[House Report 105-481]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                       HOUSE OF REPRESENTATIVES 

 2d Session                                                     105-481
_______________________________________________________________________


 
                  HIGHER EDUCATION AMENDMENTS OF 1998

                               ----------                              

                              R E P O R T

                                 of the

                              COMMITTEE ON
                      EDUCATION AND THE WORKFORCE
                        HOUSE OF REPRESENTATIVES

                                   on

                                 H.R. 6

                             together with

                    ADDITIONAL AND DISSENTING VIEWS

      [Including cost estimate of the Congressional Budget Office]





 April 17, 1998.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed


                   HIGHER EDUCATION AMENDMENTS OF 1998


105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES 

 2d Session                                                     105-481
_______________________________________________________________________


                  HIGHER EDUCATION AMENDMENTS OF 1998

                               ----------                              

                              R E P O R T

                                 of the

                              COMMITTEE ON
                      EDUCATION AND THE WORKFORCE
                        HOUSE OF REPRESENTATIVES

                                   on

                                 H.R. 6

                             together with

                    ADDITIONAL AND DISSENTING VIEWS

      [Including cost estimate of the Congressional Budget Office]





 April 17, 1998.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed


105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     105-481
_______________________________________________________________________


                  HIGHER EDUCATION AMENDMENTS OF 1998
_______________________________________________________________________


 April 17, 1998.--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 Education and the Workforce, 
                        submitted the following

                              R E P O R T

                             together with

                    ADDITIONAL AND DISSENTING VIEWS

                         [To accompany H.R. 6]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Education and the Workforce, to whom was 
referred the bill (H.R. 6) to extend the authorization of 
programs under the Higher Education Act of 1965, 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.

  This Act may be cited as the ``Higher Education Amendments of 1998''.

SEC. 2. TABLE OF CONTENTS.

  The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. References.
Sec. 4. General effective date.

                       TITLE I--GENERAL PROVISIONS

          Part A--Extension and Revision of General Provisions

Sec. 101. Redesignation and transfer of provisions.
Sec. 102. Definitions.
Sec. 103. Regulatory reform.

   Part B--Performance-based Organization for the Delivery of Federal 
                      Student Financial Assistance.

Sec. 111. Performance-based organization for the delivery of Federal 
          student financial assistance.

         TITLE II--POSTSECONDARY EDUCATION IMPROVEMENT PROGRAMS

Sec. 201. Urban community service.
Sec. 202. Fund for the Improvement of Postsecondary Education.
Sec. 203. Grants to States for workplace and community transition 
          training for incarcerated youth offenders.
Sec. 204. Advanced placement fee payment program.
Sec. 205. Teacher quality enhancement grants.
Sec. 206. Additional repeal.

                      TITLE III--INSTITUTIONAL AID

Sec. 301. Strengthening institutions.
Sec. 302. Historically black colleges and universities.
Sec. 303. Minority science and engineering improvement program.
Sec. 304. General provisions.

                      TITLE IV--STUDENT ASSISTANCE

                       Part A--Grants to Students

Sec. 401. Pell grants.
Sec. 402. Federal TRIO programs.
Sec. 403. National early intervention and partnership program.
Sec. 404. Repeals.
Sec. 405. Establishment of new programs.
Sec. 406. Federal supplemental educational opportunity grants.
Sec. 407. Grants to States for State student incentives.
Sec. 408. Special programs for students whose families are engaged in 
          migrant and seasonal farmwork.
Sec. 409. Byrd scholarships.

              Part B--Federal Family Education Loan Program

Sec. 411. Limitation repealed.
Sec. 412. Advances to reserve funds.
Sec. 413. Guaranty agency reforms.
Sec. 414. Scope and duration of program.
Sec. 415. Limitations on individual federally insured loans and Federal 
          loan insurance.
Sec. 416. Applicable interest rates.
Sec. 417. Federally guaranteed student loans.
Sec. 418. Voluntary agreements with guaranty agencies.
Sec. 419. Federal consolidation loans.
Sec. 420. Disbursement.
Sec. 421. Unsubsidized Stafford loans.
Sec. 422. Repeal of loan forgiveness.
Sec. 423. Legal powers and responsibilities.
Sec. 424. Student loan information.
Sec. 425. Definitions.
Sec. 426. Discharge.
Sec. 427. Cancellation of loans for certain public service.
Sec. 428. Debt management options.
Sec. 429. Special allowances.

                   Part C--Federal Work-Study Programs

Sec. 435. Amendments to part C.

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

Sec. 436. Selection of institutions.
Sec. 437. Terms and conditions.
Sec. 438. Contracts.
Sec. 439. Funds for administrative expenses.
Sec. 440. Authority to sell loans.
Sec. 441. Cancellation of loans for certain public service.

                      Part E--Federal Perkins Loans

Sec. 445. Amendments to part E.

                          Part F--Need Analysis

Sec. 446. Cost of attendance.
Sec. 447. Data elements.
Sec. 448. Family contribution for dependent students.
Sec. 449. Family contribution for independent students without 
          dependents other than a spouse.
Sec. 450. Family contribution for independent students with dependents 
          other than a spouse.
Sec. 451. Regulations; updated tables and amounts.
Sec. 452. Discretion of student financial aid administrators.
Sec. 453. Treatment of other financial assistance.

                       Part G--General Provisions

Sec. 461. Definitions.
Sec. 462. Master calendar.
Sec. 463. Forms and regulations.
Sec. 464. Student eligibility.
Sec. 465. State court judgments.
Sec. 466. Information for students.
Sec. 467. National student loan data system.
Sec. 468. Program participation agreements.
Sec. 469. Quality assurance and regulatory simplification.
Sec. 470. Distance education demonstration programs.
Sec. 471. Garnishment requirements.
Sec. 472. Administrative subpoena authority.
Sec. 473. Advisory committee on student financial assistance.
Sec. 474. Meetings and negotiated rulemaking.

                        Part H--Program Integrity

Sec. 476. State postsecondary review program.
Sec. 477. Accrediting agency recognition.
Sec. 478. Eligibility and certification procedures.
Sec. 479. Program review and data.

                    TITLE V--DEVELOPING INSTITUTIONS

Sec. 501. Establishment of new title V.

         TITLE VI--INTERNATIONAL AND GRADUATE EDUCATION PROGRAMS

Sec. 601. International and foreign language studies.
Sec. 602. Business and international education programs.
Sec. 603. Institute for international public policy.
Sec. 604. General provisions.
Sec. 605. Transfer and reauthorization of graduate assistance in areas 
          of national need program.

  TITLE VII--CONSTRUCTION, RECONSTRUCTION, AND RENOVATION OF ACADEMIC 
                               FACILITIES

Sec. 701. Extension of prior rights and obligations.
Sec. 702. Repeal of part A.
Sec. 703. Extension of authorization of part B.
Sec. 704. Extension of authorization of part C.

                    TITLE VIII--ADDITIONAL PROVISIONS

Sec. 801. Study of transfer of credits.
Sec. 802. Study of market mechanisms in Federal student loan programs.
Sec. 803. Improvements in market information and public accountability 
          in higher education.
Sec. 804. Differential regulation.
Sec. 805. Annual report on cost of higher education.
Sec. 806. Repeals of previous higher education amendments provisions.
Sec. 807. Limitation.

                   TITLE IX--AMENDMENTS TO OTHER LAWS

                    Part A--Education of the Deaf Act

                      SUBPART 1--GALLAUDET UNIVERSITY

Sec. 901. Board of Trustees membership.
Sec. 902. Elementary and secondary education programs.
Sec. 903. Agreement with Gallaudet University.

                SUBPART 2--NATIONAL INSTITUTE FOR THE DEAF

Sec. 911. Agreement for the National Technical Institute for the Deaf.

                       SUBPART 3--GENERAL PROVISIONS

Sec. 921. Definitions.
Sec. 922. Audits.
Sec. 923. Reports.
Sec. 924. Monitoring, evaluation, and reporting.
Sec. 925. Responsibility of the liaison.
Sec. 926. Federal endowment programs.
Sec. 927. Scholarship program.
Sec. 928. Oversight and effect of agreements.
Sec. 929. International students.
Sec. 930. Authorization of appropriations.

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

Sec. 951. Tribally controlled colleges and universities.
Sec. 952. Reauthorization of provisions from Higher Education Amendments 
          of 1992.
Sec. 953. Reauthorization of Navajo Community College Act.

                 TITLE X--FACULTY RETIREMENT PROVISIONS

Sec. 1001. Voluntary retirement incentive plans.

SEC. 3. REFERENCES.

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

SEC. 4. GENERAL EFFECTIVE DATE.

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

                      TITLE I--GENERAL PROVISIONS

          PART A--EXTENSION AND REVISION OF GENERAL PROVISIONS

SEC. 101. REDESIGNATION AND TRANSFER OF PROVISIONS.

  (a) In General.--
          (1) Repeal of title i.--Title I (20 U.S.C. 1001 et seq.) is 
        repealed.
          (2) Repeal of title xii provisions.--The following sections 
        of title XII are repealed: sections 1206, 1211, and 1212 (20 
        U.S.C. 1145a, 1145e, 1145f)
          (3) Redesignations.--
                  (A) Title XII is redesignated as title I.
                  (B) Sections 1201, 1202, and 1203 (20 U.S.C. 1141, 
                1142, 1143) are redesignated as sections 101, 102, and 
                103, respectively.
                  (C) Section 1204(b), as redesignated by section 251 
                of the Higher Education Amendments of 1968 (20 U.S.C. 
                1144(b); 82 Stat. 1042), is redesignated as section 
                104.
                  (D) Section 1204, as added by section 1201 of the 
                Education Amendments of 1980 (20 U.S.C. 1144a; 94 Stat. 
                1495), is redesignated as section 105.
                  (E) Sections 1205, 1207, 1208, 1209, 1210, and 1213 
                (20 U.S.C. 1145, 1145b, 1145c, 1145d, 1145d-1, and 
                1145g) are redesignated as sections 106 through 111, 
                respectively.
          (4) Transfer.--Title I (including sections 101 through 111), 
        as redesignated by paragraph (3), is transferred to immediately 
        follow the short title of the Higher Education Act of 1965 (20 
        U.S.C. 1001 note).
  (b) Internal Cross-References.--The Higher Education Act of 1965 is 
amended--
          (1) in section 106 (as redesignated by subsection (a)(3)), by 
        striking ``481(a)'' and inserting ``101(a)'';
          (2) in section 485(f)(1)(I), by striking ``section 1213'' and 
        inserting ``section 111'';
          (3) in section 498(j)(2), by striking ``section 1201(a)(2)'' 
        and inserting ``section 101(a)(2)'';
          (4) in section 591(d)(2), by striking ``section 1201(a)'' and 
        inserting ``section 101(a)(1)''; and
          (5) in section 631(a)(8), by striking ``section 1201(a)'' 
        each place it appears and inserting ``section 101(a)(1)''.
  (c) Conforming Amendments.--
          (1) Title 10, united states code.--Sections 2193(c)(1) and 
        2199(2) of title 10, United States Code, are each amended by 
        striking ``1201(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1141(a))'' and inserting ``101(a)(1) of the Higher 
        Education Act of 1965''.
          (2) Title 18, united states code.--Section 207(j)(2)(B) of 
        title 18, United States Code, is amended by striking 
        ``1201(a)'' and inserting ``101(a)(1)''.
          (3) Title 39, united states code.--Section 3626(b)(3) of 
        title 39, United States Code, is amended by striking ``1201(a) 
        of the Higher Education Act of 1965 (20 U.S.C. 1141(a))'' and 
        inserting ``101(a)(1) of the Higher Education Act of 1965''.
          (4) Anti-drug abuse act of 1988.--Section 3601(7) of the 
        Anti-Drug Abuse Act of 1988 (42 U.S.C. 11851(7)) is amended by 
        striking ``1201(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1141(a))'' and inserting ``101(a)(1) of the Higher 
        Education Act of 1965''.
          (5) Cranston-gonzalez national affordable housing act.--
        Section 457(9) of the Cranston-Gonzalez National Affordable 
        Housing Act (42 U.S.C. 12899f(9)) is amended by striking 
        ``1201(a)'' and inserting ``101(a)(1)''.
          (6) Department of state authorization act, fiscal years 1984 
        and 1985.--Section 803(1) of the Department of State 
        Authorization Act, Fiscal Years 1984 and 1985 (22 U.S.C. 
        4502(1)) is amended by striking ``1201(a)'' and inserting 
        ``101(a)(1)''.
          (7) Education for economic security act.--Section 3(6) of the 
        Education for Economic Security Act (20 U.S.C. 3902(6)) is 
        amended by striking ``1201(a)'' and inserting ``101(a)(1)''.
          (8) Elementary and secondary education act of 1965.--The 
        Elementary and Secondary Education Act of 1965 is amended--
                  (A) in section 7501(4) (20 U.S.C. 7601(4)) by 
                striking ``1201(a)'' and inserting ``101(a)(1)''; and
                  (B) in section 14101(17) (20 U.S.C. 8801(17)), by 
                striking ``1201(a)'' and inserting ``101(a)(1)''.
          (9) Federal agriculture improvement and reform act of 1996.--
        Section 922 of the Federal Agriculture Improvement and Reform 
        Act of 1996 (7 U.S.C. 2279c) is amended in subsections 
        (a)(1)(B) and (b)(1) by striking ``1201 of the Higher Education 
        Act of 1965 (20 U.S.C. 1141)'' and inserting ``101(a)(1) of the 
        Higher Education Act of 1965''.
          (10) Follow through act.--Section 670G(5) of the Follow 
        Through Act (42 U.S.C. 9877(5)) is amended by striking ``1201 
        of the Higher Education Act of 1965'' and inserting ``101(a)(1) 
        of the Higher Education Act of 1965''.
          (11) Food and agriculture act of 1977.--Section 1417(h)(1)(A) 
        of the Food and Agriculture Act of 1977 (7 U.S.C. 
        3152(h)(1)(A)) is amended by striking ``1201(a) of the Higher 
        Education Act of 1965 (20 U.S.C. 1141(a))'' and inserting 
        ``101(a)(1) of the Higher Education Act of 1965''.
          (12) Foreign relations authorization act, fiscal years 1986 
        and 1987.--Section 603(d) of the Foreign Relations 
        Authorization Act, Fiscal Years 1986 and 1987 (20 U.S.C. 
        4703(d)) is amended by striking ``1201(a)'' and inserting 
        ``101(a)(1)''.
          (13) General education provisions act.--Section 
        429(d)(2)(B)(ii) of the General Education Provisions Act (20 
        U.S.C. 1228c(d)(2)(B)(ii)) is amended by striking ``1201(a)'' 
        and inserting ``101(a)(1)''.
          (14) Harry s truman memorial scholarship act.--Section 3(4) 
        of the Harry S Truman Memorial Scholarship Act (20 U.S.C. 
        2002(4)) is amended by striking ``1201(a)'' and inserting 
        ``101(a)(1)''.
          (15) Head start act.--Section 649(c)(3) of the Head Start Act 
        (42 U.S.C. 9844(c)(3)) is amended by striking ``1201(a) of the 
        Higher Education Act of 1965 (20 U.S.C. 1141(a))'' and 
        inserting ``101(a)(1) of the Higher Education Act of 1965''.
          (16) Higher education amendments of 1992.--Section 
        1371(a)(1)(B) of the Higher Education Amendments of 1992 (25 
        U.S.C. 3371(a)(1)(B)) is amended by striking ``1201(a)'' and 
        inserting ``101(a)(1)''.
          (17) Intelligence authorization act, fiscal year 1992.--
        Section 808(3) of the Intelligence Authorization Act, Fiscal 
        Year 1992 (20 U.S.C. 1908(3)) is amended by striking ``1201(a) 
        of the Higher Education Act of 1965 (20 U.S.C. 1141(a))'' and 
        inserting ``101(a)(1) of the Higher Education Act of 1965''.
          (18) Job training partnership act.--The Job Training 
        Partnership Act is amended--
                  (A) in section 4(12) (29 U.S.C. 1503(12)), by 
                striking ``1201(a)'' and inserting ``101(a)(1)''; and
                  (B) in section 141(d)(3)(B) (29 U.S.C. 
                1551(d)(3)(B)), by striking ``1201(a) of the Higher 
                Education Act of 1965 (20 U.S.C. 1141(a))'' and 
                inserting ``101(a)(1) of the Higher Education Act of 
                1965''.
          (19) Justice system improvement act of 1979.--Section 
        901(a)(17) of the Justice System Improvement Act of 1979 (42 
        U.S.C. 3791(a)(17)) is amended by striking ``1201(a) of the 
        Higher Education Act of 1965 (20 U.S.C. 1141(a))'' and 
        inserting ``101(a)(1) of the Higher Education Act of 1965''.
          (20) Mutual educational and cultural exchange act of 1961.--
        Section 112(a)(8) of the Mutual Educational and Cultural 
        Exchange Act of 1961 (22 U.S.C. 2460(a)(8)) is amended by 
        striking ``1201(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1141(a))'' and inserting ``101(a)(1) of the Higher 
        Education Act of 1965''.
          (21) National and community service act of 1990.--Sections 
        101(13) and 166(6) of the National and Community Service Act of 
        1990 (42 U.S.C. 12511(13); 12626(6)) are each amended by 
        striking ``1201(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1141(a))'' and inserting ``101 of the Higher Education 
        Act of 1965''.
          (22) National defense authorization act for fiscal year 
        1987.--Section 1403(4) of the National Defense Authorization 
        Act for Fiscal Year 1987 (20 U.S.C. 4702(4)) is amended by 
        striking ``1201(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1141(a))'' and inserting ``101(a)(1) of the Higher 
        Education Act of 1965''.
          (23) National defense authorization act for fiscal year 
        1993.--The National Defense Authorization Act for Fiscal Year 
        1993 is amended in section 4451(b)(1) (10 U.S.C. 2701 note) by 
        striking ``1201(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1141(a)'' and inserting ``101(a)(1) of the Higher 
        Education Act of 1965''.
          (24) National defense authorization act for fiscal years 1992 
        and 1993.--Section 3132(b)(1) of the National Defense 
        Authorization Act for Fiscal Years 1992 and 1993 (42 U.S.C. 
        7274e(b)(1) is amended by striking ``1201(a) of the Higher 
        Education Act of 1965 (20 U.S.C. 1141(a)'' and inserting 
        ``101(a)(1) of the Higher Education Act of 1965''.
          (25) National defense authorization act for fiscal year 
        1994.--The National Defense Authorization Act for Fiscal Year 
        1994 is amended--
                  (A) in section 841(c)(2) (10 U.S.C. 2324(2) note), by 
                striking ``1201(a) of the Higher Education Act of 1965 
                (20 U.S.C. 1141(a))'' and inserting ``101(a)(1) of the 
                Higher Education Act of 1965'';
                  (B) in section 1333(i)(3) (10 U.S.C. 2701 note), by 
                striking ``1201(a) of the Higher Education Act of 1965 
                (20 U.S.C. 1141(a))'' and inserting ``101(a)(1) of the 
                Higher Education Act of 1965''; and
                  (C) in section 1334(k)(3) (10 U.S.C. 2701 note), by 
                striking ``1201(a) of the Higher Education Act of 1965 
                (20 U.S.C. 1141(a))'' and inserting ``101(a)(1) of the 
                Higher Education Act of 1965''.
          (26) National education statistics act of 1994.--Section 
        402(c)(3) of the National Education Statistics Act of 1994 (20 
        U.S.C. 9001(c)(3)) is amended by striking ``1201(a)'' and 
        inserting ``101(a)(1)''.
          (27) Older americans act of 1965.--Section 102(32) of the 
        Older Americans Act of 1965 (42 U.S.C. 3002(32)) is amended by 
        striking ``1201(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1141(a))'' and inserting ``101(a)(1) of the Higher 
        Education Act of 1965''.
          (28) Omnibus parks and public lands management act of 1996.--
        Section 1007(c)(5) of the Omnibus Parks and Public Lands 
        Management Act of 1996 (16 U.S.C. 698u-5) is amended by 
        striking ``1201(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1141(a))'' and inserting ``101(a)(1) of the Higher 
        Education Act of 1965''.
          (29) Public law 85 of the 67th congress.--Public Law 85 of 
        the 67th Congress (42 Stat. 208; 25 U.S.C. 13), popularly 
        referred to as the Snyder Act, is amended by striking ``1201'' 
        and inserting ``101(a)(1)''.
          (30) Communication act of 1934.--Section 223(h)(4) of the 
        Communication Act of 1934 (47 U.S.C. 223(h)(4)) is amended by 
        striking ``1201 of the Higher Education Act of 1965 (20 U.S.C. 
        1141)'' and inserting ``101(a)(1) of the Higher Education Act 
        of 1965''.
          (31) Federal water pollution control act.--Section 112(a)(1) 
        of the Federal Water Pollution Control Act (33 U.S.C. 
        1262(a)(1)) is amended by striking ``1201'' and inserting 
        ``101(a)(1)''.
          (32) Carl d. perkins vocational and applied technology 
        education act.--Section 347(2)(A) of the Carl D. Perkins 
        Vocational and Applied Technology Education Act (20 U.S.C. 
        2394(2)(A)) is amended by striking ``1201(a)'' and inserting 
        ``101(a)(1)''.
          (33) Energy policy and conservation act.--Section 
        362(f)(5)(A) of the Energy Policy and Conservation Act (42 
        U.S.C. 6322(f)(5)(A)) is amended by striking ``1201(a) of the 
        Higher Education Act of 1965 (20 U.S.C. 1141(a))'' and 
        inserting ``101(a)(1) of the Higher Education Act of 1965''.
          (34) James madison memorial fellowship act.--Section 815 of 
        the James Madison Memorial Fellowship Act (20 U.S.C. 4514) is 
        amended--
                  (A) in paragraph (3), by striking ``1201(a)'' and 
                inserting ``101(a)(1)''; and
                  (B) in paragraph (4), by striking ``1201(d)'' and 
                inserting ``101(a)(1)''.
          (35) Rehabilitation act of 1973.--Sections 7(32) and 
        101(a)(7)(A)(iv)(II) of the Rehabilitation Act of 1973 (29 
        U.S.C. 706(32); 29 U.S.C. 721(a)(7)(A)(iv)(II)) are each 
        amended by striking ``1201(a) of the Higher Education Act of 
        1965 (20 U.S.C. 1141(a))'' and inserting ``101(a)(1) of the 
        Higher Education Act of 1965''.
          (36) Technology related assistance for individuals with 
        disabilities act of 1988.--Section 3(8) of the Technology 
        Related Assistance for Individuals with Disabilities Act of 
        1988 (29 U.S.C. 2202(8)) is amended by striking ``1201(a) of 
        the Higher Education Act of 1965 (20 U.S.C. 1141(a))'' and 
        inserting ``101(a)(1) of the Higher Education Act of 1965''.
          (37) Tribally controlled community college assistance act of 
        1978.--The Tribally Controlled Community College Assistance Act 
        of 1978 is amended--
                  (A) in section 2(a)(5) (25 U.S.C. 1801(a)(5)), by 
                striking ``1201(a)'' and inserting ``101(a)(1)''; and
                  (B) in section 113(b)(2) (25 U.S.C. 1813(b)(2)), by 
                striking ``1201(a) of the Higher Education Act of 1965 
                (20 U.S.C. 1141(a))'' and inserting ``101(a)(1) of the 
                Higher Education Act of 1965''.
          (38) Violent crime control and law enforcement act of 1994.--
        The Violent Crime Control and Law Enforcement Act of 1994 is 
        amended--
                  (A) in sections 200103 and 200202 (42 U.S.C. 14092; 
                14111), by striking ``1201(a) of the Higher Education 
                Act of 1965 (20 U.S.C. 1141(a))'' and inserting 
                ``101(a)(1) of the Higher Education Act of 1965''; and
                  (B) in section 30401(b) (42 U.S.C. 13791(b)), by 
                striking ``a public'' through ``that Act'' and 
                inserting ``an elementary school as defined in section 
                14101(14) of the Elementary and Secondary Education Act 
                of 1965, and a secondary school as defined by section 
                14101(25) of such Act, which are public institutions''.
          (39) School-to-work opportunities act of  1994.--Section 4 of 
        the School-to-Work Opportunities Act of 1994 (20 U.S.C. 6103) 
        is amended--
                  (A) in paragraph (11)(B)(viii), by striking ``section 
                481(b)'' and inserting ``section 101(a)(3)''; and
                  (B) in paragraph (12), by striking ``section 481'' 
                and inserting ``section 101(a)(2)'';
          (40) National and community service act of 1990.--Section 
        148(g) of the National and Community Service Act of 1990 (42 
        U.S.C. 12604(g)) is amended by striking ``section 481(a) of the 
        Higher Education Act of 1965 (20 U.S.C. 1088(a))'' and 
        inserting ``section 101(a)(2) of the Higher Education Act of 
        1965''.

SEC. 102. DEFINITIONS.

  (a) Institution of Higher Education.--Section 101 (as redesignated by 
section 101(a)(3) of this Act) is amended by striking subsections (a) 
and (b) and inserting the following:
  ``(a) Institution of Higher Education.--
          ``(1) In general.--Subject to paragraphs (2) through (4) of 
        this subsection:
                  ``(A) Principal criteria.--The term `institution of 
                higher education' means an educational institution in 
                any State that--
                          ``(i) admits as regular students only persons 
                        having a certificate of graduation from a 
                        school providing secondary education, or the 
                        recognized equivalent of such a certificate;
                          ``(ii) is legally authorized within such 
                        State to provide a program of education beyond 
                        secondary education;
                          ``(iii) provides an educational program for 
                        which it awards a bachelor's degree or provides 
                        not less than a two-year program that is 
                        acceptable for full credit toward such a 
                        degree;
                          ``(iv) is a public or other nonprofit 
                        institution; and
                          ``(v) is accredited by a nationally 
                        recognized accrediting agency or association, 
                        or if not so accredited, is an institution that 
                        has been granted preaccreditation status by 
                        such an agency or association that has been 
                        recognized by the Secretary for the granting of 
                        preaccreditation status, and the Secretary has 
                        determined that there is satisfactory assurance 
                        that the institution will meet the 
                        accreditation standards of such an agency or 
                        association within a reasonable time.
                  ``(B) Additional institutions included.--The term 
                `institution of higher education' also includes--
                          ``(i) any school that provides not less than 
                        a one-year program of training to prepare 
                        students for gainful employment in a recognized 
                        occupation and that meets the provision of 
                        clauses (i), (ii), (iv), and (v) of 
                        subparagraph (A); and
                          ``(ii) a public or nonprofit private 
                        educational institution in any State that, in 
                        lieu of the requirement in subparagraph (A)(i), 
                        admits as regular students persons who are 
                        beyond the age of compulsory school attendance 
                        in the State in which the institution is 
                        located.
                  ``(C) List of accrediting agencies.--For purposes of 
                this subsection, the Secretary shall publish a list of 
                nationally recognized accrediting agencies or 
                associations that he determines, pursuant to subpart 2 
                of part H of title IV of this Act, to be reliable 
                authority as to the quality of the education or 
                training offered.
          ``(2) Definition for purposes of title iv programs.--
                  ``(A) Inclusion of additional institutions.--Subject 
                to subparagraphs (B) through (D) of this paragraph, the 
                term `institution of higher education' for purposes of 
                title IV of this Act includes, in addition to the 
                institutions covered by the definition in paragraph (1) 
                of this subsection--
                          ``(i) a proprietary institution of higher 
                        education;
                          ``(ii) a postsecondary vocational 
                        institution; and
                          ``(iii) only for the purposes of part B of 
                        title IV, an institution outside the United 
                        States that is comparable to an institution of 
                        higher education as defined in paragraph (1) of 
                        this subsection and that has been approved by 
                        the Secretary for the purpose of part B of 
                        title IV.
                  ``(B) Institutions outside the united states.--
                          ``(i) For the purpose of qualifying as an 
                        institution under subparagraph (A)(iii) of this 
                        paragraph, the Secretary shall establish 
                        criteria by regulation for the approval of 
                        institutions outside the United States and for 
                        the determination that such institutions are 
                        comparable to an institution of higher 
                        education as defined in paragraph (1) of this 
                        subsection. In the case of a graduate medical 
                        school outside the United States, such criteria 
                        shall include a requirement that a student 
                        attending a graduate medical school outside the 
                        United States is ineligible for loans made, 
                        insured, or guaranteed under part B of this 
                        title unless--
                                  ``(I)(aa) at least 60 percent of 
                                those enrolled and at least 60 percent 
                                of the graduates of the graduate 
                                medical school outside the United 
                                States were not persons described in 
                                section 484(a)(5) in the year preceding 
                                the year for which a student is seeking 
                                a loan under part B of title IV; and
                                  ``(bb) at least 60 percent of the 
                                individuals who were students or 
                                graduates of the graduate medical 
                                school outside the United States (both 
                                nationals of the United States and 
                                others) taking the examinations 
                                administered by the Educational 
                                Commission for Foreign Medical 
                                Graduates received a passing score in 
                                the year preceding the year for which a 
                                student is seeking a loan under part B 
                                of title IV; or
                                  ``(II) the institution's clinical 
                                training program was approved by a 
                                State as of January 1, 1992.
                          ``(ii) For the purpose of qualifying as an 
                        institution under subparagraph (A)(iii) of this 
                        paragraph, the Secretary shall establish an 
                        advisory panel of medical experts that shall--
                                  ``(I) evaluate the standards of 
                                accreditation applied to applicant 
                                foreign medical schools; and
                                  ``(II) determine the comparability of 
                                those standards to standards for 
                                accreditation applied to United States 
                                medical schools.
                        If such accreditation standards are determined 
                        not to be comparable, the foreign medical 
                        school shall be required to meet the 
                        requirements of paragraph (1) of this 
                        subsection.
                          ``(iii) The failure of an institution outside 
                        the United States to provide, release, or 
                        authorize release to the Secretary of such 
                        information as may be required by clause (i) of 
                        this subparagraph shall render such institution 
                        ineligible for the purpose of part B of title 
                        IV.
                          ``(iv) If, pursuant to this subparagraph, an 
                        institution loses eligibility to participate in 
                        the programs under title IV, then a student 
                        enrolled at such institution may, 
                        notwithstanding such loss of eligibility, 
                        continue to be eligible to receive a loan under 
                        part B while attending such institution for the 
                        academic year succeeding the academic year in 
                        which such loss of eligibility occurred.
                  ``(C) Limitations based on course of study or 
                enrollment.--An institution shall not be considered to 
                meet the definition of an institution of higher 
                education in subparagraph (A) of this paragraph if such 
                institution--
                          ``(i) offers more than 50 percent of such 
                        institution's courses by correspondence, unless 
                        the institution is an institution that meets 
                        the definition in section 521(4)(C) of the Carl 
                        D. Perkins Vocational and Applied Technology 
                        Education Act;
                          ``(ii) enrolls 50 percent or more of its 
                        students in correspondence courses, unless the 
                        institution is an institution that meets the 
                        definition in such section, except that the 
                        Secretary, at the request of such institution, 
                        may waive the applicability of this clause to 
                        such institution for good cause, as determined 
                        by the Secretary in the case of an institution 
                        of higher education that provides a 2-year or 
                        4-year program of instruction for which the 
                        institution awards an associate or 
                        baccalaureate degree;
                          ``(iii) has a student enrollment in which 
                        more than 25 percent of the students are 
                        incarcerated, except that the Secretary may 
                        waive the prohibition of this clause for a 
                        nonprofit institution that provides a 4-year or 
                        a 2-year program of instruction (or both) for 
                        which it awards a bachelor's or associate's 
                        degree or diploma, respectively; or
                          ``(iv) has a student enrollment in which more 
                        than 50 percent of the students do not have a 
                        high school diploma or its recognized 
                        equivalent and does not provide a 4-year or a 
                        2-year program of instruction (or both) for 
                        which it awards a bachelor's or associate's 
                        degree, respectively, except that the Secretary 
                        may waive the limitation contained in this 
                        clause if a nonprofit institution demonstrates 
                        to the satisfaction of the Secretary that it 
                        exceeds such limitation because it serves, 
                        through contracts with Federal, State, or local 
                        government agencies, significant numbers of 
                        students who do not have a high school diploma 
                        or its recognized equivalent.
                  ``(D) Limitations based on management.--An 
                institution shall not be considered to meet the 
                definition of an institution of higher education in 
                subparagraph (A) of this paragraph if--
                          ``(i) the institution, or an affiliate of the 
                        institution that has the power, by contract or 
                        ownership interest, to direct or cause the 
                        direction of the management or policies of the 
                        institution, has filed for bankruptcy; or
                          ``(ii) the institution, its owner, or its 
                        chief executive officer has been convicted of, 
                        or has pled nolo contendere or guilty to, a 
                        crime involving the acquisition, use, or 
                        expenditure of funds under title IV, or has 
                        been judicially determined to have committed 
                        fraud involving funds under title IV.
                  ``(E) Certification.--The Secretary shall certify an 
                institution's qualification as an institution of higher 
                education in accordance with the requirements of 
                subpart 2 of part H.
                  ``(F) Loss of eligibility.--An institution of higher 
                education shall not be considered to meet the 
                definition of an institution of higher education in 
                subparagraph (A) of this paragraph if such institution 
                is removed from eligibility for funds under title IV as 
                a result of an action pursuant to part H of title IV.
          ``(3) Proprietary institution of higher education.--
                  ``(A) Principal criteria.--For the purpose of this 
                subsection, the term `proprietary institution of higher 
                education' means a school that--
                          ``(i) provides an eligible program of 
                        training to prepare students for gainful 
                        employment in a recognized occupation;
                          ``(ii) meets the requirements of clauses (i) 
                        and (ii) of paragraph (1)(A) of this 
                        subsection;
                          ``(iii) does not meet the requirement of 
                        clause (iv) of paragraph (1)(A) of this 
                        subsection;
                          ``(iv) is accredited by a nationally 
                        recognized accrediting agency or association 
                        approved by the Secretary pursuant to part H of 
                        title IV;
                          ``(v) has been in existence for at least 2 
                        years; and
                          ``(vi) has at least 15 percent of its 
                        revenues from sources that are not derived from 
                        funds provided under title IV, as determined in 
                        accordance with regulations prescribed by the 
                        Secretary.
                In determining such 15 percent of revenues for purposes 
                of clause (vi), funds from programs of education and 
                training that do not meet the definition of an eligible 
                program in section 481(b), but are provided on a 
                contractual basis under Federal, State, or local 
                training programs, or under specialized business and 
                industry training requests, shall be counted.
                  ``(B) Additional institutions.--The term `proprietary 
                institution of higher education' also includes a 
                proprietary educational institution in any State that, 
                in lieuof the requirement in clause (i) of paragraph 
(1)(A) of this subsection, admits as regular students persons who are 
beyond the age of compulsory school attendance in the State in which 
the institution is located.
          ``(4) Postsecondary vocational institution.--
                  ``(A) Principal criteria.--For the purpose of this 
                subsection, the term `postsecondary vocational 
                institution' means a school that--
                          ``(i) provides an eligible program of 
                        training to prepare students for gainful 
                        employment in a recognized occupation;
                          ``(ii) meets the requirements of clauses (i), 
                        (ii), (iv), and (v) of paragraph (1)(A) of this 
                        subsection; and
                          ``(iii) has been in existence for at least 2 
                        years.
                  ``(B) Additional institutions.--The term 
                `postsecondary vocational institution also includes an 
                educational institution in any State that, in lieu of 
                the requirement in clause (i) of paragraph (1)(A) of 
                this subsection, admits as regular students persons who 
                are beyond the age of compulsory school attendance in 
                the State in which the institution is located.
  ``(b) State; Freely Associated States.--
          ``(1) State.--The term `State' includes, in addition to the 
        several States of the Union, the Commonwealth of Puerto Rico, 
        the District of Columbia, Guam, American Samoa, the Virgin 
        Islands, the Commonwealth of the Northern Mariana Islands, and 
        the Freely Associated States.
          ``(2) Freely associated states.--The term `Freely Associated 
        States' means the Republic of the Marshall Islands, the 
        Republic of Palau, and the Federated States of Micronesia.''.
  (b) Conforming Amendments.--
          (1) Section 481 (20 U.S.C. 1088) is amended--
                  (A) by striking subsections (a), (b), and (c); and
                  (B) by redesignating subsections (d) through (f) as 
                subsections (a) through (c), respectively.
          (2) Each of the following provisions are amended by striking 
        ``section 481'' and inserting ``section 101(a)(2)'': sections 
        435(a)(1), 487(d), and 496(j) and (k).
          (3) Section 498(i) (20 U.S.C. 1099c) is amended by striking 
        ``section 481 (other than the requirements in subsections 
        (b)(5) and (c)(3))'' and inserting ``section 101(a) (other than 
        the requirements in paragraphs (3)(A)(v) and (4)(A)(iii))''.
          (4) Section 498(j) is amended by striking ``sections 
        481(b)(5) and 481(c)(3)'' and inserting ``paragraphs (3)(A)(v) 
        and (4)(A)(iii) of section 101(a)''.
          (5) Section 105(b) (as redesignated by section 101(a)(3)(D)) 
        is amended by adding at the end the following new sentence: 
        ``This subsection shall cease to be effective on October 1, 
        2001.''.

SEC. 103. REGULATORY REFORM.

  Title I is amended by adding at the end the following new section:

``SEC. 112. REGULATORY REFORM.

  ``(a) Biennial Review of Regulations.--In every even-numbered year 
(beginning with 1998), the Secretary--
          ``(1) shall review all regulations issued under title IV of 
        the Higher Education Act of 1965 in effect at the time of the 
        review that apply to the operations or activities of any 
        participant in those programs; and
          ``(2) shall determine whether any such regulation is no 
        longer necessary in the public interest.
  ``(b) Effect of Determination.--The Secretary shall repeal, 
consolidate, simplify, or otherwise modify any regulation the Secretary 
determines to be no longer necessary in the public interest.
  ``(c) Report to Congress.--The Secretary shall report to the Congress 
any legislative changes necessary to permit regulatory simplification 
under this section.''.

  PART B--PERFORMANCE-BASED ORGANIZATION FOR THE DELIVERY OF FEDERAL 
                     STUDENT FINANCIAL ASSISTANCE.

SEC. 111. PERFORMANCE-BASED ORGANIZATION FOR THE DELIVERY OF FEDERAL 
                    STUDENT FINANCIAL ASSISTANCE.

  Title I (as amended by part A of this title) is amended--
          (1) by striking the heading of such title and inserting the 
        following:

            ``TITLE I--GENERAL AND ADMINISTRATIVE PROVISIONS

                    ``PART A--GENERAL PROVISIONS'';

        and
          (2) by adding at the end the following new part:

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

``SEC. 131. PERFORMANCE-BASED ORGANIZATION FOR THE DELIVERY OF FEDERAL 
                    STUDENT FINANCIAL ASSISTANCE.

  ``(a) Establishment and Purpose.--
          ``(1) Establishment.--There is established in the Department 
        a Performance-Based Organization (hereafter referred to as the 
        `PBO') which shall be a discrete management unit responsible 
        for managing the information systems supporting the programs 
        authorized under title IV of this Act, as specified in 
        subsection (b).
          ``(2) Purposes.--The purposes of the PBO are--
                  ``(A) to improve the level of service to students and 
                participants in the programs;
                  ``(B) to reduce the costs of administering the 
                Federal student financial assistance programs 
                authorized under title IV;
                  ``(C) to increase the accountability of the officials 
                responsible for administering the operational aspects 
                of these programs;
                  ``(D) to provide greater flexibility in the 
                management of the operational functions of the Federal 
                student financial assistance programs;
                  ``(E) to integrate the information systems supporting 
                the Federal student financial assistance programs; and
                  ``(F) to implement an open, common, integrated system 
                for the delivery of student financial assistance under 
                title IV.
  ``(b) Authority.--
          ``(1) Authority of secretary.-- Notwithstanding any other 
        provision of this Act, the Secretary shall maintain 
        responsibility for the development and promulgation of policy 
        relating to the programs of student financial assistance under 
        title IV. In the exercise of its functions, the PBO shall be 
        subject to the direction of the Secretary. The Secretary 
        shall--
                  ``(A) request the advice of, and work in cooperation 
                with, the Chief Operating Officer in developing 
                regulations, policies, administrative guidance, or 
                procedures affecting the information systems 
                administered by the PBO, and other functions performed 
                by the PBO;
                  ``(B) request cost estimates from the Chief Operating 
                Officer for system changes required by specific 
                policies proposed by the Secretary;
                  ``(C) consider the Chief Operating Officer's comments 
                and estimates prior to finalizing such regulations, 
                policies, administrative guidance, or procedures;
                  ``(D) assist the Chief Operating Officer in 
                identifying goals for the administration and 
                modernization of the delivery system for student 
                financial assistance under title IV; and
                  ``(E) if necessary, arrange for additional funding to 
                ensure that the PBO can efficiently perform its 
                functions.
          ``(2) Functions.--The PBO shall carry out the following 
        functions:
                  ``(A) All aspects of contracting for the data and 
                information systems supporting student financial 
                assistance under title IV, including the operational 
                administration of the William D. Ford Federal Direct 
                Loan Program, but not including the development of 
                policy relating to such programs.
                  ``(B) The administrative, accounting, and financial 
                management functions of the delivery system for Federal 
                student assistance, including--
                          ``(i) the collection, processing and 
                        transmission of applicant data to students, 
                        institutions and authorized third parties, as 
                        provided for in section 483;
                          ``(ii) technical specifications for software 
                        development and systems supporting the delivery 
                        of student financial assistance under title IV;
                          ``(iii) information technology and systems 
                        infrastructure related to the delivery and 
                        management of student financial assistance 
                        under title IV;
                          ``(iv) all software and hardware acquisitions 
                        and all information technology contracts 
                        related to the delivery and management of 
                        student financial assistance under title IV; 
                        and
                          ``(v) all customer service, training and user 
                        support related to the functions described in 
                        clauses (i) through (iv).
                  ``(C) Annual development of a budget for the 
                operations and services of the PBO, in consultation 
                with the Secretary, and for consideration and inclusion 
                in the Department's annual budget submission.
                  ``(D) Annual development of goals, in consultation 
                with the Secretary, for the administration and 
                modernization of the system for delivery of student 
                financial assistance under title IV.
                  ``(E) Other functions proposed by the Secretary, and 
                agreed to by the Chief Operating Officer as are not 
                inconsistent with the functions of the PBO.
          ``(3) Independence.--In carrying out its functions, the PBO 
        shall exercise independent control of its budget allocations 
        and expenditures, personnel decisions and processes, 
        procurements, and other administrative and management 
        functions.
          ``(4) Review of pbo.--The PBO shall be subject to the usual 
        and customary Federal audit procedures, and be subject to 
        review by the Inspector General of the Department.
  ``(c) Authorization of Appropriations.--For the purpose of funding 
the administrative costs incurred by the PBO in administering systems 
supporting programs under this part, there are authorized to be 
appropriated such sums as may be necessary for fiscal year 1999 and 
each of the 4 succeeding fiscal years, except that funds authorized 
under section 458 shall be made available to the PBO by the Secretary 
for administrative costs authorized to be funded under that section.
  ``(d) Organizational Reports.--
          ``(1) Performance plan.--Within 6 months of the hiring of the 
        Chief Operating Officer, and every 12 months thereafter, the 
        Secretary and the Chief Operating Officer of the Department 
        shall develop a performance plan for the PBO that establishes 
        measurable goals and objectives for the organization. In 
        developing this performance plan, the Secretary and the Chief 
        Operating Officer shall consult with the Committee on Education 
        and the Workforce of the House of Representatives, the 
        Committee on Labor and Human Resources of the Senate, and the 
        Advisory Committee on Student Financial Assistance. The 
        performance plan shall include a concise statement of goals for 
        a modernized system for the delivery of student financial 
        assistance under title IV and identify action steps necessary 
        to achieve such goals. Such goals shall be used in evaluating 
        the performance of the Chief Operating Officer and the PBO 
        pursuant to paragraph (2).
          ``(2) Annual accountability report.--The Chief Operating 
        Officer shall prepare and submit an annual accountability 
        report to the Secretary and the Committee on Education and the 
        Workforce of the House of Representatives and the Committee on 
        Labor and Human Resources of the Senate. The accountability 
        report shall include--
                  ``(A) an independent financial audit of the 
                expenditures of both the PBO and programs administered 
                by it;
                  ``(B) financial and performance requirements 
                applicable to the PBO under the Chief Financial Officer 
                Act of 1990 and the Government Performance and Results 
                Act of 1993;
                  ``(C) the results achieved by the PBO during the year 
                relative to the goals established in the organization's 
                performance plan;
                  ``(D) the results of the evaluations of performance 
                of the Chief Operating Officer and senior managers 
                under subsections (e)(2) and (f)(2), including the 
                amounts of bonus compensation awarded to these 
                individuals;
                  ``(E) a discussion of the effectiveness of 
                coordination between the PBO and the Secretary;
                  ``(F) recommendations for legislative and regulatory 
                changes to improve service to students and their 
                families, and to or improve program efficiency and 
                integrity; and
                  ``(G) other such information as the Director of the 
                Office of Management and Budget shall prescribe for 
                performance based organizations.
  ``(e) Chief Operating Officer.--
          ``(1) In general.--The management of the PBO shall be vested 
        in a Chief Operating Officer who shall be appointed by the 
        Secretary to a 5-year term and compensated without regard to 
        chapters 33, 51, and 53 of title 5, United States Code. The 
        Secretary shall appoint the Chief Operating Officer within 6 
        months of the date of enactment of this part. The Secretary 
        shall consult with the Chairmen of the Committee on Education 
        and the Workforce of the House of Representatives and the 
        Committee on Labor and Human Resources of the Senate prior to 
        making an appointment. The appointment shall be made on the 
        basis of demonstrated management ability and expertise in 
        information technology, including extensive experience in the 
        financial services industry, and without regard to political 
        affiliation or activity. The Secretary may reappoint the Chief 
        Operating Officer to subsequent terms so long as the 
        performance of the Chief Operating Officer, as set forth in the 
        performance agreement, is satisfactory or better. The Chief 
        Operating Officer may be removed by--
                  ``(A) the President; or
                  ``(B) the Secretary, for misconduct or failure to 
                meet performance goals set forth in the performance 
                agreement in paragraph (2).
        The President or Secretary shall communicate the reasons for 
        any such removal to the appropriate committees of Congress.
          ``(2) Performance agreement.--The Secretary and the Chief 
        Operating Officer shall enter into an annual performance 
        agreement which shall set forth measurable organization and 
        individual goals for the Chief Operating Officer in key 
        operational areas. The agreement shall be subject to review and 
        renegotiation at the end of each term. The final agreement 
        shall be transmitted to the Committee on Education and the 
        Workforce of the House of Representatives and the Committee on 
        Labor and Human Resources of the Senate, and made publicly 
        available.
          ``(3) Compensation.--The Chief Operating Officer is 
        authorized to be paid at an annual rate of basic pay not to 
        exceed the maximum rate of basic pay for the Senior Executive 
        Service under section 5382 of title 5, United States Code, 
        including any applicable locality-based comparability payment 
        that may be authorized under section 5304(h)(2)(B) of such 
        title 5. In addition, the Chief Operating Officer may receive a 
        bonus in an amount up to, but not in excess of, 50 percent of 
        such annual rate of basic pay, based upon the Secretary's 
        evaluation of the Chief Operating Officer's performance in 
        relation to the performance goals set forth in the performance 
        agreement described in paragraph (2). Payment of a bonus under 
        this paragraph may be made to the Chief Operating Officer only 
        to the extent that such payment does not cause the Chief 
        Operating Officer's total aggregate compensation in a calendar 
        year to equal or exceed the amount of the President's salary 
        under section 102 of title 3, United States Code.
  ``(f) Senior Management.--
          ``(1) In general.--The Chief Operating Officer may appoint up 
        to 5 senior managers as may be necessary without regard to the 
        provisions of title 5, United States Code, governing 
        appointments in the competitive service, and who may be paid 
        without regard to the provisions of chapter 51 and subchapter 
        III of chapter 53 of such title relating to classification and 
        General Schedule pay rates.
          ``(2) Performance agreement.--The Chief Operating Officer 
        shall enter into an annual performance agreement with each 
        senior manager appointed under this subsection which shall set 
        forth measurable organization and individual goals in key 
        operational areas. The agreement shall be subject to review and 
        renegotiation at the end of each term.
          ``(3) Compensation.--The Chief Operating Officer is 
        authorized to pay senior managers at an annual rate of basic 
        pay not to exceed 75 percent of the maximum rate of basic pay 
        for the Senior Executive Service under section 5382 of title 5, 
        United States Code, including any applicable locality-based 
        comparability payment that may be authorized under section 
        5304(h)(2)(C) of such title 5. In addition, a senior manager 
        may receive a bonus in an amount up to, but not in excess of, 
        50 percent of such annual rate of basic pay, based upon the 
        Chief Operating Officer's evaluation of the manager's 
        performance in relation to the performance goals set forth in 
        the performance agreement described in paragraph (2).
  ``(g) Personnel Flexibility.--
          ``(1) Personnel ceilings.--The PBO shall not be subject to 
        any ceiling relating to the number or grade of employees.
          ``(2) Administrative flexibility.--The Chief Operating 
        Officer shall work with the Office of Personnel Management to 
        develop and implement personnel flexibilities in staffing, 
        classification, and pay that meet the needs of the PBO, subject 
        to compliance with title 5, United States Code.
  ``(h) Establishment of a Fair and Equitable System for Measuring 
Staff Performance.--The PBO shall establish an annual performance 
management system, subject to compliance with title 5, United States 
Code and consistent with applicable provisions of law and regulations, 
which strengthens the organizational effectiveness of the PBO by 
providing for establishing goals or objectives for individual, group, 
or organizational performance (or any combination thereof), consistent 
with the performance plan of the PBO and its performance planning 
procedures, including those established under the Government 
Performance and Results Act of 1993, and communicating such goals or 
objectives to employees.
  ``(i) Procurement Flexibility.--
          ``(1) In general.--Except as provided in this subsection, the 
        PBO shall abide by all applicable Federal procurement laws and 
        regulations when procuring property and services. The PBO 
        shall--
                  ``(A) enter into contracts for information systems 
                supporting the programs authorized under title IV to 
                carry out the functions set forth in subsection (b)(2); 
                and
                  ``(B) obtain the services of experts and consultants 
                without regard to section 3109 of title 5, United 
                States Code and set pay in accordance with such 
                section.
          ``(2) Performance based servicing contracts.--The Chief 
        Operating Officer shall, to the extent practicable, maximize 
        the use of performance based servicing contracts, consistent 
        with guidelines for such contracts published by the Office of 
        Federal Procurement Policy, to achieve cost savings and improve 
        service.
          ``(3) Fee for service arrangements.--The Chief Operating 
        Officer shall, to the extent practicable and consistent with 
        the purpose of the PBO, utilize services available outside of 
        the Federal Government in the delivery of Federal student 
        financial assistance. To achieve this purpose, the PBO is 
        authorized to pay fees to an organization that are equivalent 
        to those paid by other entities for such services, if the Chief 
        Operating Officer determines that such organization currently 
        provides an information system or service that meets the 
        requirements of the PBO.
  ``(j) Focus Groups.--To facilitate information sharing and customer 
involvement, the Chief Operating Officer may establish focus groups 
composed of students, institutions, and other participants in the 
programs authorized by title IV to provide advice on student aid 
delivery matters.

``SEC. 132. ADMINISTRATIVE SIMPLIFICATION OF STUDENT AID DELIVERY.

  ``(a) In General.--The Secretary, and the Chief Operating Officer 
shall improve the efficiency and effectiveness of the student aid 
delivery system by encouraging and participating in the establishment 
of voluntary consensus standards and requirements for the electronic 
transmission of information necessary for the administration of 
programs under title IV.
  ``(b) Adoption of Voluntary Consensus Standards.--Except with respect 
to the common financial reporting form under section 483(a), the 
Secretary shall adopt voluntary consensus standards for transactions 
required under title IV, and common data elements for such 
transactions, to enable information to be exchanged electronically 
between systems administered by the Department and among participants 
in the Federal student aid delivery system.
  ``(c) Requirements for Adoption of Voluntary Consensus Standards.--
Any voluntary consensus standard adopted under this section shall--
          ``(1) be a standard that has been developed, adopted, or 
        modified by a standard setting organization that is open to the 
        participation of the various entities engaged in the delivery 
        of Federal student financial assistance; and
          ``(2) be consistent with the objective of reducing the 
        administrative costs of delivering student financial assistance 
        under title IV.
  ``(d) Participation in Standard Setting Organizations.--
          ``(1) The Chief Operating Officer shall participate in the 
        activities of standard setting organizations in carrying out 
        the provisions of this section.
          ``(2) The Chief Operating Officer shall encourage higher 
        education groups seeking to develop common forms, standards, 
        and procedures in support of the delivery of Federal student 
        financial assistance to conduct these activities within a 
        standard setting organization.
          ``(3) The Chief Operating Officer may pay necessary dues and 
        fees associated with participating in standard setting 
        organizations pursuant to this subsection from funds available 
        under subsection (j).
  ``(e) Procedures for Adoption and Implementation of Voluntary 
Consensus Standards.--In adopting voluntary consensus standards and 
implementation timetables under this section, including modifications 
of existing standards, the Secretary shall follow the procedures for 
negotiated rulemaking in section 492.
  ``(f) Initial Voluntary Consensus Standards To Be Adopted.--Through 
coordinated participation between the Chief Operating Officer and 
standard setting organizations, the initial standards adopted by the 
Secretary shall include the following:
          ``(1) Electronic personal identifier number.--The Secretary 
        shall adopt standards for a single electronic personal 
        identifier number for students receiving assistance under title 
        IV.
          ``(2) Electronic signature.--The Secretary, in coordination 
        with the Secretary of Commerce, shall adopt standards 
        specifying procedures for the electronic transmission and 
        authentication of signatures with respect to transactions 
        requiring a signature under title IV.
          ``(3) Single institutional identifier.--The Secretary shall 
        adopt standards for a single identifier for eligible 
        institutions under title IV.
  ``(g) Use of Clearinghouses.--Nothing in this section shall restrict 
the ability of participating institutions and lenders from using a 
clearinghouse to comply with the standards for the exchange of 
information established under this section.
  ``(h) Applicability to Current Systems.--
          ``(1) General rule.--Except as provided in paragraph (2) and 
        (3), this section shall apply to all Department of Education 
        information systems supporting the delivery of programs under 
        title IV no later than 12 months from the date of enactment of 
        this part.
          ``(2) National student loan data system.--This section shall 
        apply to sections 485B(e) and (f) no later than 18 months after 
        the date of enactment of this part.
          ``(3) Integrated postsecondary education data system.--The 
        Secretary shall coordinate the adoption of voluntary consensus 
        standards under this section to ensure that standards are 
        compatible with the integrated postsecondary education data 
        system (IPEDS).
  ``(i) Data Security.--Any entity that maintains or transmits 
information under a transaction covered by this section shall maintain 
reasonable and appropriate administrative, technical, and physical 
safeguards--
          ``(1) to ensure the integrity and confidentiality of the 
        information; and
          ``(2) to protect against any reasonably anticipated security 
        threats, or unauthorized uses or disclosures of the 
        information.
  ``(j) Authorization of Appropriations.--There are authorized to be 
appropriated in any fiscal year or made available from funds 
appropriated to carry out activities in this section in any fiscal year 
such sums as may be necessary to carry out the provisions of this 
section, except that if no funds are appropriated pursuant to this 
subsection, the Secretary shall make funds available to carry out this 
section from amounts appropriated for the operations and expenses of 
the Department of Education.
  ``(k) Definitions.--For purposes of this section:
          ``(1) The term `voluntary consensus standard' means a 
        standard developed or used by a standard setting organization 
        accredited by the American National Standards Institute.
          ``(2) The term `standard setting organization' means a 
        standard setting organization accredited by the American 
        National Standards Institute that develops standards for 
        information transactions, data elements, or any other standard 
        that is necessary to, or will facilitate, the implementation of 
        this section.
          ``(3) For purposes of this section, the term `clearinghouse' 
        means a public or private entity that processes or facilitates 
        the processing of nonstandard data elements into data elements 
        conforming to standards adopted under this section.''.

         TITLE II--POSTSECONDARY EDUCATION IMPROVEMENT PROGRAMS

SEC. 201. URBAN COMMUNITY SERVICE.

  (a) Designation of Title.--The Higher Education Act of 1965 is 
amended by inserting at the end of title I (20 U.S.C. 1001 et seq.) the 
following:

       ``TITLE II--POSTSECONDARY EDUCATION IMPROVEMENT PROGRAMS''

  (b) Redesignation and Transfer of Urban Community Service Program.--
          (1) Internal cross-references.--Part A of title XI is 
        amended--
                  (A) in section 1102(b), by striking ``section 1104'' 
                and inserting ``section 204'';
                  (B) in section 1104(12), by striking ``section 
                1103(a)(2)(B)'' and inserting ``section 203(a)(2)(B)''; 
                and
                  (C) in section 1108(1), by striking ``section 1103'' 
                and inserting ``section 203''.
          (2) Redesignation.--Part A of title XI (20 U.S.C. 1136 et 
        seq.) is redesignated as part A of title II, and sections 1101 
        through 1109 are redesignated as sections 201 through 209.
          (3) Transfer.--Part A of title II (including sections 201 
        through 209), as redesignated by paragraph (2), is transferred 
        to immediately follow the heading inserted by subsection (a) of 
        this section.
          (4) Repeal.--Part B of title XI (20 U.S.C. 1137 et seq.) and 
        the heading of title XI are repealed.
  (c) Allowable Activities.--Section 204 (as redesignated by subsection 
(b)(2)) is amended by adding at the end the following new paragraph:
          ``(14) Improving access to technology in local 
        communities.''.
  (d) Designation of Urban Grant Institutions.--Section 207 (as 
redesignated by subsection (b)(2)) is amended by adding at the end the 
following new sentence: ``The information developed as a result of this 
section shall be made available to Urban Grant Institutions and to any 
other interested institution of higher education by any appropriate 
means, including the Internet.''.
  (e) Authorization of Appropriations.--Section 209 (as redesignated by 
subsection (b)(2)) is amended by striking ``1993'' and inserting 
``1999''.

SEC. 202. FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION.

  (a) Redesignation and Transfer of Programs.--
          (1) Redesignation.--Part A of title X (20 U.S.C. 1135 et 
        seq.) is redesignated as part B of title II (as amended by 
        section 201) and--
                  (A) sections 1001 through 1003 (20 U.S.C. 1135 et 
                seq.) are redesignated as sections 221 through 223; and
                  (B) section 1011 (20 U.S.C. 1135a-11) is redesignated 
                as section 224.
          (2) Transfer.--Part B of title II (including sections 221 
        through 224), as redesignated by paragraph (1), is transferred 
        to follow part A of title II.
          (3) Repeal.--Section 1004 and parts B, C, and D of title X 
        (20 U.S.C. 1135a-3, 1135e et seq.) and the heading of title X 
        are repealed.
  (b) Endowment Grants.--Section 221(a) (as redesignated by subsection 
(a)(2)) is amended--
          (1) by striking ``and'' at the end of paragraph (7);
          (2) by striking the period at the end of paragraph (8) and 
        inserting ``; and''; and
          (3) by adding at the end the following new paragraph:
          ``(9) awarding an endowment grant, on a competitive basis, to 
        a national organization to enable such organization to support 
        the establishment or ongoing work of area program centers that 
        foster the development of local affiliated chapters in high-
        poverty areas to improve graduation rates and postsecondary 
        attendance through the provision of academic support services 
        and scholarship assistance for the pursuit of postsecondary 
        education.''.
  (c) Special Projects.--Section 224 (as redesignated by subsection 
(a)(2)(B)) is amended--
          (1) by striking paragraphs (1), (2), and (3) of subsection 
        (c) and inserting the following:
          ``(1) institutional restructuring to improve learning and 
        promote productivity, efficiency, quality improvement, and cost 
        and price control;
          ``(2) articulation agreements between two-year and four-year 
        institutions;
          ``(3) evaluation and dissemination of model programs; and
          ``(4) international cooperation and student exchange among 
        postsecondary educational institutions.''; and
          (2) by striking subsection (d).
  (d) Authorization of Appropriations.--
          (1) Combination of subparts.--Part B of title II (as 
        redesignated by subsection (a)) is amended by striking the 
        subpart designations and headings.
          (2) Authorization.--Part B of title II (as so redesignated) 
        is amended by adding at the end the following:

``SEC. 225. AUTHORIZATION OF APPROPRIATIONS.

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

SEC. 203. GRANTS TO STATES FOR WORKPLACE AND COMMUNITY TRANSITION 
                    TRAINING FOR INCARCERATED YOUTH OFFENDERS.

  (a) Redesignation and Transfer of Programs.--
          (1) Redesignation.--Part E of title X (20 U.S.C. 1135g) is 
        redesignated as part C of title II and section 1091 is 
        redesignated as section 231.
          (2) Transfer.--Part C of title II (including section 231), as 
        redesignated by paragraph (1), is transferred to follow part B 
        of title II (as amended by section 202 of this Act).
  (b) Reauthorization.--Section 231(j) (as so redesignated) is amended 
to read as follows:
  ``(j) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $5,000,000 for fiscal year 1999 
and such sums as may be necessary for each of the four succeeding 
fiscal years.''.

SEC. 204. ADVANCED PLACEMENT FEE PAYMENT PROGRAM.

  (a) Redesignation and Transfer of Programs.--
          (1) Redesignation.--Part G of title XV of the Higher 
        Education Amendments of 1992 (20 U.S.C. 1170) is redesignated 
        as part D of title II and section 1545 of such Act is 
        redesignated as section 241.
          (2) Transfer.--Part D of title II (including section 241), as 
        redesignated by paragraph (1), is transferred to follow part C 
        of title II (as amended by section 203 of this Act).
  (b) Reauthorization.--Section 241(f) (as so redesignated) is amended 
by striking ``1993'' and inserting ``1999''.

SEC. 205. TEACHER QUALITY ENHANCEMENT GRANTS.

  Title II is further amended by adding at the end the following new 
part:

              ``PART E--TEACHER QUALITY ENHANCEMENT GRANTS

``SEC. 271. PURPOSE.

  ``The purposes of this part are--
          ``(1) to provide competitive grants to States for assistance 
        in strengthening the quality of the teaching force by improving 
        the academic knowledge of teachers in the subject areas in 
        which they teach;
          ``(2) to hold institutions of higher education with teacher 
        preparation programs accountable for preparing teachers who are 
        highly competent in the academic content areas in which they 
        plan to teach, including training in the effective uses of 
        technologies in the classroom; and
          ``(3) to recruit high quality individuals, including 
        individuals from other occupation, into the teaching force.

``SEC. 272. ELIGIBILITY.

  ``(a) Applications.--To be eligible to receive a grant under this 
part, a Governor shall, at the time of the initial grant application, 
submit an application to the Secretary that meets the requirements of 
this part.
  ``(b) Contents of Application.--Such application shall include a 
description of how the State intends to use funds provided under this 
part and such other information and assurances as the Secretary may 
require.
  ``(c) State Authority.--Nothing under this part shall be construed to 
negate or supersede the legal authority, under State law of any State 
agency, State entity, or State public official over programs that are 
under the jurisdiction of the agency, entity, or official.

``SEC. 273. USE OF FUNDS.

  ``The Governor of a State that receives a grant under this subpart 
shall--
          ``(1) use a portion of such grant to carry out one or more of 
        the following activities:
                  ``(A) reforming State teacher certification 
                requirements to ensure that current and future teachers 
                possess the necessary academic content knowledge in the 
                subject areas in which they are certified and assigned 
                to teach;
                  ``(B) providing prospective teachers alternatives to 
                schools of education through programs at colleges of 
                arts and sciences or at nonprofit organizations;
                  ``(C) funding programs which establish or expand 
                alternative routes to State certification for highly 
                qualified individuals from other occupations;
                  ``(D) developing and implementing effective 
                mechanisms to expeditiously remove incompetent or 
                unqualified teachers; and
                  ``(E) implementing reforms which hold institutions of 
                higher education with teacher preparation programs 
                accountable for preparing teachers who are highly 
                competent in the academic content areas in which they 
                plan to teach; and
          ``(2) use a portion of such grant to establish a lighthouse 
        partnership consisting of the Governor, an exemplary 
        institution of higher education which prepares teachers, and a 
        local educational agency and which may also consist of other 
        institutions of higher education, public charter schools, and 
        public and private nonprofit elementary and secondary schools, 
        for the purpose of carrying out one or more of the following 
        activities:
                  ``(A) creating opportunities for enhance and ongoing 
                professional development which improves the academic 
                content knowledge of teachers in the subject areas in 
                which they are certified to teach or in which they are 
                working toward certification to teach;
                  ``(B) providing programs designed to implement the 
                successful integration of technology into teaching and 
                learning;
                  ``(C) implementing reforms which hold institutions of 
                higher education with teacher preparation programs 
                accountable for preparing teachers who are highly 
                competent in the academic content areas in which they 
                plan to teach;
                  ``(D) reforming State certification requirements to 
                ensure that current and future teachers possess the 
                necessary academic content knowledge in the subject 
                areas in which they are certified to teach; and
                  ``(E) recruiting minorities, and others, into the 
                teaching and counseling profession, including education 
                paraprofessionals, former military personnel, and mid-
                career professionals, by providing financial and other 
                assistance related to instruction, induction, mentoring 
                and support services.

``SEC. 274. COMPETITIVE AWARDS.

  ``(a) Competitive Basis for Awards.--The Secretary shall make annual 
grants under this part on a competitive basis.
  ``(b) Peer Review Panel.--The Secretary shall provide the 
applications submitted by Governors under section 272 to a peer review 
panel for evaluation. With respect to each application, the peer review 
panel shall initially recommend the application for funding or for 
disapproval.
  ``(c) Priority.--In recommending applications to the Secretary, the 
panel shall give priority to applications from States with proposals 
which promise initiatives to reform State teacher certification 
requirements which are designed to ensure that current and future 
teachers possess the necessary academic content knowledge in the 
subject areas in which they are certified to teach or which include 
innovative reforms to hold institutions of higher education with 
teacher preparation programs accountable for preparing teachers who are 
highly competent in the academic content areas in which they plan to 
teach.
  ``(d) Ranking of Applications.--With respect to each application 
recommended for funding, the panel shall assign the application a rank, 
relative to other recommended applications, based on the priority 
described in subsection (c), the extent to which the application 
furthers the purposes of this part, and the overall quality of the 
application, based on the quality and scope of State-supported 
strategies to improve quality of teacher preparation and their teaching 
force.
  ``(e) Recommendation of Amount.--With respect to each application 
recommended for funding, the panel shall make a recommendation to the 
Secretary with respect to the amount of the grant that should be made.
  ``(f) Secretarial Selection.--
          ``(1) In general.--Subject to paragraph (2), the Secretary 
        shall determine, based on the peer review panel's 
        recommendations, which applications shall receive funding and 
        the amounts of such grants. In determining grant amounts, the 
        Secretary shall take into account the total amount of funds 
        available for all grants under this part and the types of 
        activities proposed to be carried out.
          ``(2) Effect of ranking by panel.--In making grants under 
        this part, the Secretary shall select applications according to 
        the ranking of the applications by the peer review panel, 
        except in cases where the Secretary determines, for good cause, 
        that a variation from that order is appropriate.
  ``(g) Matching Requirement.--Each State receiving funds under this 
part shall provide, from non-Federal sources, an amount equal to 1/2 of 
the amount of the grant in cash or in kind to carry out the activities 
supported by the grant.
  ``(h) Limitation on Administrative Expenses.--A State that receives a 
grant under this part may use not more than 2 percent of the grant 
funds for administrative costs.
  ``(i) Reporting.--
          ``(1) In general.--A Governor that receives a grant under 
        this section shall submit an accountability report to the 
        Secretary and the Committee on Education and the Workforce of 
        the House of Representatives and the Committee on Labor and 
        Human Resources of the Senate. Such reports shall include a 
        description of the degree to which the State, in using these 
        funds, has made substantial progress in meeting the following 
        goals:
                  ``(A) Raising the State academic standards required 
                to enter the teaching profession.
                  ``(B) Increasing the percentage of classes taught in 
                core academic subject areas by teachers fully certified 
                by the State to teach in those subject areas.
                  ``(C) Decreasing shortages of qualified teachers in 
                poor urban and rural areas.
                  ``(D) Increasing opportunities for enhanced and 
                ongoing professional development which improves the 
                academic content knowledge of teachers in the subject 
                areas in which they are certified to teach or in which 
                they are working toward certification to teach.
          ``(2) Accountability of state institution of higher 
        education.--Prior to receiving funds under this part, a State 
        shall demonstrate that at least 80 percent of graduates of each 
        of the exemplary institutions of higher education in any 
        partnership described in section 273(a)(2) who enter the field 
        of teaching pass all applicable State qualification assessments 
        of new teachers, which must include assessments of each 
        prospective teacher's subject matter knowledge in the content 
        area or areas in which the teacher provides instruction. Prior 
        to each subsequent receipt of funds under this part, such State 
        shall demonstrate that 70 percent of the graduates of each 
        institution of higher education in the State have met such goal 
        and continue to progress to exceed such goal. Such assessment 
        shall be at least as rigorous as those in place on the date of 
        enactment of this Act and shall have qualifying scores no lower 
        than those in place on date of enactment of this Act.
          ``(3) Provision to peer review panel.--The Secretary shall 
        provide the reports submitted under paragraph (1) to the peer 
        review panel convened under subsection (b). The panel shall use 
        such accountability report in recommending applications for 
        subsequent funding under this section.
  ``(j) Teachers Qualifications Provided to Parent Upon Request.--Any 
local educational agency that participates as an eligible applicant or 
partner under this part shall make available, upon request and in an 
understandable and uniform format, to any parent of a student attending 
any school in the local educational agency, information regarding the 
qualifications of the students classroom teacher, both generally and 
with regard to the subject matter in which the teacher provides 
instruction.

``SEC. 275. LIMITATIONS.

  ``(a) Federal Control Prohibited.--Nothing in this part shall be 
construed to permit, allow, encourage, or authorize any Federal control 
over any aspect of any private, religious, or home school, whether or 
not a home school is treated as a private school or home school under 
State law. This section shall not be construed to bar private, 
religious, or home schools from participation in programs or services 
under this part.
  ``(b) No Change in State Control Encouraged or Required.--Nothing in 
this part shall be construed to encourage or require any change in a 
State's treatment of any private, religious, or home school, whether or 
not a home school is treated as a private school or home school under 
State law.
  ``(c) National System of Teacher Certification Prohibited.--Nothing 
in this part shall be construed to permit, allow, encourage, or 
authorize any national system of teacher certification.

``SEC. 276. AUTHORIZATION OF APPROPRIATIONS.

  ``(a) Authorization.--There are authorized to be appropriated to 
carry out this part, $18,500,000 for fiscal years 1999 and such sums as 
may be necessary for each of the 4 succeeding fiscal years.
  ``(b) Transition.--Notwithstanding any other provision of law, the 
Secretary may use funds appropriated under subsection (a) to complete 
awards under the original grant period for projects that were funded 
under subpart 2 of part E of title V of this Act, as in effect prior to 
enactment of the Higher Education Amendments of 1998.''.

SEC. 206. ADDITIONAL REPEAL.

  Title VIII (20 U.S.C. 1133 et seq.), relating to cooperative 
education, is repealed.

                      TITLE III--INSTITUTIONAL AID

SEC. 301. STRENGTHENING INSTITUTIONS.

  (a) Program Purpose; Use of Funds.--Section 311 (20 U.S.C. 1057) is 
amended--
          (1) in subsection (b)(2), by striking ``or'' at the end of 
        subparagraph (A) and inserting ``and'';
          (2) by amending paragraph (3) of subsection (b) to read as 
        follows:
  ``(3) Special consideration shall be given to applications which 
propose, pursuant to the institution's plan, the use of funds for 
integrating computer technology into institutional facilities to create 
smart buildings.''; and
          (3) by adding at the end the following new subsections:
  ``(c) Authorized Activities.--Grants awarded under this section shall 
be used for one or more of the following activities:
          ``(1) purchase, rental, or lease of scientific or laboratory 
        equipment for educational purposes, including instructional and 
        research purposes;
          ``(2) construction, maintenance, renovation, and improvement 
        in classrooms, libraries, laboratories, and other instructional 
        facilities;
          ``(3) support of faculty exchanges, faculty development, and 
        faculty fellowships to assist in attaining advanced degrees in 
        their field of instruction;
          ``(4) purchase of library books, periodicals, and other 
        educational materials, including telecommunications program 
        material;
          ``(5) tutoring, counseling, and student service programs 
        designed to improve academic success;
          ``(6) funds management, administrative management, and 
        acquisition of equipment for use in strengthening funds 
        management;
          ``(7) joint use of facilities, such as laboratories and 
        libraries;
          ``(8) establishing or improving a development office to 
        strengthen or improve contributions from alumni and the private 
        sector;
          ``(9) establishing or improving an endowment fund;
          ``(10) creating or improving facilities for Internet or other 
        distance learning academic instruction capabilities, including 
        purchase or rental of telecommunications technology equipment 
        or services; and
          ``(11) other activities proposed in the application submitted 
        pursuant to subsection (c) that--
                  ``(A) contribute to carrying out the purposes of this 
                section; and
                  ``(B) are approved by the Secretary as part of the 
                review and acceptance of such application.
  ``(d) Endowment Fund Limitations.--
          ``(1) Portion of grant.--An institution may not use more than 
        20 percent of its grant under this part for any fiscal year for 
        establishing or improving an endowment fund.
          ``(2) Matching required.--An institution that uses any 
        portion of its grant under this part for any fiscal year for 
        establishing or improving an endowment fund shall provide an 
        equal or greater amount for such purposes from non-Federal 
        funds.
          ``(3) Regulations.--The Secretary shall publish rules and 
        regulations specifically governing the use of funds for 
        establishing or improving an endowment fund.''.
  (b) Endowment Fund Definition.--Section 312 (20 U.S.C. 1058) is 
amended by adding at the end the following new subsection:
  ``(g) Endowment Fund.--For the purpose of this part, the term 
`endowment fund' means a fund that--
          ``(1) is established by State law, by an institution of 
        higher education, or by a foundation that is exempt from 
        Federal income taxation;
          ``(2) is maintained for the purpose of generating income for 
        the support of the institution; and
          ``(3) does not include real estate.''.
  (c) Duration of Grant.--Section 313 (20 U.S.C. 1059) is amended--
          (1) in subsection (a), by inserting before the period at the 
        end the following: ``, except that no institution shall be 
        eligible to secure a subsequent 5-year grant award under this 
        part until two calendar years have elapsed since the expiration 
        of its most recent 5-year grant award''; and
          (2) in subsection (b), by inserting ``subsection (c) and a 
        grant under'' before ``section 354(a)(1)''.
  (d) Applications.--Title III is amended by striking section 314 (20 
U.S.C. 1059a) and inserting the following:

``SEC. 314. APPLICATIONS.

  ``Each eligible institution desiring to receive assistance under this 
part shall submit an application in accordance with the requirements of 
section 351.''.
  (e) Program for Tribally Controlled Colleges and Universities.--
Section 316 (20 U.S.C. 1059c) is amended to read as follows:

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

  ``(a) Program Authorized.--The Secretary shall provide grants and 
related assistance to American Indian Tribal Colleges and Universities 
to enable such institutions to improve and expand their capacity to 
serve Indian students.
  ``(b) Definitions.--For the purposes of this section:
          ``(1) The term `Indian' has the same meaning as in section 2 
        of the Tribally Controlled Community Colleges Act of 1978.
          ``(2) The term `Indian tribe' has the same meaning as in 
        section 2 of such Act.
          ``(3) The term `Tribal College or University' has the meaning 
        given the term `tribally controlled college or university' in 
        section 2 of such Act, and includes an institution listed in 
        the Equity in Educational Land Grant Status Act of 1994.
          ``(4) The term `institution of higher education' means an 
        institution of higher education as defined by section 101(a)(1) 
        of this Act, except that subparagraph (A)(ii) of such section 
        shall not be applicable.
  ``(c) Authorized Activities.--Grants awarded under this section shall 
be used by Tribal Colleges or Universities to assist such institutions 
to plan, develop, undertake, and carry out authorized activities. Such 
authorized activities may include--
          ``(1) purchase, rental, or lease of scientific or laboratory 
        equipment for educational purposes, including instructional and 
        research purposes;
          ``(2) construction, maintenance, renovation, and improvement 
        in classrooms, libraries, laboratories, and other instructional 
        facilities, including purchase or rental of telecommunications 
        technology equipment or services;
          ``(3) support of faculty exchanges, faculty development, and 
        faculty fellowships to assist in attaining advanced degrees in 
        their field of instruction;
          ``(4) academic instruction in disciplines in which American 
        Indians are underrepresented;
          ``(5) purchase of library books, periodicals, and other 
        educational materials, including telecommunications program 
        material;
          ``(6) tutoring, counseling, and student service programs 
        designed to improve academic success;
          ``(7) funds management, administrative management, and 
        acquisition of equipment for use in strengthening funds 
        management;
          ``(8) joint use of facilities, such as laboratories and 
        libraries;
          ``(9) establishing or improving a development office to 
        strengthen or improve contributions from alumni and the private 
        sector;
          ``(10) establishing or enhancing a program of teacher 
        education designed to qualify students to teach in elementary 
        or secondary schools, with a particular emphasis on teaching 
        American Indian children and youth, that shall include, as part 
        of such program, preparation for teacher certification;
          ``(11) establishing community outreach programs which will 
        encourage American Indian elementary and secondary students to 
        develop the academic skills and the interest to pursue 
        postsecondary education;
          ``(12) establishing or improving an endowment fund; and
          ``(13) other activities proposed in the application submitted 
        pursuant to this subsection that--
                  ``(A) contribute to carrying out the purposes of this 
                section; and
                  ``(B) are approved by the Secretary as part of the 
                review and acceptance of such application.
  ``(d) Application Process.--
          ``(1) Institutional eligibility.--To be eligible to receive 
        assistance under this section, an institution shall be an 
        institution which--
                  ``(A) is an eligible institution under section 
                312(b);
                  ``(B) is eligible to receive assistance under the 
                Tribally Controlled Community College Assistance Act of 
                1978 (Public Law 95-471); or
                  ``(C) is eligible to receive funds under the Equity 
                in Educational Land Grant Status Act of 1994.
          ``(2) Application.--Any institution desiring to receive 
        assistance under this section shall submit an application to 
        the Secretary at such time, and in such manner, as the 
        Secretary may by regulation reasonably require. Each such 
        application shall include--
                  ``(A) a 5-year plan for improving the assistance 
                provided by the Tribal College or university to Indian 
                students, increasing the rates at which Indian high 
                school students enroll in higher education, and 
                increasing overall postsecondary retention rates for 
                Indian students; and
                  ``(B) such enrollment data and other information and 
                assurances as the Secretary may require to demonstrate 
                compliance with subparagraphs (A) and (B) of paragraph 
                (1).
          ``(3) Special rule.--For the purposes of this part, no Tribal 
        College or University which is eligible for and receives funds 
        under this section may concurrently receive other funds under 
        this part or part B.''.

SEC. 302. HISTORICALLY BLACK COLLEGES AND UNIVERSITIES.

  (a) Uses of Funds.--Section 323(a) (20 U.S.C. 1062(a)) is amended--
          (1) by redesignating paragraph (12) as paragraph (13); and
          (2) by inserting after paragraph (11) the following new 
        paragraph:
          ``(12) Establishing or improving an endowment fund.''.
  (b) Limitations.--Section 323(b) is amended by striking paragraph (3) 
and inserting the following:
  ``(3)(A) An institution may not use more than 20 percent of its grant 
under this part for any fiscal year for establishing or improving an 
endowment fund.
  ``(B) An institution that uses any portion of its grant under this 
part for any fiscal year for establishing or improving an endowment 
fund shall provide an equal or greater amount for such purposes from 
non-Federal funds.
  ``(C) The Secretary shall publish rules and regulations specifically 
governing the use of funds for establishing or improving an endowment 
fund.''.
  (c) Professional or Graduate Institutions.--
          (1) General authorization.--Section 326(a) (20 U.S.C. 
        1063b(a)) is amended--
                  (A) in paragraph (1), by inserting ``in mathematics 
                or the physical or natural sciences'' after ``graduate 
                education opportunities''; and
                  (B) in paragraph (2), by striking ``except that'' and 
                all that follows and inserting the following: ``, 
                except that no institution shall be required to match 
                any portion of the first $500,000 of its award from the 
                Secretary. After allocations are made to each eligible 
                institution under the funding rules provided in 
                subsection (f), the Secretary shall reallocate, on a 
                pro rata basis, any amounts which remain unallocated 
                (by reason of the failure of an institution to comply 
                with the matching requirements of this paragraph) among 
                the institutions that have complied with such matching 
                requirement.''.
          (2) Use of funds.--Section 326(c) (20 U.S.C. 1063b(c)) is 
        amended by striking paragraphs (1) through (3) and inserting 
        the following:
          ``(1) purchase, rental or lease of scientific or laboratory 
        equipment for educational purposes, including instructional and 
        research purposes;
          ``(2) construction, maintenance, renovation, and improvement 
        in classroom, library, laboratory, and other instructional 
        facilities used exclusively for the purposes of this section, 
        including purchase or rental of telecommunications technology 
        equipment or services;
          ``(3) purchase of library books, periodicals, technical and 
        other scientific journals, microfilm, microfiche, and other 
        educational materials, including telecommunications program 
        materials;
          ``(4) scholarships, fellowships, and other financial 
        assistance for needy graduate and professional students to 
        permit their enrollment in and completion of the doctoral 
        degree in medicine, dentistry, pharmacy, veterinary medicine, 
        law, and the doctorate degree in the physical or natural 
        sciences, engineering, mathematics, or other scientific 
        disciplines in which African Americans are underrepresented;
          ``(5) establish or improve a development office to strengthen 
        and increase contributions from alumni and the private sector;
          ``(6) assist in the establishment or maintenance of an 
        institutional endowment to facilitate financial independence 
        pursuant to section 331 of this title; and
          ``(7) funds and administrative management, and the 
        acquisition of equipment, including software, for use in 
        strengthening funds management and management information 
        systems.''.
          (3) Eligibility.--Section 326(e) (20 U.S.C. 1063b(e)) is 
        amended--
                  (A) in paragraph (1)
                          (i) by striking ``include--'' and inserting 
                        ``are the following:'';
                          (ii) by inserting ``and other qualified 
                        graduate programs'' before the semicolon at the 
                        end of subparagraphs (F) through (J);
                          (iii) by striking ``and'' at the end of 
                        subparagraph (O);
                          (iv) by inserting ``University'' after 
                        ``Jackson State'' in subparagraph (P);
                          (v) by striking the period at the end of such 
                        subparagraph and inserting a semicolon; and
                          (vi) by inserting after such subparagraph the 
                        following new subparagraphs:
                  ``(Q) Norfolk State University qualified graduate 
                program; and
                  ``(R) Tennessee State University qualified graduate 
                program.''; and
                  (B) by striking paragraphs (2) and (3) and inserting 
                the following:
          ``(2) Qualified graduate program.--For the purposes of this 
        section, the term `qualified graduate program' means a graduate 
        or professional program that provides an accredited program of 
        instruction in the physical or natural sciences, engineering, 
        mathematics, or other scientific discipline in which African 
        Americans are underrepresented and has students enrolled in 
        such program at the time of application for a grant under this 
        section.
          ``(3) Special rule.--Institutions that were awarded grants 
        under this section prior to October 1, 1998, shall continue to 
        receive such grants, subject to the availability of 
        appropriated funds, regardless of the eligibility of the 
        institutions described in subparagraphs (Q) and (R) of 
        paragraph (1).''; and
                  (C) in paragraph (4), by inserting before the period 
                at the end the following: ``, except that the president 
                or chancellor of the institution may decide which 
                graduate or professional school or qualified graduate 
                program will receive funds under the grant in any one 
                fiscal year''.
          (4) Funding rule.--Section 326(f) (20 U.S.C. 1063b(f)) is 
        amended--
                  (A) by striking ``Of the amount appropriated'' and 
                inserting ``Subject to subsection (g), of the amount 
                appropriated'';
                  (B) in paragraph (1)--
                          (i) by striking ``$12,000,000'' and inserting 
                        ``$26,000,000''; and
                          (ii) by striking ``(A) through (E)'' and 
                        inserting ``(A) through (P)''.
                  (C) by striking paragraph (2) and inserting the 
                following:
          ``(2) the next $1,000,000 in excess of $26,000,000 shall be 
        available for the purpose of making grants to institutions or 
        programs identified in subparagraphs (Q) and (R) of subsection 
        (e)(1); and
          ``(3) if the amount appropriated exceeds $27,000,000, the 
        Secretary shall develop a formula for making allotments of such 
        excess to each of the institutions or programs identified in 
        subparagraphs (A) through (R) using the following elements:
                  ``(A) the number of students enrolled in the eligible 
                institution's professional or graduate school, or 
                qualified graduate program which received funding under 
                this section in the previous year;
                  ``(B) the average cost of education per student for 
                all full-time graduate or professional students (or the 
                equivalent) enrolled in the eligible professional 
                school, graduate school or doctoral students in the 
                qualified graduate program; and
                  ``(C) the number of students who received their first 
                professional or doctoral degree at the professional or 
                graduate school or the qualified graduate program in 
                the preceding year for which the institution received 
                funding under this section.''.
          (5) Hold harmless rule.--Section 326 is further amended by 
        adding at the end the following new subsection:
  ``(g) Hold Harmless Rule.--Notwithstanding paragraph (2) and (3) of 
subsection (f), no institution or qualified program identified in 
subsection (e)(1) that received a grant for fiscal year 1998 and that 
is eligible to receive a grant in a subsequent fiscal year shall 
receive a grant amount in any such subsequent fiscal year that is less 
than the grant amount received for fiscal year 1998, unless the amount 
appropriated is not sufficient to provide such grant amounts to all 
such institutions and programs.''.

SEC. 303. MINORITY SCIENCE AND ENGINEERING IMPROVEMENT PROGRAM.

  (a) Amendment.--Title III (20 U.S.C. 1051) is amended--
          (1) by redesignating part D as part E; and
          (2) by inserting after part C the following new part:

     ``PART D--MINORITY SCIENCE AND ENGINEERING IMPROVEMENT PROGRAM

``SEC. 341. PROGRAM AUTHORIZED.

  ``The Secretary shall, in accordance with the provisions of this 
part, carry out a program of making grants to institutions of higher 
education that are designed to effect long-range improvements in 
science and engineering education, and improve support programs for 
minority students enrolled in science and engineering programs at 
predominantly minority institutions.

``SEC. 342. USE OF FUNDS.

  ``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.

``SEC. 343. ELIGIBILITY FOR GRANTS.

  ``The Secretary may make grants under this part to minority 
institutions (as defined in section 347), organizations, and entities 
to enable them to carry out programs and activities authorized by this 
part:
          ``(1)(A) institutions of higher education granting 
        baccalaureate degrees; and
          ``(B) institutions of higher education granting associate 
        degrees which--
                  ``(i) have a curriculum including science or 
                engineering subjects;
                  ``(ii) apply jointly with institutions described in 
                subparagraph (A); and
                  ``(iii) have an articulation agreement with 
                institutions described in subparagraph (A) for its 
                science or engineering students; and
          ``(2) consortia of--
                  ``(A) institutions which have a curriculum in science 
                or engineering;
                  ``(B) graduate institutions which have a curriculum 
                in science or engineering;
                  ``(C) Federal Education Research Centers;
                  ``(D) research laboratories of, or under contract 
                with, the Department of Energy;
                  ``(E) private organizations which have science or 
                engineering facilities; or
                  ``(F) quasi-governmental entities which have a 
                significant scientific or engineering mission;
        to enable such institutions and consortia to carry programs and 
        activities authorized by this part.

``SEC. 344. GRANT APPLICATION.

  ``(a) Submission and Contents of Applications.--An eligible applicant 
(as determined under section 343) that desires to receive a grant under 
this part shall submit to the Secretary an application therefor at such 
time or times, in such manner, and containing such information as the 
Secretary may prescribe by regulation. Such application shall set 
forth--
          ``(1) a program of activities for carrying out one or more of 
        the purposes described in section 342 in such detail as will 
        enable the Secretary to determine the degree to which such 
        program will accomplish such purpose or purposes; and
          ``(2) such other policies, procedures, and assurances as the 
        Secretary may require by regulation.
  ``(b) Approval Based on Likelihood of Progress.--The Secretary shall 
approve an application only if the Secretary determines that the 
application sets forth a program of activities which are likely to make 
substantial progress toward achieving the purposes of this part.

``SEC. 345. CROSS PROGRAM AND CROSS AGENCY COOPERATION.

  ``The Minority Science and Engineering Improvement Programs shall 
cooperate and consult with other programs within the Department and 
within Federal, State, and private agencies which carry out programs to 
improve the quality of science, mathematics, and engineering education.

``SEC. 346. ADMINISTRATIVE PROVISIONS.

  ``(a) Technical Staff.--The Secretary shall appoint, without regard 
to the provisions of title 5 of the United States Code governing 
appointments in the competitive service, not less than one technical 
employees with appropriate scientific and educational background to 
administer the programs under this part who may be paid without regard 
to the provisions of chapter 51 and subchapter III of chapter 53 of 
such title relating to classification and General Schedule pay rates.
  ``(b) Procedures for Grant Review.--The Secretary shall establish 
procedures for reviewing and evaluating grants and contracts made or 
entered into under such programs. Procedures for reviewing grant 
applications, based on the peer review system, or contracts for 
financial assistance under this title may not be subject to any review 
outside of officials responsible for the administration of the Minority 
Science and Engineering Improvement Program.

``SEC. 347. DEFINITIONS.

  ``For the purpose of this part--
          ``(1) The term `minority institution' means an institution of 
        higher education whose enrollment of a single minority or a 
        combination of minorities (as defined in paragraph (2)) exceeds 
        50 percent of the total enrollment. The Secretary shall verify 
        this information from the data on enrollments in the higher 
        education general information surveys (HEGIS) furnished by the 
        institution to the Office for Civil Rights, Department of 
        Education.
          ``(2) The term `minority' means American Indian, Alaskan 
        Native, Black (not of Hispanic origin), Hispanic (including 
        persons of Mexican, Puerto Rican, Cuban, and Central or South 
        American origin), Pacific Islander or other ethnic group 
        underrepresented in science and engineering.
          ``(3) The term `science' means, for the purpose of this 
        program, the biological, engineering, mathematical, physical, 
        behavioral, and social sciences, and history and philosophy of 
        science; also included are interdisciplinary fields which are 
        comprised of overlapping areas among two or more sciences.''.

SEC. 304. GENERAL PROVISIONS.

  (a) Applications for Assistance.--Section 351(a) (20 U.S.C. 1066(a)) 
is amended to read as follows:
  ``(a) Applications.--
          ``(1) Applications Required.--Any institution which is 
        eligible for assistance under this title shall submit to the 
        Secretary an application for assistance at such time, in such 
        form, and containing such information, as may be necessary to 
        enable the Secretary to evaluate its need for assistance. 
        Subject to the availability of appropriations to carry out this 
        title, the Secretary may approve an application for a grant 
        under this title only if the Secretary determines that--
                  ``(A) the application meets the requirements of 
                subsection (b);
                  ``(B) the applicant is eligible for assistance in 
                accordance with the part of this title under which the 
                assistance is sought; and
                  ``(C) the applicant's performance goals are 
                sufficiently rigorous as to meet the purposes of this 
                title and the performance objectives and indicators for 
                this title established by the Secretary pursuant to the 
                Government Performance and Results Act.
          ``(2) Preliminary applications.--In carrying out paragraph 
        (1), the Secretary shall develop a preliminary application for 
        use by eligible institutions applying under part A prior to the 
        submission of the principal application.''.
  (b) Contents of Applications.--Section 351(b) is amended--
          (1) in paragraph (5)(A), by inserting ``and the Government 
        Performance and Results Act'' after ``under this title''; and
          (2) in paragraph (6), by inserting before the semicolon the 
        following: ``, except that for purposes of section 316, 
        paragraphs (2) and (3) shall not apply''.
  (c) Waivers.--Section 352(a) (20 U.S.C. 1067(a)) is amended--
          (1) by striking ``or'' at the end of paragraph (5);
          (2) by redesignating paragraph (6) as paragraph (7); and
          (3) by inserting after paragraph (5) the following new 
        paragraph:
          ``(6) that is a tribally controlled community college as 
        defined in the Tribally Controlled Community College Act of 
        1978; or''.
  (d) Application Review Process.--Section 353(a) (20 U.S.C. 1068(a)) 
is amended--
          (1) in paragraph (2), by striking ``Native American colleges 
        and universities'' and inserting ``Tribal Colleges and 
        Universities''; and
          (2) in paragraph (3)--
                  (A) by striking subparagraph (A); and
                  (B) by redesignating subparagraphs (B) and (C) as 
                subparagraphs (A) and (B), respectively.
  (e) Continuation Awards.--Part D of title III is amended by inserting 
after section 354 (20 U.S.C. 1069) the following new section:

``SEC. 355. CONTINUATION AWARDS.

  ``The Secretary shall make continuation awards under this title for 
the second and succeeding years of a grant only after determining that 
the recipient is making satisfactory progress in carrying out the 
grant.''.
  (f) Authorization of Appropriations.--Section 360 (20 U.S.C. 1069f) 
is amended--
          (1) by striking subsection (a) and inserting the following:
  ``(a) Authorizations.--
          ``(1) Part a.--(A) There are authorized to be appropriated to 
        carry out part A (other that sections 316), $135,000,000 for 
        fiscal year 1999, and such sums as may be necessary for each of 
        the 4 succeeding fiscal years.
          ``(B) There are authorized to be appropriated to carry out 
        section 316, $10,000,000 for fiscal year 1999, and such sums as 
        may be necessary for each of the 4 succeeding fiscal years.
          ``(2) Part b.--(A) There are authorized to be appropriated to 
        carry out part B (other than section 326), $135,000,000 for 
        fiscal year 1999, and such sums as may be necessary for each of 
        the 4 succeeding fiscal years.
          ``(B) There are authorized to be appropriated to carry out 
        section 326, $35,000,000 for fiscal year 1999, 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, $10,000,000 for fiscal year 1999, 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, $10,000,000 for fiscal year 1999, and such 
        sums as may be necessary for each of the 4 succeeding fiscal 
        years.''; and
          (2) by striking subsections (c), (d) and (e).

                      TITLE IV--STUDENT ASSISTANCE

                       PART A--GRANTS TO STUDENTS

SEC. 401. PELL GRANTS.

  (a) Extension of Authority.--Section 401(a) (20 U.S.C. 1070a(a)) is 
amended--
          (1) in paragraph (1)--
                  (A) by striking ``September 30, 1998'' and inserting 
                ``September 30, 2004''; and
                  (B) by striking the second sentence; and
          (2) in paragraph (2), by striking ``the disbursement system 
        required by paragraph (1)'' and inserting ``the disbursement of 
        Federal Pell Grants''.
  (b) Amount of Grant.--Section 401(b)(2)(A) is amended to read as 
follows:
  ``(2)(A) The amount of the Federal Pell Grant for a student eligible 
under this part shall be--
          ``(i) $4,500 for academic year 1999-2000,
          ``(ii) $4,700 for academic year 2000-2001,
          ``(iii) $4,900 for academic year 2001-2002,
          ``(iv) $5,100 for academic year 2002-2003, and
          ``(v) $5,300 for academic year 2003-2004,
less an amount equal to the amount determined to be the expected family 
contribution with respect to that student for that year.''.
  (c) Relation of Maximum Grant to Tuition and Expenses.--Section 
401(b)(3) is amended--
          (1) by striking ``$2,400'' each place it appears and 
        inserting ``$3,000''; and
          (2) by adding at the end the following new subparagraph:
  ``(C) An institution that charged only fees in lieu of tuition as of 
January 31, 1997, may include in its determination of tuition charged, 
fees that would normally constitute tuition.''.
  (d) Dependent Care and Disability Related Expenses.--Section 
401(b)(3)(B) is amended by striking ``$750'' and inserting ``$1,500''.
  (e) Institutional Ineligibility Based on Default Rates.--Section 401 
is amended by adding at the end the following new subsection:
  ``(j) Institutional Ineligibility Based on Default Rates.--
          ``(1) In general.--No institution of higher education shall 
        be an eligible institution for purposes of this section if such 
        institution of higher education is ineligible to participate in 
        a loan program under this title as a result of a final default 
        rate determination made by the Secretary under part B or D of 
        this title, or both, after the final publication of fiscal year 
        1996 cohort default rates.
          ``(2) Sanctions subject to appeal opportunity.--No 
        institution may be subject to the terms of this subsection 
        unless it has had the opportunity to appeal its default rate 
        determination under regulations issued by the Secretary for the 
        Federal Family Education Loan or Federal Direct Loan Program, 
        as applicable. This subsection shall not apply to an 
        institution that was not participating in the loan programs 
        authorized under part B or D of this title on the date of 
        enactment of the Higher Education Amendments of 1998, unless 
        the institution subsequently participates in the loan 
        programs.''.
  (f) Conforming Amendments.--
          (1) Section 400(a)(1) (20 U.S.C. 1070(a)(1)) is amended by 
        striking ``basic educational opportunity grants'' and inserting 
        ``Federal Pell Grants''.
          (2) The heading of subpart 1 of part A of title IV is amended 
        to read as follows:

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

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

SEC. 402. FEDERAL TRIO PROGRAMS.

  (a) Program Authority; Authorization of Appropriations.--
          (1) Duration of grants.--Section 402A(b)(2) (20 U.S.C. 1070a-
        11(b)(2)) is amended--
                  (A) by striking subparagraph (A);
                  (B) by striking the period at the end of subparagraph 
                (B) and inserting ``; and'';
                  (C) by redesignating subparagraph (B) as subparagraph 
                (A); and
                  (D) by adding at the end the following new 
                subparagraph:
                  ``(B) grants under section 402H shall be awarded for 
                a period determined by the Secretary.''.
          (2) Minimum grants.--Section 402A(b)(3) is amended to read as 
        follows:
          ``(3) Minimum grants.--Unless the institution or agency 
        requests a smaller amount, individual grants under this chapter 
        shall be no less than--
                  ``(A) $170,000 for programs authorized by sections 
                402D and 402G;
                  ``(B) $180,000 for programs authorized by sections 
                402B and 402F; and
                  ``(C) $190,000 for programs authorized by sections 
                402C and 402E.''.
          (3) Procedures for awarding grants and contracts.--Subsection 
        (c) of section 402A is amended to read as follows:
  ``(c) Procedures for Awarding Grants and Contracts.--
          ``(1) Application requirements.--An eligible entity that 
        desires to receive a grant or contract under this chapter shall 
        submit an application to the Secretary in such manner and form, 
        and containing such information and assurances, as the 
        Secretary may reasonably require.
          ``(2) Prior experience.--In making grants under this chapter, 
        the Secretary shall consider each applicant's prior experience 
        of service delivery under the particular program for which 
        funds are sought. The level of consideration given the factor 
        of prior experience shall not vary from the level of 
        consideration given such factor during fiscal years 1994 
        through 1997, except that grants made under section 402H shall 
        not be given prior experience consideration.
          ``(3)  Order of awards; program fraud.--(A) Except with 
        respect to grants made under sections 402G and 402H and as 
        provided in subparagraph (B), the Secretary shall award grants 
        and contracts under this chapter in the order of the scores 
        received by the application for such grant or contract in the 
        peer review process required under section 110 and adjusted for 
        prior experience in accordance with paragraph (2) of this 
        subsection.
          ``(B) The Secretary is not required to provide assistance to 
        a program otherwise eligible for assistance under this chapter, 
        if the Secretary has determined that such program has involved 
        the fraudulent use of funds under this chapter.
          ``(4) Peer review process.--(A) The Secretary shall assure 
        that, to the extent practicable, members of groups 
        underrepresented in higher education, including African 
        Americans, Hispanics, Native Americans, Alaska Natives, Asian 
        Americans, Native American Pacific Islanders (including Native 
        Hawaiians), are represented as readers of applications 
        submitted under this chapter. The Secretary shall also assure 
        that persons from urban and rural backgrounds are represented 
        as readers.
          ``(B) The Secretary shall ensure that each application 
        submitted under this chapter is read by at least 3 readers who 
        are not employees of the Federal Government (other than as 
        readers of applications).
          ``(5) Number of applications for grants and contracts.--The 
        Secretary shall not limit the number of applications submitted 
        by an entity under any program authorized under this chapter if 
        the additional applications describe programs serving different 
        populations or campuses.
          ``(6) Coordination with other programs for disadvantaged 
        students.--The Secretary shall encourage coordination of 
        programs assisted under this chapter with other programs for 
        disadvantaged students operated by the sponsoring institution 
        or agency, regardless of the funding source of such programs. 
        The Secretary shall not limit an entity's eligibility to 
        receive funds under this chapter because such entity sponsors a 
        program similar to the program to be assisted under this 
        chapter, regardless of the funding source of such program. The 
        Secretary shall permit the Director of a program receiving 
        funds under this chapter to administer one or more additional 
        programs for disadvantaged students operated by the sponsoring 
        institution or agency, regardless of the funding sources of 
        such programs.
          ``(7)  Application status.--The Secretary shall inform each 
        entity operating programs under this chapter regarding the 
        status of their application for continued funding at least 8 
        months prior to the expiration of the grant or contract. The 
        Secretary, in the case of an entity that is continuing to 
        operate a successful program under this chapter, shall ensure 
        that the start-up date for a new grant or contract for such 
        program immediately follows the termination of preceding grant 
        or contract so that no interruption of funding occurs for such 
        successful reapplicants. The Secretary shall inform each entity 
        requesting assistance under this chapter for a new program 
        regarding the status of their application at least 8 months 
        prior to the proposed startup date of such program.''.
          (4) Authorization of appropriations.--Section 402A(f) is 
        amended--
                  (A) by striking ``$650,000,000 for fiscal year 1993'' 
                and inserting ``$800,000,000 for fiscal year 1999''; 
                and
                  (B) by striking everything after the first sentence.
  (b) Talent Search.--Section 402B(b) (20 U.S.C. 1070a-12(b)) is 
amended--
          (1) by striking paragraph (4) and inserting the following:
          ``(4) guidance on and assistance in secondary school reentry, 
        entry to general educational development (GED) programs, other 
        alternative education programs for secondary school dropouts, 
        or postsecondary education;''; and
          (2) in paragraph (8), by striking ``parents'' and inserting 
        ``families''.
  (c) Upward Bound.--Section 402C (20 U.S.C. 1070a-13) is amended--
          (1) in subsection (b)--
                  (A) in paragraph (2), by striking ``personal 
                counseling'' and inserting ``counseling and 
                workshops'';
                  (B) in paragraph (6)--
                          (i) by inserting ``work-study and other'' 
                        before ``activities''; and
                          (ii) by inserting before the semicolon at the 
                        end the following: ``, including careers 
                        requiring a postsecondary degree'';
                  (C) in paragraph (9), by striking ``and'' at the end;
                  (D) in paragraph (10), by striking ``through (9)'' 
                and inserting ``through (10)''; and
                  (E) by redesignating paragraph (10) as paragraph (11) 
                and by inserting after paragraph (9) the following new 
                paragraph:
          ``(10) special services to enable veterans to make the 
        transition to postsecondary education; and''; and
          (2) in subsection (c), by inserting ``, other than a project 
        a majority of the participants in which are veterans,'' after 
        ``this chapter''.
  (d) Student Support Services.--Section 402D(c)(6) (20 U.S.C. 1070a-
14(c)(6)) is amended by inserting before the period at the end the 
following: ``and minimize the student's loan burden''.
  (e) Postbaccalaureate Achievement Program.--Section 402E (20 U.S.C. 
1070a-15) is amended--
          (1) in subsection (c)(3), by inserting ``or accepted in a 
        graduate program'' after ``degree program''; and
          (2) in subsection (e)(1), by striking ``$2,400'' and 
        inserting ``$3,200''.
  (f) Staff Development Activities.--Section 402G(b) (20 U.S.C. 1070a-
17(b)) is amended by inserting after paragraph (3) the following new 
paragraph:
          ``(4) The use of appropriate educational technology in the 
        operation of projects assisted under this chapter.''.
  (g) Evaluation for Project Improvement.--Section 402H(b) (20 U.S.C. 
1070a-18(b)) is amended by adding at the end the following new 
sentence: ``Such evaluations shall also investigate the effectiveness 
of alternative and innovative methods within Federal TRIO programs of 
increasing access to, and retention of, students in postsecondary 
education.''.

SEC. 403. NATIONAL EARLY INTERVENTION AND PARTNERSHIP PROGRAM.

  Section 404G (20 U.S.C. 1070a-27) is amended by striking ``1993'' and 
inserting ``1999''.

SEC. 404. REPEALS.

  (a) Repeals of Subpart 2 Provisions.--The following provisions of 
subpart 2 of part A of title IV are repealed:
          (1) Chapter 3 (20 U.S.C. 1070a-31 et seq.).
          (2) Chapter 4 (20 U.S.C. 1070a-41 et seq.).
          (3) Chapter 5 (20 U.S.C. 1070a-51 et seq.).
          (4) Chapter 6 (20 U.S.C. 1070a-61 et seq.).
          (5) Chapter 7 (20 U.S.C. 1070a-71 et seq.).
          (6) Chapter 8 (20 U.S.C. 1070a-81 et seq.).
  (b) Subpart 8.--Subpart 8 of part A of title IV (20 U.S.C. 1070f) is 
repealed.
  (c) Conforming Amendment.--Section 400(b) (20 U.S.C. 1070(b)) is 
amended by striking ``subparts 1 through 8'' and inserting ``subparts 1 
through 6''.

SEC. 405. ESTABLISHMENT OF NEW PROGRAMS.

  Subpart 2 of part A of title IV is amended by inserting after chapter 
2 (20 U.S.C. 1070a-81) the following new chapters:

                  ``CHAPTER 3--HIGH HOPES FOR COLLEGE

           ``Subchapter A--21st Century Scholar Certificates

``SEC. 406A. 21ST CENTURY SCHOLAR CERTIFICATES.

  ``(a) Findings.--The Congress makes the following findings:
          ``(1) Among low-income students who, despite high test 
        scores, are not planning on attending college, nearly 60 
        percent cite an inability to afford school as the reason.
          ``(2) About 80 percent of our 12th graders who are interested 
        in continuing their education after high school go on to 
        college if their parents read materials about financial aid, 
        compared to only 55 percent of such students if their parents 
        do not read this material.
          ``(3) In 1996, the American Council on Education found that 
        the public overestimated the tuition of public 2-year colleges 
        by about 3 times the actual average tuition, of public 4-year 
        colleges by over twice the actual average tuition, and of 
        private 4-year universities by almost one-third more than the 
        actual average tuition.
          ``(4) There is a need for, and a significant benefit from, 
        providing students, and through them their parents, with 
        information about the variety of Federal student financial 
        assistance programs, such as Pell grants, Federal work-study 
        and loans, and the AmeriCorps Education Awards that make 
        college more affordable than ever before.
  ``(b) Authority.--
          ``(1) The Secretary, using funds appropriated under section 
        407H(a) of this Act--
                  ``(A) shall ensure that certificates, to be known as 
                21st Century Scholar Certificates, are provided to all 
                students participating in projects under chapter 2; and
                  ``(B) may, as practicable, ensure that such 
                certificates are provided to all students in grades 6 
                through 12 who attend schools at which at least 50 
                percent of the students enrolled are eligible for free 
                or reduced-price lunch.
          ``(2) A 21st Century Scholar Certificate shall be 
        personalized for each student and indicate the amount of 
        Federal financial aid for college for which a student may be 
        eligible.

                ``Subchapter B--High Hopes Partnerships

``SEC. 407A. PURPOSE.

  ``It is the purpose of this chapter to encourage and prepare students 
in low-income communities, beginning not later than the 7th grade, to 
prepare for, enter, and successfully complete college by assisting 
college-school-community partnerships to--
          ``(1) provide in-school and on-campus early college awareness 
        activities to these students and their parents;
          ``(2) ensure ongoing adult guidance and other support to 
        these students;
          ``(3) provide useful, early information to these students and 
        their parents on the need for, options related to, and 
        financing (including the availability of financial assistance) 
        of a college education; and
          ``(4) help ensure that these students have access to rigorous 
        core courses, such as algebra and geometry, that prepare them 
        for college.

``SEC. 407B. GRANTS.

  ``(a) Grants Authorized.--From funds appropriated under section 
407H(a), the Secretary shall make grants to college-school-community 
partnerships for activities under section 407D.
  ``(b) Eligible Partnership.--For purposes of this chapter, an 
eligible partnership shall include--
          ``(1) one or more local educational agencies acting on behalf 
        of--
                  ``(A) one or more participating schools; and
                  ``(B) the public secondary schools that students from 
                these schools would normally attend;
          ``(2) one or more degree granting institutions of higher 
        education; and
          ``(3) at least two community organizations or entities, such 
        as businesses, professional associations, community-based 
        organizations, or other public or private agencies or 
        organizations.
  ``(c) Definitions.--For the purpose of this chapter--
          ``(1) `participating school' means a public school in which--
                  ``(A) there is a 7th grade;
                  ``(B) one or more cohorts of students receive 
                services under this chapter; and
                  ``(C) at least 50 percent of the students enrolled 
                are eligible for free or reduced-price lunch; and
          ``(2) `cohort of students' means--
                  ``(A) an entire grade level of students in a 
                participating school; or
                  ``(B) if the partnership determines that it would 
                promote the effectiveness of a project, an entire grade 
                level of students, beginning not later than the 7th 
                grade, who reside in public housing as defined in 
                section 3(b)(1) of the United States Housing Act of 
                1937.
  ``(d) Duration.--Each grant awarded under this chapter shall be for a 
6-year period.
  ``(e) Cost Sharing.--
          ``(1) Federal funds shall provide no more than 80 percent of 
        the cost of the project in the first year, 70 percent of the 
        cost in the second year, 60 percent of the cost in the third 
        year, 50 percent of the cost in the fourth year, 40 percent of 
        the cost in the fifth year, and 30 percent of the cost in the 
        sixth year.
          ``(2) The non-Federal share of grants awarded under this 
        chapter may--
                  ``(A) be in cash or in kind, fairly evaluated, 
                including services, supplies, or equipment; and
                  ``(B) include the non-Federal share of work-study 
                grants under part C of title IV of this Act awarded to 
                students who serve as tutors or mentors in projects 
                under this chapter.
          ``(3) The Secretary may waive the cost sharing requirement 
        described in paragraph (1) for any eligible partnership that 
        demonstrates to the satisfaction of the Secretary an 
        extraordinary hardship that prevents compliance with that 
        requirement.
  ``(f) Equitable Geographic Distribution.--To the extent possible, the 
Secretary shall award grants under this chapter in a manner that 
achieves an equitable geographic distribution of those grants.
  ``(g) Priority Awards Under Chapter 2.--Before making grants under 
this chapter for fiscal year 1999, the Secretary shall, as appropriate, 
make awards to recipients eligible for continuation awards under 
chapter 2 of subpart 2 of this title as it was in effect prior to the 
enactment of the Higher Education Amendments of 1998.

``SEC. 407C. GRANT APPLICATION; PREFERENCES.

  ``(a) Application Required.--An eligible partnership desiring to 
receive a grant under this chapter shall submit an application to the 
Secretary, in such form and containing such information, as the 
Secretary may require.
  ``(b) Application Contents.--Each application shall include--
          ``(1) the name of each partner and a description of its 
        responsibilities, including the designation of either an 
        institution of higher education or a local educational agency 
        as the fiscal agent for the partnership;
          ``(2) a description of the need for the project, including a 
        description of how the project will build on existing services 
        and activities, if any;
          ``(3) a listing of the human, financial (other than funds 
        under this chapter), and other resources that each member of 
        the partnership will contribute to the partnership, and a 
        description of the efforts each member of the partnership will 
        make in seeking additional resources;
          ``(4) a description of how the project will operate, 
        including how grant funds will be used to meet the purpose of 
        this chapter;
          ``(5) a description of how services will be coordinated with, 
        and will complement and enhance, services received by 
        participating schools and students under other related Federal 
        and non-Federal programs, including programs under title I, 
        part A of title VII, and part 1 of title X of the Elementary 
        and Secondary Education Act of 1965, the School-to-Work 
        Opportunities Act of 1994, section 402 of this Act, and the 
        Individuals with Disabilities Education Act;
          ``(6) a description of how the partnership will support and 
        continue the services under this chapter after the grant has 
        expired;
          ``(7) an assurance from each local educational agency using 
        funds under this chapter that--
                  ``(A) at least 50 percent of the students enrolled in 
                each participating school are eligible for free or 
                reduced-price lunch;
                  ``(B) its aggregate expenditures per student for 
                activities described in this chapter will not be 
                reduced from the level of such expenditures in the year 
                prior to the grant; and
                  ``(C) someone at each participating school will be 
                designated as the primary point of contact for the 
                partnership;
          ``(8) an assurance that participating students will have 
        access to rigorous core academic courses that reflect 
        challenging State or local academic standards; and
          ``(9) an assurance that members will provide the performance 
        information required by the Secretary, which would be used to 
        base continuation of the grant.
  ``(c) Preferences.--In reviewing applications under this chapter, the 
Secretary shall give preference to projects that--
          ``(1) will serve participating schools in which at least 75 
        percent of the students enrolled are eligible for free or 
        reduced-price lunch;
          ``(2) provide a commitment from non-Federal sources to pay 
        all or part of the cost of college, through tuition assistance 
        or guarantees (not already available), such as `last-dollar 
        grants', for participating students; and
          ``(3) hold participating students responsible for school or 
        community service and high academic performance.

``SEC. 407D. PROGRAM REQUIREMENTS; USES OF FUNDS.

  ``(a) Program Requirements.--Projects under this chapter shall--
          ``(1) have a program coordinator who is either full-time or 
        whose primary responsibility is the project under this chapter;
          ``(2) provide services to at least one cohort of students, 
        beginning not later than the 7th grade;
          ``(3) ensure that the services authorized under this chapter 
        are provided through the 12th grade to students in the cohort, 
        including students who attend another participating school or a 
        secondary school identified under section 407B(b)(1)(B);
          ``(4) include activities and information that foster and 
        improve parent involvement in promoting postsecondary education 
        for their children, including the provision of useful early 
        information on the advantages of a college education, academic 
        admissions requirements, and the need to take core courses, 
        admissions and achievement tests, application procedures, 
        college costs and options, and the availability of student 
        financial aid;
          ``(5) include academic counseling, career awareness, and 
        tutoring or mentoring from trained personnel, as well as other 
        student support services that enable students to succeed 
        academically and apply for, enter, and complete college;
          ``(6) include training in promoting early college awareness 
        for classroom teachers, guidance counselors, and staff of the 
        schools involved in the project; faculty and program personnel 
        in participating institutions of higher education; and 
        participating mentors and tutors;
          ``(7) include activities on college campuses and enrichment 
        activities associated with postsecondary education; and
          ``(8) include arrangements that ensure that all participating 
        students have access to rigorous core courses that reflect 
        challenging State or local academic standards and that prepare 
        them for college.
  ``(b) Use of Funds.--In addition to the activities described in 
subsection (a), a recipient of funds under this chapter may use them--
          ``(1) where necessary and appropriate to ensure active 
        participation, to pay stipends to participating students and 
        their mentors;
          ``(2) where necessary and appropriate to ensure active 
        participation, to pay transportation costs for participants to 
        attend project-sponsored activities;
          ``(3) to provide out-of-school and summer activities related 
        to the project;
          ``(4) for project evaluation; and
          ``(5) to recognize the responsibility and achievement of 
        participating students through ceremonies, awards, and other 
        means.

``SEC. 407E. SERVICES FOR STUDENTS ATTENDING PRIVATE SCHOOLS.

  ``A local educational agency that participates in an eligible 
partnership shall provide services supported with Federal funds under 
this chapter on an equitable basis, consistent with section 14503 of 
Elementary and Secondary Education Act of 1965, to students in private 
schools that--
          ``(1) have a 7th grade;
          ``(2) have students at least 50 percent of whom are eligible 
        for free or reduced-price lunch; and
          ``(3) are located in the normal attendance area of a 
        participating school.

``SEC. 407F. EVALUATION.

  ``In order to improve the operation of the program assisted under 
this chapter, the Secretary shall, with funds appropriated under 
section 407H(a), make grants to, and enter into contracts and 
cooperative agreements with, institutions of higher education and other 
public and private institutions and organizations to evaluate the 
effectiveness of the program assisted under this chapter and, as 
appropriate, disseminate such results.

``SEC. 407G. PEER REVIEW.

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

``SEC. 407H. AUTHORIZATION OF APPROPRIATIONS.

  ``(a) Authorization of Appropriation.--There are authorized to be 
appropriated $140,000,000 for fiscal year 1999 and such sums as may be 
necessary for each of the 5 succeeding fiscal years to carry out this 
chapter.
  ``(b) Reservation for Technical Assistance and Peer Review.--From the 
amount appropriated under subsection (a) for any fiscal year, the 
Secretary may reserve up 0.5 percent of that amount to obtain 
additional qualified readers and additional staff to review 
applications, to increase the level of oversight monitoring, to support 
impact studies, program assessments and reviews, and to provide 
technical assistance to potential applicants and current grantees.

             ``CHAPTER 4--FRANK TEJEDA SCHOLARSHIP PROGRAM

``SEC. 408A. STATEMENT OF PURPOSE.

  ``It is the purpose of this chapter to establish a Frank Tejeda 
Scholarship Program to recruit and train teachers who are proficient in 
both Spanish and English and who show promise of academic achievement.

``SEC. 408B. SCHOLARSHIPS AUTHORIZED.

  ``(a) Program Authority.--The Secretary is authorized, in accordance 
with the provisions of this chapter, to award scholarships to 
individuals consistent with the purposes of this chapter.
  ``(b) Tejeda Scholars.--Individuals awarded scholarships under this 
chapter shall be known as `Tejeda Scholars'.

``SEC. 408C. ALLOCATION AMONG STATES.

  ``(a) Allocation Formula.--From the sums appropriated pursuant to the 
authority of section 408H for any fiscal year, the Secretary shall 
allocate to each State an amount equal to $5,000 multiplied by the 
number of scholarships determined by the Secretary to be available to 
such State in accordance with subsection (b).
  ``(b) Number of Scholarships Available.--The number of scholarships 
to be made available in a State for any fiscal year shall bear the same 
ratio to the number of scholarships made available to all States as the 
State's population ages 5 through 17 bears to the population ages 5 
through 17 in all the States, except that not less than 10 scholarships 
shall be made available to any State.
  ``(c) Use of Census Data.--For the purpose of this section, the 
population ages 5 through 17 in a State and in all the States shall be 
determined by the most recently available data, satisfactory to the 
Secretary, from the Bureau of the Census. The Bureau of the Census 
shall produce and publish intercensal data for Puerto Rico and the 
other territories.

``SEC. 408D. ELIGIBILITY OF SCHOLARS.

  ``(a) High School Graduation or Equivalent and Admission to 
Institution Required.--Each student awarded a scholarship under this 
chapter shall--
          ``(1) be--
                  ``(A) a low-income individual, as that term is 
                defined in section 402A(g)(2) of this title; or
                  ``(B) an individual who is eligible for a Pell Grant 
                under subpart 1 of this part;
          ``(2) be a citizen of the United States;
          ``(3) be a resident of the State in which he or she applies;
          ``(4) be enrolled or accepted for enrollment on a full- or 
        part-time basis, at a graduate or undergraduate level, in an 
        institution of higher education that has an accredited teacher 
        preparation program;
          ``(5) have demonstrated proficiency in the English and 
        Spanish languages, as certified by the applicant's academic 
        institution; and
          ``(6) have agreed, upon graduation from such program--
                  ``(A) to serve no less than one year for each year of 
                scholarship assistance, but no fewer than two years of 
                service in total, as a teacher in a public elementary 
                or secondary school in which there is a demonstrated 
                need for Spanish-speaking teachers and professionals, 
                as determined by the Secretary;
                  ``(B) to complete such service within 6 years of 
                graduation; and
                  ``(C) that if the student is unable to complete such 
                service, the student will, except as provided in 
                subsection (c), repay the Secretary the total amount, 
                or a pro rata amount of the scholarship received under 
                this chapter in proportion to the amount of service 
                completed, plus interest and collection costs in the 
                same manner as repayment of a student loan made under 
                part D of this title.
  ``(b) Selection Based on Promise of Academic Achievement.--Each 
student awarded a scholarship under this chapter must demonstrate 
outstanding academic achievement and show promise of continued academic 
achievement, as certified by the student's academic institution.
  ``(c) Exception to Repayment Obligation.--
          ``(1) Deferral during certain periods.--A recipient shall not 
        be considered in violation of the agreement entered into 
        pursuant to subsection (a)(4)(C) during any period in which the 
        recipient--
                  ``(A) is pursuing a full-time course of study related 
                to the field of teaching at an eligible institution;
                  ``(B) is serving, not in excess of 3 years, as a 
                member of the armed services of the United States;
                  ``(C) is temporarily totally disabled for a period of 
                time not to exceed 3 years as established by sworn 
                affidavit of a qualified physician;
                  ``(D) is unable to secure employment for a period not 
                to exceed 12 months by reason of having to care for a 
                spouse, child, parent, or immediate family member who 
                is disabled;
                  ``(E) is seeking and unable to find full-time 
                employment for a single period not to exceed 12 months;
                  ``(F) 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
                  ``(G) satisfies the provisions of additional 
                repayment exceptions that may be prescribed by the 
                Secretary in regulations issued pursuant to this 
                subpart.
          ``(2) Forgiveness if permanently totally disabled.--A 
        recipient shall be excused from repayment of any scholarship 
        assistance received under this chapter if the recipient becomes 
        permanently totally disabled as established by sworn affidavit 
        of a qualified physician.

``SEC. 408E. SELECTION OF SCHOLARS.

  ``(a) Establishment of Criteria.--The Secretary shall establish 
criteria for the selection of scholars under this chapter that meet the 
requirements of section 408D.
  ``(b) Timing of Selection.--The selection process shall be completed, 
and the awards made, no later than May 1 of the academic year preceding 
the academic year for which the award will be used.

``SEC. 408F. STIPENDS AND SCHOLARSHIP CONDITIONS.

  ``(a) Amount of Award.--Each student awarded a scholarship under this 
chapter shall receive a stipend of $5,000 for the academic year of 
study for which the scholarship is awarded, except that in no case 
shall the total amount of financial aid awarded to such student exceed 
such student's total cost-of-attendance.
  ``(b) Use of Award.--The State educational agency shall establish 
procedures to assure that a scholar awarded a scholarship under this 
chapter pursues a course of study at an institution of higher 
education.

``SEC. 408G. CONSTRUCTION OF NEEDS PROVISIONS.

  ``Notwithstanding section 471, nothing in this chapter, or any other 
Act, shall be construed to permit the receipt of a scholarship under 
this chapter to be counted for any needs test in connection with the 
awarding of any grant or the making of any loan under this Act or any 
other provision of Federal law relating to educational assistance.

``SEC. 408H. AUTHORIZATION OF APPROPRIATIONS.

  ``There are authorized to be appropriated for this chapter $5,000,000 
for fiscal year 1998 and such sums as may be necessary for each of the 
4 succeeding fiscal years.

                  ``CHAPTER 5--CAMPUS-BASED CHILD CARE

``SEC. 410A. CAMPUS-BASED CHILD CARE.

  ``(a) Program Authorized.--
          ``(1) Authority.--The Secretary may award grants to 
        institutions of higher education to assist the institutions in 
        providing campus-based child care services to low-income 
        students.
          ``(2) Amount of grants.--
                  ``(A) In general.--The amount of a grant awarded to 
                an institution of higher education under this section 
                for a fiscal year shall not exceed 1 percent of the 
                total amount of all Federal Pell Grant funds awarded to 
                students enrolled at the institution of higher 
                education for the preceding fiscal year.
                  ``(B) Minimum.--A grant under this section shall be 
                awarded in an amount that is not less than $10,000.
          ``(3) Duration and payments.--
                  ``(A) Duration.--The Secretary shall award a grant 
                under this section for a period of 3 years.
                  ``(B) Payments.--Subject to paragraph (2), the 
                Secretary shall make annual grant payments under this 
                section.
          ``(4) Eligible institutions.--An institution of higher 
        education shall be eligible to receive a grant under this 
        section for a fiscal year if the total amount of all Federal 
        Pell Grant funds awarded to students enrolled at the 
        institution of higher education for the preceding fiscal year 
        equals or exceeds $350,000.
          ``(5) Use of funds.--Grant funds under this section shall be 
        used by an institution of higher education to support or 
        establish a campus-based child care program serving the needs 
        of low-income students enrolled at the institution of higher 
        education.
          ``(6) Definition of low-income student.--For the purpose of 
        this section, the term `low-income student' means a student who 
        is eligible to receive a Federal Pell Grant for the fiscal year 
        for which the determination is made.
  ``(b) Applications.--An institution of higher education desiring a 
grant under this section shall submit an application to the Secretary 
at such time, in such manner, and accompanied by such information as 
the Secretary may require. Each application shall--
          ``(1) demonstrate that the institution is an eligible 
        institution described in subsection (a)(4);
          ``(2) specify the amount of funds requested;
          ``(3) demonstrate the need of low-income students at the 
        institution for campus-based child care services by including 
        in the application student demographics and other relevant 
        data;
          ``(4) identify the resources the institution will draw upon 
        to support the child care program and the participation of low-
        income students in the program, such as accessing social 
        services funding, using student activity fees to help pay the 
        costs of child care, using resources obtained by meeting the 
        needs of parents who are not low-income students, accessing 
        foundation, corporate, or other institutional support, and 
        demonstrating that the use of the resources will not result in 
        increases in student tuition;
          ``(5) contain an assurance that the institution will meet the 
        child care needs of low-income students through the provision 
        of services, or through a contract for the provision of 
        services;
          ``(6) provide a timeline, covering the period from receipt of 
        the grant through the provision of the child care services, 
        delineating the specific steps the institution will take to 
        achieve the goal of providing low-income students with child 
        care services;
          ``(7) specify any measures the institution will take to 
        assist low-income students with child care during the period 
        before the institution provides child care services;
          ``(8) include a plan for identifying resources needed for the 
        child care services, including space in which to provide child 
        care services, and technical assistance if necessary;
          ``(9) contain an assurance that any child care facility 
        assisted under this section will meet the applicable State or 
        local government licensing, certification, approval, or 
        registration requirements; and
          ``(10) contain a plan for any child care facility assisted 
        under this section to become accredited within 3 years of the 
        date the institution first receives assistance under this 
        section.
  ``(c) Reporting Requirements; Continuing Eligibility.--
          ``(1) Reporting requirements.--
                  ``(A) Reports.--Each institution of higher education 
                receiving a grant under this section shall report to 
                the Secretary 18 months and 36 months after receiving 
                the first grant payment under this section.
                  ``(B) Contents.--The report shall include--
                          ``(i) data on the population served under 
                        this section;
                          ``(ii) information on campus and community 
                        resources and funding used to help low-income 
                        students access child care services;
                          ``(iii) information on progress made toward 
                        accreditation of any child care facility; and
                          ``(iv) information on the impact of the grant 
                        on the quality, availability, and affordability 
                        of campus-based child care services.
          ``(2) Continuing eligibility.--The Secretary shall make the 
        third annual grant payment under this section to an institution 
        of higher education only if the Secretary determines, on the 
        basis of the 18-month report submitted under paragraph (1), 
        that the institution is making a good faith effort to ensure 
        that low-income students at the institution have access to 
        affordable, quality child care services.
  ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $30,000,000 for fiscal year 1999 
and such sums as may be necessary for each of the 4 succeeding fiscal 
years.''.

SEC. 406. FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS.

  (a) Extension of Authority.--Section 413A(b)(1) (20 U.S.C. 
1070b(b)(1)) is amended by striking ``1993'' and inserting ``1999''.
  (b) Use of Funds for Less-Than-Full-Time Students.--Subsection (d) of 
section 413C (20 U.S.C. 1070b-2(d)) is amended by striking ``and if the 
total financial need'' and all that follows and inserting the 
following: ``, then grant funds shall be made available to such 
independent and less-than-full-time students.''.
  (c) Allocation of Funds.--Section 413D (20 U.S.C. 1070b-3) is 
amended--
          (1) by striking subsection (b); and
          (2) in subsection (c)(1), by striking ``three-quarters of the 
        remainder'' and inserting ``the remainder'';
          (3) in subsection (c)(2)(A)(i), by striking ``subsection 
        (d)'' and inserting ``subsection (c)'';
          (4) by redesignating subsections (c), (d), (e), and (f) as 
        subsections (b), (c), (d), and (e), respectively; and
          (5) by inserting after subsection (e) (as so redesignated) 
        the following new subsection:
  ``(f) Carry-Over/Carry-Back Authority.--
          ``(1) Carry-over authority.--
                  ``(A) Carry-over up to 10 percent.--Of the sums 
                granted to an eligible institution under this subpart 
                for any fiscal year, 10 percent may, at the discretion 
                of the institution, remain available for expenditure 
                during the succeeding fiscal year to carry out the 
                program under this subpart.
                  ``(B) Reallocation of excess.--Any of the sums so 
                granted to an institution for a fiscal year which are 
                not needed by that institution to operate programs 
                under this subpart during that fiscal year, and which 
                it does not wish to use during the next fiscal year as 
                authorized in the preceding sentence, shall remain 
                available to the Secretary for making grants under 
                section 413B to other institutions in the same State 
                until the close of the second fiscal year next 
                succeeding the fiscal year for which such funds were 
                appropriated.
          ``(2) Carry-back authority.--
                  ``(A) Carry-back up to 10 percent.--Up to 10 percent 
                of the sums the Secretary determines an eligible 
                institution may receive from funds which have been 
                appropriated for a fiscal year may be used by the 
                institution for expenditure during the fiscal year 
                preceding the fiscal year for which the sums were 
                appropriated.
                  ``(B) Use of carried-back funds.--An eligible 
                institution may make grants to students after the end 
                of the academic year, but prior to the beginning of the 
                succeeding fiscal year, from such succeeding fiscal 
                year's appropriations.''.

SEC. 407. GRANTS TO STATES FOR STATE STUDENT INCENTIVES.

  (a) Authorization of Appropriations.--Section 415A(b) of the Higher 
Education Act of 1965 (20 U.S.C. 1070c(b)) is amended--
          (1) in paragraph (1), by striking ``1993'' and inserting 
        ``1999'';
          (2) by redesignating paragraph (2) as paragraph (3); and
          (3) by inserting after paragraph (1) the following:
          ``(2) Reservation.--For any fiscal year for which the amount 
        appropriated under paragraph (1) exceeds $25,000,000, the 
        excess shall be available to carry out section 415E.''.
  (b) Special Leveraging Educational Assistance Partnership Program.--
Subpart 4 of part A of title IV of the Higher Education Act of 1965 (20 
U.S.C. 1070c et seq.) is amended--
          (1) by redesignating section 415E as section 415F; and
          (2) by inserting after section 415D the following:

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

  ``(a) In General.--From amounts reserved under section 415A(b)(2) for 
each fiscal year, the Secretary shall--
          ``(1) make allotments among States in the same manner as the 
        Secretary makes allotments among States under section 415B; and
          ``(2) award grants to States, from allotments under paragraph 
        (1), to enable the States to pay the Federal share of the cost 
        of the authorized activities described in subsection (c).
  ``(b) Authorized Activities.--Each State receiving a grant under this 
section may use the grant funds for--
          ``(1) increasing the dollar amount of grants awarded under 
        section 415B to eligible students who demonstrate financial 
        need;
          ``(2) carrying out transition programs from secondary school 
        to postsecondary education for eligible students who 
        demonstrate financial need;
          ``(3) carrying out a financial aid program for eligible 
        students who demonstrate financial need and wish to enter 
        teaching or computer-related careers, or other fields of study 
        determined by the State to be critical to the State's workforce 
        needs;
          ``(4) carrying out early intervention programs, mentoring 
        programs, and career education programs for eligible students 
        who demonstrate financial need; and
          ``(5) awarding merit or academic scholarships to eligible 
        students who demonstrate financial need.
  ``(c) Maintenance of Effort Requirement.--Each State receiving a 
grant under this section for a fiscal year shall provide the Secretary 
an assurance that the aggregate amount expended per student or the 
aggregate expenditures by the State, from funds derived from non-
Federal sources, for the authorized activities described in subsection 
(b) for the preceding fiscal year were not less than the amount 
expended per student or the aggregate expenditures by the State for the 
activities for the second preceding fiscal year. The Secretary may 
waive this subsection for good cause, as determined by the Secretary.
  ``(d) Federal Share.--The Federal share of the cost of the authorized 
activities described in subsection (b) for any fiscal year shall be 25 
percent.''.
  (c) Technical and Conforming Amendments.--
          (1) Purpose.--Subsection (a) of section 415A of the Higher 
        Education Act of 1965 (20 U.S.C. 1070c(a)) is amended to read 
        as follows:
  ``(a) Purpose of Subpart.--It is the purpose of this subpart to make 
incentive grants available to States to assist States in--
          ``(1) providing grants to--
                  ``(A) eligible students attending institutions of 
                higher education or participating in programs of study 
                abroad that are approved for credit by institutions of 
                higher education at which such students are enrolled; 
                and
                  ``(B) eligible students for campus-based community 
                service work-study; and
          ``(2) carrying out the activities described in section 
        415F.''.
          (2) Allotment.--Section 415B(a)(1) of the Higher Education 
        Act of 1965 (20 U.S.C. 1070c-1(a)(1)) is amended by inserting 
        ``and not reserved under section 415A(b)(2)'' after 
        ``415A(b)(1)''.

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

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

SEC. 409. BYRD SCHOLARSHIPS.

  (a) Eligibility.--Section 419G (20 U.S.C. 1070d-37) is amended by 
adding at the end the following new subsection:
  ``(e) Termination of Eligibility.--The eligibility of students from 
the Federated States of Micronesia, the Republic of the Marshall 
Islands, and Palau shall expire on September 30, 2001.''.
  (b) Authorization of Appropriations.--Section 419K (20 U.S.C. 1070d-
41) is amended by striking ``$10,000,000 for fiscal year 1993'' and 
inserting ``$40,000,000 for fiscal year 1999''.

             PART B--FEDERAL FAMILY EDUCATION LOAN PROGRAM

SEC. 411. LIMITATION REPEALED.

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

SEC. 412. ADVANCES TO RESERVE FUNDS.

  Section 422 (20 U.S.C. 1072) is amended--
          (1) in subsection (a)(2), by striking ``428(c)(10)(E)'' and 
        inserting ``428(c)(9)(E)'';
          (2) in subsection (c)(6)(B)(i), by striking ``handle 
        written'' and inserting ``handle written, electronic,'';
          (3) in subsection (c)(7)
                  (A) by striking ``to a guaranty agency--'' and 
                everything that follows through ``(B) if the 
                Secretary'' and inserting ``to a guaranty agency, if 
                the Secretary'';
                  (B) by striking ``428(c)(10)(F)(v)'' and inserting 
                ``428(c)(9)(F)(v)'';
                  (C) by inserting ``and'' after ``cash needs,''; and
                  (D) by striking ``or ensure'' and everything that 
                follows and inserting a period; and
          (4) in the first and second sentences of subsection (g)(1), 
        by striking ``or the program authorized by part D of this 
        title'' each place it appears.

SEC. 413. GUARANTY AGENCY REFORMS.

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

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

  ``(a) Establishment.--Each guaranty agency shall, not later than 60 
days after the date of enactment of this section, deposit all funds, 
securities, and other liquid assets contained in the reserve fund 
established pursuant to section 422 of this part into a Federal Student 
Loan Reserve Fund (in this section and section 422B referred to as the 
`Federal Fund') which shall be an account of a type selected by the 
agency, with the approval of the Secretary.
  ``(b) Investment of Funds.--Funds maintained in the Federal Fund 
shall be invested in obligations issued or guaranteed by the United 
States or a State, or in other similarly low-risk securities selected 
by the guaranty agency.
  ``(c) Additional Deposits.--After the establishment of the Federal 
Fund, a guaranty agency shall deposit into the Federal Fund--
          ``(1) all amounts received from the Secretary as payment of 
        reinsurance on loans pursuant to section 428(c)(1);
          ``(2) from amounts collected on behalf of the obligation of a 
        defaulted borrower, a percentage amount equal to the complement 
        of the reinsurance percentage in effect when payment under the 
        guaranty agreement was made with respect to the defaulted loan 
        pursuant to sections 428(c)(6)(A) and 428F(a)(1)(B); and
          ``(3) insurance premiums collected from borrowers pursuant to 
        sections 428(b)(1)(H) and 428H(h).
  ``(d) Uses of Funds.--Subject to subsection (f), the Federal Fund may 
only be used by a guaranty agency--
          ``(1) to pay lender claims pursuant to section 428(b)(1)(G), 
        section 428(j), section 437, and section 439(q); and
          ``(2) to pay into the Agency Operating Fund established 
        pursuant to section 422B a default prevention fee in accordance 
        with section 428(l).
  ``(e) Ownership of Federal Fund.--
          ``(1) In general.--The Federal Fund of the guaranty agency, 
        and any assets purchased or developed with funds from the 
        Federal Fund or any other funds considered reserve funds on the 
        date of enactment of this section, regardless of who holds or 
        controls the reserves or assets, shall be considered to be the 
        property of the United States to be used in the operation of 
        the program authorized by this part, as provided in subsection 
        (d) of this section.
          ``(2) Nonliquid reserve fund and other assets.--
        Notwithstanding any other provision of law, nonliquid reserve 
        fund assets, such as buildings and equipment purchased or 
        developed by the guaranty agency with funds from the Federal 
        Fund, or any other funds considered reserve funds on the date 
        of enactment of this section shall--
                  ``(A) remain the property of the United States;
                  ``(B) be used only for such purposes as the Secretary 
                determines are appropriate; and
                  ``(C) be subject to such restrictions on the 
                disposition of such assets (which may include a 
                requirement that any sale of such assets be at not less 
                than fair market value) as the Secretary determines are 
                appropriate.
  ``(f) Transition.--
          ``(1) In general.--In order to establish the Agency Operating 
        Fund authorized by section 422B, each guaranty agency may 
        transfer up to 180 days cash expenses for normal operating 
        expenses, as a working capital reserve as defined in Office of 
        Management and budget circular A-87 (Cost Accounting Standards) 
        from the Federal Fund for deposit into the Agency Operating 
        Fund for use in the performance of its duties under this part. 
        Such transfers may occur during the first three years following 
        the establishment of the Operating Fund. However, no agency may 
        transfer in excess of 50 percent of the Federal Fund balance to 
        its Operating Fund during any fiscal year. In determining the 
        transfer amount, the agency shall insure that sufficient funds 
        remain in the Federal Fund to pay lender claims within the 
        required time periods and to meet the reserve recall 
        requirements of the Balanced Budget Act of 1997.
          ``(2) Repayment provisions.--Each guaranty agency shall begin 
        repayment of sums transferred pursuant to this subsection no 
        later than the start of the fourth year after the establishment 
        of the Agency Operating Fund, and shall repay all amounts 
        transferred no later than 5 years from the date of the 
        establishment of the Agency Operating Fund. Each guaranty 
        agency shall provide to the Secretary, on an annual basis, a 
        financial analysis demonstrating its ability to repay all 
        outstanding amounts while any transferred amounts are owned to 
        the Federal Fund.
          ``(3) Special rule.--In applying the minimum reserve level 
        required by section 428(c)(9)(A), the Secretary shall include 
        all amounts owed to the Federal Fund by the agency due to 
        transfers allowed under paragraph (1) in the calculation.''.
  (b) Agency Operating Fund Established.--Part B of title IV is further 
amended by inserting after section 422A (as added by subsection (a)) 
the following new section:

``SEC. 422B. AGENCY OPERATING FUND.

  ``(a) Establishment.--Each guaranty agency shall, not later than 60 
days after the date of enactment of this section, establish a fund 
designated as the Agency Operating Fund (hereinafter referred to as the 
`Operating Fund').
  ``(b) Investment of Funds.--Funds deposited into the Operating Fund 
shall be invested at the discretion of the guaranty agency in 
accordance with prudent investor standards.
  ``(c) Additional Deposits.--After the establishment of the Operating 
Fund, the guaranty agency shall deposit into the Operating Fund--
          ``(1) the loan processing and issuance fee paid by the 
        Secretary pursuant to section 428(f);
          ``(2) the portfolio maintenance fee paid by the Secretary 
        pursuant to section 458;
          ``(3) the default prevention fee paid in accordance with 
        section 428(l);
          ``(4) amounts retained by the guaranty agency pursuant to 
        section 428(c)(6)(B) from collection on defaulted loans held by 
        the agency, after payment of the Secretary's equitable share, 
        excluding amounts deposited in the Federal Fund pursuant to 
        section 422A(c)(2); and
          ``(5) interest earned on the Federal Fund during the first 3 
        years after the date of enactment of this section, but only to 
        the extent permitted by regulations prescribed by the Secretary 
        to permit a limited number of guaranty agencies (not to exceed 
        10) essential resources to maintain sufficient operating funds 
        and to restructure their operations in accordance with the 
        requirements of this section and section 422A.
  ``(d) Uses of Funds.--
          ``(1) In general.--Funds in the Operating Fund shall be used 
        for activities related to student financial aid, including 
        application processing, loan disbursement, enrollment and 
        repayment status management, default prevention activities, 
        default collection activities, school and lender training, 
        financial awareness and outreach activities, compliance 
        monitoring, other loan program related activities in support of 
        postsecondary education and other student financial aid related 
        activities as determined by the guaranty agency.
          ``(2) Special rule.--The guaranty agency may, in its 
        discretion, transfer funds from the Operating Fund to the 
        Federal Student Loan Reserve Fund for use in accordance with 
        section 422A. Such transfer shall be irrevocable, and any funds 
        so transferred shall become the property of the United States.
          ``(3) Definitions.--For purposes of this subsection:
                  ``(A) The term `default collection activities' means 
                activities of a guaranty agency which are directly 
                related to the collection of the loan on which a 
                default claim has been paid to the participating 
                lender, including the due diligence activities required 
                pursuant to regulations of the Secretary.
                  ``(B) The term `default prevention activities' means 
                activities of a guaranty agency which are directly 
                related to providing collection assistance to the 
                lender on a delinquent loan, prior to the loan's being 
                legally in a default status, including due diligence 
                activities required pursuant to regulations of the 
                Secretary.
                  ``(C) The term `enrollment and repayment status 
                management' means activities of a guaranty agency which 
                are directly related to ascertaining the student's 
                enrollment status, including prompt notification to the 
                lender of such status, an audit of the note or written 
                agreement to determine if the provisions of that note 
                or agreement are consistent with the records of the 
                guaranty agency as to the principal amount of the loan 
                guaranteed, and an examination of the note or agreement 
                to assure that the repayment provisions are consistent 
                with the provisions of this part.
  ``(e) Ownership of Operating Fund.--The Operating Fund of the 
guaranty agency shall be considered to be the property of the guaranty 
agency. The Secretary may regulate the uses or expenditure of moneys in 
the Operating Fund with respect to activities required under guaranty 
agency agreements under subsections (b) and (c) of section 428 until 
such time as a guaranty agency has repaid to the Federal Fund all 
reserve funds transferred under section 422A(f). During any period in 
which funds are owed to the Federal Fund as a result of a transfer 
under 422A(f), moneys in the Operating Fund may only be used for 
expenses related to the student loan programs authorized under this 
part. The Secretary may require such necessary reports and audits as 
provided in section 428(b)(2).''.
  (c) Additional Recall of Reserves.--Section 422 (as amended by 
section 412) is further amended by adding at the end the following new 
subsection:
  ``(i) Additional Recall of Reserves.--
          ``(1) In general.--Notwithstanding any other provision of 
        law, the Secretary shall recall $30,000,000 for each of the 
        fiscal years 1999, 2000, 2001, 2002, and 2003 from the reserve 
        funds held by guaranty agencies.
          ``(2) Deposit.--Funds recalled by the Secretary under this 
        subsection shall be deposited in the Treasury.
          ``(3) Required share.--The Secretary shall require each 
        guaranty agency to return annually reserve funds under 
        paragraph (1) based on one-fifth of the agency's required 
        share. For purposes of this paragraph, a guaranty agency's 
        required share shall be determined as follows:
                  ``(A) The Secretary shall impose on each guaranty 
                agency an equal percentage reduction in the amount of 
                the agency's reserve funds held as of September 30, 
                1996.
                  ``(B) The equal percentage reduction shall be the 
                percentage obtained by dividing--
                          ``(i) $150,000,000 by
                          ``(ii) the total amount of all such agencies' 
                        reserve funds held as of September 30, 1996.
          ``(4) Offset of required shares.--If any guaranty returns to 
        the Secretary any reserves in excess of the amount required 
        under this subsection or subsection (h), the total amount 
        required to be returned under paragraph (1) shall be reduced by 
        the amount of such additional reserve return.
          ``(5) Definition of reserve funds.--The term `reserve funds' 
        when used with respect to a guaranty agency--
                  ``(A) includes any reserve funds in cash or liquid 
                assets held by the guaranty agency, or held by, or 
                under the control of, any other entity; and
                  ``(B) does not include building, equipment, or other 
                nonliquid assets.''.
  (d) Conforming Amendments.--
          (1) Reinsurance payments.--
                  (A) Amendments.--Section 428(c)(1) (20 U.S.C. 
                1078(c)(1)) is amended--
                          (i) in subparagraph (A), by striking ``98 
                        percent'' and inserting ``95 percent'';
                          (ii) in subparagraph (B)(i), by striking ``88 
                        percent'' and inserting ``85 percent''; and
                          (iii) in subparagraph (B)(ii), by striking 
                        ``78 percent'' and inserting ``75 percent'';
                          (iv) in subparagraph (E)--
                                  (I) by striking ``for `98 percent';'' 
                                and inserting ``for `95 percent';'';
                                  (II) by striking ``for `88 
                                percent';'' and inserting ``for `85 
                                percent';''; and
                                  (III) by striking ``for `78 
                                percent'.'' and inserting ``for `75 
                                percent'.'';
                          (v) in subparagraph (F)--
                                  (I) by striking ``for `98 percent';'' 
                                and inserting ``for `95 percent';'';
                                  (II) by striking ``for `88 
                                percent';'' and inserting ``for `85 
                                percent';''; and
                                  (III) by striking ``for `78 
                                percent'.'' and inserting ``for `75 
                                percent'.'';
                          (vi) by striking subparagraph (D) and 
                        redesignating subparagraphs (E) and (F) as 
                        subparagraphs (D) and (E), respectively.
                  (B) Effective date.--The amendments made by 
                subparagraph (A) of this paragraph apply to loans for 
                which the first disbursement is made on or after 
                October 1, 1998.
          (2) Equitable share.--Section 428(c)(6) is amended--
                  (A) in subparagraph (A)--
                          (i) by striking ``(A) For the purpose'' and 
                        inserting ``For the purpose''; and
                          (ii) by striking clause (ii) and inserting 
                        the following:
                  ``(ii) an amount equal to 24 percent of such payments 
                for use in accordance with section 422B.'';
                  (B) by striking subparagraphs (B) and (C); and
                  (C) by redesignating clauses (i) and (ii) as 
                subparagraphs (A) and (B).
          (3) Guaranty agency reserve level.--Section 428(c)(9)(C) is 
        amended--
                  (A) by striking ``80 percent pursuant to section 
                428(c)(1)(B)(ii)'' and inserting ``85 percent pursuant 
                to paragraph (1)(B)(i) of this subsection''; and
                  (B) by striking ``30 working days'' and inserting 
                ``45 working days''.
          (4) Payment of certain costs.--Section 428(f) is amended--
                  (A) by striking paragraph (1)(A) and inserting the 
                following:
          ``(1) Payment for certain activities.--(A) The Secretary 
        shall, in accordance with the provisions of this paragraph, pay 
        to each guaranty agency for each fiscal year a loan processing 
        and issuance fee equal to 0.65 percent of thetotal principal 
amount of the loans on which insurance was issued under this part 
during such fiscal year by such agency.''; and
                  (B) in paragraph (1)(B), by striking the first 
                sentence and inserting the following: ``The payment 
                required by subparagraph (A) shall be paid on a 
                quarterly basis.''.
          (5) Default aversion assistance.--Section 428(l) is amended 
        to read as follows:
  ``(l) Default Aversion Assistance.--
          ``(1) Assistance required.--Upon receipt of a proper request 
        from a lender received not earlier than the 60th day of 
        delinquency, a guaranty agency having an agreement with the 
        Secretary under subsection (c) of this section shall engage in 
        default aversion activities designed to prevent the default by 
        a borrower on a loan covered by such agreement.
          ``(2) Reimbursement.--(A) A guaranty agency may, in 
        accordance with the provisions of this paragraph, transfer from 
        the Federal Student Loan Reserve Account to the Operating 
        Account a default aversion fee. Such fee shall be paid for any 
        loan on which a claim for default has not been presented that 
        the guaranty agency successfully brings into current repayment 
        status on or before the 210th day after the loan becomes 60 
        days delinquent.
          ``(B) The default aversion fee shall be equal to 1 percent of 
        the total unpaid principal and accrued interest on the loan at 
        the time the request is submitted by the lender. Such fee shall 
        not be paid more than once on any loan for which the guaranty 
        agency averts the default unless the borrower remained current 
        in payments for at least 12 months prior to the subsequent 
        delinquency. A guaranty agency may transfer such fees earned 
        under this subsection no more frequently than monthly.
          ``(C) For the purpose of earning the default aversion fee, 
        the term `current repayment status' means that the borrower is 
        not delinquent in the payment of any principal or interest on 
        the loan.''.

SEC. 414. SCOPE AND DURATION OF PROGRAM.

  Section 424(a) (20 U.S.C. 1074(a)) is amended--
          (1) by striking ``October 1, 2002'' and inserting ``October 
        1, 2004''; and
          (2) by striking ``September 30, 2006'' and inserting 
        ``September 30, 2008''.

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

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

SEC. 416. APPLICABLE INTEREST RATES.

  (a) Applicable Interest Rates.--
          (1) Amendment.--Section 427A (20 U.S.C. 1077a) is amended to 
        read as follows:

``SEC. 427A. APPLICABLE INTEREST RATES.

  ``(a) Interest Rates for New Loans On or After July 1, 1998.--
          ``(1) In general.--Subject to paragraph (2), with respect to 
        any loan made, insured, or guaranteed under this part (other 
        than a loan made pursuant to section 428B or 428C) for which 
        the first disbursement is made on or after July 1, 1998, the 
        applicable rate of interest shall, during any 12-month period 
        beginning on July 1 and ending on June 30, be determined on the 
        preceding June 1 and be equal to--
                  ``(A) the bond equivalent rate of 91-day Treasury 
                bills auctioned at the final auction held prior to such 
                June 1; plus
                  ``(B) 2.3 percent,
        except that such rate shall not exceed 8.25 percent.
          ``(2) In school and grace period Rules.--With respect to any 
        loan under this part (other than a loan made pursuant to 
        section 428B or 428C) for which the first disbursement is made 
        on or after July 1, 1998, the applicable rate of interest for 
        interest which accrues--
                  ``(A) prior to the beginning of the repayment period 
                of the loan; or
                  ``(B) during the period in which principal need not 
                be paid (whether or not such principal is in fact paid) 
                by reason of a provision described in section 
                428(b)(1)(M) or 427(a)(2)(C),
        shall be determined under paragraph (1) by substituting `1.7 
        percent' for `2.3 percent'.
          ``(3) PLUS loans.--With respect to any loan under section 
        428B for which the first disbursement is made on or after July 
        1, 1998, the applicable rate of interest shall be determined 
        under paragraph (1)--
                  ``(A) by substituting `3.1 percent' for `2.3 
                percent'; and
                  ``(B) by substituting `9.0 percent' for `8.25 
                percent'.
  ``(b) Lesser Rates Permitted.--Nothing in this section or section 
428C shall be construed to prohibit a lender from charging a borrower 
interest at a rate less than the rate which is applicable under this 
part.
  ``(c) Consultation.--The Secretary shall determine the applicable 
rate of interest under this section after consultation with the 
Secretary of the Treasury and shall publish such rate in the Federal 
Register as soon as practicable after the date of determination.''.
          (2) Conforming amendment.--Section 428B(d)(4) (20 U.S.C. 
        1078-2(d)(4)) is amended by striking ``section 427A(c)'' and 
        inserting ``section 427A(a)(3)''.
  (b) Special Allowances.--
          (1) Amendment.--Section 438(b)(2)(F) (20 U.S.C. 1087-
        1(b)(2)(F)) is amended to read as follows:
          ``(F) Loans disbursed after july 1, 1998.--
                  ``(i) In general.--Subject to paragraph (4) and 
                clauses (ii), (iii), and (iv) of this subparagraph, the 
                special allowance paid pursuant to this subsection on 
                loans for which the first disbursement is made on or 
                after July 1, 1998, shall be computed--
                          ``(I) by determining the average of the bond 
                        equivalent rates of 91-day Treasury bills 
                        auctioned for such 3-month period;
                          ``(II) by subtracting the applicable interest 
                        rates on such loans from such average bond 
                        equivalent rate;
                          ``(III) by adding 2.8 percent to the 
                        resultant percent; and
                          ``(IV) by dividing the resultant percent by 
                        4.
                  ``(ii) In school and grace period.--In the case of 
                any loan for which the first disbursement is made on or 
                after July 1, 1998, and for which the applicable rate 
                of interest is described in section 427A(a)(2), clause 
                (i)(III) of this subparagraph shall be applied by 
                substituting `2.2 percent' for `2.8 percent'.
                  ``(iii) PLUS loans.--In the case of any loan for 
                which the first disbursement is made on or after July 
                1, 1998, and for which the applicable rate of interest 
                is described in section 427A(a)(3), clause (i)(III) of 
                this subparagraph shall be applied by substituting `3.1 
                percent' for `2.8 percent', subject to clause (iv) of 
                this subparagraph.
                  ``(iv) Limitation on special allowances for PLUS 
                loans.--In the case of loans disbursed on or after July 
                1, 1998, for which the interest rate is determined 
                under 427A(a)(3), a special allowance shall not be paid 
                for a loan made under section 428B unless the rate 
                determined for any 12-month period under section 
                427A(a)(3) exceeds 9 percent.''.
          (2) Conforming amendment.--Section 438(b)(2)(C)(ii) is 
        amended by striking ``In the case'' and inserting ``Subject to 
        subparagraph (F), in the case''.
  (c) Effective Date.--The amendments made by this section shall apply 
with respect to any loan made, insured, or guaranteed under part B of 
title IV of the Higher Education Act of 1965 for which the first 
disbursement is made on or after July 1, 1998.

SEC. 417. FEDERALLY GUARANTEED STUDENT LOANS.

  (a) Requirements for Federal Interest Subsidies.--Section 428(a)(2) 
(20 U.S.C. 1078(a)(2)) is amended by striking everything preceding 
subparagraph (D) and inserting the following:
          ``(2) Additional requirements to receive subsidy.--(A) Each 
        student qualifying for a portion of an interest payment under 
        paragraph (1) shall provide to the lender a statement from the 
        eligible institution, at which the student has been accepted 
        for enrollment, or at which the student is in attendance, which 
        certifies the eligibility of the student to receive a loan 
        under this part and the amount of the loan for which such 
        student is eligible.
          ``(B) A student shall qualify for a portion of an interest 
        payment under paragraph (1) if the eligible institution has 
        provided the lender with a statement that--
                  ``(i) at the lender's request, sets forth such 
                student's estimated cost of attendance (as determined 
                under section 472);
                  ``(ii) sets forth such student's estimated financial 
                assistance; and
                  ``(iii) sets forth a schedule for disbursement of the 
                proceeds of the loan in installments, consistent with 
                the requirements of section 428G.
          ``(C) For the purpose of clause (ii) of subparagraph (B), a 
        student shall qualify for a portion of an interest payment 
        under paragraph (1) if the eligible institution has provided 
        the lender with a statement evidencing a determination of need 
        for a loan (as determined under part F of this title) and the 
        amount of such need, subject to the provisions of subparagraph 
        (D).''.
  (b) Duration of Authority.--Section 428(a)(5) is amended--
          (1) by striking ``September 30, 2002'' and inserting 
        ``September 30, 2004''; and
          (2) by striking ``September 30, 2006'' and inserting 
        ``September 30, 2008''.
  (c) Annual Loan Limits.--Section 428(b)(1)(A) is amended--
          (1) in clause (i)--
                  (A) by inserting ``and'' after the semicolon at the 
                end of subclause (I); and
                  (B) by striking subclauses (II) and (III) and 
                inserting the following:
                                  ``(II) if such student is enrolled in 
                                a program of undergraduate education 
                                which is less than one academic year, 
                                the maximum annual loan amount that 
                                such student may receive may not exceed 
                                the amount that bears the same ratio to 
                                the amount specified in subclause (I) 
                                as the length of such program measured 
                                in semester, trimester, quarter, or 
                                clock hours bears to one academic 
                                year;''; and
          (2) by inserting ``and'' after the semicolon at the end of 
        clause (iii).
  (d) Selection of Repayment Plans.--Section 428(b)(1)(D) is amended by 
striking ``and (iii)'' and inserting the following: ``(iii) the student 
borrower may annually change the selection of a repayment plan under 
this part, and (iv)''.
  (e) Coinsurance.--Section 428(b)(1)(G) is amended by striking ``not 
less than''.
  (f) Deferments.--Section 428(b)(1)(M) is amended--
          (1) in clause (i)(I), by inserting before the semicolon the 
        following: ``, except that no borrower, notwithstanding the 
        provisions of the promissory note, shall be required to borrow 
        an additional loan under this title in order to be eligible to 
        receive a deferment under this clause''; and
          (2) in clause (ii), by inserting before the semicolon the 
        following: ``, except that no borrower who qualifies for 
        unemployment benefits shall be required to provide any 
        additional paperwork for a deferment under this clause''.
  (g) Limitation, Suspension, and Termination.--Section 428(b)(1)(U) is 
amended--
          (1) by striking ``emergency action,,'' each place it appears 
        and inserting ``emergency action,''; and
          (2) by striking ``a compliance audit of each lender'' and 
        inserting the following: ``in the case of any lender that 
        originates or holds more than $5,000,000 in loans made under 
        this title during an annual audit period, a compliance audit of 
        such lender''.
  (h) Additional Insurance Program Requirements.--Section 428(b)(1) is 
further amended--
          (1) by striking ``and'' at the end of subparagraph (W);
          (2) in subparagraph (X)--
                  (A) by striking ``428(c)(10)'' and inserting 
                ``428(c)(9)''; and
                  (B) by striking the period at the end and inserting 
                ``; and''; and
          (3) by adding at the end the following new subparagraph:
                  ``(Y) provides that the lender shall determine the 
                eligibility of a borrower for a deferment described in 
                subparagraph (M)(i) based on receipt of (i) a request 
                for deferment from the borrower, (ii) a newly completed 
                loan application that documents the borrower's 
                eligibility for a deferment, or (iii) student status 
                information received by the lender that the borrower is 
                enrolled on at least a half-time basis.''.
  (i) Restrictions on Inducements.--Section 428(b)(3) is amended--
          (1) by striking subparagraph (C) and inserting the following:
                  ``(C) conduct unsolicited mailings of student loan 
                application forms to students enrolled in secondary 
                school or a postsecondary institution, or to parents of 
                such students, except that applications may be mailed 
                to students who have previously received loans 
                guaranteed under this part by the guaranty agency; 
                or''; and
          (2) by adding at the end the following new sentence:
        ``It shall not be a violation of this paragraph for a guaranty 
        agency to provide assistance to institutions of higher 
        education comparable to the kinds of assistance provided to 
        institutions of higher education by the Department of 
        Education.''.
  (j) Guaranty Agency Information to Eligible Institutions.--Section 
428(c)(2)(H)(ii) is amended to read as follows:
                          ``(ii) the guaranty agency shall not require 
                        the payment from the institution of any fee for 
                        such information; and''.
  (k) Forbearance.--Section 428(c)(3) is amended--
          (1) in subparagraph (A)(i), by striking ``written'';
          (2) in subparagraph (B), by inserting before the semicolon 
        the following: ``, including forbearance granted after 
        consideration of a borrower's total debt burden''; and
          (3) in the last sentence--
                  (A) by striking ``and (ii)'' and inserting ``(ii)''; 
                and
                  (B) by inserting before the period at the end the 
                following: ``, and (iii) forbearance for periods not to 
                exceed 60 days if the lender reasonably determines that 
                such suspensions are necessary to research or process 
                information relative to such loan or to collect 
                appropriate documentation relating to the borrower's 
                request for a deferment or forbearance''.
  (l) Assignment.--Section 428(c)(8) is amended--
          (1) by striking ``(A)''; and
          (2) by striking subparagraph (B).
  (m) Agency Termination.--Section 428(c)(9) is amended--
          (1) in subparagraph (E)--
                  (A) by inserting ``or'' at the end of clause (iv);
                  (B) by striking ``; or'' at the end of clause (v) and 
                inserting a period; and
                  (C) by striking clause (vi);
          (2) in subparagraph (F)(vii), by striking ``to avoid 
        disruption'' and everything that follows and inserting ``and to 
        avoid disruption of the student loan program.'';
          (3) in subparagraph (I), by inserting ``on the record'' after 
        ``for a hearing''; and
          (4) in subparagraph (K)--
                  (A) by striking ``and Labor'' and inserting ``and the 
                Workforce''; and
                  (B) by striking everything after ``guaranty agency 
                system'' and inserting a period.
  (n) Lender Referral.--Section 428(e) is amended--
          (1) in paragraph (1)(B)(ii), by striking ``during the 
        transition'' and everything that follows through ``part D of 
        this title''; and
          (2) in paragraph (3), by striking ``for costs of 
        transition''.
  (o) Action on Agreements.--Section 428(g) is amended by striking 
``and Labor'' and inserting ``and the Workforce''.
  (p) Lenders-of-Last Resort.--Section 428(j) is amended by striking 
paragraph (3).
  (q) Income Contingent Repayment.--Section 428(m) is amended by 
striking ``shall require at least 10 percent of the borrowers'' and 
inserting ``may require borrowers''.
  (r) State Share of Default Costs.--Subsection (n) of section 428 is 
repealed.
  (s) Blanket Certificate of Guaranty.--Section 428 of the Act is 
amended by adding at the end the following new subsection:
  ``(n) Blanket Certificate of Loan Guaranty.--
          ``(1) In general.--Any guaranty agency that has or enters 
        into any insurance program agreement with the Secretary under 
        this part may--
                  ``(A) offer eligible lenders participating in the 
                agency's guaranty program blanket certificates of loan 
                guaranty that permit the lender to make loans without 
                receiving prior approval from the guaranty agency of 
                individual loans for eligible borrowers enrolled in 
                eligible programs at eligible institutions; and
                  ``(B) provide eligible lenders with the ability to 
                transmit electronically data to the agency concerning 
                loans the lender has elected to make under the agency's 
                insurance program via standard reporting formats, such 
                reporting to occur at reasonable, mutually acceptable 
                intervals.
          ``(2) Limitations on Blanket certificate of guaranty.--A 
        guaranty agency and eligible lender may establish by mutual 
        agreement limitations or restrictions on the number or volume 
        of loans issued by a lender under the blanket certificate of 
        guaranty.''.

SEC. 418. VOLUNTARY AGREEMENTS WITH GUARANTY AGENCIES.

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

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

  ``(a) Voluntary Agreements.--
          ``(1) Authority.--Notwithstanding any other provision of law, 
        the Secretary may enter into a voluntary, flexible agreement 
        with not more than 6 guaranty agencies under this section, in 
        lieu of agreements with a guaranty agency under subsections (b) 
        and (c) of section 428, under which the Secretary may waive or 
        modify any requirement under this title applicable to the 
        responsibilities of the Secretary and a guaranty agency.
          ``(2) Eligibility.--Any guaranty agency that had one or more 
        agreements with the Secretary under subsections (b) and (c) of 
        section 428 as of the day before the date of enactment of this 
        section may enter into an agreement with the Secretary under 
        this subsection.
  ``(b) Terms of Agreement.--An agreement between the Secretary and a 
guaranty agency under this section--
          ``(1) shall be developed by the Secretary, in consultation 
        with the guaranty agency;
          ``(2) shall be for a period not to exceed five years, and may 
        be renewed upon the agreement of the parties;
          ``(3) may include provisions--
                  ``(A) specifying the responsibilities of the guaranty 
                agency under the agreement, such as--
                          ``(i) administering the issuance of insurance 
                        on loans made under this part on behalf of the 
                        Secretary;
                          ``(ii) monitoring insurance commitments made 
                        under this part;
                          ``(iii) default prevention activities;
                          ``(iv) review of default claims made by 
                        lenders;
                          ``(v) payment of default claims;
                          ``(vi) collection of defaulted loans;
                          ``(vii) adoption of internal systems of 
                        accounting and auditing that are acceptable to 
                        the Secretary, and reporting the result thereof 
                        to the Secretary on a timely, accurate, and 
                        auditable basis;
                          ``(viii) timely and accurate collection and 
                        reporting of such other data as the Secretary 
                        may require to carry out the purposes of the 
                        programs under this title;
                          ``(ix) monitoring of institutions and lenders 
                        participating in the program under this part; 
                        and
                          ``(x) the performance of other program 
                        functions by the guaranty agency.
                  ``(B) regarding the fees the Secretary shall pay, in 
                lieu of revenues that the guaranty agency may otherwise 
                receive under this part, to the guaranty agency under 
                the agreement, and other funds that the guaranty agency 
                may receive or retain under the agreement, except that 
                in no case may the cost to the Secretary of the 
                agreement, as reasonably projected by the Secretary, 
                exceed the cost to the Secretary, as similarly 
                projected, in the absence of the agreement;
                  ``(C) regarding the use of net revenues, as described 
                in the agreement under this section, for such other 
                activities in support of postsecondary education as may 
                be agreed to by the Secretary and the guaranty agency;
                  ``(D) regarding the standards by which the guaranty 
                agency's performance of its responsibilities under the 
                agreement will be assessed, and the consequences for a 
                guaranty agency's failure to achieve a specified level 
                of performance on 1 or more performance standards;
                  ``(E) regarding the circumstances in which a guaranty 
                agency's agreement under this section may be ended in 
                advance of its expiration date;
                  ``(F) regarding such other businesses, previously 
                purchased or developed with reserve funds, that relate 
                to the program under this part and in which the 
                Secretary permits the guaranty agency to engage; and
                  ``(G) such other provisions as the Secretary may 
                determine to be necessary to protect the United States 
                from the risk of unreasonable loss and to promote the 
                purposes of this part; and
          ``(4) shall provide for uniform lender participation with the 
        guaranty agency under the terms of the agreement.
  ``(c) Termination.--At the expiration or early termination of an 
agreement under this section, the Secretary shall reinstate the 
guaranty agency's prior agreements under subsections (b) and (c) of 
section 428, subject only to such additional requirements as the 
Secretary determines to be necessary in order to ensure the efficient 
transfer of responsibilities between the agreement under this section 
and the agreements under subsections (b) and (c) of section 428, 
including the guaranty agency's compliance with reserve requirements 
under sections 422 and 428.''.

SEC. 419. FEDERAL CONSOLIDATION LOANS.

  (a) Agreements With Lenders.--Section 428C(a) (20 U.S.C. 1078-3(a)) 
is amended--
          (1) by striking subclause (II) of paragraph (3)(B)(i) and 
        inserting the following:
                  ``(II) that loans received during the 180-day period 
                following the making of the consolidation loan may be 
                added to the consolidation loan.''; and
          (2) by striking subparagraph (C) of paragraph (4) and 
        inserting the following:
                  ``(C) made under part D of this title;''.
  (b) Contents of Agreements.--Section 428C(b) is amended--
          (1) in paragraph (1)(A), by striking ``under this section and 
        (i)'' and everything that follows and inserting ``under this 
        section;'';
          (2) in paragraph (4)(C)(ii)--
                  (A) by redesignating subclause (III) as subclause 
                (IV);
                  (B) by inserting after subclause (II) the following 
                new clause:
                          ``(III) by the Secretary, in the case of a 
                        consolidation loan for which the application is 
                        received by an eligible lender on or after 
                        October 1, 1998, except that the Secretary 
                        shall pay such interest only on that portion of 
                        the loan that repays Federal Stafford Loans for 
                        which the student borrower received an interest 
                        subsidy under section 428 or Federal Direct 
                        Stafford Loans for which the borrower received 
                        an interest subsidy under section 455; or''; 
                        and
                  (C) in subclause (IV) (as redesignated), by striking 
                ``subclause (I) or (II)'' and inserting ``subclause 
                (I), (II), or (III)''; and
          (3) in paragraph (6)(A), by inserting before the semicolon at 
        the end the following: ``except that (i) a lender is not 
        required to consolidate loans described in subparagraph (D) or 
        (E) of subsection (a)(4); and (ii) a lender is not prohibited 
        from establishing a minimum loan balance for which it will 
        process a consolidation loan application''.
  (c) Extension of Authority.--Section 428C(e) is amended by striking 
``September 30, 2002'' and inserting ``September 30, 2004''.

SEC. 420. DISBURSEMENT.

  (a) Requirements.--Section 428G(a)(1) (20 U.S.C. 1078-7(a)(1)) is 
amended by inserting ``greater than one semester, one trimester, one 
quarter, or four months'' after ``period of enrollment''.
  (b) Disbursement.--Section 428G(b)(1) is amended by adding at the end 
the following new sentence: ``An institution whose cohort default rate 
(as determined under section 435(a)) for each of the three most recent 
fiscal years for which data are available is less than 10 percent shall 
be exempt from the requirements of this paragraph.''.
  (c) Withholding of Second Disbursement.--Section 428G(d)(2) is 
amended by inserting ``by more than $300'' after ``under this title''.

SEC. 421. UNSUBSIDIZED STAFFORD LOANS.

  (a) Eligible Borrowers.--Section 428H(b) (20 U.S.C. 1078-8(b)) is 
amended by striking ``which--'' and everything that follows and 
inserting the following:
``which certifies the eligibility of the student to receive a loan 
under this part and the amount of the loan for which such student is 
eligible. A student shall qualify for a loan if the eligible 
institution has provided the lender with a statement that--
          ``(1) at the lender's request, sets forth such student's 
        estimated cost of attendance (as determined under section 472);
          ``(2) sets forth such student's estimated financial 
        assistance, including a loan which qualifies for subsidy 
        payments under section 428; and
          ``(3) sets forth a schedule for disbursement of the proceeds 
        of the loan in installments, consistent with the requirements 
        of section 428G.''.
  (b) Loan Limits.--Section 428H(d)(2)(A) is amended--
          (1) by inserting ``and'' after the semicolon at the end of 
        clause (i); and
          (2) by striking clauses (ii) and (iii) and inserting the 
        following:
                          ``(ii) if such student is enrolled in a 
                        program of undergraduate education which is 
                        less than one academic year, the maximum annual 
                        loan amount that such student may receive may 
                        not exceed the amount that bears the same ratio 
                        to the amount specified in clause (i) as the 
                        length of such program measured in semester, 
                        trimester, quarter, or clock hours bears to one 
                        academic year;''.
  (c) Qualification.--Section 428H(e) is amended by adding at the end 
the following new paragraph:
          ``(7) Qualification for forbearance, deferment, and income-
        sensitive repayment.--A borrower of a loan made under this 
        section may qualify for a forbearance or deferment, or an 
        income-sensitive repayment plan for which the borrower is 
        eligible, immediately upon receipt by the lender or holder of a 
        request from the borrower. Any necessary supporting 
        documentation shall be secured by the lender or holder within 
        30 days of the request in order to continue the forbearance, 
        deferment, or income-sensitive repayment plan.''.
  (d) Repeal.--Section 428H(f) is repealed.

SEC. 422. REPEAL OF LOAN FORGIVENESS.

  Section 428J (20 U.S.C. 1078-10) is repealed.

SEC. 423. LEGAL POWERS AND RESPONSIBILITIES.

  (a) General Powers.--Section 432(a)(2) (20 U.S.C. 1082(a)(2)) is 
amended by inserting ``except that this section shall not be deemed to 
limit court review under chapter 7 of title 5, United States Code'' 
after ``Secretary's control''.
  (b) Audit of Financial Transactions.--Section 432(f)(1) is amended--
          (1) in subparagraph (B), by striking ``section 435(d)(1) (D), 
        (F), or (H);'' and inserting ``section 435(d)(1); and'';
          (2) in subparagraph (C)--
                  (A) by striking ``and Labor'' and inserting ``and the 
                Workforce''; and
                  (B) by striking ``; and'' and inserting a period; and
          (3) by striking subparagraph (D).
  (c) Program of Assistance.--Section 432(k)(3) is amended by striking 
``Within 1 year'' and everything that follows through ``1992, the'' and 
inserting ``The''.
  (d) Common Forms and Formats.--Section 432(m) is amended--
          (1) in paragraph (1)(A), by striking ``The Secretary'' and 
        inserting ``Subject to paragraph (2), the Secretary'';
          (2) by striking subparagraph (C) of paragraph (1);
          (3) in subparagraph (D), by striking ``Nothing'' and 
        inserting ``Subject to paragraph (2), nothing'';
          (4) by redesignating subparagraph (D) of such paragraph as 
        subparagraph (C);
          (5) by redesignating paragraphs (2) and (3) as paragraphs (3) 
        and (4), respectively;
          (6) by inserting after paragraph (1) the following new 
        paragraph:
          ``(2) Free application for federal student aid.--For academic 
        year 1999-2000 and thereafter, the Secretary shall prescribe 
        the Free Application for Federal Student Aid as the application 
        form under this part (other than sections 428B and 428C).''; 
        and
          (7) by adding at the end the following new paragraph:
          ``(5) Master promissory note.--
                  ``(A) Development and approval.--Within 180 days of 
                enactment of this Act, the Secretary, in cooperation 
                with representatives of guaranty agencies, eligible 
                lenders, institutions, students, and organizations 
                involved in student financial assistance, shall develop 
                and approve a master promissory note that will allow 
                for a multiyear line of credit. Such note shall address 
                the needs of participants in the programs under this 
                part. The Secretary shall also develop and approve a 
                corresponding master promissory note for use under part 
                D of this title that addresses the needs of 
                participants in the programs under such part.
                  ``(B) Sale and assignment; enforcement.--
                Notwithstanding the preceding provisions of this 
                section, each loan made under a master promissory note 
                providing for a line of credit may be sold and assigned 
                independently of any other loan made under the same 
                promissory note, and each such loan shall be separately 
                enforceable in all State and Federal courts on the 
                basis of an original or copy of the master promissory 
                note with its terms.''.
  (e) Default Reduction Management.--Section 432(n) is amended--
          (1) in paragraph (1), by striking ``1993'' and inserting 
        ``1999''; and
          (2) in paragraph (3), by striking ``and Labor'' and inserting 
        ``and the Workforce''.
  (f) Reporting Requirement.--Section 432(p) is amended by striking 
``State postsecondary reviewing entities designated under subpart 1 of 
part H,''.

SEC. 424. STUDENT LOAN INFORMATION.

  Section 433 (20 U.S.C. 1083) is amended--
          (1) in the first sentence of subsection (a), by inserting 
        ``in simple and understandable terms'' after ``to the 
        borrower''; and
          (2) in the first sentence of subsection (b), by inserting 
        ``in simple and understandable terms'' after ``under this 
        subsection''.

SEC. 425. DEFINITIONS.

  (a) Cohort Default Rate.--Section 435(a) (20 U.S.C. 1085(a)) is 
amended--
          (1) in subparagraph (A) of paragraph (2)--
                  (A) by striking ``or'' at the end of clause (i); and
                  (B) by striking clause (ii) and inserting the 
                following:
                  ``(ii) there are exceptional mitigating circumstances 
                within the meaning of paragraph (4); or
                  ``(iii) there are, in the judgment of the Secretary, 
                other exceptional mitigating circumstances that would 
                make the application of this paragraph inequitable.'';
          (2) in subparagraph (C) of paragraph (2), by striking ``July 
        1, 1998,'' and inserting ``July 1, 1999,'';
          (3) in paragraph (3), by inserting ``or, at the request of 
        the institution, a complete copy of the records for loans made 
        under this part or of the direct loan servicer for loans made 
        under part D'' after ``and loan servicers''; and
          (4) by adding at the end the following new paragraphs:
          ``(4) Definition of mitigating circumstances.--For purposes 
        of paragraph (2), an institution shall be treated as having 
        exceptional mitigating circumstances that make application of 
        that paragraph inequitable if such institution is certified by 
        a certified public accountant to meet each of the following 
        criteria:
                  ``(A) at least two-thirds of the students enrolled on 
                at least a half-time basis at the institution--
                          ``(i) are eligible to receive a Federal Pell 
                        Grant award that is at least equal to one-half 
                        the maximum Federal Pell Grant award for which 
                        the student would be eligible based on his or 
                        her enrollment status; or
                          ``(ii) have an adjusted gross income of the 
                        student, and his or her parents (unless the 
                        student is an independent student), of less 
                        than the poverty level, as determined under 
                        criteria established by the Department of 
                        Health and Human Services;
                  ``(B) at least two-thirds of the students enrolled on 
                a full-time basis at the institution in any 12-month 
                period ending not more than six months prior to the 
                date the institution submits its appeal, and who remain 
                enrolled beyond the point at which the student would be 
                entitled to a tuition refund of 100 percent--
                          ``(i) complete the educational program in 
                        which they are enrolled within the time 
                        normally required to complete that program, as 
                        specified in the institution's enrollment 
                        contract, catalog, or other materials; or
                          ``(ii) continue to be enrolled and are making 
                        satisfactory academic progress toward 
                        completion of their program; or
                          ``(iii) have entered active duty in the armed 
                        forces of the United States; and
                  ``(C) at least two-thirds of the students enrolled on 
                a full-time basis at the institution who complete the 
                educational program in which they are enrolled within 
                any 12-month period ending not more than six months 
                prior to the date the institution submits its appeal 
                are placed for at least 13 weeks in an employment 
                position for which they have been trained, or are 
                enrolled for at least 13 weeks in higher level 
                education program for which the educational program of 
                the institution provided substantial preparation, or 
                have entered active duty in the armed forces of the 
                United States.
          ``(5) Reduction of default rates at certain minority 
        institutions.--
                  ``(A) Beneficiaries of exception required to 
                establish management plan.--After July 1, 1998, any 
                institution that has a cohort default rate that equals 
                or exceeds 25 percent for each of the three most recent 
                fiscal years for which data are available and that 
                relies on the exception inparagraph (2)(C) of this 
subsection to continue to be an eligible institution shall--
                          ``(i) submit to the Secretary a default 
                        management plan which the Secretary, in his 
                        discretion, after consideration of the 
                        institution's history, resources, dollars in 
                        default, and targets for default reduction, 
                        determines is acceptable and provides 
                        reasonable assurance that the institution will, 
                        by July 1, 2001, have a cohort default rate 
                        that is less than 25 percent;
                          ``(ii) engage an independent third party 
                        (which may be paid with funds received under 
                        part B of title III) to provide technical 
                        assistance in implementing such default 
                        management plan; and
                          ``(iii) provide to the Secretary, on an 
                        annual basis or at such other intervals as the 
                        Secretary may require, evidence of cohort 
                        default rate improvement and successful 
                        implementation of such default management plan.
                  ``(B) Discretionary eligibility conditioned on 
                improvement.--Notwithstanding the expiration of the 
                exception in paragraph (2)(C), the Secretary may, in 
                his discretion, continue to treat an institution 
                described in subparagraph (A) of this paragraph as an 
                eligible institution for each of the one-year periods 
                beginning on July 1, 1999, and July 1, 2000, only if 
                the institution submits by the beginning of such period 
                evidence satisfactory to the Secretary that--
                          ``(i) such institution has complied and is 
                        continuing to comply with the requirements of 
                        subparagraph (A); and
                          ``(ii) such institution has made substantial 
                        improvement, during each of the preceding one-
                        year periods, in its cohort default rate.
          ``(6) Special rule based on participation rate indices.--(A) 
        An institution that demonstrates to the Secretary that its 
        participation rate index (as defined in regulations in effect 
        on July 1, 1996) is equal to or less than .0375 for any of the 
        three most recent fiscal years for which data are available 
        shall not be subject to paragraph (2).
          ``(B) An institution shall provide the Secretary with 
        sufficient data to determine its participation rate index 
        within 30 days after receiving an initial notification of its 
        draft cohort default rate.
          ``(C) Prior to publication of a final cohort default rate for 
        an institution that provides the data under subparagraph (B), 
        the Secretary shall notify the institution of its compliance or 
        noncompliance with subparagraph (A).''.
  (b) Eligible Lender.--Section 435(d) is amended--
          (1) in paragraph (1)(A)(ii)--
                  (A) by striking ``or'' at the end of subclause (I); 
                and
                  (B) by inserting before the semicolon at the end of 
                subclause (II) the following: ``, or (III) it is a bank 
                that is a wholly owned subsidiary of a nonprofit 
                foundation, the foundation is described in section 
                501(c)(3) of the Internal Revenue Code of 1986 and 
                exempt from taxation under section 501(a) of such Code 
                and has been participating in the program authorized by 
                this part for three years as of the date of enactment 
                of the Higher Education Amendments of 1998 and only 
                makes loans to undergraduate students who are 22 years 
                of age or younger and has a portfolio of not more than 
                $10,000,000; and in determining whether the making or 
                holding of loans to students and parents under this 
                part is the primary consumer credit function of the 
                eligible lender, all loans (including student loans and 
                other consumer loans) made or held as trustee or in a 
                trust capacity for the benefit of a third party shall 
                be considered'';
          (2) in paragraph (1)--
                  (A) by striking ``and'' at the end of subparagraph 
                (I);
                  (B) by striking the period at the end of subparagraph 
                (J) and inserting ``; and''; and
                  (C) by adding at the end the following new 
                subparagraph:
                  ``(K) a wholly owned subsidiary of a publicly held 
                holding company which, for the three years preceding 
                the date of enactment of this subparagraph, through one 
                or more subsidiaries (i) acts as a finance company, and 
                (ii) participates in the program authorized by this 
                part pursuant to subparagraph (C).''; and
          (3) in paragraph (5), by adding at the end the following new 
        sentence:
        ``It shall not be a violation of this paragraph for a lender to 
        provide assistance to institutions of higher education 
        comparable to the kinds of assistance provided to institutions 
        of higher education by the Department of Education.''.
  (c) Line of Credit.--Section 435(e) is amended to read as follows:
  ``(e) Line of Credit.--The term `line of credit' means an agreement 
between the lender and the borrower pursuant to a master promissory 
note under which the lender may make and disburse, in addition to the 
initial loan, additional loans in subsequent years.''.

SEC. 426. DISCHARGE.

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

SEC. 427. CANCELLATION OF LOANS FOR CERTAIN PUBLIC SERVICE.

  Section 437 is further amended--
          (1) in the section heading, by striking out the period at the 
        end thereof and inserting in lieu thereof a semicolon and 
        ``loan forgiveness for 
        teaching.'';
          (2) by amending the heading for subsection (c) to read as 
        follows: ``Discharge Related to School Closure or False 
        Certification.--''; and
          (3) by adding at the end thereof the following new 
        subsection:
  ``(e) Cancellation of Loans for Teaching.--
          ``(1) Functions of secretary.--The Secretary shall discharge 
        the liability of a borrower of a qualifying loan by repaying 
        the amount owed on the loan, to the extent specified in 
        paragraph (4), for service described in paragraph (3).
          ``(2) Qualifying loans.--
                  ``(A) In general.--For purposes of this subsection, a 
                loan is a qualifying loan if--
                          ``(i) the loan was made under section 428 on 
                        or after the date of enactment of the Higher 
                        Education Amendments of 1998 to a borrower who, 
                        on the date of entering into the note or other 
                        written evidence of the loan, had no 
                        outstanding balance of principal or interest on 
                        any loan made before such date; and
                          ``(ii) the loan was obtained to cover the 
                        cost of instruction for an academic year after 
                        the first and second year of undergraduate 
                        education.
                  ``(B) Limitation.--The Secretary may not repay loans 
                described in subparagraph (A) to cover the costs of 
                instruction for more than two academic years, or three 
                academic years in the case of a program of instruction 
                normally requiring five years.
                  ``(C) Treatment of consolidation loans.--A loan made 
                under section 428C may be a qualifying loan for the 
                purposes of this subsection only to the extent that 
                such loan was used to repay a loan or loans that meet 
                the requirements of subparagraphs (A) and (B), as 
                determined in accordance with regulations prescribed by 
                the Secretary.
          ``(3) Qualifying service.--A loan shall be discharged under 
        paragraph (1) for service by the borrower as a full-time 
        teacher for each complete academic year of service, after 
        completion of the second academic year of service, in a public 
        or other nonprofit private elementary or secondary school--
                  ``(A) which is in the school district of a local 
                educational agency which is eligible in such year for 
                assistance pursuant to title I of the Elementary and 
                Secondary Education Act of 1965; and
                  ``(B) which for the purpose of this paragraph and for 
                that year has been determined by the State educational 
                agency of the State in which the school is located to 
                be a school in which the enrollment of children counted 
                under section 1124(c) of the Elementary and Secondary 
                Education Act of 1965 exceeds 30 percent of the total 
                enrollment of that school.
          ``(4) Rate of discharge.--(A) Loans shall be discharged under 
        this subsection at the rate of--
                  ``(i) 30 percent for the first or second complete 
                academic year of qualifying service as described in 
                paragraph (3) (after completion of two years of 
                service); and
                  ``(ii) 40 percent for the third complete year of such 
                qualifying service.
          ``(B) The total amount that may be discharged under this 
        subsection for any borrower shall not exceed $17,750.
          ``(C) If a portion of a loan is discharged under subparagraph 
        (A) for any year, the entire amount of interest on that loan 
        that accrues for that year shall also be discharged by the 
        Secretary.
          ``(D) Nothing in this section shall be construed to authorize 
        refunding of any repayment of a loan.
          ``(5) Limitation on teacher eligibility.--
                  ``(A) Secondary school teachers.--A borrower may not 
                receive assistance under this subsection by virtue of 
                teaching in a secondary school unless such borrower 
                majored in the subject area in which they are teaching.
                  ``(B) Elementary school teachers.--A borrower may not 
                receive assistance under this subsection by virtue of 
                teaching in a elementary school unless such borrower 
                demonstrates, in accordance with State teacher 
                certification or licensing requirements, subject matter 
                knowledge and teaching skills in reading, writing, 
                mathematics, and other subjects taught in elementary 
                schools.
          ``(6) Rule of construction.--The amount of a loan, and 
        interest on a loan, that is canceled under this subsection 
        shall not be considered income for purposes of the Internal 
        Revenue Code of 1986.
          ``(7) Prevention of double benefits.--No borrower may, for 
        the same service, receive a benefit under both this subsection 
        and subtitle D of title I of the National and Community Service 
        Act of 1990 (42 U.S.C. 12571 et seq.).
          ``(8) Method of payment.--The Secretary shall specify in 
        regulations the manner in which lenders shall be reimbursed for 
        loans made under this part, or portions thereof, that are 
        discharged under this subsection.
          ``(9) List.--If the list of schools in which a teacher may 
        perform service pursuant to paragraph (3) is not available 
        before May 1 of any year, the Secretary may use the list for 
        the year preceding the year for which the determination is made 
        to make such service determination.
          ``(10) Continuing eligibility.--Any teacher who performs 
        service in a school which--
                  ``(A) meets the requirements of paragraph (3) in any 
                year during such service; and
                  ``(B) in a subsequent year fails to meet the 
                requirements of such subsection,
        may continue to teach in such school and shall be eligible for 
        loan cancellation pursuant to this subsection with respect to 
        such subsequent years.''.

SEC. 428. DEBT MANAGEMENT OPTIONS.

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

SEC. 429. SPECIAL ALLOWANCES.

  (a) Computation.--Section 438(b)(2) (20 U.S.C. 1087-1(b)(2)) is 
amended--
          (1) in subparagraph (A), by striking ``(E), and (F)'' and 
        inserting ``and (E)''; and
          (2) in subparagraph (B)(iv), by striking ``, (E), or (F)'' 
        and inserting ``or (E)''.
  (b) Origination Fees.--Section 438(c) is amended--
          (1) in paragraph (2)--
                  (A) by striking ``(other than'' and inserting 
                ``(including loans made under section 428H, but 
                excluding''; and
                  (B) by adding at the end the following new sentence: 
                ``Except as provided in paragraph (8), a lender is not 
                authorized to assess an origination fee under this 
                paragraph unless the lender assesses the same fee to 
                all student borrowers.''; and
          (2) by adding at the end the following new paragraph:
          ``(8) Exception.--Notwithstanding paragraph (2), a lender may 
        assess a lesser origination fee for a borrower demonstrating 
        greater financial need as determined by such borrower's 
        adjusted gross family income.''.
  (c) Lending From Proceeds of Tax Exempt Obligations.--Section 438 is 
amended--
          (1) by striking subsection (e); and
          (2) by redesignating subsection (f) as subsection (e).
  (d) Study.--Section 438 is amended by adding at the end the following 
new subsection:
  ``(f) Study.--The Comptroller General shall conduct a statistical 
analysis of the subsidized and unsubsidized student loan programs under 
part B to gather data on lenders' policies on charging origination fees 
and to determine if there are any anomalies that would indicate any 
institutional, programmatic, or socioeconomic discrimination in the 
assessing or waiving of such fees. The Comptroller General shall report 
to the appropriate committees of Congress within two years after the 
date of enactment of the Higher Education Amendments of 1998.''.

                  PART C--FEDERAL WORK-STUDY PROGRAMS

SEC. 435. AMENDMENTS TO PART C.

  (a) Extension of Authority; Definition.--
          (1) Eligible students.--Section 441(a) (20 U.S.C. 2751(a)) is 
        amended by inserting after ``professional students'' the 
        following: ``, including students participating in an 
        internship or practicum, or as a research assistant, as 
        determined by the Secretary,''.
          (2) Extension of authority.--Section 441(b) is amended by 
        striking ``$800,000,000 for fiscal year 1993'' and inserting 
        ``$1,000,000,000 for fiscal year 1999''.
          (3) Definition of community service.--Section 441(c) is 
        amended by striking ``which are'' and inserting ``that are 
        performed off-campus or on-campus and that are''.
  (b) Allocation of Funds.--Section 442 (42 U.S.C. 2752) is amended--
          (1) by striking subsection (b);
          (2) in subsection (c)(1), by striking ``three-quarters of the 
        remainder'' and inserting ``the remainder'';
          (3) in subsection (c)(2)(A)(i), by striking ``subsection 
        (d)'' and inserting ``subsection (c)'';
          (4) in subsection (e)(1), by striking ``subsection (c)'' and 
        inserting ``subsection (b)''; and
          (5) by redesignating subsections (c), (d), (e), and (f) as 
        subsections (b), (c), (d), and (e), respectively.
  (c) Tutoring and Literacy Activities.--Section 443 of the Higher 
Education Act of 1965 (42 U.S.C. 2753) is amended--
          (1) in subsection (b)(2)--
                  (A) by striking ``and'' at the end of subparagraph 
                (A);
                  (B) by redesignating subparagraph (B) as subparagraph 
                (C); and
                  (C) by inserting after subparagraph (A) the following 
                new subparagraph:
                  ``(B) in academic year 1999 and succeeding academic 
                years, an institution shall use at least 2 percent of 
                the total amount of funds granted to such institution 
                under this section for such academic year in accordance 
                with subsection (d); and''; and
          (2) by adding at the end the following new subsection:
  ``(d) Tutoring and Literacy Activities.--
          ``(1) Use of funds.--In any academic year to which subsection 
        (b)(2)(B) applies, an institution shall use the amount required 
        to be used in accordance with this subsection to compensate 
        (including compensation for time spent in directly related 
        training and travel) students--
                  ``(A) employed as a reading tutor for children who 
                are in preschool through elementary school; or
                  ``(B) employed in family literacy projects.
          ``(2) Priority for schools.--An institution shall--
                  ``(A) give priority, in using such funds, to the 
                employment of students in the provision of tutoring 
                services in schools that--
                          ``(i) are identified for school improvement 
                        under section 1116(c) of the Elementary and 
                        Secondary Education Act of 1965; or
                          ``(ii) are selected by a local educational 
                        agency under section 15104(a)(2) of such Act; 
                        and
                  ``(B) ensure that any student compensated with such 
                funds who is employed in a school selected under 
                section 15104(a)(2) of the Elementary and Secondary 
                Education Act of 1965 is trained in the instructional 
                practices based on reliable, replicable research on 
                reading used by the school pursuant to such section 
                15104.
          ``(3) Federal share.--The Federal share of the compensation 
        of work study students compensated under this subsection may 
        exceed 75 percent.
          ``(4) Waiver.--The Secretary may waive the requirements of 
        this subsection if the Secretary determines that enforcing such 
        requirements would cause a hardship for students at the 
        institution.
          ``(5) Return of funds.--Any institution that does not use the 
        amount required under this subsection, and that does not 
        request and receive a waiver from the Secretary under paragraph 
        (4), shall return to the Secretary, at such time as the 
        Secretary may require for reallocation under paragraph (6), any 
        balance of such amount that is not used as so required.
          ``(6) Reallocation.--The Secretary shall reallot any amounts 
        returned pursuant to paragraph (5) among institutions that used 
        at least 4 percent of the total amount of funds granted to such 
        institution under this section to compensate students employed 
        in tutoring and literacy activities in the preceding academic 
        year. Such funds shall be reallotted among such institutions on 
        the same basis as excess eligible amounts are allocated to 
        institutions pursuant to section 442(c). Funds received by 
        institutions pursuant to this paragraph shall be used in the 
        same manner as amounts required to be used in accordance with 
        this subsection.''.
  (d) Grant Requirements.--
          (1) Community service.--Section 443(b)(2)(A) (42 U.S.C. 
        2753(b)(2)(A)) is amended--
                  (A) by striking ``in fiscal year 1994 and succeeding 
                fiscal years,''; and
                  (B) by inserting ``(including time spent in travel or 
                training, or both, directly related to such community 
                service)'' after ``community service''.
          (2) Use of funds for independent and less-than-full-time 
        students.--Section 443(b)(3) (42 U.S.C. 2753(b)(3)) is amended 
        to read as follows:
          ``(3) provide that in the selection of students for 
        employment under such work-study program, only students, who 
        demonstrate financial need in accordance with part F of this 
        title, and who meet the requirements of section 484 will be 
        assisted, except that if the institution's grant under this 
        part is directly or indirectly based in part on the financial 
        need demonstrated by students who are (A) attending the 
        institution less than full time, or (B) independent students, 
        then grant funds shall be made available to such less than 
        full-time and independent students;''.
          (3) Availability of employment.--Section 443(b)(6) is amended 
        by striking everything after ``in need thereof'' and inserting 
        a semicolon.
          (4) Academic relevance.--Section 443(c)(4) is amended by 
        inserting before the semicolon at the end the following: ``, to 
        the maximum extent practicable''.
  (e) Flexible Use of Funds.--Section 445(b) (42 U.S.C. 2755(b)) is 
amended by adding at the end the following new paragraph:
  ``(3) An eligible institution may, with the permission of a student, 
make payments to the student under this part by crediting the student's 
account at the institution or by making a direct deposit to the 
student's account at a depository institution. An eligible institution 
may only credit the student's account at the institution for (A) 
tuition and fees, (B) in the case of institutionally owned housing, 
room and board, and (C) other institutionally provided goods and 
services.''.
  (f) Job Location and Development Programs.--Section 446 (42 U.S.C. 
2756) is amended--
          (1) in subsection (a)(1)--
                  (A) by striking ``$50,000'' and inserting 
                ``$60,000''; and
                  (B) by striking ``community service jobs, for 
                currently enrolled students'' and inserting ``community 
                service jobs and cooperative education jobs, for 
                currently enrolled students, including students 
                participating in work-study programs under this part''; 
                and
          (2) in subsection (b)--
                  (A) by redesignating paragraphs (4) through (6) as 
                paragraphs (5) through (7); and
                  (B) by inserting after paragraph (3) the following 
                new paragraph:
          ``(4) provide that the institution will notify the Secretary 
        if the institution will use funds under this section to develop 
        cooperative education jobs and will provide assurances that--
                  ``(A) the funds provided under this paragraph will 
                supplement and not supplant any cooperative education 
                funds available to the institution;
                  ``(B) in the case of 2-year programs, funds will be 
                used to develop and expand cooperative education, jobs 
                for associate degree or certificate students only;
                  ``(C) the work portion of a cooperative education job 
                developed or expanded under this paragraph will be 
                related to a student's academic program; and
                  ``(D) the institution will furnish the Secretary a 
                report on cooperative education jobs expanded and 
                developed under this paragraph, including--
                          ``(i) how the funds were used;
                          ``(ii) a list of employers and whether the 
                        employer is a for-profit or not-for-profit 
                        entity; and
                          ``(iii) the employers' role in the 
                        cooperative education job.''.
  (g) Work Colleges Extension of Authority.--Section 448(f) (42 U.S.C. 
2756b(f)) is amended by striking ``1993'' and inserting ``1999''.

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

SEC. 436. SELECTION OF INSTITUTIONS.

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

SEC. 437. TERMS AND CONDITIONS.

  (a) Interest Rates.--
          (1) Amendment.--Section 455(b) (20 U.S.C. 1087e(b)) is 
        amended to read as follows:
  ``(b) Interest Rate.--
          ``(1) Rates for fdsl and fdusl.--For Federal Direct Stafford 
        Loans and Federal Direct Unsubsidized Stafford Loans for which 
        the first disbursement is made on or after July 1, 1998, the 
        applicable rate of interest shall, during any 12-month period 
        beginning on July 1 and ending on June 30, be determined on the 
        preceding June 1 and be equal to--
                  ``(A) the bond equivalent rate of 91-day Treasury 
                bills auctioned at the final auction held prior to such 
                June 1; plus
                  ``(B) 2.3 percent,
        except that such rate shall not exceed 8.25 percent.
          ``(2) In school and grace period rules.--With respect to any 
        Federal Direct Stafford Loan or Federal Direct Unsubsidized 
        Stafford Loan for which the first disbursement is made on or 
        after July 1, 1995, the applicable rate of interest for 
        interest which accrues--
                  ``(A) prior to the beginning of the repayment period 
                of the loan; or
                  ``(B) during the period in which principal need not 
                be paid (whether or not such principal is in fact paid) 
                by reason of a provision described in section 
                428(b)(1)(M) or 427(a)(2)(C),
        shall be determined under paragraph (1) by substituting `1.7 
        percent' for `2.3 percent'.
          ``(3) PLUS loans.--With respect to Federal Direct PLUS Loans 
        for which the first disbursement is made on or after July 1, 
        1998, the applicable rate of interest shall be determined under 
        paragraph (1)--
                  ``(A) by substituting `3.1 percent' for `2.3 
                percent'; and
                  ``(B) by substituting `9.0 percent' for `8.25 
                percent'.
          ``(4) Repayment incentives.--Notwithstanding any other 
        provision of this part, the Secretary is authorized to 
        prescribe in regulation such reductions in the interest rate 
        paid by a borrower of a loan made under this part as the 
        Secretary determines appropriate to encourage on-time 
        repayment. Such reductions may be offered only if the Secretary 
        determines they are both cost neutral and in the best financial 
        interest of the Federal Government. Any increase in subsidy 
        costs resulting from such reductions must be completely offset 
        by corresponding savings in funds available for the Direct Loan 
        Program in that fiscal year from section 458 and other 
        administrative accounts.
          ``(5) Publication.--The Secretary shall determine the 
        applicable rates of interest under this subsection after 
        consultation with the Secretary of the Treasury and shall 
        publish such rate in the Federal Register as soon as 
        practicable after the date of determination.''.
          (2) Effective date.--The amendments made by this section 
        shall apply with respect to any loan made under part D of title 
        IV of the Higher Education Act of 1965 for which the first 
        disbursement is made on or after July 1, 1998.
  (b) Consolidation Loans.--The first sentence of section 455(g) is 
amended by striking everything after ``section 428C(a)(4)'' and 
inserting a period.

SEC. 438. CONTRACTS.

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

SEC. 439. FUNDS FOR ADMINISTRATIVE EXPENSES.

  Section 458 (20 U.S.C. 1087h) is amended--
          (1) in subsection (a)(1), by striking subparagraph (B) and 
        everything that follows and inserting the following:
                  ``(B) account maintenance fees payable to guaranty 
                agencies under part B and calculated in accordance with 
                paragraph (2),
        not to exceed (from such funds not otherwise appropriated) 
        $626,000,000 in fiscal year 1999, $726,000,000 in fiscal year 
        2000, $770,000,000 in fiscal year 2001, $780,000,000 in fiscal 
        year 2002, and $795,000,000 in fiscal year 2003. Account 
        maintenance fees under subparagraph (B) of this paragraph shall 
        be paid quarterly and deposited in the Operating Fund 
        established under 422B. The Secretary may carry over funds 
        available under this section to a subsequent fiscal year.'';
          (2) by striking paragraph (2) of subsection (a) and inserting 
        the following:
          ``(2) Calculation basis.--Account maintenance fees payable to 
        guaranty agencies under paragraph (1)(B) shall be calculated 
        for fiscal year 1999 and fiscal year 2000, on the basis of 0.12 
        percent of the original principal amount of outstanding loans 
        on which insurance was issued under part B, and for fiscal 
        years 2001 and succeeding fiscal years, shall be calculated on 
        the basis of 0.10 percent of the original principal amount of 
        outstanding loans on which insurance was issued under part 
        B.''; and
          (3) by striking subsection (d).

SEC. 440. AUTHORITY TO SELL LOANS.

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

``SEC. 459. AUTHORITY TO SELL LOANS.

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

SEC. 441. CANCELLATION OF LOANS FOR CERTAIN PUBLIC SERVICE.

  Part D of title IV is amended by inserting after section 459, as 
added by section 440, the following new section:

``SEC. 459A. CANCELLATION OF LOANS FOR CERTAIN PUBLIC SERVICE.

  ``(a) Cancellation of Percentage of Debt Based on Years of Qualifying 
Service.--
          ``(1) Functions of secretary.--The percent specified in 
        paragraph (4) of the total amount of any qualifying loan shall 
        be canceled for each complete year of service by the borrower 
        described in paragraph (3).
          ``(2) Qualifying loans.--
                  ``(A) In general.--For purposes of this subsection, a 
                loan is a qualifying loan if--
                          ``(i) the loan was a Federal Direct Stafford 
                        Loan made on or after the date of enactment of 
                        the Higher Education Amendments of 1998 to a 
                        borrower who, on the date of entering into the 
                        note or other written evidence of the loan, had 
                        no outstanding balance of principal or interest 
                        on any loan made before such date; and
                          ``(ii) the loan was obtained to cover the 
                        cost of instruction for an academic year after 
                        the first and second year of undergraduate 
                        education.
                  ``(B) Limitation.--The Secretary may not repay loans 
                described in subparagraph (A) to cover the costs of 
                instruction for more than two academic years, or three 
                academic years in the case of a program of instruction 
                normally requiring five years.
                  ``(C) Treatment of consolidation loans.--A Federal 
                Direct Consolidation Loan may be a qualifying loan for 
                the purposes of this subsection only to the extent that 
                such loan was used to repay a loan or loans that meet 
                the requirements of subparagraphs (A) and (B), as 
                determined in accordance with regulations prescribed by 
                the Secretary.
          ``(3) Qualifying service.--A loan shall be cancelled under 
        paragraph (1) for service by the borrower as a full-time 
        teacher for each complete academic year of service, after 
        completion of the second academic year of service, in a public 
        or other nonprofit private elementary or secondary school--
                  ``(A) which is in the school district of a local 
                educational agency which is eligible in such year for 
                assistance pursuant to title I of the Elementary and 
                Secondary Education Act of 1965; and
                  ``(B) which for the purpose of this paragraph and for 
                that year has been determined by the State educational 
                agency of the State in which the school is located to 
                be a school in which the enrollment of children counted 
                under section 1124(c) of the Elementary and Secondary 
                Education Act of 1965 exceeds 30 percent of the total 
                enrollment of that school.
          ``(4) Percentage of cancellation.--(A) The percent of a loan 
        which shall be canceled under paragraph (1) of this subsection 
        is at the rate of--
                  ``(i) 30 percent for the first or second complete 
                academic year of qualifying service as described in 
                paragraph (3) (after completion of two years of 
                service); and
                  ``(ii) 40 percent for the third complete year of such 
                qualifying service.
          ``(B) The total amount that may be canceled under this 
        subsection for any borrower shall not exceed $17,750.
          ``(C) If a portion of a loan is canceled under this 
        subsection for any year, the entire amount of interest on such 
        loan which accrues for such year shall be canceled.
          ``(D) Nothing in this section shall be construed to authorize 
        refunding of any repayment of a loan.
          ``(5) Limitation on teacher eligibility.--
                  ``(A) Secondary school teachers.--A borrower may not 
                receive assistance under this subsection by virtue of 
                teaching in a secondary school unless such borrower 
                majored in the subject area in which they are teaching.
                  ``(B) Elementary school teachers.--A borrower may not 
                receive assistance under this subsection by virtue of 
                teaching in a elementary school unless such borrower 
                demonstrates, in accordance with State teacher 
                certification or licensing requirements, subject matter 
                knowledge and teaching skills in reading, writing, 
                mathematics, and other subjects taught in elementary 
                schools.
          ``(6) Definition.--For the purpose of this section, the term 
        `year' where applied to service as a teacher means an academic 
        year as defined by the Secretary.
          ``(7) Treatment of canceled amounts.--The amount of a loan, 
        and interest on a loan, which is canceled under this section 
        shall not be considered income for purposes of the Internal 
        Revenue Code of 1986.
          ``(8) Prevention of double benefits.--No 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.).
  ``(b)  Special Rules.--
          ``(1) List.--If the list of schools in which a teacher may 
        perform service pursuant to subsection (a)(3) is not available 
        before May 1 of any year, the Secretary may use the list for 
        the year preceding the year for which the determination is made 
        to make such service determination.
          ``(2) Continuing eligibility.--Any teacher who performs 
        service in a school which--
                  ``(A) meets the requirements of subsection (a)(3) in 
                any year during such service; and
                  ``(B) in a subsequent year fails to meet the 
                requirements of such subsection,
        may continue to teach in such school and shall be eligible for 
        loan cancellation pursuant to subsection (a)(1) with respect to 
        such subsequent years.''.

                     PART E--FEDERAL PERKINS LOANS

SEC. 445. AMENDMENTS TO PART E.

  (a) Extension of Authority.--Section 461(b) (20 U.S.C. 1087aa(b)) is 
amended--
          (1) in paragraph (1), by striking ``1993'' and inserting 
        ``1999''; and
          (2) in paragraph (2), by striking ``1997'' each place it 
        appears and inserting ``2003''.
  (b) Allocation of Funds.--Section 462 (20 U.S.C. 1087bb) is amended--
          (1) by striking subsection (b);
          (2) in subsection (c)(1), by striking ``three-quarters of the 
        remainder'' and inserting ``the remainder'';
          (3) in subsection (c)(2), by striking ``subsection (g)'' and 
        inserting ``subsection (f)'';
          (4) in subsection (c)(3)--
                  (A) by striking ``subsection (d)'' and inserting 
                ``subsection (c)'';
                  (B) by striking ``subsection (f)'' and inserting 
                ``subsection (e)''; and
                  (C) by striking ``subsection (g)'' and inserting 
                ``subsection (f)'';
          (5) in subsection (f)(1), by striking ``subsection (g)'' and 
        inserting ``subsection (f)'';
          (6) in subsection (j)(2)--
                  (A) by striking ``subsection (c)'' and inserting 
                ``subsection (b)''; and
                  (B) by striking ``subsection (c) of section 462'' and 
                inserting ``subsection (b)''; and
          (7) by redesignating subsections (c) through (j) as 
        subsections (b) through (i), respectively.
  (c) Default Reduction Penalties.--Section 462(e)(2)(A) (as 
redesignated by subsection (b)(7) of this section) is amended by 
inserting before the semicolon at the end the following: ``, except 
that a plan shall not be required with respect to any such institution 
that has a default rate of less than 20 percent and has less than 100 
students who have loans under this part in any academic year''.
  (d) Definitions for Default Rate Calculations.--Section 462(g) (as 
redesignated by subsection (b)(7) of this section) is amended by adding 
at the end the following new paragraph:
  ``(5) For the purpose of this subsection, the term `satisfactory 
arrangements to resume payment' includes--
          ``(A) receipt of voluntary monthly payments for three 
        consecutive months after the time periods specified in 
        paragraph (4);
          ``(B) receipt of voluntary payments sufficient to bring the 
        loan current prior to the calculation being made for any award 
        year under paragraph (3);
          ``(C) obtaining any deferment, postponement, rehabilitation, 
        forbearance, or cancellation of the loan after the time periods 
        specified in paragraph (4), but prior to the calculation being 
        made for any award year under paragraph (3);
          ``(D) receipt of the full amount due on the loan after the 
        time periods specified in paragraph (4), but prior to the 
        calculation being made for any award year under paragraph (3); 
        or
          ``(E) any other arrangements to resume payment which the 
        Secretary determines to be satisfactory.''.
  (e) Reports to Credit Bureaus of Payment Resumptions.--Section 463(c) 
(20 U.S.C. 1087cc(c)) is amended by adding at the end the following new 
paragraph:
  ``(5) Each institution of higher education shall notify the 
appropriate credit bureau organizations whenever a borrower of a loan 
that is made and held by the institution and that is in default makes 
12 consecutive monthly payments on such loan, for the purpose of 
encouraging such organizations to update the status of information 
maintained with respect to that borrower.''.
  (f) Incentive Repayment Programs.--Section 463 is amended by adding 
at the end the following new subsection:
  ``(f) Incentive Repayment Programs.--
          ``(1) Program authorized.--Any institution of higher 
        education participating in the program under this part may 
        establish, with the approval of the Secretary, an incentive 
        repayment program designed to reduce defaults on loans under 
        this part and to assist in replenishing the student loan fund 
        established under this part.
          ``(2) Contents of program.--An incentive repayment program 
        under this part may contain provisions that--
                  ``(A) offer a reduction in the interest rate on a 
                loan on which the borrower has made 48 consecutive 
                monthly payments, but in no event may the interest rate 
                be reduced by more than one percent;
                  ``(B) provide for a discount on the balance owed on a 
                loan on which the borrower pays the principal and 
                interest in full prior to the end of the applicable 
                repayment period, but in no event shall such discount 
                exceed 5 percent of the unpaid principal balance due on 
                the loan at the time the early repayment is made; and
                  ``(C) include such other incentive repayment options 
                as the institution determines, with the approval of the 
                Secretary, will carry out the objectives of this 
                subsection.
          ``(3) No net cost to the government.--No incentive option 
        contained in a program authorized by this subsection may be 
        charged to the Federal Government.''.
  (g) Terms of Loans.--
          (1) Aggregate amount.--Section 464(a)(2)(B) (20 U.S.C. 
        1087dd(a)(2)(B)) is amended by striking ``the aggregate of the 
        loans for all years'' and inserting ``the aggregate unpaid 
        principal amount for all loans''.
          (2) Allocation to less-than-full-time students.--Section 
        464(b) is amended--
          (A) by striking ``(1)''; and
          (B) by striking paragraph (2).
          (3) Qualification for deferments.--Section 464(c)(2) is 
        amended by adding at the end the following new subparagraph:
  ``(C) An individual with an outstanding loan balance who meets the 
eligibility criteria for a deferment described in subparagraph (A) as 
in effect on the date of enactment of this subparagraph shall be 
eligible for deferment under this paragraph notwithstanding any 
contrary provision of the promissory note under which the loan or loans 
were made, and notwithstanding any amendment (or effective date 
provision relating to any amendment) to this section made prior to the 
date of such deferment.''.
          (4) Clerical amendment.--The matter following clause (iv) of 
        section 464(c)(2)(A) is amended by striking ``subparagraph 
        (B)'' and inserting ``subparagraph (A) of paragraph (1)''.
  (h) Rehabilitation and Discharge of Loans.--Section 464 is further 
amended by adding at the end the following new subsections:
  ``(g) Rehabilitation of Loans.--(1)(A) If the borrower of a loan made 
under this part who has defaulted on the loan makes 12 on-time, 
consecutive, monthly payments of amounts owed on the loan, the loan 
shall be considered rehabilitated, and the institution that made the 
loan (or the Secretary, in the case of a loan held by the Secretary) 
shall instruct any credit reporting organization to which the default 
was reported to remove the default from the borrower's credit history.
  ``(B) As long as the borrower continues to make scheduled repayments 
on a loan rehabilitated under this paragraph, the rehabilitated loan 
shall be subject to the same terms and conditions, and qualify for the 
same benefits and privileges, as other loans made under this part.
  ``(C) The borrower of a rehabilitated loan shall not be precluded by 
section 484 from receiving additional grant, loan, or work assistance 
under this title (for which he or she is otherwise eligible) on the 
basis of defaulting on the loan prior to such rehabilitation.
  ``(D) A borrower may obtain the benefit of this paragraph with 
respect to rehabilitating the loan only once.
  ``(2) If the borrower of loan made under this part who has defaulted 
on that loan makes 6 on-time, consecutive, monthly payments of amounts 
owed on such loan, the borrower's eligibility for grant, loan, or work 
assistance under this title shall be restored. A borrower may obtain 
the benefit of this paragraph with respect to restored eligibility only 
once.
  ``(h) Discharge.--
          ``(1) In general.--If a student borrower who received a loan 
        made under this part on or after January 1, 1986, is unable to 
        complete the program in which such student is enrolled due to 
        the closure of the institution, then the Secretary shall 
        discharge the borrower's liability on the loan (including 
        interest and collection fees) by repaying the amount owed on 
        the loan and shall subsequently pursue any claim available to 
        such borrower against the institution and its affiliates and 
        principals, or settle the loan obligation.
          ``(2) Assignment.--A borrower whose loan has been discharged 
        pursuant to this subsection shall be deemed to have assigned to 
        the United States the right to a loan refund up to the amount 
        discharged against the institution and its affiliates and 
        principals.
          ``(3) Eligibility for additional assistance.--The period of a 
        student's assistance at an institution at which the student was 
        unable to complete a course of study due to the closing of the 
        institution shall not be considered for purposes of calculating 
        the student's period of eligibility for additional assistance 
        under this title.
          ``(4) Special rule.--A borrower whose loan has been 
        discharged pursuant to this subsection shall not be precluded, 
        because of that discharge, from receiving additional grant, 
        loan, or work assistance under this title for which the 
        borrower would be otherwise eligible (but for the default on 
        the discharged loan). The amount discharged under this 
        subsection shall be treated the same as loans under section 
        465(a)(5).
          ``(5) Reporting.--The Secretary or institution, as the case 
        may be, shall report to credit bureaus with respect to loans 
        that have been discharged pursuant to this subsection.''.
  (i) Cancellation.--Section 465 (20 U.S.C. 1087ee) is amended--
          (1) in subsection (a)--
                  (A) in paragraph (2)(C), by striking ``section 
                676(b)(9)'' and inserting ``section 635(a)(10)'';
                  (B) by striking subparagraph (H) of paragraph (2) and 
                inserting the following:
          ``(H) as a full-time nurse or medical technician providing 
        health care services;'';
                  (C) by striking the period at the end of subparagraph 
                (I) of such paragraph and inserting a semicolon;
                  (D) by adding at the end of such paragraph the 
                following new subparagraphs:
          ``(J) as a member of the Commissioned Corps of the Public 
        Health Service of the United States; or
          ``(K) as a non-physician mental health professional providing 
        health care services in a health professional shortage area 
        designated under section 332 of the Public Health Service 
        Act.'';
                  (E) in the last sentence of paragraph (2), by 
                striking ``section 602(a)(1)'' and inserting ``section 
                602(3)''; and
                  (F) by adding at the end the following new paragraph:
  ``(7) An individual with an outstanding loan obligation who performs 
service of any type that is described in paragraph (2) as in effect on 
the date of enactment of this paragraph shall be eligible for 
cancellation under this section for such service notwithstanding any 
contrary provision of the promissory note under which the loan or loans 
were made, and notwithstanding any amendment (or effective date 
provision relating to any amendment) to this section made prior to the 
date of such service.''; and
          (2) in subsection (b), by adding at the end the following new 
        sentence: ``To the extent feasible, the Secretary shall pay the 
        amounts for which any institution qualifies under this 
        subsection no later than three months after the institution 
        files an institutional application for campus-based funds.''.
  (j) Distribution of Assets.--Section 466 (20 U.S.C. 1087ff) is 
amended--
          (1) by striking ``1996'' each place it appears and inserting 
        ``2003''; and
          (2) by striking ``1997'' each place it appears and inserting 
        ``2004''.
  (k) Collection of Defaulted Loans.--
          (1) Repeal.--Subsection (c) of section 467 (20 U.S.C. 
        1087gg(c)) is repealed.
          (2) Deposit.--Any funds in the Perkins Revolving Loan Fund on 
        the date of enactment of this Act shall be deposited in the 
        general fund of the Treasury.
  (l) Status Confirmation Reports.--Section 468 (20 U.S.C. 1087hh) is 
amended--
          (1) by inserting ``(a) In General.--'' before ``In carrying 
        out''; and
          (2) by adding at the end the following new subsection:
  ``(b) Student Status Confirmation Reports.--The Secretary shall 
ensure that borrowers under this part are included in the student 
status confirmation report required by the Secretary in the same manner 
as borrowers under parts B and D of this title.''.

                         PART F--NEED ANALYSIS

SEC. 446. COST OF ATTENDANCE.

  Section 472 (20 U.S.C. 1087ll) is amended--
          (1) in paragraph (2), by inserting after ``personal 
        expenses'' the following: ``, including a reasonable allowance 
        for the rental or purchase of a personal computer,''; and
          (2) in paragraph (10), by striking everything after 
        ``determining costs'' and inserting a semicolon.

SEC. 447. DATA ELEMENTS.

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

SEC. 448. FAMILY CONTRIBUTION FOR DEPENDENT STUDENTS.

  (a) Parents' Contribution From Adjusted Available Income.--Section 
475(b)(3) (20 U.S.C. 1087oo(b)(3)) is amended by inserting ``, 
excluding the student's parents,'' after ``number of the family 
members''.
  (b) Family Contribution From Assets.--Section 475 is amended--
          (1) in subsection (b)(1)(B), by striking ``parents' 
        contribution'' and inserting ``family contribution'';
          (2) in the heading of subsection (d), by striking ``Parents' 
        Contribution'' and inserting ``Family Contribution'';
          (3) in subsection (d)(1)--
                  (A) by striking ``parents' contribution'' and 
                inserting ``family contribution''; and
                  (B) by striking ``parental net worth'' in 
                subparagraph (A) and inserting ``family net worth'';
          (4) in subsection (d)(2)--
                  (A) by striking ``Parental'' in the heading and 
                inserting ``Family'';
                  (B) by striking ``parental net worth'' and inserting 
                ``family net worth''; and
                  (C) by inserting ``, for both the parents and the 
                dependent student'' after ``by adding'';
          (5) by striking subsection (h); and
          (6) by redesignating subsection (i) as subsection (h).
  (c) Student Contribution From Available Income.--Section 475(g) is 
amended--
          (1) in paragraph (2)--
                  (A) in subparagraph (D), by striking ``$1,750; and'' 
                and inserting ``$3,000, or a successor amount 
                prescribed by the Secretary under section 478;'';
                  (B) by striking the period at the end of subparagraph 
                (E) and inserting ``; and''; and
                  (C) by inserting after subparagraph (E) the following 
                new subparagraph:
                  ``(F) an allowance for parents' negative available 
                income, determined in accordance with paragraph (6).''; 
                and
          (2) by adding at the end the following new paragraph:
          ``(6) Allowance for parents' negative available income.--The 
        allowance for parents' negative available income is the amount, 
        if any, by which the sum of the amounts deducted under 
        subparagraphs (A) through (F) of paragraph (2) exceeds the 
        parents' total income (as defined in section 480).''.
  (e) Adjustments to Students Contribution for Enrollment Periods Other 
Than Nine Months.--Section 475 is amended by adding at the end the 
following new subsection:
  ``(i) Adjustments to Students Contribution for Enrollment Periods of 
Less Than Nine Months.--For periods of enrollment of less than nine 
months, the student's contribution from adjusted available income (as 
determined under subsection (g)) is determined, for purposes other than 
subpart 2 of part A, by dividing amount determined under such 
subsection by nine, and multiplying the result by the number of months 
in the period of enrollment.''.

SEC. 449. FAMILY CONTRIBUTION FOR INDEPENDENT STUDENTS WITHOUT 
                    DEPENDENTS OTHER THAN A SPOUSE.

  (a) Adjustments for Enrollment Periods Other Than Nine Months.--
Section 476(a) (20 U.S.C. 1087pp(a)) is amended--
          (1) by striking ``and'' at the end of paragraph (1)(B);
          (2) by inserting ``and'' after the semicolon at the end of 
        paragraph (2); and
          (3) by inserting after paragraph (2) the following new 
        paragraph:
          ``(3) for periods of enrollment of other than 9 months, for 
        purposes other than subpart 2 of part A--
                  ``(A) dividing the quotient resulting under paragraph 
                (2) by nine; and
                  ``(B) multiplying the result by the number of months 
                in the period of enrollment;''.
  (b) Contribution From Available Income.--Section 476(b)(1)(A)(iv) is 
amended--
          (1) by striking ``allowance of--'' and inserting ``allowance 
        of the following amount (or a successor amount prescribed by 
        the Secretary under section 478)--'';
          (2) by striking ``$3,000'' each place it appears in 
        subclauses (I) and (II) and inserting ``$5,500''; and
          (3) by striking ``$6,000'' in subclause (III) and inserting 
        ``$8,500''.

SEC. 450. FAMILY CONTRIBUTION FOR INDEPENDENT STUDENTS WITH DEPENDENTS 
                    OTHER THAN A SPOUSE.

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

SEC. 451. REGULATIONS; UPDATED TABLES AND AMOUNTS.

  Section 478(b) (20 U.S.C. 1087rr(b)) is amended--
          (1) by striking ``For each academic year'' and inserting the 
        following:
          ``(1) Revised tables.--For each academic year''; and
          (2) by adding at the end the following new paragraph:
          ``(2) Revised amounts.--For each academic year after academic 
        year 1997-1998, the Secretary shall publish in the Federal 
        Register revised income protection allowances for the purpose 
        of sections 475(g)(2)(D) and 476(b)(1)(A)(iv). Such revised 
        allowances shall be developed by increasing each of the dollar 
        amounts contained in such section by a percentage equal to the 
        estimated percentage increase in the Consumer Price Index (as 
        determined by the Secretary) between December 1996 and the 
        December next preceding the beginning of such academic year, 
        and rounding the result to the nearest $10.''.

SEC. 452. DISCRETION OF STUDENT FINANCIAL AID ADMINISTRATORS.

  (a) Special Circumstances.--Section 479A(a) (20 U.S.C. 1087tt(a)) is 
amended--
          (1) in the first sentence, by inserting after ``(or both)'' 
        the following: ``or, in extraordinary circumstances, the amount 
        of the expected family contribution,''; and
          (2) by inserting after the second sentence the following new 
        sentence: ``Special circumstances may include tuition expenses 
        at an elementary or secondary school, medical or dental 
        expenses not covered by insurance, unusually high child care 
        costs, recent unemployment of a family member, or other changes 
        in a family's income or assets or a student's status. 
        Extraordinary circumstances shall be defined by the Secretary 
        by regulation.''.
  (b) Refusal or Adjustment of Loan Certifications.--Section 479A is 
amended by striking subsection (c) and inserting the following:
  ``(c) Refusal or Adjustment of Loan Certifications.--On a case-by-
case basis, an eligible institution may refuse to certify a statement 
which permits a student to receive a loan under part B, or refuse to 
make a loan under part D, or may certify a loan amount or make a loan 
that is less than the student's determination of need (as determined 
under this part), if the reason for the action is documented and 
provided in written form to the student and the student is afforded an 
opportunity to appeal the action in a timely fashion. No eligible 
institution shall discriminate against any borrower or applicant in 
obtaining a loan on the basis of race, national origin, religion, sex, 
marital status, age, or handicapped status.''.

SEC. 453. TREATMENT OF OTHER FINANCIAL ASSISTANCE.

  Section 480(j)(3) (20 U.S.C. 1087vv(j)(3)) is amended by inserting 
after ``paragraph (1),'' the following: ``a post-service benefit under 
chapter 30 of title 38, United States Code, or''.

                       PART G--GENERAL PROVISIONS

SEC. 461. DEFINITIONS.

  Section 481 (20 U.S.C. 1088), as amended by section 102(b), is 
further amended by adding at the end the following new subsection:
  ``(d) Distance Learning.--For the purpose of any program under this 
title, the term `distance learning' means an educational process that 
is characterized by the separation, in time or place, between 
instructor and student. Distance learning may include courses offered 
principally through the use of--
          ``(1) television, audio, or computer transmission, such as 
        open broadcast, closed circuit, cable, microwave, or satellite 
        transmission;
          ``(2) audio or computer conferencing;
          ``(3) video cassettes or discs; or
          ``(4) correspondence.''.

SEC. 462. MASTER CALENDAR.

  (a) Required Schedule.--Section 482(a) (20 U.S.C. 1089(a)) is amended 
by adding at the end the following new paragraphs:
          ``(3) The Secretary shall, to the extent practicable, notify 
        eligible institutions, guaranty agencies, lenders, interested 
        software providers, and, upon request, other interested 
        parties, by December 1 prior to the start of an award year of 
        minimal hardware and software requirements necessary to 
        administer programs under this title.
          ``(4) The Secretary shall attempt to conduct training 
        activities for financial aid administrators and others in an 
        expeditious and timely manner prior to the start of such award 
        year in order to ensure that all participants are informed of 
        all administrative requirements.''.
  (b) Delay of Effective Date.--Section 482(c) is amended by striking 
the second sentence and inserting the following: ``The Secretary shall 
provide a period for public comment of not less than 60 days after 
publication of any notice of proposed rulemaking affecting programs 
under this title.''.

SEC. 463. FORMS AND REGULATIONS.

  (a) Common Financial Aid Form.--Section 483(a) (20 U.S.C. 1090(a)) is 
amended--
          (1) in paragraph (1)--
                  (A) by striking ``A, C, D, and E'' and inserting ``A 
                through E'';
                  (B) by striking ``and to determine the need of a 
                student for the purpose of part B of this title''; and
                  (C) by striking the last sentence and inserting the 
                following: ``The Secretary shall include, on the first 
                page of the form, a prominently displayed notice to 
                students and parents advising them to check with the 
                college financial aid office in the event that they 
                have unusual circumstances which may affect their 
                eligibility for financial aid.'';
          (2) in paragraph (2)--
                  (A) by striking ``A, C, D, and E'' each place it 
                appears and inserting ``A through E'';
                  (B) by striking ``and the need of a student for the 
                purpose of part B of this title,''; and
                  (C) by striking ``or have the student's need 
                established for the purpose of part B of this title'';
          (3) in the first sentence of paragraph (3), by inserting 
        ``processing loan applications and'' after ``for the purposes 
        of''; and
          (4) by adding at the end the following new paragraph:
          ``(5) Electronic forms.--(A) The Secretary, in cooperation 
        with representatives of agencies and organizations involved in 
        student financial assistance, including private computer 
        software providers, shall develop an electronic version of the 
        form described in paragraph (1). Such an electronic version 
        shall not require a signature to be collected at the time such 
        version is submitted, as permitted by the Secretary. The 
        Secretary shall prescribe such version no later than 120 days 
        after the date of enactment of the Higher Education Amendments 
        of 1998.
          ``(B) Nothing in this section shall prohibit the use of the 
        version of the form developed by the Secretary pursuant to 
        subparagraph (A) by an eligible institution, eligible lender, 
        guaranty agency, State grant agency, private computer software 
        providers, a consortium thereof, or such other entities as the 
        Secretary may designate.
          ``(C) The Secretary shall provide to such organization or 
        consortium necessary specifications that software developed, 
        produced, distributed (including any diskette, modem or network 
        communications, or otherwise) must meet. Included in the 
        specifications shall be test cases that such organization or 
        consortia must use to prove accuracy of its cases to the 
        Secretary. If the results of the test cases are inconsistent 
        with the provisions of this part, the Secretary shall notify 
        the submitting organizations or consortium of his objection 
        within 30 days of such submission. In the absence of such an 
        objection the organization or consortium may use the electronic 
        form as submitted. No fee shall be charged to students in 
        connection with the use of the electronic form, or of any other 
        electronic forms used in conjunction with such form in applying 
        for Federal or State student financial assistance.
          ``(D) The Secretary shall ensure that data collection 
        complies with section 552a of title 5, United States Code, and 
        that any entity using the version of the form developed by the 
        Secretary pursuant to subparagraph (A) shall maintain 
        reasonable and appropriate administrative, technical, and 
        physical safeguards to ensure the integrity and confidentiality 
        of the information, and to protect against security threats, or 
        unauthorized uses or disclosures of the information provided on 
        the version of the form. Data collected by such version of the 
        form shall be used only for the application, award, and 
        administration of aid awarded under this title, State aid, or 
        aid awarded by eligible institutions or such entities as the 
        Secretary may designate. No data collected by such version of 
        the form shall be used for making final aid awards under this 
        title until such data have been processed by the Secretary or a 
        contractor or designee of the Secretary.''.
  (b) Streamlined Reapplication Process.--Section 483(b)(1) is amended 
by striking ``, within 240 days'' and everything that follows through 
``of 1992,''.
  (c) Information to Committees.--Section 483(c) is amended by striking 
``and Labor'' and inserting ``and the Workforce''.
  (d) Toll-Free Information.--Section 483(d) is amended by striking 
``section 633(c)'' and inserting ``section 685(d)(2)(C)''.
  (e) Repeal.--Subsection (f) of section 483 is repealed.

SEC. 464. STUDENT ELIGIBILITY.

  (a) In General.--Section 484(a) (20 U.S.C. 1091(a))--
          (1) in paragraph (4), by striking ``the institution'' and 
        everything that follows through ``lender), a document'' and 
        inserting ``the Federal Government, as part of the original 
        financial aid application process, a certification''; and
          (2) in paragraph (4)(B), by inserting after ``social security 
        number,'' the following: ``and if a dependent student, the 
        social security number of any parent of such student whose 
        income information is required to be included on the form,''.
  (b) Termination of Eligibility.--Section 484(j) is amended by 
inserting ``until September 30, 2001'' after ``a student shall be 
eligible''.
  (c) Verification of Income Data.--Section 484 is amended by adding at 
the end the following new subsection:
  ``(q) Verification of Income Data.--
          ``(1) Confirmation with irs.--The Secretary of Education, in 
        cooperation with the Secretary of the Treasury, is authorized 
        to confirm with the Internal Revenue Service the adjusted gross 
        income, filing status, and exemptions reported by applicants 
        (including parents) under this title on their Federal income 
        tax returns for the purpose of verifying the information 
        reported by applicants on student financial aid applications.
          ``(2) Notification.--The Secretary shall establish procedures 
        under which an applicant is notified that the Internal Revenue 
        Service will disclose to the Secretary tax return information 
        as authorized under section 6103(l)(13) of the Internal Revenue 
        Code of 1986.''.
  (d) Suspension of Eligibility for Drug-Related Offenses.--
          (1) Amendment.--Section 484 is further amended by adding at 
        the end thereof the following new subsection:
  ``(r) Suspension of Eligibility for Drug-Related Offenses.--
          ``(1) In general.--An individual student who has been 
        convicted of any offense under any Federal or State law 
        involving the possession or sale of a controlled substance 
        shall not be eligible to receive any grant, loan, or work 
        assistance under this title during the period beginning on the 
        date of such conviction and ending after the interval specified 
        in the following table:
      

                                                                        
                                                                        
                                                                        
``If convicted of an offense                                            
 involving:                                                             
                                                                        
    The possession of a controlled  Ineligibility period is:            
     substance:                                                         
      First offense...............    1 year                            
      Second offense..............    2 years                           
      Third offense...............    indefinite                        
                                                                        
    The sale of a controlled                                            
     substance:                                                         
      First offense...............    2 years                           
      Second offense..............    indefinite                        
                                                                        


      
          ``(2) Rehabilitation.--A student whose eligibility has been 
        suspended under paragraph (1) may resume eligibility before the 
        end of the period determined under such paragraph if the 
        student satisfactorily completes a drug rehabilitation program 
        that complies with such criteria as the Secretary shall 
        prescribe for purposes of this paragraph.
          ``(3) Definitions.--As used in this subsection, the term 
        `controlled substance' has the meaning given in section 102(6) 
        of the Controlled Substances Act (21 U.S.C. 802(6)).''.
          (2) Effective date.--The amendment made by paragraph (1) 
        shall apply with respect to financial assistance to cover the 
        costs of attendance for periods of enrollment beginning after 
        the date of enactment of this Act.

SEC. 465. STATE COURT JUDGMENTS.

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

SEC. 466. INFORMATION FOR STUDENTS.

  (a) Information Dissemination.--Section 485(a) (20 U.S.C. 1092(a)) is 
amended--
          (1) in paragraph (1), by striking the second sentence and 
        inserting the following: ``The information required by this 
        section shall be produced and be made readily available upon 
        request, through appropriate publications, mailings, and 
        electronic media to all current students and to any prospective 
        student. Each eligible institution shall, on an annual basis, 
        provide to all enrolled students a list of the information that 
        is required to be provided by institutions to students by this 
        Act and section 444 of the General Education Provisions Act 
        (also referred to as the Family Educational Rights and Privacy 
        Act of 1974), together with a statement of the procedures 
        required to obtain such information.'';
          (2) in paragraph (3)--
                  (A) in the first sentence, by striking ``, or 
                enrolled in any program of an eligible institution for 
                which the prior program provides substantial 
                preparation''; and
                  (B) by striking subparagraph (A) and inserting the 
                following:
          ``(A) shall be made available by July 1 each year to current 
        and prospective students prior to enrolling or entering into 
        any financial obligation; and''; and
          (3) by adding at the end the following new paragraph:
  ``(6) Each institution may, but is not required to, provide 
supplemental information to enrolled and prospective students showing 
the completion or graduation ratefor students transferring into the 
institution or information showing the rate at which students transfer 
out of the institution.''.
  (b) Departmental Publications.--Section 485(d) is amended--
          (1) by striking ``(1) assist'' and inserting ``(A) assist'';
          (2) by striking ``(2) assist'' and inserting ``(B) assist'';
          (3) by inserting ``(1)'' before ``The Secretary'' the first 
        place it appears; and
          (4) by adding at the end the following new paragraphs:
  ``(2) The Secretary shall, to the extent such information is 
available, compile information describing State prepaid tuition 
programs and disseminate such information to States, eligible 
institutions, students, and parents in departmental publications.
  ``(3) The Secretary shall, to the extent practicable, update the 
Department's Internet site to include direct links to databases which 
contain information on public and private financial assistance 
programs. The Secretary shall only provide direct links to databases 
which can be accessed without charge and shall verify with appropriate 
parties that the databases included in the direct link are not in any 
way providing fraudulent information. The Secretary shall prominently 
display adjacent to the direct link a disclaimer indicating that a 
direct link to a database does not constitute an endorsement or 
recommendation of the database or its provider or any services or 
products of such provider. The Secretary shall provide additional 
direct links to information resources from which students may obtain 
information about fraudulent and deceptive practices in the provision 
of services related to student financial aid.''.
  (c) Disclosures.--Section 485(e) is amended--
          (1) in paragraph (2)--
                  (A) by striking ``his parents, his guidance'' and 
                inserting ``the student's parents, guidance''; and
                  (B) by adding at the end the following new sentence: 
                ``If the institution is a member of a national 
                collegiate athletic association that compiles 
                graduation rate data on behalf of its member 
                institutions that the Secretary determines is 
                substantially comparable to the information described 
                in paragraph (1), the distribution of the compilation 
                of such data to all secondary schools in the United 
                States shall fulfill the responsibility of the 
                institution to provide information to a prospective 
                student athlete's guidance counselor and coach.'';
          (2) in paragraph (4), by striking ``when such completion or 
        graduation rate includes students transferring into and out of 
        such institution'' and inserting ``for students transferring 
        into the institution or information showing the rate at which 
        students transfer out of the institution''; and
          (3) by striking paragraph (9) and inserting the following:
  ``(9) The reports required by this subsection shall be due on each 
July 1 and shall cover the 1-year period ending August 31 of the 
preceding year.''.
  (d) Campus Crime Reporting and Disclosure.--Section 485(f) is 
amended--
          (1) in paragraph (1)--
                  (A) by striking subparagraph (F) and inserting the 
                following:
          ``(F) Statistics concerning the occurrence on campus, during 
        the most recent calendar year, and during the 2 preceding 
        calendar years, of the following criminal offenses or arrests 
        reported to campus security authorities, campus officials who 
        have direct administrative responsibility for student or campus 
        activities, disciplinary officers and other officials 
        responsible for resolving student disciplinary matters, 
        athletic department officials, or local police agencies 
        (including offenses handled through the campus disciplinary 
        system):
                  ``(i) murder;
                  ``(ii) sex offenses, forcible or nonforcible;
                  ``(iii) robbery;
                  ``(iv) aggravated assault;
                  ``(v) burglary;
                  ``(vi) motor vehicle theft;
                  ``(vii) manslaughter;
                  ``(viii) larceny;
                  ``(ix) arson; and
                  ``(x) arrests or persons referred for campus 
                disciplinary action for liquor law violations, drug-
                related violations, and weapons possession.'';
                  (B) by striking subparagraph (H); and
                  (C) by redesignating subparagraph (I) as subparagraph 
                (H);
          (2) in paragraph (4)--
                  (A) by striking ``Upon request of the Secretary, 
                each'' and inserting ``On an annual basis, each'';
                  (B) by striking ``paragraphs (1)(F) and (1)(H)'' and 
                inserting ``paragraph (1)(F)'';
                  (C) by striking ``and Labor'' and inserting ``and the 
                Workforce'';
                  (D) by striking ``1995'' and inserting ``2000'';
                  (E) by striking ``and'' at the end of subparagraph 
                (A);
                  (F) by redesignating subparagraph (B) as subparagraph 
                (C); and
                  (G) by inserting after subparagraph (A) the following 
                new subparagraph:
          ``(B) make copies of the statistics submitted to the 
        Secretary available to the public; and'';
          (3) in paragraph (6)--
                  (A) by striking ``paragraphs (1)(F) and (1)(H)'' and 
                inserting ``paragraph (1)(F)''; and
                  (B) by adding at the end the following new sentence: 
                ``Such statistics shall not identify victims of crimes 
                or persons accused of crimes.''; and
          (4) by adding at the end the following new paragraphs:
  ``(8)(A) Each institution participating in any program under this 
title that maintains either a police or security department of any kind 
shall make, keep, and maintain a daily log, written in a form that can 
be easily understood, recording in chronological order all crimes 
reported to such police or security department, including the nature, 
date, time, and general location of each crime and the disposition of 
the complaint, if known.
  ``(B) All entries that are required by this paragraph shall be open 
to public inspection during normal business hours within two business 
days of the initial report being made to the department, unless--
          ``(i) disclosure of such information is prohibited by law; or
          ``(ii) the release of such information is likely to 
        jeopardize an ongoing criminal investigation or the safety of 
        an individual, cause a suspect to flee or evade detection, or 
        result in the destruction of evidence.
Any information withheld under clause (ii) shall be open to public 
inspection as soon as the damage that is the basis for such withholding 
is no longer likely to occur.
  ``(9) The Secretary shall provide technical assistance in complying 
with the provisions of this section to an institution of higher 
education who requests such assistance.''.
  (e) Data Required.--Section 485(g) is amended--
          (1) in paragraph (1), by adding at the end the following new 
        subparagraphs:
                  ``(I)(i) The total revenues, and the revenues from 
                football, men's basketball, women's basketball, all 
                other men's sports combined and all other women's 
                sports combined, derived by the institution from its 
                intercollegiate athletics activities.
                  ``(ii) For the purpose of clause (i), revenues from 
                intercollegiate athletics activities allocable to a 
                sport shall include (without limitation) gate receipts, 
                broadcast revenues, appearance guarantees and options, 
                concessions, and advertising, but revenues such as 
                student activities fees or alumni contributions not so 
                allocable shall be included in the calculation of total 
                revenues only.
                  ``(J)(i) The total expenses, and the expenses 
                attributable to football, men's basketball, women's 
                basketball, all other men's sports combined, and all 
                other women's sports combined, made by the institution 
                for its intercollegiate athletics activities.
                  ``(ii) For the purpose of clause (i) expenses for 
                intercollegiate athletics activities allocable to a 
                sport shall include (without limitation) grants-in-aid, 
                salaries, travel, equipment, and supplies, but expenses 
                such as general and administrative overhead not so 
                allocable shall be included in the calculation of total 
                expenses only.
                  ``(K) A statement of any reduction that may or is 
                likely to occur during the ensuing 4 academic years in 
                the number of athletes that will be permitted to 
                participate in any collegiate sport, or in the 
                financial resources that the institution will make 
                available to any such sport, and the reasons for any 
                such reduction.''; and
          (2) by striking paragraph (5).

SEC. 467. NATIONAL STUDENT LOAN DATA SYSTEM.

  Section 485B(a) (20 U.S.C. 1092b(a)) is amended by inserting before 
the period at the end of the third sentence the following: ``no later 
than one year after the date of enactment of the Higher Education 
Amendments of 1997''.

SEC. 468. PROGRAM PARTICIPATION AGREEMENTS.

  (a) Required Content.--Section 487(a) (20 U.S.C. 1094(a)) is 
amended--
          (1) in the first sentence, by striking ``, except with 
        respect to a program under subpart 4 of part A,'';
          (2) in paragraph (3), by striking subparagraph (B) and 
        inserting the following:
                  ``(B) the appropriate State agency;'';
          (3) in paragraph (4), by striking ``subsection (b)'' and 
        inserting ``subsection (c)'';
          (4) in paragraph (15), by striking ``State review entities 
        under subpart 1 of part H'' and inserting ``appropriate State 
        agencies'';
          (5) by striking paragraph (18) and inserting the following:
          ``(18) The institution will meet the requirements established 
        pursuant to section 485(g).''; and
          (6) by striking paragraph (21) and inserting the following:
          ``(21) The institution will meet the requirements established 
        by the Secretary, appropriate State agencies, and accrediting 
        agencies, pursuant to part H of this title.''.
  (b) Audits; Financial Responsibility.--Section 487(c) is amended--
          (1) in paragraph (1)(A)(i), by striking ``State agencies'' 
        and everything that follows through the semicolon and inserting 
        ``and appropriate State agencies;'';
          (2) in paragraph (2), by striking ``subpart 3'' and inserting 
        ``subpart 2'';
          (3) in paragraph (4), by striking ``, after consultation'' 
        and everything that follows through ``part H,''; and
          (4) in paragraph (5), by striking ``State review'' and 
        everything that follows through ``part H'' and inserting 
        ``appropriate State agencies''.

SEC. 469. QUALITY ASSURANCE AND REGULATORY SIMPLIFICATION.

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

``SEC. 487A. QUALITY ASSURANCE AND REGULATORY SIMPLIFICATION PROGRAM.

  ``(a) In General.--The Secretary is authorized to select institutions 
for voluntary participation in a Regulatory Simplification Program that 
provides participating institutions with the opportunity to develop and 
implement an alternative management program that--
          ``(1) shall allow alternative methods of complying with 
        regulations issued with respect to parts A through E and G of 
        this title;
          ``(2) shall not modify or waive the application of any 
        requirement or other provision of this Act; and
          ``(3) may include a Quality Assurance Program through which 
        individual schools develop and implement their own 
        comprehensive systems to verify student financial aid 
        application data, thereby enhancing program integrity within 
        the student aid delivery system.
  ``(b) Selection Criteria.--The criteria for selecting institutions 
for participation in the Regulatory Simplification Program shall be 
based on criteria that include demonstrated institutional performance, 
as determined by the Secretary, and shall take into consideration 
regulatory simplification goals, as determined by the Secretary. The 
selection criteria shall ensure the participation of representatives of 
institutions of higher education according to size, mission, and 
geographical distribution.
  ``(c) Removal From the Program.--The Secretary is authorized to 
determine--
          ``(1) when an institution that is unable to administer the 
        Regulatory Simplification Program must be removed from such 
        program, and
          ``(2) when institutions desiring to cease participation in 
        such Program will be required to complete the current award 
        year under the requirements of the Program.
  ``(d) Experimental Sites.--The Secretary is authorized to designate 
institutions selected for participation in the Regulatory 
Simplification Program as Experimental Sites.
  ``(e) Definitions.--For purposes of this section, the term `current 
award year' means the award year during which the participating 
institution indicates its intention to cease participation.''.

SEC. 470. DISTANCE EDUCATION DEMONSTRATION PROGRAMS.

  Part G of title IV is amended--
          (1) by redesignating section 487B (20 U.S.C. 1094b) as 
        section 487C; and
          (2) by inserting after section 487A (as amended by section 
        469) the following new section:

``SEC. 487B. DISTANCE EDUCATION DEMONSTRATION PROGRAMS.

  ``(a) Purpose.--It is the purpose of this section--
          ``(1) to allow demonstration programs that are strictly 
        monitored by the Department of Education to test the quality 
        and viability of expanded distance education programs currently 
        restricted under this Act;
          ``(2) to provide for increased student access to higher 
        education through distance education programs;
          ``(3) to help determine the most effective means of 
        delivering quality education via distance education course 
        offerings; and
          ``(4) to help determine the appropriate level of Federal 
        assistance for students enrolled in distance education 
        programs.
  ``(b) Demonstration Programs Authorized.--
          ``(1) In general.--The Secretary is authorized to select 
        institutions or a consortia of institutions for voluntary 
        participation in a Distance Education Demonstration Program 
        that provides participating institutions with the ability to 
        offer distance education programs without regard to the current 
        restrictions in part F or G of this title or part A of title I.
          ``(2) Exemptions.--The Secretary is authorized to exempt any 
        institution or consortia participating in a Distance Education 
        Demonstration Program from any of the requirements of parts F 
        or G of this title, or part A of title I, or the regulations 
        prescribed under such parts.
  ``(c) Application.--Each institution or consortia of institutions 
desiring to participate in a demonstration program under this section 
shall submit an application to the Secretary at such time, in such 
manner, and accompanied by such information as the Secretary may 
require.
  ``(d) Selection.--To the extent feasible, the Secretary shall select 
a representative sample institutions for participation in the 
demonstration program authorized under this section. In selecting 
institutions for participation, the Secretary shall take into 
consideration the institution's financial and administrative capability 
and the type of program or programs being offered via distance 
education course offerings. The Secretary shall, in the exercise of his 
discretion, determine the number of demonstration programs to be 
allowed based on the number and quality of applications received and 
the Department's capacity to oversee and monitor each demonstration 
program.
  ``(e) Evaluation and Report.--
          ``(1) Evaluation.--The Secretary shall, on an annual basis, 
        evaluate the demonstration programs authorized under this 
        section. Such evaluations shall specifically review--
                  ``(A) the quality of the programs being offered;
                  ``(B) issues related to student financial assistance 
                for distance education; and
                  ``(C) effective technologies for delivering distance 
                education course offerings.
          ``(2) Policy analysis.--In addition, the Secretary shall 
        review current policies and identify those policies which 
        present impediments to the development and use of distance 
        learning and other nontraditional methods of expanding access 
        to education.
          ``(3) Report.--The Secretary shall report to the appropriate 
        committees of Congress with respect to--
                  ``(A) the evaluations of the demonstration programs 
                authorized under this section; and
                  ``(B) any proposed legislative changes designed to 
                enhance the use of distance education.''.

SEC. 471. GARNISHMENT REQUIREMENTS.

  (a) Maximum Percentage.--Section 488A(a)(1) (20 U.S.C. 1095a(a)(1)) 
is amended by striking ``10 percent'' and inserting ``15 percent''.
  (b) No Attachment of Student Assistance.--Section 488A is further 
amended--
          (1) by redesignating subsection (d) as subsection (e); and
          (2) by inserting after subsection (c) the following new 
        subsection:
  ``(d) No Attachment of Student Assistance.--Except as authorized in 
this section, notwithstanding any other provision of Federal or State 
law, no grant, loan, or work assistance awarded under this title, or 
property traceable to such assistance, shall be subject to garnishment 
or attachment in order to satisfy any debt owed by the student awarded 
such assistance, other than a debt owed to the Secretary and arising 
under this title.''.

SEC. 472. ADMINISTRATIVE SUBPOENA AUTHORITY.

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

``SEC. 490A. ADMINISTRATIVE SUBPOENAS.

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

SEC. 473. ADVISORY COMMITTEE ON STUDENT FINANCIAL ASSISTANCE.

  Section 491 (20 U.S.C. 1098) is amended--
          (1) in subsection (b)--
                  (A) by inserting ``staffing levels,'' after 
                ``allocations and expenditures,'' the first place it 
                appears; and
                  (B) by striking the fourth and fifth sentences and 
                inserting the following: ``Reports, publications, and 
                other documents, including documents in electronic 
                form, shall not be subject to review by the 
                Secretary.'';
          (2) in subsection (c)(1)--
                  (A) by striking ``11 members'' and inserting ``15 
                members''; and
                  (B) by striking ``3 members'' each place it appears 
                in subparagraphs (A) and (B) and inserting ``5 
                members'';
          (3) in subsection (c)(2), by striking ``7 members'' and 
        inserting ``11 members'';
          (4) in subsection (e)--
                  (A) by striking everything after ``except that,'' in 
                paragraph (1) and inserting the following:
``within 90 days after the date of enactment of the Higher Education 
Amendments of 1998, 2 additional members shall be appointed by the 
President pro tempore of the Senate (one upon the recommendation of the 
Majority Leader and one upon the recommendation of the Minority Leader) 
and 2 additional members shall be appointed by the Speaker of the House 
(one upon the recommendation of the Majority Leader and one upon the 
recommendation of the Minority Leader). Of the additional members--
          ``(A) 2 shall be appointed for a term of 1 year;
          ``(B) 1 shall be appointed for a term of 2 years; and
          ``(C) 1 shall be appointed for a term of 3 years.'';
                  (B) by striking ``Six members'' in paragraph (4) and 
                inserting ``Eight members''; and
                  (C) by adding at the end the following new paragraph:
  ``(6) No officer or full-time employee of the United States shall 
serve as members of the Advisory Committee.'';
          (5) by striking subsection (g) and inserting the following:
  ``(g) Compensation and Expenses.--Members of the Advisory Committee 
may each receive reimbursement for travel expenses incident to 
attending Advisory Committee meetings, including per diem in lieu of 
subsistence, as authorized by section 5703 of title 5, United States 
Code, for persons in the Government service employed intermittently.'';
          (6) in subsection (h)(1), by striking ``may be necessary by 
        the Chairman without regard to'' and inserting ``may be deemed 
        necessary by the Chairman without regard to personnel ceilings 
        or'';
          (7) in subsection (i), by striking ``$750,000'' and inserting 
        ``$850,000'';
          (8) by striking subsection (j) and inserting the following:
  ``(j) Special Analyses and Activities.--The committee shall--
          ``(1) monitor and evaluate the modernization of student 
        financial aid systems and delivery processes;
          ``(2) monitor and evaluate the implementation of a 
        performance-based organization within the Department of 
        Education and report to Congress, on not less than an annual 
        basis, including recommendations for improvements; and
          ``(3) assess the adequacy of current methods for 
        disseminating information about programs under this title and 
        recommend improvements, as appropriate, regarding early needs 
        assessment and information for first-year high school 
        students.'';
          (9) in subsection (k), by striking ``1998'' and inserting 
        ``2004''; and
          (10) by striking subsection (l).

SEC. 474. MEETINGS AND NEGOTIATED RULEMAKING.

  Section 492 (20 U.S.C. 1098a) is amended to read as follows:

``SEC. 492. NEGOTIATED RULEMAKING.

  ``(a) In General.--
          ``(1) Regulation development.--In developing regulations and 
        revisions thereof under this title, the Secretary shall obtain 
        the advice and recommendations of individuals and 
        representatives of the groups involved in student financial 
        assistance programs under this title, such as students, legal 
        assistance organizations that represent students, institutions 
        of higher education, guaranty agencies, lenders, secondary 
        markets, loan servicers, guaranty agency servicers, and 
        collection agencies.
          ``(2) Input.--Such advice and recommendations may be obtained 
        through such mechanisms as national meetings and electronic 
        exchanges of information.
  ``(b) Proposed Regulations.--After obtaining such advice and 
recommendations, and prior to publishing any proposed regulations and 
revisions thereof under this title in the Federal Register, the 
Secretary shall prepare draft regulations and submit such regulations 
to a negotiated rulemaking process. In establishing the negotiated 
rulemaking process under this section, the Secretary shall--
          ``(1) follow the procedural requirements used in implementing 
        section 1601(b) of the Elementary and Secondary Education Act 
        of 1965;
          ``(2) select participants in the negotiations process from 
        individuals and groups participating in the exchanges described 
        in subsection (a)(1), including both representatives of such 
        groups from the District of Columbia, and industry 
        participants, and to the extent possible, the Secretary shall 
        select individuals reflecting the diversity in the industry, 
        representing both large and small participants, as well as 
        individuals serving local areas and national markets;
          ``(3) conduct the negotiations process in a timely manner in 
        order that final regulations may be issued by the Secretary 
        within the 240-day period described in section 431(g) of the 
        General Education Provisions Act, and any subsequent revisions 
        to regulations under this title may be issued in accordance 
        with the master calendar provisions of section 482 of this 
        title; and
          ``(4) prepare a transcript of the negotiated rulemaking 
        proceedings that shall be available to the public prior to the 
        issuance of any final regulations.
  ``(c) Federal Advisory Committee Act.--The Federal Advisory Committee 
Act shall not apply to activities carried out under this section.''.

                       PART H--PROGRAM INTEGRITY

SEC. 476. STATE POSTSECONDARY REVIEW PROGRAM.

  (a) Amendments.--Part H of title IV is amended--
          (1) in the heading of the part, by striking ``TRIAD'';
          (2) by striking subpart 1 (20 U.S.C. 1099a through 1099a-3); 
        and
          (3) by redesignating subparts 2 and 3 as subparts 1 and 2, 
        respectively.
  (b) Conforming Amendments.--Section 496 (20 U.S.C. 1099b) is amended 
by striking ``subpart 3'' each place it appears in subsections (j) and 
(k) and inserting ``subpart 2''.

SEC. 477. ACCREDITING AGENCY RECOGNITION.

  (a) Recognition.--
          (1) The heading of subpart 1 of part H (as redesignated by 
        section 476(a)(3)) is amended by striking ``Approval'' and 
        inserting ``Recognition''.
          (2) The heading of section 496 is amended by striking 
        ``approval'' and inserting 
        ``recognition''.
  (b) Standards.--Section 496(a) is amended--
          (1) by striking ``Standards'' and inserting ``Criteria'';
          (2) by striking ``standards'' each place it appears and 
        inserting ``criteria'';
          (3) in paragraph (5)--
                  (A) by striking ``of accreditation'' and inserting 
                ``for accreditation'';
                  (B) by inserting ``the quality (including the quality 
                of distance learning programs or courses) of'' before 
                ``the institution's'';
                  (C) in subparagraph (G), by striking ``program length 
                and tuition and fees in relation to the subject matters 
                taught'' and inserting ``measures of program length'';
                  (D) by striking subparagraph (J);
                  (E) in subparagraph (L), by inserting ``the most 
                recent student loan default rate data provided by the 
                Secretary and'' after ``including'';
                  (F) by striking ``and'' at the end of subparagraph 
                (K);
                  (G) by inserting ``and'' after the semicolon at the 
                end of subparagraph (L);
                  (H) by redesignating subparagraphs (K) and (L) as 
                subparagraphs (J) and (K), respectively;
                  (I) by inserting after subparagraph (K) (as so 
                redesignated) the following new subparagraph:
                  ``(L) refund policy;''; and
                  (J) by striking ``(J), and (L)'' and inserting ``(K) 
                and (L)'';
          (4) in paragraph (7), by striking ``State postsecondary 
        review entity'' and inserting ``State licensing or authorizing 
        agency''; and
          (5) in paragraph (8), by striking ``State postsecondary'' and 
        everything that follows through ``is located'' and inserting 
        ``State licensing or authorizing agency''.
  (c) Operating Procedures.--Section 496(c) is amended--
          (1) by striking ``approved by the Secretary'' and inserting 
        ``recognized by the Secretary'';
          (2) in paragraph (1), by striking ``(at least'' and 
        everything that follows through ``unannounced),'' and inserting 
        ``(which may include unannounced site visits)''; and
          (3) in paragraph (3), by inserting before the semicolon at 
        the end the following: ``, except that new sites offered 
        through telecommunications for programs previously included in 
        the scope of accreditation approval need not be subject to such 
        on-site visits''.
  (d) Conforming Amendments.--Section 496 is further amended--
          (1) in subsection (d)--
                  (A) by striking ``Approval'' in the heading of such 
                subsection and inserting ``Recognition''; and
                  (B) by striking ``approved'' and inserting 
                ``recognized'';
          (2) in subsection (f), by striking ``approved'' and inserting 
        ``recognized'';
          (3) in subsection (g)--
                  (A) by striking ``Standards'' and inserting 
                ``Criteria''; and
                  (B) by striking ``standards'' and inserting 
                ``criteria'';
          (4) in subsection (k)(2), by striking ``standards'' and 
        inserting ``criteria'';
          (5) in subsection (l)--
                  (A) by striking ``Approval'' in the heading of such 
                subsection and inserting ``Recognition'';
                  (B) by striking ``the standards'' each place it 
                appears and inserting ``its standards''; and
                  (C) by striking ``approval'' and inserting 
                ``recognition''; and
          (6) in subsection (n)--
                  (A) by striking ``standards'' each place it appears 
                and inserting ``criteria'';
                  (B) in paragraph (3)--
                          (i) by striking ``approval or disapproval'' 
                        and inserting ``recognition or denial of 
                        recognition''; and
                          (ii) by striking ``approval process'' and 
                        inserting ``recognition process''; and
                  (C) by striking paragraph (4) and inserting the 
                following:
  ``(4) The Secretary shall maintain sufficient documentation to 
support the conclusions reached in the recognition process, and, if the 
Secretary does not recognize any accreditation agency or association, 
shall make publicly available the reason for denying recognition, 
including reference to the specific criteria under this section which 
have not been fulfilled.''.

SEC. 478. ELIGIBILITY AND CERTIFICATION PROCEDURES.

  (a) Single Application Form.--Section 498(b)(1) (20 U.S.C. 
1099c(b)(1)) is amended by striking ``accreditation, and capability'' 
and inserting ``accreditation, financial responsibility, and 
administrative capacity''.
  (b) Financial Responsibility Standards.--Section 498(c) is amended--
          (1) in paragraph (1), in the matter preceding subparagraph 
        (A), by striking ``is able'' and inserting ``has sufficient 
        resources to ensure against the precipitous closure of the 
        institution and is able'';
          (2) in paragraph (2)--
                  (A) in the first sentence, by striking ``operating 
                losses, net worth, asset-to-liabilities ratios, or 
                operating fund deficits'' and inserting ``to ratios 
                that demonstrate financial responsibility,'';
                  (B) in the second sentence, by inserting ``, 
                public,'' after ``for profit''; and
                  (C) by inserting before the period at the end the 
                following: ``, and develop an appropriate and cost 
                effective process under this subpart that does not 
                duplicate other reporting requirements for assessing 
                and reviewing financial responsibility''; and
          (3) in paragraph (4)--
                  (A) in the first sentence, by striking ``ratio of 
                current assets to current liabilities'' and inserting 
                ``criteria''; and
                  (B) in subparagraph (C), by striking ``current 
                operating ratio requirement'' and inserting ``criteria 
                imposed by the Secretary pursuant to paragraph (2)''.
  (c) Administrative Capacity.--Section 498(d)(1) is amended--
          (1) in subparagraph (A), by striking ``student aid programs; 
        and'' and inserting ``student financial assistance under this 
        title;'';
          (2) by redesignating subparagraph (B) as subparagraph (D); 
        and
          (3) by inserting after subparagraph (A) the following new 
        subparagraphs:
                  ``(B) written procedures for, or written information 
                relating to, each office with respect to, the approval, 
                disbursement, and delivery of student financial 
                assistance under this title;
                  ``(C)(i) a division of functions for authorizing 
                payments of student financial assistance under this 
                title and the disbursement or delivery of such 
                assistance, so that no office at the institution has 
                responsibility for both functions; and
                  ``(ii) an adequate system of checks and balances for 
                internal control at the institution with respect to 
                student financial assistance under this title; and''.
  (d) Actions on Applications.--Section 498(f) is amended--
          (1) by striking ``shall conduct'' and inserting ``may 
        conduct'';
          (2) by striking ``may establish'' and inserting ``shall 
        establish'';
          (3) by striking ``may coordinate'' and inserting ``shall, to 
        the extent practicable, coordinate''; and
          (4) by adding at the end the following new sentence: ``The 
        Secretary may exempt from the site visit requirement any 
        institution that is participating in the Quality Assurance 
        Program established under section 487A at the time such site 
        visit would be required under this subsection.''.
  (e) Time Limitations.--Section 498(g) is amended to read as follows:
  ``(g) Time Limitations.--(1) After the expiration of the 
certification of any institution or upon request for initial 
certification from an institution not previously certified, the 
Secretary may certify the eligibility for the purposes of any program 
authorized under this title of each such institution for a period not 
to exceed 6 years.
  ``(2) The Secretary shall notify each institution of the expiration 
of its eligibility no later than six months prior to such 
expiration.''.
  (f) Conforming Amendment.--Section 498(h)(2) is amended by striking 
``approval'' and inserting ``recognition''.
  (g) Provisional Certification.--Section 498(i) is amended by adding 
at the end the following new paragraph:
  ``(4)(A) The Secretary may provisionally certify an institution 
seeking approval of a change in ownership based on the preliminary 
review by the Secretary of a materially complete application that is 
received by the Secretary within 10 business days of the transaction 
for which the approval is sought.
  ``(B) A provisional certification under this paragraph shall expire 
no later than the end of the month following the month in which the 
transaction occurred, except that if the Secretary has not issued a 
decision on the application for the change of ownership within that 
period, the Secretary may continue such provisional certification on a 
month-to-month basis until such decision has been issued.''.

SEC. 479. PROGRAM REVIEW AND DATA.

  (a) General Authority.--Section 498A(a) (20 U.S.C. 1099c-1(a)) is 
amended--
          (1) in paragraph (2)--
                  (A) by striking ``may give'' and inserting ``shall 
                give'';
                  (B) by inserting before the semicolon at the end of 
                subparagraph (C) the following: ``, that are not 
                accounted for by changes in those programs'';
                  (C) in subparagraph (D), by striking ``the 
                appropriate'' and everything that follows through ``of 
                this part'' and inserting ``the State licensing or 
                authorizing agency'';
                  (D) by striking subparagraph (F); and
                  (E) by redesignating subparagraph (G) as subparagraph 
                (F); and
          (2) in paragraph (3)(A), by inserting ``relevant'' after 
        ``all''.
  (b) Special Administrative Rules.--Section 498A(b) is amended to read 
as follows:
  ``(b) Special Administrative Rules.--(1) In carrying out paragraphs 
(1) and (2) of subsection (a), the Secretary shall--
          ``(A) establish guidelines designed to ensure uniformity of 
        practice in the conduct of program reviews of institutions; and
          ``(B) inform the appropriate State agency and accrediting 
        agency or association whenever taking action against an 
        institution under this section, section 498, or section 432.
  ``(2) The Secretary shall review the regulations of the Department 
and the application of such regulations to ensure the uniformity of 
interpretation and application of the regulations. In conducting such 
review, the Secretary shall consult with relevant representatives of 
institutions participating in the programs authorized by this title.''.

                    TITLE V--DEVELOPING INSTITUTIONS

SEC. 501. ESTABLISHMENT OF NEW TITLE V.

  Title V is amended to read as follows:

                   ``TITLE V--DEVELOPING INSTITUTIONS

                ``PART A--HISPANIC-SERVING INSTITUTIONS

``SEC. 501. PROGRAM AUTHORIZED.

  ``The Secretary shall provide grants and related assistance to 
Hispanic-serving institutions to enable such institutions to improve 
and expand their capacity to serve Hispanic and other low-income 
students.

``SEC. 502. ELIGIBILITY; DEFINITIONS.

  ``(a) Definitions.--For the purpose of this part:
          ``(1) Hispanic-serving institution.--The term `Hispanic-
        serving institution' means an institution of higher education 
        which--
                  ``(A) is an eligible institution;
                  ``(B) at the time of application, has an enrollment 
                of undergraduate full-time equivalent students that is 
                at least 25 percent Hispanic students; and
                  ``(C) provides assurances that not less than 50 
                percent of its Hispanic students are low-income 
                individuals.
          ``(2) Eligible institution.--The term `eligible institution' 
        means--
                  ``(A) an institution of higher education--
                          ``(i) which has an enrollment of needy 
                        students as required by subsection (b) of this 
                        section;
                          ``(ii) except as provided in section 522(b), 
                        the average educational and general 
                        expenditures of which are low, per full-time 
                        equivalent undergraduate student, in comparison 
                        with the average educational and general 
                        expenditures per full-time equivalent 
                        undergraduate student of institutions that 
                        offer similar instruction;
                          ``(iii) which is--
                                  ``(I) legally authorized to provide, 
                                and provides within the State, an 
                                educational program for which such 
                                institution awards a bachelor's degree; 
                                or
                                  ``(II) a junior or community college;
                          ``(iv) which is accredited by a nationally 
                        recognized accrediting agency or association 
                        determined by the Secretary to be reliable 
                        authority as to the quality of training offered 
                        or which is, according to such an agency or 
                        association, making reasonable progress toward 
                        accreditation;
                          ``(v) which meets such other requirements as 
                        the Secretary may prescribe; and
                          ``(vi) which is located in a State; and
                  ``(B) any branch of any institution of higher 
                education described under subparagraph (A) which by 
                itself satisfies the requirements contained in clauses 
                (i) and (ii) of such subparagraph.
        For purposes of the determination of whether an institution is 
        an eligible institution under this paragraph, the factor 
        described under subparagraph (A)(i) shall be given twice the 
        weight of the factor described under subparagraph (A)(ii).
          ``(3) Low-income individual.--The term `low-income 
        individual' means an individual from a family whose taxable 
        income for the preceding year did not exceed 150 percent of an 
        amount equal to the poverty level determined by using criteria 
        of poverty established by the Bureau of the Census.
          ``(4) Full-time equivalent students.--The term `full-time 
        equivalent students' means the sum of the number of students 
        enrolled full time at an institution, plus the full-time 
        equivalent of the number of students enrolled part time 
        (determined on the basis of the quotient of the sum of the 
        credit hours of all part-time students divided by 12) at such 
        institution.
          ``(5) Junior or community college.--The term `junior or 
        community college' means an institution of higher education--
                  ``(A) that admits as regular students persons who are 
                beyond the age of compulsory school attendance in the 
                State in which the institution is located and who have 
                the ability to benefit from the training offered by the 
                institution;
                  ``(B) that does not provide an educational program 
                for which it awards a bachelor's degree (or an 
                equivalent degree); and
                  ``(C) that--
                          ``(i) provides an educational program of not 
                        less than 2 years that is acceptable for full 
                        credit toward such a degree, or
                          ``(ii) offers a 2-year program in 
                        engineering, mathematics, or the physical or 
                        biological sciences, designed to prepare a 
                        student to work as a technician or at the 
                        semiprofessional level in engineering, 
                        scientific, or other technological fields 
                        requiring the understanding and application of 
                        basic engineering, scientific, or mathematical 
                        principles of knowledge.
          ``(6) Educational and general expenditures.--For the purpose 
        of this part, the term `educational and general expenditures' 
        means the total amount expended by an institution of higher 
        education for instruction, research, public service, academic 
        support (including library expenditures), student services, 
        institutional support, scholarships and fellowships, operation 
        and maintenance expenditures for the physical plant, and any 
        mandatory transfers which the institution is required to pay by 
        law.
          ``(7) Endowment fund.--For the purpose of this part, the term 
        `endowment fund' means a fund that--
                  ``(A) is established by State law, by an institution 
                of higher education, or by a foundation that is exempt 
                from Federal income taxation;
                  ``(B) is maintained for the purpose of generating 
                income for the support of the institution; and
                  ``(C) does not include real estate.
  ``(b) Enrollment of Needy Students.--For the purpose of this part, 
the term `enrollment of needy students' means an enrollment at an 
institution of higher education or a junior or community college which 
includes--
          ``(1) at least 50 percent of the degree students so enrolled 
        who are receiving need-based assistance under title IV of this 
        Act in the second fiscal year preceding the fiscal year for 
        which the determination is being made (other than loans for 
        which an interest subsidy is paid pursuant to section 428), or
          ``(2) a substantial percentage of students receiving Pell 
        Grants in the second fiscal year preceding the fiscal year for 
        which determination is being made, in comparison with the 
        percentage of students receiving Pell Grants at all such 
        institutions in the second fiscal year preceding the fiscal 
        year for which the determination is made, unless the 
        requirement of this subdivision is waived under section 522(a).

``SEC. 503. AUTHORIZED ACTIVITIES.

  ``(a) Types of Activities Authorized.--Grants awarded under this part 
shall be used by Hispanic-serving institutions of higher education to 
assist such institutions to plan, develop, undertake, and carry out 
programs.
  ``(b) Authorized Activities.--Grants awarded under this section shall 
be used for one or more of the following activities:
          ``(1) purchase, rental, or lease of scientific or laboratory 
        equipment for educational purposes, including instructional and 
        research purposes;
          ``(2) construction, maintenance, renovation, and improvement 
        in classrooms, libraries, laboratories, and other instructional 
        facilities;
          ``(3) support of faculty exchanges, faculty development, 
        curriculum development, academic instruction, and faculty 
        fellowships to assist in attaining advanced degrees in their 
        field of instruction;
          ``(4) purchase of library books, periodicals, and other 
        educational materials, including telecommunications program 
        material;
          ``(5) tutoring, counseling, and student service programs 
        designed to improve academic success;
          ``(6) funds management, administrative management, and 
        acquisition of equipment for use in strengthening funds 
        management;
          ``(7) joint use of facilities, such as laboratories and 
        libraries;
          ``(8) establishing or improving a development office to 
        strengthen or improve contributions from alumni and the private 
        sector;
          ``(9) establishing or improving an endowment fund;
          ``(10) creating or improving facilities for Internet or other 
        distance learning academic instruction capabilities, including 
        purchase or rental of telecommunications technology equipment 
        or services;
          ``(11) establishing or enhancing a program of teacher 
        education designed to qualify students to teach in public 
        elementary and secondary schools;
          ``(12) establishing community outreach programs which will 
        encourage elementary and secondary school students to develop 
        academic skills and the interest to pursue postsecondary 
        education;
          ``(13) improving and expanding graduate and professional 
        opportunities for Hispanic students; and
          ``(14) other activities proposed in the application submitted 
        pursuant to section 504 that--
                  ``(A) contribute to carrying out the purposes of this 
                section; and
                  ``(B) are approved by the Secretary as part of the 
                review and acceptance of such application.
  ``(c) Endowment Fund Limitations.--
          ``(1) Portion of grant.--An institution may not use more than 
        20 percent of its grant under this part for any fiscal year for 
        establishing or improving an endowment fund.
          ``(2) Matching required.--An institution that uses any 
        portion of its grant under this part for any fiscal year for 
        establishing or improving an endowment fund shall provide an 
        equal or greater amount for such purposes from non-Federal 
        funds.
          ``(3) Regulations.--The Secretary shall publish rules and 
        regulations specifically governing the use of funds for 
        establishing or improving an endowment fund.

``SEC. 504. APPLICATION PROCESS.

  ``(a) Institutional Eligibility.--Each Hispanic-serving institution 
desiring to receive assistance under this part shall submit to the 
Secretary such enrollment data as may be necessary to demonstrate that 
it is a Hispanic-serving institution, along with such other information 
and data as the Secretary may by regulation require.
  ``(b) Applications.--Any institution which is determined by the 
Secretary to be a Hispanic-serving institution (on the basis of the 
information and data submitted under subsection (a)) may submit an 
application for assistance under this section to the Secretary. Such 
application shall include--
          ``(1) a 5-year plan for improving the assistance provided by 
        the Hispanic-serving institution to Hispanic and other low-
        income students; and
          ``(2) such other information and assurance as the Secretary 
        may require.
  ``(c) Priority.--The Secretary shall give priority to applications 
that contain satisfactory evidence that such institution has entered 
into or will enter into a collaborative arrangement with at least one 
local educational agency or community-based organization having 
demonstrated effectiveness to provide such agency with assistance (from 
funds other than funds provided under this part) in reducing Hispanic 
dropout rates, improving Hispanic rates of academic achievement, and 
increasing the rates at which Hispanic high school graduates enroll in 
higher education.
  ``(d) Special Rule.--For the purposes of this part, no Hispanic-
serving college or university which is eligible for and receives funds 
under this part may concurrently receive other funds under title III.

``SEC. 505. DURATION OF GRANT.

  ``(a) Award Period.--The Secretary may award a grant to an eligible 
institution under this part for 5 years, except that no institution 
shall be eligible to secure a subsequent 5-year grant award under this 
part until two years have elapsed since the expiration of its most 
recent 5-year grant award.
  ``(b) Limitations.--In awarding grants under this part the Secretary 
shall give priority to applicants who are not already receiving a grant 
under this part, except that for the purpose of this subsection a grant 
under section 524(a)(1) shall not be considered a grant under this 
part.
  ``(c) Planning Grants.--Notwithstanding subsection (a), the Secretary 
may award a grant to an eligible institution under this part for a 
period of one year for the purpose of preparation of plans and 
applications for a grant under this part.

                      ``PART B--GENERAL PROVISIONS

``SEC. 521. APPLICATIONS FOR ASSISTANCE.

  ``(a) Applications.--
          ``(1) Applications Required.--Any institution which is 
        eligible for assistance under this title shall submit to the 
        Secretary an application for assistance at such time, in such 
        form, and containing such information, as may be necessary to 
        enable the Secretary to evaluate its need for assistance. 
        Subject to the availability of appropriations to carry out this 
        title, the Secretary may approve an application for a grant 
        under this title only if the Secretary determines that--
                  ``(A) the application meets the requirements of 
                subsection (b);
                  ``(B) the applicant is eligible for assistance in 
                accordance with the part of this title under which the 
                assistance is sought; and
                  ``(C) the applicant's performance goals are 
                sufficiently rigorous as to meet the purposes of this 
                title and the performance objectives and indicators for 
                this title established by the Secretary pursuant to the 
                Government Performance and Results Act.
          ``(2) Preliminary applications.--In carrying out paragraph 
        (1), the Secretary shall develop a preliminary application for 
        use by eligible institutions applying under part A prior to the 
        submission of the principal application.
  ``(b) Contents.--An institution, in its application for a grant, 
shall--
          ``(1) set forth, or describe how the institution will 
        develop, a comprehensive development plan to strengthen the 
        institution's academic quality and institutional management, 
        and otherwise provide for institutional self-sufficiency and 
        growth (including measurable objectives for the institution and 
        the Secretary to use in monitoring the effectiveness of 
        activities under this title);
          ``(2) set forth policies and procedures to ensure that 
        Federal funds made available under this title for any fiscal 
        year will be used to supplement and, to the extent practical, 
        increase the funds that would otherwise be made available for 
        the purposes of section 503, and in no case supplant those 
        funds;
          ``(3) set forth policies and procedures for evaluating the 
        effectiveness in accomplishing the purpose of the activities 
        for which a grant is sought under this title;
          ``(4) provide for such fiscal control and fund accounting 
        procedures as may be necessary to ensure proper disbursement of 
        and accounting for funds made available to the applicant under 
        this title;
          ``(5) provide (A) for making such reports, in such form and 
        containing such information, as the Secretary may require to 
        carry out the functions under this title and the Government 
        Performance and Results Act, including not less than one report 
        annually setting forth the institution's progress toward 
        achieving the objectives for which the funds were awarded, and 
        (B) for keeping such records and affording such access thereto, 
        as the Secretary may find necessary to assure the correctness 
        and verification of such reports;
          ``(6) provide that the institution will comply with the 
        limitations set forth in section 526;
          ``(7) describe in a comprehensive manner any proposed project 
        for which funds are sought under the application and include--
                  ``(A) a description of the various components of the 
                proposed project, including the estimated time required 
                to complete each such component;
                  ``(B) in the case of any development project which 
                consists of several components (as described by the 
                applicant pursuant to subparagraph (A)), a statement 
                identifying those components which, if separately 
                funded, would be sound investments of Federal funds and 
                those components which would be sound investments of 
                Federal funds only if funded under this title in 
                conjunction with other parts of the development project 
                (as specified by the applicant);
                  ``(C) an evaluation by the applicant of the priority 
                given any proposed project for which funds are sought 
                in relation to any other projects for which funds are 
                sought by the applicant under this title, and a similar 
                evaluation regarding priorities among the components of 
                any single proposed project (as described by the 
                applicant pursuant to subparagraph (A));
                  ``(D) a detailed budget showing the manner in which 
                funds for any proposed project would be spent by the 
                applicant; and
                  ``(E) a detailed description of any activity which 
                involves the expenditure of more than $25,000, as 
                identified in the budget referred to in subparagraph 
                (D); and
          ``(8) include such other information as the Secretary may 
        prescribe.
  ``(c) Priority Criteria Publication Required.--The Secretary shall 
publish in the Federal Register, pursuant to chapter 5 of title 5, 
United States Code, all policies and procedures required to exercise 
the authority set forth in subsection (a). No other criteria, policies, 
or procedures shall apply.
  ``(d) Eligibility Data.--The Secretary shall use the most recent and 
relevant data concerning the number and percentage of students 
receiving need-based assistance under title IV of this Act in making 
eligibility determinations and shall advance the base-year forward 
following each annual grant cycle.

``SEC. 522. WAIVER AUTHORITY AND REPORTING REQUIREMENT.

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

``SEC. 523. APPLICATION REVIEW PROCESS.

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

``SEC. 524. COOPERATIVE ARRANGEMENTS.

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

``SEC. 525. ASSISTANCE TO INSTITUTIONS UNDER OTHER PROGRAMS.

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

``SEC. 526. LIMITATIONS.

  The funds appropriated under section 528 may not be used--
          ``(1) for a school or department of divinity or any religious 
        worship or sectarian activity;
          ``(2) for an activity that is inconsistent with a State plan 
        for desegregation of higher education applicable to such 
        institution;
          ``(3) for an activity that is inconsistent with a State plan 
        of higher education applicable to such institution; or
          ``(4) for purposes other than the purposes set forth in the 
        approved application under which the funds were made available 
        to the institution.

``SEC. 527. PENALTIES.

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

``SEC. 528. AUTHORIZATIONS OF APPROPRIATIONS.

  ``(a) Authorizations.--There are authorized to be appropriated to 
carry out part A, $80,000,000 for fiscal year 1999, and such sums as 
may be necessary for each of the 4 succeeding fiscal years.
  ``(b) Use of Multiple Year Awards.--In the event of a multiple year 
award to any institution under this title, the Secretary shall make 
funds available for such award from funds appropriated for this title 
for the fiscal year in which such funds are to be used by the 
recipient.''.

        TITLE VI--INTERNATIONAL AND GRADUATE EDUCATION PROGRAMS

SEC. 601. INTERNATIONAL AND FOREIGN LANGUAGE STUDIES.

  (a) Statutory Structure.--Title VI is amended--
          (1) by striking

         ``PART A--INTERNATIONAL AND FOREIGN LANGUAGE STUDIES''

        and inserting the following:

                   ``PART A--INTERNATIONAL EDUCATION

       ``Subpart 1--International and Foreign Language Studies'';

          (2) by striking

       ``PART B--BUSINESS AND INTERNATIONAL EDUCATION PROGRAMS''

        and inserting the following:

     ``Subpart 2--Business and International Education Programs'';

          (3) by striking

         ``PART C--INSTITUTE FOR INTERNATIONAL PUBLIC POLICY''

        and inserting the following:

     ``Subpart 3--Institute for International Public Policy''; and

          (4) by striking

                     ``PART D--GENERAL PROVISIONS''

        and inserting the following:

                   ``Subpart 4--General Provisions''.

  (b) Findings and Purposes.--Section 601 (20 U.S.C. 1121) is amended 
to read as follows:

``SEC. 601. FINDINGS AND PURPOSES.

  ``(a) Findings.--The Congress finds as follows:
          ``(1) The security, stability, and economic vitality of the 
        United States in a complex global era depend upon American 
        experts in and citizens knowledgeable about world regions, 
        foreign languages and international affairs, as well as on a 
        strong research base in these areas.
          ``(2) Advances in communications technology and the growth of 
        regional and global problems make knowledge of other countries 
        and the ability to communicate in other languages more 
        essential to the promotion of mutual understanding and 
        cooperation among nations and their peoples.
          ``(3) Dramatic post-Cold War changes in the world's 
        geopolitical and economic landscapes are creating needs for 
        American expertise and knowledge about a greater diversity of 
        less commonly taught foreign languages and nations of the 
        world.
          ``(4) Systematic efforts are necessary to enhance the 
        capacity of institutions of higher education in the United 
        States and to encourage a broader cross-section of institutions 
        of higher education to develop and expand programs for 
        producing graduates with international and foreign language 
        expertise and knowledge, and research on such areas, in a 
        variety of disciplines and at all levels of graduate and 
        undergraduate education.
          ``(5) Cooperative efforts among the Federal Government, 
        institutions of higher education, and the private sector are 
        necessary to promote the generation and dissemination of 
        information about world regions, foreign languages, and 
        international affairs throughout education, government, 
        business, civic, and nonprofit sectors in the United States.
  ``(b) Purposes.--The purposes of this part are--
          ``(1)(A) to support centers, programs and fellowships in 
        institutions of higher education in the United States for 
        producing increased numbers of trained personnel and research 
        in foreign languages, area and other international studies;
          ``(B) to develop a pool of international experts to meet 
        national needs;
          ``(C) to develop and validate specialized materials and 
        techniques for foreign language acquisition and fluency, 
        emphasizing (but not limited to) the less commonly taught 
        languages;
          ``(D) to promote access to research and training overseas; 
        and
          ``(E) to advance the internationalization of a variety of 
        disciplines throughout undergraduate and graduate education;
          ``(2) to support cooperative efforts promoting access to and 
        the dissemination of international and foreign language 
        knowledge, teaching materials and research throughout 
        education, government, business, civic and nonprofit sectors in 
        the United States through the use of advanced technologies; and
          ``(3) to coordinate the programs of the Federal Government in 
        the areas of foreign language, area and other international 
        studies, including professional international affairs education 
        and research.''.
  (c) Graduate and Undergraduate National Resource Centers.--
          (1) National resource centers.--Section 602(a) (20 U.S.C. 
        1122(a)) is amended--
                  (A) in the heading, by striking ``National Language 
                and Area Centers Authorized'' and inserting ``National 
                Resource Centers for Foreign Language and Area or 
                International Studies Authorized'';
                  (B) in paragraph (1)(A), by striking ``comprehensive 
                language and area centers'' and inserting 
                ``comprehensive foreign language and area or 
                international studies centers'';
                  (C) in paragraph (1)(B), by striking ``language and 
                area centers'' and inserting ``foreign language and 
                area or international studies centers''; and
                  (D) by striking paragraph (2) and inserting the 
                following:
          ``(2) Authorized activities.--
                  ``(A) In general.--Any grant made under paragraph (1) 
                may be used to pay all or part of the cost of 
                establishing or operating a center or program, in 
                accordance with this subsection.
                  ``(B) Mandatory activities.--Activities to be 
                conducted by centers assisted under this subsection 
                shall include--
                          ``(i) support for the instruction of foreign 
                        languages and the offering of courses in a 
                        variety of nonlanguage disciplines that cover 
                        the center's subject area or topic, and the 
                        incorporation of such instruction in 
                        baccalaureate and graduate programs of study in 
                        a variety of disciplinary, interdisciplinary, 
                        or professional fields;
                          ``(ii) support for teaching and research 
                        materials, including library acquisitions, in 
                        the center's subject area or topic;
                          ``(iii) programs of outreach or linkage with 
                        State and local educational agencies, 
                        postsecondary education institutions at all 
                        levels, professional schools, government, 
                        business, media, or the general public; and
                          ``(iv) program coordination and development, 
                        curriculum planning and development, and 
                        student advisement.
                  ``(C) Permissible activities.--Activities to be 
                conducted by centers assisted under this subsection may 
                include--
                          ``(i) support for the creation of faculty 
                        positions in disciplines that are 
                        underrepresented in the center's instructional 
                        program;
                          ``(ii) establishment and maintenance of 
                        linkages with overseas institutions of higher 
                        education for the purpose of contributing to 
                        the teaching and research of the center;
                          ``(iii) support for bringing visiting 
                        scholars and faculty to the center to teach or 
                        conduct research;
                          ``(iv) professional development of the 
                        center's faculty and staff;
                          ``(v) projects conducted in cooperation with 
                        other National Resource Centers addressing 
                        themes of world regional, cross-regional, 
                        international, or global importance;
                          ``(vi) summer institutes in the United States 
                        or abroad designed to provide language and area 
                        training in the center's field or topic; and
                          ``(vii) support for faculty, staff, and 
                        student travel in foreign areas, regions, or 
                        countries, and for the development and support 
                        of educational programs abroad for students.''.
          (2) Graduate fellowships; expense limitations.--Section 602 
        is further amended by striking subsections (b) and (c) and 
        inserting the following:
  ``(b) Graduate Fellowships for Foreign Language and Area or 
International Studies.--
          ``(1) Authority.--The Secretary is authorized to make grants 
        to institutions of higher education or combinations of such 
        institutions for the purpose of paying fellowships to 
        individuals undergoing advanced training in any center or 
        program approved by the Secretary under this part.
          ``(2) Eligible students.--Students receiving fellowships 
        described in paragraph (1) shall be individuals who are engaged 
        in an instructional program with stated performance goals for 
        functional foreign language use or in a program developing such 
        performance goals, in combination with area studies, 
        international studies, or the international aspects of a 
        professional studies program, including predissertation level 
        studies, preparation for dissertation research, dissertation 
        research abroad, and dissertation writing.
  ``(c) Rules With Respect to Expenses.--
          ``(1) Undergraduate travel.--No funds may be expended under 
        this part for undergraduate travel except in accordance with 
        rules prescribed by the Secretary setting forth policies and 
        procedures to assure that Federal funds made available for such 
        travel are expended as part of a formal program of supervised 
        study.
          ``(2) Graduate dependent and travel expenses.--Fellowships 
        awarded to graduate level recipients may include allowances for 
        dependents and for travel for research and study in the United 
        States and abroad.''.
  (d) Language Resource Centers.--Section 603(a) (20 U.S.C. 1123(a)) is 
amended--
          (1) by striking paragraph (5) and inserting the following:
          ``(5) a significant focus on the teaching and learning needs 
        of the less commonly taught languages, including an assessment 
        of the strategic needs, the determination of ways to meet those 
        needs nationally, and the publication and dissemination of 
        instructional materials in the less commonly taught 
        languages;'';
          (2) by striking the period at the end of paragraph (6) and 
        inserting ``; and''; and
          (3) by inserting after paragraph (6) the following new 
        paragraph:
          ``(7) the operation of intensive summer language institutes 
        to train advanced foreign language students, provide 
        professional development, and improve language instruction 
        through preservice and inservice language training for 
        teachers.''.
  (e) Undergraduate International Studies and Foreign Language 
Programs.--Section 604 (20 U.S.C. 1124) is amended--
          (1) in the heading of subsection (a), by striking 
        ``Incentives'' and all that follows through ``Programs'' and 
        inserting ``Program Incentives'';
          (2) in subsection (a)(1)--
                  (A) by striking ``or combinations of such 
                institutions'' in the first sentence and inserting ``, 
                combinations of such institutions, or partnerships 
                between nonprofit educational organizations and such 
                institutions,'';
                  (B) by striking ``a program'' and inserting 
                ``programs''; and
                  (C) by striking the second sentence and inserting the 
                following: ``Such grants shall be awarded for the 
                purpose of seeking to create new programs or to 
                strengthen existing programs in undergraduate area 
                studies, foreign languages, and other international 
                fields.'';
          (3) by striking paragraphs (2) and (3) and inserting the 
        following:
          ``(2) Use of funds.--Grants made under this section may be 
        used for Federal share of the cost of projects and activities 
        which are an integral part of such a program, such as--
                  ``(A) planning for the development and expansion of 
                programs in undergraduate international studies, and 
                foreign languages and the internationalization of 
                undergraduate education;
                  ``(B) teaching, research, curriculum development, and 
                other related activities;
                  ``(C) training of faculty members in foreign 
                countries;
                  ``(D) expansion of existing and development of new 
                opportunities for learning foreign languages, including 
                the less commonly taught languages;
                  ``(E) programs under which foreign teachers and 
                scholars may visit institutions as visiting faculty;
                  ``(F) international education programs designed to 
                develop or enhance linkages between two- and four-year 
                institutions of higher education, or baccalaureate and 
                postbaccalaureate programs or institutions;
                  ``(G) the development of an international dimension 
                in preservice and inservice teacher training;
                  ``(H) the development of undergraduate educational 
                programs in locations abroad where such opportunities 
                are not otherwise available or which serve students for 
                whom such opportunities are not otherwise available and 
                which provide courses that are closely related to on-
                campus foreign language and international curricula;
                  ``(I) the integration of new and continuing education 
                abroad opportunities for undergraduate students into 
                curricula of specific degree programs;
                  ``(J) the development of model programs to enrich or 
                enhance the effectiveness of educational programs 
                abroad, including predeparture and postreturn programs, 
                and the integration of educational programs abroad into 
                the curriculum of the home institution;
                  ``(K) the expansion of library and teaching 
                resources;
                  ``(L) the development of programs designed to 
                integrate professional and technical education with 
                area studies, foreign languages, and other 
                international fields;
                  ``(M) the establishment of linkages overseas with 
                institutions of higher education and organizations that 
                contribute to the educational objectives of this 
                subsection;
                  ``(N) the conduct of summer institutes in foreign 
                area and other international fields to provide faculty 
                and curriculum development, including the integration 
                of professional and technical education with foreign 
                area and other international studies, and to provide 
                foreign area and other international knowledge or 
                skills to government personnel or private sector 
                professionals in international activities;
                  ``(O) the development of partnerships between 
                institutions of higher education and the private 
                sector, government, and elementary and secondary 
                education institutions to enhance international 
                knowledge and skills; and
                  ``(P) the use of innovative technology to increase 
                access to international education programs.
          ``(3) Non-federal share.--The non-Federal share of the cost 
        of the programs assisted under this subsection may be provided 
        in cash from the private sector corporations or foundations in 
        an amount equal to one-third of the total requested grant 
        amount, or may be provided as in-cash or in-kind contribution 
        from institutional and noninstitutional funds, including State 
        and private sector corporation or foundation contributions, 
        equal to one-half of the total requested grant amount.'';
          (4) by adding at the end of subsection (a) the following new 
        paragraphs:
          ``(5) Special rule.--The Secretary may waive or reduce the 
        required non-Federal share for title III-eligible institutions 
        which have submitted a grant application under this section.
          ``(6) Evaluation criteria and report.--As a condition for the 
        award of any grant under this subsection, the Secretary may 
        establish criteria for evaluating programs and require an 
        annual report which evaluates the progress and performance of 
        students in such programs.''.
          (5) by striking subsection (b);
          (6) by redesignating subsection (c) as subsection (b); and
          (7) by adding at the end the following new subsection:
  ``(c) Funding Support.--The Secretary may use no more than 10 percent 
of the total amount appropriated for this title, other than amounts 
appropriated for part D, for carrying out the purposes of this 
section.''.
  (f) Intensive Summer Language Institutes.--Section 605 (20 U.S.C. 
1124a) is repealed.
  (g) Research; Studies; Annual Report.--Section 606(a) (20 U.S.C. 
1125(a)) is amended--
          (1) in paragraph (4), by inserting before the semicolon at 
        the end the following: ``, area studies, or other international 
        fields'';
          (2) by striking ``and'' at the end of paragraph (5);
          (3) by striking the period at the end of paragraph (6) and 
        inserting ``; and''; and
          (4) by inserting after paragraph (6) the following new 
        paragraph:
          ``(7) studies and surveys of the uses of technology in 
        foreign language, area and international studies programs.''.
  (h) Periodicals.--Section 607 (20 U.S.C. 1125a) is amended to read as 
follows:

``SEC. 607. TECHNOLOGICAL INNOVATION AND COOPERATION FOR FOREIGN 
                    INFORMATION ACCESS.

  ``(a) Authority.--The Secretary is authorized to make grants to 
institutions of higher education, public or nonprofit private library 
institutions, or consortia of such institutions, to develop innovative 
techniques or programs using new electronic technologies to collect, 
organize, preserve and widely disseminate information on world regions 
and countries other than the United States that address the nation's 
teaching and research needs in international education and foreign 
languages.
  ``(b) Authorized Activities.--Grants under this section may be used--
          ``(1) to facilitate access to or preserve foreign information 
        resources in print or electronic forms;
          ``(2) to develop new means of immediate, full-text document 
        delivery for information and scholarship from abroad;
          ``(3) to develop new means of shared electronic access to 
        international data;
          ``(4) to support collaborative projects of indexing, 
        cataloging, and other means of bibliographic access for 
        scholars to important research materials published or 
        distributed outside the United States;
          ``(5) to develop methods for the wide dissemination of 
        resources written in non-Roman language alphabets;
          ``(6) to assist teachers of less commonly taught languages in 
        acquiring, via electronic and other means, materials suitable 
        for classroom use; and
          ``(7) to promote collaborative technology based projects in 
        foreign languages, area and international studies among grant 
        recipients under this title.
  ``(c) Application.--Each institution or consortium desiring a grant 
under this section shall submit an application to the Secretary at such 
time, in such manner, and accompanied by such information and 
assurances as the Secretary may reasonably require.
  ``(d) Match Required.--The Federal share of the total cost of 
carrying out a program supported by a grant under this section shall 
not be more than 66\2/3\ percent. The non-Federal share of such cost 
may be provided either in-kind or in cash, and may include 
contributions from private sector corporations or foundations.''.
  (i) Development Grants.--Section 610 (20 U.S.C. 1127) is amended by 
adding at the end the following new subsection:
  ``(d) Development Grants Authorized.--The Secretary is encouraged to 
consider the establishment of new centers, and may use at least 10 
percent of the funds available for this section to make grants for the 
establishment of such new centers.''.
  (j) Authorization of Appropriations.--Section 610A (20 U.S.C. 1128) 
is amended by striking ``1993'' and inserting ``1999''.
  (k) Conforming Amendment.--Title VI is further amended by 
redesignating sections 606, 607, 608, 609, 610, and 610A as sections 
605 through 610, respectively.

SEC. 602. BUSINESS AND INTERNATIONAL EDUCATION PROGRAMS.

  (a) Centers for International Business Education.--Section 612 (20 
U.S.C. 1130-1) is amended--
          (1) in subsection (c)(1)(B), by striking ``advanced'';
          (2) in subsection (c)(1)(C), by striking ``evening or summer 
        programs,'' and inserting ``programs''; and
          (3) in subsection (d)(2)(G), by inserting before the period 
        at the end the following: ``, such as a representative of a 
        community college in the region served by the center''.
  (b) Authorization of Appropriations.--Section 614 (20 U.S.C. 1130b) 
is amended by striking ``1993'' each place it appears and inserting 
``1999''.
  (c) Technical Amendment.--The heading of section 611 (20 U.S.C. 1130) 
is amended to read as follows:

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

SEC. 603. INSTITUTE FOR INTERNATIONAL PUBLIC POLICY.

  (a) Minority Foreign Service Professional Development Program.--
Section 621(e) (20 U.S.C. 1131(e)) is amended by striking ``one-
fourth'' and inserting ``one-half''.
  (b) Junior Year and Summer Abroad Program.--Section 622 (20 U.S.C. 
1131a) is amended--
          (1) in the heading of such section, by inserting ``and 
        summer'' after ``year'';
          (2) in subsection (a)--
                  (A) by striking ``shall conduct'' and inserting ``is 
                authorized to conduct'';
                  (B) by inserting ``and summer'' after ``junior year'' 
                each place it appears in the first and second 
                sentences;
                  (C) by inserting ``in a junior year abroad program'' 
                after ``Each student'' in the last sentence;
          (3) in subsection (b)(2), by inserting ``or summer'' after 
        ``junior year''; and
          (4) in subsection (c)--
                  (A) by inserting ``or summer abroad program'' after 
                ``junior year abroad program'' each place it appears; 
                and
                  (B) by striking ``abroad or internship'' and 
                inserting ``abroad, summer abroad, or internship''.
  (c) Internships.--Section 624 (20 U.S.C. 1132c) is amended--
          (1) by striking ``The Institute'' and inserting ``(a) In 
        General.--The Institute''; and
          (2) by adding at the end the following new subsection:
  ``(b) Postbaccalaureate Internships.--The Institute shall enter into 
agreements with institutions of higher education described in the first 
sentence of subsection (a) to conduct internships in Washington, DC, 
for students who have completed study for the baccalaureate degree. The 
Internship program authorized by this subsection shall--
          ``(1) be designated to assist the students to prepare for a 
        master's degree program;
          ``(2) be carried out with the assistance of the Woodrow 
        Wilson Fellowship program;
          ``(3) contain work experience for the students designated to 
        contribute to the objectives set forth in paragraph (1); and
          ``(4) contain such other elements as the Institute determines 
        will carry out the objectives of this subsection.''.
  (d) New Programs.--Title VI is further amended--
          (1) by redesignating sections 625 through 627 (20 U.S.C. 
        1131d-1131f) as sections 627 through 629; and
          (2) by inserting after section 624 the following new 
        sections:

``SEC. 625. INSTITUTIONAL DEVELOPMENT.

  ``(a) In General.--The Institute shall make grants, from amounts 
available to it in each fiscal year, to Historically Black Colleges and 
Universities, Hispanic-serving Institutions, Tribally Controlled Indian 
Community Colleges, and minority institutions, to enable such colleges, 
universities, and institutions to strengthen international affairs 
programs.
  ``(b) Application.--No grant may be made by the Institute under this 
section unless an application is made by the college, university, or 
institution at such time, in such manner, and accompanied by such 
information as the Institute may require.
  ``(c) Definitions.--As used in this section--
          ``(1) the term `Historically Black College and University' 
        has the same meaning given the term by section 322(2) of this 
        Act;
          ``(2) the term `Hispanic-serving Institution' has the same 
        meaning given the term by section 316(b)(1) of this Act;
          ``(3) the term `Tribally controlled Indian community college' 
        has the same meaning given that term by the Tribally Controlled 
        Community College Assistance Act of 1978; and
          ``(4) the term `minority institution' has the same meaning 
        given that term in section 347 of this Act.

``SEC. 626. INTERAGENCY COMMITTEE ON MINORITY CAREERS IN INTERNATIONAL 
                    AFFAIRS.

  ``(a) Establishment.--There is established in the executive branch of 
the Federal Government an Interagency Committee on Minority Careers in 
International Affairs composed of 7 members. The members of the 
Committee shall be--
          ``(1) the Undersecretary for International Affairs and 
        Commodity Programs of the Department of Agriculture, appointed 
        by the Secretary of Agriculture;
          ``(2) the Assistant Secretary and Director General, the 
        Commercial Service of the Department of Commerce, appointed by 
        the Secretary of Commerce;
          ``(3) the Undersecretary of Defense for Personnel and 
        Readiness of the Department of Defense, appointed by the 
        Secretary of Defense;
          ``(4) the Assistant Secretary for Postsecondary Education in 
        the Department of Education, appointed by the Secretary of 
        Education;
          ``(5) the Director General of the Foreign Service of the 
        Department of State, appointed by the Secretary of State;
          ``(6) the General Counsel of the Agency for International 
        Development, appointed by the Administrator; and
          ``(7) the Associate Director for Educational and Cultural 
        Affairs of the United States Information Agency, appointed by 
        the Director.
  ``(b) Functions.--The Interagency Committee established by this 
section shall--
          ``(1) advise the Secretary and the Institute with respect to 
        programs authorized by this part; and
          ``(2) promote policies in each department and agency 
        participating on the Committee that are designed to carry out 
        the objectives of this part.''.
  (e) Authorization.--Section 629 (20 U.S.C. 1131f) (as redesignated by 
subsection (d)) is amended by striking ``1993'' and inserting ``1999''.

SEC. 604. GENERAL PROVISIONS.

  (a) Definitions.--Section 631(a) (20 U.S.C. 1132(a)) is amended--
          (1) by striking ``and'' at the end of paragraph (7);
          (2) by striking the period at the end of paragraph (8) and 
        inserting ``; and''; and
          (3) by inserting after paragraph (8) the following new 
        paragraphs:
          ``(9) the term `internationalization of undergraduate 
        education' means the incorporation of foreign languages and 
        area and international studies perspectives in any 
        undergraduate course or curriculum in order to provide 
        international content for that course of study; and
          ``(10) the term `educational programs abroad' means programs 
        of study, internships, or service learning outside the United 
        States which are part of a foreign language or other 
        international curriculum at the undergraduate or graduate 
        education levels.''.
  (b) Repeal.--Section 632 (20 U.S.C. 1132-1) is repealed.

SEC. 605. TRANSFER AND REAUTHORIZATION OF GRADUATE ASSISTANCE IN AREAS 
                    OF NATIONAL NEED PROGRAM.

  (a) Amendment.--Title VI is amended by adding at the end the 
following new part:

        ``PART B--GRADUATE ASSISTANCE IN AREAS OF NATIONAL NEED

``SEC. 651. PURPOSE.

  ``In order to sustain and enhance the capacity for graduate education 
in areas of national need, it is the purpose of this part to provide, 
through academic departments and programs of institutions of higher 
education, a fellowship program to assist graduate students of superior 
ability who demonstrate financial need.

``SEC. 652. GRANTS TO ACADEMIC DEPARTMENTS AND PROGRAMS OF 
                    INSTITUTIONS.

  ``(a) Grant Authority.--
          ``(1) In general.--The Secretary shall make grants to 
        academic departments and programs and other academic units of 
        institutions of higher education that provide courses of study 
        leading to a graduate degree in order to enable such 
        institutions to provide assistance to graduate students in 
        accordance with this part. The Secretary shall coordinate the 
        administration and regulation of programs under this part with 
        other Federal programs providing graduate assistance to 
        minimize duplication and improve efficiency.
          ``(2) Additional grants.--The Secretary may also make grants 
        to such departments and programs and to other units of 
        institutions of higher education granting graduate degrees 
        which submit joint proposals involving nondegree granting 
        institutions which have formal arrangements for the support of 
        doctoral dissertation research with degree-granting 
        institutions. Nondegree granting institutions eligible for 
        awards as part of such joint proposals include any organization 
        which--
                  ``(A) is described in section 501(c)(3) of the 
                Internal Revenue Code of 1986, and is exempt from tax 
                under section 501(a) of such Code;
                  ``(B) is organized and operated substantially to 
                conduct scientific and cultural research and graduate 
                training programs;
                  ``(C) is not a private foundation;
                  ``(D) has academic personnel for instruction and 
                counseling who meet the standards of the institution of 
                higher education in which the students are enrolled; 
                and
                  ``(E) has necessary research resources not otherwise 
                readily available in such institutions to such 
                students.
  ``(b) Award and Duration of Grants.--
          ``(1) Awards.--The principal criterion for the allocation of 
        awards shall be the relative quality of the graduate programs 
        presented in competing applications. Consistent with an 
        allocation of awards based on quality of competing 
        applications, the Secretary shall, in making such grants, 
        promote an equitable geographic distribution among eligible 
        public and private institutions of higher education.
          ``(2) Duration.--The Secretary shall approve a grant 
        recipient under this part for a 3-year period. From the sums 
        appropriated under this part for any fiscal year, the Secretary 
        shall not make a grant to any academic department or program of 
        an institution of higher education of less than $125,000 or 
        greater than $750,000 per fiscal year.
          ``(3) Reallotment.--Whenever the Secretary determines that an 
        academic department or program of 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 the amounts not 
        needed to academic departments and programs of institutions 
        which can use the grants authorized by this part.

``SEC. 653. INSTITUTIONAL ELIGIBILITY.

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

``SEC. 654. CRITERIA FOR APPLICATIONS.

  ``(a) Selection of Applications.--The Secretary shall make grants to 
academic departments and programs of institutions of higher education 
on the basis of applications submitted in accordance with subsection 
(b). Applications shall be ranked on program quality by review panels 
of nationally recognized scholars and evaluated on the quality and 
effectiveness of the academic program and the achievement and promise 
of the students to be served. To the extent possible (consistent with 
other provisions of this section), the Secretary shall make awards that 
are consistent with recommendations of the review panels.
  ``(b) Contents of Applications.--An academic department or program of 
an institution of higher education, in its application for a grant, 
shall--
          ``(1) describe the current academic program of the applicant 
        for which the grant is sought;
          ``(2) provide assurances that the applicant will provide, 
        from other non-Federal funds, for the purposes of the 
        fellowship program under this part an amount equal to at least 
        25 percent of the amount of the grant received under this part, 
        which contribution may be in cash or in kind fairly valued;
          ``(3) describe the number, types, and amounts of the 
        fellowships that the applicant intends to offer under the 
        grant;
          ``(4) set forth policies and procedures to assure that, in 
        making fellowship awards under this part, the institution will 
        make awards to individuals who--
                  ``(A) have financial need, as determined under part F 
                of title IV;
                  ``(B) have excellent academic records in their 
                previous programs of study; and
                  ``(C) plan to pursue the highest possible degree 
                available in their course of study;
          ``(5) set forth policies and procedures to ensure that 
        Federal funds made available under this part for any fiscal 
        year will be used to supplement and, to the extent practical, 
        increase the funds that would otherwise be made available for 
        the purpose of this part and in no case to supplant those 
        funds;
          ``(6) provide assurances that, in the event that funds made 
        available to the academic department or program under this part 
        are insufficient to provide the assistance due a student under 
        the commitment entered into between the academic department or 
        program and the student, the academic department or program 
        will, from any funds available to it, fulfill the commitment to 
        the student;
          ``(7) provide that the applicant will comply with the 
        limitations set forth in section 655;
          ``(8) provide assurances that the academic department will 
        provide at least 1 year of supervised training in instruction 
        for students; and
          ``(9) include such other information as the Secretary may 
        prescribe.

``SEC. 655. AWARDS TO GRADUATE STUDENTS.

  ``(a) Commitments to Graduate Students.--
          ``(1) In general.--An academic department or program of an 
        institution of higher education shall make commitments to 
        eligible graduate students as defined in section 484 (including 
        students pursuing a doctoral degree after having completed a 
        master's degree program at an institution of higher education) 
        at any point in their graduate study to provide stipends for 
        the length of time necessary for a student to complete the 
        course of graduate study, but in no case longer than 3 years.
          ``(2) Special rule.--No such commitments shall be made to 
        students under this part unless the academic department or 
        program has determined adequate funds are available to fulfill 
        the commitment either from funds received or anticipated under 
        this part, or from institutional funds.
  ``(b) Amount of Stipends.--The Secretary shall make payments to 
institutions of higher education for the purpose of paying stipends to 
individuals who are awarded fellowships under this part. The stipends 
the Secretary establishes shall reflect 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 1999-2000 
or any succeeding academic year, such stipend shall be set at a level 
of support equal to that provided by the National Science Foundation 
graduate fellowships, except such amount shall be adjusted as necessary 
so as not to exceed the fellow's demonstrated level of need as 
determined under part F of title IV.
  ``(c) Treatment of Institutional Payments.--An institution of higher 
education that makes institutional payments for tuition and fees on 
behalf of individuals supported by fellowships under this part in 
amounts that exceed the institutional payments made by the Secretary 
pursuant to section 656(a) may count the excess of such payments toward 
the amounts the institution is required to provide pursuant to section 
654(b)(2).
  ``(d) Academic Progress Required.--Notwithstanding the provisions of 
subsection (a), no student shall receive an award--
          ``(1) except during periods in which such student is 
        maintaining satisfactory progress in, and devoting essentially 
        full time to, study or research in the field in which such 
        fellowship was awarded, or
          ``(2) if the student is engaging in gainful employment other 
        than part-time employment involved in teaching, research, or 
        similar activities determined by the institution to be in 
        support of the student's progress towards a degree.

``SEC. 656. ADDITIONAL ASSISTANCE FOR COST OF EDUCATION.

  ``(a) Institutional Payments.--(1) 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 paragraph (2), such allowance shall be--
          ``(A) $10,000 annually with respect to individuals who first 
        received fellowships under this part prior to academic year 
        1999-2000; and
          ``(B) with respect to individuals who first receive 
        fellowships during or after academic year 1999-2000--
                  ``(i) $10,000 for the academic year 1999-2000; and
                  ``(ii) for succeeding academic years, $10,000 
                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.
  ``(b) Use for Overhead Prohibited.--Funds made available pursuant to 
this part may not be used for the general operational overhead of the 
academic department or program.

``SEC. 657. CONTINUATION AWARDS.

  ``Before making new awards under this part for any fiscal year, the 
Secretary shall, as appropriate, make continuation awards to recipients 
of awards under parts B, C, and D of title IX as in effect prior to the 
enactment of the Higher Education Amendments of 1998.

``SEC. 658. AUTHORIZATION OF APPROPRIATIONS.

  ``There are authorized to be appropriated $40,000,000 for fiscal year 
1999 and such sums as may be necessary for each of the 4 succeeding 
fiscal years to carry out this part.''.
  (b) Repeal.--Title IX (20 U.S.C. 1134 et seq.) is repealed.

  TITLE VII--CONSTRUCTION, RECONSTRUCTION, AND RENOVATION OF ACADEMIC 
                               FACILITIES

SEC. 701. EXTENSION OF PRIOR RIGHTS AND OBLIGATIONS.

  Section 702(a) (20 U.S.C. 1132a-1(a)) is amended by striking ``fiscal 
year 1993'' and inserting ``fiscal year 1999''.

SEC. 702. REPEAL OF PART A.

  (a) Repeal.--Part A of title VII (20 U.S.C. 1132b et seq.) is 
repealed.
  (b) Conforming Amendments.--
          (1) Section 701(b) (20 U.S.C. 1132a(b)) is amended by 
        striking ``part A or B'' and inserting ``part B''.
          (2) Part B of title VII is amended by striking section 726 
        (20 U.S.C. 1132c-5).
          (3) Section 781 (20 U.S.C. 1132i) is amended by striking 
        ``part A of this title, or'' each place it appears.

SEC. 703. EXTENSION OF AUTHORIZATION OF PART B.

  Section 727(c) (20 U.S.C. 1132c-6(c)) is amended by striking ``fiscal 
year 1993'' and inserting ``fiscal year 1999''.

SEC. 704. EXTENSION OF AUTHORIZATION OF PART C.

  Section 735 (20 U.S.C. 1132d-4) is amended by striking ``fiscal year 
1993'' and inserting ``fiscal year 1999''.

                   TITLE VIII--ADDITIONAL PROVISIONS

SEC. 801. STUDY OF TRANSFER OF CREDITS.

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

SEC. 802. STUDY OF MARKET MECHANISMS IN FEDERAL STUDENT LOAN PROGRAMS.

  (a) Study Required.--The Comptroller General, in consultation with 
interested parties, shall conduct a study of the potential to use 
auctions or other market mechanisms in the delivery of Federal student 
loans in order to reduce costs both to the Federal Government and to 
borrowers. Such study shall include an examination of--
          (1) the feasibility of using an auction of lending authority 
        for Federal student loans, and the appropriate Federal role in 
        the operation of such an auction or other alternative market 
        mechanisms;
          (2) methods for operating such a system to ensure loan access 
        for all eligible borrowers, while maximizing the cost-
        effectiveness (for the Government and borrowers) in the 
        delivery of such loans;
          (3) the impact of such mechanisms on student loan 
        availability;
          (4) any necessary transition procedures for implementing such 
        mechanisms;
          (5) the costs or savings likely to be attained for the 
        Government and borrowers;
          (6) the feasibility of incorporating income-contingent 
        repayment options into the student loan system and requiring 
        borrowers to repay through income tax withholding, and the 
        impact of such an option on the willingness of lenders to 
        participate in auctions or other market mechanisms and on the 
        efficiency of Federal management of student loan programs;
          (7) the ability of the Department of the Treasury to 
        effectively auction the right to make student loans; and
          (8) other relevant issues.
  (b) Recommendations.--Within 2 years after the date of enactment of 
this Act, the Comptroller General shall submit to the Congress a report 
on the study required by subsection (a) and shall include with such 
report any legislative recommendations the Comptroller General 
considers appropriate.

SEC. 803. IMPROVEMENTS IN MARKET INFORMATION AND PUBLIC ACCOUNTABILITY 
                    IN HIGHER EDUCATION.

  (a) Improved Data Collection.--
          (1) Development of uniform methodology.--The Secretary shall 
        direct the Commissioner of Education Statistics to convene a 
        series of forums to develop nationally consistent methodologies 
        for reporting costs incurred by postsecondary institutions in 
        providing postsecondary education.
          (2) Separation of undergraduate and graduate costs.--Such 
        consistent methodologies shall permit the Secretary to collect 
        and disseminate separate data with respect to the costs 
        incurred in providing undergraduate and graduate postsecondary 
        education.
          (3) Redesign of data systems.--On the basis of the 
        methodologies developed pursuant to paragraph (1), the 
        Secretary shall redesign relevant parts of the postsecondary 
        education data systems to improve the usefulness and timeliness 
        of the data collected by such systems.
  (b) Data Dissemination.--The Secretary shall publish, in both printed 
and electronic form, of the data collected pursuant to subsection (a). 
Such data shall be available in a form that permits the review and 
comparison of the data submissions of individual institutions of higher 
education. Such data shall be presented in a form that is easily 
understandable and allows parents and students to make informed 
decisions based on the following costs for typical full-time 
undergraduate or graduate students--
          (1) tuition charges published by the institution;
          (2) the institution's cost of educating students on a full-
        time equivalent basis;
          (3) the general subsidy on a full-time equivalent basis;
          (4) instructional cost by level of instruction;
          (5) the total price of attendance; and
          (6) the average amount of per student financial aid received, 
        including and excluding assistance in the form of loans.

SEC. 804. DIFFERENTIAL REGULATION.

  (a) GAO Study.--The Comptroller General shall conduct a study of the 
extent to which unnecessary costs are imposed on postsecondary 
education as a consequence of the applicability to postsecondary 
facilities and equipment of regulations prescribed for purposes of 
regulating industrial and commercial enterprises.
  (b) Report Required.--Within one year after the date of enactment of 
this Act, the Comptroller General shall submit a report to the Congress 
on the results of the study required by subsection (a).

SEC. 805. ANNUAL REPORT ON COST OF HIGHER EDUCATION.

  (a) GAO Report Required.--The Comptroller General shall conduct an 
on-going analysis of the following:
          (1) The increase in tuition compared with other commodities 
        and services.
          (2) Trends in college and university administrative costs, 
        including administrative staffing, ratio of administrative 
        staff to instructors, ratio of administrative staff to 
        students, remuneration of administrative staff, and 
        remuneration of college and university presidents or 
        chancellors.
          (3) Trends in (A) faculty workload and remuneration 
        (including the use of adjunct faculty), (B) faculty-to-student 
        ratios, (C) number of hours spent in the classroom by faculty, 
        and (D) tenure practices, and the impact of such trends on 
        tuition.
          (4) Trends in (A) the construction and renovation of academic 
        and other collegiate facilities, and (B) the modernization of 
        facilities to access and utilize new technologies, and the 
        impact of such trends on tuition.
          (5) The extent to which increases in institutional financial 
        aid and tuition discounting have affected tuition increases, 
        including the demographics of students receiving such aid, the 
        extent to which such aid is provided to students with limited 
        need in order to attract such students to particular 
        institutions or major fields of study, and the extent to which 
        Federal financial aid, including loan aid, has been used to 
        offset such increases.
          (6) The extent to which Federal, State, and local laws, 
        regulations, or other mandates contribute to increasing 
        tuition, and recommendations on reducing those mandates.
          (7) The establishment of a mechanism for a more timely and 
        widespread distribution of data on tuition trends and other 
        costs of operating colleges and universities.
          (8) The extent to which student financial aid programs have 
        contributed to changes in tuition.
          (9) Trends in State fiscal policies that have affected 
        college costs.
          (10) Other related topics determined to be appropriate by the 
        Comptroller General.
  (b) Annual Report to Congress.--The Comptroller General shall submit 
to the Congress an annual report on the results of the analysis 
required by subsection (a).

SEC. 806. REPEALS OF PREVIOUS HIGHER EDUCATION AMENDMENTS PROVISIONS.

  (a) Higher Education Amendments of 1986.--Title XIII of the Higher 
Education Amendments of 1986 (20 U.S.C. 1091 note, 1121 note, 1221e-1 
note, 1011 note, 1070a note, 1071 note, 1221-1 note, 1091 note) is 
repealed.
  (b) Higher Education Amendments of 1992.--
          (1) Title xiv.--Title XIV of the Higher Education Amendments 
        of 1992 (20 U.S.C. 1071 note, 1080 note, 1221e note, 1070 note, 
        1221e-1 note, 1070a-21 note, 1134 note, 1132a note, 1221-1 
        note, 1101 note) is repealed.
          (2) Title xv.--Parts A, B, C, D, and E of title XV of the 
        Higher Education Amendments of 1992 (29 U.S.C. 2401 et seq., 20 
        U.S.C. 1452 note, 1101 note, 1145h, 1070 note) are repealed.

SEC. 807. LIMITATION.

  None of the funds appropriated under the Higher Education Act of 1965 
or any other Act shall be made available by any Federal agency to the 
National Board for Professional Teaching Standards.

                   TITLE IX--AMENDMENTS TO OTHER LAWS

                   PART A--EDUCATION OF THE DEAF ACT

                    Subpart 1--Gallaudet University

SEC. 901. BOARD OF TRUSTEES MEMBERSHIP.

  Section 103(a)(1) of the Education of the Deaf Act of 1986 (20 U.S.C. 
4303(a)(1)) is amended--
          (1) in the matter preceding subparagraph (A), by striking 
        ``twenty-one'' and inserting ``twenty-two'';
          (2) in subparagraph (A), by striking ``and'' at the end;
          (3) in subparagraph (B), by striking the period at the end 
        and inserting ``; and''; and
          (4) by adding at the end the following:
          ``(C) the liaison designated under section 206, who shall 
        serve as an ex-officio, nonvoting member.''.

SEC. 902. ELEMENTARY AND SECONDARY EDUCATION PROGRAMS.

  (a) Compliance With Certain Requirements Under the Individuals With 
Disabilities Education Act.--Section 104(b)(3) of the Education of the 
Deaf Act of 1986 (20 U.S.C. 4304(b)(3)) is amended by striking 
``intermediate educational unit'' and inserting ``educational service 
agency''.
  (b) Additional Requirements.--Section 104(b)(4)(C) of such Act (20 
U.S.C. 4304(b)(4)(C)) is amended by striking clauses (i) through (iv) 
and inserting the following:
                  ``(i) Paragraph (1) and paragraphs (3) through (6) of 
                subsection (b).
                  ``(ii) Subsections (e) through (g).
                  ``(iii) Subsection (h), except the provision 
                contained in such subsection that requires that 
                findings of fact and decisions be transmitted to the 
                State advisory panel.
                  ``(iv) Paragraphs (1) and (2) of subsection (i).
                  ``(v) Subsection (j), except that such subsection 
                shall not be applicable to a decision by the University 
                to refuse to admit or to dismiss a child, except that, 
                before dismissing any child, the University shall give 
                at least 60 days notice to the child's parents and to 
                the local educational agency in which the child 
                resides.
                  ``(vi) Subsections (k) through (m).''.

SEC. 903. AGREEMENT WITH GALLAUDET UNIVERSITY.

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

               Subpart 2--National Institute for the Deaf

SEC. 911. AGREEMENT FOR THE NATIONAL TECHNICAL INSTITUTE FOR THE DEAF.

  Section 112 of the Education of the Deaf Act of 1986 (20 U.S.C. 4332) 
is amended--
          (1) in subsection (a)(2), by striking ``under this section'' 
        and all that follows and inserting the following: ``under this 
        section--
          ``(A) shall periodically assess the need for modification of 
        the agreement; and
          ``(B) shall also periodically update the agreement as 
        determined to be necessary by the Secretary or the 
        institution.''; and
          (2) in subsection (b)(3), by striking ``Committee on 
        Education and Labor'' and inserting ``Committee on Education 
        and the Workforce''.

                     Subpart 3--General Provisions

SEC. 921. DEFINITIONS.

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

SEC. 922. AUDITS.

  Section 203(b) of the Education of the Deaf Act of 1986 (20 U.S.C. 
4353(b)) is amended in the first sentence by inserting before the 
period at the end the following: ``, including the national mission and 
school operations of the elementary and secondary programs''.

SEC. 923. REPORTS.

  Section 204 of the Education of the Deaf Act of 1986 (20 U.S.C. 4354) 
is amended in the matter preceding paragraph (1) by striking 
``Committee on Education and Labor'' and inserting ``Committee on 
Education and the Workforce''.

SEC. 924. MONITORING, EVALUATION, AND REPORTING.

  Section 205(c) of the Education of the Deaf Act of 1986 (20 U.S.C. 
4355(c)) is amended by striking ``1993, 1994, 1995, 1996, and 1997'' 
and inserting ``1999 through 2003''.

SEC. 925. RESPONSIBILITY OF THE LIAISON.

  Section 206 of the Education of the Deaf Act (20 U.S.C. 4356) is 
amended--
          (1) in subsection (a), by striking ``Not later than 30 days 
        after the date of enactment of this Act, the'' and inserting 
        ``The''; and
          (2) in subsection (b)--
                  (A) in paragraph (2), by striking ``and'' at the end;
                  (B) by redesignating paragraph (3) as paragraph (4); 
                and
                  (C) by inserting after paragraph (2) the following:
          ``(3) serve as an ex-officio, nonvoting member of the Board 
        of Trustees under section 103; and''.

SEC. 926. FEDERAL ENDOWMENT PROGRAMS.

  (a) Federal Payments.--Section 207(b) of the Education of the Deaf 
Act of 1986 (20 U.S.C. 4357(b)) is amended--
          (1) in paragraph (2) to read as follows:
          ``(2) Subject to the availability of appropriations, the 
        Secretary shall make payments to each Federal endowment fund in 
        amounts equal to sums contributed to the fund from non-Federal 
        sources during the fiscal year in which the appropriations are 
        made available (excluding transfers from other endowment funds 
        of the institution involved).''; and
          (2) by striking paragraph (3).
  (b) Withdrawals and Expenditures.--Section 207(d)(2)(C) of such Act 
(20 U.S.C. 4357(d)(2)(C)) is amended by striking ``Beginning on October 
1, 1992, the'' and inserting ``The''.
  (c) Authorization of Appropriations.--Section 207(h) of such Act (20 
U.S.C. 4357(h)) is amended by striking ``fiscal years 1993 through 
1997'' each place it appears and inserting ``fiscal years 1999 through 
2003''.

SEC. 927. SCHOLARSHIP PROGRAM.

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

SEC. 928. OVERSIGHT AND EFFECT OF AGREEMENTS.

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

SEC. 929. INTERNATIONAL STUDENTS.

  (a) Enrollment.--Section 210(a) of the Education of the Deaf Act of 
1986 (20 U.S.C. 4359a(a)) is amended to read as follows:
  ``(a) Enrollment.--A qualified United States citizen seeking 
admission to the University or NTID shall not be denied admission in a 
given year due to the enrollment of international students.''.
  (b) Conforming Amendment.--Section 210 of such Act (20 U.S.C. 4359a) 
is amended by redesignating such section as section 209.

SEC. 930. AUTHORIZATION OF APPROPRIATIONS.

  Section 211 of the Education of the Deaf Act of 1986 (20 U.S.C. 4360) 
is amended--
          (1) in subsection (a), by striking ``such sums as may be 
        necessary for each of the fiscal years 1993 through 1997'' and 
        inserting ``$83,480,000 for fiscal year 1999, $84,732,000 for 
        fiscal year 2000, $86,003,000 for fiscal year 2001, $87,293,000 
        for fiscal year 2002, and $88,603,000 for fiscal year 2003'';
          (2) in subsection (b), by striking ``such sums as may be 
        necessary for each of the fiscal years 1993 through 1997'' and 
        inserting ``$44,791,000 for fiscal year 1999, $46,303,000 for 
        fiscal year 2000, $50,136,000 for fiscal year 2001, $50,818,000 
        for fiscal year 2002, and $46,850,000 for fiscal year 2003''; 
        and
          (3) by redesignating such section as section 210.

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

SEC. 951. TRIBALLY CONTROLLED COLLEGES AND UNIVERSITIES.

  (a) Extension to Colleges and Universities.--The Tribally Controlled 
Community College Assistance Act of 1978 (25 U.S.C. 1801 et seq.) is 
amended--
          (1) by striking ``community college'' each place it appears 
        and inserting ``college or university'';
          (2) by striking ``community colleges'' each place it appears 
        and inserting ``colleges and universities'';
          (3) by striking ``COMMUNITY COLLEGES'' in the heading of 
        title I and inserting ``COLLEGES AND UNIVERSITIES'';
          (4) by striking ``community college's'' in section 2(b)(5) 
        and inserting ``college's or university's'';
          (5) by striking ``the college'' in sections 102(b), 
        113(c)(2), and 305(a) and inserting ``the college or 
        university'';
          (6) by striking ``such colleges'' in sections 104(a)(2) and 
        111(a)(2) and inserting ``such colleges and universities'';
          (7) by striking ``community colleges'' in the heading of 
        section 107 and inserting ``colleges and universities'';
          (8) by striking ``such college'' each place it appears in 
        sections 108(a), 113(b)(2), 113(c)(2), 302, 303, 304, and 305 
        and inserting ``such college or university'';
          (9) by striking ``such colleges'' in section 109(b) and 
        inserting ``such college or university'';
          (10) in section 110(a)(4), by striking ``Tribally Controlled 
        Community Colleges'' and inserting ``tribally controlled 
        colleges and universities'';
          (11) by striking ``COMMUNITY COLLEGE'' in the heading of 
        title III and inserting ``COLLEGE AND UNIVERSITY'';
          (11) by striking ``that college'' in sections 302(b)(4) and 
        305(a) and inserting ``such college or university''; and
          (12) by striking ``other colleges'' in section 302(b)(4) and 
        insert ``other colleges and universities''.
  (b) Title I Eligible Grant Recipients.--Section 103 of the Tribally 
Controlled Community College Assistance Act of 1978 (25 U.S.C. 1804) is 
amended--
          (1) by striking ``and'' at the end of paragraph (2);
          (2) by striking the period at the end of paragraph (3) and 
        inserting ``; and''; and
          (3) by adding at the end the following new paragraph:
          ``(4) has been accredited by a nationally recognized 
        accrediting agency or association determined by the Secretary 
        of Education to be a reliable authority as to the quality of 
        training offered, or is, according to such an agency or 
        association, making reasonable progress toward such 
        accreditation.''.
  (c) Eligibility and Accreditation.--Section 106 of such Act (25 
U.S.C. 1806) is amended--
          (1) in the section heading, by inserting ``and accreditation 
        program'' after ``studies'';
          (2) by redesignating subsection (c) as subsection (d); and
          (3) by inserting after subsection (b) the following new 
        subsection:
  ``(c) The Secretary of Education shall assist tribally controlled 
colleges and universities in the development of a national accrediting 
agency or association for such colleges and universities.''.
  (d) Amount of Title I Grants.--Section 108(a)(2) of such Act (25 
U.S.C. 1808(a)(2)) is amended by striking ``$5,820'' and inserting 
``$6,000''.
  (e) Clerical Amendment.--Section 109 of such Act (25 U.S.C. 1809) is 
amended by redesignating subsection (d) as subsection (c).
  (f) Authorization of Appropriations for Title I.--Section 110 of such 
Act (25 U.S.C. 1810) is amended--
          (1) by striking ``1993'' each place it appears and inserting 
        ``1999''; and
          (2) in subsection (a)(2), by striking ``$30,000,000'' and 
        inserting ``$40,000,000''.
  (g) Authorization of Appropriations for Titles III and IV.--Sections 
306 and 403 of such Act (25 U.S.C. 1836, 1852) are each amended by 
striking ``1993'' and inserting ``1999''.

SEC. 952. REAUTHORIZATION OF PROVISIONS FROM HIGHER EDUCATION 
                    AMENDMENTS OF 1992.

  Title XIII of the Higher Education Amendments of 1992 (25 U.S.C. 3301 
et seq.) is amended by striking ``1993'' each place it appears in 
sections 1348, 1365, and 1371(e), and inserting ``1999''.

SEC. 953. REAUTHORIZATION OF NAVAJO COMMUNITY COLLEGE ACT.

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

                 TITLE X--FACULTY RETIREMENT PROVISIONS

SEC. 1001. VOLUNTARY RETIREMENT INCENTIVE PLANS.

  (a) In General.--Section 4 of the Age Discrimination in Employment 
Act of 1967 (29 U.S.C. 623) is amended by adding at the end the 
following:
  ``(m) Notwithstanding subsection (f)(2)(B), it shall not be a 
violation of subsection (a), (b), (c), (e), or (i) solely because a 
plan of an institution of higher education (as defined in section 
1201(a) of the Higher Education Act of 1965 (20 U.S.C. 1141(a))) offers 
employees who are serving under a contract of unlimited tenure (or 
similar arrangement providing for unlimited tenure) additional benefits 
upon voluntary retirement that are reduced or eliminated on the basis 
of age, if--
          ``(1) such institution does not implement with respect to 
        such employees any age-based reduction or elimination of 
        benefits that are not such additional benefits, except as 
        permitted by other provisions of this Act; and
          ``(2) with respect to each of such employees who have, as of 
        the time the plan is adopted, attained the minimum age and 
        satisfied all non-age-based conditions for receiving a benefit 
        under the plan, such employee is not precluded on the basis of 
        age from having 1 opportunity lasting not less than 180-days to 
        elect to retire and to receive the maximum benefit that would 
        be available to a younger employee if such younger employee 
        were otherwise similarly situated to such employee.''.
  (b) Construction.--
          (1) Application.--Nothing in the amendment made by subsection 
        (a) shall be construed to affect the application of section 4 
        of the Age Discrimination in Employment Act of 1967 (29 U.S.C. 
        623) with respect to--
                  (A) any employer other than an institution of higher 
                education (as defined in section 1201(a) of the Higher 
                Education Act of 1965); or
                  (B) any plan not described in subsection (m) of 
                section 4 of such Act (as added by subsection (a)).
          (2) Relationship to provisions relating to voluntary early 
        retirement incentive plans.--Nothing in the amendment made by 
        subsection (a) shall be construed to imply that a plan 
        described in subsection (m) of section 4 of such Act (as added 
        by subsection (a)) may not be considered to be a plan described 
        in section 4(f)(2)(B)(ii) of such Act (29 U.S.C. 
        623(f)(2)(B)(ii)).
  (c) Effective Date.--
          (1) In general.--This section shall take effect on the date 
        of enactment of this Act.
          (2) Effect on causes of action existing before date of 
        enactment.--The amendment made by subsection (a) shall not 
        apply with respect to any cause of action arising under the Age 
        Discrimination in Employment Act of 1967 prior to the date of 
        enactment of this Act.

                                Purpose

    The need for this legislation arises primarily from the 
expiration at the end of fiscal year 1998 of the authorizations 
for the programs in the Higher Education Act (HEA). The 
principle objective of the HEA is to expand postsecondary 
education opportunities, particularly for low-income 
individuals, and to increase the affordability of postsecondary 
education for moderate-income families. The fundamental purpose 
of the Higher Education Amendments of 1998 is to reaffirm 
America's commitment to maintaining its higher education system 
as the best in the world.
    The student assistance programs have increasingly become 
the dominant means by which the Federal Government pursues the 
goal of equal educational opportunity for all Americans. The 
fiscal year 1998 appropriation for programs authorized by the 
Higher Education Act will result in more than $48 billion being 
available for student financial assistance. In addition, the 
tax credits and deductions included in the Taxpayer Relief Act 
of 1997, will result in an additional $40 billion for 
postsecondary education over the next five years. In fact, the 
Federal student financial assistance programs currently provide 
75 percent of the available student financial assistance from 
all sources in the United States. Roughly one out of every two 
undergraduates receive some form of Federal student aid. This 
compares with about 1 in 10 who receive state aid and 1 in 6 
who receive institutional aid.
    In undertaking the reauthorization of the Higher Education 
Act, the Committee adopted the following guiding principles:
          Making higher education more affordable;
          Simplifying the student aid system;
          Stressing academic quality; and,
          Improving access to a postsecondary education for 
        all.

                             Affordability

    College affordability has been a central part of the 
discussions surrounding the Committee's review of the grant and 
loan programs found in the Higher Education Act. As Committee 
Members have talked to individuals across the country 
concerning the reauthorization of the Higher Education Act, the 
consistent question being asked by students and parents is 
``why is college so expensive and why are college prices rising 
so quickly?''
    The Committee recognizes that in today's technology and 
information based economy, getting a high quality postsecondary 
education is more important than ever. For many Americans, it 
is the key to the American dream. Historically, higher 
education prices have increased at roughly the rate of 
inflation. However, since the early 1980's, college tuition has 
spiraled at a rate of two-to-three times that of inflation 
every year. According to a report released by the General 
Accounting Office (GAO), between 1980-1981 and 1994-1995, 
tuition at 4-year public colleges and universities increased 
234 percent, while median household income rose 82 percent, and 
the consumer price index rose only 74 percent.
    That is not to say that there are not affordable schools. 
The Committee recognizes that there are still some affordable 
schools and there are college presidents who are committed to 
keeping costs low. The Committee notes that there are schools 
that are trying very innovative things to reduce tuition 
prices, and Members of the Committee are hopeful that some of 
these practices can serve as models for similar types of 
institutions.
    To better understand what is driving these cost increases 
and what could be done in order to reduce the price of a 
postsecondary education, the Committee favorably reported H.R. 
1511, the Cost of College Review Act of 1997, by voice vote. 
This legislation was enacted on June 12, 1997 (P.L. 105-18) and 
established the National Commission on the Cost of Higher 
Education. The Commission was composed of 11 Members appointed 
in a bipartisan fashion. The Commission members were selected 
for their expertise in higher education finance, Federal 
financial aid programs, education economics research, and 
public or private higher education administration. They were 
assigned the task of studying the reasons for the rapid tuition 
increases that have occurred over the last several years and 
making specific recommendations as to how these increases can 
be brought under control.
    On January 21, 1998, the Commission issued its final 
report, and on February 10, 1998, the Commission went out of 
existence. Representative McKeon (R-CA) and Representative 
Castle (R-DE) offered an amendment to H.R. 6 that was accepted 
by the Committee, to include a number of the Commission's 
recommendations in the reported bill. Most important for 
students and parents will be the increased availability of 
information with respect to college costs and prices that the 
Secretary of Education will make available on a yearly basis. 
In addition, Title X of the bill clarifies that colleges and 
universities can offer tenured faculty early retirement 
bonuses. This will give tenured faculty new retirement benefits 
while giving institutions more flexibility to provide 
instructors with the most up to date knowledge while reducing a 
costly regulatory burden on schools. It is the intent of the 
Committee that these cost savings be passed directly on to 
students.
    H.R. 6 also addresses the issue of affordability by 
strengthening the Pell Grant Program, particularly for 
dependent and independent students who work and save for their 
college education. It addresses affordability by keeping the 
student loan programs viable with a workable solution to the 
1998 interest rate problem. It addresses affordability by 
continuing and improving the campus-based aid programs that 
assist millions of students in financing their college 
education.

                             Simplification

    The Committee's efforts at simplification are found 
throughout H.R. 6. The most significant step is the creation of 
a Performance-Based Organization (PBO) within the Department of 
Education to manage the application and processing systems in 
order to promote improved services to students, families and 
institutions of higher education. The PBO provisions are taken 
from H.R. 2536 introduced last fall by Representative McKeon 
(R-CA) and Representative Kildee (D-MI). It is intended that 
the Chief Operating Office of the PBO and the Secretary of 
Education work in close cooperation to provide a new level of 
high quality service. The Committee's efforts at simplification 
will directly benefit students by giving them faster and easier 
access to the financial aid they need to pursue a postsecondary 
education. Our efforts will improve service to borrowers after 
they graduate by giving them easy access to information on 
their student loans, and our efforts will benefit them as 
taxpayers by reducing the cost of running our Federal financial 
aid programs.
    H.R. 6 takes the 1992 Amendments to the Higher Education 
Act a step further in the area of simplification and directs 
that the Free Application for Federal Student Aid (FAFSA) be 
the single application for both loan programs. H.R. 6 also 
provides institutions of higher education that perform well in 
their duties with relief from certain regulatory requirements. 
This will serve as a great benefit to their students, as well 
as an incentive to other institutions to perform well.
    H.R. 6 will reduce paperwork and red tape for students. 
Under H.R. 6, students will be able to use one form to apply 
for all types of Federal student assistance. Students will no 
longer have to fill out a separate form for their FFEL loans. 
In addition, H.R. 6 requires the Secretary to develop an 
electronic application for student financial assistance. This 
will allow students to apply for aid from their home, school, 
or library using a computer. H.R. 6 also retains the simplified 
needs test, allowing two-thirds of all Pell eligible students 
to avoid filling out substantial parts of the aid application 
form.
    Under H.R. 6, students will no longer have to provide 
lenders with a statement of financial need. This responsibility 
is given to the school that the student attends. In addition, 
H.R. 6 simplifies the loan deferment process. Students will no 
longer have to file a form to get the in-school deferment to 
which they are entitled. Borrowers who provide evidence of 
qualifying for unemployment benefits will no longer have to 
provide additional forms to qualify for an unemployment 
deferment. Finally, under H.R. 6, students will be able to 
quickly check on the status of their loans over the Internet.

                                Quality

    Improving academic quality comes in several forms in H.R. 
6. The new teacher education program is the focal point for 
improving academic quality. Part E of Title II replaces current 
teacher training programs under Title V of the Higher Education 
Act, with a single, competitive grant to Governors. Activities 
of such grants will focus on strengthening State teacher 
certification procedures to better reflect current and future 
teacher's academic knowledge of the subjects they teach. Grants 
would also support the reform of schools of education in 
colleges and universities to focus more attention on academic 
content knowledge. In addition, this will provide incentives to 
increase the content knowledge of the academic subject matter 
of current and future teachers, including training in the use 
of effective technologies in the classroom. Testimony at our 
hearings indicated the need for teachers to be trained in the 
subject areas that they are teaching. These grants will help 
improve and strengthen the quality of teachers so that students 
have the tools they need to achieve academically.
    By strengthening the TRIO programs, which provide outreach 
services to disadvantaged students, H.R. 6 will improve the 
academic preparedness of the students at our nation's colleges 
and universities. Students who previously would not have 
thought of pursuing a postsecondary education will be 
encouraged to excel in their studies, and will be better 
prepared for college level work.
    H.R. 6 will allow students more convenient access to a 
postsecondary education through new distance learning programs. 
The quality of these programs is assured by the requirement 
that all such programs be accredited. Under H.R. 6, students 
will be able to select classes and instructors from across the 
country or around the world. This will give students the 
ability to take courses from the best professors without 
leaving their homes.
    H.R. 6 will give students and parents quality information 
when choosing a school. For the first time, Americans will have 
access to current information on the cost of a particular 
college or university, the average amount of financial aid 
available to students at that institution, and how the 
institution is spending its money.
    H.R. 6 will improve the quality of life on campus. The 
Campus Crime Reporting provisions in H.R. 6 will provide 
students a safer college experience. Students and their 
families will be given important information on campus crime. 
They will be able to use this information in choosing a school, 
and in making decisions to protect their personal safety once 
on campus.
    By strengthening the Urban Community Service program, H.R. 
6 will improve the quality of life in cities across the nation. 
The best and brightest from campuses across the country will be 
encouraged to work with private organizations and civic groups 
to find solutions to the most pressing problems in their 
communities.

                            Improving Access

    H.R. 6 extends and improves all of the existing funded 
programs found in the Higher Education Act. Programs to support 
Historically Black Colleges and Universities, Hispanic-Serving 
Institutions and Tribally Controlled Colleges and Universities 
have allbeen strengthened in Titles III and V of H.R. 6. The 
International Education Programs have been given a thorough review in 
light of the changing global dynamics and needs of the United States 
with respect to our international colleagues.
    H.R. 6 strengthens early outreach and intervention during 
the high school and middle school years. Students and their 
families are frequently not well informed about the 
availability of financial assistance, the range of 
postsecondary educational options and the appropriate high 
school programs that lead to postsecondary education. H.R. 6 
improves early outreach and intervention efforts by 
strengthening the TRIO programs and expanding the role of the 
States under the State Student Incentive Grant Program.
    H.R. 6 improves access to a quality postsecondary education 
by allowing students, especially those in rural or remote 
areas, to take classes using new distance learning 
technologies. H.R. 6 creates a new distance learning 
demonstration program, under which the Secretary will be 
allowed to waive regulations that have been a barrier to the 
use of new technologies in the past. Under H.R. 6, students 
will be able to take courses from home over the Internet or 
through the use of emerging communications technology.
    H.R. 6 also addresses the reauthorization of the Education 
of the Deaf Act.

                            Committee Action

    In October 1996, organizations, associations and 
governmental bodies were invited to submit to the Subcommittee 
on Postsecondary Education, Training and Life-Long Learning 
their legislative recommendations for the reauthorization of 
the Higher Education Act. The Subcommittee received 
recommendations from more than 70 respondents, both from those 
who were invited to submit recommendations as well as from 
those who learned of the invitation and submitted 
recommendations. Some of those submitting recommendations to 
the Subcommittee were: Accrediting Commission of Career Schools 
and Colleges of Technology; Alcorn State University; American 
Association of Colleges for Teacher Education; American 
Association of Colleges of Nursing; American Association of 
Collegiate Registrars and Admissions Officers; American 
Association of Community Colleges; American Association of 
Cosmetology Schools; American Association of Dental Schools; 
American Association of State Colleges and Universities; 
American Council on Education; American Psychological 
Association; American Vocational Association Associated Western 
Universities Incorporated; Association of American 
Universities; Association of Catholic Colleges and 
Universities; Association of Community College Trustees; 
Association of Jesuit Colleges and Universities; Association of 
Proprietary Colleges; California Community Colleges Student 
Financial Aid Administrators Association; California State 
University; California State University-Northridge; California 
Student Aid Commission; Coalition of Higher Education 
Assistance Organizations; Commonwealth of Kentucky; 
Commonwealth of Pennsylvania; Council for Advancement and 
Support of Education; Council for Higher Education 
Accreditation; Council of Graduate Schools; Council of 
Independent Colleges; Council of Recognized National 
Accrediting Agencies; Consumer Bankers Association; Devry, 
Inc.; Education Finance Council; Education Management 
Corporation; Graduate Professional Council; Hispanic 
Association of Colleges and Universities; Hispanic Education 
Coalition; Illinois Eastern Community Colleges; Independent 
Colleges and Universities; Inter American University of Puerto 
Rico System; National Alumni Forum; National Association for 
College Admission Counseling; National Association of College 
and University Business Officers; National Association of 
Developmental Education; National Association of Graduate-
Professional Students; National Association of Independent 
Colleges and Universities; National Association of Migrant 
Education; National Association of State Universities and Land-
Grant Colleges; National Association of Student Financial Aid 
Administrators; National Education Association; National HEP-
CAMP Association; National Collegiate Athletic Association; 
National Consumer Law Center; National Council of Educational 
Opportunity Associations; National Council of Higher Education 
Loan Programs; National Student Employment Association; New 
York State Higher Education Services Corporation; Sallie Mae; 
State Higher Education Executive Officers; Student Loan 
Servicing Alliance; Teachers of English to Speakers of Other 
Languages; Texas Guaranteed Student Loan Corporation; The 
California Coalition; U.S. Public Interest Research Group; 
United Negro College Fund; United State Catholic Conference; 
United States Student Association; University Continuing 
Education Association; University of California; University of 
Missouri-Columbia.

                                hearings

    The Subcommittee on Postsecondary Education, Training and 
Life-Long Learning held hearings both in and outside of 
Washington to review and make determinations on revising the 
Higher Education Act. This review included, but was not limited 
to, grant programs, loan programs, institutional programs, 
integrity and accountability issues, and the overall role of 
the Federal Government in the area of higher education. Most 
importantly, the Subcommittee held these hearings to gather 
extensive information with respect to federal higher education 
policy and insight into the rising costs of higher education 
from those closest to the problems--local college presidents, 
students, and parents.
    In addition, hearings were held on teacher preparation, the 
Education of the Deaf Act, and early retirement incentives. 
Specifically, the Subcommittee on Postsecondary Education, 
Training, and Life-Long Learning held a hearing on July 15, 
1997 that focused on Title V of the Higher Education Act and 
the Education of the Deaf Act. At this hearing Members heard 
views relating to teacher preparation from teachers, higher 
education institutions, and the Administration and examined 
ways of improving upon the provisions the Education of the Deaf 
Act.
    Another hearing was held on February 24, 1998 by the 
Subcommittee on Early Childhood, Youth, and Families that 
examined issues surrounding teacher preparation such as 
classroom reduction initiatives; teacher shortages; 
accreditation of schools of education; certification and 
licensure of teachers; alternative certification programs; and 
various State initiatives to improve teacher quality and 
improve education.
    The Subcommittee on Employer-Employee Relations held a 
hearing on May 22, 1997 on early retirement in higher education 
to examine the flexibility under federal law to allow 
institutions of higher education to develop early retirement 
incentives that meet both institutional needs and the needs of 
tenured faculty members.
    A total of 24 hearings (including those listed above) were 
held, including 11 field hearings outside of Washington. 187 
witnesses testified at the hearings representing a broad cross 
section of experts and professionals as well as the consumers 
of education--parents and students. In fact, a total of 15 
students testified at the hearings. Witnesses representing the 
Administration, including Secretary of Education Richard Riley 
also appeared before the Subcommittee. A list of all of the 
hearings follows:

Field hearings

    The witnesses at the field hearings were invited to share 
their ideas, concerns and insights into higher education policy 
and programs contained in the Higher Education Act--those that 
work and those that do not work for students, families, and 
institutions. The witnesses were also asked to give their 
perspective on the current affordability of a postsecondary 
education.
    1. January 28, 1997, York, Pennsylvania, Pennsylvania State 
University (York Campus)
    2. January 30, 1997, Northridge, California, California 
State University
    3. March 25, 1997, Holy Family College (Newton Campus)
    4. April 1, 1997, Oshkosh, Wisconsin, University of 
Wisconsin
    5. April 3, 1997, South Bend, Indiana, University of Notre 
Dame
    6. April 21, 1997, Flint, Michigan, Mott Community College
    7. April 21, 1997, Rochester, Michigan, Oakland University
    8. April 22, 1997, Fort Wayne, Indiana, Indiana-Purdue 
University Fort Wayne
    9. May 2, 1997, Clemson, South Carolina, Clemson 
University, Strom Thurmond Institute
    10. May 5, 1997, Gainesville, Georgia, Brenau University, 
Thrumond-McRae Lecture Hall
    11. May 19, 1997, Mahwah, New Jersey, Ramapo College

Washington, D.C. hearings

    1. April 23, 1997, The Rising Cost of College Education
    2. May 22, 1997, Subcommittee on Employer-Employee 
Relations--Early Retirement Incentives in Higher Education
    3. June 5, 1997, Student Financial Aid--the Foundation 
Programs; Pell Grants and Campus-Based Programs
    4. June 17, 1997, TRIO, International Education, Graduate 
Education, Indian Education, and HEP/CAMP
    5. June 19, 1997, Secretary of Education Richard Riley--the 
Administration's Views on the Authorization of the Higher 
Education Act
    6. June 26, 1997, Title III and Urban and Community Service 
Programs
    7. July 15, 1997, Education of the Deaf Act and Title V of 
the Higher Education Act--Teacher Training
    8. July 17, 1997, Campus Crime and Regulatory Reform
    9. July 22, 1997, Title IV--Student Loan Programs
    10. July 29, 1997, System Modernization Efforts at the 
Department of Education and Accreditation
    11. September 18, 1997, Shutdown of the Consolidation Loan 
Process in the William D. Ford Direct Student Loan Program
    12. February 24, 1998, Subcommittee on Early Childhood, 
Youth and Families on Teacher Preparation and the Impact of 
Classroom Size Reduction
    13. March 5, 1998, Issues in the Student Loan Programs 
Relating to the Scheduled July 1, 1998, Interest Rate Change
    On January 7, 1997, Representatives McKeon (R-CA), Goodling 
(R-PA), Clay (D-MO), and Kildee (D-MI) introduced H.R. 6, the 
Higher Education Amendments of 1998. On the basis of the 
hearings, bills referred to the Subcommittee, the 
recommendations of the Administration and the recommendations 
of the higher education and lending communities, a draft 
legislative print was prepared. The Subcommittee on 
Postsecondary Education, Training and Life-Long Learning 
considered this print as an Amendment in the Nature of a 
Substitute to H.R. 6 in legislative session on March 4, 1998 
during which no amendments were accepted. H.R. 6 was ordered 
reported to the Full Committee on Education and the Workforce 
on March 4,1998 by voice vote.
    H.R. 6 was considered by the Committee on Education and the 
Workforce in legislative session on March 18 and 19, 1998, at 
which 34 amendments were considered. On March 19, 1998, the 
Committee on Education and the Workforce, with a majority of 
the Committee present, reported H.R. 6, to the House with 
amendments, by a vote of 38-3. The explanatory language in this 
report, including the section-by-section analysis, relates to 
the bill as reported.

                                Summary

    H.R. 6 amends the Higher Education Act of 1965 and has the 
following Titles: Title I--General Provisions; Title II--
Postsecondary Education Improvement Programs; Title III--
Strengthening Institutions; Title IV--Student Assistance; Title 
V--Developing Institutions;Title VI--International and Graduate 
Education Programs; Title VII--Construction, Reconstruction, and 
Renovation of Academic Facilities; Title VIII--Additional Provisions; 
Title IX--Amendments to Other Laws; and Title X--Faculty Retirement 
Provisions. A summary of the specific provisions in these Titles is 
included in the Background and Committee Views section of this report.

                     Background and Committee Views

                      TITLE I--GENERAL PROVISIONS

    H.R. 6 repeals the current unfunded programs in Title I, 
Parts A, B, C. The repealed programs include School, College 
and University Partnerships; Articulation Agreements; and 
Access and Equity to Education for all Americans through 
Telecommunications. Title I is now General provisions and 
includes as Part A, Extension and Revision of General 
Provisions and Part B, Administrative Provisions for Delivery 
of Student Financial Assistance.

Part A, extension and revision of general provisions

    The new Part A of Title I incorporates the general 
provisions applicable to the Higher Education Act previously 
located in Title XII. In relocating these provisions, the 
Committee felt strongly that the definition of ``institution of 
higher education'' needed to be located in one place rather 
than two as is currently the situation. The definition of 
``institution of higher education'' found in Title I 
incorporates the provisions found in Title XII with provisions 
found in Section 481 of Title IV. Although the combining of the 
definitions does not result in substantive changes to 
eligibility, it does reflect the Committee's view that all 
sectors of higher education are partners in our Nation's 
continuing efforts to enhance the productivity of our workforce 
and enrich the lives of our citizens.
    One specific change to the definition of proprietary 
institution of higher education is designed to clarify what is 
commonly known as the 85-15 rule. This rule was adopted during 
consideration of the 1992 Amendments to the Higher Education 
Act. The purpose of the amendment was to require proprietary 
institutions of higher education to obtain at least 15% of 
their revenues from sources other than Title IV funds. This 
language has been the subject of much debate and litigation 
based on the Department of Education's interpretation of the 
intent of the language. It is the view of the Committee that 
the ability to compete in the market for government and 
industry training contracts is a clear indicator of the 
educational value of an institution's program. In the 
definition of proprietary institution of higher education, the 
Committee clearly states our intent that revenue from 
educational programs offered by proprietary institutions, 
regardless of the program's eligibility under title IV, are to 
be included in the institution's revenues for purposes of the 
85-15 rule so long as those programs are provided on a 
contractual basis under a government training program or under 
a specialized training request from business and industry.

Part B, performance-based organization for the delivery of Federal 
        student financial assistance

    Part B of Title I includes the language of H.R. 2536, the 
21st Century Student Financial Aid System Improvement Act of 
1997, which was introduced by Representative McKeon (R-CA) and 
Representative Kildee (D-MI) on September 24, 1997. This 
provision instructs the Department of Education to create a 
performance-based organization (PBO) within the Department for 
the delivery of federal student financial assistance. The PBO 
will be responsible for all aspects of managing the data and 
information systems that support the student financial 
assistance programs. A Chief Operating Officer having 
demonstrated management ability and expertise in information 
technology and financial services is to be hired to manage the 
PBO.
    The purposes of the PBO are to: improve the level of 
service to program participants; reduce the costs of 
administering the programs; increase accountability; provide 
greater flexibility in the management of the operational 
functions; and integrate the information systems supporting 
federal student assistance programs.
    The Committee recognized the need to make crucial changes 
to the student financial aid system in order to make it more 
simple, modern and efficient for the 21st Century. The need for 
this provision arises from the inability of the Department of 
Education to adequately manage over $40 billion in student 
financial aid. For instance, under the current system, the 
Department has made very limited progress in integrating the 
National Student Loan Data System (NSLDS) with its other data 
systems that support the delivery of federal student aid 
despite legislative mandates in the last two authorizations of 
the Higher Education Act. Also, the Department's budget for 
student aid information systems has tripled over the last 5 
years and instead of consolidating its existing data systems, 
the Department has increased the number of system contracts 
that cannot share data with each other. And in 1998 alone the 
Department is expected to spend over $300 million on systems 
contracts to deliver student aid. Yet despite these significant 
expenditures, the current system requires dozens of paper forms 
and suffers from needless processing delays and breakdowns.
    The Committee firmly believes that a customer-based, 
Performance-Based Organization within the Department, operated 
by an experienced Chief Operating Officer can take the 
necessary steps to properly reengineer the current systems and 
contracts. This is also in concurrence with the recommendations 
of the Department's own Inspector General and the independent 
Advisory Committee on Student Financial Assistance who both 
have advocated the PBO approach. The Committee also believes 
the creation of a PBO will result in a more efficient, 
effective, less expensive and less bureaucratic financial aid 
delivery system. The end result should be a system that is easy 
for students and parents to use and one that ensures that 
students have the information theyneed to select the education 
that is best for them--all while ensuring that taxpayer funds are being 
used efficiently and effectively.
    A new Section 112 of the legislation, added by the McKeon-
Castle amendment, directs the Secretary to review on a biennial 
basis all regulations that apply to the operations or 
activities of any participant in programs authorized under 
Title IV of the Higher Education Act, and where possible 
repeal, consolidate, simplify, or modify them if they are no 
longer in the public interest. This section also requires the 
Secretary to report to Congress any legislative changes 
necessary to permit further regulatory simplification.
    One of the ``cost-drivers'' identified by the College Cost 
Commission was regulatory compliance. During the Committee's 
January 28, 1997, hearing in York, PA, the Committee was 
concerned to learn from one of its witnesses, Ms. Deborah Dunn, 
Executive Vice President of Yorktowne Business Institute, that 
between August 1992 and September 1993, the Department of 
Education issued 171 ``Dear Colleague'' letters changing the 
Title IV regulations or advising on new interpretations of the 
regulations. In addition, the Department's regulations include 
38 different definitions of ``student'', 152 different 
reporting requirements, and 237 different definitions of 
``compliance.'' The Committee is committed to ensuring the 
integrity of the Federal financial aid programs. However, it is 
not the intent of the Committee to unduly burden participants 
in the Federal student aid programs with regulations that are 
redundant, out of date, or difficult to comply with or 
understand.

         TITLE II--POSTSECONDARY EDUCATION IMPROVEMENT PROGRAMS

    Title II of the Higher Education Act contained the Higher 
Education Library Programs prior to enactment of P.L. 104-208 
which established the Institute of Museum and Library Services 
and repealed all of Title II. H.R. 6 transfers several existing 
programs to Title II. The Urban Community Service Program is 
transferred from Part A of Title XI and is now Part A of Title 
II. This program provides incentives to urban institutions 
(including academic, private and civic bodies) to work together 
to devise and implement solutions to the most pressing and 
severe problems in their communities. Applied research, 
technical assistance, improvement and provision of services, 
training and data collection and analysis are examples of 
activities that can be supported under this part. This program 
has become very popular among urban institutions and other 
institutions have asked that the information developed as a 
result of this program be shared with those who may wish to 
conduct similar programs on their own. H.R. 6 specifically 
directs that this information be made available to any 
interested institution.
    Part B of title II reflects the transfer of the Fund for 
the Improvement of Postsecondary Education from Part A of title 
X. The special projects that may be funded under the program 
have been expanded to include projects dealing with 
articulation agreements among institutions and international 
cooperation and student exchange among institutions. There are 
authorized to be appropriated $30,000,000 for fiscal year 1999 
and such sums for the four succeeding fiscal years.
    In addition, the McKeon-Castle amendment strengthened our 
role in keeping college affordable by enhancing national 
support for innovative projects. Specifically, this amendment 
added innovative projects addressing issues of productivity, 
efficiency, quality improvement, and cost control at 
postsecondary institutions as one of the special projects that 
can be funded by FIPSE.
    The Committee notes that one such initiative that the 
Commission found promising was maximizing the opportunity for 
cost savings through joint campus purchase of goods and 
services and joint use of facilities. The Committee believes 
these opportunities should be pursued through various types of 
partnerships. For example, the Committee is aware of innovative 
cost-containment efforts initiated by the Southeastern 
Pennsylvania Consortium for Higher Education (SEPCHE), a 
coalition of eight small colleges in the greater Philadelphia 
area. This initiative, geared to enhancing the quality, 
efficiency and cost effectiveness of academic programming, 
student access, faculty development, institutional operations 
and community and educational outreach through resource 
sharing, collective purchasing, joint planning and 
technological linkage, might well serve as a model for price 
control for other small colleges and universities. The 
Committee strongly endorses the pioneering work of consortia 
such as SEPCHE and encourages it and others like it to make the 
results of their efforts available to other small to mid-size 
institutions of higher learning.
    Part C of Title II reflects the transfer of Grants to 
States for Workplace and Community Transition Training for 
Incarcerated Youth Offenders from Part E of Title X. The 
program is authorized to be appropriated at $5,000,000 for 
fiscal year 1999 and such sums for the four succeeding fiscal 
years.
    Part D of Title II reflects the transfer of the Advanced 
Placement Fee Payment Program from Part G of title XV of the 
Higher Education Amendments of 1992. The program is authorized 
to be appropriated at $3,600,000 for fiscal year 1999 and such 
sums for the four succeeding fiscal years.
    Part E of Title II replaces current teacher training 
programs under Title V of the Higher Education Act, with a 
single, competitive grant to Governors. Activities of such 
grants will focus on strengthening State teacher certification 
procedures to better reflect current and future teacher's 
academic knowledge of the subjects they teach. Grants would 
also support the reform of schools of education in colleges and 
universities to focus more attention on academic content 
knowledge. In addition, this will provide incentives to 
increase the content knowledge of the academic subject matter 
of current and future teachers, including training in the use 
of effective technologies in the classroom.
    As part of the 1992 reauthorization of the Higher Education 
Act, numerous programs were established to address a variety of 
issues related to teacher recruitment, retention and 
development. When coupled with the programs that already 
existed under Title V, there were 17 separate programs, each 
with their own requirements, standards and authorization. As 
the Committee began its work in 1997 to reauthorize the Higher 
Education Act, there was a growing consensus to replace these 
programs, which have gone largely unfunded, with a more 
targeted source of funding to assist States and localities in 
addressing their needs in this area. This effort led to the 
establishment of the Teacher Quality Enhancement Grants.
    In developing these grants, the Committee gathered a 
significant amount of information through hearings. Through 
these hearings, several major issues emerged related to teacher 
preparation. Specifically, despite continued reports of an 
impending ``shortage of teachers,'' the Committee found a far 
greater need to address problems with respect to the quality of 
teachers and of teacher preparation programs in this nation. 
Other issues identified during these hearings included insight 
into the area of alternative routes to teacher certification as 
a means to increase the pool of qualified teachers; the growing 
concern regarding the inadequacy of many State teacher 
licensure requirements which often lack a focus on academic 
knowledge; and the need to focus teacher professional 
development on academic content knowledge.
    A number of legislative initiatives introduced by several 
Members of this Committee were also important in the 
development of this proposal. Those include: H.R. 2288, the 
Teaching Excellence for All Children Act of 1997 introduced by 
Representative Miller (D-CA); H.R. 3440, Alternative Routes to 
Teacher Certification Act of 1998 introduced by Representative 
Roemer (D-IN); H.R. 2698, America's Teacher Preparation 
Improvement Act introduced by Representative McCarthy (D-NY); 
H.R. 2852, the Clinton Administration's proposal introduced by 
Representative Kildee (D-MI); H.R. 3085, the Partnership for 
Professional Renewal Act of 1997 introduced by Representative 
Woolsey (D-CA); and H.R. 2495, Higher Education for the Twenty-
First Century Act introduced by Representative Hinojosa (D-TX).
    Unlike the prior array of teacher preparation programs 
under the former Title V, the Committee established a single 
program incorporating many of the issues addressed above. An 
important element of the Teacher Quality Enhancement Grants is 
providing States with the ability to competitively seek funds 
for initiatives which address the areas that they feel are most 
important within their own boundaries.
    Specific activities supported under the Teacher Quality 
Enhancement Grants include strengthening State teacher 
certification procedures to better reflect current and future 
teacher academic knowledge of the subjects they teach, and 
reforming schools of education to better prepare teachers with 
academic content knowledge. In addition, initiatives would be 
funded which increase the content knowledge of the academic 
subject matter of current and future teachers, including 
training in the use of effective technologies in the classroom. 
States would be given priority in their funding application for 
these activities.
    As a part of the Committee's efforts to increase teacher 
content knowledge (for both current and future teachers), the 
Governor could also fund projects such as partnerships between 
public and private higher education institutions, local 
educational agencies, and private and parochial schools. 
Governors could also fund other activities related to expansion 
of State programs for alternative routes to certification and 
initiatives to expeditiously remove incompetent or unqualified 
teachers.
    In short, while these grants provide significant 
flexibility to States in addressing issues related to teacher 
preparation, the Committee made an effort to ensure that the 
major focus be on improving overall teacher quality in this 
nation. During the hearings on teacher preparation, the 
Committee heard from many witnesses who provided a compelling 
case that the focus of efforts in this area should be on the 
quality of teachers over that of expanding the quantity of 
teachers. One witness, C. Emily Feistritzer, Director, National 
Center for Educational Information, put into perspective recent 
projections from the Department of Education which claim that 2 
million new teachers will be needed over the next decade as a 
result of growing enrollments and the aging of the current 
teaching workforce. Mrs. Feistritzer noted:

          ``When most people hear that we'll need 200,000 new 
        teachers every year for the next decade, [2 million in 
        total] they think it means brand new teachers--people 
        who have never taught before. Well, that is not what it 
        means. * * * According to the National Center for 
        Education Statistics Schools and Staffing Survey, 5.8 
        percent of the total teacher workforce of 2.39 million 
        were ``newly hired'' in 1993-94 (the latest year for 
        which these data are available). Of these 139,000 
        ``newly hired'' teachers, fewer than half (42 percent) 
        were ``newly minted'' teachers, that is, teachers who 
        had just finished a college program and had never 
        taught before. Nearly one-fourth (24 percent) of them 
        were ``delayed entrants'' * * * The remaining third of 
        ``new'' teachers were actually former teachers coming 
        back into the profession. These statistics are terribly 
        important. The bottom line is the nation is hiring--and 
        is projected to need to hire--approximately 45,000 
        newly minted teachers per year. That is a far cry from 
        200,000!'' She also notes ``only about a third of fully 
        qualified teachers who graduate from the nation's 1200 
        or so colleges that train teachers in any given year 
        are actually teaching the following year.''

    If there is truly a demand for 45,000 teachers each year, 
the question becomes ``how many prospective teachers are 
graduating from our colleges and universities annually?'' Mrs. 
Feistritzer, also provided insight into this question:

          ``According to the National Center for Education 
        Statistics, Integrated Postsecondary Education Data 
        System (IPEDS), 106,079 bachelor's degrees in education 
        were conferred in 1994-95, the latest year for which 
        NCES has published data. In addition, 101,242 Master's 
        degrees in education and 6,905 doctorates in education 
        were conferred. Every year in this decade, colleges and 
        universities have been awarding more than 100,000 
        bachelor's degrees in education alone. The education 
        field is second only to business in number of degrees 
        conferred''. She also notes ``only about a third of 
        fully qualified teachers who graduate from the nation's 
        1200 or so colleges that train teachers in any given 
        year are actually teaching the following year.''

    These statistics explain why, according to Census data, 
there are more than 6 million individuals holding at least a 
Bachelors Degree in education, representing 16.2% of all 
degrees held by individuals. In short, the Committee found that 
too few graduates of teacher preparation programs go into 
teaching and too few stay in the teaching profession. In fact, 
our colleges and universities are churning out more teachers 
annually than there are jobs. Based on current trends, we can 
only meet the future demand for teachers by encouraging more 
graduates of teacher preparation programs, including those who 
have chosen another profession to commit to the teaching 
profession, and by encouraging more college students to go into 
teacher preparation programs.
    There is evidence to suggest that there is a problem with 
respect to the quality of many teachers. A recent report by the 
National Center for Education Statistics found that 36 percent 
of those now teaching core subjects, such as math and science 
neither majored nor minored in those subjects.
    During hearings on teacher preparation, the Committee heard 
from numerous witnesses on the need to focus on quality. Some 
of the examples of the current situation were especially 
enlightening. Professor Ballou, Associate Professor of 
Economics at the University of Massachusetts, provided one such 
example from the Connetquot District in Long Island, NY, which 
recently had 758 applicants for 35 teaching spots. Mr. Ballou 
noted, ``As a screening device, district officials required 
applicants to answer at least 40 out of 50 multiple-choice 
reading comprehension questions from old regents exams given to 
high school juniors. Of the 758 applicants, all of whom had 
baccalaureate degrees and teaching certificates, only 202 met 
this 11th grade standard.''
    The problem of qualified teachers is most critical in poor, 
urban and rural schools. While a variety of factors have been 
attributed to this problem; the most common are the lack of 
competitive salaries and the attractive working conditions 
available in the surrounding suburbs. A recent education report 
also noted that outdated and cumbersome hiring procedures 
compound the problem facing these schools and that principals 
in large urban bureaucracies have less control over hiring 
teachers than those in non-urban areas.
    With respect to the teacher quality in poor urban and rural 
schools, Kati Haycock, Director of the Education Trust, made 
the following observation during a Committee hearing:

          As bleak as the overall situation is, the picture for 
        low-income students and minority students is even 
        bleaker. The least well-qualified teachers are most 
        likely to be found in the high poverty schools, and 
        predominately minority schools. Whereas only 8% of the 
        public school teachers in low-poverty schools taught 
        without a minor in their main teaching assignment, 
        fully a third of the teachers in high poverty school 
        were teaching without a minor in their main assignment 
        field. Nearly 70% taught without a minor in their 
        secondary assignment field. About one-third of the 
        English classes in high poverty secondary schools are 
        taught by an individual without either a college major 
        or minor in English. In fact, students in schools with 
        the highest minority enrollment have less than a 50% 
        chance of having a science or math teacher who holds 
        both a license and a degree in the field that he or she 
        is teaching. It is ludicrous to expect these children 
        to achieve at higher levels when we provide them with 
        teachers who do not know their subject areas.

    H.R. 6 also addresses this problem by providing loan 
forgiveness to teachers who teach in high poverty elementary 
and secondary schools. An amendment offered by Representative 
Graham (R-SC) and Representative Kildee (D-MI) was accepted 
that allows teachers to have their student loan forgiven if 
they teach for three academic years in a high poverty school. 
The Committee hopes this provision will help retain quality 
teachers in these schools and reduce teacher shortages in these 
areas.
    Although there is a debate with respect to the relative 
impact a ``qualified'' teacher has upon student success, common 
sense tells us that students do better if their teachers are 
knowledgeable in the subjects they teach--``you can't teach 
what you don't know.'' Professor William Sanders of the 
University of Tennessee, who has studied the impact of teacher 
qualification on student achievement made the following 
conclusion: ``What we've consistently found, starting back in 
the 80's, is that when compared to class size or the ethnicity 
of the student, or whether they are on free or reduced price 
lunch, all of these things pale in comparison to the 
effectiveness of the individual classroom teacher.'' Other 
researchers, including Dr. Ronald F. Ferguson, at Harvard, 
found that teacher qualifications are the single most important 
determinant of student test scores, having four times more 
impact on test scores than class size.
    In response to these findings, the Committee has focused 
the Teacher Quality Enhancement Grants on addressing issues of 
quality, while providing States flexibility in implementing 
such initiatives.
    Specifically, these grants will support efforts in States 
like Pennsylvania, which is working to increase the quality of 
teachers through a variety of approaches. This includes setting 
more challenging admissions standards for schools of education; 
implementing rigorous academic and curricular standards in 
teacher-training programs; setting higher qualifying 
examination scores for teacher certification; and expanding 
alternative routes to teacher certification.
    As part of this focus on quality, another major focus of 
these grants is to encourage States to hold teacher preparation 
institutions more accountable for preparing quality teachers. 
The need to improve teacher preparation programs in colleges of 
education has received significant attention recently. There is 
growing consensus that these institutions have moved away from 
focusing on ``what to teach'' and instead focus too much on 
``how to teach.''
    Responding to proposals to send funds to schools of 
education in hopes of their improvement, E.D. Hirsch, Jr., 
President, Core Knowledge Foundation, stated,

          It would be unwise to spend any taxpayer money that 
        finds its way into schools of education. Schools of 
        education, are currently the origins of our problems, 
        not their solution. Still, more generally, it is 
        undesirable to channel money to administrative entities 
        that are populated by education postgraduates or ex-
        professors of education, all of whom tend to share a 
        self-defeating emphasis on process rather than on 
        knowledge. Unfortunately, this caveat applies to most 
        state departments of education, to most accrediting 
        organizations like NCATE, and to many grant-giving 
        organizations like the education division of the 
        National Science Foundation.''

    As criticism of these institutions continues to escalate, 
current solutions to improve these schools of education have 
not yet achieved widespread support. In particular, efforts by 
the National Council for Accreditation of Teacher Education 
(NCATE) to accredit these schools has been met with resistance 
by those who claim that such accreditation has little or no 
impact on teacher quality.
    During the Committee's February 24, 1998 hearing, Eugene W. 
Hickok, Pennsylvania Secretary of Education also commented on 
NCATE. He testified:

          The National Council for Accreditation of Teacher 
        Education (NCATE) program approval process is extremely 
        labor intensive and very expensive for the schools that 
        seek the Council's accreditation. It places far less 
        emphasis on the rigorous academic quality measures that 
        will be required under Pennsylvania's initiative. Our 
        experience in Pennsylvania has been that NCATE-approved 
        schools over-emphasize education methods courses at the 
        expense of content-area studies vital for teachers' 
        future success and professional stature.

    Clearly, there is not sufficient evidence to support any 
particular initiative to improve schools of education. It is 
for this reason that under the Teacher Quality Enhancement 
Grants, Governors, (with certain exceptions with respect to 
State laws and State Constitutions), are provided the 
opportunity to receive grants to assist in their efforts to 
improve their schools of education. Specifically, the bill 
includes a priority for the receipt of funds to those Governors 
implementing reforms which hold institutions of higher 
education with teacher preparation programs accountable for 
preparing teachers who are highly competent in the academic 
content areas in which they plan to teach. Under the bill, 
these initiatives may also be undertaken through Partnerships 
described below.
    A significant provision included under these grants is a 
strict accountability measure for any institution of higher 
education preparing teachers within States receiving funds. 
Specifically, in order to receive funds a State must 
demonstrate that 80 percent of graduates of each of the 
exemplary institutions of higher education in any Partnership 
who enter the field of teaching pass all applicable State 
qualification assessments of new teachers. Such assessments 
must include an assessment of each prospective teacher's 
subject matter knowledge in the content area or areas in which 
the teacher provides instruction. A higher standard is set 
prior to subsequent funds going to the State, in that all 
institutions of higher education with teacher preparation 
programs must demonstrate a 70 percent threshold. To ensure 
that States do not simply make their test less difficult in 
order to allow more graduates to pass, the language also 
requires states to use an assessment ``at least as rigorous as 
those in place on the date of enactment of this Act.''
    In response to the significant evidence showing a general 
lack of academic knowledge of teachers in the subject areas in 
which they teach, the Teacher Quality Enhancement Grants also 
promote State initiatives to reform State teacher certification 
requirements. Specifically, these reforms are intended to 
ensure that current and future teachers possess the necessary 
academic content knowledge in the subject areas in which they 
are certified and assigned to teach.
    The Committee also notes the limits of initiatives to 
implement a National teacher certification. One initiative 
currently being undertaken by the National Board for 
Professional Teaching Standards has failed to generate the 
systemic change in quality originally envisioned, despite 
nearly $60 million in Federal expenditures over seven years.
    Eugene Hickok, Secretary of Education in Pennsylvania 
illustrated this fact during a recent Committee hearing. He 
testified that ``with only two of the 13 Master Teacher 
standards established by the National Board to evaluate Master 
Teachers, I am not convinced that this distinction rivals the 
rigorous content preparation that will be required for all 
teachers under Pennsylvania's proposal * * * While we watch the 
National Board with interest, we perceive its emphasis, like 
NCATE, to be too weighted in the traditional School of 
Education mind set of methodological training.''
    The 1992 Committee report on the reauthorization of the 
Higher Education Act provided the first authorization for the 
National Board. Although at the time, funding was intended to 
be ``seed'' money and funds were to be matched by the Board by 
100%, this appears to no longer be the case, as efforts to 
increase the reliance on Federal funding expands. H.R. 6 
includes a prohibition of Federal funds to be spent on this 
Board.
    Another important focus of the Teacher Quality Enhancement 
Grants is to encourage the use and expansion of high quality 
programs which provide alternative routes to teaching for 
individuals such as paraprofessionals, former military 
personnel, and mid-career professionals. These programs provide 
opportunities for a wide variety of qualified individuals to 
enter the teaching profession.
    According to C. Emily Feistritzer, Director, National 
Center for Educational Information, ``Despite the growing 
interest in alternative routes for certifying teachers, most 
states' programs are underutilized, due primarily to opposition 
from state officials and colleges within the state that control 
teacher education and certification.'' This, despite the fact 
that these programs have provided a viable pathway for many 
minorities into the nation's teaching force. Mrs. Feistritzer 
also notes that, ``Nationally, nine percent of public school 
teachers are minorities. This compares with about a third of 
teachers coming through alternative routes who are 
minorities.'' Evidence also suggests that expanded use of these 
programs could help meet the demand for teachers in inner 
cities, especially in bilingual education, special education, 
mathematics and science.
    A major goal of this Committee has been to ensure that 
Federally funded programs are built upon a system of 
accountability. Therefore, the Teacher Quality Enhancement 
Grants have strong reporting and accountability requirements. 
Governors receiving these funds must annually report to the 
Secretary of Education and to the Congress how they have met 
the following criteria in order to continue receiving these 
grants:
          Raising the State academic standards required to 
        teach;
          Increasing the percentage of classes taught in core 
        academic subjects areas by teachers fully certified by 
        the State to teach in those subject areas;
          Decreasing the shortage of qualified teachers in poor 
        urban and rural areas; and,
          Increasing opportunities for enhanced and ongoing 
        professional development that improves the academic 
        content knowledge of teachers in the subject areas in 
        which they are certified to teach or in which they are 
        working toward certification.
    The Committee believes that these accountability measures 
will ensure that these grants provide incentives to States to 
improve the quality of teacher preparation by focusing on the 
academic content area teachers must know in order to be 
certified to teach. Basedon the evidence that the Committee has 
heard through experts testifying at our hearings, the Committee 
believes that improving the quality of our nations teaching force 
should be a priority.
    H.R. 6 also holds teachers accountable to parents by 
requiring that local educational agencies who received funds 
under this program through a partnership make available to 
parents the qualifications of their student's classroom 
teacher. Specifically, parents must be informed, upon request, 
about the qualifications of their child's teacher both 
generally and with regard to the subject matter in which the 
teacher is providing instruction. The Committee believes this 
is another tool for parents to determine whether teachers are 
qualified to teach the subject matter their child is studying. 
Similar language was included in Chairman Goodling's Reading 
Excellence Act that passed the House unanimously.
    Finally, H.R. 6 has specific prohibitions to ensure that 
nothing in this part shall be construed to permit, allow, 
encourage or authorize any Federal control over any aspect of 
private, religious or home schools. In addition, H.R. 6 does 
not bar such schools from participation in programs or services 
provided by these grants. Also, H.R 6 ensures that nothing in 
this part permits, allows, encourages, or authorizes any 
national system of teacher certification.
    The Committee is adamant in its position that State and 
local communities must determine the qualifications of their 
teachers and must, in the end, be the ones who hold their 
teachers accountable. These Teacher Quality Enhancement Grants 
are only an incentive to help States boost their own State 
standards for teachers and help improve the quality of teachers 
graduating from colleges of education in their States.

                      TITLE III--INSTITUTIONAL AID

    Title III of the Higher Education Act provides assistance 
to Historically Black Colleges and Universities (HBCUs) and 
other institutions of higher education that enroll large 
numbers of minority students and students from low-income 
backgrounds. To be eligible for funds under Title III, 
institutions must have low educational and general expenditures 
as compared to other similar institutions.
    H.R. 6 makes significant changes to Title III, designed to 
expand the authorized activities to reflect the increased use 
of technology and new communication technologies in providing a 
quality higher education. In addition, schools which receive 
Title III grants may use up to 20% of those grants for 
establishing and/or improving their endowment funds in order to 
promote increased self-sufficiency on the part of these 
institutions. Provisions formerly included in Title III that 
related to Hispanic-Serving Institutions have been relocated to 
Title V, Developing Institutions, while the Minority Science 
and Engineering Improvement Programs formerly contained in 
Title X have been transferred to Title III as a new Part D. The 
other changes made are substantially technical and are designed 
to improve the administration of the program.

Part A, strengthening institutions

    Part A of Title III provides Federal financial assistance 
to strengthen institutions of higher education that are in 
severe financial hardship. Funds can be used for a variety of 
purposes, including faculty development, funds and 
administrative management, the joint use of libraries and 
laboratories, student services, improving facilities for 
Internet or other distance learning instruction capabilities 
and establishing or improving an endowment fund. Institutions 
that are eligible for Title III funds under Part A must engage 
in a competition for these funds.
    In light of the relatively low level of funding compared to 
the large number of applications for Part A funds, the 
Committee has included a provision requiring institutions that 
receive a grant to wait two calendar years before applying for 
another grant. The Committee believes that a waiting period is 
necessary in order to allow many different institutions to 
benefit from Part A funds. The Committee did hear from many 
Part A institutions about the rigors of the application process 
and the expense associated with simply applying for funds. In 
order to address their concerns, the Committee adopted a 
provision instructing the Secretary of Education to develop a 
preliminary application for use by institutions. The Committee 
intends that such a form be designed to allow institutions to 
apply without incurring great expense.
    The Committee has included in Part A of Title III a new 
Section 316 to provide assistance to Tribally Controlled 
Colleges and Universities. The Committee believes the needs of 
these colleges are sufficiently strong to warrant a separate 
provision and separate authorization. An institution that 
qualifies and receives support under this provision may not, 
however, concurrently receive assistance under either Part A or 
Part B of this Title. Hispanic-Serving Institutions were 
formerly included in this section, but provisions related to 
Hispanic-Serving Institutions have been transferred to Title V.
    Part A is authorized to be appropriated at (other than 
section 316) $135,000,000 for fiscal year 1999 and such sums 
for the four succeeding fiscal years. Section 316 is authorized 
to be appropriated at $10,000,000 for fiscal year 1999 and such 
sums for each of the four succeeding fiscal years.

Part B, strengthening historically black colleges and universities

    Part B authorizes a formula grant program for HBCUs with 
undergraduate programs, as well as a separate program for 
certain designated HBCU graduate and professional programs and 
schools. To be eligible for funds under this Part, an 
institution must have been established prior to 1964 with the 
ongoing mission of educating African Americans. In general, the 
activities authorized under this Part are similar to the 
activities authorized under Part A. Applicants for funds under 
this Part must providethe Secretary of Education measurable 
goals for the applicant's financial management and academic programs 
and a plan for achieving those goals. At the hearing on June 26, 1997, 
before the Subcommittee on Postsecondary Education, Training and Life-
Long Learning, Dr. Thomas Cole, Jr., President of Clark Atlanta 
University said, ``There is consensus in the HBCU community on limiting 
our recommendations with respect to Title III because the program is 
working well and should be reauthorized with only modest changes.'' The 
Committee took Dr. Cole's statement seriously and made only minor 
changes with respect to Part B.
    The Committee recognizes that Title III aid has been 
extremely important to the enhancement of HBCUs. Grants awarded 
under this title have been an integral part of the progress of 
HBCUs toward excellence and self-sufficiency. To add to the 
spectrum of effective uses of these grants, H.R. 6 amends Part 
B to mirror Part A by allowing institutions to use up to 20% of 
funds awarded under Part B to establish or improve endowment 
funds. Amounts used for this purpose must be matched by an 
equal or greater amount from non-Federal funds.
    For Part B, other than Section 326, there are authorized to 
be appropriated $135,000,000 for fiscal year 1999 and such sums 
as may be necessary for the four succeeding fiscal years.
            Section 326 of part B, graduate institutions
    African Americans continue to be underrepresented in the 
health and legal professions and in doctoral programs. Despite 
their small size and number as compared to the majority of U.S. 
institutions, HBCUs have been more effective than other 
institutions in producing African American graduate students. 
According to the National Association for Equal Opportunity in 
Higher Education, HBCUs graduate on a per institution basis, 
three and one half times more African American PhDs than all 
majority U.S. institutions combined. Title III, Section 326, 
has been a good investment as all sixteen of the institutions 
currently receiving aid under this program have developed 
outstanding programs and enhanced their applicant pool. In 
light of their success, the Committee has decided to include 
additional eligible institutions for purposes of Section 326. 
These two new institutions are Norfolk State University and 
Tennessee State University.
    H.R. 6 provides a mechanism for adding these two new 
institutions without adversely affecting the awards to the 
existing sixteen schools. H.R. 6 also includes new provisions 
for allocating funds to all schools when total funding exceeds 
$25,000,000. All newly appropriated funds above the FY 1998 
level will be distributed based upon a formula that takes into 
account:
          (i) the number of doctoral or first professional 
        degree students enrolled in an eligible program;
          (ii) the number of graduates from the qualified 
        programs for the previous year; and,
          (iii) the average cost of instruction for all 
        students enrolled in the qualified programs.
    The Secretary is directed to develop the formula guidelines 
and share them with the sixteen institutions for comment. The 
Committee believes that such a formula based on productivity 
would enhance the Section 326 program. For Section 326, there 
are authorized to be appropriated $35,000,000 for fiscal year 
1999 and such sums as may be necessary for the four succeeding 
fiscal years.

Part C, endowment challenge grants

    The Endowment Challenge Grant Program was established to 
ensure that the Federal government play a significant role in 
increasing the financial stability of developing institutions 
and HBCUs. Although funding for this Part has not been 
appropriated for the past several years, the Committee has 
retained the current provision.
    For Part C, there are authorized to be appropriated 
$10,000,000 for fiscal year 1999 and such sums as may be 
necessary for the four succeeding fiscal years.

Part D, Minority Science and Engineering Improvement Program

    The Minority Science and Engineering Improvement Program is 
designed to effect long-range improvements in science and 
engineering education, and improve support programs for 
minority students enrolled in science and engineering programs 
at predominantly minority institutions. The program provides 
support for both minority students and institutions to improve 
access and program quality in the areas of science and 
engineering. It also calls for interagency cooperation within 
the Department of Education and within Federal, State, and 
private agencies that carry out programs to improve the quality 
of science, mathematics, and engineering education. Originally 
contained in Title X of the HEA, its provisions have been moved 
to Part D of Title III.
    For Part D, there are authorized to be appropriated 
$10,000,000 for fiscal year 1999 and such sums for the four 
succeeding fiscal years.

                      TITLE IV--STUDENT ASSISTANCE

Part A, grants to students in attendance at institutions of higher 
        education

            Subpart 1, Federal Pell Grants
    Generally considered the foundation of student assistance, 
the Federal Pell Grant Program received a great deal of 
attention by the Committee in this reauthorization. Since 1973, 
when awards were first made to undergraduate students from low-
income families to help them finance their education, the 
annual number of awards has grown from 176,000 recipients to 
3.6 million in the 1995-96 academic year. After years oflittle 
or no increase to the appropriated maximum Pell Grant, Congress began 
providing serious increases to the Pell Grant Program starting with 
academic year 1996-97. For 1996-97, the increase was $130 for a maximum 
of $2,470. This maximum was increased again for the 97-98 academic year 
by $230 for a new maximum of $2,700. Then, for the 98-99 academic year, 
the Pell Grant maximum received a $300 increase, the largest single 
year increase in the history of the program. In actual budget terms, 
the taxpayer funding of the Pell Grant Program has gone from $2.4 
billion in 1980 to over $7 billion by 1998.
    The Committee strongly supports the continued increase to 
the appropriated maximum Pell Grant. The authorized levels set 
in H.R. 6 reflect this commitment by establishing levels 
designed to reach a $5,100 maximum by academic year 2002. The 
most recent statistics clearly indicate that the Pell Grant 
Program continues to serve very low-income students and 
families who will greatly benefit from increases to the 
appropriated maximum. The Department of Education's most recent 
student aid survey indicates that 54% of all Pell Grant 
recipients had incomes of less than $10,000 when applying for 
student aid.
    The Committee continues the changes made to the award rules 
in the 1992 Amendments to ensure that all needy students 
receive awards proportional to their need, while also including 
tuition-sensitivity in Pell Grant awards. In addition, the 
Committee recognizes that a $750 allowance for childcare or 
disability related expenses is insufficient in today's economy 
for most students. The Committee doubles the allowance to 
provide additional assistance to students having these special 
expenses.
    The Committee recognizes the importance of expanding 
Federal Pell grant eligibility to students who are continuing 
to make satisfactory progress in their education yet cannot 
complete their degrees within the time frame prescribed by 
current law. The 1992 Amendments also recognized this important 
issue by eliminating the requirement that a student will be 
eligible for Federal Pell grants for only 5 or 6 years, if in a 
4 or 5 year program respectively. At that time, the Committee 
demanded close oversight of this particular issue to ensure 
that no misuse of Federal money was perpetrated by students who 
may deliberately extend their participation. To date, we have 
not seen any evidence of fraud with respect to this effort to 
assist part-time students and we continue the expansion adopted 
in 1992.
    The Committee has taken an additional step toward improving 
the integrity of the Pell Grant Program by including a 
provision that has long been advocated by Representative 
Roukema (R-NJ). Currently, an institution of higher education 
which has cohort default rates in excess of 25% for three 
consecutive years loses its eligibility to participate in the 
student loan program. However, such an institution has been 
free to continue to participate in the Pell Grant Program. 
Under H.R. 6 that is no longer the situation. An institution 
that becomes ineligible to participate in the student loan 
program due to high default rates will also be ineligible to 
participate in the Pell Grant Program. This provision is 
prospective in nature and does not affect the eligibility of an 
institution deemed ineligible due to final default rate 
determinations that are prior to the 1996 fiscal year. In 
addition, no institution will be subject to this provision 
until it has had an opportunity to fully appeal any default 
rate determination made by the Secretary.
            Subpart 2, Federal Early Outreach and Student Services 
                    Programs
    In recognition of the Committee's belief that information, 
counseling, academic services, and early outreach activities 
are an integral part of the student assistance program aimed at 
achieving equal educational opportunity, the Committee has 
continued and strengthened the comprehensive approach to 
providing information and services currently found in Subpart 
2.
    The mainstay of providing counseling, academic support, 
early outreach and information services to economically 
disadvantaged students are the Federal Trio Programs and the 
National Early Intervention Scholarship and Partnership 
Program. To those programs the Committee has added the High 
Hopes for College Program which has been championed by 
Representative Fattah (D-PA) in order to promote early college 
awareness activities to students and parents who may not have 
access to information about college and financial aid.
            Chapter 1--TRIO Programs
    Since the initial authorization of the Higher Education Act 
in 1965, the importance of the programs authorized under what 
is now termed the TRIO Programs has become increasingly 
recognized. The TRIO Programs include Upward Bound, Talent 
Search, Student Support Services, Educational Opportunity 
Centers, and Ronald E. McNair Postbaccalaureate Achievement. 
Early intervention, access and retention services are an 
essential component of the Federal strategy to ensure equal 
educational opportunity.
    The Committee believes that the design of the TRIO programs 
as it has evolved is sound. Widespread support of TRIO programs 
in communities across the nation, in the Congress and within 
the Administration confirm that belief. Accordingly, a number 
of the changes made in the TRIO programs designs in this bill 
are a logical extension from twenty-five years of program 
experience.
    The increase of the authorization level to $800 million 
reflects the Committee's confidence in the strength of the TRIO 
design as well as the conviction that TRIO services must be 
expanded to enroll a larger percentage of the eligible 
population. The Committee notes that presently a very small 
percentage of eligible youth and adults are served.
    Many of the changes reflected in H.R. 6 are designed to 
improve and streamline the operation of the TRIO programs. 
Minimum grant levels, by program, are clearly established in 
order to provide sufficient funding levels for programs to 
operate.
    Grants are all established for four-year time periods. 
Sponsoring institutions or agencies are encouraged to 
coordinate all the TRIO programs operating at their particular 
institution or organization and one single director may have 
responsibility for administering more than one program 
regardless of the funding source.
    H.R. 6 continues the requirement of evaluations of the TRIO 
programs. In addition, H.R. 6 modifies the purpose of the 
evaluations to specifically investigate the effectiveness of 
alternative and innovative methods within the TRIO Programs for 
increasing access to and retention of students in postsecondary 
education.
    H.R. 6 expands the list of services which may be provided 
by Talent Search and intends to address areas with high drop 
out rates by allowing these projects to provide assistance to 
students who have dropped out of secondary school but who wish 
to return or enter programs designed for completing a general 
education development program. Listings of permissible services 
were included in this subpart for Student Support Services and 
Upward Bound in 1980. As with those programs, the Committee 
does not intend that by including a listing of permissible 
services for Educational Opportunity Centers and Talent Search, 
each individual project is required to provide all of the 
services. Such determinations can only be made by individuals 
with knowledge both of the difficulties experienced by 
disadvantaged students in a given institution or locality and 
of the locally funded resources available to such students.
    The Committee has continued the purpose of Student Support 
Services Programs in H.R. 6. Student Support Services Programs 
are designed to increase college retention and graduation 
rates, to increase transfer rates and to foster a climate 
supportive of the success of low-income students, first-
generation college students and students with disabilities. The 
Committee believes that achievement of each of these goals is 
necessary before the nation can realize its goal of assuring 
equal educational opportunity in postsecondary education and 
that Student Support Services Programs have a critical role to 
play in this regard.
    The Committee believes that the success of Student Support 
Services Programs rests, in large part, upon the commitment of 
the sponsoring institutions to the success of students from 
low-income families, first-generation college students and 
students with disabilities.
    H.R. 6 alters one assurance required from institutions 
applying for a Student Support Services Program grant. 
Currently, institutions must provide an assurance that they 
will offer sufficient financial assistance to meet a student's 
full financial need. The Committee is concerned about the 
possibility of overwhelming a student with too much loan debt 
as a means of meeting this assurance. The Committee also 
recognizes that in some cases loan debt is the only aid 
available due to the limited aid available at a particular 
institution. Therefore, the Committee has modified the 
requirement to emphasize the need to minimize a student's debt 
burden when fulfilling the requirement of offering financial 
assistance to meet full financial need.
            Chapter 2--National Early Intervention Scholarship and 
                    Partnership Program
    Chapter 2 of this subpart authorizes the National Early 
Intervention Scholarship and Partnership Program which is 
continued under H.R. 6. This program was first created in 1992 
to encourage States to guarantee low-income students that, if 
they complete high school, they will receive the financial 
assistance needed to attend a higher education institution. In 
addition, the program is designed to provide counseling and 
mentoring services to students at an early age in order to 
prepare them for college. In fiscal year 1996-97, nine states 
participated in the program. A total of $3.1 million in Federal 
grant money was overmatched by the participating states that 
contributed $4.4 million. During 1996-97, more than 44,000 
students received early intervention services under this 
program. H.R. 6 continues the current authorization of 
$200,000,000 for fiscal year 1999 and such sums for the 
succeeding four years for this program.
            Chapter 3--High Hopes for College
    Representative Fattah (D-PA) offered an amendment that was 
adopted by the Committee to authorize the High Hopes for 
College Program. The purpose of High Hopes is to promote a 
strong early intervention initiative aimed at narrowing the gap 
in college enrollment between students from high and low income 
families. Recent statistics continue to reflect that a large 
gap exists in college enrollment based on financial 
circumstances. Evidence suggests that barriers to college 
education for low-income students appear to include low 
educational expectations and poor academic achievement. To 
combat these barriers, it is critical that academic services, 
mentoring, counseling and tutoring be provided to students.
    The new High Hopes Program would provide an array of early 
intervention services to middle schools serving a high 
percentage of low-income students. The partnerships created 
under High Hopes must include a degree-granting institution of 
higher education, a middle school that has at least 50 percent 
of its students eligible for free or reduced price lunches, the 
high schools that these students will attend and at least two 
community organizations. Applicants who include tuition 
assistance or guarantees from non-Federal sources may be given 
a preference by the Secretary in awarding these grants. The 
High Hopes Program is authorized at $140 million for fiscal 
year 1999 and such sums for the succeeding five fiscal years.
            Chapter 4--Frank Tejeda Scholarship Program
    Representative Romero-Barcelo (D-PR) offered an amendment 
that was adopted by the Committee to authorize the Frank Tejeda 
Scholarship Program. The purpose of this new program is to 
recruit and train teachers who are proficient in both Spanish 
and English and who show academic promise. To receive a 
scholarship under this program a student must agree to teach in 
a public elementary or secondary school in which thereis a 
demonstrated need for Spanish-speaking teachers and professionals for 
no less than one year for each year of scholarship assistance. This 
program is authorized at $5,000,000 for fiscal year 1999 and such sums 
for the four succeeding fiscal years.
            Chapter 5--Campus-Based Child Care
    Representative Roukema (R-NJ) offered an amendment that was 
adopted by the Committee to authorize a Campus-Based Child Care 
Program. This new program authorizes the Secretary to award 
grants to institutions of higher education to assist in 
providing campus-based child care services to low income 
students. With more and more students attending postsecondary 
education who are considered non-traditional students, the need 
for affordable child care on campus has become an important 
issue. The 1995-96 data collected by the Department of 
Education indicates that undergraduates were nearly evenly 
divided between those considered dependent versus independent. 
Independent students are those who are married, over the age of 
24, a graduate or first professional student, a veteran or a 
student with legal dependents other than a spouse. As more 
people return to college for new training as demanded by the 
nation's economy, the numbers of independent students can 
expect to continue to increase.
    Under the campus-based child care program, institutions 
wishing to receive a grant will have to demonstrate the need of 
low income students at the institution for child care services. 
Institutions will also have to identify resources which it can 
draw upon to support the child care program and demonstrate 
that any resources used for this purpose will not result in 
increases in student tuition. The Campus-Child Care Program is 
authorized at $30,000,000 for fiscal year 1999 and such sums 
for the four succeeding fiscal years.
    The existing programs under Chapters 3 through 8 (Chapter 
3--Presidential Access Scholarships; Chapter 4--Model Program 
Community Partnership and Counseling Grants; Chapter 5--Public 
Information; Chapter 6--National Student Savings Demonstration 
Program; Chapter 7--Preeligibility Form; and Chapter 8--
Technical Assistance for Teachers and Counselors) are all 
unfunded programs which have been repealed in H.R. 6.
            Subpart 3, Federal Supplemental Educational Opportunity 
                    Grants
    The Committee believes that the Federal Supplemental 
Educational Opportunity Grant (Federal SEOG) program is of 
critical importance to students who demonstrate exceptional 
need for supplemental grant support in addition to the funds 
provided by the Federal Pell Grant Program. The 1986 amendments 
emphasized the interaction between these two grant programs by 
requiring that at least three-quarters of the recipients of 
Federal SEOG awards at a given institution of higher education 
also be recipients of Federal Pell Grants. The 1992 amendments 
dealing with student eligibility required institutions to make 
SEOG awards to students with exceptional need and to give 
priority to students receiving Pell Grants. Although the 
Committee heard testimony that the language of this provision 
was restricting institutions from awarding Federal SEOG funds 
to students with considerable need, the Committee continues to 
believe that the coupling of SEOG awards and Pell Grant awards 
is an important feature of this program and helps serve those 
who have the greatest financial need. As a result, no changes 
were made to this provision.
    H.R. 6 requires that institutions of higher education shall 
make SEOG funds available to independent and part-time 
students. However, the Committee has deleted the overly 
restrictive requirement that required a strict proportion of 
funds to be allocated to these students. The Committee intends 
that while institutions are given discretion in allocating an 
equitable amount of funds for nontraditional students, this 
discretion should not result in a reduction of funds for these 
students. The Committee intends to closely follow this matter 
in order to ensure that nontraditional students continue to 
receive fair participation in the SEOG Program.
    With respect to the formula for distributing campus-based 
aid, including SEOG funds, the Committee has made one 
significant change. The current formula distributes funds 
according to a two-part statutory formula. The first part, the 
``base guarantee'' considers an institution's program 
expenditures in a previous year. The second part, based on 
institutional need for additional funding, allocates the amount 
remaining after the base guarantees are fully funded by 
providing one-fourth of the remaining funds to institutions on 
a pro rata basis (pro rata) and three-fourths to institutions 
based on the institutions need (fair share). Since 1986, an 
institution's base guarantee has been the principal determinant 
of its current-year allocation. Thus, today's allocation of 
campus-based funds largely reflects a 20-year-old distribution 
of program funds.
    In recognition of the changing demographics on college 
campuses, the Committee has decided to modify the formula for 
distributing campus-based funds. At the same time, the 
Committee does not want to cause a disruption at campuses 
across the country that could occur if there are dramatic 
shifts in program funds between institutions. Therefore, the 
Committee decided to modify the formula by dropping the pro 
rata part and allowing all funds in excess of the base 
guarantee amounts to be distributed on a fair share basis. Such 
a change should allow institutions with increasing enrollments 
and populations of needy students to receive increases in 
campus-based funding.
    H.R. 6 authorizes $675,000,000 for fiscal year 1999 and 
such sums for the succeeding four years for this program.
            Subpart 4, State Student Incentive Grants
    The Committee believes that the State Student Incentive 
Grant (SSIG) Program is a successful partnership between the 
Federal Government and states. However, with Republican and 
Democrat administrations proposing the elimination of the 
program, the Committee has decided to restructure the program 
in order to more effectively allowstates to serve the needs of 
their students. H.R. 6 includes a new Special Leveraging Educational 
Assistance Partnership Program for those states that are willing to 
increase the current match required to obtain funds whenever 
appropriations exceed $25 million. States that apply for additional 
funds may use the funds to assist needy students by:
          (i) increasing state grant aid;
          (ii) carrying out transition programs from secondary 
        to postsecondary education;
          (iii) establishing financial aid programs for 
        students entering the teaching field, computer-related 
        fields, or any other field of study determined by the 
        state to be critical to the state's workforce needs;
          (iv) carrying out early intervention programs; and,
          (v) awarding merit aid to needy students.
    H.R. 6 authorizes $105,000,000 for fiscal year 1999 and 
such sums as necessary for the succeeding four fiscal years.
            Subpart 5, Special Programs for Students Whose Families Are 
                    Engaged in Migrant and Seasonal Farmwork
    Migrant students are one of the most severely educationally 
deprived populations in the United States. Therefore, the 
Committee believes that the Secretary, in administering the 
programs under Title IV, should take into consideration how 
such programs as Federal Pell Grants, student loans, Federal 
College Work-Study, and TRIO programs can meet the needs of 
migrant students.
    H.R. 6 continues both the College Assistance Migrant 
Program (CAMP) and the High School Equivalency Program (HEP) 
and requires grant recipients to coordinate projects with other 
local, state and Federal programs in order to maximize the 
resources available for migrant students. In addition, H.R. 6 
instructs the National Center for Education Statistics to 
collect postsecondary education data on migrant students. H.R. 
6 authorizes $15,000,000 for fiscal year 1999 and such sums for 
the succeeding four years for the HEP program and $5,000,000 
for fiscal year 1999 and such sums for the succeeding four 
years for the CAMP program.
            Subpart 6, Robert C. Byrd Honors Scholarship Program
    H.R. 6 extends the authorization for Byrd Honors 
Scholarship Program. Under this program, the Secretary makes 
grants to states to enable states to award scholarships to 
individuals who have demonstrated outstanding academic 
achievement and who show promise of continued academic 
achievement. This program is authorized to be appropriated at 
$40,000,000 for fiscal year 1999 and such sums for the 
succeeding four years for this program.
    H.R. 6 repeals Subpart 8--Special Child Care Services for 
Disadvantaged College Students.

Part B, Federal Family Education Loans

    In modifying the current Federal Family Education Loan 
(FFEL) Program, the Committee adopted recommendations from a 
wide range of program participants. The Committee's main goals 
in this reform effort were to resolve the pending crisis in the 
FFEL Program with respect to the new interest rate formula, 
improve service to students and institutions of higher 
education, and ensure the overall stability in the loan 
program. A bipartisan agreement to maintain a strong FFEL 
Program and a strong Direct Loan Program established the 
framework for the changes adopted by the Committee.
            Interest Rates
    Throughout the reauthorization process, one of the biggest 
challenges facing Members of the Committee has been attempting 
to reach a consensus on the optimal student loan interest rate 
for the Federal student loan programs. H.R. 6 establishes 
identical interest rates for loans in both the FFEL Program and 
the Direct Loan Program. These rates resulted from extensive 
discussions and negotiations over a period of many months. The 
Student Loan Reform Act of 1993 changed the index for 
establishing interest rates on these loans. Prior to the 
Student Loan Reform Act, interest rates had always been tied to 
91-day Treasury bills. However, as part of the changes 
associated with the creation of the Federal Direct Student Loan 
program, the index for establishing interest rates changed to 
one based on the 10-year Treasury bond. This rate change is 
scheduled to occur on July 1, 1998, and if not addressed will 
disrupt the Federal Family Education Loan Program (FFEL 
Program), which provides nearly 70 percent of this country's 
Federal student loans.
    After working extensively with all parties involved--The 
United States Student Association (USSA), the United States 
Public Interest Research Group (US PIRG), the American Council 
on Education (ACE), the American Association of State Colleges 
and Universities (AASCU), the National Association of 
Independent Colleges and Universities (NAICU) and other members 
of the higher education and lending communities--it became 
clear to Committee Members that there was a consensus in three 
key areas. First, all parties agreed that tying the interest 
rate to a long-term instrument like the 10-Year Treasury bond 
would not work. Second, no one believed that the Direct Student 
Loan Program would be a viable alternative in the event that 
private loan capital became unavailable. Third, as the March 5, 
1998, hearing before the Subcommittee on Postsecondary 
Education, Training and Life-Long Learning, showed the interest 
rates for lenders proposed by the Administration were too low 
to ensure widespread lender participation.
    For example, Mr. Jon Veenis, President of Norwest Student 
Loan Center, testified that ``our survey of the major FFEL 
lenders and the Ernst & Young analysis indicates that a train 
wreck will occur if the Gore proposal is enacted.'' In 
discussing theAdministration proposal, Mr. Paul Carey, 
Executive Vice President of Marketing and Servicing for Sallie Mae, 
Inc., had this to say, ``The student at Hopkins, Harvard, or Stanford 
may well get their loans . . . The students attending state schools, 
community colleges, or learning a trade will not.'' A recent report by 
the Congressional Budget Office (CBO) affirms this position, and shows 
that if the Administration's interest rates were implemented, only 
graduate and professional students at a few select colleges and 
universities would likely have access to private student loan capital.
    The Committee is keenly aware of the burden being placed on 
our youth by student loan debt. Members are committed to 
ensuring that the interest rate on Federal student loans is 
kept as low as possible while maintaining fiscal discipline 
within the Federal budget. However, the Committee also 
recognizes that there is a point at which lenders will leave 
the program. That point is reached when their return on making 
these loans falls short of the return they could make by 
investing elsewhere.
    Under this legislation, students will receive historically 
low interest rates. For new loans made after July 1, 1998, the 
interest rates borrowers will pay during the in-school and 
grace periods will be the equivalent of the 91-Day Treasury 
bond rate + 1.7 percent. During the repayment period, borrower 
interest rates will be the equivalent of the 91-Day Treasury 
bond rate + 2.3 percent. Both will remain capped at 8.25 
percent. In today's terms, this means interest rates for 
students will drop from the current rate of 8.25 percent down 
to 7.43 percent during the repayment period. This is the lowest 
interest rate on these loans in 17 years.
    At the same time, the amount lenders are paid will be 
reduced by 30 basis points, to a rate equal to the 91-Day 
Treasury bond rate + 2.2 percent during the in-school and grace 
periods, and equal to the 91-Day Treasury bond rate + 2.8 
percent during the repayment period. The Committee believes 
this solution will ensure uninterrupted access to private 
capital for our nation's students.
    The higher education community is supportive of this 
proposal. The major student groups have described this proposal 
as ``a realistic, fair, and even-handed compromise that 
protects students' need for lower borrower rates.'' The 
American Council on Education and 10 other major higher 
education groups representing over 3,600 colleges and 
universities has praised the fact that the proposal ``ensures 
the continued availability of capital in the guaranteed student 
loan program.''
    Finally, the Committee notes that the best way to reduce 
the debt burden for students is for colleges and universities 
to keep their prices low. Over the past 15 years we have seen 
college prices increase at two-to-three times the rate of 
inflation. The Committee challenges every college president in 
the nation to reduce the price of an education at his or her 
institution because the Federal student aid programs will never 
be able to keep up with costs that continue to increase at such 
a pace.
            Guaranty Agency Financing
    The new guarantor-financing model included in the Committee 
bill reflects a reformed administrative and financing structure 
that will achieve several goals of the Committee. First, the 
model provides incentives for greater efficiencies on the part 
of guarantee agencies since certain funds will now be the 
property of each individual agency. This is a major contrast to 
current law that dictates that all funds held by a guaranty 
agency belong to the Federal Government and are subject to 
recall at any time by Congress, thereby eliminating any 
incentive for guaranty agencies to operate more efficiently and 
produce savings.
    Second, the model increases the current risk sharing for 
defaults from 98% to 95% which will cause all agencies to use 
their best efforts to prevent defaults. This provision 
addresses an often-heard criticism of the FFEL Program that 98% 
risk was not sufficient to have any impact on the practices of 
guaranty agencies. Third, the model decreases funds retained on 
defaulted loans from 27% to 24%. This provision also addresses 
an often-heard criticism that guaranty agencies have an 
incentive to allow loans to default due to the high collection 
retention rate. The combination of increased risk and lower 
retention rates should result in improved default prevention 
activities and greater collection efforts in the event of 
default in order to offset the lost revenues from both of these 
provisions. These changes should silence the criticism of these 
two aspects of the FFEL Program.
    H.R. 6 clearly defines the services for which guarantors 
are paid and delineates which sources of revenue belong to the 
Federal Government (the reserve funds) and which are earned by 
the guarantor for services rendered. Revenues that remain the 
property of the Federal Government are clearly protected under 
the Committee bill in order to ensure their proper use by 
guaranty agencies, as well as their proper investment. 
Guarantors will be able to invest the non-Federal funds in new 
technology, training, and service improvements for the benefit 
of students and institutions of higher education participating 
in the FFEL Program. In addition, guarantors will be able to 
use their funds for a variety of other financial aid 
activities, such as early awareness programs, state grant and 
scholarship programs, and other financial aid related programs 
and services which meet the state and local needs of students, 
families and institutions of higher education.
    H.R. 6 also includes a new provision which allows the 
Secretary of Education and individual guaranty agencies (not to 
exceed six) to enter into voluntary agreements for 
participation in the FFEL Program. The Committee intends that 
this authority be used to test new and innovative methods for 
carrying out the types of activities currently required of 
guaranty agencies under the Higher Education Act in order to 
find more efficient and effective means of managing the FFEL 
Program.
            Administrative and Programmatic Changes
    Throughout H.R. 6, the Committee has modified provisions in 
order to encourage the use of modern technology. These changes 
range from the handling of routine inquiries to the processing 
of deferment requests. For example, the National Association of 
Student Financial Aid Administrators in their recommendations 
to Congress, suggested that borrowers be allowed to request 
forbearance electronically rather than in writing in order 
reduce the number of technical and actual delinquencies and 
defaults. The Committee strongly agrees with this 
recommendation and encourages the Secretary to allow the use of 
new technology wherever and whenever possible in order to 
promote efficiencies among all the participants in the loan 
programs. The Committee in no way intends to limit the type of 
communication technologies that may be used for these purposes 
as the possibilities expand during the course of this 
reauthorization.
    H.R. 6 corrects an oversight of the 1992 Amendments with 
respect to borrowers attending school on a half-time basis. 
Prior to the 1992 Amendments, a student attending school on a 
half-time basis was required to borrow a student loan in order 
to be eligible for an in-school deferment. The 1992 Amendments 
changed this provision so that a student would be eligible for 
a deferment without borrowing another loan. However, the change 
only applied prospectively leaving some students subject to the 
old requirement. H.R. 6 corrects this oversight and allows any 
student attending school on a half-time basis to be eligible 
for an in-school deferment.
    In order to assist students in selecting repayment plans, 
H.R. 6 allows students to annually change their repayment plan 
in order to provide flexibility if their financial 
circumstances change from year to year.
    H.R. 6 allows students to receive the benefit of a 
forbearance of payments on their student loans immediately upon 
request even though the necessary paperwork has not been filed. 
Lenders and students will have to collect the appropriate 
paperwork within sixty days in order to continue the 
forbearance. In addition, a lender must take into consideration 
a student's total debt burden when establishing a forbearance 
agreement.
    H.R. 6 continues the current provisions of the Emergency 
Student Loan Consolidation Act and allows students with FFEL 
Program loans and/or Direct Loans to obtain a consolidation 
loan from either program. In order to afford students the 
greatest option possible, the requirement that a student must 
first try to obtain a consolidation loan from a lender holding 
one of his or her loans has been eliminated. Students are free 
to go to any lender of their choice. In addition, a student who 
obtains a student loan within 180 days of receiving a 
consolidation loan may add such loan to the consolidation loan 
that provides the student the benefit of having only one loan 
to manage. The Committee deferred action on setting interest 
rates for consolidation loans and is continuing to study the 
available options for establishing rates for the FFEL Program 
and the Direct Loan Program.
    As a result of some confusion after passage of the 
Emergency Student Loan Consolidation Act, H.R. 6 also clarifies 
that a lender does not have to include Health Education 
Assistance Loans (HEAL) when making a consolidation loan. Not 
all lenders participate in the HEAL Program, and those that do 
not are not able to service HEAL loans in accordance with the 
rules and regulations of the Department of Health and Human 
Services. Also, some lenders require a minimum balance for 
processing a consolidation loan due to the fee they must pay 
the Federal Government with respect to consolidation loans. 
H.R. 6 clarifies that a lender is not prohibited from 
establishing a minimum balance requirement.
    H.R. 6 allows loans to students to be disbursed in a single 
disbursement if the loan is for less than one semester, one 
trimester, one quarter or four months. Students and financial 
aid administrators have all requested that the Committee adopt 
this change. Requiring multiple disbursements for very short 
periods of time has proven to cause undue and unnecessary 
hardships on students and unnecessary administrative burdens on 
institutions.
    The Committee has also adopted the recommendation of many 
institutions of higher education to allow an over award 
tolerance of $300 in the FFEL and Direct Loan Programs. The 
Committee believes this modest over award tolerance is low 
enough to prevent a student from incurring unreasonable excess 
debt, but high enough to avert costly administrative burdens 
for institutions. The $300 limit is comparable to the over 
award tolerance currently allowed in other title IV programs.
    In an effort to promote deregulation and provide incentives 
to institutions that keep default rates low, the Committee has 
included a provision to waive the 30-day delayed disbursement 
rule for institutions having cohort default rates of less than 
10% for three consecutive years. The Committee estimates that 
approximately 2,000 institutions will benefit from this 
deregulation initiative. However, any institution that fails to 
stay below the 10% in subsequent years will again be subject to 
the delayed disbursement requirement.
    The Committee has continued the authority of the Secretary 
to undertake a program to encourage corporations and other 
private and public employers to assist borrowers in repaying 
their loans. The Committee encourages the Secretary to use this 
authority to implement new and positive ways to assist 
borrowers in managing their loan repayment.
    Since the 1992 Amendments, great strides have been made in 
the area of program simplification. There is a single 
application known as the Free Application for Federal Student 
Aid (FAFSA), a single need analysis formula, standardized forms 
and processes implemented by guaranty agencies and many other 
improvements. The Committee commends all the parties for their 
efforts in promoting simplification and encourages the 
continuation of those projects. But, the Committee believes 
there is more to be done. Specifically, H.R. 6 requires the 
Secretary to use the FAFSA as the common form for both the FFEL 
and Direct Loan Programs, instead of only the Direct Loan 
Program. H.R. 6 also directs the Secretary, in cooperation with 
representativesinvolved in the financial aid programs, to 
develop a master promissory note that will allow for multiyear lines of 
credit bringing efficiencies and simplicity to the process of receiving 
student loans.
    H.R. 6 continues the current cohort default rate provisions 
that result in the elimination of institutions from 
participation in the student loan programs if an institution's 
rates exceed 25% for three consecutive years. However, the 
Committee has made modifications to the appeal provisions 
available to institutions and to the exemption for Historically 
Black Colleges and Universities, Tribally Controlled Colleges 
and Universities and Navajo Community College.
    In recognition of the fact that some institutions have high 
cohort default rates because they serve a student population at 
high risk of default, a safety net was enacted that permits the 
Secretary to exempt schools from the cohort default provision 
where exceptional mitigating circumstances make the application 
of the default triggers inequitable. This safety net, as 
defined by the Department of Education, has proven to be 
impossible to meet due to the narrowly defined circumstances 
under which an institution may qualify for an exemption.
    H.R. 6 explicitly defines the criteria for demonstrating 
exceptional mitigating circumstances that the Secretary is to 
follow when rendering a decision with respect to an appeal 
under this provision. The exceptional mitigating circumstance 
appeal will continue to prove to be difficult for an 
institution to meet. They will have to serve a large number of 
low-income students, graduate a large percentage of their 
students, and place a large percentage of their students in 
jobs for which they have been trained. The Committee is aware 
of the difficulty of meeting such a standard. However, after 
carefully weighing the interest of students and the Federal 
Government, the Committee determined that the test reflected in 
H.R. 6 will be fair to those institutions that have a high 
success rate while serving a high-risk population.
    In order to allow an institution to prepare a meaningful 
appeal, the Committee has revised the current provision dealing 
with access to loan servicing records. An institution needs 
adequate access to records in order to submit an appeal to the 
Secretary. Therefore, the Committee has included language that 
provides institutions with access to all relevant loan 
servicing records for both the FFEL and Direct Loan Programs. 
It is the Committee's intention that the Secretary exclude any 
loans which were not properly serviced and therefore ineligible 
for insurance as demonstrated by the evidence in considering 
appeals with respect to cohort default rates.
    On July 1, 1998, the exemption from program elimination due 
to high default rates for Historically Black Colleges and 
Universities, Tribally Controlled Colleges and Universities and 
the Navajo Community College will expire. These institutions 
have been exempt from this provision since its enactment in 
1988. The exemption was intended to recognize the particular 
challenges of enrolling high risk students at institutions 
having limited administrative resources. The Committee believes 
that it is time to remove this blanket exemption. However, the 
Committee does not wish to cause the precipitous closure of any 
institution. Therefore, H.R. 6 allows an institution that has 
relied on the current exemption for program eligibility 
purposes to remain eligible as long as the institution complies 
with the following requirements:
          (i) provides an acceptable default management plan to 
        the Secretary of Education that provides a reasonable 
        assurance that the institution will, by July 1, 2001, 
        have a cohort default rate that is less than 25%;
          (ii) engages an independent third party to assist in 
        implementing such a plan; and,
          (iii) provides the Secretary with evidence of 
        improvement in the institution's cohort default rate 
        and successful implementation of the default management 
        plan.
    The Secretary may continue the eligibility of an 
institution under this provision if he is satisfied that the 
institution has complied and continues to comply with the 
default management plan and has made substantial improvement in 
its cohort default rate.
    The Committee has included a special rule which reflects 
the regulation published by the Department of Education 
exempting institutions from the cohort default rate penalty if 
the institution has a participation rate index that is equal to 
or less than .0375 for any of the three most recent fiscal 
years. This provision was included in order to address the 
Committee's concern that schools not be eliminated if they have 
very few student loan borrowers compared to their overall 
enrollment.
    H.R. 6 modifies slightly the definition of eligible lender 
for purposes of participation in the FFEL Program and deletes 
an obsolete provision that requires the filing and maintenance 
of a plan for doing business by certain participants in the 
program.

Part C, Federal Work-Study Program

    The Committee strongly supports the Federal College Work-
Study Program and applauds the administration for its efforts 
to increase the number of participants to over one million in 
the 1999-2000 academic year. In support of this target, the 
Committee has increased the authorization of appropriations for 
College Work-Study to $1,000,000,000 for fiscal year 1999 and 
such sums for the succeeding four years.
    The Committee has made several changes to College Work-
Study designed to better serve the needs of students and 
institutions of higher education. In addition, the Committee 
has included language from Chairman Goodling's Reading 
Excellence Act in order to encourage more work study students 
to perform literacy and tutoring activities in local elementary 
schools.
    H.R. 6 expands the definition of community service to 
recognize that services designed to improve the quality of life 
for community residents may be performed on-campus or off-
campus. Under current law, community service activities are 
required to be conducted off-campus, which restricts the number 
and type of services that can beoffered by an institution of 
higher education. If an institution of higher education can offer a 
valuable service to the community on-campus, the Committee believes it 
should be allowed to do so.
    The Committee has modified the campus-based formula for 
College Work-Study in the same fashion as was done for the SEOG 
Program. The current formula distributes funds according to a 
two-part statutory formula. The first part, the ``base 
guarantee'' considers an institution's program expenditures in 
a previous year. The second part, based on institutional need 
for additional funding, allocates the amount remaining after 
the base guarantees are fully funded by providing one-fourth of 
the remaining funds to institutions on a pro rata basis (pro 
rata) and three-fourths to institutions based on the 
institutions need (fair share). Since 1986, an institution's 
base guarantee has been the principal determinant of its 
current-year allocation. Thus, today's allocation of campus-
based funds largely reflects a 20-year old distribution of 
program funds.
    In recognition of the changing demographics on college 
campuses, the Committee has decided to modify the formula for 
distributing campus-based funds. At the same time, the 
Committee does not want to cause a disruption at campuses 
across the country that could occur if there are dramatic 
shifts in program funds between institutions. Therefore, the 
Committee decided to modify the formula by dropping the pro 
rata part and allowing all funds in excess of the base 
guarantee amounts to be distributed on a fair share basis. Such 
a change should allow institutions with increasing enrollments 
and populations of needy students to receive increases in 
campus-based funding.
    H.R. 6 intends to expand the tutoring and literacy 
activities performed via the College Work Study Program by 
requiring institutions to use at least 2% of the total funds 
received under the program for these activities. Of the $830 
million appropriated for College Work-Study in fiscal year 
1998, $16 million would be allotted for these activities under 
H.R. 6. The provision included in H.R. 6 was taken from 
Chairman Goodling's Reading Excellence Act that passed the 
House of Representatives on November 9, 1997. Work-study 
students will be able to participate as reading tutors for 
children in preschool through elementary school or work in 
family literacy projects under this provision. Because these 
jobs are not always convenient to campus, the Committee has 
modified the existing work-study reimbursement provision to 
allow students to be compensated for time spent in both 
training and travel that is directly related to the tutoring 
and family literacy activities.
    H.R. 6 requires that institutions of higher education make 
Work-Study funds available to independent and part-time 
students. However, the Committee has deleted the overly 
restrictive requirement included in the 1992 amendments that 
required a strict proportion of funds to be allocated to these 
students. The Committee intends that while institutions are 
given discretion in allocating an equitable amount of funds for 
nontraditional students, this discretion should not result in a 
reduction of funds for these students. The Committee intends to 
closely follow this matter in order to ensure that 
nontraditional students continue to receive fair participation 
in the Work-Study Program.
    H.R. 6 continues the language included in the 1992 
amendments to allow institutions to carry back appropriations 
from current year funds to pay for previous year commitments. 
This is to correct a problem presented to the Committee by 
institutions of higher education. Many students begin summer 
work-study prior to July 1, the beginning of the fiscal year, 
but after the academic year ends in May or June. They, 
therefore, earn funds during one fiscal year which are not 
payable until the succeeding fiscal year. As a result, 
institutions currently incur enormous accounting and tracking 
problems. In addition, H.R. 6 allows institutions to credit a 
student's account or make direct deposits to a student's bank 
account with the student's permission. Since we have entered 
the era of electronic banking, it no longer makes sense to 
require each institution to cut checks in order to pay work-
study earnings.
    H.R. 6 increases the allotment of funds that may be used 
for the Job Location and Development Program from $50,000 to 
$60,000 and expands the type of jobs that may be located or 
developed to include cooperative education jobs. If funds are 
used for developing cooperative education jobs, the institution 
must notify the Secretary and provide assurances that the funds 
used under this paragraph will supplement and not supplant 
other available cooperative education funds and the cooperative 
education job will be related to a student's academic program.
    The Committee continues the authorization for Work Colleges 
and authorizes appropriations of $5,000,000 for 1999 and such 
sums for the four succeeding fiscal years.

Part D, Federal direct loans

    Part D of Title IV of H.R. 6 continues the Federal Direct 
Loan Program and the Committee assumes it will coexist with the 
Federal Family Education Loan Program. All references to the 
phase-in of the program and transition to the Direct Loan 
Program have been deleted. Institutions that wish to 
participate in the program are free to apply as long as they 
meet the eligibility criteria.
    H.R. 6 establishes identical interest rates for Federal 
Direct Loans as compared to loans made under the Federal Family 
Education Loan Program. This resulted from extensive 
discussions and negotiations with respect to interest rates 
with all participants in the student loan programs. Throughout 
the reauthorization process, one of the biggest challenges 
facing Members of the Committee has been addressing the 
interest rate offered in the Federal student loan programs. The 
Student Loan Reform Act of 1993 changed the index for 
establishing interest rates on these loans. Prior to the 
Student Loan Reform Act, interest rates had always been tied to 
91-day Treasury bills. However, as part of the changes 
associated with the creation of the Federal Direct Student Loan 
Program, the index for establishing interest rates changed to 
one based onthe 10-year Treasury bond. This rate change is 
scheduled to occur on July 1, 1998, and if not addressed will disrupt 
the Federal Family Education Loan program (FFEL), which provides nearly 
70 percent of this country's Federal student loans.
    After working extensively with all parties involved--The 
United States Student Association (USSA), the United States 
Public Interest Research Group (US PIRG), the American Council 
on Education (ACE), the American Association of State Colleges 
and Universities (AASCU), the National Association of 
Independent Colleges and Universities (NAICU) and other members 
of the higher education and lending communities--it became 
clear to Committee Members that there was a consensus in three 
key areas. First, all parties agreed that tying the interest 
rate to a long-term instrument like the 10-Year Treasury bond 
would not work. Second, no one believed that the Direct Student 
Loan Program would be a viable alternative in the event that 
private loan capital became unavailable. Third, as the March 5, 
1998, hearing before the Subcommittee on Postsecondary 
Education, Training and Life-Long Learning showed, the interest 
rates for lenders proposed by the Administration were too low 
to ensure widespread lender participation. A recent report by 
the Congressional Budget Office (CBO) affirms that position, 
and shows that if the Administration's interest rates were 
implemented, only graduate and professional students at a few 
select colleges and universities would be likely to have access 
to private student loan capital.
    The Committee is keenly aware of the burden being placed on 
our youth by student loan debt. Members are committed to 
ensuring that the interest rate on Federal student loans is 
kept as low as possible. However, the Committee also recognizes 
that there is a point at which lenders will leave the program. 
That point is reached when their return on making these loans 
falls short of the return they could make by investing 
elsewhere.
    Under H.R. 6, students will receive historically low 
interest rates. For new loans made after July 1, 1998, the 
interest rates borrowers will pay during the in-school and 
grace periods will be the equivalent of the 91-Day Treasury 
bond rate + 1.7 percent. During the repayment period, borrower 
interest rates will be the equivalent of the 91-Day Treasury 
bond rate + 2.3 percent. Both will remain capped at 8.25 
percent. In today's terms, this means interest rates for 
students will drop from the current rate of 8.25 percent down 
to 7.43 percent during the repayment period. This is the lowest 
interest rate on these loans in 17 years.
    At the same time, the amount lenders are paid will be 
reduced by 30 basis points, to a rate equal to the 91-Day 
Treasury bond rate + 2.2 percent during the in-school and grace 
periods, and equal to the 91-Day Treasury bond rate + 2.8 
percent during the repayment period. The Committee believes 
this solution will ensure uninterrupted access to private 
capital for our nation's students.
    The higher education community is supportive of this 
proposal. The major student groups have described this proposal 
as ``a realistic, fair, and even-handed compromise that 
protects students' need for lower borrower rates''. The 
American Council on Education and 10 other major higher 
education groups representing over 3,600 colleges and 
universities have praised the fact that the proposal ``ensures 
the continued availability of capital in the guaranteed student 
loan program''.
    Finally, the Committee notes that the best way to reduce 
the debt burden for students is for colleges and universities 
to keep their prices low. Over the past 15 years we have seen 
college prices increase at two-to-three times the rate of 
inflation. The Committee challenges every college president in 
the nation to reduce the price of an education at his or her 
institution.
    H.R. 6 also provides the Secretary of Education with the 
ability to offer repayment incentives to borrowers to encourage 
on-time repayment. Currently, many lenders in the Federal 
Family Education Loan Program offer discounts to borrowers who 
repay their loans on time and the Committee has extended the 
same opportunity to direct loan borrowers. In order to exercise 
this authority, the Secretary will have to ensure that such a 
program can operate on a cost neutral basis and not increase 
costs to the taxpayer.
    Section 458 of Part D has been modified to reflect the new 
payment structure adopted in H.R. 6 with respect to payments 
made to guaranty agencies. Under the revised structure, the 
Committee determined that slight increases in the yearly 
funding levels under 458 were necessary in order to allow the 
Direct Loan Program and the Federal Family Education Loan 
Program to both operate at their current levels.
    H.R. 6 gives the Secretary of Education, in consultation 
with the Secretary of the Treasury, the authority to sell loans 
if it is determined to be in the best interest of the Federal 
Government. The Secretary may use funds from any such sales to 
offer repayment incentives to direct loan borrowers.
            Loan Forgiveness for Teachers for Part B and Part D Loans
    The Committee adopted an amendment offered by 
Representative Graham (R-SC) and Representative Kildee (D-MI) 
which created a loan forgiveness program for teachers in both 
the FFEL and Direct Loan Programs.
    The Committee authorized this new program in order to 
address concerns about the quality of teachers in low-income 
schools and the ability of such schools to retain good 
teachers. A new borrower who takes out a loan may be eligible 
for loan forgiveness if he or she teaches in a public or other 
non-profit private elementary or secondary school which is in a 
school district eligible for assistance pursuant to Title I of 
the Elementary and Secondary Education Act and which has been 
determined to be a school in which the enrollment of children 
counted under section 1124(c) of the Elementary and Secondary 
Education Act exceeds 30 percent of the total enrollment of the 
school. To be eligible for loan forgiveness, a borrower must 
teach for two complete academicyears and upon concluding the 
third academic year, he or she would be eligible for 30% loan 
forgiveness, 30% upon concluding the fourth year and 40% upon 
concluding the fifth year of teaching.
    Only loans borrowed for the final two academic years of a 
four-year program, or three in the case of a program of 
instruction normally requiring five years, are eligible for 
loan forgiveness. In addition, secondary school teachers must 
have majored in the subject area in which they are teaching to 
be eligible for loan forgiveness. An elementary school teacher 
must demonstrate, in accordance with state teacher 
certification or licensing requirements, subject matter 
knowledge and teaching skills in reading, writing, mathematics 
and other subjects taught in elementary schools in order to be 
eligible for loan forgiveness.
    By creating this new loan forgiveness program, the 
Committee hopes that more students will enter the field of 
teaching and teach in areas where there is a shortage of highly 
qualified teachers. In addition, by requiring teachers to 
complete three years of teaching before a portion of their loan 
is forgiven, the Committee hopes more teachers will stay in the 
teaching profession.

Part E, Federal Perkins Loans

    The Committee has modified the campus-based formula in a 
way identical to its treatment of the other campus-based 
programs (SEOG and College Work-Study). The current formula 
distributes funds according to a two-part statutory formula. 
The first part, the ``base guarantee'' considers an 
institution's program expenditures in a previous year. The 
second part, based on institutional need for additional 
funding, allocates the amount remaining after the base 
guarantees are fully funded by providing one-fourth of the 
remaining funds to institutions on a pro rata basis (pro rata) 
and three-fourths to institutions based on the institutions 
need (fair share). Since 1986, an institution's base guarantee 
has been the principal determinant of its current-year 
allocation. Thus, today's allocation of campus-based funds 
largely reflects a 20-year-old distribution of program funds.
    In recognition of the changing demographics on college 
campuses, the Committee has decided to modify the formula for 
distributing campus-based funds. At the same time, the 
Committee does not want to cause a disruption at campuses 
across the country that could occur if there are dramatic 
shifts in program funds between institutions. Therefore, the 
Committee decided to modify the formula by dropping the pro 
rata part and allowing all funds in excess of the base 
guarantee amounts to be distributed on a fair share basis. Such 
a change should allow institutions with increasing enrollments 
and populations of needy students to receive increases in 
campus-based funding.
    In addition to the formula change, the Committee has made 
numerous changes designed to reduce the administrative burdens 
associated with the Perkins Loan Program in order to assist 
institutions and students. Institutions participating in the 
Perkins Loan Program that have default rates of less than 20 
percent and fewer than 100 students who borrow in an academic 
year will no longer be required to submit default management 
plans. The Committee believes that this de minimis standard 
will allow institutions with few Perkins Loans to avoid a 
prescriptive management plan while it employs its own 
innovative efforts to reduce defaults. Institutions will be 
allowed to extend new deferment and loan cancellation options 
to new and old borrowers in order to ease the administrative 
burden associated with deferment and cancellation processing.
    H.R. 6 also requires that institutions of higher education 
shall make Perkins funds available to independent and part-time 
students. However, the Committee has deleted the overly 
restrictive requirement included in the 1992 amendments that 
required a strict proportion of funds to be allocated to these 
students. The Committee intends that while institutions are 
given discretion in allocating an equitable amount of funds for 
nontraditional students, this discretion should not result in a 
reduction of funds for these students. The Committee intends to 
closely follow this matter in order to ensure that 
nontraditional students continue to receive fair participation 
in the Perkins Loan Program.
    In order to assist students in the repayment of their 
loans, the Committee has more broadly defined the term 
``satisfactory arrangements to resume payment'' in order to 
assist borrowers who are making a good faith effort to repay 
their loans. The Committee also requires institutions to notify 
credit bureaus whenever a borrower makes twelve consecutive 
monthly payments on his or her defaulted Perkins Loan in order 
to reflect the good faith effort to repay.
    In H.R. 6, the Committee has shown its support of programs 
designed to encourage good repayment behavior on the part of 
student borrowers by allowing lenders in the Federal Family 
Education Loan Program and the Secretary in the Federal Direct 
Loan Program to offer repayment incentives to borrowers with 
good repayment histories. Therefore, the Committee has extended 
this authority to institutions participating in the Perkins 
Loan Program as long as it does not increase the net cost of 
the Perkins Loan Program to the Federal Government.
    The Committee has also included a loan rehabilitation 
provision that allows borrowers to regain eligibility for 
student aid after making twelve consecutive on-time payments on 
a loan that is in default status. Both the incentive program 
and the rehabilitation program are designed to encourage 
borrowers to repay their loans on a timely basis.
    In order to assist students who attended an institution 
that closed while they were enrolled, the Committee has 
extended the current discharge provisions available to 
borrowers under parts B and D to the Perkins Loan Program. If a 
student attends an institution that closes while the student is 
enrolled, he or she is entitled to a discharge of any amounts 
which should have been refunded by the institution and the 
Secretary will pursue the institution for restitution.
    H.R. 6 makes two small changes to the existing cancellation 
provisions by including two new eligibility categories with 
respect to loan cancellation. A student who is a member of the 
Commissioned Corps of the Public Health Service of the United 
States and a student who is a non-physician mental health 
professional working in a shortage area designated under the 
Public Health Service Act will be eligible for loan 
cancellation.
    H.R. 6 requires the Secretary of Education to return all 
funds collected by the Department to the Treasury and makes 
other necessary and technical changes to the Perkins Loan 
Program.

Part F, need analysis

            Single need analysis
    H.R. 6 continues the single need analysis formula included 
in the 1992 Amendments and makes technical changes designed to 
improve the formula for students and families. The Committee 
believes that the current single need analysis system has 
greatly simplified the student aid process and that only minor 
adjustments are required to make it more equitable and 
justifiable for students and their parents.
            Cost of attendance
    H.R. 6 recognizes that computers are more often essential 
rather than optional for students pursuing a postsecondary 
education and that the costs associated with computers has 
become increasingly more reasonable during the last few years. 
Therefore, the Committee decided to include an allowance for 
the rental or purchase of a personal computer when determining 
a student's cost of attendance.
            Expected family contribution for dependent students
    H.R. 6 combines parent and student assets and treats them 
as family assets for purposes of determining the family 
contribution from assets. This is a significant change from 
current law. Currently, parental assets are calculated and 
assessed at a rate of twelve percent for inclusion in 
determining the contribution from assets. On the other hand, a 
student's assets are assessed at a rate of 35% when determining 
a student's contribution from his or her assets. This high rate 
of assessment has caused many to question the prudence of 
working and saving for college since a student will be eligible 
for less aid if he or she works and saves. The Committee 
believes that students should be encouraged to work and save 
for college. The Congress has already moved in that direction 
by enacting the Taxpayer Relief Act of 1997 which provides tax 
credits and deductions, and promotes increased savings options 
for certain higher education expenses. The combining of student 
and parent assets and using the twelve percent assessment rate 
continues this effort to encourage savings by protecting the 
student who has been prudent and saved for college.
            Dependent student contribution
    The current need analysis fails to recognize that some 
dependent students contribute directly to the support of their 
families. The Committee has attempted to address this inequity 
by offsetting a dependent student's income by the amount of the 
negative adjusted parental available income. When the parent's 
income is not sufficient to meet standard living expenses and 
the formula yields a negative available income, the formula 
will allow the offsetting of the student's income by the 
negative amount. In addition, H.R. 6 increases the earnings a 
dependent student is allowed to exclude from the need analysis 
calculation from $1,750 to $3,000. Again, the Committee wants 
to encourage students to work and save for college and the 
increased income protection allowance is designed to eliminate 
the disincentives to work currently included in the need 
analysis formula.
            Independent students
    The Committee also attempted to correct current inequities 
in the treatment of independent students under Part F. H.R. 6 
attempts to make postsecondary education more accessible for 
non-traditional students, many of whom are independent students 
by increasing the income protection allowance for certain 
categories of independent students. Under the current need 
analysis formula, single independent students and married 
students where both are enrolled have an income protection 
allowance of $3,000. Married students where one is enrolled 
receive an income protection allowance of $6,000. Similar to 
the dependent students described above, the Committee wants to 
encourage students to work and save for college without fear of 
being penalized in the need analysis calculation. Therefore, 
the Committee has provided for increased income protection 
allowances for these groups of students equal to $5,500 and 
$8,500 respectively.
            Miscellaneous
    An additional change with respect to income protection 
allowances included in H.R. 6 which the Committee believes 
important is the authority of the Secretary to adjust the 
stated amounts on a yearly basis pursuant to the Consumer Price 
Index. Income protection allowances for the parents of 
dependent students are adjusted each year, while income 
protection allowances for a dependent student with earnings and 
independent students remain constant. The Committee believes 
that Consumer Price Index adjustments are appropriate for all 
students and parents.
    Numerous witnesses testified before the Committee that 
students from families with proven need were being discouraged 
from participation in postsecondary education because of 
complicated forms that were not relevant to their situation. 
The Committee believes that very low-income families should 
have their eligibility for financial assistance determined with 
the least amount of bureaucratic red tape as possible. Forthis 
reason, the Committee has decided to keep in place the special 
procedures for determining a zero expected family contribution for the 
purposes of determining Federal student financial assistance 
eligibility and the simplified needs test.
    Further, it is the Committee's intent to provide financial 
aid administrators with the authority to modify standard 
procedures when unusual circumstances exist. Although the 
Committee is confident that the system of need analysis 
prescribed under this title is appropriate for the majority of 
aid applicants, it remains our desire to permit necessary 
adjustments for students whose situations are not typical or 
for those students with special conditions. However, the 
Committee does not believe that the application process or the 
need analysis should be burdened with the detail necessary to 
identify and specify the appropriate treatment for every 
conceivable special circumstance. Adjustments for families in 
these circumstances are better made on an individual basis by 
the financial aid administrator on campus, using all available 
information about the family.
    The Committee does want to mention some examples of special 
circumstances that have been brought to the Committee's 
attention. These include tuition expenses at a private 
elementary or secondary school, medical or dental expenses not 
covered by insurance, unusually high child care expenses, 
recent unemployment of a family member or other changes in 
income or assets or a student's status. However, these examples 
are not intended to limit in any way either the types of 
adjustments that may be made or the circumstances under which 
adjustments may be made.
    The Committee heard from many college administrators who 
wish to be able to refuse to certify loans for certain classes 
or categories of students. On the other hand, many students 
strongly opposed such a blanket policy with respect to loan 
eligibility. After lengthy discussions, the Committee did not 
agree with the policy of giving institutions blanket authority 
to deny or limit loans to certain groups of students. However, 
the Committee does believe that circumstances exist where 
financial aid administrators should have the authority on a 
case by case basis to deny or limit loan eligibility to 
particular students. Despite the existence of similar authority 
in current law, many student financial aid administrators 
appear to feel that any changes they might make to a loan 
certification will be subject to adverse findings by program 
reviewers.
    The intent of the revisions in Section 479A is to clarify 
that financial aid administrators have the authority to limit 
borrowing with respect to individual students as long as the 
reason for the limitation is documented and provided in written 
form to the student affected by the decision and the student is 
afforded an opportunity to appeal such a decision. The 
Committee expects that institutions will not use this authority 
unless such limitations are in the best interest of students, 
and that any limitation will not result in the inability of a 
potential student to attend an institution of higher education.
            Definitions
    H.R. 6 also makes one definitional change with respect to 
the treatment of veterans benefits. In order to provide greater 
support to service members who are transitioning to civilian 
life, the Committee decided to change the treatment of veterans 
benefits provided under the Montgomery G.I. Bill. These 
particular benefits will now be treated identical to benefits 
received under the National and Community Service Act and will 
no longer be treated as estimated financial assistance for 
purposes of the need analysis formula.

Part G, general provisions

    In amending this Part of the Higher Education Act, the 
Committee intends to simplify participation in the Federal 
financial aid programs for students and institutions, while at 
the same time preserving the integrity of the Federal student 
assistance programs and to prevent fraud and abuse in the 
programs.
            Master Calendar
    In its review of the Higher Education Act, the Committee 
continues the master calendar limitations on the effective date 
of regulations issued by the Secretary. The Committee continues 
to believe that the effective dates of all regulations on Title 
IV should be driven by the Master Calendar requirements in 
Section 482. H.R. 6 also adds to the list of activities 
governed by the master calendar a requirement that the 
Secretary notify eligible institutions, guaranty agencies, 
lenders, and other interested parties of the minimal hardware 
and software requirements necessary to administer the Title IV 
programs by December 1st prior to the start of the award year. 
As we modernize our Federal financial aid systems, and as 
institutions take advantage of the latest technologies to 
improve their operations, it is essential that institutions 
have adequate notice of the technological requirements of 
participation. It is the intent of the Committee that the 
Secretary provide that information in a timely manner. A 
provision added by Rep. Barrett (R-NE) extends that requirement 
to include interested software providers on the list of 
entities that are to receive these specifications by the 
December 1st deadline. In order to ensure that financial aid 
administrators and others have the necessary administrative 
knowledge for participation in the Title IV programs, the 
Secretary is further directed to conduct training activities in 
a timely manner, prior to the start of the award year.
    H.R. 6 also extends the amount of time that the public has 
to comment on regulations proposed by the Secretary from 30 
days to a minimum of 60 days. Throughout the hearing process, 
the Committee repeatedly heard from the public that they did 
not have enough time to thoroughly read proposed regulations 
and provide sound comment. This situation has worsened, as the 
Department has released several proposed regulations 
simultaneously in order to meet the deadlines for 
implementation imposed by the master calendar. It is the intent 
of the Committee that the public has adequate time to analyze 
and comment on any regulation proposed by the Secretary. 
TheCommittee further expects the Secretary to fully take into account 
those comments prior to issuing final regulations under Title IV.
            Forms and regulations
    One of the major goals of the Committee during this 
reauthorization is to simplify the process for applying for 
Federal aid for students and their parents. In testimony 
presented to the Committee, students informed us that the 
complexity of the forms caused confusion, and in some cases 
deterred students from applying for financial aid. As a result, 
the Committee made changes to the need analysis in Part F and 
the application form in Part G.
    As part of the Committee's paperwork simplification 
initiative, H.R. 6 extends the use of a single form to the 
application for student loans under Part B. Currently, the Free 
Federal form can be used to apply for Title IV grant aid, Title 
IV Work Study aid, and student loan aid, but only if the 
student intends to borrow under the Federal Direct Student Loan 
program. Students borrowing under the Federal Family Education 
Loan program are still required to take the unnecessary step of 
filling out a separate second application in order to apply for 
their student loans. It is the intent of the Committee in 
approving these provisions to simplify the financial aid 
process for students and families by allowing them to apply for 
all of their Federal financial aid at one time on one form.
    In addition, H.R. 6 directs the Secretary to develop an 
electronic version of the Free Application for Federal Student 
Aid (FAFSA) within 120 days of enactment of this legislation. 
It is the intent of the Committee that in so doing, the 
Secretary should consult with lenders, State guarantee 
agencies, State grant agencies, representatives of the higher 
education community, and other relevant participants in the 
Federal student financial assistance programs. It is the hope 
of the Committee that the use of a common electronic form will 
further simplify the process for the students who choose to use 
it, and reduce the amount of time necessary to process Federal 
financial aid awards. In designing the electronic version of 
the FAFSA, the Committee expects the Secretary to take 
necessary steps to ensure that adequate safeguards are in place 
to protect the integrity and confidentiality of the data 
collected.
    H.R. 6 continues the requirement that students apply for 
Federal student financial assistance on a Federal form that 
will be free of charge to the student, whether the data is 
collected by paper form or electronically. The Committee 
intends that the Secretary maintain a single Federal financial 
aid form for all students applying for Federal aid. The 
Committee further intends students to know that they are 
receiving Federal aid, understand which data elements are 
required of them by the Federal Government, and be aware that 
there is no charge whatsoever in applying for aid using the 
Federal form.
    In our efforts to build upon previous simplification 
efforts, H.R. 6 continues the use of the simplified application 
process for students from families with low incomes. The 
Committee encourages the Secretary to require these families to 
answer only demographic questions, a question on their income 
and then be able to bypass the remainder of the application.
    H.R. 6 also continues the use of a streamlined application 
process for Federal financial aid recipients who are reapplying 
for Federal aid. The Committee believes that students should 
only have to update information from their previous year's 
application that has changed. This is consistent with the 
Committee's efforts to continue practices that are working to 
simplify the current application process for students and their 
families.
            Student eligibility
    H.R. 6 makes changes to the Federal student financial aid 
form in an effort to reduce fraud in the program. Specifically, 
this legislation will allow the Secretary to better verify 
parental income data supplied by dependent students.
    The Committee also included a provision that Representative 
Solomon (R-NY) has long championed that denies Federal aid to 
persons convicted of drug-related offenses. A similar provision 
was also included in the Taxpayer Relief Act of 1997. The 
amendment offered to H.R. 6 by Representative Souder (R-IN) and 
accepted by the Committee provides that a student loses 
eligibility for one year for the first conviction on a 
possession offense, two years for the second conviction and 
indefinitely for the third conviction. Further, a student would 
lose eligibility for Title IV funds for two years for his or 
her first conviction for the sale of a controlled substance and 
indefinitely for the second conviction. The Committee intends 
that a student whose eligibility has been suspended would 
resume eligibility prior to the designated time if the student 
satisfactorily completes a drug rehabilitation program that 
complies with criteria prescribed by the Secretary.
            Information for students
    The Committee is aware that information on private or State 
sources of funding for students may be difficult to obtain. To 
ensure that this information is readily available to students 
and parents, H.R. 6 directs the Secretary to compile 
information on State prepaid tuition programs, and to update 
the Department's internet site to include direct links to 
databases containing information on public and private 
financial aid programs. The Committee intends that students and 
parents have access to the most complete information available 
regarding student financial assistance. However, the Committee 
expects the Secretary to take necessary safeguards to ensure 
that links are not provided to sources of fraudulent 
information, and that any site to which links are provided will 
be free of charge to the student.
            Campus crime provisions
    Over the years since the initial passage of the Crime 
Awareness and Campus Security Act of 1990, the Committee has 
been encouraged to make several changes to this law toincrease 
its effectiveness in providing students with important information on 
campus crimes. The Committee has made several changes to current law to 
reflect the recommendations of students, institutions of higher 
education, campus officials and security personnel, and others 
interested in protecting students and reducing campus crime.
    The Committee would, however, like to point out that our 
primary concern is insuring that participating schools comply 
with current law. We have been disappointed over the past few 
years at the growing number of reports about schools 
circumventing current law or failing to provide accurate 
information to students and faculty and others to whom such 
information is required to be made available. We again 
encourage the Department of Education to enforce the provisions 
of current law and to penalize those schools that are not in 
compliance.
    Several of the changes to current law focus on providing 
students with a more accurate picture of the criminal activity 
that takes place on their respective campus.
    The first of these changes is to increase the number of 
crimes for which statistics are to be reported. When the Crime 
Awareness and Campus Security Act was enacted on November 8, 
1990, it was the intent of Congress to focus on those crimes 
most likely to involve violence or which had the potential to 
result in injury to students or faculty. In response to 
concerns about the lack of available information on the crimes 
of manslaughter, larceny and arson, the Committee has added 
these to the list of crimes for which statistics are to be 
reported.
    The second change made by the Committee was to require the 
reporting of statistics for those crimes handled through the 
campus disciplinary system. While the Committee understands the 
sensitive nature of some of these crimes, we believe it will 
not jeopardize the confidential nature of these proceedings to 
require the reporting of statistics. If students are to take 
steps to protect themselves from becoming the victims of crimes 
on campus, they must have access to accurate information on the 
extent to which certain crimes take place on their campus.
    Similarly, the Committee has expanded the number of 
individuals who must report statistics on campus crime. Current 
law requires the reporting of criminal offenses reported to 
campus security authorities or local police agencies. The 
Committee bill expands this list to include campus security 
authorities, campus officials who have direct administrative 
responsibility for student or campus activities, disciplinary 
officers and other officials responsible for resolving 
disciplinary matters, athletic department officials, or local 
police agencies. Because of the confidential nature of 
conversations between counselors and individuals seeking their 
assistance, the Committee does not require such individuals to 
report.
    The Committee has also modified the reporting requirements 
for alcohol, drug and weapons violations. Currently schools 
only report on the number of arrests for such violations. 
However, it has come to our attention that the majority of such 
violations do not result in actual arrests but are referred, 
instead, to the campus disciplinary system for disposition. 
Because of the correlation between violent crimes on campus and 
the consumption of drugs and alcohol, the Committee believes it 
is important to receive accurate information on the extent to 
which drugs and alcohol are a problem on campus.
    One of the key changes to current law is to require each 
institution maintaining either a police or security department 
of any kind to make, keep and maintain a daily log recording 
all crimes. This log is to be open to public inspection during 
normal business hours within two business days of the initial 
report. The log is to include information on all crimes 
reported to such police or security department, including the 
nature, date, time, and general location of each crime and the 
disposition of the complaint, if known. It is the intent of the 
Committee that students and others interested in obtaining 
current information on campus crimes be able to access such 
information from daily logs. The Committee does not, however, 
intend information protected by law to be released and has 
included language to prevent the disclosure of such 
information.
    The final change made to current law by the Committee is to 
require all schools to provide campus crime statistics to the 
Secretary on a yearly basis. The intent of this provision is 
two-fold. First, it will allow the Department of Education to 
determine more clearly which schools are not in compliance with 
the reporting requirements of this law. It is not, however, the 
intent of the Committee to impose an additional paperwork 
burden on schools. Rather, the Committee expects schools to 
forward to the Department the same information it provides to 
students and faculty in printed form.
    The second reason for this provision was the failure of the 
Department to gather the information necessary to report to 
Congress by September 1, 1995 on campus crime. Although current 
law did not require the Department of Education to gather 
statistics on a yearly basis, the Committee did expect the 
Department to collect such data at reasonable intervals in 
order to meet the deadline for the report. As a result of the 
Department's failure to gather this information, they did not 
report to Congress until January 1997. This report was based on 
a sample of schools rather than all schools covered by law and, 
therefore, did not provide an accurate picture of crimes on 
campus. The Committee believes the statistics reported by 
schools will allow us to determine if there are any trends in 
campus crimes and to ascertain which schools are successful in 
reducing the incidence of crimes on campus. As such, the 
Committee believes it is important to insure that the Secretary 
collects such data on an annual basis. The Committee bill also 
requires the Secretary to make copies of such statistics 
available to the public.
    It is the belief of the Committee that these changes to 
current law will provide students, faculty and the public with 
a better picture of crimes on college campuses. The Committee 
would encourage students and others to use such information to 
make important decisions regarding their safety on campus.
            Information on college athletic programs
    The Committee notes that college athletic programs 
increasingly fuel public awareness of higher education. Many 
athletics programs are major financial enterprises, yet the 
Committee notes that little public information exists on the 
financial impact these programs have on the overall financial 
operation of their host institutions. H.R. 6 clarifies the 
information which schools must provide on their athletic 
programs.
    In addition, H.R. 6 requires that institutions notify 
students and prospective students of any likely reductions in 
the number of athletes that will be allowed to participate in 
their programs, or likely reductions in the resources devoted 
to a sports program. The Committee does not intend this 
provision to intrude on the governance of institutions of 
higher education, but to provide information that will assist 
the public in making informed decisions about attending 
particular institutions.
            National student loan data system
    In an effort to improve the usefulness of the National 
Student Loan Data System (NSLDS) to students and parents, H.R. 
6 requires the Secretary to modify NSLDS to permit borrowers to 
use the system to identify the current holders and servicers of 
the borrower's student loans. The Committee directs the 
Secretary to make these changes within one year of enactment of 
H.R. 6.
            Quality assurance and regulatory simplification
    The Committee recognizes the continued success of the 
Institutional Quality Control Pilot Project which has been 
authorized since 1985. The Committee is supportive of efforts 
to reduce the regulatory burden placed on schools, and believes 
the project has proven to be a good method of focusing 
institutional resources on areas most in need of improvement, 
which encourages better management of student aid programs and 
reduced student aid processing errors.
    However, the Committee is concerned with past attempts by 
the Secretary to waive certain statutory provisions within the 
experimental sites program without the statutory authority to 
do so, and to approve participation more as a favor to certain 
schools than as a useful or valuable experiment. H.R. 6 
therefore clarifies the Committee's intent that the Secretary 
may only waive regulations issued under Parts A, B, C, D, E, 
and G, and may not waive a statutory requirement.
            Distance education demonstration programs
    The bill creates a new section 487B that authorizes the 
Secretary to permit distance education demonstration programs. 
Distance education is emerging as an increasingly important 
component of higher education. The types and numbers of 
institutions offering distance education courses and programs 
are dramatically expanding, and the methods of delivering 
distance education are rapidly evolving. Distance education 
holds the promise of expanding access to higher education at a 
time when the number of postsecondary students will be 
expanding, including those seeking retraining and those in 
rural communities without access to local colleges and 
universities. Distance education may also help institutions to 
control costs by more efficiently using their educational 
ability to offer distance education programs and courses. There 
are provisions in the HEA designed to control fraud and abuse 
in distance education programs, and the Committee believes that 
these programs and courses must be carefully monitored to 
protect against such occurrences.
    Accordingly, the bill authorizes the Secretary to exempt 
carefully selected institutions from provisions in the Act 
which inhibit their ability to offer distance education 
effectively. In these controlled circumstances, the potential 
of distance education can be tested without unduly increasing 
the risk of fraud and abuse. The Committee wishes to emphasize 
that, in selecting institutions to participate, the Secretary 
should accept a broad range of institutions reflecting the 
diversity in higher education. In order to help ensure that 
only quality institutions and programs participate, 
institutions must be reviewed and accredited by, or have 
achieved pre-accreditation candidacy or equivalent status from 
an agency whose recognition includes assessment of distance 
education programs and courses as a precondition for 
participation.
            Garnishment requirements/administrative subpoena authority
    One of the most important issues confronted by the 
Committee during every reauthorization of the Higher Education 
Act is ensuring the integrity of the Federal loan and grant 
programs. In order to improve our efforts to collect on 
defaulted loans, H.R. 6 contains a provision increasing the 
percentage of a borrower's wages that can be garnished to 15 
percent. In addition, H.R. 6 gives the Secretary the authority 
to issue administrative subpoenas. In granting this authority, 
the Committee intends to give the Secretary another tool to use 
in investigating fraud and abuse of the programs under this 
Title.
            Advisory committee on student financial assistance
    The Committee notes that the existence of an independent 
Advisory Committee on Student Financial Assistance has been of 
great value in assisting in the evaluation of policies 
regarding student financial assistance and the administration 
of our Federal student financial aid programs. In this regard, 
the Advisory Committee has served both Congress and the 
Administration well. In order to broaden the perspectives 
representedon the Advisory Committee, H.R. 6 increases the 
Committee membership from the current 11 members to 15 members. In 
addition, when the Advisory Committee was created, the wide use of 
electronic formats for the publication of reports and other documents 
was not envisioned. H.R. 6 expands the current exemption enjoyed by the 
Advisory Committee from Secretarial review of its reports to those 
published in electronic form.
    In addition, H.R. 6 gives the Advisory Committee three new 
responsibilities. Specifically, the Advisory Committee shall 
evaluate and monitor: the modernization of the student 
financial aid systems and delivery process; the implementation 
of a Performance Based Organization within the Department to 
run the day to day operations of the student financial 
assistance programs; and the methods for disseminating 
information about programs under this title.
            Meetings and negotiated rule making
    Throughout the reauthorization process, the Committee has 
heard a great deal of frustration from participants in the 
Title IV programs over the way in which the Secretary 
formulates and issues regulations. In order to give program 
participants meaningful input into the regulatory process, H.R. 
6 strengthens the provisions for regional meetings and 
negotiated rule making in the development and revision of 
regulations on this Title. The Committee expects the 
individuals and groups involved in this negotiation to include 
representatives of all types of participants in the student 
financial assistance programs. The Committee further expects 
that the Secretary will take the advice of these participants 
seriously.
    In strengthening the negotiated rule making process, the 
Committee has added a provision requiring the Secretary to keep 
a transcript of these sessions. This requirement has been added 
because of reports that the Committee received that in previous 
negotiations, there have been a number of instances where 
consensus was reached on changes needed to proposed regulations 
only to be ignored by the Department's representatives. 
Finally, the Committee expects the Secretary to conduct 
negotiated rule making sessions in a timely manner in order to 
meet deadlines imposed under the master calendar and Section 
481 (g) of the General Education Provisions Act. The Committee 
intends for the negotiated rule making process to apply not 
only to new regulations stemming from the enactment of this 
Act, but for all revisions to the Secretary's regulations for 
Title IV programs.
            Sense of the committee regarding college admissions 
                    policies
    A growing number of Americans are receiving their 
elementary and secondary education in non-public, private, or 
non-traditional settings. These programs are a valuable part of 
our nation's efforts to prepare its youth for the demands of 
society at the edge of a new century.
    For example, the Committee recognizes that home schooling 
is one of the fastest growing education movements in the 
country, with an estimated 1.5 million students being taught at 
home by their parents. Home schooling is presently a legal 
option in all 50 states. Home schools comply with states' 
compulsory attendance laws through specific home school 
provisions or through provisions applying to private schools.
    In addition, there are numerous private and religious 
schools across the nation. These schools also comply with State 
compulsory attendance laws and teach the core curriculum 
required by the State. Students educated in these schools 
generally graduate with all the requirements of a college 
preparatory diploma, normally have a record of nationally 
standardized achievement scores well above the national 
average, and very often graduate with grade point averages high 
enough to be accepted by most colleges if their school had been 
State or regionally accredited.
    Research indicates that children educated in non-public, 
private, and non-traditional settings perform well in relation 
to their peers nationwide. A 1994 study of standardized test 
scores of 16,000 home-educated students found their mean 
performance in language skills at the 79th percentile 
nationwide and their mean performance in mathematics at the 
73rd percentile. Overall, more than half (54.7 percent) of the 
students studied achieved national scores in the top quarter of 
the population.
    The most recent report of the annual nationally 
standardized achievement testing program for the American 
Association of Christian Schools (AACS) indicated that these 
students placed in the top 10 percent of students that took the 
test nationwide (including students from both public and 
private schools). These results also showed that students from 
AACS affiliated schools were on average more than one grade 
level ahead of the national average.
    The Committee further notes research that found home-
educated students performing above the national average on the 
American College Test (ACT), as well as studies indicating that 
the collegiate grade point average of home-educated students 
sampled is higher than the mean grade point average of their 
respective institutions.
    However, the creative alternatives of non-traditional and 
individualized training frequently do not offer a seamless fit 
with traditional transcript formats and admission standards. 
Moreover, many colleges and universities have yet to address 
this emerging issue. In a 50-state survey of colleges conducted 
by the Home School Legal Defense Association, it was discovered 
that 96 percent of colleges sampled had at least one and 
sometimes more than 200 home educated graduates enrolled, but 
only 44 percent of these institutions had a verbal or written 
admission policy regarding home-educated students.
    The Committee is aware that many colleges and universities 
now require applicants from non-public, private, or non-
traditional secondary programs (including home schools) to 
submit scores from additional standardized tests (typically, 
the General Educational Development (GED) or Scholastic 
Aptitude Test subject area examinations [SAT-II]) in lieu of a 
transcript/diploma from an accredited high school. 
Historically, SAT II has been required when students seek 
advanced placement in specific subject areas. However, it is 
the understanding of the Committee that SAT II was not designed 
for, and until recently was not used to determine college 
admissions. Given that standardized test scores (ACT or SAT) 
and portfolio- or performance-based assessments may also 
provide a sound basis for an admission decision regarding these 
students, the Committee recommends that colleges and 
universities consider using these assessments for applicants 
educated in non-public, private, or non-traditional programs 
rather than requiring them to undergo additional types of 
standardized testing. Requiring additional testing only of 
students educated in these settings could reasonably be seen as 
discriminatory, and Members of the Committee are concerned that 
such practices could have the effect of discouraging these 
students from applying to certain institutions.
    As the number of students from non-public, private, and 
non-traditional settings continues to grow, institutions of 
higher education and their governing entities must seriously 
consider addressing this issue if they have not already done 
so. For example, the State of North Carolina has adopted 
legislation stating that students from lawfully operating non-
public, private, and non-traditional programs shall not be 
required to take additional admission tests if they otherwise 
qualify for admission. Similarly, the State of New Mexico now 
has a law stating that students from non-public, private, and 
non-traditional educational programs shall not be required to 
supply a GED credential for admission if they provide 
qualifying admission test scores.
    The Committee believes that college admissions should be 
determined based on the academic ability of the student and not 
the accreditation status of the school in which he or she 
received a secondary education. Accordingly, it is the sense of 
the Committee that in determining requirements for admission, 
an institution of higher education that receives Federal funds 
shall make every effort to evaluate and treat applicants from 
non-public, private, and non-traditional educational programs 
fairly and in a non-discriminatory manner. The Committee 
further urges institutions of higher learning to adopt 
admission policies that reflect the sense of the Committee, and 
to engage in a dialogue with providers of non-public, private, 
and non-traditional educational programs regarding admission 
policies that will best serve the educational interests of 
their graduates. The Committee expects that institutions 
receiving Federal funds under the Higher Education Act will not 
discriminate against students educated in non-public, private, 
or non-traditional settings (including religious and home 
schools) in their admissions policies.

Part H, program integrity

            State Postsecondary Review Program
    The last reauthorization of the Higher Education Act 
created new State Postsecondary Review Entities (SPREs). The 
goal of these provisions was to enhance the integrity of the 
student financial assistance programs, but to do so in a way 
that did not increase Federal control. However, after 
enactment, it became apparent that adding another regulatory 
entity on top of the Department of Education, regional and 
national accrediting agencies, and other State regulatory 
agencies was unnecessary. The SPREs represented an unnecessary 
and overly burdensome intrusion on the autonomy of institutions 
of higher education. In reauthorizing the Higher Education Act, 
it is the goal of the Committee to reduce the regulatory burden 
placed on all participants in the Title IV programs. H.R. 6 
therefore repeals the authorization for the SPREs. In taking 
this action, the Committee notes that States have a number of 
options in overseeing institutions within their boundaries 
including State Higher Education Boards and State licensing 
agencies. The Committee expects States to continue to use these 
entities to ensure the integrity of institutions operating 
within their boundaries.
            Accrediting agency recognition
    In proceeding with the reauthorization, one of the goals of 
the Committee has been to ensure the quality of the programs 
that are eligible for Federal financial assistance. The 
Committee recognizes that assessments of educational quality 
have historically been made by private accrediting 
organizations, and the Committee sees no need to give the 
Secretary increased authority in this area. H.R. 6 amends the 
criteria for which the Secretary may recognize accrediting 
bodies by including distance learning as an integral part of 
the accrediting agency's assessment of the quality of the 
institution in a range of areas. H.R. 6 also clarifies that new 
sites offered through telecommunications for programs 
previously included in the scope of accreditation approval need 
not be subjected to on-site visits.
    The Committee wishes to underscore the importance of 
educational quality in the accreditation of programs and of 
institutions participating in Title IV. Most importantly, the 
Committee intends that the quality of an institution's 
education continue to be evaluated by voluntary accrediting 
organizations.
    Regarding the rapidly emerging programs of distance 
learning, the Committee wishes to provide Title IV support only 
to quality programs while avoiding Federal control over program 
content. Voluntary accreditors working with the academic 
leaders and faculties of each institution have always seen to 
the assurance of educational quality. It is the understanding 
of the Committee that accrediting associations have been 
dealing with distance learning programs for many years, and 
that they are developing new approaches and procedures to 
address the new forms of distance education.
            Eligibility and certification procedures
    Ensuring that institutions participating in Title IV 
programs have the financial capability to meet their 
obligations is an important protection for America's students. 
However, it quickly became clear to the Committee that 
regulations promulgated by the Department in this area would 
not only impact schools in troubled financial condition, but 
could actually endanger the participation of schools that had 
been in existence in excess of 100 years, and that could 
reasonably be expected to remain solvent for decades to come. 
H.R. 6 clarifies the definition of financial responsibility for 
the purpose of eligibility and certification to focus on 
preventing precipitous closures, ensuring compliance, and 
meeting financial obligations. H.R. 6 also clarifies that the 
Secretary should take into account the differences in 
accounting practices applicable to public, private, and for-
profit institutions when assessing financial responsibility. 
Finally, H.R. 6 directs the Secretary to develop an appropriate 
and cost effective process for determining financial 
responsibility that is not duplicative of other assessments.
    The Committee recognizes another important aspect of 
protecting students is to ensure that schools participating in 
Title IV programs are able to administer these programs 
effectively. H.R. 6 clarifies the procedures used by the 
Secretary for assessing the administrative capability of 
schools relating to the approval, disbursement and delivery of 
Federal financial assistance.
    The Committee is cognizant of the often-duplicative 
regulatory burdens placed on institutions by the Department and 
their accrediting bodies. H.R. 6 eliminates this duplication by 
requiring the Secretary to prioritize when making on-site 
visits and to coordinate those visits with accreditation 
visits.
    Under current law, an eligible institution that undergoes a 
change in ownership resulting in a change of control must 
reapply for a determination of its eligibility under the new 
ownership to continue to participate in Title IV programs. The 
period of review commonly takes from 60-120 days, and during 
that period students lose access to their Title IV funds. This 
gap in funding can be very disruptive to students and 
institutions. In cases where the approval takes longer than the 
payment period, the interruption can result in denying eligible 
students the Pell Grant aid to which they are entitled.
    H.R. 6 changes the existing practice by providing that 
Title IV eligibility is continued on a provisional basis after 
a preliminary Department review, provided the institution files 
a materially complete application for approval within 10 days 
of the transaction. The provisional certification would 
ordinarily expire at the end of the month following the month 
it was granted, but would be continued on a month-to-month 
basis in cases where the final decision of the Secretary has 
not been issued.
            Program review and data
    Program reviews by the Secretary are an essential component 
in ensuring the integrity of the Federal student financial 
assistance programs. However, if implemented in the standard 
``Washington knows best, one-size-fits-all'' approach, they can 
pose an undue burden on institutions of higher education. H.R. 
6 attempts to remedy this by requiring the Secretary to 
prioritize when selecting institutions for program reviews. 
Criteria include significant fluctuations in student loan 
volume or Pell Grant awards, reports to the Secretary of 
deficiencies by either the State or the institution's 
accrediting body, and indications of high dropout rates. The 
Secretary may also prioritize reviews based on other factors, 
as he deems necessary. H.R. 6 also requires the Secretary to 
review the regulations of the Department and to ensure the 
uniformity of their interpretation and application. When 
conducting this review, the Secretary must consult with 
representatives of institutions participating in the Title IV 
programs.

                    TITLE V--DEVELOPING INSTITUTIONS

    H.R. 6 creates a new Title V, titled Developing 
Institutions, and transfers the provisions specifically 
addressing Hispanic-Serving Institutions from Title III to the 
newly established Title V. Many of the provisions included in 
this Title have been adopted from H.R. 2495, introduced by 
Representative Hinojosa (D-TX) last fall.
    Qualified institutions under the new Title V include 
eligible institutions having an enrollment of at least 25 
percent Hispanic students of which 50% of those students must 
be from low-income families. Institutions receiving aid under 
this Title are authorized to use such funds for the same 
purposes currently allowed under Title III of the Higher 
Education Act. In addition to the currently authorized 
activities, institutions may also use such funds for improving 
and expanding graduate opportunities for their students.
    Funds received under this Title are to be used to 
strengthen institutional, academic and fiscal resources and to 
increase services for Hispanic and other low-income, 
educationally disadvantaged students. In applying for funds 
under this Title, an institution will be required to include a 
5-year plan for improving assistance provided by the 
institution to Hispanic and other low-income students. Of 
particular importance to the Committee is the authority of the 
Secretary to give priority to applicants that will be working 
with local organizations to reduce dropout rates and improve 
academic achievement. During the reauthorization hearings, 
statistics presented to the Committee indicated that the 
dropout rate for Hispanic students is a serious problem in this 
country.
    The Developing Institutions Program under this title is 
authorized to be appropriated at $80,000,000 for fiscal year 
1999 and such sums for each of the succeeding 4 fiscal years. 
The Committee intends that the provisions transferred from 
Title III retain all currently applicable legislative and 
regulatory rules and regulations, as they apply to Title III, 
including regulatory determinations, administrative 
interpretations and guidance.

        TITLE VI--INTERNATIONAL AND GRADUATE EDUCATION PROGRAMS

    Title VI has been separated into two distinct Parts in H.R. 
6. International education programs are included under Part A, 
while graduate education programs are included under Part B.

Part A, international education

    The international education programs of Title VI, along 
with the Fulbright-Hays Act, has been the primary response of 
the Federal Government to meeting the Nation's need for 
international expertise. The Title VI programs were originally 
introduced as part of the National Defense Education Act of 
1958 enacted at the high point of the Cold War. Title VI funds 
induce universities to create and support high quality graduate 
training and research programs that produce well-trained 
specialists whose expertise spans the globe. These foreign area 
experts who graduate from Title VI centers staff government 
agencies, international organizations, and university centers 
and produce research that sets new standards of quality and 
coverage.
    In order to expand and enhance the Nation's capacity in 
international studies and foreign languages, Title VI also 
authorizes cost effective programs at the undergraduate level. 
The amendments contained in H.R. 6 are designed to strengthen 
the capacity of Title VI programs to better address the 
Nation's current and future needs for international competence. 
H.R. 6 amends Title VI throughout in order to refine the title 
further so that the Nation's need for international education 
is met.
            Subpart 1, international and foreign language studies
    H.R. 6 amends the list of authorized activities that may be 
undertaken by national resource centers. In addition to the 
currently authorized activities, H.R. 6 requires such centers 
to:
         Support the instruction of foreign languages and offer 
        courses that cover the subject area or topic applicable 
        to the national center;
         Support teaching and the acquisition of research 
        materials; and,
         Support outreach programs with state and local 
        educational agencies, government, and business.
    Title VI has created a small but competent system of 
centers producing specialized faculty, international research, 
and a corps of international experts. The Committee strongly 
encourages the Secretary to promote interactive linkages among 
the national resource centers, state and local educational 
agencies, professional schools and colleges, government and 
business. The Committee views these linkage and outreach 
functions as an increasingly important role for the centers 
which serves the national interest.
    H.R. 6 continues the authority for institutions to provide 
fellowships to graduate students who are undergoing advanced 
training in any center or program approved by the Secretary.
    In addition, H.R. 6 expands the activities which may be 
conducted by a language resource center to include the 
operation of intensive summer language institutes to train 
advanced foreign language students, provide professional 
development and improve language instruction through preservice 
and inservice language training for teachers. However, the 
Committee believes there is still a need for a more systematic 
approach to addressing the needs of the less commonly taught 
languages. The Committee urges the Secretary to encourage the 
assessment of those needs and the cultivation of cost effective 
ways to meet those needs. For example, the Secretary may allow 
some centers to focus on geographic areas or language groups, 
utilize technology to organize and provide wide access to 
teaching materials, and encourage collaborations with the less 
commonly taught language community and other Title VI grant 
recipients with similar missions.
    The allowable use of grant funds awarded to undergraduate 
international and foreign language programs has been expanded 
to include activities such as, establishing linkages overseas 
with institutions of higher education; conducting summer 
institutes in foreign area and other international fields to 
provide faculty and curriculum development; and developing 
partnerships with the private sector, government and elementary 
and secondary schools in order to enhance international 
knowledge and skills. The Committee recommends that the 
Secretary promote support for undergraduate international 
education by outreach to undergraduate institutions. In order 
to encourage institutions of higher education to support 
undergraduate international relations and foreign language 
programs, a provision was included in H.R. 6 that authorizes 
the Secretary to use no more than 10% of the funds appropriated 
for this Part for undergraduate programs. The Committee also 
included an optional, non-Federal match of one-third cash from 
the private sector to encourage more applicants to leverage 
funding from private sector corporations and foundations.
    H.R. 6 replaces the current program for periodical and 
other research materials published outside of the United States 
with a new technological innovation and cooperation for foreign 
information access program. The purpose of the program is to 
develop innovative techniques or programs using new electronic 
technologies to collect, organize, preserve and widely 
disseminate information on world regions and countries that 
address the nation's teaching and research needs in 
international education and foreign languages. This kind of 
program is timely as universities and libraries are faced with 
escalating costs for access to international resources and an 
increasing demand for international information, teaching and 
research materials in a wide variety of disciplines.
    H.R. 6 also includes a new subsection designed to encourage 
the Secretary to provide grant funds to help establish new 
overseas research centers. If the Secretary determines that 
there are no qualified applications for a new center, the funds may be 
distributed to the existing centers.
    Part A is authorized to be appropriated at $80,000,000 for 
fiscal year 1999 and such sums for the four succeeding fiscal 
years.
            Subpart 2, business and international education programs
    The Business and International Education Programs are 
continued in their current form with one modification. For 
purposes of membership on the advisory council required in 
order to apply for grant funding, the Committee makes specific 
mention of including a representative of a community college in 
the region served by the center when selecting representatives 
from institutions of higher education. Centers for 
International Business Education are authorized to be 
appropriated at $11,000,000 for fiscal year 1999 and such sums 
as may be necessary for the four succeeding fiscal years. 
Education and Training programs are authorized to be 
appropriated at $7,000,000 for fiscal year 1999 and such sums 
as may be necessary for the four succeeding fiscal years.
            Subpart 3, Institute for International Public Policy
    H.R. 6 expands the current authority of The Institute for 
International Public Policy to operate several new programs 
designed to promote careers in international affairs. The 
programs include:
          A summer abroad program in addition to the existing 
        junior year abroad program;
          A postbaccalaureate internship program to assist 
        students in preparing for a master's degree program; 
        and,
          An institutional development program to enable 
        eligible colleges and universities to strengthen 
        international affairs programs.
    This Subpart 3 is authorized to be appropriated at 
$10,000,000 for fiscal year 1999 and such sums as may be 
necessary for the four succeeding fiscal years.
            Subpart 4, general provisions
    H.R. 6 amends General Provisions to repeal a provision 
titled Preservation of Pre-1992 Programs. This provision has 
served to limit the number of new programs which have been 
created under Title VI due to a prohibition on funding new 
projects unless funding in effect for pre-existing programs is 
equal to the 1992 fiscal year level. The Committee believes the 
Secretary of Education should be free to evaluate applications 
and fund those programs that meet the objectives and priorities 
of the Federal Government applicable at that time.

Part B, Graduate Assistance in Areas of National Need (GAANN)

    H.R. 6 transfers the current Graduate Assistance in Areas 
of National Need Program (GAANN) from Title IX to Title VI and 
makes minor modifications to the program. H.R. 6 continues the 
current focus of GAANN by providing assistance to students of 
superior ability who demonstrate financial need. The 
designation of areas of national need will remain the 
responsibility of the Secretary of Education after consultation 
with appropriate Federal and nonprofit agencies and 
organizations.
    H.R. 6 repeals the existing Patricia Roberts Harris 
Fellowship Program and the Jacob K. Javits Fellowship Program 
which have been funded through the GAANN appropriation. H.R. 6 
directs the Secretary to make continuation awards to recipients 
of awards under those programs as well as recipients under 
GAANN as in effect prior to enactment of H.R. 6 in order to 
allow students to complete their programs of study.
    GAANN is authorized to be appropriated at $40,000,000 for 
fiscal year 1999 and such sums as necessary for the four 
succeeding fiscal years.

  Title VII--Construction, Reconstruction, and Renovation of Academic 
                               Facilities

    Title VII provides for a straight extension of Part B, the 
Historically Black College and University Capital Financing 
Program, for FY 99 and the four succeeding fiscal years.
    Title VII also provides for a straight extension of Part C, 
Loans for Construction, Reconstruction, and Renovation of 
Academic, Housing and Other Educational Facilities, for FY 99 
and the four succeeding fiscal years. Although no loans have 
been made under this program since 1993, the Department of 
Education is responsible for oversight and management of the 
loans made in previous years.
    Part A of Title VII, Improvement of Academic and Library 
Facilities is repealed in H.R. 6.

                   TITLE VIII--ADDITIONAL PROVISIONS

    In keeping with the Committee's goal of strengthening 
opportunities for all Americans to obtain an affordable, high 
quality postsecondary education, Title VIII of H.R. 6 contains 
requirements that the Department of Education and the General 
Accounting Office conduct a number of studies on issues 
relating to postsecondary education. Title VIII also contains 
provisions to provide parents and students with better 
information on making informed decisions about preparing for 
college. By including these provisions, the Committee hopes 
that well-informed consumers will create market competition 
among institutions of higher education, thus keeping colleges 
accountable and higher education affordable.

Study on transfer of credits

    The Committee is concerned about reports of policies that 
may prevent the transfer of credits between colleges and 
universities and shorter course programs. While it is not the 
intent of the Committee to impose transfer of credit policies 
on institutions, the Committee is concerned that some 
accrediting bodies may be adopting transfer of credit policies 
that could adversely impact students. While little concrete 
data is available, the Committee has heard reports that many 
students must repeat coursework at their new institution in 
order to obtain credit towards a postsecondary degree, thus 
increasing their costs of attendance and in some cases student 
loan burden.
    Section 801 requires the Secretary of Education to conduct 
a study evaluating the policies and/or practices instituted by 
recognized accrediting agencies or associations regarding the 
transfer of credits from one institution of higher education to 
another. Specifically, this study will look at the effects of 
such policies on students wishing to transfer and will include 
the additional time and expense that is incurred by these 
students, the extent to which Federal student financial aid is 
awarded for the duplication of coursework, and the aggregate 
cost to the Federal Government.
    It is the Committee's hope that this study will provide 
insight into the effects of different policies adopted by 
accrediting agencies or associations and provide specific 
recommendations for the recognition of accrediting bodies which 
might save students time and money.

Study of market mechanisms in Federal student loan programs

    In recent years, the Committee has been called upon on 
several occasions to recommend methods of reducing the costs of 
the student loan programs. The Committee is concerned that any 
such changes be made in such a way as to ensure continued 
participation of the private sector in these vital programs. 
Currently, the Federal Family Education Loan (FFEL) program is 
a market-based program with private sector participation. 
However, to a large extent lender returns are set through a 
political process rather than a market process. This is 
disturbing for two reasons. First, if lender yield is set too 
low, private capital will become unavailable, and the student 
loan programs will collapse. Second, if the rate of return is 
set too high, the Federal Government forgoes savings that could 
be put to better uses or returned to the taxpayer. The 
difficulty of determining the appropriate yield became most 
apparent during this reauthorization as the Committee struggled 
with the 1998 interest rate problem.
    In contrast, the Direct Student Loan Program, which has no 
market forces operating within it has been plagued with 
management problems, including a complete shutdown of the 
Direct Consolidation Loan process. As the Committee worked to 
solve the interest rate issue, it became very clear that no one 
believed the Direct Loan Program could absorb all the student 
loan volume currently handled by private sector participants in 
the FFEL Program.
    Section 802 requires the Comptroller General to conduct a 
study of the potential use of an auction mechanism or other 
market based mechanism for the delivery of Federal student 
loans. In conducting this study, the Committee expects that the 
Comptroller General will pay special attention to methods of 
ensuring continued access for all borrowers. The Committee also 
expects that any recommendations for moving to a new system 
will be accompanied by a transition plan to ensure that no 
disruption in loan availability occurs. The Comptroller General 
is to issue his report within two years after the date of 
enactment of H.R. 6.

Improvements in market information and public accountability in higher 
        education

    One consistent concern that the Committee heard from 
parents and students was that the cost of attending college was 
rising too quickly. As part of this concern the Committee 
passed into law, the Cost of College Review Act of 1997, 
establishing the National Commission on the Cost of Higher 
Education. This Commission was tasked with studying the reasons 
why college tuitions were increasing so rapidly and to make 
specific recommendations as to how these increases could be 
brought under control. One of the Commission's findings was 
that timely, accurate, reliable and understandable information 
on college costs and prices was not readily available to the 
public.
    Section 803, which was added as an amendment offered by 
Representatives McKeon (R-CA) and Castle (R-DE), requires the 
Secretary of Education to work with colleges and universities 
to develop a clear set of standards for reporting college costs 
and prices. It specifically requires the Secretary to redesign 
his collection of information on college costs and prices to 
make it more useful and timely to the public. It is the 
Committee's belief that these changes will allow students to 
make more informed choices about the level of education they 
pursue by requiring the Secretary to collect separate data on 
the costs and price of both undergraduate and graduate 
education. It will also help parents and students make informed 
decisions about the schools they choose by requiring the 
Secretary to make available for all schools, on a yearly basis, 
information on tuition, price and the relationship between 
tuition increases and increases in institutional costs.
    It is the understanding of the Committee that the Secretary 
already collects the data required to implement Section 803. To 
the extent practicable, the Committee intends that the 
Secretary re-format and re-configure data already collected 
from institutions of higher education and make this data more 
widely accessible and useful to parents and students. It is not 
the intent of the Committee to require or preclude the 
Secretary from collecting new or additional data from 
institutions of higher education.

Differential regulation

    This provision, also added by the McKeon/Castle amendment, 
provides for a report by the Comptroller General on the extent 
to which unnecessary costs are imposed on colleges and 
universities as a consequence of requiring them to abide by the 
same regulations as industrial or commercial entities. For 
example, in its report, the Cost Commission noted that some 
institutions of higher education which might have grams of 
certain chemical substances on their campuses are often held to 
the same Federal regulations as industrial entities which might 
work with tons of the same substance. The Committee is 
supportive of regulatory reductions that can provide cost 
savings to institutions, as long as health and safety are not 
jeopardized. However, the Committee fully expects that any 
savings attained in this area will be passed on to America's 
students and families through lower tuitions.

Annual report on cost of higher education

    Finally, the Committee notes that tuition increases have to 
an extent moderated in recent years, they are still increasing 
at close to twice the rate of inflation. In its report, the 
Commission concluded that in the long run, if colleges do not 
reduce their cost, prices cannot be contained without 
sacrificing either quality or access.
    Section 805 directs the Comptroller General to conduct an 
ongoing study of college costs and tuition increases, and to 
report his findings to Congress on a yearly basis. In this way, 
the Committee will continue to track the progress made by 
colleges and universities in reducing their costs and tuition 
increases.

Repeals of previous higher education amendments provisions

    Section 806 repeals a number of unfunded programs, studies, 
and commissions. Specifically, these include Secretarial 
Studies and Evaluations enacted by the Higher Education 
Amendments of 1986, General Accounting Office Reports, a study 
of the Costs of Postsecondary Education, a National Academy of 
Sciences Study, the Alien Youth Education Opportunity Panel, 
the Carl Albert Congressional Research and Studies Center, 
Studies by the Department of Education, the National Commission 
on Independent Higher Education, the National Commission on the 
Cost of Higher Education, the National Center for the 
Workplace, the National Clearinghouse for Postsecondary 
Education Materials, the School Based Decision Makers Program, 
Grants for Sexual Offenses Education, and the Olympic 
Scholarships Program.

Limitation

    Section 807 specifically prohibits Federal funds from being 
made available to the National Board for Professional Teaching 
Standards.

                   TITLE IX--AMENDMENTS TO OTHER LAWS

Part A, Education of the Deaf Act

    H.R. 6 amends the Education of the Deaf Act (EDA) by 
extending the authorization for that Act through fiscal year 
2003 and making other changes. The Committee felt that the 
Education of the Deaf should be considered when the Higher 
Education Act was reauthorized since most of the Education of 
the Deaf Act authorizes two higher education institutions: 
Gallaudet University and the National Technical Institute for 
the Deaf. Given the enormous importance of education to the 
future success of all Americans, the Committee affirms our 
long-standing commitment to programs targeted to people who are 
deaf or hearing impaired through the extension of the Education 
of the Deaf Act.
    The Committee identified a need to enhance communication 
between the Secretary and Gallaudet University. To accomplish 
this, the Committee has made the Department of Education's 
liaison to Gallaudet University an ex-officio member of its 
Board of Trustees. The Committee believes that this addition 
will enhance the flow of information between the University and 
the Department, and thereby promote coordination between the 
University's varied activities and other programs that the 
Department oversees.
    The 1992 amendments to the Education of the Deaf Act 
incorporated the procedural safeguards specified in the 
Individuals with Disabilities Education Act into the 
requirements for Gallaudet's elementary and secondary education 
programs. The 1998 Amendments update these references by citing 
the Individuals with Disabilities Education Act Amendments of 
1997 (P.L. 105-17). These references include new provisions 
from P.L. 105-17 relating to mediation, placement in 
alternative educational settings, and transfer of parental 
rights at age of majority.
    Because tracking of the costs associated with Gallaudet's 
various national mission activities and the operations of the 
elementary and secondary programs has been problematic, the 
Committee added language relating to the University's audit 
requirement stipulating that the costs for these activities 
must be separately identified. The Committee adds this 
requirement in the spirit of good stewardship for the resources 
targeted for the programs under its jurisdiction, not because 
of any concerns about mismanagement at Gallaudet.
    During the July 15 hearing, the Committee heard testimony 
relating to improving the endowment programs at Gallaudet and 
NTID. The 1992 EDA Amendments added a new requirement that the 
institutions contribute $2 from non-federal funds for every 
Federal dollar in excess of $1 million. The unintended effect 
of this change has been to discourage private contributions 
beyond the $1 million level. Therefore, the Committee decided 
to return to a dollar-for-dollar match. However, the Committee 
now stipulates that non-federal contributions can be matched 
with Federal funds only in the fiscal yearin which they are 
raised. It further clarifies that the University and NTID have an on-
going responsibility to keep records of income generated from their 
federal endowment funds from the prior year. Authorization for the 
Federal endowment programs are extended through fiscal year 2003.
    In reviewing legislation under its jurisdiction over the 
past two years, the Committee has typically repealed programs 
that have been authorized, but not funded. Consistent with this 
practice, the Committee has repealed the unfunded scholarship 
program in section 208 of the EDA for individuals who are deaf 
preparing for careers in deaf education or special education at 
institutions with teacher training programs in deaf education 
or special education.
    Responding to testimony regarding unused capacity at both 
Gallaudet and NTID, the Committee chose to repeal the current 
10 percent enrollment cap on international students at both 
institutions. The Committee also established the requirement 
that no qualified United States citizen will be denied 
admission to Gallaudet or NTID. While the Committee considered 
increasing the amount of the tuition surcharge paid by 
international students, the Committee chose to maintain the 
current international surcharge at 90 percent of base tuition 
to address concerns raised by the institutions about a possible 
decrease in enrollment resulting from higher international 
student surcharges. However, the Committee also believes that 
the current surcharge is not a financial barrier for 
international students, noting that the current international 
student tuition (including the surcharge) at Gallaudet, for 
example, is $11,200--about one-half of the tuition charged to 
students at other private universities in the District of 
Columbia.
    The Committee extends authorization of appropriations for 
Gallaudet University, its elementary and secondary programs, 
and NTID through fiscal year 2002. However, in recognition of 
the greater revenue that the institutions will receive from 
lifting the cap on the enrollment of international students and 
from growth in the institutions' endowments, the Committee has 
included specific authorizations for each fiscal year through 
2003. These authorization levels reflect the Administration's 
budget requests for the institutions in 1999, and are annually 
increased by 1.5 percent in fiscal year 2000 through 2003. In 
the case of NTID, the authorization levels also reflect the 
projected additional costs for NTID's renovation of dormitory 
facilities.

Part B, Extension and Revision of Indian Higher Education Programs

    The Committee has extended all provisions of the Tribally 
Controlled Community College Assistance Act and the Navajo 
Community College Act. This continues the practice of insuring 
that these programs have the same reauthorization schedule as 
other Higher Education programs.
    The Committee has included three important changes in 
current law regarding the Tribally Controlled Community College 
Assistance Act:
          The Act will henceforth be known as the Tribally 
        Controlled College and University Assistance Act, and 
        all references in current law to ``community colleges'' 
        will be changed to ``colleges and universities'' and 
        the word ``college'' would be changed to 
        ``institution.'' This is done to reflect more 
        accurately the makeup of tribally controlled 
        institutions of higher education;
          There is a provision requiring the Secretary of 
        Education to work with the Tribal Colleges and 
        Universities to establish a national accreditation 
        agency that would have a specific focus on the concerns 
        of these institutions; and,
          The base per-Indian student funding contained in the 
        Tribally Controlled Colleges Universities Act would be 
        increased from $5,820 to $6,000 and the overall 
        authorization for grants to Tribally Controlled 
        Colleges and Universities would be increased to $40 
        million to reflect the increase in the per student 
        figure.

                 TITLE X--FACULTY RETIREMENT INCENTIVES

    Title X amends the Age Discrimination in Employment Act of 
1967 (ADEA) to clarify that it is permissible for colleges and 
universities to offer voluntary early retirement incentives to 
tenured faculty that are in part age-based. Title X is 
identical to the bipartisan bill H.R. 3473, the Faculty 
Retirement Incentive Act. The Subcommittee on Employer-Employee 
Relations held a hearing on early retirement incentives in 
higher education on May 22, 1997.
    Currently, tenured faculty members of most colleges and 
universities are covered by defined contribution retirement 
plans, which generally offer greater financial incentives to 
remain employed than to retire. In addition, the unique nature 
of the tenure contract limits an institution's ability to 
respond to problems arising from the impact of age on 
employment. Prior to January 1, 1994, Section 12 of the ADEA 
permitted the mandatory retirement at age 70 of tenured faculty 
at institutions of higher education. In addition, some 
institutions offered age-based retirement incentives to 
encourage voluntary retirement of tenured faculty before age 
70. The ability to offer these incentives is now increasingly 
important to colleges and universities as a result of (1) the 
recent expiration of the ADEA's mandatory age 70 retirement 
provision; (2) increased budget pressures that are aggravated 
by the significant salary differential between long-term and 
entry-level faculty members; (3) an increasing need to respond 
to changing academic needs, including necessary hires in new 
and existing fields; and (4) a desire for cost-effective 
methods of providing faculty members who would like to retire 
at earlier ages the financial ability to do so.
    The National Academy of Sciences study that was 
commissioned by Congress to examine the issue of ``uncapping'' 
the mandatory age 70 retirement provision assumed the 
availability of age-based voluntary early retirement incentive 
plans when it concluded that the mandatory retirement provision 
should be allowed to expire.
    In addition, the bipartisan National Commission on the Cost 
of Higher Education included this legislative initiative in its 
January 1998 recommendations to check the skyrocketing cost of 
a college education. The Commission recommended that ``Congress 
enact a clarification to the Age Discrimination in Employment 
Act to ensure that institutions offering defined contribution 
retirement programs are able to offer early retirement 
incentives to tenured faculty members.''
    In section 4(f)(2)(B)(ii) of current law, ADEA provides 
that ``voluntary early retirement incentive plans consistent 
with the relevant purpose or purposes of the Act'' do not 
violate the ADEA's prohibition against age discrimination in 
``compensation, terms, conditions, or privileges of 
employment'' contained in Section 4(a)(1). The relevant 
purposes of the Act are set forth in Section 2(b): ``to promote 
employment of older persons based upon their ability rather 
than age; to prohibit arbitrary age discrimination in 
employment; and to help employers and workers find ways of 
meeting problems arising from the impact of age on 
employment.''
    The legislative history of the Older Workers Benefit 
Protection Act of 1990 (OWBPA), which added Section 4(f)(2) of 
the ADEA, is reasonably clear that at least some voluntary 
early retirement incentive plans under which benefits are 
reduced or eliminated based upon age are consistent with the 
purposes of the ADEA and are, therefore, encompassed by Section 
4(f)(2)(B)(ii). However, the OWBPA report language is somewhat 
ambiguous on this point. Moreover, the Equal Employment 
Opportunity Commission (EEOC) has taken the position that 
voluntary retirement incentive benefits that decrease based on 
age and ultimately cease at a specified age are by their nature 
inconsistent with the ADEA's purpose of prohibiting arbitrary 
age discrimination in employment.\1\ The Committee believes 
that the voluntary retirement incentives encompassed by Title X 
do not conflict with the purposes of the ADEA and that the ADEA 
should be amended to make this clear and to avoid unnecessary 
litigation on this issue.
---------------------------------------------------------------------------
    \1\ See EEOC v. Crown Point Community School Corporation et al., 
No. 2:93 CV 237 (N.D. Ind. 1997), in which a magistrate judge granted 
summary judgment for the EEOC; amicus curiae brief filed in Lyon v. 
Ohio Educational Association, 53 F.3d 135 (6th Cir. 1995), in which the 
Court of Appeals found no impermissible age discrimination and did not 
reach the section 4(f)(2) issue.
---------------------------------------------------------------------------
    Therefore, Title X adds to the ADEA a safe harbor under 
which institutions of higher education may offer to tenured 
faculty members voluntary retirement incentive benefits that 
are reduced or eliminated based upon age.
    To satisfy the safe harbor, a plan or arrangement must not 
preclude an eligible employee who has attained too high an age 
for the maximum benefit otherwise available under the 
applicable formula from having an opportunity of at least 180 
days' duration to elect to retire and receive that maximum 
benefit. In determining that maximum benefit, the employee will 
be assumed to retire at the age which, under the applicable 
formula, results in the largest benefit, but all relevant 
factors other than age--such as salary or years of service--
will be determined as of the employee's actual age.
    The safe harbor encompasses only benefits that are in 
addition to those already available to the faculty members 
under other plans or arrangements. Thus, the safe harbor would 
not apply to a plan under which active or retired faculty 
members, because they did not retire before a given age, ceased 
to receive benefits (other than the voluntary retirement 
incentive benefits themselves) that were available to other 
active or retired faculty members, respectively.
    Under Title X, a college or university plan or arrangement 
would not violate the ADEA, for example, by offering to tenured 
faculty members who voluntarily retire between ages 65 and 70 a 
monthly ``bridge'' benefit, payable until age 70, equal to 50 
percent of their final monthly salary, with the expectation 
that the faculty members would wait until age 70 to commence 
their regular retirement benefits. The bridge benefit that 
could be made available between other ages, such as 60 and 65, 
or 62 and 69, could involve a different percentage of pay, and 
could be subject to other conditions, such as a minimum service 
requirement for eligibility, or limitation of the plan to one 
or more schools, departments, or other classifications of 
tenured faculty. Similarly, under Title X, a plan or 
arrangement could, consistent with the ADEA, provide lump sum 
retirement incentives, expressed as a percentage of final 
salary, that are reduced based upon age at retirement and 
eliminated at a specified upper age (e.g., 65 or 70). The ADEA 
would also not be violated by a voluntary phased retirement 
program for eligible tenured faculty members under which the 
retirement incentive takes the form of subsidized pay for part-
time work. The amount of the subsidy or duration of the part-
time work, or both, is decreased or eliminated based upon age. 
In each case, upon adoption of the plan or arrangement, a 
faculty member who would otherwise be prevented by attainment 
of too high an age from receiving the maximum benefit under the 
applicable formula would be given an opportunity of at least 
180 days' duration to elect to retire and receive that maximum 
benefit, determined as described above.
    No inference is intended that these or other retirement 
incentive plans or arrangements sponsored by institutions of 
higher education or other employers do not constitute 
``voluntary early retirement incentive plan[s] consistent with 
the relevant purpose or purposes of the [ADEA]'' within the 
meaning of Sec. 4(f)(2)(B)(ii) of the ADEA, or are not 
otherwise lawful without regard to this bill.

                      Section-by-Section Analysis

    Section 1--gives the short title of the act as the ``Higher 
Education Amendments of 1998''.
    Section 2--gives the Table of Contents for the Act.
    Section 3--states that references to ``the Act'' refer to 
the Higher Education Act of 1965.
    Section 4--gives the general effective date as October 1, 
1998.

                      Title I--General Provisions

Part A--Extension and revision of general provisions

    Section 101--repeals Title I; repeals sections 1206, 1211, 
and 1212 of Title XII; redesignates Title XII as Title I; 
transfers Title I as redesignated to immediately follow the 
short title and amends the Higher Education Act of 1965 to make 
technical internal cross-references and makes the necessary 
conforming amendments.
    Section 102--amends Section 101 to add definitions for 
defining an Institution of Higher Education, specific 
definitions for purposes of Title IV programs, Institutions 
outside the United States, Proprietary Institution of Higher 
Education, Postsecondary Vocational Institution, and other 
criteria for determining an institution of higher education; 
requires the Secretary to publish a list of nationally 
recognized accrediting agencies or associations; and makes 
conforming amendments.
    Section 103--amends Title I to add a new section regarding 
Regulatory Reform.

Part B--Performance-based organization for the delivery of Federal 
        student financial assistance

    Section 111--amends Title I by adding a new Part A--General 
Provisions and a new Part B--Administrative Provisions for 
Delivery of Student Financial Assistance to create a 
performance based organization (PBO) for the delivery of 
student financial assistance. The PBO will be responsible for 
all aspects of managing the data and information systems that 
support the student financial assistance programs

         Title II--Postsecondary Education Improvement Programs

    Section 201-- Urban Community Service--amends the Higher 
Education Act of 1965 by inserting a new Title II; redesignates 
and transfers Part A of Title XI to immediately follow the 
heading of Title II and repeals Part B of Title XI; adds a new 
paragraph for allowable activities; amends section 207 to 
include Urban Grant Institutions; and extends the authorization 
of appropriations.
    Section 202--Fund for the Improvement of Postsecondary 
Education--amends section 1004 to make internal cross-
references; redesignates and transfers Part A of Title X as 
Part B of Title II; repeals section 1004 and Parts C and D of 
Title X; amends section 221 relating to endowment grants; and 
amends section 224 relating to special projects for areas of 
national need; adds new criteria for areas of national need; 
amends Part B of Title II by striking the subpart designations 
and headings and by adding new authorization levels
    Section 203--Grants to States for Workplace and Community 
Transition Training for Incarcerated Youth Offenders--
redesignates Part E of Title X as Part C of Title II and 
section 1091 as section 231; transfers Part C of Title II to 
follow Part B of Title II and amends section 231(j) to add new 
authorization levels
    Section 204--Advanced Placement Fee Payment Program--
redesignates Part G of Title XV as Part D of Title II and 
section 1545 as section 241; transfers Part D of Title II to 
follow Part C of Title II; and amends section 241(f) by 
striking 1993 and inserting 1999 for reauthorization purposes.
    Section 205--amends Title II to add a new Part E--Teacher 
Quality Enhancement Grants
    Section 206--repeals Title VIII.

                      Title III--Institutional Aid

    Section 301--Strengthening Institutions--amends section 311 
by adding a new subsection for Authorized Activities and 
Endowment Fund Limitations; amends section 312 by adding a new 
Endowment Fund definition; amends Section 313 relating to 
duration of grants and amends Title III by adding a new section 
314 for Applications and a new section 316 for American Indian 
Tribally Controlled Colleges and Universities.
    Section 302--Historically Black Colleges and Universities--
amends section 323(a) by inserting a new paragraph for 
establishing or improving an endowment fund; amends section 
323(b) by adding a new paragraph for endowment fund 
limitations; amends section 326(a) relating to professional and 
graduate institutions; amends section 326(b) by adding new 
paragraphs for use of funds; amends section 326(e) by adding 
new qualified graduate programs and universities to the list of 
eligible universities; by adding a new paragraph for defining 
qualified graduate program and a new special rule; amends 
section 326(f) relating to funding rule; amends section 326 by 
adding a new subsection regarding the hold harmless rule.
    Section 303--Minority Science and Engineering Improvement 
Program--amends Title II by adding a new Part D--Minority 
Science and Engineering Improvement Program.
    Section 304--amends section 351(a) regarding applications 
for assistance; amends section 351(b) regarding contents of 
applications; amends section 352(a) regarding waivers; amends 
section 353(a) regarding application review process; amends 
Title III, Part D by adding a new section for continuation 
awards; and amends section 360 by adding new authorization 
levels.

                      Title IV--Student Assistance

Part A--Grants to students

    Section 401--Pell Grants--amends section 401(a) by 
extending authority of the Pell Grant program; amends section 
401(b)(2)(A) by increasing grant amounts; amends section 
401(b)(3) by increasing the maximum grant amount in relation to 
tuition and expenses; increases the amounts of dependent care 
and disability expenses; amendssection 401 by adding a new 
subsection relating to institutional ineligibility based on default 
rates; and makes the necessary conforming amendments.
    Section 402--Federal TRIO Programs--amends section 
402A(b)(2) regarding duration of grants; increases the minimum 
grant amounts; amends section 402A regarding procedures for 
awarding TRIO grants and contracts; amends section 402A(f) 
relating to authorization of appropriations; and amends 402B(b) 
relating to the Talent Search program; amends section 402C 
relating to the Upward Bound program; amends section 402D 
relating to Student Support Services; amends section 402E 
relating to Postbaccalaureate Achievement Program; amends 
section 402G(b) by adding a new paragraph relating to staff 
development activities; and amends section 402H(b) by adding a 
new sentence regarding the evaluation for project improvement.
    Section 403--National Early Intervention and Partnership 
Program--amends section 404G for extension of authorization.
    Section 404--repeals provisions of subpart 2 of part A, 
Title IV; Chapter 3, Chapter 4, Chapter 5, Chapter 6, Chapter 
7, and Chapter 8; repeals Subpart 8 of Part A of Title IV; and 
makes the necessary conforming amendments.
    Section 405--amends Subpart 2 of Part A, Title IV to add 
new chapters regarding the High Hopes for College Program, the 
Frank Tejeda Scholarship Program, and Campus-Based Child Care 
Program.
    Section 406--Federal Supplemental Educational Opportunity 
Grants--amends section 413A(b)(1) for extension of authority; 
amends subsection (d) of section 413C regarding use of funds 
for less- than-full-time students; amends section 413D by 
adding a new subsection for carry-over/carry-back authority.
    Section 407--Grants to States for State Student 
Incentives--amends section 415A(b) for extension of authority 
and by adding a new paragraph relating to reservation of funds; 
amends subpart 4 of part A of Title IV to add a new section for 
Special Leveraging Educational Assistance Partnership Program; 
amends subsection (a) of 415A of the Higher Education Act of 
1965 to provide additional purposes for providing grants to 
states; and amends section 415B(a)(1) relating to allotments.
    Section 408--Special Programs for Students whose Families 
are Engaged in Migrant and Seasonal Farmwork--amends section 
418A(d) to coordinate state, local and federal programs 
relating to migrant workers; provides for the extension of 
authority; amends section 418A to add a new subsection relating 
data collection; and makes the proper technical amendments.
    Section 409--Byrd Scholarships--amends section 419G by 
adding a new subsection relating to termination of eligibility; 
and amends section 419K to increase authorization levels.

Part B--Federal Family Education Loan Program

    Section 411--repeals subsection (d) of section 421 relating 
to limitation on authorization to guarantee new loans under 
part B.
    Section 412--amends section 422 relating to advances to 
reserve funds.
    Section 413--amends Part B, Title IV to add a new section 
regarding the federal student loan reserve fund and a new 
section regarding the agency operating fund; amends section 422 
to add a new subsection regarding additional recall of 
reserves; makes the necessary conforming amendments; provides 
for an effective date; amends section 428(c)(6) relating to 
equitable share; amends section 428(c)(9)(C) regarding guaranty 
agency reserve level; amends section 428(f) to regarding 
payment for certain activities; and amends section 428(l) 
regarding default aversion assistance.
    Section 414--amends section 424(a) relating to scope and 
duration of federal loan insurance program.
    Section 415--amends section 425(a)(1)(A) by adding a new 
subclause relating to limitations on individual federally 
insured loans and federal loan insurance.
    Section 416--amends section 427A regarding applicable 
interest rates for student loans; makes conforming amendments; 
amends section 438(b)(2)(F) regarding special allowances; and 
provides for an effective date.
    Section 417--amends section 428(a)(2) by adding new 
criteria for additional requirements to receive federal 
interest subsidies; amends section 428(a)(5) to extend the 
duration of authority; amends section 428(b)(1)(A) by adding a 
new subclause relating to annual loan limits; amends section 
428(b)(1)(D) by adding a new clause to allow student borrowers 
to change their selection of repayment plan; amends section 
428(b)(1)(M) regarding deferments on loans; amends section 
428(b)(1)(U) relating to limitations, suspension, and 
termination of loans; amends section 428(b)(1) by adding a new 
subparagraph for additional insurance program requirements; 
amends section 428(b)(3) to prohibit unsolicited mailings of 
student loan application forms by guaranty agencies; amends 
section 428(c)(2)(H)(ii) to prohibit guaranty agencies from 
charging a fee to institutions for information; amends section 
428(c)(3) relating to forbearance; amends section 428(c)(8) by 
striking assignment requirements to protect federal fiscal 
interest; amends section 428(c)(9) relating to agency 
termination; amends section 428(e) relating to lender referral; 
repeals income contingent repayment option; repeals state share 
of default costs; amends section 428 by adding a new subsection 
for blanket certificate of loan guaranty.
    Section 418--amends Part B, Title IV by adding a new 
section establishing voluntary flexible agreements with 
guaranty agencies.
    Section 419--Federal Consolidation Loans--amends section 
428C(a) by adding a new subclause to allow for new loans and 
federal direct loans to be included in the consolidation of 
loans; amends section 428C(b) by adding a new clause relating 
to contents of loan agreements; amends section 428(c)(1) by 
adding a new subparagraph relating to consolidation loan 
interest rates; and extending authority.
    Section 420--Disbursement--amends section 428G(a)(1) 
relating to requirements for disbursement of student loans; 
amends section 428G(b)(1) to exempt institutions with low 
cohort default rates; amends section 428G(d)(2) relating to 
withholding of second disbursement.
    Section 421--Unsubsidized Stafford Loans--amends section 
428H(b) relating to eligible borrowers; amends section 
428H(d)(2)(A) by adding a new clause regarding loan limits; 
amends section 428H(e) by adding a new paragraph for 
qualification for forbearance, deferment, and income-sensitive 
repayment; and repeals origination fees.
    Section 422--repeals loan forgiveness for teachers, 
individuals' performing national community service and nurses.
    Section 423--amends section 432(f) regarding audit of 
financial transactions; amends section 432(m) by adding a new 
paragraph for free application for federal student aid and 
master promissory note; amends section 432(n) to extend 
authorization and make technical changes; and amends section 
432(p) to remove state postsecondary review entities from those 
listed for reporting requirements.
    Section 424--amends section 433 relating to student loan 
information.
    Section 425--amends section 435(a) regarding cohort default 
rates and by adding a new definition for mitigating 
circumstances; amends section 435(d) regarding eligible 
lenders; amends section 435(e) for a new definition of a line 
of credit.
    Section 426--amends section 437(a) to allow a certificate 
of total disability from a Veteran's Hospital to be acceptable 
for a loan discharge; and amends section 437(c)(1) regarding 
loan repayment and discharge by the Secretary.
    Section 427--amends section 437 by adding a new subsection 
regarding cancellation of loans for certain public service.
    Section 428--repeals debt management options.
    Section 429--Special Allowances--amends section 438(b)(2) 
relating to computation and payment; amends section 438(c) 
regarding origination fees and by adding a new paragraph for 
those demonstrating greater financial need; repeals section 
438(e) regarding lending from proceeds of tax exempt 
obligations; and adds a new subsection to allow a study on 
lender's policies on charging origination fees.

Part C--Federal work-study programs

    Section 435--amends section 441(a) regarding eligible 
students; amends section 441(b) to increase authorization of 
appropriation; amends section 441(c) relating to the definition 
of community service; amends section 442 regarding allocation 
of funds; amends section 443 by adding a new subparagraph for 
tutoring and literacy activities; amends section 443(b)(2)(A) 
relating to community service grant requirements; amends 
section 443(b)(3) regarding use of funds for independent and 
less-than-full time students; amends section 443(b)(6) 
regarding availability of employment; amends section 443(c)(4) 
regarding academic relevance; amends section 445(b) by adding a 
new paragraph for flexible use of funds; amends section 446 by 
adding new paragraph for cooperative education jobs; and 
extending authority for work colleges.

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

    Section 436--amends section 453(a) regarding selection of 
institutions for participation and origination; amends section 
453(b)(2) relating to selection procedure; and amends section 
453(c) regarding selection criteria.
    Section 437--amends section 455(b) regarding applicable 
interest rates for federal direct student loans; provides for 
an effective date; and amends section 455(g) regarding direct 
consolidation loans.
    Section 438--amends section 456(b) regarding contracts for 
origination, servicing, and data systems of direct loans.
    Section 439--amends section 458(a)(1) by adding a new 
subsection regarding funds for administrative expenses; amends 
section 458(a)(2) regarding calculation basis; and by striking 
section 458(2)(d) regarding notification.
    Section 440--amends Part D, Title IV by adding a new 
section to allow for the authority to sell loans.
    Section 441--amends Part D, Title IV by adding a new 
section regarding cancellation of loans for certain public 
service.

Part E--Federal Perkins Loans

    Section 445--amends section 461(b) to extend the Perkins 
Loan program authority; amends section 462 relating to 
allocation of funds; amends section 462(f)(2)(A) regarding 
default reduction penalties; amends section 462(h) by adding a 
new paragraph for default rate calculation definitions; amends 
section 463(c) by adding a new paragraph for reports to credit 
bureaus of payment resumptions; amends section 463 by adding a 
new subsection for incentive repayment programs; amends section 
464(a)(2)(B) relating to aggregate loan amounts; amends section 
464(b) by striking the allocation to less-than-full-time 
students provision; amends section 464(c)(2) by adding a new 
subparagraph for qualifications for deferments; amends section 
464 by adding new subsections for rehabilitation and discharge 
of loans; amends section 465 regarding cancellation of loans 
for certain public service; amends section 466 regarding 
distribution of assets; repeals Perkins Loan Revolving Fund; 
and amends section 468 by adding a new subsection for student 
status confirmation reports.

Part F--Need analysis

    Section 446--amends section 472 relating to the cost of 
attendance.
    Section 447--amends section 474(b)(3) regarding data 
elements.
    Section 448--amends section 475(b)(3) regarding parents' 
contribution from adjusted available income; amends section 475 
regarding family contribution from assets; amends section 
475(g) by increasing income allowance and by adding a new 
subparagraph for allowance for parent's negative available 
income; and amends section 475 by adding a new subsection for 
adjustments to students contribution for enrollment periods of 
less than nine months.
    Section 449--amends section 476(a) by adding a new 
paragraph for adjustments for enrollment periods other than 
nine months; and amends section 476(b)(1)(A)(iv) by increasing 
the income allowance protection for independent students 
without dependents and married students.
    Section 450--amends section 477(a) regarding family 
contribution for independent students with dependents other 
than a spouse.
    Section 451--amends section 478(b) by adding new revised 
tables and new revised amounts for income protection allowance.
    Section 452--amends section 479A(a) to allow specific 
special circumstances for discretion of student financial 
administrators; and amends section 479A by adding a new 
subsection for refusal or adjustment of loan certifications.
    Section 453--amends section 480(j)(3) relating to treatment 
of other financial assistance.

Part G--General provisions

    Section 461--amends section 481 by adding a new subsection 
for defining distance learning.
    Section 462--amends section 482(a) by adding new paragraphs 
regarding compliance to master schedule; and amends section 
482(c) regarding delay of effective date for late publications.
    Section 463--amends section 483(a) relating to a common 
financial aid form and by adding a new paragraph providing for 
the use of applications via electronic forms; amends section 
483(b) regarding streamlined reapplication process; and makes 
technical and conforming amendments.
    Section 464--amends section 484(a) relating to student 
eligibility; amends section 484(j) relating to termination of 
eligibility; amends section 484 by adding a new subsection for 
verification of income data with the Internal Revenue Service; 
adds a new subsection prohibiting eligibility of individual 
students convicted of any federal or state offense involving 
the possession or sale of a controlled substance; and provides 
for an effective date.
    Section 465--amends section 484A by adding a new subsection 
regarding state court judgments.
    Section 466--amends section 485(a) to add electronic media 
for information dissemination, by adding a new subparagraph to 
provide an effective date, and by adding a new paragraph to 
allow institutions to report completion or graduation rates; 
amends section 485(d) by adding a new paragraph to include 
state prepaid tuition programs and use of the Internet for 
publication of descriptions of assistance programs; amends 
section 485(e) regarding disclosures required with respect to 
athletically related student aid; amends section 485(f) by 
adding new criteria for disclosure on campus crime statistics 
reporting and by adding a new paragraph regarding disclosure of 
campus security policy and campus crime reporting; and amends 
section 485(g) by adding new subparagraphs for intercollegiate 
athletic data reporting; and by striking the effective date.
    Section 467--amends section 485B(a) regarding the national 
student loan data system.
    Section 468--amends section 487(a) regarding contents for 
program participation agreements; and amends section 487(c) 
relating to audits and financial responsibility.
    Section 469--amends section 487A by adding a new quality 
assurance and regulatory simplification program.
    Section 470--amends Part G of Title IV by adding a new 
section for distance education demonstration programs.
    Section 471--amends section 488A(a)(1) by increasing the 
maximum percentage on garnishment requirements; amends section 
488A by adding a new subsection for no attachment of student 
assistance.
    Section 472--amends section Part G of Title IV by adding a 
new section for administrative subpoena authority.
    Section 473--amends section 491 regarding the Advisory 
Committee on Student Financial Assistance and by adding new 
subsections for compensation and expenses and for special 
analysis and activities.
    Section 474--amends section 492 by adding a new section for 
negotiated rulemaking.

Part H--Program integrity

    Section 476--repeals State Postsecondary Review Program.
    Section 477--amends subpart 1 of Part H, Title IV to change 
the heading; amends 496(a) relating to standards required for 
accrediting agencies; amends section 496(c) regarding operating 
procedures; and amends section 496 by making the necessary 
technical and conforming amendments.
    Section 478--amends section 498(b)(1) relating to single 
application form; amends section 498(c) regarding financial 
responsibility standards; amends section 498(d)(1) relating to 
administrative capacity; amends section 498(f) regarding 
actions on applications, site visits and fees; amends section 
498(g) by adding a new subsection for time limitations; amends 
section 498(h)(2) to make conforming amendments; and amends 
section 498(i) by adding a new paragraph for provisional 
certification.
    Section 479--amends section 498A(a) relating to general 
authority for program review and data; and amends section 
498A(b) by adding a new subsection for special administrative 
rules.

                    Title V--Developing Institutions

    Section 501--establishes a new Title V--Developing 
Institutions; Part A--Hispanic-Serving Institutions; and Part 
B--General Provisions.

        Title VI--International and Graduate Education Programs

    Section 601--amends Title VI for statutory structure by 
adding new subparts; amends section 601 to add new findings and 
purposes section for international and foreign language 
studies; amends section 602(a) relating to graduate and 
undergraduate national resource centers and adding a new 
paragraph for authorized activities; amends section 602 by 
adding new subsections for graduate fellowships for foreign 
language and area pr international studies and for rules 
relating to expenses; amends section 603(a) by adding a new 
paragraph for intensive summer language institutes; amends 
section 604 by adding a new paragraph for use of funds for 
undergraduate international studies and foreign language 
programs, report and evaluation criteria and adds a new 
subsection relating to funding support; repeals intensive 
summer language institutes; amends section 606(a) by adding a 
new paragraph to allow for studies and surveys on the use of 
technology in foreign language, area and international studies 
program; amends section 607 to allow technological innovation 
and cooperation for foreign information access; amends section 
610 by adding a new subsection for developmental grants; 
extends appropriations authorization; and makes the necessary 
conforming amendments.
    Section 602--Business and International Education 
Programs--amends section 612 regarding centers for 
international business education; extends appropriations 
authorization; and makes technical amendments.
    Section 603--Institute for International Public Policy--
amends section 621(e) relating to minority foreign service 
professional development program; amends section 622 regarding 
junior year and summer abroad program; amends section 624 by 
adding a new subsection for postbaccalaureate internships; 
amends Title VI by adding a new section for institutional 
development program and for the interagency committee on 
minority careers in international affairs; and extends 
authorization.
    Section 604--amends section 631 by adding a new paragraph 
for definitions; repeals section 632; and makes the necessary 
redesignations.
    Section 605--amends Title VI by adding a new Part B--
Graduate Assistance in Areas of National Need; and repeals 
Title IX.

  Title VII--Construction, Reconstruction, and Renovation of Academic 
                               Facilities

    Section 701--amends section 702(a) for extension of prior 
rights and obligations.
    Section 702--repeals Part A of Title VII; and makes 
conforming amendments.
    Section 703--amends section 727(c) to extend authorization 
for Part B.
    Section 704--amends section 735 to extend authorization for 
Part C.

                   Title VIII--Additional Provisions

    Section 801--adds a new section requiring the study of 
transfer of credits.
    Section 802--adds a new section requiring the study of 
market mechanisms in the federal student loan program.
    Section 803--adds a new section for improvements in market 
information and public accountability in higher education.
    Section 804--adds a new section requiring a GAO study on 
differential regulation.
    Section 805--adds a new section requiring an annual report 
on the cost of higher education.
    Section 806--repeals Title XIII of the Higher Education 
Amendments of 1986; repeals Title XIV of the Higher Education 
Amendments of 1992; and repeals Parts A, B, C, D, and E of 
Title XV of the Higher Education Amendments of 1992.
    Section 807--prohibits funds appropriated under the Higher 
Education Act of 1965 or any other Act from being made 
available to the National Board for Professional Teaching 
Standards.

                   Title IX--Amendments to Other Laws

Part A--Education of the Deaf Act

    Section 901--amends section 103(a)(1) by adding a new 
subparagraph to include the educational liaison as an ex-
officio member of the Board of Trustees.
    Section 902--amends section 104(b)(3) for compliance under 
the Individuals with Disabilities Education Act; amends section 
104(b)(4)(C) by adding new clauses regarding additional 
administrative requirements.
    Section 903--amends section 105(a) relating to the 
agreement with Gallaudet University.
            Subpart 2--National Institute for the Deaf
    Section 911--amends section 112 regarding agreement for the 
National Technical Institute for the Deaf.
            Subpart B--General Provisions
    Section 921--amends section 201 relating to the definition 
of international student.
    Section 922--amends section 203(b) regarding independent 
audits.
    Section 923--amends section 204 to make technical 
amendments.
    Section 924--amends section 205(c) to extend appropriations 
authorization for monitoring, evaluation, and reporting.
    Section 925--amends section 206 regarding responsibility of 
the liaison.
    Section 926--amends section 207(b) by adding a new 
paragraph regarding federal payments; amends 207(d)(2)(C) 
relating to withdrawals and expenditures; and amends section 
207(h) to extend appropriations authorization.
    Section 927--repeals section 208 relating to scholarship 
program.
    Section 928--redesignates section 209 regarding oversight 
and effects of agreements.
    Section 929--amends section 210(a) relating to enrollment 
of international students; and makes conforming amendments.
    Section 930--amends section 211 to extend appropriation 
authorization and increase appropriation levels; and 
redesignates the section accordingly.

Part B--Extension and revision of Indian higher education programs

    Section 951--amends the Tribally Controlled Community 
College Assistance Act of 1978 for extension to colleges and 
universities; amends section 103 of the Tribally Controlled 
Community College Assistance Act by adding a new paragraph for 
Title I eligible grant recipients; amends section 106 of the 
Act by adding a new subsection for developing a national 
accrediting agency for tribal colleges and universities; amends 
section 108(a)(2) by increasing amounts for Title I grants; 
amends section 110 by increasing the appropriations 
authorization for Title I; and amends section 306 and 403 for 
extension of authorization of appropriations for Titles III and 
IV.
    Section 952--amends Title XIII for reauthorization of 
provisions from Education Amendments of 1992.
    Section 953--amends Section 5(a) of the Navajo Community 
College Act for reauthorization.

                 Title X--Faculty Retirement Provisions

    Section 1001--amends section 4 of the Age Discrimination in 
Employment Act of 1967 to allow institutions of higher 
education to offer voluntary retirement incentive plans.

                       Explanation of Amendments

    The Amendment in the Nature of a Substitute is explained in 
the body of this report.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch. This bill amends and reauthorizes the Higher Education 
Act. The bill does not prevent legislative branch employees 
from receiving the benefits of this legislation.

                       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. This bill amends 
and reauthorizes the Higher Education Act. The Committee 
received a letter from the Director of the Congressional Budget 
Office regarding unfunded mandates (see infra) and the 
Committee agrees with her analysis.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 2(l)(3)(A) of rule XI 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.

 Statement of Oversight Findings of the Committee on 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. 6.

                        Constitutional Authority

    The Higher Education Act and this bill, H.R. 6, are 
constitutional under the spending clause of the constitution, 
Article 1, section 8, clause 1.

                           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 that would be incurred in carrying out 
H.R. 6. 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.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements 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 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. 6 from the Director of the Congressional Budget Act:
                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, April 17, 1998.
Hon. William F. Goodling,
Chairman, Committee on Education and the Workforce,
House of Representatives, Washington, DC
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 6, the Higher 
Education Act Amendments of 1998.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Deborah 
Kalcevic.
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).
    Enclosure.

H.R. 6--Higher Education Act Amendments of 1998

    Summary: H.R. 6 would amend the Higher Education Act of 
1965 by reauthorizing several existing programs, authorizing 
new programs, and repealing others. Authorizations of 
appropriations under H.R. 6 would total $101 billion for fiscal 
years 1999-2003, assuming adjustments for inflation. Without 
adjustments for inflation, authorizations would total $100 
billion.
    H.R. 6 would also make numerous changes in federal student 
loan programs. These changes are estimated to reduce direct 
spending by $185 million in 1998 but increase spending by 
almost $3.8 billion over the 1999-2003 period.
    H.R. 6 contains no intergovernmental or private sector 
mandates that would exceed the thresholds established in the 
Unfunded Mandates Reform Act (UMRA).
    The estimates assume that H.R. 6 would be enacted by June 
1, 1998. Except where provisions have specific effective dates, 
H.R. 6 would become effective on October 1, 1998.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 6 is shown in Table 1.
    The costs of this legislation fall within budget function 
500 (education, training, employment, and social services).

                                 TABLE 1.--ESTIMATED BUDGETARY IMPACT OF H.R. 6                                 
                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                        1998      1999      2000      2001      2002      2003  
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION                                       
                                                                                                                
Spending under current law:                                                                                     
    Budget authority................................    10,052         0         0         0         0         0
    Estimated outlays...............................     9,268     8,335       385        19         0         0
                                                                                                                
                                          With Adjustment for Inflation                                         
                                                                                                                
Total proposed changes:                                                                                         
    Estimated authorization levels..................  ........    17,439    18,516    20,117    21,789    22,927
    Estimated outlays...............................  ........     3,168    16,449    18,625    20,337    21,924
Total spending under H.R. 6:                                                                                    
    Estimated authorization levels..................    10,052    17,439    18,516    20,117    21,789    22,927
    Estimated outlays...............................     9,268    11,503    16,834    18,644    20,337    21,924
                                                                                                                
                                        Without Adjustment for Inflation                                        
                                                                                                                
Total proposed changes:                                                                                         
    Estimated authorization levels..................  ........    17,439    18,425    19,929    21,501    22,528
    Estimated outlays...............................  ........     3,168    16,438    18,543    20,161    21,649
Total spending under H.R. 6:                                                                                    
    Estimated authorization levels..................    10,052    17,439    18,425    19,929    21,501    22,528
    Estimated outlays...............................     9,268    11,503    16,823    18,562    20,161    21,649
                                                                                                                
                                                 DIRECT SPENDING                                                
                                                                                                                
Baseline spending under current law:                                                                            
    Estimated budget authority......................     3,863     5,182     5,472     5,778     5,078     6,346
    Estimated outlays...............................     3,369     4,389     4,882     5,171     4,477     5,751
Proposed changes:                                                                                               
    Estimated budget authority......................     (\1\)       710       750       865       970     1,025
    Estimated outlays...............................      -185       590       665       740       845       915
Baseline spending under H.R. 6:                                                                                 
    Estimated budget authority......................     3,863     5,892     6,222     6,643     6,048     7,371
    Estimated outlays...............................     3,184     4,979     5,547     5,911     5,322     6,666
----------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.                                                                                         
Note: Components may not sum to totals due to rounding.                                                         

Basis of estimate

            Spending subject to appropriation
    H.R. 6 would reauthorize several existing discretionary 
programs within the Higher Education Act of 1965. In addition, 
some new programs would be authorized, and a number of expiring 
provisions would be repealed. For most of the programs that 
would be reauthorized or newly authorized, the bill includes 
stated amounts of authorizations for fiscal year 1999, plus 
such sums as may be necessary for the four following fiscal 
years. CBO assumes current spending patterns in estimating 
outlays.
    Tables 2 and 3 show the estimated impact of H.R. 6 on 
spending subject to appropriation by title, with and without 
adjustments for inflation after 1999.
    Title I: General Provisions.--Title I would authorize a new 
performance-based organization (PBO) within the Department of 
Education for the delivery of student financial aid assistance. 
The PBO would have a chief operating officer and up to five 
senior managers whose pay would be linked to their performance 
in improving student financial aid services. The PBO would have 
greater flexibility than the Department currently has in its 
budgeting, procurement, and personnel processes but would have 
no role in developing policy. Although the policy implications 
of the creation of this new PBO could be significant, its 
budgetary implications would be minimal, because the principal 
activities of the PBO are already being performed by the 
Department of Education. CBO estimates that this provision 
would cost an additional $2 million in 1999 and $1 million in 
each of fiscal years 2000 through 2003 to cover start-up 
activities and compensation for new personnel.
    Title II: Post-Secondary Improvement Programs.--Title II 
would authorize the Urban Community Service program, a fund for 
the improvement of post-secondary education, grants to states 
for workplace and community transition training for 
incarcerated youth offenders, an advanced placement fee payment 
program, and teacher quality enhancement grants. These 
authorizations would total $77 million in fiscal year 1999 and 
$386 million for fiscal years 1999-2003, not including 
adjustments for inflation.

    TABLE 2.--ESTIMATED IMPACT OF H.R. 6 ON SPENDING SUBJECT TO APPROPRIATION, WITH ADJUSTMENTS FOR INFLATION   
                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                   1998       1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Spending under current law:                                                                                     
    Estimated budget authority................     10,052          0          0          0          0          0
    Estimated outlays.........................      9,268      8,335        385         19          0          0
Proposed changes:                                                                                               
    Title I: General Provisions:                                                                                
        Estimated budget authority............  .........          2          1          1          1          1
        Estimated outlays.....................  .........          2          1          1          1          1
    Title II: Post-Secondary Improvement                                                                        
     Programs:                                                                                                  
        Estimated budget authority............  .........         77         79         81         83         85
        Estimated outlays.....................  .........          9         62         77         81         83
    Title III: Institutional Aid:                                                                               
        Estimated budget authority............  .........        385        343        352        360        370
        Estimated outlays.....................  .........         40        269        336        351        360
    Title IV: Pell Grants:                                                                                      
        Estimated budget authority............  .........     13,249     14,233     15,733     17,303     18,333
        Estimated outlays.....................  .........      2,650     13,181     14,513     16,017     17,478
    Title IV: Other Student Assistance:                                                                         
        Estimated budget authority............  .........      3,291      3,364      3,442      3,522      3,610
        Estimated outlays.....................  .........        413      2,576      3,219      3,381      3,485
    Title V: Developing Institutions:                                                                           
        Estimated budget authority............  .........         80         82         84         86         88
        Estimated outlays.....................  .........         10         64         80         84         86
    Title VI: International and Graduate                                                                        
     Education Programs:                                                                                        
        Estimated budget authority............  .........        148        152        155        159        164
        Estimated outlays.....................  .........         18        119        148        155        159
    Title VII: Construction, Reconstruction,                                                                    
     and Renovation of Academic Facilities:                                                                     
        Estimated budget authority............  .........         50         51         53         54         55
        Estimated outlays.....................  .........          0         15         45         52         53
    Title VII: Additional Provisions:                                                                           
        Estimated budget authority............  .........          3          3          1          1          1
        Estimated outlays.....................  .........          3          3          1          1          1
    Title IX: Amendments to the Education of                                                                    
     the Deaf Act of 1986 and Indian Higher                                                                     
     Education Act:                                                                                             
        Estimated budget authority............  .........        204        209        216        220        220
        Estimated outlays.....................  .........         24        160        204        215        219
Total proposed changes:                                                                                         
        Estimated budget authority............  .........     17,439     18,516     20,117     21,789     22,927
        Estimated outlays.....................  .........      3,168     16,449     18,625     20,337     21,924
Total spending under H.R. 6:                                                                                    
        Estimated budget authority............     10,052     17,439     18,516     20,117     21,789     22,927
        Estimated outlays.....................      9,268     11,503     16,834     18,644     20,337     21,924
----------------------------------------------------------------------------------------------------------------


   TABLE 3.--ESTIMATED IMPACT OF H.R. 6 ON SPENDING SUBJECT TO APPROPRIATION, WITHOUT ADJUSTMENT FOR INFLATION  
                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                   1998       1999       2000       2001       2002       2003  
----------------------------------------------------------------------------------------------------------------
Spending under current law:                                                                                     
    Estimated budget authority................     10,052          0          0          0          0          0
    Estimated outlays.........................      9,268      8,335        385         19          0          0
Proposed changes:                                                                                               
    Title I: General Provisions:                                                                                
        Estimated budget authority............  .........          2          1          1          1          1
        Estimated outlays.....................  .........          2          1          1          1          1
    Title II: Post-Secondary Improvement                                                                        
     Programs:                                                                                                  
        Estimated budget authority............  .........         77         77         77         77         77
        Estimated outlays.....................  .........          9         62         76         77         77
    Title III: Institutional Aid:                                                                               
        Estimated budget authority............  .........        335        335        335        335        335
        Estimated outlays.....................  .........         40        268        328        335        335
    Title IV: Pell Grants:                                                                                      
        Estimated budget authority............  .........     13,249     14,233     15,733     17,303     18,333
        Estimated outlays.....................  .........      2,650     13,181     14,513     16,017     17,478
    Title IV: Other Student Assistance:                                                                         
        Estimated budget authority............  .........      3,291      3,291      3,291      3,291      3,291
        Estimated outlays.....................  .........        413      2,566      3,153      3,241      3,266
    Title V: Developing Institutions:                                                                           
        Estimated budget authority............  .........         80         80         80         80         80
        Estimated outlays.....................  .........         10         64         78         80         80
    Title VI: International and Graduate                                                                        
     Education Programs:                                                                                        
        Estimated budget authority............  .........        148        148        148        148        148
        Estimated outlays.....................  .........         18        118        145        148        148
    Title VII: Construction, Reconstruction,                                                                    
     and Renovation of Academic Facilities:                                                                     
        Estimated budget authority............  .........         50         50         50         50         50
        Estimated outlays.....................  .........          0         15         45         50         50
    Title VII: Additional Provisions:                                                                           
        Estimated budget authority............  .........          3          3          1          1          1
        Estimated outlays.....................  .........          3          3          1          1          1
    Title IX: Amendments to the Education of                                                                    
     the Deaf Act of 1986 and Indian Higher                                                                     
     Education Act:                                                                                             
        Estimated budget authority............  .........        204        207        212        214        212
        Estimated outlays.....................  .........         24        160        202        211        213
Total proposed changes:                                                                                         
        Estimated budget authority............  .........     17,439     18,425     19,929     21,501     22,528
        Estimated outlays.....................  .........      3,168     16,438     18,543     20,161     21,649
Total spending under H.R. 6:                                                                                    
        Estimated budget authority............     10,052     17,439     18,425     19,929     21,501     22,528
        Estimated outlays.....................      9,268     11,503     16,823     18,562     20,161     21,649
----------------------------------------------------------------------------------------------------------------

    Title III: Institutional Aid.--Title III would provide 
authorizations for grants aimed at strengthening institutions 
of higher education, including historically black colleges and 
universities and tribally-controlled colleges and universities. 
Title III would also reauthorize the minority science and 
engineering improvement program. Authorizations under Title III 
would total $335 million in fiscal year 1999, and $1.7 billion 
for fiscal years 1999-2003, not including adjustments for 
inflation.
    Title IV: Pell Grants.--Title IV-A would reauthorize the 
Pell grant program and change the formulas used to determine 
Pell award levels.
    CBO has developed a simulation model using a sample of 
applicants for student aid to estimate the effects of various 
policy changes on federal spending under the Pell program and 
student loan programs. Using detailed income, asset, and 
demographic data for individual students and their families, 
the model is used to estimate how much students and their 
families would be expected to contribute to educational costs. 
For Pell grants, the model also simulates program participation 
and estimates the amount of federal support necessary to fund 
the program, based on families' expected contributions, the 
award rules, the costs of the postsecondary schools that the 
students attend, and the maximum award level. The figures 
included in this cost estimate are based on the Department of 
Education's sample of Pell grant applicants and recipients for 
the 1996-1997 academic year, the latest year for which complete 
data are available.
    Maximum awards.--The authorized Pell maximum award would be 
$4,500 for academic year 1999-2000, $4,700 for academic year 
2000-2001, $4,900 for academic year 2001-2002, $5,100 for 
academic year 2002-2003, and $5,300 for academic year 2003-
2004. The Pell program is currently authorized only through 
fiscal year 1998 (academic year 1998-1999). H.R. 6 would 
increase estimated authorizations by $13.2 billion for fiscal 
year 1999, $14.2 billion for fiscal year 2000, $15.7 billion 
for fiscal year 2001, $17.3 billion for fiscal year 2002, and 
$18.3 billion for fiscal year 2003. CBO estimates that, under 
the stated maximum grants, 4.6 million students would receive 
Pell grants in academic year 1999-2000, 4.7 million in 2000-
2001, 5.1 million in 2001-2002, 5.4 million in 2002-2003, and 
5.5 million in 2003-2004. The average award would be about 
$2,890 in 1999-2000, $3,000 in 2000-2001, $3,100 in 2001-2002, 
$3,220 in 2002-2003, and $3,300 in 2003-2004. These estimates 
assume that the program would be funded at the maximum levels 
authorized and would include the needs analysis and other 
changes contained in the bill.
    Needs analysis.--Part F of Title IV of the bill would 
modify the needs analysis formulas used for calculating federal 
Pell grants. The needs analysis formulas are used to determine 
the expected family contribution (EFC), or the amount that the 
federal government expects the parents and the student to 
contribute toward the student's education. In most cases, the 
size of the grant is determined by subtracting the EFC from the 
maximum award. Any change that would lower the EFC would 
increase an individual's grant.
    Under H.R. 6, parents of dependent students who are also 
enrolled in college courses would no longer be counted as 
students when determining the parents' contribution from 
available income. This change would raise the EFC for these 
families and reduce the Pell award. CBO estimates that this 
provision would reduce program costs by about $10 million, 
assuming a $3,000 maximum award (the same level as in 1998-
1999).
    Under H.R. 6, assets held by dependent students and their 
parents would be combined and assessed together to determine a 
family contribution from assets, rather than assessing them 
separately and at different rates as under current law. Under 
this bill, dependent students would have to contribute 12 
percent of their assets each year towards college, rather than 
the current 35 percent. CBO estimates that this provision would 
increase program costs by about $90 million in 1999, assuming a 
$3,000 maximum award.
    H.R. 6 would increase the income protection allowance (IPA) 
for dependent students and for independent students without 
children. The IPA is an amount of income that is not expected 
to be used toward college and is not counted as income as part 
of the EFC calculations. H.R. 6 would increase the IPA from 
$2,200 to $3,000 for dependent students, from $4,250 to $5,500 
for single students and for married students who are both 
enrolled in school, and from $7,250 to $8,500 for married 
students with only one enrolled. CBO estimates that the IPA 
increases would boost program costs by about $310 million in 
1999, assuming a $3,000 maximum award.
    H.R. 6 would index these IPA levels to the consumer price 
index for fiscal year 2000 and beyond. This provision would 
result in additional costs of about $30 million in 2000, $60 
million in 2001, $90 million in 2002, and $120 million in 2003.
    Under the bill, negative parental income (after taxes, 
employment expenses, and the IPA) would count as an offset 
against the students' available income. CBO estimates that this 
provision would increase costs by about $180 million in 1999 
with a $3,000 maximum award.
    H.R. 6 would give student financial aid administrators more 
discretion in determining a student's EFC. Under current law, a 
student financial aid administrator can, on a case-by-case 
basis and under ``special circumstances,'' change the items 
that go into calculating a student's EFC. H.R. 6 would allow 
the aid administrator under ``extraordinary circumstances'' (to 
be defined by the Secretary of Education) to change a student's 
EFC itself. Since under current law an aid administrator has 
the discretion to affect a student's EFC, and since any use of 
the ``extraordinary circumstances'' provision would likely need 
substantialdocumentation, CBO assumes that this provision would 
be used infrequently and have a negligible effect on costs.
    Other provisions.--Title IV would exclude schools with high 
loan default rates from participating in the Pell programs. CBO 
estimates that this provision would reduce Pell costs by about 
$15 million in 1999, assuming a $3,000 maximum award.
    Part G of Title IV contains a provision that would exclude 
individuals attending college in Micronesia, the Marshall 
islands, and Palau from receiving Pell awards beginning in 
2001. This provision would reduce program costs by $6 million 
each year assuming a $3,000 maximum award.
    Part G authorizes the Secretary of Education to verify 
income data by confirming that adjusted gross income (AGI) 
claimed on student financial aid forms corresponds to the AGI 
declared to the IRS. A recent audit by the Department of 
Education suggests that approximately 4.4 percent of applicants 
underreported their incomes and received larger awards than 
they should have. CBO estimates that the proposed policy could 
not be implemented until fiscal year 2000. Savings in that year 
would be $180 million and would total $735 million over the 
2000-2003 period.
    CBO estimates that other provisions would have little or no 
budgetary impact. They include increasing the tuition 
sensitivity formula threshold, increasing the dependent care 
allowance in cases where the tuition sensitivity formula is 
used, prorating a student's contribution for periods of 
enrollment less than nine months, excluding from participation 
individuals convicted of drug-related offenses, changing the 
rule dealing with sources of revenues for proprietary schools, 
and allowing for a distance education demonstration project.
    Title IV: Other Student Assistance.--In addition to 
authorizing Pell grants, Title IV-A would authorize other 
grants to students. These grants would include work-study 
grants, TRIO programs, a new High Hopes for College program, 
federal supplementary education opportunity grants, assistance 
for students whose families are engaged in migrant and seasonal 
farm work, a new Frank Tejeda Scholarship, and a Robert C. Byrd 
Honors Scholarship. With the exception of the High Hopes for 
College program, these grants would be authorized through 2003. 
The High Hopes program would be authorized through 2004. 
Discretionary spending authorized in Part A of Title IV, 
excluding Pell Grants, totals $3.3 billion for fiscal year 1999 
and $16.5 billion from 1999-2003, not including adjustments for 
inflation.
    Title V: Developing Institutions.--Title V would authorize 
grants to institutions with full-time undergraduate enrollment 
of at least 25 percent Hispanic students. A qualifying 
institution would need to provide assurances that at least 50 
percent of its Hispanic students are low income. The bill would 
provide $80 million in fiscal year 1999 and such sums as may be 
necessary for grants to Hispanic serving institutions. Title V 
would authorize $400 million over the 1999-2003 period, not 
including adjustments for inflation.
    Title VI: International and Grant Education Programs.--
Title VI would authorize funding for international and foreign 
language studies, a business and international education 
program, an institute for international public policy, and 
graduate assistance areas of national need. Authorizations 
under Title VI would total $148 million in fiscal year 1999 and 
$740 million for fiscal years 1999-2003, not including 
adjustments for inflation.
    Title VII: Construction, Reconstruction, and Renovation of 
Academic Facilities.--Title VII would authorize $50 million in 
1999 to cover the subsidy costs of loans for construction, 
reconstruction, and renovation of academic housing and other 
educational facilities. Estimated authorization levels would 
total $250 million for fiscal year 1999-2003, not including 
adjustments for inflation.
    Title VIII: Additional Provisions.--Title VIII would 
authorize several studies on various aspects of higher 
education. One study would be a report by the Department of 
Education on the existing practices concerning the transfer of 
credits between institutions of higher education. The General 
Accounting Office (GAO) would be required to undertake three 
studies: an analysis of the potential for using auctions or 
other market mechanisms in the delivery of student loans, a 
study on the costs to institutions of higher education of 
regulations affecting industrial and commercial enterprises, 
and an annual report on the costs of higher education. The 
final requirement of Title VIII is a study by the National 
Center on Education Statistics (NCES) on establishing 
consistent methodologies for reporting the various costs of the 
different institutions of higher education.
    The report required by the Department of Education is 
estimated to have insignificant costs. After discussions with 
GAO staff, CBO estimates that the GAO studies would cost $1.1 
million over the 1999-2000 period, with insignificant costs for 
the ongoing reporting requirement. Based on consultations with 
NCES staff, CBO estimates that the NCES study would cost $2 
million in both 1999 and 2000 and $1 million annually for the 
ongoing collection and dissemination of data.
    Title IX: Amendments to the Education of the Deaf Act of 
1986 and Indian Higher Education Act.--Title IX would amend the 
Education of the Deaf Act by authorizing funds for Gallaudet 
University and the National Technical Institute for the Deaf 
(NTID). Under this title, Gallaudet's authorization would total 
$83 million in 1999 and $430 million for fiscal years 1999-
2003; the NTID would receive $45 million in 1999 and $239 
million over the years 1999-2003.
    Authorizations under Part B of Title IX would target 
tribally-controlled colleges and universities and would include 
funds for endowment growth, construction, economic development, 
teacher training, and the Navajo Community College Act. Total 
authorizations under Title IX would be about $200 million in 
1999 and about $1.1 billion for fiscal years 1999-2003.
            Direct spending
    Title IV: Student Loans.--This bill makes several changes 
in the student loan programs, which under current law are 
expected to guarantee or issue about 52 million loans totaling 
$210 billion over the 1998-2003 period. The bill would slightly 
modify the conditions of eligibility for loans and would 
increase the government's cost of providing loan capital to 
students and parents. In general, the proposed changes may be 
generally classified by their impact: changes affecting 
interest rates for borrowers and lenders, changes affecting 
guaranty agencies, and changes affecting borrowers. The bill 
also contains a number of other changes to the program, but 
these would have relatively small budgetary effects.
    Most provisions affecting the student loan programs are 
assessed under the requirements of credit reform. As such, the 
budget records all the costs and collections associated with a 
new loan on a present-value basis in the year the loan is 
obligated. The costs of all changes affecting outstanding loans 
are displayed in the year a bill is enacted--in this case 1998.
    The changes included in this bill would decrease program 
costs by $185 million in 1998, but increase costs by $630 
million in 1999 and $3.8 billion over the 1998-2003 period (see 
Table 4). The overall federal discounted cost of providing loan 
capital to students and parents would be increased by about 2 
percentage points per each dollar loaned from an estimated 11.6 
percent to 13.6 percent.

                                                 TABLE 4.--ESTIMATED IMPACT OF H.R. 6 ON DIRECT SPENDING                                                
                                                        [By fiscal year, in millions of dollars]                                                        
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  1998     1999    2000    2001    2002    2003    2004    2005    2006    2007    2008 
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      STUDENT LOANS                                                                     
                                                                                                                                                        
Interest rates:\1\                                                                                                                                      
    Budget authority.........................................        360     700     725     790     845     870     925     970   1,010   1,050   1,095
    Outlays..................................................        160     605     650     695     750     780     820     865     895     935     975
Guaranty agencies:                                                                                                                                      
    Budget authority.........................................       -405       5      16      10      25      40      70      70      70      75      70
    Outlays..................................................       -385     -20      11      10      25      30      70      70      70      65      70
Borrowers:                                                                                                                                              
Budget authority.............................................         35      23      35      90     130     145     145     145     155     155     160
    Outlays..................................................         30      23      35      60     110     130     130     135     140     145     145
Other:                                                                                                                                                  
    Budget authority.........................................          5       5   (\2\)   (\2\)   (\2\)   (\2\)   (\2\)   (\2\)   (\2\)   (\2\)   (\2\)
    Outlays..................................................          5       5   (\2\)   (\2\)   (\2\)   (\2\)   (\2\)   (\2\)   (\2\)   (\2\)   (\2\)
Interactions among provisions:                                                                                                                          
Budget authority.............................................          5      17      14      15      10      10      15      15      20      20      25
    Outlays..................................................          5      17       9      15       0      15      10      10      10      20      15
Subtotal:                                                                                                                                               
    Budget authority.........................................      (\2\)     750     790     905   1,010   1,065   1,155   1,200   1,255   1,300   1,350
    Outlays..................................................       -185     630     705     780     885     955   1,030   1,080   1,115   1,165   1,205
                                                                                                                                                        
                                                                  PERKINS LOAN PROGRAM                                                                  
                                                                                                                                                        
Perkins, loan revolving fund:                                                                                                                           
Budget authority.............................................  .........     -40     -40     -40     -40     -40     -40     -40     -40     -40     -40
    Outlays..................................................  .........     -40     -40     -40     -40     -40     -40     -40     -40     -40     -40
Perkins loan payoff provision:                                                                                                                          
    Budget authority.........................................  .........   (\2\)   (\2\)   (\2\)   (\2\)   (\2\)   (\2\)   (\2\)   (\2\)   (\2\)   (\2\)
    Outlays..................................................  .........   (\2\)   (\2\)   (\2\)   (\2\)   (\2\)   (\2\)   (\2\)   (\2\)   (\2\)   (\2\)
Subtotal:                                                                                                                                               
    Budget authority.........................................  .........     -40     -40     -40     -40     -40     -40     -40     -40     -40     -40
    Outlays..................................................  .........     -40     -40     -40     -40     -40     -40     -40     -40     -40     -40
                                                                                                                                                        
                                                                          TOTAL                                                                         
                                                                                                                                                        
    Budget authority.........................................      (\2\)     710     750     865     970   1,025   1,115   1,160   1,215   1,260   1,310
    Outlays..................................................       -185     590     665     740     845     915     990   1,040   1,075   1,125   1,165
--------------------------------------------------------------------------------------------------------------------------------------------------------

    \1\ The estimated costs of the interest rate changes excluding the 
expected government costs associated with the cap on borrower interest 
rates are as follows:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   1998    1999    2000    2001    2002    2003    2004    2005    2006    2007    2008 
--------------------------------------------------------------------------------------------------------------------------------------------------------
      Budget authority..........................................      95     185     195     230     250     260     270     280     290     300     310
      Outlays...................................................      45     150     175     195     220     235     245     255     260     270     280
--------------------------------------------------------------------------------------------------------------------------------------------------------

    \2\ Less than $500,000.
    Changes Affecting Interest Rates for Borrowers and 
Lenders.--Under current law, a new formula for establishing the 
variable interest rate on guaranteed and direct student loans 
is scheduled to take effect in July 1998.\1\ The interest rate 
received by private lenders will be the interest rate on bonds 
of comparable maturity plus 1.0 percentage points.\2\ Borrowers 
will pay the same rate, but no more than 8.25 percent. To the 
extent that the yield to lenders exceeds the rate paid by 
borrowers, the federal government pays lenders the difference, 
which is called a special allowance. In addition the federal 
government pays the interest for student borrowers with 
subsidized loans while they are in school or in a period of 
grace or deferment.
---------------------------------------------------------------------------
    \1\ Before July 1998, borrowers in the guaranteed and direct 
student loan programs pay the bond equivalent of the 91-day Treasury 
bill rate plus 2.5 percentage points while the borrower is in school, 
grace, and deferment and 3.1 percentage points when the borrower is in 
repayment. The interest rate cap is 8.25 percent. The interest rate on 
guaranteed and direct parent loans is the bond equivalent of the 365-
day Treasury bill rate plus 3.1 percentage points, with a cap of 9 
percent.
    \2\ The CBO baseline assumes that the rate on bonds of comparable 
maturity is the 10-year bond rate. Recently, the Administration has 
indicated that it expects to use a blended rate of 10-year and 20-year 
maturities.
---------------------------------------------------------------------------
    H.R. 6 would set the rate paid by student borrowers at the 
bond-equivalent 91-day Treasury bill rate plus 1.7 percentage 
points while the borrower is in school, grace, or deferment and 
2.3 percentage points when the borrower is in repayment. 
Lenders would receive a rate that would be 50 basis points (0.5 
percentage points) higher, and the difference would be paid by 
the federal government. In addition, the cap of 8.25 percent on 
borrower's rates would be retained. (The bill would also change 
the rates on direct and guaranteed parent loans.)
    The net budgetary effect of the changes in borrower 
interest rates and lender yields is to increase federal costs 
over the 1998-2003 period by about $3.6 billion relative to 
current law. The increased cost is associated with the new, 
minimum 50-basis-point special allowance payment as well as the 
increased exposure of the federal government to interest rate 
subsidies when rates rise sufficiently to cause the borrowers' 
interest rates to be constrained by the statutory caps. The 
proposed new interest rate structure would move the interest 
rates closer to the caps. Moreover, the 91-day Treasury bill is 
a more volatile instrument than the 10-year bond rate. These 
costs are partially offset by higher borrower interest payments 
in the direct loan program.
    In estimating the expected federal costs of the interest 
rate formula change, CBO used a vector autoregressive model to 
simulate the variation in interest rates around the CBO's 
baseline forecast. The model provided probabilities of how 
often and by how much the simulated rates exceeded the 8.25 
percent interest rate cap. These probabilities were then used 
in CBO's model of the student loan program to estimate changes 
in subsidy costs.
    Changes Affecting Guarantors.--H.R. 6 would restructure the 
financing of guaranty agencies and divide the current agency 
reserve funds into federal and agency property. In addition, 
many of the federal payments to and from the guaranty agencies 
would be altered by this bill. Overall, the provisions 
affecting guaranty agencies are estimated to reduce federal 
costs by $329 million over the 1998-2003 period.
    This bill would reduce the federal reinsurance rate on new 
insured loans from 98 percent to 95 percent; the reinsurance 
rates for high default agencies would also be lowered. This 
change would lower costs by $355 million over the next five 
years.
    H.R. 6 would lower the retention allowance on default 
collections by the guaranty agencies. Currently, agencies are 
allowed to retain 27 percent of their recoveries from loans 
that default; the remainder goes to the federal government. 
This bill would reduce the retention allowance to 24 percent 
except for consolidations of defaulted loans, where the 
percentage would be set at 18.5 percent. This change would 
apply to all default collections as of October 1, 1998, and 
result in an estimated $385 million in savings over the 1998-
2003 period.
    The bill would eliminate the payment to guaranty agencies 
in cases where the agencies assist lenders in attempting to 
avert defaults. Currently the payment is equal to 1 percent of 
the principal and interest of loans for which the lenders do 
not file a default claim for at least 270 days after the loan 
is determined to be delinquent. The elimination of this 
payment, which would apply for outstanding as well as new 
loans, would save $260 million from 1998 to 2003.
    The bill would reclaim $150 million in agency reserves over 
the next five years. Although agency reserves are considered 
the property of the federal government, federal budgetary 
documents have never displayed these reserves as assets of the 
federal government. Consequently, as with the reserves 
recaptured in the Balanced Budget Act of 1997, the Office of 
Management and Budget (OMB) has displayed any reserves being 
reclaimed as offsetting receipts, and CBO has followed this 
budgetary treatment. The reserves reclaimed under H.R. 6 are 
estimated to reduce net federal spending by $150 million over 
the 1999-2003 period.
    The bill would establish a new federal subsidy payment to 
guaranty agencies equal to 0.65 percent of new guaranteed loan 
volume. Based on CBO's estimate of loan volume, this provision 
would cost $690 million over the next five years.
    The bill would increase the current $150 million annual 
mandated set-aside of Section 458 funds to be used for 
administrative costs. The new payments would be 0.12 percent 
ofoutstanding guaranteed loan volume for 1999 and 2000 and 0.1 percent 
thereafter. Section 458 funds would be increased by $131 million over 
the 1999-2003 period.
    Changes Affecting Borrowers (exclusive of changes in 
interest rates).--H.R. 6 would make numerous changes in the 
student loan program that could have implications for 
borrowers. In total, the provisions affecting borrowers--
excluding the change in interest rates--would cost the federal 
government an estimated $388 million over the 1998-2003 period.
    The bill would provide for a degree of loan cancellation 
for some teachers in public or private elementary or secondary 
schools in school districts eligible for Title I grants and in 
a school with more than 30 percent of students from low-income 
families. Teachers would have to be certified (in the case of 
elementary school teachers) or to be teaching in their college 
major (in the case of secondary school teachers). Loan 
cancellation would apply only to subsidized loans received 
after the first two years of college up to $17,750, and the 
loans and accrued interest would be canceled according to the 
following schedule: nothing for the first two years of 
teaching, 30 percent in each of the third and fourth years, and 
the remaining 40 percent in the fifth year. Eligibility would 
be restricted to new loans issued to new borrowers beginning in 
October 1998. The estimated costs of this provision were based 
on information from the National Center on Education Statistics 
on the number of newly hired teachers who are recent college 
graduates and the number of teachers who teach in the types of 
schools which would be eligible to participate under this 
program, as well as information on the number of elementary 
teachers who are certified to teach and the number of secondary 
teachers who are teaching in their major. By 2003, over 30,000 
new teachers are estimated to be participating in this program. 
The estimated subsidy costs of the provision are $218 million 
over the next five years.
    This bill would also modify certain rules with regard to 
loan disbursements, change the calculations determining 
eligibility for loans, modify various repayment rules and terms 
and alter loan amounts in certain cases. Estimates for the 
changes in eligibility requirements and loan amounts are 
generally derived from simulations from the Pell Grant model 
described earlier. Together these changes would increase costs 
by $170 million over the 1998-2003 period.
    Other Changes.--H.R. 6 would extend for one additional year 
an exemption to a rule that would eliminate schools from 
participating in the student loan program if their default 
rates for a cohort exceeded 25 percent. In addition, the 
Secretary of Education would be allowed to continue the 
exemption on a year-by-year and case-by-case basis for the next 
two years. CBO estimates that this provision will increase 
federal costs by $5 million in both fiscal years 1998 and 1999.
    Interactions Among Student Loan Provisions.--Because the 
proposed changes in the student loan programs interact with 
each other, the total savings from all of the provisions 
together do not equal the sum of the individual components. For 
example, changes in loan volume due to changes in eligibility 
rules would affect the costs of the change in interest rates. 
When all of the provisions are considered together, the 
interactions increase the costs by $17 million in 1999 and $61 
million through 2003.
    Perkins Loans.--Under current law, the Perkins loan 
revolving fund collects receipts of certain repayments from 
Perkins loans that have been assigned, referred to, or 
transferred to the Department of Education. The monies in this 
fund are to be disbursed by the Secretary to Perkins loan 
schools in the form of grants for new capital. H.R. 6 would 
repeal this fund and deposit its current balances in the 
Treasury. This change would save $200 million over the 1998-
2003 period. H.R. 6 would also mandate that the Secretary of 
Education pay off Perkins loans for borrowers whose schools 
closed before they completed their course of education. Few 
borrowers would be affected by this provision, and its cost 
would be negligible.
    Pay-as-you-go considerations: The provisions H.R. 6 would 
affect direct spending and therefore would be subject to pay-
as-you-go procedures under Section 252 of the Balanced Budget 
and Emergency Deficit Control Act of 1990. The pay-as-you-go 
procedures cover only the current year, the budget year, and 
the succeeding four years. The pay-as-you-go effects of the 
bill are shown in the table below.

                                                            SUMMARY OF PAY-AS-YOU-GO EFFECTS                                                            
                                                        [By fiscal year, in millions of dollars]                                                        
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   1998    1999    2000    2001    2002    2003    2004    2005    2006    2007    2008 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Change in outlays..............................................     -185     590     665     740     845     915     990   1,040   1,075   1,125   1,165
Change in receipts.............................................    (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)   (\1\)
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Not applicable.                                                                                                                                     

    Intergovernmental and Private-Sector Impact: H.R. 6 
contains no intergovernmental or private-sector mandates that 
would exceed the thresholds established in UMRA. (The threshold 
for intergovernmental mandates is $50 million in 1996, adjusted 
annually for inflation. The threshold is $100 million in 1996, 
adjusted annually for inflation.) The bill would prohibit all 
creditors, including state, local, and tribal governments, from 
garnishing grants, loans, or work assistance awarded to 
students (under Title IV of this bill) to satisfy any debt owed 
by the student. CBO estimates that any loss of revenue to 
creditors would not be significant.
    The bill's provisions would, on the whole, benefit public 
institutions of higher education. Although some new 
requirements would be imposed on these institutions, they would 
not be considered mandates under UMRA because they would be 
conditions of receiving federal assistance.
    Estimate prepared by: Federal Cost: Deborah Kalcevic, 
Justin Latus, Josh O'Harra, and Christina Hawley Sadoti; Impact 
on State, Local, and Tribal Governments: Marc Nicole; Impact on 
the Private Sector: Nabeel Alsalam.
    Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.





                                   House of Representatives
                                     Washington, DC, April 8, 1998.
Hon. William F. Goodling,
Chairman, Committee on Education and the Workforce, Rayburn House 
        Office Building, Washington, DC.
    Dear Mr. Chairman. On roll call vote number seven, 
regarding reporting H.R. 6 to the House floor, I was 
unavoidably detained due to legislative duties. Had I been 
present, I would have voted aye.
    I would appreciate your inserting this letter into the 
Committee's report. Thank you for your attention to this 
matter.
            Sincerely,
                                         Michael N. Castle,
                                                Member of Congress.

         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

  Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, That this 
Act may be cited as the ``Higher Education Act of 1965''.

           [TITLE I--PARTNERSHIPS FOR EDUCATIONAL EXCELLENCE

         [PART A--SCHOOL, COLLEGE, AND UNIVERSITY PARTNERSHIPS

[SEC. 101. PURPOSE.

  [It is the purpose of this part to encourage partnerships 
between institutions of higher education or State higher 
education agencies and secondary schools serving low-income and 
disadvantaged students, to support programs that--
          [(1) improve the retention and graduation rates at 
        such secondary schools;
          [(2) improve the academic skills of public and 
        private nonprofit secondary school students;
          [(3) increase such students' opportunities to 
        continue a program of education after secondary school; 
        and
          [(4) improve such students' prospects for employment 
        after secondary school.

[SEC. 102. AGREEMENT.

  [(a) Agreement.--To be eligible for a grant under this part, 
an institution of higher education, a State higher education 
agency, or a consortium consisting of any of the preceding 
entities thereof shall enter into a written partnership 
agreement with a local educational agency. Such partnership may 
include businesses, labor organizations, professional 
associations, community-based organizations, public television 
stations or other telecommunications entities, or other public 
or private agencies or organizations. Each entity participating 
in the partnership shall sign the agreement.
  [(b) Contents of Agreement.--The agreement shall include--
          [(1) a listing of all participants in the 
        partnership, including a designation of the official 
        representatives of each entity participating in the 
        partnership;
          [(2) a description of the responsibilities of each 
        participant in the partnership; and
          [(3) a listing of the resources to be contributed by 
        each participant in the partnership.

[SEC. 103. GRANTS.

  [(a) Division Between School-Year and Summer Programs.--From 
the funds appropriated to carry out this part pursuant to 
section 106, the Secretary shall reserve 65 percent of such 
funds to carry out programs operating during the regular school 
year and 35 percent of such funds to carry out programs 
operating during the summer.
  [(b) Amount and Use of Grants.--
          [(1) Amount.--The Secretary shall make grants under 
        this part in amounts which are not less than $250,000 
        and not more than $1,000,000.
          [(2) Permitted uses of funds.--Grants under this part 
        may be used by the partnership for programs that--
                  [(A) use college students to tutor secondary 
                school students and improve their basic 
                academic skills or to involve secondary school 
                students in community service-learning 
                projects;
                  [(B) are designed to improve the basic 
                academic skills of secondary school students;
                  [(C) are designed to increase the 
                understanding of specific subjects of secondary 
                school students;
                  [(D) are designed to improve the opportunity 
                to continue a program of education after 
                graduation for secondary school students; and
                  [(E) are designed to increase the prospects 
                for employment after graduation of secondary 
                school students.
  [(c) Preferences.--In making grants under this part, the 
Secretary shall give a preference to--
          [(1) programs which will serve predominantly low-
        income communities;
          [(2) partnerships which will run programs during the 
        regular school year and summer;
          [(3) programs which will serve educationally 
        disadvantaged students; students with disabilities; 
        potential dropouts; pregnant adolescents and teenage 
        parents; children of migratory agricultural workers or 
        of migratory fishermen; or students whose native 
        language is other than English; and
          [(4) programs designed to encourage women and 
        minorities who are underrepresented in the fields of 
        science and mathematics to pursue these fields.
  [(d) Duration.--Each grant awarded under this part may be 
awarded for a period not to exceed 5 years.
  [(e) Equitable Geographic Distribution.--The Secretary shall 
award grants under this part in a manner that achieves an 
equitable geographic distribution of such grants.

[SEC. 104. GRANT APPLICATION.

  [(a) Application Required.--A partnership desiring to receive 
a grant under this part shall submit an application to the 
Secretary, in such form and providing such information as the 
Secretary, by regulation, shall require.
  [(b) Contents of Application.--The application shall 
include--
          [(1) the partnership agreement described in section 
        102;
          [(2) a listing of the public and private nonprofit 
        secondary school or schools to be involved in the 
        program;
          [(3) a description of the activities and services for 
        which assistance is sought;
          [(4) a description of the programs to be developed 
        and operated by the partnership; and
          [(5) assurances to the Secretary that--
                  [(A) the partnership will establish a 
                governing body including one representative of 
                each participant in the partnership;
                  [(B) Federal funds will provide no more than 
                70 percent of the cost of the project in the 
                first year, 60 percent of such costs in the 
                second year, and 50 percent of such costs in 
                the third year and any subsequent year;
                  [(C) a local educational agency or 
                institution of higher education receiving funds 
                under this part shall not reduce its combined 
                fiscal effort per student or its aggregate 
                expenditure on education;
                  [(D) a local educational agency or 
                institution of higher education participating 
                in this partnership shall utilize any Federal 
                funds it shall receive from a grant under this 
                part to supplement, and, to the extent 
                practicable, increase the resources that would, 
                in the absence of such Federal funds, be made 
                available from non-Federal sources for the 
                education of students described in this part; 
                and
                  [(E) in no case shall funds under such a 
                grant be used to supplant non-Federal funds 
                already available.
  [(c) Special Rule.--The non-Federal share of grants awarded 
under this part may be in cash or in kind fairly evaluated, 
including services, supplies or equipment.
  [(d) Waiver.--The Secretary may waive the matching 
requirement described in paragraph (5)(B) for any eligible 
partnership that demonstrates to the satisfaction of the 
Secretary a unique hardship that prevents compliance with such 
matching requirement.

[SEC. 105. 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 shall consult with officials of the other 
Federal agencies and with non-Federal organizations to ensure 
that the panel membership shall be geographically balanced and 
be composed of representatives from public and private 
institutions of elementary, secondary, and higher education, 
labor, business, and State and local governments, who have 
expertise in community service or in education.

[SEC. 106. 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 this part.

                    [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 allstudents 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 XII--GENERAL PROVISIONS]

             TITLE I--GENERAL AND ADMINISTRATIVE PROVISIONS

                       PART A--GENERAL PROVISIONS

SEC. [1201.] 101. DEFINITIONS.

  As used in this Act--
  [(a) The term ``institution of higher education'' means an 
educational institution in any State which (1) admits as 
regular students only persons having a certificate of 
graduation from a school providing secondary education, or the 
recognized equivalent of such a certificate, (2) is legally 
authorized within such State to provide a program of education 
beyond secondary education, (3) provides an educational program 
for which it awards a bachelor's degree or provides not less 
than a two-year program which is acceptable for full credit 
toward such a degree, (4) is a public or other nonprofit 
institution, and (5) is accredited by a nationally recognized 
accrediting agency or association, or if not so accredited, is 
an institution that has been granted preaccreditation status by 
such an agency or association that has been recognized by the 
Secretary for the granting of preaccreditation status, and the 
Secretary has determined that there is satisfactory assurance 
that the institution will meet the accreditation standards of 
such an agency or association within a reasonable time. Such 
term also includes any school which provides not less than a 
one-year program of training to prepare students for gainful 
employment in a recognized occupation and which meets the 
provision of clauses (1), (2), (4), and (5). Such term also 
includes a public or nonprofit private educational institution 
in any State which, in lieu of the requirement in clause (1), 
admits as regular students persons who are beyond the age of 
compulsory school attendance in the State in which the 
institution is located. For purposes of this subsection, the 
Secretary shall publish a list of nationally recognized 
accrediting agencies or associations which he determines, 
pursuant to subpart 2 of part H of title IV of this Act, to be 
reliable authority as to the quality of the education or 
training offered.
  [(b) The term ``State'' includes, in addition to the several 
States of the Union, the Commonwealth of Puerto Rico, the 
District of Columbia, Guam, American Samoa, the Virgin Islands, 
the government of the Northern Mariana Islands, and the Trust 
Territory of the Pacific Islands.]
  (a) Institution of Higher Education.--
          (1) In general.--Subject to paragraphs (2) through 
        (4) of this subsection:
                  (A) Principal criteria.--The term 
                ``institution of higher education'' means an 
                educational institution in any State that--
                          (i) admits as regular students only 
                        persons having a certificate of 
                        graduation from a school providing 
                        secondary education, or the recognized 
                        equivalent of such a certificate;
                          (ii) is legally authorized within 
                        such State to provide a program of 
                        education beyond secondary education;
                          (iii) provides an educational program 
                        for which it awards a bachelor's degree 
                        or provides not less than a two-year 
                        program that is acceptable for full 
                        credit toward such a degree;
                          (iv) is a public or other nonprofit 
                        institution; and
                          (v) is accredited by a nationally 
                        recognized accrediting agency or 
                        association, or if not so accredited, 
                        is an institution that has been granted 
                        preaccreditation status by such an 
                        agency or association that has been 
                        recognized by the Secretary for the 
                        granting of preaccreditation status, 
                        and the Secretary has determined that 
                        there is satisfactory assurance that 
                        the institution will meet the 
                        accreditation standards of such an 
                        agency or association within a 
                        reasonable time.
                  (B) Additional institutions included.--The 
                term ``institution of higher education'' also 
                includes--
                          (i) any school that provides not less 
                        than a one-year program of training to 
                        prepare students for gainful employment 
                        in a recognized occupation and that 
                        meets the provision of clauses (i), 
                        (ii), (iv), and (v) of subparagraph 
                        (A); and
                          (ii) a public or nonprofit private 
                        educational institution in any State 
                        that, in lieu of the requirement in 
                        subparagraph (A)(i), admits as regular 
                        students persons who are beyond the age 
                        of compulsory school attendance in the 
                        State in which the institution is 
                        located.
                  (C) List of accrediting agencies.--For 
                purposes of this subsection, the Secretary 
                shall publish a list of nationally recognized 
                accrediting agencies or associations that he 
                determines, pursuant to subpart 2 of part H of 
                title IV of this Act, to be reliable authority 
                as to the quality of the education or training 
                offered.
          (2) Definition for purposes of title iv programs.--
                  (A) Inclusion of additional institutions.--
                Subject to subparagraphs (B) through (D) of 
                this paragraph, the term ``institution of 
                higher education'' for purposes of title IV of 
                this Act includes, in addition to the 
                institutions covered by the definition in 
                paragraph (1) of this subsection--
                          (i) a proprietary institution of 
                        higher education;
                          (ii) a postsecondary vocational 
                        institution; and
                          (iii) only for the purposes of part B 
                        of title IV, an institution outside the 
                        United States that is comparable to an 
                        institution of higher education as 
                        defined in paragraph (1) of this 
                        subsection and that has been approved 
                        by the Secretary for the purpose of 
                        part B of title IV.
                  (B) Institutions outside the united states.--
                          (i) For the purpose of qualifying as 
                        an institution under subparagraph 
                        (A)(iii) of this paragraph, the 
                        Secretary shall establish criteria by 
                        regulation for the approval of 
                        institutions outside the United States 
                        and for the determination that such 
                        institutions are comparable to an 
                        institution of higher education as 
                        defined in paragraph (1) of this 
                        subsection. In the case of a graduate 
                        medical school outside the United 
                        States, such criteria shall include a 
                        requirement that a student attending a 
                        graduate medical school outside the 
                        United States is ineligible for loans 
                        made, insured, or guaranteed under part 
                        B of this title unless--
                                  (I)(aa) at least 60 percent 
                                of those enrolled and at least 
                                60 percent of the graduates of 
                                the graduate medical school 
                                outside the United States were 
                                not persons described in 
                                section 484(a)(5) in the year 
                                preceding the year for which a 
                                student is seeking a loan under 
                                part B of title IV; and
                                  (bb) at least 60 percent of 
                                the individuals who were 
                                students or graduates of the 
                                graduate medical school outside 
                                the United States (both 
                                nationals of the United States 
                                and others) taking the 
                                examinations administered by 
                                the Educational Commission for 
                                Foreign Medical Graduates 
                                received a passing score in the 
                                year preceding the year for 
                                which a student is seeking a 
                                loan under part B of title IV; 
                                or
                                  (II) the institution's 
                                clinical training program was 
                                approved by a State as of 
                                January 1, 1992.
                          (ii) For the purpose of qualifying as 
                        an institution under subparagraph 
                        (A)(iii) of this paragraph, the 
                        Secretary shall establish an advisory 
                        panel of medical experts that shall--
                                  (I) evaluate the standards of 
                                accreditation applied to 
                                applicant foreign medical 
                                schools; and
                                  (II) determine the 
                                comparability of those 
                                standards to standards for 
                                accreditation applied to United 
                                States medical schools.
                        If such accreditation standards are 
                        determined not to be comparable, the 
                        foreign medical school shall be 
                        required to meet the requirements of 
                        paragraph (1) of this subsection.
                          (iii) The failure of an institution 
                        outside the United States to provide, 
                        release, or authorize release to the 
                        Secretary of such information as may be 
                        required by clause (i) of this 
                        subparagraph shall render such 
                        institution ineligible for the purpose 
                        of part B of title IV.
                          (iv) If, pursuant to this 
                        subparagraph, an institution loses 
                        eligibility to participate in the 
                        programs under title IV, then a student 
                        enrolled at such institution may, 
                        notwithstanding such loss of 
                        eligibility, continue to be eligible to 
                        receive a loan under part B while 
                        attending such institution for the 
                        academic year succeeding the academic 
                        year in which such loss of eligibility 
                        occurred.
                  (C) Limitations based on course of study or 
                enrollment.--An institution shall not be 
                considered to meetthe definition of an 
institution of higher education in subparagraph (A) of this paragraph 
if such institution--
                          (i) offers more than 50 percent of 
                        such institution's courses by 
                        correspondence, unless the institution 
                        is an institution that meets the 
                        definition in section 521(4)(C) of the 
                        Carl D. Perkins Vocational and Applied 
                        Technology Education Act;
                          (ii) enrolls 50 percent or more of 
                        its students in correspondence courses, 
                        unless the institution is an 
                        institution that meets the definition 
                        in such section, except that the 
                        Secretary, at the request of such 
                        institution, may waive the 
                        applicability of this clause to such 
                        institution for good cause, as 
                        determined by the Secretary in the case 
                        of an institution of higher education 
                        that provides a 2-year or 4-year 
                        program of instruction for which the 
                        institution awards an associate or 
                        baccalaureate degree;
                          (iii) has a student enrollment in 
                        which more than 25 percent of the 
                        students are incarcerated, except that 
                        the Secretary may waive the prohibition 
                        of this clause for a nonprofit 
                        institution that provides a 4-year or a 
                        2-year program of instruction (or both) 
                        for which it awards a bachelor's or 
                        associate's degree or diploma, 
                        respectively; or
                          (iv) has a student enrollment in 
                        which more than 50 percent of the 
                        students do not have a high school 
                        diploma or its recognized equivalent 
                        and does not provide a 4-year or a 2-
                        year program of instruction (or both) 
                        for which it awards a bachelor's or 
                        associate's degree, respectively, 
                        except that the Secretary may waive the 
                        limitation contained in this clause if 
                        a nonprofit institution demonstrates to 
                        the satisfaction of the Secretary that 
                        it exceeds such limitation because it 
                        serves, through contracts with Federal, 
                        State, or local government agencies, 
                        significant numbers of students who do 
                        not have a high school diploma or its 
                        recognized equivalent.
                  (D) Limitations based on management.--An 
                institution shall not be considered to meet the 
                definition of an institution of higher 
                education in subparagraph (A) of this paragraph 
                if--
                          (i) the institution, or an affiliate 
                        of the institution that has the power, 
                        by contract or ownership interest, to 
                        direct or cause the direction of the 
                        management or policies of the 
                        institution, has filed for bankruptcy; 
                        or
                          (ii) the institution, its owner, or 
                        its chief executive officer has been 
                        convicted of, or has pled nolo 
                        contendere or guilty to, a crime 
                        involving the acquisition, use, or 
                        expenditure of funds under title IV, or 
                        has been judicially determined to have 
                        committed fraud involving funds under 
                        title IV.
                  (E) Certification.--The Secretary shall 
                certify an institution's qualification as an 
                institution of higher education in accordance 
                with the requirements of subpart 2 of part H.
                  (F) Loss of eligibility.--An institution of 
                higher education shall not be considered to 
                meet the definition of an institution of higher 
                education in subparagraph (A) of this paragraph 
                if such institution is removed from eligibility 
                for funds under title IV as a result of an 
                action pursuant to part H of title IV.
          (3) Proprietary institution of higher education.--
                  (A) Principal criteria.--For the purpose of 
                this subsection, the term ``proprietary 
                institution of higher education'' means a 
                school that--
                          (i) provides an eligible program of 
                        training to prepare students for 
                        gainful employment in a recognized 
                        occupation;
                          (ii) meets the requirements of 
                        clauses (i) and (ii) of paragraph 
                        (1)(A) of this subsection;
                          (iii) does not meet the requirement 
                        of clause (iv) of paragraph (1)(A) of 
                        this subsection;
                          (iv) is accredited by a nationally 
                        recognized accrediting agency or 
                        association approved by the Secretary 
                        pursuant to part H of title IV;
                          (v) has been in existence for at 
                        least 2 years; and
                          (vi) has at least 15 percent of its 
                        revenues from sources that are not 
                        derived from funds provided under title 
                        IV, as determined in accordance with 
                        regulations prescribed by the 
                        Secretary.
                In determining such 15 percent of revenues for 
                purposes of clause (vi), funds from programs of 
                education and training that do not meet the 
                definition of an eligible program in section 
                481(b), but are provided on a contractual basis 
                under Federal, State, or local training 
                programs, or under specialized business and 
                industry training requests, shall be counted.
                  (B) Additional institutions.--The term 
                ``proprietary institution of higher education'' 
                also includes a proprietary educational 
                institution in any State that, in lieu of the 
                requirement in clause (i) of paragraph (1)(A) 
                of this subsection, admits as regular students 
                persons who are beyond the age of compulsory 
                school attendance in the State in which the 
                institution is located.
          (4) Postsecondary vocational institution.--
                  (A) Principal criteria.--For the purpose of 
                this subsection, the term ``postsecondary 
                vocational institution'' means a school that--
                          (i) provides an eligible program of 
                        training to prepare students for 
                        gainful employment in a recognized 
                        occupation;
                          (ii) meets the requirements of 
                        clauses (i), (ii), (iv), and (v) of 
                        paragraph (1)(A) of this subsection; 
                        and
                          (iii) has been in existence for at 
                        least 2 years.
                  (B) Additional institutions.--The term 
                ``postsecondary vocational institution'' also 
                includes an educational institution in any 
                State that, in lieu of the requirement inclause 
(i) of paragraph (1)(A) of this subsection, admits as regular students 
persons who are beyond the age of compulsory school attendance in the 
State in which the institution is located.
  (b) State; Freely Associated States.--
          (1) State.--The term ``State'' includes, in addition 
        to the several States of the Union, the Commonwealth of 
        Puerto Rico, the District of Columbia, Guam, American 
        Samoa, the Virgin Islands, the Commonwealth of the 
        Northern Mariana Islands, and the Freely Associated 
        States.
          (2) Freely associated states.--The term ``Freely 
        Associated States'' means the Republic of the Marshall 
        Islands, the Republic of Palau, and the Federated 
        States of Micronesia.

           *       *       *       *       *       *       *


SEC. [1202.] 102. ANTIDISCRIMINATION.

  (a) * * *

           *       *       *       *       *       *       *


SEC. [1203.] 103. FEDERAL-STATE RELATIONSHIPS; STATE AGREEMENTS.

  (a) * * *

           *       *       *       *       *       *       *


SEC. [1204.] 104. FEDERAL CONTROL OF EDUCATION PROHIBITED.

  [(b)] Nothing contained in this Act or any other Act shall be 
construed to authorize any department, agency, officer, or 
employee of the United States to exercise any direction, 
supervision, or control over the membership practices or 
internal operations of any fraternal organization, fraternity, 
sorority, private club or religious organization at an 
institution of higher education (other than a service academy 
or the Coast Guard Academy) which is financed exclusively by 
funds derived from private sources and whose facilities are not 
owned by such institution.

SEC. [1204.] 105. TREATMENT OF TERRITORIES AND TERRITORIAL STUDENT 
                    ASSISTANCE.

  (a) * * *
  (b) Notwithstanding any other provision of law, an 
institution of higher education that is located in any of the 
freely associated states, rather than a State, shall be 
eligible, if otherwise qualified, for assistance under chapter 
1 of subpart 2 of part A of title IV of this Act. This 
subsection shall cease to be effective on October 1, 2001.

SEC. [1205.] 106. NATIONAL ADVISORY COMMITTEE ON INSTITUTIONAL QUALITY 
                    AND INTEGRITY.

  (a) Establishment.--There is established in the Department a 
National Advisory Committee on Institutional Quality and 
Integrity (hereafter in this section referred to as the 
``Committee''), which shall be composed of 15 members appointed 
by the Secretary from among individuals who are representatives 
of, or knowledgeable concerning, education and training beyond 
secondary education, including representatives of all sectors 
and types of institutions of higher education (as defined in 
section [481(a)] 101(a)), to assess the process of eligibility 
and certification of such institutions under title IV of this 
Act and the provision of financial aid under title IV of this 
Act. The Secretary may also appoint to the Committee 
representatives of the general public serving on the National 
Advisory Committee on Accreditation and Institutional 
Eligibility (as such Committee was in existence on the date of 
enactment of the Higher Education Amendments of 1992).
          * * * * * * *

SEC. [1207.] 107. STUDENT REPRESENTATION.

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

SEC. [1208.] 108. FINANCIAL RESPONSIBILITY OF FOREIGN STUDENTS.

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

SEC. [1209.] 109. DISCLOSURES OF FOREIGN GIFTS.

  (a) * * *
          * * * * * * *

SEC. [1210.] 110. APPLICATION OF PEER REVIEW PROCESS.

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

SEC. [1213.] 111. DRUG AND ALCOHOL ABUSE PREVENTION.

  (a) * * *
          * * * * * * *

SEC. 112. REGULATORY REFORM.

  (a) Biennial Review of Regulations.--In every even-numbered 
year (beginning with 1998), the Secretary--
          (1) shall review all regulations issued under title 
        IV of the Higher Education Act of 1965 in effect at the 
        time of the review that apply to the operations or 
        activities of any participant in those programs; and
          (2) shall determine whether any such regulation is no 
        longer necessary in the public interest.
  (b) Effect of Determination.--The Secretary shall repeal, 
consolidate, simplify, or otherwise modify any regulation the 
Secretary determines to be no longer necessary in the public 
interest.
  (c) Report to Congress.--The Secretary shall report to the 
Congress any legislative changes necessary to permit regulatory 
simplification under this section.

  PART B--ADMINISTRATIVE PROVISIONS FOR DELIVERY OF STUDENT FINANCIAL 
                               ASSISTANCE

SEC. 131. PERFORMANCE-BASED ORGANIZATION FOR THE DELIVERY OF FEDERAL 
                    STUDENT FINANCIAL ASSISTANCE.

  (a) Establishment and Purpose.--
          (1) Establishment.--There is established in the 
        Department a Performance-Based Organization (hereafter 
        referred to as the ``PBO'') which shall be a discrete 
        management unit responsible for managing the 
        information systems supporting the programs authorized 
        under title IV of this Act, as specified in subsection 
        (b).
          (2) Purposes.--The purposes of the PBO are--
                  (A) to improve the level of service to 
                students and participants in the programs;
                  (B) to reduce the costs of administering the 
                Federal student financial assistance programs 
                authorized under title IV;
                  (C) to increase the accountability of the 
                officials responsible for administering the 
                operational aspects of these programs;
                  (D) to provide greater flexibility in the 
                management of the operational functions of the 
                Federal student financial assistance programs;
                  (E) to integrate the information systems 
                supporting the Federal student financial 
                assistance programs; and
                  (F) to implement an open, common, integrated 
                system for the delivery of student financial 
                assistance under title IV.
  (b) Authority.--
          (1) Authority of secretary.-- Notwithstanding any 
        other provision of this Act, the Secretary shall 
        maintain responsibility for the development and 
        promulgation of policy relating to the programs of 
        student financial assistance under title IV. In the 
        exercise of its functions, the PBO shall be subject to 
        the direction of the Secretary. The Secretary shall--
                  (A) request the advice of, and work in 
                cooperation with, the Chief Operating Officer 
                in developing regulations, policies, 
                administrative guidance, or procedures 
                affecting the information systems administered 
                by the PBO, and other functions performed by 
                the PBO;
                  (B) request cost estimates from the Chief 
                Operating Officer for system changes required 
                by specific policies proposed by the Secretary;
                  (C) consider the Chief Operating Officer's 
                comments and estimates prior to finalizing such 
                regulations, policies, administrative guidance, 
                or procedures;
                  (D) assist the Chief Operating Officer in 
                identifying goals for the administration and 
                modernization of the delivery system for 
                student financial assistance under title IV; 
                and
                  (E) if necessary, arrange for additional 
                funding to ensure that the PBO can efficiently 
                perform its functions.
          (2) Functions.--The PBO shall carry out the following 
        functions:
                  (A) All aspects of contracting for the data 
                and information systems supporting student 
                financial assistance under title IV, including 
                the operational administration of the William 
                D. Ford Federal Direct Loan Program, but not 
                including the development of policy relating to 
                such programs.
                  (B) The administrative, accounting, and 
                financial management functions of the delivery 
                system for Federal student assistance, 
                including--
                          (i) the collection, processing and 
                        transmission of applicant data to 
                        students, institutions and authorized 
                        third parties, as provided for in 
                        section 483;
                          (ii) technical specifications for 
                        software development and systems 
                        supporting the delivery of student 
                        financial assistance under title IV;
                          (iii) information technology and 
                        systems infrastructure related to the 
                        delivery and management of student 
                        financial assistance under title IV;
                          (iv) all software and hardware 
                        acquisitions and all information 
                        technology contracts related to the 
                        delivery and management of student 
                        financial assistance under title IV; 
                        and
                          (v) all customer service, training 
                        and user support related to the 
                        functions described in clauses (i) 
                        through (iv).
                  (C) Annual development of a budget for the 
                operations and services of the PBO, in 
                consultation with the Secretary, and for 
                consideration and inclusion in the Department's 
                annual budget submission.
                  (D) Annual development of goals, in 
                consultation with the Secretary, for the 
                administration and modernization of the system 
                for delivery of student financial assistance 
                under title IV.
                  (E) Other functions proposed by the 
                Secretary, and agreed to by the Chief Operating 
                Officer as are not inconsistent with the 
                functions of the PBO.
          (3) Independence.--In carrying out its functions, the 
        PBO shall exercise independent control of its budget 
        allocations and expenditures, personnel decisions and 
        processes, procurements, and other administrative and 
        management functions.
          (4) Review of pbo.--The PBO shall be subject to the 
        usual and customary Federal audit procedures, and be 
        subject to review by the Inspector General of the 
        Department.
  (c) Authorization of Appropriations.--For the purpose of 
funding the administrative costs incurred by the PBO in 
administering systems supporting programs under this part, 
there are authorized to be appropriated such sums as may be 
necessary for fiscal year 1999 and each of the 4 succeeding 
fiscal years, except thatfunds authorized under section 458 
shall be made available to the PBO by the Secretary for administrative 
costs authorized to be funded under that section.
  (d) Organizational Reports.--
          (1) Performance plan.--Within 6 months of the hiring 
        of the Chief Operating Officer, and every 12 months 
        thereafter, the Secretary and the Chief Operating 
        Officer of the Department shall develop a performance 
        plan for the PBO that establishes measurable goals and 
        objectives for the organization. In developing this 
        performance plan, the Secretary and the Chief Operating 
        Officer shall consult with the Committee on Education 
        and the Workforce of the House of Representatives, the 
        Committee on Labor and Human Resources of the Senate, 
        and the Advisory Committee on Student Financial 
        Assistance. The performance plan shall include a 
        concise statement of goals for a modernized system for 
        the delivery of student financial assistance under 
        title IV and identify action steps necessary to achieve 
        such goals. Such goals shall be used in evaluating the 
        performance of the Chief Operating Officer and the PBO 
        pursuant to paragraph (2).
          (2) Annual accountability report.--The Chief 
        Operating Officer shall prepare and submit an annual 
        accountability report to the Secretary and the 
        Committee on Education and the Workforce of the House 
        of Representatives and the Committee on Labor and Human 
        Resources of the Senate. The accountability report 
        shall include--
                  (A) an independent financial audit of the 
                expenditures of both the PBO and programs 
                administered by it;
                  (B) financial and performance requirements 
                applicable to the PBO under the Chief Financial 
                Officer Act of 1990 and the Government 
                Performance and Results Act of 1993;
                  (C) the results achieved by the PBO during 
                the year relative to the goals established in 
                the organization's performance plan;
                  (D) the results of the evaluations of 
                performance of the Chief Operating Officer and 
                senior managers under subsections (e)(2) and 
                (f)(2), including the amounts of bonus 
                compensation awarded to these individuals;
                  (E) a discussion of the effectiveness of 
                coordination between the PBO and the Secretary;
                  (F) recommendations for legislative and 
                regulatory changes to improve service to 
                students and their families, and to or improve 
                program efficiency and integrity; and
                  (G) other such information as the Director of 
                the Office of Management and Budget shall 
                prescribe for performance based organizations.
  (e) Chief Operating Officer.--
          (1) In general.--The management of the PBO shall be 
        vested in a Chief Operating Officer who shall be 
        appointed by the Secretary to a 5-year term and 
        compensated without regard to chapters 33, 51, and 53 
        of title 5, United States Code. The Secretary shall 
        appoint the Chief Operating Officer within 6 months of 
        the date of enactment of this part. The Secretary shall 
        consult with the Chairmen of the Committee on Education 
        and the Workforce of the House of Representatives and 
        the Committee on Labor and Human Resources of the 
        Senate prior to making an appointment. The appointment 
        shall be made on the basis of demonstrated management 
        ability and expertise in information technology, 
        including extensive experience in the financial 
        services industry, and without regard to political 
        affiliation or activity. The Secretary may reappoint 
        the Chief Operating Officer to subsequent terms so long 
        as the performance of the Chief Operating Officer, as 
        set forth in the performance agreement, is satisfactory 
        or better. The Chief Operating Officer may be removed 
        by--
                  (A) the President; or
                  (B) the Secretary, for misconduct or failure 
                to meet performance goals set forth in the 
                performance agreement in paragraph (2).
        The President or Secretary shall communicate the 
        reasons for any such removal to the appropriate 
        committees of Congress.
          (2) Performance agreement.--The Secretary and the 
        Chief Operating Officer shall enter into an annual 
        performance agreement which shall set forth measurable 
        organization and individual goals for the Chief 
        Operating Officer in key operational areas. The 
        agreement shall be subject to review and renegotiation 
        at the end of each term. The final agreement shall be 
        transmitted to the Committee on Education and the 
        Workforce of the House of Representatives and the 
        Committee on Labor and Human Resources of the Senate, 
        and made publicly available.
          (3) Compensation.--The Chief Operating Officer is 
        authorized to be paid at an annual rate of basic pay 
        not to exceed the maximum rate of basic pay for the 
        Senior Executive Service under section 5382 of title 5, 
        United States Code, including any applicable locality-
        based comparability payment that may be authorized 
        under section 5304(h)(2)(B) of such title 5. In 
        addition, the Chief Operating Officer may receive a 
        bonus in an amount up to, but not in excess of, 50 
        percent of such annual rate of basic pay, based upon 
        the Secretary's evaluation of the Chief Operating 
        Officer's performance in relation to the performance 
        goals set forth in the performance agreement described 
        in paragraph (2). Payment of a bonus under this 
        paragraph may be made to the Chief Operating Officer 
        only to the extent that such payment does not cause the 
        Chief Operating Officer's total aggregate compensation 
        in a calendar year to equal or exceed the amount of the 
        President's salary under section 102 of title 3, United 
        States Code.
  (f) Senior Management.--
          (1) In general.--The Chief Operating Officer may 
        appoint up to 5 senior managers as may be necessary 
        without regard to the provisions of title 5, United 
        States Code, governing appointments in the competitive 
        service, and who may be paid without regard to the 
        provisions of chapter 51 and subchapter III of chapter 
        53 of such title relating to classification and General 
        Schedule pay rates.
          (2) Performance agreement.--The Chief Operating 
        Officer shall enter into an annual performance 
        agreement with eachsenior manager appointed under this 
subsection which shall set forth measurable organization and individual 
goals in key operational areas. The agreement shall be subject to 
review and renegotiation at the end of each term.
          (3) Compensation.--The Chief Operating Officer is 
        authorized to pay senior managers at an annual rate of 
        basic pay not to exceed 75 percent of the maximum rate 
        of basic pay for the Senior Executive Service under 
        section 5382 of title 5, United States Code, including 
        any applicable locality-based comparability payment 
        that may be authorized under section 5304(h)(2)(C) of 
        such title 5. In addition, a senior manager may receive 
        a bonus in an amount up to, but not in excess of, 50 
        percent of such annual rate of basic pay, based upon 
        the Chief Operating Officer's evaluation of the 
        manager's performance in relation to the performance 
        goals set forth in the performance agreement described 
        in paragraph (2).
  (g) Personnel Flexibility.--
          (1) Personnel ceilings.--The PBO shall not be subject 
        to any ceiling relating to the number or grade of 
        employees.
          (2) Administrative flexibility.--The Chief Operating 
        Officer shall work with the Office of Personnel 
        Management to develop and implement personnel 
        flexibilities in staffing, classification, and pay that 
        meet the needs of the PBO, subject to compliance with 
        title 5, United States Code.
  (h) Establishment of a Fair and Equitable System for 
Measuring Staff Performance.--The PBO shall establish an annual 
performance management system, subject to compliance with title 
5, United States Code and consistent with applicable provisions 
of law and regulations, which strengthens the organizational 
effectiveness of the PBO by providing for establishing goals or 
objectives for individual, group, or organizational performance 
(or any combination thereof), consistent with the performance 
plan of the PBO and its performance planning procedures, 
including those established under the Government Performance 
and Results Act of 1993, and communicating such goals or 
objectives to employees.
  (i) Procurement Flexibility.--
          (1) In general.--Except as provided in this 
        subsection, the PBO shall abide by all applicable 
        Federal procurement laws and regulations when procuring 
        property and services. The PBO shall--
                  (A) enter into contracts for information 
                systems supporting the programs authorized 
                under title IV to carry out the functions set 
                forth in subsection (b)(2); and
                  (B) obtain the services of experts and 
                consultants without regard to section 3109 of 
                title 5, United States Code and set pay in 
                accordance with such section.
          (2) Performance based servicing contracts.--The Chief 
        Operating Officer shall, to the extent practicable, 
        maximize the use of performance based servicing 
        contracts, consistent with guidelines for such 
        contracts published by the Office of Federal 
        Procurement Policy, to achieve cost savings and improve 
        service.
          (3) Fee for service arrangements.--The Chief 
        Operating Officer shall, to the extent practicable and 
        consistent with the purpose of the PBO, utilize 
        services available outside of the Federal Government in 
        the delivery of Federal student financial assistance. 
        To achieve this purpose, the PBO is authorized to pay 
        fees to an organization that are equivalent to those 
        paid by other entities for such services, if the Chief 
        Operating Officer determines that such organization 
        currently provides an information system or service 
        that meets the requirements of the PBO.
  (j) Focus Groups.--To facilitate information sharing and 
customer involvement, the Chief Operating Officer may establish 
focus groups composed of students, institutions, and other 
participants in the programs authorized by title IV to provide 
advice on student aid delivery matters.

SEC. 132. ADMINISTRATIVE SIMPLIFICATION OF STUDENT AID DELIVERY.

  (a) In General.--The Secretary, and the Chief Operating 
Officer shall improve the efficiency and effectiveness of the 
student aid delivery system by encouraging and participating in 
the establishment of voluntary consensus standards and 
requirements for the electronic transmission of information 
necessary for the administration of programs under title IV.
  (b) Adoption of Voluntary Consensus Standards.--Except with 
respect to the common financial reporting form under section 
483(a), the Secretary shall adopt voluntary consensus standards 
for transactions required under title IV, and common data 
elements for such transactions, to enable information to be 
exchanged electronically between systems administered by the 
Department and among participants in the Federal student aid 
delivery system.
  (c) Requirements for Adoption of Voluntary Consensus 
Standards.--Any voluntary consensus standard adopted under this 
section shall--
          (1) be a standard that has been developed, adopted, 
        or modified by a standard setting organization that is 
        open to the participation of the various entities 
        engaged in the delivery of Federal student financial 
        assistance; and
          (2) be consistent with the objective of reducing the 
        administrative costs of delivering student financial 
        assistance under title IV.
  (d) Participation in Standard Setting Organizations.--
          (1) The Chief Operating Officer shall participate in 
        the activities of standard setting organizations in 
        carrying out the provisions of this section.
          (2) The Chief Operating Officer shall encourage 
        higher education groups seeking to develop common 
        forms, standards, and procedures in support of the 
        delivery of Federal student financial assistance to 
        conduct these activities within a standard setting 
        organization.
          (3) The Chief Operating Officer may pay necessary 
        dues and fees associated with participating in standard 
        setting organizations pursuant to this subsection from 
        funds available under subsection (j).
  (e) Procedures for Adoption and Implementation of Voluntary 
Consensus Standards.--In adopting voluntary consensus standards 
and implementation timetables under this section, including 
modifications of existing standards, the Secretary shall follow 
the procedures for negotiated rulemaking in section 492.
  (f) Initial Voluntary Consensus Standards To Be Adopted.--
Through coordinated participation between the Chief Operating 
Officer and standard setting organizations, the initial 
standards adopted by the Secretary shall include the following:
          (1) Electronic personal identifier number.--The 
        Secretary shall adopt standards for a single electronic 
        personal identifier number for students receiving 
        assistance under title IV.
          (2) Electronic signature.--The Secretary, in 
        coordination with the Secretary of Commerce, shall 
        adopt standards specifying procedures for the 
        electronic transmission and authentication of 
        signatures with respect to transactions requiring a 
        signature under title IV.
          (3) Single institutional identifier.--The Secretary 
        shall adopt standards for a single identifier for 
        eligible institutions under title IV.
  (g) Use of Clearinghouses.--Nothing in this section shall 
restrict the ability of participating institutions and lenders 
from using a clearinghouse to comply with the standards for the 
exchange of information established under this section.
  (h) Applicability to Current Systems.--
          (1) General rule.--Except as provided in paragraph 
        (2) and (3), this section shall apply to all Department 
        of Education information systems supporting the 
        delivery of programs under title IV no later than 12 
        months from the date of enactment of this part.
          (2) National student loan data system.--This section 
        shall apply to sections 485B(e) and (f) no later than 
        18 months after the date of enactment of this part.
          (3) Integrated postsecondary education data system.--
        The Secretary shall coordinate the adoption of 
        voluntary consensus standards under this section to 
        ensure that standards are compatible with the 
        integrated postsecondary education data system (IPEDS).
  (i) Data Security.--Any entity that maintains or transmits 
information under a transaction covered by this section shall 
maintain reasonable and appropriate administrative, technical, 
and physical safeguards--
          (1) to ensure the integrity and confidentiality of 
        the information; and
          (2) to protect against any reasonably anticipated 
        security threats, or unauthorized uses or disclosures 
        of the information.
  (j) Authorization of Appropriations.--There are authorized to 
be appropriated in any fiscal year or made available from funds 
appropriated to carry out activities in this section in any 
fiscal year such sums as may be necessary to carry out the 
provisions of this section, except that if no funds are 
appropriated pursuant to this subsection, the Secretary shall 
make funds available to carry out this section from amounts 
appropriated for the operations and expenses of the Department 
of Education.
  (k) Definitions.--For purposes of this section:
          (1) The term ``voluntary consensus standard'' means a 
        standard developed or used by a standard setting 
        organization accredited by the American National 
        Standards Institute.
          (2) The term ``standard setting organization'' means 
        a standard setting organization accredited by the 
        American National Standards Institute that develops 
        standards for information transactions, data elements, 
        or any other standard that is necessary to, or will 
        facilitate, the implementation of this section.
          (3) For purposes of this section, the term 
        ``clearinghouse'' means a public or private entity that 
        processes or facilitates the processing of nonstandard 
        data elements into data elements conforming to 
        standards adopted under this section.

         TITLE II--POSTSECONDARY EDUCATION IMPROVEMENT PROGRAMS

                    PART A--URBAN COMMUNITY SERVICE

SEC. [1101.] 201. FINDINGS.

  The Congress finds that--
          (1) * * *

           *       *       *       *       *       *       *


SEC. [1102.] 202. PURPOSE; PROGRAM AUTHORIZED.

  (a) * * *
  (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] 204 in accordance with the 
provisions of this part.

SEC. [1103.] 203. APPLICATION FOR URBAN COMMUNITY SERVICE GRANTS.

  (a) * * *

           *       *       *       *       *       *       *


SEC. [1104.] 204. 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) * * *

           *       *       *       *       *       *       *

          (12) Other problem areas which participants in the 
        consortium described in section [1103(a)(2)(B)] 
        203(a)(2)(B) concur are of high priority in the urban 
        area.

           *       *       *       *       *       *       *

          (14) Improving access to technology in local 
        communities.

SEC. [1105.] 205. 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.] 206. DISBURSEMENT OF FUNDS.

  (a) * * *

           *       *       *       *       *       *       *


SEC. [1107.] 207. DESIGNATION OF URBAN GRANT INSTITUTIONS.

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

SEC. [1108.] 208. 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] 203, 
        or, if no such entity has an agreement, the Secretary 
        shall designate one urban area for the purposes of this 
        part.

           *       *       *       *       *       *       *


SEC. [1109.] 209. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated $20,000,000 for 
fiscal year [1993] 1999 and such sums as may be necessary for 
each of the 4 succeeding fiscal years to carry out the 
provisions of this part.

    PART [A] B--FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION

SEC. [1001.] 221. FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION.

  (a) Authority.--The Secretary is authorized to make grants 
to, or enter into contracts with, institutions of higher 
education or combinations of such institutions and other public 
and private nonprofit institutions and agencies, to enable such 
institutions andcombinations of such institutions to improve 
postsecondary education opportunities by--
          (1) * * *

           *       *       *       *       *       *       *

          (7) the introduction of reforms in graduate 
        education, in the structure of academic professions, 
        and in the recruitment and retention of faculties; 
        [and]
          (8) the creation of new institutions and programs for 
        examining and awarding credentials to individuals, and 
        the introduction of reforms in current institutional 
        practices related thereto[.]; and
          (9) awarding an endowment grant, on a competitive 
        basis, to a national organization to enable such 
        organization to support the establishment or ongoing 
        work of area program centers that foster the 
        development of local affiliated chapters in high-
        poverty areas to improve graduation rates and 
        postsecondary attendance through the provision of 
        academic support services and scholarship assistance 
        for the pursuit of postsecondary education.

           *       *       *       *       *       *       *


SEC. [1002.] 222. NATIONAL BOARD OF THE FUND FOR THE IMPROVEMENT OF 
                    POSTSECONDARY EDUCATION.

  (a) * * *

           *       *       *       *       *       *       *


SEC. [1003.] 223. ADMINISTRATIVE PROVISIONS.

  (a) * * *

           *       *       *       *       *       *       *


SEC. [1011.] 224. SPECIAL PROJECTS.

  (a) * * *

           *       *       *       *       *       *       *

  (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.]
          (1) institutional restructuring to improve learning 
        and promote productivity, efficiency, quality 
        improvement, and cost and price control;
          (2) articulation agreements between two-year and 
        four-year institutions;
          (3) evaluation and dissemination of model programs; 
        and
          (4) international cooperation and student exchange 
        among postsecondary educational institutions.
  [(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.]

SEC. 225. AUTHORIZATION OF APPROPRIATIONS.

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

  PART [E] C--GRANTS TO STATES FOR WORKPLACE AND COMMUNITY TRANSITION 
               TRAINING FOR INCARCERATED YOUTH OFFENDERS

SEC. [1091.] 231. GRANTS TO STATES FOR WORKPLACE AND COMMUNITY 
                    TRANSITION TRAINING FOR INCARCERATED YOUTH 
                    OFFENDERS.

  (a) * * *

           *       *       *       *       *       *       *

  [(j) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this section $5,000,000 for 
fiscal year 1995 and such sums as may be necessary for fiscal 
year 1996 and each of the four succeeding fiscal years.]
  (j) Authorization of Appropriations.--There are authorized to 
be appropriated to carry out this section $5,000,000 for fiscal 
year 1999 and such sums as may be necessary for each of the 
four succeeding fiscal years.

             PART D--ADVANCED PLACEMENT FEE PAYMENT PROGRAM

SEC. 241. 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 1999 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.

               PART E--TEACHER QUALITY ENHANCEMENT GRANTS

SEC. 271. PURPOSE.

  The purposes of this part are--
          (1) to provide competitive grants to States for 
        assistance in strengthening the quality of the teaching 
        force by improving the academic knowledge of teachers 
        in the subject areas in which they teach;
          (2) to hold institutions of higher education with 
        teacher preparation programs accountable for preparing 
        teachers who are highly competent in the academic 
        content areas in which they plan to teach, including 
        training in the effective uses of technologies in the 
        classroom; and
          (3) to recruit high quality individuals, including 
        individuals from other occupation, into the teaching 
        force.

SEC. 272. ELIGIBILITY.

  (a) Eligible States.--
          (1) Applications.--To be eligible to receive a grant 
        under this part, a Governor shall, at the time of the 
        initial grant application, submit an application to the 
        Secretary that meets the requirements of this part.
          (2) Contents of application.--Such application shall 
        include a description of how the State intends to use 
        funds provided under this part and such other 
        information and assurances as the Secretary may 
        require.
          (3) Nothing under this part shall be construed to 
        negate or supersede the legal authority, under State 
        law of any State agency, State entity, or State public 
        official over programs that are under the jurisdiction 
        of the agency, entity, or official.

SEC. 273. USE OF FUNDS.

  (a) Required Activities.--The Governor of a State that 
receives a grant under this subpart shall--
          (1) use a portion of such grant to carry out one or 
        more of the following activities:
                  (A) reforming State teacher certification 
                requirements to ensure that current and future 
                teachers possess the necessary academic content 
                knowledge in the subject areas in which they 
                are certified and assigned to teach;
                  (B) providing prospective teachers 
                alternatives to schools of education through 
                programs at colleges of arts and sciences or at 
                nonprofit organizations;
                  (C) funding programs which establish or 
                expand alternative routes to State 
                certification for highly qualified individuals 
                from other occupations;
                  (D) developing and implementing effective 
                mechanisms to expeditiously remove incompetent 
                or unqualified teachers; and
                  (E) implementing reforms which hold 
                institutions of higher education with teacher 
                preparation programs accountable for preparing 
                teachers who are highly competent in the 
                academic content areas in which they plan to 
                teach; and
          (2) use a portion of such grant to establish a 
        lighthouse partnership consisting of the Governor, an 
        exemplary institution of higher education which 
        prepares teachers, and a local educational agency and 
        which may also consist of other institutions of higher 
        education, public charter schools, and public and 
        private nonprofit elementary and secondary schools, for 
        the purpose of carrying out one or more of the 
        following activities:
                  (A) creating opportunities for enhance and 
                ongoing professional development which improves 
                the academic content knowledge of teachers in 
                the subject areas in which they are certified 
                to teach or in which they are working toward 
                certification to teach;
                  (B) providing programs designed to implement 
                the successful integration of technology into 
                teaching and learning;
                  (C) implementing reforms which hold 
                institutions of higher education with teacher 
                preparation programs accountable for preparing 
                teachers who are highly competent in the 
                academic content areas in which they plan to 
                teach;
                  (D) reforming State certification 
                requirements to ensure that current and future 
                teachers possess the necessary academic content 
                knowledge in the subject areas in which they 
                are certified to teach; and
                  (E) recruiting minorities, and others, into 
                the teaching and counseling profession, 
                including education paraprofessionals, former 
                military personnel, and mid-career 
                professionals, by providing financial and other 
                assistance related to instruction, induction, 
                mentoring and support services.

SEC. 274. COMPETITIVE AWARDS.

  (a) Competitive Basis for Awards.--The Secretary shall make 
annual grants under this part on a competitive basis.
  (b) Peer Review Panel.--The Secretary shall provide the 
applications submitted by Governors under section 272 to a peer 
review panel for evaluation. With respect to each application, 
the peer review panel shall initially recommend the application 
for funding or for disapproval.
  (c) Priority.--In recommending applications to the Secretary, 
the panel shall give priority to applications from States with 
proposals which promise initiatives to reform State teacher 
certification requirements which are designed to ensure that 
current and future teachers possess the necessary academic 
content knowledge in the subject areas in which they are 
certified to teach or which include innovative reforms to hold 
institutions of higher education with teacher preparation 
programs accountable for preparing teachers who are highly 
competent in the academic content areas in which they plan to 
teach.
  (d) Ranking of Applications.--With respect to each 
application recommended for funding, the panel shall assign the 
application a rank, relative to other recommended applications, 
based on the priority described in subsection (c), the extent 
to which the application furthers the purposes of this part, 
and the overall quality of the application, based on the 
quality and scope of State-supported strategies to improve 
quality of teacher preparation and their teaching force.
  (e) Recommendation of Amount.--With respect to each 
application recommended for funding, the panel shall make a 
recommendation to the Secretary with respect to the amount of 
the grant that should be made.
  (f) Secretarial Selection.--
          (1) In general.--Subject to paragraph (2), the 
        Secretary shall determine, based on the peer review 
        panel's recommendations, which applications shall 
        receive funding and the amounts of such grants. In 
        determining grant amounts, the Secretary shall take 
        into account the total amount of funds available for 
        all grants under this part and the types of activities 
        proposed to be carried out.
          (2) Effect of ranking by panel.--In making grants 
        under this part, the Secretary shall select 
        applications according to the ranking of the 
        applications by the peer review panel, except in cases 
        where the Secretary determines, for good cause, that a 
        variation from that order is appropriate.
  (g) Matching Requirement.--Each State receiving funds under 
this part shall provide, from non-Federal sources, an amount 
equal to 1/2 of the amount of the grant in cash or in kind to 
carry out the activities supported by the grant.
  (h) Limitation on Administrative Expenses.--A State that 
receives a grant under this part may use not more than 2 
percent of the grant funds for administrative costs.
  (i) Reporting.--
          (1) In general.--A Governor that receives a grant 
        under this section shall submit an accountability 
        report to the Secretary and the Committee on Education 
        and the Workforce of the House of Representatives and 
        the Committee on Labor and Human Resources of the 
        Senate. Such reports shall include a description of the 
        degree to which the State, in using these funds, has 
        made substantial progress in meeting the following 
        goals:
                  (A) Raising the State academic standards 
                required to enter the teaching profession.
                  (B) Increasing the percentage of classes 
                taught in core academic subject areas by 
                teachers fully certified by the State to teach 
                in those subject areas.
                  (C) Decreasing shortages of qualified 
                teachers in poor urban and rural areas.
                  (D) Increasing opportunities for enhanced and 
                ongoing professional development which improves 
                the academic content knowledge of teachers in 
                the subject areas in which they are certified 
                to teach or in which they are working toward 
                certification to teach.
          (2) Accountability of state institution of higher 
        education.--Prior to receiving funds under this part, a 
        State shall demonstrate that at least 80 percent of 
        graduates of each of the exemplary institutions of 
        higher education in any partnership described in 
        section 273(a)(2) who enter the field of teaching pass 
        all applicable State qualification assessments of new 
        teachers, which must include assessments of each 
        prospective teacher's subject matter knowledge in the 
        content area or areas in which the teacher provides 
        instruction. Prior to each subsequent receipt of funds 
        under this part, such State shall demonstrate that 70 
        percent of the graduates of each institution of higher 
        education in the State have met such goal and continue 
        to progress to exceed such goal. Such assessment shall 
        be at least as rigorous as those in place on the date 
        of enactment of this Act and shall have qualifying 
        scores no lower than those in place on date of 
        enactment of this Act.
          (3) Provision to peer review panel.--The Secretary 
        shall provide the reports submitted under paragraph (1) 
        to the peer review panel convened under subsection (b). 
        The panel shall use such accountability report in 
        recommending applications for subsequent funding under 
        this section.
  (i) Teachers Qualifications Provided to Parent Upon 
Request.--Any local educational agency that participates as an 
eligible applicant or partner under this part shall make 
available, upon request and in an understandable and uniform 
format, to any parent of a student attending any school in the 
local educational agency, information regarding the 
qualifications of the students classroom teacher, both 
generally and with regard to the subject matter in which the 
teacher provides instruction.

SEC. 275. LIMITATIONS.

  (a) Federal Control Prohibited.--Nothing in this part shall 
be construed to permit, allow, encourage, or authorize any 
Federal control over any aspect of any private, religious, or 
home school, whether or not a home school is treated as a 
private school or home school under State law. This section 
shall not be construed to bar private, religious, or home 
schools from participation in programs or services under this 
part.
  (b) No Change in State Control Encouraged or Required.--
Nothing in this part shall be construed to encourage or require 
any change in a State's treatment of any private, religious, or 
home school, whether or not a home school is treated as a 
private school or home school under State law.
  (c) National System of Teacher Certification Prohibited.--
Nothing in this part shall be construed to permit, allow, 
encourage, or authorize any national system of teacher 
certification.

SEC. 276. AUTHORIZATION OF APPROPRIATIONS.

  (a) Authorization.--There are authorized to be appropriated 
to carry out this part, $18,500,000 for fiscal years 1999 and 
such sums as may be necessary for each of the 4 succeeding 
fiscal years.
  (b) Transition.--Notwithstanding any other provision of law, 
the Secretary may use funds appropriated under subsection (a) 
to complete awards under the original grant period for projects 
that were funded under subpart 2 of part E of title V of this 
Act, as in effect prior to enactment of the Higher Education 
Amendments of 1998.

TITLE III--INSTITUTIONAL AID

           *       *       *       *       *       *       *


                   Part A--Strengthening Institutions

SEC. 311. PROGRAM PURPOSE.

  (a) * * *
  (b) Grants Awarded; Special Consideration.--(1) * * *
  (2) Special consideration shall be given to any eligible 
institution--
          (A) which has endowment funds (other than any 
        endowment fund built under section 332 of this Act as 
        in effect on September 30, 1986, and under part B) the 
        market value of which, per full-time equivalent 
        student, is less than the average current market value 
        of the endowment funds, per full-time equivalent 
        student (other than any endowment fund built under 
        section 332 of this Act as in effect on September 30, 
        1986, and under part B) at similar institutions; [or] 
        and
          (B) which has expenditures per full-time equivalent 
        student for library materials which is less than the 
        average of the expenditures for library materials per 
        full-time equivalent student by other similarly 
        situated institutions.
  [(3) Special consideration shall be given to applications 
which propose, pursuant to the institution's plan, to engage 
in--
          [(A) faculty development;
          [(B) funds and administrative management;
          [(C) development and improvement of academic 
        programs;
          [(D) acquisition of equipment for use in 
        strengthening funds management and academic programs;
          [(E) joint use of facilities such as libraries and 
        laboratories; and
          [(F) student services.]
  (3) Special consideration shall be given to applications 
which propose, pursuant to the institution's plan, the use of 
funds for integrating computer technology into institutional 
facilities to create smart buildings.
  (c) Authorized Activities.--Grants awarded under this section 
shall be used for one or more of the following activities:
          (1) purchase, rental, or lease of scientific or 
        laboratory equipment for educational purposes, 
        including instructional and research purposes;
          (2) construction, maintenance, renovation, and 
        improvement in classrooms, libraries, laboratories, and 
        other instructional facilities;
          (3) support of faculty exchanges, faculty 
        development, and faculty fellowships to assist in 
        attaining advanced degrees in their field of 
        instruction;
          (4) purchase of library books, periodicals, and other 
        educational materials, including telecommunications 
        program material;
          (5) tutoring, counseling, and student service 
        programs designed to improve academic success;
          (6) funds management, administrative management, and 
        acquisition of equipment for use in strengthening funds 
        management;
          (7) joint use of facilities, such as laboratories and 
        libraries;
          (8) establishing or improving a development office to 
        strengthen or improve contributions from alumni and the 
        private sector;
          (9) establishing or improving an endowment fund;
          (10) creating or improving facilities for Internet or 
        other distance learning academic instruction 
        capabilities, including purchase or rental of 
        telecommunications technology equipment or services; 
        and
          (11) other activities proposed in the application 
        submitted pursuant to subsection (c) that--
                  (A) contribute to carrying out the purposes 
                of this section; and
                  (B) are approved by the Secretary as part of 
                the review and acceptance of such application.
  (d) Endowment Fund Limitations.--
          (1) Portion of grant.--An institution may not use 
        more than 20 percent of its grant under this part for 
        any fiscal year for establishing or improving an 
        endowment fund.
          (2) Matching required.--An institution that uses any 
        portion of its grant under this part for any fiscal 
        year for establishing or improving an endowment fund 
        shall provide an equal or greater amount for such 
        purposes from non-Federal funds.
          (3) Regulations.--The Secretary shall publish rules 
        and regulations specifically governing the use of funds 
        for establishing or improving an endowment fund.

           *       *       *       *       *       *       *


SEC. 312. DEFINITIONS; ELIGIBILITY.

  (a) * * *

           *       *       *       *       *       *       *

  (g) Endowment Fund.--For the purpose of this part, the term 
``endowment fund'' means a fund that--
          (1) is established by State law, by an institution of 
        higher education, or by a foundation that is exempt 
        from Federal income taxation;
          (2) is maintained for the purpose of generating 
        income for the support of the institution; and
          (3) does not include real estate.

SEC. 313. DURATION OF GRANT.

  (a) Award Period.--The Secretary may award a grant to an 
eligible institution under this part for 5 years, except that 
no institution shall be eligible to secure a subsequent 5-year 
grant award under this part until two calendar years have 
elapsed since the expiration of its most recent 5-year grant 
award.
  (b) Limitations.--In awarding grants under this part the 
Secretary shall give priority to applicants who are not already 
receiving a grant under this part, except that for the purpose 
of this subsection a grant under subsection (c) and a grant 
under section 354(a)(1) shall not be considered a grant under 
this part.

           *       *       *       *       *       *       *


[SEC. 314. APPLICATION REVIEW PROCESS.

  [(a) Review Panel.--(1) All applications submitted under part 
A by institutions of higher education shall be read by a panel 
of readers composed of individuals selected by the Secretary 
which shall include outside readers who are not employees of 
the Federal Government. The Secretary shall ensure that no 
individual assigned under this section to review any 
application has any conflict of interest with regard to that 
application which might impair the impartiality with which that 
individual conducts the review under this section.
  [(2) The Secretary shall take care to include as readers 
representatives of historically and predominantly Black 
colleges, Hispanic institutions, Native American colleges and 
universities, and institutions with substantial numbers of 
students who are Hispanic, Native American, Asian American, and 
Native American Pacific Islander (including Native Hawaiians).
  [(3) All readers selected by the Secretary shall receive 
thorough instruction from the Secretary regarding the 
evaluation process for applications submitted under part A, 
including--
          [(A) explanations and examples of the types of 
        activities referred to in section 311(b) that must 
        receive special consideration for grants awarded under 
        part A;
          [(B) an enumeration of the factors to be used to 
        determine the quality of applications submitted under 
        part A; and
          [(C) an enumeration of the factors to be used to 
        determine whether a grant should be awarded for a 
        project under part A, the amount of any such grant, and 
        the duration of any such grant.
  [(b) Recommendations of Panel.--In awarding grants under part 
A, the Secretary shall take into consideration the 
recommendations of the panel established under subsection (a).
  [(c) Notification.--Not later than June 30 of each year, the 
Secretary shall notify each institution of higher education 
making an application under part A of--
          [(1) the scores given the applicant by the panel 
        pursuant to this section;
          [(2) the recommendations of the panel with respect to 
        such application; and
          [(3) the reasons for the decision of the Secretary in 
        awarding or refusing to award a grant under part A and 
        any modifications, if any, in the recommendations of 
        the panel made by the Secretary.]

SEC. 314. APPLICATIONS.

  Each eligible institution desiring to receive assistance 
under this part shall submit an application in accordance with 
the requirements of section 351.

           *       *       *       *       *       *       *


[SEC. 316. HISPANIC-SERVING INSTITUTIONS.

  [(a) Program Authorized.--The Secretary shall provide grants 
and related assistance to Hispanic-serving institutions to 
enable such institutions to improve and expand their capacity 
to serve Hispanic and other low-income students.
  [(b) Definitions.--For the purpose of this section--
          [(1) the term ``Hispanic-serving institution'' means 
        an institution of higher education which--
                  [(A) is an eligible institution under section 
                312(b);
                  [(B) at the time of application, has an 
                enrollment of undergraduate full-time 
                equivalent students that is at least 25 percent 
                Hispanic students;
                  [(C) provides assurances that--
                          [(i) not less than 50 percent of its 
                        Hispanic students are low-income 
                        individuals who are first generation 
                        college students; and
                          [(ii) another 25 percent of its 
                        Hispanic students are either low-income 
                        individuals or first generation college 
                        students;
          [(2) the term ``first generation college student'' 
        means--
                  [(A) an individual both of whose parents did 
                not complete a baccalaureate degree; or
                  [(B) in the case of any individual who 
                regularly resided with and received support 
                from only one parent, an individual whose only 
                such parent did not complete a baccalaureate 
                degree; and
          [(3) the term ``low-income individual'' means an 
        individual from a family whose taxable income for the 
        preceding year did not exceed 150 percent of an amount 
        equal to the poverty level determined by using criteria 
        of poverty established by the Bureau of the Census.
  [(c) Authorized Activities.--
          [(1) Types of activities authorized.--Grants awarded 
        under this section shall be used by Hispanic-serving 
        institutions of higher education to assist such 
        institutions to plan, develop, undertake, and carry out 
        programs.
          [(2) Examples of authorized activities.--Such 
        programs may include--
                  [(A) purchase, rental, or lease of scientific 
                or laboratory equipment for educational 
                purposes, including instructional and research 
                purposes;
                  [(B) renovation and improvement in classroom, 
                library, laboratory, and other instructional 
                facilities;
                  [(C) support of faculty exchanges, and 
                faculty development and faculty fellowships to 
                assist in attaining advanced degrees in their 
                field of instruction;
                  [(D) curriculum development and academic 
                instruction;
                  [(E) purchase of library books, periodicals, 
                microfilm, and other educational materials;
                  [(F) funds and administrative management, and 
                acquisition of equipment for use in 
                strengthening funds management;
                  [(G) joint use of facilities such as 
                laboratories and libraries; and
                  [(H) academic tutoring and counseling 
                programs and student support services.
  [(d) Application Process.--
          [(1) Institutional eligibility.--Each Hispanic-
        serving institution desiring to receive assistance 
        under this Act shall submit to the Secretary such 
        enrollment data as may be necessary to demonstrate that 
        it is a Hispanic-serving institution as defined in 
        paragraph (1) of subsection (b), along with such other 
        information and data as the Secretary may by regulation 
        require.
          [(2) Applications.--Any institution which is 
        determined by the Secretary to be a Hispanic-serving 
        institution (on the basis of the information and data 
        submitted under paragraph (1)) may submit an 
        application for assistance under this section to the 
        Secretary. Such application shall include--
                  [(A) a 5-year plan for improving the 
                assistance provided by the Hispanic-serving 
                institution to Hispanic and other low-income 
                students; and
                  [(B) such other information and assurance as 
                the Secretary may require.
          [(3) Priority.--The Secretary shall give priority to 
        applications that contain satisfactory evidence that 
        such institution has entered into or will enter into a 
        collaborative arrangement with at least one local 
        educational agency to provide such agency with 
        assistance (from funds other than funds provided under 
        this part) in reducing Hispanic dropout rates, 
        improving Hispanic rates of academic achievement, and 
        increasing the rates at which Hispanic high school 
        graduates enroll in higher education.
  [(e) Special Rule.--For the purposes of this section, no 
Hispanic-serving college or university which is eligible for 
and receives funds under this section may concurrently receive 
other funds under this part or part B.]

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

  (a) Program Authorized.--The Secretary shall provide grants 
and related assistance to American Indian Tribal Colleges and 
Universities to enable such institutions to improve and expand 
their capacity to serve Indian students.
  (b) Definitions.--For the purposes of this section:
          (1) The term ``Indian'' has the same meaning as in 
        section 2 of the Tribally Controlled Community Colleges 
        Act of 1978.
          (2) The term ``Indian tribe'' has the same meaning as 
        in section 2 of such Act.
          (3) The term ``Tribal College or University'' has the 
        meaning given the term ``tribally controlled college or 
        university'' in section 2 of such Act, and includes an 
        institution listed in the Equity in Educational Land 
        Grant Status Act of 1994.
          (4) The term ``institution of higher education'' 
        means an institution of higher education as defined by 
        section 101(a)(1) of this Act, except that subparagraph 
        (A)(ii) of such section shall not be applicable.
  (c) Authorized Activities.--Grants awarded under this section 
shall be used by Tribal Colleges or Universities to assist such 
institutions to plan, develop, undertake, and carry out 
authorized activities. Such authorized activities may include--
          (1) purchase, rental, or lease of scientific or 
        laboratory equipment for educational purposes, 
        including instructional and research purposes;
          (2) construction, maintenance, renovation, and 
        improvement in classrooms, libraries, laboratories, and 
        other instructional facilities, including purchase or 
        rental of telecommunications technology equipment or 
        services;
          (3) support of faculty exchanges, faculty 
        development, and faculty fellowships to assist in 
        attaining advanced degrees in their field of 
        instruction;
          (4) academic instruction in disciplines in which 
        American Indians are underrepresented;
          (5) purchase of library books, periodicals, and other 
        educational materials, including telecommunications 
        program material;
          (6) tutoring, counseling, and student service 
        programs designed to improve academic success;
          (7) funds management, administrative management, and 
        acquisition of equipment for use in strengthening funds 
        management;
          (8) joint use of facilities, such as laboratories and 
        libraries;
          (9) establishing or improving a development office to 
        strengthen or improve contributions from alumni and the 
        private sector;
          (10) establishing or enhancing a program of teacher 
        education designed to qualify students to teach in 
        elementary or secondary schools, with a particular 
        emphasis on teaching American Indian children and 
        youth, that shall include, as part of such program, 
        preparation for teacher certification;
          (11) establishing community outreach programs which 
        will encourage American Indian elementary and secondary 
        students to develop the academic skills and the 
        interest to pursue postsecondary education;
          (12) establishing or improving an endowment fund; and
          (13) other activities proposed in the application 
        submitted pursuant to this subsection that--
                  (A) contribute to carrying out the purposes 
                of this section; and
                  (B) are approved by the Secretary as part of 
                the review and acceptance of such application.
  (d) Application Process.--
          (1) Institutional eligibility.--To be eligible to 
        receive assistance under this section, an institution 
        shall be an institution which--
                  (A) is an eligible institution under section 
                312(b);
                  (B) is eligible to receive assistance under 
                the Tribally Controlled Community College 
                Assistance Act of 1978 (Public Law 95-471); or
                  (C) is eligible to receive funds under the 
                Equity in Educational Land Grant Status Act of 
                1994.
          (2) Application.--Any institution desiring to receive 
        assistance under this section shall submit an 
        application to the Secretary at such time, and in such 
        manner, as the Secretary may by regulation reasonably 
        require. Each such application shall include--
                  (A) a 5-year plan for improving the 
                assistance provided by the Tribal College or 
                university to Indian students, increasing the 
                rates at which Indian high school students 
                enroll in higher education, and increasing 
                overall postsecondary retention rates for 
                Indian students; and
                  (B) such enrollment data and other 
                information and assurances as the Secretary may 
                require to demonstrate compliance with 
                subparagraphs (A) and (B) of paragraph (1).
          (3) Special rule.--For the purposes of this part, no 
        Tribal College or University which is eligible for and 
        receives funds under this section may concurrently 
        receive other funds under this part or part B.

Part B--Strengthening Historically Black Colleges and Universities

           *       *       *       *       *       *       *


SEC. 323. GRANTS TO INSTITUTIONS.

  (a) General Authorization; Uses of Funds.--From amounts 
available under section 360(a)(2) in any fiscal year the 
Secretary shall make grants (under section 324) to institutions 
which have applications approved by the Secretary (under 
section 325) for any of the following uses:
          (1) * * *

           *       *       *       *       *       *       *

          (12) Establishing or improving an endowment fund.
          [(12)] (13) Other activities proposed in the 
        application submitted pursuant to section 325 that--
                  (A) * * *

           *       *       *       *       *       *       *

  (b) Limitations.--(1) * * *

           *       *       *       *       *       *       *

  [(3) The Secretary shall not award a grant under this part 
for telecommunications technology equipment, facilities or 
services, if such equipment, facilities or services are 
available pursuant to section 396(k) of the Communications Act 
of 1934.]
  (3)(A) An institution may not use more than 20 percent of its 
grant under this part for any fiscal year for establishing or 
improving an endowment fund.
  (B) An institution that uses any portion of its grant under 
this part for any fiscal year for establishing or improving an 
endowment fund shall provide an equal or greater amount for 
such purposes from non-Federal funds.
  (C) The Secretary shall publish rules and regulations 
specifically governing the use of funds for establishing or 
improving an endowment fund.

           *       *       *       *       *       *       *


SEC. 326. PROFESSIONAL OR GRADUATE INSTITUTIONS.

  (a) General Authorization.--(1) Subject to the availability 
of funds appropriated to carry out this section, the Secretary 
shall award program grants to each of the postgraduate 
institutions listed in subsection (e) that is determined by the 
Secretary to be making a substantial contribution to the legal, 
medical, dental, veterinary, or other graduate education 
opportunities in mathematics or the physical or natural 
sciences for Black Americans.
  (2) No grant in excess of $500,000 may be made under this 
section unless the postgraduate institution provides assurances 
that 50 percent of the cost of the purposes for which the grant 
is made will be paid from non-Federal sources [except that the 
Morehouse School of Medicine shall receive at least 
$3,000,000.], except that no institution shall be required to 
match any portion of the first $500,000 of its award from the 
Secretary. After allocations are made to each eligible 
institution under the funding rules provided in subsection (f), 
the Secretary shall reallocate, on a pro rata basis, any 
amounts which remain unallocated (by reason of the failure of 
an institution to comply with the matching requirements of this 
paragraph) among the institutions that have complied with such 
matching requirement.

           *       *       *       *       *       *       *

  (c) Uses of Funds.--A grant under this section may be used 
for--
          [(1) any of the purposes enumerated under section 
        323;
          [(2) to establish or improve a development office to 
        strengthen and increase contributions from alumni and 
        the private sector; and
          [(3) to assist in the establishment or maintenance of 
        an institutional endowment to facilitate financial 
        independence pursuant to section 332 of this title.]
          (1) purchase, rental or lease of scientific or 
        laboratory equipment for educational purposes, 
        including instructional and research purposes;
          (2) construction, maintenance, renovation, and 
        improvement in classroom, library, laboratory, and 
        other instructional facilities used exclusively for the 
        purposes of this section, including purchase or rental 
        of telecommunications technology equipment or services;
          (3) purchase of library books, periodicals, technical 
        and other scientific journals, microfilm, microfiche, 
        and other educational materials, including 
        telecommunications program materials;
          (4) scholarships, fellowships, and other financial 
        assistance for needy graduate and professional students 
        to permit their enrollment in and completion of the 
        doctoral degree in medicine, dentistry, pharmacy, 
        veterinary medicine, law, and the doctorate degree in 
        the physical or natural sciences, engineering, 
        mathematics, or other scientific disciplines in which 
        African Americans are underrepresented;
          (5) establish or improve a development office to 
        strengthen and increase contributions from alumni and 
        the private sector;
          (6) assist in the establishment or maintenance of an 
        institutional endowment to facilitate financial 
        independence pursuant to section 331 of this title; and
          (7) funds and administrative management, and the 
        acquisition of equipment, including software, for use 
        in strengthening funds management and management 
        information systems.

           *       *       *       *       *       *       *

  (e) Eligibility.--
          (1) In general.--Independent professional or graduate 
        institutions and programs eligible for grants under 
        subsection (a) [include--] are the following:
                  (A) * * *

           *       *       *       *       *       *       *

                  (F) Xavier University School of Pharmacy and 
                other qualified graduate programs;
                  (G) Southern University School of Law and 
                other qualified graduate programs;
                  (H) Texas Southern University School of Law 
                and School of Pharmacy and other qualified 
                graduate programs;
                  (I) Florida A&M University School of 
                Pharmaceutical Sciences and other qualified 
                graduate programs;
                  (J) North Carolina Central University School 
                of Law and other qualified graduate programs;

           *       *       *       *       *       *       *

                  (O) University of Maryland Eastern Shore 
                qualified graduate program; [and]
                  (P) Jackson State University qualified 
                graduate program[.];
                  (Q) Norfolk State University qualified 
                graduate program; and
                  (R) Tennessee State University qualified 
                graduate program.
          [(2) Qualified graduate program.--For the purposes of 
        this section, the term ``qualified graduate program'' 
        means a graduate or professional program that--
                  [(A) provides a program of instruction in the 
                physical or natural sciences, engineering, 
                mathematics, or other scientific discipline in 
                which African Americans are underrepresented; 
                and
                  [(B) has students enrolled in such program at 
                the time of application for a grant under this 
                section.
          [(3) Special rule.--Graduate institutions that were 
        awarded grants under this section prior to October 1, 
        1992 shall continue to receive such grant payments, 
        regardless of the eligibility of the graduate 
        institutions described in subparagraphs (F) through 
        (P), until such grant period has expired or September 
        30, 1993, whichever is later.]
          (2) Qualified graduate program.--For the purposes of 
        this section, the term ``qualified graduate program'' 
        means a graduate or professional program that provides 
        an accredited program of instruction in the physical or 
        natural sciences, engineering, mathematics, or other 
        scientific discipline in which African Americans are 
        underrepresented and has students enrolled in such 
        program at the time of application for a grant under 
        this section.
          (3) Special rule.--Institutions that were awarded 
        grants under this section prior to October 1, 1998, 
        shall continue to receive such grants, subject to the 
        availability of appropriated funds, regardless of the 
        eligibility of the institutions described in 
        subparagraphs (Q) and (R) of paragraph (1).
          (4) One grant per institution.--The Secretary shall 
        not award more than 1 grant under this section in any 
        fiscal year to any institution of higher education or 
        university system, except that the president or 
        chancellor of the institution may decide which graduate 
        or professional school or qualified graduate program 
        will receive funds under the grant in any one fiscal 
        year.
  (f) Funding Rule.--[Of the amount appropriated] Subject to 
subsection (g), of the amount appropriated to carry out this 
section for any fiscal year--
          (1) the first [$12,000,000] $26,000,000 (or any 
        lesser amount appropriated) shall be available only for 
        the purposes of making grants to institutions or 
        programs described in subparagraphs [(A) through (E)] 
        (A) through (P) of subsection (e)(1);
          [(2) any amount appropriated in excess of $12,000,000 
        shall be available--
                  [(A) for the purposes of making grants, in 
                equal amounts not to exceed $500,000, to 
                institutions or programs described in 
                subparagraphs (F) through (P) of subsection 
                (e)(1); and
                  [(B) secondly for the purposes of making 
                grants to institutions or programs described in 
                subparagraphs (A) through (P) of subsection 
                (e)(1).]
          (2) the next $1,000,000 in excess of $26,000,000 
        shall be available for the purpose of making grants to 
        institutions or programs identified in subparagraphs 
        (Q) and (R) of subsection (e)(1); and
          (3) if the amount appropriated exceeds $27,000,000, 
        the Secretary shall develop a formula for making 
        allotments of such excess to each of the institutions 
        or programs identified in subparagraphs (A) through (R) 
        using the following elements:
                  (A) the number of students enrolled in the 
                eligible institution's professional or graduate 
                school, or qualified graduate program which 
                received funding under this section in the 
                previous year;
                  (B) the average cost of education per student 
                for all full-time graduate or professional 
                students (or the equivalent) enrolled in the 
                eligible professional school, graduate school 
                or doctoral students in the qualified graduate 
                program; and
                  (C) the number of students who received their 
                first professional or doctoral degree at the 
                professional or graduate school or the 
                qualified graduate program in the preceding 
                year for which the institution received funding 
                under this section.
  (g) Hold Harmless Rule.--Notwithstanding paragraph (2) and 
(3) of subsection (f), no institution or qualified program 
identified in subsection (e)(1) that received a grant for 
fiscal year 1998 and that is eligible to receive a grant in a 
subsequent fiscal year shall receive a grant amount in any such 
subsequent fiscal year that is less than the grant amount 
received for fiscal year 1998, unless the amount appropriated 
is not sufficient to provide such grant amounts to all such 
institutions and programs.

           *       *       *       *       *       *       *


      PART D--MINORITY SCIENCE AND ENGINEERING IMPROVEMENT PROGRAM

SEC. 341. PROGRAM AUTHORIZED.

  The Secretary shall, in accordance with the provisions of 
this part, carry out a program of making grants to institutions 
of higher education that are designed to effect long-range 
improvements in science and engineering education, and improve 
support programs for minority students enrolled in science and 
engineering programs at predominantly minority institutions.

SEC. 342. USE OF FUNDS.

  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.

SEC. 343. ELIGIBILITY FOR GRANTS.

  The Secretary may make grants under this part to minority 
institutions (as defined in section 347), organizations, and 
entities to enable them to carry out programs and activities 
authorized by this part:
          (1)(A) institutions of higher education granting 
        baccalaureate degrees; and
          (B) institutions of higher education granting 
        associate degrees which--
                  (i) have a curriculum including science or 
                engineering subjects;
                  (ii) apply jointly with institutions 
                described in subparagraph (A); and
                  (iii) have an articulation agreement with 
                institutions described in subparagraph (A) for 
                its science or engineering students; and
          (2) consortia of--
                  (A) institutions which have a curriculum in 
                science or engineering;
                  (B) graduate institutions which have a 
                curriculum in science or engineering;
                  (C) Federal Education Research Centers;
                  (D) research laboratories of, or under 
                contract with, the Department of Energy;
                  (E) private organizations which have science 
                or engineering facilities; or
                  (F) quasi-governmental entities which have a 
                significant scientific or engineering mission;
        to enable such institutions and consortia to carry out 
        programs and activities authorized by this part.

SEC. 344. GRANT APPLICATION.

  (a) Submission and Contents of Applications.--An eligible 
applicant (as determined under section 343) that desires to 
receive a grant under this part shall submit to the Secretary 
an application therefor at such time or times, in such manner, 
and containing such information as the Secretary may prescribe 
by regulation. Such application shall set forth--
          (1) a program of activities for carrying out one or 
        more of the purposes described in section 342 in such 
        detail as will enable the Secretary to determine the 
        degree to which such program will accomplish such 
        purpose or purposes; and
          (2) such other policies, procedures, and assurances 
        as the Secretary may require by regulation.
  (b) Approval Based on Likelihood of Progress.--The Secretary 
shall approve an application only if the Secretary determines 
that the application sets forth a program of activities which 
are likely to make substantial progress toward achieving the 
purposes of this part.

SEC. 345. CROSS PROGRAM AND CROSS AGENCY COOPERATION.

  The Minority Science and Engineering Improvement Programs 
shall cooperate and consult with other programs within the 
Department and within Federal, State, and private agencies 
which carry out programs to improve the quality of science, 
mathematics, and engineering education.

SEC. 346. ADMINISTRATIVE PROVISIONS.

  (a) Technical Staff.--The Secretary shall appoint, without 
regard to the provisions of title 5 of the United States Code 
governing appointments in the competitive service, not less 
than one technical employee with appropriate scientific and 
educational background to administer the programs under this 
part who may be paid without regard to the provisions of 
chapter 51 and subchapter III of chapter 53 of such title 
relating to classification and General Schedule pay rates.
  (b) Procedures for Grant Review.--The Secretary shall 
establish procedures for reviewing and evaluating grants and 
contracts made or entered into under such programs. Procedures 
for reviewing grant applications, based on the peer review 
system, or contracts for financial assistance under this title 
may not be subject to any review outside of officials 
responsible for the administration of the Minority Science and 
Engineering Improvement Program.

SEC. 347. DEFINITIONS.

  For the purpose of this part--
          (1) The term ``minority institution'' means an 
        institution of higher education whose enrollment of a 
        single minority or a combination of minorities (as 
        defined in paragraph (2)) exceeds 50 percent of the 
        total enrollment. The Secretary shall verify this 
        information from the data on enrollments in the higher 
        education general information surveys (HEGIS) furnished 
        by the institution to the Office for Civil Rights, 
        Department of Education.
          (2) The term ``minority'' means American Indian, 
        Alaskan Native, Black (not of Hispanic origin), 
        Hispanic (including persons of Mexican, Puerto Rican, 
        Cuban, and Central or South American origin), Pacific 
        Islander or other ethnic group underrepresented in 
        science and engineering.
          (3) The term ``science'' means, for the purpose of 
        this program, the biological, engineering, 
        mathematical, physical, behavioral, and social 
        sciences, and history and philosophy of science; also 
        included are interdisciplinary fields which are 
        comprised of overlapping areas among two or more 
        sciences.

                     Part [D] E--General Provisions

SEC. 351. APPLICATIONS FOR ASSISTANCE.

  [(a) Application Required; Approval.--Any institution which 
is eligible for assistance under this title shall submit to the 
Secretary an application for assistance at such time, in such 
form, and containing such information, as may be necessary to 
enable the Secretary to evaluate its need for assistance. 
Subject to the availability of appropriations to carry out this 
title, the Secretary may approve an application for a grant 
under this title if the application meets the requirements of 
subsection (b) and shows that the applicant is eligible for 
assistance in accordance with the part of this title under 
which the assistance is sought.]
  (a) Applications.--
          (1) Applications Required.--Any institution which is 
        eligible for assistance under this title shall submit 
        to the Secretary an application for assistance at such 
        time, in such form, and containing such information, as 
        may be necessary to enable the Secretary to evaluate 
        its need for assistance. Subject to the availability of 
        appropriations to carry out this title, the Secretary 
        may approve an application for a grant under this title 
        only if the Secretary determines that--
                  (A) the application meets the requirements of 
                subsection (b);
                  (B) the applicant is eligible for assistance 
                in accordance with the part of this title under 
                which the assistance is sought; and
                  (C) the applicant's performance goals are 
                sufficiently rigorous as to meet the purposes 
                of this title and the performance objectives 
                and indicators for this title established by 
                the Secretary pursuant to the Government 
                Performance and Results Act.
          (2) Preliminary applications.--In carrying out 
        paragraph (1), the Secretary shall develop a 
        preliminary application for use by eligible 
        institutions applying under part A prior to the 
        submission of the principal application.
  (b) Contents.--An institution, in its application for a 
grant, shall--
          (1) * * *

           *       *       *       *       *       *       *

          (5) provide (A) for making such reports, in such form 
        and containing such information, as the Secretary may 
        require to carry out the functions under this title and 
        the Government Performance and Results Act, including 
        not less than one report annually setting forth the 
        institution's progress toward achieving the objectives 
        for which the funds were awarded, and (B) for keeping 
        such records and affording such access thereto, as the 
        Secretary may find necessary to assure the correctness 
        and verification of such reports;
          (6) provide that the institution will comply with the 
        limitations set forth in section 357, except that for 
        purposes of section 316, paragraphs (2) and (3) shall 
        not apply;

SEC. 352. WAIVER AUTHORITY AND REPORTING REQUIREMENT.

  (a) Waiver Requirements; Need-Based Assistance Students.--The 
Secretary may waive the requirements set forth in section 
312(b)(1)(A) in the case of an institution--
          (1) * * *

           *       *       *       *       *       *       *

          (5) located on or near an Indian reservation or a 
        substantial population of Indians, if the Secretary 
        determines that the waiver will substantially increase 
        higher education opportunities appropriate to the needs 
        of American Indians; [or]
          (6) that is a tribally controlled community college 
        as defined in the Tribally Controlled Community College 
        Act of 1978; or
          [(6)] (7) wherever located, if the Secretary 
        determines that the waiver will substantially increase 
        higher education opportunities appropriate to the needs 
        of Black Americans, Hispanic Americans, Native 
        Americans, Asian Americans, or Pacific Islanders, 
        including Native Hawaiians.

           *       *       *       *       *       *       *


SEC. 353. APPLICATION REVIEW PROCESS.

  (a) Review Panel.--(1) * * *
  (2) The Secretary shall take care to assure that 
representatives of historically and predominantly Black 
colleges, Hispanic institutions, [Native American colleges and 
universities] Tribal Colleges and Universities, and 
institutions with substantial numbers of Hispanics, Native 
Americans, Asian Americans, and Native American Pacific 
Islanders (including Native Hawaiians) are included as readers.
  (3) All readers selected by the Secretary shall receive 
thorough instruction from the Secretary regarding the 
evaluation process for applications submitted under this title 
and consistent with the provisions of this title, including--
          [(A) explanations and examples of the types of 
        activities referred to in section 311(b) that should 
        receive special consideration for grants awarded under 
        part A and of the types of activities referred to in 
        section 323 that should receive special consideration 
        for grants awarded under part B;]
          [(B)] (A) an enumeration of the factors to be used to 
        determine the quality of applications submitted under 
        this title; and
          [(C)] (B) an enumeration of the factors to be used to 
        determine whether a grant should be awarded for a 
        project under this title, the amount of any such grant, 
        and the duration of any such grant.

           *       *       *       *       *       *       *


SEC. 355. CONTINUATION AWARDS.

  The Secretary shall make continuation awards under this title 
for the second and succeeding years of a grant only after 
determining that the recipient is making satisfactory progress 
in carrying out the grant.

           *       *       *       *       *       *       *


SEC. 360. AUTHORIZATIONS OF APPROPRIATIONS.

  [(a) Authorizations.--
          [(1) Part a.--(A) There are authorized to be 
        appropriated to carry out part A, $135,000,000 (other 
        than section 316) for fiscal year 1993, and such sums 
        as may be necessary for each of the 4 succeeding fiscal 
        years.
          [(B)(i) There are authorized to be appropriated to 
        carry out section 316, $45,000,000 for fiscal year 1993 
        and such sums as may be necessary for each of the 4 
        succeeding fiscal years.
          [(ii) No funds are authorized to be appropriated 
        pursuant to clause (i) for any fiscal year unless the 
        amount appropriated pursuant to paragraph (1)(A) for 
        such fiscal year equals or exceeds $80,000,000.
          [(2) Part b.--(A) There are authorized to be 
        appropriated to carry out part B (other than section 
        326), $135,000,000 for fiscal year 1993, and such sums 
        as may be necessary for each of the 4 succeeding fiscal 
        years.
          [(B) There are authorized to be appropriated to carry 
        out section 326, $20,000,000 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, $50,000,000 for fiscal year 1993, 
        and such sums as may be necessary for each of the 4 
        succeeding fiscal years.]
  (a) Authorizations.--
          (1) Part a.--(A) There are authorized to be 
        appropriated to carry out part A (other that sections 
        316), $135,000,000 for fiscal year 1999, and such sums 
        as may be necessary for each of the 4 succeeding fiscal 
        years.
          (B) There are authorized to be appropriated to carry 
        out section 316, $10,000,000 for fiscal year 1999, and 
        such sums as may be necessary for each of the 4 
        succeeding fiscal years.
          (2) Part b.--(A) There are authorized to be 
        appropriated to carry out part B (other than section 
        326), $135,000,000 for fiscal year 1999, and such sums 
        as may be necessary for each of the 4 succeeding fiscal 
        years.
          (B) There are authorized to be appropriated to carry 
        out section 326, $35,000,000 for fiscal year 1999, 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, $10,000,000 for fiscal year 1999, 
        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, $10,000,000 for fiscal year 1999, 
        and such sums as may be necessary for each of the 4 
        succeeding fiscal years.

           *       *       *       *       *       *       *

  [(c) Reservations.--If the amount appropriated under 
subsection (a)(1) for part A for any fiscal year beginning 
after September 30, 1986, equals or exceeds the amount 
appropriated for such part for fiscal year 1986, the Secretary 
shall, for such fiscal year--
          [(1) allocate 25 percent of the excess (above the 
        amount appropriated for part A for fiscal year 1986) 
        among eligible institutions at which at least 60 
        percent of the students are African Americans, Hispanic 
        Americans, Native Americans, Asian Americans, Native 
        Hawaiians, or Pacific Islanders, or any combination 
        thereof; and
          [(2) allocate 75 percent of such excess among other 
        eligible institutions.
  [(d) Ratable Reduction in Fiscal Year in Which Amounts 
Appropriated Are Insufficient.--In any fiscal year in which the 
sums appropriated for part A are insufficient to make the 
reservations required by subsection (c) of this section, the 
Secretary shall ratably reduce the amount of the reservation.
  [(e) Additional Reservation.--In any fiscal year beginning 
after September 30, 1992, the Secretary shall award at least 25 
percent of the amount appropriated pursuant to the authority of 
paragraph (3) of subsection (a) in each fiscal year to 
historically black colleges and universities that meet the 
requirements of part C, unless there are an insufficient number 
of quality applications or an insufficient number of 
applications due to the provisions in subsection (b)(2)(C) or 
subsection (b)(4)(B) of section 331.]

                      TITLE IV--STUDENT ASSISTANCE

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

SEC. 400. STATEMENT OF PURPOSE; PROGRAM AUTHORIZATION.

  (a) Purpose.--It is the purpose of this part, to assist in 
making available the benefits of postsecondary education to 
eligible students (defined in accordance with section 484) in 
institutions of higher education by--
          (1) providing [basic educational opportunity] Federal 
        Pell Grants grants to all eligible students;

           *       *       *       *       *       *       *

  (b) Secretary Required To Carry Out Purposes.--The Secretary 
shall, in accordance with subparts 1 through [8] 6, carry out 
programs to achieve the purposes of this part.

           [Subpart 1--Basic Educational Opportunity Grants]

                     Subpart 1--Federal Pell Grants

SEC. 401. [BASIC EDUCATIONAL OPPORTUNITY] FEDERAL PELL GRANTS: AMOUNT 
                    AND DETERMINATIONS; APPLICATIONS.

  (a) Program Authority and Method of Distribution.--(1) The 
Secretary shall, during the period beginning July 1, 1972, and 
ending September 30, [1998] 2004, pay to each eligible 
institution such sums as may be necessary to pay to each 
eligible student (defined in accordance with section 484) for 
each academic year during which that student is in attendance 
at an institution of higher education, as an undergraduate, a 
[basic grant] Federal Pell Grant in the amount for which that 
student is eligible, as determined pursuant to subsection (b). 
[Not less than 85 percent of such sums shall be advanced to 
eligible institutions prior to the start of each payment period 
and shall be based upon an amount requested by the institution 
as needed to pay eligible students, except that this sentence 
shall not be construed to limit the authority of the Secretary 
to place an institution on a reimbursement system of payment.]
  (2) Nothing in this section shall be interpreted to prohibit 
the Secretary from paying directly to students, in advance of 
the beginning of the academic term, an amount for which they 
are eligible, in cases where the eligible institution elects 
not to participate in [the disbursement system required by 
paragraph (1)] the disbursement of Federal Pell Grants.
  (3) [Basic grants] Grants made under this subpart shall be 
known as ``Federal Pell Grants''.
  (b) Purpose and Amount of Grants.--(1) The purpose of this 
subpart is to provide a [basic grant] Federal Pell Grant that 
in combination with reasonable family and student contribution 
and supplemented by the programs authorized under subparts 3 
and 4 of this part, will meet at least 75 percent of a 
student's cost of attendance (as defined in section 472), 
unless the institution determines that a greater amount of 
assistance would better serve the purposes of section 401.
  [(2)(A) The amount of the basic grant for a student eligible 
under this part shall be--
          [(i) $3,700 for academic year 1993-1994,
          [(ii) $3,900 for academic year 1994-1995,
          [(iii) $4,100 for academic year 1995-1996,
          [(iv) $4,300 for academic year 1996-1997, and
          [(v) $4,500 for academic year 1997-1998,
less an amount equal to the amount determined to be the 
expected family contribution with respect to that student for 
that year.]
  (2)(A) The amount of the Federal Pell Grant for a student 
eligible under this part shall be--
          (i) $4,500 for academic year 1999-2000,
          (ii) $4,700 for academic year 2000-2001,
          (iii) $4,900 for academic year 2001-2002,
          (iv) $5,100 for academic year 2002-2003, and
          (v) $5,300 for academic year 2003-2004,
less an amount equal to the amount determined to be the 
expected family contribution with respect to that student for 
that year.

           *       *       *       *       *       *       *

  (3)(A) For any academic year for which an appropriation Act 
provides a maximum [basic grant] Federal Pell Grant in an 
amount in excess of [$2,400] $3,000, the amount of a student's 
[basic grant] Federal Pell Grant shall equal [$2,400] $3,000 
plus--
          (i) one-half of the amount by which such maximum 
        [basic grant] Federal Pell Grant exceeds [$2,400] 
        $3,000; plus
          (ii) the lesser of--
                  (I) * * *

           *       *       *       *       *       *       *

  (B) For purposes of subparagraph (A)(ii)(II), a student's 
allowance is [$750] $1,500 if the student has dependent care 
expenses (as defined in section 472(8)) or disability related 
expenses (as defined in section 472(9)).
  (C) An institution that charged only fees in lieu of tuition 
as of January 31, 1997, may include in its determination of 
tuition charged, fees that would normally constitute tuition.
  (4) No [basic grant] Federal Pell Grant under this subpart 
shall exceed the difference between the expected family 
contribution for a student and the cost of attendance (as 
defined in section 472) at the institution at which that 
student is in attendance. If, with respect to any student, it 
is determined that the amount of a [basic grant] Federal Pell 
Grant plus the amount of the expected family contribution for 
that student exceeds the cost of attendance for that year, the 
amount of the [basic grant] Federal Pell Grant shall be reduced 
until the combination of expected family contribution and the 
amount of the [basic grant] Federal Pell Grant does not exceed 
the cost of attendance at such institution.
  (5) No [basic grant] Federal Pell Grant shall be awarded to a 
student under this subpart if the amount of that grant for that 
student as determined under this subsection for any academic 
year is less than $400, except that a student who is eligible 
for a [basic grant] Federal Pell Grant that is equal to or 
greater than $200 but less than $400 shall be awarded a [basic 
grant] Federal Pell Grant of $400.

           *       *       *       *       *       *       *

  (7) Notwithstanding any other provision of this subpart, the 
Secretary shall allow the amount of the [basic grant] Federal 
Pell Grant to be exceeded for students participating in a 
program of study abroad approved for credit by the institution 
at which the student is enrolled when the reasonable costs of 
such program are greater than the cost of attendance at the 
student's home institution, except that the amount of such 
[basic grant] Federal Pell Grant in any fiscal year shall not 
exceed the grant level specified in the appropriate 
Appropriation Act for this subpart for such year. If the 
preceding sentence applies, the financial aid administrator at 
the home institution may use the cost of the study abroad 
program, rather than the home institution's cost, to determine 
the cost of attendance of the student.
  (8) No [basic grant] Federal Pell Grant shall be awarded 
under this subpart to any individual who is incarcerated in any 
Federal or State penal institution.
  (c) Period of Eligibility for Grants.--(1) The period during 
which a student may receive [basic grants] Federal Pell Grants 
shall be the period required for the completion of the first 
undergraduate baccalaureate course of study being pursued by 
that student at the institution at which the student is in 
attendance except that any period during which the student is 
enrolled in a noncredit or remedial course of study as defined 
in paragraph (2) shall not be counted for the purpose of this 
paragraph.

           *       *       *       *       *       *       *

  (d) Applications for Grants.--(1) The Secretary shall from 
time to time set dates by which students shall file 
applications for [basic grants] Federal Pell Grants under this 
subpart.
  (2) Each student desiring a [basic grant] Federal Pell Grant 
for any year shall file an application therefor containing such 
information and assurances as the Secretary may deem necessary 
to enable the Secretary to carry out the functions and 
responsibilities of this subpart.

           *       *       *       *       *       *       *

  (f) Calculation of Eligibility.--(1) Each contractor 
processing applications for awards under this subpart 
(including a central processor, if any, designated by the 
Secretary) shall, in a timely manner, furnish to the student 
financial aid administrator (at each institution of higher 
education which a student awarded a [basic grant] Federal Pell 
Grant under this subpart is attending), as a part of its 
regular output document, the expected family contribution for 
each such student. Each such student financial aid 
administrator shall--
          (A) * * *

           *       *       *       *       *       *       *

  (3) Each contractor processing applications for awards under 
this subpart shall for each academic year after academic year 
1986-1987 prepare and submit a report to the Secretary on the 
correctness of the computations of amount of the expected 
family contribution, and on the accuracy of the questions on 
the application form under this subpart for the previous 
academic year for which the contractor is responsible. The 
Secretary shall transmit the report, together with the comments 
and recommendations of the Secretary, to the Committee on 
Appropriations and the Committee on Labor and Human Resources 
of the Senate and the Committee on Appropriations and the 
Committee on [Education and Labor] Education and the Workforce 
of the House of Representatives.

           *       *       *       *       *       *       *

  (j) Institutional Ineligibility Based on Default Rates.--
          (1) In general.--No institution of higher education 
        shall be an eligible institution for purposes of this 
        section if such institution of higher education is 
        ineligible to participate in a loan program under this 
        title as a result of a final default rate determination 
        made by the Secretary under part B or D of this title, 
        or both, after the final publication of fiscal year 
        1996 cohort default rates.
          (2) Sanctions subject to appeal opportunity.--No 
        institution may be subject to the terms of this 
        subsection unless it has had the opportunity to appeal 
        its default rate determination under regulations issued 
        by the Secretary for the Federal Family Education Loan 
        or Federal Direct Loan Program, as applicable. This 
        subsection shall not apply to an institution that was 
        not participating in the loan programs authorized under 
        part B or D of this title on the date of enactment of 
        the Higher Education Amendments of 1998, unless the 
        institution subsequently participates in the loan 
        programs.

    Subpart 2--Federal Early Outreach and Student Services Programs

                    CHAPTER 1--FEDERAL TRIO PROGRAMS

SEC. 402A. PROGRAM AUTHORITY; AUTHORIZATION OF APPROPRIATIONS.

  (a) * * *
  (b) Recipients, Duration, and Size.--
          (1) * * *
          (2) Duration.--Grants or contracts made under this 
        chapter shall be awarded for a period of 4 years, 
        except that--
                  [(A) the Secretary shall award such grants or 
                contracts for 5 years to applicants whose peer 
                review scores were in the highest 10 percent of 
                scores of all applicants receiving grants or 
                contracts in each program competition for the 
                same award year; and]
                  [(B)] (A) grants made under section 402G 
                shall be awarded for a period of 2 years[.]; 
                and
                  (B) grants under section 402H shall be 
                awarded for a period determined by the 
                Secretary.
          [(3) Minimum grant level.--In any year in which the 
        appropriations authorized under this chapter exceed the 
        prior year appropriation as adjusted for inflation, the 
        Secretary shall use 80 percent of the amount 
        appropriated above the current services level to bring 
        each award up to the minimum grant level or the amount 
        requested by the institution or agency, whichever is 
        less. The minimum grant level (A) for programs 
        authorized under section 402D or 402G, shall not be 
        less than $170,000 for fiscal year 1993; (B) for 
        programs authorized under section 402B or 402F shall 
        not be less than $180,000 for fiscal year 1994; and (C) 
        for programs authorized under section 402C or 402E 
        shall not be less than $190,000 for fiscal year 1995.]
          (3) Minimum grants.--Unless the institution or agency 
        requests a smaller amount, individual grants under this 
        chapter shall be no less than--
                  (A) $170,000 for programs authorized by 
                sections 402D and 402G;
                  (B) $180,000 for programs authorized by 
                sections 402B and 402F; and
                  (C) $190,000 for programs authorized by 
                sections 402C and 402E.
  [(c) Procedures for Awarding Grants and Contracts.--
          [(1) Prior experience.--In making grants and 
        contracts under this chapter, the Secretary shall 
        consider the prior experience of service delivery under 
        the particular program for which funds are sought by 
        each applicant. For fiscal years after 1985, the level 
        of consideration given to prior experience shall not 
        vary from the level of consideration given this factor 
        for fiscal year 1985, except that in the case of the 
        programs authorized in sections 402E and 402G, the 
        level of consideration given to prior experience shall 
        be the same as the level of consideration given this 
        factor in the other programs authorized in this 
        chapter.
          [(2) Order of awards; program fraud.--(A) Except with 
        respect to grants made under section 402G, and as 
        provided in subparagraph (B), the Secretary shall award 
        grants and contracts under this chapter in the order of 
        the scores received by the application for such grant 
        or contract in the peer review process required under 
        section 1210 and adjusted for prior experience in 
        accordance with paragraph (1).
          [(B) The Secretary is not required to provide 
        assistance to a program otherwise eligible for 
        assistance under this chapter, if the Secretary has 
        determined that such program has involved the 
        fraudulent use of funds under this chapter.
          [(3) Peer review process.--(A) The Secretary shall 
        assure that, to the extent practicable, members of 
        groups underrepresented in higher education, including 
        African Americans, Hispanics, Native Americans, Alaska 
        Natives, Asian Americans, Native American Pacific 
        Islanders (including Native Hawaiians), are represented 
        as readers of applications submitted under this 
        chapter. The Secretary shall also assure that persons 
        from urban and rural backgrounds are represented as 
        readers.
          [(B) The Secretary shall ensure that each application 
        submitted under this chapter is read by at least 3 
        readers who are not employees of the Federal Government 
        (other than as readers of applications).
          [(4) Application status.--The Secretary shall inform 
        each entity operating programs under this chapter 
        regarding the status of their application for continued 
        funding at least 8 months prior to the expiration of 
        the grant or contract. The Secretary, in the case of an 
        entity that is continuing to operate a successful 
        program under this chapter, shall ensure that the 
        start-up date for a new grant or contract for such 
        program immediately follows the termination of 
        preceding grant or contract so that no interruption of 
        funding occurs for such successful reapplicants. The 
        Secretary shall inform each entity requesting 
        assistance under this subpart for a new program 
        regarding the status of their application at least 8 
        months prior to the proposed startup date of such 
        program.
          (5) Number of applications for grants and 
        contracts.--The Secretary shall not limit the number of 
        applications submitted by an entity under any program 
        authorized under this chapter if the additional 
        applications describe programs serving different 
        populations or campuses.
          (6) Coordination with other programs for 
        disadvantaged students.--The Secretary shall encourage 
        coordination of programs assisted under this chapter 
        with other programs for disadvantaged students operated 
        by the sponsoring institution or agency, regardless of 
        the funding source of such programs. The Secretary 
        shall not limit an entity's eligibility to receive 
        funds under this chapter because such entity sponsors a 
        program similar to the program to be assisted under 
        this chapter, regardless of the funding source of such 
        programs. The Secretary shall permit the Director of a 
        program receiving funds under this chapter to 
        administer one or more additional programs for 
        disadvantaged students operated by the sponsoring 
        institution or agency, regardless of the funding 
        sources of such programs.
          (7)  Application status.--The Secretary shall inform 
        each entity operating programs under this chapter 
        regarding the status of their application for continued 
        funding at least 8 months prior to the expiration of 
        the grant or contract. The Secretary, in the case of an 
        entity that is continuing to operate a successful 
        program under this chapter, shall ensure that the 
        start-up date for a new grant or contract for such 
        program immediately follows the termination of 
        preceding grant or contract so that no interruption of 
        funding occurs for such successful reapplicants. The 
        Secretary shall inform each entity requesting 
        assistance under this chapter for a new program 
        regarding the status of their application at least 8 
        months prior to the proposed startup date of such 
        program.

           *       *       *       *       *       *       *

  (f) Authorization of Appropriations.--For the purpose of 
making grants and contracts under this chapter, there are 
authorized to be appropriated [$650,000,000 for fiscal year 
1993] $800,000,000 for fiscal year 1999, and such sums as may 
be necessary for each of the 4 succeeding fiscal years. [Of the 
amount appropriated under this chapter, the Secretary may use 
no more than \1/2\ of 1 percent of such amount to obtain 
additional qualified readers and additional staff to review 
applications, to increase the level of oversight monitoring, to 
support impact studies, program assessments and reviews, and to 
provide technical assistance to potential applicants and 
current grantees. In expending these funds, the Secretary shall 
give priority to the additional administrative requirements 
provided in the Higher Education Amendments of 1992, to 
outreach activities, and to obtaining additional readers. The 
Secretary shall report to Congress by October 1, 1994, on the 
use of these funds.]

           *       *       *       *       *       *       *


SEC. 402B. TALENT SEARCH.

  (a) * * *
  (b) Permissible Services.--Any talent search project assisted 
under this chapter may provide services such as--
          (1) * * *

           *       *       *       *       *       *       *

          [(4) guidance on secondary school reentry or entry to 
        general educational development (GED) programs or other 
        alternative education programs for secondary school 
        dropouts;]
          (4) guidance on and assistance in secondary school 
        reentry, entry to general educational development (GED) 
        programs, other alternative education programs for 
        secondary school dropouts, or postsecondary education;

           *       *       *       *       *       *       *

          (8) workshops and counseling for [parents] families 
        of students served;

           *       *       *       *       *       *       *


SEC. 402C. UPWARD BOUND.

  (a) * * *
  (b) Permissible Services.--Any upward bound project assisted 
under this chapter may provide services such as--
          (1) * * *
          (2) [personal counseling] counseling and workshops;

           *       *       *       *       *       *       *

          (6) work-study and other activities designed to 
        acquaint youths participating in the project with the 
        range of career options available to them, including 
        careers requiring a postsecondary degree;

           *       *       *       *       *       *       *

          (9) mentoring programs involving elementary or 
        secondary school teachers, faculty members at 
        institutions of higher education, students, or any 
        combination of such persons; [and]
          (10) special services to enable veterans to make the 
        transition to postsecondary education; and
          [(10)] (11) programs and activities as described in 
        paragraphs (1) [through (9)] through (10) which are 
        specially designed for students of limited English 
        proficiency.
  (c) Required Services.--Any upward bound project assisted 
under this chapter, other than a project a majority of the 
participants in which are veterans, which has received funding 
for two or more years shall include, as part of the core 
curriculum in the next and succeeding years, instruction in 
mathematics through precalculus, laboratory science, foreign 
language, composition, and literature.

           *       *       *       *       *       *       *


SEC. 402D. STUDENT SUPPORT SERVICES.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Requirements for Approval of Applications.--In approving 
applications for student support services projects under this 
chapter for any fiscal year, the Secretary shall--
          (1) * * *

           *       *       *       *       *       *       *

          (6) require an assurance from the institution which 
        is the recipient of the grant or contract that each 
        student enrolled in the project will be offered 
        sufficient financial assistance to meet that student's 
        full financial need and minimize the student's loan 
        burden.

SEC. 402E. POSTBACCALAUREATE ACHIEVEMENT PROGRAM AUTHORITY.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Requirements.--In approving applications for 
postbaccalaureate achievement projects assisted under this 
section for any fiscal year, the Secretary shall require--
          (1) * * *

           *       *       *       *       *       *       *

          (3) an assurance that participants be enrolled in a 
        degree program or accepted in a graduate program at an 
        eligible institution having an agreement with the 
        Secretary in accordance with the provisions of section 
        487; and

           *       *       *       *       *       *       *

  (e) Maximum Stipends.--Students participating in research 
under a postbaccalaureate achievement project may receive an 
award that--
          (1) shall include a stipend not to exceed [$2,400] 
        $3,200 per annum; and

           *       *       *       *       *       *       *


SEC. 402G. STAFF DEVELOPMENT ACTIVITIES.

  (a) * * *
  (b) Contents of Training Programs.--Such training shall 
include conferences, internships, seminars, workshops, and the 
publication of manuals designed to improve the operation of 
such programs and projects and shall be carried out in the 
various regions of the Nation in order to ensure that the 
training opportunities are appropriate to meet the needs in the 
local areas being served by such programs and projects. Such 
training shall be offered annually for new directors of 
projects funded under this chapter as well as annually on the 
following topics and other topics chosen by the Secretary:
          (1) * * *

           *       *       *       *       *       *       *

          (4) The use of appropriate educational technology in 
        the operation of projects assisted under this chapter.

           *       *       *       *       *       *       *


SEC. 402H. EVALUATION FOR PROJECT IMPROVEMENT.

  (a) * * *
  (b) Content.--The evaluations described in subsection (a) 
shall identify institutional, community and program practices 
particularly effective in increasing the access of low-income 
individuals and first-generation college students to 
postsecondary education, the preparation of such individuals 
and students for postsecondary education, and such individuals' 
and students' success in postsecondary education. Such 
evaluations shall also investigate the effectiveness of 
alternative and innovative methods within Federal TRIO programs 
of increasing access to, and retention of, students in 
postsecondary education.

           *       *       *       *       *       *       *


  CHAPTER 2--NATIONAL EARLY INTERVENTION SCHOLARSHIP AND PARTNERSHIP 
PROGRAM

           *       *       *       *       *       *       *


SEC. 404G. APPROPRIATIONS.

  There is authorized to be appropriated to make grants under 
this chapter $200,000,000 for fiscal year [1993] 1999 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 6--NATIONAL STUDENT SAVINGS DEMONSTRATION PROGRAM

[SEC. 410A. NATIONAL STUDENT SAVINGS DEMONSTRATION PROGRAM.

  [(a) Statement of Purpose.--It is the purpose of this section 
to--
          [(1) create a demonstration program to test the 
        feasibility of establishing a national student savings 
        program to encourage families to save for their 
        children's college education and thereby reduce the 
        loan indebtedness of college students; and
          [(2) help determine the most effective means of 
        achieving the activities described in paragraph (1).
  [(b) Demonstration Program Authorized.--
          [(1) In general.--The Secretary is authorized to 
        award a demonstration grant to not more than 5 States 
        to enable each such State to conduct a student savings 
        program in accordance with this section.
          [(2) Amount of grant.--The amount of each grant 
        awarded pursuant to paragraph (1) shall be computed on 
        the basis of--
                  [(A) a Federal match in an amount equal to 
                the initial State deposit into each account 
                established pursuant to subsection (c)(2)(B), 
                except that such Federal match shall not exceed 
                $50 per child; multiplied by
                  [(B) the number of children participating in 
                the program assisted under this part.
          [(3) Priority.--In awarding grants under this section 
        the Secretary shall give priority to States proposing 
        programs that establish accounts for a child prior to 
        the age of compulsory school attendance in the State in 
        which such child resides.
          [(4) Special consideration.--In awarding grants under 
        this section the Secretary shall give special 
        consideration to States--
                  [(A) that permit employers to use pretax 
                income in making contributions to a child's 
                account; and
                  [(B) that provide assurances that interest 
                earned in accounts shall be exempt from State 
                taxes.
  [(c) Application.--
          [(1) In general.--Each State 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) Contents.--Each application submitted pursuant 
        to paragraph (1) shall--
                  [(A) describe the student savings program to 
                be established and the number of children to be 
                served;
                  [(B) contain assurances that an account shall 
                be established for each child participating in 
                the program assisted under this section and set 
                forth the initial amount to be deposited into 
                each such account by the State;
                  [(C) contain assurances that deposits into 
                such account shall be invested in a responsible 
                manner that provides a reasonable rate of 
                return;
                  [(D) contain assurances that funds in the 
                account shall only be used to pay the cost of 
                attendance (as such term is defined in section 
                472) at any eligible institution (as such term 
                is defined in section 481);
                  [(E) describe the amount of the Federal 
                contribution requested for starting each 
                child's account, which shall not exceed $50 per 
                child participating in the program;
                  [(F) describe the age at which children in 
                the State may establish such accounts;
                  [(G) indicate whether the program will be 
                open to all children, regardless of family 
                income, or only to disadvantaged children;
                  [(H) describe how additional deposits into 
                each account from the State or other resources 
                will be earned by a child for performance of 
                community service, academic performance, or 
                other activities or achievements;
                  [(I) contain assurances that contributions in 
                an account shall be refundable to the 
                contributor without interest if the child is 
                unable to attend college;
                  [(J) contain assurances that the State shall 
                encourage individuals and organizations to make 
                contributions to a child's account;
                  [(K) contain assurances that the State shall 
                provide incentives to employers to make 
                contributions to a child's account and 
                participate in the program assisted under this 
                section; and
                  [(L) contain assurances that if a child 
                leaves the State in which such child has an 
                account, then such child shall retain the right 
                to make contributions to the account, except 
                that the State shall not be required to make 
                any additional deposits other than interest.
  [(d) 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 section.

                    [CHAPTER 7--PREELIGIBILITY FORM

[SEC. 410B. INFORMATION ON ELIGIBILITY FOR ASSISTANCE.

  [To help ensure access to postsecondary education by 
providing early notice to students of their potential 
eligibility for financial aid, the Secretary, as part of the 
contracts developed pursuant to section 483, may--
          [(1) develop and process a common preeligibility 
        Federal financial aid form,
          [(2) distribute and process such form on a year-round 
        basis free of charge to students and parents, and
          [(3) issue, on the basis of information reported by 
        the student on such form, a preeligibility expected 
        family contribution figure and estimate of the amount 
        of Federal (and, if feasible, non-Federal) funds for 
        which the student might qualify in later completing and 
        submitting the application form called for under 
        section 483.
The Secretary shall widely disseminate the preeligibility form 
through post offices and other appropriate Federal 
installations, schools, institutions of higher education, 
libraries, and community-based agencies, including projects 
assisted under subparts 2 and 5 of this part.

      [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.]

                   CHAPTER 3--HIGH HOPES FOR COLLEGE

            Subchapter A--21st Century Scholar Certificates

SEC. 406A. 21ST CENTURY SCHOLAR CERTIFICATES.

  (a) Findings.--The Congress makes the following findings:
          (1) Among low-income students who, despite high test 
        scores, are not planning on attending college, nearly 
        60 percent cite an inability to afford school as the 
        reason.
          (2) About 80 percent of our 12th graders who are 
        interested in continuing their education after high 
        school go on to college if their parents read materials 
        about financial aid, compared to only 55 percent of 
        such students if their parents do not read this 
        material.
          (3) In 1996, the American Council on Education found 
        that the public overestimated the tuition of public 2-
        year colleges by about 3 times the actual average 
        tuition, of public 4-year colleges by over twice the 
        actual average tuition, and of private 4-year 
        universities by almost one-third more than the actual 
        average tuition.
          (4) There is a need for, and a significant benefit 
        from, providing students, and through them their 
        parents, with information about the variety of Federal 
        student financial assistance programs, such as Pell 
        grants, Federal work-study and loans, and the 
        AmeriCorps Education Awards that make college more 
        affordable than ever before.
  (b) Authority.--
          (1) The Secretary, using funds appropriated under 
        section 416H(a) of this Act--
                  (A) shall ensure that certificates, to be 
                known as 21st Century Scholar Certificates, are 
                provided to all students participating in 
                projects under chapter 2; and
                  (B) may, as practicable, ensure that such 
                certificates are provided to all students in 
                grades 6 through 12 who attend schools at which 
                at least 50 percent of the students enrolled 
                are eligible for free or reduced-price lunch.
          (2) A 21st Century Scholar Certificate shall be 
        personalized for each student and indicate the amount 
        of Federal financial aid for college for which a 
        student may be eligible.

                 Subchapter B--High Hopes Partnerships

SEC. 407A. PURPOSE.

  It is the purpose of this chapter to encourage and prepare 
students in low-income communities, beginning not later than 
the 7th grade, to prepare for, enter, and successfully complete 
college by assisting college-school-community partnerships to--
          (1) provide in-school and on-campus early college 
        awareness activities to these students and their 
        parents;
          (2) ensure ongoing adult guidance and other support 
        to these students;
          (3) provide useful, early information to these 
        students and their parents on the need for, options 
        related to, and financing (including the availability 
        of financial assistance) of a college education; and
          (4) help ensure that these students have access to 
        rigorous core courses, such as algebra and geometry, 
        that prepare them for college.

SEC. 407B. GRANTS.

  (a) Grants Authorized.--From funds appropriated under section 
407H(a), the Secretary shall make grants to college-school-
community partnerships for activities under section 407D.
  (b) Eligible Partnership.--For purposes of this chapter, an 
eligible partnership shall include--
          (1) one or more local educational agencies acting on 
        behalf of--
                  (A) one or more participating schools; and
                  (B) the public secondary schools that 
                students from these schools would normally 
                attend;
          (2) one or more degree granting institutions of 
        higher education; and
          (3) at least two community organizations or entities, 
        such as businesses, professional associations, 
        community-based organizations, or other public or 
        private agencies or organizations.
  (c) Definitions.--For the purpose of this chapter--
          (1) ``participating school'' means a public school in 
        which--
                  (A) there is a 7th grade;
                  (B) one or more cohorts of students receive 
                services under this chapter; and
                  (C) at least 50 percent of the students 
                enrolled are eligible for free or reduced-price 
                lunch; and
          (2) ``cohort of students'' means--
                  (A) an entire grade level of students in a 
                participating school; or
                  (B) if the partnership determines that it 
                would promote the effectiveness of a project, 
                an entire grade level of students, beginning 
                not later than the 7th grade, who reside in 
                public housing as defined in section 3(b)(1) of 
                the United States Housing Act of 1937.
  (d) Duration.--Each grant awarded under this chapter shall be 
for a 6-year period.
  (e) Cost Sharing.--
          (1) Federal funds shall provide no more than 80 
        percent of the cost of the project in the first year, 
        70 percent of the cost in the second year, 60 percent 
        of the cost in the third year, 50 percent of the cost 
        in the fourth year, 40 percent of the cost in the fifth 
        year, and 30 percent of the cost in the sixth year.
          (2) The non-Federal share of grants awarded under 
        this chapter may--
                  (A) be in cash or in kind, fairly evaluated, 
                including services, supplies, or equipment; and
                  (B) include the non-Federal share of work-
                study grants under part C of title IV of this 
                Act awarded to students who serve as tutors or 
                mentors in projects under this chapter.
          (3) The Secretary may waive the cost sharing 
        requirement described in paragraph (1) for any eligible 
        partnership that demonstrates to the satisfaction of 
        the Secretary an extraordinary hardship that prevents 
        compliance with that requirement.
  (f) Equitable Geographic Distribution.--To the extent 
possible, the Secretary shall award grants under this chapter 
in a manner that achieves an equitable geographic distribution 
of those grants.
  (g) Priority Awards Under Chapter 2.--Before making grants 
under this chapter for fiscal year 1999, the Secretary shall, 
as appropriate, make awards to recipients eligible for 
continuation awards under chapter 2 of subpart 2 of this title 
as it was in effect prior to the enactment of the Higher 
Education Amendments of 1998.

SEC. 407C. GRANT APPLICATION; PREFERENCES.

  (a) Application Required.--An eligible partnership desiring 
to receive a grant under this chapter shall submit an 
application to the Secretary, in such form and containing such 
information, as the Secretary may require.
  (b) Application Contents.--Each application shall include--
          (1) the name of each partner and a description of its 
        responsibilities, including the designation of either 
        an institution of higher education or a local 
        educational agency as the fiscal agent for the 
        partnership;
          (2) a description of the need for the project, 
        including a description of how the project will build 
        on existing services and activities, if any;
          (3) a listing of the human, financial (other than 
        funds under this chapter), and other resources that 
        each member of the partnership will contribute to the 
        partnership, and a description of the efforts each 
        member of the partnership will make in seeking 
        additional resources;
          (4) a description of how the project will operate, 
        including how grant funds will be used to meet the 
        purpose of this chapter;
          (5) a description of how services will be coordinated 
        with, and will complement and enhance, services 
        received by participating schools and students under 
        other related Federal and non-Federal programs, 
        including programs under title I, part A of title VII, 
        and part 1 of title X of the Elementary and Secondary 
        Education Act of 1965, the School-to-Work Opportunities 
        Act of 1994, section 402 of this Act, and the 
        Individuals with Disabilities Education Act;
          (6) a description of how the partnership will support 
        and continue the services under this chapter after the 
        grant has expired;
          (7) an assurance from each local educational agency 
        using funds under this chapter that--
                  (A) at least 50 percent of the students 
                enrolled in each participating school are 
                eligible for free or reduced-price lunch;
                  (B) its aggregate expenditures per student 
                for activities described in this chapter will 
                not be reduced from the level of such 
                expenditures in the year prior to the grant; 
                and
                  (C) someone at each participating school will 
                be designated as the primary point of contact 
                for the partnership;
          (8) an assurance that participating students will 
        have access to rigorous core academic courses that 
        reflect challenging State or local academic standards; 
        and
          (9) an assurance that members will provide the 
        performance information required by the Secretary, 
        which would be used to base continuation of the grant.
  (c) Preferences.--In reviewing applications under this 
chapter, the Secretary shall give preference to projects that--
          (1) will serve participating schools in which at 
        least 75 percent of the students enrolled are eligible 
        for free or reduced-price lunch;
          (2) provide a commitment from non-Federal sources to 
        pay all or part of the cost of college, through tuition 
        assistance or guarantees (not already available), such 
        as ``last-dollar grants'', for participating students; 
        and
          (3) hold participating students responsible for 
        school or community service and high academic 
        performance.

SEC. 407D. PROGRAM REQUIREMENTS; USES OF FUNDS.

  (a) Program Requirements.--Projects under this chapter 
shall--
          (1) have a program coordinator who is either full-
        time or whose primary responsibility is the project 
        under this chapter;
          (2) provide services to at least one cohort of 
        students, beginning not later than the 7th grade;
          (3) ensure that the services authorized under this 
        chapter are provided through the 12th grade to students 
        in the cohort, including students who attend another 
        participating school or a secondary school identified 
        under section 407B(b)(1)(B);
          (4) include activities and information that foster 
        and improve parent involvement in promoting 
        postsecondary education for their children, including 
        the provision of useful early information on the 
        advantages of a college education, academic admissions 
        requirements, and the need to take core courses, 
        admissions and achievement tests, application 
        procedures, college costs and options, and the 
        availability of student financial aid;
          (5) include academic counseling, career awareness, 
        and tutoring or mentoring from trained personnel, as 
        well as other student support services that enable 
        students to succeed academically and apply for, enter, 
        and complete college;
          (6) include training in promoting early college 
        awareness for classroom teachers, guidance counselors, 
        and staff of the schools involved in the project; 
        faculty and program personnel in participating 
        institutions of higher education; and participating 
        mentors and tutors;
          (7) include activities on college campuses and 
        enrichment activities associated with postsecondary 
        education; and
          (8) include arrangements that ensure that all 
        participating students have access to rigorous core 
        courses that reflect challenging State or local 
        academic standards and that prepare them for college.
  (b) Use of Funds.--In addition to the activities described in 
subsection (a), a recipient of funds under this chapter may use 
them--
          (1) where necessary and appropriate to ensure active 
        participation, to pay stipends to participating 
        students and their mentors;
          (2) where necessary and appropriate to ensure active 
        participation, to pay transportation costs for 
        participants to attend project-sponsored activities;
          (3) to provide out-of-school and summer activities 
        related to the project;
          (4) for project evaluation; and
          (5) to recognize the responsibility and achievement 
        of participating students through ceremonies, awards, 
        and other means.

SEC. 407E. SERVICES FOR STUDENTS ATTENDING PRIVATE SCHOOLS.

  A local educational agency that participates in an eligible 
partnership shall provide services supported with Federal funds 
under this chapter on an equitable basis, consistent with 
section 14503 of Elementary and Secondary Education Act of 
1965, to students in private schools that--
          (1) have a 7th grade;
          (2) have students at least 50 percent of whom are 
        eligible for free or reduced-price lunch; and
          (3) are located in the normal attendance area of a 
        participating school.

SEC. 407F. EVALUATION.

  In order to improve the operation of the program assisted 
under this chapter, the Secretary shall, with funds 
appropriated under section 407H(a), make grants to, and enter 
into contracts and cooperative agreements with, institutions of 
higher education and other public and private institutions and 
organizations to evaluate the effectiveness of the program 
assisted under this chapter and, as appropriate, disseminate 
such results.

SEC. 407G. PEER REVIEW.

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

SEC. 407H. AUTHORIZATION OF APPROPRIATIONS.

  (a) Authorization of Appropriation.--There are authorized to 
be appropriated $140,000,000 for fiscal year 1999 and such sums 
as may be necessary for each of the 5 succeeding fiscal years 
to carry out this chapter.
  (b) Reservation for Technical Assistance and Peer Review.--
From the amount appropriated under subsection (a) for any 
fiscal year, the Secretary may reserve up 0.5 percent of that 
amount to obtain additional qualified readers and additional 
staff to review applications, to increase the level of 
oversight monitoring, to support impact studies, program 
assessments and reviews, and to provide technical assistance to 
potential applicants and current grantees.

              CHAPTER 4--FRANK TEJEDA SCHOLARSHIP PROGRAM

SEC. 408A. STATEMENT OF PURPOSE.

  It is the purpose of this chapter to establish a Frank Tejeda 
Scholarship Program to recruit and train teachers who are 
proficient in both Spanish and English and who show promise of 
academic achievement.

SEC. 408B. SCHOLARSHIPS AUTHORIZED.

  (a) Program Authority.--The Secretary is authorized, in 
accordance with the provisions of this chapter, to award 
scholarships to individuals consistent with the purposes of 
this chapter.
  (b) Tejeda Scholars.--Individuals awarded scholarships under 
this chapter shall be known as ``Tejeda Scholars''.

SEC. 408C. ALLOCATION AMONG STATES.

  (a) Allocation Formula.--From the sums appropriated pursuant 
to the authority of section 408H for any fiscal year, the 
Secretary shall allocate to each State an amount equal to 
$5,000 multiplied by the number of scholarships determined by 
the Secretary to be available to such State in accordance with 
subsection (b).
  (b) Number of Scholarships Available.--The number of 
scholarships to be made available in a State for any fiscal 
year shall bear the same ratio to the number of scholarships 
made available to all States as the State's population ages 5 
through 17 bears to the population ages 5 through 17 in all the 
States, except that not less than 10 scholarships shall be made 
available to any State.
  (c) Use of Census Data.--For the purpose of this section, the 
population ages 5 through 17 in a State and in all the States 
shall be determined by the most recently available data, 
satisfactory to the Secretary, from the Bureau of the Census. 
The Bureau of the Census shall produce and publish intercensal 
data for Puerto Rico and the other territories.

SEC. 408D. ELIGIBILITY OF SCHOLARS.

  (a) High School Graduation or Equivalent and Admission to 
Institution Required.--Each student awarded a scholarship under 
this chapter shall--
          (1) be--
                  (A) a low-income individual, as that term is 
                defined in section 402A(g)(2) of this title; or
                  (B) an individual who is eligible for a Pell 
                Grant under subpart 1 of this part;
          (2) be a citizen of the United States;
          (3) be a resident of the State in which he or she 
        applies;
          (4) be enrolled or accepted for enrollment on a full- 
        or part-time basis, at a graduate or undergraduate 
        level, in an institution of higher education that has 
        an accredited teacher preparation program;
          (5) have demonstrated proficiency in the English and 
        Spanish languages, as certified by the applicant's 
        academic institution; and
          (6) have agreed, upon graduation from such program--
                  (A) to serve no less than one year for each 
                year of scholarship assistance, but no fewer 
                than two years of service in total, as a 
                teacher in a public elementary or secondary 
                school in which there is a demonstrated need 
                for Spanish-speaking teachers and 
                professionals, as determined by the Secretary;
                  (B) to complete such service within 6 years 
                of graduation; and
                  (C) that if the student is unable to complete 
                such service, the student will, except as 
                provided in subsection (c), repay the Secretary 
                the total amount, or a pro rata amount of the 
                scholarship received under this chapter in 
                proportion to the amount of service completed, 
                plus interest and collection costs in the same 
                manner as repayment of a student loan made 
                under part D of this title.
  (b) Selection Based on Promise of Academic Achievement.--Each 
student awarded a scholarship under this chapter must 
demonstrate outstanding academic achievement and show promise 
of continued academic achievement, as certified by the 
student's academic institution.
  (c) Exception to Repayment Obligation.--
          (1) Deferral during certain periods.--A recipient 
        shall not be considered in violation of the agreement 
        entered into pursuant to subsection (a)(4)(C) during 
        any period in which the recipient--
                  (A) is pursuing a full-time course of study 
                related to the field of teaching at an eligible 
                institution;
                  (B) is serving, not in excess of 3 years, as 
                a member of the armed services of the United 
                States;
                  (C) is temporarily totally disabled for a 
                period of time not to exceed 3 years as 
                established by sworn affidavit of a qualified 
                physician;
                  (D) is unable to secure employment for a 
                period not to exceed 12 months by reason of 
                having to care for a spouse, child, parent, or 
                immediate family member who is disabled;
                  (E) is seeking and unable to find full-time 
                employment for a single period not to exceed 12 
                months;
                  (F) 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
                  (G) satisfies the provisions of additional 
                repayment exceptions that may be prescribed by 
                the Secretary in regulations issued pursuant to 
                this subpart.
          (2) Forgiveness if permanently totally disabled.--A 
        recipient shall be excused from repayment of any 
        scholarship assistance received under this chapter if 
        the recipient becomes permanently totally disabled as 
        established by sworn affidavit of a qualified 
        physician.

SEC. 408E. SELECTION OF SCHOLARS.

  (a) Establishment of Criteria.--The Secretary shall establish 
criteria for the selection of scholars under this chapter that 
meet the requirements of section 408D.
  (b) Timing of Selection.--The selection process shall be 
completed, and the awards made, no later than May 1 of the 
academic year preceding the academic year for which the award 
will be used.

SEC. 408F. STIPENDS AND SCHOLARSHIP CONDITIONS.

  (a) Amount of Award.--Each student awarded a scholarship 
under this chapter shall receive a stipend of $5,000 for the 
academic year of study for which the scholarship is awarded, 
except that in no case shall the total amount of financial aid 
awarded to such student exceed such student's total cost-of-
attendance.
  (b) Use of Award.--The State educational agency shall 
establish procedures to assure that a scholar awarded a 
scholarship under this chapter pursues a course of study at an 
institution of higher education.

SEC. 408G. CONSTRUCTION OF NEEDS PROVISIONS.

  Notwithstanding section 471, nothing in this chapter, or any 
other Act, shall be construed to permit the receipt of a 
scholarship under this chapter to be counted for any needs test 
in connection with the awarding of any grant or the making of 
any loan under this Act or any other provision of Federal law 
relating to educational assistance.

SEC. 408H. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated for this chapter 
$5,000,000 for fiscal year 1998 and such sums as may be 
necessary for each of the 4 succeeding fiscal years.

                   CHAPTER 5--CAMPUS-BASED CHILD CARE

SEC. 410A. CAMPUS-BASED CHILD CARE.

  (a) Program Authorized.--
          (1) Authority.--The Secretary may award grants to 
        institutions of higher education to assist the 
        institutions in providing campus-based child care 
        services to low-income students.
          (2) Amount of grants.--
                  (A) In general.--The amount of a grant 
                awarded to an institution of higher education 
                under this section for a fiscal year shall not 
                exceed 1 percent of the total amount of all 
                Federal Pell Grant funds awarded to students 
                enrolled at the institution of higher education 
                for the preceding fiscal year.
                  (B) Minimum.--A grant under this section 
                shall be awarded in an amount that is not less 
                than $10,000.
          (3) Duration and payments.--
                  (A) Duration.--The Secretary shall award a 
                grant under this section for a period of 3 
                years.
                  (B) Payments.--Subject to paragraph (2), the 
                Secretary shall make annual grant payments 
                under this section.
          (4) Eligible institutions.--An institution of higher 
        education shall be eligible to receive a grant under 
        this section for a fiscal year if the total amount of 
        all Federal Pell Grant funds awarded to students 
        enrolled at the institution of higher education for the 
        preceding fiscal year equals or exceeds $350,000.
          (5) Use of funds.--Grant funds under this section 
        shall be used by an institution of higher education to 
        support or establish a campus-based child care program 
        serving the needs of low-income students enrolled at 
        the institution of higher education.
          (6) Definition of low-income student.--For the 
        purpose of this section, the term ``low-income 
        student'' means a student who is eligible to receive a 
        Federal Pell Grant for the fiscal year for which the 
        determination is made.
  (b) Applications.--An institution of higher education 
desiring a grant under this section shall submit an application 
to the Secretary at such time, in such manner, and accompanied 
by such information as the Secretary may require. Each 
application shall--
          (1) demonstrate that the institution is an eligible 
        institution described in subsection (a)(4);
          (2) specify the amount of funds requested;
          (3) demonstrate the need of low-income students at 
        the institution for campus-based child care services by 
        including in the application student demographics and 
        other relevant data;
          (4) identify the resources the institution will draw 
        upon to support the child care program and the 
        participation of low-income students in the program, 
        such as accessing social services funding, using 
        student activity fees to help pay the costs of child 
        care, using resources obtained by meeting the needs of 
        parents who are not low-income students, accessing 
        foundation, corporate, or other institutional support, 
        and demonstrating that the use of the resources will 
        not result in increases in student tuition;
          (5) contain an assurance that the institution will 
        meet the child care needs of low-income students 
        through the provision of services, or through a 
        contract for the provision of services;
          (6) provide a timeline, covering the period from 
        receipt of the grant through the provision of the child 
        care services, delineating the specific steps the 
        institution will take to achieve the goal of providing 
        low-income students with child care services;
          (7) specify any measures the institution will take to 
        assist low-income students with child care during the 
        period before the institution provides child care 
        services;
          (8) include a plan for identifying resources needed 
        for the child care services, including space in which 
        to provide child care services, and technical 
        assistance if necessary;
          (9) contain an assurance that any child care facility 
        assisted under this section will meet the applicable 
        State or local government licensing, certification, 
        approval, or registration requirements; and
          (10) contain a plan for any child care facility 
        assisted under this section to become accredited within 
        3 years of the date the institution first receives 
        assistance under this section.
  (c) Reporting Requirements; Continuing Eligibility.--
          (1) Reporting requirements.--
                  (A) Reports.--Each institution of higher 
                education receiving a grant under this section 
                shall report to the Secretary 18 months and 36 
                months after receiving the first grant payment 
                under this section.
                  (B) Contents.--The report shall include--
                          (i) data on the population served 
                        under this section;
                          (ii) information on campus and 
                        community resources and funding used to 
                        help low-income students access child 
                        care services;
                          (iii) information on progress made 
                        toward accreditation of any child care 
                        facility; and
                          (iv) information on the impact of the 
                        grant on the quality, availability, and 
                        affordability of campus-based child 
                        care services.
          (2) Continuing eligibility.--The Secretary shall make 
        the third annual grant payment under this section to an 
        institution of higher education only if the Secretary 
        determines, on the basis of the 18-month report 
        submitted under paragraph (1), that the institution is 
        making a good faith effort to ensure that low-income 
        students at the institution have access to affordable, 
        quality child care services.
  (d) Authorization of Appropriations.--There are authorized to 
be appropriated to carry out this section $30,000,000 for 
fiscal year 1999 and such sums as may be necessary for each of 
the 4 succeeding fiscal years.

     Subpart 3--Federal Supplemental Educational Opportunity Grants

SEC. 413A. PURPOSE; APPROPRIATIONS AUTHORIZED.

  (a) * * *
  (b) Authorization of Appropriations.--(1) For the purpose of 
enabling the Secretary to make payments to institutions of 
higher education which have made agreements with the Secretary 
in accordance with section 413C(a), for use by such 
institutions for payments to undergraduate students of 
supplemental grants awarded to them under this subpart, there 
are authorized to be appropriated $675,000,000 for fiscal year 
[1993] 1999 and such sums as may be necessary for the 4 
succeeding fiscal years.

           *       *       *       *       *       *       *


SEC. 413C. AGREEMENTS WITH INSTITUTIONS; SELECTION OF RECIPIENTS.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Use of Funds for Less-Than-Full-Time Students.--If the 
institution's allocation under this subpart is directly or 
indirectly based in part on the financial need demonstrated by 
students who are independent students or attending the 
institution less than full time [and if the total financial 
need of all such students attending the institution exceeds 5 
percent of the total financial need of all students attending 
such institution, then at least 5 percent of such allotment 
shall be made available to such students.], then grant funds 
shall be made available to such independent and less-than-full-
time students.

           *       *       *       *       *       *       *


SEC. 413D. ALLOCATION OF FUNDS.

  (a) * * *
  [(b) Allocation of Excess Based on Pro Rata Share.--From one-
quarter of the remainder of the amount appropriated pursuant to 
section 413A(b) for any fiscal year (after making the 
allocations required by subsection (a)), the Secretary shall 
allocate to each eligible institution an amount which bears the 
same ratio to such one-quarter as the amount the eligible 
institution receives for such fiscal year under subsection (a) 
bears to the amount all such institutions receive under such 
subsection (a).]
  [(c)] (b) Allocation of Excess Based on Fair Share.--(1) From 
[three-quarters of] the remainder of the amount appropriated 
pursuant to section 413A(b) for each year (after making the 
allocations required by subsection (a)), the Secretary shall 
allocate to each eligible institution which has an excess 
eligible amount an amount which bears the same ratio to such 
remainder as such excess eligible amount bears to the sum of 
the excess eligible amounts of all such eligible institutions 
(having such excess eligible amounts).
  (2) For any eligible institution, the excess eligible amount 
is the amount, if any, by which--
          (A)(i) the amount of that institution's need (as 
        determined under subsection [(d)] (c)), divided by (ii) 
        the sum of the need of all institutions (as so 
        determined), multiplied by (iii) the amount 
        appropriated pursuant to section 413A(b) of the fiscal 
        year; exceeds
          (B) the amount required to be allocated to that 
        institution under subsection (a).
  [(d)] (c) Determination of Institution's Need.--(1) * * *

           *       *       *       *       *       *       *

  [(e)] (d) Reallocation of Excess Allocations.--(1) * * *

           *       *       *       *       *       *       *

  [(f)] (e) Filing Deadlines.--The Secretary shall, from time 
to time, set dates before which institutions must file 
applications for allocations under this part.
  (f) Carry-Over/Carry-Back Authority.--
          (1) Carry-over authority.--
                  (A) Carry-over up to 10 percent.--Of the sums 
                granted to an eligible institution under this 
                subpart for any fiscal year, 10 percent may, at 
                the discretion of the institution, remain 
                available for expenditure during the succeeding 
                fiscal year to carry out the program under this 
                subpart.
                  (B) Reallocation of excess.--Any of the sums 
                so granted to an institution for a fiscal year 
                which are not needed by that institution to 
                operate programs under this subpart during that 
                fiscal year, and which it does not wish to use 
                during the next fiscal year as authorized in 
                the preceding sentence, shall remain available 
                to the Secretary for making grants under 
                section 413B to other institutions in the same 
                State until the close of the second fiscal year 
                next succeeding the fiscal year for which such 
                funds were appropriated.
          (2) Carry-back authority.--
                  (A) Carry-back up to 10 percent.--Up to 10 
                percent of the sums the Secretary determines an 
                eligible institution may receive from funds 
                which have been appropriated for a fiscal year 
                may be used by the institution for expenditure 
                during the fiscal year preceding the fiscal 
                year for which the sums were appropriated.
                  (B) Use of carried-back funds.--An eligible 
                institution may make grants to students after 
                the end of the academic year, but prior to the 
                beginning of the succeeding fiscal year, from 
                such succeeding fiscal year's appropriations.

        Subpart 4--Grants to States for State Student Incentives

SEC. 415A. PURPOSE; APPROPRIATIONS AUTHORIZED.

  [(a) Purpose of Subpart.--It is the purpose of this subpart 
to make incentive grants available to States to assist States 
in providing grants to--
          [(1) eligible students attending institutions of 
        higher education or participating in programs of study 
        abroad that are approved for credit by institutions of 
        higher education at which such students are enrolled; 
        and
          [(2) eligible students for campus-based community 
        service work-study.]
  (a) Purpose of Subpart.--It is the purpose of this subpart to 
make incentive grants available to States to assist States in--
          (1) providing grants to--
                  (A) eligible students attending institutions 
                of higher education or participating in 
                programs of study abroad that are approved for 
                credit by institutions of higher education at 
                which such students are enrolled; and
                  (B) eligible students for campus-based 
                community service work-study; and
          (2) carrying out the activities described in section 
        415F.
  (b) Authorization of Appropriations; Availability.--
          (1) In general.--There are authorized to be 
        appropriated $105,000,000 for fiscal year [1993] 1999, 
        and such sums as may be necessary for each of the 4 
        succeeding fiscal years.
          (2) Reservation.--For any fiscal year for which the 
        amount appropriated under paragraph (1) exceeds 
        $25,000,000, the excess shall be available to carry out 
        section 415E.
          [(2)] (3) Availability.--Sums appropriated pursuant 
        to the authority of paragraph (1) for any fiscal year 
        shall remain available for payments to States under 
        this subpart until the end of the fiscal year 
        succeeding the fiscal year for which such sums were 
        appropriated.

SEC. 415B. ALLOTMENT AMONG STATES.

  (a) Allotment Based on Number of Eligible Students in 
Attendance.--(1) From the sums appropriated pursuant to section 
415A(b)(1) and not reserved under section 415A(b)(2) for any 
fiscal year, the Secretary shall allot to each State an amount 
which bears the same ratio to such sums as the number of 
students who are deemed eligible in such State for 
participation in the grant program authorized by this subpart 
bears to the total number of such students in all the States, 
except that no State shall receive less than the State received 
for fiscal year 1979.

           *       *       *       *       *       *       *


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

  (a) In General.--From amounts reserved under section 
415A(b)(2) for each fiscal year, the Secretary shall--
          (1) make allotments among States in the same manner 
        as the Secretary makes allotments among States under 
        section 415B; and
          (2) award grants to States, from allotments under 
        paragraph (1), to enable the States to pay the Federal 
        share of the cost of the authorized activities 
        described in subsection (c).
  (b) Authorized Activities.--Each State receiving a grant 
under this section may use the grant funds for--
          (1) increasing the dollar amount of grants awarded 
        under section 415B to eligible students who demonstrate 
        financial need;
          (2) carrying out transition programs from secondary 
        school to postsecondary education for eligible students 
        who demonstrate financial need;
          (3) carrying out a financial aid program for eligible 
        students who demonstrate financial need and wish to 
        enter teaching or computer-related careers, or other 
        fields of study determined by the State to be critical 
        to the State's workforce needs;
          (4) carrying out early intervention programs, 
        mentoring programs, and career education programs for 
        eligible students who demonstrate financial need; and
          (5) awarding merit or academic scholarships to 
        eligible students who demonstrate financial need.
  (c) Maintenance of Effort Requirement.--Each State receiving 
a grant under this section for a fiscal year shall provide the 
Secretary an assurance that the aggregate amount expended per 
student or the aggregate expenditures by the State, from funds 
derived from non-Federal sources, for the authorized activities 
described in subsection (b) for the preceding fiscal year were 
not less than the amount expended per student or the aggregate 
expenditures by the State for the activities for the second 
preceding fiscal year. The Secretary may waive this subsection 
for good cause, as determined by the Secretary.
  (d) Federal Share.--The Federal share of the cost of the 
authorized activities described in subsection (b) for any 
fiscal year shall be 25 percent.

SEC. [415E.] 415F. DEFINITION.

  For the purpose of this subpart, the term ``community 
service'' means services, including direct service, planning, 
and applied research which are identified by an institution of 
higher education, through formal or informal consultation with 
local nonprofit, governmental, and community-based 
organizations, and which--
          (1) * * *

           *       *       *       *       *       *       *


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

SEC. 418A. MAINTENANCE AND EXPANSION OF EXISTING PROGRAMS.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Management Plan Required.--Each project application shall 
include a management plan which contains assurances that the 
grant recipient will coordinate its project, to the extent 
feasible, with other local, State, and Federal programs to 
maximize the resources available for migrant students, and 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) * * *

           *       *       *       *       *       *       *

  (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)] in accordance with section 402A(c)(1).

           *       *       *       *       *       *       *

  (g) Authorization of Appropriations.--(1) There are 
authorized to be appropriated for the high school equivalency 
program $15,000,000 for fiscal year [1993] 1999 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] 
1999 and such sums as may be necessary for each of the 4 
succeeding fiscal years.
  (h) Data Collection.--The National Center for Education 
Statistics shall collect postsecondary education data on 
migrant students.

Subpart 6--Robert C. Byrd Honors Scholarship Program

           *       *       *       *       *       *       *


SEC. 419G. SELECTION OF SCHOLARS.

  (a) * * *

           *       *       *       *       *       *       *

  (e) Termination of Eligibility.--The eligibility of students 
from the Federated States of Micronesia, the Republic of the 
Marshall Islands, and Palau shall expire on September 30, 2001.

           *       *       *       *       *       *       *


SEC. 419K. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated for this subpart 
[$10,000,000 for fiscal year 1993] $40,000,000 for fiscal year 
1999 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. 421. STATEMENT OF PURPOSE; NONDISCRIMINATION; AND APPROPRIATIONS 
                    AUTHORIZED.

  (a) * * *

           *       *       *       *       *       *       *

  [(d) Limitation on Authorization To Guarantee New Loans Under 
This Part.--Notwithstanding any other provision of this part, 
no new loan guarantees shall be issued after June 30, 1994, if 
the Secretary does not issue final regulations implementing the 
changes made to this part under the Higher Education Amendments 
of 1992 prior to that date. The authority to issue new loan 
guarantees shall resume upon the Secretary's issuance of such 
regulations. This subsection shall not provide the basis for 
avoiding any requirements for notice and public hearing on such 
regulations.]

SEC. 422. ADVANCES FOR RESERVE FUNDS OF STATE AND NONPROFIT PRIVATE 
                    LOAN INSURANCE PROGRAMS.

  (a) Purpose of and Authority for Advances to Reserve Funds.--
          (1) * * *
          (2) Matching requirement.--No advance shall be made 
        after June 30, 1968, unless matched by an equal amount 
        from non-Federal sources. Such equal amount may include 
        the unencumbered non-Federal portion of a reserve fund. 
        As used in the preceding sentence, the term 
        ``unencumbered non-Federal portion'' means the amount 
        (determined as of the time immediately preceding the 
        making of the advance) of the reserve fund less the 
        greater of--
                  (A) * * *

           *       *       *       *       *       *       *

        Except as provided in section [428(c)(10)(E)] 
        428(c)(9)(E) or (F), such unencumbered non-Federal 
        portion shall not be subject to recall, repayment, or 
        recovery by the Secretary.

           *       *       *       *       *       *       *

  (c) Advances for Insurance Obligations.--
          (1) * * *

           *       *       *       *       *       *       *

          (6) Payment of advances where no State program.--(A) 
        * * *
          (B) The Secretary may enter into an agreement with a 
        private nonprofit institution or organization for the 
        purpose of this paragraph under which such institution 
        or organization--
                  (i) agrees to establish within such State at 
                least one office with sufficient staff to 
                handle written, electronic, and telephone 
                inquiries from students, eligible lenders, and 
                other persons in the State, to encourage 
                maximum commercial lender participation within 
                the State, and to conduct periodic visits to at 
                least the major eligible lenders within the 
                State;

           *       *       *       *       *       *       *

          (7) Emergency advances.--The Secretary is authorized 
        to make advances, on terms and conditions satisfactory 
        to the Secretary, [to a guaranty agency--
                  [(A) in accordance with section 428(j), in 
                order to ensure that the guaranty agency shall 
                make loans as the lender-of-last-resort during 
                the transition from the Federal Family 
                Education Loan Program under this part to the 
                Federal Direct Student Loan Program under part 
                D of this title; or
                  [(B) if the Secretary] to a guaranty agency, 
                if the Secretary is seeking to terminate the 
                guaranty agency's agreement, or assuming the 
                guaranty agency's functions, in accordance with 
                section [428(c)(10)(F)(v)] 428(c)(9)(F)(v), in 
                order to assist the agency in meeting its 
                immediate cash needs, and ensure the 
                uninterrupted payment of claims, [or ensure 
                that the guaranty agency shall make loans as 
                described in subparagraph (A)].

           *       *       *       *       *       *       *

  (g) Preservation and Recovery of Guaranty Agency Reserves.--
          (1) Authority to recover funds.--Notwithstanding any 
        other provision of law, the reserve funds of the 
        guaranty agencies, and any assets purchased with such 
        reserve funds, regardless of who holds or controls the 
        reserves or assets, shall be considered to be the 
        property of the United States to be used in the 
        operation of the program authorized by this part [or 
        the program authorized by part D of this title]. 
        However, the Secretary may not require the return of 
        all reserve funds of a guaranty agency to the Secretary 
        unless the Secretary determines that such return is in 
        the best interest of the operation of the program 
        authorized by this part [or the program authorized by 
        part D of this title], or to ensure the proper 
        maintenance of such agency's funds or assets or the 
        orderly termination of the guaranty agency's operations 
        and the liquidation of its assets. The reserves shall 
        be maintained by each guaranty agency to pay program 
        expenses and contingent liabilities, as authorized by 
        the Secretary, except that--
                  (A) * * *

           *       *       *       *       *       *       *

  (i) Additional Recall of Reserves.--
          (1) In general.--Notwithstanding any other provision 
        of law, the Secretary shall recall $30,000,000 for each 
        of the fiscal years 1999, 2000, 2001, 2002, and 2003 
        from the reserve funds held by guaranty agencies.
          (2) Deposit.--Funds recalled by the Secretary under 
        this subsection shall be deposited in the Treasury.
          (3) Required share.--The Secretary shall require each 
        guaranty agency to return annually reserve funds under 
        paragraph (1) based on one-fifth of the agency's 
        required share. For purposes of this paragraph, a 
        guaranty agency's required share shall be determined as 
        follows:
                  (A) The Secretary shall impose on each 
                guaranty agency an equal percentage reduction 
                in the amount of the agency's reserve funds 
                held as of September 30, 1996.
                  (B) The equal percentage reduction shall be 
                the percentage obtained by dividing--
                          (i) $150,000,000 by
                          (ii) the total amount of all such 
                        agencies' reserve funds held as of 
                        September 30, 1996.
          (4) Offset of required shares.--If any guaranty 
        returns to the Secretary any reserves in excess of the 
        amount required under this subsection or subsection 
        (h), the total amount required to be returned under 
        paragraph (1) shall be reduced by the amount of such 
        additional reserve return.
          (5) Definition of reserve funds.--The term ``reserve 
        funds'' when used with respect to a guaranty agency--
                  (A) includes any reserve funds in cash or 
                liquid assets held by the guaranty agency, or 
                held by, or under the control of, any other 
                entity; and
                  (B) does not include building, equipment, or 
                other nonliquid assets.

SEC. 422A. FEDERAL STUDENT LOAN RESERVE FUND.

  (a) Establishment.--Each guaranty agency shall, not later 
than 60 days after the date of enactment of this section, 
deposit all funds, securities, and other liquid assets 
contained in the reserve fund established pursuant to section 
422 of this part into a Federal Student Loan Reserve Fund (in 
this section and section 422B referred to as the ``Federal 
Fund'') which shall be an account of a type selected by the 
agency, with the approval of the Secretary.
  (b) Investment of Funds.--Funds maintained in the Federal 
Fund shall be invested in obligations issued or guaranteed by 
the United States or a State, or in other similarly low-risk 
securities selected by the guaranty agency.
  (c) Additional Deposits.--After the establishment of the 
Federal Fund, a guaranty agency shall deposit into the Federal 
Fund--
          (1) all amounts received from the Secretary as 
        payment of reinsurance on loans pursuant to section 
        428(c)(1);
          (2) from amounts collected on behalf of the 
        obligation of a defaulted borrower, a percentage amount 
        equal to the complement of the reinsurance percentage 
        in effect when payment under the guaranty agreement was 
        made with respect to the defaulted loan pursuant to 
        sections 428(c)(6)(A) and 428F(a)(1)(B); and
          (3) insurance premiums collected from borrowers 
        pursuant to sections 428(b)(1)(H) and 428H(h).
  (d) Uses of Funds.--Subject to subsection (f), the Federal 
Fund may only be used by a guaranty agency--
          (1) to pay lender claims pursuant to section 
        428(b)(1)(G), section 428(j), section 437, and section 
        439(q); and
          (2) to pay into the Agency Operating Fund established 
        pursuant to section 422B a default prevention fee in 
        accordance with section 428(l).
  (e) Ownership of Federal Fund.--
          (1) In general.--The Federal Fund of the guaranty 
        agency, and any assets purchased or developed with 
        funds from the Federal Fund or any other funds 
        considered reserve funds on the date of enactment of 
        this section, regardless of who holds or controls the 
        reserves or assets, shall be considered to be the 
        property of the United States to be used in the 
        operation of the program authorized by this part, as 
        provided in subsection (d) of this section.
          (2) Nonliquid reserve fund and other assets.--
        Notwithstanding any other provision of law, nonliquid 
        reserve fund assets, such as buildings and equipment 
        purchased or developed by the guaranty agency with 
        funds from the Federal Fund, or any other funds 
        considered reserve funds on the date of enactment of 
        this section shall--
                  (A) remain the property of the United States;
                  (B) be used only for such purposes as the 
                Secretary determines are appropriate; and
                  (C) be subject to such restrictions on the 
                disposition of such assets (which may include a 
                requirement that any sale of such assets be at 
                not less than fair market value) as the 
                Secretary determines are appropriate.
  (f) Transition.--
          (1) In general.--In order to establish the Agency 
        Operating Fund authorized by section 422B, each 
        guaranty agency may transfer up to 180 days cash 
        expenses for normal operating expenses, as a working 
        capital reserve as defined in Office of Management and 
        Budget circular A-87 (Cost Accounting Standards) from 
        the Federal Fund for deposit into the Agency Operating 
        Fund for use in the performance of its duties under 
        this part. Such transfers may occur during the first 
        three years following the establishment of the 
        Operating Fund. However, no agency may transfer in 
        excess of 50 percent of the Federal Fund balance to its 
        Operating Fund during any fiscal year. In determining 
        the transfer amount, the agency shall insure that 
        sufficient funds remain in the Federal Fund to pay 
        lender claims within the required time periods and to 
        meet the reserve recall requirements of the Balanced 
        Budget Act of 1997.
          (2) Repayment provisions.--Each guaranty agency shall 
        begin repayment of sums transferred pursuant to this 
        subsection no later than the start of the fourth year 
        after the establishment of the Agency Operating Fund, 
        and shall repay all amounts transferred no later than 5 
        years from the date of the establishment of the Agency 
        Operating Fund. Each guaranty agency shall provide to 
        the Secretary, on an annual basis, a financial analysis 
        demonstrating its ability to repay all outstanding 
        amounts while any transferred amounts are owned to the 
        Federal Fund.
          (3) Special rule.--In applying the minimum reserve 
        level required by section 428(c)(9)(A), the Secretary 
        shall include all amounts owed to the Federal Fund by 
        the agency due to transfers allowed under paragraph (1) 
        in the calculation.

SEC. 422B. AGENCY OPERATING FUND.

  (a) Establishment.--Each guaranty agency shall, not later 
than 60 days after the date of enactment of this section, 
establish a fund designated as the Agency Operating Fund 
(hereinafter referred to as the ``Operating Fund'').
  (b) Investment of Funds.--Funds deposited into the Operating 
Fund shall be invested at the discretion of the guaranty agency 
in accordance with prudent investor standards.
  (c) Additional Deposits.--After the establishment of the 
Operating Fund, the guaranty agency shall deposit into the 
Operating Fund--
          (1) the loan processing and issuance fee paid by the 
        Secretary pursuant to section 428(f);
          (2) the portfolio maintenance fee paid by the 
        Secretary pursuant to section 458;
          (3) the default prevention fee paid in accordance 
        with section 428(l);
          (4) amounts retained by the guaranty agency pursuant 
        to section 428(c)(6)(B) from collection on defaulted 
        loans held by the agency, after payment of the 
        Secretary's equitable share, excluding amounts 
        deposited in the Federal Fund pursuant to section 
        422A(c)(2); and
          (5) interest earned on the Federal Fund during the 
        first 3 years after the date of enactment of this 
        section, but only to the extent permitted by 
        regulations prescribed by the Secretary to permit a 
        limited number of guaranty agencies (not to exceed 10) 
        essential resources to maintain sufficient operating 
        funds and to restructure their operations in accordance 
        with the requirements of this section and section 422A.
  (d) Uses of Funds.--
          (1) In general.--Funds in the Operating Fund shall be 
        used for activities related to student financial aid, 
        including application processing, loan disbursement, 
        enrollment and repayment status management, default 
        prevention activities, default collection activities, 
        school and lender training, financial awareness and 
        outreach activities, compliance monitoring, other loan 
        program related activities in support of postsecondary 
        education and other student financial aid related 
        activities as determined by the guaranty agency.
          (2) Special rule.--The guaranty agency may, in its 
        discretion, transfer funds from the Operating Fund to 
        the Federal Student Loan Reserve Fund for use in 
        accordance with section 422A. Such transfer shall be 
        irrevocable, and any funds so transferred shall become 
        the property of the United States.
          (3) Definitions.--For purposes of this subsection:
                  (A) The term ``default collection 
                activities'' means activities of a guaranty 
                agency which are directly related to the 
                collection of the loan on which a default claim 
                has been paid to the participating lender, 
                including the due diligence activities required 
                pursuant to regulations of the Secretary.
                  (B) The term ``default prevention 
                activities'' means activities of a guaranty 
                agency which are directly related toproviding 
collection assistance to the lender on a delinquent loan, prior to the 
loan's being legally in a default status, including due diligence 
activities required pursuant to regulations of the Secretary.
                  (C) The term ``enrollment and repayment 
                status management'' means activities of a 
                guaranty agency which are directly related to 
                ascertaining the student's enrollment status, 
                including prompt notification to the lender of 
                such status, an audit of the note or written 
                agreement to determine if the provisions of 
                that note or agreement are consistent with the 
                records of the guaranty agency as to the 
                principal amount of the loan guaranteed, and an 
                examination of the note or agreement to assure 
                that the repayment provisions are consistent 
                with the provisions of this part.
  (e) Ownership of Operating Fund.--The Operating Fund of the 
guaranty agency shall be considered to be the property of the 
guaranty agency. The Secretary may regulate the uses or 
expenditure of moneys in the Operating Fund with respect to 
activities required under guaranty agency agreements under 
subsections (b) and (c) of section 428 until such time as a 
guaranty agency has repaid to the Federal Fund all reserve 
funds transferred under section 422A(f). During any period in 
which funds are owed to the Federal Fund as a result of a 
transfer under 422A(f), moneys in the Operating Fund may only 
be used for expenses related to the student loan programs 
authorized under this part. The Secretary may require such 
necessary reports and audits as provided in section 428(b)(2).

           *       *       *       *       *       *       *


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

  (a) Limitations on Amounts of Loans Covered by Federal 
Insurance.--The total principal amount of new loans made and 
installments paid pursuant to lines of credit (as defined in 
section 435) to students covered by Federal loan insurance 
under this part shall not exceed $2,000,000,000 for the period 
from July 1, 1976, to September 30, 1976, and for each of the 
succeeding fiscal years ending prior to October 1, [2002] 2004. 
Thereafter, Federal loan insurance pursuant to this part may be 
granted only for loans made (or for loan installments paid 
pursuant to lines of credit) to enable students, who have 
obtained prior loans insured under this part, to continue or 
complete their educational program; but no insurance may be 
granted for any loan made or installment paid after September 
30, [2006] 2008.

           *       *       *       *       *       *       *


SEC. 425. LIMITATIONS ON INDIVIDUAL FEDERALLY INSURED LOANS AND ON 
                    FEDERAL LOAN INSURANCE.

  (a) Annual and Aggregate Limits.--
          (1) Annual limits.--(A) The total of loans made to a 
        student in any academic year or its equivalent (as 
        determined by the Secretary) which may be covered by 
        Federal loan insurance under this part may not exceed--
                  (i) in the case of a student at an eligible 
                institution who has not successfully completed 
                the first year of a program of undergraduate 
                education--
                          (I) $2,625, if such student is 
                        enrolled in a program whose length is 
                        at least one academic year in length 
                        (as determined under section 481); and
                          [(II) $1,750, if such student is 
                        enrolled in a program whose length is 
                        less than one academic year, but at 
                        least \2/3\ of such an academic year; 
                        and
                          [(III) $875, if such student is 
                        enrolled in a program whose length is 
                        less than \2/3\, but at least \1/3\, of 
                        such an academic year;]
                          (II) if such student is enrolled in a 
                        program of undergraduate education 
                        which is less than one academic year, 
                        the maximum annual loan amount that 
                        such student may receive may not exceed 
                        the amount that bears the same ratio to 
                        the amount specified in subclause (I) 
                        as the length of such program measured 
                        in semester, trimester, quarter, or 
                        clock hours bears to one academic year;

           *       *       *       *       *       *       *

                  (iii) in the case of a student at an eligible 
                institution who has successfully completed the 
                first and second years of a program of 
                undergraduate education but has not 
                successfully completed the remainder of such 
                program--
                          (I) $5,500; or
                          (II) if such student is enrolled in a 
                        program of undergraduate education, the 
                        remainder of which is less than one 
                        academic year, the maximum annual loan 
                        amount that such student may receive 
                        may not exceed the amount that bears 
                        the same ratio to the amount specified 
                        in subclause (I) as such remainder 
                        measured in semester, trimester, 
                        quarter, or clock hours bears to one 
                        academic year; and

           *       *       *       *       *       *       *


[SEC. 427A. APPLICABLE INTEREST RATES.

  [(a) Rates To Be Consistent for Borrower's Entire Debt.--With 
respect to any loan to cover the cost of instruction for any 
period of instruction beginning on or after January 1, 1981, 
the rate of interest applicable to any borrower shall--
          [(1) not exceed 7 percent per year on the unpaid 
        principal balance of the loan in the case of any 
        borrower who, on the date of entering into the note or 
        other written evidence of that loan, has an outstanding 
        balance of principal or interest on any loan made, 
        insured, or guaranteed under this part, for which the 
        interest rate does not exceed 7 percent;
          [(2) except as provided in paragraph (3), be 9 
        percent per year on the unpaid principal balance of the 
        loan in the case of any borrower who, on the date of 
        entering into the note or other written evidence of 
        that loan, has no outstanding balance of principal or 
        interest on any loan described in paragraph (1) or any 
        loan for which the interest rate is determined under 
        paragraph (1); or
          [(3) be 8 percent per year on the unpaid principal 
        balance of the loan for a loan to cover the cost of 
        education for any period of enrollment beginning on or 
        after a date which is 3 months after a determination 
        made under subsection (b) in the case of any borrower 
        who, on the date of entering into the note or other 
        written evidence of the loan, has no outstanding 
        balance of principal or interest on any loan for which 
        the interest rate is determined under paragraph (1) or 
        (2) of this subsection.
  [(b) Reduction for New Borrowers After Decline in Treasury 
Bill Rates.--If for any 12-month period beginning on or after 
January 1, 1981, the Secretary, after consultation with the 
Secretary of the Treasury, determines that the average of the 
bond equivalent rates of 91-day Treasury bills auctioned for 
such 12-month period is equal to or less than 9 percent, the 
interest rate for loans under this part shall be the rate 
prescribed in subsection (a)(3) for borrowers described in such 
subsection.
  [(c) Rates for Supplemental Loans for Students and Loans for 
Parents.--
          [(1) In general.--Except as otherwise provided in 
        this subsection, the applicable rate of interest on 
        loans made pursuant to section 428A or 428B on or after 
        October 1, 1981, shall be 14 percent per year on the 
        unpaid principal balance of the loan.
          [(2) Reduction of rate after decline in treasury bill 
        rates.--If for any 12-month period beginning on or 
        after October 1, 1981, the Secretary, after 
        consultation with the Secretary of the Treasury, 
        determines that the average of the bond equivalent 
        rates of 91-day Treasury bills auctioned for such 12-
        month period is equal to or less than 14 percent, the 
        applicable rate of interest for loans made pursuant to 
        section 428A or 428B on and after the first day of the 
        first month beginning after the date of publication of 
        such determination shall be 12 percent per year on the 
        unpaid principal balance of the loan.
          [(3) Increase of rate after increase in treasury bill 
        rates.--If for any 12-month period beginning on or 
        after the date of publication of a determination under 
        paragraph (2), the Secretary, after consultation with 
        the Secretary of the Treasury, determines that the 
        average of the bond equivalent rates of 91-day Treasury 
        bills auctioned for such 12-month period exceeds 14 
        percent, the applicable rate of interest for loans made 
        pursuant to section 428A or 428B on and after the first 
        day of the first month beginning after the date of 
        publication of that determination under this paragraph 
        shall be 14 percent per year on the unpaid principal 
        balance of the loan.
          [(4) Availability of variable rates.--(A) For any 
        loan made pursuant to section 428A or 428B and 
        disbursed on or after July 1, 1987, or any loan made 
        pursuant to such section prior to such date that is 
        refinanced pursuant to section 428A(d) or 428B(d), the 
        applicable rate of interest during any 12-month period 
        beginning on July 1 and ending on June 30 shall be 
        determined under subparagraph (B), except that such 
        rate shall not exceed 12 percent.
          [(B) For any 12-month period beginning on July 1 and 
        ending on June 30, the rate determined under this 
        subparagraph is determined on the preceding June 1 and 
        is equal to--
                  [(i) the bond equivalent rate of 52-week 
                Treasury bills auctioned at the final auction 
                held prior to such June 1; plus
                  [(ii) 3.25 percent.
          [(C) The Secretary shall determine the applicable 
        rate of interest under subparagraph (B) after 
        consultation with the Secretary of the Treasury and 
        shall publish such rate in the Federal Register as soon 
        as practicable after the date of determination.
          [(D) Notwithstanding subparagraph (A)--
                  [(i) for any loan made pursuant to section 
                428A for which the first disbursement is made 
                on or after October 1, 1992--
                          [(I) subparagraph (B) shall be 
                        applied by substituting ``3.1'' for 
                        ``3.25''; and
                          [(II) the interest rate shall not 
                        exceed 11 percent; and
                  [(ii) for any loan made pursuant to section 
                428B for which the first disbursement is made 
                on or after October 1, 1992--
                          [(I) subparagraph (B) shall be 
                        applied by substituting ``3.1'' for 
                        ``3.25''; and
                          [(II) the interest rate shall not 
                        exceed 10 percent.
          [(E) Notwithstanding subparagraphs (A) and (D) for 
        any loan made pursuant to section 428B for which the 
        first disbursement is made on or after July 1, 1994--
                  [(i) subparagraph (B) shall be applied by 
                substituting ``3.1'' for ``3.25''; and
                  [(ii) the interest rate shall not exceed 9 
                percent.
  [(d) Interest Rates for New Borrowers After July 1, 1988.--
Notwithstanding subsections (a) and (b) of this section, with 
respect to any loan (other than a loan made pursuant to 
sections 428A, 428B, and 428C) to cover the cost of instruction 
for any period of enrollment beginning on or after July 1, 
1988, to any borrower who, on the date of entering into the 
note or other written evidence of the loan, has no outstanding 
balance of principal or interest on any loan made, insured, or 
guaranteed under this part, the applicable rate of interest 
shall be--
          [(1) 8 percent per year on the unpaid principal 
        balance of the loan during the period beginning on the 
        date of the disbursement of the loan and ending 4 years 
        after the commencement of repayment; and
          [(2) 10 percent per year on the unpaid principal 
        balance of the loan during the remainder of the 
        repayment period.
  [(e) Interest Rates for New Borrowers After October 1, 
1992.--
          [(1) In general.--Notwithstanding subsections (a), 
        (b), and (d) of this section, with respect to any loan 
        (other than a loan made pursuant to sections 428A, 428B 
        and 428C) for which the first disbursement is made on 
        or after October 1, 1992, to any borrower who, on the 
        date of entering into the note or other written 
        evidence of the loan, has no outstanding balance of 
        principal or interest on any loan made, insured, or 
        guaranteed under section 427, 428, or 428H of this 
        part, the applicable rate of interest shall, during any 
        12-month period beginning on July 1 and ending on June 
        30, be determined on the preceding June 1 and be equal 
        to--
                  [(A) the bond equivalent rate of 91-day 
                Treasury bills auctioned at the final auction 
                held prior to such June 1; plus
                  [(B) 3.10 percent,
        except that such rate shall not exceed 9 percent.
          [(2) Consultation.--The Secretary shall determine the 
        applicable rate of interest under paragraph (1) after 
        consultation with the Secretary of the Treasury and 
        shall publish such rate in the Federal Register as soon 
        as practicable after the date of determination.
  [(f) Interest Rates for New Loans After July 1, 1994.--
          [(1) In general.--Notwithstanding subsections (a), 
        (b), (d), and (e) of this section, with respect to any 
        loan made, insured, or guaranteed under this part 
        (other than a loan made pursuant to section 428B or 
        428C) for which the first disbursement is made on or 
        after July 1, 1994, the applicable rate of interest 
        shall, during any 12-month period beginning on July 1 
        and ending on June 30, be determined on the preceding 
        June 1 and be equal to--
                  [(A) the bond equivalent rate of 91-day 
                Treasury bills auctioned at the final auction 
                held prior to such June 1; plus
                  [(B) 3.10 percent,
        except that such rate shall not exceed 8.25 percent.
          [(2) Consultation.--The Secretary shall determine the 
        applicable rate of interest under paragraph (1) after 
        consultation with the Secretary of the Treasury and 
        shall publish such rate in the Federal Register as soon 
        as practicable after the date of determination.
  [(g) In School and Grace Period Rules.--
          [(1) General rule.--Notwithstanding the provisions of 
        subsection (f), but subject to subsection (h), with 
        respect to any loan under section 428 or 428H of this 
        part for which the first disbursement is made on or 
        after July 1, 1995, the applicable rate of interest for 
        interest which accrues--
                  [(A) prior to the beginning of the repayment 
                period of the loan; or
                  [(B) during the period in which principal 
                need not be paid (whether or not such principal 
                is in fact paid) by reason of a provision 
                described in section 428(b)(1)(M) or 
                427(a)(2)(C),
        shall not exceed the rate determined under paragraph 
        (2).
          [(2) Rate determination.--For purposes of paragraph 
        (1), the rate determined under this paragraph shall, 
        during any 12-month period beginning on July 1 and 
        ending on June 30, be determined on the preceding June 
        1 and be equal to--
                  [(A) the bond equivalent rate of 91-day 
                Treasury bills auctioned at the final auction 
                prior to such June 1; plus
                  [(B) 2.5 percent,
        except that such rate shall not exceed 8.25 percent.
          [(3) Consultation.--The Secretary shall determine the 
        applicable rate of interest under this subsection after 
        consultation with the Secretary of the Treasury and 
        shall publish such rate in the Federal Register as soon 
        as practicable after the date of determination.
  [(h) Interest Rates for New Loans After July 1, 1998.--
          [(1) In general.--Notwithstanding subsections (a), 
        (b), (d), (e), (f), and (g) of this section, with 
        respect to any loan made, insured, or guaranteed under 
        this part (other than a loan made pursuant to sections 
        428B and 428C) for which the first disbursement is made 
        on or after July 1, 1998, the applicable rate of 
        interest shall, during any 12-month period beginning on 
        July 1 and ending on June 30, be determined on the 
        preceding June 1 and be equal to--
                  [(A) the bond equivalent rate of the 
                securities with a comparable maturity as 
                established by the Secretary; plus
                  [(B) 1.0 percent,
        except that such rate shall not exceed 8.25 percent.
          [(2) Interest rates for new plus loans after july 1, 
        1998.--Notwithstanding subsections (a), (b), (d), (e), 
        (f), and (g), with respect to any loan made under 
        section 428B for which the first disbursement is made 
        on or after July 1, 1998, paragraph (1) shall be 
        applied--
                  [(A) by substituting ``2.1 percent'' for 
                ``1.0 percent'' in subparagraph (B); and
                  [(B) by substituting ``9.0 percent'' for 
                ``8.25 percent'' in the matter following such 
                subparagraph.
          [(3) Consultation.--The Secretary shall determine the 
        applicable rate of interest under this subsection after 
        consultation with the Secretary of the Treasury and 
        shall publish such rate in the Federal Register as soon 
        as practicable after the date of determination.
  [(i) Treatment of Excess Interest Payments on New Borrower 
Accounts Resulting From Decline in Treasury Bill Rates.--
          [(1) Excess interest on 10 percent loans.--If, with 
        respect to a loan for which the applicable interest 
        rate is 10 percent under subsection (d) of this section 
        at the close of any calendar quarter, the sum of the 
        average of the bond equivalent rates of 91-day Treasury 
        bills auctioned for that quarter and 3.25 percent is 
        less than 10 percent, then an adjustment shall be made 
        to a borrower's account--
                  [(A) by calculating excess interest in the 
                amount computed under paragraph (2) of this 
                subsection; and
                  [(B)(i) during any period in which a student 
                is eligible to have interest payments paid on 
                his or her behalf by the Government pursuant to 
                section 428(a), by crediting the excess 
                interest to the Government; or
                  [(ii) during any other period, by crediting 
                such excess interest to the reduction of 
                principal to the extent provided in paragraph 
                (5) of this subsection.
          [(2) Amount of adjustment for 10 percent loans.--The 
        amount of any adjustment of interest on a loan to be 
        made under this subsection for any quarter shall be 
        equal to--
                  [(A) 10 percent minus the sum of (i) the 
                average of the bond equivalent rates of 91-day 
                Treasury bills auctioned for such calendar 
                quarter, and (ii) 3.25 percent; multiplied by
                  [(B) the average daily principal balance of 
                the loan (not including unearned interest added 
                to principal) during such calendar quarter; 
                divided by
                  [(C) four.
          [(3) Excess interest on loans after 1992 amendments, 
        to borrowers with outstanding balances.--If, with 
        respect to a loan made on or after the date of 
        enactment of the Higher Education Amendments of 1992 to 
        a borrower, who on the date of entering into the note 
        or other written evidence of the loan, has an 
        outstanding balance of principal or interest on any 
        other loan made, insured, or guaranteed under this 
        part, the sum of the average of the bond equivalent 
        rates of 91-day Treasury bills auctioned for that 
        quarter and 3.1 percent is less than the applicable 
        interest rate, then an adjustment shall be made--
                  [(A) by calculating excess interest in the 
                amount computed under paragraph (4) of this 
                subsection; and
                  [(B)(i) during any period in which a student 
                is eligible to have interest payments paid on 
                his or her behalf by the Government pursuant to 
                section 428(a), by crediting the excess 
                interest to the Government; or
                  [(ii) during any other period, by crediting 
                such excess interest to the reduction of 
                principal to the extent provided in paragraph 
                (5) of this subsection.
          [(4) Amount of adjustment.--The amount of any 
        adjustment of interest on a loan to be made under this 
        subsection for any quarter shall be equal to--
                  [(A) the applicable interest rate minus the 
                sum of (i) the average of the bond equivalent 
                rates of 91-day Treasury bills auctioned for 
                such calendar quarter, and (ii) 3.1 percent; 
                multiplied by
                  [(B) the average daily principal balance of 
                the loan (not including unearned interest added 
                to principal) during such calendar quarter; 
                divided by
                  [(C) four.
          [(5) Annual adjustment of interest and borrower 
        eligibility for credit.--Any adjustment amount computed 
        pursuant to paragraphs (2) and (4) of this subsection 
        for any quarter shall be credited, by the holder of the 
        loan on the last day of the calendar year in which such 
        quarter falls, to the loan account of the borrower so 
        as to reduce the principal balance of such account. No 
        such credit shall be made to the loan account of a 
        borrower who on the last day of the calendar year is 
        delinquent for more than 30 days in making a required 
        payment on the loan, but the excess interest shall be 
        calculated and credited to the Secretary. Any credit 
        which is to be made to a borrower's account pursuant to 
        this subsection shall be made effective commencing no 
        later than 30 days following the last day of the 
        calendar year in which the quarter falls for which the 
        credit is being made. Nothing in this subsection shall 
        be construed to require refunding any repayment of a 
        loan. At the option of the lender, the amount of such 
        adjustment may be distributed to the borrower either by 
        reduction in the amount of the periodic payment on the 
        loan, by reducing the number of payments that shall be 
        made with respect to the loan, or by reducing the 
        amount of the final payment of the loan. Nothing in 
        this paragraph shall be construed to require the lender 
        to make additional disclosures pursuant to section 
        433(b).
          [(6) Publication of treasury bill rate.--For the 
        purpose of enabling holders of loans to make the 
        determinations and adjustments provided for in this 
        subsection, the Secretary shall for each calendar 
        quarter commencing with the quarter beginning on July 
        1, 1987, publish a notice of the average of the bond 
        equivalent rates of 91-day Treasury bills auctioned for 
        such quarter. Such notice shall be published not later 
        than 7 days after the end of the quarter to which the 
        notice relates.
          [(7) Conversion to variable rate.--(A) Subject to 
        subparagraphs (C) and (D), a lender or holder shall 
        convert the interest rate on a loan that is made 
        pursuant to this part and is subject to the provisions 
        of this subsection to a variable rate. Such conversion 
        shall occur not later than January 1, 1995, and, 
        commencing on the date of conversion, the applicable 
        interest rate for each 12-month period beginning on 
        July 1 and ending on June 30 shall be determined by the 
        Secretary on the June 1 preceding each such 12-month 
        period and be equal to the sum of (i) the bond 
        equivalent rate of the 91-day Treasury bills auctioned 
        at the final auction prior to such June 1; and (ii) 
        3.25 percent in the case of loans described in 
        paragraph (1), or 3.10 percent in the case of loans 
        described in paragraph (3).
          [(B) In connection with the conversion specified in 
        subparagraph (A) for any period prior to such 
        conversion, and subject to paragraphs (C) and (D), a 
        lender or holder shall convert the interest rate to a 
        variable rate on a loan that is made pursuant to this 
        part and is subject to the provisions of this 
        subsection to a variable rate. The interest rates for 
        such period shall be reset on a quarterly basis and the 
        applicable interest rate for any quarter or portion 
        thereof shall equal the sum of (i) the average of the 
        bond equivalent rates of 91-Treasury bills auctioned 
        for the preceding 3-month period, and (ii) 3.25 percent 
        in the case of loans described in paragraph (1) or 3.10 
        percent in the case of loans described in paragraph 
        (3). The rebate of excess interest derived through this 
        conversion shall be provided to the borrower as 
        specified in paragraph (5) for loans described in 
        paragraph (1) or to the Government and borrower as 
        specified in paragraph (3).
          [(C) A lender or holder of a loan being converted 
        pursuant to this paragraph shall complete such 
        conversion on or before January 1, 1995. The lender or 
        holder shall notify the borrower that the loan shall be 
        converted to a variable interest rate and provide a 
        description of the rate to the borrower not later than 
        30 days prior to the conversion. The notice shall 
        advise the borrower that such rate shall be calculated 
        in accordance with the procedures set forth in this 
        paragraph and shall provide the borrower with a 
        substantially equivalent benefit as the adjustment 
        otherwise provided for under this subsection. Such 
        notice may be incorporated into the disclosure required 
        under section 433(b) if such disclosure has not been 
        previously made.
          [(D) The interest rate on a loan converted to a 
        variable rate pursuant to this paragraph shall not 
        exceed the maximum interest rate applicable to the loan 
        prior to such conversion.
          [(E) Loans on which the interest rate is converted in 
        accordance with subparagraph (A) or (B) shall not be 
        subject to any other provisions of this subsection.
  [(j) Lesser Rates Permitted.--Nothing in this section or 
section 428C shall be construed to prohibit a lender from 
charging a borrower interest at a rate less than the rate which 
is applicable under this part.
  [(k) Definitions.--For the purpose of subsections (a) and (d) 
of this section--
          [(1) the term ``period of instruction'' shall, at the 
        discretion of the lender, be any academic year, 
        semester, trimester, quarter, or other academic period; 
        or shall be the period for which the loan is made as 
        determined by the institution of higher education; and
          [(2) the term ``period of enrollment'' shall be the 
        period for which the loan is made as determined by the 
        institution of higher education and shall coincide with 
        academic terms such as academic year, semester, 
        trimester, quarter, or other academic period as defined 
        by such institution.]

SEC. 427A. APPLICABLE INTEREST RATES.

  (a) Interest Rates for New Loans On or After July 1, 1998.--
          (1) In general.--Subject to paragraph (2), with 
        respect to any loan made, insured, or guaranteed under 
        this part (other than a loan made pursuant to section 
        428B or 428C) for which the first disbursement is made 
        on or after July 1, 1998, the applicable rate of 
        interest shall, during any 12-month period beginning on 
        July 1 and ending on June 30, be determined on the 
        preceding June 1 and be equal to--
                  (A) the bond equivalent rate of 91-day 
                Treasury bills auctioned at the final auction 
                held prior to such June 1; plus
                  (B) 2.3 percent,
        except that such rate shall not exceed 8.25 percent.
          (2) In school and grace period Rules.--With respect 
        to any loan under this part (other than a loan made 
        pursuant to section 428B or 428C) for which the first 
        disbursement is made on or after July 1, 1998, the 
        applicable rate of interest for interest which 
        accrues--
                  (A) prior to the beginning of the repayment 
                period of the loan; or
                  (B) during the period in which principal need 
                not be paid (whether or not such principal is 
                in fact paid) by reason of a provision 
                described in section 428(b)(1)(M) or 
                427(a)(2)(C),
        shall be determined under paragraph (1) by substituting 
        ``1.7 percent'' for ``2.3 percent''.
          (3) PLUS loans.--With respect to any loan under 
        section 428B for which the first disbursement is made 
        on or after July 1, 1998, the applicable rate of 
        interest shall be determined under paragraph (1)--
                  (A) by substituting ``3.1 percent'' for ``2.3 
                percent''; and
                  (B) by substituting ``9.0 percent'' for 
                ``8.25 percent''.
  (b) Lesser Rates Permitted.--Nothing in this section or 
section 428C shall be construed to prohibit a lender from 
charging a borrower interest at a rate less than the rate which 
is applicable under this part.
  (c) Consultation.--The Secretary shall determine the 
applicable rate of interest under this section after 
consultation with the Secretary of the Treasury and shall 
publish such rate in the Federal Register as soon as 
practicable after the date of determination.

SEC. 428. FEDERAL PAYMENTS TO REDUCE STUDENT INTEREST COSTS.

  (a) Federal Interest Subsidies.--
          (1) * * *
          [(2) Additional requirements to receive subsidy.--(A) 
        Each student qualifying for a portion of an interest 
        payment under paragraph (1) shall--
                  [(i) have provided to the lender a statement 
                from the eligible institution, at which the 
                student has been accepted for enrollment, or at 
                which the student is in attendance, which--
                          [(I) sets forth such student's 
                        estimated cost of attendance (as 
                        determined under section 472);
                          [(II) sets forth such student's 
                        estimated financial assistance; and
                          [(III) sets forth a schedule for 
                        disbursement of the proceeds of the 
                        loan in installments, consistent with 
                        the requirements of section 428G; and
                  [(ii) meet the requirements of subparagraph 
                (B); and
                  [(iii) have provided to the lender at the 
                time of application for a loan made, insured, 
                or guaranteed under this part, the student's 
                driver's number, if any.
          [(B) For the purpose of clause (ii) of subparagraph 
        (A), a student shall qualify for a portion of an 
        interest payment under paragraph (1) if the eligible 
        institution has provided the lender with a statement 
        evidencing a determination of need for a loan (as 
        determined under part F of this title) and the amount 
        of such need, subject to the provisions of subparagraph 
        (D).
          [(C) For the purpose of paragraph (1) and this 
        paragraph--
                  [(i) a student's estimated financial 
                assistance means, for the period for which the 
                loan is sought, the amount of assistance such 
                student will receive under subpart 1 of part A 
                (as determined in accordance with section 
                484(b)), subpart 3 of part A, and parts C and E 
                of this title, and any veterans' education 
                benefits paid because of enrollment in a 
                postsecondary education institution, including 
                veterans' education benefits (as defined in 
                section 480(c)), plus other scholarship, grant, 
                or loan assistance; and
                  [(ii) the determination of need and of the 
                amount of a loan by an eligible institution 
                under subparagraph (B) with respect to a 
                student shall be calculated in accordance with 
                part F.]
          (2) Additional requirements to receive subsidy.--(A) 
        Each student qualifying for a portion of an interest 
        payment under paragraph (1) shall provide to the lender 
        a statement from the eligible institution, at which the 
        student has been accepted for enrollment, or at which 
        the student is in attendance, which certifies the 
        eligibility of the student to receive a loan under this 
        part and the amount of the loan for which such student 
        is eligible.
          (B) A student shall qualify for a portion of an 
        interest payment under paragraph (1) if the eligible 
        institution has provided the lender with a statement 
        that--
                  (i) at the lender's request, sets forth such 
                student's estimated cost of attendance (as 
                determined under section 472);
                  (ii) sets forth such student's estimated 
                financial assistance; and
                  (iii) sets forth a schedule for disbursement 
                of the proceeds of the loan in installments, 
                consistent with the requirements of section 
                428G.
          (C) For the purpose of clause (ii) of subparagraph 
        (B), a student shall qualify for a portion of an 
        interest payment under paragraph (1) if the eligible 
        institution has provided the lender with a statement 
        evidencing a determination of need for a loan (as 
        determined under part F of this title) and the amount 
        of such need, subject to the provisions of subparagraph 
        (D).

           *       *       *       *       *       *       *

          (5) Duration of authority to make interest subsidized 
        loans.--The period referred to in subparagraph (B) of 
        paragraph (1) of this subsection shall begin on the 
        date of enactment of this Act and end at the close of 
        September 30, [2002] 2004, except that, in the case of 
        a loan made or insured under a student loan or loan 
        insurance program to enable a student who has obtained 
        a prior loan made or insured under such program to 
        continue his or her education program, such period 
        shall end at the close of September 30, [2006] 2008.

           *       *       *       *       *       *       *

  (b) Insurance Program Agreements To Qualify Loans for 
Interest Subsidies.--
          (1) Requirements of insurance program.--Any State or 
        any nonprofit private institution or organization may 
        enter into an agreement with the Secretary for the 
        purpose of entitling students who receive loans which 
        are insured under a student loan insurance program of 
        that State, institution, or organization to have made 
        on their behalf the payments provided for in subsection 
        (a) if the Secretary determines that the student loan 
        insurance program--
                  (A) authorizes the insurance in any academic 
                year or its equivalent (as determined under 
                regulations of the Secretary) for any student 
                who is carrying at an eligible institution or 
                in a program of study abroad approved for 
                credit by the eligible home institution at 
                which such student is enrolled at least one-
                half the normal full-time academic workload (as 
                determined by the institution) in any amount up 
                to a maximum of--
                          (i) in the case of a student at an 
                        eligible institution who has not 
                        successfully completed the first year 
                        of a program of undergraduate 
                        education--
                                  (I) $2,625, if such student 
                                is enrolled in a program whose 
                                length is at least one academic 
                                year in length (as determined 
                                under section 481); and
                                  [(II) $1,750, if such student 
                                is enrolled in a program whose 
                                length is less than one 
                                academic year, but at least \2/
                                3\ of such an academic year; 
                                and
                                  [(III) $875, if such student 
                                is enrolled in a program whose 
                                length is less than \2/3\, but 
                                at least \1/3\, of such an 
                                academic year;]
                                  (II) if such student is 
                                enrolled in a program of 
                                undergraduate education which 
                                is less than one academic year, 
                                the maximum annual loan amount 
                                that such student may receive 
                                may not exceed the amount that 
                                bears the same ratio to the 
                                amount specified in subclause 
                                (I) as the length of such 
                                program measured in semester, 
                                trimester, quarter, or clock 
                                hours bears to one academic 
                                year;

           *       *       *       *       *       *       *

                          (iii) in the case of a student at an 
                        eligible institution who has 
                        successfully completed the first and 
                        second years of a program of 
                        undergraduate education but has not 
                        successfully completed the remainder of 
                        such program--
                                  (I) $5,500; or
                                  (II) if such student is 
                                enrolled in a program of 
                                undergraduate education, the 
                                remainder of which is less than 
                                one academic year, the maximum 
                                annual loan amount that such 
                                student may receive may not 
                                exceed the amount that bears 
                                the same ratio to the amount 
                                specified in subclause (I) as 
                                such remainder measured in 
                                semester, trimester, quarter, 
                                or clock hours bears to one 
                                academic year; and

           *       *       *       *       *       *       *

                  (D) provides that (i) the student borrower 
                shall be entitled to accelerate without penalty 
                the whole or any part of an insured loan, (ii) 
                the repayment period of any insured loan may 
                not exceed 10 years, [and (iii)] (iii) the 
                student borrower may annually change the 
                selection of a repayment plan under this part, 
                and (iv) the note, or other written evidence of 
                any loan, may contain such reasonable 
                provisions relating to repayment in the event 
                of default by the borrower as may be authorized 
                by regulations of the Secretary in effect at 
                the time such note or written evidence was 
                executed, and shall contain a notice that 
                repayment may, following a default by the 
                borrower, be subject to income contingent 
                repayment in accordance with subsection (m);

           *       *       *       *       *       *       *

                  (G) insures [not less than] 98 percent of the 
                unpaid principal of loans insured under the 
                program, except that such program shall insure 
                100 percent of the unpaid principal of loans 
                made with funds advanced pursuant to section 
                428(j) or 439(q);

           *       *       *       *       *       *       *

                  (M) provides that periodic installments of 
                principal need not be paid, but interest shall 
                accrue and be paid by the Secretary, during any 
                period--
                          (i) during which the borrower--
                                  (I) is pursuing at least a 
                                half-time course of study as 
                                determined by an eligible 
                                institution, except that no 
                                borrower, notwithstanding the 
                                provisions of the promissory 
                                note, shall be required to 
                                borrow an additional loan under 
                                this title in order to be 
                                eligible to receive a deferment 
                                under this clause; or

           *       *       *       *       *       *       *

                          (ii) not in excess of 3 years during 
                        which the borrower is seeking and 
                        unable to find full-time employment, 
                        except that no borrower who qualifies 
                        for unemployment benefits shall be 
                        required to provide any additional 
                        paperwork for a deferment under this 
                        clause; or

           *       *       *       *       *       *       *

                  (U) provides (i) for the eligibility of all 
                lenders described in section 435(d)(1) under 
                reasonable criteria, unless (I) that lender is 
                eliminated as a lender under regulations for 
                the [emergency action,,] emergency action, 
                limitation, suspension, or termination of a 
                lender under the Federal student loan insurance 
                program or is eliminated as a lender pursuant 
                to criteria issued under the student loan 
                insurance program which are substantially the 
                same as regulations with respect to such 
                eligibility as a lender issued under the 
                Federal student loan insurance program, or (II) 
                there is a State constitutional prohibition 
                affecting the eligibility of a lender, (ii) 
                assurances that the guaranty agency will report 
                to the Secretary concerning changes in such 
                criteria, including any procedures in effect 
                under such program to take [emergency action,,] 
                emergency action, limit, suspend, or terminate 
                lenders, and (iii) for (I) [a compliance audit 
                of each lender] in the case of any lender that 
                originates or holds more than $5,000,000 in 
                loans made under this title during an annual 
                audit period, a compliance audit of such lender 
                at least once a year and covering the period 
                since the most recent audit, conducted by a 
                qualified, independent organization or person 
                in accordance with standards established by the 
                ComptrollerGeneral 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, or (II) with regard to a lender that is 
audited under chapter 75 of title 31, United States Code, such audit 
shall be deemed to satisfy the requirements of subclause (I) for the 
period covered by such audit, except that the Secretary may waive the 
requirements of this clause (iii) if the lender submits to the 
Secretary the results of an audit conducted for other purposes that the 
Secretary determines provides the same information as the audits 
required by this clause;

           *       *       *       *       *       *       *

                  (W) provides assurances that the agency will 
                implement all requirements of the Secretary for 
                uniform claims and procedures pursuant to 
                section 432(l); [and]
                  (X) provides information to the Secretary in 
                accordance with section [428(c)(10)] 428(c)(9) 
                and maintains reserve funds determined by the 
                Secretary to be sufficient in relation to such 
                agency's guarantee obligations[.]; and
                  (Y) provides that the lender shall determine 
                the eligibility of a borrower for a deferment 
                described in subparagraph (M)(i) based on 
                receipt of (i) a request for deferment from the 
                borrower, (ii) a newly completed loan 
                application that documents the borrower's 
                eligibility for a deferment, or (iii) student 
                status information received by the lender that 
                the borrower is enrolled on at least a half-
                time basis.

           *       *       *       *       *       *       *

          (3) Restrictions on inducements, mailings, and 
        advertising.--A guaranty agency shall not--
                  (A) * * *

           *       *       *       *       *       *       *

                  [(C) conduct unsolicited mailings to students 
                enrolled in secondary school of student loan 
                application forms; or]
                  (C) conduct unsolicited mailings of student 
                loan application forms to students enrolled in 
                secondary school or a postsecondary 
                institution, or to parents of such students, 
                except that applications may be mailed to 
                students who have previously received loans 
                guaranteed under this part by the guaranty 
                agency; or
                  (D) conduct fraudulent or misleading 
                advertising concerning loan availability.
        It shall not be a violation of this paragraph for a 
        guaranty agency to provide assistance to institutions 
        of higher education comparable to the kinds of 
        assistance provided to institutions of higher education 
        by the Department of Education.

           *       *       *       *       *       *       *

  (c) Guaranty Agreements for Reimbursing Losses.--
          (1) Authority to enter into agreements.--(A) The 
        Secretary may enter into a guaranty agreement with any 
        guaranty agency, whereby the Secretary shall undertake 
        to reimburse it, under such terms and conditions as the 
        Secretary may establish, with respect to losses 
        (resulting from the default of the student borrower) on 
        the unpaid balance of the principal and accrued 
        interest of any insured loan. The guaranty agency shall 
        be deemed to have a contractual right against the 
        United States, during the life of such loan, to receive 
        reimbursement according to the provisions of this 
        subsection. Upon receipt of an accurate and complete 
        request by a guaranty agency for reimbursement with 
        respect to such losses, the Secretary shall pay 
        promptly and without administrative delay. Except as 
        provided in subparagraph (B) of this paragraph and in 
        paragraph (7), the amount to be paid a guaranty agency 
        as reimbursement under this subsection shall be equal 
        to [98] 95 percent of the amount expended by it in 
        discharge of its insurance obligation incurred under 
        its loan insurance program. A guaranty agency shall 
        file a claim for reimbursement with respect to losses 
        under this subsection within 45 days after the guaranty 
        agency discharges its insurance obligation on the loan.
          (B) Notwithstanding subparagraph (A)--
                  (i) if, for any fiscal year, the amount of 
                such reimbursement payments by the Secretary 
                under this subsection exceeds 5 percent of the 
                loans which are insured by such guaranty agency 
                under such program and which were in repayment 
                at the end of the preceding fiscal year, the 
                amount to be paid as reimbursement under this 
                subsection for such excess shall be equal to 
                [88] 85 percent of the amount of such excess; 
                and
                  (ii) if, for any fiscal year, the amount of 
                such reimbursement payments exceeds 9 percent 
                of such loans, the amount to be paid as 
                reimbursement under this subsection for such 
                excess shall be equal to [78] 75 percent of the 
                amount of such excess.

           *       *       *       *       *       *       *

          [(D) Reimbursements of losses made by the Secretary 
        on loans submitted for claim by an eligible lender, 
        servicer, or guaranty agency designated for exceptional 
        performance under section 428I shall not be subject to 
        additional review by the Secretary or repurchase by the 
        guaranty agency for any reason other than a 
        determination by the Secretary that the eligible 
        lender, servicer, or guaranty agency engaged in fraud 
        or other purposeful misconduct in obtaining designation 
        for exceptional performance.]
          [(E)] (D) Notwithstanding any other provisions of 
        this section, in the case of a loan made pursuant to a 
        lender-of-last-resort program, the Secretary shall 
        apply the provisions of--
                  (i) the fourth sentence of subparagraph (A) 
                by substituting ``100 percent'' [for ``98 
                percent'';] for ``95 percent'';
                  (ii) subparagraph (B)(i) by substituting 
                ``100 percent'' [for ``88 percent'';] for ``85 
                percent''; and
                  (iii) subparagraph (B)(ii) by substituting 
                ``100 percent'' [for ``78 percent''.] for ``75 
                percent''.
          [(F)] (E) Notwithstanding any other provisions of 
        this section, in the case of an outstanding loan 
        transferred to a guaranty agency from another guaranty 
        agency pursuant to a plan approved by the Secretary in 
        response to the insolvency of the latter such guarantee 
        agency, the Secretary shall apply the provision of--
                  (i) the fourth sentence of subparagraph (A) 
                by substituting ``100 percent'' [for ``98 
                percent'';] for ``95 percent'';
                  (ii) subparagraph (B)(i) by substituting ``90 
                percent'' [for ``88 percent'';] for ``85 
                percent''; and
                  (iii) subparagraph (B)(ii) by substituting 
                ``80 percent'' [for ``78 percent''.] for ``75 
                percent''.
          (2) Contents of guaranty agreements.--The guaranty 
        agreement--
                  (A) * * *

           *       *       *       *       *       *       *

                  (H) set forth assurances that--
                          (i) * * *
                          [(ii) the guaranty agency may require 
                        the payment by the institution of a 
                        reasonable fee (as determined in 
                        accordance with regulations prescribed 
                        by the Secretary) for such information; 
                        and]
                          (ii) the guaranty agency shall not 
                        require the payment from the 
                        institution of any fee for such 
                        information; and

           *       *       *       *       *       *       *

          (3) Forbearance.--A guaranty agreement under this 
        subsection--
                  (A) shall contain provisions providing that--
                          (i) upon [written] request, a lender 
                        shall grant a borrower forbearance, 
                        renewable at 12-month intervals, on 
                        terms agreed to in writing by the 
                        parties to the loan with the approval 
                        of the insurer, and otherwise 
                        consistent with the regulations of the 
                        Secretary, if the borrower--
                                  (I) * * *

           *       *       *       *       *       *       *

                  (B) may, to the extent provided in 
                regulations of the Secretary, contain 
                provisions that permit such forbearance for the 
                benefit of the student borrower as may be 
                agreed upon by the parties to an insured loan 
                and approved by the insurer, including 
                forbearance granted after consideration of a 
                borrower's total debt burden; and

           *       *       *       *       *       *       *

        Guaranty agencies shall not be precluded from 
        permitting the parties to such a loan from entering 
        into a forbearance agreement solely because the loan is 
        in default. The Secretary shall permit lenders to 
        exercise administrative forbearances that do not 
        require the agreement of the borrower, under conditions 
        authorized by the Secretary. Such forbearances shall 
        include (i) forbearances for borrowers who are 
        delinquent at the time of the granting of an authorized 
        period of deferment under section 428(b)(1)(M) or 
        427(a)(2)(C), [and (ii)] (ii) if the borrower is less 
        than 60 days delinquent on such loans at the time of 
        sale or transfer, forbearances for borrowers on loans 
        which aresold or transferred, and (iii) forbearance for 
periods not to exceed 60 days if the lender reasonably determines that 
such suspensions are necessary to research or process information 
relative to such loan or to collect appropriate documentation relating 
to the borrower's request for a deferment or forbearance.

           *       *       *       *       *       *       *

          (6) Secretary's equitable share.--[(A)] For the 
        purpose of paragraph (2)(D), the Secretary's equitable 
        share of payments made by the borrower shall be that 
        portion of the payments remaining after the guaranty 
        agency with which the Secretary has an agreement under 
        this subsection has deducted from such payments--
                  [(i)] (A) a percentage amount equal to the 
                complement of the reinsurance percentage in 
                effect when payment under the guaranty 
                agreement was made with respect to the loan; 
                and
                  [(ii) an amount equal to 27 percent of such 
                payments (subject to subparagraph (D) of this 
                paragraph) for costs related to the student 
                loan insurance program, including the 
                administrative costs of collection of loans 
                reimbursed under this subsection, the 
                administrative costs of preclaims assistance 
                for default prevention, the administrative 
                costs of supplemental preclaims assistance for 
                default prevention, and the administrative 
                costs of monitoring the enrollment and payment 
                status of students (as such terms are defined 
                in subparagraph (B) or (C) of this paragraph).
          [(B) For the purpose of this paragraph and subsection 
        (f) of this section, the term--
                  [(i) ``administrative costs of collection of 
                loans'' means any administrative costs incurred 
                by a guaranty agency which are directly related 
                to the collection of the loan on which a 
                default claim has been paid to the 
                participating lender, including the 
                attributable compensation of collection 
                personnel (and in the case of personnel who 
                perform several functions for such an agency 
                only the portion of the compensation 
                attributable to the collection activity), 
                attorney's fees, fees paid to collection 
                agencies, postage, equipment, supplies, 
                telephone and similar charges, but does not 
                include the overhead costs of such agency 
                whether or not attributable;
                  [(ii) ``administrative costs of preclaim 
                assistance for default prevention'' means any 
                administrative costs incurred by a guaranty 
                agency which are directly related to providing 
                collection assistance to the lender on a 
                delinquent loan, prior to the loan's being 
                legally in a default status, including the 
                attributable compensation of appropriate 
                personnel (and in the case of personnel who 
                perform several functions for such an agency 
                only the portion of compensation attributable 
                to the collection activity), fees paid to 
                locate a missing borrower, postage, equipment, 
                supplies, telephone and similar charges, but 
                does not include the overhead costs of such 
                agency whether or not attributable; and
                  [(iii) ``administrative costs of monitoring 
                the enrollment and repayment status of 
                students'' means any administrative costs by a 
                guaranty agency which are directly related to 
                ascertaining the student's enrollment status, 
                prompt notification to the lender of such 
                status, an audit of the note or written 
                agreement to determine if the provisions of 
                that note or agreement are consistent with the 
                records of the guaranty agency as to the 
                principal amount of the loan guaranteed, and an 
                examination of the note or agreement to assure 
                that the repayment provisions are consistent 
                with the provisions of this part,
        subject to such additional criteria as the Secretary 
        may by regulation prescribe.
          [(C)(i) For the purpose of subsection (1), 
        ``administrative costs of supplemental preclaims 
        assistance'' means (subject to divisions (ii) through 
        (iv)) any administrative costs--
                  [(I) incurred by a guaranty agency in 
                connection with a loan on which the guarantor 
                has exercised preclaims assistance generally 
                comparable in intensiveness to the level of 
                preclaims assistance performed, prior to the 
                120th day of delinquency, by the guaranty 
                agency as of October 16, 1990, and which has 
                been in delinquent status for at least 120 
                days; and
                  [(II) which are directly related to providing 
                collection assistance to the lender on a 
                delinquent loan, prior to a claim being filed 
                with the guaranty agency.
        including the attributable compensation of appropriate 
        personnel (and in the case of personnel who perform 
        several functions, only the portion of compensation 
        attributable to the collection assistance), fees paid 
        to locate a missing borrower, postage, equipment, 
        supplies, telephone, and similar charges, but does not 
        include overhead costs.
          [(ii) The administrative costs for which payment 
        under subsection (1) is authorized under this 
        subparagraph must be clearly supplemental to the 
        preclaim assistance for default prevention described in 
        division (i)(I) of this subparagraph.
          [(iii) The services associated with carrying out this 
        subparagraph may be provided by the guaranty agency 
        directly or under contract, except that such services 
        may not be carried out by an organization or entity 
        (other than the guaranty agency)--
                  [(I) that is the holder or servicer of the 
                loan or an organization or entity that owns or 
                controls the holder or servicer of the loan;
                  [(II) that is owned or controlled by the same 
                corporation, partnership, association, or 
                individual that owns or controls the holder or 
                servicer of the loan; or
                  [(III) that is an organization or entity that 
                has a contract with a guaranty agency to 
                perform collection activities with respect to 
                the same loans in the event of default.
          [(iv) In the case of accounts brought into repayment 
        status as a result of performing supplemental preclaims 
        assistance, the cost of such assistance is a 
        permissible charge to the borrower (for the cost of 
        collection) for which the borrower shall be liable.]
                  (B) an amount equal to 24 percent of such 
                payments for use in accordance with section 
                422B.

           *       *       *       *       *       *       *

          (8) Assignment to protect federal fiscal interest.--
        [(A)] If the Secretary determines that the protection 
        of the Federal fiscal interest so requires, a guaranty 
        agency shall assign to the Secretary any loan of which 
        it is the holder and for which the Secretary has made a 
        payment pursuant to paragraph (1) of this subsection.
          [(B) An orderly transition from the Federal Family 
        Education Loan Program under this part to the Federal 
        Direct Student Loan Program under part D of this title 
        shall be deemed to be in the Federal fiscal interest, 
        and a guaranty agency shall promptly assign loans to 
        the Secretary under this paragraph upon the Secretary's 
        request.]
          (9) Guaranty agency reserve level.--(A) * * *

           *       *       *       *       *       *       *

          (C) If (i) any guaranty agency falls below the 
        required minimum reserve level in any 2 consecutive 
        years, (ii) any guaranty agency's Federal reimbursement 
        payments are reduced to [80 percent pursuant to section 
        428(c)(1)(B)(ii)] 85 percent pursuant to paragraph 
        (1)(B)(i) of this subsection, or (iii) the Secretary 
        determines that the administrative or financial 
        condition of a guaranty agency jeopardizes such 
        agency's continued ability to perform its 
        responsibilities under its guaranty agreement, then the 
        Secretary shall require, as appropriate, the guaranty 
        agency to submit and implement a management plan 
        acceptable to the Secretary within [30] 45 working days 
        of any such event.

           *       *       *       *       *       *       *

          (E) The Secretary may terminate a guaranty agency's 
        agreement in accordance with subparagraph (F) if--
                  (i) * * *

           *       *       *       *       *       *       *

                  (iv) the Secretary determines that such 
                action is necessary to protect the Federal 
                fiscal interest; or
                  (v) the Secretary determines that such action 
                is necessary to ensure the continued 
                availability of loans to student or parent 
                borrowers[; or].
                  [(vi) the Secretary determines that such 
                action is necessary to ensure an orderly 
                transition from the loan programs under this 
                part to the direct student loan programs under 
                part D of this title.]
          (F) If a guaranty agency's agreement under this 
        subsection is terminated pursuant to subparagraph (E), 
        then the Secretary shall assume responsibility for all 
        functions of the guaranty agency under the loan 
        insurance program of such agency. In performing such 
        functions the Secretary is authorized to--
                  (i) * * *

           *       *       *       *       *       *       *

                  (vii) take any other action the Secretary 
                determines necessary to ensure the continued 
                availability of loans made under this part to 
                residents of the State or States in which the 
                guaranty agency did business, the full honoring 
                of all guarantees issued by the guaranty agency 
                prior to the Secretary's assumption of the 
                functions of such agency, and the proper 
                servicing of loans guaranteed by the guaranty 
                agency prior to the Secretary's assumption of 
                the functions of such agency, [to avoid 
                disruption of the student loan program, and to 
                ensure an orderly transition from the loan 
                programs under this part to the direct student 
                loan programs under part D of this title.] and 
                to avoid disruption of the student loan 
                program.

           *       *       *       *       *       *       *

          (I) The Secretary shall not take any action under 
        subparagraph (E) or (F) without giving the guaranty 
        agency notice and the opportunity for a hearing on the 
        record.
          (J) Notwithstanding any other provision of law, the 
        information transmitted to the Secretary pursuant to 
        this paragraph shall be confidential and exempt from 
        disclosure under section 552 of title 5, United States 
        Code, relating to freedom of information, or any other 
        Federal law.
          (K) The Secretary, within 3 months after the end of 
        each fiscal year, shall submit to the House Committee 
        on Education and [Labor] the Workforce and the Senate 
        Committee on Labor and Human Resources a report 
        specifying the Secretary's assessment of the fiscal 
        soundness of the guaranty agency system [and the 
        progress of the transition from the loan programs under 
        this part to the direct student loan programs under 
        part D of this title].

           *       *       *       *       *       *       *

  (e) Payments for lender referral services.--
          (1) In general; agreements with guaranty agencies.--
        (A) * * *
          (B)(i) * * *
          (ii) The Secretary shall publish in the Federal 
        Register whatever standards, criteria, and procedures, 
        consistent with the provisions of this part and part D 
        of this title, the Secretary determines are reasonable 
        and necessary to provide lender referral services under 
        this subsection and ensure loan access to student and 
        parent borrowers [during the transition from the loan 
        programs under this part to the direct student loan 
        programs under part D of this title]. Section 431 of 
        the General Education Provisions Act shall not apply to 
        the publication of such standards, criteria, and 
        procedures.

           *       *       *       *       *       *       *

          (3) Amount of payment.--From funds available [for 
        costs of transition] under section 458 of the Act, the 
        amount which the Secretary shall pay to any eligible 
        guaranty agency under this paragraph shall be equal to 
        one-half of 1 percent of the total principal amount of 
        the loans (upon which insurance was issued under this 
        part) to a student described in paragraph (2) who 
        subsequently obtained such loans because of such 
        agency's referral service.

           *       *       *       *       *       *       *

  (f) Payments of Certain Costs.--
          [(1) Payments based on insurance program agreement.--
        (A) For a fiscal year prior to fiscal year 1994, the 
        Secretary shall make payments in accordance with the 
        provisions of this paragraph to any guaranty agency for 
        the purposes of--
                  [(i) the administrative cost of promotion of 
                eligible lender participation;
                  [(ii) the administrative costs of collection 
                of loans;
                  [(iii) the administrative costs of preclaims 
                assistance for default prevention;
                  [(iv) the administrative costs of monitoring 
                the enrollment and repayment status of 
                students; or
                  [(v) other such costs related to the student 
                loan insurance program subject to such 
                agreement.]
          (1) Payment for certain activities.--(A) The 
        Secretary shall, in accordance with the provisions of 
        this paragraph, pay to each guaranty agency for each 
        fiscal year a loan processing and issuance fee equal to 
        0.65 percent of the total principal amount of the loans 
        on which insurance was issued under this part during 
        such fiscal year by such agency.
          (B) [The total amount of payments for any fiscal year 
        prior to fiscal year 1994 made under this paragraph 
        shall be equal to 1 percent of the total principal 
        amount of the loans upon which insurance was issued 
        under this part during such fiscal year by such 
        guaranty agency.] The payment required by subparagraph 
        (A) shall be paid on a quarterly basis. The guaranty 
        agency shall, be deemed to have a contractual right 
        against the United States to receive payments according 
        to the provisions of this subparagraph. Payments shall 
        be made promptly and without administrative delay to 
        any guaranty agency submitting an accurate and complete 
        application therefor under this subparagraph.

           *       *       *       *       *       *       *

  (g) Action on Insurance Program and Guaranty Agreements.--If 
a nonprofit private institution or organization--
          (1) * * *
          (2) as provided in the application, undertakes to 
        meet the requirements of section 422(c)(6)(B) (i), 
        (ii), and (iii),
the Secretary shall consider and act upon such application 
within 180 days, and shall forthwith notify the Committee on 
Labor and Human Resources of the Senate and the Committee on 
Education and [Labor] the Workforce of the House of 
Representatives of his actions.

           *       *       *       *       *       *       *

  (j) Lenders-of-Last-Resort.--
          (1) * * *

           *       *       *       *       *       *       *

          [(3) Advances to guaranty agencies for lender-of-
        last-resort services during transition to direct 
        lending.--(A) In order to ensure the availability of 
        loan capital during the transition from the Federal 
        Family Education Loan Program under this part to the 
        Federal Direct Student Loan Program under part D of 
        this title, the Secretary is authorized to provide a 
        guaranty agency with additional advance funds in 
        accordance with section 422(c)(7), with such 
        restrictions on the use of such funds as are determined 
        appropriate by the Secretary, in order to ensure that 
        the guaranty agency will make loans as the lender-of-
        last-resort. Such agency shall make such loans in 
        accordance with this subsection and the requirements of 
        the Secretary.
          [(B) Notwithstanding any other provision in this 
        part, a guaranty agency serving as a lender-of-last-
        resort under this paragraph shall be paid a fee, 
        established by the Secretary, for making such loans in 
        lieu of interest and special allowance subsidies, and 
        shall be required to assign such loans to the Secretary 
        on demand. Upon such assignment, the portion of the 
        advance represented by the loans assigned shall be 
        considered repaid by such guaranty agency.]

           *       *       *       *       *       *       *

  [(l) Preclaims Assistance and Supplemental Preclaims 
Assistance.--
          [(1) Assistance required.--Upon receipt of a proper 
        request from the lender, a guaranty agency having an 
        agreement with the Secretary under subsection (c) of 
        this section shall engage in preclaims assistance 
        activities (as described in subsection (c)(6)(C)(i)(I)) 
        and supplemental preclaims assistance activities (as 
        described in subsection (c)(6)(C)) with respect to each 
        loan covered by such agreement.
          [(2) Payments for supplemental preclaims 
        assistance.--The Secretary shall make payments in 
        accordance with the provisions of this paragraph to any 
        guaranty agency that engages in supplemental preclaims 
        assistance (as defined in subsection (c)(6)(C)) on a 
        loan guaranteed under this part. For each loan on which 
        such assistance is performed and for which a default 
        claim is not presented to the guaranty agency by the 
        lender on or before the 150th day after the loan 
        becomes 120 days delinquent, such payment shall be 
        equal to one percent of the total of the unpaid 
        principal and the accrued unpaid interest of the loan.]
  (l) Default Aversion Assistance.--
          (1) Assistance required.--Upon receipt of a proper 
        request from a lender received not earlier than the 
        60th day of delinquency, a guaranty agency having an 
        agreement with the Secretary under subsection (c) of 
        this section shall engage in default aversion 
        activities designed to prevent the default by a 
        borrower on a loan covered by such agreement.
          (2) Reimbursement.--(A) A guaranty agency may, in 
        accordance with the provisions of this paragraph, 
        transfer from the Federal Student Loan Reserve Account 
        to the Operating Account a default aversion fee. Such 
        fee shall be paid for any loan on which a claim for 
        default has not been presented that theguaranty agency 
successfully brings into current repayment status on or before the 
210th day after the loan becomes 60 days delinquent.
          (B) The default aversion fee shall be equal to 1 
        percent of the total unpaid principal and accrued 
        interest on the loan at the time the request is 
        submitted by the lender. Such fee shall not be paid 
        more than once on any loan for which the guaranty 
        agency averts the default unless the borrower remained 
        current in payments for at least 12 months prior to the 
        subsequent delinquency. A guaranty agency may transfer 
        such fees earned under this subsection no more 
        frequently than monthly.
          (C) For the purpose of earning the default aversion 
        fee, the term ``current repayment status'' means that 
        the borrower is not delinquent in the payment of any 
        principal or interest on the loan.
  (m) Income Contingent Repayment.--
          (1) Authority of secretary to require.--The Secretary 
        [shall require at least 10 percent of the borrowers] 
        may require borrowers who have defaulted on loans made 
        under this part that are assigned to the Secretary 
        under subsection (c)(8) to repay those loans under an 
        income contingent repayment plan, the terms and 
        conditions of which shall be established by the 
        Secretary and the same as, or similar to, an income 
        contingent repayment plan established for purposes of 
        part D of this title.

           *       *       *       *       *       *       *

  [(n) State Share of Default Costs.--
          [(1) In general.--In the case of any State in which 
        there are located any institutions of higher education 
        that have a cohort default rate that exceeds 20 
        percent, such State shall pay to the Secretary an 
        amount equal to--
                  [(A) the new loan volume attributable to all 
                institutions in the State for the current 
                fiscal year; multiplied by
                  [(B) the percentage specified in paragraph 
                (2); multiplied by
                  [(C) the quotient of--
                          [(i) the sum of the amounts 
                        calculated under paragraph (3) for each 
                        such institution in the State; divided 
                        by
                          [(ii) the total amount of loan volume 
                        attributable to current and former 
                        students of institutions located in 
                        that State entering repayment in the 
                        period used to calculate the cohort 
                        default rate.
          [(2) Percentage.--For purposes of paragraph (1)(B), 
        the percentage used shall be--
                  [(A) 12.5 percent for fiscal year 1995;
                  [(B) 20 percent for fiscal year 1996; and
                  [(C) 50 percent for fiscal year 1997 and 
                succeeding fiscal years.
          [(3) Calculation.--For purposes of paragraph 
        (1)(C)(i), the amount shall be determined by 
        calculating for each institution the amount by which--
                  [(A) the amount of the loans received for 
                attendance by such institution's current and 
                former students who (i) enter repayment during 
                the fiscal year used for the calculation of the 
                cohort default rate, and (ii) default before 
                the end of the following fiscal year; exceeds
                  [(B) 20 percent of the loans received for 
                attendance by all the current and former 
                students who enter repayment during the fiscal 
                year used for the calculation of the cohort 
                default rate.
          [(4) Fee.--A State may charge a fee to an institution 
        of higher education that participates in the program 
        under this part and is located in that State according 
        to a fee structure, approved by the Secretary, that is 
        based on the institution's cohort default rate and the 
        State's risk of loss under this subsection. Such fee 
        structure shall include a process by which an 
        institution with a high cohort default rate is exempt 
        from any fees under this paragraph if such institution 
        demonstrates to the satisfaction of the State that 
        exceptional mitigating circumstances, as determined by 
        the State and approved by the Secretary, contributed to 
        its cohort default rate.]
  (n) Blanket Certificate of Loan Guaranty.--
          (1) In general.--Any guaranty agency that has or 
        enters into any insurance program agreement with the 
        Secretary under this part may--
                  (A) offer eligible lenders participating in 
                the agency's guaranty program blanket 
                certificates of loan guaranty that permit the 
                lender to make loans without receiving prior 
                approval from the guaranty agency of individual 
                loans for eligible borrowers enrolled in 
                eligible programs at eligible institutions; and
                  (B) provide eligible lenders with the ability 
                to transmit electronically data to the agency 
                concerning loans the lender has elected to make 
                under the agency's insurance program via 
                standard reporting formats, such reporting to 
                occur at reasonable, mutually acceptable 
                intervals.
          (2) Limitations on blanket certificate of guaranty.--
        A guaranty agency and eligible lender may establish by 
        mutual agreement limitations or restrictions on the 
        number or volume of loans issued by a lender under the 
        blanket certificate of guaranty.

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

  (a) Voluntary Agreements.--
          (1) Authority.--Notwithstanding any other provision 
        of law, the Secretary may enter into a voluntary, 
        flexible agreement with not more than 6 guaranty 
        agencies under this section, in lieu of agreements with 
        a guaranty agency under subsections (b) and (c) of 
        section 428, under which the Secretary may waive or 
        modify any requirement under this title applicable to 
        the responsibilities of the Secretary and a guaranty 
        agency.
          (2) Eligibility.--Any guaranty agency that had one or 
        more agreements with the Secretary under subsections 
        (b) and (c) of section 428 as of the day before the 
        date of enactment of this section may enter into an 
        agreement with the Secretary under this subsection.
  (b) Terms of Agreement.--An agreement between the Secretary 
and a guaranty agency under this section--
          (1) shall be developed by the Secretary, in 
        consultation with the guaranty agency;
          (2) shall be for a period not to exceed five years, 
        and may be renewed upon the agreement of the parties;
          (3) may include provisions--
                  (A) specifying the responsibilities of the 
                guaranty agency under the agreement, such as--
                          (i) administering the issuance of 
                        insurance on loans made under this part 
                        on behalf of the Secretary;
                          (ii) monitoring insurance commitments 
                        made under this part;
                          (iii) default prevention activities;
                          (iv) review of default claims made by 
                        lenders;
                          (v) payment of default claims;
                          (vi) collection of defaulted loans;
                          (vii) adoption of internal systems of 
                        accounting and auditing that are 
                        acceptable to the Secretary, and 
                        reporting the result thereof to the 
                        Secretary on a timely, accurate, and 
                        auditable basis;
                          (viii) timely and accurate collection 
                        and reporting of such other data as the 
                        Secretary may require to carry out the 
                        purposes of the programs under this 
                        title;
                          (ix) monitoring of institutions and 
                        lenders participating in the program 
                        under this part; and
                          (x) the performance of other program 
                        functions by the guaranty agency.
                  (B) regarding the fees the Secretary shall 
                pay, in lieu of revenues that the guaranty 
                agency may otherwise receive under this part, 
                to the guaranty agency under the agreement, and 
                other funds that the guaranty agency may 
                receive or retain under the agreement, except 
                that in no case may the cost to the Secretary 
                of the agreement, as reasonably projected by 
                the Secretary, exceed the cost to the 
                Secretary, as similarly projected, in the 
                absence of the agreement;
                  (C) regarding the use of net revenues, as 
                described in the agreement under this section, 
                for such other activities in support of 
                postsecondary education as may be agreed to by 
                the Secretary and the guaranty agency;
                  (D) regarding the standards by which the 
                guaranty agency's performance of its 
                responsibilities under the agreement will be 
                assessed, and the consequences for a guaranty 
                agency's failure to achieve a specified level 
                of performance on 1 or more performance 
                standards;
                  (E) regarding the circumstances in which a 
                guaranty agency's agreement under this section 
                may be ended in advance of its expiration date;
                  (F) regarding such other businesses, 
                previously purchased or developed with reserve 
                funds, that relate to the program under this 
                part and in which the Secretary permits the 
                guaranty agency to engage; and
                  (G) such other provisions as the Secretary 
                may determine to be necessary to protect the 
                United States from the risk of unreasonable 
                loss and to promote the purposes of this part; 
                and
          (4) shall provide for uniform lender participation 
        with the guaranty agency under the terms of the 
        agreement.
  (c) Termination.--At the expiration or early termination of 
an agreement under this section, the Secretary shall reinstate 
the guaranty agency's prior agreements under subsections (b) 
and (c) of section 428, subject only to such additional 
requirements as the Secretary determines to be necessary in 
order to ensure the efficient transfer of responsibilities 
between the agreement under this section and the agreements 
under subsections (b) and (c) of section 428, including the 
guaranty agency's compliance with reserve requirements under 
sections 422 and 428.

SEC. 428B. FEDERAL PLUS LOANS.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Payment of Principal and Interest.--
          (1) * * *

           *       *       *       *       *       *       *

          (4) Applicable rates of interest.--Interest on loans 
        made pursuant to this section shall be at the 
        applicable rate of interest provided in section 
        [427A(c)] 427A(a)(3).

           *       *       *       *       *       *       *


SEC. 428C. FEDERAL CONSOLIDATION LOANS.

  (a) Agreements With Eligible Lenders.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Definition of eligible borrowers.--(A) * * *
          (B)(i) An individual's status as an eligible borrower 
        under this section terminates upon receipt of a 
        consolidation loan under this section, except--
                  (I) with respect to eligible student loans 
                received after the date of receipt of the 
                consolidation loan; and
                  [(II) that loans received prior to the date 
                of the consolidation loan may be added to the 
                consolidation loan during the 180-day period 
                following the making of the consolidation 
                loan.]
                  (II) that loans received during the 180-day 
                period following the making of the 
                consolidation loan may be added to the 
                consolidation loan.

           *       *       *       *       *       *       *

          (4) Definition of eligible student loans.--For the 
        purpose of paragraph (1), the term ``eligible student 
        loans'' means loans--
                  (A) * * *

           *       *       *       *       *       *       *

                  [(C) made under part D of this title, except 
                that loans made under such part shall be 
                eligible student loans only for consolidation 
                loans for which the application is received by 
                an eligible lender during the period beginning 
                on the date of enactment of the Emergency 
                Student Loan Consolidation Act of 1997 and 
                ending on October 1, 1998;]
                  (C) made under part D of this title;

           *       *       *       *       *       *       *

  (b) Contents of Agreements, Certificates of Insurance, and 
Loan Notes.--
          (1) Agreements with lenders.--Any lender described in 
        subparagraph (A), (B), or (C) of subsection (a)(1) who 
        wishes to make consolidation loans under this section 
        shall enter into an agreement with the Secretary or a 
        guaranty agency which provides--
                  (A) that, in the case of all lenders 
                described in subsection (a)(1), the lender will 
                make a consolidation loan to an eligible 
                borrower (on request of that borrower) only if 
                the borrower certifies that the borrower has no 
                other application pending for a loan [under 
                this section and (i) the lender holds an 
                outstanding loan of that borrower which is 
                selected by the borrower for consolidation 
                under this section, or (ii) the borrower 
                certifies that the borrower has sought and has 
                been unable to obtain a consolidation loan with 
                income-sensitive repayment terms from the 
                holders of the outstanding loans of that 
                borrower (which are so selected for 
                consolidation);] under this section;

           *       *       *       *       *       *       *

          (4) Terms and conditions of loans.--A consolidation 
        loan made pursuant to this section shall be insurable 
        by the Secretary or a guaranty agency pursuant to 
        paragraph (2) only if the loan is made to an eligible 
        borrower who has agreed to notify the holder of the 
        loan promptly concerning any change of address and the 
        loan is evidenced by a note or other written agreement 
        which--
                  (A) * * *

           *       *       *       *       *       *       *

                  (C)(i) provides that periodic installments of 
                principal need not be paid, but interest shall 
                accrue and be paid in accordance with clause 
                (ii), during any period for which the borrower 
                would be eligible for a deferral under section 
                428(b)(1)(M), and that any such period shall 
                not be included in determining the repayment 
                schedule pursuant to subsection (c)(2) of this 
                section; and
                  (ii) provides that interest shall accrue and 
                be paid--
                          (I) * * *

           *       *       *       *       *       *       *

                          (III) by the Secretary, in the case 
                        of a consolidation loan for which the 
                        application is received by an eligible 
                        lender on or after October 1, 1998, 
                        except that the Secretary shall pay 
                        such interest only on that portion of 
                        the loan that repays Federal Stafford 
                        Loans for which the student borrower 
                        received an interest subsidy under 
                        section 428 or Federal Direct Stafford 
                        Loans for which the borrower received 
                        an interest subsidy under section 455; 
                        or
                          [(III)] (IV) by the borrower, or 
                        capitalized, in the case of a 
                        consolidation loan other than a loan 
                        described in subclause [(I) or (II)] 
                        (I), (II), or (III);

           *       *       *       *       *       *       *

          (6) Nondiscrimination in Loan Consolidation.--An 
        eligible lender that makes consolidation loans under 
        this section shall not discriminate against any 
        borrower seeking such a loan--
                  (A) based on the number or type of eligible 
                student loans the borrower seeks to consolidate 
                except that (i) a lender is not required to 
                consolidate loans described in subparagraph (D) 
                or (E) of subsection (a)(4); and (ii) a lender 
                is not prohibited from establishing a minimum 
                loan balance for which it will process a 
                consolidation loan application;

           *       *       *       *       *       *       *

  (e) Termination of Authority.--The authority to make loans 
under this section expires at the close of September 30, [2002] 
2004. Nothing in this section shall be construed to authorize 
the Secretary to promulgate rules or regulations governing the 
terms or conditions of the agreements and certificates under 
subsection (b). Loans made under this section which are insured 
by the Secretary shall be considered to be new loans made to 
students for the purpose of section 424(a).

           *       *       *       *       *       *       *


SEC. 428G. REQUIREMENTS FOR DISBURSEMENT OF STUDENT LOANS.

  (a) Multiple Disbursement Required.--
          (1) Two disbursements required.--The proceeds of any 
        loan made, insured, or guaranteed under this part that 
        is made for any period of enrollment greater than one 
        semester, one trimester, one quarter, or four months 
        shall be disbursed in 2 or more installments, none of 
        which exceeds one-half of the loan.

           *       *       *       *       *       *       *

  (b) Disbursement and Endorsement Requirements.--
          (1) First year students.--The first installment of 
        the proceeds of any loan made, insured, or guaranteed 
        under this part that is made to a student borrower who 
        is entering the first year of a program of 
        undergraduate education, and who has not previously 
        obtained a loan under this part, shall not (regardless 
        of the amount of such loan or the duration of the 
        period of enrollment) be presented by the institution 
        to the student for endorsement until 30 days after the 
        borrower begins a course of study, but may be delivered 
        to the eligible institution prior to the end of that 
        30-day period. An institution whose cohort default rate 
        (as determined under section 435(a)) for each of the 
        three most recent fiscal years for which data 
areavailable is less than 10 percent shall be exempt from the 
requirements of this paragraph.

           *       *       *       *       *       *       *

  (d) Withholding of Second Disbursement.--
          (1) * * *
          (2) Students receiving over-awards.--If the sum of a 
        disbursement for any student and the other financial 
        aid obtained by such student exceeds the amount of 
        assistance for which the student is eligible under this 
        title by more than $300, the institution such student 
        is attending shall withhold and return to the lender or 
        escrow agent the portion (or all) of such installment 
        that exceeds such eligible amount, except that 
        overawards permitted pursuant to section 443(b)(4) of 
        the Act shall not be construed to be overawards for 
        purposes of this paragraph. Any portion (or all) of a 
        disbursement installment which is so returned shall be 
        credited to the borrower's loan and treated as a 
        prepayment thereon.

           *       *       *       *       *       *       *


SEC. 428H. UNSUBSIDIZED STAFFORD LOANS FOR MIDDLE-INCOME BORROWERS.

  (a) * * *
  (b) Eligible Borrowers.--Any student meeting the requirements 
for student eligibility under section 484 (including graduate 
and professional students as defined in regulations promulgated 
by the Secretary) shall be entitled to borrow an unsubsidized 
Stafford loan. Such student shall provide to the lender a 
statement from the eligible institution at which the student 
has been accepted for enrollment, or at which the student is in 
attendance, [which--
          [(1) sets forth such student's estimated cost of 
        attendance (as determined under section 472);
          [(2) sets forth such student's estimated financial 
        assistance, including a loan which qualifies for 
        subsidy payments under section 428; and
          [(3) certifies the eligibility of the student to 
        receive a loan under this section and the amount of the 
        loan for which such student is eligible, in accordance 
        with subsection (c).]
which certifies the eligibility of the student to receive a 
loan under this part and the amount of the loan for which such 
student is eligible. A student shall qualify for a loan if the 
eligible institution has provided the lender with a statement 
that--
          (1) at the lender's request, sets forth such 
        student's estimated cost of attendance (as determined 
        under section 472);
          (2) sets forth such student's estimated financial 
        assistance, including a loan which qualifies for 
        subsidy payments under section 428; and
          (3) sets forth a schedule for disbursement of the 
        proceeds of the loan in installments, consistent with 
        the requirements of section 428G.

           *       *       *       *       *       *       *

  (d) Loan Limits.--
          (1) * * *
          (2) Annual limits for independent, graduate, and 
        professional students.--The maximum annual amount of 
        loans under this section an independent student (or a 
        student whose parents are unable to borrow under 
        section 428B or the Federal Direct PLUS Loan Program) 
        may borrow in any academic year or its equivalent or in 
        any period of 7 consecutive months, whichever is 
        longer, shall be the amount determined under paragraph 
        (1), plus--
                  (A) in the case of such a student attending 
                an eligible institution who has not completed 
                such student's first 2 years of undergraduate 
                study--
                          (i) $4,000, if such student is 
                        enrolled in a program whose length is 
                        at least one academic year in length 
                        (as determined under section 481); and
                          [(ii) $2,500, if such student is 
                        enrolled in a program whose length is 
                        less than one academic year, but at 
                        least \2/3\ of such an academic year; 
                        and
                          [(iii) $1,500, if such student is 
                        enrolled in a program whose length is 
                        less than \2/3\, but at least \1/3\, of 
                        such an academic year;]
                          (ii) if such student is enrolled in a 
                        program of undergraduate education 
                        which is less than one academic year, 
                        the maximum annual loan amount that 
                        such student may receive may not exceed 
                        the amount that bears the same ratio to 
                        the amount specified in clause (i) as 
                        the length of such program measured in 
                        semester, trimester, quarter, or clock 
                        hours bears to one academic year;

           *       *       *       *       *       *       *

  (e) Payment of Principal and Interest.--
          (1) * * *

           *       *       *       *       *       *       *

          (7) Qualification for forbearance, deferment, and 
        income-sensitive repayment.--A borrower of a loan made 
        under this section may qualify for a forbearance or 
        deferment, or an income-sensitive repayment plan for 
        which the borrower is eligible, immediately upon 
        receipt by the lender or holder of a request from the 
        borrower. Any necessary supporting documentation shall 
        be secured by the lender or holder within 30 days of 
        the request in order to continue the forbearance, 
        deferment, or income-sensitive repayment plan.
  [(f) Origination Fee.--
          [(1) Amount of origination fee.--The lender shall 
        charge the borrower an origination fee in the amount of 
        3.0 percent of the principal amount of the loan, to be 
        deducted proportionately from each installment payment 
        of the proceeds of the loan prior to payment to the 
        borrower.
          [(2) Relation to applicable interest.--Such 
        origination fee shall not be taken into account for 
        purposes of determining compliance with section 427A.
          [(3) Disclosure required.--The lender shall disclose 
        to the borrower the amount and method of calculating 
        the origination fee.
          [(4) Use of origination fee to offset default 
        costs.--Each lender making loans under this section 
        shall transmit all origination fees authorized to be 
        collected from borrowers to the Secretary, who shall 
        use such fees to pay the Federal costs of default 
        claims paid for loans under this section and to reduce 
        the cost of special allowances paid thereon, if any, 
        under section 438(b).
          [(5) Review of origination fee and insurance 
        premium.--In fiscal year 1995, the Secretary is 
        directed to analyze the risk rates of borrowers who 
        have participated in this program in the 2 previous 
        fiscal years. If the Secretary finds, that as a result 
        of this review, the projected defaults and special 
        allowance costs of the unsubsidized program do not 
        exceed the combined origination fee under this 
        subsection and the insurance premium under subsection 
        (h), the Secretary is directed to lower the origination 
        fee and insurance premium accordingly.]

           *       *       *       *       *       *       *


[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. 432. LEGAL POWERS AND RESPONSIBILITIES.

  (a) General Powers.--In the performance of, and with respect 
to, the functions, powers, and duties, vested in him by this 
part, the Secretary may--
          (1) * * *
          (2) sue and be sued in any court of record of a State 
        having general jurisdiction or in any district court of 
        the United States, and such district courts shall have 
        jurisdiction of civil actions arising under this part 
        without regard to the amount in controversy, and action 
        instituted under this subsection by or against the 
        Secretary shall survive notwithstanding any change in 
        the person occupying the office of Secretary or any 
        vacancy in that office; but no attachment, injunction, 
        garnishment, or other similar process, mesne or final, 
        shall be issued against the Secretary or property under 
        the Secretary's control except that this section shall 
        not be deemed to limit court review under chapter 7 of 
        title 5, United States Code and nothing herein shall be 
        construed to except litigation arising out of 
        activities under this part from the application of 
        sections 509, 517, 547, and 2679 of title 28 of the 
        United States Code;

           *       *       *       *       *       *       *

  (f) Audit of Financial Transactions.--
          (1) Comptroller General and Inspector General 
        authority.--The Comptroller General and the Inspector 
        General of the Department of Education shall each have 
        the authority to conduct an audit of the financial 
        transactions of--
                  (A) any guaranty agency operating under an 
                agreement with the Secretary pursuant to 
                section 428(b);
                  (B) any eligible lender as defined in section 
                [435(d)(1) (D), (F), or (H);] section 
                435(d)(1); and
                  (C) a representative sample of eligible 
                lenders under this part, upon the request of 
                the Committee on Education and [Labor] the 
                Workforce of the House of Representatives or 
                the Committee on Labor and Human Resources of 
                the Senate, with respect to the payment of the 
                special allowance under section 438 in order to 
                evaluate the program authorized by this part[; 
                and].
                  [(D) any Authority required to file a plan 
                for doing business under section 438(d).]

           *       *       *       *       *       *       *

  (k) Program of Assistance for Borrowers.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Recommendation.--[Within 1 year after the date of 
        enactment of the Higher Education Amendments of 1992, 
        the] The Secretary shall recommend to the appropriate 
        committees in the Senate and House of Representatives 
        changes to statutes that could be made in order to 
        further encourage such efforts.

           *       *       *       *       *       *       *

  (m) Common Forms and Formats.--
          (1) Common guaranteed student loan application form 
        and promissory note.--
                  (A) In general.--[The Secretary] Subject to 
                paragraph (2), the Secretary, in cooperation 
                with representatives of guaranty agencies, 
                eligible lenders, and organizations involved in 
                student financial assistance, shall prescribe a 
                common application form and promissory note to 
                be used for applying for loans under part B of 
                this title.

           *       *       *       *       *       *       *

                  [(C) Approval of form.--The Secretary shall 
                approve a form for use not later than 360 days 
                after the date of enactment of the Higher 
                Education Amendments of 1992.]
                  [(D)] (C) Special rule.--[Nothing] Subject to 
                paragraph (2), nothing in this section shall be 
                construed to limit the development of 
                electronic forms and procedures.
          (2) Free application for federal student aid.--For 
        academic year 1999-2000 and thereafter, the Secretary 
        shall prescribe the Free Application for Federal 
        Student Aid as the application form under this part 
        (other than sections 428B and 428C).
          [(2)] (3) Common deferment form.--The Secretary, in 
        cooperation with representatives of guaranty agencies, 
        institutions of higher education, and lenders involved 
        in loans made under part B of this title, shall 
        prescribe a common deferment reporting form to be used 
        for the processing of deferments of loans made under 
        this title.
          [(3)] (4) Common reporting formats.--The Secretary 
        shall promulgate standards including necessary rules, 
        regulations (including the definitions of all relevant 
        terms), and procedures so as to require all lenders and 
        guaranty agencies to report information on all aspects 
        of loans made under this part in uniform formats, so as 
        to permit the direct comparison of data submitted by 
        individual lenders, servicers, or guaranty agencies.
          (5) Master promissory note.--
                  (A) Development and approval.--Within 180 
                days of enactment of this Act, the Secretary, 
                in cooperation with representatives of guaranty 
                agencies, eligible lenders, institutions, 
                students, and organizations involved in student 
                financial assistance, shall develop and approve 
                a master promissory note that will allow for a 
                multiyear line of credit. Such note shall 
                address the needs of participants in the 
                programs under this part. The Secretary shall 
                also develop and approve a corresponding master 
                promissory note for use under part D of this 
                title that addresses the needs of participants 
                in the programs under such part.
                  (B) Sale and assignment; enforcement.--
                Notwithstanding the preceding provisions of 
                this section, each loan made under a master 
                promissory note providing for a line of credit 
                may be sold and assigned independently of any 
                other loan made under the same promissory note, 
                and each such loan shall be separately 
                enforceable in all State and Federal courts on 
                the basis of an original or copy of the master 
                promissory note with its terms.
  (n) Default Reduction Management.--
          (1) Authorization.--There are authorized to be 
        appropriated $25,000,000 for fiscal year [1993] 1999 
        and each of the four succeeding fiscal years, for the 
        Secretary to expend for default reduction management 
        activities for the purposes of establishing a 
        performance measure that will reduce defaults by 5 
        percent relative to the prior fiscal year. Such funds 
        shall be in addition to, and not in lieu of, other 
        appropriations made for such purposes.

           *       *       *       *       *       *       *

          (3) Plan for use required.--The Secretary shall 
        submit a plan, for inclusion in the materials 
        accompanying the President's budget each fiscal year, 
        detailing the expenditure of funds authorized by this 
        section to accomplish the 5 percent reduction in 
        defaults. At the conclusion of the fiscal year, the 
        Secretary shall report the Secretary's findings and 
        activities concerning the expenditure of funds and 
        whether the performance measure was met. If the 
        performance measure was not met, the Secretary shall 
        report the following:
                  (A) * * *

           *       *       *       *       *       *       *

        This report shall be submitted to the Appropriations 
        Committees of the House of Representatives and the 
        Senate and to the Committee on Education and [Labor] 
        the Workforce of the House of Representatives and the 
        Committee on Labor and Human Resources of the Senate.

           *       *       *       *       *       *       *

  (p) Reporting Requirement.--All officers and directors, and 
those employees and paid consultants of eligible institutions, 
eligible lenders, guaranty agencies, loan servicing agencies, 
accrediting agencies or associations, State licensing agencies 
or boards, [State postsecondary reviewing entities designated 
under subpart 1 of part H,] and entities acting as secondary 
markets (including the Student Loan Marketing Association), who 
are engaged in making decisions as to the administration of any 
program or funds under this title or as to the eligibility of 
any entity or individual to participate under this title, shall 
report to the Secretary, in such manner and at such time as the 
Secretary shall require, on any financial interest which such 
individual may hold in any other entity participating in any 
program assisted under this title.

SEC. 433. STUDENT LOAN INFORMATION BY ELIGIBLE LENDERS.

  (a) Required Disclosure Before Disbursement.--Each eligible 
lender shall, at or prior to the time such lender disburses a 
loan which is insured or guaranteed under this part (other than 
a loan made under section 428C), provide thorough and accurate 
loan information on such loan to the borrower in simple and 
understandable terms. Any disclosure required by this 
subsection may be made by an eligible lender as part of the 
written application material provided to the borrower, or as 
part of the promissory note evidencing the loan, or on a 
separate written form provided to the borrower. The disclosure 
shall include--
          (1) * * *

           *       *       *       *       *       *       *

  (b) Required Disclosure Before Repayment.--Each eligible 
lender shall, at or prior to the start of the repayment period 
of the student borrower on loans made, insured, or guaranteed 
under this part, disclose to the borrower the information 
required under thissubsection in simple and understandable 
terms. For any loan made, insured, or guaranteed under this part, other 
than a loan made under section 428B or 428C, such disclosure required 
by this subsection shall be made not less than 30 days nor more than 
240 days before the first payment on the loan is due from the borrower. 
The disclosure shall include--
          (1) * * *

           *       *       *       *       *       *       *


SEC. 435. DEFINITIONS FOR STUDENT LOAN INSURANCE PROGRAM.

  As used in this part:
  (a) Eligible Institution.--
          (1) In general.--Except as provided in paragraph (2), 
        the term ``eligible institution'' means an institution 
        of higher education, as defined in section [481] 
        101(a)(2), except that, for the purposes of sections 
        427(a)(2)(C)(i) and 428(b)(1)(M)(i), an eligible 
        institution includes any institution that is within 
        this definition without regard to whether such 
        institution is participating in any program under this 
        title and includes any institution ineligible for 
        participation in any program under this part pursuant 
        to paragraph (2) of this subsection.
          (2) Ineligibility based on high default rates.--(A) 
        An institution whose cohort default rate is equal to or 
        greater than the threshold percentage specified in 
        subparagraph (B) for each of the three most recent 
        fiscal years for which data are available shall not be 
        eligible to participate in a program under this part 
        for the fiscal year for which the determination is made 
        and for the two succeeding fiscal years, unless, within 
        30 days of receiving notification from the Secretary of 
        the loss of eligibility under this paragraph, the 
        institution appeals the loss of its eligibility to the 
        Secretary. The Secretary shall issue a decision on any 
        such appeal within 45 days after its submission. Such 
        decision may permit the institution to continue to 
        participate in a program under this part if--
                  (i) the institution demonstrates to the 
                satisfaction of the Secretary that the 
                Secretary's calculation of its cohort default 
                rate is not accurate, and that recalculation 
                would reduce its cohort default rate for any of 
                the three fiscal years below the threshold 
                percentage specified in subparagraph (B); [or]
                  [(ii) there are, in the judgment of the 
                Secretary, exceptional mitigating circumstances 
                that would make the application of this 
                paragraph inequitable.]
                  (ii) there are exceptional mitigating 
                circumstances within the meaning of paragraph 
                (4); or
                  (iii) there are, in the judgment of the 
                Secretary, other exceptional mitigating 
                circumstances that would make the application 
                of this paragraph inequitable.
        During such appeal, the Secretary may permit the 
        institution to continue to participate in a program 
        under this part.

           *       *       *       *       *       *       *

          (C) Until July 1, [1998,] 1999, this paragraph shall 
        not apply to any institution that is--
                  (i) * * *

           *       *       *       *       *       *       *

          (3) Appeals based upon allegations of improper loan 
        servicing.--An institution that--
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) is an institution whose cohort default 
                rate equals or exceeds 20 percent for the most 
                recent year for which data are available;
        may include in its appeal of such loss or rate a 
        defense based on improper loan servicing (in addition 
        to other defenses). In any such appeal, the Secretary 
        shall take whatever steps are necessary to ensure that 
        such institution has access to a representative sample 
        (as determined by the Secretary) of the relevant loan 
        servicing and collection records of the affected 
        guaranty agencies and loan servicers or, at the request 
        of the institution, a complete copy of the records for 
        loans made under this part or of the direct loan 
        servicer for loans made under part D for a reasonable 
        period of time, not to exceed 30 days. The Secretary 
        shall reduce the institution's cohort default rate to 
        reflect the percentage of defaulted loans in the 
        representative sample that are required to be excluded 
        pursuant to subsection (m)(1)(B).
          (4) Definition of mitigating circumstances.--For 
        purposes of paragraph (2), an institution shall be 
        treated as having exceptional mitigating circumstances 
        that make application of that paragraph inequitable if 
        such institution is certified by a certified public 
        accountant to meet each of the following criteria:
                  (A) at least two-thirds of the students 
                enrolled on at least a half-time basis at the 
                institution--
                          (i) are eligible to receive a Federal 
                        Pell Grant award that is at least equal 
                        to one-half the maximum Federal Pell 
                        Grant award for which the student would 
                        be eligible based on his or her 
                        enrollment status; or
                          (ii) have an adjusted gross income of 
                        the student, and his or her parents 
                        (unless the student is an independent 
                        student), of less than the poverty 
                        level, as determined under criteria 
                        established by the Department of Health 
                        and Human Services;
                  (B) at least two-thirds of the students 
                enrolled on a full-time basis at the 
                institution in any 12-month period ending not 
                more than six months prior to the date the 
                institution submits its appeal, and who remain 
                enrolled beyond the point at which the student 
                would be entitled to a tuition refund of 100 
                percent--
                          (i) complete the educational program 
                        in which they are enrolled within the 
                        time normally required to complete that 
                        program, as specified in the 
                        institution's enrollment contract, 
                        catalog, or other materials; or
                          (ii) continue to be enrolled and are 
                        making satisfactory academic progress 
                        toward completion of their program; or
                          (iii) have entered active duty in the 
                        armed forces of the United States; and
                  (C) at least two-thirds of the students 
                enrolled on a full-time basis at the 
                institution who complete the educational 
                program in which they are enrolled within any 
                12-month period ending not more than six months 
                prior to the date the institution submits its 
                appeal are placed for at least 13 weeks in an 
                employment position for which they have been 
                trained, or are enrolled for at least 13 weeks 
                in higher level education program for which the 
                educational program of the institution provided 
                substantial preparation, or have entered active 
                duty in the armed forces of the United States.
          (5) Reduction of default rates at certain minority 
        institutions.--
                  (A) Beneficiaries of exception required to 
                establish management plan.--After July 1, 1998, 
                any institution that has a cohort default rate 
                that equals or exceeds 25 percent for each of 
                the three most recent fiscal years for which 
                data are available and that relies on the 
                exception in paragraph (2)(C) of this 
                subsection to continue to be an eligible 
                institution shall--
                          (i) submit to the Secretary a default 
                        management plan which the Secretary, in 
                        his discretion, after consideration of 
                        the institution's history, resources, 
                        dollars in default, and targets for 
                        default reduction, determines is 
                        acceptable and provides reasonable 
                        assurance that the institution will, by 
                        July 1, 2001, have a cohort default 
                        rate that is less than 25 percent;
                          (ii) engage an independent third 
                        party (which may be paid with funds 
                        received under part B of title III) to 
                        provide technical assistance in 
                        implementing such default management 
                        plan; and
                          (iii) provide to the Secretary, on an 
                        annual basis or at such other intervals 
                        as the Secretary may require, evidence 
                        of cohort default rate improvement and 
                        successful implementation of such 
                        default management plan.
                  (B) Discretionary eligibility conditioned on 
                improvement.--Notwithstanding the expiration of 
                the exception in paragraph (2)(C), the 
                Secretary may, in his discretion, continue to 
                treat an institution described in subparagraph 
                (A) of this paragraph as an eligible 
                institution for each of the one-year periods 
                beginning on July 1, 1999, and July 1, 2000, 
                only if the institution submits by the 
                beginning of such period evidence satisfactory 
                to the Secretary that--
                          (i) such institution has complied and 
                        is continuing to comply with the 
                        requirements of subparagraph (A); and
                          (ii) such institution has made 
                        substantial improvement, during each of 
                        the preceding one-year periods, in its 
                        cohort default rate.
          (6) Special rule based on participation rate 
        indices.--(A) An institution that demonstrates to the 
        Secretary that its participation rate index (as defined 
        in regulations in effect on July 1, 1996) is equal to 
        or less than .0375 for any of the three most recent 
        fiscal years for which data are available shall not be 
        subject to paragraph (2).
          (B) An institution shall provide the Secretary with 
        sufficient data to determine its participation rate 
        index within 30 days after receiving an initial 
        notification of its draft cohort default rate.
          (C) Prior to publication of a final cohort default 
        rate for an institution that provides the data under 
        subparagraph (B), the Secretary shall notify the 
        institution of its compliance or noncompliance with 
        subparagraph (A).
  (d) Eligible Lender.--
          (1) In general.--Except as provided in paragraphs (2) 
        through (6), the term ``eligible lender'' means--
                  (A) a National or State chartered bank, a 
                mutual savings bank, a savings and loan 
                association, a stock savings bank, or a credit 
                union which--
                          (i) * * *
                          (ii) does not have as its primary 
                        consumer credit function the making or 
                        holding of loans made to students under 
                        this part unless (I) it is a bank which 
                        is wholly owned by a State, or a bank 
                        which is subject to examination and 
                        supervision by an agency of the United 
                        States, makes student loans as a 
                        trustee pursuant to an express trust, 
                        operated as a lender under this part 
                        prior to January 1, 1975, and which 
                        meets the requirements of this 
                        provision prior to the enactment of the 
                        Higher Education Amendments of 1992, 
                        [or] (II) it is a single wholly owned 
                        subsidiary of a bank holding company 
                        which does not have as its primary 
                        consumer credit function the making or 
                        holding of loans made to students under 
                        this part, or (III) it is a bank that 
                        is a wholly owned subsidiary of a 
                        nonprofit foundation, the foundation is 
                        described in section 501(c)(3) of the 
                        Internal Revenue Code of 1986 and 
                        exempt from taxation under section 
                        501(a) of such Code and has been 
                        participating in the program authorized 
                        by this part for three years as of the 
                        date of enactment of the Higher 
                        Education Amendments of 1998 and only 
                        makes loans to undergraduate students 
                        who are 22 years of age or younger and 
                        has a portfolio of not more than 
                        $10,000,000; and in determining whether 
                        the making or holding of loans to 
                        students and parents under this part is 
                        the primary consumer credit function of 
                        the eligible lender, all loans 
                        (including student loans and other 
                        consumer loans) made or held as trustee 
                        or in a trust capacity for the benefit 
                        of a third party shall be considered;

           *       *       *       *       *       *       *

                  (I) a Rural Rehabilitation Corporation, or 
                its successor agency, which has received 
                Federal funds under Public Law 499, Eighty-
                first Congress (64 Stat. 98 (1950)); [and]
                  (J) for purpose of making loans under section 
                428C, any nonprofit private agency functioning 
                in any State as a secondary market[.]; and
                  (K) a wholly owned subsidiary of a publicly 
                held holding company which, for the three years 
                preceding the date of enactment of this 
                subparagraph, through one or more subsidiaries 
                (i) acts as a finance company, and (ii) 
                participates in the program authorized by this 
                part pursuant to subparagraph (C).

           *       *       *       *       *       *       *

          (5) Disqualification for use of certain incentives.--
        The term ``eligible lender'' does not include any 
        lender that the Secretary determines, after notice and 
        opportunity for a hearing, has after the date of 
        enactment of this paragraph--
                  (A) * * *

           *       *       *       *       *       *       *

        It shall not be a violation of this paragraph for a 
        lender to provide assistance to institutions of higher 
        education comparable to the kinds of assistance 
        provided to institutions of higher education by the 
        Department of Education.

           *       *       *       *       *       *       *

  [(e) Line of Credit.--The term ``line of credit'' means an 
arrangement or agreement between the lender and the borrower 
whereby a loan is paid out by the lender to the borrower in 
annual installments, or whereby the lender agrees to make, in 
addition to the initial loan, additional loans in subsequent 
years.]
  (e) Line of Credit.--The term ``line of credit'' means an 
agreement between the lender and the borrower pursuant to a 
master promissory note under which the lender may make and 
disburse, in addition to the initial loan, additional loans in 
subsequent years.

           *       *       *       *       *       *       *


SEC. 437. REPAYMENT BY THE SECRETARY OF LOANS OF BANKRUPT, DECEASED, OR 
                    DISABLED BORROWERS; TREATMENT OF BORROWERS 
                    ATTENDING CLOSED SCHOOLS OR FALSELY CERTIFIED AS 
                    ELIGIBLE TO BORROW[.]; LOAN FORGIVENESS FOR 
                    TEACHING.

  (a) Repayment in Full for Death and Disability.--If a student 
borrower who has received a loan described in subparagraph (A) 
or (B) of section 428(a)(1) dies or becomes permanently and 
totally disabled (as determined in accordance with regulations 
of the Secretary), then the Secretary shall discharge the 
borrower's liability on the loan by repaying the amount owed on 
the loan. A certification of permanent and total disability 
from a Veteran's Hospital shall be acceptable documentation for 
discharge under this subsection.

           *       *       *       *       *       *       *

  (c) [Discharge.--] Discharge Related to School Closure or 
False Certification.--
          (1)  In general.--If a borrower who received, on or 
        after January 1, 1986, a loan made, insured, or 
        guaranteed under this part and the student borrower, or 
        the student on whose behalf a parent borrowed, is 
        unable to complete the program in which such student is 
        enrolled due to the closure of the institution or if 
        such student's eligibility to borrow under this part 
        was falsely certified by the eligible institution, or 
        if the institution failed to make a refund of loan 
        proceeds which it owed to such student's lender, then 
        the Secretary shall discharge the borrower's liability 
        on the loan (including interest and collection fees) by 
        repaying the amount owed on the loan and shall 
        subsequently pursue any claim available to such 
        borrower against the institution and its affiliates and 
        principals or settle the loan obligation pursuant to 
        the financial responsibility authority under subpart 3 
        of part H. In the case of a discharge based upon a 
        failure to refund, the amount of the discharge shall 
        not exceed that portion of the loan which should have 
        been refunded. The Secretary shall report to the 
        Committee on Education and the Workforce of the House 
        of Representatives and the Committee on Labor and Human 
        Resources of the Senate annually as to the dollar 
        amount of loan discharges attributable to failures to 
        make refunds.

           *       *       *       *       *       *       *

  (e) Cancellation of Loans for Teaching.--
          (1) Functions of secretary.--The Secretary shall 
        discharge the liability of a borrower of a qualifying 
        loan by repaying the amount owed on the loan, to the 
        extent specified in paragraph (4), for service 
        described in paragraph (3).
          (2) Qualifying loans.--
                  (A) In general.--For purposes of this 
                subsection, a loan is a qualifying loan if--
                          (i) the loan was made under section 
                        428 on or after the date of enactment 
                        of the Higher Education Amendments of 
                        1998 to a borrower who, on the date of 
                        entering into the note or other written 
                        evidence of the loan, had no 
                        outstanding balance of principal or 
                        interest on any loan made before such 
                        date; and
                          (ii) the loan was obtained to cover 
                        the cost of instruction for an academic 
                        year after the first and second year of 
                        undergraduate education.
                  (B) Limitation.--The Secretary may not repay 
                loans described in subparagraph (A) to cover 
                the costs of instruction for more than two 
                academic years, or three academic years in the 
                case of a program of instruction normally 
                requiring five years.
                  (C) Treatment of consolidation loans.--A loan 
                made under section 428C may be a qualifying 
                loan for the purposes of this subsection only 
                to the extent that such loan was used to repay 
                a loan or loans that meet the requirements of 
                subparagraphs (A) and (B), as determined in 
                accordance with regulations prescribed by the 
                Secretary.
          (3) Qualifying service.--A loan shall be discharged 
        under paragraph (1) for service by the borrower as a 
        full-time teacher for each complete academic year of 
        service, after completion of the second academic year 
        of service, in a public or other nonprofit private 
        elementary or secondary school--
                  (A) which is in the school district of a 
                local educational agency which is eligible in 
                such year for assistance pursuant to title I of 
                the Elementary and Secondary Education Act of 
                1965; and
                  (B) which for the purpose of this paragraph 
                and for that year has been determined by the 
                State educational agency of the State in which 
                the school is located to be a school in which 
                the enrollment of children counted under 
                section 1124(c) of the Elementary and Secondary 
                Education Act of 1965 exceeds 30 percent of the 
                total enrollment of that school.
          (4) Rate of discharge.--(A) Loans shall be discharged 
        under this subsection at the rate of--
                  (i) 30 percent for the first or second 
                complete academic year of qualifying service as 
                described in paragraph (3) (after completion of 
                two years of service); and
                  (ii) 40 percent for the third complete year 
                of such qualifying service.
          (B) The total amount that may be discharged under 
        this subsection for any borrower shall not exceed 
        $17,750.
          (C) If a portion of a loan is discharged under 
        subparagraph (A) for any year, the entire amount of 
        interest on that loan that accrues for that year shall 
        also be discharged by the Secretary.
          (D) Nothing in this section shall be construed to 
        authorize refunding of any repayment of a loan.
          (5) Limitation on teacher eligibility.--
                  (A) Secondary school teachers.--A borrower 
                may not receive assistance under this 
                subsection by virtue of teaching in a secondary 
                school unless such borrower majored in the 
                subject area in which they are teaching.
                  (B) Elementary school teachers.--A borrower 
                may not receive assistance under this 
                subsection by virtue of teaching in a 
                elementary school unless such borrower 
                demonstrates, in accordance with State teacher 
                certification or licensing requirements, 
                subject matter knowledge and teaching skills in 
                reading, writing, mathematics, and other 
                subjects taught in elementary schools.
          (6) Rule of construction.--The amount of a loan, and 
        interest on a loan, that is canceled under this 
        subsection shall not be considered income for purposes 
        of the Internal Revenue Code of 1986.
          (7) Prevention of double benefits.--No borrower may, 
        for the same service, receive a benefit under both this 
        subsection and subtitle D of title I of the National 
        and Community Service Act of 1990 (42 U.S.C. 12571 et 
        seq.).
          (8) Method of payment.--The Secretary shall specify 
        in regulations the manner in which lenders shall be 
        reimbursed for loans made under this part, or portions 
        thereof, that are discharged under this subsection.
          (9) List.--If the list of schools in which a teacher 
        may perform service pursuant to paragraph (3) is not 
        available before May 1 of any year, the Secretary may 
        use the list for the year preceding the year for which 
        the determination is made to make such service 
        determination.
          (10) Continuing eligibility.--Any teacher who 
        performs service in a school which--
                  (A) meets the requirements of paragraph (3) 
                in any year during such service; and
                  (B) in a subsequent year fails to meet the 
                requirements of such subsection,
        may continue to teach in such school and shall be 
        eligible for loan cancellation pursuant to this 
        subsection with respect to such subsequent years.

[SEC. 437A. DEBT MANAGEMENT OPTIONS.

  [(a) Program Authority.--For the purpose of offering 
additional debt management options, the Secretary is 
authorized, to the extent of funds appropriated--
          [(1) to acquire from eligible holders the notes of 
        borrowers under this part (other than section 428B) who 
        are considered to be at high risk of default and who 
        submit a request to the Secretary for an alternative 
        repayment option;
          [(2) to offer such borrowers one or more alternative 
        repayment options, which may include graduated or 
        extended repayment and which shall, subject to 
        subsection (b)(2), include an income contingent 
        repayment option established in accordance with 
        subsection (b); and
          [(3) to enter into contracts or other agreements with 
        private firms or other agencies of the Government as 
        necessary to carry out the purposes of this section.
  [(b) Income Contingent Repayment Option.--
          [(1) Regulations.--For the purposes of subsection 
        (a)(2), the Secretary shall, by regulation, establish 
        the terms and conditions for an income contingent 
        repayment option. Such regulations shall specify the 
        schedules under which income will be assessed for 
        repayment of loans, shall permit the discharge of the 
        remaining obligation on the loan not later than 25 
        years after the commencement of income contingent 
        repayment, and may provide for the potential collection 
        of amounts in excess of the principal and interest owed 
        on the original loan or loans.
          [(2) Collection mechanism determination required.--
        Such regulations shall not be effective unless the 
        Secretary publishes a finding that--
                  [(A) the Secretary has, pursuant to 
                subsection (a)(3), established a collection 
                mechanism that will provide a high degree of 
                certainty that collections will be made in 
                accordance with the repayment option 
                established under paragraph (1); and
                  [(B) the use of such repayment option and 
                collection mechanism will result in an increase 
                in the net amount the Government will collect.
  [(c) Determinations of High Risk of Default.--In making 
determinations under subsection (a)(1), the Secretary shall--
          [(1) consider the ratio of part B debt repayment to 
        income; or
          [(2) establish, by regulation, such other indicators 
        of high risk as the Secretary considers appropriate.
  [(d) Loan Limitation.--Not more than $200,000,000 may be used 
to acquire loans under this section in any fiscal year.]

SEC. 438. SPECIAL ALLOWANCES.

  (a) * * *
  (b) Computation and Payment.--
          (1) * * *
          (2) Rate of special allowance.--(A) Subject to 
        subparagraphs (B), (C), (D), [(E), and (F)] and (E) and 
        paragraph (4), the special allowance paid pursuant to 
        this subsection on loans shall be computed (i) by 
        determining the average of the bond equivalent rates of 
        91-day Treasury bills auctioned for such 3-month 
        period, (ii) by subtracting the applicable interest 
        rate on such loans from such average, (iii) by adding 
        3.10 percent to the resultant percent, and (iv) by 
        dividing the resultant percent by 4. If such 
        computation produces a number less than zero, such 
        loans shall be subject to section 427A(f).
          (B)(i) * * *

           *       *       *       *       *       *       *

          (iv) Notwithstanding clauses (i) and (ii), the 
        quarterly rate of the special allowance for holders of 
        loans which are financed with funds obtained by the 
        holder from the issuance of obligations originally 
        issued on or after October 1, 1993, the income from 
        which is excluded from gross income under the Internal 
        Revenue Code of 1986, shall be the quarterly rate of 
        the special allowance established under subparagraph 
        (A)[, (E), or (F)] or (E), as the case may be. Such 
        rate shall also apply to holders of loans which were 
        made or purchased with funds obtained by the holder 
        from collections or default reimbursements on, or 
        interest or other income pertaining to, eligible loans 
        made or purchased with funds described in the preceding 
        sentence of this subparagraph or from income on the 
        investment of such funds.
          (C)(i) * * *
          (ii) [In the case] Subject to subparagraph (F), in 
        the case of loans disbursed on or after October 1, 
        1992, pursuant to section 428A or 428B for which the 
        interest rate is determined under section 427A(c)(4), a 
        special allowance shall not be paid unless the rate 
        determined for any 12-month period under section 
        427A(c)(4)(B) exceeds--
                  (I) * * *

           *       *       *       *       *       *       *

          [(F) Subject to paragraph (4), the special allowance 
        paid pursuant to this subsection on loans for which the 
        applicable rate of interest is determined under section 
        427A(h) shall be computed (i) by determining the 
        applicable bond equivalent rate of the security with a 
        comparable maturity, as established by the Secretary, 
        (ii) by subtracting the applicable interest rates on 
        such loans from such applicable bond equivalent rate, 
        (iii) by adding 1.0 percent to the resultant percent, 
        and (iv) by dividing the resultant percent by 4. If 
        such computation produces a number less than zero, such 
        loans shall be subject to section 427A(f).]
          (F) Loans disbursed after july 1, 1998.--
                  (i) In general.--Subject to paragraph (4) and 
                clauses (ii), (iii), and (iv) of this 
                subparagraph, the special allowance paid 
                pursuant to this subsection on loans for which 
                the first disbursement is made on or after July 
                1, 1998, shall be computed--
                          (I) by determining the average of the 
                        bond equivalent rates of 91-day 
                        Treasury bills auctioned for such 3-
                        month period;
                          (II) by subtracting the applicable 
                        interest rates on such loans from such 
                        average bond equivalent rate;
                          (III) by adding 2.8 percent to the 
                        resultant percent; and
                          (IV) by dividing the resultant 
                        percent by 4.
                  (ii) In school and grace period.--In the case 
                of any loan for which the first disbursement is 
                made on or after July 1, 1998, and for which 
                the applicable rate of interest is described in 
                section 427A(a)(2), clause (i)(III) of this 
                subparagraph shall be applied by substituting 
                ``2.2 percent'' for ``2.8 percent''.
                  (iii) PLUS loans.--In the case of any loan 
                for which the first disbursement is made on or 
                after July 1, 1998, and for which the 
                applicable rate of interest is described in 
                section 427A(a)(3), clause (i)(III) of this 
                subparagraph shall be applied by substituting 
                ``3.1 percent'' for ``2.8 percent'', subject to 
                clause (iv) of this subparagraph.
                  (iv) Limitation on special allowances for 
                plus loans.--In the case of loans disbursed on 
                or after July 1, 1998, for which the interest 
                rate is determined under 427A(a)(3), a special 
                allowance shall not be paid for a loan made 
                under section 428B unless the rate determined 
                for any 12-month period under section 
                427A(a)(3) exceeds 9 percent.

           *       *       *       *       *       *       *

  (c) Origination Fees From Students.--
          (1) * * *
          (2) Amount of origination fees.--Subject to paragraph 
        (6) of this subsection, with respect to any loan 
        [(other than] (including loans made under section 428H, 
        but excluding loans made under sections 428C and 
        439(o)) for which a completed note or other written 
        evidence of the loan was sent or delivered to the 
        borrower for signing on or after 10 days after the date 
        of enactment of the Postsecondary Student Assistance 
        Amendments of 1981, each eligible lender under this 
        part is authorized to charge the borrower an 
        origination fee in an amount not to exceed 3.0 percent 
        of the principal amount of the loan, to be deducted 
        proportionately from each installment payment of the 
        proceeds of the loan prior to payment to the borrower. 
        Except as provided in paragraph (8), a lender is not 
        authorized to assess an origination fee under this 
        paragraph unless the lender assesses the same fee to 
        all student borrowers.

           *       *       *       *       *       *       *

          (8) Exception.--Notwithstanding paragraph (2), a 
        lender may assess a lesser origination fee for a 
        borrower demonstrating greater financial need as 
        determined by such borrower's adjusted gross family 
        income.

           *       *       *       *       *       *       *

  [(e) Lending From Proceeds of Tax Exempt Obligations.--
          [(1) Plan for doing business required.--In order for 
        the holders of loans any portion of which were made or 
        purchased with funds obtained by the holder from an 
        Authority issuing obligations, the income from which is 
        exempt from taxation under the Internal Revenue Code of 
        1986, to be eligible to receive a special allowance 
        under subsection (b)(2) of this section, the Authority 
        shall submit to the Governor of the State, and to the 
        guaranty agency determined by the Secretary to be the 
        principal guaranty agency for the State, a plan for 
        doing business. The Governor shall, after consultation 
        with the guaranty agency, approve or disapprove the 
        plan within 30 days of the receipt of the proposed plan 
        from the Authority. Such plan shall also be transmitted 
        to the Secretary within 60 days after approval.
          [(2) Contents of plan.--Each such plan shall contain 
        provisions designed to assure that--
                  [(A) no eligible lender in the area served by 
                the Authority will be excluded from 
                participation in the program of the Authority 
                and all eligible lenders may participate in the 
                program on the same terms and conditions if 
                eligible lenders are going to participate in 
                the program;
                  [(B) no director or staff member of the 
                Authority who receives compensation from the 
                Authority may own stock in, or receive 
                compensation from, any agency that would 
                contract to service and collect the loans of 
                the Authority;
                  [(C) student loans will not be purchased from 
                participating lenders at a premium amounting to 
                more than 1 percent of the unpaid principal 
                amount borrowed plus accrued interest to the 
                date of acquisition, but a reasonable loan 
                transfer fee may be paid by the purchaser;
                  [(D) the Authority will, within the limit of 
                funds available and subject to the applicable 
                State and Federal law, make loans to, or 
                purchase loans incurred by, all eligible 
                students who are residents of, or who attend an 
                eligible institution within, the area served by 
                the Authority;
                  [(E) the Authority has a plan under which the 
                Authority will pursue the development of new 
                lender participation in a continuing program of 
                benefits to students together with assurances 
                of existing lender commitments to the program; 
                and
                  [(F) there will be an annual audit of the 
                Authority by a certified public accounting firm 
                which will include review of compliance by the 
                Authority with the provisions of the plan.
          [(3) Nondiscrimination.--In order for the holders of 
        loans which were made or purchased with funds obtained 
        by the holder from an Authority issuing obligations, 
        the income from which is exempt from taxation under the 
        Internal Revenue Code of 1986, to be eligible to 
        receive a special allowance under subsection (b)(2) of 
        this section on any such loans, the Authority shall not 
        engage in any pattern or practice which results in a 
        denial of a borrower's access to loans under this part 
        because of the borrower's race, sex, color, religion, 
        national origin, age, handicapped status, income, 
        attendance at a particular eligible institution within 
        the area served by the Authority, length of the 
        borrower's educational program, or the borrower's 
        academic year in school.
          [(4) Report by the secretary.--The Secretary shall, 
        no later than September 30, 1988, and each succeeding 
        September 30th, submit a report to the Committee on 
        Education and Labor of the House of Representatives and 
        the Committee on Labor and Human Resources of the 
        Senate specifying--
                  [(A) the amount of student loan credit 
                provided through the use of tax-exempt 
                obligations for the most recent fiscal year;
                  [(B) an assessment of the impact of the 
                availability of such financing on the 
                availability of student credit in the areas 
                served by the authorities issuing such 
                obligations;
                  [(C) an assessment of the need for additional 
                tax-exempt financing for student credit for the 
                next fiscal year; and
                  [(D) any other information determined by the 
                Secretary to be relevant to the purposes of the 
                report.]
  [(f)] (e) Regulations To Prevent Denial of Loans to Eligible 
Students.--The Secretary shall adopt or amend appropriate 
regulations pertaining to programs carried out under this part 
to prevent, where practicable, any practices which the 
Secretary finds have denied loans to a substantial number of 
eligible students.
  (f) Study.--The Comptroller General shall conduct a 
statistical analysis of the subsidized and unsubsidized student 
loan programs under part B to gather data on lenders' policies 
on charging origination fees and to determine if there are any 
anomalies that would indicate any institutional, programmatic, 
or socioeconomic discrimination in the assessing or waiving of 
such fees. The Comptroller General shall report to the 
appropriate committees of Congress within two years after the 
date of enactment of the Higher Education Amendments of 1998.

           *       *       *       *       *       *       *


                  Part C--Federal Work-Study Programs

SEC. 441. PURPOSE; APPROPRIATIONS AUTHORIZED.

  (a) Purpose.--The purpose of this part is to stimulate and 
promote the part-time employment of students who are enrolled 
as undergraduate, graduate, or professional students, including 
students participating in an internship or practicum, or as a 
research assistant, as determined by the Secretary, and who are 
in need of earnings from employment to pursue courses of study 
at eligible institutions, and to encourage students receiving 
Federal student financial assistance to participate in 
community service activities that will benefit the Nation and 
engender in the students a sense of social responsibility and 
commitment to the community.
  (b) Authorization of Appropriations.--There are authorized to 
be appropriated to carry out this part, [$800,000,000 for 
fiscal year 1993] $1,000,000,000 for fiscal year 1999 and such 
sums as may be necessary for each of the 4 succeeding fiscal 
years.
  (c) Community Services.--For purposes of this part, the term 
``community services'' means services [which are] that are 
performed off-campus or on-campus and that are identified by an 
institution of higher education, through formal or informal 
consultation with local nonprofit, governmental, and community-
based organizations, as designed to improve the quality of life 
for community residents, particularly low-income individuals, 
or to solve particular problems related to their needs, 
including--
          (1) * * *

           *       *       *       *       *       *       *


SEC. 442. ALLOCATION OF FUNDS.

  (a) * * *
  [(b) Allocation of Excess Based on Pro Rata Share.--From one-
quarter of the remainder of the amount appropriated pursuant to 
section 441(b) for any fiscal year (after making the 
allocations required by subsection (a)), the Secretary shall 
allocate to each eligible institution an amount which bears the 
same ratio to such one-quarter as the amount the eligible 
institution receives for such fiscal year under subsection (a) 
bears to the amount all such institutions receive under such 
subsection (a).]
  [(c)] (b) Allocation of Excess Based on Share of Excess 
Eligible Amounts.--(1) From [three-quarters of the remainder] 
the remainder of the amount appropriated pursuant to section 
441(b) after making the allocations required by subsection (a), 
the Secretary shall allocate to each eligible institution which 
has an excess eligible amount an amount which bears the same 
ratio to such remainder as such excess eligible amount bears to 
the sum of the excess eligible amounts of all such eligible 
institutions (having such excess eligible amounts).
  (2) For any eligible institution, the excess eligible amount 
is the amount, if any, by which--
          (A)(i) the amount of that institution's need (as 
        determined under subsection [(d)] (c)), divided by (ii) 
        the sum of the need of all institutions (as so 
        determined), multiplied by (iii) the amount 
        appropriated pursuant to section 441(b) for the fiscal 
        year; exceeds
          (B) the amount required to be allocated to that 
        institution under subsection (a).
  [(d)] (c) Determination of Institution's Need.--(1) The 
amount of an institution's need is equal to the sum of the 
self-help need of the institution's eligible undergraduate 
students and the self-help need of the institution's eligible 
graduate and professional students.

           *       *       *       *       *       *       *

  [(e)] (d) Reallocation of Excess Allocations.--(1) If 
institutions return to the Secretary any portion of the sums 
allocated to such institutions under this section for any 
fiscal year, the Secretary shall reallot such excess to 
eligible institutions which used at least 10 percent of the 
total amount of funds granted to such institution under this 
section to compensate students employed in community service in 
the preceding fiscal year. Such excess funds shall be 
reallotted to institutions which qualify under this subsection 
on the same basis as excess eligible amounts are allocated to 
institutions pursuant to subsection [(c)] (b). Funds received 
by institutions pursuant to this subsection shall be used to 
compensate students employed in community service.

           *       *       *       *       *       *       *

  [(f)] (e) Filing Deadlines.--The Secretary shall, from time 
to time, set dates before which institutions must file 
applications for allocations under this part.

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

  (a) * * *
  (b) Contents of Agreements.--An agreement entered into 
pursuant to this section shall--
          (1) * * *
          (2) provide that funds granted an institution of 
        higher education, pursuant to section 443, may be used 
        only to make payments to students participating in 
        work-study programs, except that--
                  (A) [in fiscal year 1994 and succeeding 
                fiscal years,] an institution shall use at 
                least 5 percent of the total amount of funds 
                granted to such institution under this section 
                in any fiscal year to compensate students 
                employed in community service (including time 
                spent in travel or training, or both, directly 
                related to such community service), except that 
                the Secretary may waive this subparagraph if 
                the Secretary determines that enforcing it 
                would cause hardship for students at an 
                institution; [and]
                  (B) in academic year 1999 and succeeding 
                academic years, an institution shall use at 
                least 2 percent of the total amount of funds 
                granted to such institution under this section 
                for such academic year in accordance with 
                subsection (d); and
                  [(B)] (C) an institution may use a portion of 
                the sums granted to it to meet administrative 
                expenses in accordance with section 489 of this 
                Act, may use a portion of the sums granted to 
                it to meet the cost of a job location and 
                development program in accordance with section 
                446 of this part, and may transfer funds in 
                accordance with the provisions of section 488 
                of this Act;
          [(3) provide that in the selection of students for 
        employment under such work-study program, only 
        students, who demonstrate financial need in accordance 
        with part F of this title, and who meet the 
        requirements of section 484 will be assisted, except 
        that--
                  [(A) if the institution's grant under this 
                part is directly or indirectly based in part on 
                the financial needdemonstrated by students who 
are (i) attending the institution less than full time, or (ii) 
independent students; and
                  [(B) if the total financial need of all such 
                less than full-time and independent students at 
                the institution exceeds 5 percent of the total 
                financial need of all students at such 
                institution,
        then at least 5 percent of the grant shall be made 
        available to such less than full-time and independent 
        students;]
          (3) provide that in the selection of students for 
        employment under such work-study program, only 
        students, who demonstrate financial need in accordance 
        with part F of this title, and who meet the 
        requirements of section 484 will be assisted, except 
        that if the institution's grant under this part is 
        directly or indirectly based in part on the financial 
        need demonstrated by students who are (A) attending the 
        institution less than full time, or (B) independent 
        students, then grant funds shall be made available to 
        such less than full-time and independent students;

           *       *       *       *       *       *       *

          (6) include provisions to make employment under such 
        work-study program reasonably available (to the extent 
        of available funds) to all eligible students in the 
        institution in need thereof[, and to make equivalent 
        employment offered or arranged by the institution 
        reasonably available (to the extent of available funds) 
        to all students in the institution who desire such 
        employment;];

           *       *       *       *       *       *       *

  (c) Private Sector Employment Agreement.--As part of its 
agreement described in subsection (b), an institution of higher 
education may, at its option, enter into an additional 
agreement with the Secretary which shall--
          (1) * * *

           *       *       *       *       *       *       *

          (4) provide that jobs under the work study program 
        will be academically relevant, to the maximum extent 
        practicable; and
          (5) provide that the for-profit organization will not 
        use funds made available under this part to pay any 
        employee who would otherwise be employed by the 
        organization.
  (d) Tutoring and Literacy Activities.--
          (1) Use of funds.--In any academic year to which 
        subsection (b)(2)(B) applies, an institution shall use 
        the amount required to be used in accordance with this 
        subsection to compensate (including compensation for 
        time spent in directly related training and travel) 
        students--
                  (A) employed as a reading tutor for children 
                who are in preschool through elementary school; 
                or
                  (B) employed in family literacy projects.
          (2) Priority for schools.--An institution shall--
                  (A) give priority, in using such funds, to 
                the employment of students in the provision of 
                tutoring services in schools that--
                          (i) are identified for school 
                        improvement under section 1116(c) of 
                        the Elementary and Secondary Education 
                        Act of 1965; or
                          (ii) are selected by a local 
                        educational agency under section 
                        15104(a)(2) of such Act; and
                  (B) ensure that any student compensated with 
                such funds who is employed in a school selected 
                under section 15104(a)(2) of the Elementary and 
                Secondary Education Act of 1965 is trained in 
                the instructional practices based on reliable, 
                replicable research on reading used by the 
                school pursuant to such section 15104.
          (3) Federal share.--The Federal share of the 
        compensation of work study students compensated under 
        this subsection may exceed 75 percent.
          (4) Waiver.--The Secretary may waive the requirements 
        of this subsection if the Secretary determines that 
        enforcing such requirements would cause a hardship for 
        students at the institution.
          (5) Return of funds.--Any institution that does not 
        use the amount required under this subsection, and that 
        does not request and receive a waiver from the 
        Secretary under paragraph (4), shall return to the 
        Secretary, at such time as the Secretary may require 
        for reallocation under paragraph (6), any balance of 
        such amount that is not used as so required.
          (6) Reallocation.--The Secretary shall reallot any 
        amounts returned pursuant to paragraph (5) among 
        institutions that used at least 4 percent of the total 
        amount of funds granted to such institution under this 
        section to compensate students employed in tutoring and 
        literacy activities in the preceding academic year. 
        Such funds shall be reallotted among such institutions 
        on the same basis as excess eligible amounts are 
        allocated to institutions pursuant to section 442(c). 
        Funds received by institutions pursuant to this 
        paragraph shall be used in the same manner as amounts 
        required to be used in accordance with this subsection.

           *       *       *       *       *       *       *


SEC. 445. FLEXIBLE USE OF FUNDS.

  (a) * * *
  (b) Carry-Back Authority.--(1) * * *

           *       *       *       *       *       *       *

  (3) An eligible institution may, with the permission of a 
student, make payments to the student under this part by 
crediting the student's account at the institution or by making 
a direct deposit to the student's account at a depository 
institution. An eligible institution may only credit the 
student's account at the institution for (A) tuition and fees, 
(B) in the case of institutionally owned housing, room and 
board, and (C) other institutionally provided goods and 
services.

SEC. 446. JOB LOCATION AND DEVELOPMENT PROGRAMS.

  (a) Agreements Required.--(1) The Secretary is authorized to 
enter into agreements with eligible institutions under which 
such institution may use not more than 10 percent or [$50,000] 
$60,000 of its allotment under section 442, whichever is less, 
to establish or expand a program under which such institution, 
separately or in combination with other eligible institutions, 
locates and develops jobs, including [community service jobs, 
for currently enrolled students] community service jobs and 
cooperative education jobs, for currently enrolled students, 
including students participating in work-study programs under 
this part.

           *       *       *       *       *       *       *

  (b) Contents of Agreements.--Agreements under subsection (a) 
shall--
          (1) * * *

           *       *       *       *       *       *       *

          (4) provide that the institution will notify the 
        Secretary if the institution will use funds under this 
        section to develop cooperative education jobs and will 
        provide assurances that--
                  (A) the funds provided under this paragraph 
                will supplement and not supplant any 
                cooperative education funds available to the 
                institution;
                  (B) in the case of 2-year programs, funds 
                will be used to develop and expand cooperative 
                education, jobs for associate degree or 
                certificate students only;
                  (C) the work portion of a cooperative 
                education job developed or expanded under this 
                paragraph will be related to a student's 
                academic program; and
                  (D) the institution will furnish the 
                Secretary a report on cooperative education 
                jobs expanded and developed under this 
                paragraph, including--
                          (i) how the funds were used;
                          (ii) a list of employers and whether 
                        the employer is a for-profit or not-
                        for-profit entity; and
                          (iii) the employers' role in the 
                        cooperative education job.
          [(4)] (5) provide satisfactory assurance that the 
        location or development of jobs pursuant to programs 
        assisted under this section will not result in the 
        displacement of employed workers or impair existing 
        contracts for services;
          [(5)] (6) provide satisfactory assurance that Federal 
        funds used for the purpose of this section can 
        realistically be expected to help generate student 
        wages exceeding, in the aggregate, the amount of such 
        funds, and that if such funds are used to contract with 
        another organization, appropriate performance standards 
        are part of such contract; and
          [(6)] (7) provide that the institution will submit to 
        the Secretary an annual report on the uses made of 
        funds provided under this section and an evaluation of 
        the effectiveness of such program in benefiting the 
        students of such institution.

           *       *       *       *       *       *       *


SEC. 448. WORK COLLEGES.

  (a) * * *

           *       *       *       *       *       *       *

  (f) Authorization of Appropriations.--There are authorized to 
be appropriated to carry out this section $5,000,000 for fiscal 
year [1993] 1999 and such sums as may be necessary for each of 
the 4 succeeding fiscal years.

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

           *       *       *       *       *       *       *


SEC. 452. FUNDS FOR ORIGINATION OF DIRECT STUDENT LOANS.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Delivery of Loan Funds.--Loan funds shall be paid and 
delivered to an institution by the Secretary prior to the 
beginning of the payment period established by the Secretary in 
a manner that is consistent with payment and delivery of [basic 
grants] Federal Pell Grants under subpart 1 of part A of this 
title.

SEC. 453. SELECTION OF INSTITUTIONS FOR PARTICIPATION AND ORIGINATION.

  (a) [Phase-In of Program.--
          [(1) General authority.--] General Authority.--The 
        Secretary shall enter into agreements pursuant to 
        section 454(a) with institutions of higher education to 
        participate in the direct student loan program under 
        this part, and agreements pursuant to section 454(b) 
        with institutions of higher education, or consortia 
        thereof, to originate loans in such program, for 
        academic years beginning on or after July 1, 1994. 
        Alternative origination services, through which an 
        entity other than the participating institution at 
        which the student is in attendance originates the loan, 
        shall be provided by the Secretary, through 1 or more 
        contracts under section 456(b) or such other means as 
        the Secretary may provide, for students attending 
        participating institutions that do not originate direct 
        student loans under this part. Such agreements for the 
        academic year 1994-1995 shall, to the extent feasible, 
        be entered into not later than January 1, 1994.
          [(2) Transition provisions.--In order to ensure an 
        expeditious but orderly transition from the loan 
        programs under part B of this title to the direct 
        student loan program under this part, the Secretary 
        shall, in the exercise of the Secretary's discretion, 
        determine the number of institutions with which the 
        Secretary shall enter into agreements under subsections 
        (a) and (b) of section 454 for any academic year, 
        except that the Secretary shall exercise such 
        discretion so as to achieve the following goals:
                  [(A) for academic year 1994-1995, loans made 
                under this part shall represent 5 percent of 
                the new student loan volume for such year;
                  [(B) for academic year 1995-1996, loans made 
                under this part shall represent 40 percent of 
                the new student loan volume for such year;
                  [(C) for academic years 1996-1997 and 1997-
                1998, loans made under this part shall 
                represent 50 percent of the new student loan 
                volume for such years; and
                  [(D) for the academic year that begins in 
                fiscal year 1998, loans made under this part 
                shall represent 60 percent of the new student 
                loan volume for such year.
          [(3) Exception.--The Secretary may exceed the 
        percentage goals described in subparagraphs (C) or (D) 
        of paragraph (2) if the Secretary determines that a 
        higher percentage is warranted by the number of 
        institutions of higher education that desire to 
        participate in the program under this part and that 
        meet the eligibility requirements for such 
        participation.
          [(4) New student loan volume.--For the purpose of 
        this subsection, the term ``new student loan volume'' 
        means the estimated sum of all loans (other than 
        consolidation loans) that will be made, insured or 
        guaranteed under this part and part B in the year for 
        which the determination is made. The Secretary shall 
        base the estimate described in the preceding sentence 
        on the most recent program data available.]
  (b) Selection Criteria.--
          (1) * * *
          (2) Selection procedure.--The Secretary shall select 
        institutions for participation in the direct student 
        loan program under this part, and shall enter into 
        agreements with such institutions under section 454(a), 
        from among those institutions that submit the 
        applications described in paragraph (1), and meet such 
        other eligibility requirements as the Secretary shall 
        [prescribe, by, to the extent possible--
                  [(A)(i) categorizing such institutions 
                according to anticipated loan volume, length of 
                academic program, control of the institution, 
                highest degree offered, size of student 
                enrollment, geographic location, annual loan 
                volume, and default experience; and
                  [(ii) beginning in academic year 1995-1996 
                selecting institutions that are reasonably 
                representative of each of the categories 
                described pursuant to clause (i); and
                  [(B) if the Secretary determines it necessary 
                in order to carry out the purposes of 
                subparagraph (A) and attain such reasonable 
                representation (as required by subparagraph 
                (A)), selecting additional institutions.] 
                prescribe.
  (c) Selection Criteria for Origination.--
          (1) * * *
          (2) [Transition selection criteria] Selection 
        criteria.--[For academic year 1994-1995, the] The 
        Secretary may approve an institution to originate loans 
        only if such institution--
                  [(A) made loans under part E of this title in 
                academic year 1993-1994 and did not exceed the 
                applicable maximum default rate under section 
                462(g) for the most recent fiscal year for 
                which data are available;]
                  [(B)] (A) is not on the reimbursement system 
                of payment for any of the programs under 
                subpart 1 or 3 of part A, part C, or part E of 
                this title;
                  [(C)] (B) is not overdue on program or 
                financial reports or audits required under this 
                title;
                  [(D)] (C) is not subject to an emergency 
                action, or a limitation, suspension, or 
                termination under section 428(b)(1)(T), 432(h), 
                or 487(c);
                  [(E)] (D) 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.
          (3) Regulations governing approval [after 
        transition].--[For academic year 1995-1996 and 
        subsequent academic years, the] The Secretary shall 
        promulgate and publish in the Federal Register 
        regulations governing the approval of institutions to 
        originate loans under this part in accordance with 
        section 457(a)(2).

           *       *       *       *       *       *       *


SEC. 455. TERMS AND CONDITIONS OF LOANS.

  (a) * * *
  [(b) Interest Rate.--
          [(1) Rates for fdsl and fdusl.--For Federal Direct 
        Stafford Loans and Federal Direct Unsubsidized Stafford 
        Loans for which the first disbursement is made on or 
        after July 1, 1994, the applicable rate of interest 
        shall, during any 12-month period beginning on July 1 
        and ending on June 30, be determined on the preceding 
        June 1 and be equal to--
                  [(A) the bond equivalent rate of 91-day 
                Treasury bills auctioned at the final auction 
                held prior to such June 1; plus
                  [(B) 3.1 percent,
        except that such rate shall not exceed 8.25 percent.
          [(2) In school and grace period rules.--(A) 
        Notwithstanding the provisions of paragraph (1), but 
        subject to paragraph (3), with respect to any Federal 
        Direct Stafford Loan or Federal Direct Unsubsidized 
        Stafford Loan for which the first disbursement is made 
        on or after July 1, 1995, the applicable rate of 
        interest for interest which accrues--
                  [(i) prior to the beginning of the repayment 
                period of the loan; or
                  [(ii) during the period in which principal 
                need not be paid (whether or not such principal 
                is in fact paid) by reason of a provision 
                described in section 428(b)(1)(M) or 
                427(a)(2)(C),
        shall not exceed the rate determined under subparagraph 
        (B).
          [(B) For the purpose of subparagraph (A), the rate 
        determined under this subparagraph shall, during any 
        12-month period beginning on July 1 and ending on June 
        30, be determined on the preceding June 1 and be equal 
        to--
                  [(i) the bond equivalent rate of 91-day 
                Treasury bills auctioned at the final auction 
                prior to such June 1; plus
                  [(ii) 2.5 percent,
        except that such rate shall not exceed 8.25 percent.
          [(3) Out-year rule.--Notwithstanding paragraphs (1) 
        and (2), for Federal Direct Stafford Loans and Federal 
        Direct Unsubsidized Stafford Loans made on or after 
        July 1, 1998, the applicable rate of interest shall, 
        during any 12-month period beginning on July 1 and 
        ending on June 30, be determined on the preceding June 
        1 and be equal to--
                  [(A) the bond equivalent rate of the security 
                with a comparable maturity as established by 
                the Secretary; plus
                  [(B) 1.0 percent,
        except that such rate shall not exceed 8.25 percent.
          [(4) Rates for fdplus.--(A) For Federal Direct PLUS 
        Loans for which the first disbursement is made on or 
        after July 1, 1994, the applicable rate of interest 
        shall, during any 12-month period beginning on July 1 
        and ending on June 30, be determined on the preceding 
        June 1 and be equal to--
                  [(i) the bond equivalent rate of 52-week 
                Treasury bills auctioned at final auction held 
                prior to such June 1; plus
                  [(ii) 3.1 percent,
        except that such rate shall not exceed 9 percent.
          [(B) For Federal Direct PLUS loans made on or after 
        July 1, 1998, the applicable rate of interest shall, 
        during any 12-month period beginning on July 1 and 
        ending on June 30, be determined on the preceding June 
        1 and be equal to--
                  [(i) the bond equivalent rate of the security 
                with a comparable maturity as established by 
                the Secretary; plus
                  [(ii) 2.1 percent,
        except that such rate shall not exceed 9 percent.
          [(5) Publication.--The Secretary shall determine the 
        applicable rates of interest under this subsection 
        after consultation with the Secretary of the Treasury 
        and shall publish such rate in the Federal Register as 
        soon as practicable after the date of determination.]
  (b) Interest Rate.--
          (1) Rates for fdsl and fdusl.--For Federal Direct 
        Stafford Loans and Federal Direct Unsubsidized Stafford 
        Loans for which the first disbursement is made on or 
        after July 1, 1998, the applicable rate of interest 
        shall, during any 12-month period beginning on July 1 
        and ending on June 30, be determined on the preceding 
        June 1 and be equal to--
                  (A) the bond equivalent rate of 91-day 
                Treasury bills auctioned at the final auction 
                held prior to such June 1; plus
                  (B) 2.3 percent,
        except that such rate shall not exceed 8.25 percent.
          (2) In school and grace period rules.--With respect 
        to any Federal Direct Stafford Loan or Federal Direct 
        Unsubsidized Stafford Loan for which the first 
        disbursement is made on or after July 1, 1995, the 
        applicable rate of interest for interest which 
        accrues--
                  (A) prior to the beginning of the repayment 
                period of the loan; or
                  (B) during the period in which principal need 
                not be paid (whether or not such principal is 
                in fact paid) by reason of a provision 
                described in section 428(b)(1)(M) or 
                427(a)(2)(C),
        shall be determined under paragraph (1) by substituting 
        ``1.7 percent'' for ``2.3 percent''.
          (3) PLUS loans.--With respect to Federal Direct PLUS 
        Loan for which the first disbursement is made on or 
        after July 1, 1998, the applicable rate of interest 
        shall be determined under paragraph (1)--
                  (A) by substituting ``3.1 percent'' for ``2.3 
                percent''; and
                  (B) by substituting ``9.0 percent'' for 
                ``8.25 percent''.
          (4) Repayment incentives.--Notwithstanding any other 
        provision of this part, the Secretary is authorized to 
        prescribe in regulation such reductions in the interest 
        rate paid by a borrower of a loan made under this part 
        as the Secretary determines appropriate to encourage 
        on-time repayment. Such reductions may be offered only 
        if the Secretary determines they are both cost neutral 
        and in the best financial interest of the Federal 
        Government. Any increase in subsidy costs resulting 
        from such reductions must be completely offset by 
        corresponding savings in funds available for the Direct 
        Loan Program in that fiscal year from section 458 and 
        other administrative accounts.
          (5) Publication.--The Secretary shall determine the 
        applicable rates of interest under this subsection 
        after consultation with the Secretary of the Treasury 
        and shall publish such rate in the Federal Register as 
        soon as practicable after the date of determination.

           *       *       *       *       *       *       *

  (g) Federal Direct Consolidation Loans.--A borrower of a loan 
made under this part may consolidate such loan with the loans 
described in section 428C(a)(4) [only under such terms and 
conditions as the Secretary shall establish pursuant to section 
457(a)(1) or regulations promulgated under this part.]. Loans 
made under this subsection shall be known as ``Federal Direct 
Consolidation Loans''.

           *       *       *       *       *       *       *

  (j) Loan Disbursement.--
          (1) * * *
          (2) Payment periods.--The Secretary shall establish 
        periods for the payments described in paragraph (1) in 
        a manner consistent with payment of [basic grants] 
        Federal Pell Grants under subpart 1 of part A of this 
        title.
  (k) Fiscal Control and Fund Accountability.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Transaction histories.--All transaction histories 
        under this part shall be maintained using the same 
        system designated by the Secretary for the provision of 
        [basic grants] Federal Pell Grants under subpart 1 of 
        part A of this title.

SEC. 456. CONTRACTS.

  (a) * * *
  (b) Contracts for Origination, Servicing, and Data Systems.--
The Secretary may enter into contracts for--
          (1) * * *

           *       *       *       *       *       *       *

          (3) the establishment and operation of 1 or more data 
        systems for the maintenance of records on all loans 
        made under this part; and
          [(4) services to assist in the orderly transition 
        from the loan programs under part B to the direct 
        student loan program under this part; and]
          [(5)] (4) such other aspects of the direct student 
        loan program as the Secretary determines are necessary 
        to ensure the successful operation of the program.

           *       *       *       *       *       *       *


SEC. 458. FUNDS FOR ADMINISTRATIVE EXPENSES.

  (a) Administrative Expenses.--
          (1) In general.--Each fiscal year, there shall be 
        available to the Secretary from funds not otherwise 
        appropriated, funds to be obligated for--
                  (A) administrative costs under this part and 
                part B, including the costs of the direct 
                student loan programs under this part, and
                  [(B) administrative cost allowances payable 
                to guaranty agencies under part B and 
                calculated in accordance with paragraph (2),
        not to exceed (from such funds not otherwise 
        appropriated) $507,000,000 in fiscal year 1998, 
        $610,000,000 in fiscal year 1999, $705,000,000 in 
        fiscal year 2000, $750,000,000 in fiscal year 2001, and 
        $750,000,000 in fiscal year 2002. Administrative cost 
        allowances under subparagraph (B) of this paragraph 
        shall be paid quarterly and used in accordance with 
        section 428(f). The Secretary may carry over funds 
        available under this section to a subsequent fiscal 
        year.
          [(2) Calculation basis.--Administrative cost 
        allowances payable to guaranty agencies under paragraph 
        (1)(B) shall be calculated on the basis of 0.85 percent 
        of the total principal amount of loans upon which 
        insurance was issued in excess of $8,200,000,000 in 
        fiscal year 1997 and upon which insurance is issued on 
        or after October 1, 1997, except that such allowances 
        shall not exceed--
                  [(A) $170,000,000 for each of the fiscal 
                years 1998 and 1999; or
                  [(B) $150,000,000 for each of the fiscal 
                years 2000, 2001, and 2002.]
                  (B) account maintenance fees payable to 
                guaranty agencies under part B and calculated 
                in accordance with paragraph (2),
        not to exceed (from such funds not otherwise 
        appropriated) $626,000,000 in fiscal year 1999, 
        $726,000,000 in fiscal year 2000, $770,000,000 in 
        fiscal year 2001, $780,000,000 in fiscal year 2002, and 
        $795,000,000 in fiscal year 2003. Account maintenance 
        fees under subparagraph (B) of this paragraph shall be 
        paid quarterly and deposited in the Operating Fund 
        established under 422B. The Secretary may carry over 
        funds available under this section to a subsequent 
        fiscal year.
          (2) Calculation basis.--Account maintenance fees 
        payable to guaranty agencies under paragraph (1)(B) 
        shall be calculated for fiscal year 1999 and fiscal 
        year 2000, on the basis of 0.12 percent of the original 
        principal amount of outstanding loans on which 
        insurance was issued under part B, and for fiscal years 
        2001 and succeeding fiscal years, shall be calculated 
        on the basis of 0.10 percent of the original principal 
        amount of outstanding loans on which insurance was 
        issued under part B.

           *       *       *       *       *       *       *

  [(d) Notification.--In the event the Secretary finds it 
necessary to use the authority provided to the Secretary under 
subsection (a) to draw funds for administrative expenses from a 
future year's funds, no funds may be expended under this 
section unless the Secretary immediately notifies the 
Committees on Appropriations of the Senate and of the House of 
Representatives, and the Labor and Human Resources Committee of 
the Senate and the Education and Labor Committee of the House 
of Representatives, of such action and explain the reasons for 
such action.]

SEC. 459. AUTHORITY TO SELL LOANS.

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

SEC. 459A. CANCELLATION OF LOANS FOR CERTAIN PUBLIC SERVICE.

  (a) Cancellation of Percentage of Debt Based on Years of 
Qualifying Service.--
          (1) Functions of secretary.--The percent specified in 
        paragraph (4) of the total amount of any qualifying 
        loan shall be canceled for each complete year of 
        service by the borrower described in paragraph (3).
          (2) Qualifying loans.--
                  (A) In general.--For purposes of this 
                subsection, a loan is a qualifying loan if--
                          (i) the loan was a Federal Direct 
                        Stafford Loan made on or after the date 
                        of enactment of the Higher Education 
                        Amendments of 1998 to a borrower who, 
                        on the date of entering into the note 
                        or other written evidence of the loan, 
                        had no outstanding balance of principal 
                        or interest on any loan made before 
                        such date; and
                          (ii) the loan was obtained to cover 
                        the cost of instruction for an academic 
                        year after the first and second year of 
                        undergraduate education.
                  (B) Limitation.--The Secretary may not repay 
                loans described in subparagraph (A) to cover 
                the costs of instruction for more than two 
                academic years, or three academic years in the 
                case of a program of instruction normally 
                requiring five years.
                  (C) Treatment of consolidation loans.--A 
                Federal Direct Consolidation Loan may be a 
                qualifying loan for the purposes of this 
                subsection only to the extent that such loan 
                was used to repay a loan or loans that meet the 
                requirements of subparagraphs (A) and (B), as 
                determined in accordance with regulations 
                prescribed by the Secretary.
          (3) Qualifying service.--A loan shall be cancelled 
        under paragraph (1) for service by the borrower as a 
        full-time teacher for each complete academic year of 
        service, after completion of the second academic year 
        of service, in a public or other nonprofit private 
        elementary or secondary school--
                  (A) which is in the school district of a 
                local educational agency which is eligible in 
                such year for assistance pursuant to title I of 
                the Elementary and Secondary Education Act of 
                1965; and
                  (B) which for the purpose of this paragraph 
                and for that year has been determined by the 
                State educational agency of the State in which 
                the school is located to be a school in which 
                the enrollment of children counted under 
                section 1124(c) of the Elementary and Secondary 
                Education Act of 1965 exceeds 30 percent of the 
                total enrollment of that school.
          (4) Percentage of cancellation.--(A) The percent of a 
        loan which shall be canceled under paragraph (1) of 
        this subsection is at the rate of--
                  (i) 30 percent for the first or second 
                complete academic year of qualifying service as 
                described in paragraph (3) (after completion of 
                two years of service); and
                  (ii) 40 percent for the third complete year 
                of such qualifying service.
          (B) The total amount that may be canceled under this 
        subsection for any borrower shall not exceed $17,750.
          (C) If a portion of a loan is canceled under this 
        subsection for any year, the entire amount of interest 
        on such loan which accrues for such year shall be 
        canceled.
          (D) Nothing in this section shall be construed to 
        authorize refunding of any repayment of a loan.
          (5) Limitation on teacher eligibility.--
                  (A) Secondary school teachers.--A borrower 
                may not receive assistance under this 
                subsection by virtue of teaching in a secondary 
                school unless such borrower majored in the 
                subject area in which they are teaching.
                  (B) Elementary school teachers.--A borrower 
                may not receive assistance under this 
                subsection by virtue of teaching in a 
                elementary school unless such borrower 
                demonstrates, in accordance with State teacher 
                certification or licensing requirements, 
                subject matter knowledge and teaching skills in 
                reading, writing, mathematics, and other 
                subjects taught in elementary schools.
          (6) Definition.--For the purpose of this section, the 
        term ``year'' where applied to service as a teacher 
        means an academic year as defined by the Secretary.
          (7) Treatment of canceled amounts.--The amount of a 
        loan, and interest on a loan, which is canceled under 
        this section shall not be considered income for 
        purposes of the Internal Revenue Code of 1986.
          (8) Prevention of double benefits.--No 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.).
  (b)  Special Rules.--
          (1) List.--If the list of schools in which a teacher 
        may perform service pursuant to subsection (a)(3) is 
        not available before May 1 of any year, the Secretary 
        may use the list for the year preceding the year for 
        which the determination is made to make such service 
        determination.
          (2) Continuing eligibility.--Any teacher who performs 
        service in a school which--
                  (A) meets the requirements of subsection 
                (a)(3) in any year during such service; and
                  (B) in a subsequent year fails to meet the 
                requirements of such subsection,
        may continue to teach in such school and shall be 
        eligible for loan cancellation pursuant to subsection 
        (a)(1) with respect to such subsequent years.

                     Part E--Federal Perkins Loans

SEC. 461. APPROPRIATIONS AUTHORIZED.

  (a) * * *
  (b) Authorization of Appropriations.--(1) For the purpose of 
enabling the Secretary to make contributions to student loan 
funds established under this part, there are authorized to be 
appropriated $250,000,000 for fiscal year [1993] 1999 and such 
sums as may be necessary for each of the 4 succeeding fiscal 
years.
  (2) In addition to the funds authorized under paragraph (1), 
there are hereby authorized to be appropriated such sums for 
fiscal year [1997] 2003 and each of the 5 succeeding fiscal 
years as may be necessary to enable students who have received 
loans for academic years ending prior to October 1, [1997] 
2003, to continue or complete courses of study.

           *       *       *       *       *       *       *


SEC. 462. ALLOCATION OF FUNDS.

  (a) * * *
  [(b) Allocation of Excess Based on Pro Rata Share.--From one-
quarter of the remainder of the amount appropriated pursuant to 
section 461(b) for any fiscal year (after making the 
allocations required by subsection (a) of this section), the 
Secretary shall allocate to each eligible institution an amount 
which bears the same ratio to such one-quarter as--
          [(1) the amount the eligible institution receives for 
        such fiscal year under subsection (a), bears to
          [(2) the amount all such institutions receive under 
        such subsection (a).]
  [(c)] (b) Allocation of Excess Based on Share of Excess 
Eligible Amounts.--(1) From [three-quarters of the remainder] 
the remainder of the amount appropriated pursuant to section 
461(b) after making the allocations required by subsection (a) 
of this section, the Secretary shall allocate to each eligible 
institution which has an excess eligible amount an amount which 
bears the same ratio to such remainder as such excess eligible 
amount bears to the sum of the excess eligible amounts of all 
such eligible institutions (having such excess eligible 
amounts).
  (2) For any eligible institution, the excess eligible amount 
is the amount, if any, by which--
          (A)(i) that institution's eligible amount (as 
        determined under paragraph (3)), divided by (ii) the 
        sum of the eligible amounts of all institutions (as so 
        determined), multiplied by (iii) the amount 
        appropriated pursuant to section 461(b) for the fiscal 
        year; exceeds
          (B) the amount required to be allocated to that 
        institution under subsection (a),
except that an eligible institution which has a default rate in 
excess of the applicable maximum default rate under subsection 
[(g)] (f) may not receive an allocation under this paragraph.
  (3) For any eligible institution, the eligible amount of that 
institution is equal to--
          (A) the amount of the institution's self-help need, 
        as determined under subsection [(d)] (c); minus
          (B) the institution's anticipated collections; 
        multiplied by
          (C) the institution's default penalty, as determined 
        under subsection [(f)] (e);
except that, if the institution has a default rate in excess of 
the applicable maximum default rate under subsection [(g)] (f), 
the eligible amount of that institution is zero.
  [(d)] (c) Determination of Institution's Self-Help Need.--(1) 
The amount of an institution's self-help need is equal to the 
sum of the self-help need of the institution's eligible 
undergraduate students and the self-help need of the 
institution's eligible graduate and professional students.

           *       *       *       *       *       *       *

  [(e)] (d) Anticipated Collections.--(1) An institution's 
anticipated collections are equal to the amount which was 
collected during the second year preceding the beginning of the 
award period, multiplied by 1.21.

           *       *       *       *       *       *       *

  [(f)] (e) Default Reduction and Default Penalties.--(1) For 
any fiscal year prior to fiscal year 1994, any institution 
which has a default rate which equals or exceeds 7.5 percent 
but does not exceed the maximum default rate applicable to the 
award year under subsection [(g)] (f), the institution's 
default penalty is a percentage equal to the complement of such 
default rate. For any institution which has a default rate that 
does not exceed 7.5 percent, the institution's default penalty 
is equal to one.
  (2) For fiscal year 1994 and any succeeding fiscal year, any 
institution with a cohort default rate (as defined under 
subsection (h)) which--
          (A) equals or exceeds 15 percent, shall establish a 
        default reduction plan pursuant to regulations issued 
        by the Secretary, except that a plan shall not be 
        required with respect to any such institution that has 
        a default rate of less than 20 percent and has less 
        than 100 students who have loans under this part in any 
        academic year;

           *       *       *       *       *       *       *

  [(g)] (f) Applicable Maximum Default Rate.--(1) For award 
years 1992 and 1993, the applicable maximum default rate is 15 
percent.
  (2) For award year 1994 and subsequent years, the maximum 
cohort default rate is 30 percent.
  [(h)] (g) Definitions of Default Rate and Cohort Default 
Rate.--(1) * * *

           *       *       *       *       *       *       *

  (5) For the purpose of this subsection, the term 
``satisfactory arrangements to resume payment'' includes--
          (A) receipt of voluntary monthly payments for three 
        consecutive months after the time periods specified in 
        paragraph (4);
          (B) receipt of voluntary payments sufficient to bring 
        the loan current prior to the calculation being made 
        for any award year under paragraph (3);
          (C) obtaining any deferment, postponement, 
        rehabilitation, forbearance, or cancellation of the 
        loan after the time periods specified in paragraph (4), 
        but prior to the calculation being made for any award 
        year under paragraph (3);
          (D) receipt of the full amount due on the loan after 
        the time periods specified in paragraph (4), but prior 
        to the calculation being made for any award year under 
        paragraph (3); or
          (E) any other arrangements to resume payment which 
        the Secretary determines to be satisfactory.
  [(i)] (h) Filing Deadlines.--The Secretary shall, from time 
to time, set dates before which institutions must file 
applications for allocations under this part.
  [(j)] (i) Reallocation of Excess Allocations.--
          (1) * * *
          (2) Excess eligible amount.--For any participating 
        institution, the excess eligible amount is the amount, 
        if any, by which--
                  (A)(i) that institution's eligible amount (as 
                determined under paragraph (3) of subsection 
                [(c)] (b)), divided by (ii) the sum of the 
                eligible amounts of all participating 
                institutions (as determined under paragraph 
                (3)), multiplied by (iii) the amount of funds 
                available for reallocation under this 
                subsection; exceeds
                  (B) the amount required to be allocated to 
                that institution under subsection [(c) of 
                section 462] (b).

           *       *       *       *       *       *       *


SEC. 463. AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Cooperative Agreements With Credit Bureau 
Organizations.--(1) * * *

           *       *       *       *       *       *       *

  (5) Each institution of higher education shall notify the 
appropriate credit bureau organizations whenever a borrower of 
a loan that is made and held by the institution and that is in 
default makes 12 consecutive monthly payments on such loan, for 
the purpose of encouraging such organizations to update the 
status of information maintained with respect to that borrower.

           *       *       *       *       *       *       *

  (f) Incentive Repayment Programs.--
          (1) Program authorized.--Any institution of higher 
        education participating in the program under this part 
        may establish, with the approval of the Secretary, an 
        incentive repayment program designed to reduce defaults 
        on loans under this part and to assist in replenishing 
        the student loan fund established under this part.
          (2) Contents of program.--An incentive repayment 
        program under this part may contain provisions that--
                  (A) offer a reduction in the interest rate on 
                a loan on which the borrower has made 48 
                consecutive monthly payments, but in no event 
                may the interest rate be reduced by more than 
                one percent;
                  (B) provide for a discount on the balance 
                owed on a loan on which the borrower pays the 
                principal and interest in full prior to the end 
                of the applicable repayment period, but in no 
                event shall such discount exceed 5 percent of 
                the unpaid principal balance due on the loan at 
                the time the early repayment is made; and
                  (C) include such other incentive repayment 
                options as the institution determines, with the 
                approval of the Secretary, will carry out the 
                objectives of this subsection.
          (3) No net cost to the government.--No incentive 
        option contained in a program authorized by this 
        subsection may be charged to the Federal Government.

           *       *       *       *       *       *       *


SEC. 464. TERMS OF LOANS.

  (a) Terms and Conditions.--(1) * * *
  (2)(A) * * *
  (B) Except as provided in paragraph (4), [the aggregate of 
the loans for all years] the aggregate unpaid principal amount 
for all loans made to a student by institutions of higher 
education from loan funds established pursuant to agreements 
under this part may not exceed--
          (i) * * *

           *       *       *       *       *       *       *

  (b) Demonstration of Need and Eligibility Required.--[(1)] A 
loan from a student loan fund assisted under this part may be 
made only to a student who demonstrates financial need in 
accordance with part F of this title, who meets the 
requirements of section 484, and who provides the institution 
with the student's drivers license number, if any, at the time 
of application for the loan.
  [(2) If the institution's capital contribution under section 
462 is directly or indirectly based in part on the financial 
need demonstrated by students who are (A) attending the 
institution less than full time, or (B) independent students, 
and if the total financial need of all such less than full-time 
and independent students at the institution exceeds 5 percent 
of the total financial need of all students at such 
institution, then at least 5 percent of such loans shall be 
made available to such less than full-time and independent 
students.]
  (c) Contents of Loan Agreement.--(1) * * *
  (2)(A) No repayment of principal of, or interest on, any loan 
from a student loan fund assisted under this part shall be 
required during any period--
          (i) * * *

           *       *       *       *       *       *       *

          (iv) during which the borrower is engaged in service 
        described in section 465(a)(2);
and provides that any such period shall not be included in 
determining the 10-year period described in [subparagraph (B)] 
subparagraph (A) of paragraph (1).
  (B) No repayment of principal of, or interest on, any loan 
for any period described in subparagraph (A) shall begin until 
6 months after the completion of such period.
  (C) An individual with an outstanding loan balance who meets 
the eligibility criteria for a deferment described in 
subparagraph (A) as in effect on the date of enactment of this 
subparagraph shall be eligible for deferment under this 
paragraph notwithstanding any contrary provision of the 
promissory note under which the loan or loans were made, and 
notwithstanding any amendment (or effectivedate provision 
relating to any amendment) to this section made prior to the date of 
such deferment.

           *       *       *       *       *       *       *

  (g) Rehabilitation of Loans.--(1)(A) If the borrower of a 
loan made under this part who has defaulted on the loan makes 
12 on-time, consecutive, monthly payments of amounts owed on 
the loan, the loan shall be considered rehabilitated, and the 
institution that made the loan (or the Secretary, in the case 
of a loan held by the Secretary) shall instruct any credit 
reporting organization to which the default was reported to 
remove the default from the borrower's credit history.
  (B) As long as the borrower continues to make scheduled 
repayments on a loan rehabilitated under this paragraph, the 
rehabilitated loan shall be subject to the same terms and 
conditions, and qualify for the same benefits and privileges, 
as other loans made under this part.
  (C) The borrower of a rehabilitated loan shall not be 
precluded by section 484 from receiving additional grant, loan, 
or work assistance under this title (for which he or she is 
otherwise eligible) on the basis of defaulting on the loan 
prior to such rehabilitation.
  (D) A borrower may obtain the benefit of this paragraph with 
respect to rehabilitating the loan only once.
  (2) If the borrower of the loan made under this part who has 
defaulted on that loan makes 6 on-time, consecutive, monthly 
payments of amounts owed on such loan, the borrower's 
eligibility for grant, loan, or work assistance under this 
title shall be restored. A borrower may obtain the benefit of 
this paragraph with respect to restored eligibility only once.
  (h) Discharge.--
          (1) In general.--If a student borrower who received a 
        loan made under this part on or after January 1, 1986, 
        is unable to complete the program in which such student 
        is enrolled due to the closure of the institution, then 
        the Secretary shall discharge the borrower's liability 
        on the loan (including interest and collection fees) by 
        repaying the amount owed on the loan and shall 
        subsequently pursue any claim available to such 
        borrower against the institution and its affiliates and 
        principals, or settle the loan obligation.
          (2) Assignment.--A borrower whose loan has been 
        discharged pursuant to this subsection shall be deemed 
        to have assigned to the United States the right to a 
        loan refund up to the amount discharged against the 
        institution and its affiliates and principals.
          (3) Eligibility for additional assistance.--The 
        period of a student's assistance at an institution at 
        which the student was unable to complete a course of 
        study due to the closing of the institution shall not 
        be considered for purposes of calculating the student's 
        period of eligibility for additional assistance under 
        this title.
          (4) Special rule.--A borrower whose loan has been 
        discharged pursuant to this subsection shall not be 
        precluded, because of that discharge, from receiving 
        additional grant, loan, or work assistance under this 
        title for which the borrower would be otherwise 
        eligible (but for the default on the discharged loan). 
        The amount discharged under this subsection shall be 
        treated the same as loans under section 465(a)(5).
          (5) Reporting.--The Secretary or institution, as the 
        case may be, shall report to credit bureaus with 
        respect to loans that have been discharged pursuant to 
        this subsection.

SEC. 465. CANCELLATION OF LOANS FOR CERTAIN PUBLIC SERVICE.

  (a) Cancellation of Percentage of Debt Based on Years of 
Qualifying Service.--(1) * * *
  (2) Loans shall be canceled under paragraph (1) for service--
          (A) * * *

           *       *       *       *       *       *       *

          (C) as a full-time special education teacher, 
        including teachers of infants, toddlers, children, or 
        youth with disabilities in a public or other nonprofit 
        elementary or secondary school system, or as a full-
        time qualified professional provider of early 
        intervention services in a public or other nonprofit 
        program under public supervision by the lead agency as 
        authorized in [section 676(b)(9)] section 635(a)(10) of 
        the Individuals With Disabilities Education Act;

           *       *       *       *       *       *       *

          [(H) as a full-time nurse or medical technician 
        providing health care services; or]
          (H) as a full-time nurse or medical technician 
        providing health care services;
          (I) as a full-time employee of a public or private 
        nonprofit child or family service agency who is 
        providing, or supervising the provision of, services to 
        high-risk children who are from low-income communities 
        and the families of such children[.];
          (J) as a member of the Commissioned Corps of the 
        Public Health Service of the United States; or
          (K) as a non-physician mental health professional 
        providing health care services in a health professional 
        shortage area designated under section 332 of the 
        Public Health Service Act.
For the purpose of this paragraph, the term ``children with 
disabilities'' has the meaning set forth in [section 602(a)(1)] 
section 602(3) of the Individuals with Disabilities Education 
Act.

           *       *       *       *       *       *       *

  (7) An individual with an outstanding loan obligation who 
performs service of any type that is described in paragraph (2) 
as in effect on the date of enactment of this paragraph shall 
be eligible for cancellation under this section for such 
service notwithstanding any contrary provision of the 
promissory note under which the loan or loans were made, and 
notwithstanding any amendment (or effective date provision 
relating to any amendment) to this section made prior to the 
date of such service.
  (b) Reimbursement for Cancellation.--The Secretary shall pay 
to each institution for each fiscal year an amount equal to the 
aggregate of the amounts of loans from its student loan fund 
which are canceled pursuant to this section for such year, 
minus an amount equal to the aggregate of the amounts of any 
such loans so canceled which were made from Federal capital 
contributions to its student loan fund provided by the 
Secretary under section 468. None of the funds appropriated 
pursuant to section 461(b) shall be available for payments 
pursuant to this subsection. To the extent feasible, the 
Secretary shall pay the amounts for which any institution 
qualifies under this subsection no later than three months 
after the institution files an institutional application for 
campus-based funds.

           *       *       *       *       *       *       *


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

  (a) In General.--After September 30, [1996] 2003, and not 
later than March 31, [1997] 2004, there shall be a capital 
distribution of the balance of the student loan fund 
established under this part by each institution of higher 
education as follows:
          (1) The Secretary shall first be paid an amount which 
        bears the same ratio to the balance in such fund at the 
        close of September 30, [1996] 2003, as the total amount 
        of the Federal capital contributions to such fund by 
        the Secretary under this part bears to the sum of such 
        Federal contributions and the institution's capital 
        contributions to such fund.
          (2) The remainder of such balance shall be paid to 
        the institution.
  (b) Distribution of Late Collections.--After March 31, 2005, 
each institution with which the Secretary has made an agreement 
under this part, shall pay to the Secretary the same 
proportionate share of amounts received by this institution 
after September 30, [1996] 2003, in payment of principal and 
interest on student loans made from the student loan fund 
established pursuant to such agreement (which amount shall be 
determined after deduction of any costs of litigation incurred 
in collection of the principal or interest on loans from the 
fund and not already reimbursed from the fund or from such 
payments of principal or interest), as was determined for the 
Secretary under subsection (a).
  (c) Distribution of Excess Capital.--(1) Upon a finding by 
the institution or the Secretary prior to October 1, [1997] 
2004, that the liquid assets of a student loan fund established 
pursuant to an agreement under this part exceed the amount 
required for loans or otherwise in the foreseeable future, and 
upon notice to such institution or to the Secretary, as the 
case may be, there shall be, subject to such limitations as may 
be included in regulations of the Secretary or in such 
agreement, a capital distribution from such fund. Such capital 
distribution shall be made as follows:
          (A) * * *

           *       *       *       *       *       *       *


SEC. 467. COLLECTION OF DEFAULTED LOANS: PERKINS LOAN REVOLVING FUND.

  (a) * * *

           *       *       *       *       *       *       *

  [(c) Perkins Loan Revolving Fund.--(1) There is established a 
Perkins Loan Revolving Fund which shall be available without 
fiscal year limitation to the Secretary to make payments under 
this part, in accordance with paragraph (2) of this subsection. 
There shall be deposited in the Perkins Revolving Loan Fund--
          [(A) all funds collected by the Secretary on any loan 
        referred, transferred, or assigned under paragraph 
        (5)(A), (5)(B)(i), or (6) of section 463(a);
          [(B) all funds collected by the Secretary on any loan 
        referred under paragraph (5)(B)(ii) of section 463(a);
          [(C) all funds paid to the Secretary under section 
        466(c)(1)(A);
          [(D) all funds from a student loan fund under this 
        part received by the Secretary as the result of the 
        closure of an institution of higher education;
          [(E) all funds received by the Secretary as a result 
        of an audit of a student loan fund established under 
        this part; and
          [(F) all funds which have been appropriated and which 
        the Secretary determines are not necessary for carrying 
        out section 465, relating to the cancellation of 
        certain loans under this part for qualifying service.
  [(2) Notwithstanding any other provision of law, the 
Secretary shall, from the Perkins Loan Revolving Fund 
established under paragraph (1), pay allocations of additional 
capital contributions to eligible institutions of higher 
education in accordance with section 462, except that funds 
described in subparagraph (B) of paragraph (1) shall be repaid 
to the institution of higher education which referred the loan, 
as specified in section 463(a)(5)(B)(ii). The Secretary shall 
make the payments required by this paragraph in a manner 
designed to maximize the availability of capital loan funds 
under this part.]

SEC. 468. GENERAL AUTHORITY OF SECRETARY.

  (a) In General.--In carrying out the provisions of this part, 
the Secretary is authorized--
          (1) * * *

           *       *       *       *       *       *       *

  (b) Student Status Confirmation Reports.--The Secretary shall 
ensure that borrowers under this part are included in the 
student status confirmation report required by the Secretary in 
the same manner as borrowers under parts B and D of this title.

           *       *       *       *       *       *       *


PART F--NEED ANALYSIS

           *       *       *       *       *       *       *


SEC. 472. COST OF ATTENDANCE.

  For the purpose of this title, the term ``cost of 
attendance'' means--
          (1) * * *
          (2) an allowance for books, supplies, transportation, 
        and miscellaneous personal expenses, including a 
        reasonable allowance for the rental or purchase of a 
        personal computer, for a student attending the 
        institution on at least a half-time basis, as 
        determined by the institution;

           *       *       *       *       *       *       *

          (10) for a student receiving all or part of the 
        student's instruction by means of telecommunications 
        technology, no distinction shall be made with respect 
        to the mode of instruction in determining costs[, but 
        this paragraph shall not be construed to permit 
        including the cost of rental or purchase of 
        equipment;];

           *       *       *       *       *       *       *


SEC. 474. DETERMINATION OF EXPECTED FAMILY CONTRIBUTION; DATA ELEMENTS.

  (a) * * *
  (b) Data Elements.--The following data elements are 
considered in determining the expected family contribution:
          (1) * * *

           *       *       *       *       *       *       *

          (3) the number of dependents in the family of the 
        student, excluding the student's parents, who are 
        enrolled or accepted for enrollment, on at least a 
        half-time basis, in a degree, certificate, or other 
        program leading to a recognized educational credential 
        at an institution of higher education that is an 
        eligible institution in accordance with the provisions 
        of section 487 and for whom the family may reasonably 
        be expected to contribute to their postsecondary 
        education;

           *       *       *       *       *       *       *


SEC. 475. FAMILY CONTRIBUTION FOR DEPENDENT STUDENTS.

  (a) * * *
  (b) Parents' Contribution From Adjusted Available Income.--
The parents' contribution from adjusted available income is 
equal to the amount determined by--
          (1) computing adjusted available income by adding--
                  (A) the parents' available income (determined 
                in accordance with subsection (c)); and
                  (B) the [parents' contribution] family 
                contribution from assets (determined in 
                accordance with subsection (d));

           *       *       *       *       *       *       *

          (3) dividing the assessment resulting under paragraph 
        (2) by the number of the family members, excluding the 
        student's parents, who are enrolled or accepted for 
        enrollment, on at least a half-time basis, in a degree, 
        certificate, or other program leading to a recognized 
        educational credential at an institution of higher 
        education that is an eligible institution in accordance 
        with the provisions of section 487 during the award 
        period for which assistance under this title is 
        requested;
except that the amount determined under this subsection shall 
not be less than zero.

           *       *       *       *       *       *       *

  (d) [Parents' Contribution] Family Contribution From 
Assets.--
          (1) In general.--The [parents'] family contribution 
        from assets is equal to--
                  (A) the [parental] family net worth 
                (determined in accordance with paragraph (2)); 
                minus

           *       *       *       *       *       *       *

          (2) [Parental] Family net worth.--The [parental] 
        family net worth is calculated by adding, for both the 
        parents and the dependent student--
                  (A) * * *

           *       *       *       *       *       *       *

  (g) Student Contribution From Available Income.--
          (1) * * *
          (2) Adjustment to student income.--The adjustment to 
        student income is equal to the sum of--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) an income protection allowance of 
                [$1,750; and] $3,000, or a successor amount 
                prescribed by the Secretary under section 478;
                  (E) the amount of any tax credit taken by the 
                student under section 25A of the Internal 
                Revenue Code of 1986[.]; and
                  (F) an allowance for parents' negative 
                available income, determined in accordance with 
                paragraph (6).

           *       *       *       *       *       *       *

          (6) Allowance for parents' negative available 
        income.--The allowance for parents' negative available 
        income is the amount, if any, by which the sum of the 
        amounts deducted under subparagraphs (A) through (F) of 
        paragraph (2) exceeds the parents' total income (as 
        defined in section 480).
  [(h) Student Contribution From Assets.--The student 
contribution from assets is determined by calculating the net 
assets of the student and multiplying such amount by 35 
percent, except that the result shall not be less than zero.]
  [(i)] (h) Adjustments to Parents' Contribution for Enrollment 
Periods Other Than 9 Months For Purposes Other Than Subpart 2 
of Part A of This Title.--For periods of enrollment other than 
9 months, the parents' contribution from adjusted available 
income (as determined under subsection (b)) is determined as 
follows for purposes other than subpart 2 of part A of this 
title:
          (1) * * *

           *       *       *       *       *       *       *

  (i) Adjustments to Students Contribution for Enrollment 
Periods of Less Than Nine Months.--For periods of enrollment of 
less than nine months, the student's contribution from adjusted 
available income (as determined under subsection (g)) is 
determined, for purposes other than subpart 2 of part A, by 
dividing amount determined under such subsection by nine, and 
multiplying the result by the number of months in the period of 
enrollment.

SEC. 476. FAMILY CONTRIBUTION FOR INDEPENDENT STUDENTS WITHOUT 
                    DEPENDENTS OTHER THAN A SPOUSE.

  (a) Computation of Expected Family Contribution.--For each 
independent student without dependents other than a spouse, the 
expected family contribution is determined by--
          (1) adding--
                  (A) the family's contribution from available 
                income (determined in accordance with 
                subsection (b)); and
                  (B) the family's contribution from assets 
                (determined in accordance with subsection (c)); 
                [and]
          (2) dividing the sum resulting under paragraph (1) by 
        the number of students who are enrolled or accepted for 
        enrollment, on at least a half-time basis, in a degree, 
        certificate, or other program leading to a recognized 
        educational credential at an institution of higher 
        education that is an eligible institution in accordance 
        with the provisions of section 487 during the award 
        period for which assistance under this title is 
        requested; and
          (3) for periods of enrollment of other than 9 months, 
        for purposes other than subpart 2 of part A--
                  (A) dividing the quotient resulting under 
                paragraph (2) by nine; and
                  (B) multiplying the result by the number of 
                months in the period of enrollment;
except that the amount determined under this subsection shall 
not be less than zero.
  (b) Family's Contribution From Available Income.--
          (1) In general.--The family's contribution from 
        income is determined by--
                  (A) deducting from total income (as defined 
                in section 480)--
                          (i) * * *

           *       *       *       *       *       *       *

                          (iv) an income protection [allowance 
                        of--] allowance of the following amount 
                        (or a successor amount prescribed by 
                        the Secretary under section 478)--
                                  (I) [$3,000] $5,500 for 
                                single students;
                                  (II) [$3,000] $5,500 for 
                                married students where both are 
                                enrolled pursuant to subsection 
                                (a)(2); and
                                  (III) [$6,000] $8,500 for 
                                married students where one is 
                                enrolled pursuant to subsection 
                                (a)(2);

           *       *       *       *       *       *       *


SEC. 477. FAMILY CONTRIBUTION FOR INDEPENDENT STUDENTS WITH DEPENDENTS 
                    OTHER THAN A SPOUSE.

  (a) Computation of Expected Family Contribution.--For each 
independent student with dependents other than a spouse, the 
expected family contribution is equal to the amount determined 
by--
          (1) * * *
          (2) assessing such adjusted available income in 
        accordance with an assessment schedule set forth in 
        subsection (d); [and]
          (3) dividing the assessment resulting under paragraph 
        (2) by the number of family members who are enrolled or 
        accepted for enrollment, on at least a half-time basis, 
        in a degree, certificate, or other program leading to a 
        recognized educational credential at an institution of 
        higher education that is an eligible institution in 
        accordance with the provisions of section 487 during 
        the award period for which assistance under this title 
        is requested; and
          (4) for periods of enrollment of other than 9 months, 
        for purposes other than subpart 2 of part A--
                  (A) dividing the quotient resulting under 
                paragraph (3) by nine; and
                  (B) multiplying the result by the number of 
                months in the period of enrollment;
except that the amount determined under this subsection shall 
not be less than zero.

           *       *       *       *       *       *       *


SEC. 478. REGULATIONS; UPDATED TABLES.

  (a) * * *
  (b) Income Protection Allowance.--[For each academic year]
          (1) Revised tables.--For each academic year after 
        academic year 1993-1994, the Secretary shall publish in 
        the Federal Register a revised table of income 
        protection allowances for the purpose of sections 
        475(c)(4) and 477(b)(4). Such revised table shall be 
        developed by increasing each of the dollar amounts 
        contained in the table in each such section by a 
        percentage equal to the estimated percentage increase 
        in the Consumer Price Index (as determined by the 
        Secretary) between December 1992 and the December next 
        preceding the beginning of such academic year, and 
        rounding the result to the nearest $10.
          (2) Revised amounts.--For each academic year after 
        academic year 1997-1998, the Secretary shall publish in 
        the Federal Register revised income protection 
        allowances for the purpose of sections 475(g)(2)(D) and 
        476(b)(1)(A)(iv). Such revised allowances shall be 
        developed by increasing each of the dollar amounts 
        contained in such section by a percentage equal to the 
        estimated percentage increase in the Consumer Price 
        Index (as determined by the Secretary) between December 
        1996 and the December next preceding the beginning of 
        such academic year, and rounding the result to the 
        nearest $10.

           *       *       *       *       *       *       *


SEC. 479A. DISCRETION OF STUDENT FINANCIAL AID ADMINISTRATORS.

  (a) In General.--Nothing in this part shall be interpreted as 
limiting the authority of the financial aid administrator, on 
the basis of adequate documentation, to make adjustments on a 
case-by-case basis to the cost of attendance or the values of 
the data items required to calculate the expected student or 
parent contribution (or both) or, in extraordinary 
circumstances, the amount of the expected family contribution, 
to allow for treatment of an individual eligible applicant with 
special circumstances. However, this authority shall not be 
construed to permit aid administrators to deviate from the 
contributions expected in the absence of special circumstances. 
Special circumstances may include tuition expenses at an 
elementary or secondary school, medical or dental expenses not 
covered by insurance, unusually high child care costs, recent 
unemployment of a family member, or other changes in a family's 
income or assets or a student's status. Extraordinary 
circumstances shall be defined by the Secretary by regulation. 
Special circumstances shall be conditions that differentiate an 
individual student from a class of students rather than 
conditions that exist across a class of students. Adequate 
documentation for such adjustments shall substantiate such 
special circumstances of individual students. In addition, 
nothing in this title shall be interpreted as limiting the 
authority of the student financial aid administrator in such 
cases to request and use supplementary information about the 
financial status or personal circumstances of eligible 
applicants in selecting recipients and determining the amount 
of awards under this title. No student or parent shall be 
charged a fee for collecting, processing, or delivering such 
supplementary information.

           *       *       *       *       *       *       *

  [(c) Adjustments for Special Circumstances.--
          [(1) In general.--A student financial aid 
        administrator shall be considered to be making an 
        adjustment for special circumstances in accordance with 
        subsection (a) if--
                  [(A) in the case of a dependent student--
                          [(i) such student received a Federal 
                        Pell Grant as a dependent student in 
                        academic year 1992-1993 and the amount 
                        of such student's Federal Pell Grant 
                        for academic year 1993-1994 is at least 
                        $500 less than the amount of such 
                        student's Federal Pell Grant for 
                        academic year 1992-1993; and
                          [(ii) the decrease described in 
                        clause (i) is the direct result of a 
                        change in the determination of such 
                        student's need for assistance in 
                        accordance with this part that is 
                        attributable to the enactment of the 
                        Higher Education Amendments of 1992; 
                        and
                  [(B) in the case of a single independent 
                student--
                          [(i) such student received a Federal 
                        Pell Grant as a single independent 
                        student in academic year 1992-1993 and 
                        qualified as an independent student in 
                        accordance with section 480(d) for 
                        academic year 1993-1994, and the amount 
                        of such student's Federal Pell Grant 
                        for academic year 1993-1994 is at least 
                        $500 less than the amount of such 
                        student's Federal Pell Grant for 
                        academic year 1992-1993; and
                          [(ii) the decrease described in 
                        clause (i) is the direct result of a 
                        change in the determination of such 
                        student's need for assistance in 
                        accordance with this part that is 
                        attributable to the enactment of the 
                        Higher Education Amendments of 1992.
          [(2) Amount.--A financial aid administrator shall not 
        make an adjustment for special circumstances pursuant 
        to this subsection in an amount that exceeds one-half 
        of the differencebetween the amount of a student's 
Federal Pell Grant for academic year 1992-1993 and the amount of such 
student's Federal Pell Grant for academic year 1993-1994.
          [(3) Academic year limitation.--A financial aid 
        administrator shall make adjustments under this 
        subsection only for Federal Pell Grants awarded for 
        academic years 1993-1994, 1994-1995, and 1995-1996.
          [(4) Special rule.--Adjustments under this subsection 
        shall be made in any fiscal year only if an Act that 
        contains an appropriation for such fiscal year to carry 
        out this subsection is enacted on or after the date of 
        enactment of the Higher Education Technical Amendments 
        of 1993.
          [(5) Limitation.--Adjustments under this subsection 
        shall not be available for any academic year to any 
        student who, on the basis of the financial 
        circumstances of the student for the current academic 
        year, would not have been eligible for a grant under 
        this section in academic year 1992-1993.]
  (c) Refusal or Adjustment of Loan Certifications.--On a case-
by-case basis, an eligible institution may refuse to certify a 
statement which permits a student to receive a loan under part 
B, or refuse to make a loan under part D, or may certify a loan 
amount or make a loan that is less than the student's 
determination of need (as determined under this part), if the 
reason for the action is documented and provided in written 
form to the student and the student is afforded an opportunity 
to appeal the action in a timely fashion. No eligible 
institution shall discriminate against any borrower or 
applicant in obtaining a loan on the basis of race, national 
origin, religion, sex, marital status, age, or handicapped 
status.

           *       *       *       *       *       *       *


SEC. 480. DEFINITIONS.

  As used in this part:
  (a) * * *
  (j) Other Financial Assistance; Tuition Prepayment Plans.--
(1) * * *

           *       *       *       *       *       *       *

  (3) Notwithstanding paragraph (1), a post-service benefit 
under chapter 30 of title 38, United States Code, or a national 
service educational award or post-service benefit under title I 
of the National and Community Service Act of 1990 (42 U.S.C. 
12571 et seq.) shall not be treated as financial assistance for 
purposes of section 471(3).

           *       *       *       *       *       *       *


   Part G--General Provisions Relating to Student Assistance Programs

SEC. 481. DEFINITIONS.

  [(a) Institution of Higher Education.--(1) Subject to 
paragraphs (2) through (4) of this subsection, the term 
``institution of higher education'' for purposes of this title 
includes, in addition to the institutions covered by the 
definition in section 1201(a)--
          [(A) a proprietary institution of higher education;
          [(B) a postsecondary vocational institution; and
          [(C) only for the purposes of part B of this title, 
        an institution outside the United States which is 
        comparable to an institution of higher education as 
        defined in section 1201(a) and which has been approved 
        by the Secretary for the purpose of part B.
  [(2)(A) For the purpose of qualifying as an institution under 
paragraph (1)(C) of this subsection, the Secretary shall 
establish criteria by regulation for the approval of 
institutions outside the United States and for the 
determination that such institutions are comparable to an 
institution of higher education as defined in section 1201(a). 
In the case of a graduate medical school outside the United 
States, such criteria shall include a requirement that a 
student attending a graduate medical school outside the United 
States is ineligible for loans made, insured, or guaranteed 
under part B of this title unless--
          [(i)(I) at least 60 percent of those enrolled and at 
        least 60 percent of the graduates of the graduate 
        medical school outside the United States were not 
        persons described in section 484(a)(5) in the year 
        preceding the year for which a student is seeking a 
        loan under part B of this title; and
          [(II) at least 60 percent of the individuals who were 
        students or graduates of the graduate medical school 
        outside the United States (both nationals of the United 
        States and others) taking the examinations administered 
        by the Educational Commission for Foreign Medical 
        Graduates received a passing score in the year 
        preceding the year for which a student is seeking a 
        loan under part B of this title; or
          [(ii) the institution's clinical training program was 
        approved by a State as of January 1, 1992.
  [(B) For the purpose of qualifying as an institution under 
paragraph (1)(C), the Secretary shall establish an advisory 
panel of medical experts which shall--
          [(i) evaluate the standards of accreditation applied 
        to applicant foreign medical schools; and
          [(ii) determine the comparability of those standards 
        to standards for accreditation applied to United States 
        medical schools.
If such accreditation standards are determined not to be 
comparable, the foreign medical school shall be required to 
meet the requirements of section 1201(a).
  [(C) The failure of an institution outside the United States 
to provide, release, or authorize release to the Secretary of 
such information as may be required by subparagraph (A) of this 
paragraph shall render such institution ineligible for the 
purpose of part B of this title.
  [(D) The Secretary shall, not later than one year after the 
date of enactment of the Higher Education Amendments of 1992, 
prepare and submit to the Committee on Education and Labor of 
the House of Representatives and the Committee on Labor and 
Human Resources of the Senate a report on the implementation of 
the regulations required by subparagraph (A) of this paragraph.
  [(E) If, pursuant to this paragraph, an institution loses 
eligibility to participate in the programs under this title, 
then a student enrolled at such institution may, 
notwithstanding such loss of eligibility, continue to be 
eligible to receive a loan under part B while attending such 
institution for the academic year succeeding the academic year 
in which such loss of eligibility occurred.
  [(3) An institution shall not be considered to meet the 
definition of an institution of higher education in paragraph 
(1), if such institution--
          [(A) offers more than 50 percent of such 
        institution's courses by correspondence, unless the 
        institution is an institution that meets the definition 
        in section 521(4)(C) of the Carl D. Perkins Vocational 
        and Applied Technology Education Act;
          [(B) enrolls 50 percent or more of its students in 
        correspondence courses, unless the institution is an 
        institution that meets the definition in such section, 
        except that the Secretary, at the request of such 
        institution, may waive the applicability of this 
        subparagraph to such institution for good cause, as 
        determined by the Secretary in the case of an 
        institution of higher education that provides a 2-year 
        or 4-year program of instruction for which the 
        institution awards an associate or baccalaureate 
        degree;
          [(C) has a student enrollment in which more than 25 
        percent of the students are incarcerated, except that 
        the Secretary may waive the prohibition of this 
        subparagraph for a nonprofit institution that provides 
        a 4-year or a 2-year program of instruction (or both) 
        for which it awards a bachelor's or associate's degree, 
        respectively; or
          [(D) has a student enrollment in which more than 50 
        percent of the students do not have a high school 
        diploma or its recognized equivalent and does not 
        provide a 4-year or a 2-year program of instruction (or 
        both) for which it awards a bachelor's or associate's 
        degree, respectively, except that the Secretary may 
        waive the limitation contained in this subparagraph if 
        a nonprofit institution demonstrates to the 
        satisfaction of the Secretary that it exceeds such 
        limitation because it serves, through contracts with 
        Federal, State, or local government agencies, 
        significant numbers of students who do not have a high 
        school diploma or its recognized equivalent.
  [(4) An institution shall not be considered to meet the 
definition of an institution of higher education in paragraph 
(1) if--
          [(A) the institution, or an affiliate of the 
        institution that has the power, by contract or 
        ownership interest, to direct or cause the direction of 
        the management or policies of the institution, has 
        filed for bankruptcy; or
          [(B) the institution, its owner, or its chief 
        executive officer has been convicted of, or has pled 
        nolo contendere or guilty to, a crime involving the 
        acquisition, use, or expenditure of funds under this 
        title, or has been judicially determined to have 
        committed fraud involving funds under this title.
  [(5) The Secretary shall certify an institution's 
qualification as an institution of higher education in 
accordance with the requirements of subpart 3 of part H.
  [(6) An institution of higher education shall not be 
considered to meet the definition of an institution of higher 
education in paragraph (1) if such institution is removed from 
eligibility for fundsunder this title as a result of an action 
pursuant to part H of this title.
  [(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. 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.
  [(c) Postsecondary Vocational Institution.--For the purpose 
of this section, the term ``postsecondary vocational 
institution'' 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), (2), (4), and (5) of section 1201(a), and (3) 
which has been in existence for at least 2 years. Such term 
also includes an 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.]
  [(d)] (a) Academic and Award Year.--(1) For the purpose of 
any program under this title, the term ``award year'' shall be 
defined as the period beginning July 1 and ending June 30 of 
the following year.

           *       *       *       *       *       *       *

  [(e)] (b) Eligible Program.--(1) * * *

           *       *       *       *       *       *       *

  [(f)] (c) Third Party Servicer.--For purposes of this title, 
the term ``third party servicer'' means any individual, or any 
State, or private, profit or nonprofit organization which 
enters into a contract with--
          (1) * * *

           *       *       *       *       *       *       *

  (d) Distance Learning.--For the purpose of any program under 
this title, the term ``distance learning'' means an educational 
process that is characterized by the separation, in time or 
place, between instructor and student. Distance learning may 
include courses offered principally through the use of--
          (1) television, audio, or computer transmission, such 
        as open broadcast, closed circuit, cable, microwave, or 
        satellite transmission;
          (2) audio or computer conferencing;
          (3) video cassettes or discs; or
          (4) correspondence.

           *       *       *       *       *       *       *


SEC. 482. MASTER CALENDAR.

  (a) Secretary Required To Comply With Schedule.--To assure 
adequate notification and timely delivery of student aid funds 
under this title, the Secretary shall adhere to the following 
calendar dates in the year preceding the award year:
          (1) * * *

           *       *       *       *       *       *       *

          (3) The Secretary shall, to the extent practicable, 
        notify eligible institutions, guaranty agencies, 
        lenders, interested software providers, and, upon 
        request, other interested parties, by December 1 prior 
        to the start of an award year of minimal hardware and 
        software requirements necessary to administer programs 
        under this title.
          (4) The Secretary shall attempt to conduct training 
        activities for financial aid administrators and others 
        in an expeditious and timely manner prior to the start 
        of such award year in order to ensure that all 
        participants are informed of all administrative 
        requirements.

           *       *       *       *       *       *       *

  (c) Delay of Effective Date of Late Publications.--Any 
regulatory changes initiated by the Secretary affecting the 
programs pursuant to this title that have not been published in 
final form by December 1 prior to the start of the award year 
shall not become effective until the beginning of the second 
award year after such December 1 date. [For award year 1994-95, 
this subsection shall not require a delay in the effectiveness 
of regulatory changes affecting parts B, G, and H of this title 
that are published in final form by May 1, 1994.] The Secretary 
shall provide a period for public comment of not less than 60 
days after publication of any notice of proposed rulemaking 
affecting programs under this title.

           *       *       *       *       *       *       *


SEC. 483. FORMS AND REGULATIONS.

  (a) Common Financial Aid Form and Processing.--
          (1) Single form required.--The Secretary, in 
        cooperation with representatives of agencies and 
        organizations involved in student financial assistance, 
        shall produce, distribute, and process free of charge a 
        common financial reporting form to be used to determine 
        the need and eligibility of a student for financial 
        assistance under parts [A, C, D, and E] A through E of 
        this title (other than under subpart 4 of part A) [and 
        to determine the need of a student for the purpose of 
        part B of this title]. The Secretary may include on the 
        form developed pursuant to this paragraph not more than 
        eight nonfinancial data items selected in consultation 
        with the States to assist the States in awarding State 
        student financial assistance. Such form shall satisfy 
        the requirements of section 401(d) of this title. [For 
        the purpose of collecting eligibility and other data 
        for the purpose of part B, the Secretary shall develop 
        a separate, identifiable loan application document 
        (pursuant to section 432(m)) that applicants or 
        institutions in which the students are enrolled or 
        accepted for enrollment shall submit directly to 
        eligible lenders and on which the applicant shall 
        clearly indicate a choice of a lender.] The Secretary 
        shall include, on the first page of the form, a 
        prominently displayed notice to students and parents 
        advising them to check with the college financial aid 
        office in the event that they have unusual 
        circumstances which may affect their eligibility for 
        financial aid.
          (2) Charges to students and parents for use of form 
        prohibited.--The common financial reporting form 
        prescribed by the Secretary under paragraph (1) shall 
        be produced, distributed, and processed by the 
        Secretary and no parent or student shall be charged a 
        fee for the collection, processing, or delivery of 
        financial aid through the use of such form. The need 
        and eligibility of a student for financial assistance 
        under parts [A, C, D, and E] A through E of this title 
        (other than under subpart 4 of part A) [and the need of 
        a student for the purpose of part B of this title,] may 
        only be determined by using the form developed by the 
        Secretary pursuant to paragraph (1) of this subsection. 
        No student may receive assistance under parts [A, C, D, 
        and E] A through E of this title (other than under 
        subpart 4 of part A) [or have the student's need 
        established for the purpose of part B of this title], 
        except by use of the form developed by the Secretary 
        pursuant to this section. No data collected on a form 
        for which a fee is charged shall be used to complete 
        the form prescribed under paragraph (1).
          (3) Distribution of data.--Institutions of higher 
        education and States shall receive, without charge, the 
        data collected by the Secretary using the form 
        developed pursuant to this section for the purposes of 
        processing loan applications and determining need and 
        eligibility for institutional and State financial aid 
        awards. Entities designated by institutions of higher 
        education or States to receive such data shall be 
        subject to all requirements of this section, unless 
        such requirements are waived by the Secretary.

           *       *       *       *       *       *       *

          (5) Electronic forms.--(A) The Secretary, in 
        cooperation with representatives of agencies and 
        organizations involved in student financial assistance, 
        including private computer software providers, shall 
        develop an electronic version of the form described in 
        paragraph (1). Such an electronic version shall not 
        require a signature to be collected at the time such 
        version is submitted, as permitted by the Secretary. 
        The Secretary shall prescribe such version no later 
        than 120 days after the date of enactment of the Higher 
        Education Amendments of 1998.
          (B) Nothing in this section shall prohibit the use of 
        the version of the form developed by the Secretary 
        pursuant to subparagraph (A) by an eligible 
        institution, eligible lender, guaranty agency, State 
        grant agency, private computer software providers, a 
        consortium thereof, or such other entities as the 
        Secretary may designate.
          (C) The Secretary shall provide to such organization 
        or consortium necessary specifications that software 
        developed, produced, distributed (including any 
        diskette, modem or network communications, or 
        otherwise) must meet. Included in the specifications 
        shall be test cases that such organization or consortia 
        must use to prove accuracy of its cases to the 
        Secretary. If the results of the test cases are 
        inconsistent with the provisions of this part, the 
        Secretary shall notify the submitting organizations or 
        consortium of his objection within 30 days of such 
        submission. In the absence of such an objection the 
        organization or consortium may use the electronic form 
        as submitted. No fee shall be charged to students in 
        connection with the use of the electronic form, or of 
        any other electronic forms used in conjunction with 
        such form in applying for Federal or State student 
        financial assistance.
          (D) The Secretary shall ensure that data collection 
        complies with section 552a of title 5, United States 
        Code, and that any entity using the version of the form 
        developed by the Secretary pursuant to subparagraph (A) 
        shall maintain reasonable and appropriate 
        administrative, technical, and physical safeguards to 
        ensure the integrity and confidentiality of the 
        information, and to protect against security threats, 
        or unauthorized uses or disclosures of the information 
        provided on the version of the form. Data collected by 
        such version of the form shall be used only for the 
        application, award, and administration of aid awarded 
        under this title, State aid, or aid awarded by eligible 
        institutions or such entities as the Secretary may 
        designate. No data collected by such version of the 
        form shall be used for making final aid awards under 
        this title until such data have been processed by the 
        Secretary or a contractor or designee of the Secretary.
  (b) Streamlined Reapplication Process.--(1) The Secretary 
shall[, within 240 days after the date of enactment of the 
Higher Education Amendments of 1992,] develop a streamlined 
reapplication form and process, including electronic 
reapplication process, consistent with the requirements of 
subsection (a), for those recipients who apply for financial 
aid funds under this title in the next succeeding academic year 
subsequent to the initial year in which such recipients apply.

           *       *       *       *       *       *       *

  (c) Information to Committees of Congress.--Copies of all 
rules, regulations, guidelines, instructions, and application 
forms published or promulgated pursuant to this title shall be 
provided to the Committee on Labor and Human Resources of the 
Senate and the Committee on Education and [Labor] the Workforce 
of the House of Representatives at least 45 days prior to their 
effective date.
  (d) Toll-Free Information.--The Secretary shall contract for, 
or establish, and publicize a toll-free telephone service to 
provide timely and accurate information to the general public. 
The information provided shall include specific instructions on 
completing the application form for assistance under this 
title. Such service shall also include a service accessible by 
telecommunications devices for the deaf (TDD's) and shall, in 
addition to the services provided for in the previous sentence, 
refer such students to the national clearinghouse on 
postsecondary education that is authorized under section 
[633(c)] 685(d)(2)(C) of the Individuals with Disabilities 
Education Act.

           *       *       *       *       *       *       *

  [(f) Special Rule.--Nothing in section 1544 of the Higher 
Education Amendments of 1992 shall relieve processors or 
institutions of higher education of any or all obligations 
under this section.]

SEC. 484. STUDENT ELIGIBILITY.

  (a) In General.--In order to receive any grant, loan, or work 
assistance under this title, a student must--
          (1) * * *

           *       *       *       *       *       *       *

          (4) file with [the institution of higher education 
        which the student intends to attend, or is attending 
        (or in the case of a loan or loan guarantee with the 
        lender), a document] the Federal Government, as part of 
        the original financial aid application process, a 
        certification, which need not be notarized, but which 
        shall include--
                  (A) * * *
                  (B) such student's social security number, 
                and if a dependent student, the social security 
                number of any parent of such student whose 
                income information is required to be included 
                on the form, except that the provisions of this 
                subparagraph shall not apply to a student from 
                the Republic of the Marshall Islands, the 
                Federated States of Micronesia, or the Republic 
                of Palau;

           *       *       *       *       *       *       *

  (j) Assistance Under Subparts 1, 3, and 6, and Chapter 1 of 
Subpart 2, of Part A, and Part C.--Notwithstanding any other 
provision of law, a student shall be eligible until September 
30, 2001, if otherwise qualified, for assistance under subparts 
1, 3, and 6, and chapter 1 of subpart 2, of part A, and part C, 
of this title, if the student is otherwise qualified and--
          (1) * * *

           *       *       *       *       *       *       *

  (q) Verification of Income Data.--
          (1) Confirmation with irs.--The Secretary of 
        Education, in cooperation with the Secretary of the 
        Treasury, is authorized to confirm with the Internal 
        Revenue Service the adjusted gross income, filing 
        status, and exemptions reported by applicants 
        (including parents) under this title on their Federal 
        income tax returns for the purpose of verifying the 
        information reported by applicants on student financial 
        aid applications.
          (2) Notification.--The Secretary shall establish 
        procedures under which an applicant is notified that 
        the Internal Revenue Service will disclose to the 
        Secretary tax return information as authorized under 
        section 6103(l)(13) of the Internal Revenue Code of 
        1986.
  (r) Suspension of Eligibility for Drug-Related Offenses.--
          (1) In general.--An individual student who has been 
        convicted of any offense under any Federal or State law 
        involving the possession or sale of a controlled 
        substance shall not be eligible to receive any grant, 
        loan, or work assistance under this title during the 
        period beginning on the date of such conviction and 
        ending after the interval specified in the following 
        table:
      

If convicted of an offense                                              
 involving:                                                             
                                                                        
    The possession of a controlled  Ineligibility period is:            
     substance:                                                         
      First offense...............    1 year                            
      Second offense..............    2 years                           
      Third offense...............    indefinite                        
                                                                        
    The sale of a controlled                                            
     substance:                                                         
      First offense...............    2 years                           
      Second offense..............    indefinite                        
                                                                        

      
          (2) Rehabilitation.--A student whose eligibility has 
        been suspended under paragraph (1) may resume 
        eligibility before the end of the period determined 
        under such paragraph if the student satisfactorily 
        completes a drug rehabilitation program that complies 
        with such criteria as the Secretary shall prescribe for 
        purposes of this paragraph.
          (3) Definitions.--As used in this subsection, the 
        term ``controlled substance'' has the meaning given in 
        section 102(6) of the Controlled Substances Act (21 
        U.S.C. 802(6)).

SEC. 484A. STATUTE OF LIMITATIONS.

  (a) * * *

           *       *       *       *       *       *       *

  (c) State Court Judgments.--A judgment of a State court for 
the recovery of money provided as grant, loan, or work 
assistance under this title that has been assigned or 
transferred to the Secretary under this title may be registered 
in any district court by filing a certified copy of the 
judgment and the assignment or other transfer to the Secretary. 
A judgment so registered shall have the same force and effect, 
and may be enforced in the same manner, as a judgment of the 
district court of the district in which the judgment is 
registered.

           *       *       *       *       *       *       *


SEC. 485. INSTITUTIONAL AND FINANCIAL ASSISTANCE INFORMATION FOR 
                    STUDENTS.

  (a) Information Dissemination Activities.--(1) Each eligible 
institution participating in any program under this title shall 
carry out information dissemination activities for prospective 
and enrolled students (including those attending or planning to 
attend less than full time) regarding the institution and all 
financial assistance under this title. [The information 
required by this section shall be produced and be made readily 
available, through appropriate publications and mailings, to 
all current students, and to any prospective student upon 
request.] The information required by this section shall be 
produced and be made readily availableupon request, through 
appropriate publications, mailings, and electronic media to all current 
students and to any prospective student. Each eligible institution 
shall, on an annual basis, provide to all enrolled students a list of 
the information that is required to be provided by institutions to 
students by this Act and section 444 of the General Education 
Provisions Act (also referred to as the Family Educational Rights and 
Privacy Act of 1974), together with a statement of the procedures 
required to obtain such information. The information required by this 
section shall accurately describe--
          (A) * * *

           *       *       *       *       *       *       *

  (3) In calculating the completion or graduation rate under 
subparagraph (L) of paragraph (1) of this subsection or under 
subsection (e), a student shall be counted as a completion or 
graduation if, within 150 percent of the normal time for 
completion of or graduation from the program, the student has 
completed or graduated from the program[, or enrolled in any 
program of an eligible institution for which the prior program 
provides substantial preparation]. The information required to 
be disclosed under such subparagraph--
          [(A) shall, for any academic year beginning more than 
        270 days after the Secretary first prescribes final 
        regulations pursuant to such subparagraph (L), be made 
        available to current and prospective students prior to 
        enrolling or entering into any financial obligation; 
        and]
          (A) shall be made available by July 1 each year to 
        current and prospective students prior to enrolling or 
        entering into any financial obligation; and

           *       *       *       *       *       *       *

  (6) Each institution may, but is not required to, provide 
supplemental information to enrolled and prospective students 
showing the completion or graduation rate for students 
transferring into the institution or information showing the 
rate at which students transfer out of the institution.

           *       *       *       *       *       *       *

  (d) Departmental Publication of Descriptions of Assistance 
Programs.--(1) The Secretary shall make available to eligible 
institutions, eligible lenders, and secondary schools 
descriptions of Federal student assistance programs including 
the rights and responsibilities of student and institutional 
participants, in order to [(1)] (A) assist students in gaining 
information through institutional sources, and [(2)] (B) assist 
institutions in carrying out the provisions of this section, so 
that individual and institutional participants will be fully 
aware of their rights and responsibilities under such programs. 
In particular, such information shall include information to 
enable students and prospective students to assess the debt 
burden and monthly and total repayment obligations that will be 
incurred as a result of receiving loans of varying amounts 
under this title. In addition, such information shall include 
information to enable borrowers to assess the practical 
consequences of loan consolidation, including differences in 
deferment eligibility, interest rates, monthly payments, and 
finance charges, and samples of loan consolidation profiles to 
illustrate such consequences. The Secretary shall provide 
information concerning the specific terms and conditions under 
which students may obtain partial or total cancellation or 
defer repayment of loans for service, shall indicate (in terms 
of the Federal minimum wage) the maximum level of compensation 
and allowances that a student borrower may receive from a tax-
exempt organization to qualify for a deferment, and shall 
explicitly state that students may qualify for such partial 
cancellations or deferments when they serve as a paid employee 
of a tax-exempt organization. Such information shall be 
provided by eligible institutions and eligible lenders at any 
time that information regarding loan availability is provided 
to any student.
  (2) The Secretary shall, to the extent such information is 
available, compile information describing State prepaid tuition 
programs and disseminate such information to States, eligible 
institutions, students, and parents in departmental 
publications.
  (3) The Secretary shall, to the extent practicable, update 
the Department's Internet site to include direct links to 
databases which contain information on public and private 
financial assistance programs. The Secretary shall only provide 
direct links to databases which can be accessed without charge 
and shall verify with appropriate parties that the databases 
included in the direct link are not in any way providing 
fraudulent information. The Secretary shall prominently display 
adjacent to the direct link a disclaimer indicating that a 
direct link to a database does not constitute an endorsement or 
recommendation of the database or its provider or any services 
or products of such provider. The Secretary shall provide 
additional direct links to information resources from which 
students may obtain information about fraudulent and deceptive 
practices in the provision of services related to student 
financial aid.
  (e) Disclosures Required With Respect to Athletically Related 
Student Aid.--(1) * * *
  (2) When an institution described in paragraph (1) of this 
subsection offers a potential student athlete athletically 
related student aid, such institution shall provide to the 
student and [his parents, his guidance] the student's parents, 
guidance counselor, and coach the information contained in the 
report submitted by such institution pursuant to paragraph (1). 
If the institution is a member of a national collegiate 
athletic association that compiles graduation rate data on 
behalf of its member institutions that the Secretary determines 
is substantially comparable to the information described in 
paragraph (1), the distribution of the compilation of such data 
to all secondary schools in the United States shall fulfill the 
responsibility of the institution to provide information to a 
prospective student athlete's guidance counselor and coach.

           *       *       *       *       *       *       *

  (4) Each institution of higher education described in 
paragraph (1) may provide supplemental information to students 
and the Secretary showing the completion or graduation rate 
[when such completion or graduation rate includes students 
transferring into and out of such institution] for students 
transferring into the institution or information showing the 
rate at which students transfer out of the institution.

           *       *       *       *       *       *       *

  [(9) This subsection shall not be effective until the first 
July 1 that follows, by more than 270 days, the date on which 
the Secretary first prescribes final regulations pursuant to 
this subsection. The reports required by this subsection shall 
be due on that July 1 and each succeeding July 1 and shall 
cover the 1-year period ending August 31 of the preceding 
year.]
  (9) The reports required by this subsection shall be due on 
each July 1 and shall cover the 1-year period ending August 31 
of the preceding year.
  (f) Disclosure of Campus Security Policy and Campus Crime 
Statistics.--(1) Each eligible institution participating in any 
program under this title shall on August 1, 1991, begin to 
collect the following information with respect to campus crime 
statistics and campus security policies of that institution, 
and beginning September 1, 1992, and each year thereafter, 
prepare, publish, and distribute, through appropriate 
publications or mailings, to all current students and 
employees, and to any applicant for enrollment or employment 
upon request, an annual security report containing at least the 
following information with respect to the campus security 
policies and campus crime statistics of that institution:
          (A) * * *

           *       *       *       *       *       *       *

          [(F) Statistics concerning the occurrence on campus, 
        during the most recent calendar year, and during the 2 
        preceding calendar years for which data are available, 
        of the following criminal offenses reported to campus 
        security authorities or local police agencies--
                  [(i) murder;
                  [(ii) sex offenses, forcible or nonforcible;
                  [(iii) robbery;
                  [(iv) aggravated assault;
                  [(v) burglary; and
                  [(vi) motor vehicle theft.]
          (F) Statistics concerning the occurrence on campus, 
        during the most recent calendar year, and during the 2 
        preceding calendar years, of the following criminal 
        offenses or arrests reported to campus security 
        authorities, campus officials who have direct 
        administrative responsibility for student or campus 
        activities, disciplinary officers and other officials 
        responsible for resolving student disciplinary matters, 
        athletic department officials, or local police agencies 
        (including offenses handled through the campus 
        disciplinary system):
                  (i) murder;
                  (ii) sex offenses, forcible or nonforcible;
                  (iii) robbery;
                  (iv) aggravated assault;
                  (v) burglary;
                  (vi) motor vehicle theft;
                  (vii) manslaughter;
                  (viii) larceny;
                  (ix) arson; and
                  (x) arrests or persons referred for campus 
                disciplinary action for liquor law violations, 
                drug-related violations, and weapons 
                possession.

           *       *       *       *       *       *       *

          [(H) Statistics concerning the number of arrests for 
        the following crimes occurring on campus:
                  [(i) liquor law violations;
                  [(ii) drug abuse violations; and
                  [(iii) weapons possessions.]
          [(I)] (H) A statement of policy regarding the 
        possession, use, and sale of alcoholic beverages and 
        enforcement of State underage drinking laws and a 
        statement of policy regarding the possession, use, and 
        sale of illegal drugs and enforcement of Federal and 
        State drug laws and a description of any drug or 
        alcohol abuse education programs as required under 
        section [1213] 111 of this Act.

           *       *       *       *       *       *       *

  (4) [Upon the request of the Secretary, each] On an annual 
basis, each institution participating in any program under this 
title shall submit to the Secretary a copy of the statistics 
required to be made available under [paragraphs (1)(F) and 
(1)(H)] paragraph (1)(F). The Secretary shall--
          (A) review such statistics and report to the 
        Committee on Education and [Labor] the Workforce of the 
        House of Representatives and the Committee on Labor and 
        Human Resources of the Senate on campus crime 
        statistics by September 1, [1995; and] 2000;
          (B) make copies of the statistics submitted to the 
        Secretary available to the public; and
          [(B)] (C) in coordination with representatives of 
        institutions of higher education, identify exemplary 
        campus security policies, procedures, and practices and 
        disseminate information concerning those policies, 
        procedures, and practices that have proven effective in 
        the reduction of campus crime.

           *       *       *       *       *       *       *

  (6) The statistics described in [paragraphs (1)(F) and 
(1)(H)] paragraph (1)(F) shall be compiled in accordance with 
the definitions used in the uniform crime reporting system of 
the Department of Justice, Federal Bureau of Investigation, and 
the modifications in such definitions as implemented pursuant 
to the Hate Crime Statistics Act. Such statistics shall not 
identify victims of crimes or persons accused of crimes.

           *       *       *       *       *       *       *

  (8)(A) Each institution participating in any program under 
this title that maintains either a police or security 
department of any kind shall make, keep, and maintain a daily 
log, written in a form that can be easily understood, recording 
in chronological order all crimes reported to such police or 
security department, including the nature, date, time, and 
general location of each crime and the disposition of the 
complaint, if known.
  (B) All entries that are required by this paragraph shall be 
open to public inspection during normal business hours within 
two business days of the initial report being made to the 
department, unless--
          (i) disclosure of such information is prohibited by 
        law; or
          (ii) the release of such information is likely to 
        jeopardize an ongoing criminal investigation or the 
        safety of an individual, cause a suspect to flee or 
        evade detection, or result in the destruction of 
        evidence.
Any information withheld under clause (ii) shall be open to 
public inspection as soon as the damage that is the basis for 
such withholding is no longer likely to occur.
  (9) The Secretary shall provide technical assistance in 
complying with the provisions of this section to an institution 
of higher education who requests such assistance.
  (g) Data Required.--
          (1) In general.--Each coeducational institution of 
        higher education that participates in any program under 
        this title, and has an intercollegiate athletic 
        program, shall annually, for the immediately preceding 
        academic year, prepare a report that contains the 
        following information regarding intercollegiate 
        athletics:
                  (A) * * *

           *       *       *       *       *       *       *

                  (I)(i) The total revenues, and the revenues 
                from football, men's basketball, women's 
                basketball, all other men's sports combined and 
                all other women's sports combined, derived by 
                the institution from its intercollegiate 
                athletics activities.
                  (ii) For the purpose of clause (i), revenues 
                from intercollegiate athletics activities 
                allocable to a sport shall include (without 
                limitation) gate receipts, broadcast revenues, 
                appearance guarantees and options, concessions, 
                and advertising, but revenues such as student 
                activities fees or alumni contributions not so 
                allocable shall be included in the calculation 
                of total revenues only.
                  (J)(i) The total expenses, and the expenses 
                attributable to football, men's basketball, 
                women's basketball, all other men's sports 
                combined, and all other women's sports 
                combined, made by the institution for its 
                intercollegiate athletics activities.
                  (ii) For the purpose of clause (i) expenses 
                for intercollegiate athletics activities 
                allocable to a sport shall include (without 
                limitation) grants-in-aid, salaries, travel, 
                equipment, and supplies, but expenses such as 
                general and administrative overhead not so 
                allocable shall be included in the calculation 
                of total expenses only.
                  (K) A statement of any reduction that may or 
                is likely to occur during the ensuing 4 
                academic years in the number of athletes that 
                will be permitted to participate in any 
                collegiate sport, or in the financial resources 
                that the institution will make available to any 
                such sport, and the reasons for any such 
                reduction.

           *       *       *       *       *       *       *

          [(5) Regulations and effective date.--The Secretary 
        shall issue final regulations to implement the 
        requirements of this subsection not later than 180 days 
        following the enactment of this subsection. Each 
        institution described in paragraph (1) shall make 
        available its first report pursuant to this section not 
        later than October 1, 1996.]

           *       *       *       *       *       *       *


SEC. 485B. NATIONAL STUDENT LOAN DATA SYSTEM.

  (a) Development of the System.--The Secretary shall consult 
with a representative group of guaranty agencies, eligible 
lenders, and eligible institutions to develop a mutually 
agreeable proposal for the establishment of a National Student 
Loan Data System containing information regarding loans made, 
insured, or guaranteed under part B and loans made under parts 
D and E, and for allowing the electronic exchange of data 
between program participants and the system. In establishing 
such data system, the Secretary shall place a priority on 
providing for the monitoring of enrollment, student status, 
information about current loan holders and servicers, and 
internship and residency information. Such data system shall 
also permit borrowers to use the system to identify the current 
loan holders and servicers of such borrower's loan no later 
than one year after the date of enactment of the Higher 
Education Amendments of 1997. The information in the data 
system shall include (but is not limited to)--
          (1) * * *

           *       *       *       *       *       *       *


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;]
                  (B) the appropriate State agency;
                  (C) the appropriate guaranty agency; and
                  (D) the appropriate accrediting agency or 
                association.
          (4) The institution will comply with the provisions 
        of subsection [(b)] (c) of this section and the 
        regulations prescribed under that subsection, relating 
        to fiscal eligibility.

           *       *       *       *       *       *       *

          (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] appropriate 
        State agencies 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.

           *       *       *       *       *       *       *

          [(18)(A) With respect to any institution that offers 
        athletically related student aid, the institution 
        will--
                  [(i) cause an annual compilation, 
                independently audited not less often than every 
                3 years, to be prepared within 6 months after 
                the end of its fiscal year, of--
                          [(I) the total revenues, and the 
                        revenues from football, men's 
                        basketball, women's basketball, all 
                        other men's sports combined, and all 
                        other women's sports combined, derived 
                        by the institution from its 
                        intercollegiate athletics activities;
                          [(II) the total expenses, and the 
                        expenses attributable to football, 
                        men's basketball, women's basketball, 
                        all other men's sports combined and all 
                        other women's sports combined, made by 
                        the institution for its intercollegiate 
                        athletics activities; and
                          [(III) the total revenues and 
                        operating expenses of the institution; 
                        and
                  [(ii) make the reports on such compilations 
                and, where allowable by State law, the audits, 
                available for inspection by the Secretary and 
                the public.
          [(B) For the purpose of subparagraph (A)--
                  [(i) revenues from intercollegiate athletics 
                activities allocable to a sport shall include 
                without limitation gate receipts, broadcast 
                revenues, appearance guarantees and options, 
                concessions and advertising, but revenues such 
                as student activities fees or alumni 
                contributions not so allocable shall be 
                included in the calculation of total revenues 
                only; and
                  [(ii) expenses for intercollegiate athletics 
                activities allocable to a sport shall include 
                without limitation grants-in-aid, salaries, 
                travel, equipment, and supplies, but expenses 
                such as general and administrative overhead not 
                so allocable shall be included in the 
                calculation of total expenses only.]
          (18) The institution will meet the requirements 
        established pursuant to section 485(g).

           *       *       *       *       *       *       *

          [(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.]
          (21) The institution will meet the requirements 
        established by the Secretary, appropriate State 
        agencies, 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 appropriate 
        State agencies; or

           *       *       *       *       *       *       *

  (2) If an individual who, or entity that, exercises 
substantial control, as determined by the Secretary in 
accordance with the definition of substantial control in 
subpart [3] 2 of part H, over one or more institutions 
participating in any program under this title, or, for purposes 
of paragraphs (1) (H) and (I), over one or more organizations 
that contract with an institution to administer any aspect of 
the institution's student assistance program under this title, 
is determined to have committed one or more violations of the 
requirements of any program under this title, or has been 
suspended or debarred in accordance with the regulations of the 
Secretary, the Secretary may use such determination, 
suspension, or debarment as the basis for imposing an emergency 
action on, or limiting, suspending, or terminating, in a single 
proceeding, the participation of any or all institutions under 
the substantial control of that individual or entity.

           *       *       *       *       *       *       *

  (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] appropriate State 
agencies, and accrediting agencies or associations the results 
of the audits of eligible institutions conducted pursuant to 
paragraph (1)(A).

           *       *       *       *       *       *       *

  (d) Definition of Eligible Institution.--For the purpose of 
this section, the term ``eligible institution'' means any such 
institution described in section [481] 101(a)(2) of this Act.

           *       *       *       *       *       *       *


[SEC. 487A. QUALITY ASSURANCE PROGRAM.

  [(a) In General.--The Secretary is authorized to select 
institutions for voluntary participation in a Quality Assurance 
Program that provides participating institutions with an 
alternative management approach through which individual 
schools develop and implement their own comprehensive systems 
to verify student financial aid application data, thereby 
enhancing program integrity within the student aid delivery 
system. The Quality Assurance Program authorized by this 
section shall be based on criteria that include demonstrated 
institutional performance, as determined by the Secretary, and 
shall take into consideration current quality assurance goals, 
as determined by the Secretary.
  [(b) Exemption From Requirements.--The Secretary is 
authorized to exempt any institution participating in the 
Quality Assurance Program from any reporting or verification 
requirements in this title, and may substitute such quality 
assurance reporting as the Secretary deems necessary to ensure 
accountability and compliance with the purposes of the programs 
under this title.
  [(c) Removal From the Program.--The Secretary is authorized 
to determine--
          [(1) when an institution that is unable to administer 
        the Quality Assurance Program must be removed from such 
        program, and
          [(2) when institutions desiring to cease 
        participation in such program will be required to 
        complete the current award year under the requirements 
        of the Quality Assurance Program.
  [(d) Experimental Sites.--(1) The Secretary is authorized to 
select institutions for voluntary participation as experimental 
sites to provide recommendations to the Secretary on the impact 
and effectiveness of proposed regulations or new management 
initiatives.
  [(2) The Secretary is authorized to exempt any institution 
participating as an experimental site from any requirements in 
this title, or in regulations prescribed under this title, that 
would bias experimental results.
  [(e) Definitions.--For purposes of this section, ``current 
award year'' is defined as the award year during which the 
participating institution indicates its intention to cease 
participation.]

SEC. 487A. QUALITY ASSURANCE AND REGULATORY SIMPLIFICATION PROGRAM.

  (a) In General.--The Secretary is authorized to select 
institutions for voluntary participation in a Regulatory 
Simplification Program that provides participating institutions 
with the opportunity to develop and implement an alternative 
management program that--
          (1) shall allow alternative methods of complying with 
        regulations issued with respect to parts A through E 
        and G of this title;
          (2) shall not modify or waive the application of any 
        requirement or other provision of this Act; and
          (3) may include a Quality Assurance Program through 
        which individual schools develop and implement their 
        own comprehensive systems to verify student financial 
        aid application data, thereby enhancing program 
        integrity within the student aid delivery system.
  (b) Selection Criteria.--The criteria for selecting 
institutions for participation in the Regulatory Simplification 
Program shall be based on criteria that include demonstrated 
institutional performance, as determined by the Secretary, and 
shall take into consideration regulatory simplification goals, 
as determined by the Secretary. The selection criteria shall 
ensure the participation of representatives of institutions of 
higher education according to size, mission, and geographical 
distribution.
  (c) Removal From the Program.--The Secretary is authorized to 
determine--
          (1) when an institution that is unable to administer 
        the Regulatory Simplification Program must be removed 
        from such program, and
          (2) when institutions desiring to cease participation 
        in such Program will be required to complete the 
        current award year under the requirements of the 
        Program.
  (d) Experimental Sites.--The Secretary is authorized to 
designate institutions selected for participation in the 
Regulatory Simplification Program as Experimental Sites.
  (e) Definitions.--For purposes of this section, the term 
``current award year'' means the award year during which the 
participating institution indicates its intention to cease 
participation.

SEC. 487B. DISTANCE EDUCATION DEMONSTRATION PROGRAMS.

  (a) Purpose.--It is the purpose of this section--
          (1) to allow demonstration programs that are strictly 
        monitored by the Department of Education to test the 
        quality and viability of expanded distance education 
        programs currently restricted under this Act;
          (2) to provide for increased student access to higher 
        education through distance education programs;
          (3) to help determine the most effective means of 
        delivering quality education via distance education 
        course offerings; and
          (4) to help determine the appropriate level of 
        Federal assistance for students enrolled in distance 
        education programs.
  (b) Demonstration Programs Authorized.--
          (1) In general.--The Secretary is authorized to 
        select institutions or a consortia of institutions for 
        voluntary participation in a Distance Education 
        Demonstration Program that provides participating 
        institutions with the ability to offer distance 
        education programs without regard to the current 
        restrictions in part F or G of this title or part A of 
        title I.
          (2) Exemptions.--The Secretary is authorized to 
        exempt any institution or consortia participating in a 
        Distance Education Demonstration Program from any of 
        the requirements of parts F or G of this title, or part 
        A of title I, or the regulations prescribed under such 
        parts.
  (c) Application.--Each institution or consortia of 
institutions desiring to participate in a demonstration program 
under this section shall submit an application to the Secretary 
at such time, in such manner, and accompanied by such 
information as the Secretary may require.
  (d) Selection.--To the extent feasible, the Secretary shall 
select a representative sample institutions for participation 
in the demonstration program authorized under this section. In 
selecting institutions for participation, the Secretary shall 
take into consideration the institution's financial and 
administrative capability and the type of program or programs 
being offered via distance education course offerings. The 
Secretary shall, in the exercise of his discretion, determine 
the number of demonstration programs to be allowed based on the 
number and quality of applications received and the 
Department's capacity to oversee and monitor each demonstration 
program.
  (e) Evaluation and Report.--
          (1) Evaluation.--The Secretary shall, on an annual 
        basis, evaluate the demonstration programs authorized 
        under this section. Such evaluations shall specifically 
        review--
                  (A) the quality of the programs being 
                offered;
                  (B) issues related to student financial 
                assistance for distance education; and
                  (C) effective technologies for delivering 
                distance education course offerings.
          (2) Policy analysis.--In addition, the Secretary 
        shall review current policies and identify those 
        policies which present impediments to the development 
        and use of distance learning and other nontraditional 
        methods of expanding access to education.
          (3) Report.--The Secretary shall report to the 
        appropriate committees of Congress with respect to--
                  (A) the evaluations of the demonstration 
                programs authorized under this section; and
                  (B) any proposed legislative changes designed 
                to enhance the use of distance education.

SEC. [487B.] 487C. ASSIGNMENT OF IDENTIFICATION NUMBERS.

  The Secretary shall assign to each participant in title IV 
programs, including institutions, lenders, and guaranty 
agencies, a single Department of Education identification 
number to be used to identify its participation in each of the 
title IV programs.



           *       *       *       *       *       *       *
SEC. 488A. WAGE GARNISHMENT REQUIREMENT.

  (a) Garnishment Requirements.--Notwithstanding any provision 
of State law, a guaranty agency, or the Secretary in the case 
of loans made, insured or guaranteed under this title that are 
held by the Secretary, may garnish the disposable pay of an 
individual to collect the amount owed by the individual, if he 
or she is not currently making required repayment under a 
repayment agreement with the Secretary, or, in the case of a 
loan guaranteed under part B on which the guaranty agency 
received reimbursement from the Secretary under section 428(c), 
with the guaranty agency holding the loan, as appropriate, 
provided that--
          (1) the amount deducted for any pay period may not 
        exceed [10] 15 percent of disposable pay, except that a 
        greater percentage may be deducted with the written 
        consent of the individual involved;

           *       *       *       *       *       *       *

  (d) No Attachment of Student Assistance.--Except as 
authorized in this section, notwithstanding any other provision 
of Federal or State law, no grant, loan, or work assistance 
awarded under this title, or property traceable to such 
assistance, shall be subject to garnishment or attachment in 
order to satisfy any debt owed by the student awarded such 
assistance, other than a debt owed to the Secretary and arising 
under this title.
  [(d)] (e) Definition.--For the purpose of this section, the 
term ``disposable pay'' means that part of the compensation of 
any individual from an employer remaining after the deduction 
of any amounts required by law to be withheld.

           *       *       *       *       *       *       *


SEC. 490A. ADMINISTRATIVE SUBPOENAS.

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

SEC. 491. ADVISORY COMMITTEE ON STUDENT FINANCIAL ASSISTANCE.

  (a) * * *
  (b) Independence of Advisory Committee.--In the exercise of 
its functions, powers, and duties, the Advisory Committee shall 
be independent of the Secretary and the other offices and 
officers of the Department. Notwithstanding Department of 
Education policies and regulations, the Advisory Committee 
shall exert independent control of its budget allocations and 
expenditures, staffing levels, personnel decisions and 
processes, procurements, and other administrative and 
management functions. The Advisory Committee's administration 
and management shall be subject to the usual and customary Federal 
audit procedures. [Notwithstanding Department of Education policies and 
regulations, the Advisory Committee shall exert independent control of 
its budget allocations and expenditures, personnel decisions and 
processes, procurements, and other administrative and management 
functions. The Advisory Committee's administration and management shall 
be subject to the usual and customary Federal audit procedures.] 
Reports, publications, and other documents, including documents in 
electronic form, shall not be subject to review by the Secretary. The 
recommendations of the Committee shall not be subject to review or 
approval by any officer in the executive branch, but may be submitted 
to the Secretary for comment prior to submission to the Congress in 
accordance with subsection (f). The Secretary's authority to terminate 
advisory committees of the Department pursuant to section 448(b) of the 
General Education Provisions Act ceased to be effective on June 23, 
1983.
  (c) Membership.--(1) The Advisory Committee shall have [11] 
15 members of which--
          (A) [3] 5 members shall be appointed by the President 
        pro tempore of the Senate upon the recommendation of 
        the Majority Leader and the Minority Leader,
          (B) [3] 5 members shall be appointed by the Speaker 
        of the House of Representatives upon the recommendation 
        of the Majority Leader and the Minority Leader, and
          (C) 5 members shall be appointed by the Secretary 
        including, but not limited to representatives of 
        States, institutions of higher education, secondary 
        schools, credit institutions, students, and parents.
  (2) Not less than [7] 11 members of the Advisory Committee 
shall be individuals who have been appointed on the basis of 
technical qualifications, professional standing and 
demonstrated knowledge in the fields of higher education and 
student aid administration, need analysis, financing 
postsecondary education, student aid delivery, and the 
operations and financing of student loan guarantee agencies.

           *       *       *       *       *       *       *

  (e) Operations of the Committee.--(1) Each member of the 
Advisory Committee shall be appointed for a term of 3 years, 
except that, [of the members first appointed--
          [(A) 4 shall be appointed for a term of 1 year;
          [(B) 4 shall be appointed for a term of 2 years; and
          [(C) 3 shall be appointed for a term of 3 years,
as designated at the time of appointment by the Secretary.]
within 90 days after the date of enactment of the Higher 
Education Amendments of 1998, 2 additional members shall be 
appointed by the President pro tempore of the Senate (one upon 
the recommendation of the Majority Leader and one upon the 
recommendation of the Minority Leader) and 2 additional members 
shall be appointed by the Speaker of the House (one upon the 
recommendation of the Majority Leader and one upon the 
recommendation of the Minority Leader). Of the additional 
members--
          (A) 2 shall be appointed for a term of 1 year;
          (B) 1 shall be appointed for a term of 2 years; and
          (C) 1 shall be appointed for a term of 3 years.

           *       *       *       *       *       *       *

  (4) [Six] Eight members of the Advisory Committee shall 
constitute a quorum.
  (5) The Advisory Committee shall meet at the call of the 
Chairman or a majority of its members.
  (6) No officer or full-time employee of the United States 
shall serve as members of the Advisory Committee.

           *       *       *       *       *       *       *

  [(g) Compensation and Expenses.--(1) Members of the Advisory 
Committee who are officers or full-time employees of the United 
States shall serve without compensation in addition to that 
received for their services as officers or employees of the 
United States; but 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 the 
Government service employed intermittently.
  [(2) Members of the Advisory Committee who are not officers 
or full-time employees of the United States may each receive 
reimbursement for travel expenses incident to attending 
Advisory Committee meetings, including per diem in lieu of 
subsistence, as authorized by section 5703 of title 5, United 
States Code, for persons in the Government service employed 
intermittently.]
  (g) Compensation and Expenses.--Members of the Advisory 
Committee may each receive reimbursement for travel expenses 
incident to attending Advisory Committee meetings, including 
per diem in lieu of subsistence, as authorized by section 5703 
of title 5, United States Code, for persons in the Government 
service employed intermittently.
  (h) Personnel and Resources.--(1) The Advisory Committee may 
appoint such personnel as [may be necessary by the Chairman 
without regard to] may be deemed necessary by the Chairman 
without regard to personnel ceilings or the provisions of title 
5, United States Code, governing appointments in the 
competitive service, and may be paid without regard to the 
provisions of chapter 51 and subchapter III of chapter 53 of 
such title relating to classification and General Schedule pay 
rates, but no individual so appointed shall be paid in excess 
of the rate authorized for GS-18 of the General Schedule.

           *       *       *       *       *       *       *

  (i) Availability of Funds.--In each fiscal year not less than 
[$750,000] $850,000, shall be available from the amount 
appropriated for each such fiscal year from salaries and 
expenses of the Department for the costs of carrying out the 
provisions of this section.
  [(j) Special Analyses and Activities.--The committee shall--
          [(1) monitor and evaluate the program modifications 
        resulting from the enactment of the Higher Education 
        Amendments of 1992, especially as such amendments 
        relate to the need analysis;
          [(2) monitor and evaluate the implementation, 
        pursuant to section 483, of a Free Application for 
        Federal Student Aid and the process for determining 
        eligibility and awards for programs under this title, 
        including a simplified reapplication process;
          [(3) assess the adequacy of current methods for 
        disseminating information about programs under this 
        title and recommend improvements, as appropriate, 
        regarding early needs assessment and information for 
        first-year high school students; and
          [(4) assess the adequacy of methods of monitoring 
        student debt burden.]
  (j) Special Analyses and Activities.--The committee shall--
          (1) monitor and evaluate the modernization of student 
        financial aid systems and delivery processes;
          (2) monitor and evaluate the implementation of a 
        performance-based organization within the Department of 
        Education and report to Congress, on not less than an 
        annual basis, including recommendations for 
        improvements; and
          (3) assess the adequacy of current methods for 
        disseminating information about programs under this 
        title and recommend improvements, as appropriate, 
        regarding early needs assessment and information for 
        first-year high school students.
  (k) Term of the Committee.--Notwithstanding the sunset and 
charter provisions of the Federal Advisory Committee Act (5 
U.S.C. App. I) or any other statute or regulation, the Advisory 
Committee shall be authorized until October 1, [1998] 2004.
  [(l) Student Loan Program Simplification Study.--(1) The 
Advisory Committee shall conduct a thorough study of means of 
simplifying all aspects of the loan programs under part B of 
this title. In carrying out the study, the Advisory Committee 
shall examine, at a minimum--
          [(A) reduction of paperwork burdens experienced by 
        financial aid administrators resulting from the current 
        structure of such loan programs;
          [(B) promotion of simplification and standardization 
        of forms, procedures, and all other aspects of guaranty 
        agency operations for the purpose of facilitating data 
        exchanges with such agencies (including the National 
        Student Loan Database) and facilitating Department of 
        Education oversight;
          [(C) simplification of the repayment process to 
        minimize borrower confusion, including encouragement of 
        single holder ownership of all of an individual's 
        loans;
          [(D) encouragement of efficient utilization of loan 
        programs to minimize multiple program borrowing in 
        postsecondary education; and
          [(E) other proposals which are designed to reduce the 
        administrative burdens on, and paperwork required of, 
        students, educational institutions, guaranty agencies, 
        lenders, secondary markets, and the Secretary submitted 
        in response to a general solicitation by the Advisory 
        Committee.
  [(2) The Advisory Committee shall consult with the Committee 
on Education and Labor of the House of Representatives and the 
Committee on Labor and Human Resources of the Senate in 
carrying out the study required by this subsection.
  [(3) The Advisory Committee shall, not later than 1 year 
after the date of enactment of this Act, prepare and submit to 
the Committee on Education and Labor of the House of 
Representatives and the Committee on Labor and Human Resources 
of the Senate a report on the study required by this 
subsection.]

[SEC. 492. REGIONAL MEETINGS AND NEGOTIATED RULEMAKING.

  [(a) Meetings.--
          [(1) In general.--The Secretary shall convene 
        regional meetings to obtain public involvement in the 
        development of proposed regulations for parts B, G, and 
        H of this title. Such meetings shall include 
        individuals and representatives of the groups involved 
        in student financial assistance programs under this 
        title, such as students, legal assistance organizations 
        that represent students, institutions of higher 
        education, guaranty agencies, lenders, secondary 
        markets, loan servicers, guaranty agency servicers, and 
        collection agencies.
          [(2) Issues.--During such meetings, the Secretary 
        shall provide for a comprehensive discussion and 
        exchange of information concerning the implementation 
        of parts B, G, and H, as amended by the Higher 
        Education Amendments of 1992. The Secretary shall take 
        into account the information received at such meetings 
        in the development of proposed regulations and shall 
        publish a summary of such information in the Federal 
        Register together with such proposed regulations.
  [(b) Draft Regulations.--After holding regional meetings and 
before publishing proposed regulations in the Federal Register, 
the Secretary shall prepare draft regulations implementing 
parts B, G, and H of this title as amended by the Higher 
Education Amendments of 1992 and shall submit such regulations 
to a negotiated rulemaking process. The Secretary shall follow 
the guidance provided in sections 305.82-4 and 305.85-5 of 
chapter 1, Code of Federal Regulations, and any successor 
recommendation, regulation, or law. Participants in the 
negotiations process shall be chosen by the Secretary from 
individuals nominated by groups participating in the regional 
meetings described in subsection (a)(1), and shall include both 
representatives of such groups from Washington, D.C., and 
industry participants. To the extent possible, the Secretary 
shall select individuals reflecting the diversity in the 
industry, representing both large and small participants, as 
well as individuals serving local areas and national markets. 
The negotiation process shall be conducted in a timely manner 
in order that the final regulations may be issued by the 
Secretary within the 240-day period described in section 431(g) 
of the General Education Provisions Act.
  [(c) Applicability of Federal Advisory Committee Act.--The 
Federal Advisory Committee Act shall not apply to activities 
carried out under this section.
  [(d) Authorization of Appropriations.--There are authorized 
to be appropriated in any fiscal year or made available from 
funds appropriated to carry out this part in any fiscal year 
such sums as may be necessary to carry out the provisions of 
this section, except that if no funds are appropriated pursuant 
to this subsection, the Secretary shall make funds available to 
carry out this section from amounts appropriated for the 
operations and expenses of the Department of Education.]

SEC. 492. NEGOTIATED RULEMAKING.

  (a) In General.--
          (1) Regulation development.--In developing 
        regulations and revisions thereof under this title, the 
        Secretary shall obtain the advice and recommendations 
        of individuals and representatives of the groups 
        involved in student financial assistance programs under 
        this title, such as students, legal assistance 
        organizations that represent students, institutions of 
        higher education, guaranty agencies, lenders, secondary 
        markets, loan servicers, guaranty agency servicers, and 
        collection agencies.
          (2) Input.--Such advice and recommendations may be 
        obtained through such mechanisms as national meetings 
        and electronic exchanges of information.
  (b) Proposed Regulations.--After obtaining such advice and 
recommendations, and prior to publishing any proposed 
regulations and revisions thereof under this title in the 
Federal Register, the Secretary shall prepare draft regulations 
and submit such regulations to a negotiated rulemaking process. 
In establishing the negotiated rulemaking process under this 
section, the Secretary shall--
          (1) follow the procedural requirements used in 
        implementing section 1601(b) of the Elementary and 
        Secondary Education Act of 1965;
          (2) select participants in the negotiations process 
        from individuals and groups participating in the 
        exchanges described in subsection (a)(1), including 
        both representatives of such groups from the District 
        of Columbia, and industry participants, and to the 
        extent possible, the Secretary shall select individuals 
        reflecting the diversity in the industry, representing 
        both large and small participants, as well as 
        individuals serving local areas and national markets;
          (3) conduct the negotiations process in a timely 
        manner in order that final regulations may be issued by 
        the Secretary within the 240-day period described in 
        section 431(g) of the General Education Provisions Act, 
        and any subsequent revisions to regulations under this 
        title may be issued in accordance with the master 
        calendar provisions of section 482 of this title; and
          (4) prepare a transcript of the negotiated rulemaking 
        proceedings that shall be available to the public prior 
        to the issuance of any final regulations.
  (c) Federal Advisory Committee Act.--The Federal Advisory 
Committee Act shall not apply to activities carried out under 
this section.

           *       *       *       *       *       *       *


                   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] 1--Accrediting Agency [Approval] Recognition

SEC. 496. [APPROVAL] RECOGNITION OF ACCREDITING AGENCY OR ASSOCIATION.

  (a) [Standards] Criteria 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] criteria 
established by the Secretary pursuant to this section. The 
Secretary shall, after notice and opportunity for a hearing, 
establish [standards] criteria for such determinations. Such 
[standards] criteria shall include an appropriate measure or 
measures of student achievement. Such [standards] criteria 
shall require that--
          (1) * * *

           *       *       *       *       *       *       *

          (4) such agency or association consistently applies 
        and enforces [standards] criteria that ensure that the 
        courses or programs of instruction, training, or study 
        at the institution of higher education are of 
        sufficient quality to achieve, for the duration of the 
        accreditation period, the stated objective for which 
        the courses or the programs are offered;
          (5) the [standards of accreditation ] criteria for 
        accreditation of the agency or association assess the 
        quality (including the quality of distance learning 
        programs or courses) of the institution's--
                  (A) * * *

           *       *       *       *       *       *       *

                  (G) [program length and tuition and fees in 
                relation to the subject matters taught] 
                measures of program length and the objectives 
                of the degrees or credentials offered;

           *       *       *       *       *       *       *

                  [(J) default rates in the student loan 
                programs under title IV of this Act, based on 
                the most recent data provided by the 
                Secretary;]
                  [(K)] (J) record of student complaints 
                received by, or available to, the agency or 
                association; [and]
                  [(L)] (K) compliance with its program 
                responsibilities under title IV of this Act, 
                including the most recent student loan default 
                rate data provided by the Secretary and any 
                results of financial or compliance audits, 
                program reviews, and such other information as 
                the Secretary may provide to the agency or 
                association; and
                  (L) refund policy;
        except that subparagraphs (G), (H), (I), [(J), and (L)] 
        (K) and (L) shall not apply to agencies or associations 
        described in paragraph (2)(A)(ii) of this subsection;

           *       *       *       *       *       *       *

          (7) such agency or association shall notify the 
        Secretary and the appropriate [State postsecondary 
        review entity] State licensing or authorizing agency 
        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] 
        State licensing or authorizing agency 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.

           *       *       *       *       *       *       *

  (c) Operating Procedures Required.--No accrediting agency or 
association may be [approved by the Secretary] recognized by 
the Secretary as a reliable authority as to the quality of 
education or training offered by an institution seeking to 
participate in the programs authorized under this title, unless 
the agency or association--
          (1) performs, at regularly established intervals, on-
        site inspections and reviews of institutions of higher 
        education [(at least one of which inspections at each 
        institution that provides vocational education and 
        training shall be unannounced),] (which may include 
        unannounced site visits) with particular focus on 
        educational quality and program effectiveness, and 
        ensures that accreditation team members are well-
        trained and knowledgeable with respect to their 
        responsibilities;

           *       *       *       *       *       *       *

          (3) agrees to conduct, as soon as practicable, but 
        within a period of not more than 6 months of the 
        establishment of a new branch campus or a change of 
        ownership of an institution of higher education, an on-
        site visit of that branch campus or of the institution 
        after a change of ownership, except that new sites 
        offered through telecommunications for programs 
        previously included in the scope of accreditation 
        approval need not be subject to such on-site visits;

           *       *       *       *       *       *       *

  (d) Length of [Approval] Recognition.--No accrediting agency 
or association may be [approved] recognized by the Secretary 
for the purpose of this Act for a period of more than 5 years.

           *       *       *       *       *       *       *

  (f) Jurisdiction.--Notwithstanding any other provision of 
law, any civil action brought by an institution of higher 
education seeking accreditation from, or accredited by, an 
accrediting agency or association [approved] recognized by the 
Secretary for the purpose of this title and involving the 
denial, withdrawal, or termination of accreditation of the 
institution of higher education, shall be brought in the 
appropriate United States district court.
  (g) Limitation on Scope of [Standards] Criteria.--Nothing in 
this Act shall be construed to permit the Secretary to 
establish [standards] criteria for accrediting agencies or 
associations that are not required by this section. Nothing in 
this Act shall be construed to prohibit or limit any 
accrediting agency or association from adopting additional 
standards not provided for in this section.

           *       *       *       *       *       *       *

  (j) Impact of Loss of Accreditation.--An institution may not 
be certified or recertified as an institution of higher 
education under section [481] 101(a)(2) and subpart [3] 2 of 
this part or participate in any of the other programs 
authorized by this Act if such institution--
          (1) * * *

           *       *       *       *       *       *       *

  (k) Religious Institution Rule.--Notwithstanding subsection 
(j), the Secretary shall allow an institution that has had its 
accreditation withdrawn, revoked, or otherwise terminated, or 
has voluntarily withdrawn from an accreditation agency, to 
remain certified as an institution of higher education under 
section [481] 101(a)(2) and subpart [3] 2 of this part for a 
period sufficient to allow such institution to obtain 
alternative accreditation, if the Secretary determines that the 
reason for the withdrawal, revocation, or termination--
          (1) is related to the religious mission or 
        affiliation of the institution; and
          (2) is not related to the accreditation [standards] 
        criteria provided for in this section.
  (l) Limitation, Suspension or Termination of [Approval] 
Recognition.--(1) The Secretary shall limit, suspend, or 
terminate the [approval] recognition of an accrediting agency 
or association if the Secretary determines, after notice and 
opportunity for a hearing, that the accrediting agency or 
association has failed to apply effectively [the] its standards 
or operate according to the procedures provided in this 
section.
  (2) The Secretary may determine that an accrediting agency or 
association has failed to apply effectively [the] its standards 
provided in this section if an institution of higher education 
seeks and receives accreditation from the accrediting agency or 
association during any period in which the institution is the 
subject of any interim action by another accrediting agency or 
association, described in paragraph (2)(A)(i), (2)(B), or 
(2)(C) of subsection (a) of this section, leading to the 
suspension, revocation, or termination of accreditation or the 
institution has been notified of the threatened loss of 
accreditation, and the due process procedures required by such 
suspension, revocation, termination, or threatened loss have 
not been completed.

           *       *       *       *       *       *       *

  (n) Independent Evaluation.--(1) The Secretary shall conduct 
a comprehensive review and evaluation of the performance of all 
accrediting agencies or associations which seek recognition by 
the Secretary in order to determine whether such accrediting 
agencies or associations meet the [standards] criteria 
established by this section. The Secretary shall conduct an 
independent evaluation of the information provided by such 
agency or association. Such evaluation shall include--
          (A) * * *

           *       *       *       *       *       *       *

  (3) The Secretary shall consider all available relevant 
information concerning the compliance of the accrediting agency 
or association with the [standards] criteria provided for in 
this section, including any complaints or legal actions against 
such agency or association. In cases where deficiencies in the 
performance of an accreditation agency or association with 
respect to the requirements of this section are noted, the 
Secretary shall take these deficiencies into account in the 
[approval] recognition process. The Secretary shall not, under 
any circumstances, base decisions on the [approval or 
disapproval] recognition or denial of recognition of 
accreditation agencies or associations on [standards] criteria 
other than those contained in this section.
  [(4) The Secretary shall maintain sufficient documentation to 
support the conclusions reached in the approval process, and, 
upon disapproval of any accreditation agency or association, 
shall make publicly available the reason for such disapproval, 
including reference to the specific standards under this 
section which have not been fulfilled.]
  (4) The Secretary shall maintain sufficient documentation to 
support the conclusions reached in the recognition process, 
and, if the Secretary does not recognize any accreditation 
agency or association, shall make publicly available the reason 
for denying recognition, including reference to the specific 
criteria under this section which have not been fulfilled.

           *       *       *       *       *       *       *


        Subpart [3] 2--Eligibility and Certification Procedures

SEC. 498. ELIGIBILITY AND CERTIFICATION PROCEDURES.

  (a) * * *
  (b) Single Application Form.--The Secretary shall prepare and 
prescribe a single application form which--
          (1) requires sufficient information and documentation 
        to determine that the requirements of eligibility, 
        [accreditation, and capability] accreditation, 
        financial responsibility, and administrative capacity 
        of the institution of higher education are met;

           *       *       *       *       *       *       *

  (c) Financial Responsibility Standards.--(1) The Secretary 
shall determine whether an institution has the financial 
responsibility required by this title on the basis of whether 
the institution [is able] has sufficient resources to ensure 
against the precipitous closure of the institution and is 
able--
          (A) * * *

           *       *       *       *       *       *       *

  (2) Notwithstanding paragraph (1), if an institution fails to 
meet criteria prescribed by the Secretary with respect to 
[operating losses, net worth, asset-to-liabilities ratios, or 
operating fund deficits] to ratios that demonstrate financial 
responsibility, then the institution shall provide the 
Secretary with satisfactory evidence of its financial 
responsibility in accordance with paragraph (3). Such criteria 
shall take into account any differences in generally accepted 
accounting principles, and the financial statements required 
thereunder, that are applicable to for profit, public, and 
nonprofit institutions. The Secretary shall take into account 
an institution's total financial circumstances in making a 
determination of its ability to meet the standards herein 
required, and develop an appropriate and cost effective process 
under this subpart that does not duplicate other reporting 
requirements for assessing and reviewing financial 
responsibility.

           *       *       *       *       *       *       *

  (4) If an institution of higher education that provides a 2-
year or 4-year program of instruction for which the institution 
awards an associate or baccalaureate degree fails to meet the 
[ratio of current assets to current liabilities] criteria 
imposed by the Secretary pursuant to paragraph (2), the 
Secretary shall waive that particular requirement for that 
institution if the institution demonstrates to the satisfaction 
of the Secretary that--
          (A) * * *

           *       *       *       *       *       *       *

          (C) it has substantial equity in school-occupied 
        facilities, the acquisition of which was the direct 
        cause of its failure to meet the [current operating 
        ratio requirement] criteria imposed by the Secretary 
        pursuant to paragraph (2).

           *       *       *       *       *       *       *

  (d) Administrative Capacity Standard.--The Secretary is 
authorized--
          (1) to establish procedures and requirements relating 
        to the administrative capacities of institutions of 
        higher education, including--
                  (A) consideration of past performance of 
                institutions or persons in control of such 
                institutions with respect to [student aid 
                programs; and] student financial assistance 
                under this title;
                  (B) written procedures for, or written 
                information relating to, each office with 
                respect to, the approval, disbursement, and 
                delivery of student financial assistance under 
                this title;
                  (C)(i) a division of functions for 
                authorizing payments of student financial 
                assistance under this title and the 
                disbursement or delivery of such assistance, so 
                that no office at the institution has 
                responsibility for both functions; and
                  (ii) an adequate system of checks and 
                balances for internal control at the 
                institution with respect to student financial 
                assistance under this title; and
                  [(B)] (D) maintenance of records;

           *       *       *       *       *       *       *

  (f) Actions on Applications; Site Visits and Fees.--The 
Secretary shall ensure that prompt action is taken by the 
Department on any application required under subsection (b). 
The personnel of the Department of Education [shall] may 
conduct a site visit at each institution before certifying or 
recertifying its eligibility for purposes of any program under 
this title. The Secretary [may] shall establish priorities by 
which institutions are to receive site visits, and [may 
coordinate] shall, to the extent practicable, coordinate such 
visits with site visits by States, guaranty agencies, and 
accrediting bodies in order to eliminate duplication, and 
reduce administrative burden. The Secretary may charge 
reasonable fees to cover the expenses of certification and site 
visits and, to the extent permitted by appropriations Acts, may 
retain such fees to cover such expenses. The Secretary may 
exempt from the site visit requirement any institution that is 
participating in the Quality Assurance Program established 
under section 487A at the time such site visit would be 
required under this subsection.
  [(g) Time Limitations on, and Renewal of, Eligibility.--(1) 
The eligibility for the purposes of any program authorized 
under this title of any institution that is participating in 
any such program on the date of enactment of the Higher 
Education Amendments of 1992 shall expire in accordance with 
the schedule prescribed by the Secretary in accordance with 
paragraph (2), but not later than 5 years after such date of 
enactment.
  [(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.
  [(3) After the expiration of the certification of any 
institution under the schedule prescribed under this 
subsection, or upon request for initial certification from an 
institution not previously certified, the Secretary may certify 
the eligibility for the purposes of any program authorized 
under this title of each such institution for a period not to 
exceed 4 years.]
  (g) Time Limitations.--(1) After the expiration of the 
certification of any institution or upon request for initial 
certification from an institution not previously certified, the 
Secretary may certify the eligibility for the purposes of any 
program authorized under this title of each such institution 
for a period not to exceed 6 years.
  (2) The Secretary shall notify each institution of the 
expiration of its eligibility no later than six months prior to 
such expiration.
  (h) Provisional Certification of Institutional Eligibility.--
(1) * * *
  (2) Whenever the Secretary withdraws the [approval] 
recognition of any accrediting agency, an institution of higher 
education which meets the requirements of accreditation, 
eligibility, and certification on the day prior to such 
withdrawal, the Secretary may, notwithstanding the withdrawal, 
continue the eligibility of the institution of higher education 
to participate in the programs authorized by this title for a 
period not to exceed 18 months from the date of the withdrawal 
of approval.

           *       *       *       *       *       *       *

  (i) Treatment of Changes of Ownership.--(1) An eligible 
institution of higher education that has had a change in 
ownership resulting in a change of control shall not qualify to 
participate in programs under this title after the change in 
control (except as provided in paragraph (3)) unless it 
establishes that it meets the requirements of [section 481 
(other than the requirements in subsections (b)(5) and (c)(3))] 
section 101(a) (other than the requirements in paragraphs 
(3)(A)(v) and (4)(A)(iii)) and this section after such change 
in control.

           *       *       *       *       *       *       *

  (4)(A) The Secretary may provisionally certify an institution 
seeking approval of a change in ownership based on the 
preliminary review by the Secretary of a materially complete 
application that is received by the Secretary within 10 
business days of the transaction for which the approval is 
sought.
  (B) A provisional certification under this paragraph shall 
expire no later than the end of the month following the month 
in which the transaction occurred, except that if the Secretary 
has not issued a decision on the application for the change of 
ownership within that period, the Secretary may continue such 
provisional certification on a month-to-month basis until such 
decision has been issued.
  (j) Treatment of Branches.--(1) A branch of an eligible 
institution of higher education, as defined pursuant to 
regulations of the Secretary, shall be certified under this 
subpart before it may participate as part of such institution 
in a program under this title, except that such branch shall 
not be required to meet the requirements of [sections 481(b)(5) 
and 481(c)(3)] paragraphs (3)(A)(v) and (4)(A)(iii) of section 
101(a) prior to seeking such certification. Such branch is 
required to be in existence at least 2 years prior to seeking 
certification as a main campus or free-standing institution.
  (2) The Secretary may waive the requirement of section 
[1201(a)(2)] 101(a)(2) for a branch that (A) is not located in 
a State, (B) is affiliated with an eligible institution, and 
(C) was participating in one or more programs under this title 
on or before January 1, 1992.

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) * * *
          (2) [may] shall give priority for program review to 
        institutions of higher education that are--
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) institutions with a significant 
                fluctuation in Federal Stafford Loan volume or 
                Federal Pell Grant awards, or both, in the year 
                for which the determination is made compared to 
                the year prior to such year, that are not 
                accounted for by changes in those programs;
                  (D) institutions reported to have 
                deficiencies or financial aid problems by [the 
                appropriate State postsecondary review entity 
                designated under subpart 1 of this part] the 
                State licensing or authorizing agency or by the 
                appropriate accrediting agency or association;
                  (E) institutions with high annual dropout 
                rates;
                  [(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) all relevant information available to the 
                Department;

           *       *       *       *       *       *       *

  [(b) Special Administrative Rules.--(1) In carrying out 
paragraphs (1) and (2) of subsection (a), the Secretary shall 
establish guidelines designed to ensure uniformity of practice 
in the conduct of program reviews of institutions of higher 
education.
  [(2) The Secretary shall review the regulations of the 
Department and the application of such regulations to ensure 
the uniformity of interpretation and application of the 
regulations.]
  (b) Special Administrative Rules.--(1) In carrying out 
paragraphs (1) and (2) of subsection (a), the Secretary shall--
          (A) establish guidelines designed to ensure 
        uniformity of practice in the conduct of program 
        reviews of institutions; and
          (B) inform the appropriate State agency and 
        accrediting agency or association whenever taking 
        action against an institution under this section, 
        section 498, or section 432.
  (2) The Secretary shall review the regulations of the 
Department and the application of such regulations to ensure 
the uniformity of interpretation and application of the 
regulations. In conducting such review, the Secretary shall 
consult with relevant representatives of institutions 
participating in the programs authorized by this title.

           *       *       *       *       *       *       *


       [TITLE V--EDUCATOR RECRUITMENT, RETENTION, AND DEVELOPMENT

[SEC. 500. FINDINGS AND PURPOSES.

  [(a) Findings.--The Congress finds that--
          [(1) teachers in the classroom are the men and women 
        who must play an integral role in leading our Nation's 
        schools into the 21st century;
          [(2) we should encourage individuals to enter the 
        education profession so that our teaching force is 
        representative both of the diversity of our Nation and 
        of the tremendous talents and skills of our citizens;
          [(3) the methods used to prepare prospective teachers 
        and the continuing education and support provided to 
        practicing teachers have a significant influence on the 
        effectiveness of classroom teachers;
          [(4) the postsecondary education of education 
        professionals has not been linked to local, State and 
        national goals and standards;
          [(5) the inservice and continuing professional 
        development of educators has not promoted systematic 
        and sustained improvement of the education system;
          [(6) State educational agencies have not been funded 
        and staffed adequately to carry out a mission of 
        supporting a process to achieve local, State, or 
        national goals and standards;
          [(7) in order to encourage more women and 
        underrepresented minorities to enter the fields of 
        science and mathematics and succeed in these fields, we 
        must provide proper training for existing mathematics 
        and science teachers and recruit women and 
        underrepresented minorities as teachers in these 
        fields;
          [(8) educators must have the expertise and the 
        support that allow them to adapt to the changing 
        environment in our schools and to the evolving skills 
        required of our schools' graduates; and
          [(9) the Federal Government plays an essential role 
        in providing support to educator training and 
        professional development that will enable teachers to 
        be classroom leaders and administrators to be school 
        leaders at the forefront of reforming our Nation's 
        schools.
  [(b) Purpose.--It is the purpose of this title--
          [(1) to provide assistance to our Nation's teaching 
        force for the continued improvement of their 
        professional skills;
          [(2) to provide assistance for professional 
        development activities enabling teachers, school 
        administrators, and institutions of higher education to 
        work collaboratively to improveeducational performance 
through school reform and restructuring;
          [(3) to address the Nation's teacher shortage, 
        particularly in areas where there are heavy 
        concentrations of low-income students, by encouraging 
        talented persons, including the individuals already 
        employed as school paraprofessionals and individuals 
        who have been employed in other areas of endeavor, to 
        enter the teaching profession;
          [(4) to encourage academically qualified students to 
        become teachers through scholarship assistance;
          [(5) to support the recruitment of underrepresented 
        populations into teaching careers;
          [(6) to provide scholarship assistance to encourage 
        women and minorities who are underrepresented in the 
        fields of science and mathematics to enter the teaching 
        profession in these fields;
          [(7) to encourage the establishment and maintenance 
        of programs that provide professional teacher 
        preparation to individuals who are moving to careers in 
        education from other occupations;
          [(8) to promote partnerships between institutions of 
        higher education and local educational agencies for the 
        purpose of promoting the simultaneous restructuring and 
        renewal of elementary and secondary schools and 
        college-based teacher education programs;
          [(9) to improve the leadership and administrative 
        skills of elementary and secondary school 
        administrators;
          [(10) to provide assistance to schools of education 
        in institutions of higher education in order to reform 
        teacher education programs by encouraging new 
        developments in teacher preparation which provide for 
        greater integration of subject matter and pedagogical 
        training and which prepare classroom teachers to 
        effectively meet changing noneducational challenges in 
        the schools; and
          [(11) to promote high quality child development and 
        early childhood education specialist training programs, 
        including preschool and early intervention services for 
        infants and toddlers with disabilities.

        [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 andshall 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 
givespecial 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 2--Christa McAuliffe Fellowship Program

[SEC. 531. DECLARATION OF PURPOSE; DESIGNATION.

  [(a) Purpose.--It is the purpose of this subpart to establish 
a national fellowship program for experienced and outstanding 
teachers.
  [(b) Designation.--A recipient of a fellowship under this 
subpart shall be known as a ``Christa McAuliffe fellow''.

[SEC. 532. PROGRAM AUTHORIZED.

  [(a) In General.--The Secretary is authorized to make grants, 
in accordance with the provisions of this subpart, to State 
educational agencies to enable such State educational agencies 
to--
          [(1) conduct Christa McAuliffe fellowship activities; 
        and
          [(2) award fellowships to Christa McAuliffe fellows 
        in accordance with the provisions of this subpart.
  [(b) Amount of Grants.--The amount awarded to each State 
educational agency pursuant to paragraph (1) of subsection (a) 
shall be an amount awarded on the basis of the school-age 
population in the State compared to the school-age population 
in all States, except that the Secretary may adjust the awards 
to ensure that such awards are of sufficient size to carry out 
the purposes of this subpart.
  [(c) State Activities.--Each State educational agency 
receiving a grant pursuant to subsection (a) shall use not more 
than 3 percent of such grant for administrative purposes.
  [(d) Use of Funds for Fellowships and Administration.--Funds 
appropriated for any fiscal year for fellowships to teachers 
under this subpart shall be used to award fellowships in 
accordance with the requirements of this subpart, except that 
not more than 1 percent of such funds shall be used by the 
Secretary for purposes of administering this subpart, including 
activities authorized under section 537(b).

[SEC. 533. CHRISTA MCAULIFFE FELLOWSHIPS.

  [(a) Award Distribution and Amount.--
          [(1) Award distribution.--Each State educational 
        agency receiving a grant under this subpart shall use 
        such funds to award Christa McAuliffe fellowships to 
        public and private school teachers who have been 
        employed as teachers for 8 or more years to enable such 
        teachers to engage in the activities described in 
        subsection (b).
          [(2) Amount.--Fellowships shall be in an amount equal 
        to the annual salary the individual would earn in such 
        individual's current place of employment for the award 
        period.
          [(3) Ratable reduction.--If an individual receives a 
        fellowship award for less than a school year, such 
        fellowship shall be ratably reduced to equal the salary 
        forgone.
          [(4) Duration.--No Christa McAuliffe fellow may 
        receive an award for 2 consecutive years.
          [(5) Requirement.--Subject to the repayment 
        provisions of section 536, each Christa McAuliffe 
        fellow shall be required to return to a teaching 
        position, in their place of employment prior to 
        receiving the fellowship award, for at least 2 years 
        following such award. The Secretary is authorized, in 
        extraordinary circumstances, to waive or defer all or a 
        portion of the service requirement, or allow fellows to 
        fulfill their service requirement by going into a 
        teaching position in another school or school district 
        within the State or in another State upon approval of 
        the sending and receiving State.
  [(b) Use of Fellowships.--Each Christa McAuliffe fellowship 
may be used for--
          [(1) sabbaticals for study, research or academic 
        improvement to--
                  [(A)(i) improve such teacher's knowledge base 
                in an area of expertise; or
                  [(ii) learn a new area of expertise;
                  [(B) increase skills and professional 
                ability; and
                  [(C) enhance the ability of teachers to work 
                with special education populations, including--
                          [(i) gifted and talented children;
                          [(ii) limited-English proficient 
                        children;
                          [(iii) children with disabilities; 
                        and
                          [(iv) economically and educationally 
                        disadvantaged children;
          [(2)(A) consultation with or assistance to other 
        school districts or private school systems; or
          [(B) development of special innovative programs;
          [(3) projects or partnerships that involve the 
        business community and the schools;
          [(4) programs that incorporate the use and the 
        sharing of technologies to help students learn; or
          [(5) expanding or replicating model programs of staff 
        development.

[SEC. 534. SELECTION OF CHRISTA MCAULIFFE FELLOWS.

  [(a) In General.--Christa McAuliffe fellows in each State 
shall be selected (in accordance with section 535) by a 7-
member statewide panel appointed by the chief State school 
officer, or by an existing panel designated by the chief State 
school officer. The statewide panel shall be representative of 
school administrators, teachers, parents, and institutions of 
higher education.
  [(b) Special Rule.--Each State educational agency may choose 
to administer the program assisted under this subpart through a 
pre-existing panel which is experienced in administering 
similar programs.

[SEC. 535. EVALUATION OF APPLICATIONS.

  [(a) Submission to and Review by Statewide Panel.--An 
applicant for a Christa McAuliffe fellowship shall submit a 
proposal for a project in accordance with section 533(b), and 
shall indicate the extent to which the applicant wishes to 
continue current teaching duties. The applicant shall submit 
such a proposal to the local educational agency for comment 
prior to submission to the statewide panel (appointed under 
section 534) for the State in which the project will be 
conducted. Each such application shall contain such information 
as such State educational agency may reasonably require.
  [(b) Consultation and Consideration.--
          [(1) In general.--In evaluating proposals, the 
        statewide panel shall consult with the local 
        educational agency, and shall consider--
                  [(A) evaluations during employment as a 
                teacher;
                  [(B) demonstrated commitment to teaching in 
                the future; and
                  [(C) intended activities during the award 
                period.
          [(2) Recommendations.--The statewide panel may 
        request recommendations from teaching peers and the 
        applicant's principal and superintendent on the quality 
        of the proposal, the benefit of such proposal to 
        education, and any other criteria for awarding 
        fellowships as are considered appropriate by such 
        statewide panel.
          [(3) Selection.--Selection of members of the 
        statewide panel shall be made in accordance with 
        regulations prescribed by the Secretary.
  [(c) Public Announcement.--Announcement of fellowship awards 
shall be made in a public ceremony.

[SEC. 536. FELLOWSHIP REPAYMENT PROVISIONS.

  [Repayment of the award shall be made to the Federal 
Government in the case of fraud or gross noncompliance.

[SEC. 537. SECRETARY'S RESPONSIBILITIES.

  [(a) In General.--The Secretary shall--
          [(1) make awards to State educational agencies having 
        applications approved under section 538; and
          [(2) in cooperation with the State educational 
        agency, conduct activities which foster communication 
        among and bring together Christa McAuliffe fellows 
        including activities such as written communications, 
        meetings, or training sessions.
  [(b) Information Dissemination.--The Secretary shall 
establish a clearinghouse or otherwise provide for the 
collection and dissemination of information on exemplary 
projects for improving education that were developed in 
accordance with section 533(b) of this part. The Secretary may 
utilize the National Diffusion Network in carrying out the 
requirements of this section.

[SEC. 538. STATE APPLICATION.

  [(a) Application Required.--Each State educational agency 
desiring a grant under this subpart shall submit an application 
to the Secretary at such time, in such manner, and containing 
such information as the Secretary may reasonably require.
  [(b) Contents.--Each application submitted pursuant to 
subsection (a) shall--
          [(1) provide assurances that Christa McAuliffe 
        fellows will be released from teaching responsibilities 
        for up to one school year (if the fellow's proposal 
        requires such release time) without jeopardizing the 
        rights such members would have had without 
        participating in the program assisted under this 
        subpart;
          [(2) provide assurances that the State educational 
        agency, or its designee, in cooperation with local 
        educational agencies, shall maintain accurate records 
        regarding the activities of Christa McAuliffe fellows 
        within the State to ensure that such members are 
        meeting all conditions of the fellowships provided 
        pursuant to this subpart, and shall notify the 
        Secretary immediately upon a change in a Christa 
        McAuliffe fellow's status rendering such fellow in 
        violation of the conditions of the fellowship; and
          [(3) provide assurances that the State educational 
        agency has consulted with local educational agencies in 
        designing and developing the Christa McAuliffe 
        Fellowship program.

[SEC. 539. EVALUATION.

  [(a) In General.--
          [(1) In general.--The Secretary shall conduct, by 
        grant or contract, an independent evaluation of--
                  [(A) Christa McAuliffe fellows; and
                  [(B) the impact of the activities undertaken 
                by the Christa McAuliffe fellows on teachers, 
                teacher research, curricula, staff development, 
                improvement of programs and improvement of 
                student achievement.
          [(2) Competitive basis.--The grant or contract 
        described in paragraph (1) shall be awarded on a 
        competitive basis.
  [(b) Contents.--The evaluation shall--
          [(1) include information on the nature of projects 
        developed and implemented by Christa McAuliffe fellows;
          [(2) assess the measurable effects of such projects 
        on the academic performance of the students served by 
        such projects;
          [(3) assess the effect of the fellowship program 
        assisted under this subpart on the postfellowship 
        experiences of Christa McAuliffe fellows;
          [(4) identify the barriers to such program's 
        effectiveness;
          [(5) assess the extent to which successful projects 
        were disseminated and adopted by other teachers and 
        schools without further Federal assistance; and
          [(6) determine and explore ways to improve the cost-
        effectiveness of such program.
  [(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 540 in fiscal years 1993 through 1997 
to carry out this section.

[SEC. 540. 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 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 thissection 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 1--National Board for Professional Teaching Standards

[SEC. 551. NATIONAL BOARD FOR PROFESSIONAL TEACHING STANDARDS.

  [(a) Definitions.--For the purpose of this subpart--
          [(1) The term ``Board'' means the National Board for 
        Professional Teaching Standards.
          [(2) The term ``Committee'' means the Fund for 
        Improvement and Reform of Schools and Teaching Board 
        established in section 3231 of the Fund for the 
        Improvement and Reform of Schools and Teaching Act.
          [(3) The term ``Director'' means the Director of the 
        National Science Foundation.
  [(b) Program Authorization.--
          [(1) Program authorized.--From sums appropriated 
        pursuant to the authority of subsection (k) in any 
        fiscal year, the Secretary shall, in accordance with 
        this subpart, provide financial assistance to the 
        National Board for Professional Teaching Standards, in 
        order to pay the costs of the activities described in 
        subsection (d).
          [(2) Terms and conditions.--(A) No financial 
        assistance may be made available under this subpart 
        except upon an application as required by subsection 
        (e).
          [(B) No financial assistance may be made available 
        under this subpart unless the Secretary determines 
        that--
                  [(i) the Board will comply with the 
                provisions of this subpart;
                  [(ii) the Board will use the Federal funds 
                only for research and development activities in 
                accordance with subsection (d) and such teacher 
                assessment and certification procedures will be 
                free from racial, cultural, gender or regional 
                bias;
                  [(iii) the Board--
                          [(I) will widely disseminate for 
                        review and comment announcements of 
                        specific research projects to be 
                        conducted with Federal funds, including 
                        a description of the goals and focus of 
                        the specific project involved and the 
                        specific merit review procedures and 
                        evaluation criteria to be used in the 
                        competitive award process; and
                          [(II) will send such announcements to 
                        the Secretary, the Director, the 
                        National Research Council, and the 
                        educational research community;
                  [(iv) the Secretary, pursuant to an 
                arrangement with the Board, will publish the 
                announcements described in clause (iii) in the 
                Federal Register (or such other publication 
                deemed appropriate by the Secretary) and in 
                publications of general circulation designed to 
                disseminate such announcements widely to the 
                educational research community;
                  [(v) the Board will, after offering any 
                interested party an opportunity to make comment 
                upon, and take exception to, the projects 
                contained in the announcements described in 
                clause (iii) for a 30-day period following 
                publication, and after reconsidering any 
                project upon which comment is made or to which 
                exception is taken, issue through the Secretary 
                a request for proposals in the Federal Register 
                (or such other publication deemed appropriate 
                by the Secretary) containing any revised 
                project information;
                  [(vi) the Board will make awards of Federal 
                funds competitively on the basis of merit, and, 
                in the award process, the Board will select, to 
                the extent practicable consistent with 
                standards of excellence--
                          [(I) a broad range of institutions 
                        associated with educational research 
                        and development; and
                          [(II) individuals who are broadly 
                        representative of the educational 
                        research and teaching communities with 
                        expertise in the specific area of 
                        research and development in question;
                  [(vii) the Board will adopt audit practices 
                customarily applied to nonprofit private 
                organizations and will comply with subsection 
                (g)(4);
                  [(viii) the Board will not use Federal funds 
                to meet the administrative and operating 
                expenses of the Board;
                  [(ix) the Board will submit an annual report 
                to the Congress in accordance with the 
                provisions of subsection (g)(1); and
                  [(x) the Board will, upon request, 
                disseminate to States, local educational 
                agencies, or other public educational entities 
                the results of any research or research project 
                produced with funds authorized by this subpart, 
                upon the payment of the cost of reproducing the 
                appropriate material.
          [(3) Availability of funds.--(A) Notwithstanding any 
        other provision of law, funds appropriated to carry out 
        this subpart shall remain available for obligation and 
        expenditure until the end of the second fiscal year 
        succeeding the fiscal year for which the funds were 
        appropriated.
          [(B) No funds shall be made available to the Board 
        after September 30, 1997, except as authorized by 
        subparagraph (A) of this subsection.
  [(c) Consultation.--The Board shall consult at least twice 
annually with the Committee on the design and execution of its 
overall research and development strategy, including procedures 
to assure compliance with the requirements of this subpart. The 
procedures shall include--
          [(1) an outline of specific research and development 
        agenda and activities to be conducted with the Federal 
        funds; and
          [(2) provisions to ensure compliance with the open 
        competition and merit review requirements of this 
        subpart for proposals and projects assisted under this 
        subpart.
  [(d) Authorized Activities.--
          [(1) In general.--Federal funds received under this 
        subpart may only be used for research and development 
        activities directly related to the development of 
        teacher assessment and certification procedures for 
        elementary and secondary school teachers.
          [(2) Priorities.--(A) The Board shall give priority 
        to research and development activities in--
                  [(i) mathematics;
                  [(ii) the sciences;
                  [(iii) foreign languages; and
                  [(iv) literacy, including the ability to 
                read, write and analyze.
          [(B) The Board shall give priority to research and 
        development activities for the certification of 
        elementary and secondary school teachers and the need 
        and ability of such teachers to teach special 
        educational populations, including--
                  [(i) limited English proficient children;
                  [(ii) gifted and talented children;
                  [(iii) children with disabilities; and
                  [(iv) economically and educationally 
                disadvantaged children.
  [(e) Application.--
          [(1) In general.--The Board shall submit applications 
        to the Secretary at such time and in such manner as the 
        Secretary may reasonably require. Each such application 
        shall--
                  [(A) describe the activities for which 
                assistance is sought; and
                  [(B) provide assurances that the non-Federal 
                share of the cost of activities of the Board is 
                paid from non-Federal sources, together with a 
                description of the manner in which the Board 
                will comply with the requirements of this 
                subparagraph.
          [(2) Approval.--The Secretary shall approve an 
        application unless such application fails to comply 
        with the provisions of this subpart.
  [(f) Matching Funds Requirement.--
          [(1) In general.--The Secretary shall not provide 
        financial assistance under this subpart to the Board 
        unless the Board agrees to expend non-Federal 
        contributions equal to $1 for every $1 of the Federal 
        funds provided pursuant to such financial assistance.
          [(2) Non-federal contributions.--The non-Federal 
        contributions described in paragraph (1)--
                  [(A) may include all non-Federal funds raised 
                by the Board on or after January 1, 1987; and
                  [(B) may be used for outreach, 
                implementation, administration, operation, and 
                other costs associated with the development and 
                implementation of national teacher assessment 
                and certification procedures under this 
                subpart.
  [(g) Reports and Auditing Provision.--
          [(1) National board for professional teaching 
        standards report.--The Board shall submit an annual 
        report to the appropriate committees of the Congress 
        not later than June 30 of any fiscal year in which 
        Federal funds are expended pursuant to this subpart. 
        The Board shall disseminate the report for review and 
        comment to the Department of Education, the National 
        Science Foundation, the National Research Council, and 
        the education research community. The report shall--
                  [(A) include a detailed financial statement 
                and a report of the audit practices described 
                in subsection (b)(2)(B)(vii);
                  [(B) include a description of the general 
                procedures to assure compliance with the 
                requirements of this subpart as required in 
                subsection (d); and
                  [(C) provide a comprehensive and detailed 
                description of the Board's agenda, activities, 
                and planned activities for the preceding and 
                succeeding fiscal years, including--
                          [(i) the Board's overall research and 
                        development program and activities;
                          [(ii) the specific research and 
                        development projects and activities 
                        conducted with Federal funds during the 
                        preceding fiscal year, including--
                                  [(I) a description of the 
                                goals and methodology of the 
                                project;
                                  [(II) a description and 
                                assessment of the findings (or 
                                status and preliminary findings 
                                if the project is not yet 
                                completed);
                                  [(III) a description of the 
                                competitive bidding process, 
                                the merit review procedures, 
                                and the evaluation criteria 
                                used to award project funds; 
                                and
                                  [(IV) a description of the 
                                Board's plans for dissemination 
                                of the findings described in 
                                clause (ii);
                          [(iii) the specific research and 
                        development projects and activities 
                        planned to be conducted with Federal 
                        funds during the succeeding fiscal 
                        year, including the goals and 
                        methodologies to be used; and
                          [(iv) a listing of available 
                        publications of the Board, including 
                        publications related to policies, 
                        standards and general information, 
                        research reports, and commissioned 
                        papers of the Board.
          [(2) First annual report.--The first annual report 
        required by this subsection shall include a description 
        of the Board's research and development agenda for the 
        succeeding 5-year period. Such first report shall 
        include to the maximum extent practicable, a 
        description of specific research and development 
        projects and activities, and the goals and 
        methodologies of such projects and activities.
          [(3) Additional reports.--The Secretary, the 
        Director, and the National Research Council shall 
        report to the appropriate committees of the Congress on 
        the compliance of the Board with the requirements of 
        this part not later than 30 days after the Board 
        submits its annual report pursuant to paragraph (1).
          [(4) Auditing provision.--The Comptroller General of 
        the United States, and any of the Comptroller's 
        authorized representatives, shall have access, for the 
        purpose of audit and examination, to any books, 
        documents, papers, and records of the Board, and to any 
        recipient of the Board, that is pertinent to the sums 
        received and disbursed under this subpart.
  [(h) Evaluation.--
          [(1) In general.--After September 30, 1995, the 
        Secretary shall reserve not more than 2 percent of the 
        amount appropriated pursuant to the authority of 
        subsection (k) to provide for an independent, ongoing 
        evaluation of the research program of teacher 
        assessments carried out by the Board and the fairness 
        and the accuracy of the data such evaluations produce. 
        The evaluation shall include an analysis of the impact 
        of teacher assessments on minority teachers. The 
        findings of the evaluation shall be submitted to the 
        Labor and Human ResourcesCommittee of the Senate and 
the Education and Labor Committee of the House of Representatives.
          [(2) Special rule.--The Secretary shall enter into a 
        contract for the performance of the evaluation 
        described in paragraph (1) with a nationally recognized 
        organization (such as the National Academy of Sciences 
        or the National Academy of Education).
  [(i) Construction.--Nothing in this subpart shall be 
construed to--
          [(1) establish a preferred national curriculum or 
        preferred teaching methodology for elementary and 
        secondary school instruction;
          [(2) infringe upon the rights and responsibilities of 
        the States to license elementary and secondary school 
        teachers;
          [(3) infringe upon the practice or accreditation of 
        home school or private school teaching;
          [(4) provide an individual certified by the Board 
        with a right of action against a State, local 
        educational agency, or other public educational entity 
        for any decisions related to hiring, promotion, 
        retention or dismissal;
          [(5) authorize the Board to--
                  [(A) study, create, or promulgate separate 
                standards applicable to home school or private 
                school teachers;
                  [(B) take any action to require home school, 
                private school, or public school teachers to 
                participate in any program offered by the 
                Board; or
                  [(C) take any action that infringes in any 
                manner on the right of parents to direct the 
                education of their children; or
          [(6) authorize the Secretary to exercise supervision 
        or control over the research program, standards, 
        assessment practices, administration, or staffing 
        policies of the Board.
  [(j) Voluntary Participation.--Notwithstanding any other 
provision of this subpart, voluntary participation in 
certification assessments by the Board shall be open to home 
school, private school, and public school teachers.
  [(k) Authorization of Appropriations.--There are authorized 
to be appropriated $20,000,000 for the period beginning October 
1, 1992, and ending September 30, 1997, to carry out the 
provisions of this subpart.

               [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.

 [Subpart 2--Programs to Encourage Minority Students to Become Teachers

[SEC. 577. STATEMENT OF PURPOSE.

  [It is the purpose of the program conducted pursuant to 
section 578 to carry out activities designed to--
          [(1) improve recruitment and training opportunities 
        in education for minority individuals, including 
        language minority individuals;
          [(2) increase the number of minority teachers, 
        including language minority teachers, in elementary and 
        secondary schools; and
          [(3) to identify and encourage minority students in 
        the 7th through the 12th grades to aspire to, and to 
        prepare for, careers in elementary and secondary school 
        teaching.

[SEC. 578. PARTNERSHIP GRANTS AUTHORIZED.

  [(a) Authority.--The Secretary is authorized to make grants 
to pay the Federal share of carrying out the purposes of this 
subpart to a partnership between--
          [(1) one or more institutions of higher education 
        which have a demonstrated record and special expertise 
        in carrying out the purposes of this subpart; and
          [(2)(A) one or more local educational agencies;
          [(B) a State educational agency or a State higher 
        education agency; or
          [(C) community-based organizations.
  [(b) Federal Share.--The Federal share of each grant awarded 
under this section shall be 50 percent.
  [(c) Non-Federal Share.--The non-Federal share of each grant 
awarded under this section may be in cash or kind fairly 
evaluated, including planned equipment or services.
  [(d) Administrative Costs.--Not more than 5 percent of any 
grant awarded under this section may be used for administrative 
expenses.

[SEC. 579. PARTNERSHIP AGREEMENT.

  [(a) In General.--In order to be eligible for a grant under 
section 578, a partnership shall enter into a written 
partnership agreement. All partners shall sign the agreement.
  [(b) Contents of Agreement.--The agreement shall include--
          [(1) a listing of all participants in the 
        partnership;
          [(2) a description of the responsibilities of each 
        participant in the partnership; and
          [(3) a listing of the resources, if any, to be 
        contributed to the partnership.
  [(c) Selection Criteria.--In making grants under section 578, 
the Secretary shall approve applications which contain 
provision for projects designed to carry out the purposes 
described in section 577 and which--
          [(1) identify students who indicate an interest in 
        entering the teaching profession, and provide such 
        individuals with support programs such as--
                  [(A) scholarship funds to meet expenses;
                  [(B) remedial and tutoring programs;
                  [(C) counseling and support services;
                  [(D) academic advice and guidance in course 
                selection to prepare for teacher certification;
                  [(E) information and advice regarding 
                eligibility for membership in the Teacher Corps 
                established under subpart 3 of part C of this 
                title, and other financial assistance programs;
                  [(F) teaching mentors;
                  [(G) motivational activities;
                  [(H) teaching skill development;
                  [(I) future teacher clubs; and
                  [(J) instruction in test-taking skills.
          [(2) establish or strengthen teacher training 
        programs;
          [(3) establish or enhance early identification/
        articulation partnership programs with secondary 
        schools and community colleges;
          [(4) establish partnerships with graduate schools of 
        education to foster and facilitate the movement of 
        minority students into post-graduate studies;
          [(5) establish programs and activities which foster 
        and facilitate the movement of students interested in 
        pursuing teaching careers from 2-year institutions to 
        4-year institutions, focusing particular attention on 
        facilitating the transfer of academic credit; and
          [(6) improve existing assessment practices that 
        determine an individual's qualifications to become a 
        teacher.

[SEC. 580. APPLICATION FOR TEACHER PARTNERSHIPS PROGRAM.

  [(a) Application Required.--A partnership desiring to receive 
a grant under section 578 shall submit an application to the 
Secretary.
  [(b) Contents of Application.--The application shall 
include--
          [(1) the written and signed partnership agreement 
        required by section 579;
          [(2) set forth the individuals to be served;
          [(3) a listing of the elementary, if applicable, and 
        secondary schools of the local educational agency to be 
        involved in the program assisted under this subpart;
          [(4) a description of the services and activities to 
        be offered under the program assisted under this 
        subpart; and
          [(5) such additional information and assurances as 
        the Secretary may reasonably require.
  [(c) State Educational Agency Review.--Each application from 
a partnership for a grant under section 578 shall be forwarded 
to the appropriate State educational agency (unless the State 
educational agency is a member of the partnership) for review 
and comment if the State educational agency requests the 
opportunity for such a review. The State educational agency 
must complete a review of such application and comment to the 
Secretary within 30 calendar days of receipt. Failure of the 
State educational agency to submit comments to the Secretary 
shall not prejudice such application.

[SEC. 580A. TEACHER PLACEMENT PROGRAM.

  [(a) Grants Authorized.--
          [(1) In general.--The Secretary is authorized to make 
        grants to institutions of higher education that have 
        schools or departments of education to pay the Federal 
        share of developing and carrying out programs and 
        activities designed to--
                  [(A) prepare and train students to become 
                elementary and secondary school teachers; and
                  [(B) to the extent practicable, place the 
                students as teachers in urban and rural public 
                or private nonprofit elementary or secondary 
                schools where at least 50 percent of students 
                enrolled are from minority groups.
          [(2) Federal share.--The Federal share of each grant 
        awarded under this section shall be 50 percent.
          [(3) Non-federal share.--The non-Federal share of 
        each grant awarded under this section may be in cash or 
        in kind fairly evaluated, including planned equipment 
        or services.
  [(b) Use of Funds.--Grants under this section may be used for 
the costs of developing and carrying out the program of teacher 
preparation, training, and placement described in subsection 
(a).
  [(c) Applications.--No grant may be made under this section 
unless an application to the Secretary is made by the 
institution of higher education at such time, in such manner, 
and containing or accompanied by such information as the 
Secretary may reasonably require.
  [(d) Special Consideration.--The Secretary is authorized, in 
making grants under this section, to give special consideration 
to historically Black colleges and universities and to 
institutions which--
          [(1) are eligible to receive funds under part C of 
        title X; and
          [(2) have enrollments of at least 50 percent minority 
        students in their teacher education programs.
  [(e) Performance Incentive.--In any fiscal year beginning 
after September 30, 1993, the Secretary may, based upon 
evaluation and monitoring of programs assisted under this 
section, increase the Federal share for a recipient of funds 
under this section for the succeeding fiscal year to 75 
percent, if the Secretary determines that there is demonstrated 
success in the operation of the program assisted by such 
recipient.
  [(f) Administrative Costs.--Not more than 5 percent of any 
grant awarded under this section may be used for administrative 
expenses.

[SEC. 580B. 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 not more than \2/3\ 
shall be available to carry out programs under section 578 and 
not less than \1/3\ shall be available to carry out programs 
under section 580A.

               [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 V--DEVELOPING INSTITUTIONS

                 PART A--HISPANIC-SERVING INSTITUTIONS

SEC. 501. PROGRAM AUTHORIZED.

  The Secretary shall provide grants and related assistance to 
Hispanic-serving institutions to enable such institutions to 
improve and expand their capacity to serve Hispanic and other 
low-income students.

SEC. 502. ELIGIBILITY; DEFINITIONS.

  (a) Definitions.--For the purpose of this part:
          (1) Hispanic-serving institution.--The term 
        ``Hispanic-serving institution'' means an institution 
        of higher education which--
                  (A) is an eligible institution;
                  (B) at the time of application, has an 
                enrollment of undergraduate full-time 
                equivalent students that is at least 25 percent 
                Hispanic students; and
                  (C) provides assurances that not less than 50 
                percent of its Hispanic students are low-income 
                individuals.
          (2) Eligible institution.--The term ``eligible 
        institution'' means--
                  (A) an institution of higher education--
                          (i) which has an enrollment of needy 
                        students as required by subsection (b) 
                        of this section;
                          (ii) except as provided in section 
                        522(b), the average educational and 
                        general expenditures of which are low, 
                        per full-time equivalent undergraduate 
                        student, in comparison with the average 
                        educational and general expenditures 
                        per full-time equivalent undergraduate 
                        student of institutions that offer 
                        similar instruction;
                          (iii) which is--
                                  (I) legally authorized to 
                                provide, and provides within 
                                the State, an educational 
                                program for which such 
                                institution awards a bachelor's 
                                degree; or
                                  (II) a junior or community 
                                college;
                          (iv) which is accredited by a 
                        nationally recognized accrediting 
                        agency or association determined by the 
                        Secretary to be reliable authority as 
                        to the quality of training offered or 
                        which is, according to such an agency 
                        or association, making reasonable 
                        progress toward accreditation;
                          (v) which meets such other 
                        requirements as the Secretary may 
                        prescribe; and
                          (vi) which is located in a State; and
                  (B) any branch of any institution of higher 
                education described under subparagraph (A) 
                which by itself satisfies the requirements 
                contained in clauses (i) and (ii) of such 
                subparagraph.
        For purposes of the determination of whether an 
        institution is an eligible institution under this 
        paragraph, the factor described under subparagraph 
        (A)(i) shall be given twice the weight of the factor 
        described under subparagraph (A)(ii).
          (3) Low-income individual.--The term ``low-income 
        individual'' means an individual from a family whose 
        taxable income for the preceding year did not exceed 
        150 percent of an amount equal to the poverty level 
        determined by using criteria of poverty established by 
        the Bureau of the Census.
          (4) Full-time equivalent students.--The term ``full-
        time equivalent students'' means the sum of the number 
        of students enrolled full time at an institution, plus 
        the full-time equivalent of the number of students 
        enrolled part time (determined on the basis of the 
        quotient of the sum of the credit hours of all part-
        time students divided by 12) at such institution.
          (5) Junior or community college.--The term ``junior 
        or community college'' means an institution of higher 
        education--
                  (A) that admits as regular students persons 
                who are beyond the age of compulsory school 
                attendance in the State in which the 
                institution is located and who have the ability 
                to benefit from the training offered by the 
                institution;
                  (B) that does not provide an educational 
                program for which it awards a bachelor's degree 
                (or an equivalent degree); and
                  (C) that--
                          (i) provides an educational program 
                        of not less than 2 years that is 
                        acceptable for full credit toward such 
                        a degree, or
                          (ii) offers a 2-year program in 
                        engineering, mathematics, or the 
                        physical or biological sciences, 
                        designed to prepare a student to work 
                        as a technician or at the 
                        semiprofessional level in engineering, 
                        scientific, or other technological 
                        fields requiring the understanding and 
                        application of basic engineering, 
                        scientific, or mathematical principles 
                        of knowledge.
          (6) Educational and general expenditures.--For the 
        purpose of this part, the term ``educational and 
        general expenditures'' means the total amount expended 
        by an institution of higher education for instruction, 
        research, public service, academic support (including 
        library expenditures), student services, institutional 
        support, scholarships and fellowships, operation and 
        maintenance expenditures for the physical plant, and 
        any mandatory transfers which the institution is 
        required to pay by law.
          (7) Endowment fund.--For the purpose of this part, 
        the term ``endowment fund'' means a fund that--
                  (A) is established by State law, by an 
                institution of higher education, or by a 
                foundation that is exempt from Federal income 
                taxation;
                  (B) is maintained for the purpose of 
                generating income for the support of the 
                institution; and
                  (C) does not include real estate.
  (b) Enrollment of Needy Students.--For the purpose of this 
part, the term ``enrollment of needy students'' means an 
enrollment at an institution of higher education or a junior or 
community college which includes--
          (1) at least 50 percent of the degree students so 
        enrolled who are receiving need-based assistance under 
        title IV of this Act in the second fiscal year 
        preceding the fiscal year for which the determination 
        is being made (other than loans for which an interest 
        subsidy is paid pursuant to section 428), or
          (2) a substantial percentage of students receiving 
        Pell Grants in the second fiscal year preceding the 
        fiscal year for which determination is being made, in 
        comparison with the percentage of students receiving 
        Pell Grants at all such institutions in the second 
        fiscal year preceding the fiscal year for which the 
        determination is made, unless the requirement of this 
        subdivision is waived under section 522(a).

SEC. 503. AUTHORIZED ACTIVITIES.

  (a) Types of Activities Authorized.--Grants awarded under 
this part shall be used by Hispanic-serving institutions of 
higher education to assist such institutions to plan, develop, 
undertake, and carry out programs.
  (b) Authorized Activities.--Grants awarded under this section 
shall be used for one or more of the following activities:
          (1) purchase, rental, or lease of scientific or 
        laboratory equipment for educational purposes, 
        including instructional and research purposes;
          (2) construction, maintenance, renovation, and 
        improvement in classrooms, libraries, laboratories, and 
        other instructional facilities;
          (3) support of faculty exchanges, faculty 
        development, curriculum development, academic 
        instruction, and faculty fellowships to assist in 
        attaining advanced degrees in their field of 
        instruction;
          (4) purchase of library books, periodicals, and other 
        educational materials, including telecommunications 
        program material;
          (5) tutoring, counseling, and student service 
        programs designed to improve academic success;
          (6) funds management, administrative management, and 
        acquisition of equipment for use in strengthening funds 
        management;
          (7) joint use of facilities, such as laboratories and 
        libraries;
          (8) establishing or improving a development office to 
        strengthen or improve contributions from alumni and the 
        private sector;
          (9) establishing or improving an endowment fund;
          (10) creating or improving facilities for Internet or 
        other distance learning academic instruction 
        capabilities, including purchase or rental of 
        telecommunications technology equipment or services;
          (11) establishing or enhancing a program of teacher 
        education designed to qualify students to teach in 
        public elementary and secondary schools;
          (12) establishing community outreach programs which 
        will encourage elementary and secondary school students 
        to develop academic skills and the interest to pursue 
        postsecondary education;
          (13) improving and expanding graduate and 
        professional opportunities for Hispanic students; and
          (14) other activities proposed in the application 
        submitted pursuant to section 504 that--
                  (A) contribute to carrying out the purposes 
                of this section; and
                  (B) are approved by the Secretary as part of 
                the review and acceptance of such application.
  (c) Endowment Fund Limitations.--
          (1) Portion of grant.--An institution may not use 
        more than 20 percent of its grant under this part for 
        any fiscal year for establishing or improving an 
        endowment fund.
          (2) Matching required.--An institution that uses any 
        portion of its grant under this part for any fiscal 
        year for establishing or improving an endowment fund 
        shall provide an equal or greater amount for such 
        purposes from non-Federal funds.
          (3) Regulations.--The Secretary shall publish rules 
        and regulations specifically governing the use of funds 
        for establishing or improving an endowment fund.

SEC. 504. APPLICATION PROCESS.

  (a) Institutional Eligibility.--Each Hispanic-serving 
institution desiring to receive assistance under this part 
shall submit to the Secretary such enrollment data as may be 
necessary to demonstrate that it is a Hispanic-serving 
institution, along with such other information and data as the 
Secretary may by regulation require.
  (b) Applications.--Any institution which is determined by the 
Secretary to be a Hispanic-serving institution (on the basis of 
the information and data submitted under subsection (a)) may 
submit an application for assistance under this section to the 
Secretary. Such application shall include--
          (1) a 5-year plan for improving the assistance 
        provided by the Hispanic-serving institution to 
        Hispanic and other low-income students; and
          (2) such other information and assurance as the 
        Secretary may require.
  (c) Priority.--The Secretary shall give priority to 
applications that contain satisfactory evidence that such 
institution has entered into or will enter into a collaborative 
arrangement with at least one local educational agency or 
community-based organization having demonstrated effectiveness 
to provide such agency with assistance (from funds other than 
funds provided under this part) in reducing Hispanic dropout 
rates, improving Hispanic rates of academic achievement, and 
increasing the rates at which Hispanic high school graduates 
enroll in higher education.
  (d) Special Rule.--For the purposes of this part, no 
Hispanic-serving college or university which is eligible for 
and receives funds under this part may concurrently receive 
other funds under title III.

SEC. 505. DURATION OF GRANT.

  (a) Award Period.--The Secretary may award a grant to an 
eligible institution under this part for 5 years, except that 
no institution shall be eligible to secure a subsequent 5-year 
grant award under this part until two years have elapsed since 
the expiration of its most recent 5-year grant award.
  (b) Limitations.--In awarding grants under this part the 
Secretary shall give priority to applicants who are not already 
receiving a grant under this part, except that for the purpose 
of this subsection a grant under section 524(a)(1) shall not be 
considered a grant under this part.
  (c) Planning Grants.--Notwithstanding subsection (a), the 
Secretary may award a grant to an eligible institution under 
this part for a period of one year for the purpose of 
preparation of plans and applications for a grant under this 
part.

                       PART B--GENERAL PROVISIONS

SEC. 521. APPLICATIONS FOR ASSISTANCE.

  (a) Applications.--
          (1) Applications required.--Any institution which is 
        eligible for assistance under this title shall submit 
        to the Secretary an application for assistance at such 
        time, in such form, and containing such information, as 
        may be necessary to enable the Secretary to evaluate 
        its need for assistance. Subject to the availability of 
        appropriations to carry out this title, the Secretary 
        may approve an application for a grant under this title 
        only if the Secretary determines that--
                  (A) the application meets the requirements of 
                subsection (b);
                  (B) the applicant is eligible for assistance 
                in accordance with the part of this title under 
                which the assistance is sought; and
                  (C) the applicant's performance goals are 
                sufficiently rigorous as to meet the purposes 
                of this title and the performance objectives 
                and indicators for this title established by 
                the Secretary pursuant to the Government 
                Performance and Results Act.
          (2) Preliminary applications.--In carrying out 
        paragraph (1), the Secretary shall develop a 
        preliminary application for use by eligible 
        institutions applying under part A prior to the 
        submission of the principal application.
  (b) Contents.--An institution, in its application for a 
grant, shall--
          (1) set forth, or describe how the institution will 
        develop, a comprehensive development plan to strengthen 
        the institution's academic quality and institutional 
        management, and otherwise provide for institutional 
        self-sufficiency and growth (including measurable 
        objectives for the institution and the Secretary to use 
        in monitoring the effectiveness of activities under 
        this title);
          (2) set forth policies and procedures to ensure that 
        Federal funds made available under this title for any 
        fiscal year will be used to supplement and, to the 
        extent practical, increase the funds that would 
        otherwise be made available for the purposes of section 
        503, and in no case supplant those funds;
          (3) set forth policies and procedures for evaluating 
        the effectiveness in accomplishing the purpose of the 
        activities for which a grant is sought under this 
        title;
          (4) provide for such fiscal control and fund 
        accounting procedures as may be necessary to ensure 
        proper disbursement of and accounting for funds made 
        available to the applicant under this title;
          (5) provide (A) for making such reports, in such form 
        and containing such information, as the Secretary may 
        require to carry out the functions under this title and 
        the Government Performance and Results Act, including 
        not less than one report annually setting forth the 
        institution's progress toward achieving the objectives 
        for which the funds were awarded, and (B) for keeping 
        such records and affording such access thereto, as the 
        Secretary may find necessary to assure the correctness 
        and verification of such reports;
          (6) provide that the institution will comply with the 
        limitations set forth in section 526;
          (7) describe in a comprehensive manner any proposed 
        project for which funds are sought under the 
        application and include--
                  (A) a description of the various components 
                of the proposed project, including the 
                estimated time required to complete each such 
                component;
                  (B) in the case of any development project 
                which consists of several components (as 
                described by the applicant pursuant to 
                subparagraph (A)), a statement identifying 
those components which, if separately funded, would be sound 
investments of Federal funds and those components which would be sound 
investments of Federal funds only if funded under this title in 
conjunction with other parts of the development project (as specified 
by the applicant);
                  (C) an evaluation by the applicant of the 
                priority given any proposed project for which 
                funds are sought in relation to any other 
                projects for which funds are sought by the 
                applicant under this title, and a similar 
                evaluation regarding priorities among the 
                components of any single proposed project (as 
                described by the applicant pursuant to 
                subparagraph (A));
                  (D) a detailed budget showing the manner in 
                which funds for any proposed project would be 
                spent by the applicant; and
                  (E) a detailed description of any activity 
                which involves the expenditure of more than 
                $25,000, as identified in the budget referred 
                to in subparagraph (D); and
          (8) include such other information as the Secretary 
        may prescribe.
  (c) Priority Criteria Publication Required.--The Secretary 
shall publish in the Federal Register, pursuant to chapter 5 of 
title 5, United States Code, all policies and procedures 
required to exercise the authority set forth in subsection (a). 
No other criteria, policies, or procedures shall apply.
  (d) Eligibility Data.--The Secretary shall use the most 
recent and relevant data concerning the number and percentage 
of students receiving need-based assistance under title IV of 
this Act in making eligibility determinations and shall advance 
the base-year forward following each annual grant cycle.

SEC. 522. WAIVER AUTHORITY AND REPORTING REQUIREMENT.

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

SEC. 523. APPLICATION REVIEW PROCESS.

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

SEC. 524. COOPERATIVE ARRANGEMENTS.

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

SEC. 525. ASSISTANCE TO INSTITUTIONS UNDER OTHER PROGRAMS.

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

SEC. 526. LIMITATIONS.

  The funds appropriated under section 528 may not be used--
          (1) for a school or department of divinity or any 
        religious worship or sectarian activity;
          (2) for an activity that is inconsistent with a State 
        plan for desegregation of higher education applicable 
        to such institution;
          (3) for an activity that is inconsistent with a State 
        plan of higher education applicable to such 
        institution; or
          (4) for purposes other than the purposes set forth in 
        the approved application under which the funds were 
        made available to the institution.

SEC. 527. PENALTIES.

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

SEC. 528. AUTHORIZATIONS OF APPROPRIATIONS.

  (a) Authorizations.--There are authorized to be appropriated 
to carry out part A, $80,000,000 for fiscal year 1999, and such 
sums as may be necessary for each of the 4 succeeding fiscal 
years.
  (b) Use of Multiple Year Awards.--In the event of a multiple 
year award to any institution under this title, the Secretary 
shall make funds available for such award from funds 
appropriated for this title for the fiscal year in which such 
funds are to be used by the recipient.

               TITLE VI--INTERNATIONAL EDUCATION PROGRAMS

          [PART A--INTERNATIONAL AND FOREIGN LANGUAGE STUDIES]

                    PART A--INTERNATIONAL EDUCATION

         Subpart 1--International and Foreign Language Studies

[SEC. 601. FINDINGS AND PURPOSES.

  [(a) Findings.--The Congress finds that--
          [(1) the well-being of the United States, its economy 
        and long-range security, is dependent on the education 
        and training of Americans in international and foreign 
        language studies and on a strong research base in these 
        areas;
          [(2) knowledge of other countries and the ability to 
        communicate in other languages is essential to the 
        promotion of mutual understanding and cooperation among 
        nations; and
          [(3) present and future generations of Americans must 
        be afforded the opportunity to develop to the fullest 
        extent possible their intellectual capacities in all 
        areas of knowledge.
  [(b) Purposes.--It is the purpose of this part to assist in 
the development of knowledge, international study, resources 
and trained personnel, to stimulate the attainment of foreign 
language acquisition and fluency, to develop a pool of 
international experts to meet national needs, and to coordinate 
the programs of the Federal Government in the areas of foreign 
language, area and other international studies, including 
professional international affairs education, and research.]

SEC. 601. FINDINGS AND PURPOSES.

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

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

  (a) [National Language and Area Centers Authorized] National 
Resource Centers for Foreign Language and Area or International 
Studies Authorized.--
          (1) General authority.--The Secretary is authorized--
                  (A) to make grants to institutions of higher 
                education, or combinations thereof, for the 
                purpose of establishing, strengthening, and 
                operating [comprehensive language and area 
                centers] comprehensive foreign language and 
                area or international studies centers and 
                programs; and
                  (B) to make grants to such institutions or 
                combinations for the purpose of establishing, 
                strengthening, and operating a diverse network 
                of undergraduate [language and area centers] 
                foreign language and area or international 
                studies centers and programs,
        which will be national resources for teaching of any 
        modern foreign language, for instruction in fields 
        needed to provide full understanding of areas, regions, 
        or countries in which such language is commonly used, 
        for research and training in international studies, and 
        the international and foreign language aspects of 
        professional and other fields of study, and for 
        instruction and research on issues in world affairs 
        which concern one or more countries.
          [(2) Authorized activities.--Any such grant may be 
        used to pay all or part of the cost of establishing or 
        operating a center or program, including the cost of--
                  [(A) faculty, staff, and student travel in 
                foreign areas, regions, or countries;
                  [(B) teaching and research materials;
                  [(C) curriculum planning and development;
                  [(D) bringing visiting scholars and faculty 
                to the center to teach or to conduct research;
                  [(E) establishing and maintaining linkages 
                with overseas institutions of higher education 
                and other organizations that may contribute to 
                the educational objectives of this section for 
                the purpose of contributing to the teaching and 
                research of the center or program; and
                  [(F) training and improvement of the staff, 
                for the purpose of, and subject to such 
                conditions as the Secretary finds necessary, 
                for carrying out the objectives of this 
                section.]
          (2) Authorized activities.--
                  (A) In general.--Any grant made under 
                paragraph (1) may be used to pay all or part of 
                the cost of establishing or operating a center 
                or program, in accordance with this subsection.
                  (B) Mandatory activities.--Activities to be 
                conducted by centers assisted under this 
                subsection shall include--
                          (i) support for the instruction of 
                        foreign languages and the offering of 
                        courses in a variety of nonlanguage 
                        disciplines that cover the center's 
                        subject area or topic, and the 
                        incorporation of such instruction in 
                        baccalaureate and graduate programs of 
                        study in a variety of disciplinary, 
                        interdisciplinary, or professional 
                        fields;
                          (ii) support for teaching and 
                        research materials, including library 
                        acquisitions, in the center's subject 
                        area or topic;
                          (iii) programs of outreach or linkage 
                        with State and local educational 
                        agencies, postsecondary education 
                        institutions at all levels, 
                        professional schools, government, 
                        business, media, or the general public; 
                        and
                          (iv) program coordination and 
                        development, curriculum planning and 
                        development, and student advisement.
                  (C) Permissible activities.--Activities to be 
                conducted by centers assisted under this 
                subsection may include--
                          (i) support for the creation of 
                        faculty positions in disciplines that 
                        are underrepresented in the center's 
                        instructional program;
                          (ii) establishment and maintenance of 
                        linkages with overseas institutions of 
                        higher education for the purpose of 
                        contributing to the teaching and 
                        research of the center;
                          (iii) support for bringing visiting 
                        scholars and faculty to the center to 
                        teach or conduct research;
                          (iv) professional development of the 
                        center's faculty and staff;
                          (v) projects conducted in cooperation 
                        with other National Resource Centers 
                        addressing themes of world regional, 
                        cross-regional, international, or 
                        global importance;
                          (vi) summer institutes in the United 
                        States or abroad designed to provide 
                        language and area training in the 
                        center's field or topic; and
                          (vii) support for faculty, staff, and 
                        student travel in foreign areas, 
                        regions, or countries, and for the 
                        development and support of educational 
                        programs abroad for students.

           *       *       *       *       *       *       *

  [(b) Stipends for Foreign Language and Area Studies.--
          [(1) Graduate stipends.--(A) The Secretary is 
        authorized to make grants to institutions of higher 
        education or combinations of such institutions for the 
        purpose of paying stipends to individuals undergoing 
        advanced training in any center or program approved by 
        the Secretary under this part.
          [(B) Students receiving stipends described in 
        subparagraph (A) shall be individuals who are engaged 
        in an instructional program with stated performance 
        goals for functional foreign language use or in a 
        program developing such performance goals, in 
        combination with area studies, international studies, 
        or the international aspects of a professional studies 
        program.
          [(C) Stipends awarded to graduate level recipients 
        may include allowances for dependents and for travel 
        for research and study in the United States and abroad.
          [(2) Doctoral stipends.--(A) The Secretary is 
        authorized to make grants to institutions of higher 
        education or combinations of such institutions for the 
        purpose of paying stipends to students beginning with 
        their third year of graduate training in any center or 
        program approved by the Secretary under this part.
          [(B) Students receiving stipends described in 
        subparagraph (A) shall be individuals engaged in 
        completing advanced degree requirements in foreign 
        language, foreign area studies, or other international 
        fields.
          [(C) Stipends shall be for the purpose of completing 
        degree requirements, such as the predissertation level 
        studies, preparation for dissertation research 
        including the study of less commonly taught languages, 
        dissertation research abroad, and dissertation writing.
          [(D) Students may receive stipends described in 
        subparagraph (A) for a maximum of 4 years if such 
        students make satisfactory progress toward completion 
        of a degree program.
          [(3) Funding limitations.--The Secretary is not 
        authorized to make awards under paragraph (2) for any 
        fiscal year unless the amount made available under 
        paragraph (1) for such fiscal year equals or exceeds 
        the current services equivalent of the level of funding 
        during fiscal year 1992 under paragraph (1).
  [(c) Special Rule With Respect to Travel.--No funds may be 
expended under this part for undergraduate travel except in 
accordance with rules prescribed by the Secretary setting forth 
policies and procedures to assure that Federal funds made 
available for such travel are expended as part of a formal 
program of supervised study.]
  (b) Graduate Fellowships for Foreign Language and Area or 
International Studies.--
          (1) Authority.--The Secretary is authorized to make 
        grants to institutions of higher education or 
        combinations of such institutions for the purpose of 
        paying fellowships to individuals undergoing advanced 
        training in any center or program approved by the 
        Secretary under this part.
          (2) Eligible students.--Students receiving 
        fellowships described in paragraph (1) shall be 
        individuals who are engaged in an instructional program 
        with stated performance goals for functional foreign 
        language use or in a program developing such 
        performance goals, in combination with area studies, 
        international studies, or the international aspects of 
        a professional studies program, including 
        predissertation level studies, preparation for 
        dissertation research, dissertation research abroad, 
        and dissertation writing.
  (c) Rules With Respect to Expenses.--
          (1) Undergraduate travel.--No funds may be expended 
        under this part for undergraduate travel except in 
        accordance with rules prescribed by the Secretary 
        setting forth policies and procedures to assure that 
        Federal funds made available for such travel are 
        expended as part of a formal program of supervised 
        study.
          (2) Graduate dependent and travel expenses.--
        Fellowships awarded to graduate level recipients may 
        include allowances for dependents and for travel for 
        research and study in the United States and abroad.

SEC. 603. LANGUAGE RESOURCE CENTERS.

  (a) Language Resource Centers Authorized.--The Secretary is 
authorized to make grants to and enter into contracts with 
institutions of higher education, or combinations of such 
institutions, for the purpose of establishing, strengthening, 
and operating a small number of national language resource and 
training centers, which shall serve as resources to improve the 
capacity to teach and learn foreign languages effectively. 
Activities carried out by such centers may include--
          (1) * * *

           *       *       *       *       *       *       *

          [(5) the publication of instructional materials in 
        the less commonly taught languages; and]
          (5) a significant focus on the teaching and learning 
        needs of the less commonly taught languages, including 
        an assessment of the strategic needs, the determination 
        of ways to meet those needs nationally, and the 
        publication and dissemination of instructional 
        materials in the less commonly taught languages;
          (6) the widespread dissemination of research results, 
        teaching materials, and improved pedagogical strategies 
        to others within the postsecondary education 
        community[.]; and
          (7) the operation of intensive summer language 
        institutes to train advanced foreign language students, 
        provide professional development, and improve language 
        instruction through preservice and inservice language 
        training for teachers.

           *       *       *       *       *       *       *


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

  (a) [Incentives for the Creation of Undergraduate 
International Studies and Foreign Language Programs] Program 
Incentives.--
          (1) Authority.--The Secretary is authorized to make 
        grants to institutions of higher education [or 
        combinations of such institutions], combinations of 
        such institutions, or partnerships between nonprofit 
        educational organizations and such institutions, to 
        assist such institutions or combinations in planning, 
        developing, and carrying out [a program] programs to 
        improve undergraduate instruction in international 
        studies and foreign languages. [Such grants shall be 
        awarded to institutions of higher education or 
        combinations of such institutions seeking to create new 
        programs or curricula in area studies, foreign 
        languages, and other international fields.] Such grants 
        shall be awarded for the purpose of seeking to create 
        new programs or to strengthen existing programs in 
        undergraduate area studies, foreign languages, and 
        other international fields.
          [(2) Federal share and use of funds.--Grants made 
        under this section may be used to pay not more than 50 
        percent of the cost of projects and activities which 
        are an integral part of such a program, such as--
                  [(A) planning for the development and 
                expansion of undergraduate programs in 
                international studies;
                  [(B) teaching, research, curriculum 
                development, and other related activities;
                  [(C) training of faculty members in foreign 
                countries;
                  [(D) expansion of foreign language courses;
                  [(E) programs under which foreign teachers 
                and scholars may visit institutions as visiting 
                faculty;
                  [(F) international education programs 
                designed to develop or enhance linkages between 
                two- and four-year institutions of higher 
                education, or baccalaureate and post-
                baccalaureate programs or institutions;
                  [(G) the development of an international 
                dimension in preservice and inservice teacher 
                training;
                  [(H) the development of undergraduate study 
                abroad programs in locations abroad in which 
                such study opportunities are not otherwise 
                available or which serve students for whom such 
                opportunities are not otherwise available and 
                which provide courses that are closely related 
                to on-campus foreign language and international 
                studies curricula; and
                  [(I) the integration of new study abroad 
                opportunities for undergraduate students into 
                curricula of specific degree programs.
          [(3) Non-federal share.--The non-Federal share of the 
        cost of the programs assisted under this subsection may 
        be provided either in cash or in kind. Such assistance 
        may be composed of institutional and noninstitutional 
        funds, including State and private contributions.]
          (2) Use of funds.--Grants made under this section may 
        be used for Federal share of the cost of projects and 
        activities which are an integral part of such a 
        program, such as--
                  (A) planning for the development and 
                expansion of programs in undergraduate 
                international studies, and foreign languages 
                and the internationalization of undergraduate 
                education;
                  (B) teaching, research, curriculum 
                development, and other related activities;
                  (C) training of faculty members in foreign 
                countries;
                  (D) expansion of existing and development of 
                new opportunities for learning foreign 
                languages, including the less commonly taught 
                languages;
                  (E) programs under which foreign teachers and 
                scholars may visit institutions as visiting 
                faculty;
                  (F) international education programs designed 
                to develop or enhance linkages between two- and 
                four-year institutions of higher education, or 
                baccalaureate and postbaccalaureate programs or 
                institutions;
                  (G) the development of an international 
                dimension in preservice and inservice teacher 
                training;
                  (H) the development of undergraduate 
                educational programs in locations abroad where 
                such opportunities are not otherwise available 
                or which serve students for whom such 
                opportunities are not otherwise available and 
                which provide courses that are closely related 
                to on-campus foreign language and international 
                curricula;
                  (I) the integration of new and continuing 
                education abroad opportunities for 
                undergraduate students into curricula of 
                specific degree programs;
                  (J) the development of model programs to 
                enrich or enhance the effectiveness of 
                educational programs abroad, including 
                predeparture and postreturn programs, and the 
                integration of educational programs abroad into 
                the curriculum of the home institution;
                  (K) the expansion of library and teaching 
                resources;
                  (L) the development of programs designed to 
                integrate professional and technical education 
                with area studies, foreign languages, and other 
                international fields;
                  (M) the establishment of linkages overseas 
                with institutions of higher education and 
                organizations that contribute to the 
                educational objectives of this subsection;
                  (N) the conduct of summer institutes in 
                foreign area and other international fields to 
                provide faculty and curriculum development, 
                including the integration of professional and 
                technical education with foreign area and other 
                international studies, and to provide foreign 
                area and other international knowledge or 
                skills to government personnel or private 
                sector professionals in international 
                activities;
                  (O) the development of partnerships between 
                institutions of higher education and the 
                private sector, government, and elementary and 
                secondary education institutions to enhance 
                international knowledge and skills; and
                  (P) the use of innovative technology to 
                increase access to international education 
                programs.
          (3) Non-federal share.--The non-Federal share of the 
        cost of the programs assisted under this subsection may 
        be provided in cash from the private sector 
        corporations or foundations in an amount equal to one-
        third of the total requested grant amount, or may be 
        provided as in-cash or in-kind contribution from 
        institutional and noninstitutional funds, including 
        State and private sector corporation or foundation 
        contributions, equal to one-half of the total requested 
        grant amount.

           *       *       *       *       *       *       *

          (5) Special rule.--The Secretary may waive or reduce 
        the required non-Federal share for title III-eligible 
        institutions which have submitted a grant application 
        under this section.
          (6) Evaluation criteria and report.--As a condition 
        for the award of any grant under this subsection, the 
        Secretary may establish criteria for evaluating 
        programs and require an annual report which evaluates 
        the progress and performance of students in such 
        programs.
  [(b) Grants To Strengthen Programs of Demonstrated Excellence 
in Undergraduate International Studies and Foreign Language 
Programs.--
          [(1) In general.--The Secretary is authorized to make 
        grants to institutions of higher education, 
        combinations of such institutions, or partnerships 
        between nonprofit educational organizations and 
        institutions of higher education to enable such 
        institutions of higher education, combinations of such 
        institutions or partnerships to--
                  [(A) strengthen programs of demonstrated 
                excellence in area studies, foreign languages, 
                and other international fields in order to 
                ensure the self-sustaining maintenance and 
                growth of such programs; and
                  [(B) enhance the capacity-building and 
                dissemination functions of such programs.
          [(2) Federal share and use of grant funds.--Grants 
        awarded under this subsection may be used to pay not 
        more than 50 percent of the cost of projects and 
        activities which are an integral part of the programs 
        described in paragraph (1), such as--
                  [(A) teaching, research, curriculum 
                development, and other related activities;
                  [(B) strengthening undergraduate majors and 
                minors directly related to the generation of 
                international expertise;
                  [(C) developing new foreign language courses, 
                especially in languages previously not taught 
                at such institution or combination of such 
                institutions, and improving the quality of 
                existing foreign language programs;
                  [(D) expanding library and teaching 
                resources;
                  [(E) establishing linkages overseas with 
                institutions of higher education and 
                organizations that contribute to the 
                educational objectives of this subsection;
                  [(F) developing programs designed to 
                integrate professional and technical education 
                with area studies, foreign languages, and other 
                international fields;
                  [(G) disseminating curricular materials and 
                program designs to other educational 
                institutions;
                  [(H) integrating on-campus undergraduate 
                curriculum with study abroad and exchange 
                programs;
                  [(I) training faculty and staff in area 
                studies, foreign languages, and other 
                international fields;
                  [(J) conducting summer institutes in foreign 
                area and other international fields to provide 
                faculty and curriculum development, including 
                the integration of professional and technical 
                education with foreign area and other 
                international studies, and to provide foreign 
                area and other international knowledge or 
                skills to government personnel or private 
                sector professionals in international 
                activities;
                  [(K) developing study and internship abroad 
                programs--
                          [(i) in locations in which such 
                        opportunities are not otherwise 
                        available; or
                          [(ii) which serve students for whom 
                        such opportunities are not otherwise 
                        available; and
                  [(L) developing model programs to enrich or 
                enhance the effectiveness of study abroad 
                programs, including predeparture and post 
                return orientation programs, integration of 
                study abroad into the curriculum of the home 
                institution, credit transfer, improved faculty 
                involvement, cross-disciplinary programs, 
                student selection and advising services, and 
                academic advising.
          [(3) Non-federal share.--The non-Federal share of the 
        cost of the programs assisted under this subsection may 
        be provided either in cash or in kind. Such assistance 
        may be composed of institutional and noninstitutional 
        funds, including State and private contributions.
          [(4) Evaluation criteria and report.--As a condition 
        for the award of any grant under this subsection, the 
        Secretarymay establish criteria for evaluating programs 
and require an annual report which evaluates the progress and 
performance of students in such programs.]
  [(c)] (b) Programs of National Significance.--The Secretary 
may also award grants to public and private nonprofit agencies 
and organizations, including professional and scholarly 
associations, whenever the Secretary determines such grants 
will make an especially significant contribution to attaining 
the objective of this section.
  (c) Funding Support.--The Secretary may use no more than 10 
percent of the total amount appropriated for this title, other 
than amounts appropriated for part D, for carrying out the 
purposes of this section.

[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. [606.] 605. RESEARCH; STUDIES; ANNUAL REPORT.

  (a) Authorized Activities.--The Secretary may, directly or 
through grants or contracts, conduct research and studies which 
contribute to the purposes of this part. Such research and 
studies may include but are not limited to--
          (1) * * *

           *       *       *       *       *       *       *

          (4) research on more effective methods of providing 
        instruction and achieving competency in foreign 
        languages, area studies, or other international fields;
          (5) the development and publication of specialized 
        materials for use in foreign language, area studies, 
        and other international fields, or for training foreign 
        language, area, and other international specialists; 
        [and]
          (6) the application of performance tests and 
        standards across all areas of foreign language 
        instruction and classroom use[.]; and
          (7) studies and surveys of the uses of technology in 
        foreign language, area and international studies 
        programs.

           *       *       *       *       *       *       *


[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.]

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

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

SEC. [608.] 607. SELECTION OF CERTAIN GRANT RECIPIENTS.

  (a) * * *

           *       *       *       *       *       *       *


SEC. [609.] 608. EQUITABLE DISTRIBUTION OF CERTAIN FUNDS.

  (a) * * *

           *       *       *       *       *       *       *


SEC. [610.] 609. AMERICAN OVERSEAS RESEARCH CENTERS.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Development Grants Authorized.--The Secretary is 
encouraged to consider the establishment of new centers, and 
may use at least 10 percent of the funds available for this 
section to make grants for the establishment of such new 
centers.

SEC. [610A.] 610. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated to carry out this 
part $80,000,000 for fiscal year [1993] 1999, and such sums as 
may be necessary for the 4 succeeding fiscal years.

        [PART B--BUSINESS AND INTERNATIONAL EDUCATION PROGRAMS]

        Subpart 2--Business and International Education Programs

[SEC. 611. AUTHORIZATION OF APPROPRIATIONS.]

SEC. 611. FINDINGS AND PURPOSES.

  (a) * * *

           *       *       *       *       *       *       *


SEC. 612. CENTERS FOR INTERNATIONAL BUSINESS EDUCATION.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Authorized Activities.--
          (1) Mandatory activities.--Programs and activities to 
        be conducted by centers assisted under this section 
        shall include--
                  (A) * * *
                  (B) interdisciplinary programs which provide 
                business, finance, management, communications 
                systems, and other professional training for 
                foreign language and international studies 
                faculty and [advanced] degree candidates;
                  (C) [evening or summer programs,] programs 
                such as intensive language programs, available 
                to members of the business community and other 
                professionals which are designed to develop or 
                enhance their international skills, awareness, 
                and expertise;

           *       *       *       *       *       *       *

  (d) Advisory Council.--
          (1) * * *

           *       *       *       *       *       *       *

          (2) Membership on advisory council.--The center 
        advisory council shall include--
                  (A) * * *

           *       *       *       *       *       *       *

                  (G) such other individuals as the institution 
                of higher education deems appropriate, such as 
                a representative of a community college in the 
                region served by the center.

           *       *       *       *       *       *       *


SEC. 614. AUTHORIZATION OF APPROPRIATIONS.

  (a) Centers for International Business Education.--There are 
authorized to be appropriated $11,000,000 for the fiscal year 
[1993] 1999 and such sums as may be necessary for each of the 4 
succeeding fiscal years to carry out the provisions of section 
612.
  (b) Education and Training Programs.--There are authorized to 
be appropriated $7,000,000 for fiscal year [1993] 1999, and 
such sums as may be necessary for the 4 succeeding fiscal 
years, to carry out the provisions of section 613.

          [PART C--INSTITUTE FOR INTERNATIONAL PUBLIC POLICY]

          Subpart 3--Institute for International Public Policy

SEC. 621. MINORITY FOREIGN SERVICE PROFESSIONAL DEVELOPMENT PROGRAM.

  (a) * * *

           *       *       *       *       *       *       *

  (e) Match Required.--The eligible recipient of a grant under 
this section shall contribute to the conduct of the program 
supported by the grant an amount from non-Federal sources equal 
to at least [one-fourth] one-half the amount of the grant, 
which contribution may be in cash or in kind.

SEC. 622. JUNIOR YEAR AND SUMMER ABROAD PROGRAM.

  (a) Program Authority.--The Institute [shall conduct] is 
authorized to conduct, by grant or contract, a junior year and 
summer abroad program. The junior year and summer abroad 
program shall be open to eligible students at institutions of 
higher education, including historically Black colleges and 
universities as defined in section 322 of this Act, tribally 
controlled Indian community colleges as defined in the Tribally 
Controlled Community College Assistance Act of 1978, and other 
institutions of higher education with significant minority 
student populations. Eligible student expenses shall be shared 
by the Institute and the institution at which the student is in 
attendance. Each student in a junior year abroad program may 
spend not more than 9 months abroad in a program of academic 
study, as well as social, familial and political interactions 
designed to foster an understanding of and familiarity with the 
language, culture, economics and governance of the host 
country.
  (b) Definition of Eligible Student.--For the purpose of this 
section, the term ``eligible student'' means a student that 
is--
          (1) enrolled full-time in a baccalaureate degree 
        program at an institution of higher education; and
          (2) entering the third year of study at an 
        institution of higher education which nominates such 
        student for participation in the junior year or summer 
        abroad program.
  (c) Special Rule.--An institution of higher education 
desiring to send a student on the junior year abroad program or 
summer abroad program shall enter into a Memorandum of 
Understanding with the Institute under which such institution 
of higher education agrees to--
          (1) provide the requisite academic preparation for 
        students participating in the junior year [abroad or 
        internship] abroad, summer abroad, or internship 
        programs;
          (2) pay one-half the cost of each student it 
        nominates for participation in the junior year abroad 
        program or summer abroad program; and
          (3) meet such other requirements as the Secretary may 
        from time to time, by regulation, reasonably require.

SEC. 624. INTERNSHIPS.

  (a) In General.--The Institute shall enter into agreements 
with historically Black colleges and universities as defined in 
section 322 of this Act, tribally controlled Indian community 
colleges as defined in the Tribally Controlled Community 
College Assistance Act of 1978, other institutions of higher 
education with significant numbers of minority students, and 
institutions of higher education with programs in training 
foreign service professionals, to provide academic year 
internships during the junior and senior year and summer 
internships following the sophomore and junior academic years, 
by work placements with an international voluntary or 
government organizations or agencies, including the Agency for 
International Development, the United States Information 
Agency, the International Monetary Fund, the National Security 
Council, the Organization of American States, the Export-Import 
Bank, the Overseas Private Investment Corporation, the 
Department of State, Office of the United States Trade 
Representative, the World Bank, and the United Nations.
  (b) Postbaccalaureate Internships.--The Institute shall enter 
into agreements with institutions of higher education described 
in the first sentence of subsection (a) to conduct internships 
in Washington, DC, for students who have completed study for 
the baccalaureate degree. The Internship program authorized by 
this subsection shall--
          (1) be designated to assist the students to prepare 
        for a master's degree program;
          (2) be carried out with the assistance of the Woodrow 
        Wilson Fellowship program;
          (3) contain work experience for the students 
        designated to contribute to the objectives set forth in 
        paragraph (1); and
          (4) contain such other elements as the Institute 
        determines will carry out the objectives of this 
        subsection.

SEC. 625. INSTITUTIONAL DEVELOPMENT.

  (a) In General.--The Institute shall make grants, from 
amounts available to it in each fiscal year, to Historically 
Black Colleges and Universities, Hispanic-serving Institutions, 
Tribally Controlled Indian Community Colleges, and minority 
institutions, to enable such colleges, universities, and 
institutions to strengthen international affairs programs.
  (b) Application.--No grant may be made by the Institute under 
this section unless an application is made by the college, 
university, or institution at such time, in such manner, and 
accompanied by such information as the Institute may require.
  (c) Definitions.--As used in this section--
          (1) the term ``Historically Black College and 
        University'' has the same meaning given the term by 
        section 322(2) of this Act;
          (2) the term ``Hispanic-serving Institution'' has the 
        same meaning given the term by section 316(b)(1) of 
        this Act;
          (3) the term ``Tribally controlled Indian community 
        college'' has the same meaning given that term by the 
        Tribally Controlled Community College Assistance Act of 
        1978; and
          (4) the term ``minority institution'' has the same 
        meaning given that term in section 347 of this Act.

SEC. 626. INTERAGENCY COMMITTEE ON MINORITY CAREERS IN INTERNATIONAL 
                    AFFAIRS.

  (a) Establishment.--There is established in the executive 
branch of the Federal Government an Interagency Committee on 
Minority Careers in International Affairs composed of 7 
members. The members of the Committee shall be--
          (1) the Undersecretary for International Affairs and 
        Commodity Programs of the Department of Agriculture, 
        appointed by the Secretary of Agriculture;
          (2) the Assistant Secretary and Director General, the 
        Commercial Service of the Department of Commerce, 
        appointed by the Secretary of Commerce;
          (3) the Undersecretary of Defense for Personnel and 
        Readiness of the Department of Defense, appointed by 
        the Secretary of Defense;
          (4) the Assistant Secretary for Postsecondary 
        Education in the Department of Education, appointed by 
        the Secretary of Education;
          (5) the Director General of the Foreign Service of 
        the Department of State, appointed by the Secretary of 
        State;
          (6) the General Counsel of the Agency for 
        International Development, appointed by the 
        Administrator; and
          (7) the Associate Director for Educational and 
        Cultural Affairs of the United States Information 
        Agency, appointed by the Director.
  (b) Functions.--The Interagency Committee established by this 
section shall--
          (1) advise the Secretary and the Institute with 
        respect to programs authorized by this part; and
          (2) promote policies in each department and agency 
        participating on the Committee that are designed to 
        carry out the objectives of this part.

SEC. [625.] 627. REPORT.

  The Institute shall annually prepare a report on the 
activities of the Institute and shall submit such report to the 
Secretary of Education and the Secretary of State.

SEC. [626.] 628. GIFTS AND DONATIONS.

  The Institute is authorized to receive money and other 
property donated, bequeathed, or devised to the Institute with 
or without a condition of restriction, for the purpose of 
providing financial support for the fellowships or underwriting 
the cost of the Junior Year Abroad Program. All funds or 
property given, devised, or bequeathed shall be retained in a 
separate account, and an accounting of those funds and property 
shall be included in the annual report described in section 
625.

SEC. [627.] 629. AUTHORIZATION.

  There is authorized to be appropriated $10,000,000 for fiscal 
year [1993] 1999 and such sums as may be necessary for each of 
the 4 succeeding fiscal years to carry out this part.

                      [PART D--GENERAL PROVISIONS]

                     Subpart 4--General Provisions

SEC. 631. DEFINITIONS.

  (a) Definitions.--As used in this title--
          (1) * * *

           *       *       *       *       *       *       *

          (7) the term ``critical languages'' means each of the 
        languages contained in the list of critical languages 
        designated by the Secretary pursuant to section 212(d) 
        of the Education for Economic Security Act (50 Fed. 
        Reg. 149, 31413), except that, in the implementation of 
        this definition, the Secretary may set priorities 
        according to the purposes of this title; [and]
          (8) the term ``institution of higher education'' 
        means, in addition to institutions which meet the 
        definition of section [1201(a)] 101(a)(1) of this Act, 
        institutions which meet the requirements of section 
        [1201(a)] 101(a)(1) of this Act except that (1) they 
        are not located in the United States, and (2) they 
        apply for assistance under this title in consortia with 
        institutions which meet the definition of [1201(a)] 
        101(a)(1) of this Act[.]; and
          (9) the term ``internationalization of undergraduate 
        education'' means the incorporation of foreign 
        languages and area and international studies 
        perspectives in any undergraduate course or curriculum 
        in order to provide international content for that 
        course of study; and
          (10) the term ``educational programs abroad'' means 
        programs of study, internships, or service learning 
        outside the United States which are part of a foreign 
        language or other international curriculum at the 
        undergraduate or graduate education levels.

[SEC. 632. PRESERVATION OF PRE-1992 PROGRAMS.

  [Notwithstanding any other provision of law, amendments to 
this title establishing new programs or expanding existing 
programs enacted pursuant to the Higher Education Amendments of 
1992 shall not be funded in fiscal year 1993, or the 4 
succeeding fiscal years, unless and until Congress enacts 
appropriations for programs under this title enacted prior to 
such Amendments at a level no less than the level of funding in 
effect for such preexisting programs for fiscal year 1992.]

         PART B--GRADUATE ASSISTANCE IN AREAS OF NATIONAL NEED

SEC. 651. PURPOSE.

  In order to sustain and enhance the capacity for graduate 
education in areas of national need, it is the purpose of this 
part to provide, through academic departments and programs of 
institutions of higher education, a fellowship program to 
assist graduate students of superior ability who demonstrate 
financial need.

SEC. 652. GRANTS TO ACADEMIC DEPARTMENTS AND PROGRAMS OF INSTITUTIONS.

  (a) Grant Authority.--
          (1) In general.--The Secretary shall make grants to 
        academic departments and programs and other academic 
        units of institutions of higher education that provide 
        courses of study leading to a graduate degree in order 
        to enable such institutions to provide assistance to 
        graduate students in accordance with this part. The 
        Secretary shall coordinate the administration and 
        regulation of programs under this part with other 
        Federal programs providing graduate assistance to 
        minimize duplication and improve efficiency.
          (2) Additional grants.--The Secretary may also make 
        grants to such departments and programs and to other 
        units of institutions of higher education granting 
        graduate degrees which submit joint proposals involving 
        nondegree granting institutions which have formal 
        arrangements for the support of doctoral dissertation 
        research with degree-granting institutions. Nondegree 
        granting institutions eligible for awards as part of 
        such joint proposals include any organization which--
                  (A) is described in section 501(c)(3) of the 
                Internal Revenue Code of 1986, and is exempt 
                from tax under section 501(a) of such Code;
                  (B) is organized and operated substantially 
                to conduct scientific and cultural research and 
                graduate training programs;
                  (C) is not a private foundation;
                  (D) has academic personnel for instruction 
                and counseling who meet the standards of the 
                institution of higher education in which the 
                students are enrolled; and
                  (E) has necessary research resources not 
                otherwise readily available in such 
                institutions to such students.
  (b) Award and Duration of Grants.--
          (1) Awards.--The principal criterion for the 
        allocation of awards shall be the relative quality of 
        the graduate programs presented in competing 
        applications. Consistent with an allocation of awards 
        based on quality of competing applications, the 
        Secretary shall, in making such grants, promote an 
        equitable geographic distribution among eligible public 
        and private institutions of higher education.
          (2) Duration.--The Secretary shall approve a grant 
        recipient under this part for a 3-year period. From the 
        sums appropriated under this part for any fiscal year, 
        the Secretary shall not make a grant to any academic 
        department or program of an institution of higher 
        education of less than $125,000 or greater than 
        $750,000 per fiscal year.
          (3) Reallotment.--Whenever the Secretary determines 
        that an academic department or program of 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 the amounts not 
        needed to academic departments and programs of 
        institutions which can use the grants authorized by 
        this part.

SEC. 653. INSTITUTIONAL ELIGIBILITY.

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

SEC. 654. CRITERIA FOR APPLICATIONS.

  (a) Selection of Applications.--The Secretary shall make 
grants to academic departments and programs of institutions of 
higher education on the basis of applications submitted in 
accordance with subsection (b). Applications shall be ranked on 
program quality by review panels of nationally recognized 
scholars and evaluated on the quality and effectiveness of the 
academic program and the achievement and promise of the 
students to be served. To the extent possible (consistent with 
other provisions of this section), the Secretary shall make 
awards that are consistent with recommendations of the review 
panels.
  (b) Contents of Applications.--An academic department or 
program of an institution of higher education, in its 
application for a grant, shall--
          (1) describe the current academic program of the 
        applicant for which the grant is sought;
          (2) provide assurances that the applicant will 
        provide, from other non-Federal funds, for the purposes 
        of the fellowship program under this part an amount 
        equal to at least 25 percent of the amount of the grant 
        received under this part, which contribution may be in 
        cash or in kind fairly valued;
          (3) describe the number, types, and amounts of the 
        fellowships that the applicant intends to offer under 
        the grant;
          (4) set forth policies and procedures to assure that, 
        in making fellowship awards under this part, the 
        institution will make awards to individuals who--
                  (A) have financial need, as determined under 
                part F of title IV;
                  (B) have excellent academic records in their 
                previous programs of study; and
                  (C) plan to pursue the highest possible 
                degree available in their course of study;
          (5) set forth policies and procedures to ensure that 
        Federal funds made available under this part for any 
        fiscal year will be used to supplement and, to the 
        extent practical, increase the funds that would 
        otherwise be made available for the purpose of this 
        part and in no case to supplant those funds;
          (6) provide assurances that, in the event that funds 
        made available to the academic department or program 
        under this part are insufficient to provide the 
        assistance due a student under the commitment entered 
        into between the academic department or program and the 
        student, the academic department or program will, from 
        any funds available to it, fulfill the commitment to 
        the student;
          (7) provide that the applicant will comply with the 
        limitations set forth in section 655;
          (8) provide assurances that the academic department 
        will provide at least 1 year of supervised training in 
        instruction for students; and
          (9) include such other information as the Secretary 
        may prescribe.

SEC. 655. AWARDS TO GRADUATE STUDENTS.

  (a) Commitments to Graduate Students.--
          (1) In general.--An academic department or program of 
        an institution of higher education shall make 
        commitments to eligible graduate students as defined in 
        section 484 (including students pursuing a doctoral 
        degree after having completed a master's degree program 
        at an institution of higher education) at any point in 
        their graduate study to provide stipends for the length 
        of time necessary for a student to complete the course 
        of graduate study, but in no case longer than 3 years.
          (2) Special rule.--No such commitments shall be made 
        to students under this part unless the academic 
        department or program has determined adequate funds are 
        available to fulfill the commitment either from funds 
        received or anticipated under this part, or from 
        institutional funds.
  (b) Amount of Stipends.--The Secretary shall make payments to 
institutions of higher education for the purpose of paying 
stipends to individuals who are awarded fellowships under this 
part. The stipends the Secretary establishes shall reflect 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 1999-2000 or any 
succeeding academic year, such stipend shall be set at a level 
of support equal to that provided by the National Science 
Foundation graduate fellowships, except such amount shall be 
adjusted as necessary so as not to exceed the fellow's 
demonstrated level of need as determined under part F of title 
IV.
  (c) Treatment of Institutional Payments.--An institution of 
higher education that makes institutional payments for tuition 
and fees on behalf of individuals supported by fellowships 
under this part in amounts that exceed the institutional 
payments made by the Secretary pursuant to section 656(a) may 
count the excess of such payments toward the amounts the 
institution is required to provide pursuant to section 
654(b)(2).
  (d) Academic Progress Required.--Notwithstanding the 
provisions of subsection (a), no student shall receive an 
award--
          (1) except during periods in which such student is 
        maintaining satisfactory progress in, and devoting 
        essentially fulltime to, study or research in the field 
in which such fellowship was awarded, or
          (2) if the student is engaging in gainful employment 
        other than part-time employment involved in teaching, 
        research, or similar activities determined by the 
        institution to be in support of the student's progress 
        towards a degree.

SEC. 656. ADDITIONAL ASSISTANCE FOR COST OF EDUCATION.

  (a) Institutional Payments.--(1) 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 paragraph (2), 
such allowance shall be--
          (A) $10,000 annually with respect to individuals who 
        first received fellowships under this part prior to 
        academic year 1999-2000; and
          (B) with respect to individuals who first receive 
        fellowships during or after academic year 1999-2000--
                  (i) $10,000 for the academic year 1999-2000; 
                and
                  (ii) for succeeding academic years, $10,000 
                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.
  (b) Use for Overhead Prohibited.--Funds made available 
pursuant to this part may not be used for the general 
operational overhead of the academic department or program.

SEC. 657. CONTINUATION AWARDS.

  Before making new awards under this part for any fiscal year, 
the Secretary shall, as appropriate, making continuation awards 
to recipients of awards under parts B, C, and D of title IX as 
in effect prior to the enactment of the Higher Education 
Amendments of 1998.

SEC. 658. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated $40,000,000 for 
fiscal year 1999 and such sums as may be necessary for each of 
the 4 succeeding fiscal years to carry out this part.

  TITLE VII--CONSTRUCTION, RECONSTRUCTION, AND RENOVATION OF ACADEMIC 
                               FACILITIES

SEC. 701. PURPOSES.

  (a) * * *
  (b) Priority on Renovation.--In the awarding of grants under 
[part A or B] part B of this title, priority shall be given to 
projects involving the renovation of facilities.

SEC. 702. PRIOR RIGHTS AND OBLIGATIONS.

  (a) Authorization of Appropriations.--There are authorized to 
be appropriated such sums as may be necessary for fiscal year 
[1993] 1999 and for each of the 4 succeeding fiscal years to 
pay obligations incurred prior to 1987 under parts C and D of 
this title, as such parts were in effect before the effective 
date of the Higher Education Act Amendments of 1992.

           *       *       *       *       *       *       *


        [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 B--HISTORICALLY BLACK COLLEGE AND UNIVERSITY CAPITAL FINANCING

           *       *       *       *       *       *       *


[SEC. 726. PROHIBITION.

  [No institution that receives a loan under this part shall 
also receive a grant under part A of this title.]

SEC. 727. HBCU CAPITAL FINANCING ADVISORY BOARD.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Authorization of Appropriations.--There are authorized to 
be appropriated $50,000 for fiscal year [1993] 1999 and each of 
the 4 succeeding fiscal years to carry out this section.

           *       *       *       *       *       *       *


   PART C--LOANS FOR CONSTRUCTION, RECONSTRUCTION AND RENOVATION OF 
ACADEMIC, HOUSING, AND OTHER EDUCATIONAL FACILITIES

           *       *       *       *       *       *       *


SEC. 735. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated to carry out this 
part, $50,000,000 for fiscal year [1993] 1999 and such sums as 
may be necessary for each of the 4 succeeding fiscal years.

           *       *       *       *       *       *       *


                            Part E--General

SEC. 781. RECOVERY OF PAYMENTS.

  (a) Public Benefit.--The Congress declares that, if a 
facility constructed with the aid of a grant under [part A of 
this title, or] part B of this title as such part was in effect 
prior to the enactment of the Higher Education Amendments of 
1992, is used as an academic facility for 20 years following 
completion of such construction, the public benefit accruing to 
the United States will equal in value the amount of the grant. 
The period of 20 years after completion of such construction 
shall therefore be deemed to be the period of Federal interest 
in such facility for the purposes of this title.
  (b) Recovery Upon Cessation of Public Benefit.--If, within 20 
years after completion of construction of an academic facility 
which has been constructed, in part with a grant under [part A 
of this title, or] part B of this title as such part was in 
effect prior to the enactment of the Higher Education 
Amendments of 1992--
          (1) * * *

           *       *       *       *       *       *       *


                   [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

[SEC. 901. PURPOSE AND ADMINISTRATIVE PROVISIONS.

  [(a) Purpose.--It is the purpose of this title to--
          [(1) foster and support graduate and professional 
        education;
          [(2) provide incentives and support for United States 
        citizens to complete doctoral degree programs leading 
        to academic careers, especially women and students from 
        underrepresented groups; and
          [(3) provide support for students from 
        underrepresented groups to complete masters and 
        professional degree programs.
  [(b) Administrative Provisions.--
          [(1) Coordinated administration.--In carrying out the 
        purposes of this title, the Secretary shall provide for 
        coordinated administration and regulation of graduate 
        programs under this title to ensure that the programs 
        are carried out in a manner most compatible with 
        academic practices.
          [(2) Hiring authority.--For purposes of carrying out 
        this title, the Secretary shall appoint, without regard 
        to the provisions of title 5 of the United States Code 
        governing appointments in the competitive service, such 
        administrative and technical employees, with the 
        appropriate educational background, as shall be needed 
        to assist in the administration of such title. Such 
        employees shall be paid without regard to the 
        provisions of chapter 51 and subchapter III of chapter 
        53 of such title relating to classification and General 
        Schedule pay rates.
          [(3) Use for religious purposes prohibited.--No 
        fellowship shall be awarded under this title for study 
        at a school or department of divinity.

 [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 D--GRADUATE ASSISTANCE IN AREAS OF NATIONAL NEED

[SEC. 941. PURPOSE.

  [In order to sustain and enhance the capacity for teaching 
and research in areas of national need, it is the purpose of 
this part to provide, through academic departments and programs 
of institutions of higher education, a fellowship program to 
assist graduate students of superior ability who demonstrate 
financial need.

[SEC. 942. GRANTS TO ACADEMIC DEPARTMENTS AND PROGRAMS OF INSTITUTIONS.

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

[SEC. 943. INSTITUTIONAL ELIGIBILITY.

  [(a) Eligibility Criteria.--Any academic department or 
program of an institution of higher education that offers a 
program of postbaccalaureate study leading to a graduate degree 
in an area of national need (as designated under subsection 
(b)) may apply for a grant under this part. No department or 
program shall be eligible for a grant unless the program of 
postbaccalaureate study has been in existence for at least 4 
years at the time of application for assistance under this 
part.
  [(b) Designation of Areas of National Need.--After 
consultation with the National Science Foundation, the National 
Academy of Sciences, the National Endowments for the Arts and 
the Humanities, and other appropriate Federal and nonprofit 
agencies and organizations, the Secretary shall designate areas 
of national need, such as mathematics, biology, physics, 
chemistry, engineering, geosciences, computer science, or 
foreign languages and area studies. In making such 
designations, the Secretary shall take into account the extent 
to which the interest is compelling and the extent to which 
other Federal programs support postbaccalaureate study in the 
area concerned.

[SEC. 944. CRITERIA FOR APPLICATIONS.

  [(a) Selection of Applications.--The Secretary shall make 
grants to academic departments and programs of institutions of 
higher education on the basis of applications submitted in 
accordance with subsection (b). Applications shall be ranked on 
program quality by geographically balanced review panels of 
nationally recognized scholars. To the extent possible 
(consistent with other provisions of this section), the 
Secretary shall make awards that are consistent with 
recommendations of the review panels.
  [(b) Contents of Applications.--An academic department or 
program of an institution of higher education, in its 
application for a grant, shall--
          [(1) describe the current academic program of the 
        applicant for which the grant is sought;
          [(2) provide assurances that the applicant will 
        provide, from other non-Federal funds, for the purposes 
        of the fellowship program under this part an amount 
        equal to at least 25 percent of the amount of the grant 
        received under this part;
          [(3) set forth policies and procedures to assure 
        that, in making fellowship awards under this part the 
        institution will seek talented students from 
        traditionally underrepresented backgrounds, as 
        determined by the Secretary;
          [(4) set forth policies and procedures to assure 
        that, in making fellowship awards under this part, the 
        institution will make awards to individuals who--
                  [(A) have financial need, as determined under 
                criteria developed by the institution;
                  [(B) have excellent academic records in their 
                previous programs of study;
                  [(C) plan teaching or research careers; and
                  [(D) plan to pursue the highest possible 
                degree available in their course of study;
          [(5) set forth policies and procedures to ensure that 
        Federal funds made available under this part for any 
        fiscal year will be used to supplement and, to the 
        extent practical, increase the funds that would 
        otherwise be made available for the purpose of this 
        part and in no case to supplant those funds;
          [(6) provide assurances that, in the event that funds 
        made available to the academic department or program 
        under this part are insufficient to provide the 
        assistance due a student under the commitment entered 
        into between the academic department or program and the 
        student, the academic department or program will 
        endeavor, from any funds available to it, to fulfill 
        the commitment to the student;
          [(7) provide that the applicant will comply with the 
        limitations set forth in section 945;
          [(8) provide assurances that the academic department 
        will provide at least 1 year of supervised training in 
        instruction for students; and
          [(9) include such other information as the Secretary 
        may prescribe.

[SEC. 945. AWARDS TO GRADUATE STUDENTS.

  [(a) Commitments to Graduate Students.--
          [(1) In general.--An academic department or program 
        of an institution of higher education shall make 
        commitments to graduate students (including students 
        pursuing a doctoral degree after having completed a 
        master's degree program at an institution of higher 
        education) at any point in their graduate study to 
        provide stipends for the length of time necessary for a 
        student to complete the course of graduate study, but 
        in no case longer than 5 years.
          [(2) Special rule.--No such commitments shall be made 
        to students under this part unless the academic 
        department or program has determined adequate funds are 
        available to fulfill the commitment either from funds 
        received or anticipated under this part, or from 
        institutional funds.
  [(b) Amount of Stipends.--The Secretary shall make payments 
to institutions of higher education for the purpose of paying 
stipends to individuals who are awarded fellowships under this 
part. The stipends the Secretary establishes shall reflect 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.
  [(c) Treatment of Institutional Payments.--An institution of 
higher education that makes institutional payments for tuition 
and fees on behalf of individuals supported by fellowships 
under this part in amounts that exceed the institutional 
payments made by the Secretary pursuant to section 946(a) may 
count such payments toward the amounts the institution is 
required to provide pursuant to section 944(b)(2).
  [(d) Academic Progress Required.--Notwithstanding the 
provisions of subsection (a), no student shall receive an 
award--
          [(1) except during periods in which such student is 
        maintaining satisfactory progress in, and devoting 
        essentially full time to, study or research in the 
        field in which such fellowship was awarded, or
          [(2) if the student is engaging in gainful employment 
        other than part-time employment involved in teaching, 
        research, or similar activities determined by the 
        institution to be in support of the student's progress 
        towards a degree.

[SEC. 946. ADDITIONAL ASSISTANCE FOR COST OF EDUCATION.

  [(a) Institutional Payments.--(1) 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 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.
  [(b) Use for Overhead Prohibited.--Funds made available 
pursuant to this part may not be used for the general 
operational overhead of the academic department or program.

[SEC. 947. AUTHORIZATION OF APPROPRIATIONS.

  [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 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 secondaryschool, 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 actualcases 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 1--Program Authority

[SEC. 1001. FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION.

  [(a) Authority.--The Secretary is authorized to make grants 
to, or enter into contracts with, institutions of higher 
education or combinations of such institutions and other public 
and private nonprofit institutions and agencies, to enable such 
institutions and combinations of such institutions to improve 
postsecondary education opportunities by--
          [(1) encouraging the reform, innovation, and 
        improvement of postsecondary education, and providing 
        equal educational opportunity for all;
          [(2) the creation of institutions and programs 
        involving new paths to career and professional 
        training, and new combinations of academic and 
        experiential learning;
          [(3) the establishment of institutions and programs 
        based on the technology of communications;
          [(4) the carrying out in postsecondary educational 
        institutions of changes in internal structure and 
        operations designed to clarify institutional priorities 
        and purposes;
          [(5) the design and introduction of cost-effective 
        methods of instruction and operation;
          [(6) the introduction of institutional reforms 
        designed to expand individual opportunities for 
        entering and reentering institutions and pursuing 
        programs of study tailored to individual needs;
          [(7) the introduction of reforms in graduate 
        education, in the structure of academic professions, 
        and in the recruitment and retention of faculties; and
          [(8) the creation of new institutions and programs 
        for examining and awarding credentials to individuals, 
        and the introduction of reforms in current 
        institutional practices related thereto.
  [(b) Planning Grants.--The Secretary is authorized to make 
planning grants to institutions of higher education for the 
development and testing of innovative techniques in 
postsecondary education. Such grants shall not exceed $20,000.

[SEC. 1002. NATIONAL BOARD OF THE FUND FOR THE IMPROVEMENT OF 
                    POSTSECONDARY EDUCATION.

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

[SEC. 1003. ADMINISTRATIVE PROVISIONS.

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

[SEC. 1004. AUTHORIZATION OF APPROPRIATIONS.

  [(a) In General.--There are authorized to be appropriated to 
carry out this subpart (except for section 1001(b)) $20,000,000 
for fiscal year 1993 and such sums as may be necessary for each 
of the 4 succeeding fiscal years.
  [(b) Planning Grants.--There are authorized to be 
appropriated to carry out section 1001(b) $1,000,000 for fiscal 
year 1993 and such sums as may be necessary for each of the 4 
succeeding fiscal years.

         [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 1--Minority Science Improvement Program

[SEC. 1021. PURPOSE; AUTHORITY.

  [(a) It is the purpose of this subpart to continue the 
authority of the Department to operate the Minority 
Institutions Science Improvement Program created under section 
3(a)(1) of the National Science Foundation Act of 1950 and 
transferred to the Department by section 304(a)(1) of the 
Department of Education Organization Act of 1979.
  [(b) 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 effect 
long-range improvement in science and engineering education at 
predominantly minority institutions and to increase the 
participation of underrepresented ethnic minorities, 
particularly minority women, in scientific and technological 
careers.

[SEC. 1022. GRANT RECIPIENT SELECTION.

  [(a) Establishment of Criteria.--Grants under this subpart 
shall be awarded on the basis of criteria established by the 
Secretary by regulations.
  [(b) Priorities To Be Given in Criteria.--In establishing 
criteria under subsection (a), the Secretary shall give 
priority to applicants which have not previously received 
funding from the Minority Institutions Science Improvement 
Program and to previous grantees with a proven record of 
success, as well as to applications that contribute to 
achieving balance among projects with respect to geographic 
region, academic discipline, and project type.
  [(c) Required Criteria.--In establishing criteria under 
subsection (a), the Secretary may consider the following 
selection criteria in making grants:
          [(1) plan of operation;
          [(2) quality of key personnel;
          [(3) budget and cost effectiveness;
          [(4) evaluation plan;
          [(5) adequacy of resources;
          [(6) identification of need for the project;
          [(7) potential institutional impact of the project;
          [(8) institutional commitment to the project;
          [(9) expected outcomes; and
          [(10) scientific and educational value of the 
        proposed project.

[SEC. 1023. USE OF FUNDS.

  [(a) Types of Grants.--Funds appropriated to carry out this 
subpart may be made available as--
          [(1) institutional grants (as defined in section 
        1046(6));
          [(2) cooperative grants (as defined in section 
        1046(7));
          [(3) design projects (as defined in section 1046(8)); 
        or
          [(4) special projects (as defined in section 
        1046(9)).
  [(b) Authorized Uses for Each Type of Grant.--(1) The 
authorized uses of funds made available as institutional grants 
include (but are not limited to)--
          [(A) faculty development programs; or
          [(B) development of curriculum materials.
  [(2) The authorized uses of funds made available as 
cooperative grants include (but are not limited to)--
          [(A) assisting institutions in sharing facilities and 
        personnel;
          [(B) disseminating information about established 
        programs in science and engineering;
          [(C) supporting cooperative efforts to strengthen the 
        institutions' science and engineering programs; or
          [(D) carrying out a combination of any of the 
        activities in subparagraphs (A) through (C).
  [(3) The authorized uses of funds made available as design 
projects include (but are not limited to)--
          [(A) developing planning, management, and evaluation 
        systems; or
          [(B) developing plans for initiating scientific 
        research and for improving institutions' capabilities 
        for such activities.
Funds used for design project grants may not be used to pay 
more than 50 percent of the salaries during any academic year 
of faculty members involved in the project.
  [(4) The authorized uses of funds made available as special 
projects include (but are not limited to)--
          [(A) advanced science seminars;
          [(B) science faculty workshops and conferences;
          [(C) faculty training to develop specific science 
        research or education skills;
          [(D) research in science education;
          [(E) programs for visiting scientists;
          [(F) preparation of films or audio-visual materials 
        in science;
          [(G) development of learning experiences in science 
        beyond those normally available to minority 
        undergraduate students;
          [(H) development of pre-college enrichment activities 
        in science; or
          [(I) any other activities designed to address 
        specific barriers to the entry of minorities into 
        science.

[SEC. 1024. MULTIAGENCY STUDY OF MINORITY SCIENCE PROGRAMS.

  [Sec. 1024. The Secretary, in cooperation with the heads of 
other departments and agencies that operate programs similar in 
purposes to the Minority Science Improvement Program which seek 
to increase minority participation and representation in 
scientific fields, shall submit a report to the President and 
Congress summarizing and evaluating such programs by January 1, 
1996.

          [Subpart 2--Science and Engineering Access Programs

[SEC. 1031. MINORITY SUPPORT IN SCIENCE AND ENGINEERING PROGRAMS.

  [Sec. 1031. 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 toimprove 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.

           [Subpart 3--Administrative and General Provisions

[SEC. 1041. ELIGIBILITY FOR GRANTS.

  [Eligibility to receive grants under this part is limited 
to--
          [(1) public and private nonprofit institutions that 
        are minority institutions (as defined in section 
        1046(3));
          [(2) nonprofit science-oriented organizations, 
        professional scientific societies, and all nonprofit, 
        accredited colleges and universities which provide a 
        needed service to a group of eligible minority 
        institutions or which provide in-service training for 
        project directors, scientists, and engineers from 
        eligible minority institutions; and
          [(3) for the purposes of section 1032, public and 
        private nonprofit institutions that have at least 10 
        percent minority enrollment.

[SEC. 1042. GRANT APPLICATION.

  [(a) Submission and Contents of Applications.--An eligible 
applicant (as determined under section 1041) that desires to 
receive a grant under this part shall submit to the Secretary 
an application therefor at such time or times, in such manner, 
and containing such information as the Secretary may prescribe 
by regulation. Such application shall set forth--
          [(1) a program of activities for carrying out one or 
        more of the purposes described in section 1021(b) in 
        such detail as will enable the Secretary to determine 
        the degree to which such program will accomplish such 
        purpose or purposes; and
          [(2) such other policies, procedures, and assurances 
        as the Secretary may require by regulation.
  [(b) Approval Based on Likelihood of Progress.--The Secretary 
shall approve an application only if the Secretary determines 
that the application sets forth a program of activities which 
are likely to make substantial progress toward achieving the 
purposes of this part.

[SEC. 1043. CROSS PROGRAM AND CROSS AGENCY COOPERATION.

  [The Minority Science and Engineering Improvement Programs 
shall cooperate and consult with other programs within the 
Department and within Federal, State, and private agencies 
which carry out programs to improve the quality of science, 
mathematics, and engineering education.

[SEC. 1044. ADMINISTRATIVE PROVISIONS.

  [(a) Technical Staff.--The Secretary shall appoint, without 
regard to the provisions of title 5 of the United States Code 
governing appointments in the competitive service, not less 
than 2 technical employees with appropriate scientific and 
educational background to administer the programs under this 
part who may be paid without regard to the provisions of 
chapter 51 and subchapter III of chapter 53 of such title 
relating to classification and General Schedule pay rates.
  [(b) Procedures for Grant Review.--The Secretary shall 
establish procedures for reviewing and evaluating grants and 
contracts made or entered into under such programs. Procedures 
for reviewing grant applications, based on the peer review 
system, or contracts for financial assistance under this title 
may not be subject to any review outside of officials 
responsible for the administration of the Minority Science and 
Engineering Improvement Programs.

[SEC. 1046. DEFINITIONS.

  [For the purpose of this part--
          [(1) The term ``accredited'' means currently 
        certified by a nationally recognized accrediting agency 
        or making satisfactory progress toward achieving 
        accreditation.
          [(2) The term ``minority'' means American Indian, 
        Alaskan Native, Black (not of Hispanic origin), 
        Hispanic (including persons of Mexican, Puerto Rican, 
        Cuban, and Central or South American origin), Pacific 
        Islander or other ethnic group underrepresented in 
        science and engineering.
          [(3) The term ``minority institution'' means an 
        institution of higher education whose enrollment of a 
        single minority or a combination of minorities (as 
        defined in paragraph (2)) exceeds 50 percent of the 
        total enrollment. The Secretary shall verify this 
        information from the data on enrollments in the higher 
        education general information surveys (HEGIS) furnished 
        by the institution to the Office for Civil Rights, 
        Department of Education.
          [(4) The term ``science'' means, for the purpose of 
        this program, the biological, engineering, 
        mathematical, physical, and social sciences, and 
        history and philosophy of science; also included are 
        interdisciplinary fields which are comprised of 
        overlapping areas among two or more sciences.
          [(5) The term ``underrepresented in science and 
        engineering'' means a minority group whose number of 
        scientists and engineers per 10,000 population of that 
        group is substantially below the comparable figure for 
        scientists and engineers who are white and not of 
        Hispanic origin.
          [(6) The term ``institutional grant'' means a grant 
        that supports the implementation of a comprehensive 
        science improvement plan, which may include any 
        combination of activities for improving the preparation 
        of minority students for careers in science.
          [(7) The term ``cooperative grant'' means a grant 
        that assists groups of nonprofit accredited colleges 
        and universities to work together to conduct a science 
        improvement program.
          [(8) The term ``design projects'' means projects that 
        assist minority institutions that do not have their own 
        appropriate resources or personnel to plan and develop 
        long-range science improvement programs.
          [(9) The term ``special projects'' means--
                  [(A) a special project grant to a minority 
                institution which support activities that--
                          [(i) improve the quality of training 
                        in science and engineering at minority 
                        institutions; or
                          [(ii) enhance the minority 
                        institutions' general scientific 
                        research capabilities; or
                  [(B) a special project grant to any eligible 
                applicant which supports activities that--
                          [(i) provide a needed service to a 
                        group of eligible minority 
                        institutions; or
                          [(ii) provide in-service training for 
                        project directors, scientists, and 
                        engineers from eligible minority 
                        institutions.

[SEC. 1047. AUTHORIZATION OF APPROPRIATIONS.

  [(a) Authorizations.--There are authorized to be appropriated 
to carry out the purposes of this part, $10,000,000 for fiscal 
year 1993 and such sums as may be necessary for each of the 4 
succeeding fiscal years.
  [(b) Appropriation Limitation.--For any fiscal year, 50 
percent of the funds appropriated for this part shall be 
allocated for the purpose of section 1021, 33.33 percent for 
the purpose of section 1031, and 16.67 percent for the purpose 
of section 1032.

    [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 thosestudents 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.

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

[SEC. 1091. GRANTS TO STATES FOR WORKPLACE AND COMMUNITY TRANSITION 
                    TRAINING FOR INCARCERATED YOUTH OFFENDERS.

  [(a) Findings.--The Congress finds the following:
          [(1) Over 150,000 youth offenders age 21 and younger 
        are incarcerated in the Nation's jails, juvenile 
        facilities, and prisons.
          [(2) Most youth offenders who are incarcerated have 
        been sentenced as first-time adult felons.
          [(3) Approximately 75 percent of youth offenders are 
        high school dropouts who lack basic literacy and life 
        skills, have little or no job experience, and lack 
        marketable skills.
          [(4) The average incarcerated youth has attended 
        school only through grade 10.
          [(5) Most of these youths can be diverted from a life 
        of crime into productive citizenship with available 
        educational, vocational, work skills, and related 
        service programs.
          [(6) If not involved with educational programs while 
        incarcerated, almost all of these youths will return to 
        a life of crime upon release.
          [(7) The average length of sentence for a youth 
        offender is about 3 years. Time spent in prison 
        provides a unique opportunity for education and 
        training.
          [(8) Even with quality education and training 
        provided during incarceration, a period of intense 
        supervision, support, and counseling is needed upon 
        release to ensure effective reintegration of youth 
        offenders into society.
          [(9) Research consistently shows that the vast 
        majority of incarcerated youths will not return to the 
        public schools to complete their education.
          [(10) There is a need for alternative educational 
        opportunities during incarceration and after release.
  [(b) Definition.--For purposes of this part, the term ``youth 
offender'' means a male or female offender under the age of 25, 
who is incarcerated in a State prison, including a prerelease 
facility.
  [(c) Grant Program.--The Secretary shall establish a program 
in accordance with this section to provide grants to the State 
correctional education agencies to assist and encourage 
incarcerated youths to acquire functional literacy, life, and 
job skills, through the pursuit of a postsecondary education 
certificate, or an associate of arts or bachelor's degree while 
in prison, and employment counseling and other related services 
which start during incarceration and continue through 
prerelease and while on parole.
  [(d) Application.--To be eligible for a grant under this 
section, a State correctional education agency shall submit to 
the Secretary a proposal for a youth offender program that--
          [(1) identifies the scope of the problem, including 
        the number of incarcerated youths in need of 
        postsecondary education and vocational training;
          [(2) lists the accredited public or private 
        educational institution or institutions that will 
        provide postsecondary educational services;
          [(3) lists the cooperating agencies, public and 
        private, or businesses that will provide related 
        services, such as counseling in the areas of career 
        development, substance abuse, health, and parenting 
        skills;
          [(4) describes the evaluation methods and performance 
        measures that the State correctional education agency 
        will employ, provided that such methods and measures 
        are appropriate to meet the goals and objectives of the 
        proposal, and that such methods and measures include 
        measures of--
                  [(A) program completion;
                  [(B) student academic and vocational skill 
                attainment;
                  [(C) success in job placement and retention; 
                and
                  [(D) recidivism;
          [(5) describes how the proposed programs are to be 
        integrated with existing State correctional education 
        programs (such as adult education, graduate education 
        degree programs, and vocational training) and State 
        industry programs;
          [(6) addresses the educational needs of youth 
        offenders who are in alternative programs (such as boot 
        camps); and
          [(7) describes how students will be selected so that 
        only youth offenders eligible under subsection (f) will 
        be enrolled in postsecondary programs.
  [(e) Program Requirements.--Each State correctional education 
agency receiving a grant under this section shall--
          [(1) integrate activities carried out under the grant 
        with the objectives and activities of the school-to-
        work programs of such State, including--
                  [(A) work experience or apprenticeship 
                programs;
                  [(B) transitional worksite job training for 
                vocational education students that is related 
                to the occupational goals of such students and 
                closely linked to classroom and laboratory 
                instruction;
                  [(C) placement services in occupations that 
                the students are preparing to enter;
                  [(D) employment-based learning programs; and
                  [(E) programs that address State and local 
                labor shortages;
          [(2) annually report to the Secretary and the 
        Attorney General on the results of the evaluations 
        conducted using the methods and performance measures 
        contained in the proposal; and
          [(3) provide to each State for each student eligible 
        under subsection (f) not more than $1,500 annually for 
        tuition, books, and essential materials, and not more 
        than $300 annually for related services such as career 
        development, substance abuse counseling, parenting 
        skills training, and health education, for each 
        eligible incarcerated youth.
  [(f) Student Eligibility.--A youth offender shall be eligible 
for participation in a program receiving a grant under this 
section if the youth offender--
          [(1) is eligible to be released within five years 
        (including a youth offender who is eligible for parole 
        within such time); and
          [(2) is 25 years of age or younger.
  [(g) Length of Participation.--A State correctional education 
agency receiving a grant under this section shall provide 
educational and related services to each participating youth 
offender for a period not to exceed 5 years, 1 year of which 
may be devoted to study in a graduate education degree program 
or to remedial education services for students who have 
obtained a secondary school diploma. Educational and related 
services shall start during the period of incarceration in 
prison or prerelease and may continue during the period of 
parole.
  [(h) Education Delivery Systems.--State correctional 
education agencies and cooperating institutions shall, to the 
extent practicable, use high-tech applications in developing 
programs to meet the requirements and goals of this section.
  [(i) Allocation of Funds.--From the amounts appropriated 
pursuant to subsection (j), the Secretary shall allot to each 
State an amount that bears the same relationship to such funds 
as the total number of students eligible under subsection (f) 
in such State bears to the total number of such students in all 
States.
  [(j) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this section $5,000,000 for 
fiscal year 1995 and such sums as may be necessary for fiscal 
year 1996 and each of the four succeeding fiscal years.

                 [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 aredesigned 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.

                     [TITLE XII--GENERAL PROVISIONS

[SEC. 1201. DEFINITIONS.

  [As used in this Act--
  [(a) The term ``institution of higher education'' means an 
educational institution in any State which (1) admits as 
regular students only persons having a certificate of 
graduation from a school providing secondary education, or the 
recognized equivalent of such a certificate, (2) is legally 
authorized within such State to provide a program of education 
beyond secondary education, (3) provides an educational program 
for which it awards a bachelor's degree or provides not less 
than a two-year program which is acceptable for full credit 
toward such a degree, (4) is a public or other nonprofit 
institution, and (5) is accredited by a nationally recognized 
accrediting agency or association, or if not so accredited, is 
an institution that has been granted preaccreditation status by 
such an agency or association that has been recognized by the 
Secretary for the granting of preaccreditation status, and the 
Secretary has determined that there is satisfactory assurance 
that the institution will meet the accreditation standards of 
such an agency or association within a reasonable time. Such 
term also includes any school which provides not less than a 
one-year program of training to prepare students for gainful 
employment in a recognized occupation and which meets the 
provision of clauses (1), (2), (4), and (5). Such term also 
includes a public or nonprofit private educational institution 
in any State which, in lieu of the requirement in clause (1), 
admits as regular students persons who are beyond the age of 
compulsory school attendance in the State in which the 
institution is located. For purposes of this subsection, the 
Secretary shall publish a list of nationally recognized 
accrediting agencies or associations which he determines, 
pursuant to subpart 2 of part H of title IV of this Act, to be 
reliable authority as to the quality of the education or 
training offered.
  [(b) The term ``State'' includes, in addition to the several 
States of the Union, the Commonwealth of Puerto Rico, the 
District of Columbia, Guam, American Samoa, the Virgin Islands, 
the government of the Northern Mariana Islands, and the Trust 
Territory of the Pacific Islands.
  [(c) The term ``nonprofit'' as applied to a school, agency, 
organization, or institution means a school, agency, 
organization, or institution owned and operated by one or more 
nonprofit corporations or associations no part of the net 
earnings of which inures, or may lawfully inure, to the benefit 
of any private shareholder or individual.
  [(d) The term ``secondary school'' has the same meaning given 
that term under section 1471(21) of the Elementary and 
Secondary Education Act of 1965.
  [(e) The term ``Secretary'' means the Secretary of Education.
  [(f) The term ``local educational agency'' has the same 
meaning given that term under section 1471(12) of the 
Elementary and Secondary Education Act of 1965.
  [(g) The term ``State educational agency'' has the same 
meaning given that term under section 1471(23) of the 
Elementary and Secondary Education Act of 1965.
  [(h) The term ``State higher education agency'' means the 
officer or agency primarily responsible for the State 
supervision of higher education.
  [(i) The term ``elementary school'' has the same meaning 
given that term under section 1471(8) of the Elementary and 
Secondary Education Act of 1965.
  [(j) The term ``combination of institutions of higher 
education'' means a group of institutions of higher education 
that have entered into a cooperative arrangement for the 
purpose of carrying out a common objective, or a public or 
private nonprofit agency, organization, or institution 
designated or created by a group of institutions of higher 
education for the purpose of carrying out a common objective on 
their behalf.
  [(k) The term ``gifted and talented children'' has the same 
meaning given that term under section 4103(1) of the Elementary 
and Secondary Education Act of 1965.
  [(l) The term ``school or department of divinity'' means an 
institution or a department or a branch of an institution the 
program of instruction of which is designed for the education 
of students (A) to prepare them to become ministers of religion 
or to enter upon some other religious vocation (or to provide 
continuing training forany such vocation), or (B) to prepare 
them to teach theological subjects.
  [(m) The term ``Department'' means the Department of 
Education.
  [(n) The term ``disability'' has the same meaning given that 
term under section 3(2) of the Americans With Disabilities Act 
of 1990 (42 U.S.C. 12102(2)).
  [(o) The term ``special education teacher'' means teachers 
who teach children with disabilities as defined in the 
Individuals With Disabilities Education Act.
  [(p) The term ``service-learning'' has the same meaning given 
that term under section 101(23) of the National and Community 
Service Act of 1990 (42 U.S.C. 12511(21)).

[SEC. 1202. ANTIDISCRIMINATION.

  [(a) In General.--Institutions of higher education receiving 
Federal financial assistance may not use such financial 
assistance whether directly or indirectly to undertake any 
study or project or fulfill the terms of any contract 
containing an express or implied provision that any person or 
persons of a particular race, religion, sex, or national origin 
be barred from performing such study, project, or contract, 
except no institution shall be barred from performing such 
study, project, or contract, except no institution shall be 
barred from conducting objective studies or projects concerning 
the nature, effects, or prevention of discrimination, or have 
its curriculum restricted on the subject of discrimination, 
against any such person.
  [(b) Limitations on Statutory Construction.--Nothing in this 
Act shall be construed to limit the rights or responsibilities 
of any individual under the Americans With Disabilities Act of 
1990, the Rehabilitation Act of 1973, or any other law.

[SEC. 1203. FEDERAL-STATE RELATIONSHIPS; STATE AGREEMENTS.

  [(a) Any State which desires to receive assistance under an 
applicable program, as described in subsection (f), shall enter 
into an agreement with the Secretary pursuant to subsection (b) 
setting forth the terms and conditions for the relationship 
between the Federal Government and that State for the purposes 
set forth in the applicable programs.
  [(b) Such agreement shall consist of assurances by the State, 
including a description of the means to be used by the State to 
fulfill the assurances, that--
          [(1) the State will provide for such methods of 
        administration as are necessary for the proper and 
        efficient administration of any program in keeping with 
        the purposes of the applicable programs described in 
        subsection (f);
          [(2) the State will provide such fiscal control and 
        fund accounting procedures as may be necessary to 
        ensure proper disbursement of, and accounting for, 
        Federal funds paid to the State under any title of this 
        Act;
          [(3) the State will follow policies and practices of 
        administration that will ensure that non-Federal funds 
        will not be supplanted by Federal funds, and that 
        equitable and appropriate criteria will be used in 
        evaluation of applications or proposals for grants or 
        contracts under any such applicable program; and
          [(4) the State has a comprehensive planning or policy 
        formulation process which--
                  [(A) considers the relation between State 
                administration of any such applicable program, 
                and administration of similar State programs or 
                processes;
                  [(B) encourages State policies designed to 
                consider effects on declining enrollments on 
                all sectors of postsecondary education in the 
                State;
                  [(C) considers the postsecondary education 
                needs of unserved and underserved individuals 
                within the State, including individuals beyond 
                the traditional college age;
                  [(D) considers the resources of institutions, 
                organizations, or agencies (both public and 
                private) within the State capable of providing 
                postsecondary educational opportunities in the 
                State; and
                  [(E) provides for direct, equitable and 
                active participation in the comprehensive 
                planning or policy formulation process or 
                processes of representatives of institutions of 
                higher education (including community colleges, 
                proprietary institutions, and independent 
                colleges and universities), students, other 
                providers of postsecondary education services, 
                and the general public in the State.
Participation under subclause (E) shall, consistent with State 
law, be achieved through membership on State planning 
commissions, State advisory councils, or other State entities 
established by the State to conduct federally assisted 
comprehensive planning or policy formulation.
  [(c) The information and assurances provided by a State in 
accordance with paragraphs (1), (2), and (3) of subsection (b), 
and regulations issued by the Secretary related directly to 
such assurances, shall be satisfactory for the purposes of, and 
shall be considered in lieu of, any comparable requirements for 
information and assurances in any applicable program described 
in subsection (f).
  [(d)(1) An agreement of a State shall remain in effect 
subject to modification as changes in information or 
circumstances require.
  [(2) Whenever the Secretary, after reasonable notice and 
opportunity for a hearing has been given to the State, finds 
that there is a failure to comply substantially with the 
assurances required in paragraph (1), (2), or (3) of subsection 
(b), the Secretary shall notify the State that it is no longer 
eligible to participate in any applicable program described in 
subsection (f) until the Secretary is satisfied that there is 
no longer any such failure to comply.
  [(e)(1) For the purpose of this section, the selection of the 
State entity or entities authorized to act on behalf of the 
State 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.
  [(2)(A) Nothing in this section shall be construed to 
authorize the Secretary to require any State to adopt, as a 
condition for entering into an agreement, or for participation 
in an applicable program as defined in subsection (f), a 
specific State organizational structure for achieving 
participation in the planning, or administration of programs, 
or for statewide planning, coordination, governing, regulating, 
or administering of postsecondary education agencies, 
institutions, or programs in the State.
  [(B) Nothing in this section shall be construed as a 
limitation on the authority of any State to adopt a State 
organizational structure for postsecondary education agencies, 
institutions, or programs which is appropriate to the needs, 
traditions, and circumstances of that State, or as a limitation 
on the authority of a State entering into an agreement pursuant 
to this section to modify the State organizational structure at 
any time subsequent to entering into such an agreement.
  [(f) For the purposes of this section an ``applicable 
program'' is defined as--
          [(1) title I;
          [(2) subpart 3 of part A of title IV; and
          [(3) part A of title VII.

                [federal control of education prohibited

  [Sec. 1204.
  [(b) Nothing contained in this Act or any other Act shall be 
construed to authorize any department, agency, officer, or 
employee of the United States to exercise any direction, 
supervision, or control over the membership practices or 
internal operations of any fraternal organization, fraternity, 
sorority, private club or religious organization at an 
institution of higher education (other than a service academy 
or the Coast Guard Academy) which is financed exclusively by 
funds derived from private sources and whose facilities are not 
owned by such institution.

[SEC. 1204. TREATMENT OF TERRITORIES AND TERRITORIAL STUDENT 
                    ASSISTANCE.

  [(a) The Secretary is required to waive the eligibility 
criteria of any postsecondary education program administered by 
the Department where such criteria do not take into account the 
unique circumstances in Guam, the Virgin Islands, American 
Samoa, Palau, the Commonwealth of the Northern Mariana Islands, 
and the freely associated states.
  [(b) Notwithstanding any other provision of law, an 
institution of higher education that is located in any of the 
freely associated states, rather than a State, shall be 
eligible, if otherwise qualified, for assistance under chapter 
1 of subpart 2 of part A of title IV of this Act.

[SEC. 1205. NATIONAL ADVISORY COMMITTEE ON INSTITUTIONAL QUALITY AND 
                    INTEGRITY.

  [(a) Establishment.--There is established in the Department a 
National Advisory Committee on Institutional Quality and 
Integrity (hereafter in this section referred to as the 
``Committee''), which shall be composed of 15 members appointed 
by the Secretary from among individuals who are representatives 
of, or knowledgeable concerning, education and training beyond 
secondary education, including representatives of all sectors 
and types of institutions of higher education (as defined in 
section 481(a)), to assessthe process of eligibility and 
certification of such institutions under title IV of this Act and the 
provision of financial aid under title IV of this Act. The Secretary 
may also appoint to the Committee representatives of the general public 
serving on the National Advisory Committee on Accreditation and 
Institutional Eligibility (as such Committee was in existence on the 
date of enactment of the Higher Education Amendments of 1992).
  [(b) Terms of Members.--Terms of office of each member of the 
Committee shall be 3 years, except that--
          [(1) of the members first appointed to the Committee 
        the Secretary shall designate--
                  [(A) 5 such members to serve for a term of 1 
                year;
                  [(B) 5 such members to serve for a term of 2 
                years; and
                  [(C) 5 such members to serve for a term of 3 
                years; and
          [(2) any member appointed to fill in a vacancy 
        occurring prior to the expiration of the term for which 
        the member's predecessor was appointed shall be 
        appointed for the remainder of such term.
  [(c) Functions.--The Committee shall--
          [(1) advise the Secretary with respect to 
        establishment and enforcement of the standards of 
        accrediting agencies or associations under subpart 2 of 
        part H of title IV of this Act;
          [(2) advise the Secretary with respect to the 
        recognition of a specific accrediting agency or 
        association;
          [(3) advise the Secretary with respect to the 
        preparation and publication of the list of nationally 
        recognized accrediting agencies and associations;
          [(4) develop and recommend to the Secretary standards 
        and criteria for specific categories of vocational 
        training institutions and institutions of higher 
        education for which there are no recognized accrediting 
        agencies, associations, or State agencies, in order to 
        establish the eligibility of such institutions on an 
        interim basis for participation in federally funded 
        programs;
          [(5) advise the Secretary with respect to the 
        eligibility and certification process for institutions 
        of higher education under title IV of this Act, 
        together with recommendations for improvements in such 
        process;
          [(6) advise the Secretary with respect to the 
        functions of the Secretary under subpart 1 of part H of 
        title IV of this Act, relating to State institutional 
        integrity standards;
          [(7) advise the Secretary with respect to the 
        relationship between--
                  [(A) accreditation of institutions of higher 
                education and the certification and eligibility 
                of such institutions; and
                  [(B) State licensing responsibilities with 
                respect to such institutions; and
          [(8) carry out such other advisory functions relating 
        to accreditation and institutional eligibility as the 
        Secretary may prescribe.
  [(d) Meeting Procedures.--The Committee shall meet not less 
than twice each year at the call of the Chairperson. The date 
of, and agenda for, each meeting of the Committee shall be 
submitted in advance to the Secretary for approval. A 
representative of the Secretary shall be present at all 
meetings of the Committee.
  [(e) Report.--The Committee shall, not later than November 30 
of each year, make an annual report through the Secretary to 
the Congress. The annual report shall contain--
          [(1) a list of the members of the Committee and their 
        addresses;
          [(2) a list of the functions of the Committee;
          [(3) a list of dates and places of each meeting 
        during the preceding fiscal year; and
          [(4) a summary of the activities, findings and 
        recommendations made by the Committee during the 
        preceding fiscal year.
  [(f) Termination.--Subject to section 448(b) of the General 
Education Provision Act, the National Advisory Committee on 
Institutional Quality and Integrity shall continue to exist 
until September 30, 1998.

[SEC. 1206. COMMISSION TO STUDY POSTSECONDARY INSTITUTIONAL AND 
                    PROGRAMMATIC RECOGNITION PROCESS.

  [(a) There is established in the legislative branch a Joint 
Study Commission on Postsecondary Institutional Recognition 
(hereafter in this section referred to as the ``Commission'').
  [(b) The Commission shall be composed of 5 members appointed 
jointly by the President pro tempore of the Senate, upon the 
recommendation of the Majority Leader and the Minority Leader, 
and by the Speaker of the House of Representatives, upon the 
recommendation of the Majority Leader and the Minority Leader.
  [(c)(1) Members of the Commission shall be appointed, on the 
basis of their integrity, impartiality, and good judgment, from 
among individuals who, as a result of their training, 
experience, and attainment, are widely recognized by 
professionals in the fields of education and governmental 
administration as experts in those fields.
  [(2) A majority of the members of the Commission may not, at 
the time of their appointment, be serving as either employees 
or officers of any accrediting agency or an organization of 
accrediting agencies, currently serving as administrators of 
accredited institutions, or be current or past members of the 
Advisory Committee on Accreditation and Institutional 
Eligibility of the Department.
  [(3) Vacancies in the membership of the Commission shall not 
affect the power of the remaining members to perform the duties 
of the Commission and shall be filled in the same manner in 
which the original appointment was made.
  [(4) Each member of the Commission not otherwise employed by 
the United States Government shall receive the daily equivalent 
of the annual basic pay for level V of the Executive Schedule 
under section 5316 of title 5, United States Code, for each day 
during which such member is actually engaged in the performance 
of the duties of the Commission. Each member of the Commission 
shall be allowed travel expenses in the same manner as any 
individual employed intermittently by the Federal Government is 
allowed travel expenses under section 5703 of title 5, United 
States Code.
  [(d)(1) The Commission shall conduct a thorough study of the 
institutional and programmatic recognition process used by the 
Department in determining institutional or programmatic 
eligibility for student participation in Federal student 
assistance programs under this Act with attention being given 
to the accreditation of various types of public and private 
postsecondary institutions and programs.
  [(2) The study shall address, analyze, and report 
specifically on--
          [(A) the comprehensiveness of the standards and 
        criteria used by existing accreditation agencies;
          [(B) the reliability and validity of the 
        institutional and programmatic review processes used by 
        the existing accreditation agencies;
          [(C) the adequacy of the current accreditation 
        methodology and system;
          [(D) alternative structures, standards, criteria, and 
        processes that might be used in accrediting 
        institutions and programs;
          [(E) the indicators of educational quality that might 
        be incorporated into the accreditation process;
          [(F) the educational outcome measurements that might 
        be used in the accreditation process;
          [(G) the indicators of institutional and programmatic 
        quality that should be provided to applicants and 
        students; and
          [(H) alternative approaches that might be used by the 
        Secretary for institutional and programmatic 
        recognition to permit student participation in Federal 
        student assistance programs,
as each factor bears on eligibility for participation in 
Federal student assistance programs.
  [(3) The study shall also include an analysis of--
          [(A) the processes and procedures currently utilized 
        by the Secretary and the Department in determining 
        institutional and program eligibility for receiving 
        Federal student assistance funds;
          [(B) the operations and effectiveness in carrying out 
        eligibility determination of the division of the 
        Department referred to as the ``Division of Eligibility 
        and Agency Evaluation'';
          [(C) review of alternatives to accreditation in 
        determining eligibility and their acceptability;
          [(D) the role and effectiveness of, participation 
        agreements, between institutions and programs and the 
        Department in determining specific institutional 
        program eligibility for Federal funds;
          [(E) the ability of the Department to enforce 
        conditions specified in participation agreements, 
        including institutional and program audits;
          [(F) the current status, functioning, and 
        effectiveness of the National Advisory Committee on 
        Accreditation and Institutional Eligibility, including 
        its role in developing criteria for recognition of 
        accrediting agencies and evaluating their success in 
        assessing the quality of the education or training 
        offered.
  [(e) The Commission shall adopt procedures allowing any 
interested party to submit information with respect to the 
recognition process, including critiques of current accrediting 
agency recognition procedures, accreditation procedures, 
possible alternative procedures, and proposed changes in 
criteria for recognition of individual accrediting agencies.
  [(f) The Commission shall prepare a narrative and statistical 
report consisting of--
          [(1) an overview description of the voluntary 
        accrediting process used for postsecondary education in 
        the United States; and
          [(2) a brief description of each accrediting agency 
        recognized by the Department.
The report shall include at least a statement of the agency's 
purpose and a description of the organizational and governance 
structure of the agency, the agency's accreditation and 
visitation procedures, employers of members of the accrediting 
agency's governing body, the agency's sources of financial 
support, and such background information as the Commission may 
request from the agency regarding the number of members, number 
of candidates for accreditation, number of members voluntarily 
withdrawn after membership, number of applications withdrawn 
before membership, number of members dropped, and number of 
applicants denied accreditation. The report shall include the 
types of information shared among the various accrediting 
agencies, the degree of duplication among accrediting agencies 
in the current system, and an analysis of reported complaints 
by the agency and its member institutions and programs.
  [(g) The Commission shall also prepare a report on--
          [(1) the history, operation, procedures, and the role 
        and adequacy of staff of the division described in 
        subsection (e)(3)(B);
          [(2) the history and current operations of the 
        National Advisory Committee on Accreditation and 
        Institutional Eligibility, including current criteria 
        for Federal recognition of accrediting bodies, how the 
        criteria were developed, possible modifications, and 
        procedures for accomplishing this; and
          [(3) with respect to the Department in general, an 
        overview of its role in the institutional and 
        programmatic recognition process as it relates to 
        eligibility for Federal student assistance, including 
        recommendations, if appropriate, on how this role might 
        be changed and improved.
  [(h)(1)(A) By agreement between the President pro tempore of 
the Senate and the Speaker of the House of Representatives, the 
Commission is authorized to secure on a reimbursable basis, 
office space, clerical personnel, travel expenses, and such 
supplies and equipment as may be necessary for the Commission 
to carry out the study.
  [(B) Subject to such limitations as the President pro tempore 
of the Senate and the Speaker of the House of Representatives 
may jointly prescribe, the Commission may appoint such 
personnel as the Commission deems necessary and fix the 
compensation at an annual rate that does not exceed the rate of 
basic pay then payable for GS-18 of the General Schedule under 
section 5332 of title 5, United States Code, and may procure by 
contract the temporary and intermittent services of clerical 
personnel and experts or consultants, or organizations thereof.
  [(2) In conducting the study authorized by this section, the 
Commission is authorized to--
          [(A) seek such assistance and support as may be 
        required to conduct the study from appropriate Federal 
        agencies;
          [(B) arrange for the detail of staff personnel from 
        other Federal agencies;
          [(C) enter into contracts and make other 
        arrangements, as may be necessary for the conduct of 
        the study;
          [(D) convene such technical groups as deemed 
        necessary to secure information about the existing 
        recognition process; and
          [(E) provide transportation and subsistence for 
        persons serving without compensation.
  [(3) Upon request by the Commission, the head of any Federal 
agency is authorized to detail, on a reimbursable basis, any of 
the personnel of such agency to the Commission to assist in the 
conduct of the study.
  [(i) The Commission shall submit a report of the findings and 
recommendations of the study required by this section to the 
Postsecondary Education Subcommittee of the Education and Labor 
Committee of the House of Representatives and the Subcommittee 
on Education, Arts, and Humanities of the Labor and Human 
Resources Committee of the Senate not later than one year after 
funds are appropriated and made available for this study.
  [(j) There are authorized to be appropriated $1,000,000 to 
carry out the study authorized by this section.

[SEC. 1207. STUDENT REPRESENTATION.

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

[SEC. 1208. FINANCIAL RESPONSIBILITY OF FOREIGN STUDENTS.

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

[SEC. 1209. DISCLOSURES OF FOREIGN GIFTS.

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

[SEC. 1210. APPLICATION OF PEER REVIEW PROCESS.

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

[SEC. 1211. AGGREGATE LIMIT OF AUTHORIZATION OF APPROPRIATIONS.

  [Notwithstanding any other provision of this Act, the total 
amount which may be appropriated to carry out the programs and 
activities authorized by this Act, other than the programs and 
activities authorized by subpart 1 of part A and part B of 
title IV, shall not exceed--
          [(1) $3,166,000,000 for fiscal year 1987,
          [(2) $3,351,000,000 for fiscal year 1988,
          [(3) $3,552,000,000 for fiscal year 1989,
          [(4) $3,771,000,000 for fiscal year 1990, and
          [(5) $4,007,000,000 for fiscal year 1991.

[SEC. 1212. TECHNOLOGY TRANSFER CENTERS.

  [(a)(1)(A) Except as provided in subparagraph (B), there are 
authorized to be appropriated $15,000,000 for fiscal year 1988 
and such sums as may be necessary for each of the 3 succeeding 
fiscal years to develop, construct, and operate regional 
technology transfer centers. The Secretary shall establish such 
regional centers--
          [(i) to promote the study and development of programs 
        and depositories necessary to further the transfer of 
        technology relevant to a respective region's economy;
          [(ii) to assist in developing incubator facilities to 
        encourage new economic initiatives;
          [(iii) to provide technical assistance linking 
        university expertise and private sector resources to 
        solve technical, marketing, and manufacturing problems 
        associated with technology-transfer and start-up 
        businesses; and
          [(iv) to ensure consideration of the economic 
        development needs of rural as well as urban areas 
        within the region.
  [(B) The Secretary shall reserve not less than $3,000,000 of 
amounts appropriated pursuant to subparagraph (A) for the 
purpose of carrying out the Training Technology Transfer Act of 
1988.
  [(2) In carrying out the requirements of this section, 
regional technology-transfer centers are authorized--
          [(A) to build on or, where needed, develop 
        telecommunications systems to link the centers and 
        their affiliates with industrial users;
          [(B) to build on or develop necessary computer 
        networks and data bases; and
          [(C) to utilize or help develop regional and national 
        libraries.
  [(b) Financial assistance to each center shall be awarded 
competitively. Such financial assistance shall be awarded for 
the establishment or operation of such centers.
  [(c) Each regional center established shall be operated by an 
appropriately qualified college or university within the 
region, a consortium of such schools within the region, or a 
university-related research park or center, and such regional 
center shall, where deemed necessary, establish one or more 
affiliate centers at colleges and universities based in other 
States within the region.
  [(d) In establishing such centers, the institutions applying 
shall show in their application--
          [(1) how the center will facilitate the economy of 
        the region;
          [(2) that the center's mission is compatible with the 
        economic development plans of States in the region; and
          [(3) that appropriate consultation with the relevant 
        State agencies concerned with economic development has 
        taken place.
  [(e)(1) Such center also may be operated by a consortium 
composed of an entity or entities described in subsection (c), 
and an existing campus-based research entity, or other State 
and local agencies, nonprofit agencies, interstate higher 
education organizations, or, where appropriate, for-profit 
agencies. The Secretary, through regulation, shall determine a 
mechanism for assessing the percentage of operating costs paid 
by other members of a technology transfer consortium 
arrangements.
  [(2) For purpose of paragraph (1), the term ``existing 
campus-based research facilities'', includes agricultural 
research facilities, mining and minerals research facilities; 
forestry and wood-products research facilities, solar renewable 
energy research facilities, high technology facilities, and 
manufacturing technology research facilities.
  [(f) Each such center shall establish a Board to advise the 
center on policy. Such board shall be--
          [(1) representative of the States involved in the 
        region; and
          [(2) consist of representatives for urban areas, 
        rural areas, ethnic concerns, business, labor, and 
        education.
  [(g)(1) Grants for each center shall be awarded for a 5-year 
period. Before the end of such period, the Secretary shall 
conduct a competition for the award of grants for the 
succeeding 5-year period.
  [(2) For the fourth and fifth year of each such 5-year 
period, and during any renewal of the grant for succeeding 5-
year periods, 50 percent of the cost of the activities for 
which assistance is awarded shall be provided from non-Federal 
sources.
  [(h) Funding for affiliate centers authorized in subsection 
(c) shall be provided by the regional center and the college or 
university operating the affiliate center, with funding levels 
to be reached by the 2 entities in a scope-of-work agreement 
negotiated between the 2 entities. Should the affiliate center 
wish, its operations and funding support can be a consortia, as 
specified in subsection (e).
  [(i)(1) The Secretary, after consultation with the 
Departments of Agriculture, Energy, Commerce, and Interior 
shall publish, for public comment, a proposed list of 
priorities for the establishment of regional technology 
transfer centers and shall propose the regional composition of 
such centers, keeping in mind that satellite and 
telecommunications technology enables regions to contain 
noncontiguous States.
  [(2) The Secretary shall publish the final list of regions 
and priorities along with the public's comments. In 
establishing such regions, the Secretary may designate a State 
or a portion of a State as a region.

[SEC. 1213. DRUG AND ALCOHOL ABUSE PREVENTION.

  [(a) Notwithstanding any other provision of law, no 
institution of higher education shall be eligible to receive 
funds or any other form of financial assistance under any 
Federal program, including participation in any federally 
funded or guaranteed student loan program, unless it certifies 
to the Secretary that it has adopted and has implemented a 
program to prevent the use of illicit drugs and the abuse of 
alcohol by students and employees that, at a minimum, 
includes--
          [(1) the annual distribution to each student and 
        employee of--
                  [(A) standards of conduct that clearly 
                prohibit, at a minimum, the unlawful 
                possession, use, or distribution of illicit 
                drugs and alcohol by students and employees on 
                its property or as part of any of its 
                activities;
                  [(B) a description of the applicable legal 
                sanctions under local, State, or Federal law 
                for the unlawful possession or distribution of 
                illicit drugs and alcohol;
                  [(C) a description of the health-risks 
                associated with the use of illicit drugs and 
                the abuse of alcohol;
                  [(D) a description of any drug or alcohol 
                counseling, treatment, or rehabilitation or re-
                entry programs that are available to employees 
                or students; and
                  [(E) a clear statement that the institution 
                will impose sanctions on students and employees 
                (consistent with local, State, and Federal 
                law), and a description of those sanctions, up 
                to and including expulsion or termination of 
                employment and referral for prosecution, for 
                violations of the standards of conduct required 
                by paragraph (1)(A); and
          [(2) a biennial review by the institution of its 
        program to--
                  [(A) determine its effectiveness and 
                implement changes to the program if they are 
                needed; and
                  [(B) ensure that the sanctions required by 
                paragraph (1)(E) are consistently enforced.
  [(b) Each institution of higher education that provides the 
certification required by subsection (a) shall, upon request, 
make available to the Secretary and to the public a copy of 
each item required by subsection (a)(1) as well as the results 
of the biennial review required by subsection (a)(2).
  [(c)(1) The Secretary shall publish regulations to implement 
and enforce the provisions of this section, including 
regulations that provide for--
          [(A) the periodic review of a representative sample 
        of programs required by subsection (a); and
          [(B) a range of responses and sanctions for 
        institutions of higher education that fail to implement 
        their programs or to consistently enforce their 
        sanctions including information and technical 
        assistance, the development of a compliance agreement, 
        and the termination of any form of Federal financial 
        assistance.
  [(2) The sanctions required by subsection (a)(1)(E) may 
include the completion of an appropriate rehabilitation 
program.
  [(d) Upon determination by the Secretary to terminate 
financial assistance to any institution of higher education 
under this section, the institution may file an appeal with an 
administrative law judge before the expiration of the 30-day 
period beginning on the date such institution is notified of 
the decision to terminate financial assistance under this 
section. Such judge shall hold a hearing with respect to such 
termination of assistance before the expiration of the 45-day 
period beginning on the date that such appeal is filed. Such 
judge may extend such 45-day period upon a motion by the 
institution concerned. The decision of the judge with respect 
to such termination shall be considered to be a final agency 
action.]
                              ----------                              


                      TITLE 10, UNITED STATES CODE



           *       *       *       *       *       *       *
Subtitle A--General Military Law

           *       *       *       *       *       *       *


PART III--TRAINING AND EDUCATION

           *       *       *       *       *       *       *


CHAPTER 111--SUPPORT OF SCIENCE, MATHEMATICS, AND ENGINEERING EDUCATION

           *       *       *       *       *       *       *


Sec. 2193. Science and mathematics education improvement program

  (a) * * *

           *       *       *       *       *       *       *

  (c) In this section:
          (1) The term ``institution of higher education'' has 
        the meaning given such term in section [1201(a) of the 
        Higher Education Act of 1965 (20 U.S.C. 1141(a))] 
        101(a)(1) of the Higher Education Act of 1965.

           *       *       *       *       *       *       *


Sec. 2199. Definitions

  In this chapter:
          (1) * * *
          (2) The term ``institution of higher education'' has 
        the meaning given such term in section [1201(a) of the 
        Higher Education Act of 1965 (20 U.S.C. 1141(a))] 
        101(a)(1) of the Higher Education Act of 1965.

           *       *       *       *       *       *       *

                              ----------                              


              SECTION 207 OF TITLE 18, UNITED STATES CODE

Sec. 207. Restrictions on former officers, employees, and elected 
                    officials of the executive and legislative branches

  (a) * * *

           *       *       *       *       *       *       *

  (j) Exceptions.--
          (1) * * *
          (2) State and local governments and institutions, 
        hospitals, and organizations.--The restrictions 
        contained in subsections (c), (d), and (e) shall not 
        apply to acts done in carrying out official duties as 
        an employee of--
                  (A) * * *
                  (B) an accredited, degree-granting 
                institution of higher education, as defined in 
                section [1201(a)] 101(a)(1) of the Higher 
                Education Act of 1965, or a hospital or medical 
                research organization, exempted and defined 
                under section 501(c)(3) of the Internal Revenue 
                Code of 1986, if the appearance, communication, 
                or representation is on behalf of such 
                institution, hospital, or organization.

           *       *       *       *       *       *       *

                              ----------                              


              SECTION 3626 OF TITLE 39, UNITED STATES CODE

Sec. 3626. Reduced rates

  (a) * * *
  (b)(1) * * *

           *       *       *       *       *       *       *

  (3) For purposes of this subsection, the term ``institution 
of higher education'' has the meaning given it by section 
[1201(a) of the Higher Education Act of 1965 (20 U.S.C. 
1141(a))] 101(a)(1) of the Higher Education Act of 1965.

           *       *       *       *       *       *       *

                              ----------                              


            SECTION 3601 OF THE ANTI-DRUG ABUSE ACT OF 1988

SEC. 3601. DEFINITIONS.

  Unless otherwise defined by an Act amended by this title, for 
purposes of this title and the amendments made by this title--
          (1) * * *

           *       *       *       *       *       *       *

          (7) the term ``institution of higher education'' has 
        the meaning given it in section [1201(a) of the Higher 
        Education Act of 1965 (20 U.S.C. 1141(a))] 101(a)(1) of 
        the Higher Education Act of 1965,

           *       *       *       *       *       *       *

                              ----------                              


  SECTION 457 OF THE CRANSTON-GONZALEZ NATIONAL AFFORDABLE HOUSING ACT

SEC. 457. DEFINITIONS.

  For purposes of this subtitle:
          (1) * * *

           *       *       *       *       *       *       *

          (9) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning 
        given the term in section [1201(a)] 101(a)(1) of the 
        Higher Education Act of 1965.

           *       *       *       *       *       *       *

                              ----------                              


  SECTION 803 OF THE RESEARCH AND TRAINING FOR EASTERN EUROPE AND THE 
       INDEPENDENT STATES OF THE FORMER SOVIET UNION ACT OF 1983

                              definitions

  Sec. 803. As used in this title--
          (1) the term ``institution of higher education'' has 
        the same meaning given such term in section [1201(a)] 
        101(a)(1) of the Higher Education Act of 1965; and

           *       *       *       *       *       *       *

                              ----------                              


          SECTION 3 OF THE EDUCATION FOR ECONOMIC SECURITY ACT

                              definitions

  Sec. 3. For the purpose of this Act--
          (1) * * *

           *       *       *       *       *       *       *

          (6) The term ``institution of higher education'' has 
        the same meaning given that term by section [1201(a)] 
        101(a)(1) of the Higher Education Act of 1965.

           *       *       *       *       *       *       *

                              ----------                              


             ELEMENTARY AND SECONDARY EDUCATION ACT OF 1965



           *       *       *       *       *       *       *
  TITLE VII--BILINGUAL EDUCATION, LANGUAGE ENHANCEMENT, AND LANGUAGE 
ACQUISITION PROGRAMS

           *       *       *       *       *       *       *


                       PART E--GENERAL PROVISIONS

SEC. 7501. DEFINITIONS; REGULATIONS.

  Except as otherwise provided, for purposes of this title--
          (1) * * *

           *       *       *       *       *       *       *

          (4) Community college.--The term ``community 
        college'' means an institution of higher education as 
        defined in section [1201(a)] 101(a)(1) of the Higher 
        Education Act of 1965 which provides not less than a 
        two-year program which is acceptable for full credit 
        toward a bachelor's degree, including institutions 
        receiving assistance under the Tribally Controlled 
        Community College Assistance Act of 1978.

           *       *       *       *       *       *       *


                     TITLE XIV--GENERAL PROVISIONS

                          PART A--DEFINITIONS

SEC. 14101. DEFINITIONS.

  Except as otherwise provided, for the purposes of this Act, 
the following terms have the following meanings:
          (1) * * *

           *       *       *       *       *       *       *

          (17) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning 
        given that term in section [1201(a)] 101(a)(1) of the 
        Higher Education Act of 1965.

           *       *       *       *       *       *       *

                              ----------                              


 SECTION 922 OF THE FEDERAL AGRICULTURE IMPROVEMENT AND REFORM ACT OF 
                                  1996

SEC. 922. STUDENT INTERNSHIP PROGRAMS.

  (a) Student Intern Subsistence Program.--
          (1) Definition of student intern.--In this 
        subsection, the term ``student intern'' means a person 
        who--
                  (A) * * *
                  (B) is a student in good standing at an 
                institution of higher education (as defined in 
                section [1201 of the Higher Education Act of 
                1965 (20 U.S.C. 1141)] 101(a)(1) of the Higher 
                Education Act of 1965) pursuing a course of 
                study related to the field in which the person 
                is employed by the Department.

           *       *       *       *       *       *       *

  (b) Cooperation With Associations of Colleges and 
Universities.--
          (1) Authority to cooperate.--Notwithstanding chapter 
        63 of title 31, United States Code, the Secretary may 
        enter into cooperative agreements on an annual basis 
        with 1 or more associations of institutions of higher 
        education (as defined in section [1201 of the Higher 
        Education Act of 1965 (20 U.S.C. 1141)] 101(a)(1) of 
        the Higher Education Act of 1965) for the purpose of 
        providing for Department participation in internship 
        programs for graduate and undergraduate students who 
        are selected by the associations from students 
        attending member institutions of the associations and 
        other institutions of higher education.

           *       *       *       *       *       *       *

                              ----------                              


                 SECTION 670G OF THE FOLLOW THROUGH ACT

                              definitions

  Sec. 670G. For purposes of this subchapter--
          (1) * * *

           *       *       *       *       *       *       *

          (5) the term ``institution of higher education'' has 
        the same meaning given that term under section 
        [1201(a)] 101(a)(1) of the Higher Education Act of 
        1965;

           *       *       *       *       *       *       *

                              ----------                              


          SECTION 1417 OF THE FOOD AND AGRICULTURE ACT OF 1977

  (a) * * *

           *       *       *       *       *       *       *

  (h) Secondary Education and 2-Year Postsecondary Education 
Teaching Programs.--
          (1) Definitions.--In this subsection:
                  (A) Institution of higher education.--The 
                term ``institution of higher education'' has 
                the meaning given the term in section [1201(a) 
                of the Higher Education Act of 1965 (20 U.S.C. 
                1141(a))] 101(a)(1) of the Higher Education Act 
                of 1965.

           *       *       *       *       *       *       *

                              ----------                              


 SECTION 603 OF THE FOREIGN RELATIONS AUTHORIZATION ACT, FISCAL YEARS 
                             1986 AND 1987

SEC. 603. SCHOLARSHIP PROGRAM AUTHORITY.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Definition.--For purposes of this title, the term 
``institution of higher education'' has the same meaning as 
given to such term by section [1201(a)] 101(a)(1) if the Higher 
Education Act of 1965.
                              ----------                              


          SECTION 429 OF THE GENERAL EDUCATION PROVISIONS ACT

                        disclosure requirements

  Sec. 429. (a) * * *

           *       *       *       *       *       *       *

  (d) Definitions.--As used in this section:
          (1) Disability.--The term ``disability'' has the same 
        meaning given to such term by section 3(2) of the 
        Americans with Disabilities Act of 1990.
          (2) Educational organization.--(A) * * *
          (B) The definition in subparagraph (A) shall not 
        include--
                  (i) a local educational agency, State 
                educational agency, a State department of 
                education, or an elementary or secondary school 
                as defined by the Elementary and Secondary 
                Education Act of 1965;
                  (ii) an institution of higher education as 
                defined by section [1201(a)] 101(a)(1) of the 
                Higher Education Act of 1965; or

           *       *       *       *       *       *       *

                              ----------                              


        SECTION 3 OF THE HARRY S TRUMAN MEMORIAL SCHOLARSHIP ACT

                              definitions

  Sec. 3. As used in this Act, the term--
          (1) * * *

           *       *       *       *       *       *       *

          (4) ``institution of higher education'' means any 
        such institution as defined by section [1201(a)] 
        101(a)(1) of the Higher Education Act of 1965;

           *       *       *       *       *       *       *

                              ----------                              


                   SECTION 649 OF THE HEAD START ACT

SEC. 649. RESEARCH, DEMONSTRATIONS, AND EVALUATION.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Consultation and Collaboration.--In carrying out 
activities under this section, the Secretary shall--
          (1) * * *

           *       *       *       *       *       *       *

          (3) establish, to the extent appropriate, working 
        relationships with the faculties of institutions of 
        higher education, as defined in section [1201(a) of the 
        Higher Education Act of 1965 (20 U.S.C. 1141(a))] 
        101(a)(1) of the Higher Education Act of 1965, located 
        in the area in which any evaluation under this section 
        is being conducted, unless there is no such institution 
        of higher education willing and able to participate in 
        such evaluation.

           *       *       *       *       *       *       *

                              ----------                              


                  HIGHER EDUCATION AMENDMENTS OF 1992



           *       *       *       *       *       *       *
TITLE XIII--INDIAN HIGHER EDUCATION PROGRAMS

           *       *       *       *       *       *       *


PART E--TRIBAL DEVELOPMENT STUDENT ASSISTANCE REVOLVING LOAN PROGRAM

           *       *       *       *       *       *       *


SEC. 1348. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated to carry out this 
part, $2,000,000 for fiscal year [1993] 1999 and such sums as 
may be necessary for each of the 4 succeeding fiscal years.

           *       *       *       *       *       *       *


PART F--AMERICAN INDIAN POSTSECONDARY ECONOMIC DEVELOPMENT SCHOLARSHIP

           *       *       *       *       *       *       *


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] 1999 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)] 101(a)(1) of the Higher Education Act 
                of 1965; and

           *       *       *       *       *       *       *

  (e) Authorization of Appropriations.--There are authorized to 
be appropriated $5,000,000 for fiscal year [1993] 1999 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. 1401. STUDY OF ROLE OF GUARANTY AGENCIES.

  [(a) Study.--The Secretary of Education shall review the role 
of guaranty agencies within the Federal Family Education Loan 
Program by examining the administrative and financial 
operations of such agencies and the relationships between 
guaranty agencies and State governments.
  [(b) Report.--The Secretary of Education shall report to the 
Congress within 1 year of the date of enactment of this Act on 
the study described in subsection (a). Such report shall 
consider and make recommendations concerning--
          [(1) increasing the role of guaranty agencies in 
        oversight and licensing of proprietary trade schools 
        under the Federal Family Education Loan Program;
          [(2) strengthening Federal disincentives for high 
        default rate portfolios;
          [(3) consolidating guaranty agencies regionally or 
        otherwise;
          [(4) eliminating the role of guaranty agencies within 
        the Federal Family Education Loan Program; and
          [(5) the compensation of chief executive officers and 
        managerial staffs of guaranty agencies.

[SEC. 1402. STUDY OF STATUTORY PROTECTIONS.

  [The Secretary of Education shall report to the Congress 
within 180 days of the date of enactment of the Higher 
Education Amendments of 1992 on the advisability of statutorily 
protecting officials of accrediting agencies involved in the 
performance of legitimate Federal Family Education Loan Program 
activities.

[SEC. 1403. STUDY OF FRAUD-BASED DEFENSES.

  [(a) Study.--The Secretary shall conduct a study of the 
impact of fraud-based defenses on the Federal Family Education 
Loan Program. Such study shall include--
          [(1) an analysis of statutory, regulatory, and case 
        law regarding the use of fraud-based defenses against 
        repayment of such loans;
          [(2) an estimate of the total number of borrowers 
        filing for relief from repayment of such loans using a 
        fraud-based defense and amount of such loan principal 
        involved;
          [(3) an estimate of such loan principal relieved 
        annually through fraud-based defenses;
          [(4) an evaluation of the importance of a fraud-based 
        defense to the protection of borrowers of such loans; 
        and
          [(5) an evaluation of the effects of the availability 
        of a fraud-based defense on the accessibility of 
        Stafford loans by geographical area and by type of 
        postsecondary institution.
  [(b) Date.--The study described in subsection (a) shall be 
completed not later than 18 months after the date of enactment 
of this Act.
  [(c) Report.--
          [(1) In general.--The Secretary shall submit a report 
        to the Congress on the study described in subsection 
        (a) that makes specific recommendations for legislative 
        options that may be needed to address the rights of 
        borrowers with respect to the availability of fraud-
        based defenses under the Federal Family Education Loan 
        Program without jeopardizing the participation of 
        lenders or the solvency of guaranty agencies required 
        to maintain the integrity of such program.
          [(2) Date.--The report described in paragraph (1) 
        shall be completed not later than 19 months after the 
        date of enactment of this Act.

[SEC. 1404. DATA ON NONTRADITIONAL STUDENTS.

  [(a) Study Required.--The Secretary of Education shall 
conduct a 2-year study regarding the types of programs 
available for, and determine the success or failure of such 
programs in, increasing the accessibility for nontraditional 
students to postsecondary education. The study shall be 
conducted through the Office of Educational Research and 
Improvement.
  [(b) Purpose.--The purpose of the study shall be--
          [(1) to appraise the adequacies and deficiencies of 
        current student financial aid information resources and 
        services and evaluate the effectiveness of these 
        programs as they pertain to the nontraditional student;
          [(2) to investigate the availability of grants and 
        loans and other financial assistance to nontraditional 
        students (including independent students and part-time 
        students);
          [(3) to assess the availability of supportive 
        services for the nontraditional students including (but 
        not limited to) counseling, child care services, campus 
        health center services, and library services;
          [(4) to make recommendations on how the Department of 
        Education can maintain an effective data base regarding 
        nontraditional students that will include--
                  [(A) a yearly count of the number of students 
                who are nontraditional and breakdown of the 
                institutions they are attending;
                  [(B) the number of nontraditional students 
                who work and go to school;
                  [(C) the extent of participation in Federal 
                student aid programs;
                  [(D) the amount of unmet costs of 
                postsecondary education for nontraditional 
                students; and
                  [(E) trends over the last decade regarding 
                participation of nontraditional students in 
                title IV programs.
  [(c) Report.--The Secretary of Education shall submit an 
interim report to the Committee on Education and Labor of the 
House of Representatives and the Committee on Labor and Human 
Resources of the Senate within 1 year after the date of 
enactment of this section and submit a final report 2 years 
after such date of enactment.

[SEC. 1405. STUDY OF FEDERAL BENEFIT COORDINATION.

  [(a) In General.--The Secretary of Education shall conduct a 
study to evaluate the coordination of Federal student financial 
assistance programs under title IV of the Higher Education Act 
of 1965 with other programs funded in whole or in part with 
Federal funds, giving particular attention to--
          [(1) the effect of receipt of program assistance 
        under title IV of the Higher Education Act of 1965 on 
        students eligible for other programs funded in whole or 
        in part with Federal funds, including reduction or 
        denial of such other program funds; and
          [(2) the attendance cost elements funded in whole or 
        in part by programs under title IV of the Higher 
        Education Act of 1965 for students eligible for other 
        Federal programs and the inclusion of room or board 
        costs in such attendance costs.
  [(b) Report.--The Secretary of Education shall prepare and 
submit to the appropriate committees of the Congress a report 
on the study conducted pursuant to subsection (a) not later 
than 3 years after the date of enactment of this Act, together 
with such recommendations as the Secretary of Education deems 
appropriate.

[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 Americans, 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. 1407. EVALUATION OF TUITION GUARANTY PROGRAMS.

  [(a) Purpose.--The purposes of this section are--
          [(1) to require the Secretary of Education to 
        determine the effectiveness of programs for 
        disadvantaged elementary and secondary school students 
        that offer guarantees for postsecondary education; and
          [(2) to identify ways to encourage the business 
        community to participate in such programs.
  [(b) Conduct of Study.--
          [(1) In general.--The Secretary of Education shall 
        evaluate the effectiveness of programs for 
        disadvantaged children that, in exchange for the 
        child's commitment to achieving a satisfactory 
        elementary and secondary education, promise the child 
        the financial resources needed to pursue a 
        postsecondary education.
          [(2) Content.--The Secretary of Education shall study 
        a sample of the types of programs available, and (A) 
        determine the success or failure of such programs in 
        increasing the access and entry of disadvantaged 
        students into postsecondary education, (B) identify the 
        most successful programs and the causes for success, 
        and (C) determine the responsibilities of sponsors of 
        the programs.
          [(3) Programs studied.--The programs studied shall 
        include a guarantee of postsecondary education for 
        students currently in elementary or secondary grade 
        levels. The programs may include supportive services, 
        mentoring, study skills, and counseling to students 
        participating in the program.
  [(c) Dissemination.--The Secretary of Education shall 
disseminate the findings through appropriate agencies and 
organizations including associations of businesses.
  [(d) Submission of Report.--The Secretary of Education shall 
submit an interim report regarding the study by June 30, 1996, 
and a final report regarding the study by January 1, 1997, to 
the Committee on Education and Labor of the House of 
Representatives and the Committee on Labor and Human Resources 
of the Senate.

[SEC. 1408. INFORMATION ON GRADUATE EDUCATION.

  [(a) Assessment Required.--The Secretary of Education shall 
conduct a study which will provide an assessment of the 
information currently collected on graduate education and will 
identify what additional information should be generated to 
guide the Department of Education in defining and executing its 
role in the support of graduate education.
  [(b) Subject of Assessment.--The assessment required by 
subsection (a) shall include the assessment of the total amount 
of Federal, State, private, foundation, and institutional 
fellowships, assistantships, loans, or any other forms of 
financial assistance to all graduate students, including both 
American and foreign students; and how these amounts are 
distributed by race, by sex, to nontraditional students, and to 
students with disabilities. In addition, the assessment shall 
determine the number of graduate students, cross-referenced by 
race, sex, and national origin, part-time, full-time, 
independent versus dependent status, and individuals with 
disabilities who enrolled and completed all requirements for 
the degrees master of arts, master of science, master in 
business administration, doctor of philosophy, doctor of 
education, juris doctor, medical doctor, doctor in veterinary 
medicine, and doctor of dental science.
  [(c) Consultation.--In conducting such study, the Secretary 
of Education shall consult with other agencies and 
organizations involved in graduate education policy, including 
the Congressional Office of Technology Assessment, the 
President's Office of Science and Technology Policy, the 
National Science Foundation and the other Federal agencies 
supporting academic research and graduate education, the 
National Academy of Sciences and other public and private 
organizations which participate in the formulation and 
implementation of national graduate education policies and 
programs.
  [(d) Date for Completion.--The study shall be completed 
within 2 years of the date of enactment of this Act.

[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. 1410. STUDY OF CIVILIAN AVIATION TRAINING PROGRAMS.

  [(a) Findings.--The Congress finds that--
          [(1) the role of the military as a source of supply 
        of trained pilots and mechanics and other personnel for 
        commercial aviation is severely reduced;
          [(2) approximately 50 percent of the 52,000 
        commercial pilots currently flying will retire by the 
        year 2000 and an additional 8,000 to 10,000 pilots will 
        be needed by then;
          [(3) there is significant underrepresentation of 
        minorities and women currently working in the aviation 
        industry and African Americans constitute less than 1 
        percent of pilots with the Nation's scheduled air 
        carriers;
          [(4) there is a substantial projected increase of 
        minorities and women as a proportion of the workforce 
        by the year 2000; and
          [(5) there is need for a comprehensive study of 
        future human resources needs for the air transportation 
        industry, including a thorough investigation of 
        recruitment, aviation training outside the military 
        context, financial and other incentives and 
        disincentives which affect the flow of people, and 
        especially minorities and women, into the industry.
  [(b) Study Required.--The Secretary of Education shall enter 
into appropriate arrangements with the National Academy of 
Sciences Commission on Behavioral and Social Sciences and 
Education to study civilian aviation training programs needed 
to satisfy the workforce requirements of the commercial 
aviation industry in the year 2000 and beyond. The specific 
concerns to be addressed by the study shall include--
          [(1) the avenues for civilians to enter the aviation 
        industry,
          [(2) the characteristics of current training and the 
        match with skill requirements in the workplace, and
          [(3) the impediments and incentives for minorities 
        and women to enter the aviation industry (such as a 
        lack of role models, cost of schooling and flight time, 
        the underutilization of historically black colleges and 
        universities in the educational training process, and 
        institutional barriers).
  [(c) Interim Report.--The Secretary of Education shall 
request that the National Academy of Sciences Commission on 
Behavioral and Social Sciences and Education submit an interim 
report to the Secretary and the Congress within 1 year after 
the date of enactment of this Act, and the study shall be 
completed within 2 years of the date of enactment of this Act.

[SEC. 1411. REPORT ON THE USE OF PELL GRANTS BY PRISONERS.

  [(a) Report Required.--The Secretary of Education shall 
submit to the Congress a report on the use of Pell Grants by 
prisoners. Such report shall contain a statement of--
          [(1) the number of prisoners receiving Pell Grants;
          [(2) the average amount of the Pell Grants awarded to 
        prisoners;
          [(3) the average length of Pell Grant subsidized 
        study for prisoners;
          [(4) the graduation or success rate of prisoners 
        receiving Pell Grants;
          [(5) an analysis of whether prisoners' lack of income 
        has made them more successful in obtaining Pell Grants 
        over other low-income citizens who are not 
        incarcerated;
          [(6) an analysis of whether prisoners lack of income 
        provides them with an advantage in receiving Pell 
        Grants; and
          [(7) the Secretary's recommendations for making the 
        program more equitable with regard to awards to 
        prisoners in relation to other applicants.
  [(b) Deadline for Submission.--The report required by 
subsection (a) shall be submitted not later than 6 months after 
the date of enactment of this Act.

[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.

      [PART B--NATIONAL COMMISSION ON INDEPENDENT HIGHER EDUCATION

[SEC. 1421. SHORT TITLE.

  [This part may be cited as the ``National Independent 
Colleges and Universities Discovery Act''.

[SEC. 1422. FINDINGS.

  [The Congress finds that--
          [(1) the quality and scope of higher education in our 
        Nation is without argument the finest in the world, and 
        a distinguishing feature of our Nation's system of 
        higher education is its strong and diverse nonprofit 
        independent sector;
          [(2) independent colleges and universities are as 
        diverse as the Nation itself and include traditional 
        liberal arts institutions, major research universities, 
        church- and faith-related colleges, colleges and 
        universities primarily attended by minorities, women's 
        colleges, junior colleges, and schools of law, 
        medicine, engineering, business and other professions;
          [(3) the diversity of independent colleges and 
        universities offers students a choice in the type of 
        educational experience that will best serve such 
        students' interests, needs and aspirations;
          [(4) independent colleges and universities enroll 21 
        percent of all students in the United States, award 33 
        percent of all bachelor's degrees in the United States, 
        42 percent of all such master's degrees, 36 percent of 
        all such doctoral degrees, and 59 percent of all such 
        professional degrees;
          [(5) a majority of all undergraduate students 
        attending independent colleges and universities receive 
        some form of financial assistance, and such independent 
        colleges and universities provide such financial 
        assistance from their own resources;
          [(6) independent colleges and universities are deeply 
        involved in hundreds of partnerships with elementary 
        and secondary schools, and such partnerships are 
        largely funded by such colleges and universities;
          [(7) independent colleges and universities have been 
        an extraordinary example of private-public 
        partnerships, with such colleges and universities 
        operating in the public interest to provide a public 
        good;
          [(8) less than 20 percent of the revenue of 
        independent colleges and universities comes from 
        governmental funds, most of which is in the form of 
        Federal and State financial aid;
          [(9) decreases in Federal and State support for 
        student financial aid programs has placed at risk the 
        option of choosing an independent college or university 
        for an increasing number of students;
          [(10) whereas at the turn of the twentieth century 80 
        percent of the students enrolled in higher education in 
        the United States were enrolled in independent colleges 
        and universities, such percentage has now declined to 
        21 percent, and further erosions place at risk the 
        option of choosing an independent college or university 
        for students and parents; and
          [(11) the entire sector of independent colleges and 
        universities and the important contributions such 
        sector makes to our Nation is at risk and deserves 
        national policy attention.

[SEC. 1423. PURPOSE.

  [It is the purpose of this part to establish a National 
Commission on Independent Higher Education.

[SEC. 1424. NATIONAL COMMISSION ON INDEPENDENT HIGHER EDUCATION.

  [(a) Establishment.--There is established as an independent 
agency in the executive branch a commission to be known as the 
National Commission on Independent Higher Education (hereafter 
in this part referred to as the ``Commission'').
  [(b) Membership.--
          [(1) Composition.--The Commission shall be composed 
        of 9 members, 3 of whom shall be appointed by the 
        President, 2 of whom shall be appointed by the Speaker 
        of the House of Representatives, 1 of whom shall be 
        appointed by the Minority Leader of the House of 
        Representatives, 2 of whom shall be appointed by the 
        Majority Leader of the Senate, and 1 of whom shall be 
        appointed by the Minority Leader of the Senate.
          [(2) Expertise requirement.--The members of the 
        Commission shall consist of individuals with expertise 
        and experience in independent higher education, 
        including expertise in national tax policy, individuals 
        with expertise in State higher education finance, 
        individuals with expertise in Federal financial aid 
        programs, individuals with expertise in issues of 
        student and faculty diversity, and individuals with 
        expertise in graduate education and research.
          [(3) Date.--The members of the Commission shall be 
        appointed not later than 6 months after the date of 
        enactment of this Act.
  [(c) Period of Appointment; Vacancies.--Members of the 
Commission shall be appointed for the life of the Commission. 
Any vacancy in the Commission shall not affect its powers, but 
shall be filled in the same manner as the original appointment.
  [(d) Meetings.--The Commission shall meet at the call of the 
Chairman.
  [(e) Quorum.--Six of the members of the Commission shall 
constitute a quorum, but a lesser number of members may hold 
hearings.
  [(f) Chairperson.--The Commission shall select a Chairperson 
from among its members.

[SEC. 1425. DUTIES OF THE COMMISSION.

  [The Commission shall--
          [(1) develop a factual base for understanding the 
        status of independent colleges and universities, their 
        contributions to public priorities, and the effects of 
        national higher education policies on the independent 
        nonprofit sector;
          [(2) review the issuance of Federal regulations 
        regarding independent colleges and universities, and 
        suggest means by which independent colleges and 
        universities can be held accountable for use of public 
        resources without inappropriate intrusion into 
        institutional autonomy; and
          [(3) address the relation between Federal and State 
        policies on independent colleges and universities, 
        particularly with respect to student access and choice, 
        finance, institutional subsidies, and institutional 
        accountability.

[SEC. 1426. REPORT AND RECOMMENDATIONS.

  [(a) Interim Report.--The Commission shall submit an interim 
report to the President and the Congress on the Commission's 
activities and findings within 18 months of the date of 
enactment of this Act.
  [(b) Final Report.--
          [(1) In general.--The Commission shall submit a final 
        report to the President and the Congress on the 
        Commission's activities and findings within 3 years of 
        the date of enactment of this Act.
          [(2) Recommendation.--The report described in 
        paragraph (1) shall contain a recommendation regarding 
        the establishment of a national policy on independent 
        colleges and universities appropriate to meeting the 
        Nation's higher educational goals in the twenty-first 
        century.

[SEC. 1427. POWERS OF THE COMMISSION.

  [(a) Hearings.--The Commission may hold such hearings, sit 
and act at such times and places, take such testimony, and 
receive such evidence as the Commission considers advisable to 
carry out the purposes of this part.
  [(b) Information From Federal Agencies.--The Commission may 
secure directly from any Federal department or agency such 
information as the Commission considers necessary to carry out 
the provisions of this part. Upon request of the Chairperson of 
the Commission, the head of such department or agency shall 
furnish such information to the Commission.
  [(c) Gifts.--The Commission may accept in the name of the 
United States grants, gifts, and bequests of money for 
immediate disbursement in furtherance of the functions of the 
Commission. Such grants, gifts, and bequests, after acceptance 
by the Commission, shall be paid by the donor or representative 
of the donor to the Treasurer of the United States, whose 
receipts shall be their acquittance. The Treasurer of the 
United States shall enter such grants, gifts, and bequests in a 
special account to the credit of the Commission for the 
purposes specified.
  [(d) Authorization of Appropriations.--There are authorized 
to be appropriated $1,000,000 to carry out this part for fiscal 
year 1993 and each succeeding fiscal year. Amounts appropriated 
under this subsection are authorized to remain available until 
expended, or until the Commission is terminated, whichever 
occurs first.

[SEC. 1428. COMMISSION PERSONNEL MATTERS.

  [(a) Travel Expenses.--From amounts appropriated under 
section 1427(d), the members of the Commission shall be allowed 
travel expenses, including per diem in lieu of subsistence, at 
rates authorized for employees of agencies under subchapter I 
of chapter 57 of title 5, United States Code, while away from 
their homes or regular places of business in the performance of 
services for the Commission.
  [(b) Detail of Government Employees.--Any Federal Government 
employee may be detailed to the Commission without 
reimbursement, and such detail shall be without interruption or 
loss of civil service status or privilege.
  [(c) Staff.--
          [(1) In general.--The Chairperson of the Commission 
        may, without regard to the civil service laws and 
        regulations,appoint and terminate an executive director 
and not more than 2 staff members to enable the Commission to perform 
its duties. The employment of an executive director shall be subject to 
confirmation by the Commission.
          [(2) Compensation.--The Chairperson of the Commission 
        may fix the compensation of the executive director and 
        not more than 2 staff members without regard to the 
        provisions of chapter 51 and subchapter III of chapter 
        53 of title 5, United States Code, relating to 
        classification of positions and General Schedule pay 
        rates, except that the rate of pay for the executive 
        director and such staff may not exceed the rate payable 
        for level 15 of the General Schedule classified under 
        section 5107 of such title.

[SEC. 1429. TERMINATION OF THE COMMISSION.

  [The Commission shall terminate 3 years after the date of 
enactment of this Act.

      [PART C--NATIONAL COMMISSION ON THE COST OF HIGHER EDUCATION

[SEC. 1441. ESTABLISHMENT OF COMMISSION.

  [There is established a Commission to be known as the 
``National Commission on the Cost of Higher Education'' 
(hereafter in this part referred to as the ``Commission'').

[SEC. 1442. MEMBERSHIP OF COMMISSION.

  [(a) Appointment.--The Commission shall be composed of 12 
members as follows:
          [(1) Four citizens of the United States appointed by 
        the President.
          [(2) Two Senators appointed by the Majority Leader of 
        the Senate, of which--
                  [(A) one shall be a member of the Committee 
                on Labor and Human Resources of the Senate; and
                  [(B) one shall be a member of the Committee 
                on Appropriations of the Senate.
          [(3) Two Senators appointed by the Minority Leader of 
        the Senate, of which--
                  [(A) one shall be a member of the Committee 
                on Labor and Human Resources of the Senate; and
                  [(B) one shall be a member of the Committee 
                on Appropriations of the Senate.
          [(4) Two Members of the House of Representatives 
        appointed by the Speaker of the House of 
        Representatives, of which--
                  [(A) one shall be a member of the Committee 
                on Education and Labor of the House of 
                Representatives; and
                  [(B) one shall be a member of the Committee 
                on Appropriations of the House of 
                Representatives.
          [(5) Two Members of the House of Representatives 
        appointed by the Minority Leader of the House of 
        Representatives, of which--
                  [(A) one shall be a member of the Committee 
                on Education and Labor of the House of 
                Representatives; and
                  [(B) one shall be a member of the Committee 
                on Appropriations of the House of 
                Representatives.
  [(b) Additional Qualifications.--
          [(1) Presidential appointees.--An individual 
        appointed under subsection (a)(1) may not be an officer 
        or an employee of the Executive Branch.
          [(2) Citizens.--Individuals who are not Members of 
        the Congress and are appointed under subsection (a)(1) 
        shall be individuals who--
                  [(A) have extensive knowledge of higher 
                education and its financing and who are leaders 
                of the education community, distinguished 
                academics, State or local government officials, 
                students, parents of college students, members 
                of the business community, or other individuals 
                with distinctive qualifications or experience; 
                and
                  [(B) are not officers or employees of the 
                United States.
  [(c) Chairperson and Vice Chairperson.--The members of the 
Commission shall elect a Chairman and a Vice Chairperson. In 
the absence of the Chairperson, the Vice Chairperson will 
assume the duties of the Chairperson.
  [(d) Quorum.--A majority of the members of the Commission 
shall constitute a quorum for the transaction of business.
  [(e) Appointments.--All appointments under subsection (a) 
shall be made within 3 months after the date of enactment of 
this Act.
  [(f) Voting.--Each member of the Commission shall be entitled 
to one vote, which shall be equal to the vote of every other 
member of the Commission.
  [(g) Vacancies.--Any vacancy on the Commission shall not 
affect its powers, but shall be filled in the manner in which 
the original appointment was made.
  [(h) Prohibition of Additional Pay.--Members of the 
Commission shall receive no additional pay, allowances, or 
benefits by reason of their service on the Commission. Members 
appointed from among private citizens of the United States may 
be allowed travel expenses, including per diem, in lieu of 
subsistence, as authorized by law for persons serving 
intermittently in the government service to the extent funds 
are available for such expenses.

[SEC. 1443. FUNCTIONS OF COMMISSION.

  [(a) Specific Findings and Recommendations.--The Commission 
shall study and make findings and specific recommendations 
regarding the following:
          [(1) The increase in tuition costs compared with 
        other commodities and services as well as methods of 
        reducing increased tuition costs.
          [(2) Trends in college and university administrative 
        costs as well as other costs and means of reducing such 
        increased costs.
          [(3) The development of a standardized annual report 
        that colleges and universities shall distribute which 
        details the administrative costs, instructional costs 
        and capital costs of such colleges and universities.
          [(4) The extent to which Federal, State and local 
        regulations contribute to increased tuition costs and 
        the increase in the cost of higher education.
          [(5) The establishment of a mechanism for a more 
        timely and widespread distribution of data on tuition 
        trends and other costs of operating colleges and 
        universities.
          [(6) The extent to which the lack of student 
        financial assistance programs has contributed to 
        increased tuition costs.
          [(7) Other related topics determined to be 
        appropriate by the Commission.
  [(b) Final Report.--
          [(1) In general.--Subject to paragraph (2), the 
        Commission shall submit to the President and to the 
        Congress not later than September 1, 1994, a report 
        which shall contain a detailed statement of the 
        findings and conclusions of the Commission, including 
        the Commission's recommendations for administrative and 
        legislative action that the Commission considers 
        advisable.
          [(2) Majority vote required for recommendations.--Any 
        recommendation described in paragraph (1) shall be made 
        by the Commission to the President and to the Congress 
        only if such recommendation is adopted by a majority 
        vote of the members of the Commission who are present 
        and voting.

[SEC. 1444. POWERS OF COMMISSION.

  [(a) Hearings.--The Commission may, for the purpose of 
carrying out this part, hold such hearings and sit and act at 
such times and places, as the Commission may find advisable.
  [(b) Rules and Regulations.--The Commission may adopt such 
rules and regulations as may be necessary to establish the 
Commission's procedures and to govern the manner of the 
Commission's operations, organization, and personnel.
  [(c) Assistance From Federal Agencies.--
          [(1) Information.--The Commission may request from 
        the head of any Federal agency or instrumentality such 
        information as the Commission may require for the 
        purpose of this part. Each such agency or 
        instrumentality shall, to the extent permitted by law 
        and subject to the exceptions set forth in section 552 
        of title 5, United States Code (commonly referred to as 
        the Freedom of Information Act), furnish such 
        information to the Commission, upon request made by the 
        Chairperson of the Commission.
          [(2) Facilities and services, personnel detail 
        authorized.--Upon request of the Chairperson of the 
        Commission, the head of any Federal agency or 
        instrumentality shall, to the extent possible and 
        subject to the discretion of such head--
                  [(A) make any of the facilities and services 
                of such agency or instrumentality available to 
                the Commission; and
                  [(B) detail any of the personnel of such 
                agency or instrumentality to the Commission, on 
                a nonreimbursable basis, to assist the 
                Commission in carrying out the Commission's 
                duties under this part, except that any 
                expenses of the Commission incurred under this 
                subparagraph shallbe subject to the limitation 
on total expenses set forth in section 1445(b).
  [(d) Mails.--The Commission may use the United States mails 
in the same manner and under the same conditions as other 
Federal agencies.
  [(e) Contracting.--The Commission, to such extent and in such 
amounts as are provided in appropriation Acts, may enter into 
contracts with State agencies, private firms, institutions, and 
individuals for the purpose of conducting research or surveys 
necessary to enable the Commission to discharge the 
Commission's duties under this part, subject to the limitation 
on total expenses set forth in section 1445(b).
  [(f) Staff.--Subject to such rules and regulations as may be 
adopted by the Commission, the Chairperson of the Commission 
(subject to the limitation on total expenses set forth in 
section 1445(b)) shall have the power to appoint, terminate, 
and fix the compensation (without regard to the provisions of 
title 5, United States Code, governing appointments in the 
competitive service, and without regard to the provisions of 
chapter 51 and subchapter III of chapter 53 of such title, or 
of any other provision, or of any other provision of law, 
relating to the number, classification, and General Schedule 
rates) of an Executive Director, and of such additional staff 
as the Chairperson deems advisable to assist the Commission, at 
rates not to exceed a rate equal to the maximum rate for level 
IV of the Executive Schedule under section 5332 of such title.
  [(g) Advisory Committee.--The Commission shall be considered 
an advisory committee within the meaning of the Federal 
Advisory Committee Act (5 U.S.C. App.) and shall be independent 
from the Executive Branch.

[SEC. 1445. EXPENSES OF COMMISSION.

  [(a) In General.--Any expenses of the Commission shall be 
paid from such funds as may be available to the Secretary of 
the Treasury.
  [(b) Limitation.--The total expenses of the Commission shall 
not exceed $2,000,000.
  [(c) GAO Audit.--Prior to the termination of the Commission 
pursuant to section 1446, the Comptroller General of the United 
States shall conduct an audit of the financial books and 
records of the Commission to determine that the limitation on 
expenses has been met, and shall include the Comptroller 
General's determination in an opinion to be included in the 
report of the Commission.

[SEC. 1446. TERMINATION OF COMMISSION.

  [The Commission shall cease to exist on the date that is 90 
days after the date on which the Commission submits its final 
report in accordance with section 1443(b).

        [TITLE XV--RELATED PROGRAMS AND AMENDMENTS TO OTHER LAWS

               [PART A--NATIONAL CENTER FOR THE WORKPLACE

[SEC. 1511. PURPOSE; DESIGNATION.

  [It is the purpose of this part to address the problems 
created by the simultaneous convergence of broad economic, 
social, cultural, political, and technological changes in the 
workplace through a national center administered by the 
Department of Labor that will join together workplace experts 
from America's best institutions of higher education with 
experts from the public and private sectors to conduct 
research, share information, and propose remedies.

[SEC. 1512. ESTABLISHMENT.

  [(a) Establishment.--
          [(1) In general.--There is authorized to be 
        established the National Center for the Workplace 
        (hereafter in this part referred to as the ``Center'') 
        through competitive grant or contract between the 
        Secretary of Labor and an eligible recipient.
          [(2) Matching funds.--In order to receive the grant 
        described in paragraph (1) an eligible entity shall 
        provide matching funds from non-Federal sources equal 
        to 25 percent of the funds received pursuant to such 
        grant.
  [(b) Eligible Recipient.--An eligible recipient shall be a 
consortium of institutions of higher education in the United 
States. The consortium shall represent a diversity of views on 
and an expertise in the field of employment policy, and shall 
be represented and coordinated by a host institution of higher 
education that meets all of the following criteria:
          [(1) Broad collective knowledge of and demonstrable 
        experience in the wide range of employment and 
        workplace issues.
          [(2) A faculty that, collectively, demonstrates a 
        nonpartisan research and policy perspective joining the 
        several relevant workplace disciplines (labor 
        economics, industrial relations, collective bargaining, 
        human resource management, sociology, psychology, and 
        law) in a multidisciplinary approach to workplace 
        issues.
          [(3) Established credibility and working 
        relationships with employers, unions, and government 
        agencies on a national scale, and established means of 
        providing education and technical assistance to each of 
        the above groups that include publications, state-of-
        the-art electronic and video technology, and 
        distinguished extension/outreach programs operating on 
        a national and international level.
  [(c) Report.--The Center shall annually report to the 
Congress, the Secretary of Education, and the Secretary of 
Labor on the activities of the Center.

[SEC. 1513. USE OF FUNDS.

  [(a) Center Activities.--Payments made under this part may be 
used to establish and operate the Center, to bring together 
major independent researchers from the Center's member-
institutions focused on the most significant workplace problems 
with the aim of analysis and synthesis of policy implications 
and dissemination of findings, and to support the following 
activities:
          [(1) The coordination and funding of research 
        activities of the Center's member-institutions for 
        collaborative collection and evaluation of data on 
        changes and trends in the workplace and in the labor 
        force, on established and emerging public policy 
        issues, on the economic and occupational structures, 
        and on work organizations and employment conditions.
          [(2) The analysis of the public policy implications 
        of social and demographic changes in the United States 
        as they relate to the workplace.
          [(3) The conduct of seminars for Federal and State 
        policymakers on policy implications of the Center's 
        findings. Such seminars shall be held not more 
        frequently than once each year. In addition, the Center 
        shall utilize electronic technology, such as computer 
        networks and video conferencing, to convey the 
        cumulative value of the Center's activities from year 
        to year and to foster continuous exchange of ideas and 
        information.
          [(4) The conduct of a National Conference on 
        employment policy not more frequently than once each 
        year for the leaders of business and organized labor in 
        the United States designed to convey the cumulative 
        value of the Center's activities and to foster an 
        exchange of ideas and information.
          [(5) The nonpartisan evaluation of the economic and 
        social implications of national and international 
        workplace and employment issues.
          [(6) The provision of ready access to the Center's 
        collective expertise for policy officials in the 
        Federal and State governments and representatives of 
        private and public sector organizations through 
        meetings, publications, special reports, video 
        conferences, electronic mail and computer networks, and 
        other means to share up-to-date information on 
        workplace and employment issues, practices, and 
        innovations, the most promising options, and guidance 
        in management of the change process.
          [(7) The development of programs, curricula, and 
        instructional materials for colleges, universities, and 
        other educational institutions designed to impart the 
        knowledge and skills required to promote innovations in 
        the design of work and employment conditions that 
        enhance organizational performance and meet worker 
        needs.
          [(8) The development and administration of a national 
        repository of information on key workplace issues that 
        can be readily accessed by the public and private 
        sector.
  [(b) Fellowships.--Grant funds awarded under this title may 
also be used to provide graduate assistantships and fellowships 
at the Center to encourage graduate study of the field of 
employment policy and to encourage graduate research in areas 
that are seen as critical to national competitiveness.

[SEC. 1514. GIFTS AND DONATIONS.

  [The Center is authorized to receive money and other property 
donated, bequeathed, or devised to the Center with or without a 
condition of restriction, for the purpose of furthering the 
activities of the Center. All funds or property given, devised, 
or bequeathed shall be retained in a separate account, and an 
accounting of those funds and property shall be included in the 
annual report submitted pursuant to section 1512(c).

[SEC. 1515. AUTHORIZATION.

  [(a) In General.--There are authorized to be appropriated 
$2,500,000 for fiscal year 1993 and such sums as may be 
necessary for each of the 4 succeeding fiscal years to carry 
out this part.
  [(b) Availability.--Funds appropriated pursuant to the 
authority of subsection (a) shall remain available until 
expended.

 [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.]

           *       *       *       *       *       *       *

                              ----------                              


  SECTION 808 OF THE INTELLIGENCE AUTHORIZATION ACT, FISCAL YEAR 1992

SEC. 808. DEFINITIONS.

  For the purpose of this title:
          (1) * * *

           *       *       *       *       *       *       *

          (3) The term ``institution of higher education'' has 
        the meaning given that term by section [1201(a) of the 
        Higher Education Act of 1965 (20 U.S.C. 1141(a))] 
        101(a)(1) of the Higher Education Act of 1965.
                              ----------                              


JOB TRAINING PARTNERSHIP ACT

           *       *       *       *       *       *       *


                              definitions

  Sec. 4. For the purposes of this Act, the following 
definitions apply:
          (1) * * *

           *       *       *       *       *       *       *

          (12) The term ``institution of higher education'' 
        means any institution of higher education as that term 
        is defined in section [1201(a)] 101(a)(1) of the Higher 
        Education Act of 1965.

           *       *       *       *       *       *       *


TITLE IV--FEDERALLY ADMINISTERED PROGRAMS

           *       *       *       *       *       *       *


        Part C--Program Requirements for Service Delivery System

                      general program requirements

  Sec. 141. Except as otherwise provided, the following 
conditions are applicable to all programs under this Act:
  (a) * * *

           *       *       *       *       *       *       *

  (d)(1) * * *

           *       *       *       *       *       *       *

  (3)(A) * * *
  (B) Tuition charges for training or education provided by an 
institution of higher education (as defined in section [1201(a) 
of the Higher Education Act of 1965 (20 U.S.C. 1141(a))] 
101(a)(1) of the Higher Education Act of 1965) or a proprietary 
institution of higher education (as defined in section 481(b) 
of such Act (20 U.S.C. 1088(b))), that are not more than the 
charges for such training or education made available to the 
general public, do not require a breakdown of cost components.

           *       *       *       *       *       *       *

                              ----------                              


       SECTION 901 OF THE JUSTICE SYSTEM IMPROVEMENT ACT OF 1979

                              definitions

  Sec. 901. (a) As used in this title--
          (1)  * * *

           *       *       *       *       *       *       *

          (17) ``institution of higher education'' means any 
        such institution as defined by section [1201(a) of the 
        Higher Education Act of 1965 (20 U.S.C. 1141(a))] 
        101(a)(1) of the Higher Education Act of 1965, subject, 
        however, to such modifications and extensions as the 
        Office may determine to be appropriate;

           *       *       *       *       *       *       *

                              ----------                              


SECTION 112 OF THE MUTUAL EDUCATIONAL AND CULTURAL EXCHANGE ACT OF 1961

  Sec. 112. (a) In order to carry out the purposes of this Act, 
there is established in the United States Information Agency, 
or in such appropriate agency of the United States as the 
President shall determine, a Bureau of Educational and Cultural 
Affairs (hereinafter in this section referred to as the 
``Bureau''). The Bureau shall be responsible for managing, 
coordinating, and overseeing programs established pursuant to 
this Act, including but not limited to--
          (1) * * *

           *       *       *       *       *       *       *

          (8) the Samantha Smith Memorial Exchange Program 
        which advances understanding between the United States 
        and the independent states of the former Soviet Union 
        and between the United States and Eastern European 
        countries through the exchange of persons under the age 
        of 21 years and of students at an institution of higher 
        education (as defined in [section 1201(a) of the Higher 
        Education Act of 1965 (20 U.S.C. 1141(a))] 101(a)(1) of 
        the Higher Education Act of 1965) who have not received 
        their initial baccalaureate degree or through other 
        programs designed to promote contact between the young 
        peoples of the United States, the independent states of 
        the former Soviet Union, and Eastern European 
        countries; and

           *       *       *       *       *       *       *

                              ----------                              


NATIONAL AND COMMUNITY SERVICE ACT OF 1990

           *       *       *       *       *       *       *


      TITLE I--NATIONAL AND COMMUNITY SERVICE STATE GRANT PROGRAM

                     Subtitle A--General Provisions

SEC. 101. DEFINITIONS.

  For purposes of this title:
          (1) * * *

           *       *       *       *       *       *       *

          (13) Institution of higher education.--The term 
        ``institution of higher education'' has the same 
        meaning given such term in section [1201(a) of the 
        Higher Education Act of 1965 (20 U.S.C. 1141(a))] 
        101(a)(1) of the Higher Education Act of 1965.

           *       *       *       *       *       *       *


 Subtitle D--National Service Trust and Provision of National Service 
Educational Awards

           *       *       *       *       *       *       *


SEC. 148. DISBURSEMENT OF NATIONAL SERVICE EDUCATIONAL AWARDS.

  (a) * * *

           *       *       *       *       *       *       *

  (g) Definition of Institution of Higher Education.--
Notwithstanding section 101 of this Act, for purposes of this 
section the term ``institution of higher education'' has the 
meaning provided by section [481(a) of the Higher Education Act 
of 1965 (20 U.S.C. 1088(a))] 101(a)(2) of the Higher Education 
Act of 1965.

           *       *       *       *       *       *       *


Subtitle E--Civilian Community Corps

           *       *       *       *       *       *       *


SEC. 166. DEFINITIONS.

  In this subtitle:
          (1) * * *

           *       *       *       *       *       *       *

          (6) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning 
        given that term in section [1201(a) of the Higher 
        Education Act of 1965 (20 U.S.C. 1141(a))] 101(a)(1) of 
        the Higher Education Act of 1965.

           *       *       *       *       *       *       *

                              ----------                              


SECTION 1403 OF THE NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 
1987

           *       *       *       *       *       *       *


SEC. 1403. DEFINITIONS.

  In this title:
          (1) * * *

           *       *       *       *       *       *       *

          (4) The term ``institution of higher education'' 
        means any such institution as defined in section 
        [1201(a) of the Higher Education Act of 1965 (20 U.S.C. 
        1141(a))] 101(a)(1) of the Higher Education Act of 
        1965.

           *       *       *       *       *       *       *

                              ----------                              


SECTION 4451 OF THE NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 
                                  1993

SEC. 4451. ENVIRONMENTAL SCHOLARSHIP AND FELLOWSHIP PROGRAMS FOR THE 
                    DEPARTMENT OF DEFENSE

  (a) * * *
  (b) Eligibility.--To be eligible to participate in the 
scholarship or fellowship program, an individual must--
          (1) be accepted for enrollment or be currently 
        enrolled as a full-time student at an institution of 
        higher education (as defined in section [1201(a) of the 
        Higher Education Act of 1965 (20 U.S.C. 1141(a)] 
        101(a)(1) of the Higher Education Act of 1965);

           *       *       *       *       *       *       *

                              ----------                              


SECTION 3132 OF THE NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEARS 
                             1992 AND 1993

SEC. 3132. SCHOLARSHIP AND FELLOWSHIP PROGRAM FOR ENVIRONMENTAL 
                    RESTORATION AND WASTE MANAGEMENT.

  (a) * * *
  (b) Eligibility.--To be eligible to participate in the 
scholarship and fellowship program, an individual must--
          (1) be accepted for enrollment or be currently 
        enrolled as a full-time student at an institution of 
        higher education (as defined in section [1201(a) of the 
        Higher Education Act of 1965 (20 U.S.C. 1141(a))] 
        101(a)(1) of the Higher Education Act of 1965;

           *       *       *       *       *       *       *

                              ----------                              


NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1994

           *       *       *       *       *       *       *


DIVISION A--DEPARTMENT OF DEFENSE AUTHORIZATIONS

           *       *       *       *       *       *       *


  TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED 
MATTERS

           *       *       *       *       *       *       *


                       Subtitle E--Other Matters

SEC. 841. REIMBURSEMENT OF INDIRECT COSTS OF INSTITUTIONS OF HIGHER 
                    EDUCATION UNDER DEPARTMENT OF DEFENSE CONTRACTS.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Definitions.--In this section:
          (1) * * *
          (2) The term ``institution of higher education'' has 
        the meaning given such term in section [1201(a) of the 
        Higher Education Act of 1965 (20 U.S.C. 1141(a))] 
        101(a)(1) of the Higher Education Act of 1965.

           *       *       *       *       *       *       *


TITLE XIII--DEFENSE CONVERSION, REINVESTMENT, AND TRANSITION ASSISTANCE

           *       *       *       *       *       *       *


Subtitle C--Personnel Adjustment, Education, and Training Programs

           *       *       *       *       *       *       *


SEC. 1333. GRANTS TO INSTITUTIONS OF HIGHER EDUCATION TO PROVIDE 
                    EDUCATION AND TRAINING IN ENVIRONMENTAL RESTORATION 
                    TO DISLOCATED DEFENSE WORKERS AND YOUNG ADULTS.

  (a) * * *

           *       *       *       *       *       *       *

  (i) Definitions.--For purposes of this section:
          (1) * * *

           *       *       *       *       *       *       *

          (3) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning 
        given such term in section [1201(a) of the Higher 
        Education Act of 1965 (20 U.S.C. 1141(a))] 101(a)(1) of 
        the Higher Education Act of 1965.

           *       *       *       *       *       *       *


SEC. 1334. ENVIRONMENTAL EDUCATION OPPORTUNITIES PROGRAM.

  (a) * * *

           *       *       *       *       *       *       *

  (k) Definitions.--For purposes of this section:
          (1) * * *

           *       *       *       *       *       *       *

          (3) The term ``institution of higher education'' has 
        the same meaning given such term in [1201(a) of the 
        Higher Education Act of 1965 (20 U.S.C. 1141(a))] 
        101(a)(1) of the Higher Education Act of 1965.

           *       *       *       *       *       *       *

                              ----------                              


      SECTION 402 OF THE NATIONAL EDUCATION STATISTICS ACT OF 1994

SEC. 402. FINDINGS; PURPOSE; DEFINITIONS.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Definitions.--For the purpose of this title and unless 
otherwise specified--
          (1) * * *

           *       *       *       *       *       *       *

          (3) the term ``institution of higher education'' has 
        the same meaning given such term in section [1201(a)] 
        101(a)(1) of the Higher Education Act of 1965;

           *       *       *       *       *       *       *

                              ----------                              


             SECTION 102 OF THE OLDER AMERICANS ACT OF 1965

                              definitions

      Sec. 102. For the purposes of this Act--
          (1) * * *

           *       *       *       *       *       *       *

          (32) The term ``institution of higher education'' has 
        the meaning given the term in section [1201(a) of the 
        Higher Education Act of 1965 (20 U.S.C. 1141(a))] 
        101(a)(1) of the Higher Education Act of 1965.

           *       *       *       *       *       *       *

                              ----------                              


 SECTION 1007 OF THE OMNIBUS PARKS AND PUBLIC LANDS MANAGEMENT ACT OF 
                                  1996

SEC. 1007. ADVISORY COMMITTEE.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Membership.--The Advisory Committee shall consist of 13 
members, who shall be appointed by the Secretary as follows:
          (1) * * *

           *       *       *       *       *       *       *

          (5) One member shall be a range management specialist 
        representing institutions of higher education (as 
        defined in section [1201(a) of the Higher Education Act 
        of 1965 (20 U.S.C.1141(a))] 101(a)(1) of the Higher 
Education Act of 1965) in the State of Kansas.

           *       *       *       *       *       *       *

                              ----------                              


                        ACT OF NOVEMBER 2, 1921

                 (Populary known as the ``Snyder Act'')

      AN ACT Authorizing appropriations and expenditures for the 
       administration of Indian affairs, and for other purposes.

  Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, That the 
Bureau of Indian Affairs, under the supervision of the 
Secretary of the Interior, shall direct, supervise, and expend 
such moneys as Congress may from time to time appropriate, for 
the benefit, care, and assistance of the Indians throughout the 
United States for the following purposes:
  General support and civilization, including education.
  For relief of distress and conservation of health.
  For industrial assistance and advancement and general 
administration of Indian property.
  For extension, improvement, operation, and maintenance of 
existing Indian irrigation systems and for development of water 
supplies.
  For the the enlargement, extension, improvement, and repair 
of the buildings and grounds of existing plants and projects.
  For the employment of inspectors, supervisors, 
superintendents, clerks, field matrons, farmers, physicians, 
Indian police, Indian judges, and other employees.
  For the suppression of traffic in intoxicating liquor and 
deleterious drugs.
  For the purchase of horse-drawn and motor-propelled 
passenger-carrying vehicles for official use.
  And for general and incidental expenses in connection with 
the administration of Indian affairs.
  Notwithstanding any other provision of this Act or any other 
law, postsecondary schools administered by the Secretary of the 
Interior for Indians, and which meet the definition of an 
``institution of higher education'' under section [1201] 
101(a)(1) of the Higher Education Act of 1965 shall be eligible 
to participate in and receive appropriated funds under any 
program authorized by the Higher Education Act of 1965, or any 
other applicable program for the benefit of institutions of 
higher education, community colleges, or postsecondary 
educational institutions.
                              ----------                              


              SECTION 223 OF THE COMMUNICATION ACT OF 1934

SEC. 223. OBSCENE OR HARASSING TELEPHONE CALLS IN THE DISTRICT OF 
                    COLUMBIA OR IN INTERSTATE OR FOREIGN 
                    COMMUNICATIONS.

  (a) * * *

           *       *       *       *       *       *       *

  (h) For purposes of this section--
          (1) * * *

           *       *       *       *       *       *       *

          (4) The term ``institution of higher education'' has 
        the meaning provided in section [1201 of the Higher 
        Education Act of 1965 (20 U.S.C. 1141)] 101(a)(1) of 
        the Higher Education Act of 1965.

           *       *       *       *       *       *       *

                              ----------                              


                  FEDERAL WATER POLLUTION CONTROL ACT

                     definitions and authorizations

      Sec. 112. (a) As used in sections 109 through 112 of this 
Act--
          (1) The term ``institution of higher education'' 
        means an educational institution described in the first 
        sentence of section [1201] 101(a)(1) of the Higher 
        Education Act of 1965 (other than an institution of any 
        agency of the United States) which is accredited by a 
        nationally recognized accrediting agency or association 
        approved by the Administrator for this purpose. For 
        purposes of this subsection, the Administrator shall 
        publish a list of nationally recognized accrediting 
        agencies or associations which he determines to be 
        reliable authority as to the quality of training 
        offered.

           *       *       *       *       *       *       *

                              ----------                              


 SECTION 347 OF THE CARL D. PERKINS VOCATIONAL AND APPLIED TECHNOLOGY 
                             EDUCATION ACT

SEC. 347. DEFINITIONS.

  For purposes of this part:
          (1) * * *
          (2) The term ``community college''--
                  (A) has the meaning provided in section 
                [1201(a)] 101(a)(1) of the Higher Education Act 
                of 1965 for an institution which provides not 
                less than a 2-year program which is acceptable 
                for full credit toward a bachelor's degree; and

           *       *       *       *       *       *       *

                              ----------                              


         SECTION 362 OF THE ENERGY POLICY AND CONSERVATION ACT

                    state energy conservation plans

  Sec. 362. (a) * * *

           *       *       *       *       *       *       *

  (f)(1) The purposes of this subsection are to--
          (A) * * *

           *       *       *       *       *       *       *

  (5) For the purposes of this subsection, the term--
          (A) ``institution of higher education'' has the same 
        meaning as such term is defined in section [1201(a) of 
        the Higher Education Act of 1965 (20 U.S.C. 1141(a))] 
        101(a)(1) of the Higher Education Act of 1965;

           *       *       *       *       *       *       *

                              ----------                              


        SECTION 815 OF THE JAMES MADISON MEMORIAL FELLOWSHIP ACT

                               definition

  Sec. 815. As used in this title--
          (1) * * *

           *       *       *       *       *       *       *

          (3) the term ``institution of higher education'' has 
        the same meaning given that term by section [1201(a)] 
        101(a)(1) of the Higher Education Act of 1965; and
          (4) the term ``secondary school'' has the same 
        meaning given that term by section [1201(d)] 101(a)(1) 
        of the Higher Education Act of 1965.

           *       *       *       *       *       *       *

                              ----------                              


REHABILITATION ACT OF 1973

           *       *       *       *       *       *       *


                              definitions

  Sec. 7. For the purposes of this Act:
  (1) * * *

           *       *       *       *       *       *       *

  (32) The term ``institution of higher education'' has the 
meaning given the term in section [1201(a) of the Higher 
Education Act of 1965 (20 U.S.C. 1141(a))] 101(a)(1) of the 
Higher Education Act of 1965.

           *       *       *       *       *       *       *


              TITLE I--VOCATIONAL REHABILITATION SERVICES

Part A--General Provisions

           *       *       *       *       *       *       *


                              state plans

  Sec. 101. (a) In order to be eligible to participate in 
programs under this title, a State shall submit to the 
Commissioner a State plan for vocational rehabilitation 
services for a 3-year period, or shall submit the plan on such 
date, and at such regular intervals, as the Secretary may 
determine to be appropriate to coincide with the intervals at 
which the State submits State plans under other Federal laws, 
such as part B of the Individuals with Disabilities Education 
Act (20 U.S.C. 1411 et seq.). In order to be eligible to 
participate in programs under this title, a State, upon the 
request of the Commissioner, shall make such annual revisions 
in the plan as may be necessary. Each such plan shall--
  (1) * * *

           *       *       *       *       *       *       *

  (7)(A) include a description (consistent with the purposes of 
this Act) of a comprehensive system of personnel development, 
which shall include--
          (i) a description of the procedures and activities 
        the State agency will undertake to ensure an adequate 
        supply of qualified State rehabilitation professionals 
        and paraprofessionals for the designated State unit, 
        including the development and maintenance of a system 
        for determining, on an annual basis--
                  (I) * * *

           *       *       *       *       *       *       *

          (iv) a description of the development, updating, and 
        implementation of a plan that--
                  (I) * * *
                  (II) provides for the coordination and 
                facilitation of efforts between the designated 
                State unit and institutions of higher education 
                (as defined in section [1201(a) of the Higher 
                Education Act of 1965 (20 U.S.C. 1141(a))] 
                101(a)(1) of the Higher Education Act of 1965) 
                and professional associations to recruit, 
                prepare and retain qualified personnel, 
                including personnel from minority backgrounds, 
                and personnel who are individuals with 
                disabilities; and

           *       *       *       *       *       *       *

                              ----------                              


  SECTION 3 OF THE TECHNOLOGY-RELATED ASSISTANCE FOR INDIVIDUALS WITH 
                        DISABILITIES ACT OF 1988

SEC. 3. DEFINITIONS.

  For purposes of this Act:
          (1) * * *

           *       *       *       *       *       *       *

          (8) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning 
        given such term in section [1201(a) of the Higher 
        Education Act of 1965 (20 U.S.C. 1141(a))] 101(a)(1) of 
        the Higher Education Act of 1965, and includes 
        community colleges receiving funding under the Tribally 
        Controlled Community College Assistance Act of 1978 (25 
        U.S.C. 1801 et seq.).

           *       *       *       *       *       *       *

                              ----------                              


 THE TRIBALLY CONTROLLED COMMUNITY COLLEGE ASSISTANCE ACT OF 1978

           *       *       *       *       *       *       *


  Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, That this 
Act may be cited as the ``Tribally Controlled Community College 
Assistance Act of 1978''.

                              definitions

  Sec. 2. (a) For purposes of this Act, the term--
          (1) * * *

           *       *       *       *       *       *       *

          (4) ``tribally controlled [community college] college 
        or university'' means an institution of higher 
        education which is formally controlled, or has been 
        formally sanctioned, or chartered, by the governing 
        body of an Indian tribe or tribes, except that no more 
        than one such institution shall be recognized with 
        respect to any such tribe;
          (5) ``institution of higher education'' means an 
        institution of higher education as defined by section 
        [1201(a)] 101(a)(1) of the Higher Education Act of 
        1965, except that clause (2) of such section shall not 
        be applicable and the reference to Secretary in clause 
        (5)(A) of such section shall be deemed to refer to the 
        Secretary of the Interior;
          (6) ``national Indian organization'' means an 
        organization which the Secretary finds is nationally 
        based, represents a substantial Indian constituency, 
        and has expertise in the field of Indian education;
          (7) ``Indian student count'' means a number equal to 
        the total number of Indian students enrolled in each 
        tribally controlled [community college] college or 
        university, determined in a manner consistent with 
        subsection (b) of this section on the basis of the 
        quotient of the sum of the credit hours of all Indian 
        students so enrolled, divided by twelve; and
          (8) ``satisfactory progress toward a degree or 
        certificate'' has the meaning given to such term by the 
        institution at which the student is enrolled.
  (b) The following conditions shall apply for the purpose of 
determining the Indian student count pursuant to paragraph (7) 
of subsection (a):
          (1) * * *

           *       *       *       *       *       *       *

          (4) Indian students earning credits in any continuing 
        education program of a tribally controlled [community 
        college] college or university shall be included in 
        determining the sum of all credit hours.
          (5) Credits earned in a continuing education program 
        shall be converted to a credit-hour basis in accordance 
        with the tribally controlled [community college's] 
        college's or university's system for providing credit 
        for participation in such program.
          (6) No credit hours earned by an Indian student who 
        is not making satisfactory progress toward a degree or 
        certificate, shall be taken into account.

    TITLE I--TRIBALLY CONTROLLED [COMMUNITY COLLEGES] COLLEGES AND 
                              UNIVERSITIES

                                purpose

  Sec. 101. It is the purpose of this title to provide grants 
for the operation and improvement of tribally controlled 
[community colleges] colleges and universities to insure 
continued and expanded educational opportunities for Indian 
students, and to allow for the improvement and expansion of the 
physical resources of such institutions.

                           grants authorized

  Sec. 102. (a) The Secretary shall, subject to appropriations, 
make grants pursuant to this title to tribally controlled 
[community colleges] colleges and universities to aid in the 
postsecondary education of Indian students.
  (b) Grants made pursuant to this title shall go into the 
general operating funds of the institution to defray, at the 
determination of the tribally controlled [community college] 
college or university, expenditures for academic, educational, 
and administrative purposes and for the operation and 
maintenance of the college or university. Funds provided 
pursuant to this title shall not be used in connection with 
religious worship or sectarian instruction.

                       eligible grant recipients

  Sec. 103. To be eligible for assistance under this title, a 
tribally controlled [community college] college or university 
must be one which--
          (1) is governed by a board of directors or board of 
        trustees a majority of which are Indians;
          (2) demonstrates adherence to stated goals, a 
        philosophy, or a plan of operation which is directed to 
        meet the needs of Indians; [and]
          (3) if in operation for more than one year, has 
        students a majority of whom are Indians[.]; and
          (4) has been accredited by a nationally recognized 
        accrediting agency or association determined by the 
        Secretary of Education to be a reliable authority as to 
        the quality of training offered, or is, according to 
        such an agency or association, making reasonable 
        progress toward such accreditation.

                            planning grants

  Sec. 104. (a) The Secretary shall establish a program in 
accordance with this section to make grants to tribes and 
tribal entities (1) to conduct planning activities for the 
purpose of developing proposals for the establishment of 
tribally controlled [community colleges] colleges and 
universities, or (2) to determine the need and potential for 
the establishment of such colleges and universities.
  (b) The Secretary shall establish, by regulation, procedures 
for the submission and review of applications for grants under 
this section.

           *       *       *       *       *       *       *


                     technical assistance contracts

  Sec. 105. The Secretary shall provide, upon request from a 
tribally controlled [community college] college or university 
which is receiving funds under section 108, technical 
assistance either directly or through contract. In the awarding 
of contracts for technical assistance, preference shall be 
given to an organization designated by the tribally controlled 
[community college] college or university to be assisted. No 
authority to enter into contracts provided by this section 
shall be effective except to the extent authorized in advance 
by appropriations Acts.

             eligibility studies and accreditation program

  Sec. 106. (a) The Secretary is authorized to enter into an 
agreement with the Secretary of Education to assist the Bureau 
of Indian Affairs in developing plans, procedures, and criteria 
for conducting the eligibility studies required by this 
section. Such agreement shall provide for continuing technical 
assistance in the conduct of such studies.
  (b) The Secretary, within thirty days after a request by any 
Indian tribe, shall initiate a eligibility study to determine 
whether there is justification to encourage and maintain a 
tribally controlled [community college] college or university, 
and, upon a positive determination, shall aid in the 
preparation of grant applications and related budgets which 
will insure successful operation of such an institution. Such a 
positive determination shall be effective for the fiscal year 
succeeding the fiscal year in which such determination is made.
  (c) The Secretary of Education shall assist tribally 
controlled colleges and universities in the development of a 
national accrediting agency or association for such colleges 
and universities.
  [(c)] (d) Funds to carry out the purposes of this section for 
any fiscal year may be drawn from either--
          (1) general administrative appropriations to the 
        Secretary made after the date of enactment of this Act 
        for such fiscal year; or
          (2) not more than 5 per centum of the funds 
        appropriated to carry out section 107 for such fiscal 
        year.

    grants to tribally controlled [community colleges] colleges and 
                              universities

  Sec. 107. (a) Grants shall be made under this title only in 
response to applications by tribally controlled [community 
colleges] colleges and universities. Such applications shall be 
submitted at such time, in such manner, and will contain or be 
accompanied by such information as the Secretary may reasonably 
require pursuant to regulations. Such application shall include 
a description of recordkeeping procedures for the expenditure 
of funds received under this Act which will allow the Secretary 
to audit and monitor programs conducted with such funds. The 
Secretary shall not consider any grant application unless a 
eligibility study has been conducted under section 106 and it 
has been found that the applying [community college] college or 
university will service a reasonable student population.
  (b) The Secretary shall consult with the Secretary of 
Education to determine the reasonable number of students 
required to support a tribally controlled [community college] 
college or university. Consideration shall be given to such 
factors as tribal and cultural differences, isolation, the 
presence of alternate education sources, and proposed 
curriculum.

           *       *       *       *       *       *       *


                            amount of grants

  Sec. 108. (a) Except as provided in section 111, the 
Secretary shall, subject to appropriations, grant for each 
academic year to each tribally controlled [community college] 
college or university having an application approved by him an 
amount equal to the product of--
          (1) the Indian student count at such college or 
        university during the academic year preceding the 
        academic year for which such funds are being made 
        available, as determined by the Secretary in accordance 
        with section 2(a)(7); and
          (2) [$5,820] $6,000,
except that no grant shall exceed the total cost of the 
education program provided by such college or university.
  (b)(1) * * *

           *       *       *       *       *       *       *

  (3)(A) Notwithstanding any provision of law other than 
subparagraph (B), any interest or investment income that 
accrues on any funds provided under this title after such funds 
are paid to the tribally controlled [community college] college 
or university and before such funds are expended for the 
purpose for which such funds were provided under this title 
shall be the property of the tribally controlled [community 
college] college or university and shall not be taken into 
account by any officer or employee of the Federal Government in 
determining whether to provide assistance, or the amount of 
assistance, to the tribally controlled [community college] 
college or university under any provision of Federal law.
  (B) All interest or investment income described in 
subparagraph (A) shall be expended by the tribally controlled 
[community college] college or university by no later than the 
close of the fiscal year succeeding the fiscal year in which 
such interest or investment income accrues.
  (4) Funds provided under this title may only be invested by 
the tribally controlled [community college] college or 
university in obligations of the United States or in 
obligations or securities that are guaranteed or insured by the 
United States.
  (c)(1) Each institution receiving payments under this title 
shall annually provide to the Secretary an accurate and 
detailed accounting of its operating and maintenance expenses 
and such other information concerning costs as the Secretary 
may request.
  (2) The Secretary shall, in consultation with the National 
Center for Education Statistics, establish a data collection 
system for the purpose of obtaining accurate information with 
respect to the needs and costs of operation and maintenance of 
tribally controlled [community colleges] colleges and 
universities.

           *       *       *       *       *       *       *


                        effect on other programs

  Sec. 109. (a) Except as specifically provided in this title, 
eligibility for assistance under this title shall not, by 
itself, preclude the eligibility of any tribally controlled 
college to receive Federal financial assistance under any 
program authorized under the Higher Education Act of 1965 or 
any other applicable program for the benefit of institutions of 
higher education, [community colleges] colleges and 
universities, or postsecondary educational institutions.
  (b)(1) The amount of any grant for which tribally controlled 
[community colleges] colleges and universities are eligible 
under section 108 shall not be altered because of funds 
allocated to any [such colleges] such college or university 
from funds appropriated under the Act of November 2, 1921 (42 
Stat. 208; 25 U.S.C. 13).
  (2) No tribally controlled [community college] college or 
university shall be denied funds appropriated under such Act of 
November 2, 1921 (42 Stat. 208; 25 U.S.C. 13).
  (3) No tribally controlled [community college] college or 
university for which a tribe has designated a portion of the 
funds appropriated for the tribe from funds appropriated under 
the Act of November 2, 1921 (42 Stat. 208; 25 U.S.C. 13) may be 
denied a contract for such portion under the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450 et 
seq.) (except as provided in that Act), or denied appropriate 
contract support to administer such portion of the appropriated 
funds.
  [(d)] (c) Notwithstanding any other provision of law, funds 
provided under this title to the tribally controlled [community 
college] college or university may be treated as non-Federal 
law which requires that non-Federal or private funds of the 
college be used in a project or for a specific purpose.

                      appropriation authorization

  Sec. 110. (a)(1) There is authorized to be appropriated, for 
the purpose of carrying out section 105, $3,200,000 for fiscal 
year [1993] 1999 and such sums as may be necessary for each of 
the 4 succeeding fiscal years.
  (2) There is authorized to be appropriated for the purpose of 
carrying out section 107, [$30,000,000] $40,000,000 for fiscal 
year [1993] 1999 and such sums as may be necessary for each of 
the 4 succeeding fiscal years.
  (3) There is authorized to be appropriated for the purpose of 
carrying out sections 112(b) and 113, $10,000,000 for fiscal 
year [1993] 1999 and such sums as may be necessary for each of 
the 4 succeeding fiscal years.
  (4) Funds appropriated pursuant to the authorizations under 
this section for the fiscal year [1993] 1999 and for each of 
the succeeding 4 fiscal years shall be transferred by the 
Secretary of the Treasury through the most expeditious method 
available, with each of the [Tribally Controlled Community 
Colleges] tribally controlled colleges and universities being 
designated as its own certifying agency.

           *       *       *       *       *       *       *


                           grant adjustments

  Sec. 111. (a)(1) * * *
  (2) For purposes of paragraph (1) of this subsection, the 
term ``per capita payment'' for any fiscal year shall be 
determined by dividing the amount available for grants to 
tribally controlled [community colleges] colleges and 
universities under section 107 for such fiscal year by the sum 
of the Indian student counts of such colleges and universities 
for such fiscal year. The Secretary shall, on the basis of the 
most satisfactory data available, compute the Indian student 
count for any fiscal year for which such count was not used for 
the purpose of making allocations under this title.

           *       *       *       *       *       *       *


                          report on facilities

  Sec. 112. (a) The Secretary shall provide for the conduct of 
a study of facilities available for use by tribally controlled 
[community colleges] colleges and universities. Such study 
shall consider the condition of currently existing Bureau of 
Indian Affairs facilities which are vacant or underutilized and 
shall consider available alternatives for renovation, 
alteration, repair, and reconstruction of such facilities 
(including renovation, alteration, repair, and reconstruction 
necessary to bring such facilities into compliance with local 
building codes). Such study shall also identify the need for 
new construction. A report on the results of such study shall 
be submitted to the Congress not later than eighteen months 
after the date of enactment of the Tribally Controlled 
Community College Assistance Amendments of 1986. Such report 
shall also include an identification of property--
          (1) on which structurally sound buildings suitable 
        for use as educational facilities are located, and
          (2) which is available for use by tribally controlled 
        [community colleges] colleges and universities under 
        section 202(a)(2) of the Federal Property and 
        Administrative Services Act of 1949 (40 U.S.C. 
        483(a)(2)) and under the Act of August 6, 1956 (70 
        Stat. 1057; 25 U.S.C. 443a).

           *       *       *       *       *       *       *

  (c)(1) * * *
  (2) An organization described in this section is any 
organization that--
          (A) is eligible to receive a contract under the 
        Indian Self-Determination and Education Assistance Act; 
        and
          (B) has demonstrated expertise in areas and issues 
        dealing with tribally controlled [community colleges] 
        colleges and universities.

           *       *       *       *       *       *       *


                     construction of new facilities

  Sec. 113. (a) With respect to any tribally controlled 
[community college] college or university for which the report 
of the Administrator of General Services under section 112(a) 
of this Act identifies a need for new construction, the 
Secretary shall, subject to appropriations and on the basis of 
an application submitted in accordance with such requirements 
as the Secretary may prescribe by regulation, provide grants 
for such construction in accordance with this section.
  (b) In order to be eligible for a grant under this section, a 
tribally controlled [community college] college or university--
          (1) must be a current recipient of grants under 
        section 105 or 107, and
          (2) must be accredited by a nationally recognized 
        accrediting agency listed by the Secretary of Education 
        pursuant to the last sentence of section [1201(a) of 
        the Higher Education Act of 1965 (20 U.S.C. 1141(a))] 
        101(a)(1) of the Higher Education Act of 1965, except 
        that such requirement may be waived if the Secretary 
        determines that there is a reasonable expectation that 
        [such college] such college or university will be fully 
        accredited within eighteen months. In any case where 
        such a waiver is granted, grants under this section 
        shall be available only for planning and development of 
        proposals for construction.
  (c)(1) Except as provided in paragraph (2), grants for 
construction under this section shall not exceed 80 per centum 
of the cost of such construction, except that no tribally 
controlled [community college] college or university shall be 
required to expend more than $400,000 in fulfillment of the 
remaining 20 per centum. For the purpose of providing its 
required portion of the cost of such construction, a tribally 
controlled [community college] college or university may use 
funds provided under the Act of November 2, 1921 (25 U.S.C. 
13), popularly referred to as the Snyder Act.
  (2) The Secretary may waive, in whole or in part, the 
requirements of paragraph (1) in the case of any tribally 
controlled [community college] college or university which 
demonstrates that neither [such college] such college or 
university nor the tribal government with which it is 
affiliated have sufficient resources to comply with such 
requirements. The Secretary shall base a decision on whether to 
grant such a waiver solely on the basis of the 
followingfactors: (A) tribal population; (B) potential student 
population; (C) the rate of unemployment among tribal members; (D) 
tribal financial resources; and (E) other factors alleged by the 
college or university to have a bearing on the availability of 
resources for compliance with the requirements of paragraph (1) and 
which may include the educational attainment of tribal members.

           *       *       *       *       *       *       *


     TITLE III--TRIBALLY CONTROLLED [COMMUNITY COLLEGE] COLLEGE OR 
                      UNIVERSITY ENDOWMENT PROGRAM

                                purpose

  Sec. 301. It is the purpose of this title to provide grants 
for the encouragement of endowment funds for the operation and 
improvement of tribally controlled [community colleges] 
colleges and universities.

              establishment of program; program agreements

  Sec. 302. (a) From the amount appropriated pursuant to 
section 306, the Secretary shall establish a program of making 
endowment grants to tribally controlled [community colleges] 
colleges and universities which are current recipients of 
assistance under section 107 of this Act or under section 3 of 
the Navajo Community College Act. No such college or university 
shall be ineligible for such a grant for a fiscal year by 
reason of the receipt of such a grant for a preceding fiscal 
year, but no such college or university shall be eligible for 
such a grant for a fiscal year if such college or university 
has been awarded a grant under section 331 of the Higher 
Education Act of 1965 for such fiscal year.
  (b) No grant for the establishment of an endowment fund by a 
tribally controlled [community college] college or university 
shall be made unless such college or university enters into an 
agreement with the Secretary which--
          (1) * * *
          (2) provides for the deposit in such trust fund of--
                  (A) any Federal capital contributions made 
                from funds appropriated under section 306;
                  (B) a capital contribution by such college or 
                university in an amount (or of a value) equal 
                to half of the amount of each Federal capital 
                contribution; and
                  (C) any earnings of the funds so deposited;
          (3) provides that such funds will be deposited in 
        such a manner as to insure the accumulation of interest 
        thereon at a rate not less than that generally 
        available for similar funds deposited at the banking or 
        savings institution for the same period or periods of 
        time;
          (4) provides that, if at any time such college or 
        university withdraws any capital contribution made by 
        [that college] such college or university, an amount of 
        Federal capital contribution equal to twice the amount 
        of (or value of) such withdrawal shall be withdrawn and 
        returned to the Secretary for reallocation to other 
        colleges and universities;

           *       *       *       *       *       *       *


                              use of funds

  Sec. 303. Interest deposited, pursuant to section 
302(b)(2)(C), in the trust fund of any tribally controlled 
[community college] college or university may be periodically 
withdrawn and used, at the discretion of such college or 
university, to defray any expenses associated with the 
operation of such college or university, including expense of 
operations and maintenance, administration, academic and 
support personnel, community and student services programs, and 
technical assistance.

                  compliance with matching requirement

  Sec. 304. For the purpose of complying with the contribution 
requirement of section 302(b)(2)(B), a tribally controlled 
[community college] college or university may use funds which 
are available from any private or tribal source. Any real or 
personal property received by a tribally controlled [community 
college] college or university as a donation or gift on or 
after the date of the enactment of this sentence may, to the 
extent of its fair market value as determined by the Secretary, 
be used by such college or university as its contribution 
pursuant to section 302(b)(2)(B), or as part of such 
contribution, as the case may be. In any case in which any such 
real or personal property so used is thereafter sold or 
otherwise disposed of by such college or university, the 
proceeds therefrom shall be deposited pursuant to section 
302(b)(2)(B) but shall not again be considered for Federal 
capital contribution purposes.

                          allocation of funds

  Sec. 305. (a) From the amount appropriated pursuant to 
section 306, the Secretary shall allocate to each tribally 
controlled [community college] college or university which is 
eligible for an endowment grant under this title an amount for 
a Federal capital contribution equal to twice the value of the 
property or the amount which such college or university 
demonstrates has been placed within the control of, or 
irrevocably committed to the use of, the college or university 
and is available for deposit as a capital contribution of [that 
college] such college or university in accordance with section 
302(b)(2)(B), except that the maximum amount which may be so 
allocated to any such college or university for any fiscal year 
shall not exceed $750,000.
  (b) If for any fiscal year the amount appropriated pursuant 
to section 306 is not sufficient to allocate to each tribally 
controlled [community college] college or university an amount 
equal to twice the value of the property or the amount 
demonstrated by such college or university pursuant to 
subsection (a), then the amount of the allocation to each such 
college or university shall be ratably reduced.

                    authorization of appropriations

  Sec. 306. (a) There are authorized to be appropriated to 
carry out the provisions of this title, $10,000,000 for fiscal 
year [1993] 1999 and such sums as may be necessary for each of 
the 4 succeeding fiscal years.
  (b) Any funds appropriated pursuant to subsection (a) are 
authorized to remain available until expended.

                 TITLE IV--TRIBAL ECONOMIC DEVELOPMENT

SEC. 401. SHORT TITLE.

  This title may be cited as the ``Tribal Economic Development 
and Technology Related Education Assistance Act of 1990''.

SEC. 402. GRANTS AUTHORIZED.

    (a) General Authority.--The Secretary is authorized, 
subject to the availability of appropriations, to make grants 
to tribally controlled [community colleges] colleges and 
universities which receive grants under either this Act or the 
Navajo Community College Act for the establishment and support 
of tribal economic development and education institutes. Each 
program conducted with assistance under a grant under this 
subsection shall include at least the following activities:
          (1) * * *

           *       *       *       *       *       *       *


SEC. 403. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated for grants under this 
title, $2,000,000 for fiscal year [1993] 1999 and such sums as 
may be necessary for each of the 4 succeeding fiscal years.
                              ----------                              


         VIOLENT CRIME CONTROL AND LAW ENFORCEMENT ACT OF 1994



           *       *       *       *       *       *       *
TITLE III--CRIME PREVENTION

           *       *       *       *       *       *       *


    Subtitle D--Family and Community Endeavor Schools Grant Program

SEC. 30401. COMMUNITY SCHOOLS YOUTH SERVICES AND SUPERVISION GRANT 
                    PROGRAM.

  (a) Short Title.--This section may be cited as the 
``Community Schools Youth Services and Supervision Grant 
Program Act of 1994''.
  (b) Definitions.--In this section--
          ``child'' means a person who is not younger than 5 
        and not older than 18 years old.

           *       *       *       *       *       *       *

          ``public school'' means [a public elementary school, 
        as defined in section 1201(i) of the Higher Education 
        Act of 1965 (20 U.S.C. 1141(i)), and a public secondary 
        school, as defined in section 1201(d) of that Act] an 
        elementary school as defined in section 14101(14) of 
        the Elementary and Secondary Education Act of 1965, and 
        a secondary school as defined by section 14101(25) of 
        such Act, which are public institutions.

           *       *       *       *       *       *       *


   TITLE XX--POLICE CORPS AND LAW ENFORCEMENT OFFICERS TRAINING AND 
                               EDUCATION

Subtitle A--Police Corps

           *       *       *       *       *       *       *


SEC. 200103. DEFINITIONS.

  In this subtitle--
          ``academic year'' means a traditional academic year 
        beginning in August or September and ending in the 
        following May or June.

           *       *       *       *       *       *       *

          ``institution of higher education'' has the meaning 
        stated in the first sentence of section [1201(a) of the 
        Higher Education Act of 1965 (20 U.S.C. 1141(a))] 
        101(a)(1) of the Higher Education Act of 1965.

           *       *       *       *       *       *       *


            Subtitle B--Law Enforcement Scholarship Program

SEC. 200202. DEFINITIONS.

  In this subtitle--
          ``Director'' means the Director of the Office of the 
        Police Corps and Law Enforcement Education appointed 
        under section 200104.

           *       *       *       *       *       *       *

          ``institution of higher education'' has the meaning 
        stated in the first sentence of section [1201(a) of the 
        Higher Education Act of 1965 (20 U.S.C. 1141(a))] 
        101(a)(1) of the Higher Education Act of 1965.

           *       *       *       *       *       *       *

                              ----------                              


       SECTION 4 OF THE SCHOOL-TO-WORK OPPORTUNITIES ACT OF 1994

SEC. 4. DEFINITIONS.

  As used in this Act:
          (1) * * *

           *       *       *       *       *       *       *

          (11) Local partnership.--The term ``local 
        partnership'' means a local entity that is responsible 
        for local School-to-Work Opportunities programs and 
        that--
                  (A) * * *
                  (B) may include other entities, such as--
                          (i) * * *

           *       *       *       *       *       *       *

                          (viii) proprietary institutions of 
                        higher education (as defined in section 
                        [481(b)] 101(a)(3) of the Higher 
                        Education Act of 1965 (20 U.S.C. 
                        1088(b)) that continue to meet the 
                        eligibility and certification 
                        requirements under title IV of such Act 
                        (20 U.S.C. 1070 et seq.);

           *       *       *       *       *       *       *

          (12) Postsecondary educational institution.--The term 
        ``postsecondary educational institution'' means an 
        institution of higher education (as such term is 
        defined in section [481] 101(a)(2) of the Higher 
        Education Act of 1965 (20 U.S.C. 1088)) which continues 
        to meet the eligibility and certification requirements 
        under title IV of such Act (20 U.S.C. 1070 et seq.).

           *       *       *       *       *       *       *

                              ----------                              


                   EDUCATION OF THE DEAF ACT OF 1986

  TITLE I--GALLAUDET UNIVERSITY; NATIONAL TECHNICAL INSTITUTE FOR THE 
                                  DEAF

Part A--Gallaudet University

           *       *       *       *       *       *       *


SEC. 103. BOARD OF TRUSTEES.

  (a) Composition of the Board.--(1) Gallaudet University shall 
be under the direction and control of a Board of Trustees, 
composed of [twenty-one] twenty-two members who shall include--
          (A) three public members of whom (i) one shall be a 
        United States Senator appointed by the President of the 
        Senate, and (ii) two shall be Representatives appointed 
        by the Speaker of the House of Representatives; [and]
          (B) eighteen other members, all of whom shall be 
        elected by the Board of Trustees and of whom one shall 
        be elected pursuant to regulations of the Board of 
        Trustees, on nominationby the Gallaudet University 
Alumni Association, for a term of three years[.]; and
          (C) the liaison designated under section 206, who 
        shall serve as an ex-officio, nonvoting member.

           *       *       *       *       *       *       *


SEC. 104. ELEMENTARY AND SECONDARY EDUCATION PROGRAMS.

  (a) * * *
  (b) Administrative Requirements.--(1) * * *

           *       *       *       *       *       *       *

  (3) If a local educational agency, [intermediate educational 
unit] educational service agency, or State educational agency 
refers a child to, or places a child in, one of the elementary 
or secondary education programs to meet its obligation to make 
available a free appropriate public education under part B of 
the Individuals with Disabilities Education Act, the agency or 
unit shall be responsible for ensuring that the special 
education and related services provided to the child by the 
education program are in accordance with part B of that Act and 
that the child is provided the rights and procedural safeguards 
under section 615 of that Act.
  (4) If the parents or guardian places a child in one of the 
elementary or secondary education programs, the University 
shall--
          (A) * * *

           *       *       *       *       *       *       *

          (C) provide the child a free appropriate public 
        education in accordance with part B of the Individuals 
        with Disabilities Education Act and procedural 
        safeguards in accordance with the following provisions 
        of section 615 of such Act:
                  [(i) Subparagraphs (A), (C), (D), and (E) of 
                paragraph (1) of subsection (b), and paragraph 
                (2) of such subsection.
                  [(ii) Subsection (d), except the portion of 
                paragraph (4) requiring that findings and 
                decisions be transmitted to a State advisory 
                panel.
                  [(iii) Paragraphs (1) through (3) of 
                subsection (e). Paragraph (3) of such 
                subsection is not applicable to a decision by 
                the University to refuse to admit or to dismiss 
                a child, except that, before dismissing any 
                child, the University shall give at least 60 
                days notice to the child's parents and to the 
                local educational agency in which the child 
                resides.
                  [(iv) Subsection (f).]
                  (i) Paragraph (1) and paragraphs (3) through 
                (6) of subsection (b).
                  (ii) Subsections (e) through (g).
                  (iii) Subsection (h), except the provision 
                contained in such subsection that requires that 
                findings of fact and decisions be transmitted 
                to the State advisory panel.
                  (iv) Paragraphs (1) and (2) of subsection 
                (i).
                  (v) Subsection (j), except that such 
                subsection shall not be applicable to a 
                decision by the University to refuse to admit 
                or to dismiss a child, except that, before 
                dismissing any child, the University shall give 
                at least 60 days notice to the child's parents 
                and to the local educational agency in which 
                the child resides.
                  (vi) Subsections (k) through (m).

           *       *       *       *       *       *       *


SEC. 105. AGREEMENT WITH GALLAUDET UNIVERSITY.

  (a) General Authority.--The Secretary and Gallaudet 
University shall establish, [within 1 year after enactment of 
the Education of the Deaf Act Amendments of 1992, a new] and 
periodically update, an agreement governing the operation and 
national mission activities, including construction and 
provision of equipment, of the elementary and secondary 
education programs at the University. [The Secretary and the 
University shall periodically update the agreement as 
determined to be necessary by the Secretary or the University.] 
The necessity of the periodic update referred to in the 
preceding sentence shall be determined by the Secretary or the 
University.

           *       *       *       *       *       *       *


Part B--National Technical Institute for the Deaf

           *       *       *       *       *       *       *


SEC. 112. AGREEMENT FOR THE NATIONAL TECHNICAL INSTITUTE FOR THE DEAF.

  (a) General Authority.--(1) * * *
  (2) The Secretary and the institution of higher education 
with which the Secretary has an agreement [under this section 
shall, within 1 year after the enactment of the Education of 
the Deaf Act Amendments of 1992, assess the need for 
modification of the agreement. The Secretary and the 
institution of higher education with which the Secretary has an 
agreement under this section shall also periodically update the 
agreement as determined to be necessary by the Secretary or the 
institution.] under this section--
          (A) shall periodically assess the need for 
        modification of the agreement; and
          (B) shall also periodically update the agreement as 
        determined to be necessary by the Secretary or the 
        institution.
  (b) Provisions of Agreement.--The agreement shall--
          (1) * * *

           *       *       *       *       *       *       *

          (3) provide that the Board of Trustees or other 
        governing body of the institution will prepare and 
        submit to the Secretary, not later than June 1 
        following the fiscal year for which the report is 
        submitted, an annual report containing an accounting of 
        all indirect costs paid to the institution of higher 
        education under the agreement with the Secretary, which 
        accounting the Secretary shall transmit to the 
        Committee on [Education and Labor] Education and the 
        Workforce of the House of Representatives and to the 
        Committee on Labor and Human Resources of the Senate, 
        with such comments and recommendations as the Secretary 
        may deem appropriate;

           *       *       *       *       *       *       *


                      TITLE II--GENERAL PROVISIONS

SEC. 201. DEFINITIONS.

  As used in this Act--
          (1) The term ``international student'' means an 
        individual who--
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) is not lawfully admitted for permanent 
                residence in American Samoa, Guam, [Palau (but 
                only until the Compact of Free Association with 
                Palau takes effect),] the Commonwealth of the 
                Northern Mariana Islands, the Commonwealth of 
                Puerto Rico, or the Virgin Islands.

           *       *       *       *       *       *       *

          (5) The term ``State'' means each of the several 
        States, the District of Columbia, the Commonwealth of 
        Puerto Rico, Guam, American Samoa, the Virgin Islands, 
        and the Commonwealth of the Northern Mariana Islands[, 
        and Palau (but only until the Compact of Free 
        Association with Palau takes effect).].

           *       *       *       *       *       *       *


SEC. 203. AUDIT.

  (a) * * *
  (b) Independent Audit.--Gallaudet University shall have an 
annual independent financial audit made of the programs and 
activities of the University, including the national mission 
and school operations of the elementary and secondary programs. 
The institution of higher education with which the Secretary 
has an agreement under section 112 shall have an annual 
independent financial audit made of the programs and activities 
of such institution of higher education, including NTID, and 
containing specific schedules and analyses for all NTID funds, 
as determined by the Secretary.

SEC. 204. REPORTS.

  The Board of Trustees of Gallaudet University and the Board 
of Trustees or other governing body of the institution of 
higher education with which the Secretary has an agreement 
under section 112 shall prepare and submit an annual report to 
the Secretary, and to the Committee on [Education and Labor] 
Education and the Workforce of the House of Representatives and 
the Committee on Labor and Human Resources of the Senate, not 
later than 100 days after the end of each fiscal year, which 
shall include the following:
          (1) * * *

           *       *       *       *       *       *       *


SEC. 205. MONITORING, EVALUATION, AND REPORTING.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Authorization of Appropriations.--There are authorized to 
be appropriated such sums as may be necessary for each of the 
fiscal years [1993, 1994, 1995, 1996, and 1997] 1999 through 
2003 to carry out the monitoring and evaluation activities 
authorized under this section.

SEC. 206. LIAISON FOR EDUCATIONAL PROGRAMS.

  (a) Designation of Liaison.--[Not later than 30 days after 
the date of enactment of this Act, the] The Secretary shall 
designate an individual in the Office of Special Education and 
Rehabilitative Services of the Department of Education from 
among individuals who have experience in the education of 
individuals who are deaf to serve as liaison between the 
Department and Gallaudet University, the National Technical 
Institute for the Deaf, and other postsecondary educational 
programs for individuals who are deaf under the Individuals 
with Disabilities Education Act, the Rehabilitation Act of 
1973, and other Federal or non-Federal agencies, institutions, 
or organizations involved with the education or rehabilitation 
of individuals who are deaf or hard of hearing.
  (b) Duties of Liaison.--The individual serving as liaison for 
educational programs for individuals who are deaf or hard of 
hearing shall:
          (1) provide information to institutions regarding the 
        Department's efforts directly affecting the operation 
        of such programs by such institutions;
          (2) review research and other activities carried out 
        by the University, NTID, and other Federal or non-
        Federal agencies, institutions, or organizations 
        involved with the education or rehabilitation of 
        individuals who are deaf or hard of hearing for the 
        purpose of determining overlap and opportunities for 
        coordination among such entities; [and]
          (3) serve as an ex-officio, nonvoting member of the 
        Board of Trustees under section 103; and
          [(3)] (4) provide such support and assistance as such 
        institutions may request and the Secretary considers 
        appropriate.

SEC. 207. [20 U.S.C. 4357] FEDERAL ENDOWMENT PROGRAMS FOR GALLAUDET 
                    UNIVERSITY AND THE NATIONAL TECHNICAL INSTITUTE FOR 
                    THE DEAF.

  (a) * * *
  (b) Federal Payments.--
          (1) The Secretary shall, consistent with this 
        section, make payments to the Federal endowment funds 
        established under subsection (a) from amounts 
        appropriated under subsection (h) for the fund 
        involved.
          [(2) Subject to the availability of appropriations 
        and the non-Federal matching requirements of paragraph 
        (3), the Secretary shall make payments to each Federal 
        endowment fund in amounts equal to sums contributed to 
        the fund from non-Federal sources (excluding transfers 
        from other endowment funds of the institution 
        involved).
          [(3) Effective for fiscal year 1993 and each 
        succeeding fiscal year, for any fiscal year in which 
        the sums contributed to the Federal endowment fund of 
        the institution involved from non-Federal sources 
        exceed $1,000,000, the non-Federal contribution to the 
        Federal endowment fund shall be $2 for each Federal 
        dollar provided in excess of $1,000,000 (excluding 
        transfers from other endowment funds of the institution 
        involved).]
          (2) Subject to the availability of appropriations, 
        the Secretary shall make payments to each Federal 
        endowment fund in amounts equal to sums contributed to 
        the fund from non-Federal sources during the fiscal 
        year in which the appropriations are made available 
        (excluding transfers from other endowment funds of the 
        institution involved).
  (d) Withdrawals and Expenditures.--
          (1) * * *
          (2)(A) * * *

           *       *       *       *       *       *       *

          (C) [Beginning on October 1, 1992, the] The 
        University and NTID shall maintain records of the 
        income generated from its respective Federal endowment 
        fund for the prior fiscal year.

           *       *       *       *       *       *       *

  (h) Authorization of Appropriations.--
          (1) In the case of the University, there are 
        authorized to be appropriated for the purposes of this 
        section such sums as may be necessary for each of the 
        fiscal years [1993 through 1997] 1999 through 2003.
          (2) In the case of NTID, there are authorized to be 
        appropriated for the purposes of this section such sums 
        as may be necessary for each of the fiscal years 1993 
        through 1997.
          (3) Amounts appropriated under paragraph (1) or (2) 
        shall remain available until expended.

[SEC. 208. SCHOLARSHIP PROGRAM.

  [(a) In General.--The Secretary may make grants to 
institutions of higher education that have teacher training 
programs in deaf education or special education for the purpose 
of providing scholarships to individuals who are deaf for 
careers in deaf education or special education. Such 
institutions shall give priority consideration in the selection 
of qualified recipients of the scholarships to individuals from 
underrepresented backgrounds, particularly minority individuals 
who are deaf and who are underrepresented in the teaching 
profession. Grants may be used by institutions to assist in 
covering the cost of courses of training or study for such 
individuals and for establishing and maintaining fellowships or 
traineeships with stipends and allowances as may be determined 
by the Secretary.
  [(b) Authorization of Appropriations.--For the purpose of 
making grants under subsection (a), there are authorized to be 
appropriated $2,000,000 for fiscal year 1993, and such sums as 
may be necessary for each of the fiscal years 1994 through 
1997.]

SEC. [209.] 208. OVERSIGHT AND EFFECT OF AGREEMENTS.

  (a) Oversight Activities.--Nothing in this Act shall be 
construed to diminish the oversight activities of the Committee 
on Labor and Human Resources of the Senate and the Committee on 
[Education and Labor] Education and the Workforce of the House 
of Representatives with respect to any agreement entered into 
between the Secretary of Education and Gallaudet University, 
andthe institution of higher education with which the Secretary 
has an agreement under part B of title I.

           *       *       *       *       *       *       *


SEC. [210.] 209. INTERNATIONAL STUDENTS.

  [(a) Enrollment.--Effective with new admissions for academic 
year 1993-1994 and each succeeding academic year, the 
University (including preparatory, undergraduate, and graduate 
students) and NTID shall limit the enrollment of international 
students to approximately 10 percent of the total postsecondary 
student population enrolled respectively at the University or 
NTID.]
  (a) Enrollment.--A qualified United States citizen seeking 
admission to the University or NTID shall not be denied 
admission in a given year due to the enrollment of 
international students.

           *       *       *       *       *       *       *


SEC. [211.] 210. AUTHORIZATION OF APPROPRIATIONS.

  (a) Gallaudet University.--There are authorized to be 
appropriated [such sums as may be necessary for each of the 
fiscal years 1993 through 1997] $83,480,000 for fiscal year 
1999, $84,732,000 for fiscal year 2000, $86,003,000 for fiscal 
year 2001, $87,293,000 for fiscal year 2002, and $88,603,000 
for fiscal year 2003 to carry out the provisions of this Act, 
relating to--
          (1) Gallaudet University,
          (2) Kendall Demonstration Elementary School, and
          (3) the model secondary school for individuals who 
        are deaf.
  (b) National Technical Institute for the Deaf.--There are 
authorized to be appropriated [such sums as may be necessary 
for each of the fiscal years 1993 through 1997] $44,791,000 for 
fiscal year 1999, $46,303,000 for fiscal year 2000, $50,136,000 
for fiscal year 2001, $50,818,000 for fiscal year 2002, and 
$46,850,000 for fiscal year 2003 to carry out the provisions of 
this Act relating to the National Technical Institute for the 
Deaf.
                              ----------                              


             SECTION 5 OF THE NAVAJO COMMUNITY COLLEGE ACT

                    authorization of appropriations

  Sec. 5. (a)(1) For the purpose of making construction grants 
under this Act, there are authorized to be appropriated 
$2,000,000 for fiscal year [1993] 1999 and such sums as may be 
necessary for each of the 4 succeeding fiscal years.

           *       *       *       *       *       *       *

                              ----------                              


     SECTION 4 OF THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967

                   prohibition of age discrimination

  Sec. 4. (a) * * *

           *       *       *       *       *       *       *

  (m) Notwithstanding subsection (f)(2)(B), it shall not be a 
violation of subsection (a), (b), (c), (e), or (i) solely 
because a plan of an institution of higher education (as 
defined in section 1201(a) of the Higher Education Act of 1965 
(20 U.S.C. 1141(a))) offers employees who are serving under a 
contract of unlimited tenure (or similar arrangement providing 
for unlimited tenure) additional benefits upon voluntary 
retirement that are reduced or eliminated on the basis of age, 
if--
          (1) such institution does not implement with respect 
        to such employees any age-based reduction or 
        elimination of benefits that are not such additional 
        benefits, except as permitted by other provisions of 
        this Act; and
          (2) with respect to each of such employees who have, 
        as of the time the plan is adopted, attained the 
        minimum age and satisfied all non-age-based conditions 
        for receiving a benefit under the plan, such employee 
        is not precluded on the basis of age from having 1 
        opportunity lasting not less than 180-days to elect to 
        retire and to receive the maximum benefit that would be 
        available to a younger employee if such younger 
        employee were otherwise similarly situated to such 
        employee.
                              ----------                              


         TITLE XIII OF THE HIGHER EDUCATION AMENDMENTS OF 1986

                 [TITLE XIII--EDUCATION ADMINISTRATION

              [Part A--Secretarial Studies and Evaluations

[SEC. 1301. SATISFACTORY PROGRESS.

  [The Secretary, through the Office of Educational Research 
and Improvement, shall conduct a survey on the impact, if any, 
on grades of students of the amendments made by this Act to 
section 484(c) of the Act. The study required by this 
subsection shall be conducted over the 5-year period ending 
September 30, 1991. The Secretary, after the end of each year 
of the study, shall submit to the Congress a report of the 
survey required by this subsection, together with such 
recommendations as the Secretary deems appropriate.

[SEC. 1302. NATIONAL ENDOWMENT FOR INTERNATIONAL STUDIES.

  [(a) Study Required.--The Secretary shall, in consultation 
with the Director of the United States Information Agency, the 
Director of the Agency for International Development, the 
Secretary of State, and the Secretary of Defense, conduct a 
study on the establishment of a National Endowment for 
International Studies. The study shall develop a program, a 
funding plan, and priorities for such an Endowment.
  [(b) Conduct of Study.--In carrying out the study required by 
this section, the Secretary shall consider--
          [(1) the extent of the need for international studies 
        programs at all educational levels, not served by title 
        VI of the Act;
          [(2) the programs at the Agency for International 
        Development, the United States Information Agency, and 
        the Departments of State, Defense, and Education which 
        can be coordinated to increase the scope and number and 
        kinds of participants in international educational 
        programs;
          [(3) the feasibility of an Endowment for 
        International Studies, by whom it shall be 
        administered, and procedures for receiving corporate 
        and other private contributions for supplemental 
        funding, similar to Treasury fund accounts at other 
        Federal agencies; and
          [(4) a comprehensive evaluation of the weaknesses and 
        strengths in international education and foreign 
        language training at all levels of education in our 
        Nation and the role of the Endowment to remedy these 
        weaknesses, and encourage expansion of these strengths.
  [(c) Report.--The Secretary shall prepare and submit to the 
Congress, not later than one year after the date of enactment 
of this section, a report on the study required by this 
section, together with such recommendations, including 
recommendations for legislation, as the Secretary deems 
appropriate.

[SEC. 1303. DATA STUDY REQUIRED.

  [(a) Conduct of Studies.--The Secretary, through the Office 
of Education Research and Improvement, shall conduct the 
studies required by this section and submit reports thereon to 
the Congress not later than September 30, 1990. The reports 
shall contain such recommendations, including recommendations 
for legislation, as the Secretary deems appropriate.
  [(b) Cost Study Required.--(1) The Secretary shall conduct a 
study on the escalating cost of higher education. The study 
required by this section shall--
          [(A) identify the current cost of obtaining a higher 
        education and determine how that cost has changed in 
        recent years,
          [(B) determine the specific causes of such changes in 
        cost and the extent to which those causes have 
        contributed to such changes,
          [(C) forecast the future cost of obtaining a higher 
        education with consideration given to prospective 
        demographic changes in student enrollments,
          [(D) evaluate the impact of such changes in cost on 
        institutions of higher education, their students, and 
        lower- and middle-income families,
          [(E) make recommendations on how such changes in cost 
        can be minimized in the future, and
          [(F) outline State and Federal policy options which 
        may help to minimize such changes in cost in the 
        future.
  [(2) In conducting such study, the Secretary shall give 
special consideration to the impact of escalating costs on 
lower- and middle-income students and families, the impact of 
escalating costs on female and minority students, the impact of 
escalating costs on the career choices made by students, and 
the relationship between escalating costs and the Federal 
student financial assistance programs.
  [(3) During the conduct of such study, the Secretary shall 
consult frequently with the Chairman of the Senate Committee on 
Labor and Human Resources and the Chairman of the House 
Committee on Education and Labor.
  [(c) Student Aid Recipient Survey.--(1) The Secretary shall 
survey student aid recipients on a regular cycle, but not less 
than once every 3 years--
          [(A) to identify the population of students receiving 
        Federal student aid;
          [(B) to determine the income distribution and other 
        socioeconomic characteristics of federally aided 
        students;
          [(C) to describe the combinations of aid from State, 
        Federal, and private sources received by students from 
        all income groups;
          [(D) to describe the debt burden of loan recipients 
        and their capacity to repay their education debts; and
          [(E) to disseminate such information in both 
        published and machine readable form.
  [(2) The survey shall be representative of full-time and 
part-time, undergraduate, graduate, and professional and 
current and former students in all types of institutions, and 
should be designed and administered in consultation with the 
Congress and the postsecondary education community.
  [(d) Teacher Supply and Demand.--(1) The Secretary shall 
utilize the legislative authority under section 406(b) of the 
General Education Provisions Act to annually assess current and 
future supply and demand for teachers with particular attention 
to--
          [(A) long-term and short-term shortages of personnel 
        in various subject areas or teaching specialties;
          [(B) shortages in particular States or regions;
          [(C) the number of minorities entering teaching;
          [(D) the number of women and minorities entering 
        educational administration;
          [(E) the effect of State curriculum and graduation 
        requirements on the need for teachers in each State;
          [(F) the extent to which demographic characteristics 
        of persons currently employed as teachers and persons 
        studying to be teachers match the characteristics of 
        the students in each State (race, age, sex);
          [(G) the academic qualifications of prospective 
        teachers and the academic preparation of persons 
        currently preparing to be teachers;
          [(H) the effect of the introduction of State mandated 
        teacher competency tests on the demographic and 
        educational characteristics of teachers and the supply 
        of teachers; and
          [(I) an assessment of new and emerging specialties 
        and the technologies, academic subjects, and 
        occupational areas requiring vocational education, with 
        emphasis on the unique needs for preparing an adequate 
        supply of vocational teachers of handicapped students, 
        with added emphasis on the preparation required to 
        teach combined classrooms of handicapped, or other 
        highly targeted groups of students and other students 
        within a vocational education setting.
  [(2) The analysis conducted under this subsection may include 
assessment of other educational needs identified by the 
Congress, including an assessment of the need for instructional 
equipment and materials in elementary and secondary schools and 
in institutions of higher education.
  [(e) Equitable Student Aid for Farm Families.--The Secretary 
shall conduct a study of financial aid formulas under title IV 
of the Act for students in postsecondary educational 
institutions with special attention to devising a more 
equitable formula for farm families.
  [(f) There are authorized to be appropriated $2,700,000 for 
the fiscal year 1987 and for each of the 2 succeeding fiscal 
years to carry out the provisions of this section.

[SEC. 1304. EVALUATION OF CONTINUING EDUCATION.

  [(a) Evaluation.--The Secretary shall enter into a contract 
with a qualified entity to study and evaluate the programs 
established under part A of title I of this Act.
  [(b) Secretary's Responsibilities.--The Secretary shall 
assist in evaluating the status and progress of adult education 
and postsecondary continuing education in achieving the 
purposes of this title. Such assistance shall include--
          [(1) an analysis of the findings of the report under 
        subsection (a) together with suggestions for 
        improvements in planning or program operation; and
          [(2) the provision of an information network on 
        research in adult and continuing education, the 
        operation of model or innovative programs, successful 
        experiences in the planning, administration, and 
        conduct of adult and continuing education programs, and 
        advances in curriculum and instructional practices and 
        technologies.
  [(c) Report.--Not later than January 1, 1990, the Secretary 
shall submit a report to the Congress on the program 
evaluations required under this section and on any progress in 
fulfilling the goals and purposes of title I of the Act. The 
Secretary may include in the report appropriate recommendations 
or legislative proposals.

[SEC. 1305. STUDY OF BANKRUPTCY TREATMENT OF STUDENTS.

  [The Secretary shall conduct a study of the treatment of 
students under chapter 13 of title 11, United States Code, 
relating to the discharge of student loan indebtedness in 
bankruptcy proceedings, and of the effect of including such 
students under that provision of that law. The Secretary shall 
prepare and submit a report to the Congress on the study 
required by this section not later than 3 months after the date 
of enactment of this Act.

[SEC. 1306. STUDY OF PELL GRANT LESS THAN HALF-TIME STUDENTS.

  [The Secretary shall conduct a study to determine the number 
of less than half-time students who would be eligible for Pell 
grants by reason of having an expected family contribution of 
$0 and by reason of having an expected family contribution of 
$0-$200 for the appropriate academic years. The Secretary shall 
prepare and submit a report to the Congress not later than 
September 30, 1988, on the results of the study required by 
this section.

[SEC. 1307. AUTHORIZATION OF APPROPRIATIONS.

  [There are authorized to be appropriated $1,000,000 for the 
fiscal year 1987 and for each of the 2 succeeding fiscal years 
to carry out the provisions of sections 1301 and 1302.

               [Part B--General Accounting Office Reports

[SEC. 1311. STUDY OF PRACTICES OF STATE GUARANTY AGENCIES AND 
                    MULTISTATE GUARANTORS UNDER THE GUARANTEED STUDENT 
                    LOAN PROGRAM.

  [(a) Study Required.--The Comptroller General shall conduct a 
complete study of the practices of State guaranty agencies and 
multistate guarantors under the guaranteed student loan program 
authorized by part B of title IV of the Act. The study shall 
investigate, on a comparative basis--
          [(1) due diligence practice of lenders;
          [(2) default rates and recovery rates on student 
        loans;
          [(3) changes in loan volume;
          [(4) methods of soliciting student borrowers;
          [(5) potential for fraudulent double borrowing by 
        students;
          [(6) participation agreements between the types of 
        guarantor and lenders;
          [(7) eligible institution participation agreements;
          [(8) adequacy of reserved funds in relation to 
        guaranty commitments made by the agency and the default 
        risk which such commitments represent, as reflected by 
        the socio-economic background of the borrowers, the 
        category of institution attended, and the historical 
        experience of the agency;
          [(9) types of services provided to lenders, eligible 
        institutions, and borrowers;
          [(10) use of funds generated through participation in 
        the guaranteed student loan program by amount and 
        nature of expenses for administrative support for 
        programs other than the guaranteed student loan 
        program;
          [(11) to what extent the guarantors meet the 
        requirements of truth-in-lending provisions;
          [(12) profile of borrowers and defaulters of loans 
        guaranteed by the agency and an assessment of the 
        default risks inherent in such loans;
          [(13) coordination of the loan guaranty program with 
        grant programs;
          [(14) general student access to loan assistance; and
          [(15) need for administrative cost allowances by 
        particular guaranty agencies in relation to the default 
        risk faced by the agency, the administrative costs 
        incurred, or needed to be incurred by the agency, and 
        other factors relevant to the cost of guaranteeing 
        loans under the program.
  [(b) Report.--The Comptroller General of the United States 
shall prepare and submit a report, not later than 2 years after 
the date of enactment of this Act, to the Committee on Labor 
and Human Resources of the Senate and the Committee on 
Educationand Labor of the House of Representatives on the 
findings of the study required by subsection (a) of this section, 
together with such recommendations as the Comptroller General deems 
appropriate.

[SEC. 1312. STUDY OF USE OF MULTIPLE-YEAR LINES OF CREDIT.

  [The Comptroller General shall evaluate the feasibility and 
efficiency of permitting students to establish lines of credit 
with eligible lenders under part B of title IV of the Act that 
cover more than 2 years of attendance at an institution of 
higher education. Such evaluation shall determine the extent to 
which such an arrangement would reduce the administrative costs 
associated with making separate loans annually under such part. 
In conducting such evaluation, the Comptroller General shall 
consult institutions of higher education and eligible lenders 
under such part. Within 2 years after the date of enactment of 
this Act, the Comptroller General shall submit to the Congress 
a report on the results of such evaluation together with such 
recommendations as the Secretary considers appropriate.

[SEC. 1313. STUDY OF MULTIPLE DISBURSEMENT.

  [The Comptroller General shall evaluate the impact of the 
multiple disbursement system required for student loans under 
part B of title IV of the Act on the ability of both students 
and institutions of higher education to meet their expenses as 
they arise. Such evaluation shall include an assessment of any 
other impacts of such system on such students or institutions 
that the Comptroller General determines to be significant. A 
report on the results of such evaluation shall be submitted to 
the Congress not later than 2 years after the date of enactment 
of this Act.

[SEC. 1314. STUDENT LOAN CONSOLIDATION.

  [The Comptroller General shall evaluate the cost, efficiency, 
and impact of the consolidation loan program established by the 
amendments made by this Act to part B of title IV of the Act 
and shall report to the Congress not later than 2 years after 
the date of enactment of this Act on the findings and 
recommendations required by this subsection. Nothing in this 
section shall be interpreted to authorize the Secretary to 
require lenders, holders, or guarantors to maintain or report 
records relating to the loans discharged by borrowers in 
receiving a consolidation loan pursuant to section 428C of the 
Act.

               [Part C--Costs of Postsecondary Education

[SEC. 1321. NATIONAL COMMISSION ON RESPONSIBILITIES FOR FINANCING 
                    POSTSECONDARY EDUCATION.

  [(a) Findings.--The Congress finds--
          [(1) that institutions of higher education in our 
        Nation and their human and intellectual resources are 
        critical to the future of the American society, and the 
        Nation's economic potential, its strength, security, 
        and freedom, and the quality of life for all citizens 
        are tied to the quality and extent of higher education 
        available;
          [(2) that it is the responsibility of the Federal 
        Government to establish a clearly defined national 
        policy regarding--
                  [(A) the role and expectations of respective 
                institutions in society (the family unit, 
                institutions of higher education, government, 
                and the individual in financing the costs of 
                postsecondary education); and
                  [(B) the most efficient and effective use of 
                limited Federal, State, and private resources 
                for supplementing the family effort in 
                financing postsecondary education and for 
                creating incentives for individuals and 
                families to plan for financing postsecondary 
                education; and
          [(3) the appropriate response to economic, budgetary, 
        demographic, and social changes which will require 
        individuals, families, institutions of higher 
        education, and government to plan and adapt to the 
        future needs for student financial assistance for 
        postsecondary education.
  [(b) Establishment of the Commission.--(1) There is 
established as an independent agency in the executive branch a 
commission to be known as the National Commission on 
Responsibilities for Financing Postsecondary Education 
(hereafter in this section referred to as the ``Commission'').
  [(2) The Commission shall be composed of 9 members, 3 of whom 
shall be appointed by the President, 3 of whom shall be 
appointed by the Speaker of the House of Representatives, and 3 
of whom shall be appointed by the majority leader of the 
Senate. The membership of the Commission shall provide 
expertise and experience in the provision and financing of 
postsecondary education, including student financial aid 
administrators, secondary school administrators, individuals 
skilled in education economics research, individuals having 
expertise in the development of standards and systems of need 
analysis for student assistance programs, and individuals with 
particular expertise in credit financing for postsecondary 
education.
  [(c) Duties of the Commission.--
          [(1) In general.--The Commission shall study and 
        investigate the extent to which--
                  [(A) there is a consistent and coherent 
                Federal policy regarding the appropriate family 
                role in financing the costs of postsecondary 
                education for family members;
                  [(B) the current Federal laws and regulations 
                promote the stated Federal policy; and
                  [(C) the extent to which State laws which 
                remove parental responsibilities for children 
                over 18 years of age conflict with Federal 
                policy in this area.
          [(2) Report and recommendations.--The Commission 
        shall--
                  [(A) summarize the appropriate findings of 
                the National Commission on Student Financial 
                Assistance;
                  [(B) recommend to the Congress a 
                comprehensive analysis on the extent to which a 
                consensus exists regarding the appropriate role 
                of the family in financing postsecondary 
                education; and
                  [(C) to the extent that a consensus exists, 
                recommend changes in current law that would be 
                required to achieve the desired Federal policy, 
                including recommendations on Federal incentives 
                to encourage families to plan and save for 
                their financial responsibilities in financing 
                postsecondary education for family members 
                taking into account the needs of future 
                generations.
  [(d) Specific Requirements.--In carrying out its 
responsibilities under subsection (c), the Commission shall 
make a study of the following areas:
          [(1) Need analysis.--
                  [(A) The most appropriate mechanisms for 
                measuring student and family ability to pay for 
                postsecondary education.
                  [(B) The incentives and disincentives for 
                family saving in existing need analysis 
                systems.
                  [(C) The feasibility and impact of different 
                need analysis systems and eligibility formulas 
                for determining student and family 
                contributions for Federal and non-Federal 
                grant, loan, and work-study programs.
                  [(D) The extent to which existing systems of 
                need analysis take into account the 
                circumstances of older and non-traditional 
                students, students with minor dependents, and 
                divorced and separated parents.
                  [(E) The extent to which existing systems of 
                need analysis recognize differing regional 
                economic conditions.
                  [(F) The feasibility of a simplified need 
                analysis system for determining ability to pay 
                for low-income families, economically 
                disadvantaged families, and families receiving 
                public assistance benefits.
                  [(G) The postsecondary education financing 
                partnership, and the impact of external 
                influences, such as economic conditions or 
                State-level initiatives, that affect the 
                balance of financial support among students and 
                their families, the Federal Government, States, 
                postsecondary institutions, credit 
                institutions, and the private sector.
          [(2) Student independence.--The most appropriate 
        mechanisms and factors to be considered in determining 
        student independence and self-support and in 
        determining when families should be expected to provide 
        parental financial information in determining expected 
        family contributions for Federal student assistance 
        programs.
          [(3) Parental responsibility.--In consultation and 
        cooperation with associations of higher education 
        institutions and administrators, secondary schools, 
        student and parent associations, and other 
        organizations, the most effective means of reinforcing 
        and promoting the principle of parental responsibility 
        for contributing, to the extent that they are able, to 
        the costs of their children's postsecondary education.
          [(4) Student responsibility.--The most effective 
        mechanisms for measuring student ability to contribute 
        to educational cost through earnings and savings, the 
        extent to which such mechanisms reflect the 
        circumstances of students from disadvantaged families, 
        and the existing levels of student contributions from 
        past, current, and future earnings.
          [(5) Institutional responsibility.--The most 
        effective mechanisms of reinforcing and promoting the 
        principle of institutional responsibility for providing 
        need-based aid to students attending postsecondary 
        institutions.
          [(6) Governmental responsibility.--The most efficient 
        and appropriate mechanisms for providing student 
        assistance from the various levels of government.
          [(7) Early information, planning, and information 
        technology.--The extent to which programs providing 
        early information on postsecondary education, costs, 
        and financial aid programs to students and their 
        families influence educational opportunity and family 
        saving.
  [(e) Administration of the Commission.--
          [(1) Rate of pay.--Members of the Commission who are 
        not full-time officers or employees of the United 
        States and who are not Members of Congress may, while 
        serving on business of the Commission, be compensated 
        at a rate not to exceed the rate specified at the time 
        of such service for Grade GS-18 of the General Schedule 
        as authorized by section 5332 of title 5, United States 
        Code, for each day, or any part of a day, they are 
        engaged in the actual performance of Commission duties, 
        including travel time; and while so serving away from 
        their homes or regular places of business, all members 
        of the Commission may be allowed travel expenses, 
        including per diem in lieu of susbsistence, as 
        authorized by section 5703 of title 5, United States 
        Code, for persons in Government service employed 
        intermittently.
          [(2) Temporary exemption.--Subject to such rules as 
        may be adopted by the Commission, the Chairperson, 
        without regard to the provisions of title 5, United 
        States Code, governing appointments in the competitive 
        service and without regard to the provisions of chapter 
        51 and subchapter III of chapter 53 of such title 
        relating to classification and General Schedule pay 
        rates, shall have the power to--
                  [(A) appoint a Director or Executive Director 
                who shall be paid at a rate not to exceed the 
                rate of basic pay for GS-18 of the General 
                Schedule; and
                  [(B) appoint and fix the compensation at a 
                rate not to exceed the rate payable at the GS-
                18 rate of such other personnel as the 
                Chairperson considers necessary.
          [(3) Authority to contract.--Subject to the Federal 
        Property and Administrative Services Act of 1949, as 
        amended, the Commission is authorized to enter into 
        contracts with Federal and State agencies, private 
        firms, institutions, and individuals for the conduct of 
        activities necessary to the discharge of its duties and 
        responsibilities.
          [(4) Source of administrative support.--Financial and 
        administrative support services (including those 
        related to budget and accounting, financial reporting, 
        payroll, and personnel) shall be provided to the 
        Commission by the General Services Administration (or 
        other appropriate organization) for which payment shall 
        be made in advance or by reimbursement, from funds of 
        the Commission, in such amounts as may be agreed by the 
        Chairperson of the Commission and the Administrator of 
        General Services.
          [(5) Authority to hire experts and consultants.--The 
        Commission is authorized to procure temporary and 
        intermittent services of experts and consultants as are 
        necessary to the extent authorized by section 3109 of 
        title 5, United States Code, but at rates not to exceed 
        the rate specified at the time of such service for 
        grade GS-18. Experts and consultants may be employed 
        without compensation if they agree to do so in advance.
          [(6) Authority for detail of employees.--Upon request 
        of the Commission, the head of any Federal agency is 
        authorized to detail on a reimbursable basis, any of 
        the personnel of such agency to the Commission to 
        assist the Commission in carrying out its duties under 
        this section.
  [(f) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this part $1,000,000.
  [(g) Termination.--The Commission shall terminate 2 years 
after the first meeting of the members.

              [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.

                      [Part F--Faulkner University

[SEC. 1351. RELIEF OF LIABILITY.

  [(a) Relief of Liability.--Faulkner University (formerly 
Alabama Christian College) of Montgomery, Alabama, is relieved 
of all liability--
          [(1) to repay to the United States the sum of 
        $147,681.39, plus accrued interest, and
          [(2) to pay $7,822.50 to the National Direct Student 
        Loan Fund of the Faulkner University,
representing payments inadvertently made pursuant to subpart 1 
and subpart 2 of part A and part C of title IV of the Higher 
Education Act of 1965 and direct student loans inadvertently 
made
Under part E of such title IV prior to the receipt of 
eligibility status for the junior and senior years of the 
baccalaureate degree programs offered by Faulkner University. 
In the audit and settlement of the accounts of any certifying 
or disbursing officer of the United States, full credit shall 
be given for the amount for which liability is relieved by this 
section.
  [(b) Special Rule.--For the purpose of part B of title IV of 
the Higher Education Act of 1965, each student in attendance at 
the Faulkner University of Montgomery, Alabama, receiving a 
federally insured loan for the academic year 1981-1982 and for 
the academic year 1982-1983 pursuant to such part B shall be 
deemed to be in attendance at an eligible institution for that 
academic year.

            [Part G--Alien Youth Education Opportunity Panel

[SEC. 1361. DENIAL OF STUDENT ASSISTANCE TO CERTAIN NONCITIZENS.

  [(a) Establishment of Panel.--(1) There is established in the 
Department of Education a panel to be known as the ``Alien 
Youth Education Opportunity Panel'' (hereafter in this section 
referred to as the ``Panel'').
  [(2) The Panel shall be composed of 7 members, 3 of whom 
shall be appointed by the Secretary, 2 of whom shall be 
appointed by the Speaker of the House of Representatives, and 2 
of whom shall be appointed by the Majority Leader of the 
Senate.
  [(b) Duties of Panel.--The Panel shall study and investigate 
the extent to which the requirements of section 484(a)(5) of 
the Act result in the denial of student assistance to long-term 
residents of the United States who have graduated from United 
States high schools and the extent to which that denial 
deprives those individuals of an equal educational opportunity.
  [(c) Report and Recommendations.--The Panel shall submit a 
report of its findings and recommendations to the Secretary, 
the President, and the Congress not later than 2 years after 
the date of enactment of this section.
  [(d) Administrative and Clerical Support.--The Secretary 
shall provide the Panel with such administrative and clerical 
support as it may require to carry out its activities under 
this section.
  [(e) Compensation and Expenses.--(1) Members of the Panel who 
are officers or full-time employees of the United States shall 
serve without compensation in addition to that received for 
their services as officers or employees of the United States; 
but 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 the Government service 
employed intermittently.
  [(2) Members of the Panel who are not officers or full-time 
employees of the United States may each receive reimbursement 
for travel expenses incident to attending Panel meetings, 
including per diem in lieu of subsistence, as authorized by 
section 5703 of title 5, United States Code, for persons in the 
Government service employed intermittently.
  [(f) Access to Information.--The Panel is authorized to 
secure directly from any executive department, bureau, agency, 
board, commission, office, independent establishment, or 
instrumentality information, suggestions, estimates, and 
statistics for the purpose of this section and each such 
department, bureau, agency, board, commission, office, 
independent establishment, or instrumentality is authorized and 
directed, to the extent permitted by law, to furnish such 
information, suggestions, estimates, and statistics directly to 
the Panel.

                        [Part H--Boston College

[SEC. 1371. DEBT PROVISION.

  [The Secretary is directed to cancel all annual debt service 
obligations of the receiving institution for fiscal years 1987, 
1988, 1989, and 1990 of which the total amount to be cancelled 
shall not exceed $2,700,000 adjusted as required in fiscal year 
1990, for the Department of Education Project Loan #5-1-00665-0 
dated August 5, 1981, and shall adjust the loan agreement to 
reflect the change required by this section without any other 
provision of law being applicable.

     [Part I--Carl Albert Congressional Research and Studies Center

[SEC. 1381. APPROPRIATION PROVISION.

  [Funds appropriated in Public Law 97-377 under the heading 
``higher and continuing education'', for the Carl Albert 
Congressional Research and Studies Center, under the terms of 
H.R. 3598 (97th Congress) shall be available as a direct 
appropriation without regard to section 4(a) of H.R. 3598 (97th 
Congress).]

                 ADDITIONAL VIEWS OF MICHAEL N. CASTLE

    The purpose of the Higher Education Act is to increase 
access to higher education through a variety of programs, most 
importantly the financial aid programs. Ensuring access to 
higher education, however, should be a broad effort that post-
secondary institutions actively participate in.
    Most parents, regardless of their income, are concerned 
about how their children are going to be able to afford higher 
education. In response to this concern, Chairman McKeon 
initiated legislation to establish the Commission on the Cost 
of Higher Education to investigate trends of college tuition 
and to make recommendations to slow the rate of tuition 
increases.
    H.R. 6 includes an amendment offered by Chairman McKeon and 
myself that codifies the recommendations of the National 
Committee on the Cost of Higher Education. Among other 
provisions, it requires the Department of Education to review 
student financial assistance regulations every two years, and 
where possible repeal, consolidate, or simplify those 
regulations. It also provides federal support for innovative 
projects addressing issues of productivity, efficiency, quality 
improvement, and cost control. And it requires GAO to issue a 
yearly report to Congress on various college cost factors and 
tuition increases.
    But one of the most important provisions is the one 
requiring the Secretary of Education to work with colleges to 
develop a clear set of standards for reporting college costs 
and prices. With this in hand, colleges and universities will 
be well-positioned to provide valuable information to students 
and families that enables them to make accurate comparisons. 
They will have a clear sense of what their college tuition buys 
them, what institutions' financial priorities are. This 
valuable information could guide consumer choices, and may have 
some influence on institutions' spending decisions.
    I offered an amendment, which I withdrew, to require 
institutions to report cost and tuition information to students 
and families. I think it makes sense for institutions to be 
financially transparent, and accountable for their spending 
decisions. My amendment required schools seeking Title IV 
financial aid to report the amount of, and annual percentage 
increase in, the charges for tuition, fees, room, and board, 
for the last five years.
    In addition, it required schools to disclose the amount 
spent on teaching and instruction; academic support services 
for students; other student support services; buildings and 
facilities; research; general administrative expenses; and 
grants, scholarships, tuition remission, or other student 
financial aid for the last year and as an average for the 5 
most recently completed academic years.
    I ultimately withdrew this amendment because I'd rather see 
this reporting happen voluntarily. This is data that schools 
could easily make available to families. I'm attaching some 
charts submitted to the National Commission on the Cost of 
Higher Education in November by Harvard University President 
Neil Rudenstein, that contain the kind of information I think 
families would like to see.
    The reasons behind tuition trends are multi-faceted and 
complex. I do not mean to suggest that mere reporting and 
accountability will reverse unfavorable trends by themselves. 
But reporting and accountability could have a distinct impact 
on these trends by focusing attention on institutional 
priorities, and perhaps raising questions. The answers to these 
questions are certainly part of the solution to making post-
secondary education more affordable.

                                                 Michael N. Castle.





                   ADDITIONAL VIEWS OF HON. TOM PETRI

    The committee report states that the Direct Student Loan 
Program ``has no market forces operating within it.'' This is 
not correct. Many of the functions of that program are 
performed by non federal contractors, and all of those services 
are procured in a competitive bid process, which is clearly a 
market process for determining how much such contractors should 
be paid. In addition, the cost of capital for Direct Loans is 
set in a market process when the federal government sells 
securities. It is the FFEL program, in contrast, which today 
has virtually no market processes for determining what non 
federal parties are paid for their services.

                                                         Tom Petri.

                            ADDITIONAL VIEWS

                            teacher training

    We agree that there is a strong need to improve the quality 
of the teaching force nationwide. The minority believes there 
is a shortage of highly trained quality teachers--particularly 
in areas which serve large numbers of low-income and minority 
students. For this reason, a program designed to improve the 
quality of instruction must also contain a significant teacher 
recruitment provision.
    In addition, the minority believes that if there is to be 
meaningful teacher reform, then all parties involved in the 
recruitment, training, licensing and placement of teachers must 
be included in the process. Meaningful partnerships which 
include local educational agencies, institutions of higher 
education and state teacher licensing agencies must be 
established. Providing competitive block grants to the 
Governors is not an acceptable substitute for genuine local 
involvement by local schools, and institutions of higher 
education, and community education leaders.
    During the full Committee markup of H.R. 6, Representative 
Kildee (D-MI) offered a Democratic alternative which addressed 
the issues of improving the quality of instruction and the 
undersupply of highly qualified teachers. The amendment 
proposed creating strong partnerships between institutions of 
higher education, state education agencies (including state 
licensing agencies) and local education agencies (Including 
local community organizations) designed to strengthen how 
teachers are trained. It encourages, through partnerships, the 
creation of a more diverse teaching force through the 
recruitment and preparation of minority individuals, including 
language minority individuals, and individuals with 
disabilities, to enter teaching. Further, it requires that 
teachers have demonstrated subject matter knowledge, teaching 
knowledge, and teaching skills necessary to teach effectively.
    The Democratic alternative creates a discretionary grant 
program operated by the Secretary until such time as funding 
exceeds $335 million. Above that funding level, the program 
would be formula driven to the state higher education agencies. 
It would provide scholarships and loan forgiveness as well as 
support services as part of a teacher recruitment initiative. 
In addition, it places emphasis upon recruiting 
paraprofessionals and persons from non-traditional areas 
(military retirees, corporate and scientific retirees, etc.) 
who have a high potential for teaching.
    The Democratic alternative provides for a mentoring and 
induction period for new teachers; ensures areas most in need 
receive priority in receiving new teachers with increased 
skills; calls for greater accountability for institutions 
preparing teachers; provides support for improving the quality 
of counselors; and provides alternative routes to teacher 
certification. In short, the Democratic alternative is a far 
more comprehensive and inclusive effort to improve the quality 
of instruction received by our nation's school children. The 
minority members of the Committee will continue to work with 
the majority to strengthen the provisions on teacher training 
currently contained in H.R. 6.
    We strongly oppose the bill's elimination of funding for 
the National Board of Professional Teaching Standards.
    The National Board of Professional Teaching Standards was 
created in 1987 after the Carnegie Forum on Education and the 
Economy's Task Force on Teaching as a Profession released ``A 
Nation Prepared: Teachers for the 21st Century.'' The report 
called for the creation of a National Board to ``establish high 
standards for what teachers need to know and be able to do, and 
to certify teachers who meet that standard.''
    The National Board has developed assessments that measure 
the skills and knowledge of teachers in seven specialties. 
Funding from the U.S. Department of Education is critical to 
helping the National Board complete the development of the 
assessments for certificates in other fields. The Board also 
receives funds from private foundations, corporations, and 
revenue from certification fees.
    The work of the Board is critical in our nation's efforts 
to raise standards for teachers. It is important because it 
invites experienced teachers to open their practice to rigorous 
examination and provides us with models of exemplary teaching. 
It gives us a way to determine what accomplished teaching looks 
like. Currently, only about half of the nation's teachers have 
access to National Board certification. It is critical that the 
Board receive federal funding to complete the development of 
the unfinished certificate areas so that all teachers have the 
opportunity to seek National Board certification.

                       guaranty agency provisions

    The Department of Education opposes H.R. 6's guaranty 
agency provisions. It believes the bill establishes excessive 
fees and counter-productive incentives that will result in poor 
guaranty agency performance and greater federal taxpayer cost. 
The Department may recommend the following changes:
          The Secretary of Education should approve the use of 
        the operating fund for student related activities; 
        State approval should also be provided;
          Base the portfolio/account maintenance fees on the 
        current outstanding balance of loans rather than 
        original principal;
          Reduce the guaranty agency collection retention to 
        18.5% and use the savings to reduce the student 
        origination fees;
          Delete the provision in the House bill to deposit 
        interest from the reserve fund into operating funds; 
        and
          Begin the default-aversion period at 120 days rather 
        than 60 days.
    These recommendations deserve serious consideration.

                         reducing student fees

    Students are currently required to pay a 4% loan 
origination fee (technically under the FFEL program the loan 
origination fee is 3% and there is a 1% guaranty agency 
insurance fee).
    The loan origination fees were imposed on students in the 
1980's as a temporary revenue measure--they were never intended 
to be permanent. Also, many students are not aware of these 
hidden fees until they are deducted from their loan proceeds.
    We believe that these fees should be phased-out. 
Elimination of these fees would provide additional funds to 
students up front, at the time that loan funds are needed to 
pay for the cost of attendance.

                                   William L. Clay.
                                   Dale E. Kildee.
                                   Major R. Owens.
                                   Tim Roemer.
                                   Lynn Woolsey.
                                   Chaka Fattah.
                                   Carolyn McCarthy.
                                   Ron Kind.
                                   Harold E. Ford, Jr.
                                   George Miller.
                                   Matthew G. Martinez.
                                   Donald M. Payne.
                                   Robert E. Andrews.
                                   Bobby Scott.
                                   Carlos Romero-Barcelo.
                                   Ruben Hinojosa.
                                   John F. Tierney.
                                   Loretta Sanchez.
                                   Dennis J. Kucinich.

                   DISSENTING VIEWS OF HON. RON PAUL

                             1. introduction

    Congress should reject HR 6, the Higher Education Act 
Amendments of 1998, because this bill furthers the federal 
stranglehold over higher education. Instead of furthering 
federal control over education, Congress should focus on 
allowing Americans to devote more of their resources to higher 
education by dramatically reducing their taxes. There are 
numerous proposals to do this before this Congress. For 
example, the Higher Education Affordability and Availability 
Act (HR 2847), of which I am an original cosponsor, allows 
taxpayers to deposit up to $5,000 per year in a pre-paid 
tuition plan without having to pay tax on the interest earned, 
thus enabling more Americans to afford college. This is just 
one of the many fine proposals to reduce the tax burden on 
Americans so they can afford a higher education for themselves 
and/or their children. Other good ideas which I have supported 
are the PASS A+ accounts for higher education included in last 
year's budget, and the administration's HOPE scholarship 
proposal, which I was one of the few members of the majority to 
champion. Although the various plans I have supported differ in 
detail, they all share one crucial element: each allows 
individuals the freedom to spend their own money on higher 
education rather than forcing taxpayers to rely on Washington 
to return to them some percentage of their tax dollars to spend 
as bureaucrats see fit.
    Federal control inevitably accompanies federal funding, 
because politicians cannot resist imposing their preferred 
solutions for perceived ``problems'' on institutions dependent 
upon taxpayer dollars. The prophetic soundness of those who 
spoke out against the creation of federal higher education 
programs in the 1960's because they would lead to federal 
control of higher education is demonstrated by numerous 
provisions in HR 6. Clearly federal funding is being used as an 
excuse to tighten the federal noose around both higher and 
elementary education.

   ii. hr 6 should be opposed because it creates an unconstitutional 
                        teacher training program

    One particular objectionable feature of the Higher 
Education Reauthorization Act is that this act creates four new 
federal programs at a cost to the taxpayers of approximately 
$318.5 million. One can only approximate the cost because some 
of the programs have not yet been scored by the Congressional 
Budget Office. Voting to create new programs without a clear 
idea of how much they will cost does not seem to be responsible 
stewardship of the taxpayers' money.
    The most objectionable program is ``teacher training.'' The 
Federal Government has no constitutional authority to dictate, 
or ``encourage,'' states and localities to adopt certain 
methods of education. Yet, this Congress is preparing to 
authorize the federal government to bribe states, with monies 
the federal government should never have taken from the people 
in the first place, to adopt teacher training methods favored 
by a select group of DC-based congressmen and staffers.
    As HR 6 was being drafted and marked-up, some Committee 
member did attempt to protect the interests of the taxpayers by 
refusing to support authorizing this program unless the 
spending was offset by cuts in other programs. Unfortunately, 
some members who might have otherwise opposed this program 
supported it at the Committee mark-up because of the offset.
    While having an offset for the teacher training program is 
superior to authorizing a new program, at least from an 
accounting perspective, supporting this program remains 
unacceptable for two reasons. First of all, just because the 
program is funded this year by reduced expenditures is no 
guarantee the same formula will be followed in future years. In 
fact, given the trend toward ever-higher expenditures in 
federal education programs, it is likely that the teacher 
training program will receive new funds over and above any 
offset contained in this authorizing legislation.
    Second, and more importantly, the 10th amendment does not 
prohibit federal control of education without an offset, it 
prohibits all programs that centralize education regardless of 
how they are funded. Savings from defunded education programs 
should be used for education tax cuts and credits, not poured 
into new, unconstitutional programs.

  iii. hr 6 imposes new, unconstitutional mandates on institutions of 
         higher education in the name of fighting campus crime

    Another unconstitutional interference within HR 6 is the 
provision creating new federal mandates on institutes of higher 
education regarding the reporting of criminal incidents to the 
general public. Once again, the federal government is using its 
funding of higher education to impose unconstitutional mandates 
on colleges and universities.
    Officials of the Texas-New Mexico Association of College 
and University Police Departments have raised concerns about 
some of the new requirements in this bill. Two provisions the 
association finds particularly objectional are those mandating 
that campus report incidents of arson and report students 
referred to disciplinary action on drug and alcohol charges. 
These officials are concerned these expanded requirements will 
lead to the reporting of minor offenses, such as lighting a 
fire in a trash can or a 19-year-old student caught in his room 
with a six-pack of beer as campus crimes, this, distorting the 
true picture of the criminal activity level occurring on 
campus.
    The association also objects to the requirement that 
campuses make police and security logs available to the general 
public within two business days as this may not allow for an 
intelligent interpretation of the impact of the availability of 
the information and may compromise an investigation, cause the 
destruction of evidence, or the flight of an accomplice. 
Furthermore, reporting the general location, date, and time for 
a crime may identify victims against their will in cases of 
sexual assault, drug arrests, and burglary investigations. The 
informed views of those who deal with campus crime on a daily 
basis should be given their constitutional due rather than 
dictating to them the speculations of those who sit in 
Washington and presume to mandate a uniform reporting system 
for campus crimes.
    Another offensive provision of the campus crime reporting 
section of the bill that has raised concerns in the higher 
education community is the mandate that any campus disciplinary 
proceeding alleging criminal misconduct shall be open. This 
provision may discourage victims, particularly women who have 
been sexually assaulted, from seeking redress through a campus 
disciplinary procedure for fear they will be put ``on 
display.'' For example, a student at Miami University in Ohio 
recently chose to seek redress over a claim of sexual assault 
``* * * through the university, rather than the county 
prosecutor's office, so that she could avoid the publicity and 
personal discomfort of a prosecution,'' (affidavit, p. 5, State 
of Ohio, ex. rel. The Miami Student, et al. v. Miami 
University, et. al, Case No. 9601596 Supreme Court of Ohio). 
Assaulting the privacy rights of victimized students by taking 
away the option of a campus disciplinary proceeding is not only 
unconstitutional but immoral.

    iv. hr 6 further involves the government in educational central 
                                planning

    The Higher Education Reauthorization Act also contains a 
section authorizing special funding for programs in areas of 
so-called ``national need'' as designated by the Secretary of 
Education. This is little more than central planning, based on 
the fallacy that omnipotent ``experts'' can easily determine 
the correct allocation of educational resources. However, basic 
economics teaches that a bureaucrat in Washington cannot 
determine ``areas of national need.'' The only way to know this 
is throughout the interaction of students, colleges, employers, 
and consumers operating in a free-market, where individuals can 
decide what higher education is deserving of additional 
resources as indicated by employer, and ultimately consumer, 
workplace demand.

                             v. conclusion

    The Higher Education Act of 1998 expands the 
unconstitutional role of the federal government in education by 
increasing federal control over higher education, as well as 
creating a new teacher training program. This bill represents 
more of the same, old ``Washington knows best'' philosophy that 
has so damaged American education over the past century. 
Congress should therefore reject this bill and instead join me 
in working to defund all unconstitutional programs and free 
Americans from the destructive tax and monetary policies of the 
past few decades, thus making higher education more readily 
available and more affordable for millions of Americans.

                                                          Ron Paul.

                                
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