[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.