share of the project costs; and
[(4) has developed a plan for continuing the Academy
after Federal funding is no longer available.
[(c) Application Required.--
[(1) In general.--Each eligible entity desiring to
operate an Academy under this section shall submit an
application to the State educational agency at such
time, in such manner, and accompanied by such
information as the State educational agency may
reasonably require.
[(2) Contents.--Each application submitted pursuant
to subsection (a) shall describe--
[(A) what schools within the local
educational agency and what institutions of
higher education shall participate in the
partnership or otherwise participate in the
program;
[(B) the goals of the Academy and the steps
that shall be taken to evaluate the extent to
which the Academy reaches such goals;
[(C) a plan for monitoring progress and
evaluating the effectiveness of the Academy in
meeting the goals it has developed for teacher
and student performance;
[(D) a description of the partnership's plan
for systemic change in education, and a
description of the activities and services for
which assistance is sought;
[(E) ways in which the professional
development programs shall cover course content
in key academic subjects, methods of
instruction, and classroom and school-based
management skills;
[(F) plans to involve prospective and novice
teachers in the programs offered by the
Academy, including outreach efforts to identify
and attract--
[(i) minority group members;
[(ii) individuals with disabilities;
and
[(iii) individuals from areas with
large numbers or concentrations of
disadvantaged students; and
[(G) estimates of the number of prospective
and beginning teachers to be trained in the
Academy in each year of the project and
assurances that a significant number of
prospective and beginning teachers will be
trained in the Academy in each year of the
project.
[(3) Assurances.--Each application submitted pursuant
to this subsection shall contain assurances that--
[(A) professional development programs at the
Academy shall be designed and conducted by
faculty members from institutions of higher
education and teachers from local schools of
demonstrated excellence;
[(B) in establishing the Academy, the
applicant has consulted with teachers,
administrators, and parents who will be
affected at the teaching school site;
[(C) participating faculty from institutions
of higher education shall include faculty
members who are experts in the key academic
subjects; and
[(D) the activities, services and programs
offered by the Academy shall be of sufficient
length and comprehensiveness to significantly
improve participants' knowledge.
[(4) Priorities.--In making awards under this part,
the State educational agency shall give priority to
applicants that--
[(A) select Academy sites based on need, as
evidenced by such measures as a high rate of
teacher attrition or a high proportion of the
student body at risk of educational failure;
[(B) propose projects that demonstrate the
strong commitment to or previous active support
for educational innovation;
[(C) propose projects that demonstrate
collaboration with other educational
organizations, social or human service
agencies, other community organizations, and
the business community in the teaching school's
operation;
[(D) demonstrate potential for a significant
impact on the quality of the future education
work force; and
[(E) demonstrate the long-term feasibility of
the partnership.
[(5) Special rules.--Each such application shall
describe--
[(A) how the local educational agency will
address the need to change or waive a local
rule or regulation that is found by an Academy
to impede the school's progress in achieving
its goals; and
[(B) how partners that are institutions of
higher education will involve the School of
Education, the School of Arts and Sciences, and
the School of Technology or Engineering and any
other department of the institution.
[(d) Use of Allotted Funds.--
[(1) Permitted uses.--Each eligible entity receiving
a grant under this section shall use such funds to meet
the operating costs of carrying out the activities
described in subsection (e), which may include
reasonable startup and initial operating costs, staff
development, purchase of books, materials, and
equipment, including new technology, costs associated
with release time, payment of personnel directly
related to the operation of the Academy, and
participation in the activities of a network of
Academies.
[(2) Limitations.--The Secretary may limit the
amounts of funds that may be used for minor remodeling
and the purchase of equipment under this part.
[(e) Authorized Activities.--Each eligible entity receiving a
grant to operate an Academy under this section may use such
grant funds for--
[(1) training and internship activities for
prospective or novice teachers in a school setting
under the guidance of master or mentor teachers and
faculty from institutions of higher education,
especially faculty who are experts in key academic
subjects;
[(2) mentoring and induction activities for
prospective and novice teachers, including such
teachers seeking to enter teaching through alternative
routes;
[(3) participation of experienced teachers in the
internship training and assessment of prospective and
beginning teachers;
[(4) teaching skills and strategies to increase the
ability of prospective, novice and experienced teachers
to teach disadvantaged students, students with
disabilities (including students with severe and
multiple disabilities and students with lesser known or
newly emerging disabilities), students who are limited-
English proficient, and students from diverse cultural
backgrounds;
[(5) programs to enhance teaching and classroom
management skills, including school-based management
skills, of novice, prospective and experienced
teachers;
[(6) experimentation and research to improve teaching
and learning conducted in the Academy by teachers and
university faculty;
[(7) activities to integrate academic and vocational
education;
[(8) training and other activities to promote the
continued learning of experienced teachers, especially
in their subject matter knowledge and how to teach it;
[(9) participation of expert practicing teachers and
administrators in the university-based education
studies of prospective teachers;
[(10) activities designed to disseminate information
about the teaching strategies acquired through the
Academy with other teachers in the district's schools;
[(11) organizational restructuring, including the
introduction of new roles and staffing patterns in the
school and university;
[(12) activities intended to address the effects of
chronic community violence, such as violence counseling
and conflict resolution training; and
[(13) other activities proposed by the applicant and
approved by the Secretary.
[(f) Cost-Sharing.--Funds received under this section may be
used to pay 100 percent of the cost of a planning grant and not
more than 75 percent of the cost of operating an Academy in the
first 2 years an eligible entity receives a grant under this
subpart and not more than 50 percent of such cost in such third
and fourth years. The remaining share shall be provided from
non-Federal sources, and may be in-kind, fairly valued.
[SEC. 509. FEDERAL FUNDS TO SUPPLEMENT, NOT SUPPLANT REGULAR NONFEDERAL
FUNDS.
[A State educational agency, local educational agency, or
institution of higher education may use funds received under
this part only so as to supplement and, to the extent
practicable, increase the level of funds that would be
available from non-Federal sources for the uses of funds under
this part and in no case may such funds be so used as to
supplant such funds from such non-Federal sources.
[SEC. 510. COORDINATION WITH OTHER PROGRAMS.
[The State educational agency shall ensure that activities
conducted under this part shall be consistent with the goals
and objectives of any Federal or State systemic educational
reform activities.
[SEC. 510A. AUTHORIZATION OF APPROPRIATIONS.
[There are authorized to be appropriated to carry out this
part $350,000,000 for fiscal year 1993 and such sums as may be
necessary for each of the 4 succeeding fiscal years.
[PART B--NATIONAL TEACHER ACADEMIES
[SEC. 511. PROGRAM ESTABLISHED.
[(a) In General.--The Secretary is authorized, in accordance
with the provisions of this part, to make grants to eligible
recipients to establish and operate National Teacher Academies.
[(b) Subject Areas and Staff.--
[(1) Subject areas.--At least 1 but not more than 3
National Teacher Academies shall be established in each
of the following subject areas commonly taught in
elementary and secondary schools:
[(A) English.
[(B) Mathematics.
[(C) Science.
[(D) History.
[(E) Geography.
[(F) Civics and government.
[(G) Foreign languages.
[(2) Staff.--Academy staff shall be selected from the
most accomplished and prominent scholars in the
relevant fields of study and in the methodologies which
improve the skills of persons who teach in such fields
of study.
[(c) Duration of Grant.--Each grant to establish and operate
a National Teacher Academy shall be for a period of 3 years,
and is renewable.
[(d) Competitive Grant Awards.--The Secretary shall award
grants under this part on a competitive basis.
[(e) Consistency With Systemic Reforms.--In awarding grants
under this part, the Secretary shall ensure that activities
conducted under this part are consistent with the goals and
objectives of other Federal or State systemic educational
reform activities.
[SEC. 512. ELIGIBLE RECIPIENTS.
[(a) In General.--For the purposes of this part, the term
``eligible recipient'' means--
[(1) an institution of higher education;
[(2) a private nonprofit educational organization of
demonstrated effectiveness; or
[(3) a combination of the institutions or
organizations set forth in paragraphs (1) and (2) of
this paragraph.
[(b) Expertise Requirements.--The Secretary shall only award
grants to eligible recipients that have demonstrated expertise
in the--
[(1) subject area of the National Teacher Academy to
be established and operated; and
[(2) in-service training of teachers at the national,
State, and local levels.
[SEC. 513. USE OF FUNDS.
[(a) In General.--Funds provided pursuant to this part shall
be used to--
[(1) provide in-service training programs for
teachers and administrators, including--
[(A) programs which emphasize improving the
teachers' knowledge in the particular subject
area of the National Teacher Academy;
[(B) programs which integrate knowledge of
subject matter with techniques for
communicating that knowledge to students,
including students who are disadvantaged,
limited-English proficient, drug- or alcohol-
exposed, or who have disabilities;
[(C) the use of the most recent applied
research findings concerning education and the
classroom; and
[(D) integration of materials from different
disciplines into classroom instruction,
especially for elementary school teachers;
[(2) conduct each year at least one summer institute
of at least 3 weeks duration for the State delegations
described in section 515; and
[(3) provide support services to the State Academies
for Teachers, including--
[(A) the establishment of a national network
of individuals to assist in teacher education
programs in State Academies for Teachers;
[(B) consultation assistance in the design
and implementation of in-service teacher
training programs; and
[(C) monthly newsletters or other methods of
communicating useful information.
[(b) Administrative Costs.--Not more than 10 percent of the
amount of funds received under this part may be used by an
eligible recipient for administrative costs.
[SEC. 514. APPLICATION.
[(a) Application.--Each eligible recipient desiring a grant
under this part shall submit an application to the Secretary at
such time and in such manner as the Secretary may reasonably
require.
[(b) Contents.--Each application submitted pursuant to
subsection (a) shall--
[(1) describe the activities, services, and programs
for which assistance is sought;
[(2) describe how at least 70 percent of the National
Teacher Academy's time shall be devoted to basic course
content relevant to the particular subject field and
necessary for improving the quality of teaching in
public and private elementary and secondary schools;
[(3) describe how not more than 30 percent of the
National Teacher Academy's time shall be devoted to
methods of instruction relevant to the particular
subject field;
[(4) describe how the National Teacher Academy's
activities will be coordinated with or administered
cooperatively with institutes established by other
Federal entities, such as the National Science
Foundation and the National Endowment for the
Humanities; and
[(5) provide such additional assurances or
information as the Secretary may reasonably require.
[SEC. 515. STATE DELEGATIONS.
[(a) In General.--Each selection panel established pursuant
to section 516(b) shall select a State delegation to
participate in each National Teacher Academy assisted under
this part.
[(b) Composition.--
[(1) In general.--Except as provided in paragraphs
(2) and (3), each State delegation described in
subsection (a) shall, at a minimum, be composed of--
[(A) 1 school administrator with authority to
design and conduct in-service teacher training
and academic programs; and
[(B) at least 5 teachers, of whom at least 2
shall be elementary school teachers.
[(2) Special rule.--The State delegations for the
Commonwealth of the Northern Mariana Islands, Guam, the
Virgin Islands, American Samoa and the Republic of
Palau (until the Compact of Free Association is
ratified) shall, at a minimum, be composed of--
[(A) 1 school administrator with authority to
design and conduct in-service teacher training
and academic programs; and
[(B) at least 3 teachers, of whom at least 1
shall be an elementary school teacher.
[(3) Additional teachers.--
[(A) Each State that has obtained the
approval of the appropriate National Teacher
Academy may send to such National Teacher
Academy the number of additional teachers
determined in accordance with subparagraph (B).
[(B) The appropriate National Teacher Academy
shall determine the number of additional
teachers to attend such National Teacher
Academy on the basis of the number of full-time
equivalent teachers in the State compared to
such number in all States.
[(c) Duties.--Each State delegation shall--
[(1) attend the appropriate subject area summer
institute at the appropriate National Teacher Academy;
and
[(2) after participation in the National Teacher
Academy assist in the development and operation of the
appropriate National Teacher Academy.
[SEC. 516. SELECTION.
[(a) In General.--Individuals participating in a National
Teacher Academy shall be selected by the selection panel
described in subsection (b) in accordance with the provisions
of section 515.
[(b) Selection Panel.--
[(1) Establishment.--Each State educational agency
receiving assistance under part A of this title shall
establish a 10-member selection panel to select
teachers to attend the National Teacher Academies
established pursuant to this part.
[(2) Composition and representation.--
[(A) Composition.--At least 50 percent of the
membership of each selection panel shall be
classroom teachers, selected in consultation
with teacher organizations, if any, in the
State.
[(B) Representation.--The composition of each
selection panel shall be broadly representative
of the elementary and secondary schools and the
State.
[(3) Function.--Each selection panel shall--
[(A) annually select the State delegations in
accordance with section 515; and
[(B) involve the individuals selected
pursuant to subparagraph (A) in the operation
of the State academies, if any, or other in-
service training activities in the local
educational agency in which such individuals
teach.
[SEC. 517. NATIONAL TEACHER ACADEMY EVALUATION.
[The Secretary shall evaluate the system of National Teacher
Academies and the effects of such academies on teachers every 2
years. The Secretary shall make available to the Congress and
the public the results of such evaluation.
[SEC. 518. AUTHORIZATION OF APPROPRIATIONS.
[(a) In General.--There are authorized to be appropriated
$35,000,000 for fiscal year 1993 and such sums as may be
necessary for the 4 succeeding fiscal years to carry out the
provisions of this part, of which not more than $5,000,000
shall be available for each of the National Teacher Academy
subject areas listed in section 511(b)(1).
[(b) Special Rules.--
[(1) Appropriations less than $14,000,000.--If the
amount appropriated pursuant to the authority of
subsection (a) is less than $14,000,000, then not more
than $2,000,000 shall be available for each National
Teacher Academy subject area in the order in which such
subject areas are listed in section 511(b)(1), until
such funds are expended.
[(2) Appropriations equal to or in excess of
$14,000,000.--If the amount appropriated pursuant to
the authority of subsection (a) is equal to or exceeds
$14,000,000, then such funds as equals or exceeds
$14,000,000 shall be allocated equitably among each of
the National Teacher Academy subject areas listed in
section 511(b)(1).]
PART C--TEACHER SCHOLARSHIPS AND FELLOWSHIPS
[Subpart 1--Paul Douglas Teacher Scholarships
[SEC. 521. PURPOSE; DESIGNATION.
[(a) Purpose.--It is the purpose of this subpart to make
available, through grants to the States, scholarships to
individuals who are outstanding secondary school graduates and
who demonstrate an interest in teaching, in order to enable and
encourage those individuals to pursue teaching careers in
education at the preschool, elementary or secondary level.
[(b) Designation.--Scholarships awarded under this subpart
shall be referred to as the ``Paul Douglas Teacher
Scholarships''.
[SEC. 522. ALLOCATION AMONG STATES.
[(a) Allocation.--From the sums appropriated for this subpart
for any fiscal year, the Secretary shall allocate to any State
an amount based on the school-age population in the State
compared to the school-age population in all States.
[(b) Use of Census Data.--For the purpose of this section,
the number of persons in a State and in all States shall be
determined by the most recently available data from the Bureau
of the Census.
[SEC. 523. GRANT APPLICATIONS.
[(a) Submission of Applications.--The Secretary is authorized
to make grants to States in accordance with the provisions of
this subpart. In order to receive a grant under this subpart, a
State shall submit an application at such time or times, in
such manner, and containing such information as the Secretary
may prescribe by regulation. Such application shall set forth a
program of activities for carrying out the purposes set forth
in section 521 in such detail as will enable the Secretary to
determine the degree to which such program will accomplish such
purposes and such other policies, procedures, and assurances as
the Secretary may require by regulation.
[(b) Content of Applications.--The Secretary shall approve an
application under this subpart only if the application--
[(1) describes the selection criteria and procedures
to be used by the State in the selection of scholarship
recipients under this subpart;
[(2) designates as the State agency responsible for
administering the grants received under this subpart
the State agency which administers the program under
subpart 4 of part A of title IV (relating to State
student incentive grants), the State agency with which
the Secretary has an agreement under section 428(b), or
another appropriate State agency approved by the
Secretary;
[(3) describes the outreach effort the State agency
intends to use to publicize the availability of Paul
Douglas Scholarships to secondary school students in
the State;
[(4) describes how the State will inform recipients,
upon receipt of the award, of current and projected
teacher shortages and surpluses within the State;
[(5) provides assurances that each recipient eligible
under section 525(b) of this subpart who receives a
Paul Douglas Scholarship shall enter into an agreement
with the State agency under which the recipient shall--
[(A) within the 10-year period after
completing the postsecondary education for
which the Paul Douglas Teacher Corps
Scholarship was awarded, teach for a period of
not less than 2 years for each year for which
assistance was received, in a public or private
nonprofit preschool, elementary, or secondary
school in any State, or, on a full-time basis,
children with disabilities or children with
limited English proficiency in a private
nonprofit school, except that, in the case of
individuals who teach in a shortage area
established by the Secretary pursuant to
section 530A, the requirements of this
subparagraph shall be reduced by one-half;
[(B) provide the State agency evidence of
compliance with section 526 as required by the
State agency; and
[(C) repay all or part of a Paul Douglas
Scholarship received under section 524 plus
interest and, if applicable, reasonable
collection fees, in compliance with regulations
issued by the Secretary under section 527, in
the event that the conditions of subparagraph
(A) are not complied with, except as provided
for in section 528;
[(6) provides that the agreement entered into with
recipients shall fully disclose the terms and
conditions under which assistance under this subpart is
provided and under which repayment may be required,
including--
[(A) a description of the procedures required
to be established under paragraph (7); and
[(B) a description of the appeals procedures
required to be established under paragraph (8)
under which a recipient may appeal a
determination of noncompliance with any
provision under this subpart;
[(7) provides for procedures under which a recipient
of assistance received under this subpart who teaches
for less than the period required under paragraph
(5)(A) will have the repayment requirements reduced or
eliminated consistent with the provisions of sections
527 and 528;
[(8) provides for appeals procedures under which a
recipient may appeal any determination of noncompliance
with any provision under this subpart; and
[(9) provides assurances that the State agency shall
make particular efforts to attract students from low-
income backgrounds; ethnic and racial minority
students; individuals with disabilities; other
individuals from groups historically underrepresented
in teaching; individuals who express a willingness or
desire to teach in rural schools, urban schools, or
schools having less than average academic results or
serving large numbers of economically disadvantaged
students; or women or minorities who show interest in
pursuing teaching careers in mathematics and science
and who are underrepresented in such fields.
[(c) Selection Criteria and Procedures.--The State
educational agency, in cooperation with the State higher
education agency, and pursuant to scholarship selection
criteria included in section 525, shall establish criteria to
select Paul Douglas Teacher Scholarship recipients. These
criteria shall be intended to attract highly qualified
individuals into teaching, to ensure that these students are
enrolled or are accepted for enrollment in approved teacher
education programs, and to meet the present and projected needs
of States in addressing teacher shortages, including the demand
for and supply of early childhood and elementary teachers in
the State, the demand for and supply of secondary teachers in
the State, and the demand for teachers with training in
specific academic disciplines in the State.
[(d) Special Consideration.--The State educational agency, in
cooperation with the State higher education agency, shall give
special consideration in the selection of scholarship
recipients to individuals who--
[(1) intend to teach or provide related services to
students with disabilities;
[(2) intend to teach limited English proficient
students;
[(3) intend to teach preschool age children;
[(4) intend to teach in schools servicing inner city
or rural or geographically isolated areas (as defined
by the Secretary by regulations consistent with the
purposes of this section);
[(5) intend to teach in curricular areas or
geographic areas where there are demonstrated shortages
of qualified teachers; or
[(6) are from disadvantaged backgrounds, including
racial and ethnic minorities and individuals with
disabilities, and are underrepresented in the teaching
profession or in the curricular areas in which they are
preparing to teach.
[(e) Solicitation of Views on Selection Criteria and
Procedures.--In developing the selection criteria and
procedures to be used by the State, the State shall solicit the
views of local educational agencies, private educational
institutions, and other interested parties. Such views--
[(1) shall be solicited by means of--
[(A) written comments; and
[(B) publication of proposed selection
criteria and procedures in final form for
implementation; and
[(2) may be solicited by means of--
[(A) public hearings on the teaching needs of
elementary and secondary schools in the State
(including the number of new teachers needed,
the expected supply of new teachers, and the
shortages in the State of teachers with
specific preparation); or
[(B) such other methods as the State may
determine to be appropriate to gather
information on such needs.
[SEC. 524. AMOUNT AND DURATION OF AND RELATION TO OTHER ASSISTANCE.
[(a) Limitations on Amount and Duration.--Subject to
subsection (c) each Paul Douglas Teacher Scholarship recipient
shall receive a $5,000 scholarship for each academic year of
postsecondary education for study in preparation to become a
preschool, special education, elementary, or secondary teacher.
No individual shall receive scholarship assistance for more
than 4 years of postsecondary education, as determined by the
State agency.
[(b) Consideration of Award in Other Programs.--
Notwithstanding the provisions of title IV of this Act,
scholarship funds awarded pursuant to this part shall be
considered in determining eligibility for student assistance
under title IV of this Act.
[(c) Assistance Not To Exceed Cost of Attendance.--No
individual shall receive an award under the Paul Douglas
Teacher Scholarship established under this subpart, in any
academic year, which exceeds the cost of attendance, as defined
in section 472 of this Act, at the institution the individual
is attending. A scholarship awarded under this part shall not
be reduced on the basis of the student's receipt of other forms
of Federal student financial assistance, but shall be taken
into account in determining the eligibility of the student for
those other forms of Federal student financial assistance.
[SEC. 525. SELECTION OF PAUL DOUGLAS TEACHER SCHOLARS.
[(a) Selection by Statewide Panels.--Paul Douglas Teacher
Scholars shall be selected by a 7-member statewide panel
appointed by the chief State elected official, acting in
consultation with the State educational agency, or by an
existing grant agency or panel designated by the chief State
elected official and approved by the Secretary. The statewide
panel shall be representative of school administrators,
teachers, including preschool and special education teachers,
and parents.
[(b) Eligibility for Selection; Selection Criteria and
Procedures.--Selections of Paul Douglas Scholars shall be made
from students who have graduated or who are graduating from
secondary school and who rank in the top 10 percent of their
graduating class. The State educational agency shall make
applications available to public and private nonprofit
secondary schools in the State and in other locations
convenient to applicants, parents, and others. The statewide
panel shall develop criteria and procedures for the selection
of Paul Douglas Scholars. Such criteria may include the
applicant's secondary school grade point average, involvement
in extracurricular activities, financial need, and expression
of interest in teaching as expressed in an essay written by the
applicant. The panel may also require the applicant to furnish
letters of recommendation from teachers and others.
[(c) Waivers.--For purposes of giving special consideration
under section 523(d), a State may waive the criteria contained
in the first sentence of subsection (b) for not more than 25
percent of individuals receiving Paul Douglas Teacher
Scholarships on or after July 1, 1993.
[SEC. 526. SCHOLARSHIP CONDITIONS.
[Recipients of scholarship assistance under this subpart
shall continue to receive such scholarship payments only during
such periods that the State agency finds that the recipient
is--
[(1) enrolled as a full-time student in an accredited
postsecondary institution;
[(2) pursuing a course of study leading to teacher
certification; and
[(3) maintaining satisfactory progress as determined
by the postsecondary institution the recipient is
attending.
[SEC. 527. SCHOLARSHIP REPAYMENT PROVISIONS.
[Recipients found by the State agency to be in noncompliance
with the agreement entered into under section 523(b)(5) of this
subpart shall be required to repay a pro rata amount of the
scholarship awards received, plus interest (but in no event at
an interest rate higher than the rate applicable to loans in
the applicable period under part B of title IV of this Act)
and, where applicable, reasonable collection fees, on a
schedule and at a rate of interest to be prescribed by the
Secretary by regulations issued pursuant to this subpart.
[SEC. 528. EXCEPTIONS TO REPAYMENT PROVISIONS.
[(a) Deferral During Certain Periods.--A recipient shall not
be considered in violation of the agreement entered into
pursuant to section 523(b)(5)(C) during any period in which the
recipient--
[(1) is pursuing a full-time course of study related
to the field of teaching at an eligible institution;
[(2) is serving, not in excess of 3 years, as a
member of the armed services of the United States;
[(3) is temporarily totally disabled for a period of
time not to exceed 3 years as established by sworn
affidavit of a qualified physician;
[(4) is unable to secure employment for a period not
to exceed 12 months by reason of the care required by a
spouse who is disabled;
[(5) is seeking and unable to find full-time
employment for a single period not to exceed 12 months;
[(6) is seeking and unable to find full-time
employment as a teacher in a public or private
nonprofit preschool, elementary or secondary school, or
education program for a single period not to exceed 27
months; or
[(7) satisfies the provisions of additional repayment
exceptions that may be prescribed by the Secretary in
regulations issued pursuant to this subpart.
[(b) Forgiveness if Permanently Totally Disabled.--A
recipient shall be excused from repayment of any scholarship
assistance received under this subpart if the recipient becomes
permanently totally disabled as established by sworn affidavit
of a qualified physician.
[SEC. 529. FEDERAL ADMINISTRATION OF STATE PROGRAMS; JUDICIAL REVIEW.
[(a) Disapproval Hearing Required.--The Secretary shall not
finally disapprove any application for a State program
submitted under section 523, or any modification thereof,
without first affording the State agency submitting the program
reasonable notice and opportunity for a hearing.
[(b) Suspension of Eligibility.--Whenever the Secretary,
after reasonable notice and opportunity for a hearing to the
State agency administering a State program approved under this
subpart, finds--
[(1) that the State program has been so changed that
it no longer complies with the provisions of this
subpart, or
[(2) that in the administration of the program there
is a failure to comply substantially with any such
provisions,
the Secretary shall notify such State agency that the State
will not be regarded as eligible to participate in the program
under this subpart until the Secretary is satisfied that there
is no longer any such failure to comply.
[(c) Court Review.--
[(1) In general.--If any State is dissatisfied with
the Secretary's final action under subsection (b) (1)
or (2), such State may appeal to the United States
court of appeals for the circuit in which such State is
located. The summons and notice of appeal may be served
at any place in the United States. The Secretary shall
forthwith certify and file in the court the transcript
of the proceedings and the record on which the action
was based.
[(2) Findings.--The findings of fact by the
Secretary, if supported by substantial evidence, shall
be conclusive; but the court, for good cause shown, may
remand the case to the Secretary to take further
evidence, and the Secretary may thereupon make new or
modified findings of fact and may modify any previous
action, and shall certify to the court the transcript
and record of further proceedings. Such new or modified
findings of fact shall likewise be conclusive if
supported by substantial evidence.
[(3) Jurisdiction.--The court shall have jurisdiction
to affirm the action of the Secretary or to set it
aside, in whole or in part. The judgment of the court
shall be subject to review by the Supreme Court of the
United States upon certiorari or certification as
provided in section 1254 of title 28, United States
Code.
[SEC. 530. EVALUATION.
[(a) In General.--The Secretary shall conduct, by grant or
contract, an independent evaluation of recipients of
scholarship assistance under this subpart, which shall
summarize and evaluate the State activities assisted under this
subpart and the performance of such recipients. The evaluation
shall assess the impact of the scholarship program assisted
under this subpart to determine whether such program has
brought into teaching a significant number of highly able
individuals who otherwise would not have entered teaching.
[(b) Contents.--The evaluation described in subsection (a)
shall include--
[(1) a description of the characteristics, including
the educational preparation and achievement, of
recipients of scholarship assistance under this subpart
compared to similar students participating in teacher
training who do not receive such scholarships;
[(2) the rate at which such recipients successfully
complete academic training and go on to teaching
careers in preschool, elementary, or secondary
education, compared to such rate for similar
individuals who do not receive scholarship assistance
under this subpart;
[(3) the extent to which it is possible to determine
objectively that the receipt of scholarship assistance
under this subpart was the primary reason for an
individual's choice of a teaching education and career;
[(4) the extent to which such recipients comply with
the provisions of this subpart;
[(5) the length of time such recipients remain in
teaching careers, compared to similar teachers who do
not receive scholarships;
[(6) the barriers to the effectiveness of the program
assisted under this subpart; and
[(7) the cost-effectiveness of such program in
improving teacher quality and quantity.
[(c) Evaluation Reports.--The Secretary shall submit such
interim evaluation reports to the President and the Congress as
may be appropriate, and shall submit a final report on or
before January 1, 1997.
[(d) Funding.--The Secretary shall reserve a total of not
more than $1,000,000 from the amounts appropriated pursuant to
the authority of section 530B in fiscal years 1993 through 1997
to carry out this section.
[SEC. 530A. DESIGNATION OF SHORTAGE AREAS.
[For the purposes of this part, the term ``shortage areas''
means (1) geographic areas of the State in which there is a
shortage of preschool, elementary, and secondary school
teachers, and (2) an area of shortage of preschool, elementary,
and secondary school teachers in specific grade levels and in
specific academic, instructional, subject matter, and
discipline classifications. Such shortage areas shall be
prescribed by the Secretary, in consultation with the chief
State school officer or, in the case of nonprofit private
elementary or secondary schools, with appropriate officials of
nonprofit private schools in each State in accordance with this
section. In carrying out the provisions of this section, the
Secretary shall give special consideration to areas in which
emergency certification of individuals in a State is being used
to correct teacher shortages and to States which have
retirement laws permitting early retirement.
[SEC. 530B. AUTHORIZATION OF APPROPRIATIONS.
[There are authorized to be appropriated $26,000,000 for
fiscal year 1993 and such sums as may be necessary for each of
the 4 succeeding fiscal years to carry out this subpart.]
* * * * * * *
[Subpart 3--Teacher Corps
[SEC. 541. TEACHER CORPS PROGRAM AUTHORIZED.
[(a) Grants by the Secretary.--In any fiscal year in which
the appropriations for this subpart do not equal or exceed
$50,000,000, the Secretary is authorized, in accordance with
the provisions of this subpart, to make grants, on a
competitive basis, to State educational agencies to carry out
Teacher Corps activities.
[(b) State Grant Program.--In any fiscal year in which the
appropriations for this subpart equal or exceed $50,000,000,
the Secretary is authorized, in accordance with the provisions
of this subpart, to make grants to State educational agencies
from allocations under subsection (c) to carry out Teacher
Corps activities.
[(c) Allocation.--Except as provided in subsection (a), each
State educational agency shall be eligible to receive a grant
under this subpart in each fiscal year that bears the same
ratio to the amount appropriated under section 548 in that
fiscal year as the school-age population of the State bears to
the school-age population of all States.
[(d) Teacher Corps School.--For the purpose of this subpart
the term ``Teacher Corps school'' means a public elementary or
secondary school identified by the State educational agency as
having the highest levels of poverty and the lowest levels of
student achievement based on a ranking of such elementary
schools and secondary schools in the State according to the
number of children living in poverty and the levels of student
achievement. In carrying out the preceding sentence, the State
educational agency shall identify and inform not more than 10
percent of such elementary schools and not more than 10 percent
of such secondary schools in the State which have the highest
levels of poverty and the lowest levels of student achievement.
[(e) Designation.--
[(1) Scholarship.--A scholarship awarded under this
subpart shall be referred to as a ``Teacher Corps
scholarship''.
[(2) Recipient.--A recipient of a scholarship under
this subpart shall be referred to as a ``Teacher Corps
member''.
[SEC. 542. USE OF FUNDS.
[(a) Secretary.--The Secretary shall use funds provided
pursuant to this subpart to--
[(1) disseminate information nationally about the
availability of scholarships under this subpart;
[(2) conduct activities, with the cooperation of the
State and local educational agencies, which foster
communication among, and bring together, members of the
Teacher Corps, including activities such as written
communications, meetings, or training sessions;
[(3) establish and conduct summer preservice
orientation programs for Teacher Corps members about to
begin teaching;
[(4) ensure that Teacher Corps members recognize the
challenges of teaching in a Teacher Corps school;
[(5) inform Teacher Corps members of Teacher Corps
schools and facilitate the hiring and placement of
Teacher Corps members at Teacher Corps schools;
[(6) evaluate applications from and award grants to
State educational agencies to enable such agencies to
award Teacher Corps scholarships in accordance with the
provisions of this subpart; and
[(7) collect scholarship repayments from individual
Teacher Corps members, in accordance with the
provisions of section 546.
[(b) State Educational Agency.--Each State educational agency
receiving a grant under this subpart shall use such grant funds
to--
[(1) evaluate applications for Teacher Corps
membership and award scholarships to Teacher Corps
members;
[(2) provide technical assistance to local
educational agencies establishing and operating
induction programs;
[(3) ensure that Teacher Corps members understand the
obligation to repay the scholarships received under
this subpart upon failure to comply with the conditions
of the scholarship; and
[(4) ensure that Teacher Corps members are fulfilling
the obligation to repay scholarships received under
this subpart, and provide the Secretary with the names
and addresses of Teacher Corps members who have not
fulfilled such obligation.
[(c) Special Rule.--The Secretary may enter into contracts
with or make grants to nonprofit educational organizations
for--
[(1) recruiting members of the Teacher Corps;
[(2) establishing and conducting summer preservice
training programs; and
[(3) conducting activities that foster communications
among and bring together members of the Teacher Corps.
[(d) Reservations.--Each State receiving a grant under this
subpart may reserve--
[(1) 5 percent of such grant funds to provide
technical assistance to local educational agencies and
to pay administrative costs; and
[(2) 5 percent of such grant funds to provide for
induction and mentoring programs.
[(e) Special Rule.--Each State educational agency receiving a
grant under this subpart may enter into contracts with or award
grants to nonprofit educational agencies to conduct the
activities described in subsection (b).
[SEC. 543. TEACHER CORPS.
[(a) Selection.--The State educational agency shall select
Teacher Corps members.
[(b) Criteria.--
[(1) In general.--The State educational agency shall
establish criteria to select Teacher Corps members that
are intended to--
[(A) attract highly qualified individuals to
teaching; and
[(B) meet the needs of Teacher Corps schools
in addressing teacher shortages.
[(2) Criteria.--The criteria described in paragraph
(1) may include--
[(A) in the case of students or recent
graduates, outstanding academic records, or in
other cases, contributions which may be made by
individuals working in other careers; and
[(B) a demonstrated commitment to teaching or
professional experience in substantive fields
of expertise in which the State is experiencing
or expects to experience teacher shortages.
[(c) Special Consideration.--The State educational agency, in
selecting Teacher Corps members, shall give special
consideration to individuals who--
[(1) intend to teach or provide related services to
students with disabilities;
[(2) intend to teach limited-English proficient
students;
[(3) intend to teach preschool age children;
[(4) are from disadvantaged backgrounds, including
racial and ethnic minorities and individuals with
disabilities;
[(5) are members of populations that are
underrepresented in the teaching profession or in the
curricular areas in which such individuals are
preparing to teach;
[(6) intend to teach in the areas of science or
mathematics, especially women and minorities who are
underrepresented in such fields; or
[(7) intend to teach on Indian reservations or in
Alaska Native villages named or certified pursuant to
section 3(c) of the Alaska Native Claims Settlement
Act, Public Law 92-203, or in areas with high
concentrations of Native Hawaiians.
[(d) Application.--Each individual desiring to participate in
the program assisted under this subpart shall submit an
application at such time, in such manner, and containing such
information as the State educational agency may reasonably
require.
[SEC. 544. STATE APPLICATION.
[In order to receive funds under this subpart, a State
educational agency, in consultation with the Governor, shall
submit an application to the Secretary at such time, in such
manner, and containing such information as the Secretary may
reasonably require. Each such application shall--
[(1) describe how the State educational agency shall
select Teacher Corps members;
[(2) identify Teacher Corps schools within the State,
where Teacher Corps members shall be assigned, provided
that not more than 10 percent of all public schools in
the State may be designated Teacher Corps schools;
[(3) provide assurances that the State educational
agency, in cooperation with local educational agencies,
shall assist in employment placement within such State
for Teacher Corps members in Teacher Corps schools;
[(4) provide assurances that the State educational
agency, in cooperation with local educational agencies,
shall ensure that Teacher Corps members are paid at
rates comparable to other entry level teachers in the
school district where the Teacher Corps member is
assigned;
[(5) provide assurances that the local educational
agencies in which the Teacher Corps members shall be
placed shall establish or expand induction programs
that assist Teacher Corps members in adjusting to the
new school and community where such members shall
teach, including working with a mentor teacher in the
school building where the Teacher Corps members are
placed; and
[(6) describe how the State educational agency shall
monitor and report to the Secretary not less than
annually on the operation of programs assisted under
this subpart and on the compliance of individuals who
receive Teacher Corps scholarships with the provisions
of this subpart.
[SEC. 545. SCHOLARSHIPS.
[(a) Eligibility.--
[(1) In general.--An individual is eligible to
receive Teacher Corps scholarships for a maximum of 3
years during enrollment in any of the following
programs of study, or a combination thereof:
[(A) a program of study leading to a
baccalaureate degree;
[(B) a 1- or 2-year postbaccalaureate program
of study leading to a master's or specialist
degree or a teaching certificate; or
[(C) a 2-year program of study leading to an
associate's degree in early childhood education
or early childhood development, or a 1-year
program of study leading to a child development
associate credential.
[(2) Special rules.--(A) An individual pursuing a
program of study described in subparagraph (B) of
paragraph (1) is eligible to receive a Teacher Corps
scholarship during any of the first 3 years that such
individual is employed as a teacher to defray the costs
of pursuing such postbaccalaureate instruction.
[(B) An individual in possession of a bachelor's
degree, who wishes to enter teaching from another
profession, is eligible to receive a Teacher Corps
scholarship to enable such individual to receive the
instruction necessary to enter the teaching profession,
as determined by the State in which the individual
wishes to teach. Such instruction may be provided while
the individual is employed as a provisional teacher.
[(b) Limitations on Amount and Duration.--Subject to
subsection (d), each Teacher Corps member shall receive a
$5,000 scholarship for each academic year of postsecondary
education, except that no individual shall receive scholarship
assistance for more than 3 years of postsecondary education
(including postbaccalaureate), as determined by the Secretary.
[(c) Consideration of Award in Other Programs.--Each Teacher
Corps scholarship awarded pursuant to this subpart shall be
considered as student financial assistance in determining
eligibility for student assistance under title IV.
[(d) Assistance Not To Exceed Need.--Each Teacher Corps
scholarship, when added to assistance received under title IV,
if any, shall not exceed the cost of attendance, as defined in
section 472, at the institution the individual is attending. If
the amount of the Teacher Corps scholarship and assistance
received under title IV exceeds the cost of attendance, loans
received under part B, D, or E of such title shall be reduced
by an amount equal to the amount by which the combined awards
exceed the cost of attendance.
[(e) Continued Eligibility.--Each individual who receives a
Teacher Corps scholarship shall continue to receive such
scholarship payments only during such periods that the State
educational agency finds that such individual is--
[(1) enrolled as a full-time student in an accredited
postsecondary institution; and
[(2) maintaining satisfactory progress defined under
section 484.
[SEC. 546. SCHOLARSHIP CONDITIONS.
[(a) Scholarship Agreement.--Each individual receiving a
scholarship under this subpart shall enter into a written
agreement with the State educational agency which shall provide
assurances that each such individual--
[(1) shall pursue a course of study which meets State
requirements for teacher preparation;
[(2) has completed at least 2 years of undergraduate
education at an institution of higher education;
[(3) shall maintain satisfactory academic progress
and participate in teaching-related activities while in
undergraduate or post-baccalaureate programs;
[(4) shall work as a teacher upon completion of such
individual's education for 3 years in a Teacher Corps
school, as identified by the State educational agency
pursuant to section 541(d), except that Teacher Corps
members may transfer to another such school within the
State or in another State upon approval of the State
educational agency;
[(5) in carrying out the obligation described in
paragraph (4), shall meet the performance requirements
of--
[(A) the school in which such individual
teaches; and
[(B) the local educational agency exercising
administrative control or direction of, or
performing a service function for such school;
[(6) shall repay all or part of a Teacher Corps
scholarship received under section 545(b) plus interest
and, if applicable, reasonable collection fees, in
compliance with regulations issued by the Secretary
under subsection (b), in the event that the conditions
of this subsection are not complied with, except as
provided for in subsection (c);
[(7) at least during the first year of employment,
shall participate in an induction program which
includes working with a mentor teacher selected by the
local educational agency in which the Teacher Corps
member is employed and who, to the extent practicable,
is teaching in the same subject as the Teacher Corps
member; and
[(8) who is not enrolled in a program of study as set
forth in section 545(a)(1)(C) shall obtain State
teacher certification during the period of employment
or as soon as possible as State law requires.
[(b) Scholarship Repayment.--
[(1) In general.--Individuals found by the State
educational agency to be in noncompliance with the
agreement entered into under subsection (a) shall be
required to repay to the Secretary a pro rata amount of
the scholarship awards received, plus interest at the
highest rate applicable to loans under part B of title
IV and, where applicable, reasonable collection fees,
in accordance with the provisions of paragraph (3).
[(2) Exceptions to repayment.--An individual shall
not be considered to be in violation of the agreement
entered into pursuant to subsection (a) during any
period in which such individual meets the exceptions to
repayment provisions set forth in section 528(a)(2),
528(a)(3) or 528(b), or if the individual dies.
[(3) Repayment percentages.--Each individual found by
the Secretary to be in noncompliance with the agreement
entered into under subsection (a) shall be required to
repay--
[(A) 100 percent of the total amount of
scholarships awarded under this subpart if such
individual does not teach pursuant to the
agreement described in subsection (a) or
teaches pursuant to such agreement for less
than 1 year;
[(B) 67 percent of such amount if such
individual teaches pursuant to such agreement
for at least 1 year but less than 2 years; and
[(C) 34 percent of such amount if such
individual teaches pursuant to such agreement
for at least 2 years but less than 3 years.
[(4) Interest.--If a portion of scholarship is repaid
under this subsection in any year, the entire amount of
interest on such portion of such scholarship which
accrues for such year shall be repaid.
[(5) Use of repayments.--Any repayments of
scholarships made to the Secretary pursuant to the
provisions of this section shall be used by the
Secretary to make additional grants in accordance with
the provisions of this subpart.
[(c) Waiver.--The Secretary may provide for the partial or
total waiver or suspension of any service obligation or
repayment by an individual who received a Teacher Corps
scholarship whenever compliance by such individual is
impossible or would involve extreme hardship to such
individual.
[SEC. 547. PUBLICATION AND RECRUITMENT.
[(a) In General.--The Secretary shall--
[(1) publicize the availability of, and procedure to
apply for, Teacher Corps scholarships, particularly
among students participating in teaching-related
activities through summer teaching institutes, future
teacher clubs, and other teaching-related activities,
at institutions of higher education nationwide,
particularly in institutions of higher education with
large minority enrollments, historically black colleges
and universities, secondary schools nationwide
(especially such schools with minority enrollment in
excess of the statewide average minority enrollment),
and with--
[(A) individuals participating in programs
assisted under subpart 4 of part A of title IV;
[(B) individuals leaving the armed services,
the Peace Corps, VISTA, and programs funded
under the National and Community Service Act of
1990;
[(C) community-based organizations working in
minority education; and
[(D) other agencies and entities likely to
attract individuals interested in entering
teaching from another career;
[(2) recruit minority students to participate in the
program assisted under this subpart; and
[(3) recruit students with outstanding academic
records to participate in such program.
[(b) Special Rule.--The publications required under
subsection (a) shall describe substantive fields of expertise
and geographic areas experiencing teacher shortages within the
Nation.
[SEC. 548. AUTHORIZATION OF APPROPRIATIONS.
[There are authorized to be appropriated $25,000,000 for
fiscal year 1993 and such sums as may be necessary for each of
the 4 succeeding fiscal years to carry out the provisions of
this subpart.]
PART D--INNOVATION AND RESEARCH
* * * * * * *
[Subpart 3--Class Size Demonstration Grant
[SEC. 561. PURPOSE.
[It is the purpose of this subpart to provide grants to local
educational agencies to enable such agencies to determine the
benefits in various school settings of reducing class size on
the educational performance of students and on classroom
management and organization.
[SEC. 562. PROGRAM AUTHORIZED.
[(a) Program Authorized.--
[(1) In general.--The Secretary shall carry out a
program of awarding grants, in accordance with the
provisions of this subpart, to local educational
agencies to pay the Federal share of the costs of
conducting demonstration projects that demonstrate
methods of reducing class size which may provide
information meaningful to other State and local
educational agencies.
[(2) Federal share.--The Federal share shall be 50
percent.
[(b) Reservation.--The Secretary may reserve not more than 5
percent of the amount appropriated pursuant to the authority of
section 565A in each fiscal year to carry out the evaluation
activities described in section 565.
[(c) Selection Criteria.--The Secretary shall make grants to
local educational agencies on the basis of--
[(1) the need and the ability of a local educational
agency to reduce the class size of an elementary or
secondary school served by such agency;
[(2) the ability of a local educational agency to
furnish the non-Federal share of the costs of the
demonstration project for which assistance is sought;
[(3) the ability of a local educational agency to
continue the project for which assistance is sought
after the termination of Federal financial assistance
under this subpart; and
[(4) the degree to which a local educational agency
demonstrates in the application submitted pursuant to
section 564 consultation in program implementation and
design with parents, teachers, school administrators,
and local teacher organizations, where applicable.
[(d) Priority.--In awarding grants under this subpart, the
Secretary shall give priority to demonstration projects that
involve at-risk students, including educationally or
economically disadvantaged students, students with
disabilities, limited-English proficient students, and young
students.
[(e) Grants Must Supplement Other Funds.--A local educational
agency shall use the Federal funds received under this subpart
to supplement and not supplant other Federal, State and local
funds available to the local educational agency.
[SEC. 563. PROGRAM REQUIREMENTS.
[(a) Annual Competition.--In each fiscal year, the Secretary
shall announce the factors to be examined in a demonstration
project assisted under this subpart. Such factors may include--
[(1) the magnitude of the reduction in class size to
be achieved;
[(2) the level of education and the subject areas in
which the demonstration projects shall occur;
[(3) the form of the instructional strategy to be
demonstrated; and
[(4) the duration of the project.
[(b) Random Techniques and Appropriate Comparison Groups.--
Demonstration projects assisted under this subpart shall be
designed to utilize randomized techniques or appropriate
comparison groups, where feasible.
[SEC. 564. APPLICATION.
[(a) In General.--In order to receive a grant under this
subpart a local educational agency shall submit an application
to the Secretary that is responsive to the announcement
described in section 563(a), at such time, in such manner, and
containing or accompanied by such information as the Secretary
may reasonably require.
[(b) Duration.--The Secretary shall encourage local
educational agencies to submit applications under this subpart
for a period of 3 years.
[(c) Contents.--Each application submitted pursuant to
subsection (a) shall include--
[(1) a description of the objectives to be attained
with the financial assistance made available under this
subpart and the manner in which such financial
assistance shall be used to reduce class size;
[(2) a description of the steps to be taken to
achieve target class sizes, including, where
applicable, the acquisition of additional teaching
personnel and classroom space;
[(3) a statement of the methods for the collection of
data necessary for the evaluation of the impact of
class size reduction programs on student achievement;
[(4) an assurance that the local educational agency
shall pay from non-Federal sources the non-Federal
share of the costs of the demonstration project for
which assistance is sought; and
[(5) such additional assurances as the Secretary may
reasonably require.
[(d) Sufficient Size and Scope Required.--The Secretary shall
only award grants under this subpart to applicants having
applications which describe projects of sufficient size and
scope to contribute to carrying out the purposes of this
subpart.
[SEC. 565. EVALUATION AND DISSEMINATION.
[(a) National Evaluation.--The Secretary shall conduct a
national evaluation of the demonstration projects assisted
under this subpart to determine the costs incurred in achieving
the reduction in class size and the effects of the reductions
on outcomes, such as student performance in the affected
subjects or grades, attendance, discipline, classroom
organization, management, and teacher satisfaction and
retention.
[(b) Cooperation.--Each local educational agency receiving a
grant under this subpart shall cooperate in the national
evaluation described in subsection (a) and shall provide such
information to the Secretary as the Secretary may reasonably
require.
[(c) Reports.--The Secretary shall report to the Congress on
the results of the evaluation conducted pursuant to subsection
(a).
[(d) Dissemination.--The Secretary shall widely disseminate
information about the results of the class size demonstration
projects assisted under this subpart.
[SEC. 565A. AUTHORIZATION OF APPROPRIATIONS.
[There are authorized to be appropriated $3,000,000 for
fiscal year 1993, and such sums as may be necessary for each of
the 4 succeeding fiscal years to carry out this subpart.
[Subpart 4--Middle School Teaching Demonstration Programs
[SEC. 566. STATEMENT OF PURPOSE.
[It is the purpose of this subpart to provide financial
assistance to institutions of higher education which offer
teacher training or retraining programs to develop model
programs with a specialized focus on teaching grades 6 through
9.
[SEC. 567. DEFINITIONS.
[As used in this subpart:
[(1) The term ``developmentally appropriate'' means a
program that is appropriate for a child's age and all
areas of an individual child's development, including
educational, physical, emotional, social, cognitive,
and communication.
[(2) The term ``middle school'' means a school which
enrolls students in at least two of the grades 6, 7, 8,
and 9.
[SEC. 568. PROGRAM AUTHORIZED.
[(a) In General.--The Secretary is authorized to make grants,
on a competitive basis, to institutions of higher education to
develop model programs with a specialized focus on teaching
grades 6 through 9.
[(b) Special Rule.--
[(1) Equitable distribution.--The Secretary shall
ensure an equitable geographic distribution of grants
awarded under this subpart.
[(2) Consideration.--The Secretary shall take into
consideration equitable levels of funding for urban and
rural areas in awarding grants under this subpart.
[(c) Grant Period.--Grants under this subpart may be awarded
for a period not to exceed 3 years.
[(d) Funding Limitation.--Grants awarded under this subpart
may not exceed $250,000 in the first year of funding.
[SEC. 569. APPLICATION.
[(a) In General.--Each institution of higher education
desiring a grant under this subpart shall submit an application
to the Secretary at such time, in such manner, and accompanied
by such information as the Secretary may reasonably require.
[(b) Contents.--Each application submitted pursuant to
subsection (a) shall demonstrate that--
[(1) the applicant will establish and maintain a
program of teacher training or retraining designed to
offer specialized preparation for individuals teaching
grades 6 through 9;
[(2) the applicant has designed a program of teacher
training or retraining which includes--
[(A) a study of adolescent development
(including cognitive, social, and emotional)
with particular emphasis on early adolescent
development;
[(B) a study of the influence of institutions
such as schools, families, and peer groups in
the socialization of adolescents;
[(C) information concerning the organization
of schools for students in grades 6 through 9,
with particular emphasis on developmentally
appropriate school and classroom organization
and practices;
[(D) training in at least 2 subject areas and
related instructional strategies;
[(E) direct experience through internships in
middle grade schools under the guidance of
teachers who demonstrate exemplary classroom
practices;
[(F) strategies for the prevention and
detection of high risk behavior, particularly
drug and alcohol abuse, and for the enhancement
of self esteem among adolescents;
[(G) a study of effective methods and models
of presenting substance abuse information and
education to adolescent students; and
[(H) methods of encouraging parental and
community involvement with middle schools; and
[(3) the program will be designed and operated with
the active participation of classroom teachers and will
include an in-service training component.
[SEC. 570. REPORTS AND INFORMATION DISSEMINATION.
[Each institution of higher education receiving a grant under
this subpart shall submit to the Secretary such reports and
other information regarding programs conducted under this
subpart as the Secretary deems necessary. The Secretary shall
disseminate such information to other institutions of higher
education, State educational agencies, and local educational
agencies.
[SEC. 570A. AUTHORIZATION OF APPROPRIATIONS.
[There are authorized to be appropriated $5,000,000 for
fiscal year 1993 and such sums as may be necessary for each of
the 4 succeeding fiscal years to carry out the provisions of
this subpart.]
PART E--MINORITY TEACHER RECRUITMENT
[Subpart 1--New Teaching Careers
[SEC. 571. STATEMENT OF PURPOSE.
[It is the purpose of this subpart to establish and operate
new career programs to attract minority candidates, who are in
school support or paraprofessional positions in shortage area
schools serving disadvantaged students, to careers as certified
or licensed teachers.
[SEC. 572. STATE GRANT AUTHORITY; APPLICATIONS.
[(a) Authority.--
[(1) Grants by secretary.--In any fiscal year in
which appropriations for this subpart do not equal or
exceed $50,000,000, the Secretary is authorized, in
accordance with this subpart, to award grants, on a
competitive basis, to States to enable States to pay
the Federal share of supporting programs that carry out
the purpose of this subpart.
[(2) State grant program.--In any fiscal year in
which appropriations for this subpart equal or exceed
$50,000,000, the Secretary is authorized, in accordance
with the provisions of this subpart, to make grants to
States in accordance with allocations under subsection
(b) to enable States to pay the Federal share of
supporting programs that carry out the purposes of this
subpart.
[(b) Allocation Among States.--Except as provided in
subsection (a)(1), each State shall be eligible to receive a
grant under this subpart in each fiscal year that bears as
nearly as possible the same ratio to the amount appropriated
under section 576C as the allocation of funds under part A of
title I of the Elementary and Secondary Education Act of 1965
in that State bears to the total allocation of such funds in
all States, except that no State grant shall be less than
$500,000 in any fiscal year.
[(c) Duration of Grant.--Each grant awarded under this
subpart shall be awarded for a term of 5 years, subject to the
availability of appropriations.
[(d) Federal Share.--The Federal share of each grant awarded
under this subpart shall be 75 percent in the first year in
which the State receives a grant, 65 percent in the second such
year, 55 percent in the third such year, 45 percent in the
fourth such year, and 35 percent in the fifth such year.
[(e) Non-Federal Share.--The non-Federal share of each grant
awarded under this subpart may be in cash or in kind fairly
evaluated, including planned equipment or services.
[(f) Submission of State Applications.--In order to receive a
grant under this subpart, a State shall submit an application
at such time or times, in such manner, and containing such
information as the Secretary may prescribe by regulation. Such
application shall--
[(1) contain assurances that the State will award
grants on a competitive basis to eligible recipients
submitting applications described in section 574;
[(2) set forth a program of activities for carrying
out the purposes set forth in this subpart in such
detail as will enable the Secretary to determine the
degree to which such program will accomplish such
purposes and such other policies, procedures, and
assurances as the Secretary may require by regulation.
[SEC. 573. AGREEMENTS.
[Each State receiving a grant under this subpart shall enter
into an agreement with the Secretary. Each such agreement shall
include provisions designed to ensure that--
[(1) the State educational agency, the State higher
education agency, or the State agency which administers
subpart 4 of part A of title IV, relating to State
student incentive grants, will administer the program
authorized by this subpart in the State;
[(2) the State educational agency or higher education
agency will use not more than 5 percent of the grant it
receives for administrative expenses;
[(3) the State educational agency or higher education
agency will keep such records and provide such
information to the Secretary as may be required for
fiscal audit and program evaluation, consistent with
the responsibilities of the Secretary; and
[(4) the State will establish a system for the
evaluation of the programs assisted under this subpart.
[SEC. 574. APPLICATION.
[(a) In General.--A grant under this subpart may be made only
to an eligible recipient which submits an application to the
State containing or accompanied by such information as the
State may reasonably require.
[(b) Contents of Application.--Each such application shall--
[(1) describe the activities and services for which
assistance is sought;
[(2) set forth the number of expected participants in
each program assisted under this subpart;
[(3) demonstrate steps on a career ladder leading to
the position of fully credentialed teacher, ranging
from nonskilled entry positions, extending through
intermediate subprofessional functions, and terminating
in full professional status as a certified teacher duly
recognized by the appropriate State agency;
[(4) contain assurances that advancement within such
career ladders would be based on merit, but that the
opportunity for professional growth is available to
all;
[(5) demonstrate a plan for employing permanently
individuals who have participated in the program at
their new level of training, including individuals who
terminate the program at a level below that of fully
credentialed teacher;
[(6) demonstrate a plan for bringing a sizable
portion of the educational program and coursework to
the place of the participant's employment;
[(7) demonstrate a plan for providing academic credit
for in-service training and other relevant experience
as well as formal academic coursework;
[(8) provide for participation of individuals who
have attained various levels of education, including
individuals who have not completed high school, with
special consideration for such participation given to
individuals already serving within the school system;
[(9) provide assurances that the program assisted
under this subpart will be available to individuals
with disabilities; and
[(10) contain such other assurances as the State may
reasonably require.
[SEC. 575. REQUIREMENTS.
[(a) General Requirements.--An eligible recipient of a grant
under this subpart shall require that any paraprofessional who
receives student financial assistance under this subpart and
who becomes a fully certified or licensed teacher enter into an
agreement under which the paraprofessional shall--
[(1) within the 10-year period after completing the
postsecondary education for which the assistance was
provided, act as an educational professional or a
paraprofessional in the local educational agency that
is a consortium member of the eligible recipient
providing such assistance, or, if no teaching position
is offered by such local educational agency, in a
shortage area school approved by the State for a period
of not less than one year for each full-time academic
year or equivalent for which the assistance was
received;
[(2) provide to the State evidence of compliance with
paragraph (1); and
[(3) repay that portion of the student financial
assistance received under this subpart which was
provided for tuition, plus interest and reasonable
collection costs (if applicable), in the event that the
teacher fails to comply with the conditions of
paragraph (1), in accordance with the regulations
prescribed by the Secretary under section 527, except
that the provisions of this paragraph shall not apply
to anyone for whom no teaching position was made
available by the local educational agency or State, or
in the circumstances provided in section 528.
[(b) Amount of Financial Assistance.--The amount of financial
assistance awarded under this subpart shall be reduced by the
amount that the financial assistance exceeds the student's cost
of attendance, as defined in section 472. Financial assistance
awarded under this subpart shall not be reduced on the basis of
the student's receipt of other forms of Federal student
financial assistance but shall be taken into account in
determining the eligibility of the student for those other
forms of Federal student financial assistance.
[SEC. 576. SPECIAL CONSIDERATION.
[In awarding grants under this subpart, the State shall give
special consideration to--
[(1) programs designed to identify, recruit, and
certify--
[(A) speakers of non-English languages who
have been trained as teachers in their home
country; or
[(B) individuals already employed in a local
educational agency; and
[(2) eligible recipients located in shortage areas as
defined in section 576B.
[SEC. 576A. USE OF FUNDS.
[Funds provided to eligible recipients pursuant to this
subpart may be used for--
[(1) tuition or part or all of the costs of
attendance (as determined under section 472) for
participants in programs assisted under this subpart;
[(2) the release time of such participants;
[(3) instructional and supportive services for such
participants in such programs; and
[(4) stipends for child care to such participants
whose academic coursework takes place outside the
normal workday.
[SEC. 576B. DEFINITIONS.
[For the purpose of this subpart--
[(1) the term ``certified or licensed teacher'' means
an individual who possesses a document certifying that
the individual has met the requirements of a State for
employment as a teacher in the public schools of that
State (including individuals who have been certified as
specialists in preschool and early childhood
education);
[(2) the term ``eligible recipient'' means a
consortium of--
[(A) an institution of higher education, and
[(B) one or more local educational agencies.
[(3) the term ``paraprofessional'' means an
individual with at least a high school diploma or
recognized equivalent who is employed in a preschool or
elementary or secondary school under the supervision of
a certified or licensed teacher, including individuals
employed in bilingual education, special education, and
migrant education;
[(4) the term ``school support'' means an individual
who is employed by a local educational agency; and
[(5) the term ``shortage area'' means (A) an area the
Secretary has designated as an area with a shortage of
elementary and secondary school teachers, or (B) a
shortage in a designated subject area as described in
section 530A of this Act.
[SEC. 576C. AUTHORIZATION OF APPROPRIATIONS.
[There are authorized to be appropriated $30,000,000 for
fiscal year 1993 and such sums as may be necessary for each of
the 4 succeeding fiscal years to carry out this subpart.]
* * * * * * *
PART F--PROGRAMS FOR SPECIAL POPULATIONS
[Subpart 1--National Mini Corps Program
[SEC. 581. NATIONAL MINI CORPS.
[(a) Program Authorized.--The Secretary is authorized to make
grants to institutions of higher education to enable such
institutions to establish partnerships with local educational
agencies to carry out the purposes of the National Mini Corps
Program.
[(b) Definitions.--As used in this subpart--
[(1) the term ``children'' means children who are
eligible to receive services under part A or C of title
I of the Elementary and Secondary Education Act of
1965; and
[(2) the term ``individual'' (A) has the same meaning
as the terms ``first generation college student'' and
``low income individual'' as defined under section
402A(g) of this Act, or (B) means a student enrolled in
an institution of higher education who is the child of
current or former migratory workers (including
migratory agricultural dairy workers) or of migratory
fishermen.
[(c) Purpose of the Program.--It is the purpose of the
National Mini Corps Program to--
[(1) provide individuals who are enrolled or plan to
enroll in an institution of higher education with
advisement, training, and instructional services, and
to encourage individuals to be role models for
children;
[(2) provide outreach and recruitment services to
encourage individuals to enroll in teacher education
programs;
[(3) provide support and instructional services to
individuals who are enrolled in an institution of
higher education to enable such individuals to provide
direct instructional services, which are coordinated
with the overall educational goals of the State or
local educational agency, to children eligible to
receive services under title I of the Elementary and
Secondary Education Act of 1965 during the regular
school year or summer term. Such support and services
may include--
[(A) lessons and provision of materials that
meet the academic needs of children in the
classroom;
[(B) supplemental instruction to reinforce
the basic skills and concepts provided through
instruction by the teacher;
[(C) instruction in other subject areas;
[(D) academic assistance, home visits,
parental involvement, parent-student advisement
services, and family advocacy; and
[(E) stipends for individuals who participate
in the program assisted under this subpart for
at least 10 but not more than 15 hours per
week;
[(4) designate college coordinators at participating
institutions of higher education to train, supervise,
and assign individuals to carry out the activities of
this subpart in cooperation with State and local
educational agencies in which children with special
needs have been identified; and
[(5) support other appropriate activities related to
encouraging individuals to enter the teaching
profession and to provide a link to the community.
[(d) Application Required.--Institutions of higher education
desiring to receive a grant under this subpart shall submit an
application to the Secretary which shall include--
[(1) a written partnership agreement with the State
and local educational agency in which the children have
been identified for participation in the activities
under this subpart;
[(2) a description of the strategies that will be
employed to engage the community generally in the
activities and programs supported by the programs under
this subpart;
[(3) a description of the process by which
individuals will be recruited and selected to
participate in the programs assisted under this
subpart;
[(4) a description of the programs and activities
which will be supported by the programs under this
subpart; and
[(5) such other information as the Secretary
considers necessary to determine the nature of the
local needs, the quality of the proposed Mini Corps
Program, and the capability of the applicant to
implement the proposed Mini Corps Program.
[(e) Awarding of Grants.--In awarding grants under this
subpart, the Secretary shall ensure, to the extent practicable,
that--
[(1) grants are equitably distributed on a geographic
basis throughout the Nation and among a variety of
communities;
[(2) the amount of the grant awarded is proportionate
to the number of individuals and children who, on the
basis of the grant application, are expected to be
involved in the programs and activities supported by
the National Mini Corps; and
[(3) not less than 30 percent of the grants awarded
under this subpart are awarded for programs serving
migrant students and children.
[(f) Uses of Funds.--Funds provided under this part may be
used for planning, implementing and operating a National Mini
Corps Program, except that not more than 5 percent of any grant
received under this subpart may be used for administrative
costs.
[(g) Evaluation.--The Secretary shall, by January 1, 1996,
evaluate the demonstration program assisted under this part and
report the results of such evaluation to the appropriate
committees of the Congress.
[(h) Authorization of Appropriations.--There are authorized
to be appropriated to carry out this subpart $10,000,000 for
fiscal year 1993 and such sums as may be necessary for each of
the 4 succeeding fiscal years.]
Subpart 2--Foreign Language Instruction
[SEC. 586. DEMONSTRATION GRANTS FOR CRITICAL LANGUAGE AND AREA STUDIES.
[(a) Program Authority.--The Secretary is authorized to make
demonstration grants to eligible consortia to enable such
eligible consortia to--
[(1) operate critical language and area studies
programs;
[(2) develop and acquire educational equipment and
materials; and
[(3) develop teacher training programs, texts,
curriculum, and other activities designed to improve
and expand the instruction of foreign languages at
elementary and secondary schools across the Nation.
[(b) Grant Limitation.--The Secretary shall not award a grant
which exceeds $2,000,000 to an eligible consortium under this
section in any fiscal year, but shall award grants of
sufficient size, scope and quality for a program of
comprehensive instruction of foreign languages.
[(c) Special Rules.--
[(1) Priority.--In awarding grants under this
section, the Secretary shall give priority to eligible
consortia with demonstrated, proven effectiveness in
the field of critical language and area studies and
which have been in existence for at least 1 year prior
to applying for a grant under this section.
[(2) Equitable distribution.--In awarding grants
under this section, the Secretary shall take into
consideration providing an equitable geographic
distribution of such grants among the regions of the
United States.
[(3) Program requirement.--Each eligible consortium
receiving a grant under this section shall include in
the activities assisted pursuant to such grant, a study
abroad or cultural exchange program.
[(d) Eligible Consortium.--
[(1) In general.--For the purposes of this section,
the term ``eligible consortium'' means a cooperative
effort between entities in one or more States that must
include at least 4 schools, of which--
[(A) one shall be an institution of higher
education;
[(B) one shall be a secondary school with
experience in teaching critical languages;
[(C) one shall be a secondary school with
experience in teaching critical languages and
in which at least 25 percent of the students
are eligible to be counted under title I of the
Elementary and Secondary Education Act of 1965;
and
[(D) one shall be a secondary school in which
at least 25 percent of the students are
eligible to be counted under title I of the
Elementary and Secondary Education Act of 1965.
[(2) Nonprofit organizations.--Each eligible
consortium described in paragraph (1) may include a
nonprofit organization to provide services not
otherwise available from the entities described in
paragraph (1).
[(e) Administration.--Each eligible consortium receiving a
grant under this section may use not more than 10 percent of
such grant for administrative expenses.
[(f) Application.--
[(1) In general.--Except as provided in paragraph
(2), each eligible 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 as the Secretary may reasonably
require.
[(2) Special rule.--The State educational agency or
State higher education agency responsible for the
supervision of any one school participating in an
eligible consortium may submit the application
described in paragraph (1) on behalf of such eligible
consortium.
[(g) Definitions.--For purposes of this section, the term
``critical language'' means each of the languages contained in
the list of critical foreign languages designated by the
Secretary pursuant to section 212(d) of the Education for
Economic Security Act (50 Fed. Reg. 149, 31413).
[(h) Authorization of Appropriations.--There are authorized
to be appropriated $15,000,000 for fiscal year 1993 and such
sums as may be necessary for each of the 4 succeeding fiscal
years to carry out the provisions of this section.
[SEC. 587. DEVELOPMENT OF FOREIGN LANGUAGE AND CULTURE INSTRUCTIONAL
MATERIALS.
[(a) Grants Authorized.--The Secretary is authorized to
provide one or more grants on a competitive basis to a State or
local educational agency, an institution of higher education, a
private nonprofit foreign language organization, a nonprofit
education association, or a consortium thereof, to enable such
entity to act as a resource center for--
[(1) coordinating the development of and
disseminating foreign language and culture
instructional material, including children's literature
in foreign languages, videotapes and computer software,
and teacher's instructional kits relating to
international study; and
[(2) encouraging the expanded use of technology in
teaching foreign languages and culture at the
elementary school level and, when the needs of
elementary schools have been met, at the secondary
school level, with a particular emphasis on expanding
the use of technology in teaching foreign languages and
culture at elementary and secondary schools that have
proportionally fewer resources available for teaching
foreign languages and cultures, including schools in
urban and rural areas.
[(b) Coordination.--In developing materials and technologies
under this section, the Secretary shall, where appropriate,
make use of materials and technologies developed under the Star
Schools Program Assistance Act.
[(c) Authorization of Appropriation.--There are authorized to
be appropriated $4,000,000 for fiscal year 1993 and such sums
as may be necessary for each of the 4 succeeding fiscal years
to carry out the provisions of this section.
[Subpart 3--Small State Teaching Initiative
[SEC. 591. MODEL PROGRAMS AND EDUCATIONAL EXCELLENCE.
[(a) Purpose.--It is the purpose of this section to provide
sufficient funds to small States to enable such States to
develop model programs for educational excellence, teacher
training and educational reform.
[(b) Program Authorized.--
[(1) Authority.--The Secretary is authorized to make
grants to small States in order to enable such States
to make grants to eligible institutions for the purpose
of enhancing and improving the quality of teacher
education, training, and recruitment in the Nation's
smallest States.
[(2) Equitable distribution.--The Secretary shall
award grants described in paragraph (1) in equal
amounts among small States having applications approved
under subsection (e).
[(c) Institutional Use of Funds.--Eligible institutions
receiving funds under this section may use such funds for the
development of innovative teaching techniques and materials,
preservice and inservice training programs, renovation of
training facilities and construction of model classrooms.
[(d) Definitions.--
[(1) Small state.--For the purposes of this section
the term ``small State'' means a State the total
population of which is less than 1,108,500 as reported
in the 1990 Census of Population and Housing.
[(2) Eligible institution.--For the purposes of this
section, the term ``eligible institution'' means any
institution of higher education (as such term is
defined in section 1201(a)) that is located in a small
State and that provides a course of study which
prepares an individual to become a classroom teacher.
[(e) Application.--Any eligible institution which desires to
receive a grant under this section shall submit to the State an
application which--
[(1) if the State educational agency is not
administering the program assisted under this subpart,
certifies that the State educational agency has
participated in the development of the application;
[(2) provides for a process of active discussion and
consultation with an advisory committee convened by the
State educational agency and the eligible institution;
and
[(3) describes how the institution will use the
funding.
[(f) Authorization of Appropriations.--For the purposes of
this part there are authorized to be appropriated $5,000,000
for fiscal year 1993 and such sums as may be necessary in each
of the 4 succeeding fiscal years.
[Subpart 4--Faculty Development Grants
[SEC. 593. TRAINING GRANTS.
[(a) Grants Authorized.--The Secretary is authorized to award
grants to institutions of higher education to enable such
institutions to--
[(1) develop model programs that provide training to
secondary school faculty to prepare students with
disabilities for postsecondary educational
opportunities; and
[(2) establish programs of faculty development for
faculty who teach in an institution of higher education
to prepare such faculty for the enrollment of students
with disabilities at such institution.
[(b) Use of Grants.--The grants described in subsection (a)
may be used to--
[(1) provide scholarships, including stipends and
allowances, to faculty described in paragraph (1) or
(2) of subsection (a);
[(2) develop materials and inservice programs to
assist such faculty in making the curriculum at an
institution of higher education accessible to students
with disabilities; and
[(3) provide funds to support the release of such
faculty from teaching assignments for the purpose of
educating such faculty regarding the needs of students
with disabilities.
[(c) Special Rules.--The Secretary shall ensure that grants
awarded under subsection (a)(1) are used for programs that are
in compliance with State and professionally recognized
standards for the training of special education personnel.
[(d) Application.--Each 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 reasonably require.
[(e) Authorization of Appropriations.--There are authorized
to be appropriated to carry out this subpart $5,000,000 for
fiscal year 1993 and such sums as may be necessary for each of
the 4 succeeding fiscal years.
[Subpart 5--Early Childhood Education Training
[SEC. 596. TRAINING IN EARLY CHILDHOOD EDUCATION AND VIOLENCE
COUNSELING.
[(a) Program Authorized.--The Secretary shall award grants to
institutions of higher education to enable such institutions to
establish innovative programs to recruit and train students for
careers in--
[(1) early childhood development and care, or
preschool programs; or
[(2) providing counseling to young children from
birth to 6 years of age who have been affected by
violence and to adults who work with such young
children.
[(b) Application.--An institution of higher education
desiring a grant pursuant to subsection (a) shall submit an
application to the Secretary at such time, in such form and
containing or accompanied by such information or assurances as
the Secretary may require. Each such application shall--
[(1) describe the activities and services for which
assistance is sought;
[(2) contain a plan in accordance with subsection
(c);
[(3) demonstrate that such institution has the
capacity to implement such plan; and
[(4) provide assurances that such plan was developed
in consultation with agencies and organizations that
will assist the institution in carrying out such plan.
[(c) Plan.--Each application described in subsection (a)
shall contain a comprehensive plan for the recruitment,
retention and training of students seeking careers in early
childhood development or violence counseling. Such plan shall
include a description of--
[(1) specific strategies for reaching students at
secondary schools, community colleges, undergraduate
institutions, or other agencies and institutions from
which such students are to be drawn for participation
in the program, including any partnerships with such
institutions;
[(2) specific strategies for retaining such students
in the program, such as summer sessions, internships,
mentoring, and other activities;
[(3) methods that will be used to ensure that
students trained pursuant to the plan will find
employment in early childhood education, development
and care, or violence counseling;
[(4) the goals, objectives, and timelines to be used
in assessing the success of the plan and of the
activities assisted under this section;
[(5) the curriculum and training leading to the
degree or credential that prepares students for the
careers described in the plan;
[(6) the special plans, if any, to assure that
students trained pursuant to the plan will be prepared
for serving in economically disadvantaged areas; and
[(7) sources of financial aid, to ensure that the
training program offered pursuant to this section is
available to all qualified students.
[(d) Selection and Priorities.--In evaluating the
applications submitted under this section, the Secretary shall
prescribe criteria regarding such evaluation and shall give
priority in granting funds to institutions that--
[(1) prepare students for work in economically
disadvantaged areas;
[(2) plan to focus their recruitment, retention, and
training efforts on disadvantaged students; and
[(3) have demonstrated effectiveness in providing the
type of training for which the institution seeks
assistance under this section.
[(e) Duration and Amount.--
[(1) Duration.--A grant under this section shall be
awarded for a period of not less than 3 years nor more
than 5 years.
[(2) Amount.--The total amount of the grant awarded
under this section to any institution of higher
education for any 1 year shall not be less than
$500,000 nor more than $1,000,000.
[SEC. 597. EARLY CHILDHOOD STAFF TRAINING AND PROFESSIONAL ENHANCEMENT.
[(a) Program Authorized.--
[(1) In general.--The Secretary shall award grants,
on a competitive basis, to States in accordance with
the provisions of this section.
[(2) Duration.--Grants under this section shall be
awarded for a period of 5 years.
[(b) Application.--A State desiring a grant pursuant to this
section shall submit an application to the Secretary at such
time, in such form and containing or accompanied by such
information or assurances as the Secretary may require.
[(c) Lead Agency.--
[(1) Designation of lead agency.--The chief executive
officer of a State, in consultation with the State
educational agency, desiring to receive a grant shall
designate an appropriate State agency to act as the
lead agency to--
[(A) administer funds received under this
section;
[(B) develop a State plan pursuant to
subsection (e); and
[(C) coordinate the provision of services
with other appropriate Federal, State, and
local programs.
[(2) Advisory committee.--The lead agency shall
establish an advisory committee, described in
subsection (d), to assist in developing the plan
required under subsection (e).
[(d) Advisory Committee.--Each advisory committee established
pursuant to subsection (c)(2) shall consist of a representative
of the following agencies, institutions, organizations,
divisions, programs or departments in the State to the extent
such entities exist within such State:
[(1) The lead State agency responsible for
administering funds received under the Child Care and
Development Block Grant Act.
[(2) Other State agencies administering or regulating
childcare, early childhood development or education
programs.
[(3) Institutions of higher education.
[(4) Organizations representing early childhood
development staff and parents.
[(5) A local child care resource and referral agency
or an organization representing local child care
resource and referral.
[(6) A State Head Start association.
[(7) An organization with significant experience in
training in the fields of early childhood development,
early care and early education.
[(8) State agencies or departments administering or
regulating employment, job training, and community
development programs.
[(e) State Plan.--
[(1) In general.--Each State desiring a grant under
this section shall submit, through the lead agency, a
plan to the Secretary at such time, in such manner and
accompanied by such information as the Secretary may
reasonably require. The Secretary shall consult with
the Secretary of Health and Human Services regarding
the contents of such plan.
[(2) Contents.--Each plan submitted pursuant to
subsection (a) shall--
[(A) identify the lead agency as described in
subsection (c);
[(B) assess the training offerings and
content of such offerings, amount of training
required for an early childhood development
staff license or certificate, compensation,
recruitment and turnover of staff, and any
coordination of training offerings and
professional growth of early childhood
development staff in the State;
[(C) describe the goals of the activities
assisted under this part; and
[(D) describe how the State shall--
[(i) identify and maintain a career
development path, based on a
progression of roles for early
childhood development staff, with each
role articulated with training and
different levels of responsibility and
suggested compensation, in such manner
as will permit an individual to qualify
for a more responsible role;
[(ii) ensure that trainers of early
childhood development staff in the
State are qualified, licensed or
certified in accordance with State law;
[(iii) describe the ways in which the
State will encourage the coordination
of training programs among institutions
of higher education, including, if
practicable, transfer of credits among
institutions;
[(iv) set forth the ways in which the
State will pay the costs of any
assessment, credentialing,
certification, licensing, training
offering, training inventory, increase
in staff participation in training, or
other services assisted by a grant
under this section;
[(v) describe the ways in which the
State plans to coordinate the various
State and local agencies and
organizations to maximize coordination
of standards and requirements for
certifications, licenses, and
accreditations;
[(vi) describe the ways in which the
State will compile and disseminate
information on--
[(I) training offerings;
[(II) requirements for
admission into courses and
programs;
[(III) requirements for a
license, certificate,
credential, or degree to which
such offerings may be applied;
[(IV) funding sources
available for such activities;
and
[(V) the cost of training
offerings; and
[(vii) describe the ways in which the
State will use the funds received under
this section and any other funds
available to the State to carry out the
activities described in the State plan.
[SEC. 598. REPORT.
[Each institution of higher education or State receiving a
grant under this subpart shall submit to the Secretary program
reports and evaluations at such times and containing such
information as the Secretary may require.
[SEC. 599. AUTHORIZATION OF APPROPRIATIONS.
[(a) Training in Early Childhood Education and Violence
Counseling.--To carry out activities described in section 596,
there are authorized to be appropriated $20,000,000 for fiscal
year 1993 and such sums as may be necessary for each of the 4
succeeding fiscal years.
[(b) Early Childhood Staff Training and Professional
Enhancement.--To carry out activities described in section 597,
there are authorized to be appropriated $10,000,000 for fiscal
year 1993 and such sums as may be necessary for each of the 4
succeeding fiscal years.]
TITLE VI--INTERNATIONAL EDUCATION PROGRAMS
PART A--INTERNATIONAL AND FOREIGN LANGUAGE STUDIES
* * * * * * *
[SEC. 605. INTENSIVE SUMMER LANGUAGE INSTITUTES.
[(a) Intensive Summer Language Institutes Authorized.--
[(1) Grants authorized.--The Secretary is authorized
to make grants to institutions of higher education, or
combinations of such institutions, for the purpose of
establishing and conducting intensive summer language
institutes.
[(2) Eligible grant recipients.--Training authorized
by this section shall be provided through--
[(A) institutes designed to meet the needs
for intensive language training by advanced
foreign language students;
[(B) institutes designed to provide
professional development and improve language
instruction through preservice and inservice
training for language teachers; or
[(C) institutes that combine the purposes of
subparagraphs (A) and (B).
[(3) Authorized activities.--Grants made under this
section may be used for--
[(A) intensive training in critical
languages;
[(B) training in neglected languages; and
[(C) stipends for students and faculty
attending the institutes authorized by this
section.
[(4) Instructional program.--Institutes supported
under this section may provide instruction on a full-
time or part-time basis to supplement instruction not
fully available in centers supported under section 602.
[(b) Peer Review.--Grants made under this section shall be
awarded on the basis of recommendations made by peer review
panels composed of broadly representative professionals.]
* * * * * * *
[SEC. 607. PERIODICALS AND OTHER RESEARCH MATERIALS PUBLISHED OUTSIDE
THE UNITED STATES.
[(a) Program Authorized; Authorization of Appropriations.--
[(1) Program authorized.--From the amount
appropriated under paragraph (2), the Secretary is
authorized to award grants to institutions of higher
education, public or nonprofit private library
institutions, or consortia of such institutions for the
acquisition of, and provision of access to, periodicals
and other research materials published outside the
United States.
[(2) Authorization of appropriations.--In addition to
the amount authorized to be appropriated by section
610A, there are authorized to be appropriated
$5,000,000 for fiscal year 1993, and such sums as may
be necessary for each of the 4 succeeding fiscal years
to carry out this section.
[(b) Authorized Activities.--Grants under this section shall
be used for the following purposes:
[(1) To acquire periodicals and other research
materials published outside the United States which are
not commonly held by American academic libraries and
which are of scholarly or research importance.
[(2) To maintain in machine-readable form current
bibliographic information on periodicals and other
research materials thus acquired, and to enter such
information into one or more of the widely available
bibliographic data bases.
[(3) To preserve such periodicals and other research
materials.
[(4) To make such periodicals and other research
materials widely available to researchers and scholars.
[(c) Application and Preference.--
[(1) 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.
[(2) Preference.--The Secretary shall give preference
to grant applications according to the following
criteria:
[(A) The total number of library research
materials in an institution's or consortium's
collection.
[(B) The comprehensiveness, both current and
retrospective, of the institution's or
consortium's collection of periodicals and
other research materials published outside the
United States.
[(C) Public accessibility to the
institution's or consortium's collection of
periodicals and other research materials
published outside the United States.
[(D) The institution's or consortium's
technological capability to share its
collection of periodicals and other research
materials published outside the United States
with other institutions of higher education,
with public or nonprofit institutions, and with
individual scholars.
[(E) The institution's or consortium's budget
and staff capability to build, maintain, and
service periodicals and other research
materials published outside the United States.
[(3) Sufficient size.--The Secretary shall award
grants under this section of sufficient size to enable
an institution or consortium to--
[(A) substantially improve its collection of
foreign periodicals and other research
materials published outside the United States;
and
[(B) contribute to a comprehensive national
base of foreign language materials for students
and scholars.
[(d) Written Agreement.--
[(1) Agreement required.--Prior to the awarding of
grants authorized under subsection (c), each recipient
institution or consortium shall file a formal written
agreement with the Secretary which outlines their
collecting responsibilities regarding periodicals and
other research materials published outside the United
States and ensures public access.
[(2) Funding limitation.--No funds from grants
authorized under subsection (c) may be used by a
recipient institution or consortium to acquire and
process periodicals and other research materials
published outside the United States other than that
specified in the agreement filed with the Secretary
under paragraph (1).
[(e) Copyright.--Nothing in this section shall be considered
to amend, affect, or define the provisions of title 17, United
States Code, relating to copyright.]
* * * * * * *
TITLE VII--CONSTRUCTION, RECONSTRUCTION, AND RENOVATION OF ACADEMIC
FACILITIES
* * * * * * *
[PART A--IMPROVEMENT OF ACADEMIC AND LIBRARY FACILITIES
[SEC. 711. SHORT TITLE.
[This part may be cited as the ``Higher Education Facilities
Act of 1992''.
[SEC. 712. FINDINGS.
[The Congress finds that--
[(1) over the past 50 years institutions of higher
education have expanded dramatically, while at the same
time traditional sources of funding facilities
maintenance and repair have declined and even
disappeared in some instances;
[(2) in order to meet the rising cost of educating
students, resulting mainly from inflation and the
higher costs of research, many colleges and
universities made the choice to defer renovations and
improvements;
[(3) overall, the need for capital investment by
institutions of higher education has been estimated to
exceed $60,000,000,000;
[(4) the deterioration of facilities has caused
valuable research experiments and programs to be
postponed, delayed or canceled; and
[(5) the United States' competitive position within
the world economy is vulnerable if the necessary
research facilities are not available to provide
advanced training in the fields of science and
technology.
[SEC. 713. DISTRIBUTION OF ASSISTANCE.
[(a) Competitive or Formula Distribution.--
[(1) Competitive grants.--If the amount appropriated
pursuant to section 716 for a fiscal year is less than
$50,000,000, then the Secretary shall award grants
under this part on a competitive basis in accordance
with subsection (h) to institutions of higher education
to carry out the activities described in section 714.
[(2) Allotment formula.--
[(A) Formula.--If the amount appropriated
pursuant to section 716 for a fiscal year is
equal to or greater than $50,000,000, then the
Secretary shall allot to each State higher
education agency with an approved application--
[(i) 50 percent of such funds on the
basis of the population of the State
compared to the population of all
States; and
[(ii) 50 percent of such funds on the
basis of the number of students
attending institutions of higher
education within the State compared to
the number of students attending
institutions of higher education in all
States.
[(B) Use of formula grants.--Each State
higher education agency receiving an allotment
pursuant to subparagraph (A), shall use such
allotment to award grants, on a competitive
basis, to institutions of higher education
within the State to enable such institutions to
carry out the activities described in section
714.
[(C) Reallotment.--Except as provided in
subsection (f), any amount that the Secretary
determines will not be available to a State
higher education agency because such agency
elects not to participate in the program
assisted under this part shall be reallotted to
other States in the same manner as the original
allotments were made.
[(b) Matching Requirements.--
[(1) State matching requirement.--
[(A) In general.--In order to receive an
allotment under subsection (a)(2)(A), each
State higher education agency shall provide
matching funds equal to 25 percent of the
amount of any allotment received pursuant to
such subsection. The Secretary may waive the
requirements of the preceding sentence if the
State can demonstrate to the satisfaction of
the Secretary that such matching requirement
would present a severe financial hardship to
the State.
[(B) Cash requirement.--Each State higher
education agency receiving funds under this
part shall only provide matching funds pursuant
to paragraph (1) in cash.
[(2) Institutional matching requirement.--In order to
receive a grant under subsection (a)(1) or (a)(2)(B),
each eligible institution shall provide matching funds
equal to 50 percent of the amount of any grant received
pursuant to such subsection. Such matching funds may be
provided by the State higher education agency or the
institution of higher education.
[(c) Priority.--In awarding grants pursuant to subsection
(a), the Secretary or each State higher education agency shall
give priority to institutions of higher education that serve
large numbers or percentages of minority or disadvantaged
students.
[(d) Equitable Participation.--In awarding grants pursuant to
subsection (a), the Secretary or each State higher education
agency shall ensure the equitable participation of both public
and private eligible institutions within the State.
[(e) Special Rule.--If the Secretary determines that any
eligible institution within a State has received, within the 2
preceding fiscal years, a direct, noncompetitive award of
Federal funds for facilities construction, renovation,
improvement or repair, then the eligible institution shall be
ineligible to receive assistance under this part.
[(f) Use for Maintenance.--An amount less than or equal to 10
percent of that portion of funds awarded under this part which
is allotted by the recipient to meet costs of--
[(1) research and instructional instrumentation and
equipment; and
[(2) equipment and structural changes necessary to
ensure the proper functioning of such research or
instructional instrumentation and equipment;
may be allocated by the recipient for maintenance of equipment
and changes described in paragraphs (1) and (2). Part or all of
this percentage may also be applied to costs of upgrading such
equipment and structural changes within 3 years of the date of
initial use, if the recipient deems such upgrading essential to
the continued usefulness of such research or instructional
instrumentation and equipment.
[(g) Supplementation.--Grants awarded pursuant to subsection
(a) shall be used to supplement and not supplant other Federal,
State, and local funds available for improvement of academic
and library facilities.
[(h) Peer Review Required.--In making grants under subsection
(a)(1), the Secretary shall utilize a national peer review
panel. The panel shall be broadly representative of all types
and classes of institutions of higher education in the United
States.
[SEC. 714. USE OF FUNDS.
[Institutions of higher education shall use funds awarded
under this part for any one or more of the following
activities:
[(1) The improvement, renovation, and repair of
academic facilities.
[(2) The improvement and renovation of library
facilities.
[(3) The improvement and renovation of broadcast,
cable, and satellite interconnection equipment for use
in postsecondary educational television and radio
programming, including interactive technology and
communications.
[(4) The construction of academic and library
facilities if the State determines such construction
necessary.
[SEC. 715. APPLICATION.
[(a) State Higher Education Agency.--
[(1) Application.--Each State higher education agency
desiring an allotment pursuant to section 713(a)(2)(A)
shall submit an application to the Secretary at such
time, in such manner and accompanied by such
information as the Secretary may reasonably require.
[(2) Contents.--Each application described in
paragraph (1) shall--
[(A) describe the activities and services for
which assistance is sought;
[(B) contain assurances that the State higher
education agency will comply with the matching
requirement described in section 713(b)(1);
[(C) contain a description and the amount of
any direct, noncompetitive appropriation of
funds for facilities construction, renovation,
improvement or repair which the State provides
to any institution of higher education within
the State; and
[(D) contain such other assurances as the
Secretary determines necessary to ensure
compliance with the provisions of this part.
[(b) Institutions of Higher Education.--
[(1) Application.--Each institution of higher
education desiring a grant pursuant to section
713(a)(1) or 713(a)(2)(B) shall submit an application
to the Secretary or the State higher education agency,
as appropriate, at such time, in such manner and
accompanied by such information as the Secretary or
such agency may reasonably require.
[(2) Contents.--Each application described in
paragraph (1) shall--
[(A) describe the activities and services for
which assistance is sought;
[(B) contain assurances that the eligible
institution will comply with the matching
requirement described in section 713(b)(2); and
[(C) contain such other assurances as the
Secretary or State higher education agency
determines necessary to ensure compliance with
the provisions of this part.
[SEC. 716. AUTHORIZATION OF APPROPRIATIONS.
[There are authorized to be appropriated $350,000,000 for
fiscal year 1993 and each of the 4 succeeding fiscal years to
carry out the provisions of this part.]
* * * * * * *
[Part D--College Construction Loan Insurance Association
[SEC. 751. CONGRESSIONAL DECLARATION OF PURPOSE; DEFINITION;
INCORPORATION.
[(a) Purpose.--The Congress hereby declares that it is the
purpose of this part to authorize participation of the United
States Government and the Student Loan Marketing Association in
a private, for profit corporation to be known as the College
Construction Loan Insurance Association (hereinafter referred
to as the ``Corporation'') which will, directly or indirectly,
alone or in collaboration with others--
[(1) guarantee, insure, and reinsure bonds,
debentures, notes, evidences of debt, loans, and
interests therein, the proceeds of which are to be used
for an education facilities purpose;
[(2) guarantee and insure leases of personal, real,
or mixed property to be used for an education
facilities purpose; and
[(3) issue letters of credit and undertake
obligations and commitments as the Corporation deems
necessary to carry out the purposes described in
paragraphs (1) and (2).
[(b) Status as Non-Governmental Entity.--The Corporation
shall not be an agency, instrumentality, or establishment of
the United States Government and shall not be a ``Government
corporation'' nor a ``Government controlled corporation'' as
defined in section 103 of title 5, United States Code. No
action under section 1491 of title 28, United States Code
(commonly known as the Tucker Act) shall be allowable against
the United States based on the actions of the Corporation.
[(c) Corporate Powers and Limitations.--The Corporation shall
be subject to the provisions of this part and, to the extent
not inconsistent with this part, to the District of Columbia
Business Corporation Act. The business activities of the
Corporation shall always be limited to the purposes set forth
in subsection (a) of this section. It shall have the powers
conferred upon a corporation by the District of Columbia
Business Corporation Act as from time to time in effect in
order to conduct its corporate affairs and to carry out its
purposes and activities incidental thereto.
[(d) Definition of Education Facilities Purpose.--As used in
this section, an ``education facilities purpose'' includes any
activity (including activities related to the payment of
financing or transaction costs) relating to the construction,
reconstruction, renovation, acquisition, or purchase of (1)
education, training, or research facilities or housing for
students, faculty, or staff, (2) any underlying real property
or any interest therein, (3) furniture, fixtures, and equipment
to be used in connection with any education or training
facility or housing for students, faculty, or staff, and (4)
instructional equipment and research instrumentation including
site preparation for such equipment and instrumentation.
[SEC. 752. CRITERIA FOR GUARANTEES AND INSURANCE.
[(a) General Rule.--The Corporation shall provide direct
insurance, guarantees, and reinsurance on obligations issued
for education facilities purposes only in accordance with the
requirements of this section.
[(b) Allocation of Reinsurance Capacity.--
[(1) At least the percentages specified in paragraph
(2) of the aggregate dollar amount of bond and
debenture issues reinsured by the Corporation shall be
issues which, without insurance, are listed by a
nationally recognized statistical rating organization
at a rating below the third highest rating of such
organization.
[(2) For the purpose of paragraph (1) of this
subsection, the percentages specified in this paragraph
shall be--
[(A) 10 percent for the first full year of
operation of the Corporation;
[(B) 30 percent for the second full year of
such operation; and
[(C) 50 percent for the third full year of
such operation and thereafter.
[(3) No bond or debenture issue which is both
reinsured and directly insured by the Corporation may
be counted toward the fulfillment of the requirements
of paragraph (1).
[(c) Direct Insurance and Guarantee Activities;
Limitations.--
[(1) All of the assets and obligations directly
covered by primary insurance or guarantees issued by
the Corporation shall be assets or obligations of
institutions which are, without insurance or guarantee,
listed by a nationally recognized statistical rating
organization at a rating below the third highest rating
of such organization.
[(2) At least the percentages specified in paragraph
(3) of the aggregate dollar amount of the assets and
obligations reinsured, insured, and guaranteed by the
Corporation under this section shall be in the direct
insurance and guarantee activities specified in this
subsection.
[(3) For the purpose of paragraph (2) of this
paragraph, the percentages specified in this paragraph
shall be--
[(A) 10 percent for the first full year of
operation of the Corporation;
[(B) 30 percent for the second full year of
such operation; and
[(C) 50 percent for the third full year of
such operation and thereafter.
[(4) For the purpose of paragraph (1), the assets and
obligations which may be directly covered by primary
insurance or guarantees issued by the Corporation are--
[(A) bonds, debentures, notes, evidences of
debt, loans, and interests therein, the
proceeds of which are to be used for an
education facilities purpose; and
[(B) leases of personal, real, or mixed
property to be used for an education facilities
purpose.
[(5) Notwithstanding paragraph (1), the Corporation
may issue primary insurance or guarantees covering the
assets or obligations of institutions which are,
without insurance or guarantee, listed by a nationally
recognized statistical rating organization at or above
the third highest rating of such organization, subject
to all of the following conditions and limitations:
[(A) The proposed transaction shall have been
declined for coverage by all unaffiliated
monoline insurers that are authorized to write
financial guarantee insurance and that, in the
previous year, provided primary insurance or
guarantees on educational facility obligations.
The Secretary shall publish by January 31 of
each year a list of all such insurers.
[(B) Within 2 business days of receiving
complete documentation concerning a proposed
transaction by an institution seeking insurance
from the Corporation pursuant to this paragraph
(5), an insurer shall offer to provide coverage
or execute an affidavit of declination, or its
failure to respond shall be deemed a
declination. The institution seeking insurance
from the Corporation shall file with the
Corporation the affidavits from all declining
insurers, as well as an affidavit of the
institution's financial advisor specifically
identifying the pertinent terms of the proposed
transaction, the requested insurance coverage,
and the date on which complete documentation
concerning the proposed transaction was
submitted to each insurer and certifying that
such information was provided to each insurer
that declined coverage.
[(C) The proceeds of the assets or
obligations insured or guaranteed by the
Corporation pursuant to this paragraph shall be
used exclusively for the renovation, repair,
replacement, or construction of academic and
educational facilities and shall not be used
for the renovation, repair, replacement, or
construction of athletic facilities.
[(D) The aggregate par value of assets and
obligations insured or guaranteed by the
Corporation under this paragraph (5) shall not
exceed--
[(i) $100,000,000 per year during
calendar years 1993, 1994, and 1995; or
[(ii) $150,000,000 per year during
calendar years 1996 and 1997.
[(E) The aggregate dollar amount of
transactions under this paragraph (5) shall not
exceed--
[(i) in calendar year 1993, 1994, or
1995, 10 percent of the aggregate
dollar amount of assets and obligations
directly covered by primary insurance
or guarantees issued by the Corporation
under this section in such year; or
[(ii) in calendar year 1996 or 1997,
15 percent of the aggregate dollar
amount of assets and obligations
directly covered by primary insurance
or guarantees issued by the Corporation
under this section in such year.
[(d) Notice of Services.--The Corporation shall take such
steps as may be necessary to publicize the availability of its
insurance and reinsurance programs under this section in a
manner that assures that information concerning such programs
will be available to each eligible institution.
[(e) Nondiscrimination Required.--
[(1) The Corporation may not carry out any activities
with respect to any educational facilities purpose of a
participating institution if the institution
discriminates on account of race, color, religion
(subject to paragraph (2)), national origin, sex (to
the extent provided in title IX of the Education
Amendments of 1972), or handicapping condition.
[(2) The prohibition with respect to religion shall
not apply to an educational institution which is
controlled by or which is closely identified with the
tenets of a particular religious organization if the
application of this section would not be consistent
with the religious tenets of such organization.
[(3) Each participating institution shall certify to
the Corporation that the institution does not
discriminate as required by the provisions of paragraph
(1).
[SEC. 753. PROCESS OF ORGANIZATION.
[The Secretary of the Treasury, the Secretary, and the
Student Loan Marketing Association shall each appoint 2 persons
to be incorporators of the Corporation. If either the Secretary
of the Treasury or the Secretary fail to appoint incorporators
within 90 days after the date of enactment of the Higher
Education Amendments of 1986, the Student Loan Marketing
Association, after consultation with the Committee on Labor and
Human Resources of the Senate and the Committee on Education
and Labor of the House of Representatives, shall have the
authority to name the incorporators which have not been so
appointed. The incorporators so appointed shall each sign the
articles of incorporation and shall serve as the initial Board
of Directors until the members of the first regular Board of
Directors shall have been appointed and elected. Such
incorporators shall take whatever actions are necessary or
appropriate to establish the Corporation, including the filing
of articles of incorporation.
[SEC. 754. OPERATION AND ELECTION OF BOARD OF DIRECTORS.
[(a) In General.--The Corporation shall have a Board of
Directors which shall consist of 11 members, of whom one shall
be elected annually by the Board to serve as chairman.
Directors shall serve for terms of one year or until their
successors have been appointed and qualified, and any member so
appointed to fill a vacancy shall be appointed only for the
unexpired term of the Director whom he succeeds. Two Directors
shall be appointed by the Secretary of the Treasury; 2
Directors shall be appointed by the Secretary; 3 Directors
shall be appointed by the Student Loan Marketing Association;
and the remaining 4 Directors shall be elected by the holders
of the Corporation's voting common stock at least one of whom
shall be a college or university administrator. The failure of
the Secretary or the Secretary of the Treasury to make any one
or more appointments to the Board of Directors of the
Corporation shall not affect or diminish the right and power of
(1) the other directors who have been appointed or elected to
assume and carry out their duties as directors and (2) the
Board so constituted to act for all purposes as the full Board
of the Corporation.
[(b) Cumulative Voting.--The articles of incorporation of the
Corporation shall provide for cumulative voting under section
27(d) of the District of Columbia Business Corporation Act
(D.C. Code, sec. 29-327(d)).
[SEC. 755. INITIAL CAPITAL.
[(a) Authority To Issue Common Stock.--The Corporation shall
issue shares of voting common stock of no par value at such
time within 6 months of its incorporation as shall be
designated by the initial Board of Directors, and from time to
time thereafter.
[(b) Subscription by Secretary.--The Secretary is authorized
and directed to subscribe to and purchase, in each of the 5
years following the incorporation of the Corporation, voting
common stock of the Corporation having an aggregate purchase
price of not more than $20,000,000, subject to availability of
appropriations.
[(c) Subscription by Association.--The Student Loan Marketing
Association is authorized to subscribe to and purchase during
the 5 years following the incorporation of the Corporation
voting common stock of the Corporation having an aggregate
purchase price of $25,000,000 or more.
[(d) Annual Issuance.--The Corporation is authorized to offer
for subscription and purchase to the general public during the
5 years following the incorporation of the Corporation, voting
common stock having an aggregate purchase price of
$125,000,000. Not less than 40 percent of such stock shall be
set aside for purchase by institutions of higher education
prior to being offered to the general public.
[SEC. 756. ISSUE OF NONVOTING STOCK AND DEBT TO THE PUBLIC.
[The Corporation may issue, without limitation as to amount
or restriction as to ownership, such nonvoting common,
preferred, and preference stock, debt, and such other
securities and obligations, in such amounts, at such times, and
having such terms and conditions as may be deemed necessary or
appropriate by its Board of Directors.
[SEC. 757. OBLIGATIONS NOT FEDERALLY GUARANTEED; NO FEDERAL PRIORITY.
[No obligation which is insured, guaranteed, or otherwise
backed by the Corporation, shall be deemed to be an obligation
which is guaranteed by the full faith and credit of the United
States. No obligation which is insured, guaranteed, or
otherwise backed by the Corporation shall be deemed to be an
obligation which is guaranteed by the Student Loan Marketing
Association. This section shall not affect the determination of
whether such obligation is guaranteed for purposes of Federal
income taxes.
[SEC. 758. AUTHORITY OF SECRETARY TO SELL COMMON STOCK; RIGHT OF FIRST
REFUSAL.
[(a) Authority To Sell.--The Secretary may, at any time after
a date which is 5 years after the date of incorporation of the
Corporation, sell (in one or more transactions) the voting
common stock of the Corporation owned by the Secretary. Prior
to offering such common stock for sale to any other person, the
Secretary shall offer such stock to the Student Loan Marketing
Association at the price determined pursuant to subsection (b).
Not later than 30 days prior to the sale of such stock, the
Secretary shall advise, in writing, the Committee on Labor and
Human Resources of the Senate and the Committee on Education
and Labor of the House of Representatives of plans of the
Secretary.
[(b) Purchase Price.--The price at which the Secretary may
sell the voting common stock of the Corporation under
subsection (a) shall be the market value of such shares as
determined by the Secretary, on the basis of an independent
appraisal, but shall not be less than the value of such shares
as shown on the books of account of the Corporation as of the
date of closing of such purchase. In no event shall the
purchase price be less than the original issuance price.
[(c) Board of Directors Elected After Majority Buy-Out.--If
the Student Loan Marketing Association acquires from the
Secretary sufficient voting common stock so as to own more than
50 percent of the issued and outstanding voting common stock of
the Corporation, section 754 (except subsection (b)) shall be
of no further force or effect and the Board of Directors of the
Corporation shall thereafter be elected entirely by the voting
common shareholders.
[(d) Right of First Refusal to Association.--Until such time
as the Student Loan Marketing Association acquires all of the
voting common stock owned by the Secretary, the Student Loan
Marketing Association shall have the right to purchase all, or
any lesser portion it shall select, of each of the issues of
equity securities or other securities convertible into equity
of the Corporation as the Corporation may issue from time to
time, on the same terms and conditions as such securities are
to be offered to other persons.
[(e) Authority of Association With Respect to Corporation.--
The Student Loan Marketing Association is authorized and
empowered to purchase stock and to carry out such other
activities as are necessary and appropriate for carrying out
the Association's obligations and responsibilities with respect
to the Corporation. The Student Loan Marketing Association is
also authorized to enter into such other transactions with the
Corporation, including the acquisition of securities and
obligations of the Corporation referred to in this section and
sections 755 and 756, and arrangements for the provision of
management and other services to the Corporation, as shall be
approved by the Student Loan Marketing Association and the
Corporation.
[SEC. 759. USE OF STOCK SALE PROCEEDS.
[The proceeds received by the Secretary upon the sale of any
shares of the Corporation to the Student Loan Marketing
Association or any other person shall be deposited in the
general fund of the Treasury.
[SEC. 760. AUDITS; REPORTS TO THE PRESIDENT AND THE CONGRESS.
[(a) Accounting.--The books of account of the Corporation
shall be maintained in accordance with generally accepted
accounting principles and shall be subject to an annual audit
by an independent public accountant.
[(b) Reports.--The Corporation shall transmit to the
President and the Congress, annually and at such other times as
it deems desirable, a report of its operations and activities
under this part, which annual report shall include a copy of
the Corporation's financial statements and the opinion with
respect thereto prepared by the independent public accountant
reviewing such statements and a copy of any report made on an
audit conducted under subsection (a). The annual reports shall
include such information and other evidence as is necessary to
demonstrate that the Corporation has complied with the
requirements of section 752.]
* * * * * * *
[TITLE VIII--COOPERATIVE EDUCATION
[SEC. 801. STATEMENT OF PURPOSE; DEFINITION.
[(a) Purpose.--It is the purpose of this title to award
grants to institutions of higher education or combinations of
such institutions to encourage such institutions to develop and
make available to as many of their students as possible work
experience that will aid such students in future careers and
will enable such students to support themselves financially
while in school.
[(b) Definition.--For the purpose of this title the term
``cooperative education'' means the provision of alternating or
parallel periods of academic study and public or private
employment in order to give students work experiences related
to their academic or occupational objectives and an opportunity
to earn the funds necessary for continuing and completing their
education.
[SEC. 802. AUTHORIZATION OF APPROPRIATIONS; RESERVATIONS.
[(a) Appropriations Authorized.--There are authorized to be
appropriated to carry out this title $30,000,000 for fiscal
year 1993 and such sums as may be necessary for each of the 4
succeeding fiscal years.
[(b) Reservations.--Of the amounts appropriated in each
fiscal year the Secretary shall reserve such amount as is
necessary to make continuing awards to institutions of higher
education that were, on the date of enactment of the Higher
Education Amendments of 1992, operating an existing cooperative
education program under a multiyear project award and to
continue to pay to such institutions the Federal share in
effect on the day before such date of enactment. Of the
remainder of the amount appropriated in such fiscal year--
[(1) not less than 50 percent shall be available for
carrying out grants to institutions of higher education
and combinations of such institutions described in
section 803(a)(1)(A) for cooperative education under
section 803;
[(2) not less than 25 percent shall be available for
carrying out grants to institutions of higher education
described in section 803(a)(1)(B) for cooperative
education under section 803;
[(3) not to exceed 11 percent shall be available for
demonstration projects under paragraph (1) of section
804(a);
[(4) not to exceed 11 percent shall be available for
training and resource centers under paragraph (2) of
section 804(a); and
[(5) not to exceed 3 percent shall be available for
research under paragraph (3) of section 804(a).
[(c) Availability of Appropriations.--Appropriations under
this title shall not be available for the payment of
compensation of students for employment by employers under
arrangements pursuant to this title.
[SEC. 803. GRANTS FOR COOPERATIVE EDUCATION.
[(a) Grants Authorized.--
[(1) In general.--The Secretary is authorized--
[(A) from the amount available under section
802(b)(1) in each fiscal year and in accordance
with the provisions of this title, to make
grants to institutions of higher education or
combinations of such institutions that have not
received a grant under this paragraph in the
10-year period preceding the date for which a
grant under this section is requested to pay
the Federal share of the cost of planning,
establishing, expanding, or carrying out
programs of cooperative education by such
institutions or combinations of institutions;
and
[(B) from the amount available under section
802(b)(2) in each fiscal year and in accordance
with the provisions of this title, to make
grants to institutions of higher education that
are operating an existing cooperative education
program as determined by the Secretary to pay
the cost of planning, establishing, expanding,
or carrying out programs of cooperative
education by such institutions.
[(2) Program requirement.--Cooperative education
programs assisted under this section shall provide
alternating or parallel periods of academic study and
of public or private employment, giving students work
experience related to their academic or occupational
objectives and the opportunity to earn the funds
necessary for continuing and completing their
education.
[(3) Amount of grants.--(A) The amount of each grant
awarded pursuant to paragraph (1)(A) to any institution
of higher education or combination of such institutions
in any fiscal year shall not exceed $500,000.
[(B)(i) Except as provided in clauses (ii) and (iii),
the Secretary shall award grants in each fiscal year to
each institution of higher education described in
paragraph (1)(B) that has an application approved under
subsection (b) in an amount which bears the same ratio
to the amount reserved pursuant to section 802(b)(2)
for such fiscal year as the number of unduplicated
students placed in cooperative education jobs during
the preceding fiscal year (other than cooperative
education jobs under section 804 and as determined by
the Secretary) by such institution of higher education
bears to the total number of all such students placed
in such jobs during the preceding fiscal year by all
such institutions.
[(ii) No institution of higher education shall
receive a grant pursuant to paragraph (1)(B) in any
fiscal year in an amount which exceeds 25 percent of
such institution's cooperative education program's
personnel and operating budget for the preceding fiscal
year.
[(iii) The minimum annual grant amount which an
institution of higher education is eligible to receive
under paragraph (1)(B) is $1,000 and the maximum annual
grant amount is $75,000.
[(4) Limitation.--The Secretary shall not award
grants pursuant to paragraphs (1)(A) and (1)(B) to the
same institution of higher education or combination of
such institution in any one fiscal year.
[(5) Uses.--Grants under paragraph (1)(B) shall be
used exclusively--
[(A) to expand the quality and participation
of a cooperative education program;
[(B) for outreach in new curricular areas;
and
[(C) for outreach to potential participants
including underrepresented and nontraditional
populations.
[(b) Applications.--Each institution of higher education or
combination of such institutions desiring to receive a grant
under this section shall submit an application to the Secretary
at such time and in such manner as the Secretary shall
prescribe. Each such application shall--
[(1) set forth the program or activities for which a
grant is authorized under this section;
[(2) specify each portion of such program or
activities which will be performed by a nonprofit
organization or institution other than the applicant
and the compensation to be paid for such performance;
[(3) provide that the applicant will expend during
such fiscal year for the purpose of such program or
activities not less than the amount expended for such
purpose during the previous fiscal year;
[(4) describe the plans which the applicant will
carry out to assure, and contain a formal statement of
the institution's commitment which assures, that the
applicant will continue the cooperative education
program beyond the 5-year period of Federal assistance
described in subsection (c)(1) at a level which is not
less than the total amount expended for such program
during the first year such program was assisted under
this section;
[(5) provide that, in the case of an institution of
higher education that provides a 2-year program which
is acceptable for full credit toward a bachelor's
degree, the cooperative education program will be
available to students who are certificate or associate
degree candidates and who carry at least one-half the
normal full-time academic workload;
[(6) provide that the applicant will--
[(A) make such reports as may be essential to
ensure that the applicant is complying with the
provisions of this section, including the
reports for the second and each succeeding
fiscal year for which the applicant receives a
grant with respect to the impact of the
cooperative education program in the previous
fiscal year, including--
[(i) the number of unduplicated
student applicants in the cooperative
education program;
[(ii) the number of unduplicated
students placed in cooperative
education jobs;
[(iii) the number of employers who
have hired cooperative education
students;
[(iv) the income for students derived
from working in cooperative education
jobs; and
[(v) the increase or decrease in the
number of unduplicated students placed
in cooperative education jobs in each
fiscal year compared to the previous
fiscal year; and
[(B) keep such records as are essential to
ensure that the applicant is complying with the
provisions of this title, including the
notation of cooperative education employment on
the student's transcript;
[(7) describe the extent to which programs in the
academic discipline for which the application is made
have had a favorable reception by public and private
sector employers;
[(8) describe the extent to which the institution is
committed to extending cooperative education on an
institution-wide basis for all students who can
benefit;
[(9) describe the plans that the applicant will carry
out to evaluate the applicant's cooperative education
program at the end of the grant period;
[(10) provide for such fiscal control and fund
accounting procedures as may be necessary to assure
proper disbursement of, and accounting for, Federal
funds paid to the applicant under this title;
[(11) demonstrate a commitment to serving special
populations such as women, individuals with
disabilities, and African American, Mexican-American,
Puerto Rican, Cuban, other Hispanic, American Indian,
Alaska Native, Aleut, Native Hawaiian, American Samoan,
Micronesian, Guamanian (Chamorro), and Northern
Marianian students; and
[(12) include such other information as is essential
to carry out the provisions of this title.
[(c) Duration of Grants; Federal Share.--
[(1) Duration of grants.--No individual institution
of higher education may receive, individually or as a
participant in a combination of such institutions--
[(A) a grant pursuant to subsection (a)(1)(A)
for more than 5 fiscal years; or
[(B) a grant pursuant to subsection (a)(1)(B)
for more than 5 fiscal years.
[(2) Federal share.--The Federal share of a grant
under section 803(a)(1)(A) may not exceed--
[(A) 85 percent of the cost of carrying out
the program or activities described in the
application in the first year the applicant
receives a grant under this section;
[(B) 70 percent of such cost in the second
such year;
[(C) 55 percent of such cost in the third
such year;
[(D) 40 percent of such cost in the fourth
such year; and
[(E) 25 percent of such cost in the fifth
such year.
[(3) Special rule.--Any provision of law to the
contrary notwithstanding, the Secretary shall not waive
the provisions of this subsection.
[(d) Maintenance of Effort.--If the Secretary determines that
a recipient of funds under this section has failed to maintain
the fiscal effort described in subsection (b)(3), then the
Secretary may elect not to make grant payments under this
section to such recipient.
[(e) Factors for Special Consideration of Applications.--
[(1) In general.--In approving applications under
this section, the Secretary shall give special
consideration to applications from institutions of
higher education or combinations of such institutions
for programs which show the greatest promise of success
because of--
[(A) the extent to which programs in the
academic discipline with respect to which the
application is made have had a favorable
reception by public and private sector
employers;
[(B) the strength of the commitment of the
institution of higher education or combination
of such institutions to cooperative education
as demonstrated by the plans and formalized
institutional commitment statement which such
institution or combination has made to continue
the program after the termination of Federal
financial assistance,
[(C) the extent to which the institution or
combination is committed to extending
cooperative education for all students who can
benefit, and
[(D) such other factors as are consistent
with the purposes of this section.
[(2) Additional special consideration.--The Secretary
shall also give special consideration to applications
from institutions of higher education or combinations
of such institutions which demonstrate a commitment to
serving special populations such as women, individuals
with disabilities, and African American, Mexican-
American, Puerto Rican, Cuban, other Hispanic, American
Indian, Alaska Native, Aleut, Native Hawaiian, American
Samoan, Micronesian, Guamanian (Chamorro), and Northern
Marianian students.
[SEC. 804. DEMONSTRATION AND INNOVATION PROJECTS; TRAINING AND RESOURCE
CENTERS; AND RESEARCH.
[(a) Authorization.--The Secretary is authorized, in
accordance with the provisions of this section, to make grants
and enter into contracts for--
[(1) the conduct of demonstration projects designed
to demonstrate or determine the feasibility or value of
innovative methods of cooperative education from the
amounts available in each fiscal year under section
802(b)(3);
[(2) the conduct of training and resource centers
designed to--
[(A) train personnel in the field of
cooperative education;
[(B) improve materials used in cooperative
education programs if such improvement is
conducted in conjunction with other activities
described in this paragraph;
[(C) furnish technical assistance to
institutions of higher education to increase
the potential of the institution to continue to
conduct a cooperative education program without
Federal assistance;
[(D) encourage model cooperative education
programs which furnish education and training
in occupations in which there is a national
need;
[(E) support partnerships under which an
institution carrying out a comprehensive
cooperative education program joins with one or
more institutions of higher education in order
to (i) assist the institution other than the
comprehensive cooperative education institution
to develop and expand an existing program of
cooperative education, or (ii) establish and
improve or expand comprehensive cooperative
education programs; and
[(F) encourage model cooperative education
programs in the fields of science and
mathematics for women and minorities who are
underrepresented in such fields
from the amounts available in each fiscal year under
section 802(b)(4); and
[(3) the conduct of research relating to cooperative
education, from the amounts available in each fiscal
year under section 802(b)(5).
[(b) Administrative Provision.--
[(1) In general.--To carry out this section, the
Secretary may--
[(A) make grants to or contracts with
institutions of higher education, or
combinations of such institutions; and
[(B) make grants to or contracts with other
public or private nonprofit agencies or
organizations, whenever such grants or
contracts will make an especially significant
contribution to attaining the objectives of
this section.
[(2) Limitation.--(A) The Secretary may not use more
than 3 percent of the amount appropriated to carry out
this section in each fiscal year to enter into
contracts described in paragraph (1)(A).
[(B) The Secretary may use not more than 3 percent of
the amount appropriated to carry out this section in
each fiscal year to enter into contracts described in
paragraph (1)(B).
[(c) Supplement Not Supplant.--A recipient of a grant or
contract under this section may use the funds provided only so
as to supplement and, to the extent possible, increase the
level of funds that would, in the absence of such funds, be
made available from non-Federal sources to carry out the
activities supported by such grant or contract, and in no case
to supplant such funds from non-Federal sources.]
TITLE IX--GRADUATE PROGRAMS
* * * * * * *
[PART A--GRANTS TO INSTITUTIONS AND CONSORTIA TO ENCOURAGE WOMEN AND
MINORITY PARTICIPATION IN GRADUATE EDUCATION
[SEC. 911. GRANTS AUTHORIZED.
[The Secretary shall make grants to institutions of higher
education and consortia of such institutions to enable such
institutions and consortia--
[(1) to identify talented undergraduate students
who--
[(A) demonstrate financial need; and
[(B) are individuals from minority groups
underrepresented in graduate education or are
women underrepresented in fields of study in
graduate education such as the fields of
science and mathematics; and
[(2) to provide such students with an opportunity to
participate in a program of research and scholarly
activities at such institutions or consortia designed
to provide such students with effective preparation for
graduate study in such fields or related fields.
[SEC. 912. SUBMISSION AND CONTENTS OF APPLICATION.
[(a) Required Information.--Each institution of higher
education or consortium desiring assistance under this part
shall submit an application to the Secretary in such form and
containing such information as the Secretary may by regulation
prescribe. Each such application shall provide information
regarding--
[(1) the program of study, to take the form of summer
research internships, seminars, and other educational
experiences;
[(2) the institution's or consortium's plan for
identifying and recruiting talented women and minority
undergraduates, especially those interested in entering
fields in which such women and minority undergraduates
are underrepresented;
[(3) the participation of faculty in the program and
a detailed description of the research in which
students will be involved;
[(4) a plan for the evaluation of the effectiveness
of the program; and
[(5) such other assurances and information as the
Secretary may require by regulation.
[(b) Selection Requirements.--In making awards to
institutions and consortia--
[(1) the Secretary shall consider the quality of the
research in which students will be involved as well as
the recruitment program and program of study; and
[(2) the Secretary shall ensure an equitable
geographic distribution among public and private
institutions of higher education and consortia.
[SEC. 913. USE OF FUNDS.
[Awards made to institutions or consortia under this part
shall be used exclusively to provide direct fellowship aid
which may include need-based stipends, room and board costs,
transportation costs, and tuition for courses for which credit
is given by the institution or consortium as approved by the
Secretary.
[SEC. 914. INFORMATION COLLECTION.
[In order to assist institutions of higher education or
consortia to identify talented women and minority
undergraduates for graduate study, institutions or consortia
receiving awards under this part shall provide to the Secretary
such information as the Secretary determines is necessary to
carry out this section. With respect to students participating
in a summer internship under this part, the Secretary shall
collect information submitted by such institutions or
consortia, such as the students' names, addresses, and
institutions attended for undergraduate study. The Secretary
shall, subject to the authorization of each student, make the
information available to institutions of higher education or
consortia offering graduate programs seeking to identify
talented women and minority undergraduates for graduate study.
[SEC. 915. AUTHORIZATION OF APPROPRIATIONS.
[There are authorized to be appropriated to carry out this
part $25,000,000 for fiscal year 1993 and such sums as may be
necessary for each of the 4 succeeding fiscal years.
[PART B--PATRICIA ROBERTS HARRIS FELLOWSHIP PROGRAM
[SEC. 921. STATEMENT OF PURPOSE; DESIGNATION.
[(a) Purpose.--It is the purpose of this part to provide,
through institutions of higher education, a program of grants
to assist in making available the benefits of master's level,
professional, and doctoral education programs to individuals
from minority groups and women who are underrepresented in such
programs.
[(b) Designation.--Each recipient of such an award under this
part shall be known as a ``Patricia Roberts Harris Graduate
Fellow''.
[SEC. 922. PROGRAM AUTHORIZED.
[(a) Grants by Secretary.--
[(1) In general.--The Secretary shall make grants to
institutions of higher education to enable such
institutions to make grants in accordance with the
provisions of this part.
[(2) Reservations.--The Secretary shall reserve--
[(A) 50 percent of the amount appropriated
pursuant to the authority of section 924 to
award grants to institutions of higher
education to enable such institutions to make
awards for master's level and professional
study; and
[(B) 50 percent of such amount to award
grants to such institutions to enable such
institutions to make awards for doctoral study.
[(b) Distribution and Amounts of Grants.--
[(1) Equitable distribution.--In making such grants
the Secretary shall, to the maximum extent feasible,
ensure an equitable geographic distribution of awards
and an equitable distribution among eligible public and
independent institutions of higher education.
[(2) Reallotment.--Whenever the Secretary determines
that an institution of higher education is unable to
use all of the amounts available to it under this part,
the Secretary shall, on such dates during each fiscal
year as the Secretary may fix, reallot such amounts not
needed to institutions which can use the grants
authorized by this part.
[(c) Applications.--Any eligible institution of higher
education offering a program of postbaccalaureate study leading
to a master's level, professional, or doctoral degree may apply
for grants under this part. Each such institution may make an
application to the Secretary at such time, in such manner, and
containing or accompanied by such information as the Secretary
may reasonably require. Such application may be made on behalf
of professional schools, academic departments, or similar
organizational units within such institution meeting the
requirements of this subsection, including interdisciplinary or
interdepartmental programs.
[(d) Selection of Applications.--In making grants to
institutions of higher education, the Secretary shall--
[(1) take into account present and projected needs
for highly trained individuals in academic career
fields of high national priority;
[(2) consider the need to prepare a larger number of
women and individuals from minority groups, especially
from among such groups which have been traditionally
underrepresented in professional and academic careers
requiring master's level, professional, or doctoral
degrees, but nothing contained in this paragraph shall
be interpreted to require any institution to grant
preference or disparate treatment to the members of one
minority group on account of an imbalance which may
exist with respect to the total number or percentage of
individuals of such group participating in or receiving
the benefits of the program authorized in this section,
in comparison with the total number or percentage of
individuals of such group in any community, State,
section, or other area;
[(3) take into account the need to expand access by
women and minority groups to careers heretofore lacking
adequate representation of women and minority groups;
and
[(4) take into account the success of the applicant
in providing students with access to careers in which
women and minority groups are underrepresented.
[(e) Priorities for Fellowships.--The Secretary shall assure
that, in making grants under this part, a priority for awards
is accorded to--
[(1) individuals from minority groups and women who
are pursuing master's level or professional study in
fields in which they are underrepresented;
[(2) individuals from minority groups and women who
are pursuing master's level study leading to careers
that serve the public interest; and
[(3) women and individuals from traditionally
underrepresented groups undertaking doctoral study,
including those interested in entering the fields of
science and mathematics.
[(f) Institutional Payments.--(1) The Secretary shall pay to
the institution of higher education, for each individual
awarded a fellowship under this part at such institution, an
institutional allowance. Except as provided in paragraph (2),
such allowance shall be--
[(A) $6,000 annually with respect to individuals who
first received fellowships under this part prior to
academic year 1993-1994; and
[(B) with respect to individuals who first receive
fellowships during or after academic year 1993-1994--
[(i) $9,000 for the academic year 1993-1994;
and
[(ii) for succeeding academic years, $9,000
adjusted annually thereafter in accordance with
inflation as determined by the Department of
Labor's Consumer Price Index for the previous
calendar year.
[(2) The institutional allowance paid under paragraph (1)
shall be reduced by the amount the institution charges and
collects from a fellowship recipient for tuition and other
expenses as part of the recipient's instructional program.
[SEC. 923. AWARD OF FELLOWSHIPS.
[(a) Awards.--The Secretary shall make payments to
institutions of higher education for the purpose of paying
stipends to individuals who are awarded fellowships under this
part. The stipends the Secretary may establish shall reflect
the purpose of this program to encourage students to undertake
master's level, professional, and doctoral study as described
in this part. In the case of an individual who receives such
individual's first stipend under this part in academic year
1993-1994 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 according to measurements
of need approved by the Secretary.
[(b) Requirements for Awards.--
[(1) Master's or professional degree.--No student
enrolled in graduate study leading to a master's or
professional degree shall receive an award except
during periods in which such student is maintaining
satisfactory progress in, and devoting essentially full
time to study or research (including acting as a
teaching assistant or research assistant as may be
required as a condition to award a degree), in the
field in which such fellowship was awarded and is not
engaging in gainful employment, other than part-time
employment by the institution of higher education
involved in teaching, research, or similar activities,
approved by the Secretary. Such period shall not exceed
the normal period for completing the program in which
the student is enrolled or a total of 3 years,
whichever is less, except that the Secretary may
provide by regulation for the granting of such
fellowships for an additional period of study not to
exceed one 12-month period, under special circumstances
which the Secretary determines would most effectively
serve the purposes of this part. The Secretary shall
make a determination to provide such 12-month extension
of an award to an individual fellowship recipient for
study or research upon review of an application for
such extension by the recipient.
[(2) Doctoral degree.--No student enrolled in
graduate study leading to a doctoral degree shall
receive an award under this part except during periods
in which such student is maintaining satisfactory
progress in, and devoting essentially full time to
study, research (including acting as a teaching
assistant or research assistant as may be required as a
condition to award a degree), or dissertation work in
the field in which such fellowship was awarded and is
not engaging in gainful employment, other than part-
time employment by the institution of higher education
involved in teaching, research, or similar activities,
approved by the Secretary. Such period shall not exceed
a total of 3 years, consisting of not more than 2 years
of support for study or research, and not more than 1
year of support for dissertation work, provided that
the student has attained satisfactory progress prior to
the dissertation stage, except that the Secretary may
provide by regulation for the granting of such
fellowships for an additional period of study not to
exceed one 12-month period, under special circumstances
which the Secretary determines would most effectively
serve the purposes of this part. The Secretary shall
make a determination to provide such 12-month extension
of an award to an individual fellowship recipient for
study or research upon review of an application for
such extension by the recipient. The institution shall
provide 2 years of support for each student following
the years of Federal predissertation support under this
part. Any student receiving an award for graduate study
leading to a doctoral degree shall receive at least 1
year of supervised training in instruction during such
student's doctoral program.
[(3) Continuation of awards under prior law.--
Notwithstanding any other provision of law, in the case
of an individual who was awarded a multiyear fellowship
under this part before the date of enactment of the
Higher Education Amendments of 1992, awards to such
individual for the remainder of such fellowship may, at
the discretion of the institution of higher education
attended by such individual, be subject to the
requirements of this subsection as in effect prior to
such date of enactment. The institution shall be
required to exercise such discretion at the time that
its application to the Secretary for a grant under this
part, and the amount of any such grant, are being
considered by the Secretary.
[SEC. 924. AUTHORIZATION OF APPROPRIATIONS.
[There are authorized to be appropriated $60,000,000 for
fiscal year 1993 and such sums as may be necessary for each of
the 4 succeeding fiscal years to carry out this part.
Notwithstanding any other provision of law, the Secretary may
use funds appropriated pursuant to this section for fiscal year
1994 to make continuation awards under section 923(b)(3) to
individuals who would have been eligible for such awards in
fiscal year 1993 if such section had been in effect.
[PART C--JACOB K. JAVITS FELLOWSHIP PROGRAM
[SEC. 931. 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 part for graduate study in the arts,
humanities, and social sciences by students of superior ability
selected on the basis of demonstrated achievement and
exceptional promise. These fellowships shall be awarded to
students intending 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 commonly
accepted as the appropriate degree for a tenured-track faculty
position in a baccalaureate degree-granting institution. 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 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 part 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.
[SEC. 932. ALLOCATION OF FELLOWSHIPS.
[(a) Fellowship Board.--
[(1) Appointment.--The Secretary shall appoint a
Jacob K. Javits Fellows Program Fellowship Board
(hereinafter in this part 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 knowledgeable about and have
experience in graduate education in arts, humanities,
and social sciences.
[(2) Duties.--The Board shall--
[(A) establish general policies for the
program established by this part and oversee
its operation;
[(B) establish general criteria for the
distribution of fellowships among eligible
academic fields identified by the Board;
[(C) appoint panels of academic scholars with
distinguished backgrounds in the arts,
humanities, and social sciences for the purpose
of selecting fellows; 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 institution, 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 their appointment.
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 its
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 traveltime, and while so serving away from
their homes or regular places of business, they 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. 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. 933. STIPENDS.
[(a) Award by Secretary.--The Secretary shall pay to
individuals awarded fellowships under this part 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 part. In the case of an
individual who receives such individual's first stipend under
this part in academic year 1993-1994 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
according to measurements of need approved by the Secretary.
[(b) Institutional Payments.--
[(1) In general.--(A) The Secretary shall (in
addition to stipends paid to individuals under this
part) pay to the institution of higher education, for
each individual awarded a fellowship under this part at
such institution, an institutional allowance. Except as
provided in subparagraph (B), such allowance shall be--
[(i) $6,000 annually with respect to
individuals who first received fellowships
under this part prior to academic year 1993-
1994; and
[(ii) with respect to individuals who first
receive fellowships during or after academic
year 1993-1994--
[(I) $9,000 for the academic year
1993-1994; and
[(II) for succeeding academic years,
$9,000 adjusted 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 part 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. 934. FELLOWSHIP CONDITIONS.
[(a) Requirements for Receipt.--An individual awarded a
fellowship under the provisions of this part shall continue to
receive payments provided in section 933 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
part. 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. 935. AUTHORIZATION OF APPROPRIATIONS.
[There are authorized to be appropriated $30,000,000 for
fiscal year 1993 and such sums as may be necessary for each of
the 4 succeeding fiscal years to carry out this part.]
* * * * * * *
[PART E--FACULTY DEVELOPMENT FELLOWSHIP PROGRAM
[SEC. 951. FELLOWSHIPS AUTHORIZED.
[(a) Fellowship Program Authorization.--The Secretary shall
make grants to institutions of higher education or consortia of
such institutions and nonprofit organizations associated with
institutions of higher education, with a demonstrated record of
enhancing the access of individuals from underrepresented
groups including African Americans, Asian Americans, Hispanic
Americans, Native Americans, Pacific Islanders, and Native
Hawaiians, to enable such institutions or consortia to--
[(1) identify talented faculty from underrepresented
groups who wish to--
[(A) continue in the higher education
professorate and obtain a doctoral degree; or
[(B) participate in faculty professional
development programs specifically designed to
advance the careers of underrepresented
minorities;
[(2) identify talented baccalaureate degree
recipients from underrepresented groups who have
financial need and who wish to obtain a doctoral degree
and enter the higher education professorate; and
[(3) provide the individuals described in paragraphs
(1) and (2) with a fellowship to assist such students
in obtaining a doctoral degree or to participate in a
faculty development program.
[(b) Geographic Distribution.--In awarding grants pursuant to
subsection (a), the Secretary shall ensure--
[(1) an equitable geographic distribution of such
grants; and
[(2) that both public and private institutions of
higher education are fairly represented among the grant
recipients.
[(c) Special Rule.--
[(1) Equitable distribution.--Each institution of
higher education or consortium receiving a grant under
this part shall ensure that during the period of the
grant there is an equitable distribution of fellowships
under this part among underrepresented groups.
[(2) Construction.--Nothing in this section shall be
interpreted to require any institution of higher
education or consortium to grant preference or
disparate treatment to the members of one group on
account of an imbalance which may exist with respect to
the total number or percentage of individuals of such
group participating in or receiving the benefits of the
program authorized in this part, in comparison with the
total number or percentage of individuals of such group
in any community, State, section, or other area.
[(d) Waiver by the Secretary.--The Secretary may waive all or
any portion of the requirement under subsection (b) upon
application of any institution which is eligible for funds
under title III of this Act, pursuant to criteria established
by the Secretary by regulation.
[(e) Selection Requirements.--In awarding grants under
subsection (a), the Secretary shall give priority to
applications describing programs that--
[(1) provide to each fellowship recipient--
[(A) a tuition waiver; and
[(B)(i) a minimum $2,000 stipend; or
[(ii) additional financial support in
conjunction with teaching or research
activities that are part of such recipient's
doctoral program;
[(2) provide additional financial support to each
fellowship recipient from non-Federal resources, either
in cash or in kind, such as contributions from the
business community and civic organizations;
[(3) emphasize courses of study leading to the
doctoral degrees in disciplines where minorities are
underrepresented; and
[(4) describe steps to ensure that a fellowship
recipient will teach at an institution of higher
education where minority undergraduate students are
likely to benefit from the educational experience and
academic achievement of such recipient.
[(f) Designation.--Students receiving fellowship awards under
this part shall be known as ``Faculty Development Fellows''.
[SEC. 952. FELLOWSHIPS.
[Each institution of higher education or consortium receiving
a grant under this part shall award fellowships in an amount
equal to the amount awarded to National Science Foundation
graduate fellowship recipients for that year, or an amount
based on the financial need of the recipient (as determined by
the institution in accordance with measurements of need
approved by the Secretary) whichever is less.
[SEC. 953. APPLICATION.
[(a) Application Required.--Each institution of higher
education or consortium desiring a grant under this part shall
submit an application to the Secretary at such time, in such
manner and containing such information as the Secretary may by
regulation reasonably require.
[(b) Contents.--Each application submitted pursuant to
subsection (a) shall contain--
[(1) the institution of higher education's or
consortium's plan for identifying and recruiting
faculty and baccalaureate degree recipients who may
participate in the program assisted under this part;
[(2) a description of the program or programs of
doctoral study that the institution of higher education
or consortium plans to offer in the institution's
doctoral program;
[(3) the institution of higher education's or
consortium's plan for using minority faculty and other
faculty as advisors and academic resources in support
of the program assisted under this part;
[(4) a description of other resources of the
institution of higher education or consortium,
including tuition waivers, assistantships or financial
aid other than loans, that such institution or
consortium shall make available to fellowship
recipients;
[(5) a description of the method such institution or
consortium shall use to determine a student's financial
need;
[(6) the names of those undergraduate institutions
which are historically or predominantly black colleges
and universities or other institutions with significant
enrollments of African Americans, Asian Americans,
Hispanic Americans, Native Hawaiians, Pacific
Islanders, and Native Americans which have agreed to
cooperate with the applicant institution to carry out
the purposes of this part; and
[(7) such other assurances and information as the
Secretary may reasonably require by regulation.
[SEC. 954. FELLOWSHIP AGREEMENT.
[Each recipient of a fellowship under this part shall enter
into an agreement with the institution of higher education or
consortium awarding such fellowship under which the fellowship
recipient shall--
[(1) in the case of a fellowship recipient described
in section 951(a)(1), within a 5-year period after
completing the doctoral degree for which the fellowship
under this part was awarded, teach, for a period of not
less than 1 year for each year for which financial
assistance under this part was received, in a public or
private nonprofit institution of higher education that
has a significant minority enrollment;
[(2) in the case of a fellowship recipient described
in section 951(a)(2), within a 5-year period after
completing the doctoral degree for which the fellowship
under this part was awarded, teach, for a period of not
less than 1 year for each year for which financial
assistance under this part was received, in a public or
private nonprofit institution of higher education;
[(3) agree to provide the Secretary with evidence of
compliance, determined pursuant to regulations issued
by the Secretary, with the provisions of paragraph (1)
or (2); and
[(4) repay all or part of the fellowship received,
plus interest, and if applicable reasonable collection
fees, under regulations issued by the Secretary, in the
event the conditions of paragraph (1) or (2) are not
complied with, except as provided in section 956.
[SEC. 955. FELLOWSHIP REPAYMENT PROVISIONS.
[A recipient of a fellowship under this part found by the
Secretary to be in noncompliance with the agreement entered
into under section 954(1) or 954(2) shall be required to repay
a pro rata amount of such fellowship assistance received, plus
interest (but in no event at an interest rate higher than the
rate applicable to loans in the applicable period under part B
of title IV) and, where applicable, reasonable collection fees,
on a schedule and at a rate of interest to be prescribed by the
Secretary by regulations issued pursuant to this part.
[SEC. 956. EXCEPTIONS TO REPAYMENT PROVISIONS.
[(a) Deferral During Certain Periods.--A recipient shall not
be considered in violation of the agreement entered into
pursuant to section 954 (1) or (2) during any period in which
the recipient--
[(1) is pursuing a full-time course of study related
to the field of teaching at an eligible institution;
[(2) is serving, not in excess of 3 years, as a
member of the armed services of the United States;
[(3) is temporarily totally disabled for a period of
time not to exceed 3 years as established by sworn
affidavit of a qualified physician;
[(4) is unable to secure employment for a period not
to exceed 12 months by reason of the care required by a
spouse who is disabled;
[(5) is seeking and unable to find full-time
employment for a single period not to exceed 12 months;
[(6) is engaged in full-time employment as a teacher
in a public or private nonprofit preschool, elementary
or secondary school, or a public or private nonprofit
preschool, education program; or
[(7) satisfies the provisions of additional repayment
exceptions that may be prescribed by the Secretary in
regulations issued pursuant to this part.
[(b) Forgiveness if Permanently Totally Disabled.--A
recipient shall be excused from repayment of any fellowship
assistance received under this part if the recipient becomes
permanently totally disabled as established by sworn affidavit
of a qualified physician.
[SEC. 957. AUTHORIZATION OF APPROPRIATIONS.
[There are authorized to be appropriated to carry out this
part $25,000,000 for fiscal year 1993 and such sums as may be
necessary for each of the 4 succeeding fiscal years.
[PART F--ASSISTANCE FOR TRAINING IN THE LEGAL PROFESSION
[SEC. 961. PROGRAM REQUIREMENTS.
[(a) Program Authority.--The Secretary shall carry out a
program to assist minority, low-income, or educationally
disadvantaged college graduates to successfully pursue a law
degree and service in the legal profession through an annual
grant or contract with the Council on Legal Education
Opportunity (hereinafter CLEO). A grant or contract under this
part shall permit CLEO to use up to 6 percent of the funds
provided for administrative costs of the grant or contract.
[(b) Services Authorized.--A legal training project under
this part may provide the following services:
[(1) Assistance and counseling in gaining admission
to accredited law schools.
[(2) A 6-week intensive summer program designed to
prepare minority, low-income or educationally
disadvantaged individuals for the successful completion
of legal studies.
[(3) An academic-year program of tutorial services,
academic advice and counseling designed to assist
eligible participants successfully complete their legal
training, which may include--
[(A) instruction in reading, legal research,
legal writing skills and problem analysis;
[(B) academic advice and assistance in course
selection;
[(C) advisement about financing their legal
education and available student financial aid;
[(D) personal and professional counseling
relative to career alternatives in the legal
profession and bar examination preparation; and
[(E) any other activity consistent with
subparagraphs (A) through (D) which furthers
the objectives of this part which the Secretary
may, by regulation, reasonably require.
[(c) Use of Funds.--The Secretary shall by grant or contract
on a biennial basis, with the Council on Legal Education
Opportunity, cover all or part of the cost of--
[(1) publicizing the existence and availability of
program funds to assist minority, low-income, and
educationally disadvantaged individuals to pursue a
legal education;
[(2) selecting minority, low-income and educationally
disadvantaged individuals for training for the legal
profession;
[(3) facilitating the entry of such individuals into
law schools at institutions of higher education for the
purpose of pursuing a legal education;
[(4) selecting from among all qualified applicants,
which shall provide the services authorized by section
961(b) (2) or (3);
[(5) evaluating the quality, impact and continuing
feasibility of the programs implemented under section
961(b);
[(6) providing, through the institutions, agencies,
and organizations selected under paragraph (4), for not
more than 6 months prior to entry of such individuals
upon their course of training for the legal profession,
or following entry, training designed to assist them to
complete successfully such training for the legal
profession;
[(7) paying such stipends (including allowances for
participant travel and for their dependents) as the
Secretary may determine for such individuals for any
such period of preliminary training for the legal
profession during which such individuals maintain
satisfactory academic progress toward the J.D. or LL.B.
degree, as determined by the respective institution;
and
[(8) paying for administrative activities of the
institutions of higher education, agencies, or
organizations which receive subgrants or contracts
under paragraph (6), or with which such contracts are
entered into, to the extent that such activities are
for the purpose of furthering the activities described
in paragraphs (1) through (7).
[SEC. 962. AUTHORIZATION OF APPROPRIATIONS.
[There are authorized to be appropriated to carry out this
part $7,000,000 for fiscal year 1993 and such sums as may be
necessary for each of the 4 succeeding fiscal years.
[PART G--LAW SCHOOL CLINICAL EXPERIENCE PROGRAMS
[SEC. 971. PROGRAM AUTHORIZED.
[(a) Grant and Contract Purposes.--The Secretary is
authorized to enter into grants or contracts with accredited
law schools in the States for the purpose of paying not to
exceed 90 percent of the costs of continuing, expanding, or
establishing programs in such schools to provide clinical
experience to students in the practice of law, which includes
any form of law student work involving performance in the role
of a lawyer exercising legal skills and roles such as those of
an advocate, counselor, negotiator, investigator, and ethical
practitioner, whether by way of the provision of representation
of or services to an identifiable client in actual cases or
situations (subject to existing State or local limitations upon
such provision) or by way of simulation of such provision
through appropriate exercises. Preference shall be given to
those programs providing legal experience in the preparation
and trial of actual cases, including administrative cases and
the settlement of controversies outside the courtroom. The
cases and situations handled in actuality or by simulation may
encompass any one or more of the following:
[(1) Judicial, administrative, executive, or
legislative proceedings, including the full range of
preparation therefor.
[(2) Office or house counsel problems.
[(3) Factual investigation, empirical research, or
policy or legal analysis.
[(b) Use of Funds.--Such costs may include necessary
expenditures incurred for--
[(1) planning;
[(2) training of faculty members and salary for
additional faculty members;
[(3) travel and per diem for faculty and students;
[(4) reasonable stipends for students for work in the
public service performed as part of any such program at
a time other than during the regular academic year;
[(5) equipment and library resources;
[(6) involving practicing lawyers in the process of
training law students to perform as lawyers; and
[(7) such other items as are allowed pursuant to
regulations issued by the Secretary.
[(c) Limitations on Amounts.--No law school may receive more
than $250,000 in any fiscal year pursuant to this part, no part
of which may be used to pay for indirect costs or charges.
[(d) Definition.--For the purpose of this part, the term
``accredited law school'' means any law school which is
accredited by a nationally recognized accrediting agency or
association approved by the Secretary for this purpose,
including any combination or consortium of such schools.
[SEC. 972. APPLICATIONS.
[(a) Requirements.--A grant or contract authorized by this
part may be made by the Secretary upon application which--
[(1) is made at such time or times and contains such
information as the Secretary may prescribe;
[(2) provides for such fiscal control and fund
accounting procedures as may be necessary to assure
proper disbursement of and accounting for Federal funds
paid to the applicant under this part; and
[(3) provides for making such reports, in such form
and containing such information as the Secretary may
require to carry out functions under this part, and for
keeping such records and for affording such access
thereto as the Secretary may find necessary to assure
the correctness and verification of such reports.
[(b) Distribution of Grants and Contracts.--The Secretary
shall allocate grants or contracts under this part in such
manner as will provide an equitable distribution of such grants
or contracts throughout the United States among law schools
which show promise of being able to use funds effectively for
the purposes of this part.
[SEC. 973. AUTHORIZATION OF APPROPRIATIONS.
[There are authorized to be appropriated to carry out this
part $10,000,000 for fiscal year 1993 and such sums as may be
necessary for each of the 4 succeeding fiscal years.]
TITLE X--POSTSECONDARY IMPROVEMENT PROGRAMS
PART A--FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION
* * * * * * *
Subpart 2--Special Projects in Areas of National Need
[SEC. 1011. 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) International exchanges.
[(2) Campus climate and culture.
[(3) Evaluation and dissemination.
[(d) Authorization of Appropriations.--There are authorized
to be appropriated to carry out this subpart $5,000,000 for
fiscal year 1993 and such sums as may be necessary for each of
the 4 succeeding fiscal years.]
Part B--Minority Science and Engineering Improvement Programs
* * * * * * *
[Subpart 2--Science and Engineering Access Programs
[SEC. 1031. MINORITY SUPPORT IN SCIENCE AND ENGINEERING PROGRAMS.
[The Secretary shall, in accordance with the provisions of
this subpart, carry out a program of making grants to
institutions of higher education that are designed to provide
or improve support programs for minority students enrolled in
science and engineering programs at institutions with a
significant minority enrollment (at least 10 percent).
[SEC. 1032. SPECIAL SERVICE PROJECTS PROGRAM.
[The Secretary shall, in accordance with the provisions of
this subpart, carry out a program of making grants to
institutions of higher education that are designed to provide
or improve support to accredited colleges and universities and
professional scientific societies for a broad range of
activities designed to eliminate or reduce specific barriers to
the entry of minorities into science and technology.
[SEC. 1033. SUPPORTABLE ACTIVITIES.
[Funds appropriated for the purpose of this subpart may be
made available for--
[(1) providing needed services to groups of minority
institutions or providing training for scientists and
engineers from eligible minority institutions;
[(2) providing needed services to groups of
institutions serving significant numbers of minority
students or providing training for scientists and
engineers from such institutions to improve their
ability to train minority students in science or
engineering;
[(3) assisting minority institutions to improve the
quality of preparation of their students for graduate
work or careers in science, mathematics, and
technology;
[(4) improving access of undergraduate students at
minority institutions to careers in the sciences,
mathematics, and engineering;
[(5) improving access of minority students,
particularly minority women, to careers in the
sciences, mathematics, and engineering;
[(6) improving access for pre-college minority
students to careers in science, mathematics, and
engineering through community outreach programs
conducted through colleges and universities eligible
for support through the Minority Science and
Engineering Improvement Programs;
[(7) disseminating activities, information, and
educational materials designed to address specific
barriers to the entry of minorities into science and
technology, and conducting activities and studies
concerning the flow of underrepresented ethnic
minorities into scientific careers;
[(8) supporting curriculum models to encourage
minority student participation in research careers in
science, mathematics, and technology; and
[(9) improving the capability of minority
institutions for self-assessment, management, and
evaluation of their science, mathematics, and
engineering programs and dissemination of their
results.]
* * * * * * *
[PART C--WOMEN AND MINORITIES SCIENCE AND ENGINEERING OUTREACH
DEMONSTRATION PROGRAM
[SEC. 1061. PURPOSE.
[It is the purpose of this part to provide grants to
institutions working in partnership with elementary and
secondary schools to establish outreach programs for female and
minority elementary and secondary school students to increase
the participation of those students in science and engineering
undergraduate and graduate degree programs.
[SEC. 1062. PROGRAM AUTHORIZED.
[The Secretary shall, in accordance with the provision of
this part, award grants to eligible institutions to enable such
eligible institutions to pay the Federal share of the costs of
carrying out a program that is designed to enhance, coordinate,
develop, and expand programs and initiatives which identify and
encourage female and minority elementary and secondary school
students to pursue higher education in preparation for careers
in science and engineering.
[SEC. 1063. ELIGIBLE INSTITUTIONS.
[(a) Definition.--For the purpose of this part the term
``eligible institution'' means an institution of higher
education which--
[(1) has science and engineering programs;
[(2) has female and minority enrollment and retention
rates significantly higher than the national averages
of such rates, but does not meet the definition of
``minority institution'' set forth in section 1046(3);
[(3) demonstrates its ability to conduct outreach
activities in science and engineering to female and
minority students at the elementary and secondary
school levels;
[(4) incorporates the use of advanced
telecommunications equipment, including fiber optics
and interactive video systems, to improve the
development of intermodal programs targeted toward
female and minority students;
[(5) enters into a partnership agreement with a local
educational agency and at least 1 local business or
industry; and
[(6) describes in the application submitted pursuant
to section 1065 the duties of each partner entering
into the partnership agreement described in paragraph
(5).
[(b) Limitation.--The Secretary shall award at least 40
percent of the total funds made available under this section in
any fiscal year to eligible institutions located in any of the
Nation's ten largest metropolitan statistical areas.
[SEC. 1064. AMOUNT, DURATION, AND USE OF FUNDS.
[(a) Amount and Duration of Grants.--Grants under this part
shall be provided in an amount which is not less than $500,000
in a single fiscal year, and shall be continued for a period
not to exceed 5 fiscal years.
[(b) Use of Grants.--Grants provided under this section may
be used for--
[(1) the operation and administration of outreach
programs to elementary and secondary school students;
[(2) faculty development programs in support of
outreach programs;
[(3) curriculum development in support of the
outreach programs;
[(4) disseminating information about the outreach
programs to elementary and secondary schools and
institutions of higher education;
[(5) supporting cooperative efforts with elementary
and secondary schools, community groups, business and
industry, and other education-related groups, to expand
the scope of the outreach programs; and
[(6) establishing infrastructure necessary to operate
programs, specifically including telecommunications
equipment providing distance learning capabilities.
[SEC. 1065. APPLICATION.
[To receive a grant under this part, an eligible institution
shall submit an application at such time, in such manner, and
containing or accompanied by such information, as the Secretary
may reasonably require. Each such application shall contain a
description of the goals of the activities to be assisted.
[SEC. 1066. EVALUATION.
[(a) Independent Annual Evaluation.--The Secretary shall
provide for the annual independent evaluation of activities
assisted under this part to determine their effectiveness in
providing--
[(1) the operation and administration of outreach
programs to elementary and secondary school students;
[(2) faculty development programs in support of
outreach programs;
[(3) curriculum development in support of the
outreach programs;
[(4) disseminating information about the outreach
programs to elementary and secondary schools and
institutions of higher education;
[(5) supporting cooperative efforts with elementary
and secondary schools, community groups, business and
industry, and other education-related groups, to expand
the scope of outreach programs; and
[(6) establishing infrastructure necessary to operate
programs, specifically including telecommunications
equipment providing distance learning capabilities.
[(b) Evaluations.--
[(1) Conduct and criteria.--Each evaluation described
in subsection (a) shall be conducted by individuals not
directly involved in the administration of the
activities assisted under this part. Such independent
evaluators and the program administrators shall jointly
develop evaluation criteria which provide for
appropriate analysis of the factors described in
subsection (a). When possible, each evaluation shall
include comparisons with appropriate control groups.
[(2) Program effectiveness.--In order to determine
the effectiveness of assistance provided under this
part in achieving the goals stated in the application
described in section 1065, each evaluation described in
subsection (a) shall contain objective measures of such
goals and, where feasible, shall obtain the specific
views of participants about the activities assisted
under this part.
[(c) Report to Congress and Dissemination.--The Secretary
shall prepare and submit to the Congress a review and summary
of the results of the evaluations described in subsection (a)
not later than September 30, 1997.
[SEC. 1067. FEDERAL SHARE.
[The Federal share of the costs of activities assisted under
this part shall be 90 percent of the costs of such activities
in the first year an eligible institution receives a grant
under this part, 80 percent of such cost in the second such
year, 70 percent of such cost in the third such year, 60
percent of such cost in the fourth such year, and 50 percent of
such costs in the fifth such year. The remaining funds shall be
provided from non-Federal sources.
[SEC. 1068. SUPPLEMENT NOT SUPPLANT.
[An eligible institution may use funds received under this
part only so as to supplement and, to the extent practicable,
increase the level of funds that would be available from non-
Federal sources for the activities described in section 1064(b)
and in no case may such funds be so used as to supplant such
funds from such non-Federal sources.
[SEC. 1069. AUTHORIZATION OF APPROPRIATIONS.
[There are authorized to be appropriated to carry out this
part, $10,000,000 for fiscal year 1993 and such sums as may be
necessary for each of the 4 succeeding fiscal years. Not more
than 3 percent of the amount appropriated for this part in any
fiscal year may be used for purposes of section 1066.
[PART D--DWIGHT D. EISENHOWER LEADERSHIP PROGRAM
[SEC. 1081. SHORT TITLE; ESTABLISHMENT OF THE PROGRAM.
[(a) Short Title.--This part may be cited as the ``Dwight D.
Eisenhower Leadership Development Act of 1992''.
[(b) Establishment of Program.--
[(1) In general.--The Secretary shall establish a
program to be known as the ``Dwight D. Eisenhower
Leadership Development Program''.
[(2) Special rule.--The program assisted under this
part shall be established in conjunction with
institutions of higher education which are specially
prepared to undertake the development of new
generations of leaders in the areas of national and
international affairs.
[(c) Functions of the Program.--The functions of the program
assisted under this part shall include--
[(1) stimulating and supporting the development of
leadership skills among new generations of American
college students;
[(2) directing a national program that identifies,
recruits, inspires, and educates outstanding young men
and women regarding leadership roles in a wide variety
of fields in both the public and private sectors;
[(3) offering opportunities for young American
leaders who meet the requirements of section 484(a) of
this Act and who are broadly representative of the
population of the United States to benefit from
internships in national and international
organizations, with special attention being given to
establishing such opportunities in developing
countries;
[(4) developing curriculum for secondary and
postsecondary education;
[(5) developing a prototype for understanding and
teaching critical leadership skills to young Americans
and encouraging institutions of higher education to
establish similar leadership programs throughout the
United States and abroad; and
[(6) stimulating the theoretical and practical study
of leadership and leadership development to develop
both a better understanding of leadership and improved
methods to teach critical skills to young adults.
[(d) Operation of the Program.--The Secretary is authorized
to make grants to or enter into cooperative agreements,
contracts, or leases with institutions of higher education (as
defined in section 1201 of this title), or with nonprofit
private organizations in consortia with such institutions, to
operate the program assisted under this part.
[(e) Authorization of Appropriations.--There are authorized
to be appropriated $10,000,000 for fiscal year 1993 and such
sums as may be necessary for each of the 4 succeeding fiscal
years to carry out this part.]
* * * * * * *
[TITLE XI--COMMUNITY SERVICE PROGRAMS
[PART A--URBAN COMMUNITY SERVICE
[SEC. 1101. 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. 1102. 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 1104 in accordance with the
provisions of this part.
[SEC. 1103. 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.
[(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. 1104. 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 alleviation 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 1103(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 with their community.
[SEC. 1105. 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 will be geographically balanced and be
composed of representatives from public and private
institutions of higher education, labor, business, State and
local government, who have expertise in urban community service
or in education.
[SEC. 1106. 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
equitable geographic distribution of such grants.
[(c) Matching Requirement.--An applicant under this part and
the local governments associated with its 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. 1107. 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.
[SEC. 1108. 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 entity of the State having an agreement
or submitting an application under section 1103, or, if
no such entity has an agreement, 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. 1109. AUTHORIZATION OF APPROPRIATIONS.
[There are authorized to be appropriated $20,000,000 for
fiscal year 1993 and such sums as may be necessary for each of
the 4 succeeding fiscal years to carry out the provisions of
this part.
[PART B--INNOVATIVE PROJECTS
[Subpart 1--Innovative Projects for Community Service
[SEC. 1121. STATEMENT OF PURPOSE.
[It is the purpose of this subpart to support innovative
projects in order to encourage student participation in
community service projects, including literacy projects.
[SEC. 1122. INNOVATIVE PROJECTS FOR COMMUNITY SERVICE.
[(a) Program Authorized.--
[(1) In general.--The Secretary is authorized, in
accordance with the provisions of this subpart, to make
grants to and enter into contracts with institutions of
higher education (including combinations of such
institutions) and with such other public agencies and
nonprofit private organizations as the Secretary deems
necessary for innovative projects designed to carry out
the purpose of this subpart.
[(2) Projects.--The projects described in paragraph
(1) may--
[(A) support research regarding the effects
of student community service organizations;
[(B) provide assistance to student
organizations that work with community service
organizations;
[(C) support linkages between youth corps
programs, as described in section 122(a)(2) of
the National and Community Service Act of 1990
and institutions of higher education; and
[(D) support innovative student service
programs.
[(b) Applications.--No grant may be made and no contract may
be entered into under this section unless an application is
made at such time, in such manner, and containing or
accompanied by such information as the Secretary may require.
[(c) Applicable Procedures.--
[(1) Procedures.--No application may be approved
under subsection (b) unless the National Board of the
Fund for Improvement of Postsecondary Education, under
procedures established by the Director of such Fund,
approves the application.
[(2) Special rule.--The provisions of section 1003(b)
shall apply to grants made under this subpart.
[(d) Definition.--For the purpose of this subpart, the term
``community service'' means planned, supervised services
designed to improve the quality of life for community
residents, particularly community residents with low income, or
to assist in the solution of particular problems related to the
needs of such residents.
[Subpart 2--Student Literacy Corps and Student Mentoring Corps
[SEC. 1141. PURPOSE.
[It is the purpose of this subpart to provide financial
assistance to institutions of higher education to promote the
development of literacy corps programs and mentoring corps
programs to be operated by institutions of higher education in
public community agencies in the communities in which such
institutions are located.
[SEC. 1142. LITERACY CORPS PROGRAM AND MENTORING CORPS PROGRAM.
[(a) General Authority.--From the amount appropriated for
this subpart pursuant to section 1151 for any fiscal year, the
Secretary is authorized, in accordance with the provisions of
this subpart, to make grants to institutions of higher
education for not more than 4 years to pay the Federal share of
the cost of carrying out a student literacy corps program or a
student mentoring corps program.
[(b) Limitation.--An institution of higher education shall
only receive 1 grant under this subpart in each fiscal year.
[(c) Continuation of Literacy or Mentoring Program.--Grants
under this section are renewable upon application by the
institution of higher education in accordance with section
1144.
[(d) Federal Share.--
[(1) In general.--The Federal share of carrying out a
student literacy corps program or a student mentoring
corps program under this subpart shall be--
[(A) not more than 100 percent for an initial
grant to an institution of higher education;
and
[(B) not more than 75 percent for a grant
renewed under subsection (c).
[(2) Non-federal share.--The non-Federal share of
carrying out a student literacy corps program or a
student mentoring corps program under this subpart may
be paid from any non-Federal sources.
[SEC. 1143. USES OF FUNDS.
[(a) In General.--Funds made available under this subpart may
be used for--
[(1) grants to institutions of higher education for--
[(A) the costs of participation of
institutions of higher education in the student
literacy corps program or student mentoring
corps program for which assistance is sought;
and
[(B) stipends for student coordinators
engaged in the student literacy corps program
or student mentoring corps program for which
assistance is sought; and
[(2) technical assistance, collection and
dissemination of information, and evaluation in
accordance with section 1145.
[(b) Limitations.--No grant under this subpart to an
institution of higher education may exceed $100,000. No
institution of higher education may expend more than $35,000 of
a grant made under this subpart in the first year in which the
institution receives such a grant.
[SEC. 1144. APPLICATIONS.
[(a) Application Required.--Each institution of higher
education desiring to receive a grant under this subpart 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.
[(b) Contents of Application.--
[(1) Literacy corps.--Each application to conduct a
student literacy corps program under this subpart
shall--
[(A) contain assurances that the institution
will use the grant in accordance with section
1143;
[(B) contain adequate assurances that--
[(i) the institution has established
1 or more courses of instruction for
academic credit which are designed to
combine the training of undergraduate
students in various academic
departments such as social sciences,
economics, and education with
experience as tutors;
[(ii) such individuals will be
required, as a condition of receiving
credit in such course, to perform, for
each credit, not less than 2 hours a
week, of voluntary, uncompensated
service during the academic term in a
public community agency as a tutor in
such agency's educational or literacy
program;
[(iii) such tutoring service will be
supplementary to the existing
instructional services, offered in a
structured classroom setting, and
furnished under the supervision of
qualified personnel; and
[(iv) the institution will locate
such tutoring services in one or more
public community agencies which serve
educationally or economically
disadvantaged individuals, and will
give priority in providing tutoring
services to--
[(I) educationally
disadvantaged students
receiving services under title
I of the Elementary and
Secondary Education Act of
1965;
[(II) students with
disabilities; and
[(III) illiterate parents of
educationally or economically
disadvantaged elementary school
students, with special emphasis
on single-parent households;
and
[(C) demonstrate that the institution of
higher education has participated, prior to
applying for a grant under this subpart, in
community service activities, including the
conduct of a cooperative education program; and
[(D) contain such other assurances as the
Secretary may reasonably require.
[(2) Mentoring corps.--Each application to conduct a
student mentoring corps program under this subpart
shall--
[(A) contain assurances that the institution
will use the grant in accordance with section
1144;
[(B) contain adequate assurances that--
[(i) the institution has established
1 or more courses of instruction for
academic credit which are designed to
combine the training of undergraduate
students of various academic
departments with experience as mentors;
[(ii) such individuals will be
required, as a condition of receiving
credit in such course, to perform not
less than 60 hours of voluntary,
uncompensated service during the
academic term as a mentor to
economically disadvantaged children and
youth;
[(iii) such mentoring will be
complimentary to the existing
instructional services offered in a
structured classroom setting, and will
include structured and informal
activities geared towards improving the
academic, social and emotional
development of children in the
programs;
[(iv) the institution will locate
public community agencies or elementary
or secondary schools which serve
educationally or economically
disadvantaged youth and will give
priority in providing mentoring
services to economically disadvantaged
children and youth through community-
based organizations or elementary or
secondary schools;
[(C) demonstrate that the institution of
higher education has participated, prior to
applying for a grant under this subpart, in
community service activities, including the
conduct of a cooperative education program; and
[(D) contain such other assurances as the
Secretary may reasonably require.
[(c) Waiver.--
[(1) In general.--The Secretary may, upon request of
an institution of higher education which does not meet
the requirements of subsection (b)(1)(C) or (b)(2)(C),
grant a waiver of the requirement under such paragraph
if the institution of higher education provides
assurances that--
[(A) the institution of higher education has
conducted another significant program which
involves community outreach and service; or
[(B) its failure to engage in community
service-related programs or activities prior to
making application under this subpart will not
impede the ability of the institution to engage
in the outreach efforts necessary to carry out
the requirements of this subpart.
[(2) Special rule.--An institution of higher
education may apply for a waiver as part of the
application described in subsection (b).
[(d) Carryover of Funds.--Notwithstanding any other provision
of law, in any fiscal year in which funds are appropriated
under this subpart but not expended by the end of such fiscal
year, at least 75 percent of such funds shall remain available
in the succeeding fiscal year to carry out this subpart.
[SEC. 1145. TECHNICAL ASSISTANCE AND COORDINATION CONTRACT.
[To the extent that funds are available therefor pursuant to
section 1151, the Secretary may, directly or by way of grant,
contract, or other arrangement--
[(1) provide technical assistance to grant recipients
under this subpart;
[(2) collect and disseminate information with respect
to programs assisted under this subpart; and
[(3) evaluate such programs and issue reports on the
results of such evaluations.
[SEC. 1146. DEFINITIONS.
[For the purpose of this subpart--
[(1) Institution of higher education.--The term
``institution of higher education'', in the case of an
institution of higher education with a branch campus,
means, at the election of the institution--
[(A) a branch campus of the institution; or
[(B) the institution.
[(2) Public community agency.--The term ``public
community agency'' means an established community
agency with an established program of instruction such
as elementary and secondary schools, Head Start
centers, prisons, agencies serving youth, and agencies
serving individuals with disabilities, including
disabled veterans.
[Subpart 3--Authorization of Appropriations
[SEC. 1151. AUTHORIZATION OF APPROPRIATIONS.
[There are authorized to be appropriated $15,000,000 for
fiscal year 1993 and such sums as may be necessary for each of
the 4 succeeding fiscal years of which, for any such fiscal
year--
[(1) not more than one-third shall be available to
carry out subpart 1; and
[(2) not less than two-thirds shall be available to
carry out subpart 2.]
* * * * * * *
----------
HIGHER EDUCATION AMENDMENTS OF 1986
* * * * * * *
TITLE XIII--EDUCATION ADMINISTRATION
* * * * * * *
[Part E--National Academy of Sciences Study
[SEC. 1341. VOLUNTEERS.
[(a) Study Required.--The National Academy of Sciences shall
conduct a thorough study of how volunteers can best be used in
the classroom. The study required by this section shall
include--
[(1) the feasibility of using recipients of student
loans made, assured, or guaranteed under part B of
title IV of the Act or part E of such title as part of
repayment of such loans;
[(2) the use of older Americans as such volunteers;
[(3) the use of business persons and other
professionals as volunteers; and
[(4) the place of incentives to encourage
volunteerism.
The study required by this section shall examine the methods of
using volunteers designed to provide the greatest flexibility
for local educational agencies.
[(b) Report Required.--Not later than one year after the date
of entering into a contract with the Department of Education
for the study described in this section, the National Academy
of Sciences shall prepare and submit to the Congress a report,
together with a description of programs on the use of
volunteers and with such recommendations as deemed appropriate.
[(c) Availability of Funds.--The Secretary shall, from funds
available for the administration of the Department of
Education, make available not to exceed $500,000 for the study
required by this section.]
* * * * * * *
TITLE XV--AMERICAN INDIAN, ALASKA NATIVE, AND NATIVE HAWAIIAN CULTURE
AND ART DEVELOPMENT
SEC. 1501. SHORT TITLE.
This title may be cited as the ``American Indian, Alaska
Native, and Native Hawaiian Culture and Art Development Act''.
* * * * * * *
[Part B--Native Hawaiians and Alaska Natives
[SEC. 1521. PROGRAM FOR NATIVE HAWAIIAN AND ALASKA NATIVE CULTURE AND
ARTS DEVELOPMENT.
[(a) In General.--The Secretary of the Interior is authorized
to make grants for the purpose of supporting programs for
Native Hawaiian or Alaska Native culture and arts development
to any private, nonprofit organization or institution which--
[(1) primarily serves and represents Native Hawaiians
or Alaska Natives, and
[(2) has been recognized by the Governor of the State
of Hawaii or the Governor of the State of Alaska, as
appropriate, for the purpose of making such
organization or institution eligible to receive such
grants.
[(b) Purpose of Grants.--Grants made under subsection (a)
shall, to the extent deemed possible by the Secretary and the
recipient of the grant, be used--
[(1) to provide scholarly study of, and instruction
in, Native Hawaiian or Alaska Native art and culture,
[(2) to establish programs which culminate in the
awarding of degrees in the various fields of Native
Hawaiian or Alaska Native art and culture, or
[(3) to establish centers and programs with respect
to Native Hawaiian or Alaska Native art and culture
that are similar in purpose to the centers and programs
described in subsections (b) and (c) of section 1510.
[(c) Management of Grants.--
[(1) Any organization or institution which is the
recipient of a grant made under subsection (a) shall
establish a governing board to manage and control the
program with respect to which such grant is made.
[(2) For any grants made with respect to Native
Hawaiian art and culture, the members of the governing
board which is required to be established under
paragraph (1) shall--
[(A) be Native Hawaiians or individuals
widely recognized in the field of Native
Hawaiian art and culture,
[(B) include a representative of the Office
of Hawaiian Affairs of the State of Hawaii,
[(C) include the president of the University
of Hawaii,
[(D) include the president of the Bishop
Museum, and
[(E) serve for a fixed term of office.
[(3) For any grants made with respect to Alaska
Native art and culture, the members of the governing
board which is required to be established under
paragraph (1) shall--
[(A) include Alaska Natives and individuals
widely recognized in the field of Alaska Native
art and culture,
[(B) represent the Eskimo, Indian and Aleut
cultures of Alaska, and
[(C) serve for a fixed term.
[SEC. 1522. ADMINISTRATIVE PROVISIONS.
[(a) Payments.--The Secretary may award grants under this
part in installments, in advance, or by way of reimbursement
and may make necessary adjustments in payments of grants on
account of overpayments or underpayments.
[(b) Recovery of Overpayments.--
[(1) If the Secretary or a court of competent
jurisdiction finds that--
[(A) any person--
[(i) has--
[(I) made, or has caused to
be made by another, a false
statement or representation of
a material fact knowing it to
be false, or
[(II) knowingly failed, or
caused another to fail, to
disclose a material fact; and
[(ii) as a result of such action, has
received any funds under this part
which such person would not have
otherwise received, or
[(B) any person misappropriates any funds
paid by the Secretary under this part,
such person shall be liable to repay the amount of such
funds to the United States. Any such finding by the
Secretary may be made only after an opportunity for a
fair hearing.
[(2) Any amount repaid under this subsection shall be
returned to the general fund of the Treasury of the
United States.
[(c) Penalties.--Whoever--
[(1) makes a false statement of a material fact
knowing it to be false, or knowingly fails to disclose
a material fact, for the purpose of obtaining or
increasing for such person or for any other person any
payment of funds provided under this part, or
[(2) misappropriates any funds provided under this
part,
shall be fined not more than $1,000 or imprisoned for not more
than one year, or both.
* * * * * * *
----------
HIGHER EDUCATION AMENDMENTS OF 1992
* * * * * * *
TITLE XIII--INDIAN HIGHER EDUCATION PROGRAMS
* * * * * * *
[PART F--AMERICAN INDIAN POSTSECONDARY ECONOMIC DEVELOPMENT SCHOLARSHIP
[SEC. 1361. AMERICAN INDIAN POSTSECONDARY ECONOMIC DEVELOPMENT
SCHOLARSHIP.
[(a) Program Authorized.--The Secretary of Education is
authorized to make grants, in accordance with the provisions of
this part, to federally recognized Indian tribes which lack
sufficient numbers of professionally trained tribal members to
support established or ongoing economic development
initiatives. Priority shall be given to tribes which are not
served by federally funded postsecondary institutions. The
purpose of such grants is to enable such tribes to make
scholarships available to tribal members to assist such members
to pursue courses of study leading to an undergraduate or
postbaccalaureate degree in order to provide professionally
trained tribal members to support such economic development
initiatives on Indian reservations.
[(b) Designation.--A scholarship awarded under this part
shall be referred to as an ``American Indian Post-Secondary
Economic Development Scholarship'' (hereafter referred to in
this part as ``scholarship'').
[SEC. 1362. INDIAN SCHOLARSHIPS.
[(a) Selection.--Each Indian tribe receiving a grant pursuant
to this part for the purpose of providing scholarships shall
select tribal members eligible to receive such scholarships. In
determining grant recipients the Secretary of Education shall
consider--
[(1) geographic distribution of grants; and
[(2) a tribal economic plan which demonstrates how
individual recipients shall benefit the economic
conditions of the tribe.
[(b) Criteria.--Each Indian tribe, in consultation with the
Secretary of Education, shall give preference to select, as
those tribal members eligible to receive such scholarships,
tribal members who have successfully completed at least 30
hours of postsecondary education and who are eligible for
readmission to a postsecondary institution.
[SEC. 1363. SCHOLARSHIP CONDITIONS.
[(a) Scholarship Agreement.--Each tribal member receiving a
scholarship under this part shall enter into an agreement,
satisfactory to the Secretary of Education and the tribal
government awarding such scholarship, under which such member
agrees--
[(1) to utilize the proceeds of such scholarship to
pursue a course of study which meets the requirements
of the educational institution in which the student is
enrolled for an undergraduate or postbaccalaureate
degree;
[(2) upon the acquisition of such degree, to work,
one year for each year of financial assistance under
this part, on the Indian reservation in employment
related to the course of study pursued which will
support economic development initiatives on such
reservation; and
[(3) to maintain satisfactory academic progress, as
determined in accordance with section 484(c) of the
Higher Education Act of 1965, while in an undergraduate
or postbaccalaureate program.
[(b) Repayments.--Each tribal member found by the Secretary
of Education to be in noncompliance with the agreement pursuant
to subsection (a)(2) shall be required to repay--
[(1) 100 percent of the total amount of scholarships
awarded under this part if such tribal member does not
work pursuant to such agreement; or
[(2) a pro rata portion of the total amount of
scholarships awarded under this part, as determined by
the Secretary of Education, if such tribal member
worked pursuant to such agreement but less than the
time period required thereunder.
[(c) Waiver and Suspension of Service Agreement.--
[(1) Waiver.--A federally recognized Indian tribe
may, by formal action, waive the service agreement of a
tribal member for just cause, as determined in
accordance with regulations prescribed by the
Secretary. The tribe shall notify the Secretary in
writing of any waiver granted under this subsection.
[(2) Suspension.--The obligation of a tribal member
to perform services under this part--
[(A) shall be suspended for not more than 18
months if, at the request of the tribal member,
the tribe determines that there are no
employment opportunities available in any
applicable area; and
[(B) shall be suspended if the tribal member
ceases to attend an institution of higher
education as a consequence of an institutional
determination of unsatisfactory performance.
If, at the end of a period of suspension under
subparagraph (A), there are still no employment
opportunities available which fulfill the requirements
of this part, the tribal member's obligations under the
agreement shall terminate. A suspension under
subparagraph (B) shall be reviewed by the tribe
annually, but may be continued indefinitely.
[(d) Disclaimer.--No scholarship awarded pursuant to this
part shall be considered in determining eligibility for student
assistance under title IV of the Higher Education Act of 1965.
[(e) Limitation.--Any tribal member selected by an Indian
tribe to receive a scholarship under this part shall be
eligible to receive a $10,000 scholarship for each academic
year of postsecondary education, except that no such member
shall receive scholarship assistance under this part for more
than 4 years of postsecondary education (including
postbaccalaureate).
[(f) Cost of Attendance.--Calculation of the cost of
attendance for the tribal member shall include all costs as
determined by the tribe for the purposes of fulfilling the
policy of this part.
[(g) Additional Requirements.--Any tribal member seeking a
loan under this part shall apply for and accept the maximum
financial aid available from other sources. However, for
purposes of determining eligibility, loans provided under this
program may not be considered in needs analysis under any other
Federal law, and may not penalize tribal members in determining
eligibility for other funds.
[(h) Applications for Assistance.--Any federally recognized
Indian tribe desiring a grant under this part shall submit an
application to the Secretary of Education at such time, in such
manner, and containing such information as the Secretary may
reasonably require. Each such application shall--
[(1) describe the shortages on the reservation of
such Indian tribe of professionally trained tribal
members necessary to support economic development
initiatives on such reservation;
[(2) provide assurances that the Indian tribe will
assist in employment placement on the reservation of
tribal members receiving scholarship assistance under
this part; and
[(3) provide assurances that any tribal member
performing work pursuant to this part will be provided
compensation, benefits, and working conditions at the
same level and to the same extent as any other employee
working a similar length of time and doing the same
type of work.
[SEC. 1364. REPORT.
[Each federally recognized Indian tribe receiving a grant
pursuant to this part shall annually report to the Secretary
concerning the administration of such grant, including the
identities of any individual receiving a scholarship pursuant
to this part, and of any individual performing service pursuant
to his or her commitment under this part.
[SEC. 1365. AUTHORIZATION OF APPROPRIATIONS.
[For the purpose of carrying out the provisions of this part,
there are authorized to be appropriated $2,000,000 for fiscal
year 1993 and such sums as may be necessary for each of the 4
succeeding fiscal years.
[PART G--AMERICAN INDIAN TEACHER TRAINING
[SEC. 1371. AMERICAN INDIAN TEACHER TRAINING.
[(a) Institutional Support.--
[(1) In general.--The Secretary of Education is
authorized to award grants to tribally controlled
postsecondary, vocational and technical institutions
for the purposes of--
[(A) developing teacher training programs;
[(B) building articulation agreements between
such institutions and other institutions of
higher education as defined in section 1201(a)
of the Higher Education Act of 1965; and
[(C) basic strengthening of tribally
controlled community colleges, as defined in
section 2(a)(4) of the Tribally Controlled
Community Colleges Act (P.L. 95-471, 25 U.S.C.
1801).
[(2) Use of grants.--Grants awarded under this
subsection shall be for the purpose of providing upper
division course work, transfer programs, articulation
agreements (similar to those under part D of title I of
the Higher Education Act of 1965) with other accredited
institutions, telecommunications programs or other
mechanisms which directly support the training of
American Indian teachers.
[(b) Student Support Grants.--
[(1) In general.--The Secretary of Education is
authorized to award grants to institutions that have
developed teacher training programs under subsection
(a) for the purpose of providing financial and
programmatic support to American Indian students
seeking to participate in such institutions' teacher
training programs.
[(2) Use of grants.--Institutions receiving grants
under this section shall require recipients of grants
under this subsection to serve as teachers in an Indian
community for 1 year for each year of scholarship
support received.
[(3) Eligibility.--Students eligible to receive
support grants shall include those who have completed
at least 30 hours of postsecondary education and who
intend to pursue a 4-year degree.
[(4) Work requirement.--Students who fail to satisfy
the requirements of paragraph (2) shall be required to
repay a pro rata portion of the total amount of
scholarships awarded under this part if the student
worked for less than the required time period described
in such paragraph.
[(c) Scholarships.--
[(1) Authority.--The Secretary of Education is
authorized to provide scholarship assistance to
American Indian students who seek to become teachers
and who--
[(A) agree to serve as teachers in an Indian
community for 1 year for each year of
scholarship support received, and
[(B) have completed at least 30 hours of
postsecondary education.
[(2) Work requirement.--Students who fail to satisfy
the requirements of paragraph (1) shall be required to
repay a pro rata portion of the total amount of
scholarships awarded under this part if the student
worked for less than the required time period described
in paragraph (1)(B).
[(d) Definition.--For purposes of this part, the term
``Indian'' has the same meaning given such term in section 4(d)
of the Indian Self Determination and Education Assistance Act
(P.L. 93-638, 20 U.S.C. 450b).
[(e) Authorization of Appropriations.--There are authorized
to be appropriated $5,000,000 for fiscal year 1993 and such
sums as may be necessary for each of the 4 succeeding fiscal
years to carry out this part.]
* * * * * * *
TITLE XIV--STUDIES AND COMMISSIONS
PART A--STUDIES BY THE DEPARTMENT OF EDUCATION
* * * * * * *
[SEC. 1406. NATIONAL SURVEY OF FACTORS ASSOCIATED WITH PARTICIPATION.
[(a) Authority of the Secretary of Education.--In order to
assure improved and accurate data on the participation of at-
risk students in postsecondary education, the Secretary of
Education, acting through the National Center for Educational
Statistics, shall conduct a special purpose survey on a
biennial basis of factors associated with participation of low-
income, disadvantaged, non-English language background,
disabled, and minority students, including (but not limited to)
African American, Native Americans, Native Hawaiians, major
Hispanic subgroups, and Asian students from disadvantaged
backgrounds in various types of postsecondary education. The
survey data shall permit comparisons with other groups that
have characteristically participated at higher rates than at-
risk students.
[(b) Development of the Survey.--The Secretary of Education
shall consult with the Congress and the elementary and
secondary and higher education community in developing such an
annual survey. The survey shall include, but not be limited
to--
[(1) academic preparation of groups at key points in
the elementary and secondary education process;
[(2) rates of academic progress and graduation from
high school;
[(3) participation in postsecondary education by type
and control of institution and by program of study;
[(4) persistence rates in postsecondary programs, or,
in the case of short-term programs, completion rates;
and
[(5) average student financial assistance awarded to
groups, including Federal, State, and other assistance.
[(c) Report to Congress.--The Secretary of Education shall
report relevant data and conclusions from the survey to
Congress on an annual basis, including comparisons of important
factors for at-risk and other relevant populations.
[(d) Development of Plan.--In the event of significant
findings related to underparticipation rates of at-risk and
other students, the Secretary of Education shall submit a plan
containing policies and program modifications for ensuring the
participation of at-risk students. The plan shall indicate the
modifications the Secretary will make to increase
participation, including, but not limited to, increasing
information and training, and recommending other relevant
changes to the programs under this title.
[(e) Panel Survey on Income Dynamics.--
[(1) In general.--The Secretary of Education, acting
through the National Center for Education Statistics,
shall make an interagency agreement with the National
Science Foundation to provide for additional questions
and an appropriate sample size as part of an existing
panel study of income dynamics to provide information
on the educational processes and other developmental
behavior of Hispanic, black, and non-Hispanic white
children and their short-term and long-term
consequences.
[(2) Authorization of appropriations.--There are
authorized to be appropriated $900,000 for fiscal year
1993 and such sums for each of the 4 succeeding fiscal
years to carry out this subsection.]
* * * * * * *
[SEC. 1409. STUDY OF ENVIRONMENTAL HAZARDS IN INSTITUTIONS OF HIGHER
EDUCATION.
[(a) Study Authorized.--The Secretary of Education, in
cooperation with the Administrator of the Environmental
Protection Agency, is authorized to conduct a study of the
extent to which asbestos, lead in drinking water, or radon gas
pose a threat to the health and safety of students and
employees of institutions of higher education.
[(b) Survey Required.--Such study shall include a survey of a
representative sample of institutions of higher education in
order to assess how widespread such hazards are. A sufficient
number of institutions shall be sampled and tested in order to
provide reasonable estimates on--
[(1) the number of institutions which contain friable
asbestos (as defined in the Asbestos Hazard Emergency
Response Act) and how many students and employees may
be exposed to unsafe levels of asbestos fibers,
[(2) the number of institutions that have rooms which
contain more than 4 picocuries/liter of radon, and
[(3) the number of institutions which contain water
fountains or faucets or water coolers which discharge
water with more than 10 parts per billion of lead.
[(c) Consultation.--In designing and carrying out such study,
the Secretary shall consult with associations representing
institutions of higher education, faculty, and other employees.
[(d) Report on Study.--The Secretary of Education shall
submit a report with the results of the assessment, including
the information required by subsection (b), along with
recommendations by the Secretary regarding what actions, if
any, Congress and the Administration should take to ensure that
environmental health hazards, if any, are eliminated. The
report shall be presented to Congress not later than July 1,
1995.
[(e) Authorization of Appropriations.--There are authorized
to be appropriated $3,000,000 in fiscal year 1994 for the
purposes of carrying out this section.]
* * * * * * *
[SEC. 1412. NATIONAL JOB BANK FOR TEACHER RECRUITMENT.
[(a) Feasibility Study.--The Secretary of Education is
authorized to conduct a study on the feasibility of--
[(1) establishing a clearinghouse to operate a
national teacher job bank; or
[(2) establishing regional clearinghouses to operate
regional teacher job banks.
[(b) National Teacher Job Bank Demonstration.--
[(1) Program Authorized.--The Secretary of Education
is authorized to contract with one or more State
entities, nonprofit organizations, or institutions of
higher education to establish a national or regional
teacher job bank clearinghouse which shall--
[(A) assist local educational agencies and
private schools in locating qualified
applicants for teaching-related positions; and
[(B) help individuals in locating teaching-
related jobs or the training necessary to enter
the teaching profession or the field of early
childhood or preschool education.
[(2) Application required.--Each entity desiring to
enter into a contract with the Secretary of Education
for the establishment of a teacher job bank
clearinghouse shall submit an application to the
Secretary at such time, in such manner and accompanied
by such information as the Secretary may reasonably
require. Each such application shall include--
[(A) a demonstration of the applicant's
capacity to efficiently and effectively handle
a large volume of inquiries from employers and
potential employees;
[(B) a demonstration of support from local
educational agencies and private schools and
institutions of higher education that are
likely to use the services provided by the
teacher job bank clearinghouse; and
[(C) a demonstration of ability to provide
prospective teachers with information, either
directly or by contract with another entity,
regarding the certification and licensure
requirements of each State which is served by a
clearinghouse and information regarding
procedures for assisting out-of-State teachers
to meet State certification requirements.
[(3) Priority.--The Secretary shall give priority to
applications submitted pursuant to paragraph (2)
which--
[(A) demonstrate the ability to serve a
region of the United States and involve the
cooperation of several State educational
agencies and institutions of higher education;
or
[(B) demonstrate an ability to address
shortages of teachers, such as teachers from
minority groups, special education teachers,
bilingual teachers, or individuals planning to
teach in subject areas, geographical areas, or
types of schools with shortages.
[(c) Use of Funds.--Each entity, organization, or institution
receiving funds under this section may use such funds to--
[(1) develop, in consultation with local education
agencies and other appropriate entities, standardized
initial application forms for teaching jobs and related
positions, and standardized forms and procedures for
announcing available teaching positions;
[(2) coordinate and assist State and local teacher
recruitment efforts;
[(3) publish and disseminate information about
opportunities for teacher employment and teacher
training;
[(4) maintain a system for matching available
teachers with job openings for which they are qualified
and for tracking the supply of teachers and the demand
for teachers among the States;
[(5) encourage the development of programs to recruit
and train minorities and individuals with disabilities
to become teachers;
[(6) assist employers in checking the background of
applicants;
[(7) publicize the availability of scholarships,
loans, and other programs that assist individuals
wishing to pursue a teaching career;
[(8) assist employers in the development of effective
teacher recruitment programs;
[(9) assist in developing reciprocal agreements on
teacher certification among States; and
[(10) conduct such other activities and services
necessary to carrying out the purposes of this section
in accordance with the provisions of this section.
[(d) Definition.--For the purposes of this section, the term
``teacher'' includes elementary and secondary school classroom
teachers, and preschool and early childhood education
specialists.
[(e) Authorization.--There are authorized to be appropriated
$2,000,000 for fiscal year 1993 and such sums as may be
necessary for each of the 4 succeeding fiscal years to carry
out this section.]
* * * * * * *
TITLE XV--RELATED PROGRAMS AND AMENDMENTS TO OTHER LAWS
* * * * * * *
[PART B--NATIONAL CLEARINGHOUSE FOR POSTSECONDARY EDUCATION MATERIALS
[SEC. 1521. NATIONAL CLEARINGHOUSE FOR POSTSECONDARY EDUCATION
MATERIALS.
[(a) Purpose.--The purpose of this section is to coordinate
the production and distribution of educational materials in an
accessible form, especially audio and digital text production,
to college and university based print-disabled populations.
[(b) Program Authority.--
[(1) In general.--The Secretary of Education is
authorized to award a grant or contract to pay the
Federal share of the cost of establishing a National
Clearinghouse for Postsecondary Education Materials
(hereafter in this part referred to as the
``Clearinghouse'') to coordinate the production and
distribution of educational materials, in an accessible
form, including audio and digital, for students with
disabilities.
[(2) Award basis.--The grant or contract awarded
pursuant to paragraph (1) shall be made on a
competitive basis.
[(3) Duration.--The grant or contract awarded under
this section shall be awarded for a period of 3 years.
[(c) Use of Funds.--The grant or contract awarded under this
section shall be used to--
[(1) catalog in computer-readable form postsecondary
education materials;
[(2) identify college campus-based services producing
taped texts whose technical and reader quality make
them eligible for inclusion in the Clearinghouse and
share its quality control standards with campus-based
student support services offices serving students with
disabilities;
[(3) promote data conversion and programming to allow
the electronic exchange of bibliographic information
between existing on line systems;
[(4) encourage outreach efforts that will educate
print-disabled individuals, as defined by section
652(d)(2) of the Individuals With Disabilities
Education Act, educators, schools, and agencies about
the Clearinghouse's activities;
[(5) upgrade existing computer systems at the
Clearinghouse;
[(6) coordinate with identifiable and existing data
bases containing postsecondary education materials,
including the programs authorized under section 652(d)
of the Individuals With Disabilities Act; and
[(7) develop and share national guidelines and
standards for the production of audio and digital text
materials.
[(d) Federal Share Limitation.--The Federal share under this
section may not be more than--
[(1) 80 percent of the total cost of the program in
the first year;
[(2) 60 percent of the total cost of the program in
the second year; and
[(3) 50 percent of the total cost of the program in
the third year.
[(e) Authorization of Appropriations.--There are authorized
to be appropriated for the purpose of this section, $1,000,000
for fiscal year 1993 and such sums as may be necessary for each
of the fiscal years 1994 and 1995.
[PART C--SCHOOL-BASED DECISIONMAKERS
[SEC. 1531. TRAINING AND TECHNICAL ASSISTANCE FOR SCHOOL-BASED
DECISIONMAKERS DEMONSTRATION PROGRAM.
[(a) In General.--The Secretary of Education is authorized to
make grants to local education agencies, in consortia with one
or more institutions of higher education, to establish programs
to provide training and technical assistance to school-based
decisionmakers in local education agencies implementing system-
wide reform.
[(b) Application.--To be eligible to receive a training and
technical assistance demonstration grant under this section,
consortia shall submit an application to the Secretary of
Education in such form and containing or accompanied by such
information as the Secretary may require. A copy of the
application shall also be sent to the State educational agency
for notification purposes.
[(c) Authorization of Appropriations.--There are authorized
to be appropriated $1,000,000 for fiscal year 1993 and such
sums as may be necessary for fiscal years 1994 and 1995.
[PART D--GRANTS FOR SEXUAL OFFENSES EDUCATION
[SEC. 1541. GRANTS FOR CAMPUS SEXUAL OFFENSES EDUCATION.
[(a) Grants Authorized.--
[(1) In general.--The Secretary of Education
(hereafter in this part referred to as the
``Secretary'') is authorized to make grants to or enter
into contracts with institutions of higher education or
consortia of such institutions to enable such
institution to carry out sexual offenses education and
prevention programs under this section.
[(2) Award basis.--The Secretary shall award grants
and contracts under this section on a competitive
basis.
[(3) Equitable participation.--The Secretary shall
make every effort to ensure the equitable participation
of private and public institutions of higher education
and to ensure the equitable geographic participation of
such institutions in the activities assisted under this
part.
[(4) Priority.--In the award of grants and contracts
under this section, the Secretary shall give priority
to institutions of higher education or consortia of
such institutions that show the greatest need for the
sums requested.
[(b) General Sexual Offenses Prevention and Education
Grants.--Funds provided under this part may be used for the
following purposes:
[(1) To provide training for campus security and
college personnel, including campus disciplinary or
judicial boards, that address the issues of sexual
offenses.
[(2) To develop, disseminate, or implement campus
security and student disciplinary policies to prevent
and discipline sexual offense crimes.
[(3) To develop, enlarge, or strengthen support
services programs including medical or psychological
counseling to assist victims' recovery from sexual
offense crimes.
[(4) To create, disseminate, or otherwise provide
assistance and information about victims' options on
and off campus to bring disciplinary or other legal
action.
[(5) To implement, operate, or improve sexual offense
education and prevention programs, including programs
making use of peer-to-peer education.
[(c) Model Grants.--Not less than 25 percent of the funds
appropriated for this section in any fiscal year shall be
available for grants or contracts for model demonstration
programs which will be coordinated with local rape crisis
centers for the development and implementation of quality rape
prevention and education curricula and for local programs to
provide services to student sexual offense victims.
[(d) Eligibility.--No institution of higher education or
consortium of such institutions shall be eligible to be awarded
a grant or contract under this section unless--
[(1) its student code of conduct, or other written
policy governing student behavior explicitly prohibits
all forms of sexual offenses;
[(2) it has in effect and implements a written policy
requiring the disclosure to the victim of any sexual
offense of the outcome of any investigation by campus
police or campus disciplinary proceedings brought
pursuant to the victim's complaint against the alleged
perpetrator of the sexual offense, except that nothing
in this section shall be interpreted to authorize
disclosure to any person other than the victim; and
[(3) the Secretary shall give priority to those
applicants who do not have an established campus
education program regarding sexual offenses.
[(e) Applications.--
[(1) In general.--In order to be eligible to be
awarded a grant or contract under this section for any
fiscal year, an institution of higher education or
consortium of such institutions shall submit an
application to the Secretary at such time and in such
manner as the Secretary shall prescribe.
[(2) Contents.--Each application submitted under
paragraph (1) shall--
[(A) set forth the activities and programs to
be carried out with funds granted under this
part;
[(B) contain an estimate of the cost for the
establishment and operation of such programs;
[(C) explain how the program intends to
address the issue of sexual offenses;
[(D) provide assurances that the Federal
funds made available under this section shall
be used to supplement and, to the extent
practical, to increase the level of funds that
would, in the absence of such Federal funds, be
made available by the applicant for the purpose
described in this part, and in no case to
supplant such funds; and
[(E) include such other information and
assurances as the Secretary reasonably
determines to be necessary.
[(f) Grantee Reporting.--Upon completion of the grant or
contract period under this section, the grantee institution or
consortium of such institutions shall file a performance report
with the Secretary explaining the activities carried out
together with an assessment of the effectiveness of those
activities in achieving the purposes of this section. The
Secretary shall suspend funding for an approved application if
an applicant fails to submit an annual performance report.
[(g) Definitions.--For purposes of this part, the term
``sexual offenses educational and prevention'' includes
programs that provide education seminars, peer-to-peer
counseling, operation of hotlines, self-defense courses, the
preparation of informational materials, and any other effort to
increase campus awareness of the facts about, or to help
prevent, sexual offenses.
[(h) General Terms and Conditions.--
[(1) Regulations.--Not later than 90 days after the
date of enactment of this section, the Secretary shall
publish proposed regulations implementing this section.
Not later than 150 days after such date, the Secretary
shall publish final regulations implementing this
section.
[(2) Reports to congress.--Not later than 180 days
after the end of each fiscal year for which grants or
contracts are awarded under this section, the Secretary
shall submit to the committees of the House of
Representatives and the Senate responsible for issues
relating to higher education and to crime, a report
that includes--
[(A) the amount of grants or contracts
awarded under this section;
[(B) a summary of the purposes for which
those grants or contracts were awarded and an
evaluation of their progress; and
[(C) a copy of each grantee report filed
pursuant to subsection (f) of this section.
[(i) Authorization of Appropriations.--For the purpose of
carrying out this part, there are authorized to be appropriated
$10,000,000 for the fiscal year 1993 and such sums as may be
necessary for each of the 4 succeeding fiscal years.
[PART E--OLYMPIC SCHOLARSHIPS
[SEC. 1543. OLYMPIC SCHOLARSHIPS.
[(a) Scholarships Authorized.--
[(1) In general.--The Secretary of Education is
authorized to provide financial assistance to the
United States Olympic Education Center or the United
States Olympic Training Center to enable such centers
to provide financial assistance to athletes who are
training at such centers and are pursuing postsecondary
education at institutions of higher education (as such
term is defined in section 481(a) of the Higher
Education Act of 1965).
[(2) Award determination.--The amount of financial
assistance provided to athletes described in paragraph
(1) shall be determined in accordance with such
athlete's financial need as determined in accordance
with part F of title IV of the Higher Education Act of
1965.
[(b) Eligibility.--The Secretary of Education shall ensure
that financial assistance provided under this part is available
to both full-time and part-time students who are athletes at
centers described in subsection (a).
[(c) Application.--Each center desiring financial assistance
under this section shall submit an application to the Secretary
of Education at such time, in such manner and accompanied by
such information as the Secretary may reasonably require.
[(d) Authorization of Appropriations.--There are authorized
to be appropriated $5,000,000 for fiscal year 1993 and such
sums as may be necessary for each of the 4 succeeding fiscal
years to carry out this section.]
* * * * * * *
[PART G--ADVANCED PLACEMENT FEE PAYMENT PROGRAM
[SEC. 1545. ADVANCED PLACEMENT FEE PAYMENT PROGRAM.
[(a) Program Established.--The Secretary of Education is
authorized to make grants to States to enable the States to
reimburse individuals to cover part or all of the cost of
advance placement test fees, to low-income individuals who--
[(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 on 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 advance placement test fees the
State will pay on behalf of individual students;
[(2) require an assurance that any funds received
under this section shall only be used to pay advanced
placement test fees; and
[(3) contain such information as the Secretary may
require to demonstrate that the State will ensure that
the 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.
[(d) Supplementation of Funding.--Funds provided under this
section shall be used to supplement and not supplant other
Federal, State, and local or private funds available to assist
low-income individuals in paying for advanced placement
testing.
[(e) Regulations.--The Secretary of Education shall prescribe
such regulations as are necessary to carry out this section.
[(f) Authorization of Appropriations.--There are authorized
to be appropriated $3,600,000 for fiscal year 1993 and such
sums as may be necessary for each of the 4 succeeding fiscal
years to carry out the provisions of this section.
[(g) Definition.--As used 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.]
* * * * * * *
MINORITY VIEWS
We have mixed views on this bill. We support the major
provisions of H.R. 720 concerning privatization of the Student
Loan Marketing Association (Sallie Mae) and the College
Construction Loan Insurance Association (Connie Lee). However,
we vigorously object to the provisions in this bill that repeal
53 existing higher education programs. These provisions were
repealed without the benefit of any hearing, public comment
period, or the opportunity for interested parties to inform us
of their views or concerns. This is not the way this committee
should conduct its business.
privatization of sallie mae and connie lee
We have worked with the majority in a bi-partisan manner on
privatization of Sallie Mae and Connie Lee. With the majority,
we met with the Departments of Education and Treasury numerous
times to discuss this matter. We met with two affected entities
to develop privatization legislation agreeable to them as well.
The overwhelming evidence supports privatizing Sallie Mae and
Connie Lee.
Deputy Assistant Secretary of the Treasury, Darcy Bradbury,
underscored the fundamental reason for privatization when she
testified before our committee. Secretary Bradbury stated:
The Treasury has for a number of years, in Democratic
and Republican Administrations, believed it is
appropriate to wean a GSE (Government-sponsored
enterprise) from Federal sponsorship once the GSE
becomes economically viable and successfully fulfills
the purpose for which it was created with Federal
sponsorship, or when the purpose for which it was
created ceases to exist.
The Treasury Department has concluded, and the Education
Department concurs, that both Sallie Mae and Connie Lee have
met this privatization threshold. We agree, and other witnesses
before this committee have come to the same conclusion. For
instance, Frederick Khedouri, senior managing director of Bear,
Stearns & Co. Inc., a worldwide investment banking firm, stated
that:
Salle Mae is an excellent example of a Federal
program--and creating and maintaining a government
sponsored enterprise is most definitely a Federal
program even though no budget outlays may ever result--
for which the time has come to ask a simple question:
Will the policy objectives for which Sallie Mae was
established still be met if it is no longer a
government sponsored enterprise? The answer to this
first question is a resounding yes.
In its own behalf, Sallie Mae set out three compelling
reasons for its privatization (1) it has accomplished its
original mission; (2) privatizing Sallie Mae will reduce
unnecessary borrowing with federal backing; and (3) privatizing
Sallie Mae will prove that the government can successfully
spin-off a GSE, in effect demonstrating that what was created
as a public-private partnership can become a totally private
venture once government support is no longer needed.
We think these are compelling reasons to privatize Sallie
Mae. We also think that same logic applies to Connie Lee.
However, while we find the logic unassailable, we are
confounded by the fact that the majority treats the two
agencies--Sallie Mae and Connie Lee--differently in the manner
in which the two entities are privatized. Sallie Mae's
privatization can at best be termed ``contingent''; that is,
Sallie Mae will only be privatized if Sallie Mae's shareholders
agree to such a privatization. We appreciate the majority's
concern for the shareholders.
We are at a loss to understand why the majority does not
hold a similar concern for Connie Lee's shareholders. Under
H.R. 1720, Connie Lee would become privatized upon enactment of
the bill. If the federal government has determined that
privatization makes sense, and it appears that the Clinton
Administration agrees with this proposition (as does Sallie
Mae, Connie Lee and the witnesses who appeared before our
committee), we should privatize the agency. Certainly we should
take steps to ensure a smooth, functional transition from GSE
status to privatization.
However, we should not engage in the kind of contingent
privatization provided with respect to Sallie Mae. In our
opinion, the privatization model used in this bill for Connie
Lee is the appropriate model. And we will attempt to apply a
similar model to Sallie Mae as H.R. 1720 progresses.
higher education program repeals
We have strong objections to the provisions in H.R. 1720
that repeal a number of important higher education programs.
The majority seems to forget that we are the authorizing
committee, not the budget or appropriations committees. As
such, we should set out an agenda for what is actually needed
to make this a better and more productive nation. It is our
responsibility to identify important national needs and then to
make a strong and convincing case as to why significant federal
investments are important, in fact, essential. If this
Committee does not make that case, it is hard to imagine that
any other committee will.
Unfortunately, in this case the majority is turning its
back on that responsibility. H.R. 1720 repeals 53 higher
education programs. Many of these programs are receiving funds
in the current fiscal year. Thus, the argument that these
programs are ones that have either gone unfunded or received
small amounts of funding lacks merit. The currently funded
programs are receiving close to $100 million this year. Only in
Washington, D.C. would anyone claim that $100 million is not
much money at all.
To the students who receive Harris or Javits Fellowships,
such programs signify the difference between continuing their
education or dropping out of school. We do not think that
programs that can have such a significant impact on the lives
of thousands of students should be repealed or dismissed as
insignificant. If we are to repeal any of these programs, they
deserve to be looked at more carefully than the majority has
done.
America is a great nation with an unparalleled recognition
of the concerns of people with disabilities. Our federal
programs offer exemplary leadership striving for new ways to
improve the quality of life for citizens with disabilities.
But since the beginning of this Congress, Republicans have
set about to change all of that. They have thrown thousands of
children off of Supplemental Security Income (SSI); they have
eviscerated the Rehabilitation Act; and their Majority Leader
in the House wants to repeal the Americans with Disabilities
Act, a law which has paved the way for people with disabilities
to fully participate in the workforce and to perform everyday
activities that most of us take for granted (like the ability
to make a phone call from a pay phone).
Now, in this bill, Section 301(a)(25) proposes to repeal
faculty development grants, which prepare faculty for the
instruction of students with disabilities and train faculty to
prepare students with disabilities for postsecondary
educational opportunities. For example, these grants can be
used by faculty to develop course materials which are
accessible to students with disabilities, i.e., produced in a
variety of alternative formats so that students with
disabilities can read the same documents as their classmates.
Not only are individuals with disabilities under attack,
but so are other minority groups. Section 301(a)(34) of the
bill would repeal the faculty development fellowship program
for underrepresented populations. The program rewards
institutions with a record of enhancing higher education access
for underrepresented groups with funds to provide fellowships
or faculty development programs to individuals from
underrepresented groups who are employed as faculty but have
not earned a doctoral degree, and individuals from
underrepresented groups with financial need who wish to obtain
a doctoral degree and enter the higher education professorate.
This program requires repayment or service as a faculty
member for each year of fellowship support received. Therefore,
it is a program which reaps its own reward. The program also
spurs institutions toward greater efforts in areas of national
need, helping to produce the highest-quality future college
faculty with an unmatched depth and breadth of experience and
knowledge.
Section 301(a)(32) also undermines minority participation
in graduate education by repealing the Harris fellowship
program. This program is the largest, longest-serving trainee
program offered to women and minorities anywhere in the federal
government. It assists approximately 938 graduate and
professional students who demonstrate financial need.
Harris fellowships represent an extremely effective
approach to increasing the enrollment of students who are
underrepresented in graduate education. Eliminating the program
would seriously erode our nation's capacity to ensure equal
opportunity in graduate education. The only practical
alternative to existing fellowship dollars in increased
borrowing and greater dependence on loans. As it stands, loans
are necessary in most areas of higher education. To argue who
should substitute for fellowships is short-sighted.
At the heart of our educational system lie the nation's
libraries. But not even these centers of community learning are
being spared in the Republicans' haste to slash the budget.
This bill repeals Title II of the Higher Education Act relating
to academic libraries and information services; Section 607
relating to foreign language periodicals; and Part A of Title
VII relating to academic and library facilities.
Title II is currently funded at $11.5 million, a level that
makes a major difference in recruitment of minorities in the
field of library science and in supporting doctoral candidates
who later replenish faculty in library schools. Additionally,
Title II supports major research and demonstration projects in
library science which otherwise would not exist.
Section 607 provides grants to libraries to acquire and
provide access to research materials published outside the
United States. The ability to acquire comprehensive collections
helps universities to produce experts knowledgeable about world
conditions, as well as business people able to compete in
foreign markets.
Part A of Title VII provides grants for construction,
improvement, renovation, and repair of academic and library
facilities, as well as improvement of major technological and
communications equipment. It cannot be argued that this program
is not needed. At the end of the 1980's, the capital renewal
and replacement needs of U.S. colleges and universities totaled
$60 billion, $38 billion of which was needed by public
institutions. We have not done a great deal since then to close
that gap.
Part A of Title VII is a vehicle through which the federal
government can provide vital capital investments in higher
education in a far more rational way than the current haphazard
process of earmarking. Moreover, without this program, small
college and community college library facilities may never
attain the technological upgrades they so badly need. The
information superhighway will be a futile learning tool if our
students cannot gain access to it.
H.R. 1720 also repeals the authority for State
Postsecondary Review Entities. The majority notes in its report
that student loan defaults have declined in the past few years.
We contend that this is the case because we applied more
scrutiny, not less, to the student aid programs. Repealing
SPREs sends a countervailing message. It removes one of the
methods we have in place to make sure that students are not
``ripped off'' by unscrupulous schools. By repealing SPREs the
majority is not serious about fraud and abuse in our student
aid programs. Does the majority not care whether gatekeepers
are stationed to make sure that taxpayers dollars are wisely
spent?
We agree that some SPRE reform is necessary. But repealing
SPREs is not equivalent to SPRE reform. And it is definitely
not the best solution to whatever problems may exist. We hope
to revisit this issue as H.R. 1720 progresses.
William L. Clay.
Dale E. Kildee.
Matthew G. Martinez.
Tom Sawyer.
Patsy T. Mink.
Jack Reed.
Eliot L. Engel.
Robert C. Scott.
Lynn Woolsey.
Mel Reynolds.
George Miller.
Pat Williams.
Major R. Owens.
Donald M. Payne.
Tim Roemer.
Xavier Becerra.
Gene Green.
Carlos Romero-Barcelo.
ADDITIONAL MINORITY VIEWS OF MR. SCOTT
The opportunities offered by higher education have inspired
the dreams of individuals seeking to participate in and
contribute to our market economy. But for many women and
minorities, these dreams have remained dreams deferred. With
this in mind, I find it disheartening that the Majority chose
the path of least resistance by repealing higher education
programs in H.R. 1720 that benefit women and minorities;
specifically, Grants to Institutions and Consortia to Encourage
Women and Minority Participation in Graduate Education and the
Women and Minorities Science and Engineering Outreach
Demonstration Program.
The record before this Committee establishes that shifting
demographics will result in a workforce where women,
minorities, and immigrants constitute a majority. In addition,
a global economy and emerging technologies demand that new
entrants into the workforce possess advanced skills. In light
of these issues, access to graduate education and
``pipelining'' youth into science and engineering disciplines
are critical to preparing women and minorities to fully
participate in the workforce of the future.
The American Council on Education (ACE) states in its
report ``Environments of Support'' that ``[t]he number of
doctorates awarded to African Americans has decreased by 20%
over the last decade. While the Hispanic and American Indian
doctorate pools have made relative gains, the numbers are still
very small and do not reflect their share of the U.S.
population. In certain areas of study, minority representation
is nearly non-existent. In mathematics, African Americans
received only four of 416 doctorates awarded to U.S. citizens
in 1990; Hispanics received ten and American Indians, one.''
These numbers are hardly representative of their populations
and are cause for great concern as we assess our readiness for
the 21st Century. It is only through continuing our investment
in graduate education for women and minorities that we can
begin to improve the odds for maintaining a U.S. presence in
this global economy.
The ACE report also states that ``efforts to increase the
success of minorities in graduate education will improve
graduate education for all students . . . the changing needs of
all students [must] be identified and served through
challenging and supportive strategies designed for a changing
demography and different national priorities.'' The ``pipeline
approach'' is an effective strategy for accomplishing this
task. The pipeline approach targets children at an early age
for an academic career in a certain discipline. The Women and
Minorities Science and Engineering Outreach Demonstration
Program is an excellent example of the pipeline that builds a
pool of scientists and engineers that will be ready for the
21st Century and its challenges. It promotes a partnership
between higher education institutions and elementary and
secondary schools for the purpose of encouraging and developing
science and engineering interests in our youth.
In closing, women and minorities are part of a historically
underserved and overlooked population, yet they will move this
country into the 21st century. Eliminating programs designed to
prepare them for this role is not sound economic or education
policy. Moreover, it does not live up to the new name of this
Committee.
ADDITIONAL VIEWS ON H.R. 1720
We are in fundamental disagreement with the provisions in
H.R. 1720 that repeal the High School Equivalency Program (HEP)
and the College Assistance Migrant Program (CAMP) from the
Higher Education Act. These programs provide a unique service
to some of the most disadvantaged youth in our country and do
so with incredible success rates. The HEP helps migrant
students who have dropped out of high school get their GED.
CAMP assists migrant students in their first year of college
with both counseling and stipends. 69 percent of HEP students
successfully complete the program and 96 percent of CAMP
students complete their first year of college. There are no
other programs that can fill the gap that will be left if HEP
and CAMP are eliminated.
These programs bear no similarity to any other federal
education program either in the populations they serve, the
services they provide, or their extraordinary success rates.
Other programs do not and will not serve migrant youth, because
they do not have the expertise to know how and where to recruit
such children; do not offer the same services; and have far
lower success rates. Eliminating HEP and CAMP means slamming
the door shut to higher education for migrant students and
condemning them to a life of low-skilled jobs.
Over the past 20 years, because of HEP and CAMP, the higher
education community has begun to accept migrant youth into the
mainstream of postsecondary education. Much of their success
has do with the programs' strong academic influences. Most of
the programs are hosted by institutions of higher education,
including The Pennsylvania State University; California State
Universities at Sacramento and Fresno; St. Edwards University
in Austin, Texas; University of Oregon at Eugene; Boise State
University; University of Houston; University of Tennessee;
Inter American University, San German, Puerto Rico; University
of South Florida; and State University of New York at New
Paltz.
On many campuses, students served by the HEP program,
reside in campus dormitories and interact fully in the academic
environment of the university. Faculty members often
participate in activities with HEP students and assist them in
defining and clarifying their goals for future education. The
presence of such students on campus is mutually beneficial to
the student and the campus. As George R. Newkome, Vice
President for Research at the University of South Florida
stated, ``The determination, perseverance, and courage HEP
students demonstrate in the face of significant challenges
serve as a model for other students, faculty and staff to
emulate.''
William L. Clay.
Patsy T. Mink.
Robert C. Scott.
Matthew G. Martinez.
Major R. Owens.
Robert E. Andrews.
Lynn C. Woolsey.
Pat Williams.
Carlos Romero-Barcelo.
Eliot L. Engel.
George Miller.
Dale E. Kildee.
Tom Sawyer.
Jack Reed.
Gene Green.